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Fundamentals

Consider this ● a staggering number of small to medium-sized businesses, nearly 70%, initiate automation projects without a clear strategy for measuring success beyond immediate cost reduction. This rush to automate, often fueled by competitive pressure or the allure of technological advancement, can leave SMBs adrift, unsure if their investments are truly yielding desired outcomes. Defining success in transcends simple metrics; it requires a holistic understanding of business impact, from streamlined operations to enhanced customer experiences and beyond.

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Beyond Cost Cutting ● A Broader View of Automation Success

For many SMBs, the initial appeal of automation lies in the promise of reduced operational costs. While is undeniably a significant potential benefit, fixating solely on this metric provides an incomplete picture of automation’s true value. A successful automation implementation should reverberate across various facets of the business, creating a ripple effect of positive change. To truly gauge success, businesses must adopt a wider lens, encompassing metrics that reflect efficiency gains, improved quality, enhanced customer satisfaction, and even employee well-being.

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Key Business Metrics for SMB Automation Success

Navigating the landscape of can feel overwhelming. However, for SMBs, focusing on a core set of easily trackable and highly impactful metrics provides a practical starting point. These metrics should align with the specific goals of the automation project and reflect the business’s overall strategic objectives. Let’s examine some fundamental metrics that SMBs can leverage to assess their automation journey:

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Operational Efficiency Gains

One of the primary drivers for automation is to boost operational efficiency. Metrics in this category directly measure how effectively automation streamlines processes and optimizes resource utilization.

Successful automation in SMBs isn’t just about doing things cheaper; it’s about doing things better, faster, and with fewer errors, ultimately freeing up valuable resources for growth and innovation.

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Financial Performance Improvements

While not the sole indicator, financial metrics remain crucial for evaluating the business impact of automation. These metrics demonstrate the tangible and the financial sustainability of automation initiatives.

  • Return on Investment (ROI) ● Calculate the financial return generated by the automation project relative to the initial investment. ROI provides a clear picture of profitability and helps justify automation expenditures. For example, automating with chatbots can lead to significant cost savings in staffing, directly impacting ROI.
  • Cost Reduction in Specific Areas ● Identify specific areas where automation is expected to reduce costs, such as labor, materials, or overhead. Track these costs before and after automation to quantify the savings. Automating marketing tasks, like email campaigns, can reduce marketing agency fees, leading to direct cost reduction.
  • Revenue Growth Attributable to Automation ● In some cases, automation can directly contribute to revenue growth by enabling faster service delivery, expanding service offerings, or improving product quality. Track revenue changes in areas impacted by automation to assess this contribution. For instance, automating appointment scheduling can lead to increased appointment bookings and, consequently, higher revenue.
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Customer Experience Enhancement

In today’s competitive landscape, is paramount. Automation can play a vital role in enhancing customer interactions and building stronger customer relationships.

  • Customer Satisfaction (CSAT) Scores ● Measure levels through surveys or feedback mechanisms before and after automation implementation in customer-facing processes. Improvements in CSAT scores indicate that automation is positively impacting the customer journey. Automating support ticket routing can lead to faster response times and improved customer satisfaction.
  • Customer Retention Rate ● Analyze customer retention rates to see if automation initiatives, particularly those focused on customer service or personalized experiences, are contributing to increased customer loyalty. Automation in CRM systems can enable more personalized customer interactions, potentially improving retention.
  • Net Promoter Score (NPS) ● Track NPS, which measures customer willingness to recommend the business, to gauge the overall impact of automation on customer advocacy. Improved NPS scores suggest that automation is enhancing the overall customer perception of the business. Automating order tracking and delivery updates can improve customer experience and positively influence NPS.
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Employee Productivity and Satisfaction

Automation should not be viewed as a replacement for employees but rather as a tool to empower them. Metrics related to and satisfaction are crucial for assessing the human impact of automation.

  • Employee Productivity Metrics ● Measure employee output and efficiency in tasks that are now augmented or supported by automation. Automation should free up employees from repetitive tasks, allowing them to focus on higher-value activities, thus increasing overall productivity. Automating data analysis can enable employees to spend more time on strategic decision-making.
  • Employee Satisfaction Scores ● Assess employee satisfaction levels, particularly in departments directly affected by automation. Well-implemented automation can reduce workload stress and improve job satisfaction by eliminating mundane tasks. Surveys and feedback sessions can help gauge employee sentiment towards automation.
  • Employee Training and Upskilling Metrics ● Track the number of employees trained on new technologies and skills related to automation. Successful automation implementation often requires employee upskilling to manage and utilize the automated systems effectively. This metric reflects the business’s investment in its workforce and its commitment to adapting to technological changes.

