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Automation – A Means to Scaling Businesses & Disrupting Markets

Democratising The Power To Earn
June 14, 2022
diraction youth
DirAction Youth
April 1, 2022

The first time the world experienced automation was in 1913 when Henry Ford started mass production of his Model T cars and came up with the moving assembly line. Since then, automation has evolved multi-fold. Today, you can automate everything from the schedule of your social media posts to an assembly line building an aeroplane.

Automation, simply put, is the use of technology that takes away the need for physical intervention. Automation, however, differs from ‘digitisation’. Where digitisation means using of digital platforms to connect, conduct transactions or activities, automation is a step forward and takes away the need to carry out the activity by one’s own self.

One type of automation is that you commonly find in industries, and now even restaurants, where robots are used to carry out repetitive tasks that once people would be required to do.

The second kind of automation comes with the usage of software as support systems. As companies were growing in scale, their efficiency was not at par with the pace of their growth. Other than the processes that were carried out by robots, the increased number of routine mundane tasks to be done by the workforce was lowering employees’ productivity, thereby, hampering the growth of businesses as a whole. That led to the emergence of ‘software’ that took away the need of redundant documentation, physically entering data into systems, making reports, and keeping track of companies’ resources and their utilisation.

The first kind of automation software used by the world was the Enterprise Resource Planning (ERP) System. The organizations began to manage their day-to-day business functions and streamline their business processes from accounting to procurement, project management, production and supply chain operations using the power of systems. But this came at a large cost for businesses. From getting automation systems made – either by in-house tech team or purchasing it from an external software house, to getting it deployed brought with it the incurrence of heavy expenses. Therefore, automation remained a feat for businesses large in scale for many years.

Then came the era of cloud computing with companies such as Google venturing into the space. Automation tools-slash-systems were now integrated with cloud technology to primarily allow small and medium scale enterprises to use the power of automation without incurring heavy costs as a direct benefit of using ‘shared’ resources offered by cloud. Small businesses now could use the same technology at a cost unimaginably low without having to purchase or build an entire software; they could now simply buy monthly or yearly subscriptions. It was this development that took the advantages of automation to a micro level where now you see solo, micro entrepreneurs - be it a stay-at-home mother working on her business or fresh graduate in the initial stage of his or her startup, using automation tools to manage their businesses.

Today, one comes across a plethora of automation systems from Salesforce Management Systems that organisations use to automate workflows, streamline sales process, track sales leads, generate and manage sales pipeline and forecast sales among other actionable data; to Human Management Systems that help companies in maintaining employees’ database, their performance trends to hiring suitable candidate for any given position opening. Where Customer Relationship Management system helps businesses manage and maintain customer relationships by keeping track of customer interactions, Financial Management System is used to assess the health of a business, enhance financial controls and make growth strategy on the basis of financial reports based on AI-driven insights and analytics, minimise costs and optimise spending across business geographies with process automation, budget control, and financial planning and analysis.

Hyper-connectivity, agility and innovation are the needs of the time; corporations that aim at expanding highly depend on the insights gathered by connecting data processes and teams with intelligent business applications. Where these automation systems have promised large scale solutions for industry leaders, they are also providing growth opportunities for small businesses and startups. Tools like Microsoft Dynamics 365 and IBM technologies offer end-to-end automation solutions for small, medium and big businesses alike helping them integrate functions across the spectrum - vertically and horizontally. This enables them boost productivity, support evolving business models and maximise financial performance.

With the explosion of Artificial Intelligence, the use case of automation was up-scaled as well using the power of AI. ‘AI Automation’ allows businesses to reap the benefits of automation such as increased speed and efficiency, along with the advantages of using AI such as insights and increased processing power. We experience it in our everyday lives. From coming across automatically generated recommendations on our social media platforms and e-commerce websites such as AliBaba and Amazon; to receiving ‘customised’ automated emails based on our purchasing behaviour, likes and dislikes; automatic updates of our computer systems; and our smart fridges automatically placing orders on our behalf without us having to keep a count on the items we need to buy – these are all examples of how AI automation is deeply penetrated in how we live today.

Now one finds these systems being used as a means to operate, integrate and scale, not just by tech companies but organisations across industries and sectors – from manufacturing to healthcare, education, retail, government, telecommunications, mobility and financial services among others. You find these systems enabling individuals, departments and firms as a whole. According a research done by Zapier, in 2021, 22% of businesses that used automation systems had higher than expected revenue as compared to only 13% of those who don't.

