7 Ways Workflow Automation Reduces Operating Costs

Workflow automation can cut business process costs by up to 30% while improving efficiency and accuracy. Here’s how businesses save money and streamline operations with automation:

• Fewer Errors: Automation prevents costly data entry mistakes, saving businesses millions annually.

• Lower Labor Costs: Automating repetitive tasks reduces manual workload and reallocates resources to higher-value activities.

• Smarter Resource Use: AI-driven tools optimize resource planning, cutting costs by 20–30%.

• Minimized Downtime: Predictive maintenance detects issues early, reducing equipment failures and unplanned downtime.

• Efficient Supply Chains: Automation improves inventory management and supplier coordination, avoiding overstocking and shortages.

• Faster Invoice Processing: Automated systems process invoices 80% faster, saving time and unlocking early payment discounts.

• Scalable Growth: Businesses expand without increasing overhead by automating workflows and reallocating employee time.

Quick Comparison

With automation, companies save time, reduce costs, and achieve better accuracy, making it essential for long-term growth. Read on to learn how these strategies can transform your business.

Automate Business Processes to Cut Costs with Power Automate | Advisicon

1. Prevent Data Entry Mistakes

Data entry errors cost businesses over $600 billion each year in areas like procurement and supply chain operations. AT&T found that 40% of their invoicing data contained mistakes, leading to tens of millions in overpayments.

Manual data entry has a high error rate of 40%. Common issues include:

• Incorrectly transcribed data

• Swapped or transposed numbers

• Misplaced account entries

• Missing details

• Duplicate payments

• Misclassified expenses

Automation can drastically reduce these mistakes by standardizing processes and applying strict quality checks. This is especially helpful for accounting teams, where automated systems can catch duplicate payments - an issue that affects about 25% of all invoices.

"It's far less expensive to implement solutions that prevent bad data from entering a system than it is to fix bad data or to suffer the consequences. Investment in automation is almost always a net benefit to a business that relies on accurate data." - Brady Behrman, CEO and founding partner of PunchOut2Go

Modern tools like Optical Character Recognition (OCR) and automated 3-way matching speed up and improve accuracy in data entry. For example, using Generative AI to classify 100,000 articles reduced costs from $10,000 to just $215.83, a mere 2.16% of the manual expense.

Beyond immediate cost savings, automated systems help businesses avoid:

• Time wasted fixing errors

• Revenue loss from billing mistakes

• Fines for compliance violations

• Strained supplier relationships

• Legal fees tied to data disputes

To get the most out of automation, set up standardized data collection methods and consistently monitor system performance to catch issues early. This ensures reliable accuracy while keeping operations running smoothly.

2. Cut Labor Costs with Automated Tasks

Automation doesn’t just prevent errors - it also trims labor costs. A 2024 Deloitte survey found that 81% of finance leaders see automation as the best way to cut future expenses in their departments. This has pushed many companies to integrate automation into their strategies.

Businesses that allocated at least 20% of their IT budgets to automation saw a 17% cost reduction compared to those sticking with manual processes. These savings come from cutting direct labor costs and improving efficiency across teams.

How Automation Boosts Productivity

Automation reshapes how work gets done. Here are two key ways it drives efficiency:

• Task Reallocation
  Take Christie Lites, for example. In November 2022, they introduced Avidbots' Neo robot to handle cleaning tasks. This allowed employees to shift their focus to revenue-generating activities.

• Continuous Operation
  Automated systems run 24/7, perfect for tasks like inventory management, customer service (via chatbots), data processing, and report generation. Procter & Gamble, for instance, uses AI-powered inventory management, saving them $60 million annually.

"Workflow automation has proven to be a powerful tool for driving business growth and success. By relieving employees of tedious, repetitive tasks, automation boosts productivity, reduces errors, fosters collaboration across teams and allows staff to focus on higher-value work, such as innovating, problem-solving and delivering exceptional customer experiences." - NetSuite

A 2022 McKinsey survey showed that two-thirds of companies using automation reported better quality control, enhanced customer satisfaction, and improved employee experiences.

Steps to Get Started with Automation

• Pinpoint repetitive, high-volume tasks that take up a lot of staff time.

