Differentiating automation leaders from laggers in the age of COVID-19

Amid a torrent of news on the impact of COVID-19 on businesses, one thing remains certain – the pandemic has shifted digital transformation efforts into overdrive. The disruption to traditional work models, including the tectonic shift to remote working and the adoption of intelligent automation technology, has meant that the scale and prevalence of digital technologies have never been more apparent. 

However, that is not to say that the pandemic has induced the same pace of digital acceleration in all companies. In fact, the uneven impact of the pandemic has led to some businesses stalling their digital transformation efforts, with many citing the tightening of IT budgets. Indeed, the health crisis has divided the plurality of businesses that were automating work and augmenting knowledge tasks into two camps: those that went big, and those that hunkered down.

How did businesses fare?

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According to a whitepaper from Knowledge Capital Partners (KCP), its research of over 500 case studies from multiple sectors and economies found that 15% of companies went bold, while the other 85% played it safe. The report uncovered a common thread among the 15% of businesses that continued to invest heavily in automation and digital technologies – most of them had adopted and executed a digital transformation roadmap at least four years before the pandemic struck. 

In contrast, the 85% of businesses that hunkered down either invested only in automation activities that underpinned getting business today, or slowed their wider automation and digital strategies, but continued to make targeted investments to automate processes that provide immediate benefits such as remote working enablement.

The unexploited value of robotic process automation (RPA)

Among the businesses that had an early start to their digital transformation journey, the report found examples of return on investment (ROI) between 30-200% in the first 18 months, as well as the ‘triple-win’ of shareholder, customer and employee benefits. Yet, with all this talk about the effectiveness of and the need for RPA, the market for it is still considerably small at US$3.5 billion in 2021, despite a growth trajectory of around 40% per annum in the next five years. So why is there still so much business value being left at the table?

For this, we have to go back to the root of the resistance. The roadblocks to digital transformation are well established – they range from the lack of strategic intent or limited senior executive support for automation, to the incohesive deployment of automation efforts across individual departments in a company. 

According to KCP, a typical organisation that finds itself sitting comfortably in the “hunker down” space would find itself in a cycle of small and local initial outlays, with frequently good efficiency returns. When looking beyond a short-term horizon, however, further investments would begin looking expensive, with fewer clear benefits. Relying on traditional ROI-based business cases, senior management typically under-invests and refrains from scaling deployment, all the while seeing automation only as a back-office tool.

The organisational and managerial challenges 

It goes without saying that digital transformation comes with its technological challenges. The barriers, especially for a company that is about to embark on its digital transformation journey, are usually fixed around the strength of the existing IT infrastructure or the pool of digital expertise. However, as with previous technologies, the report found that only 25% of the challenges are technological, while 75% are managerial and organisational, resulting in slow progress when it comes to realising the true strategic value of RPA and intelligent automation.

According to the whitepaper, previous studies showed 41 material risks arising when trying to introduce automation, but also identified 39 management actions that mitigate those risks and lead to effective business deployment. 

Going big, will first and foremost, require a mindset shift. The integration, deployment and institutionalisation of different emerging digital technologies is by nature a long and drawn-out process. In fact, it takes many organisations more than five years to become digital businesses. This brings to mind a statement made by Amit Zavery, the VP and head of platform at Google Cloud, who said that the way to approach digital transformation is to think of it “less as a technology project to be finished than as a state of perpetual agility”.

The imaginative and big-picture view of digital transformation

With the change in mindset setting the all-important groundwork for a company’s digital transformation efforts, how have companies that have gone big unlocked the potential of RPA? 

For one, they tend to manage RPA more imaginatively. Based on findings from the whitepaper, companies that went bold have gone beyond implementing programmes in automation-friendly areas, and have also scaled their RPA deployments to the enterprise level, and across back-office, mid-office and customer facing activities. By leveraging the opportunity presented by intelligent automation, these companies have managed to successfully integrate RPA with other advanced technologies that can handle complex algorithms relating to unstructured data, analytics, and probabilistic decision-making.

What makes these companies stand out can also be attributed to the senior management, who view technologies like automation as a strategic tool forming the foundation of a digital platform that creates value for stakeholders. With a big-picture and long-term view of what the company needs and the benefits technology can bring, these executives are able to align and ensure activities such as task allocation, control, and management are directed toward the company’s broader business objectives. 

As we look ahead, the growing market for technologies that anchor digital transformation efforts show no signs of slowing down. Companies that have hunkered down during the pandemic will need to ask themselves how they can use this moment of disruption to navigate operational and cultural challenges in their business and unlock the business value of RPA and intelligent automation. If sustaining competitiveness and increasing organisational agility are aligned with their overall business objectives, it’s time for these companies to “go big” very soon.

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