Forrester: Automation could lead to another jobless recovery

Forrester: Automation could lead to another jobless recovery

Organizations will be looking to lower their exposure to future business disruption that comes from having humans executing most processes and functions, according to a new report.

As the world slowly comes to terms with the COVID-19 pandemic and begins to reopen for business, the adoption of automation and autonomous technologies by businesses and manufacturers is expected to accelerate as companies look for ways to protect their organizations from future pandemics and other predictable “Gray Swan” events that are extremely rare but still likely to occur, according to a new report from Forrester.

The report, “The COVID-19 Crisis Will Accelerate Enterprise Automation Plans,” companies will be looking to lower their exposure to future business disruption that comes from having humans executing most processes and functions within the organization.

“Enterprises across the world are watching as large segments of their human workforce and human-driven value chains are suspended,” the report said. “As we emerge from the crisis, firms will look to automation as a way to mitigate the risks that future crises pose to the supply and productivity of human workers. They will invest more in cognitive capabilities and applied AI, industrial robotics, service robots, and robotic process automation (RPA).”

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These predictions are based on past events, according to Forrester. Recessions are often followed by waves of automation that can lead to “jobless recoveries,” the report said. Following recessions in the 1970s and early 1980s, jobs came back within months. But, the after the next three recessions, between 1991 and 2009, it took up to two years for jobs to return. This was caused, at least in part, by investments in automation. 

“The aftermath of COVID-19 will be no different,” the report said. “The impact of jobless recoveries via increased automation will deepen the automation trends that were already in progress pre-pandemic. Routine jobs with a cognitive (i.e., nonmanual) aspect will continue to bear the highest risk as the automation water level rises. These include sales, administration, and support jobs that were already under pressure.”

While the trend toward automating business processes and workflows has been well-established for many years, how quickly these efforts can be ramped up post-COVID-19 is uncertain. Automation technologies are still relatively new enough that people with the skills needed to integrate them into existing business processes are hard to find. 

“Most companies do not have the resources to do this in-house,” Leslie Joseph, a Forrester principal analyst and the report’s lead author, said. “Pre-COVID-19 automation efforts were often stalled because of automation sprawl, because different parts of a company experimented with automation in isolation, with disparate standards, which failed to attain scale. However, with automation becoming a top-down boardroom initiative, we expect greater stewardship and oversight of a firm’s automation efforts.”

Automation was already a growing business opportunity for systems integrators (SIs), so Joseph expects these firms will be looking to leverage this expertise to gain new business post-COVID-19. 

“[A]utomation is a very big motion within most of the large SI’s and consulting firms, who are aggressively upskilling their manpower,” he said. “In fact, many SI’s with large automation practices began with aggressively applying automation to their own internal delivery and back-office function, at significant scale.”

Another caveat that may lead to fewer job losses is the expectation that large-scale automation of business processes and routine, repetitive tasks will not necessarily lead to large-scale job replacement. 

“Automation is not just like any standard technology implementation,” he said. “It requires significant participation and support from the existing workforce. Successful automation leaders will bring their people along on the journey. This will include elements of reskilling of people whose jobs are sidelined by bots, to bring them back into helping run and manage the automation program itself.”

Over the next year, Joseph anticipates significant uptick in interest in chatbots and RPA technologies. In the medium-term, companies will look to adopt automation technologies with faster payback cycles. More well-established capex-heavy automation trends, such as assembly line automation and robotics, will continue to take, as they do today, years of planning and change management to implement.

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