Automation Helping Businesses, Small and Large, Scale and Disrupt Markets

For example, if we speak about global case studies, Columbia Sportswear – a sports retail business, uses supply chain management system, finance management system and commerce automation solution for its digital transformation and streamline operations such as IT data centres, warehouse inventory management and point-of-sale checkouts.

Another example is of NHS Digital – a health and social care system, that used automation technology to digitally transform itself by allowing patients and service users to leave public feedback anonymously. It resulted in the organisation not only keep its customer feedback database safe without losing comments but also process 250,000 reviews from more than 80,000 users much faster than how they used to with legacy systems.

Another similar example can be of Truckcell, a Turkish mobile phone operator, that used CRM system in integration with Optical Character Recognition engine to process 15 million documents by a team of 20 in 6 months that would have taken 2.5 years otherwise. This resulted in the company completely avoid the risk of marketing to customers without relevant information helping it achieve compliance while protecting customer satisfaction.

Volkswagen, on the other hand, presents an impressive case study of integration of financial and production automation. A global leader in the automotive industry, Volkswagen Group being at the forefront of electric car revolution, aimed at meeting consumers’ increasing appetite for sustainable mobility by producing 30 completely battery-powered electric models by 2025. Keeping a close eye on profitability was a must for it to ensure smooth transition to e-mobility without hampering the group’s financial growth.

The brand had separate finance and enterprise resource planning systems deployed at different production sites initially adding complexity to its operations. It resulted in the company relying heavily on manual workflows for reporting, using spreadsheets for tracking and analysing manufacturing costs. Creation of a standardised finance system, integration of existing applications to increase transparency and productivity, and improving analytics capabilities, emerged as necessities.

After deploying integrated automation solution, the brand was able to get a transparent and unified view of its business that helped it make its processes more agile enabling it further to take more effective decisions. The company standardised, digitised and automated its financial planning and controlling operations for 2,000 employees. It shifted from time consuming activities such as compiling complex reports and tracking manufacturing costs to having instant, clear breakdowns of its profits, with the added capability of drilling down within various dimensions, such as vehicle model, line of business, production plant and more. Today the company uses 30% fewer cost centres, has optimised organisational processes, streamlined approval processes, and has reduced 13 hierarchy levels to 8, a reduction of 40% that allows for faster information flows and more effective decision-making at all levels. All employees have access to the latest information at the click of a button, in real time, providing a clearer view of profitability across production lines. The clarity and accuracy provided means that the company can better identify and understand costs, trends and variations, enabling better-informed strategic decision-making. 80% efficiency on workflows, 20% improvement in financial processes and 50% fewer staff involved in order-input processes, freeing time for business development.

Government Use Cases from Around The World

Talking about international landscape, governments around the world are rapidly automating their processes. Take the example of Moroccan financial institution – CDG’s pension and provident funds entity, Prévoyance. To carry out the mission of managing retirement systems and solidarity funds to support economic and social development, CDG Prévoyance deployed digital, agile and scaleable solutions that automated 50 core business processes to give a satisfactory customer experience. A process that took 5 days now takes them 1 hour. By the virtue of hybrid cloud deployment, now the process does not necessitate people to come to CDG office.

On the other hand, New Zealand Trade and Enterprise, government agency that helps the country’s businesses expand around the globe, stepped up to unify data across multiple sources, reduce manual processes, streamline sales activities and better manage its marketing events. Resorting to sales, marketing and customer service integrated automation solution, the agency successfully reduced its costs, improve decision making through enhanced data insights and boost customer engagement by 400%.

Another example is of Milan, the capital of Lombardy, Northern Italy, that has implemented a genuine system of dialogue and connection with its citizens—the Citizen Relationship Management system. In 2016, Milan started the journey of digital transformation under the slogan “from smart city to smart citizen” with the ultimate aim of the project being to improve citizens’ quality of life and sustainability of the city. This required simplification of processes and development of data-driven policies using the right technologies with the aim to increase listening channels. This meant re-engineering of interaction processes with citizens, making the services provided by different offices more effective and efficient, and improving user experience generally. By transitioning towards a unified platform and multi-channel system on cloud, resulted in the municipal government issuing digital certificates to 85% of its inhabitants and more than three million digital payment transactions by 2020.

