The automation imperative

 

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As many organizations move to build their automation capabilities, recent survey results suggest that certain best practices will differentiate successful efforts from others.
Organizations in every region and industry are automating at least some business processes, yet only a slight majority have succeeded at meeting their targets, according to a new McKinsey Global Survey on the topic. As advances in artificial intelligence, software robotics, machine learning, and innovative technology platforms enable businesses to redefine processes, workplace automation is expected to provide a significant opportunity for improvements in performance and efficiency. Indeed, three-quarters of all respondents say their companies have already begun to automate business processes or plan to do so within the next year. The results also suggest which practices best support a successful automation effort: making automation a strategic priority, deploying technologies systematically, decentralizing governance, ensuring the IT function’s involvement, internalizing automation’s costs and benefits, and prioritizing workforce management.

Automation, a global phenomenon

Across regions and industries, the survey results suggest that automating businesses is a global phenomenon (Exhibit 1). A majority of all respondents (57 percent) say their organizations are at least piloting the automation of processes in one or more business units or functions. Another 38 percent say their organizations have not begun to automate business processes, but nearly half of them say their organizations plan to do so within the next year. Across regions, respondents in developing markets are just as likely as their peers to report automation activity. (See Exhibit 1)

Not surprisingly, the high-tech and telecom industries are leading the way on automation. Three-quarters of respondents in those sectors say they are at least piloting automation in one or more business units or functions. Nonetheless, the results suggest that all industries have been or expect to be deploying automation technologies. At least half of respondents in all other industries say their companies have already begun to pilot or adopt automation.

The results also suggest that larger organizations are leading smaller ones in pursuing automation.4 Among respondents at large companies, 40 percent say theirs are using automation across the organization or have fully automated processes in at least one function or business unit. At smaller organizations, just 25 percent say the same.

The factors of automation success

Although automation has become commonplace, the results indicate that success is by no means assured. We looked closely at the responses from larger organizations, where automation is more prevalent. Across industries, more than half of large-company respondents say their organizations have seen success to date (that is, their automation efforts have been successful or very successful at meeting targets). The results also point to six practices that the most successful companies tend to employ.

[Here are the first three.]

Make automation a strategic priority

According to respondents, organizations with successful automation efforts are more likely than others to designate automation as a strategic priority. When asked about their companies’ primary reasons for adopting automation technologies, these respondents are more likely than others to say automation was defined as a priority during the strategic-planning processes or is required to keep pace with competitors (See Exhibit 2).

Deploy automation technologies systematically

While automation success is possible through either traditional top-down (waterfall) deployment or more flexible agile methods, a systematic approach is key. Only 5 percent of respondents at successful companies say their deployment methods have been ad hoc, compared with 19 percent of peers not reporting success (See Exhibit 3).

What’s more, successful organizations are implementing different automation technologies from the ones other organizations are adopting. Respondents with successful automation efforts are more than twice as likely as others to say their organizations are deploying machine learning (See Exhibit 4). They are also more likely to cite the use of other cognitive-based automation capabilities, such as cognitive agents and natural-language processing. At respondents’ organizations overall, the most commonly adopted automation technology is robotic process automation, which respondents say is deployed in equal shares of successful and other organizations

Decentralize governance

Another differentiator of automation success, the results suggest, is the way programs are organized. The results favor decentralization. Respondents at successful organizations are more likely than their peers to say their functions or business units are accountable for delivering automation efforts, with or without support from a central team. Conversely, respondents at less successful organizations are more than twice as likely as those at successful ones to say a central team is solely responsible for automation delivery across the organization.

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Here is a direct link to the complete article.

The contributors to the development and analysis of this survey include Alexander Edlich, a senior partner in McKinsey’s New York office; Fanny Ip, an associate partner in the Southern California office; and Rohit Panikkar and Rob Whiteman, an associate partner and partner, respectively, in the Chicago office.

They wish to thank Gary Herzberg for his contribution to this work.

 

 

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