January 03, 2019
Is Automation the Same as Innovation?
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The new year has come up and every organizational team has put up their budget. Excel sheets were furiously worked on, workload estimated, staffing recommended, and finally, a presentation to the President made. The President now asks a simple question: “A lot of the money you’re asking for in 2019 is for automation of systems and processes. Does automation equal innovation? If we automate all these systems, could we call ourselves the most innovative company in our space? And by the way, every group who has presented to me has kept a separate line item for automation. Is their automation different from yours? Aren’t we double-counting budgets for automation?”
It’s a great
But practically, do a lot of automation projects constitute innovation? More specifically, should a separately funded, stand-alone innovation team (“Incubator Lab”, “Process R&D”, call it what you may) be set up to do automation? Or if a company already has such a team, should it focus on automation or should that be left to individual functions (while the innovation team does something else)?
Here are some learnings I’ve gathered, after speaking with tens of practitioners in IT, Data Sciences, innovation teams, and functional SMEs.
Innovation is a cultural tenet, not just an initiative. If the only team talking of innovation is the ‘incubator lab’, there’s a problem. As with all facets of organization culture, the value system begins at the top. Senior management needs to decide if innovation is something that truly defines the organization (either from past DNA or from future aspiration). And if yes, then everything from market positioning to product development to sales to delivery needs to speak the language of innovation.
Once that is decided, every team needs to eat, live, breathe, sleep innovation (just as they would any other cultural tenet like say, customer orientation). Which means that in the example above, yes, every team would have a separate budget line item for ‘innovation’, whatever that might mean to them. If that means process re-engineering, so be it. If it means technology automation, that’s fine too.
If every department or group is immersed in innovation, they will continually push to do things a better way. We could call this, ‘functional innovation’. An example of functional innovation might be, say, when Legal funds and builds/buys a front-end that can search disparate, global legal databases and systems with proper access controls. This saves time and effort, increases productivity, and saves on expensive IT license costs by not requiring additional licenses of each separate system as the organization scales.
The advantages of functional innovation are immense:
And yet – a separately funded innovation group is also something the CEO must consider. In many organizations, innovation cannot only be left to functional teams. Here’s why:
So, what should an innovation group do?
Automation can very well qualify as innovation, especially for companies that are still fairly manual in their business processes. However, while every function can and should focus on automation (which I refer to as functional innovation in this article), there is yet sense in having a separately-funded process innovation team that looks at innovation at a broader level. Automation projects should form perhaps no more than 50% of the workload for such a group, which must additionally focus on revolutionary changes, external research, critical and high-return initiatives, visioning and portfolio management.
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