Abu Dhabi’s Department of Culture and Tourism (DT) deployed automation tools for effective communication to unify geographically spread teams, and making the data digitally available to all team members of the organisation in real time; this also included monitoring standards, evaluating hotels, gathering data and analysing reports. Initially, the employees would be working on legacy technology on desktops tethered to a centrally managed data centre, and to make it worse, they were working on different versions of CRMs.  Employees are now able to record recommendations and requirements onsite as they work, collaborating right there and then in the field as they move among archaeological and cultural sites using only one device.

Tel Aviv’s adoption of automation is another significant example of how automation can assist government boost citizen service and build relationship with nationals. With the aim to become a smart city and deliver citizen services with a new approach, Tel Aviv’s government realised the need to embrace new technologies that would enable the digital transformation of the city. This required moving assets from the city’s main datacenter to the cloud. The deployment of the AI driven technology that automated citizen’s responses, helped the government scale and gain flexibility at a reduced cost. Their new CRM service app, ‘My Place’, takes inventory of all available spaces in municipal buildings allowing residents to reserve any open space for any activity. This has allowed the citizens to become stakeholders in the management and progression of their own areas, and the government to solicits citizen’s input on construction and renovation projects alongside. The residents are now involved in the decision making along with the government in matters of the state such as education.

Automation In Pakistan – The Evolution

Pakistan was introduced to the world of IT in the 1990s when the idea became more mainstream and local companies started to take interest. Large manufacturers had begun automating their hardcore production processes, however, when it came to automating simpler day-to-day activities, financial management and customer service, it was met by apprehension. This reservation was two pronged; it not only emerged from the lack of ‘technical knowledge’ but also from a perception that it was being introduced to replace employees. A local success story had to emerge to show its value and propagate change; a prominent example of this was the rise of Gourmet Bakers. The bakery mushroomed in every prominent corner of Lahore in no time. The experience of having your order processed by machines (Point-of-Sale systems) and bill being generated on auto was new to the people at the time. Not only did the bakery scale rapidly, it also expanded in multiple verticals in just a few years. 

Today, the scenario has evolved by multitudes. Automation was initially thought to be a solution for big businesses only but the evolution of small and medium sized enterprises, and eruption of startups in the past five years has made automation alter the status quo. Thanks to cloud based SaaS (Software as a Service) tools offered by a myriad of companies, the technology is now not just affordable but seen as a mandatory part of running a business with efficiency. These tools have enabled startup founders to carry out various functions of their businesses without having to increase their human resource by a significant number.  

Motive, formerly known as Keep Truckin, is a Pakistani startup that offers a fully integrated suite of products to businesses across the physical economy from construction and energy, to trucking and logistics, helping them connect and automate operations. Where their AI-powered applications automate vehicle and equipment tracking, driver safety, and ELD compliance among other variables, their IoT platform connects vehicles, equipment and facilities to the cloud, enabling organisations take their physical operations online. Their products have helped 120,000 businesses in the form of 22% reduction in accidents, 20% improvement in resource utilisation, 25% reduction in insurance premiums overall.

Another startup named Aitomation helps businesses automate their processes with the help of their SaaS products such as desktop automation, web automation, and customised automation solutions. For example, their solution for a real estate company helped the organisation reduce their data retrieval time for an employee to 2.5 minutes for one property website; something that would take them approximately 2.5 hours for each website per day.

The advent of COVID-19 global pandemic pushed an increasingly large number of businesses and startups to shift towards automation to not only meet with spiking online demand but also stay relevant in the rapidly changing market dynamics. From students having to take classes online to getting groceries delivered at your doorstep, automation came as a necessity for an overwhelmingly large majority of households.

Where startups are found using AI in tandem with automation to provide services to other businesses, we also find businesses that provide no-code solutions to businesses across spectrum – from home-run micro enterprises to small and medium businesses. What the emergence of low-code/no-code platforms has done is that it has taken automation from the hands of IT leaders to anyone who wants to run a business. It has empowered them to work with automation on their own and jump start the process without having any technical expertise or the need to undergo any such training. Fishry, a Pakistani e-commerce platform on the likes of Shopify, is one such company that enables a layman with no technical background to not just setup their own website in minutes but also at the same time fetch automatically generated reports ranging from their customer interactions to leads, cart abandonment and sales without having to manually insert data.

