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For businesses, what are the downsides to increasing automation in the U.S. workplace?
Obviously, there are benefits to automating all sorts of processes, such as fewer workers needed and all the costs that involve employing real people. But what's the flip side, particularly for SMBs?
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9 Answers
Automation, when done correctly can provide significant value. But when done incorrectly the risks can be much larger when compared to the intended benefits. Starting at the most basic level, we need to revisit the mantra that's been around since the dawn of automation - "if you automate a mess you end up with an automated mess."
Essentially, if you don't understand the method or processes you are attempting to automate, then you can potentially end up with a bigger and more expensive problem than the one you were trying to solve. This has been the bane of many an "xRM" implementation. Enterprises, large and small, simply didn't have a good handle on their existing processes before they embarked on an automation initiative.
For SMBs, this can be a hit or miss situation, since they typically aren't burdened with complex legacy policies, procedures and processes - so they aren't constrained by sunk costs and resistance to change. But on the flip side, SMBs often do not have the resources to implement automation initiatives, so it's either outsource it to a consultant, select a self-service solution (e.g., SaaS) or get the manuals out and try the "DIY" approach. All of which have unforeseen upfront and ongoing costs.
Selecting a third party approach can also result in "automation lock-in." Simply put, we tend to shape our work processes (and sometimes even our products and services) around the feature boundaries/constraints of the product or tool. Rather than working according to what the market or our customers need, we tend to work within constraints imposed by our systems and then try to convince our markets and customers that what we are offering is what they need. Only a few companies, such as Apple, can get away with this model.
You touched on a very key point - "fewer" workers. The vast majority of the intellectual property that exists in an enterprise, SMB or "mom and pop" shop is in the heads of the workers. When those workers leave that IP goes with them. There have been many attempts to replace workers with "knowledge-based" systems - most of which have been unsuccessful. The reason being that however good we think artificial intelligence may be - it still does not know how to interpret and react to variations in human interactions, behavior and experience. Take Siri for example - we've all been excited about its potential for "automating" our daily lives. But YouTube is littered with our hilarious (and not so hilarious...) experiences with Siri.
And, even if we are able to replace people with automation, we many times don't replace the people. We convince ourselves to reassign them to new, more important or more productive tasks. This is okay if your business model will support it, but many times the outlook has not comprehended the ongoing expenses for these people.
Finally, the "ROI" of automation, like most business and IT initiatives is hard to measure. We have unrealistic expectations going in, we get frustrated with the results (intended or otherwise) and we then have a hard decision to make - stay the course or start over. Both can be expensive propositions.
Your question asked about the downsides, so the answers will paint a pretty bleak picture. Automation is a good thing - when done correctly.
The biggest impact from my observation to enterprises and SMBs alike is the loss of human intuition. This is a very valuable component that is often overlooked when process automation is designed and implemented
Business process automation generally begins with a thorough review of the current state process(es). Most architects and business analysts carefully review the logic and mechanics of the decision process but it can be easy to miss the myriad of minor circumstances that the human beings doing the process are compensating for.
BPM and process automation solutions run on fixed lines and are not “aware” of the ultimate goal of the process in the way that people are. In some cases like in the use of an IVR or autodialer it can be annoying to customers, in other cases however, this can result in significant risk and losses.
For example, in the finance and insurance industries, loan/credit and claims approval processes are often targeted for automation because of the high potential for time and monetary savings. However, the people that are submitting credit and claim requests quickly figure out what they have to do to have their requests approved automatically. This shifts incentives from really vetting applicants to preparing documents in a way that they’ll be approved. This in turn leads to loans being approved and claims being paid that might have warranted higher scrutiny but they were just good enough to pass the automated logic. In general, varying amounts will get past the gate before some later process (usually one with human intervention like fraud prevention) picks up on it and closes the gap.
In cases like this, it’s not uncommon for thousands or millions of dollars to be lost before the gap is identified and closed. Human inspection of the incoming documents would generally have caught it early. The human ability to “read between the lines” is usually too complex to justify building into business process flow logic until there’s a problem.
