IT automation can lead to 66% cost reduction, ISG says

Dive Brief:

  • Automation in IT may improve productivity by double digits, leading to a 66% cost reduction for the average businesses, according to a new study by market intelligence firm Information Services Group (ISG).
  • "We see productivity improvements fueled by automation accelerating quickly," said Steve Hall, partner, ISG Digital Services said in an announcement. "As automation moves up into higher-order IT processes and out into business operations, it will eliminate a significant amount of work through problem avoidance and self-healing, and with it, a significant amount of the headcount needed to deliver large-scale ITO services."
  • With automation, ISG found as much as a 50% reduction in the number of resources required for some IT services. Those gains in productivity are in turn decreasing how much it costs for IT services. 

Dive Insight:

An earlier ISG survey found one-third of companies say they plan to cut 25% of IT workers by 2020. Increased automation of back-office IT services jobs will be the primary driver of such reductions, according to the survey.

The potential for future layoffs comes at a time when companies are trying to work smarter, not harder. Rather than bog employees down in "rote" work, automation would allow workers to have more time for developing creative solutions to advance the enterprise. 

But some fear for the stability of the workforce, especially after a Forrester report projected an elimination of a net 6% of U.S. jobs in the next five years. Though the rise of automation and intelligent software agents will likely create some new jobs, automation could drive layoffs in the transportation, logistics, customer service and consumer services sectors. 

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Filed Under: IT Strategy Software
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