While this is one side of the table, on the other hand there are startups that are using the power of automation to scale. One of the most recent examples of how automation helped a non-tech startup expand is of AimFit, a fitness studio turned fitness service provider using the power of technology. Them venturing into tech meant they had to deal with a plethora of data that included details of years-old customers who would come to their fitness studio in-person and then those who became their customers through their app by subscribing to their online services. Now with using easily available online CRM tools, they are not just able to maintain their increasing customer interactions but also effectively follow-up with them and market their new offerings as per their customers’ needs.

Skin Deep International, a Pakistani skincare brand, is another startup that was also able to scale faster once their production processes were automated. Once they could confidently cater to a bigger market, they started working towards becoming a global skincare brand. The recent surge of tech startups in Pakistan, particularly in e-commerce and last-mile logistics verticals, is highly credited to the power of automation. The most prominent of startups were able to tap into a large, geographically spread-out customer-base, build their relationship with them, and gain valuable insights to drive their businesses because they leveraged back-end automation well. From routing to dispatching, sending customer notifications, communication, invoicing and driver settlements, all processes are made seamlessly possible due to automation.

Automation is now being widely implemented in education sector as well. For example, Dow University of Health Sciences, one of the leading medical public universities of the country, resorted to automation to overcome their challenges arising due to a growing student population, complicated administrative workflows, and delays in reporting and manual processes. Automation overhaul resulted in the university not just controlling the problems faced but also enhance their back-office capabilities across finance, operations and human resources departments. Consequently, hierarchy and chain of command got clearer, transactions became agile through real-time payment reconciliations and instant reporting.

In case of medium and large businesses that opt for deploying automation solutions to replace legacy systems, the initial stage - from shifting the database to training employees and making the system ‘live’, can be time consuming but once a system is in place, it becomes second nature to all those involved. Having automated multiple local conventional businesses myself, seth-companies as they are called commonly, it is more than introducing a tool - it is a ‘cultural’ shift.

Empathy, at this point, is a core strength that will make the process seamless more than anything else. In traditional organisations, people are trained to perform certain duties in a way that has been practiced for decades; shifting from those conventional methods of doing things is perceived as a ‘threat’ more than a strength. Learning from my personal experiences, I can guarantee that anyone can be taught how to use a system - I have done that with people working on the front desks to halwais working in stuffy factories. The journey is tedious and often met with a lot of resistance, but once they see how it benefits their professional and personal lives, they join you. You might need to bring in a skilled team to implement automated systems but unless upskilling the current staff is not a priority, this move will cause more harm than good. For a business in Pakistan, automation is an opportunity to educate and increase the quality of work for every stakeholder involved.

In the recent past, one saw automation being implemented by the Government of Pakistan to keep track of performance of their initiatives. Kamyab Jawan Programme’s Business Loan portal is a noteworthy example of that. An initiative of the government under the premiership of Imran Khan to distribute loans among micro-entrepreneurs, Kamyab Jawan’s insights are updated in real-time; from the amount of loan disbursed to the number of jobs created, all figures are available for the public to see. This was the first time a government project used automation and set an example for other projects to follow suit.

Current Areas of Lag and Closing the Gap

Despite the growth in the usage of automation tools and systems, there is a large gap that needs to be filled if we are to tap into the technology’s full potential. Rather than using automation for a select few functions or using disparate systems for different processes, businesses should resort to integrating processes end-to-end. Currently, on the whole, the flow of a business is interrupted and creates friction between departments owing to different software being used. In order to capitalise on the full potential of automation and optimise unit-economics, meeting the following imperatives can help businesses:

  1. Identification of and focusing on the most critical business processes, which, if automated, will best support their growth strategy and then take a systematic approach to automating them rather than focusing on solutions that are specific to certain pain points in isolation.
  2. Investment in people and training them on the new way of working.Automation should be viewed as a way to enhance human productivity rather than a means to replace human resource. Before employees can work effectively with newly deployed automation technologies, they must be trained on how to use them. A culture of continuous learning while incorporating new technologies helps companies scale while ensuring upskilling of their employees. Rather than downsizing, the companies should deter­mine what skills people would need that will help them meet their automation goals. Typically, implementation of automation programmes requires creation of new roles along with modification of the existing ones.
  3. Increased cross-functional collaboration.Automation requires a collective expertise in technology, digitisation, customer experience, analytics and organisational design. Quite often, these capabilities exist in different units of the organisation, for example, IT, marketing, finance, and sales. By adopting a model that brings together capabilities from across the organisation, companies can seamlessly reinvent critical processes that are needed with automation. Practices such as talent/team rotations help organisations meet their desired goals.