Business Digital Transformation: Are We At A Game-Changing Moment?

Business Digital Transformation: Are We At A Game-Changing Moment?

Faced with unprecedented challenges of adapting to operational and supply chain changes overnight, remote customer acquisition and economic uncertainty, going digital is right back at the top of the agenda for businesses and corporates in Asia Pacific.

Rewind a year and businesses were still in the early stages of their digital journey with less than one in four (24.8 percent) large businesses in the region having a clearly defined digital strategy, despite most recognising the importance of digital transformation to improve their ability to survive and thrive (http://eastandpartners.com/uploads/files/research-notes/2019/2019-07_Research_Note.html).

So where do we stand now with business digital transformation? The DBS/East & Partners second “Digital Treasurer” benchmarking research is out.

 

Businesses Are Making Strides in Their Digital Transformation Journey

As businesses reshape their overall business strategy in response to the Covid pandemic, taking into account the shift in customer behaviour, supply chain disruptions, business model opportunities and operational continuity, they are having to take a step back and reassess their roadmaps. Many businesses are reporting a shift in their priorities and resources for the digital roadmap itself.

Despite these challenges, a larger proportion of businesses in Asia Pacific now have a clearly defined digital strategy relative to a year ago, according to insights research conducted by East & Partners for the DBS Digital Treasurer Index II. This figure has grown by 7.7 percent to reach 26.2 percent. At the same time, there is a material drop in the proportion of businesses with no strategy, falling from 25.1 percent a year ago to 18.7 percent. Taken together, these highlight an accelerating growth in digital strategy development among businesses in the region.

Current State of Digital Roadmap Development

% of businesses

Insights Research: Current State of Digital Roadmap Development (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

Businesses Are Making Strides in Their Digital Transformation Journey

Reducing cost and improving efficiencies in the long run have always been the emphasis in many business cases for digitisation. But increasingly, enhancing customer experience is rising as a key driver and for good reason. Having a user friendly and seamless digital platform is now integral to ensuring business continuity, especially when direct interactions with customers are becoming increasingly remote.

In fact, improving customer experience has been highlighted as the greatest ROI from investing in technology solutions by treasuries in the region, alongside reducing cost. Perhaps unsurprisingly, our research suggests that middle-market enterprises stand to benefit more relative to the larger corporates when it comes to customer experience enhancement, levelling the playing field for market participants.

“Cost efficiencies were where we began developing business cases together for digitisation investments but we’ve actually found lots of other benefits that flow, in particular making our customers more sticky and spending more with us.”

- Treasurer, US$2.5Bn, Hong Kong Regional Hotel Group

Key Returns to Investment

Rating on a 1-5 scale, with 1= high return and 5=no return at all

Insights Research: Key Returns to Investment (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

Where Are Businesses Investing in Treasury Services?

There has also been a shift in treasury investment focus. Cash management digitisation has initially led treasury digitisation in the region, as evidenced by the higher level of automation reported in cash management for large Asian businesses relative to other functions such as trade and supply chain financing, cross-border payments & FX, and risk & compliance reporting.

But now, businesses seem to have already eked out efficiencies in their cash management operations and looking to digitise their physical and financial supply chains. This is particularly prominent in Malaysia, India, Japan, Hong Kong, China, Singapore and Indonesia where a majority of businesses are investing in new technology solutions related to trade and supply chain financing.

“We’ve currently got 3 supply chain funding and management development projects happening which will then drive a redevelopment of our cross-border payment operations.”

- Treasurer, US$1.4Bn, Malaysian Importer/Exporter

Top Investment Area for Each Market

% of businesses

Insights Research: Top Investment Area for Each Market (Graph)

Source: East & Partners insights research for DBS’ Digital Treasurer Index II – H1 2020 (N count = 1,686)

What is your experience implementing digitisation projects in your organisation? What is the most valuable learning point that helped you along your journey?

We'd like to hear your thoughts and opinions, get in touch with us below.

On behalf of DBS, we are delighted to provide you with access to an interactive benchmarking tool, where you can find out how your organisation measures up against your peers in digital readiness.

