Adopting automation can save companies up to $165 billion by 2022: Study

Businesses could achieve up to $165 billion in cost savings by 2022 through the wide-scale adoption of automation across sectors like automotive, retail, utilities, manufacturing, among others, a recent survey said.

According to a study by Capgemini Research Institute, India ranks fifth in the adoption of automation technologies at scale.

While the US tops the list at 26 per cent followed by France 21 per cent and Germany 17 per cent are at the forefront of adopting automation technologies at scale. India at 15 per cent ranks fifth after the United Kingdom at 16 per cent.

The report, surveyed over 700 executives from companies who are experimenting with or implementing automation solutions, revealed that organisations are focusing on operational gains versus strategic long-term growth.

 

Over 40 per cent of businesses surveyed have cited that the number one objective behind automation initiatives is to improve quality, and only 23 per cent are looking to gain incremental revenue, the report said.

The study showed that automotive leads the way in wide-scale deployments.

"Of those organisations that are already implementing automation, 25 per cent are using automation at scale in the automotive sector, followed by industrial manufacturing and retail, both at 15 per cent," it said.

Commenting on the study, Ashwin Yardi, chief industrialisation and automation officer and India COO, said, "With only 16 per cent of organisations, having implemented multiple automation use cases at scale, automation presents the huge potential to drive both efficiency gains and business value."

He further said firms should learn from those use cases in automation today and look to some of the 'quick wins' to drive uptake and return on investment.

"Leaders need a bold vision and a clear roadmap to build momentum and bring the organisation behind them. It needs to be recognised that automation is a technology solution to business transformation, and hence both business and technology leadership should be engaged actively from day one," Yardi added.

The report further noted that back and middle-office functions recognise biggest gains as 56 per cent of organisations using automation have deployed it in IT and 37 per cent have implemented automation solutions in the middle office.

"The back-office functions of procurement and supply chain, and human resources realise on average the greatest return on investment at 18 per cent and 15 per cent, respectively. Twenty-nine per cent of organisations using automation have deployed it in front-office functions such as sales and marketing," it said.

Yardi further noted that automation needs to be tackled as an end-to-end strategic transformation program as opposed to a series of tactical deployments.

"Transformation should also be a two-way conversation, with employees encouraged to suggest automation initiatives. Combine all of this with buy-in from the executive leadership team and organisations will find automation a powerful and rewarding business enabler," he added.