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Digital Automation Revolution

IBEF, Knowledge Centre

Nov 20, 2020 11:14


Rapid developments in artificial intelligence, machine learning and robotic technology are revolutionising the modern world with automated systems that can perform a host of functions with minimal intervention. Technology adoption is expected to double in India from the current 14% to 30% in the next 3–5 years. The projection puts India’s growth rate higher than the global and Asia-Pacific average.


The coronavirus pandemic has expedited and re-emphasised the need for automation across the globe. There is a growing interest in adopting bots for process discovery, intelligent data capture and cloud native bots across sectors. Automation software companies have reported sharp increases in their utilisation rates from ~60% to 95–98% in the recent times. Even in a pre-Covid world, India was well placed to capitalise on the fast-growing robotic process automation (RPA) industry. There are more than 42,000 hyper intelligent automation (HIA) developers in the country, concentrated in Bengaluru (35%) and New Delhi (18%).


Organisations have quickly begun to realise that automation is the way forward. Depending on the size of the company, different models of transition have emerged. Smaller companies tend to prefer a moratorium or deferred payment schemes, whereas larger organisations are choosing pay-as-you-use cloud services. Organisations that had already invested in automation are prudently expanding their use of bots.


Most businesses that were hesitant to transition have now begun implementing automation solutions in a phased manner. The key drivers for this move are reduction in overall costs, increase in efficiency and accuracy of service delivery. Data science platforms can provide actionable solutions by analysing trillions of data points in real-time. Industrial robots and drones are capable of spotting potential problems and making instant decisions based on a library of pre-determined algorithms.

Automation is transforming economies and the workforce on a global scale. About 60% of all occupations have at least 30% repetitive tasks that can be automated.

India stands at the precipice of rapid automation and robotics technology adoption. Currently, all thrust factors of demand push, government policy, technical skills, industry inclination and financial investments are fuelling momentum. Interestingly, some technology implementations in the country are better adopted and commercially deployed than their counterparts in developed countries such as Japan or North America.

BFSI Sector

Sector-wide adoption of automation solutions is currently underway with businesses reaping large monetary benefits with low capital outlay. Banking, finance and insurance support services are sectors leading the charge in India. During the last few months, many multinational firms have depended on their India support centres to provide services without disruption. For instance, banks had to implement changes to accommodate new guidelines on moratoriums and execute transactions; insurance firms had to continue collecting confidential documents from their customers in a secure manner; and financial institutes had to disperse loans and credit for small and medium businesses as per government-assistance programmes. Firms were able to rely on their centres in India as the bulk of work (~90%) was automated and customisable/modifiable and could be monitored remotely using cognitive automation products.

BFSI is the clear leader among industries in digital adoption and automation. Artificial intelligence-powered platforms are slowly becoming a necessity for financial services to achieve true digital transformation.


Healthcare Sector

The second-fastest growing area for robotics and automation is the healthcare sector. Their use of artificial intelligence in predictive analysis and diagnosis has brought efficiencies in testing and reporting of cases. Robotics has become one of the most powerful tools in the country’s fight against Covid. Autonomous bots are being deployed in isolation wards for a variety of tasks – disinfecting surfaces, opening communication channels with patients, dispensing food and medical supplies to patients and providing means for visual inspection of patients and patient-linked health monitors. In addition, medical research and precision surgeries are now aided by these technologies.

Robotisation of medical care is reducing community transmission of the virus while consuming fewer supplies of PPE kits. Usability, clinical integration and scalability remain some challenges that require investment and efforts from scientists and medical professionals.

Support Services Sector

The third area registering growth is customer services and experience centres. AI-powered bots have gradually replaced the initial layers of the customer service request processes, specifically with respect to allocating issues to departments concerned and assigning priority levels.

Other Sectors

Several other sectors are increasingly adopting robotics technologies for quick and significant wins in productivity and profitability, with modest capital expenditures. Education, Telecom, Governance, Retail, Automotive, Manufacturing, Warehousing and Logistics are among the key secondary sectors.

The industrial internet of things (IIOT) or Industry 4.0 revolution is making a dent in these sectors by leveraging smart machines and real-time analytics on data produced by dumb machines; however, the current automation scenario has created several challenges in these sectors. Expected operational improvements have proven hard to match due to lack of integration with the required hardware. For instance, automation contributes to only 1% of the manufacturing GDP in India compared with ~5% in developed economies. This stems from a gap in suitable technology available for adoption.


Since the 1990s, Indian firms have conducted back-office tasks and IT services such as data entry, running call centres and testing software for foreign companies at low costs. With rising automation, India will no longer be able to rely on its cheap labour resources as machines become more adept at handling repetitive, rule-based tasks and low skill jobs. Bulk of the Indian IT workers are employed in this segment and face the highest risk of unemployment due to automation. According to World Bank estimates, ~69% jobs in India are under threat at present. Other sectors at risk include automotive, textiles, construction, pharmaceuticals, food & beverages, logistics and security services.

However, there is a silver lining to these projections. Firstly, India is a large country with talent shortages across sectors. Automation could help plug these talent shortages and not result in unemployment. Another perspective states that while the bulk jobs may be automated today, they are likely to be replaced with other roles in deployment and management of the automated solutions in tandem with other advanced activities requiring analytical or strategy-based solutioning.