Automation is commonly hailed as one of the best and most straightforward ways for businesses to save money. When implemented properly, it can be highly efficient, capable of reducing expenses while improving consistency and performance.
But is automation truly cost effective in all applications?
The Promise of Automation
The promise of technological automation is to take some previously manual effort and exert that effort with a machine or an algorithm, effectively completing the same task without human intervention.
For example, consider AP automation software. AP automation software is designed to automate many tasks associated with accounts payable, such as checking and verifying invoices or processing payments.
Automation can hypothetically be applied almost anywhere, assuming the technology is advanced enough and the task is simple enough. Ultimately, there are several individual benefits of adopting automation within a business.
- Reduced need for manual labor. The most obvious benefit is the reduced need for manual labor. Imagine that you have an employee that makes $50 an hour. They spend about 10 hours a week on a given task, ultimately costing the business $500 to complete that task. If a piece of automation is rolled out to replace that work, the company stands to save $500 a week, minus any costs associated with using the technology. The employee, if retained, will have 10 hours they can spend on more important responsibilities.
- Reskilling and upskilling existing staff. Automating some of the most repetitive and least complex tasks in your organization also gives you the opportunity to reskill and upskill your existing staff members. Most people don’t want to work in careers where they’re exclusively responsible for mundane data entry that a machine could easily take over. Additionally, most people want to feel like they’re constantly learning new things and advancing in their careers. When you automate more low-level tasks, you’ll give people the opportunities they crave.
- Improving speed and efficiency. Automation is designed to improve speed and efficiency, and when utilized properly, it does so with virtually no headaches. Algorithms are typically much faster than their human counterparts at executing repetitive tasks.
- Improving consistency and reducing errors. It’s also worth noting that algorithms and properly programmed machines are practically incapable of making mistakes. By employing automation, you can almost eliminate the possibility of human error. Given that human errors can be quite expensive and complicated, this is a huge advantage.
The Problems With Automation Cost Effectiveness
It’s clear that automation can be very beneficial. But the central question here is whether the benefits of automation truly outweigh the costs.
So, let’s take a look at the factors that could complicate our decision.
- Costs. Automation typically isn’t free; it’s usually priced to be affordable to the businesses that need it most, but it’s still going to cost money. If you’re developing custom software for your business, your costs will increase significantly, but you should be assured that you get exactly the right product for your needs.
- Integration. There can also be problems with integration. If your automation software is capable of working with some platforms but not others, it could present logistical complications that prevent you from coordinating streamlined workflows. Additionally, the early stages of automation rollout may come with unforeseen bugs or wrinkles.
- Labor adjustments. It’s not always easy to adjust a labor force in response to new automation software. Is it wise to replace some of your workers? Should you move them elsewhere and retrain them? Should you put them in higher positions in the hierarchy?
- Effective use. Having access to automation isn’t the same as using automation responsibly. Your results, and the cost-effectiveness of your efforts, depend heavily on how you integrate and use your automation.
Even with all these factors in play, automation typically has the power to provide benefits well in excess of the initial costs, assuming no significant redundancy or unreasonable costs.
Key Takeaways
These are the most important takeaways:
- Automation is typically valuable. Generally speaking, automation is valuable, and objectively so. Automating any individual process is typically better than leaving it to manual effort.
- Costs and benefits are both significant. When making any decision about automation software, it’s important to include considerations for both costs and benefits, as both are relevant factors in determining overall effectiveness or value.
- Deliberate, thoughtful integration is necessary. Deploying and using automation software requires thoughtful planning. It’s not something you can assume will work under all foreseeable circumstances.
Automation isn’t perfect. We can’t automate everything. Automation isn’t always the right solution. It can sometimes be expensive, and it can sometimes be used improperly. But when you choose the right automation tools and use them correctly, you stand to benefit enormously – in ways that typically far exceed the initial costs.