Is Automation Cost-effective for SMBs?
Over the past few years, large enterprises have adopted automation technologies in ever-larger numbers in order to scale their business, streamline processes, and cut costs. But then, these companies have large technology budgets, and access to the best tools and people to realise the benefits of automation.
But what about smaller companies with more humble budgets and scarcer resources? Is automation out of their reach?
The Rise of Automation
According to Deloitte, at least 50% of tasks performed by humans are mundane, manual, labour-intensive, and therefore ripe for automation. Many organisations have realised this, with 66% of companies in 2020 looking to automate at least one business process, up from 57% in 2018.
But do these facts apply only to larger businesses?
Until about a decade ago, they might as well have. Previously, the high costs of automation meant that only bigger companies with large tech budgets could afford Business Process Automation (BPA) or Robotic Process Automation (RPA). However, this landscape has completely transformed, and now, smaller businesses are also adopting BPA and RPA in much larger numbers. In fact, a recent survey of SMBs reiterates this trend with some solid findings:
- 80% of SMBs believe that automation is important to their survival
- 75% say they are more reliant on workflow technologies now compared to pre-COVID
- 82% say digitizing paperwork is a key business imperative
RPA and BPA technologies have advanced to a great extent, and are now easier to use and deploy, and at much lower costs than before. As a result, they’re now much more mainstream, and all kinds of organisations are adopting them at a fast rate. This includes larger companies, as well as SMBs.
Automation After COVID in SMBs
In 2019, the global RPA market was worth $1.4 billion. In 2020, it grew by 12% to $1.6 billion. In 2021, it’s expected to grow by an even greater margin, and hit nearly $2 billion. By 2028, RPA will be worth a whopping $13.74 billion.
COVID-19 is one big reason for this massive pivot towards RPA. Since early 2020, the pandemic has disrupted business activities around the world, resulting in revenue losses, and creating a need to reduce costs and streamline processes. Automation is the natural solution for both challenges. RPA enables cost-conscious organisations to replace manual labour with automation in order to speed up processes, improve output quality, and as Gartner says, “empower critical business processes through resilience and scalability”.
SMBs in particular have been badly affected by the pandemic. With declines in customer demand, disrupted supply chains, and fewer resources to weather the storm, many have struggled to survive, while some have had to shut shop permanently. Those who have embraced automation have fared much better than those who buried their heads in the sand.
In forward-thinking SMB organisations, the pandemic has accelerated digital transformation plans. In these companies, the need to monitor costs, cut overhead expenses, and increase human productivity has increased the demand for RPA solutions. By leveraging RPA, these SMBs have automated repetitive, rules-based processes across various functional areas to augment available capacity, increase throughput, reduce time-to-market, and get more value out of every dollar, Euro, pound or yen. In short, the pandemic has imposed a lot of operational pain on SMBs, but many have found the right antidote – automation.
SMBs Can Expect an Increasing ROI from RPA in Future
Digital robots always follow rules, never make mistakes, complete things much faster, and work 24/7. Large RPA deployments of 500 or more bots have saved companies upwards of $150 million annually. So, when it comes to the million dollar question, is automation cost-effective for SMBs, there’s no reason why smaller deployments cannot save SMBs a substantial amount of money, while also yielding a healthy ROI. In fact, according to Deloitte, companies should “think big, start small”. And SMBs are perfectly placed to put such a philosophy into action right away.
In a 2018 survey, Deloitte found that most organisations experienced the benefits of RPA –reduced transactional costs, increased productivity, faster turnaround times, improved quality, and even improved compliance – within an attractive payback period of less than a year.
Another key benefit of RPA is that it effortlessly takes over the repetitive, mundane tasks that human workers find boring and even de-motivating. Human skills are still required where tasks require higher cognitive ability, flexibility, emotional intelligence, and creativity. Thus, with robots, organisations have the flexibility to add a significant amount to their FTE capacity, while also successfully repurposing their human workforce to complete more value-adding, mission-critical tasks. This leads to more satisfied, more engaged employees who can make more meaningful contributions to the organisation.
Worries about RPA cost, especially among SMBs, are mainly unfounded. Back in 2016, the cost of deploying a single bot was somewhere between $5,000 to $15,000. Today, RPA solutions – many designed specifically for SMBs – are available that cost as little as $90 per user per month. Some providers even offer free trials, so SMBs can evaluate the solution before making an investment.
Put all these benefits together, and the question: is automation cost-effective for SMBs is almost moot.
What Next for SMBs and Automation?
In the post-pandemic world, many SMB leaders are optimistic about the future of their organisations. Many also believe that they will successfully return to pre-pandemic operations. Digital transformation and automation will play a big role in realising these expectations.
On the other hand, SMBs who continue to be wary of automation will struggle to keep going in an incredibly dynamic post-COVID landscape. They will struggle even more if they’re already grappling with inefficient processes, human errors, or high costs. To avoid this fate, they must stop wondering “if we should adopt automation”, and start thinking about “when and how can we adopt automation?”
Fortunately, the technological landscape is already conducive to digital transformation and RPA. As its advantages become clearer, and as deployment costs fall, SMBs are well-placed to implement RPA, and experience a massive transformation in business results in a very short time.
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