Intelligent automation (IA) is software-based automation that helps businesses focus on cost reduction, improvement of process speed, optimization of decision outcomes, improved process resilience, and improved quality and compliance. This is done by automating tedious and repetitive work activities like generating invoices, etc.
So, here comes the big question.
What can IA do for your business?
When talking about the agenda of business owners and CEOs, several sources are united on what should be the top three priorities. And IA has a vital role to play in all of them. The top priorities identified:
- Spotting new opportunities for growth like new business models, disruptive technologies, and new locations.
- Identifying cost-cutting technologies that also bring about improved productivity.
- Enhancement of every executives’ digital skills, including CEOs.
Intelligent automation: a better way of improving business productivity
For the best part of the last two decades, CEOs have often used initiatives for improving business productivity that focused on shared service centers (SSCs), lean programs, and enterprise resource planning (ERP) systems implementations. Those initiatives often take years to implement. They also require deep changes to the company, its processes, and its people, and the payback periods can be between two to five years.
However, IA can be deployed in months instead of years as mentioned above. The IA initiative is scalable to an infinite level and the payback periods are often less than a year.
Related read: Overcoming the Productivity Paradox With RPA
McKinsey Global Institute has already indicated that the artificial intelligence (AI) adoption rate is proving to be a serious differentiator among competitors. Those that adopted the technology early enough experienced higher margins of profit—about an average of more than 10-15% compared to those lagging. Also, their expected free cash flows are positioned to accelerate faster.
A report by Statista shows that 84% of companies embrace AI because of the competitive edge it provides over other competitors.
Creating new business strategies using intelligent automation
There are two recent business concepts built on an IA base that are having a powerful impact—I’ll be discussing both in this blog post:
- New digital business building
- Ecosystems of data
Both concepts demonstrate how you can create new business strategies using IA.
Building new digital businesses
Companies like energy providers, telecommunications, insurance organizations, and banks need to digitize to be competitive against solely digital-native organizations just entering the market. Oftentimes, the best way to go about this digitization is to focus on creating a whole new digital business offshoot that is highly automated instead of trying to digitize the existing business structure.
Building a new digital business involves having a digital business based around technology in its development and the way it delivers products and services.
Through this business strategy, customer experience is elevated as customers encounter easier, cheaper, faster, and more seamless services due to the user-friendliness and accessibility of the digital business.
In some cases, the business ends up having a new core in the form of the new digital business. A good example is the case of LEGO® in the toy industry. When the toy market started shrinking, LEGO began the process of building a new digital business by venturing into a LEGO social network community, video games, a LEGO design crowdsource platform, and epic movies. You must have heard of LEGO movies if you are an ardent lover of blockbuster movies. This act increased LEGO’s net profit four times more than it had raked in in 10 years. LEGO recorded €1.1 billion net profit in 2019 from the €300 million recorded in 2009.
Ecosystems of data
Ecosystems of data can be viewed as gateways that offer users access to several related services in a single interface. An ecosystem of data works as a group of actors joining hands together in shared resources and information to provide an interconnected set of services.
This saves users the headache of having to switch between related services. Why switch when you can access all services in a single interface? At the same time, this strategy lowers the costs of clients’ acquisition for partners in the data ecosystem. Take the banking sector as an example. Ecosystems of data can help save as much as 10-20% on customer-acquisition cost (CAC), according to The ecosystem playbook: Winning in a world of ecosystems.
The manifestation of ecosystems of data
One of the early movers, Ping An, has been able to demonstrate the power of ecosystems of data. Ping An, which is a China-based insurance company, created a reference ecosystem. As a result, the company expanded beyond the insurance industry into a wider group of ecosystems that include healthcare, housing, banking, and smart cities. The result of this is an increase in the number of online users to almost 500 million users and 11 new digital platforms built across several sectors. Additionally, the company was able to add to its number of insurance agents (all equipped with the digital apps and tools they will need).
Another illustration comes from the “The ecosystem playbook: Winning in a world of ecosystems” report. DBS Bank also embraced digital transformation; a transformation that includes ecosystems of data after DBS was “inspired by platform players such as Alibaba and Tencent.” For the past five years, the bank has committed SG$1 billion per year to its digital transformation. The result has been “a substantial increase in digital customers from 33% in 2015 to 48% in 2018.”