Cape Town – The economic outcomes of replacing humans with robots are not as rosy as originally projected.
It is predicted that 30% of the tasks in a majority of occupations can be automated and robotics is the way to do that, according to a blog post, published by global advisory firm McKinsey & Company.
Although this may be the case, it does not necessarily translate into 30% of cost reduction, say the editors of the blog post, Alex Edlich and Vik Sohoni, both senior partners at McKinsey & Company.
Robotics has become a buzzword in recent times and has dominated discussion forums worldwide where thought leaders, economists and even politicians try to predict the impact that the so-called "rise of the robots" (also known as the Fourth Industrial Revolution) could have on the global economy.
At the most recent World Economic Forum in Davos, Switzerland and the World Economic Forum on Africa held in Durban in May this year, participants also grappled with the way in which automation, specifically robots, would change the employment landscape.
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Automation will indeed replace unskilled labour for highly skilled jobs, but it proves costly to do so, say McKinsey’s Edlich and Sohoni.
The authors point out that there have been several successes with robotic automation. At one overseas mining company for example the firm’s finance function saved 30 human days per year worth of work by automating the journal posting process, while also saving 60 human days per year of work in the area of financial reporting.
Fin24 earlier reported that Kumba Iron Ore installed remote-controlled robotic machines that drill blast holes and drones for aerial surveys at two of its key mines in the Northern Cape, which have resulted in significant cost savings.
However, in conversations the McKensey authors had with a number of executives globally it has become clear that the so-called robotics evolution has not been that easy.
It has taken companies for example a lot longer to install robots and it turned out to be more complex than some hoped it would be.
In addition, robots need care and attention in the form of maintenance, upgrades and cybersecurity protocols, Edlich and Sohoni say, and this introduces additional costs and an ongoing focus for company executives.
Installing a large number of robots also require bespoke governance and oversight by IT people, who are in many instances already burdened with legacy systems.
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As a result of these challenges, the authors say several robotic programmes have been put on hold, while some chief information officers have refused to install them until solutions to the problems are found.
The way forward
Companies have realised that robots is just another "tool in a toolkit", the authors say, and companies need to apply these "tool" as part of an orchestrated action, not in isolation. To make the installation of robots successful requires collaboration and coordination with other "silos".
It’s also important that companies realise beforehand what the "architectural implication" are before installing robots, which includes determining and keeping track of all the various linkages between the systems that robots will develop, say Edlich and Sohoni.
There needs to be clarity around who is responsible for which function and how robots will be managed before installation.
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Edlich and Sohoni also suggest that companies treat employees as "problem solvers" and enable them to have authority over robots as opposed to running the robots centrally. This will ensure improved employee participation and mean that employees would need to understand how robots function so that they could even learn to configure or code them, which could be empowering to employees. Read Fin24's top stories trending on Twitter: