Discover The
Future of Work

Robots Make A Money-Making Assembly Line By Cutting Costs

Automation
Machines
Robots
Healthcare
Robotic Process Automation
Healthcare
Agile Business

Robots Make A Money-Making Assembly Line By Cutting Costs

Process automation is saving business substantial amounts of money, today. Our new research from the Cognizant Center for the...

6 Minutes Read

Process automation is saving business substantial amounts of money, today. Our new research from the Cognizant Center for the Future of Work highlights the ability of intelligent automation to improve materially upon what people can do.  Automation is empowering businesses to work smarter, with fewer people “doing the process;” nearly one-fifth of respondents achieved greater than 15% cost savings through automation in the past year. Executives also predict that the number of people directly tasked with performing process delivery will contract significantly in the coming years — and in some areas, this may be happening faster than we realized.

Consider this an evolutionary step for humans today – we are using technologies of work enhancement to attain new levels of process efficiency, such as improved operational cost, speed, accuracy and throughput volume. And consequently, smart businesses are doing a much better job of tackling complex process opportunities. As a result, we are entering a new era of human machine interface for repetitive and rote processes, in which software tools have emerged as “the robots” for knowledge work, and they’re becoming force-multipliers to people who are still essential to process work in banking, healthcare, life sciences and insurance.

Because they are not taking over physical work such as welding or painting, these automation tools aren’t immediately recognizable as “robots” — but the impact they’re driving is real. Some have called this “robotic process automation.” While true, use of this semi- technical term can convey the wrong impression. In spite of significant software tool development, we still do not have Robby the Robot or “the Borg” running around our call centers, medical management facilities or insurance enrollment offices.

Show Me the Money – and Go with the (Work) Flow

Think about the “long tail” of process steps that haven’t been automated by core systems. These are usually process workarounds that entail manual inputs to get systems “ready to get ready” for processing knowledge work (i.e., claims processing, audit preparation, logging customer contacts, verifications, etc.). As a percent of overall workflow, these steps may be more generalized in terms of specialization, follow rote procedures, involve regulatory requirements or require rapid response. With further process automation, those incremental steps are likely to be handled by robots, and the collective, cumulative impact of the “long tail” — in terms of cost — is likely to be significant.

In aggregate, nearly one-fifth of respondents have achieved greater than 15% cost savings through automation in the past year 

Moreover, 66% of all respondents expect at least 10% cost savings (again, using 2013 as a baseline) from automation in the long-term future. As a result, buyers and business process services providers will need to start anticipating and incorporating these levels of projected savings into their future plans and commercial models.

Let’s look at it by industry: While 26% of banking respondents have enjoyed 15%-plus cost savings from automation in their front office and customer-facing functions compared with one year ago, 55% expect those same levels of savings (15% or more savings) within three to five years. It’s a similar story in just about every vertical and horizontal process domain. That’s good for all participants — especially when success is measured based on the outcome of cost savings, and less on the operational cost tied to the number of people “doing the process.”

The Impact on People Performing Non-Differentiating, Rote Tasks Is Potentially Massive

The executives we surveyed also predict that as a result of process automation, the number of people directly tasked with performing process delivery will contract significantly in the coming years — and in some areas, it may be happening faster than we realized.

Our data shows that the more “industrialized” general and administrative (G&A) functions are being impacted the most. At least one in five companies surveyed have already seen a 25% reduction in employees across supply chain, HR and F&A functions.

  • In the short term, healthcare payers are vertical-industry trailblazers. They’re pushing frontiers of cost reduction through automation, especially when it comes to middle-office functions such as claims coding and processing, in which over one-quarter of payer respondents have seen at least 15% cost savings year-over-year

Inertia is not an option, and for almost every business, it won’t be enough to simply flip a light-switch and drive process change overnight. Organizations will need to accept and embrace different process approaches for better outcomes to deliver higher impact. (Hint: it’s not about the number of “people doing the process.”) With automation, make sure you’re keeping business outcomes as the “prime directive” to drive, guide, scale and test for success. Look for transaction-based or outcome-based pricing models. In other words, the days are over for simply “throwing more bodies at the task” to get it done. With powerful new technologies of automation, the capabilities of fewer people are magnified by robots.

Our new research spotlights a deeper understanding of “how far, how fast” developments in process automation, analytics and other operational models will play out. While we have miles to travel, our findings reveal that robots don’t dominate the process automation space, but rather work in tandem to help make smart humans smarter and businesses more agile.

 


This content is bookmarked!...

Contact Us

YOUR INFORMATION HAS BEEN SUBMITTED SUCCESSFULLY!