What is Business Automation?
What is Business Automation?

What is Business Automation?

Business automation, also known as corporate automation or business process automation, is the application of technology to automate repeatable, recurring tasks or processes that would otherwise be carried out manually.

Business automation can lead to a variety of benefits for your organization, and has been the subject of a sizable number of studies and surveys.

McKinsey conducted a second global survey on organizations that successfully automate business processes.

  • Two years prior, their first survey found that making business-process automation a strategic priority was conducive to success beyond the piloting stage.
  • The new survey found that prioritizing automation has become even more important to enable success.
  • Successful organizations continue to focus on employees as much as technology. They have introduced new ways to do so, where employees work alongside new technologies.
  • Rethinking operating models has emerged as a new directive.
  • More companies are pursuing automation now than two years ago.
  • Two-thirds of those surveyed say that their organizations are at least piloting the automation of business processes in one or more business units or functions. This is up from 57% percent in the previous survey.

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The evolution of business automation

Automation dates back thousands of years. In fact, according to Inverse and their article “How Automatons Helped Predict the Future of Robotics”, The Greeks were heavy into the concepts of automatons. As far back as 420 BCE, Greek engineers developed rudimentary automatons propelled by compressed air, steam, and hydraulics.

The great mathematician and engineer Hero of Alexandria is said to have created “…machines able to perform basic functions (such as opening gates) or decorative objects like clocks or mechanized dioramas.” Not really what you think of when you look at the software and technology available to us today.

Skip forward to 1819, when the mathematician  Charles Babbage created a giant, steam-powered calculator. He then teamed up with Ada Lovelace (now regarded as the first computer programmer) to develop the Analytical Engine. The Analytical Engine is regarded as being the first functional computer language – and, perhaps, the first predecessor to artificial intelligence.

In the 1970s, material requirements planning (MRP) systems were created to increase productivity. They ensured raw materials were available for production and products for customers, maintained the lowest material and product levels needed, and planned manufacturing and purchasing activities and delivery schedules. In the 1980s, MRP II systems were created to optimize manufacturing processes.

These led to Enterprise Resource Planning (ERP) systems, a term coined by Gartner in 1990. As they define it, “ERP applications automate and support a range of administrative and operational business processes across multiple industries, including line of business, customer-facing, administrative and the asset management aspects of an enterprise. ERP deployments are complex and expensive endeavors, and some organizations struggle to define the business benefits.”

Sticking to terms coined by Gartner, in the early 2000s (as technology advanced), Gartner coined the term “Business Process Management Suite” (BPMS)  to describe software applications that could handle processes. In 2012, Gartner coined “Intelligent Business Process Management” (iBPM). As they describe, “iBPMSs have added enhanced support for human collaboration such as integration with social media, mobile-enabled process tasks, streaming analytics and real-time decision management.”

Finally, Digital Process Automation (DPA) technologies include business process management, robotic process automation (RPA), low-code application and integration platforms.

Four types of business automation:

Marketing automation

What does marketing automation entail? It’s the process of using technology and software to automate repetitive marketing tasks. It’s also implementing technology and tools to market more effectively across multiple channels. This includes email marketing, advertising campaigns, and social media marketing, among others.

75% of marketers use at least one marketing automation tool already, and it makes sense when you look at the market size.  According to a study by Statista that examined marketing automation technology revenue worldwide between 2017 and 2023, the entire global marketing automation market size is expected to reach a whopping 25.1 billion U.S. dollars by the end of 2023. Advertising automation alone can save businesses $130,000 each year in costs.

Human Resources (HR) automation

Similarly, Human Resources automation uses software to digitize and automate HR-related tasks, especially time-consuming, repetitive ones such as employee onboarding, timekeeping and payroll. This enhances efficiency and productivity, freeing up time for the HR department to focus on more complex tasks such as decision making or planning and implementing strategy. Naturally, this in turn lowers the capacity for human error (mitigating risk) and reduces costs spent on manual HR processing.

Accounting and finance automation

Automating the accounting process means applying software to automate tasks related to finance and accounting departments. This can include processes such as accounts reconciliation, creating financial statements, and updating financial records. Again, automating these tasks so there is minimal human intervention results in lower costs and greater efficiency overall.

Accounting and finance automation leads to better data integrity by lowering the potential for human error. It leads to speedier approvals (as these can sometimes take longer when they go to management and get bottlenecked) as well as speedier customer payments. Automation also allows for greater visibility and transparency, providing your organization with greater insight internally to see what is and isn’t working with your data.

According to Robert Half, a recruitment agency, there are several main duties and tasks that will be affected by accounting automation. These include:

  • Routine tasks

Number-crunching, and any other job that involves algorithms, such as calculating depreciation, can be automated by robotic process automation (RPA) tools.

  • Compliance 

Accounts will need a deep understanding of compliance, but machine learning (ML) can help improve the effectiveness of automated controls. With both automation and aware accountants, you should be able to avoid any costly compliance breaches.

  • Customer interaction

In terms of person-to-person interaction, automation can’t replace humans – but natural language processing (NLP) can aid in automating some of these scenarios through chatbots and similar tools. It can also help automate processes such as preparing contracts and documents.

  • Strategy

Strategizing requires human creativity, of course, but artificial intelligence (AI) can help with the analysis required.

Process automation

Process automation (not to be confused with workflow automation) is applying technology to automate repeatable tasks or sub-tasks. This is done by applying user-defined rules to drive business operations.

The difference between BPA and BPM

According to Forbes,

“The Workflow Management Coalition [WfMC] has been working to standardize terminology for process oriented thinking for 20 years. Business Process Management (BPM) is a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners within and beyond the enterprise boundaries.”

The WfMC has now been disbanded, as they consider their work complete.

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According to Gartner,

“Business process automation (BPA) is defined as the automation of complex business processes and functions beyond conventional data manipulation and record-keeping activities, usually through the use of advanced technologies. It focuses on ‘run the business’ as opposed to ‘count the business’ types of automation efforts and often deals with event-driven, mission-critical, core processes. BPA usually supports an enterprise’s knowledge workers in satisfying the needs of its many constituencies.”

All business process automation can be considered a form of business process management. The two share the same goal – increasing efficiency and streamlining your organization for greater productivity.

According to the 2020 State of BPM by Signavio, almost 70% of organizations implement BPM to reduce costs or improve productivity. 60% claimed they are working on one or more transformation projects. Similarly, as per the study “Business Process Management Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021-2026)” by Mordor Intelligence, the business process management market is expected to reach a value of USD 4.78 billion by 2026.

Business automation benefits

So, what does business automation really deliver? In short, some of its standout advantages include:

  • Greater transparency into your business processes and data.
  • Error reduction as it lowers the potential for human error.
  • Improved efficiency, which goes hand-in-hand with greater productivity.
  • Streamlines collaboration and relationship-building between your employees and departments, and even with outside vendors who are linked to your automation system.

Choose the right tools to implement business automation

Mitratech has a range of best-in-class automation tools to suit your organization, starting with TAP Workflow Automation and its too-many-to-count use cases for HR, legal, procurement, and other enterprise departments.

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