Automation: The Critical Deflationary Digital Transformation
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In 2020, we saw that organizations that were waiting until they had to digitally transform the way they did business, weren’t able to do it fast enough. Now under different pressures, we’re seeing history repeat itself.
The longer that brick and mortar businesses held out that the pandemic would only mark a temporary setback in the way they did business, the more crucial it became that they adopt the technologies necessary to enable a digital customer experience.
Now, in the face of a labor shortage that’s predicted to last another decade and the crushing pressure of inflation, organizations are faced with another do-or-die moment: automate, or get priced out of the market.
There’s no escaping the true cost of higher wages
Overall, inflation for the year 2022 is estimated to be roughly between five and seven percent, over two percent higher than it was in 2020. And while there’s a lot of political finger-pointing going on, there’s more than one culprit.
Beyond the supply chain constraints on budgets, wages have further compounded the issues and put additional strain on margins. Understandably, workers are asking for more than they have in the last 20 years, with wages up by at least four-and-a-half percent in the private sector in 2021.
As global labor markets continue to contract, it’s predicted that the labor shortage is no longer a short-term problem. Experts estimate that we could be dealing with the talent crisis until at least the year 2032.
Further, a talent to market gap has put a very narrow segment of the workforce into a highly sought-after (and very expensive) category of talent that is insufficient to meet the demand. Digital transformation has changed the talent needs of organizations faster than the labor market has adapted, and now, it’s a candidates’ market, and a race to the top to provide the most compelling compensation packages to attract them.
The increasing adoption of digital workforces
But as companies struggle to tackle so many issues at once, something interesting is happening: the adoption of automation technology is accelerating.
What we’re seeing is a sort of workplace renaissance in how organizations view their workers and the future of work. Rather than seeing growth objectives as a need to hire more members of a team, companies are seeing it as a sign that they need to automate more of their processes, and make better use of their existing human capital.
The teams of the future don’t look like the people you see sitting in your offices today. Instead, we predict (and already, we’re beginning to see) teams made up of humans and autonomous programs, known as bots, executing workflows in tandem, with bots scuttling beneath their human workers to do the tedious, monotonous tasks that are crucial to the function of an organization, but not befitting of the true capabilities of the creative human brain.
Instead of a culture of work that paints digital office work as a slog through endless spreadsheets and copy/paste sequences, what we’re seeing more and more is that companies are using automation technology not only to bring down the cost of their human capital, but to bring more value-add working experiences to their human employees.
Automation is inherently deflationary
All across the board, where automation is implemented, we see better price competition among vendors. In consumer goods, we’ve seen that automation in ecommerce and logistics has made the cost of delivered goods comparable to what you would see on a price tag in a brick and mortar retail store.
In fact, one of the only things keeping prices at bay right now is the implementation of technology in place of a human workforce. It’s more scalable, it’s more cost-effective, and now, thanks to our brilliant team of engineers, it’s more accessible than ever.
And what’s more, contrary to the aged stigma surrounding automation, it creates new types of jobs for human workers. In spite of the rapid adoption of automation in recent years, research has shown that the fraction of working adults has only increased alongside of increased adoption of automation technologies.
Automation simply reallocates employment opportunities, and creates scalable systems that will allow the companies of today to rise to meet the consumer demands of tomorrow.
The future of HR in a workforce of humans and bots
Like the workforces of tomorrow, tomorrow’s HR departments are rapidly looking somewhat different. Human teams go to human counterparts for their human problems at work, and today’s bots are human-attended by digital workforce management teams.
Just like human teams need resources to support their productivity and growth in a company, bots require teams of workflow specialists and engineers to ensure that these programs have everything they need to execute their work quickly and effectively.
At the nexus of HR and IT, we predict there will be a digital workforce department that oversees the output, productivity, health, and scalability of teams of bots.
And that’s what we’ve built at Thoughtful.
We’re democratizing automation
Until now, digital workforce management was cobbled together through a combination of consultants, platform costs, technology licenses, and engineers. The system was incredibly costly, ranging from hundreds of thousands of dollars in ongoing costs and implementation fees, and maintenance complications that made these technologies virtually inaccessible to SMBs.
The slow adoption of automation until recent years has been in large part due to the difficulty of its implementation. The tech talent pool has not gone unaffected by the labor shortages, and companies are struggling more than ever to build their own automation solutions in-house. For smaller firms and brands, the build or buy conversation was a flat non-starter: both were simply too expensive.
But all monolithic technologies must come down, and today we sit at the beginning of the democratization of digital process automation.
Thanks to the tireless work of our developers and open source enthusiasts, automation technologies that were previously accessible only to the technological behemoths of the world are now at a price and implementation plane that the middle market AND enterprise companies of the world can afford and scale with rapidly.
The walls are coming down, and the digital workforce of the future is here.
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April 28, 2023
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