8 Questions to Ask before You Automate

This post is revised and republished from Carl’s blog at Crain’s Detroit Business.

Mobile phone construction conceptInnovation is not exclusively about revolutionary new products or services. Extending an existing offering or improving an internal business process can be an important form of innovation, too.

When I talk with business owners about using software to automate an existing business process, the request usually goes something like this: “We have this clunky process to do X which uses an old buggy application (or spreadsheets or email). It drives the people who do the work crazy. We’re growing and really need to automate the whole thing. Can you help?”

Of course, custom software and even automation is not always the answer. Given the cost of software development, jumping into a project too quickly can doom the hoped-for return. I always start with a few crucial questions:

1. Why do you do X in the first place?

My point in asking this question first is not only to learn about the business, but to challenge the client to really stop and think about the process, its inputs and outputs, and what’s being accomplished from a business perspective. Sometimes there are steps, or even whole processes, that have outlived their original intent and can be dropped.

2. What’s your business goal for automation?

Are you trying to improve your response time? Increase your throughput? Reduce errors? Eliminate staff? Increase your capacity? Without knowing the business goal it’s hard to determine the best way of solving the problem, and it won’t be possible to measure your success.

3. What would you gain if you achieved your goals?

Another reason for understanding the business goals of the project is to be able to gauge whether an investment in custom software is justified. If you can’t save as much money in a year or two as the new system costs to build, it should give you pause as to whether the project is worth doing. I’ve found that many times the irritation of a clunky or buggy system is disproportionately painful to the actual time it wastes or errors it causes. It might be worth eliminating the irritation, but if that’s the rationale for the project, you better not be expecting to also save a lot of staff time, and hence money, or you’ll be disappointed.

4. Have you done this manually?

No one should automate anything that they haven’t done (and done many times) by hand. Until you do a process manually, it’s very hard to fully understand it. And automating something you don’t fully understand is taking a bigger risk than you should with internal innovation projects. In addition to understanding, if you haven’t done a process manually, you can’t know what the cost of the manual alternative is, and so you can’t calculate a return on your automation project.

5. What feeds this process? What does this process feed?

Understanding what is both up and downstream from the clunky process is not only crucial to understanding it, but it also helps detect situations where the cost savings impact to the company is unlikely to be large. You can estimate the overall impact of automating something pretty easily by measuring the time and effort required for the end-to-end process, pretending that your miracle automation project makes the time of the clunky bit go to zero, then looking at the remaining time in the whole system. If you reduce the clunky process to zero, and still have 90 percent of what was there before, you know that your project can at best swing the needle by 10 percent.

6. Have you looked for an off-the-shelf product?

Every business has some special and unique aspects. Very often a process that’s been around for a while has particular, custom elements to it. We get used to doing things “just so” and usually assume that’s the way they have to be done. But adjusting a business process to use an off-the-shelf product can be a much more economical approach than custom software. Particularly if your business is in a common category (e.g. retail, dental office, etc), there is almost certainly off-the-shelf software out there that you should evaluate. Challenging the status quo and thinking critically about whether an off-the-shelf app can suffice is always time well spent.

7. Can you use a generic tool?

If your business is truly unusual, and your category isn’t served by decent off-the-shelf software products, then consider using a generic tool. For example, if your problem is communication and coordination, look at BaseCamp. If your problem is around workflow and tracking progress, try using Trello. Perhaps using Google Drive can be part of your solution. A generic tool may not be your ultimate answer, but they are inexpensive to experiment with, and at the very least, using one will cause you to better understand your problem and think creatively about solving it.

8. Do you have to automate everything?

The cost of automating the final 10 percent of a process, or of handling all exceptional cases, can be disproportionately expensive to the benefit gained. Keeping a human in the loop for some of the process, or as an exception handler, can significantly improve the financial return on the project.

Business process automation can be a valuable form of internal innovation and increase your competitiveness. Ask yourself the questions above before you start your project and you’re more likely to be be satisfied with the final outcome.