Automation refers to the technology that regulates a specific procedure or process, enabling the process to be carried out automatically without the need for human intervention. Automation has played a vital role in the development of machinery and is further evolving to include artificial intelligence and machine learning. Process automation, also known as business process automation, refers to the automation of business processes through the use of computers and software. Through process automation, repetitive tasks can easily be carried out with a minimal need for human involvement, freeing up time for human resources. Not only does process automation save time, but it also increases efficiency, reduces the chance of error and saves costs overall.
Process automation has immense applications across industries, functions, and departments, and the potential for process automation is greater still. The capabilities of process automation receive a significant boost by adding machine learning and artificial intelligence that facilitate process automation in improving its procedures as and when required. Process automation is in great demand at a global level, due to the many benefits it offers, such as improved customer experience, streamlined processes better time and cost savings, improved regulatory compliance, better employee satisfaction and better overall allocation of resources.
Process Automation Global Outlook
The global outlook for the process automation market is positive, which can be witnessed from the current process automation market size that is growing at a compound annual growth rate (CAGR) of 6.6 percent and is expected to reach a value of $178 billion by 2020. At a global level, the process automation market is fragmented with there being a variety of industries and end-user segments making use of process automation
High market maturity regions are North America and Europe while medium maturity regions are the Asia Pacific. Europe is expected to maintain its dominating position in the process automation market with respect to growth prospects, while the MEA region is projected to have the fastest growth rate at a CAGR of 9.5 percent till 2020.
Market Drivers: There are several factors that are driving the growth of the process automation market, primarily based on the benefits it offers by accurately conducting repetitive work, and freeing up human resources. This is especially beneficial in chemical and pharma industries where minute errors can make a drastic difference in end results. In addition, process automation can carry out tasks that are hazardous for humans to conduct personally. Rapid technological changes are further improving the capabilities of process automation, for example through machine learning, cloud-based automation, large-scale customization, and system integrations.
Market Challenges: Despite the myriad benefits of process automation, there are certain challenges associated. The initial implementation and maintenance costs of a process automation setup are significant and there is also a lack of trained professionals in the market to oversee the setup process, posing challenges to the process automation market. Large-scale implementation of process automation poses another challenge in the form of risk of unemployment.
Process Automation Market Size
Process automation is a versatile technology that can be used for numerous processes across departments, including human resources, operations, IT, finance, sales, and management, by removing the hassle of routine manual tasks that take up time and risk human error. The major end-user industries for the process automation market currently are oil & gas, metals, and mining, pharma, paper & pulp, automotive, and chemicals.
The supplier landscape in the process automation market is highly competitive, due to which major players engage in mergers and acquisitions to expand into untapped markets, enhance their product offerings and invest in innovating to develop new products. Major suppliers in the global process automation market include Honeywell International Inc., Mitsubishi Electric, General Electric Company, Rockwell Automation, ABB Ltd., and Johnson Controls Inc.
Market Trends: Raw materials account for nearly 55 percent of the total cost of manufacturing the automation equipment. While original equipment manufacturers (OEMs) generally have a preference for lump-sum pricing models, distributors favor cost-plus pricing and integrators prefer milestone based or time and material based pricing. The most popular contract length is for 2-3 years duration with optional service for maintenance and spare parts.
The Internet of Things (IoT) has immense potential in combination with process automation as the automation will not be restricted to a specific computer, but can also be applicable to the entire IoT network. As the IoT technology evolves, process automation can maximize the machine-to-machine connection and perform a host of tasks, further increasing efficiency and productivity.
The technology of process automation has made a significant mark in the functioning of industries, due to its capability of undertaking repetitive tasks and carrying them out with efficiency without the need for human intervention. There is immense potential in the field, both in terms of global expansion and growth across industries. The customizability of process automation further increases its usefulness, however, the costs involved in implementation and maintenance hinder the growth of the process automation field.