The human and automation dynamic

The December 2017 edition of Manufacturing & Logistics IT features a Special Technology Report on Big Data Analytics, an area of technology that is playing an increasingly important role within digital transformation.

And seeing as digital transformation is such a current hot talking point, I thought it would be timely also to consider the current journey of another aspect of this concept; that of intelligent automation. According to Gartner, intelligent automation can be considered as an overarching term representing a number of strategies, skills, tools and techniques some service providers use to remove the need for labour, and increase the predictability and reliability of services while reducing the cost of delivery.

Gartner believes intelligent automation will transform workplace outsourcing; therefore, it maintains that sourcing and vendor management leaders must prepare to restructure the services and renegotiate contracts to leverage intelligent automation.

DD Mishra, Gartner research director, said intelligent automation will alter the provision of managed workplace services over the next few years, increasing service quality at a lower price. “Automation-driven improvements in service delivery and pricing will allow sourcing and vendor management leaders to select a wide range of moving managed workplace services (MWS) outcomes that will improve quality and cost simultaneously,” he said.

Gartner states that moving MWS functions from ones that are solely resourced by humans to functions that have a mix of humans and intelligent automation services (IAS) will create benefits in both pricing and service quality. It adds, however, that the replacement of human labour by such mixed services can only occur if the automated services offer a cost reduction for the service provider. Many service providers recognize that they cannot continue to resource MWS by simply adding more service heads and thus are investing heavily in IAS for this reason.

As IAS provision becomes part of MWS, Gartner believes providers will pass on part of the resultant cost savings to clients in an attempt to win business. For services such as service desks, intelligent automation tools can be up to 65% less expensive than offshore-based staff. Up to 2021, Gartner expects the cost of commodity services to decline by 15% to 25% annually, as they move towards this price point.

Ongoing reductions in outsourced headcount due to intelligent automation will eventually force sourcing and vendor management leaders to redesign the workplace services for their organisations' users, states Gartner. This, it says, will result a corresponding drop in the numbers of staff required on the service desk, so that when 70% of the workload is dealt with by IAS, only 30% of the staff will remain. Gartner believes that, eventually, the potential for vendor lock-in, driven by a dependency on new tools and the IP they create, will require sourcing and vendor management leaders to incorporate new risk management provisions in MWS contracts.

Intelligent automation services continue to be an ongoing and fast-moving area of development within the digital transformation landscape. However, it should be said that the more traditional IT solutions within manufacturing and logistics sphere also continue to evolve and adapt to modern users’ business and operational requirements. This is very much evidenced by some of the areas of development referenced within Manufacturing & Logistics IT’s Special Technology Report round-up; looking at ERP, Demand Forecasting/Planning/S&OP and Warehouse Management/Voice Picking. One thing’s for sure, in today’s world technology can never stand still. Of course, neither can time – and as we fast approach the festive period, I would like to take this opportunity on behalf of all of us at Manufacturing & Logistics IT to wish you a very Happy Christmas and a healthy and prosperous New Year.