Manual vs Automated Business Processes

Manual and automated business processes are key components to every organization, and the right composition is the ideal rather than a desire for excessive automation. Unfortunately organizations fall in two two equally harmful positions: unintentionally automating processes that have low ROI, or leaving manual processes as is, despite significant waste in time, materials, and even damaging their reputation.

Key Comparison of Manual vs Automated Business Processes

Even though there are an extensive number of dimensions to analyzing the two types of forms of business processes, these are some general areas for comparison that can be helpful for business leaders. In this report we focus on the comparison of a automated vs manual processes to understand the impact of each.

Example: Manual vs Automated Payroll Processing

Manual Process: Every month employees are required to submit their time sheets to the company’s accounting department. The process for payroll creation requires the input of multiple factors like hours worked, vacation time, sick days, and statutory holidays. A payroll clerk would then use the time input from the employees across the organization to determine a pay cheque for each employee after applying rules the company uses and follows like government tax deductions. Evidently this requires extensive amount of manual effort to process each employee.

Automated process: In an automated process, the system will apply the same rules used by the payroll clerk in a rapid fashion to determine which employees can be successfully processed without intervention i.e. free of delinquencies or time sheet errors. This allows the payroll clerk to manage exceptions and focus his or her time on further optimizing their department or working with end-users to reduce payroll errors.

 

Why Does Automating Processes Matter

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The automation of a business process creates compounding effects for an organization because a cost has become an efficiency which frees up people, resources, and time. This allows a company to pursue further investment or simply increases employee satisfaction by reducing manual work. Consider also the other benefits to business process automation:

  1. Creates a culture of innovation: manual processes that have never been challenged creates a culture of good-enough and positions an organization in the long-term for mediocre performance, where as the exercises of exploring solutions to problems creates the right sparks in helping people on the team grow and inevitably serving stakeholders in a more impactful and effective way
  2. Provides a platform to understand what is really REALLY important: the process of redefining processes helps distill what is truly essential to each step of a business, meaning greater effectiveness of the end product and reduce waste during the delivery process. Organization that start with their stakeholder first will work backwards to create far more innovative solutions.
  3. Clarity around process: automated processes often result form highly systemized and documented processes, or they created as an ingredient to automation
  4. Exponential lag for organizations that over-rely on manual processes: the difference between two organizations one with a manual process and another with automated processes is exponential rather than linear, the company with automated process can indefinitely reinvest savings from resources and time towards high impact projects, rather than spending time duplicating files, moving files, or manual data entry.

Though there are benefits to process automation organizations should consider the risks of introducing new technology to an organization, and diligent assess the value of such initiative.

Manual Process Can Still Be Effective

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By Joey Cortez (Flickr: _MG_3171) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

The key to process automation is in fact knowing which processes to automate and which to remain as is for the most impact. In fact organizations will often forget to bench mark or compare manual versus automated processes. Leading to a lack of clarity as to the value of the automation or the effectiveness of current processes. The main determinant when a manual process is effective is if it can outperform all automated measures in terms of the defined key performance indicators. For example most modern call centres uses a portion of automated call routing or self-serve menus to triage callers. In the event that customer satisfaction drops using the self-serve or automated system, business leaders should consider whether efficiency or customer service is more important.

Amazon which is heralded as one of the leaders in the eCommerce industry, opts to not be heavily reliant on self-serve menus so that customers can speak to a real person as quickly as possible to get their issue resolved. But Amazon is also industry leading for its automated supply chain processes that have helped it topple decades old brands like Sears, Target, and many other brick and mortar retailers. In that way Amazon has very patiently and carefully chosen which processes to automate and which to leave to humans.

 

Finding the Right Proportions of Manual vs Automated Business Processes

Business leaders are asked to make difficult and bold decision at times, process automation is one of those challenges particularly with executing on a bold vision for operational efficiency. Often time industries that require seasoned technology talent are the most starved for them as a result of a lack of talent branding and clear articulation of career prospects that resonates with technology talent.

Mindfield Consulting has helped Organizations lead using the right mix of manual and automated process from planning service delivery to remote locations to global trading systems for precious materials and resources, our team has over two decades of experience delivering technology that meets every mission. Our client’s win when they are empowered with the right technology and the right people.

 

 

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