Upon completion of the tool, you will receive an assessment of your digital readiness via 4 core digital values. Kindly access the benchmarking tool here: https://treasuryprism.dbs.com/digitaltreasurer

Have a conversation with DBS today.

Start your digital transformation journey today by finding out more about the latest, available digital solutions that can help to solve your treasury challenges. See our most recent articles on Digital Pulse, or sign up/login to Treasury Prism today to discover a world of opportunities.

 

This article was first published by East & Partners on 20 August 2020. The Digital Treasurer Index Research 2020 was conducted by East & Partners, in partnership with DBS and The Corporate Treasurer.

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.

Digital Supply Chain Solutions: Asia at the forefront of digital growth

Digital Supply Chain Solutions: Asia at the forefront of digital growth

COVID-19 has made it clear that digitalisation is imperative for organisations to survive and thrive. As the pandemic accelerates global adoption of digital supply chain solutions, Asia is emerging as a catalyst for digital transformation and a beneficiary of economic growth, says Mark Troutman, Group Head of Sales, Global Transaction Services, at DBS Bank.

The COVID-19 crisis has created a need for contact-free interaction between customers, suppliers and employees, directly impacting business strategy, sales transactions, trade finance processes and treasury operations. As a result, many organisations have accelerated their digitalisation plans and treasury professionals are leveraging technology to overcome supply chain disruption – from API-led connectivity to enable remote engagement and eliminate manual workflows in the order-to-settlement journey.

 

Amid all these trends, Asia – spurred by its relatively quick recovery – is at the forefront of global digital transformation and poised to benefit economically from post-pandemic opportunities in Asia.

“There is a serious move to digitalisation and we are here to help,” confirms Troutman. “We are seeing a particularly notable swing amongst organisations operating in Asia.” And within this new normal landscape, he believes banks are playing a greater role in helping businesses adapt to the reality of a post-pandemic world.

A new global supply chain ecosystem

As organisations recover from the effects of the pandemic, there is a need to consider their broader supply chain needs. This is where banks can take a more proactive and far-reaching leadership role in driving digital transformation for their clients.

“Banks can leverage existing strengths of connectivity across the supply chain ecosystem, linking manufacturing lines to supplier lines with data, along with their ability to help finance and deliver on logistics needs in a contact-free manner,” explains Troutman.

APIs are also key in the digital transformation of supply chains; they allow organisations to upload trade applications digitally and directly from their own internal platforms, offering an alternative solution to replace wet signatures, with enhanced real-time status notification capabilities. Recently, DBS offered same-day financing to distributors of products made by Haier, the Chinese electronics manufacturer, via Haier’s own digital supply chain platform. Through a series of APIs, DBS enabled distributors to obtain financing digitally and Haier to sell more products.

The digital priority

Digitised supply chains offer greater efficiency and more robust processes, ensuring access to fast and fluid working capital for all parties and enhancing connectivity across a horizontal ecosystem. Each step in the client journey can be digital – from online account opening and digital onboarding of suppliers, to uploading or presenting transactional documents, online platforms, managing application and resubmission processes, as well as receiving financing.

Shorter processing time is another benefit. For example, DBS completed the first transaction through the CamelONE Trade Finance portal early in 2020, becoming the first Singapore bank to join Contour’s network, enabling shorter settlement times, less paperwork and simpler trade processes for customers.

Efficient liquidity management - crucial during times of crisis – is improved by instant settlement, automated reconciliation and greater visibility of the organisations’ cash. In the wake of COVID-19, banks enabled digital solutions for organisations to leverage surplus funds across entities, enabling treasurers to better manage borrowing costs, and to enjoy greater transparency over transactions and increased control over cash as the result of more instant payment transactions.

Asia at the centre of digital transformation

Troutman believes Asia, with its general resilience based on economic strength, robust domestic and regional demand and agility in digital adoption, is well-positioned to lead its Western counterparts in supply chain transformation and post-pandemic economic recovery.

“The overall recovery is slow, especially for major trading partners in Europe and the US,” explains Troutman. “There is also more economic interdependence between Asian countries as geopolitical and economic forces are impacting traditional relationships.”