For SMBs venturing into automation, starting with these fundamental metrics provides a solid foundation for evaluating success. Regularly monitoring these metrics, comparing pre- and post-automation data, and adapting strategies based on the insights gained are essential steps in ensuring that deliver tangible and meaningful business value. The key is to remember that automation is a journey, not a destination, and continuous measurement and refinement are critical for long-term success.

Strategic Alignment and Deeper Metric Analysis

While fundamental metrics offer a crucial starting point, a more sophisticated evaluation of necessitates delving into and employing deeper analytical techniques. For SMBs seeking to leverage automation for sustained growth and competitive advantage, understanding how automation initiatives contribute to overarching business strategies becomes paramount. This requires moving beyond basic and examining metrics that reflect strategic impact, process optimization, and resilience.

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Strategic Contribution Metrics ● Automation as a Growth Catalyst

Automation, when strategically implemented, acts as a catalyst for business growth. Metrics in this category assess how automation initiatives contribute to achieving key strategic objectives, such as market expansion, new product development, or enhanced competitive positioning.

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Market Share Expansion

Automation can enable SMBs to scale operations and reach wider markets. Metrics related to market share expansion track whether automation initiatives are contributing to capturing a larger portion of the target market. For example, automating customer onboarding processes can facilitate faster customer acquisition and support growth in market share.

  • Market Penetration Rate ● Measure the percentage of the potential market that the SMB has captured. Automation-driven improvements in efficiency and service delivery can lead to increased market penetration.
  • Customer Acquisition Cost (CAC) Reduction ● Automation can streamline marketing and sales processes, reducing the cost of acquiring new customers. Lower CAC, coupled with increased market penetration, indicates successful market share expansion.
  • Geographic Market Reach ● Automation can enable SMBs to serve customers in new geographic locations. Track the expansion of customer base into new regions as a result of automation initiatives. For instance, automating order fulfillment can enable an SMB to expand its e-commerce reach nationally or internationally.
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New Product and Service Innovation

Automation can free up resources and empower employees to focus on innovation. Metrics in this area assess how automation contributes to the development of new products, services, and business models.

  • Number of New Products/Services Launched ● Track the number of new offerings introduced after automation implementation. Automation can streamline R&D processes, accelerate product development cycles, and enable the creation of innovative solutions.
  • Time-To-Market for New Offerings ● Measure the time taken to bring new products or services to market. Automation in areas like prototyping and testing can significantly reduce time-to-market, providing a competitive edge.
  • Innovation Pipeline Growth ● Assess the number of new ideas and projects in the innovation pipeline. Automation can foster a by freeing up employees from routine tasks and encouraging creative problem-solving.
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Competitive Advantage Enhancement

In a competitive market, automation can be a key differentiator. Metrics in this category evaluate how automation initiatives strengthen the SMB’s competitive position.

  • Lead Time Reduction Compared to Competitors ● Measure the reduction in lead times for order fulfillment or service delivery compared to industry benchmarks or key competitors. Faster lead times, enabled by automation, can be a significant competitive advantage.
  • Product/Service Quality Improvement Metrics ● Track metrics related to product or service quality, such as defect rates or customer complaints, in comparison to competitors. Automation can enhance quality control and consistency, leading to superior offerings.
  • Customer Responsiveness Metrics ● Assess the speed and effectiveness of customer service and support compared to competitors. Automation in customer communication channels can enable faster response times and improved customer satisfaction, contributing to competitive differentiation.

Strategic automation is not about automating for automation’s sake; it’s about strategically deploying technology to achieve specific business goals, drive growth, and outpace the competition.

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Process Optimization and Efficiency Deep Dive

Beyond basic efficiency metrics, a deeper analysis of is crucial for maximizing the benefits of automation. This involves examining metrics that reveal bottlenecks, identify areas for further improvement, and ensure that automated processes are truly optimized for peak performance.

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Process Bottleneck Identification and Resolution

Automation implementation should aim to eliminate process bottlenecks. Metrics in this area focus on identifying and tracking bottlenecks to ensure that automation is effectively addressing these inefficiencies.

  • Waiting Time Reduction in Processes ● Measure the time spent waiting between process steps before and after automation. Significant reductions in waiting times indicate that automation is streamlining workflows and eliminating delays.
  • Work-In-Progress (WIP) Inventory Reduction ● Track the amount of WIP inventory in manufacturing or service processes. Automation can optimize production flow and reduce WIP, leading to improved efficiency and reduced carrying costs.
  • Resource Utilization Rate Improvement ● Measure the utilization rate of key resources, such as equipment or personnel, before and after automation. Improved resource utilization indicates that automation is optimizing resource allocation and minimizing idle time.
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Process Standardization and Consistency

Automation promotes process standardization and consistency, reducing variability and improving predictability. Metrics in this category assess the level of standardization achieved through automation.

