A roadmap to achieving Automation At Scale

Automation at Scale is achieved when automation, data analytics and machine learning tools are used in concert to perform a wide variety of corporate activities at a level of efficiency and effectiveness that provides a firm with a competitive business advantage. Many companies aspire to achieve Automation at Scale. Few do.

 Strategic IT initiatives can fail for many reasons such as inadequate funding or the absence of sustained executive support. In its 2020 Automation with Intelligence report, Deloitte found that automation initiatives fail most frequently due to the fragmentation of existing business processes and inadequate IT skills. 

 Automation at Scale has been achieved by a number of Fortune 500 companies. Conversations with leaders at several of these firms reveal the following patterns in launching and scaling successful automation initiatives.

 How does automation find its way into C-suite conversations?

 Automation is never an end in itself within companies that have achieved Automation at Scale. Automation is a means to strategic business outcomes. Contrary to popular perceptions, those outcomes are not always related to labor cost savings. 

 Automation may play a key role in a more fundamental re-invention of a company’s legacy business model. Digital transformation means many different things to many different people but it commonly refers to the digitization of business processes in ways that improve efficiency and effectiveness. Companies seeking to become more data-driven in the way they optimize internal operations or address customer needs routinely embrace automation as a means of transforming their conventional work practices. 

 In other instances, automation may be a key enabler of more narrowly focused initiatives that seek to improve speed of service, customer retention or rework reduction. In yet other instances, strategic automation efforts may ride on the coattails of other initiatives such as harmonizing back office operations following a major acquisition or consolidating IT systems employed by different lines of business.

 Technology-enabled initiatives that have strategic business impact typically rely upon a collection of IT capabilities that includes but is not limited to common automation tools. Natural language processing, optical character recognition, sentiment analysis, AI/ML models, streaming analytics and other technologies can play an equally important or even more significant role in achieving strategic business outcomes. Although automation may play a key role in many strategic programs, it’s frequently unfair and factually misleading to refer to them solely as automation initiatives.  

 In selected industries, competitive pressures may also play a role in expanding C-suite consciousness about the strategic importance of automation capabilities. Competitors may tout their automation accomplishments during analyst calls. Prospective customers may solicit information concerning a company’s automation expertise during a competitive RFP bidding process. Analyst queries and customer demands can be powerful forcing functions in focusing executive attention upon the strategic use of automation methodologies within their companies.   

 Getting off to a successful start

 The three critical success factors to launching an automation program that can be scaled into a strategic organizational competency are easy to describe in principle but much harder to achieve in practice.

·        Obtain dedicated budget resources and dedicated staff. The best launch condition is a venture capital type of investment model in which corporate seed money is used to establish an automation center of excellence (CoE) with delivery capabilities. A corporate funded CoE can operate without having to seek funding from individual business units on a project-by-project basis. 

·        Define automation as broadly as possible in both technology and business terms. If an embryonic automation program is assigned a technology or vendor label – such as the RPA program or the Vendor X initiative – it’s become just another IT project and will labor mightily to dispel that perception in the future. Establish a ‘North Star’ business vision for the program at the earliest possible moment and articulate it in terms of cost reduction, customer experience, employee well-being or competitive survival that every C-suite executive can understand.  

·        Build a strong opportunity pipeline. Freed from the need to sell its services to individual business units, an embryonic CoE should seek the broadest range of potential automation opportunities. The probability of getting some early wins on the board becomes exponentially greater when you have a broad range of possibilities to choose from. Too many automation programs falter coming out of the gate because their initial project selections were too difficult to complete as planned or produced results of marginal business significance.

 Achieving escape velocity

 Successful automation programs are managed as a portfolio of individual projects. They are ideally funded at the portfolio level using corporate resources. Success metrics – financial or otherwise – should also be defined at the portfolio level. This avoids inordinate time being wasted on soliciting business unit funds on a project-by-project basis and turning the estimation of project-specific benefits into PhD research exercises. With this approach, business units or functions are only required to incorporate the incremental revenues or savings achieved by individual projects in their operating plans for the following fiscal year. Investment costs required to achieve these benefits are borne by corporate funds during the current fiscal year.

 Approval of individual projects can be further simplified by the use of minimal viable business cases to make go/no-go decisions. Protracted discussions about the financial benefits of individual projects can be avoided by simply designating a minimum benefit that will be realized in subsequent fiscal years based upon an individual investment. So, for example, if a $500K project can produce a $500K benefit in the next fiscal year (that also becomes a recurring annuity in all subsequent years), the project essentially pays for itself. If a company wants to do more than break even over a 12 month time frame, then a different ratio of 1.5:1 or 2:1 (benefit to investment) can be established. 

 Realistic benefit forecasts should always be included in every project business case and used to assess the success of the overall automation portfolio at the corporate level. Minimum viable project benefits represent the financial consequences that business functions and units are prepared to accept in their future operating plans.

 The portfolio approach to program management offers many benefits. Individual projects have a variety of success metrics that may relate to increased revenue, decreased cost, customer retention, customer satisfaction, etc. These metrics can be easily used to reprioritize projects in response to changing business conditions. Measuring program success at the portfolio level also provides the flexibility to conduct projects that fail to meet business case approval thresholds as a means of testing new tools or procedures or educating recalcitrant business units about automation benefits. 

 Finally, automation programs that evolve into critical enablers of corporate business strategy typically establish ambitious goals early in their history. This observation will likely be counterintuitive to many IT professionals who have been coached to under promise and over deliver throughout their careers. To educate C-suite executives about the true scope of the automation opportunity confronting their companies, it’s advisable to establish audacious stretch goals when the proof-of-concept stage of automation experimentation come to an end. Even if such goals are not immediately attained, the corporate-wide impact of underachieving an ambitious goal is likely to be far greater than modestly surpassing a much more conservative target.

 Many thanks to Adam Bennett (CIO, Suncorp), Max Cheprasov (CEO, Ubersuggest), Dave Duvall (CIO, Discovery), Andy Fanning (Managing Director, CIGNA), Rich Gilbert (Chief Digital & Information Officer, AFLAC), Cindy Miller (Chief Digital Officer, Hanesbrands) and Randy Swanberg (SVP, Automation & AI, State Street Bank) for sharing their automation experiences and advice.

Originally posted on Forbes.com CIO Network