Think automation is your firm’s next best step to growth? Check out this infographic on the pros and cons of business process automation and what to ask before going ahead

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Whether it’s rising labour costs, in markets such as China, or the quest for higher productivity in the West, businesses are being driven to digitise their business processes. According to the Grant Thornton International Business Report (IBR), a survey of more than 2,500 executives across 36 economies, 56% of firms are either automating business processes or plan to do so over the next 12 months.

Some jobs will go as a result – with the biggest losses in the manufacturing, cleantech, technology, and food and beverage sectors. More than a third of companies in all four sectors expect automation to replace at least 5% of their workforce.

“In this digital age, businesses are increasingly looking to technology,” says Steve Perkins, global leader for technology at Grant Thornton. “Post-financial crisis, firms continue to strive for greater efficiency and better productivity, and as businesses consider whether to invest in staff or machines, for many the latter is the more cost-effective solution.”

But with 43% of businesses expecting automation to lead to job losses, according to the IBR survey, one of the biggest challenges posed by automation is the reputational damage incurred by job cuts. Companies can face immense pressure not to reduce staffing levels and big job losses can quickly attract negative headlines.

Perkins is concerned that people in lower-skill occupations could be particularly at risk: “Without intervention we will continue to see a growing divide in income and opportunity between knowledge-based and service-based economies and careers.”

‘Automation will bring opportunities to assume new, potentially higher-value roles and responsibilities’

The research suggests that automation will bring opportunities to assume new, potentially higher-value roles and responsibilities. More than half of automating businesses expect to redeploy workers into other areas (54%), split fairly evenly between retraining and redeployment.

Just as North American and European workers adapted to the loss of manufacturing jobs to Asia, so businesses will adapt to a more automated world, says Perkins. He adds: “Increased dialogue between governments, businesses and educational institutions will help us understand where gaps in the labour market will exist, to ensure we have a pipeline of educated and trained people to fill those roles.”

Should your business automate?

So is automation your next best step for growth? We asked Tantra Tantraporn, management consulting partner, Grant Thornton Thailand, for some points to consider.

How can businesses tell if automation is a good option?
Ask yourself whether what you’re trying to do suffers or benefits from human involvement. Does it suffer to a degree that would be more than compensated in any way by having a machine do it instead?

What are the potential pitfalls?
Not having a clear and detailed understanding of relevant functions should be addressed by taking the time to study each process and task at the level of detail needed to quantifiably evaluate the potential application and benefit of automation.

How should businesses manage the reputational damage caused by job cuts?
Reputation is a human perception; machines don’t care. If reputation is important, think of other useful functions your staff could support. If job loss is inevitable then implement strategies to give as much forewarning as possible to mitigate impact.

Illustration: Rosbif