The imperatives for automation success

August 30, 2020

Here is an excerpt from an article from the McKinsey Quarterly, published by McKinsey & Company, that shares the results of an especimally impirtant study of automation.

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New survey findings show that organizations that successfully automate business processes follow a few common practices.
At a time when companies are increasingly embracing technologies such as robotic process automation, natural language processing, and artificial intelligence, and as companies’ automation efforts mature, findings from our second McKinsey Global Survey on the topic show that the imperatives for automation success are shifting. Two years ago our survey found that making business-process automation a strategic priority was conducive to success beyond the piloting stage.  This year’s findings show that prioritizing automation has become even more important to enable success. They also suggest that successful organizations continue to focus on employees as much as technology—and that they have instituted new ways of doing so in which employees work alongside the new technologies. Finally, rethinking operating models, including how different functions work together, has emerged as a new imperative.
The survey, conducted just before the COVID-19 pan­demic, suggests that while more companies are pursuing automation, there hasn’t been a significant change in the share achieving success over the past two years. Just 61 percent of respondents say their companies have met their automation targets.  This makes it even more important to understand the factors that enable success.

The use of automation is growing

The findings suggest that more companies are pursuing automation now than two years ago. Two-thirds of respondents say their organizations are at least piloting the automation of business processes in one or more business units or functions, compared with 57 percent who said so in the previous survey (See Exhibit 1). Most of that change comes from an increase in the percentage of respondents reporting pilot projects; the share of organizations that respondents say are moving beyond the piloting phase hasn’t grown significantly since 2018. Of those who report that their organizations have not begun to automate, nearly half say there are plans to do so within the next year.

The most commonly deployed technologies, according to respondents, are business-process-management platforms and robotic process automation (Exhibit 2). These are followed by image-recognition technologies, such as optical character recognition (OCR), and by machine-learning algorithms and automated process-mining, -discovery, and -documentation tools. We also see evidence of adoption of conversation-automation technologies such as voice assistants and chatbots.

The evolving factors in successful automation

Looking at respondents from larger companies (with $1 billion or more in annual revenues) that are meeting their automation targets, we found three distinguishing factors: they make automation a strategic priority, focus on people as much as technology, and develop an operating model that enables scaling.

Looking at respondents from larger companies that are meeting their automation targets, we found three distinguishing factors: they make automation a strategic priority, focus on people as much as technology, and develop an operating model that enables scaling.

[Here is the first imperative.]

1. Make automation a strategic priority

In 2018, respondents from organizations with success­ful automation efforts were nearly twice as likely as others to say their organizations designated automation as a strategic priority, align­ing the automation strategy with the overall business strategy and placing automation high on the C-suite agenda. The 2020 findings reinforce this imperative. When we asked respondents the primary reasons their companies are pursuing automation, 38 percent of those reporting success say their companies defined automation as a priority during their strategic planning process—nearly four times the share from other companies (See Exhibit 3). What’s more, among respondents reporting success, 72 percent credit making auto­mation a strategic priority with being one of the most important factors in their companies’ achieve­ments with automation. Respondents from companies that haven’t succeeded with automation most commonly say their companies are pursuing automation programs for long-term cost savings, to keep pace with competitors, or to address concerns about the effectiveness of their business processes.

We also see successful companies scaling automation across the organization. Respondents from organizations with successful efforts are nearly five times more likely than others to say the scope of their automation efforts covers the entire 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 Gary Herzberg, a consultant in McKinsey’s New Jersey office; Rohit Panikkar and Rob Whiteman, both partners in the Chicago office; and Anand Sahu, a consultant in the Silicon Valley office.

This article was edited by Heather Hanselman, an associate editor in the Atlanta office.

 

 

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