The time and money spent on manual processes have become too high for any organization to disregard automation as an optional cost-cutting measure.

The world of business has become so fast-paced that efficiency plays a pivotal role. Brand owners, business executives, and everyone involved in business often find themselves juggling multiple tasks in a bid to keep the operations of the firm running smoothly. This is easily achievable when the business is "small." What happens when the operations cannot be handled by the business owners and even those employed? Of course, there will be a need to automate some processes, or else the company or business would spend a lot of money on salaries and more recruitment for each new task or operation that can easily be automated.

Why would a business in this present-day world rely on manual processes? The world has evolved far beyond that! Relying on non-automatic processes can lead to significant hidden costs that many may overlook, but these costs are in no sense negligible. In the long run, the business might have spent a lot more than it would have spent if those processes were automated. In this article, we will explore various reasons why automation has transitioned from being just a luxury to a necessity for every business, regardless of its size.

Understanding Manual Processes

Before diving into the costs of manual processes, it's vital to understand what they are. Manual processes are tasks completed by humans without the aid of technology. These operations could involve a variety of tasks ranging from data entry, sorting files, and processing invoices. While these tasks may be straightforward, they require a lot of commitment, dedication, and work hours to achieve, and they come with a lot of challenges that can hinder business growth. Would you pay someone for a job at a higher rate than it would cost to automate the process? Perhaps if there's an added advantage of the former, that would be a considerable option, and to some persons, it is! Manual processes have an appeal to some extent, but the question still remains

Does it stand on the same level as an automated process?

A lot of business owners would consider manual processes because there is no upfront investment in technology, and many of them would argue that the familiarity with manual processes is an advantage as they feel comfortable with hands-on tasks, relying on their instincts and experiences to solve problems. But is familiarity a substitute for efficiency?

The initial appearance of manual processes as a money-saving method is deceptive because unexpected expenses materialize rapidly. Unseen costs that businesses routinely disregard consist of the following

1. Human Error:

Minimizing errors when tasks are manual is difficult. Humans are prone to making mistakes; it's a reality that we all make mistakes, and they are bound to happen in the work environment. There isn't a single person in the work environment who can boast that they've never made errors. Sometimes, even when the data to be entered is our personal details, there's still a possibility we could do it wrong. A tiny error can lead to issues that might require hours to fix—hours of time that could be expended in more productive ventures. Automation comes in as a powerful tool that allows systems to perform those same tasks seamlessly with high accuracy and consistency, effectively eliminating any form of error that can occur when humans manually execute these operations. In the event of data entry, inventory management, financial calculations, and a host of other operations, automation is key.

Factors that could affect the productivity of humans at work and consequently lead to errors are spread over a wide range. They could be dealing with fatigue, family or marital issues, distraction, complacency, lack of training, or perhaps a lack of focus during repetitive work. The consequences of such errors could be severe. A single error from a staff member could have a huge impact on the organization's reputation, financial stability, and regulatory compliance.

This is not to say that all processes can be automated or that humans should be replaced with robots, but automation minimizes those risks. With automation, the right method is the only method. If a system is automated to allow certain data to be entered, it would either correct or remove any data not in that category in the system. This is important when dealing with large data sets.

In various industries and business operations, human errors have been poised to be the major source of accidents, contributing about 70-80% of incidents. In areas where it directly affects life, especially in the healthcare sector, medical errors caused by humans have contributed greatly to the loss of life. Errors have led to about 98,000 deaths annually. Automation can reduce errors by 90% by increasing the efficiency in processes like data entry and quality control. Manufacturing defects are often attributed to human mistakes, and the training cost to mitigate these errors is a great deal. Overall, embracing automation is crucial for minimizing human errors and enhancing efficiency across sectors.

2. Cost of Training:

Trained employees working in manual processes require constant refreshers and updates. This training takes time and resources away from other critical business functions and isn't the best option, especially when considering long-term expenses. Why not automate processes and make just a one-time investment in the software or hardware? It is likely that automation might require ongoing maintenance and updates, but would you consider it compared to the cost of managing a large workforce requiring continuous training and development? The cost of neglecting employee training can be deadly. Humans are irreplaceable, and companies that have embraced automation are increasingly realizing that they still need humans—and not just humans, but experienced professionals with a certain skill set. Embracing automation would still incur training costs. Companies would need to retrain or replace a portion of their employees to suit the current conditions, but this would be a far less expense compared to when tasks are not automated.

