Automation and You.

My next topic is about automation or the use of technology to complete a process or procedure with little to no human effort. Automation promises a world of higher productivity, greater efficiency, flexible work environments and convenience. Doesn’t it sound great?

A McKinsey Global Institute report, called ‘A future that works: Automation, Employment and Productivity’, estimated that if automation was broadly adopted at a moderate speed, then that would displace 15% of the global workforce by 2030.

While this might lead to productivity gains and income growth for those occupations that benefit from automation. Which in turn would increase demand for goods and services. However, if the displaced workers are unable to find new jobs quickly, then unemployment or underemployment will rise, putting downward pressure on wages and consumer spending.

What does it mean for your business?

Simply, automation provides an opportunity for smaller businesses to do more with less, but some things that only humans can do, such as business partnering, developing relationships, judgement and decision making.

A relevant example that I would use is from a consulting engagement, where the client still used physical timesheets to record their employee hours and these timesheets were then manually entered by the payroll team.

Overtime was recorded on a separate timesheet, which then had to be authorised by the line manager and handed to payroll. Consequently, there were errors with payment due to the misplacement of timesheets, input errors and delays in processing overtime.

As you can imagine these delays and errors all negatively impacted upon employee satisfaction.

Firstly, the client wanted to retain payroll as an internal capability, which ruled out outsourcing payroll as a function. We implemented an online timesheet package, whereby the employees completed their timesheets at a desktop, tablet or a smartphone. The software was also ‘location specific’ meaning that employees could not ‘clock on’ online, unless they were physically on site.

The timesheet information automatically fed into the accounting software, dramatically reducing input errors and improving data quality. This change reduced payroll labour costs for the Company by 64 % and improved task completion time by 55 %.

Another outcome was that the staff were happier due to the decreased amount of paperwork and that the amount of payroll errors also decreased. Since the payroll team had more time available following implementing the new timesheet system, they were able to regularly contact the Company’s customers speeding up cash collection by two days on average.

This great result for the Company was only possible through automation. Think about a process that might be bugging you within your business, because there is a great chance that you could be able to reduce your pain via automation.

In closing, a former American President Lyndon B Johnson sums up the potential offered by automation quite well.

“Automation is not our enemy. Our enemies are ignorance, indifference, and inertia. Automation can be the ally of our prosperity if we will just look ahead, if we will understand what is to come, and if we will set our course wisely after proper planning for the future.”