As organisations look to minimise supply chain disruption and diversify production bases, this could mean a shift in procurement to countries such as Vietnam and India, where labour costs remain relatively low. In addition, organisations that built out their local and regional supply chains within Asia can benefit from shortened supply chains and expedited transactions as well as strong demand from a demographic that is highly receptive to digital services.

With attractive growth opportunities, Asia is expected to remain a nexus for trade, while propelling digital transformation across global supply chains in a post-pandemic world. This bodes well for organisations able to tap this potential first-hand and ready to embark on the next phase of their journey. “Organisations that prioritise digital transformation and look forward to the ‘new normal’ will position themselves to be more relevant, and improve their relevance in the post-pandemic world,” concludes Troutman.

Have a conversation with DBS today.

Start your digital transformation journey today by finding out more about the latest, available digital solutions that can help to solve your treasury challenges. See our most recent articles on Digital Pulse, or sign up/login to Treasury Prism today to discover a world of opportunities.

 

This article was first published in Global Finance in July 2020.

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.

A new light on cash management

Digitalisation is having a profound effect on the way we communicate, commute and consume services, including banking services. In today’s digital world, the question for a bank is not whether to create a digital solution and service offering, which clients expect. Instead, the issue is how to leverage digital channels and capabilities to transform and enrich the client experience, provide new perspectives into treasury challenges and opportunities, and take a multi-faceted approach to exploring potential solutions. This is at the heart of our strategy at DBS, and the inspiration behind the development of our innovative dynamic digital solutioning and advisory platform, DBS Treasury Prism.

 

The birth of DBS Treasury Prism

DBS Treasury Prism was designed to enable clients to model current and potential cash and liquidity management structures, taking into account regulatory and tax considerations in each country where there are business operations and the various cash and treasury management solutions available globally. However, what distinguishes DBS Treasury Prism is not only the multi-faceted functionality and insight that it offers but the way it has been developed, which places the client’s needs and journey at the core of its development. This included a "design-thinking '4D'" approach to development: discover; define; develop and deliver, a commitment to ensure that the platform delivers strategic value to treasurers and their organisations.  

 

The 4D Development of DBS Treasury Prism

Discover - We formed a multidisciplinary group to work with 70 current and prospective clients to understand their banking and cash management challenges in detail. This was refined through a process of detailed in-person studies to understand and incorporate functional, emotional and social dimensions into the design of the solution.

Define - Based on this input, we crystallised the feedback from participants into the five key insights (challenge areas), and designed the functionality, scope and usability of DBS Treasury Prism.

Develop -The team followed an iterative process of developing prototypes in conjunction with an innovative US technology/user experience (UX) company, seeking client feedback on their impressions and how they might use it in practice, and refining on a continuous basis.

Deliver - We are now in the delivery stage, with DBS Treasury Prism in beta phase is now available to our clients; however, this is far from the end of the journey. We continue to engage in a constant process of re-evaluation, feedback and refinement to ensure that the platform continues to offer value to our clients and reinforces our digital relationship with them.

 

The result is a highly functional, pragmatic and insight-led design based on in-depth engagement and feedback from a deep pool of both existing and prospective clients. This research and insight emphasised:

  • Time challenges. Treasurers say that it takes too much time and preparation to define and deliver an optimal cash management solution, leading many to postpone or cancel the implementation of new cash management initiatives, particularly given competing business priorities.
  • Uncertain benefits. Many companies – and indeed banks find it difficult to quantify the cost and productivity benefits of a new cash management solution, which is a major obstacle when trying to develop a compelling business case.
  • Keeping up to date. Given the diversity and speed of change across Asia, treasurers and finance managers lack the time and resources to navigate and keep up to date with the plethora of regulatory and tax changes that have an impact on cash management decisions. This creates challenges when trying to position a new cash management solution, and treasurers may ultimately decide not to implement a new cash management strategy for fear of noncompliance.
  • Stakeholder engagement. Treasurers typically need to work with a large number of stakeholders across the business, including central functions such as legal, tax and other finance teams, as well as operating units. Consequently, the easier it is to collaborate and share knowledge, such as the ability to create a dynamic visualisation of account and liquidity structures, the more likely that a cash management project will be successful.
  • Implementation risk. Implementing a new cash management solution, even with an existing bank, is a highrisk project for corporate treasurers, often with significant internal scrutiny. Treasury functions are often small, so it can be difficult to balance resources across day-to-day activities and specific projects. Hence, treasurers tend to be sceptical about implementing new cash management solutions unless they have assessed and are fully assured of the benefits of doing so.

