The Harvard Business Review has a nice write-up of a McKinsey study looking at the benefits to organizations that automate as many daily tasks as possible:
To pinpoint the opportunities, we have looked at about 2,000 activities that are performed in various occupations across the U.S. economy. We find that, from a technical standpoint, work that occupies 45% of employee time could be automated by adapting currently available or demonstrated technology. However, less than 5% of jobs could be fully automated—that is, every activity could be handled by a machine.We estimate, that for 60% of existing US jobs, 30% or more of current work activities can be automated by with available or announced technologies. In other words, for the majority of US jobs, a day and a half’s worth of activities in each work week can be automated…
…The over-arching implication from our research into automating tasks is that roles will be redesigned and organizations will have to become very good at understanding where machines can do a better job, where humans have the edge, and how to reinvent processes to make the most of both types of talent. The largest benefits of information technology accrue to organizations that analyze their processes carefully to determine how smart machines can enhance and transform them—rather than organizations that simply automate old activities.
Embracing automation has been a hallmark of our work here at Dorsey Wright over the years. Reading the above referenced study took me on a trip down memory lane as I thought about how automation has changed our business for the better. When I asked John Lewis, our Senior Portfolio Manager and the person most responsible for automating many of our investment strategies, for feedback on this he gave me the following thoughts:
Automating the investment process allows us to examine a huge universe of securities without needing to have a huge team of analysts. We can run many strategies and we can follow many different markets (domestic, small cap, emerging, developed, etc….) without having to staff up and get analysts up the curve. This also helps keep costs down, which is very important as fee compression has been happening since commissions were deregulated in the 1970’s.
Automation has also allowed us to be more disciplined and not let emotion get in the way of the investment process. That has been one of the largest benefits over time. We used to do all of the analysis manually, but it wasn’t any better. You begin to realize that computer rankings are relentless – they never have a bad day or take a vacation. Day after day you get the exact same unemotional ranking no matter what is happening in the market.
Automating repetitive tasks has also freed up our time to focus on more important things. You can’t automate everything. We have a lot of functions that require the time of an experienced person that can’t be automated. A few examples of this include: new product development, trying to make existing strategies better, and client service. By automating everyday tasks (like loading data into databases and running ranks and models) we can devote more resources to areas that need experienced people.
We never feel like we are “behind” in the investment process. When the markets do crazy things, our ranks still run overnight and all of our models are updated and ready for us in the morning. We are never trying to figure out why something is happening or what we should be doing. That is a huge deal for that small sample of time when everyone is wondering what they should do.
Nobody likes doing repetitive, clerical tasks day after day so automating them makes for a better quality of life in the workplace. People are just happier not having to copy column C to column D in Excel every day. When you have happier people they are more productive.
We’re not far from the time of the year where people get introspective and start making goals for the new year. It might be a healthy activity to review your business and evaluate what percentage of your time is spent on repetitive tasks. Automating those tasks may well be the key to taking your business to the next level in the years ahead.