February 17, 2022
Innovation and Automation are the Answer to Increasing Productivity
Ways to to push efficiency and reduce costs
4 min read
Innovation and Automation is the Answer to Increasing Productivity
Productivity in economics is a measure of output per unit of input, commonly applied to labor, capital, and other resources. It is also considered one of the most important areas of economics, because it is a major factor in the economy’s ability to grow which directly impacts our standard of living. Traditionally wages have risen as a result of increases in productivity (e.g. for each hour of work more goods and services are produced).
Over the past year and a half, inflation has taken hold across consumer prices and wages. From December 2020 to December 2021 consumer prices rose almost 7.0%, while productivity grew around 1.9% during the same period. This is not sustainable. The FED has already signaled it is going to take action and increase rates. In addition, many of the companies we work with are now looking for solutions to increase productivity and reduce costs. A quick Google search on how to increase productivity results in a recommendation to have an optimal dedicated workspace, get your day started early, structure your day, take breaks, stay hydrated, and eat well. While these are great recommendations for having structure, discipline, and self-care, they are not the solution – innovation and automation are the keys to solving this complex problem.
I was reading a blog post by one of my business school professors, Edward D. Hess, who has researched and written on the future of work extensively. In his post, he points out that McKinsey predicts that by 2030, over 25 million jobs in the United States will be automated, and Oxford University research has predicted that within 15 years there is a high probability that 47% of U.S. jobs including professional jobs will be automated. These are staggering numbers that are hard to wrap your head around. In order to understand how this will unfold and the practical applications of technology, it is important to understand how other industries have embraced technology to solve similar problems.
Manufacturing has a history of innovation pushing productivity, starting with the industrial revolution, the creation of the assembly line, lean manufacturing, and robotics. These same concepts can be applied to first line business, compliance, and back office functions throughout the corporate world. The tools used in manufacturing have different names, but the concepts are essentially the same. Take a look at your process maps and you will see an assembly line of functions ripe with opportunity for automation using advanced technologies, including:
Computer Vision to pull data from documents (typed text and handwriting) versus having an individual key them in.
Natural Language Processing to read text and discover consumer sentiment, categorize complaints, analyze customer calls and mine for things like compliance with regulatory requirements (think collections call center disclosures, requests for do not call lists, etc.)
Robotic Process Automation to kick off next steps in processes, pull relevant documentation / data for your analytics to review, enter information to systems and workflow tools.
Artificial Intelligence and Machine Learning, which can be deployed to understand content, look for patterns, and gets smarter the more information you feed into the models.
Many of our clients are already incentivizing their management teams to push efficiency and reduce costs. We expect this to accelerate over the next twelve months as inflation plays out and the economic cycle changes. Many businesses are looking for off-the-shelf solutions that do not exist or are developing solutions in-house using teams that understand robotics but do not understand the business, oftentimes resulting in less than minimum viable solutions. This is where we have had the most success stepping in to help our clients accelerate their transition to a digital workforce. Some of the areas we have been focusing on with automation include:
Mortgage Loss Mitigation
Bankruptcy Check Posting
Credit Reporting Dispute Investigations
Mortgage Originations First Line Quality Control
Federal Regulatory Compliance Testing
This list will grow exponentially as companies see the benefits of replacing repetitive manual processes with machines that work 24/7, do not get tired or sick, and oftentimes cost less than a traditional employee – including offshore resources.
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