The Three Traps of Automation
Automation, with the help of Artificial intelligence (AI), is likely to continue drastically improving operational efficiencies for companies going forward. But companies need to beware of three critical issues of relying too heavily on automation:
1) Automation can commoditize products and services
Sure, automation has greatly reduced costs for companies and will continue to do so. The catch is that it is reducing costs for other companies too, including competitors. If a company focuses too much on automating and cost-cutting, it runs the risk of commoditizing its products and services. An extreme example, but what happens if every fast-casual restaurant makes automated hamburgers? A pure automation approach focuses only on producing those burgers more and more cheaply until there is no profitability left…for anyone.
2) Too much automation can lock companies to the same processes
A company has spent several years building an automated approach to its internal financial reporting process, and it’s finally finished. But what happens when new features or demands need to be added to the system? It’s easy to instruct a human to do a new process or demand, but for automated software, changes must be designed, coded and tested. Too heavy reliance on automation can make it difficult to change or be flexible internally.
3) Too much automation can make companies forget how processes work in the first place
If a company decides to automate several processes and fire the humans that once did them, the company may run into trouble when the code breaks, the software must be updated, or the process must be manually performed. Complex, machine learning-driven software isn’t usually easy to quickly troubleshoot, either.
To avoid these issues, its important companies don’t underestimate the value human workers can add. Humans are flexible and constantly add value to customer-facing facets of a business. Human experts also understand how automation works and can step in when there is a problem or a set of new demands. As Tom Davenport and Julia Kirby argue in Only Humans Need Apply, companies who best employ augmentation, the ideal combination of humans and automation, are the companies best positioned for long-term success.
1) Only Humans Need Apply, Tom Davenport and Julia Kirby (pages 204 - 205)