How Startups Should Consider Whether to Automate Business Processes

August 10, 2015

9:00 am

No matter how tech-savvy they are, entrepreneurs often agonize when deciding whether to automate.

Automation has a great track record, but it is sometimes perceived as risky because of a couple common misperceptions. However, when all factors are considered, the benefits of automation far outweigh the risks.

Here are the important things you should consider to help you decide whether to automate business processes:

Money matters

The first concern is money. Entrepreneurs often fear that the money they invest in automation won’t pay off in the long run, and they think they’re better off using their funds elsewhere. Automation can be expensive in the short run, but its long-term return on investment is exceptional. By eliminating human error, decreasing reliance on manual systems and limiting operational costs, automation offers tangible benefits.

Cisco Systems, for example, saved more than $270 million through automation. On a smaller scale, Pebble Limited Partnership has saved more than $8,000 on basic paper supplies each year by automating its invoices.

When given time to work its magic, automation has clear financial benefits. But money isn’t the only thing entrepreneurs worry about.

Remaining relevant

Entrepreneurs often fear that new, more advanced technology will come along and make their automation systems irrelevant. Some would rather sit on their hands and wait for the ultimate tool to emerge. The fact is that any automation system is better than no automation system.

That’s not to say you should automate too soon before you truly understand your pain points and conduct thorough testing. Not every business process can or should be automated; some definitely require a human touch.

Is automation right for you?

When considering automation, entrepreneurs should perform a SWOT — strengths, weaknesses, opportunities, and threats — analysis to look at the big picture. Ask yourself these four questions:

1. Will automation increase my productivity?

The most obvious factor entrepreneurs should consider is whether automation will increase productivity. Don’t waste money by automating processes that are already productive.

2. Will automation give my company a competitive edge?

Automating certain processes often is necessary to stay competitive. If your competition is successfully automating, you might want to follow suit. Also look for ways to get an advantage by automating a process that no one else is automating.

3. Do I truly understand the processes I want to automate?

Know your processes inside and out before deciding whether to automate them. Without this in-depth knowledge, you could be creating inefficiencies though automation — the exact opposite of your goal.

4. Have I explored every option?

If you decide to automate, make sure you’re aware of your options. A low-cost automation tool will work for some simple processes, while complicated, in-depth processes require larger investments.

Automation is a companywide effort; you need to discuss this decision with your staff. By doing this, you’ll gain valuable insight and make sure you firmly grasp the ins and outs of every process you want to automate.

In the end, automation can help you increase efficiency, spend less time on tedious tasks and reduce operational costs. Time is money — especially for young companies that are trying to quickly gain market share.

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Sathvik Tantry is the co-founder of FormSwift, a San Francisco-based SaaS platform that helps organizations go paperless. FormSwift’s tools allow businesses and individuals to create, edit, sign and collaborate on documents and workflows in the cloud, eliminating unnecessary printing, faxing and snail mail.

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