Enterprise Automation for CIOs—A Swan or a Grizzly Bear?

by June 22, 2020 0 comments

The Covid pandemic is shaping into a cliff where the only way forward is to jump—right in the thick of the things that were easy to avoid, put off or leave on a snail’s ramp. Not anymore, writes Pratima H.

We know what ‘Black Swan’ events are—Those unpredictable, improbable events with high global impact, yes. But some Forrester analysts recently dubbed COVID-19 as a ‘Gray Swan’— something that is unpredictable, but highly probable and with a high global impact.

After all, how far from truth can this prognosis be? Who could have predicted this beast? Who can deny the wide-berth impact it has caused—and straddling every industry, every product, every service that we can think of?

Now when we say ‘impact’—does it have to necessarily be a negative one? Don’t we remember the underpinnings of the Nova effect? What seems a bad incident at first, may eventually, and layer by layer, turn out to be the cue for the best possible outcome one can hope for! If a car accident leaves you with a few scars but compels you to take a brain scan, thus, revealing a benign tumor that can now be treated on time—is the accident really bad?

The answer will transpire in time. Specially for enterprises and their CIOs grappling with what to do next. The pandemic has moved some, has pushed some, and well, has bulldozed some into a world of unavoidable automation and transformation.

Does it matter now whether they were ready or not?

Out of the Fish Bowl now!

If we go by what Leslie Joseph and some co-authors outline in a Forrester report on COVID-19’s impact on enterprise automation plans, we can spot that one of the lasting legacies of this pandemic could be a renewed focus on automation. It is interesting to see how companies see automation as increasingly urgent in the context of risk mitigation and strategic investment, as Joseph unveils here.

Referring to previous trends, we can see how firms recovering from recent recessions have increased their investments in automation. As the recovery comes, the adoption of automation will take on a new urgency in the context of enterprise risk and resilience. Leaders will rethink old ways of tying work to specific locations or types of labor, whether that’s human or digital, writes Joseph.

Ashish Bansal, CIO Director Global A&D ERP Operations, GSK observes that enterprise automation was growing at 33.6 per cent Compounded Annual Growth Rate (CAGR). “Overall challenges of manpower due to COVID-19 would expedite the existing projects in the pipeline. The pressure on cost efficiency, with speed of delivery which is error free & consistent—that is the need of the hour in the industry more than ever.”

Automation has been around over few years for many industrial applications, points out Manikant R Singh, Chief Information Security Officer (CISO), DMI Finance. “The robotising of process through technology has been here since many generations. Right since day zero of lockdown, only organisations which had invested in process tech optimisation via automation were very successful during the lockdown. Be in business continuity, employee on-boarding or cyber security; automation has helped companies to extract productivity at max.”

Singh unravels some reasons that make it important for CIOs to invest in automation. It is all easy to configure, easy to manage once it is deployed, it is scalable and up-gradable. It improves workflow and alerting-exceptions. It gives better safety too.”

Where do the sea gulls fly to?

Now that everyone is scrambling to survive and salvage what is possible, the rush to automation can also turn into a bad knee-jerk reaction. While jumping all the hoops is something CIOs may not have enough time for, can they take a big pole and leap directly into a place where technology rules? Specially when they are standing at a place with no incremental steps to count on, or no previous encounters to fall back on—just because they had been postponing automation all this time?

That’s a danger, avers Sanjay Srivastava, Chief Digital Officer, Genpact. “Most enterprises are jumping too fast and too deep at this time—more than what they can handle. Picking the very first software vendor that comes to you for automation in the wake of this pandemic—that’s not a smart decision. CIOs might need a little more strategic thinking here. Think about end-to-end business. Think about the entirety of a customer journey. Drawing a good roadmap would help before anything else.”

Automation may, hence, vary as per the industry and the stripe of technology that works best in a given scenario. For one—The Forrester report explains the impact on supply chains as they move closer home. Talking about the enormous stress on global supply chains, the analysts underline that as the world emerges from the grip of the pandemic, business leaders in sectors including manufacturing and retail will look to bring their supply chains closer to key markets. That could essentially mean a move away from just-in-time supply and toward greater global diversification and technology enabled demand responsiveness using big data, Artificial Intelligence (AI), and cloud technologies.

