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The Top Disadvantages of Business Process Automation

the top disadvantages of business process automation

Ever since the Great Recession, businesses across the country have looked for new ways to decrease operating expenses by cutting back on labor costs.

Though the economy vastly improved until the coronavirus crisis, this pattern has not changed. Developments in technology and an increasingly competitive landscape has caused millions of small to medium-sized companies to seek new ways to save money.

One steadfast and common solution includes employing automated processes replace manual tasks. Automating tasks allows businesses to trim down their labor-intensive activities and increase operational efficiency. Though many organizations have survived the recession and went on to thrive due to automation, the disadvantages of replacing man with a machine cannot be ignored.

Disadvantages of Automation Business Processes

Automation is associated with an increase in productivity, better project management, increased output, and a more efficient allocation of resources. An additional benefit to automation is the decrease in potential for human error, which is particularly critical when managing contracts, performing payroll, and ensuring the quality of deliverables.

Despite all of the benefits of automation, several organizations have resisted making the switch due to concerns about worker displacement and the high cost of investing in these tools. Furthermore, some don't see the purpose of automating manual processes when everyone is meeting key performance indicators by using them.

Other disadvantages of automating business processes include-

1. Worker Displacement

Automation and worker displacement have become important topics in the national conversation. With the rise of globalization and advancements in technology, many companies have switched to automation to remain competitive.

As a result, millions of jobs have been lost to automation. Here are some sobering statistics on automation and worker displacement-

  • In roughly 50% of occupations, at least 1/3 of the related activities can be automated.
  • By 2030, 20 million manufacturing jobs will be gone due to automation
  • Roughly 8.5% of the global manufacturing force will be replaced by robots by 2030.
  • More than 25% of jobs in the United States are experiencing disruption due to automation.
  • Manufacturing and factory positions have been most affected by automation. Others at risk include customer service jobs, fast food jobs, delivery services, research, and data entry, and service-industry related jobs.
Although there is the potential to retrain displaced employees for other roles, any person who is substituted for a machine experiences hardship.

Some workers make sure to only operate one piece of machinery or perform one type of job. To start over and begin from scratch in a new role can be overwhelming for even the most resilient individuals.

2. High Cost to Invest in Automation

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Investing in automation and spending money to maintain/operate the technology can be expensive. This is particularly true for small businesses with limited resources and a shortage of labor.

An automated system may cost thousands to millions of dollars to outline, build, and install. Some automated tools necessitate more maintenance than traditional machinery. As a result, small manufacturing companies may be hesitant to invest in an automated solution when they already have machinery that works.

Fortunately, there are less expensive automation tools that can be used in place of manual processes. Many small businesses have automated a few activities by using low-cost and intuitive systems. Social media marketing tools, customer service tools, employee scheduling systems, and other solutions usually come at a minimal cost.

3. Limited Capacity of Machines

Though machinery is less prone to human error for some processes, there is a downside to using technology in place of a person. A person can think critically, respond more flexibly to situations, and use creativity to solve problems. A machine is limited by pre-programmed inputs and is less able to solve complex situations.

For example, very few people rely only on Spell Check to proofread their typed because Spell Check doesn't understand nuance, out-of-the-ordinary language, or context.

As a result, many people read through their documents in addition to using Spell Check. Employers may hesitate to implement automation for similar reasons. They worry that a kiosk may cause backups or angry customers due to preprogrammed limitations.

4. Security Concerns

In a data-driven world, businesses are harnessing valuable information to attract new customers, increase sales, and improve productivity.

Unfortunately, automated tools that manage large quantities of customer/company data are susceptible to hackers. Though ample security protection mechanisms can be put in place to prevent fraud, many small businesses don't want to risk data theft.

On the other hand, managing thousands of paper documents, receipts, and transactions is just as susceptible to theft and fraud. Businesses are forced to rely on locks and security measures to protect valuable records and financial information.

Paper-based records can easily be misused by an unauthorized individual in the workplace. Automated computer systems put more protections in place to prevent fraud. For example, a biometric time clock requires an individual's fingerprint to verify identity before that person can clock in/out.

Key Takeaways

In conclusion, here are the key disadvantages of business process automation-

  • Though automation increases productivity, efficiency, and the bottom line, there are some disadvantages when replacing manual processes.
  • Worker displacement job loss as a reult of automation process management has been one of the biggest concerns. Potential job creation from automation can make up for some of this loss over time.
  • The high cost to invest in automation prevents some small businesses from implementing it in the workplace. The cost benefits can make up for much of the initial investment and maintenance costs.
  • Machines are less able to think creatively and understand complexities/nuances. For this reason, some businesses have resisted automating manual processes.
  • Computer systems hold valuable customer data. Organizations are concerned with ensuring proper security to prevent hacking, though paper-based documents are also susceptible to theft/fraud.