The most typical downside is the loss of a 'personal' touch, which for SMBs in particular can be a very important differentiator. The ability to work with a person rather than a 'machine' is quite commonly why a customer would choose a smaller business rather than a larger one, so the loss of that can be a significant risk.
Increasing automation can bring some business risks as it pertains to knowledge management and retention. Although both Robert and John touched on one aspect of this, I'm going to go in a slightly different direction.
As more and more automation is deployed, the general corporate IQ (for lack of a better term) tends to trend downward. What I mean, is that the existing/remaining employees and any subsequent employees learn or are taught how to operate the environment with the automation in place, but are rarely if ever taught what the underlying processes are (and why). Thus, if there is any failure of the automation, there is no-one who understands what is actually supposed to be happening, and all work ceases.
The extension of this is that only a few employees even know how or why something works, and the risk of that employee being unavailable (injury/retirement/departure/etc) represents a much greater threat to the continued operation of the business, as compared to an organization that does not have that level of automation.
Beyond a certain point, automation does not lead to increased morale, but rather the underlying belief that people are not as important as processes or productivity. There are great benefits to automating tedious tasks, or unsafe tasks, or tasks that require both speed and precision and can easily be programmed for such. But, as with too many other things, we tend to take the concept beyond its maximum effective range, and reap serious consequences.
-ASB: http://XeeMe.com/AndrewBaker
Automation comes in a variety of shapes and sizes and I am a big believer in automation. Whether you are a SME or a multi-national conglomerate, automation is a great way to manage processes, track their success, and draw analytics and reporting on it. That said, I fully agree with Robert, "if you automate a mess you end up with an automated mess."
So in effect the major downside is businesses automating poor processes (or processes that just plain shouldn't be automated in the first place) and not actually spending the time to correct them before automation.
Thanks,
Laurence
www.discretemanufacturingerp.com
www.tlcgroupinc.com
Interesting, the answers fall into too groups, High Tech and High Touch.
The High Tech group sees automation good, unless it is flawed, then it is bad.
The High Touch group sees automation good, as long as humans still manage (retain decisions) but admit that the downside is poor training (although no one said it, resistance to training and change by the humans themselves).
The one argument that was made, that in the final analysis is wrong, is that automation eliminates workers. Overall it doesn't. While the bowling ball setter from years gone by is gone, now that the automated pin setters were installed in almost every bowling center in the land, a whole crop of new jobs were created, to care and feed these new machines.
Ultimately it was up to the pin setter whether he acquired new skills or not. Individuals must have some accountability in life...
Some answers reflect popular expectations that characterize flawed automation and technology applications. The idea isn't to replace good judgment and decision-making, but to enable better decisions with more powerful tools to support intuitive inclinations and experience-based judgment.
As to the "fewer workers" outcome, that can be a business-case outcome that pleaes the green eyeshade brigade, but the real long-term objective ought really to be leveraging the capabilities of some number of workers - perhaps even a greater number than at present - for greater, and higher-quality, throughput per capita.
The core upsides and downsides for SMBs and other businesses are much the same, with the exception that the SMB may be taking a bigger economic risk with a sizable investment - an argument for making sure that the spirit and reality of application are right for the long term.
The downside is that adequate training does not typically follow the increased automation. Lack of proper training for users and those who maintain the new automation greatly lowers the ROI for the new automation.
Automation is not only good. Its inevitable. Robots are even becoming more intelligent than humans. Either you do it too or your nearest competitor will leave you in the dust who resort to automation. For SMBs this is THE tool to grow big and be at par with the Giants. Because of automation, processes are easily scaled down, delivers on time with good quality - that is the real side of automation. You may not need more people directly involved on the operation of SMBs which can be replaced with automated machine, but this people can go to different areas of other industries where machine automation or automated machine is not possible. It is easier said than done, but this is the only way to stay afloat and relevant.
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