• Train employees to oversee and work with automated systems, increasing their contribution to the company.

• Roll out automation gradually to ensure smooth transitions.

• Focus on revamping entire processes instead of individual tasks.

3. Use AI to Improve Resource Planning

AI-driven resource planning can reduce operating costs by 20–30%.

Smarter Resource Allocation

AI is great at analyzing vast amounts of data to spot inefficiencies and improve resource distribution. Here's how some companies are using AI to cut costs:

Sage Publishing revamped its marketing operations with AI:

• Cut content drafting time by 99%

• Reduced marketing expenses by 50%

• Streamlined production for over 100 new textbooks each year

Crexi enhanced its sales process through AI, allowing sales reps to:

• Save 5 hours daily on admin work

• Spend 80% more time engaging with customers

• Use CRM data more effectively

AI doesn't just optimize resources - it also helps avoid expensive operational breakdowns.

Predictive Maintenance and Operations

General Electric uses AI for predictive maintenance to:

• Detect maintenance needs 60% faster

• Monitor engine performance in real time

• Predict when parts need replacement

"AI can also analyze spending patterns, identify the most efficient internal routes to reducing spending, and make cost-saving suggestions." – BiztechCS

Supply Chain Optimization

Walmart uses AI in its supply chain to:

• Cut 30 million unnecessary transportation miles

• Avoid 94 million pounds of CO₂ emissions

• Improve product availability in stores

AI-powered demand forecasting can also reduce inventory costs by up to 20%. Beyond inventory, AI helps with:

• Real-time tracking of supply chain disruptions

• Adjusting resources dynamically based on demand

• Automating supplier management to save costs

Industry-Specific Achievements

In mining, an open-pit copper mine used machine learning to:

• Identify seven ore types instead of three

• Update processing methods in near real time

• Boost production by over 10% in just six months

4. Reduce Downtime with Early Problem Detection

AI-powered monitoring can cut equipment failures by up to 70% and improve machine uptime by 10–20%. This approach plays a key role in lowering operational costs through smarter automation.

Real-World Success Stories

At BMW Group's Regensburg Plant, AI monitors the assembly line and alerts technicians at the first sign of trouble. This system prevents over 500 minutes of downtime annually.

Mercer Celgar saw major maintenance improvements:

• Equipment failures dropped from 50 to just 5 per year.

• Pump replacements fell from 123 in 2007 to only 15 in 2018.

Noranda Alumina LLC reduced bearing replacements by 60% in 2019 using predictive maintenance, saving $900,000 by minimizing downtime and part replacements.

Financial Impact of Downtime

Unplanned shutdowns can be costly:

• Oil & Gas industry: $144,452.28 per hour.

• Data centers: $138,000 per hour in lost revenue.

Identifying problems early shifts the focus from reactive repairs to smarter cost management.

How AI Detection Works

Modern AI systems analyze real-time and historical data to identify unusual vibrations or heat patterns. When an issue is detected, they send immediate alerts and suggest maintenance actions.

Examples include BlueScope Steel's GenAI solution and Makino Asia's IIoT-based system. These tools provide real-time alerts and coordinate maintenance across locations, cutting downtime and improving scheduling efficiency.

Companies using predictive maintenance report:

• 25% lower maintenance costs.

• 50% fewer major equipment failures.

• Equipment lifespan extended by 20–36%.

5. Improve Supply Chain Efficiency

Using automation in supply chain management can help lower costs by fine-tuning inventory processes and building stronger supplier relationships. Combining smarter inventory practices with effective supplier collaboration leads to better cost control over time.

Smart Inventory Management

Automated inventory systems give businesses real-time insights into stock levels across all sales channels. This helps avoid costly issues like overstocking or running out of products. For context, businesses lose about $163 billion annually due to spoiled or discarded inventory.

Some key advantages include:

• Automated Reorder Points: Automatically restocks inventory when it dips below set levels, ensuring stock is always up-to-date.

• Lower Carrying Costs: Accurate forecasting keeps inventory levels just right, cutting down on storage expenses.

