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article imageOp-Ed: Automation – CEOs love it, but there’s a Catch 22 and 23

By Paul Wallis     Jul 11, 2019 in Technology
A report by The Economist and the world’s major driver of automation, UIPath, has found that CEOs and other C level people love automation. Other surveys tell a very different story of its impact.
Information provided by various sources does generally agree that it’s the top levels of business which are pushing automation, hard and fast. Automation is directly linked to strategic goals and revenue. In short, senior executive around the world are making major commitments to automation as the way forward across a very broad spectrum of major corporations. It’s coming, whether anyone else likes it or not.
The reasons for this enthusiastic support are pretty basic:
• Increased competitive capabilities: There is obviously a view that failure to automate will put businesses at a disadvantage.
• Increased productivity: This is the “Amazon equation”, upscaling automation to improve the business processes across the board.
• Efficient marketing: The efficiencies are basically referring to the entire supply chain including online sales, etc.
• New sources of revenue: This may mean diversification or it may mean revenue from better cost bases, or both.
Hence the gigantic amounts of money which are flowing into automation, from DIY checkouts to drones delivering goods and everything in between.
This level of commitment is pretty unambiguous on all levels. Automation is creating a palette for CEOs to work with, and it’s also covering the risks of failure to change to meet business competitive demands.
When change manages itself…The Catch 22
Digital transformation, managing change, and adapting to a very fluid global business environment have made automation a natural priority. The overall strategy and goals of automation seem pretty straightforward, at first glance.
It’s definitely not going to be that simple. In any kind of tech, there is a built-in Catch 22:
• Automation locks in a tech cycle everyone knows all too well. Current generation tech is replaced by more advanced tech. On the scale of the introduction of automation, that is likely to be a very complex, expensive cycle.
• Current automation will be truly obsolete by the time artificial intelligence becomes the working machinery of business. There’s no specific time frame involved. It could happen tomorrow or 10 years from now. A.I. based automation will be far more efficient.
• Current advantages will, therefore, become future short term advantages or actual liabilities. The competitive edge of the present forms of automation will evaporate, and this old tech will become a liability. That could leave businesses holding expensive, uncompetitive equipment and a supply chain which can’t compete.
• Simply replacing automation systems will definitely not be the whole story, either. The likelihood is that like so many forms of technology, automated systems will evolve and diversify, probably pretty quickly. That gives businesses more opportunities, perhaps, but it also creates a much longer shopping list.
• There will be casualties from this cycle. Many of the gung-ho tech companies of the past, and the present, have hit this Catch 22 and simply not survived. They took the top-tech approach, and missed the market realities completely.
• The kind of capital required for maintaining an automation advantage is huge. New technologies are always more expensive, often bug-ridden, and require some time to come onstream. Some simply don’t deliver, others turn out to be much less valuable than their costs.
The Catch 22 is that automation is an obvious asset, but also an instantly predictable liability and risk from the moment it’s introduced.
Sorry (to a point) for the generalizations, but “automation” is such a vast range of issues that it’s necessary to stick to a clear, if too general, narrative. The obvious narrative here is that the automation story is as much about the future directions automation is likely to take as any current issues.
Technologies, like businesses, do not exist in some pristine state where everything goes with the flow chart. That simply does not happen, and never has, particularly since the Digital Revolution, nearly 40 years ago, which was the last time a massive surge of technology went down to ground level for the entire world.
A lot of predictions came true, to various degrees, but let’s face it – Nobody anticipated the scale and scope of the vast tides of new unheard-of issues that came with digital tech. Technological prophecies may be noble, etc., but it’s rarely right on the balance sheets.
Robotics, the speciality of UIPath, is a good example. Just search robotics research news, and you’ll see a whole universe of issues, every day. The benefits are obvious, the innovations sometimes spectacular. Now try translating this menagerie of tech into a profitable working business model. The rates of change will accelerate, in multiple directions.
Winning a lottery is a much safer, and much more painless, bet. Even the most competent predictions of digital tech didn’t really come close. Add A.I. and robotics, and it’s a guess at best.
A counter-automation revolution? Not really, but…
Surveys by Pew and others indicate a strong distrust of the effects of automation on employment, professions, customer satisfaction, and other rather basic issues.
The distrust is well-founded:
1. While most senior executives claimed, for some reason, that automation would free people from mundane repetitive tasks, exactly how (and even why) that happens is very unclear. If a robot takes your job, does that instantly qualify you for a fabulous new job? Of course not.
2. Automated systems are machines. They break down. They don’t work properly. They have software bugs. They can cause real problems in many different scenarios, from infrastructure to basic business systems operations. Everybody has experienced these problems in some form.
Catch 23
Against this, people do actually like the tech they use themselves. Nobody’s suggesting the banning of the mobile phone or even the two-dimensional alleged people who can’t seem to live for a second without one.
The Catch 23 is that people will accept even things they distrust or even hate intensely, if there’s a clear value to them. To achieve that, you have to prove the value, while introducing something they already hate.
For the No-Brainers R Us brigade – if the numbers don’t make sense, the tech won’t make sense. Cost, market impacts, and real business will make the decisions for you. Be as superficially enthusiastic as you like, but keep an eye on the hard money situation, because that’s going to define the realities of automation.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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