Charlie Bess over on the EDS Next Big Thing Blog had a great post on Operational Automation will Always Win Out in the End in which he argues that a focus on low cost locations is never going to work better than operational automation. I could not agree more - history is pretty conclusive on this. This is one of the reasons I am so certain that enterprise decision management (EDM), a focus on the automation and management of operational decisions will be critical for company success as we move into the 21st Century. Decision automation is the key as it's the "hard" part - the part where companies think they need people to make a decision. Automating these decisions not only makes it possible to automate the whole operation, not just the easy bits, it is also what makes a system smart enough to truly run on its own much of the time. Automating decisions at the 90-95% level means that humans are only needed for the exceptions and the corner cases (the things at which we excel) and not for the day-to-day repeatable stuff (which we tend to do poorly). To work, this automation must be consistent across channels and processes, agile so that it can change readily and precise so that you make the best decisions you can with the data you have. This takes business rules (for expertise, regulations, policies - FAQ here) and predictive analytics (for insight, data-driven decisioning - FAQ here).
One of the side benefits of this approach is that any steps that must remain manual can be outsourced wherever that makes sense because the critical decisions are controlled and managed. I discuss this in my review of John Hagel's book The Only Sustainable Edge and in the context of the future of BPO including business rules. I also blogged live from a Delphi summit on "When Your Business Knowledge Goes East" discussing the risks of outsourcing in terms of lost business know-how, something that automating decisions with EDM can avoid.
Lastly Charlie talks about IVR systems and points out that, for all their limitations, they make the price of delivering certain kinds of services so low that companies can offer them for free, to everyone's benefit. IVR systems are useful but they are also a great example where the current "dumb" automation achieved with traditional systems approaches could be made much smarter or, indeed, smart enough!