With CIOs facing sudden and significant pressure to lower costs within their own departments and those they support, smart leaders are looking to transform investments in IT automation from productivity boosters to cost-savings engines.
Early adopters have found that intelligent automation is capable of generating significant value and profit improvement by eliminating manual tasks, reducing operational costs, decreasing downtime and more—but only when implemented thoughtfully and strategically.
In fact, Bain’s Automation Scorecard reports that the top quartile of organizations prioritizing automation investments were able to cut costs by an average of 37 percent. On the other hand, organizations investing five percent or less of their IT budgets in automation could only manage to cut costs by eight percent.
“The question is, why wouldn’t you automate?” asked Richard Henshall, head of product management for Ansible at Red Hat. By focusing on internal areas, companies can further enhance overall efficiency, reduce risks and free up employees for more strategic work.
How can IT automation specifically lower direct and indirect costs across the enterprise? Here’s a look at some of the biggest benefits and impact in terms of cost reduction, efficiency and competitive advantage.
Reduction in Manual Interventions
Reducing manual interventions requires automating processes, collaborating with business leaders across the enterprise and looking at ways to cut down the need for repetitive or time-consuming tasks both in IT and other business areas that significantly impact IT.
While optimizing business processes is beneficial, it often comes with the caveat of potential negative impacts if the technology is not implemented correctly.
Simply automating a flawed or bad process will not optimize productivity or savings, Henshall warned. The technology is there to facilitate changes in behavior and the way things work. Streamlining a process means making it more efficient and effective by identifying and eliminating unnecessary steps, redundancies as well as manual tasks. Bain refers to this process as “zero-based redesign.”
Other manual areas within IT that are ripe for automation include onboarding new hires, which typically includes provisioning devices, configuring software, granting permissions and establishing communication channels. Areas where costs compound—such as onboarding new employees which may happen hundreds of times per year—and automating day-to-day operations generally offer the greatest savings potential.
IT can also achieve cost savings by looking across the enterprise for opportunities to streamline operations that are formulaic in nature and have a lot of manual work, such as accounts payable and accounts receivable, noted Joseph Macaluso, director of Strategy and Performance Solutions for Eagle Hill Consulting. In his experience, automating processes in these areas can reduce costs by as much as 20 percent to 30 percent.
“Cost savings has a ripple effect,” Macaluso said. What is holding back organizations is that automation efforts cannot be driven by IT alone; they need to be driven within the business, so collaboration is vital.
Improvement in Speed, Reliability and Uptime
Today’s tech operations are under constant pressure to deliver continuous, always-on digital services. To that end, automation significantly improves performance, reliability and scalability and reduces manual errors by automating repetitive tasks and leveraging tools for real-time monitoring.
Automating tests can also help your team identify and fix issues before they cause a major outage, keeping your business operations and systems running smoothly. According to recent research, the average cost of downtime is $9,000 per minute for large organizations, not including potential fines or penalties. Suffice to say, that investments in technologies that monitor the cause of service disruptions and help staff intervene effectively, are capable of delivering significant savings and ROI.
Enhanced Security and Risk Reduction
Automating threat detection and response improves response time, enhances security and helps with compliance management and proactive risk mitigation. Automated systems can track security activities, streamline the auditing process and even send alerts about potential compliance violations.
The more you can automate tasks that increase risk, like logons, the more you can improve security and efficiency, Henshall noted. Without automation, tracking tasks that increase downstream risk is very labor intensive.
Reductions in Operational Overhead and Ticket Volume
Automating IT operations including tasks like ticket routing, prioritization and initial resolution can translate into a reduction in IT service costs of up to 30 percent according to McKinsey.
Macaluso agrees. There is lost time in deciding who is the best person that needs to answer this, or where an issue should be handled, he said. Just leveraging the interpretation that comes with AI assisted workflow automation, can get issues in the hands of the right people faster.
Opportunities to Gain a Competitive Advantage
Most importantly, experts say that the biggest financial benefit from deploying intelligent automation in IT, and across the enterprise, is not reducing headcount but maximizing the productivity and efficiency of existing resources.
By automating repetitive tasks and leveraging advanced IT automation tools as a job aid, organizations can free up IT staff to focus on more strategic initiatives and avoid lost business opportunities.
“Automating IT is not going to replace folks; it’s going to augment and enhance them,” Macaluso said. Most companies are probably realizing some soft cost savings already. The hard cost savings are out there, but it is going to take time and work to get them.