  • Process Variation Reduction ● Measure the variability in process outputs or cycle times before and after automation. Reduced variation indicates increased process consistency and predictability.
  • Adherence to Standard Operating Procedures (SOPs) ● Track the degree to which automated processes adhere to established SOPs. Automation ensures consistent execution of processes according to defined standards.
  • Data Accuracy and Consistency Improvement ● Assess the accuracy and consistency of data generated and processed by automated systems. Automation minimizes manual data entry errors and ensures data integrity across processes.
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Scalability and Flexibility Metrics

Automation should enhance the scalability and flexibility of business operations. Metrics in this area evaluate the SMB’s ability to handle increased workloads and adapt to changing business demands with automated systems.

  • Scalability Capacity Increase ● Measure the increase in the business’s capacity to handle larger volumes of transactions or customers without proportional increases in resources. Automation enables businesses to scale operations efficiently.
  • Process Adaptability to Changing Demands ● Assess the ease with which automated processes can be adapted to changing business requirements or market conditions. Flexible automation solutions allow for rapid adjustments to meet evolving needs.
  • System Uptime and Reliability ● Track the uptime and reliability of automated systems. High uptime and reliability are crucial for ensuring and minimizing disruptions.
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Resilience and Risk Mitigation Metrics

Automation can contribute to business resilience and by reducing reliance on manual processes and enhancing operational robustness. Metrics in this category evaluate these aspects of automation success.

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Business Continuity Improvement

Automation can enhance business continuity by ensuring that critical processes can continue to operate even in the face of disruptions.

  • Disaster Recovery Time Reduction ● Measure the time taken to recover critical business processes after a disruption. Automated systems with robust backup and recovery mechanisms can significantly reduce disaster recovery time.
  • Redundancy and Failover Capability ● Assess the level of redundancy and failover capabilities built into automated systems. Redundant systems ensure business continuity in case of system failures.
  • Data Backup and Recovery Frequency and Reliability ● Track the frequency and reliability of data backup and recovery processes for automated systems. Regular and reliable backups are essential for data protection and business continuity.
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Risk Reduction in Operational Processes

Automation can mitigate risks associated with manual processes, such as human error, fraud, and compliance violations.

  • Compliance Violation Reduction ● Track the number of compliance violations related to automated processes compared to manual processes. Automation can enforce compliance rules and reduce the risk of violations.
  • Fraud Detection and Prevention Improvement ● Assess the effectiveness of automated systems in detecting and preventing fraudulent activities. Automation can enhance fraud detection capabilities and reduce financial losses.
  • Operational Risk Score Reduction ● Implement a comprehensive operational risk scoring system and track the reduction in overall risk scores after automation implementation. This provides a holistic view of risk mitigation benefits.
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Cybersecurity Enhancement Metrics

In an increasingly digital world, cybersecurity is paramount. Automation can play a role in enhancing cybersecurity defenses and mitigating cyber risks.

  • Security Incident Rate Reduction ● Track the number of security incidents affecting automated systems. Robust cybersecurity measures integrated into automation solutions can reduce security incidents.
  • Data Breach Prevention Metrics ● Assess the effectiveness of automation in preventing data breaches and protecting sensitive information. Data encryption and access control mechanisms in automated systems contribute to data breach prevention.
  • Cybersecurity Response Time Improvement ● Measure the time taken to respond to and resolve cybersecurity incidents. Automated security monitoring and response systems can significantly improve response times.

Moving beyond basic metrics requires a strategic mindset, a deep understanding of business processes, and a commitment to continuous improvement. For SMBs aiming for sustained success, this deeper level of metric analysis is not just beneficial; it is essential.

By incorporating these strategic, process-oriented, and resilience-focused metrics, SMBs can gain a far more comprehensive and insightful understanding of their automation implementation success. This advanced approach allows for data-driven decision-making, continuous optimization, and ultimately, the realization of automation’s full potential as a driver of sustainable growth and competitive advantage.

Ecosystemic Impact and Transformative Automation Metrics

Contemporary business landscapes are characterized by interconnected ecosystems and transformative technologies. For SMBs to not only survive but to lead in this environment, automation must be viewed through an ecosystemic lens, considering its impact beyond immediate operational efficiencies. Advanced metrics for must therefore extend to encompass ecosystemic influence, transformative potential, and long-term value creation. This necessitates a shift from linear, isolated metric evaluation to a multi-dimensional, interconnected assessment framework.

