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How Automation Can Modernize the Work Environment

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by Thomas Saunders

During the recent UK elections, a policy put forward by the Green Party got me thinking: Would reducing the work week from five days down to four be such a bad idea?

As a millennial, the idea of a shortened work week seems quite appealing. I suppose I could be accused of a poor work ethic for making the case for a shortened work week, but numerous studies point to the fact that reduced working time leads to higher productivity levels.

Fig-1-Growth-in-GDP
StatLink: http://dx.doi.org/10.1787/888933477227
Although Sweden is not the top country for GDP per hour worked, it comfortably beat the EU28, the EA19, the OECD average and other developed economies such as Japan and the US. However, the reason for this can be found in higher rates of multifactor productivity which twins output per hour worked with capital investment (e.g. RPA). Source: OECD Compendium of Productivity Indicators 2017.

Take Sweden as an example. Some companies that have chosen to implement six-hour work days are reporting happier staff, reduced staff turnover and higher profits. Although a reduction in daily hours is slightly different from removing an entire day from the work week, it highlights the idea that reduced working time can – or at least is perceived by the organisations implementing these measures to – drive a happier and more productive workforce.

Now, consider the potential impact of robotic process automation (RPA) on the workforce as the benefits to business begin to be realized. Let’s suppose the Governor of the Bank of England Mark Carney is right when he says every technological revolution mercilessly destroys jobs well before new ones emerge. The potential risk to the workforce posed by advances in RPA and artificial intelligence can be mitigated by proactively creating workforce resilience. This is a particularly relevant topic today since the ISG Automation IndexTM finds nearly three-quarters of companies plan to use RPA to automate support functions by 2019.

The ISG Automation IndexTM also finds that RPA can reduce resource need by as much as 37 percent. Not only can a robot complete a process in a fraction of the time of a human, it can operate on a 24-hour cycle and with a degree of accuracy unaffected by a poor night’s sleep or an illness.

Business leaders considering RPA often ask “What impact will process automation have on my current human workforce?” The typical answer is that it can be used to supplement the workforce rather than replace it, but the uncomfortable truth is somewhat more nuanced. If an employee’s work is predominantly made up of manual, repetitive tasks, he or she may well be considered “surplus to requirements.”

But, thinking about it slightly differently, if RPA can take over time-consuming work – indeed, the ISG Automation IndexTM finds RPA can save more than a third of FTEs in certain back-office processes – it can give back time to employees, leading to happier staff through an improved work-life balance. And voila! We have what we need to support a policy of reducing human work hours to align with potential cost savings.

If a business is averse to reducing the number of days in the work week, the decreased human workload could instead free employees to improve how they work, even using the time to upskill business users in RPA, for example. This helps companies satisfy the 80:20 rule – a philosophy recommended by The Phoenix Project authors Gene Kim, Kevin Behr and George Spafford who say 80 percent of work time should be spent “doing work” and 20 percent of work time should be spent “improving work.”

Using one day a week to focus on improving processes or employee professional development would show an organisation to be forward thinking, future-proofing for policy changes or disruptive technologies. Some companies are restructuring work time by creating a centre of excellence that uses dedicated RPA-trained staff. A more agile approach to workloads might include facilitating an intensively collaborative environment one day a week, much the way scrum teams within software development work. Besides the obvious benefits of building a harmonised, close-knit work environment, a company that invests in this way would also be able to gain from well-defined roles and a robust governance framework with documented processes, so that improving work has increased priority alongside doing work.

Of course, considering a change in how the workforce operates may be a necessity caused by external factors rather than internal. Cutting a day from the work week may be an antidote to advanced economies in which people are postponing retirement and competing for a finite supply of jobs. A company that brings in more staff at a reduced cost could spread the work out more evenly and have an easing effect on the larger socio-economic landscape.

Either way, measuring the satisfaction and productivity of a workforce and measuring the output of that workforce can increase visibility into a company’s return on investment in automation. And, let’s be clear: workforce decisions that sometimes seem to be about productivity can also be about reputation. In a hypercompetitive market, where profit margins can be ruthlessly prioritised above all else, the question of how to adapt the workforce to maximise the potential of RPA comes down to whether a company is looking to cultivate a culture of increased employee learning to deal with the fast changing skill demands of the work environment or greater wellbeing through work-life balance to drive employee productivity.

ISG can help you realize this cost benefit and design a future workforce strategy, starting with an assessment of current use of time and resources. Contact me to discuss further.

About the author

Thomas has been with ISG for over 18 months after joining in August 2013 as part of ISG’s graduate analyst intake. A keen eye for detail, he prides himself on completion of work to a high standard. His background in Finance makes him suited to the BFSI vertical, and analytical skills make him ideal for assessment work. Successful experience in many other areas of the services wheel also show that he can act as a vital resource on many types of engagement.