Recession and Automation

The silver lining of recession: turning the tough times into your organization’s gold. Glenn Ricketts October 2, 2019
A large ship navigating through a stormy sea.

March 2020 update: even though this was written last year, the following advice is especially relevant in today's climate.

As a young man, I experienced my first recession in 1987. Since then I have been through a number of significant ones – 1992, 2001, and of course the GFC in 2010 – these last three in senior management roles.

The question for a leader is always "how do you navigate your ship (business) through the rocks caused by a recessionary cycle?"

During these cycles, "clarity" around future business performance becomes cloudy and full of unknowns. It’s the same problem for small companies and for multi-billion dollar multinationals.

The first thing most CEOs and CFOs do in these times is cease investment. They wait for some form of clarity around the impact of this recessionary cycle on their business environments.

The outcomes for many businesses are the inward cycle of redundancies, plant closures, and retrenchment from new markets et al, as the executives seek to steady the ship and rig it for rough weather.

Stormy sea.

The problem with this standard reaction to recessionary cycles is that when a business starts to see clarity again and things improve, the legacy of an inward contracting strategy can prove difficult to reverse.

This approach makes it difficult for the business to realign itself into an expansionary cycle.

Often, key manpower and skills are lost during the inward contracting cycle. Technology is under-invested in, and in extreme cases competitors seize the opportunity to eat your lunch.

Great, you say, we know this, but it does not change the fact that companies, just like individuals, have to balance their budgets according to income versus expense if they want to survive.

One option is taking on additional debt. However, this can place your business into potential conflicts between bankers/investors, and the strategies the leadership team believe are required for success.

Most leaders I know would choose to avoid this option if they possibly can.

When we look at costs in a business, we note that in almost every case headcount is one of the top expenses, and one of the first to suffer in recessions.

The normal process is headcount expansion in good times, and headcount contraction in bad times.

Two groups of people: large group with the caption Good Times, small group with the caption Bad Times.

Ask any leader who has been in business for some time what the most challenging thing they will face in expansionary cycles is. They will tell you:

The biggest gate to expansion is talent, and talent takes time to find, and time to train to become productive.

Which leads me nicely to automation and why automation is important.

Most people think of automation in the context of robotics. Automation is really about the concept of replacing or supplementing human beings with technology, liberating them from mundane tasks in order to focus on tasks requiring a higher skill level, or at least reducing the impact of time versus skills.

What I mean by “time versus skills” is this: imagine you have a business that requires skilled people to design a product or implement a service.

If automation could supplement or even replace a large element of the skills or knowledge required to achieve that objective, would this reduce risk, improve efficiency, and reduce costs? The answer of course is YES.

The advancements in machine learning and AI, and robotic process automation (RPA) technologies are accelerating this adoption primarily because these technologies reduce the risks posed by human beings.

This brings me to the automation I see evolving in the document space – specifically, the creation of high value documents that drive a company’s revenues. Automating the generation of these documents removes the reliance of knowledge and skills residing in specific staff members, and allows a business to “scale out” via implementing technology.

Graphic of an automated document production process.

We have been at the forefront of the document automation space for over 25 years. In that time, I have witnessed the growth and adaptation of automation.

Automation was initially used for simple tasks like Mail Merge, and within the legal space for simple legal documents. Since then, automation has expanded to supplement the advanced skills and business knowledge held by critical staff members in a variety of multinational business sectors such as insurance, banking, procurement, health and the judiciary to name just a few.

In fact, there is really not a market segment or business type that we have not engaged with or deployed our technology into. Why?

All companies, regardless of size or vertical, can create efficiencies by automation.

The point I am trying to make is not about ActiveDocs per se. It’s about utilizing automation to reduce the risk inherent with the human involvement in your business.

This type of technology can remove the mistakes often unfortunately unavoidable when you rely on human beings.

This is also of significant concern to the executives in a company, given the on-going and ever fluctuating regulatory changes being legislated within not only countries, but also states or regions.

Automation can de-risk your business processes by removing dependencies on skills or knowledge contained in and by your staff. Most importantly, it allows the leadership of your business to navigate business cycles with more confidence.

This brings us back to recessionary cycles, and how we as leaders navigate these challenges.

Helm of a fancy ship.

At any time, the supplementation of human beings with automation and digitalization enhances a business’ efficiency both with an increase in accuracy, and by freeing key personnel from mundane tasks, enabling them to focus on higher skill tasks.

In recessionary times this not only becomes more important, it is in fact essential – as a way to both utilize available human resources better, and to minimize loss of business knowledge in those areas best suited to digitalization.

Automation will not solve all your business challenges, but it certainly will reduce your overall risk in challenging times – and that's vital.

About the Author

Glenn Ricketts


Glenn has over 40 years of experience in the IT sector, and has been with ActiveDocs for 15 years. He has a strong international sales, marketing, and management background.

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