The Covid-19 pandemic has forever altered our world. And the changes to businesses are dramatic. We’ve seen New Zealand’s economy shut down for more than a month as we fight to gain the upper hand over this virus. I’ve been pondering ‘How can automation support businesses, accelerate our recovery – and provide more resilience to handle future events like this?
Written by Garry Green, this is the 2nd article in a 3-part content series. Part one addressed the growth in the global RPA market, followed by this article which explores how automation will support businesses through the coming challenges associated with Covid-19 and the impending recession. Part 3 will address what to focus on to create immediate business value and build the foundations for a scalable programme.
With a proportion of the New Zealand workforce currently working remotely, the opportunity is for companies to look at how they can orchestrate services across people, AI, automation and bots, to provide efficient, seamless delivery to customers. Those who have already embraced automation have been able to weather the storm better than others and have a head start in competing in a very challenging environment and getting through this recession.
Here at Quanton we’re seeing our clients across financial services, insurance, utilities, health, and primary industry continue with their automation plans – and with their businesses, because the robots can continue to work.
There are plenty of opportunities to leverage the dispersed workforce integrated with automation and smart technologies to enable Kiwi businesses to get back on their feet quicker and emerge from the recession stronger and more competitive.
Right now, many companies are just worried about how they’re going to survive the next two or three months, and then weather a recession. For virtually all companies cost control is going to be a massive focus in the coming months, if not years. Businesses need to be able to compete in a very challenging environment and that will require a mix of automation and people if they are to survive and come out of the other side
Automation can enable many service sector businesses to keep the same headcount while doing more – enabling staff to perform higher value work. Repetitive tasks, across areas including finance, accounts payable, HR, IT and service desks, procurement and operations, can be rapidly automated providing cost savings and releasing capacity to handle more complex customer centric tasks. Equally automation can be leveraged to handle peaks of activity, new service demands and backlogs that we are seeing in government and banking.
New Zealand’s productivity has traditionally been poor. According to a New Zealand Productivity Commission 2019 report, New Zealand’s productivity growth has slowed, with the average annual labour productivity being 1.0% between 2008 and 2018 and below the long-running average of 1.4% since 1996.
To view productivity in a global context, New Zealand’s GDP per capita is below the top half of all countries measured by the Organisation for Economic Co-operation and Development (OECD). According to the report our productivity is similar to countries like Mexico, Greece and Portugal.
New Zealand is one of a small number of OECD countries with both a low level of labour productivity and a low level of productivity growth. The services sector represents 67% of New Zealand’s total economy, so getting productivity up for businesses in this sector was critical before. Now moving forward, it will be absolutely essential for national prosperity in the post-Covid world.
There have been many blocks to productivity, including human capital, management practices, investment in technology and access to capital. Given the accelerating pace of change we are in real danger of slipping further behind.
In the primary health sector, as result of the Covid crisis we’ve seen dramatic changes in the delivery of services, with the rapid adoption of tele and videohealth and new operating practices.
The sector was facing a looming crisis with 50% of GPs retiring in the next 10 years, resistance to change, acceptance of new technology, existing funding models and low productivity. Virtually overnight, the way they operate has become more efficient and their productivity has increased – with the potential to improve even more with wider adoption of automation and artificial intelligence augmentation technologies.
The health sector has been on an automation journey, with many District Health Boards starting to leverage automation to support their clinical and back office services. The rapid automation of one small process for one DHB returned over 3,300 hours back to their staff, the equivalent of over one-and-a-half full-time-equivalent (FTE) staff members. And, in a more recent example a primary health practice freed up the equivalent of nearly five working weeks of an FTE’s time.
This is going to be an important consideration going forward. How can you ensure that your business has resilience, can handle future shocks and still continue to operate? Are you prepared for another pandemic or disruptive crisis, when the next one unfold?
Robots do not get sick. They don’t stop production and can continue in a pandemic.
Automation should be part of any business’s tool kit going forward as well as greater use of remote working and a dispersed workforce.
This week Telecoms giant Optus has said that it will make Covid work-at-home measures a permanent feature of its call centre operations. The increased use of remote working and automation will require revised operating models and utilisation of tools, such as service orchestration, to ensure optimal resource mix, visibility of work and productivity.
While cost will be a key focus, so too will levels of service, particularly as businesses move rapidly to deliver their offerings and services in new ways.
While businesses will see service demand in some areas decrease, there will also be increased demand in others, requiring businesses to balance the workforce across the business.
The banking industry is one sector which adopted automation early and is seeing the benefits. They’ve been able to deal with the spikes of activity seen in recent months. But there are some areas still causing blockages and needing to be addressed. Much of this is around more complex tasks requiring people to interact and work through scenarios with customers – and there is the potential for more staff to be freed up to do just that through wider use of automation and intelligent decisioning technologies to deal with the majority of customer interactions and work processing.
For years now, many businesses have been outsourcing work to the likes of the Philippines and India. But in the wake of Covid-19 there’s a real question mark on the impact of that outsourcing on a company’s resilience, particularly with many other countries facing longer lockdowns, poor infrastructure outside of cities, or drawn out economic issues.
There is an opportunity to bring some of those processes back to Kiwi shores and utilise local talent and automation to provide the service in a manner that is more effective and efficient than current offshore models.
This could provide some much-needed economic stimulus to the New Zealand regions hit by the collapse of international tourism.
There is a real opportunity for a win-win here if companies, including telcos and insurance companies, can repatriate work back to New Zealand, boosting the local economy. There are contractual and commercial issues that would need to be worked through, but Optus in Australia appear to be positioning to move away from the offshore call centre model.
The impact of Covid-19 has been unprecedented and economically devastating but has also provided a springboard platform for change and removed many blocks that previously existed. We have many challenges to overcome but also many opportunities to grasp in the post Covid world.
These are all topics I would like to explore further in an informal cross-sector think tank taking place on May 6th. The aim of this think tank is to articulate the key challenges that will be faced by businesses in the post-Covid business environment and identify potential strategies and solutions that we can share with the wider business community.
If you are interested in participating please reach out to me.