Automation!! Really????
With the incessant drive to demonstrate value and a tangible return on investment, decision makers are increasingly being presented with business cases that purport to deliver better value by automation. There are a number of factors that drive this thought process. Most of these are well meaning and lucidly articulated. However, it behooves an executive to look at the argument being presented in a little greater detail.Some of the factors that are presented to a decision maker take the form of broad sweeping statements. For example, I recently heard a consultant say, "It is a best practice to automate the termination of accounts." While this statement may in itself not be erroneous, the automation argument has buried within it an inherent weakness. That weakness is like most things a part of its strength.
Automation results in quantifiable cost savings in terms of head count and its associated overhead. Accordingly, it is very easy for a consultant to put together and make the case for automation. The investment is well known and measurable, the benefits can be calculated on documented and referenced assumptions and the case itself plays to a need that is tangible to every manager. Furthermore, automation provides an additional benefit of control. Unlike humans, a computer program or machine will deliver predictable, consistent and reliable service with little maintenance.
However, automation suffers from two major weaknesses. The first is that any automation effort requires an initial upfront fixed cost. Typically this cost is significant. Secondly, automation reduces flexibility. While human resources can be retrained and redeployed, it requires a significantly greater effort to reprogram, retool or recalibrate an automated solution. What compounds the difficulty of the situation is that technology training and integration costs cause the implementer to be locked in to a vendor for the long term. This in turn increases teh costs of further enhancements. Of course, it can be argued that retraining a person can be just as daunting a task. This is a valid point but it does not detract from the essence of the argument. Indeed, automated solutions also require training and education as they modify existing processes, introduce newer interfaces and render data in new forms.
Furthermore, technology suffers from increasingly shortened lifecycles. Thus the benefits that are expected to accrue over a longer duration of time do not materialize. Typically this is on account of the fact that automated solutions typically bring about reductions in incremental cost over a period of time. The shorter the period the less the benefit gained.
I believe, that executives must carefully weigh three key factors within their organizational context:
- The rate of change of the legal framework within which their processes exist and the ease with which the context within which their processes exist can be codified into rules. This will be a key determinant of the flexibility and longevity of any automated solution.
- The marginal cost of redeploying or enhancing the productivity of existing resources via training and motivation. This will provide a good metric with which to weigh the alternatives.
- Any existing factors, such as integration, sunset, data migration or other operational factors that make automation risky.
Indeed the above factors may, when analyzed thoroughly, prod you to respond to a solution that is emblazoned "Automation!!" with a skeptical "Really???". Any healthy dose of skepticism will ensure that the emperor continues to wear his clothes.
posted by vivek pinto @ 10:44 AM
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