Organisations are missing out on automation benefits, says Capgemini

Lindsay James
Lindsay James
By Lindsay James on 12 October 2018
Organisations are missing out on automation benefits, says Capgemini

A new report by the Capgemini Research Institute has found that organisations are missing a huge opportunity in automation, with just 16% of global businesses stating that they have adopted multiple automation use cases at scale.

The report also reveals that organisations are focusing on operational gains versus strategic long-term growth. Over 40% of businesses have cited that the number one objective behind automation initiatives is to improve quality, and only 23% are looking to gain incremental revenue. The report also highlights that only 32% of surveyed organisations are focusing on use cases deemed ‘quick wins’ – those that are not only easy to implement but also highly beneficial.

The report “Reshaping the future: Unlocking automation’s untapped value”, surveyed over 700 executives from companies who are experimenting with or implementing automation solutions and analysed over 110 real-world use cases across six sectors. It showed that automotive leads the way in wide-scale deployments. Of those organisations that are already implementing automation, 25% are using automation at scale in the automotive sector, followed by industrial manufacturing and retail, both at 15%.  From a country perspective, the US (26%), France (21%) and Germany (17%) are at the forefront of adopting automation technologies at scale.

The study also highlighted that businesses could achieve up to US$165 billion in cost savings by 2022 through wide-scale adoption of automation across the automotive, retail, utilities and manufacturing sectors. The back and middle-office functions recognise biggest gains: over half (56%) of organisations using automation have deployed it in IT and over a third (37%) have implemented automation solutions in the middle office. The back-office functions of procurement and supply chain, and human resources realise on average the greatest return on investment (ROI) at 18% and 15%, respectively. 29% of organisations using automation have deployed it in front-office functions such as sales and marketing.

Quick wins could be the route to scale: the report analysed use cases for automation in terms of their complexity and benefits, to understand why many organisations are not yet seeing significant benefits. Only a third (32%) of surveyed organisations are focusing on use cases deemed “quick wins” at scale, spanning sectors and business functions, such as reconciliation for accounting, onboarding for human resources, lead generation for sales and marketing and anti-fraud checks for financial services.

In contrast, over a third (36%) of organisations are focusing on case by case implementations in areas such as data entry or storage automation. The reports found that these deployments are not as scalable, difficult to implement and may not deliver large returns.

Ashwin Yardi, chief industrialization and automation officer and India COO, said: “With only 16% of organisations having implemented multiple automation use cases at scale, automation presents huge potential to drive both efficiency gains and business value. We should learn from those use cases in automation today and look to some of the ‘quick wins’ to drive uptake and return on investment.”

“Leaders need a bold vision and a clear roadmap to build momentum and bring the organisation behind them. It needs to be recognised that automation is a technology solution to business transformation, and hence both business and technology leadership should be engaged actively from day one. Automation needs to be tackled as an end-to-end strategic transformation programme as opposed to a series of tactical deployments. Transformation should also be a two-way conversation, with employees encouraged to suggest automation initiatives. Combine all of this with buy-in from the executive leadership team and organisations will find automation a powerful and rewarding business enabler.”

 

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