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Businesses looking to automate in 2024 should start preparations early to avoid delays and to realize the full potential of their investments, says HowToRobot. Source: Adobe Stock
Although the economy has slowed, investments in robotics and automation are growing. Global robot installations are expected to increase by 7% yearly between 2024 and 2026, according to the International Federation of Robotics.
This is supported by surveys from both Make UK and McKinsey. Businesses expect to spend more on automation in the coming years, allowing automated systems to account for a growing share of overall capital spending.
As the year’s end approaches, businesses should already begin preparations for next year’s investments in robotics and automation. Failing to start on time could delay investment decisions at critical moments, postponing projects. Or, if the vendor selection is rushed, the business could risk investing in a solution that does not deliver the expected return on investment.
Based on data from HowToRobot’s global automation marketplace, the time from starting an automation project to signing an agreement with a vendor can vary from a few weeks to more than a year. This is based on the complexity of the project and the level of preparations made.
The earlier the business starts the process of defining a budget, finding potential vendors, and confirming price points, the sooner it will be able to make a decision to invest – and begin reaping the benefits of automation.
Measurable goals help avoid missed automation opportunities
Although many businesses intend to automate, the lack of a budget is still one key barrier cited by Make UK’s survey. Deciding what to spend on automation can be difficult without knowing how much it’s worth financially to the business.
To find out, the first step is to decide what the robotics investments should achieve. This includes setting clear and measurable goals. For example, they could include the number of operators that the robot should free up to perform other tasks or the intended increase in process throughput. Goals could also be improvements in quality, reductions in scrap and waste, and more.
Companies should set these goals to estimate the financial gains from automation. This should be done before involving vendors in the discussion. Without goals, it would be difficult to know how much to spend on a robotic system while still achieving a positive return on the investment.
Establishing goals and calculating the potential benefits of automation early on helps avoid wasted efforts and missed opportunities. Having financial proof of a good investment opportunity helps management prioritize the investment and not let it slip into another calendar year.
In the opposite scenario, spotting a bad investment early on makes it easier to move on and avoid spending unnecessary time with vendor negotiations.
Early estimates of investments test project feasibility
Knowing the cost of automation can be a challenge without having actual proposals from a range of vendors. As robot solutions often include some degree of customization for each client, it is rare to find list prices.
This means that those businesses will need to do a significant amount of work finding relevant vendors. They may have engaged them in crafting proposals before they have a realistic idea about a project’s cost and potential payback time.
Often, this puts end users in a dilemma. Should they (and the vendors) invest all that time and effort without knowing in advance if the business case is positive and the investment is likely to go through?
Finding relevant robotics providers is a common challenge, cited by 42% of business leaders surveyed by McKinsey. This can also help explain, why decisions to engage with vendors are sometimes postponed until the last moment after the budget has been approved.
Having to find systems and suppliers in a short time can put pressure on end users. It also increases the risks of not finding and investing in the ideal solution, scoping the project wrong, or realizing very late that it is unfeasible.
The market research and talks with vendors must start earlier on to give end users enough time to gather the necessary data to inform their investment decisions. This does not have to mean that end users must first craft detailed specifications and wait months for the final proposals from vendors.
Simply describing the process to automate and the goals the system should meet can be enough to get preliminary price indications from suppliers. Through HowToRobot’s marketplace, we can see that end users can get a range of budgetary quotes on automation from vendors indicating a price range in a few weeks.
This can help end users in several ways. It allows them to get an early validation of the business case and make the necessary adjustments to the project scope.
It also shows how common solutions may be for the problem or task being considered, and therefore the level of complexity and risk involved. Ultimately, it helps narrow down the playing field so end-users only have to engage with the most relevant vendors – making it easier to make the right investment decision, even when time is scarce.
About the author
Søren Peters is CEO of HowToRobot.com, a global robot marketplace, as well as Gain & Co. This blog is reposted with permission.
