Since the financial crisis, businesses across America have been working to bulk up their corporate profit margins. Despite cutting back on costs and squeezing more out of existing resources, building up profits is becoming increasingly difficult. The tightening labor market, which today has manifested in the form of wage growth, has forced companies to raise pay in order to recruit and retain workers. As explained by Citi’s Tobias Levkovich,
“Investors are appropriately worried about margins falling more sharply given that labor costs account for more than 60% of corporate expenses and small companies need to lift employee compensation but do not seem to have pricing power to offset related higher expenses.”
Labor is not only costly, it is also inefficient. Traditional business models believe that hiring people to complete tasks is the simplest and easiest way of getting things done. However, in an increasingly digital world, companies are looking toward automation to give their businesses an edge over the competition. Innovations in technology has streamlined labor- intensive tasks to be error- free, transparent, cost- effective and value- adding experiences, both for companies and consumers.
Business Process Automation (BPA) is defined as:
” The technology-enabled automation of activities or services that accomplish a specific function or workflow.”
Business Process Automation is based on three fundamental principles:
- Orchestration: Allows an organization to build systems that supply centralized management of the company’s computing architecture.
- Integration: The BPA system is spread across the processes throughout an organization, thus linking all business functions.
- Automated Execution: Reduces multiple tasks with minimal human intervention.
Business Process Automation isn’t just about eliminating the paper trail. It is about ensuring that companies implement the best practices to improve overall operational efficiency. For example, statistics surrounding employee productivity show that:
- 1 in 5 people waste more than a third of their time in office.
- In a week, this adds up to 2 full workdays of wasted time. In a year, it amounts to 98 workdays of wasted time.
- The average American worker is earning $47,230 a year.
- Employers are spending $17,713.80 a year on wasted time.
Automation can be employed in streamlining many segments of company activities, including sales, management, operations, supply chain, human resources, and information technology.
Procedures surrounding human resources work are usually paper- driven and time- intensive. Sifting through volumes of applicant information manually is repetitive and dull, which can lead to mistakes and false rejections.
Texas A&M University’s College of Engineering committed itself to increasing student enrollment by more than 65 percent by 2025. In order to manage the influx of students, the college had to hire new employees while balancing costs. By using automated HR onboarding with Laserfiche, the college was able to hire more than 3,400 employees in little over a year.
Offshore suppliers are automating procedures because they are seeing labor arbitrage coming to an end. In the quest for improving customer processes and reducing the number of offshore workers, systems integrators are becoming the biggest users of automation software.
Indian IT services giant Infosys is drawing on IPsoft technology to automate the IT and business process services it provides to its global customer base. By harnessing IPsoft’s IPcenter platform, Infosys plans on automating its service delivery and training 5,000 people in India to support it.
The financial services industry has instituted changes concerning regulatory, customer, technology, and market challenges. By embracing trends in automation, financial institutions are catering to customer expectations and creating new opportunities.
In 2005, Co-operative Financial Services implemented Blue Prism Software by automating manual processes in its customer services center. Recently, the bank has extended its use of Blue Prism software by automating daily banking procedures such as accepting or rejecting direct debits, issuing checks, as well as standing orders on accounts with insufficient funds. This has freed up nine staff members and reduced by four hours the time required to review about 2,500 higher-risk accounts. The bank has also been able to move 50 staff members from back- office processing to front- office customer service.
In conclusion, Business Process Automation simplifies and supports the workflow process, thus increasing efficiency and decreasing cost structures. Last week, Genpact purchased artificial intelligence (AI) and automation vendor Rage Frameworks. Rage Frameworks has been applying machine learning and language processing to build smart automation platforms for financial services, capital markets and supply chains. In doing so, Genpact became the first IT and business process service provider to acquire an AI platform. With greater implementation of such intelligent automation technology, businesses will able to cut back on labor costs and generate competitive profit margins.