When technological advancement turns to be a key driver of the uptake of automation, it is hard to dismiss an AI-dominated world next. “AI and Robotic Process Automation (RPA) have already introduced the world to digital workforces that can take on routine back- and front-office functions. In the current crisis, investments in drone-based delivery by Alibaba, Amazon, and JD.com and in robotic telemedicine by companies such as Denmark’s UVD Robots and China’s Yuoibot have demonstrated viability for larger-scale deployment. The Corona Virus pandemic is seeing national governments and institutions commit heavily to investments in AI-centric technologies such as synthetic biology, robotics, and drones.” Joseph illustrates in the report.

Bansal notes that automating the mundane repetitive task—which isn’t adding much value for the skilled young workforce of India—would help firms to focus on niche areas, advance tech or deep tech work & create a USP across the globe given the young enthusiastic workforce availability in India. Several industries leading this change are Banking, Insurance, Healthcare, Manufacturing, Telecom & Energy sector.”

Once the Sharks go back

Would enterprise automation slow down or pick up as we move through, and past, the lock-downs? Should it?

Post the lock-down crisis there would be a plethora of job cuts and new opportunities, Siinghh looks ahead and tells. “It would become difficult to find the exact fit of job-cuts; and replacements are not going to be easy and low-cost, which leads to automation of work. Jobs done by humans will be broken into small portions and computers will handle this work seamlessly. While manual intervention cannot be nullified, companies will invest intensively to ensure automation in next coming years.” He predicts that following automation, companies will invest in Employee on-boarding—Remote, Sales & Marketing – Remote Sales, Manual & Labour Intensive Repetitive Work, Customer Interaction – Remote support automation L1 & L2 and in Lab testing & Reporting.”

Do not forget the White Swans

Organizations often make tradeoffs favoring short-term outcomes over long-term resilience, warns Joseph. In the aftermath of COVID-19, Business Continuity Planning (BCP) will have to extend to account for unknown unknowns and their second- and third-order effects, as the report drills into, and without mincing any words. “Much automation has a transactional cost-reduction focus; some, particularly involving AI technologies and insights-driven automation, supports the transformation of parts of the business model. In the aftermath of the Corona Virus crisis, CEOs will demand that their business leaders strategically focus on risk mitigation and recovery from global ‘White Swan’ events. Investments in automation can remove some risk of dependence on humans and adapt without intervention to demand.”

Look for the white space. That’s the way to go about it and it is simple, in Srivastava’s reckoning. Create a good roadmap of the customer journey first, he advises. “Then slice all your areas into three categories. First one is where you do not need to touch anything. Let it be as it is. Second category is of those applications that do not change but move to Cloud. Lift and shift them. The last category is the one where you might need to fill a lot of white space with analytics and AI. But whatever you do, start with business, do not start with technology.

The hangover-effects of the Covid pandemic can be surmised in the way earlier ‘Black Swan’ events left the world scampering for more technology. In the aftermath of recessions between 1970 and 1982, it took two to six months for unemployment to begin to recover. But in the wake of the three recessions between 1991 and 2009, this process took 17 to 23 months. And these jobless recoveries occurred predominantly in middle-skill, routine jobs due to increased effectiveness of and investments in automation technology—Joseph argues in the report.

The writing on the horizon may be hazy but it is still legible. “Pre-Corona Virus, 57 per cent of global data and analytics decision makers at enterprises said that their firm had implemented automation technologies or were in the process of doing so. However, many of these automation initiatives suffered from the problem of automation sprawl, ending up as disconnected, localised islands of automation across the enterprise. In the post-pandemic recovery, enterprises must revisit their automation plans.” Joseph switches on the torch-light for a peek into the way ahead.

The impact of these investments will continue to show up long after the Corona Virus has receded—and that comes out strongly here.

One thing looks certain. Automation is now not some strategic-retreat-topic or the good old boardroom-hot potato. It is not a choice. It is coming after you with a never-before force. CIOs can now stop running away from this bear. The smart way is to befriend it and let it show you the way out of the forest. It might just save you from some swans. Right Pooh!

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