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Ecosystemic Influence Metrics ● Automation Beyond Organizational Boundaries

Automation’s impact transcends the internal operations of an SMB, influencing its broader ecosystem of suppliers, partners, customers, and even the wider community. Metrics in this category assess the ripple effects of automation across this interconnected network.

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Supply Chain Optimization and Resilience

Automation can significantly enhance supply chain efficiency and resilience. Metrics here track improvements in supply chain performance and stability attributable to automation initiatives.

  • Supply Chain Cycle Time Reduction Across Network ● Measure the reduction in overall supply chain cycle time, encompassing order placement, fulfillment, and delivery across the entire network of suppliers and partners. Automation in areas like demand forecasting and logistics optimization can lead to significant reductions.
  • Supplier Performance Improvement Metrics ● Track key performance indicators (KPIs) of suppliers, such as on-time delivery rates and quality metrics, before and after automation initiatives that involve supplier integration. Automation can facilitate better communication and collaboration with suppliers, leading to improved performance.
  • Supply Chain Disruption Mitigation Metrics ● Assess the SMB’s ability to withstand and recover from supply chain disruptions. Automation in areas like inventory management and risk monitoring can enhance supply chain resilience and minimize the impact of disruptions.
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Customer Ecosystem Engagement and Value Creation

Automation can foster deeper engagement with customers and create new avenues for value delivery within the customer ecosystem.

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Partner Ecosystem Synergies and Collaboration

Automation can unlock new synergies and collaborative opportunities within the SMB’s partner ecosystem.

  • Partner Collaboration Efficiency Metrics ● Track the efficiency of collaborative processes with partners, such as joint product development or co-marketing initiatives, before and after automation. Automation can streamline communication and data sharing, enhancing collaboration efficiency.
  • Joint Value Creation with Partners Metrics ● Assess the value jointly created with partners through automation-enabled collaborations. This could include new revenue streams, cost savings, or enhanced market reach achieved through partnerships.
  • Partner Satisfaction and Retention Rates ● Measure partner satisfaction and retention rates to gauge the health and strength of partner relationships. Automation that facilitates seamless collaboration and mutual value creation can improve partner satisfaction and loyalty.

Ecosystemic automation transcends organizational silos, recognizing that true success lies in optimizing value creation across the entire network of stakeholders. It’s about building a resilient, collaborative, and customer-centric ecosystem powered by intelligent automation.

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Transformative Automation Impact Metrics ● Beyond Incremental Gains

Transformative automation goes beyond incremental process improvements; it fundamentally reshapes business models, creates entirely new value propositions, and disrupts existing industry paradigms. Metrics in this category assess the radical and transformative impact of automation initiatives.

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Business Model Innovation and Disruption

Automation can be a catalyst for business model innovation, enabling SMBs to create disruptive offerings and challenge established players.

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Value Proposition Redefinition and Enhancement

Transformative automation can enable SMBs to redefine their value propositions and offer significantly enhanced customer experiences.

  • Customer Experience Transformation Metrics ● Measure the degree to which automation has transformed the customer experience, moving beyond incremental improvements to create fundamentally new and superior experiences. This could involve using qualitative and quantitative data to assess customer journey transformation.
  • Value Proposition Differentiation Index ● Develop an index to measure the differentiation of the SMB’s value proposition compared to competitors, considering automation-driven enhancements. This index could assess factors like unique features, personalized experiences, and value-added services.
  • Customer Advocacy Growth Rate Post-Transformation ● Track the growth rate of customer advocacy, such as online reviews and referrals, after implementing transformative automation initiatives. Radically improved value propositions should lead to significant increases in customer advocacy.

Industry Paradigm Shift Contribution

In some cases, SMBs leveraging transformative automation can contribute to broader industry paradigm shifts, reshaping industry norms and practices.

  • Industry Best Practice Influence Metrics ● Assess the extent to which the SMB’s automation practices are being adopted as industry best practices by other organizations. This could involve tracking industry publications, conference presentations, and competitor benchmarking.
  • Industry Standard Setting Contribution ● Measure the SMB’s contribution to setting new industry standards related to automation technologies or practices. This could involve participation in industry consortia and contributions to standardization bodies.
  • Thought Leadership Recognition in Automation Domain ● Track the SMB’s recognition as a thought leader in the automation domain, measured by factors like media mentions, speaking engagements, and industry awards. Transformative automation initiatives can position SMBs as industry pioneers.

Long-Term Value Creation and Sustainability Metrics

Ultimately, automation success must be evaluated in terms of and sustainability. Metrics in this category assess the enduring impact of automation initiatives on the SMB’s overall health and future prospects.