Strategic Supplier Collaboration

Toyota's Production System (TPS) is a great example of how automation can improve supplier coordination. Their just-in-time (JIT) approach focuses on:

• Reducing storage costs by timing deliveries precisely.

• Enhancing communication and coordination with suppliers.

• Encouraging shared innovation through joint development efforts.

Sharing data and integrating processes with suppliers further strengthens these relationships.

Data-Driven Supply Chain Optimization

Modern automation tools allow businesses to:

• Share real-time data with suppliers for better visibility.

• Automatically update order statuses.

• Link procurement systems directly with inventory management.

• Centralize all supplier communications.

With these tools, companies can work closely with suppliers to find cost-saving opportunities while keeping inventory at the right levels.

Automated Risk Management

AI-powered systems add resilience to supply chains by analyzing supplier performance, monitoring trends, optimizing delivery routes, and predicting potential disruptions. This proactive approach helps businesses stay ahead of challenges.

6. Speed Up Invoice Processing

Handling invoices manually can take as long as 25 days, consuming time and resources. Automation not only cuts costs but also helps businesses take advantage of early payment discounts. Here’s a breakdown of how automation can transform invoice processing.

How Automation Improves Invoice Processing

AI-driven systems make invoice processing faster and more accurate by:

• Extracting Data Intelligently: Using OCR and machine learning to capture invoice details with precision, minimizing errors.

• Validating Automatically: Three-way matching ensures invoices align with purchase orders and receipts.

• Streamlining Approvals: Digital workflows replace manual approvals, speeding up the entire process.

Unlocking Early Payment Discounts

Automated solutions enable businesses to secure early payment discounts more effectively. For example, Ardent Partners reported a 15% rise in early-payment discount capture in 2021 as more companies moved to automation.

For companies processing 20,000 checks annually, automation can generate over $100,000 in yearly savings. These savings come from quicker approvals, reduced admin costs, better supplier relationships, and automatic identification of discounts.

Real-World Examples of Success

The benefits of automation are evident in real-world cases:

American Greetings saw remarkable results after adopting automated invoice processing, including:

• 99% automated cash posting for 12 million invoices annually.

• Faster payments through AI-powered matching.

• Enhanced customer satisfaction with a self-service payment portal.

ResMed, another success story, achieved:

• A 95% accuracy rate across all business units.

• A 13-hour reduction in manual processing time.

• A 33-day drop in Days Sales Outstanding within 10 months.

Insights Through Real-Time Analytics

Modern automation platforms offer detailed analytics, providing visibility into payment processes. These tools help businesses:

• Analyze payment trends.

• Monitor outstanding balances.

• Identify bottlenecks.

• Optimize cash flow.

This level of insight not only boosts efficiency but also drives significant cost savings.

7. Grow Business Without Adding Costs

Scaling operations has often been associated with higher expenses. But with workflow automation, businesses can expand without increasing overhead. Data shows that companies using automation solutions can cut operational costs by 20–40% while achieving growth. This approach frees up resources, enabling businesses to grow without extra financial strain.

Boosting Team Productivity

Automation tools allow teams to work smarter, not harder. Research indicates that automation reduces time spent on manual tasks by 10–50%. This means teams can handle more work, shift their focus to strategic projects, and maintain high service standards.

Real-World Example: Vonage

A great example of automation in action is Vonage. By automating workflows, they streamlined customer data management, reduced account provisioning time from four days to just minutes, and eliminated manual onboarding errors.

Smarter Use of Resources

To grow efficiently, companies often rely on these strategies:

Evaluating Processes

Studies show that 68% of employees are bogged down by repetitive tasks. These tasks are prime candidates for automation, freeing up time for more valuable work.

Strategic Implementation

Focus on solutions that deliver measurable results. For example, the percentage of businesses automating across multiple functions rose from 57% in 2018 to 66% today.

The Impact on Productivity

• 90% of employees report higher productivity with automation tools.

• 85% of teams experience better collaboration.

• 86% of workers say automation makes their jobs more efficient.

"Automation helps protect companies from the burden of inefficiency." - Juan Perez, EVP and CIO of Salesforce

Preparing for Long-Term Growth

Looking ahead, 80% of organizations are expected to adopt intelligent automation by 2025. Choosing scalable automation platforms now ensures your business is ready to grow alongside these advancements.

