SHORT
CUT
DEUS EX MACHINA?
How intelligent automation drives competitive advantage
In 2013, Carl Frey and Michael Osborne
of Oxford University were among the first
researchers to provide a scientific perspective
on the impact of computerization on
our working world and job situation. Their
paper, though disputed, did not only set a
societal discussion in motion, but also provided
food for thought for how companies
need to plan ahead for the future of their
processes and employees. Following in the
footsteps of the Oxford paper, many more
studies have been published since that
focus on the automation potential of the
global economy as well as individual sectors
and countries. But nearly all these only
provide a long-term outlook.
To determine the potential that companies
can attain with automation right now,
goetzpartners conducted an expert survey
with many of the leading software companies
that enable automation 1 through technologies
such as Robotic Process Automation
(RPA), Business Process Management
(BPM) or Artificial Intelligence (AI). Apart
from a certain level of optimistic bias regarding
the results from the participating
companies, the panel provided a broader
horizon and deeper understanding of the
topic than would usually be expected from
managers responsible for implementing
automation within a single organization
alone. Therefore, the results provide a
helpful additional perspective for business
leaders who must decide on their companies’
digitalization and automation strategies.
DANGEROUS HESITATION
However, automation technologies should
not be treated like a “Deus ex machina”-
device. In an ever-changing business world,
waiting for a magical solution to a seemingly
unsolvable problem is seldom a
promising strategy. The goetzpartners expert
study provides concrete perspectives
on how the intelligent use of machines can
create a sustainable competitive advantage
and how companies can get control
over this development.
While in most established European
companies there are shattered proofs of
concepts and even actual applications in
several business functions, such as IT or
Finance, only few pursue overarching, concerted
programs to drive intelligent automation
and make full use of technologies
such as RPA or AI. There are three major
threats that render a lack of an overarching
automation strategy very dangerous:
• Increasing international competition:
Many other regions outside Europe –
most notably China and the U.S. – take a
much more strategic stance and invest
heavily into intelligent automation. U.S.-
based companies Amazon, Facebook,
Alphabet, Microsoft and Apple together
spent over $70 billion on research and
development in 2018, a sum of which a
large part is invested into AI 2 . China has
already overtaken the U.S., with the government’s
latest venture capital fund
for AI investing more than $30 billion
into state-owned firms 3 . This trend is
reflected also in the business strategy
of individual companies: While nearly 9
out of 10 Chinese companies are active
AI players, in Germany the percentage is
only 49% 4 .
• False sense of security: Even companies
with business models that appear to be
safe from technological disruption will
eventually face it. The average lifespan
of large publicly traded companies has
continuously decreased over the last
decades and will continue to do so 5 .
• Underestimated adoption time: People
need their time to acquire new skills
and change their mindset. This cultural
change is also essential for successfully
hiring and retaining the new talent
every company requires. If the culture
clash of existing employees and newly
hired technology experts is too large,
the organization will reject the targeted
infusion of new skills.
NEARLY 35% IS THE POTENTIAL
CURRENTLY ATTAINABLE
The goetzpartners study has found that
today, companies could already automate
up to 34.8% of the work conducted manually
with a positive business case according
to our expert panel. The lion’s share
– 25.2% – is obtainable by means of basic
automation and the computerization of
simple, rule-based tasks though technologies
such as RPA. An additional 9.6% can
be achieved with advanced automation of
more complex processes requiring cognitive
capabilities provided by technologies
from the realm of AI.
CURRENTLY ATTAINABLE AUTOMATION POTENTIAL
by core function [in %] 1
Ø
R&D
Sales
Human
Resource
Marketing
Legal
Controlling
Procurement
[1] Numbers may not sum up due to rounding
40 40 40 40 40
35 35 35 35
33
30
28
5 15 8 10 10
10
10
10
23
8
15
8
8
30
25
20 23 23
25
25 28 30 30
20
15
Finance IT Customer
Service
LOW MEDIUM HIGH
5
35
Logistics Production
Advanced Automation
Basic Automation
1) Expert Circle consisted of 20 technology and software companies providing automation and AI tools
2) Statista, 2019: https://www.statista.com/statistics/265645/ranking-of-the-20-companies-with-the-highest-spending-on-research-and-development/
3) The Conversation, 2019: http://theconversation.com/china-is-catching-up-to-the-us-on-artificial-intelligence-research-112119
4) Forbes, 2018: https://www.forbes.com/sites/louiscolumbus/2018/12/16/how-china-is-dominating-artificial-intelligence/#6d709b152b2f
5) Innosight, 2018: https://www.innosight.com/insight/creative-destruction/