Within five years there will be at least one fully automated McDonald’s. That was the bet Jackie Leo, Editor-in-Chief of The Fiscal Times, made two years ago with a friend.

Why not? Google and several automotive manufacturers are working on vehicles that drive themselves, manufacturing and warehouse workers have been replaced in many sectors by robots, and in Japan the Kura Sushi chain uses robots to make sushi, which it delivers to customers via conveyor belt.  

“I figured if you could robotically serve a delicate Japanese meal, why not a hamburger?” said Leo during a speech she gave earlier this week at Forbes’s Techonomy conference in Tucson, Ariz.

Well, McDonald’s won’t reveal its plans for automating stores (I asked), but it does plan to take one small, high-tech step forward by implementing touch-screen ordering systems in European locations.

So what’s a smaller business to do? Try to catch the automation wave early? Differentiate with humans, not robots? I asked some experts to weigh in.

Automation: What’s in it for you

OK, obviously, there are big benefits to automating certain business processes and functions. For one thing, it can save companies a lot of money.

One example: An Elmsford, New York-based e-Discovery services provider called Planet Data uses automated workflow combined with analytic and advanced search and filtering tools that it claims does a better job than humans alone in sifting through hundreds of thousands of electronic documents. That means less billable legal hours when a company is being sued and finds itself in the unenviable position of having to hand over huge amounts of data—all of which have to be reviewed by lawyers first.

And automation can increase efficiency and create a safer work environment.

Companies like Office Depot, Zappos, Crate & Barrel, Gap Direct, Saks.com and Staples.com are using warehouse robots made by Kiva Systems that receive commands and communicate with each other wirelessly to move products while avoiding collisions. They also continually rearrange shelving layout to increase efficiency. These companies are saying order fulfillment time has dropped significantly thanks to the intelligent machines.

But then there can be too much of a good thing.

Step with me into my local Walmart, which a few years ago installed a large number of self-checkout lanes. With significantly fewer workers manning the checkout lines, these self-serve stations have obvious appeal.

My main complaint—in addition to having to bag my own groceries—is if you scan something that doesn’t weigh much, say, a packet of seeds for your garden, the system can’t detect that you’ve put it into the bagging area. Then you get an annoying (and process-clogging) message telling you as much. If you scan several tiny items it will let you bypass bagging a few times but at some point the whole show goes on hold and you’re left waiting for a human to come over and get the thing going again.

Where the robots fall short

Besides the loss of human interactions—no small thing for local business—another consideration is how automation displaces the intellectual property in the heads of workers. “However good we think artificial intelligence may be, it still does not know how to interpret and react to variations in human interactions, behavior, and experience,” says Robert Keahey, founder and principal of the IT consulting firm SummaLogic and expert on the Focus Network.  

Keahey holds up Apple’s new artificial intelligence for the iPhone 4S as an example.

“We've all been excited about its potential for automating our daily lives. But YouTube is littered with our hilarious and not so hilarious experiences with Siri,” he says.

The AI underlying high-tech business automation—i.e. “the brains” behind modern robotics—lack something critical: human intuition. “This is a very valuable component that is often overlooked when process automation is designed and implemented,” says John McCoy, Enterprise Solutions Architect for New York-based Assurant. Even the most advanced automated system can’t respond to context the way a human worker would.

And then there is obviously cost: Automation can be extremely expensive. Those Kiva Systems robots I mentioned earlier run about $1.5 million each.

“The core upsides and downsides for SMBs and other businesses are much the same, with the exception that the SMB may be taking a bigger economic risk with a sizable investment,” says Art van Bodegraven, president of Powell, Ohio-based Van Bodegraven Associates, a supply chain and logistics consulting company.

What are your thoughts? Have you taken smaller (and cheaper) steps toward automation?