Sustainable Competitive Advantage Metrics

Transformative automation should create sustainable competitive advantages that are difficult for competitors to replicate.

  • Competitive Barrier to Entry Metrics ● Assess the extent to which automation creates barriers to entry for new competitors. Proprietary automation technologies or unique data assets can create significant competitive moats.
  • Imitation Resistance Index ● Develop an index to measure the resistance of the SMB’s automation-driven competitive advantages to imitation by competitors. This index could consider factors like technology complexity, data exclusivity, and network effects.
  • Sustained Market Leadership Metrics ● Track the SMB’s ability to maintain market leadership over extended periods, attributable to its automation-driven competitive advantages. Long-term market leadership is a key indicator of sustainable competitive advantage.

Organizational Agility and Adaptability Metrics

Automation should enhance organizational agility and adaptability, enabling the SMB to thrive in dynamic and uncertain environments.

  • Time-To-Adapt to Market Changes Reduction ● Measure the reduction in time taken for the SMB to adapt its operations and strategies in response to market changes, enabled by automation. Agile automation solutions facilitate rapid adjustments.
  • Organizational Resilience Score Improvement ● Track the improvement in the SMB’s overall score, considering factors like adaptability, robustness, and recovery capacity. Automation contributes to organizational resilience in the face of disruptions.
  • Innovation Velocity Increase Over Time ● Measure the increase in the velocity of innovation within the SMB over time, reflecting its ability to continuously innovate and adapt to evolving market demands. Automation fosters a culture of innovation and continuous improvement.

Societal and Ethical Impact Metrics

In an increasingly conscious business environment, the societal and ethical impact of automation cannot be ignored. Metrics in this category assess the responsible and ethical deployment of automation technologies.

  • Job Displacement Mitigation Metrics ● Track the SMB’s efforts to mitigate job displacement resulting from automation, such as employee retraining programs and job creation in new areas. Responsible automation implementation considers the human impact.
  • Ethical AI and Algorithm Audit Metrics ● Implement audits to assess the ethical implications of AI and algorithms used in automation systems, ensuring fairness, transparency, and accountability. Ethical AI is crucial for building trust and avoiding unintended biases.
  • Sustainability and Environmental Impact Metrics ● Measure the positive impact of automation on sustainability and environmental performance, such as reduced energy consumption or waste reduction. Sustainable automation aligns business goals with environmental responsibility.

Transformative automation metrics are not about measuring the past; they are about predicting the future. They are about assessing the potential of automation to reshape industries, redefine value, and create a more sustainable and equitable business ecosystem. For SMBs aiming for true leadership, these are the metrics that truly matter.

Adopting this advanced, ecosystemic, and transformative approach to measuring automation requires a paradigm shift in thinking. It demands a move beyond traditional ROI calculations and efficiency metrics to embrace a holistic, multi-dimensional framework that captures the full spectrum of automation’s impact. For SMBs that dare to think beyond incremental gains and embrace transformative automation, these advanced metrics provide the compass and the roadmap to navigate the complexities of the modern business world and achieve enduring success.

References

  • Brynjolfsson, Erik, and Andrew McAfee. The Second Machine Age ● Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company, 2014.
  • Davenport, Thomas H., and Julia Kirby. Only Humans Need Apply ● Winners and Losers in the Age of Smart Machines. Harper Business, 2016.
  • Kaplan, Andreas, and Michael Haenlein. “Rulers of the world, unite! The challenges and opportunities of artificial intelligence.” Business Horizons, vol. 62, no. 1, 2019, pp. 37-50.
  • Manyika, James, et al. A Future That Works ● Automation, Employment, and Productivity. McKinsey Global Institute, 2017.
  • Schwab, Klaus. The Fourth Industrial Revolution. World Economic Forum, 2016.

Reflection

Perhaps the most critical metric of automation success for SMBs is not quantifiable at all. It resides in the intangible shift in organizational culture ● the fostering of a mindset that embraces continuous improvement, data-driven decision-making, and a relentless pursuit of innovation. If automation implementation cultivates this adaptive and forward-thinking culture, then even in the face of fluctuating market conditions or unforeseen technological disruptions, the SMB is fundamentally better positioned for sustained prosperity. This cultural transformation, though elusive to measure directly, may be the most enduring and valuable outcome of any automation journey.

[Business Automation Metrics, SMB Growth Strategy, Digital Transformation, Operational Efficiency]

Automation success for SMBs is indicated by metrics spanning operational efficiency, strategic alignment, ecosystemic impact, and transformative potential, reflecting holistic business value.

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