Although many businesses use new software products, many are still dealing with Excel or even paper based systems to cope with information. In a previous blog post I stated that most business owners and managers will reluctantly acknowledge that two-thirds of the time that their employees spend doing work is lost in battling old processes, double handling, fixing typo mistakes and searching for documents. But how do you know which processes you should automate? In the course of this blog post I hope to offer a few tests to decide when you should automate.
Employees and Processes
One of the simplest processes to optimize is storing records with associated data. An example is storing an image of a receipt with the name of the person who purchased the product and the date the receipt was generated. If we take each employee as costing $60k and 66% of time is wasted each employee wastes a whopping $42k per year. The average investment of a business process automation application at reinteractive is between $120k and $150k… If you have more than three employees doing the same task then you should automate the task and start seeing your savings within the year.
What Does McKinsey’s Think?
In McKinsey’s report on automation the analyst thinks 60% of employees will have 30% of their jobs automated away. Add the wages of all of your staff, multiply by 0.6, then by 0.3 and if the result is more than $120k you should automate. To put it another way, if your wages cost is over $700k per year then you should automate.
2% Improvement in Productivity
The other justification for automation is the ability to monitor and therefore manage every process being automated. What would it look like if you could improve your company’s production efficiency by 2%? If your process generates over one million dollars, then you should look into automating that process just so you can optimize the process itself.
Conclusion
Over two-thirds of employees waste time getting their work done. Automation is the answer to helping your employees be more productive. I recommend building an automation system if more than three employees are used in a process. If your wages bill is over $700k you should look into automating processes. If you have no visibility of how your process is working and it generates over one million dollars you should automate just to get reporting on the process. If you know of any other tests to decide when to automate please feel free to comment below.