 

Treasurers often express frustration that they are not necessarily able to replicate the solutions that they read about in the treasury media or bank brochures due to regulatory or tax considerations. DBS Treasury Prism however, enables them to model potential solutions and gain clarity on the outcomes for their business to devise a compelling business case. Furthermore, they can manage project risk and complexity more effectively using DBS Treasury Prism's dynamic guidance on the latest restrictions, regulatory implications and documentation requirements.

 

Design, delivery and differentiation

We have adopted an iterative, client-centric approach to keep these priorities at the forefront of the design and development of DBS Treasury Prism. One of the benefits of this approach is to understand how clients will use the solution in practice, and their level of satisfaction. In addition, subsequent engagements with clients quickly revealed the degree of enthusiasm with which treasurers have embraced the new tool and the scale of its potential value.

 

"Sixty five percent of participating treasurers said that they would be happy to use DBS Treasury Prism as the first step in their relationship with the bank, and a far higher number of people noted that it will play a valuable role in their cash management decision-making and identification of potential solutions to optimise their business."

Anirudda Joshi, Vice President, DBS Global Transaction Services

 

The outcome is not just a transformation in business solutions for treasurers and finance managers, but a change in culture too, with an emphasis on directing client insights towards the development of banking solutions that shine new light on treasury challenges and opportunities. 

 

"This is a powerful demonstration of the value of our approach which is not only client-centric at a corporate level, but people-centric, with a precise focus on the needs and experience of individual users. This approach is crucial to the bank’s innovation strategy as we continue to extend and enhance our digital relationships with our clients, and support their current and future needs in a convenient, efficient and value-rich way."

Iain Taylor, Managing Director and COO, DBS Global Transaction Services

About DBS Treasury Prism

DBS Treasury Prism is a dynamic digital solutioning platform that enables corporate treasurers to simulate cash and liquidity management scenarios within the context of risk, return and regulation. It provides an interactive interface for modelling structures, benchmarking of solutions, guidance on regulatory and tax implications, as well as insights on local market and cultural practices.

What can it do for me?

  • Simulate cash management structures across multiple geographies, and analyse the impact of different balance and flow solutions.
  • Optimise your cash management structure, and compare optimised outcomes to find the most appropriate cash management structure for your business to achieve cost savings, and optimise liquidity, yield and operational efficiency.
  • Access dynamic insights on different tools that are available, and how they can be used in each country in line with its banking and payment systems, tax and regulatory conditions.
  • Share your customised simulations with your colleagues and enhance your business case.

Why is it unique?

  • Single source of information and advice. One of the challenges for treasurers when devising and analysing cash management solutions is that they rely on information from different sources. DBS Treasury Prism brings together treasury’s own data with tax, regulatory and market practices to provide a single source of information with which to visualise strategies and inform decision-making.
  • Cloud-based global solution. DBS Treasury Prism is developed as a global, cloud-based solution that offers easy, convenient and secure access.
  • Bank agnostic. Multinational corporations typically choose to work with a panel of partner banks to cover their international footprint, but their cash management requirements extend beyond the remit of each individual bank. Consequently, DBS Treasury Prism is bank-agnostic and enables treasurers to independently model their cash management structures domestically, regionally or globally.
  • Compare and contrast. It is said that two heads are better than one, so DBS Treasury Prism facilitates the creation of strategies independently or collaboratively, and provides a commonplace to compare and contrast potential solutions to harness the rich experience and expertise across the team.

 

Discover a spectrum of opportunities

Explore DBS Treasury Prism today to start building your own cash management simulations.

 

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.