 "Automation can transform sales")
On Thursday, ICICI Bank CEO Chanda Kochhar, said that the bank has started using software robots to re-engineer about 200 business processes. And that in a year the bank will raise this number to 500, as the bank looks to improve its efficiency.
In doing so, ICICI Bank became the first bank in India to use automation and joins the group of banks across the globe that have started using robots.
HDFC will be another bank which is expected to introduce robots in its front office in a month's time.
ICICI Bank may be the first bank to have deployed robots, but the automotive industry has been using automation for decades. After using robots at the assembly line, the auto industry is now talking of driverless cars. At present almost 70-80 per cent of work at the assembly line of an auto manufacturer is automated. In firms like Tesla, automation or robots manage the entire operations.
Closer home, Ford's Sanand plant in Gujarat has already adopted high level of automation in line with maintaining gloabl quality standard, as the company looks at using India as a hub for exports too. With 437 robots, the body-shop is almost 95 per cent automated, among the highest in the Asia-Pacific and Africa region.
According to sources, automation levels in Ford's plants across the globe are only around 30 per cent.
This is not all, over 400 robots work at Hyundai's Sriperumbudur factory. The Tata Motors plant at Sanand making Nano, uses 100 robots. Maruti Suzuki, country's largest auto manufacturer has more than 1,000 robots working at its Gurgaon and Manesar.
Even a people intensive sector like IT and ITeS have not been able to stay away from automation. As per a report by Nasscom along with Everest Group, robotic process automation (RPA) is now being implemented by BPM (business process management) service providers for transaction processing and data entry in high-volume, repeatable and computer-centric processes.
While the cost reduction through RPA in Finance & Accounting (F&A) can range from 13-20 per cent for offshore operations to 60-67 per cent for onshore operations, the benefits of RPA goes beyond costs to improve service delivery plus better ability to manage.
The Indian IT services industry too is betting on automation with several players investing heavily in developing artificial intelligence powered platforms or use of cognitive technology. IBM’s Watson is an apt example of cognitive technology being applied to solve business problems.
All this use of technology is likely to impact employee headcount. And though ICICI Bank has not revealed the impact on its hiring plans, several Indian IT service players have hinted that hiring in future will get impacted. This does not mean that humans will be redundant. When ATMs were being launched, several people said that the bank teller's job will be redundant. Well, it has not, however the number of people being hired for the profile has perhaps gone down.
Kalpana B, partner, management consulting at KPMG believes that this will impact jobs in future. “Robotics has been in the market for quite some time now and picked up in the last 15-18 months. We see that in the next 10-15 years it is likely that 45 per cent and maybe even up to 75 per cent of the operational roles would be performed by robots bringing about large scale savings. Organisations are currently keen on reshaping their set up to reduce transactional activities performed by their human resources and move them to a more strategic and decision roles,” she said.
Kalpana further added that other than entry level jobs that have a higher chance of being impacted by the first wave of automation, mid-level managers in the age group of 30-40 years need to revisit their career and look at reskilling themselves or soon become obsolete for their organization. She believes that banks, consumer retail and telecom are verticals that are at present bullish on use of automation.
There are several instances where this is happening. For instance, campus recruitment of all the top IT players has gone down. Tata Consultancy Services, India’s largest IT services provider and also the largest recruiter in the industry said that lateral hiring for the fiscal year 2016-17 will go down and subsequently over the years, campus hiring will too go down.
Vishal Sikka, CEO, Infosys has been talking about automation and design thinking even as the company aims to increase revenue per employee to $80,000 by 2020.
Infosys expects that about 20,000 freshers will join sometime in the June-July time frame. Pravin Rao, COO, Infosys said that the company wants to leverage the benefits of automation particularly at a lateral level and over a period of time trying to figure out how to do more of just-in-time hiring at the fresher level. “On an average last year we did lateral hiring of about 2,500-3,000 every quarter (for Infosys standalone) but with more and more of FTEs being released through automation, and automation benefits kicking in we would expect to see some part of reduction in the hiring numbers,” said Rao.
“It is very simple. The number of people that is required at the lower end of the pyramid, let us face it, is going off. Robots and bots are taking over. You will see a slowdown in hiring across industry. Also, lot of work earlier where you were sending people from India to onsite is changing by locally hiring onsite. Even if the company hiring is higher, the number of people hiring in India will be lower,” explained Abidali Neemuchwala, CEO, Wipro.
The shift has been happening for some time now, it’s just that the companies are now coming out and accepting it. The top five Indian IT vendors (Indian top four + Cognizant) together added 77,265 employees in CY15, a 24 per cent decline YoY. Drop in hiring at Cognizant and HCL Tech contributed a lion’s share to the decline. Vendors across the pack are focusing on automation and we believe that FY16 would be an inflection point, said a report from analyst firm Centrum.