Manual vs. Automated Process Costs

Comparing manual and automated processes clearly shows how automation can save money and improve efficiency. Manual processes can cost organizations 20–30% of their revenue each year.

Invoice Processing Comparison

Automated systems process invoices 80% faster and at 80% lower costs.

Hidden Cost Factors

Manual processes come with less obvious costs that add up over time:

Labor Inefficiencies

Office workers spend around 10% of their time on manual data entry and more than 50% updating documents. Add to that a 35% overhead on salaries, and the result is significant labor waste.

Error-Related Expenses

Mistakes in manual processes are costly - errors cost businesses approximately $12.9 million annually.

Operational Impact

Automation doesn’t just save money; it also transforms how work gets done:

These differences highlight how manual processes can drain IT resources, making automation even more critical.

"Workflow Automation can reduce general business process costs by 30 percent. This takes into account staff and time savings as well as accuracy improvements." - Deloitte

IT Department Efficiency

Manual tasks also create challenges for IT teams. Automatable, low-level tasks take up 30% of their time, diverting resources from more important work.

Digital Transformation Impact

Automation is a key driver of digital transformation. In fact, 97% of IT decision-makers now view process automation as essential to staying competitive. This shift not only reduces costs but also improves overall operations.

Conclusion

The data speaks for itself: workflow automation not only reduces costs but also boosts efficiency in significant ways. On average, businesses save 26,660 worker hours annually through automation, equating to over $1 million in savings compared to $480,000 in implementation costs.

Consider accounts payable automation: it slashes costs by 80%, cutting invoice processing costs from $16.91 to $3.47 and reducing processing time from 14.6 to 2.9 days. Companies allocating at least 20% of their IT budgets to automation report 17% lower costs compared to manual processes.

Here are a few other key benefits:

• Higher Accuracy: Workflow automation increases data accuracy by 88% and reduces human errors by 32%.

• Better Use of Resources: McKinsey Digital reports that automation can free up 30% of employees' time for higher-value tasks.

• Forward-Thinking Strategy: A 2024 Deloitte survey found that 81% of finance leaders view automation as the most effective way to cut future costs.

Real-world success stories back this up. For example, Procter & Gamble's automation initiatives have delivered substantial annual savings.

With the robotic process automation market expected to grow nearly 40% annually through 2030, adopting automation is no longer optional - it’s a must for staying competitive. By leveraging these strategies, businesses can cut costs, increase efficiency, and position themselves for long-term success.

FAQs

How does workflow automation help businesses lower labor costs?

Workflow automation lowers labor costs by reducing the need for manual tasks, allowing employees to focus on higher-value activities. By automating repetitive processes, businesses can streamline operations, minimize errors, and improve overall productivity.

Additionally, automation tools can handle tasks more efficiently and consistently than manual labor, leading to faster turnarounds and better resource allocation. This not only saves time but also translates into measurable cost savings for the organization.

What technologies are used in automated invoice processing, and how do they boost efficiency?

Automated invoice processing relies on several advanced technologies to streamline operations and reduce manual effort. These include invoice automation software for extracting and organizing data, cloud-based storage for secure and accessible data management, and AI-powered tools that enhance accuracy and speed.

AI and machine learning (ML) play a key role by intelligently extracting, categorizing, and validating invoice information, minimizing errors, and saving time. ML can also adapt to approval workflows, enabling smarter decision-making over time. By reducing manual tasks and improving accuracy, these technologies help businesses save both time and money while enhancing overall efficiency.

What steps can businesses take to implement automation smoothly without interrupting daily operations?

To implement automation smoothly without disrupting daily operations, businesses should start by mapping out existing workflows to identify inefficiencies and areas where automation can have the most impact. Ensure the automation tools selected integrate seamlessly with current systems and are user-friendly to minimize the learning curve.

Adopting a phased approach can also help reduce disruptions. Begin by automating simple, repetitive tasks, then gradually expand to more complex processes as employees become comfortable with the changes. Providing training and ongoing support for staff ensures a smoother transition and encourages adoption across the organization.