What Manual Processes Cost Companies Over Time

Intro

Just 500 years ago, most work performed by humans was manual. In order to plant crops or build a house, many people had to exert their physical strength over long time frames. This used to result in slow economic growth and rather low living standards. Life in the year 1500 was much more similar to life in the year 500 or 1000 than it is to life in the year 2026. What makes our year so special? Automation.

Where in the past most work had to be done by humans independently, we are now assisted by a large number of machines. We generate energy by capitalizing on our knowledge of physics. We can solve complex mathematical problems that would take humans years to calculate in a matter of days via supercomputers. In short, our power is now augmented by a large number of tools that not only make us stronger (like a hammer in the hands of a builder) but also do most of the previously manual work for us. Businesses pioneered this rapid transition towards innovation and continue to drive it. In this article, we will discuss how costly manual processes can be for companies over time and discuss why automation is always the best option in long-term scenarios.

The current digital revolution has led to the appearance of multiple high-quality products that make automation possible. For example, Make.com apps development enables businesses to interconnect multiple digital aspects of their operations and reduce reliance on manual configurations. Other important services include tools like Zapier, Bubble, and Webflow. Opportunities for automation have never been so easy to access.

Nonetheless, the preceding 20 years saw multiple examples of large companies or well-established small and medium businesses failing due to their reliance on manual processes. Let’s take a look at some of those examples and try to find the root causes behind these issues.

Today, Amazon is almost synonymous with retail. Most Americans buy laptops, clothing, and many other products there. In the year 2000, this was not the case. Many people across the globe relied on local stores or medium-sized retail brands. Really big retail brands that offered “everything” marketplaces were quite rare. So, what changed? Retail companies in the past relied on manual work. They had a large number of retail locations, which had to be operated by extensive staff. Logistics were also very difficult to manage: it was necessary to offer a more or less balanced selection of wares across all locations in order to meet not only general but also niche demand. Mail order lists had to be created manually, needed printing, and required large workforces to manage orders. All this was affecting retail prices. The process of selling wares required a lot of manual work.

Then, Amazon came and completely changed the game by shifting from brick-and-mortar stores to online marketplaces, where users could choose not only from local wares but from wares available all across their home country (and even abroad). It then started bringing major innovations in storage logistics, optimizing delivery times and its product stocks to minimize costs for end users by using robots and smart algorithms. As a result, due to the rising popularity of online retailers (apart from Amazon, big players include Walmart and eBay), brick-and-mortar retail stores are no longer mainstream. They continue to function well in particular niches like food or clothing retail, but are becoming increasingly irrelevant in other sectors. Automation via Internet technologies, logistics algorithms, and robotics has completely transformed the way we buy things. Many older retailers relied on manual processes established in their sector and, consequently, lost their market shares or even went out of business.

There are many other cases in which similar processes occurred. For example, Netflix and other streaming/video-on-demand services managed to largely replace TV and film rental among younger generations. They combine the user agency (users can choose what films they want to watch) of rental services, which require physical brick-and-mortar stores, with a streamlined TV-like experience, which is based on automated recommendation algorithms that are now enhanced by AI. Similar processes occurred in transportation, logistics, and even real estate. Automation via the Internet or, earlier, via complex industrial machines (for example, robotics systems for car assembly) always results in the decline of companies that rely on manual processes. In the cases we outlined, this can lead to dramatic declines in entire sectors. In others, manual processes can negatively affect particular departments without disrupting the whole company (for example, if an innovative manufacturer relies on manual processes in marketing).

Why does this happen so often from a historical standpoint? Why do so many companies retain manual processes over automation despite its seemingly obvious benefits? One of the main reasons is the lack of immediate feedback. Automation requires initial investments that can pay off in several years. The process of increasing the manual workforce to drive company growth is faster and easier in the short term. Once automated processes adopted by competitors become profitable after some time, however, those increasing investments into the expansion of manual workforces can have an unexpected negative effect, leading to significant resource losses due to overextension. More importantly, it is not always obvious which automation method will bring the best benefits. Hence, the decision to focus on the simple expansion of existing processes often seems tempting.

This problem of delayed benefits, which led to dramatic changes for many companies over the last 200 years, is becoming less and less relevant. Innovations based on digital technologies and AI are often so powerful and cost-efficient that they can bring meaningful benefits in relatively short time frames (for example, one or two years). If in the past the choice between automating and not automating was not always obvious due to the slower pace of technological development, today it is becoming increasingly clear: a workforce enhanced by automated tools is better than the one relying on manual labor in an overwhelming number of cases. Here are some technologies that can help most companies (the list is not exhaustive): LLMs, websites with high-quality algorithms for order processing, and digital accounting solutions.

To summarize, historical evidence shows that automation is the best course of action for most companies on the market in the long term. Manual processes often seem easier to implement and cheaper in short-term scenarios, but they almost always lose to automation even in the scope of one decade. One of the most powerful directions for automation these days is software development. Computer technologies enhance manual processes all across the globe. The appearance of no-code and low-code technologies and development partners like Keenethics that know how to use this technology indicates that this process will only continue accelerating. We are approaching an era where automation is going to become ubiquitous.