Through the automation of assembly lines, in 1913, Henry Ford reduced the manufacturing time of an automobile from 12 hours to 1.5 hours; this allowed him to increase the wages of his workers even though he also reduced working hours from 9 to 8 hours a day.
This served as an inspiration to many businesses that began to define their processes and automate them to take advantage of both manufacturing and services benefits. Today many companies still execute their processes manually, compromising their effectiveness and efficiency by exposing themselves to interruptions in workflows or loss of information. Automating business processes will not only bring benefits by reducing these errors but can also help you improve your customers' experience.
In this post, we will not give a guide on how to automate; we will talk about that later in another blog. Here we will answer three preliminary questions: What is a business process? What is automation? Why should I automate? So, if you haven't heard about it yet or want to start getting familiar with it, you can start here.
What is a business process?
Before talking about automation, we need to define what processes are since they form the basis of every business and are the ones that may require the need for an automation project.
A business process is, then, a set of activities that are executed to achieve a specific objective. The company must order these activities in a step-by-step sequence since they always involve the repetition of a series of tasks that allow the flow of materials and information through different physical or digital channels.
We can divide processes into three types:
- Strategic: are all those linked to management responsibilities, such as defining and controlling strategic objectives or company policies.
- Operational: these are the processes involved in manufacturing a product or the provision and delivery of a service. Here we can include purchasing, sales, or production.
- Support: support operational processes. You can outsource these types of operations. Marketing, accounting, some purchasing processes, or internal communication may fall into this category.
What is business process automation?
Automation is about reducing the amount of involvement humans have with some routine and tedious tasks, reducing errors while freeing up time and resources so that people can focus on more complex and less transactional tasks.
The most basic level of automation takes simple, repetitive tasks, digitizes them, and uses tools to make them run as independently as possible. More complex levels can create fully automated workflows where, for example, processes can be defined where the only human intervention is supervision. In addition to reducing errors, this means that it also increases the speed of delivery of a product or service, improves its quality standard, and reduces its costs.
If you are interested in this topic, here is an article on business automation: What is business automation?
When and why should I automate?
Do you want to reduce the amount of rework, waste, cycle times, resources required, or production costs? These are all consequences of automating a process. However, the main reason for doing so should always come from a cost-benefit analysis. It is not because you can automate something that you must do it.
I propose an example. Let's suppose you have a small bakery that you have just opened. Customers come to the point of sale, choose one of your products and buy it. From your business perspective, you carry out a completely manual sales process. First, you check at the pastry counter to see what products you have to offer, and the customer chooses one. You generate a receipt, charge them, and deliver the product and an invoice to the counter.
In the automated scenario, you could have an online store so that your customer can manage their purchase from any device (cell phone, computer, or tablet). Let's think that this store has behind it a Content Management System (CMS), where you upload your product information only once; it also connects to an Enterprise Resource Planning (ERP) system, so that a product for which you have no inventory will not be displayed in the online store.
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In addition, you also decide to incorporate a Customer Relationship Management (CRM) system, which generates purchase orders and invoices automatically and then mails them to your customer's address. All through automated workflows. The only time your customer would interact with another human being in this sales process, or the only time you perform an action manually is when the product is delivered at the counter.
Is it worth so much effort and investment? It depends. If the bakery is small, if its strategic objectives are not geared towards growth and the sales projections do not reflect a significant increase, definitely not. If the bakery is growing and seems to have good numbers, we still need to estimate some financial indicators to determine the project's profitability.
The point is, as ideal as this hypothetical automated process sounds (your customer doesn't have to wait in line, you don't have to check to see if you have any cake in stock, produce a receipt by hand, collect the money in cash or through a dataphone, or hand over the invoice at the end), if the cost of implementing this whole project is not justified, for example, by a return on investment, maybe you shouldn't even think about automating, as you could go out of business.
Of course, I drew the extreme case. An alternative could be to talk in terms of automation levels. In this way, a small bakery could still invest in small projects with the right tools to help it better control its business. In contrast, the large bakery could implement a phased project, streamlining its processes gradually as it grows simultaneously.
It is worth noting that other factors may also come into play in the why or why not to automate. If you sell to supermarket chains, your customers will undoubtedly appreciate the agility to continue with the example. But, if you sell to end consumers, you may be sacrificing personalized service and negatively affecting your customer's experience. For this, it would be necessary to use other strategies, such as the analysis of your Buyer Personas and their Buyer's Journeys, which will allow you to understand the experience they want to have and thus redesign your processes to automate what is necessary.
I invite you to look for more of our blogs, where you will find the benefits of automation or guides to start thinking about automating your business processes. In the meantime, here are some critical points covered in this blog:
Business process automation can bring many benefits to your organization. From improving the way your employees perform their work to increasing customer satisfaction.
The choice of what to automate and why depends on a company's strategic goals, gaps, and needs. Not everything that you can automate should be automated.
There are levels and tools for automation that adapt to the needs of each project. You can start with small processes and work your way up to the necessary ones. Dividing a project into stages can reduce the economic impact, resistance to change, and associated risks.