Since the Industrial Revolution, organizations have been on a mission to improve workforce productivity with operations automation. During the Industrial Revolution in the 17th century, factory owners realized that by introducing automation to the manufacturing process they could automate workers' labor-intensive manual tasks, making their operations more efficient, profitable, and safer for their employees.
In today's digital era, AI-driven process automation is expected to deliver and even exceed operational transformations and improvements comparable to those achieved during major technological advancements such as the Industrial Revolution.
In this article, we will analyze operational excellence in an AI world, discuss examples of automated processes, and provide practical advice for organizations to automate their operations.
Let's start by answering what is operational automation.
Operations automation involves automating repetitive manual operational tasks via AI-powered process automation platforms. The end goal of operations automation is to improve operational efficiency, reduce costs, and achieve a state of 'operational excellence'.
Screenshot from McKinsey's Future of Operational Excellence report
According to McKinsey's Future of Operational Excellence report, there are five core steps on the journey to operational excellence. Let's look at the steps through an AI-powered process automation lens.
Purpose: The report discusses the need for organizations to craft a strategy that is clear, actionable, and filled with purpose. For organizations to successfully implement operational automation, a robust strategy is needed. A strategy will outline the budget, resources, technology requirements, and goals for operational excellence.
Principals and behaviors: For organizations to successfully adopt operations automation a new mindset and culture are required. We view managers, technology champions, and digital advocates as essential in fostering a digital-first mindset. They play a pivotal role in driving behavioral change, promoting continuous improvement by automating tasks, and consistently refining and enhancing the value and quality of automation efforts.
5 pillars of operational excellence
Management systems: Process automation has reshaped how managers in particular work. Automating repetitive manual tasks frees up time for overburdened managers, allowing them to concentrate on higher-value activities. With data readily accessible at their fingertips, managers can work more productively, stay focused, and make decisions driven by key performance indicators—ushering in a new era of digital management systems designed for operation excellence.
Technical systems: Introducing digital platforms that streamline operational processes is the cornerstone of operational excellence. Reshaping how you use technical systems is key to eliminating wasted resources on manual repetitive tasks. A value-led approach to technical systems will help you identify processes that make a real business impact, showcase ROI, and free up time for workers to focus on more strategic tasks.
Technology: McKinsey highlights technology that enhances human capabilities to drive continuous improvement. At FlowForma, this concept is embodied by the revolutionary AI-powered innovations developed in our AI lab. These advancements include augmenting the process builder to create processes using agentic AI technology and providing step-by-step summaries to enhance visibility across each stage of a process. Both technologies are designed to accelerate process automation, drive operational excellence, and save time orchestrating critical processes.
Learn more about the transformative potential of Copilot in this introductory video here.
Automating operations is important for multiple stakeholders across a business including front-line employees, managers and directors, and partners and investors. Let's look at why it's important and the value it's bringing to all stakeholders:
Cost reduction: Cost reduction will always be a major goal of organizations and a key talking point in boardrooms across the globe. With the introduction of AI-powered process automation, organizations can drive significant productivity improvements that save time and ultimately money for the business.
Increased productivity: Productivity improvements are one of the key outcomes of automating operations. Automating repetitive manual tasks will streamline tasks into digital workflows that drive immediate productivity results.
Strategic decision-making: Organizations relying on emails, spreadsheets, or isolated data systems to manage operational information may face delays in enabling business leaders to make strategic decisions. By automating operations, business leaders can make strategic decisions based on task data happening in real-time.
Data-driven insights: Whether it's HR, finance, or IT, process automation provides real-time insights into every step of every process. This enables process owners, managers, and business leaders to identify bottlenecks, trends, and forecasts based on quality data.
Enhanced employee, customer, and partner experience: From communications to collaborations, streamlined operations with digital workflows will provide an enhanced experience for employees, customers, and partners. By streamlining every task, organizations will work better, and faster and improve the quality of interaction at all touchpoints.
AI-first organization: This past year has seen AI transform from a buzzword to an actionable and results-driven strategy. Organizations looking to drive operations automation initiatives need to tap into platforms that provide AI functionality to accelerate process builds, speed up return on investment, and ultimately achieve operational excellence.
Onboarding is a key HR activity that ensures new employees, contractors, and partners experience a smooth engagement with a company. As onboarding typically involves managing personal data, task management, and approvals, it is a process ideally suited to process automation.
However, many organizations still rely on manual onboarding processes, utilizing emails, spreadsheets, or outdated legacy systems to manage these tasks.
This self-guided demo showcases how fast and easy onboarding process automation can be when you have the right platform. In the demo, you'll see FlowForma Copilot build the skeleton framework of an onboarding process that can be tailored to your business needs.
Finance departments are involved in routine manual tasks that are business-critical. Processes such as Capital Expenditures (CAPEX), employee expenses management, and PO approval processes ensure that finance leaders can reconcile finances, ensure payment of employees and external organizations, and forecast finance performance.
Managing these processes via email, spreadsheets or legacy systems can result in mislaid data, errors, and slow payment processing. Deploying a process automation platform to automate these critical tasks has significant business benefits such as:
CAPEX: CAPEX (Capital Expenditures) focuses on the management of funds an organization uses to maintain business-critical operations such as offices, technologies, or equipment. Effective CAPEX management is essential for the smooth operation of any organization, ensuring streamlined processes and minimizing downtime. Relying on spreadsheets or outdated technologies for CAPEX management can hinder communication, increase the risk of financial inaccuracies, and slow down processes for both the organization and its suppliers. Automating the entire process improves the quality of data for all parties, streamlines communications, and ensures finance can reconcile their expenditure at any time.
Expenses: Expenses are everyday tasks that employees submit for approval from one or multiple managers. In some instances, line managers and finance managers may have to approve expenses. When expenses are submitted via email, a printed copy, or text message, this causes an administrative challenge for the finance team. Process automation simplifies expense management by capturing expense data, uploading relevant documentation, centralizing records in a unified system, and seamlessly routing tasks to the next approver in a fully automated workflow.
Purchase orders: Purchase orders are typically used by organizations to document, control, and manage the purchase of goods or services. Managing POs using spreadsheets, emails, or legacy technologies can lead to delays in the purchase of goods and services, poor visibility on spending, and poor finance forecasting.
When organizations introduce process automation to manage their PO process, they will see an immediate improvement in operational effectiveness, better communications with suppliers, and with real-time visibility on POs, be equipped to forecast finance budgets with accurate data.
Discover even more operational automation opportunities in this video.
Having the right strategy, technologies, and resources is vital to support operations automation. We recommend the following six-step strategic approach to automating your business operations.
SMART goals: Clear project goals need to be established before starting your operations automation project. We recommend applying SMART goal setting (Specific, Measurable, Achievable, Relevant, and Time-Bound). For example:
Reducing operational costs by $1M within 12 months
Improving the productivity of the HR team by 150% within 6-months
Automating 50x operations processes within 18 months
Choose the right platform: Choosing the right platform for operations automation can be the difference between the success or failure of your project. There are several frameworks you can use to shortlist technology vendors. The key features and functionality to compare vendors include:
In the era of AI-driven process automation, business operations have the opportunity to significantly boost productivity, lower operational costs, and enhance compliance.
However, a strategic approach is needed to align the people, technologies, and resources to ensure success.
Get started with an introduction to a platform such as FlowForma, where operations processes can be automated by CoPilot with a simple prompt. Register for a free trial or book a demo to learn more.