Automation and Its Advantages and Disadvantages

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Automation can be defined as the mechanization and integration of the sensing of environmental variables, data processing, decision making and mechanical action (Sheridan, 2002). Automation is a major trend in the transport industry which the companies in this industry use as a competitive advantage in the market. Automated systems can be applied in most of the operations of the courier company.

In the courier industry, automation can be used in the operations of sourcing customers, ordering rides, tracking courier vehicles, navigation, achieving effective customer care among others. However, automated systems do not function solely but they ought to be integrated. Human operators are required to ensure the effective operations of the automated systems. As systems become more automated, consequently there is a need for more of the human aspect of control, development, and management (Sheridan, 2002). An example of automation is where ‘My Taxi,’ owns an app that customers can use to order rides. The implementation of the automated system could be expensive and demanding but it has great advantages for its users.

Pros and Cons

Automation would be advantageous as it would allow for the managers of ‘My Taxi’ to control the company’s assets, ensuring efficiency in operations. ‘My Taxi’ would reduce the costs of operating the business as labor costs and human error related costs are also reduced (Amundrud, 2017). This would mean more profits for ‘My Taxi’. With automation, most people who operate the company’s operations are replaced by machines and systems which causes less human error.

Automation would ensure that the organization would not have to experience the highs and lows of changing seasons. For example, the drivers do not have to waste time and energy in looking for customers during the low seasons as they would be brought to them through the apps. By absorbing Hailo, the company was able to connect more clients with additional drivers. The ordering of a ride is made easier for customers, the drivers are able to get customers easier and the company is also getting its commissions and communicating with drivers easily. The customers also will be more satisfied through automation of the company operations.

Automation for ‘My Taxi’ would also ensure that its customers are more satisfied and maintained for the continuous success of the company. Every company is in constant competition. Each company now seeks how best to satisfy its customers better than the competitors. Automated cab hailing would ensure that the customers are not discriminated against and that the customers are better responded to by any driver. That is, the driver does not discriminate the customers on the basis of color, race, religion or social status as the courier tasks would be issued automatically to the nearby driver.

Fares are better regulated and the company can obtain an account of the drivers’ whereabouts, expenses on fuel and the turnover for the day. The driver hence cannot overstate fares for his benefits and he/she cannot steal from the company’s earnings. Should ‘My Taxi’ choose to invest in robots, they are assured that their earnings are secure as no robots can siphon money unless programmed to do so. Satisfied customers would provide the best loyal customer base for the success of ‘My Taxi’. Although these automated systems assure ‘My Taxi’ and its customers of great service and efficiency, they also present the company with disadvantages.

The downsides to implementing automation are mainly based on the expenses involved, the skills and experience of the personnel required and also the surrounding environments. Automated systems involve the use of technology that is advanced, algorithms, robots and also more improved vehicles and machines. These technologies are expensive to invest in for the company as the process of automating the company starts and it is also expensive to maintain and develop them as time goes by. The expenses could be too great and later the projected income could not be achieved resulting in huge loses for ‘My Taxi’ and its shareholders.

Integrating people and systems would also be expensive and a technical process. As a start, training is required to equip the staff with the skills best suited to operate and understand the automated machines and systems to be used. The Human Resource Managers would also need to invest time and money into human resource activities involved with the additional human resources acquired. This would mean additional expenses for the organization. The human resources activities are expensive and qualified staff are required to manage these activities. The staff needed to develop and maintain the automated systems are also expensive as they have to be paid steep prices which means more expenses for the organization.

It is risky to automate the business as the managers may not be served with all the facts about the potential risks. The system may be poorly developed if the company seeks cheap services given by unqualified professionals, causing potential errors in operations. The staff may rely too much on the systems and this would present a risk to the company, and especially when the systems fail, and the staff needs to perform operations manually. Who will perform the necessary tasks for the continuity of the company? It is also risky to operate a Cab Company which uses a self-driven vehicle as there is potential for accidents that could be avoided through human judgment and response (Richtel and Dougherty, 2015). Automated systems can also be hacked and the automated vehicles used to satisfy the hackers needs (Alheeti, Gruebler, and McDonald-Maier, 2015).


Automated systems make work easier, management is made more efficient, costs are reduced and response time to the customers’ needs is minimized. Which drivers and customers wouldn’t want that? These systems are also involved in high initial investment costs which can be a disadvantage to some companies instead of an advantage. It is only by careful examination of the situations facing the company and proper implementation of good systems that the company can be able to achieve success in its automated processes. The success of good automated systems would depend on the implementation process and resources put into it.