3. Scalability:

Every business owner seeks to grow; humans are not foreign to expansion. When a business grows, the volume of work becomes increasingly difficult to manage, especially if it's handled manually. In the long run, this can lead to a significant increase in costs and operational inefficiencies as there would be a need for more staff to scale proportionally with the number of people handling the task. What worked for six clients won't work for sixty. Manual workflows would not just slow progress but make it almost impossible to scale operations.

For example, a small e-commerce startup might start with a handful of orders daily. Initially, it's manageable for one person to pack and ship items. However, with time and as sales surge, that same person becomes completely overwhelmed, risking errors like wrong shipments, delays, and unhappy customers.

70% of businesses face difficulties scaling due to inefficient manual processes

In real life, imagine this startup faces a sudden rush on Black Friday. They might miss fulfilling a large chunk of orders, resulting in lost sales and a damaged reputation.

How can an automated system handle this? Automated systems are tailored to handle increased orders smoothly, and staff are left with enough time to focus on customer service and any other essential delegation. Investing in automated systems and scalable solutions allows businesses to adapt to market demands and meet their full potential.

4. Employee Dissatisfaction:

Every person applying for a job has an idea of what it entails to work in whatever firm they might have submitted their application to. When employed, they might know what to expect as part of their jobs or responsibilities as they're pre-informed, but they're not usually completely informed, as some firms would want to keep some information private until they've begun work. What happens when they find out that a lot has been kept away from them and that their responsibilities are more? Dissatisfaction, right? This is exactly how employees employed to work in a firm that relies solely on manual processes would react when there's an event of expansion in any capacity. Too many manual processes would overwhelm employees.

 A lot of people in today's world spend not less than 40 hours a week at their jobs, and it is for this reason that job satisfaction is key. It is not just a prerequisite for productivity but a critical measure of our mental health, physical health, stress levels, and more. If employees feel that they're being overly occupied by tasks that could be easily handled by a computer, they'll feel less satisfied with their jobs, and consequently, this will affect productivity. Happy people are often the most productive. It is impossible to get a hundred percent from someone who dreads coming to work.

5. Reduced Compliance:

When tasks are done manually, there's a higher chance of human errors, which could be deadly. It could result in data inaccuracy and ultimately, non-compliance or reduced compliance with regulatory standards or internal standards, potentially resulting in legal issues, penalties, or reputational damage. Aside from errors, the employees could be working with outdated information, and there could be cases where one employee interprets a regulation differently than another. All this leads to compliance lapses, and as said earlier, the organization might need to allocate funds for audits or legal consultation to address issues that arise from non-compliance and perhaps pay penalties.

 Consider a small manufacturing company that handles safety regulations manually. Employees get to fill out forms by hand, leading to frequent mistakes and inconsistent errors. One day, they miss a crucial safety deadline, resulting in a hefty \$60,000 fine. Additionally, they spend countless hours correcting errors and retraining staff to prevent further errors, causing delays in production and a waste of valuable work time. While they initially thought manual processes would save them a lot of money, the hidden costs of fines, lost productivity, and damaged reputation add up. If they had invested in automated systems, they could easily ensure compliance, and none of this would have happened. There would have been no fine, no lost work time, and the reputation of the company would still be intact.

In essence, while manual processes may seem straightforward, they can introduce hidden costs that undermine operational efficiency and increase risk exposure. Ultimately, investing in automated systems can help ensure consistent compliance and reduced errors, allowing businesses to focus on growing rather than constantly putting out fires.

In conclusion, relying heavily on manual processes can significantly impact a business in various negative ways. Human errors are inevitable, and when tasks are handled manually, the results are often mixed with mistakes that could have been handled by automation. The hidden costs of manual processes can be quite substantial, affecting not only the finances of the firm but also the overall efficiency and employee satisfaction within an organization, as they tend to levy a silent tax on business. The only presumptive way to mitigate these issues is to employ automation and technology. This would help provide a more streamlined, accurate, and scalable approach to business operations, ensuring a brighter future for both the company and the workforce.