While most companies look externally to apply the benefits of data analytics to their business—including data monetization and creating new products—a select group of innovators is looking inward, transforming the way traditional departments, including HR, Finance, and IT, have functioned for decades.
Is your company exploring how data analytics impacts operations?
A recent McKinsey article takes a deeper look at how “bots, algorithms, and artificial intelligence” are benefiting key support functions by automating tasks, freeing up resources, and reducing costs.
According to the article, companies that drive “tech-enabled transformation” powered by today’s more affordable, easier-to-use solutions are reaping huge benefits faster. In fact, some are achieving “5 to 10 percent cost savings in as little as 18 to 24 months, with long-term savings of more than 30 percent.”
The finance department is one area that’s witnessing big changes thanks to automation and data-driven decision making. Examples include using algorithms to better track employee vacation time, automating journal entries, and using machine learning to reconcile accounts. The McKinsey piece also points to innovative ways the HR department is evolving with big data analytics technology, including using bots to support transactional activity such as time collection and payroll, and employing more sophisticated solutions for talent sourcing and recruiting.
To help companies obtain similar results, the McKinsey report offers up great advice for tapping into the power of big data analytics to transform functions at your company. Here are some steps you can take:
- Make automation a strategic priority. To achieve real results, the article recommends setting automation as a strategic initiative for the company and including it in the business planning process.
- Deploy automation technologies systematically. Whether using systematic deployments or agile approaches, take a phased approach that starts with automating common tasks and evolves to the use of more advanced technologies, including machine learning and natural language processing applications.
- Decentralized governance. As part of its research, McKinsey found that successful companies place automation efforts in the hands of the individual departments or business units that are deploying the technologies instead of using a centralized approach.
- Ensure IT is involved. Success in automation also requires engagement from the IT department. In fact, 69 percent of successful organizations involved IT early in the automation planning process, according to the McKinsey article.
- Internalize costs and benefits. Since cost reduction is often a key desired outcome for automation projects, McKinsey recommends that executives truly understand the total cost of ownership for automation initiatives.
- Prioritize workforce management. Automation will no doubt have a big impact on the future skill sets your company and your people will need. Make sure your company has a plan to acquire these new skills either by re-skilling the current workforce or externally recruiting new hires.
For more strategic insights and advice on how to get started, read the complete McKinsey & Company article.