Every organization aims at improving its business (Harmon, 2003). ‘My Taxi’ can benefit from the automation of its operations but, it would also need to effectively control the risks and expenses of automation. Following this, the company needs to develop a good implementation process and supporting activities to make automation a success. Like every profit-making company, ‘My Taxi’ would be aiming at the satisfying economy, efficiency, and effectiveness. The company needs to perform various operations to effect automation of the company.

First, the company managers need to check and evaluate its operations. By this evaluation, the managers will seek an answer to what operations are automated? Which automated systems are inefficient and need development? What operations can be automated to achieve efficiency in operations? What is the opportunity costs of doing away with certain operations? What are the customers saying about the company’s operations? These questions will be answered if the managers ensure proper evaluation procedures in all areas of operations. The evaluation will be expensive since the managers will seek the support of technicians in various environments such as IT experts.

After the assessment of the company’s operations and the entire organization, the company will have what it needs to be changed. The company managers need to discuss and answer the question, do we really need this automation? Therefore, the managers should assess the funds they have currently and the costs, time and work involved in acquiring more funds. They will need to answer questions such as will these new automated systems change the way of doing business? Will it reduce the operational expenses and costs related to human error (Amundrud, 2017)? Some automated operations and systems may result in more expenses than the expected benefits which would not be promoting an economic business.

The managers also need to establish a good financial plan. They can hold discussions with the Chief Financial Officer of the company and establish the current financial position of the company. There are no developments that can be made without money being involved hence the need to engage financial officers. The CFO can advise the managers if there is the need for more funds and where to get these funds. He/she may advise the management of good investment deals currently in the market. Investors may be unwilling to invest if they are not convinced of the viability of the investment, therefore, convincing the investors is a lot of work.

Technology changes from time to time, and this is reiterated by Harmon (2003, p. 1) as he discusses on the process of changing a business where he states, “We live in a world that keeps changing faster all the time. What worked yesterday may not work today or tomorrow.” The management by the help of the experts needs to assess what technology is latest in the market to ensure the company does not invest in obsolete technology. However, amateur techies may be wrong in their assessments if they lack the experience in the area. If so, the manager may either be forced to forego an important investment that would benefit the company or, they may be advised to invest in a technology that is really not of benefit to the company.

The managers now need to assess what the competitors are doing. For a competitive advantage, the company has to do things more uniquely than the competitors. Henry Ford automated his motor vehicle assembly line which then resulted in reduced assembly time and costs. This further led to improved salaries for his workers better than the competitors (Harmon, 2003). The managers thus need to assess the automated systems that they need to improve or add to have a competitive advantage against their peers. They can improve navigation systems in the apps to enable a customer to be linked with the nearest cab driver within the shortest time. The competitors, however, may also decide to upgrade their systems after realizing a change in ‘My Taxi’s’ systems. Therefore, the company has to find new competitive advantages.

The managers need to engage risk managers in the process of implementing any new automated systems. They assess the potential risks associated with automated systems and they give a report on the same. If the managers choose to accept these risks, the risk managers can give suggestions on how to minimize the risks and offer an insurance scheme for the company’s automated systems. Driverless cars can be a risky investment. One of Google’s driverless cars was involved in an accident for following traffic rules that the human driver - who was involved in the accident - could not (Richtel and Dougherty, 2015). Risk managers could be able to ensure the automated car against such an accident indemnifying the owners of the vehicle; if they had taken an insurance policy for the vehicle.


    In conclusion, automation of the systems of ‘My Taxi’ is a good investment for the stakeholders of the company. The customers are able to get better services and satisfaction, the drivers are able to get customers much easier and the company is able to improve efficiency in its operations and reduce the costs of doing business. Every investment in something new or a change is also not without problems. Automated systems have various disadvantages and risks which ought to be explained to the investors before the management can choose to implement them. Every investor wants to make a quality investment one that does not put the investors’ money to undue risks.


Alheeti, K.M.A., Gruebler, A. and McDonald-Maier, K.D., 2015, January. An intrusion detection system against malicious attacks on the communication network of driverless cars. In Consumer Communications and Networking Conference (CCNC), 2015 12th Annual IEEE (pp, 916-921). IEEE.

Amundrud, P.N., 2017. Opportunities for Automation, Internet of Things, Big Data Analytics and 3D Printing within Oil and Gas Drilling, Production and Transport (Master’s Thesis, University of Stavanger, Norway).

Harmon, P., 2003. Business process change: a manager’s guide to improving, redesigning and automating processes. Morgan Kaufmann.

Richtel, M. and Dougherty, C., 2015. Google’s driverless cars run into problem: Cars with drivers. New York Times, 1.

Sheridan, T.B., 2002. Humans and automation: System design and research issues. Human Factors and Ergonomics Society.

October 24, 2023

Business Economics

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Company Automation

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