Emerging from Recession with More Marketshare: Thoughtful's Approach to Automation
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With many forecasts predicting a recession is around the corner, both employers and employees alike are worried about the future. It's not a hopeful picture. A recent KPMG survey of 400 leaders of large US companies found that an eye-watering 91% believe a recession will happen in the next 12 months. And even more worryingly, only 34% think the recession will be mild and short.
Companies are worried about a reduction in profit, and workers are concerned about job security. And we already see some of these concerns become a reality. Already this year, many major US companies have begun mass layoffs. Twitter comes to mind immediately with its mass layoff of nearly 50% of its workforce. But the rest of the tech sector isn't immune either. Amazon plans to cut 10,000 jobs worldwide, Meta (formally Facebook) announced mass layoffs for 11,000 employees, and Snap Inc (Snapchat) says it will lay off 20% of its workforce. And more layoffs will follow across industries.
Automation can boost efficiency and productivity, reduce errors, improve customer satisfaction, and offer cost savings. However, implementing automation during an economic downturn can be challenging. Many businesses are reluctant to invest in automation due to the upfront costs, and many have difficulty finding the right talent to bring automation to life. As a result, organizations across sectors need to find a way to implement automation that is quick, cost-efficient, and effective.
Why Economic Downturn Accelerates the Need for Automation
Here's the bottom line. Companies are under intense pressure during a recession to do more with less. And automation helps achieve this in various ways.
Automation reduces risk. Mitigating risk during an economic downturn is paramount. And since bots don't fatigue, can't get sick, are speedy, and always perform tasks with high accuracy, they lower risk across several parameters.
Automation also eliminates time spent on tedious, inefficient manual processes, thereby increasing productivity. As a result, employees can spend more time on tasks that directly drive revenue for the company. In addition, the higher speed and accuracy offered by bots handling time-consuming, error-prone tasks results in lower operational costs.
Simply put, automation offers benefits during peacetime, but those benefits often become essential to survival during a recession.
Thoughtful's Approach to Embracing Automation During a Recession
Recessions make automation projects even more valuable but also more challenging to get off the ground. Many companies are tempted to scale back or drop automation initiatives, but this can be costly. Cutting investment in automation can offer immediate cost savings, but it can also decrease your potential to weather the recession and come out stronger.
In a study into corporate performance in recent years, research firm Gartner found that "Winners spur innovation, change strategy and take risks, while others are eaten away by conservatism and cost-cutting." Essentially, winners gain the competitive edge by preparing to navigate turns before they are clearly in view. They also plan for the long term and adjust quickly to changing circumstances.
When it comes down to it, having a "wait and see" approach or diving straight into defensive cost-cutting won't power you through hardship. It may provide temporary relief, but at a high cost for your future success and agility.
With this in mind, let's look at how you can prepare to be a winner by bolstering your automation initiatives even in an economic downturn.
Align Your Stakeholders
Let's say you're embarking on a robotic process automation (RPA) project. Of course, the success of any project involves getting the right people aligned and on board. However, often RPA requires a more significant level of cooperation than other projects. On a typical RPA team, you'd have the RPA Project Manager, Solutions Architect, RPA Engineer, RPA Process Owner, Subject Matter Expert (SME), and Team Lead. But critically, your IT team is another crucial set of stakeholders, and they need to be engaged early on.
The IT team can often be skeptical of RPA projects due to concerns about how the new technology will interface with existing systems and whether it will comply with current policies and standards. The last thing you want to do is surprise the IT department with a project already in the works.
Other key stakeholders will include:
- Financial decision-makers.
- Strategic decision-makers.
- Champions (the people you can count on to evangelize your project).
- Derailers (the people who can intentionally or unintentionally kill your project).
The key to aligning your stakeholders is taking a deliberate approach to engaging with them. Here are some top tips:
- Get them involved: Communication is paramount. Everyone needs to be involved in the project, understand the objectives, and be kept updated on progress.
- Anticipate their needs: Often, objections are needs or concerns in disguise. Try to find out why your stakeholders have concerns and attempt to address them.
- Center your stakeholders: Craft messages that resonate with specific stakeholders rather than using a "one-size-fits-all" approach to communication.
It's also important to decide whether you want to take a "top down" or "bottom-up" approach to your automation journey. Some organizations opt for the top-down approach and engage stakeholders from departments across the organization from the beginning. Other companies opt for smaller, contained automation projects and then look to expand to other areas once the project has proved successful.
Plan Your Change Management Communications
It's important to remember that despite its benefits, there's a lot of negativity surrounding automation. For example, many people worry it's going to replace their jobs. And the business decision-makers may have concerns the technology is unreliable, more non-IT people will need IT skills, or believe a catch-all solution doesn't exist.
With this in mind, the way you communicate your initiative is crucial. The key is communicating clearly, early, and often through the right people and multiple channels. Clearly is the keyword here. It's important not to allow your message to become confusing or convoluted. Instead, it needs to be strong and leave no room for misunderstanding.
The best way to ensure your message is clear is to summarize the goal of your program in as few words as possible. Why are your implementing bots? If it's about cost reduction, then craft your message around that. If it's about optimizing your business for future growth, combatting the skills gap, or something else, then you need a different message. Decide on the primary goal and leverage that to shape a story around how automation will improve the business and the users on the ground.
Select the Best Processes
Identifying the best processes for automation is one of the most important tasks you'll embark on. However, it's critical to understand that the best processes during a thriving economy and recession may look different. The best processes (most suitable for automation) during the good times might lean towards things that support future growth. They might also be high-risk but high-reward experimental ideas..
But in a recession, you're more likely to pick processes that cut costs and plug labor gaps (reduce the need for manual workers). You may also want to start with straightforward, simple, easily automatable processes. It's a good idea to pick processes that:
- Are rules-based (processes that follow strict predefined rules are highly suitable for RPA, unlike processes that involve decision-making).
- Are routine and well-defined (the process and related systems don't change often).
Your approach will be different for more complex automation projects, like those that involve artificial intelligence and machine learning. Here you're looking for things that could significantly impact and potentially recession-proof your business by transforming entire systems.
Communicate Your Cost/Benefit Analysis
The cost/benefit analysis will undoubtedly form a significant element of your business case for automation. You need to justify the cost of automation, which is even more crucial when budgets are tight. Of course, you'll be comparing the short and long-term costs and benefits of implementing automation vs. keeping things as is (traditional labor). But it's also essential to consider the cost to the business of not automating to keep up with your competitors. You can look at market and industry trends to understand the impact of automation in your industry and determine whether you may lose more customers by failing to act.
Moreover, many businesses make the mistake of only communicating the cost/benefit analysis for the specific project in front of them and the primary problem it solves. This is important, of course, but it's not everything. Instead, you should explain the impact of your automation project on the broader business. If business decision-makers can see how this automation project can pave the way for future successful projects that can help accelerate success, you'll be more likely to convert them.
Without a crystal ball, we can't be sure how exactly the economy will shift in the next few years and the impact this will have on businesses. But what seems clear already is that we have a bumpy road ahead. Automation can help your company weather the storm and allow you to come out the other side ahead of your competitors. So now is not the time to kill your automation projects.
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January 9, 2024