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.

5 steps to treasury excellence

While each treasurer’s functional responsibilities may vary, every treasurer is looking for new ways to add value to their organisation. Some seek to do so by achieving greater operational efficiency or cost-effectiveness. Others try to optimise liquidity and risk management strategies. Many need to scale their activities to support new business needs resulting from international growth, diversification or M&A.

These aims are both organisational and personal. Treasury needs to be at the top table to inform and influence decisions that impact on cash, liquidity and risk; and as individuals, treasurers need to boost their personal visibility and authority.

DBS Treasury Prism is an award-winning tool that has been successfully helping treasurers do this. Treasury Prism is a highly intuitive, standalone simulation platform which complements existing treasury technology. Using Treasury Prism, treasurers can support their organisations through change by testing techniques, modelling solutions, and devising new ways to add value.

 

Step 1: Recognise the challenge but look for potential

As companies of all sizes expand into new territories, it becomes more difficult to harmonise cash management processes and liquidity structures. Regulatory, market, currency and cultural conditions frequently differ, and liquidity, risk and operational issues may become more complex. At the same time, treasury is playing a more strategic role as the wider organisation matures and expands. Consequently, many treasurers are focused on how it can add more value to the business. By understanding what is possible in each country, and how regulations, business and consumer culture are changing, treasurers can harmonise their operational processes and controls whilst taking into account regional variations, and develop integrated, scalable liquidity and risk management strategies.

Treasury Prism gives treasurers access to comprehensive, authoritative data on regulatory and market conditions in 24 countries across Asia and beyond to build knowledge, insight and confidence in navigating complexity, and identifying opportunities.

 

Step 2: Leverage data and intelligence

Access to ‘raw’ reference data is not enough. To deliver operational efficiencies, effective liquidity and risk solutions, or scalability across new and existing markets, treasurers need to be able to analyse data and develop insights. The volumes of data involved can be vast, and with regulatory, market conditions changing quickly in many countries, knowledge can quickly become out of date. Many of our clients report that it takes so much time and preparation to define, let alone implement, an optimal cash, liquidity or risk management solution, and the fear of non-compliance is so great, that they may postpone or cancel these initiatives entirely.

To develop meaningful, actionable insights, treasurers need to be able to combine complex reference data from different sources into a single platform. This includes data such as average balance and transaction volume data from banking systems, together with accounts payable, accounts receivable and treasury data.

Treasury Prism then overlays this consolidated banking and account data with intelligence such as permitted techniques and market and regulatory practices in each country. Treasurers can therefore see where the opportunities are to optimise cash and liquidity management, whether domestically, regionally or globally, and identify exceptions.

"Managing money across the Asia region is not easy due to regulations — this platform makes it easy to see what’s possible, with regulatory insights, through a drag and drop interface. It’s something not readily available in other treasury platforms."

Group Treasurer, Kerry Logistics

 

Step 3: Find the optimal

The next step is to move beyond identifying what treasurers could do to what they should do. Most treasurers base their plans on solutions presented to them by their current or potential banking partners. By modelling scenarios and benefits in Treasury Prism, treasury can look beyond solutions offered by individual banks and identify solutions that offer the greatest benefit.

"Treasurers tell us that it is often difficult to compare alternative solutions and approaches in an objective way. As a result, they have found the pragmatic approach of Treasury Prism extremely useful when putting together and presenting recommendations to the treasury committee or Board. In Treasury Prism, the results of different scenarios are presented instantly, showing the relative advantages and disadvantages, and markets that can or cannot be included, allowing treasurers to make informed, confident recommendations."

Aniruddha (Andy) Joshi, Product Owner of Treasury Prism, IBG Digital at DBS

 

Step 4: Show proof

With resources and budgets stretched across the enterprise, treasury is often jostling for budgets and resources, so it is essential to be able to demonstrate value clearly to senior management. Many treasurers find it difficult to quantify the cost and productivity benefits of a potential cash or liquidity management solution, which is a major obstacle when trying to develop a compelling business case.

Treasury Prism automatically calculates the financial impact of each potential solution and presents the results in an easily digestible way. This helps treasurers to compare and prioritise treasury initiatives and drive forward a treasury agenda that centres on benefits to the organisation. Clear, quantitative data also helps to mitigate implementation risk. Implementing a new cash management solution, even with an existing bank, is a high-risk project for corporate treasurers, and given the critical nature of their activities, such projects are often subject to significant internal scrutiny. Consequently, they may be sceptical about implementing new cash management solutions unless they have assessed, and are fully assured of the benefits of doing so, particularly given resourcing pressures.

"What takes a week today can be done in two minutes with Treasury Prism. This is the most innovative solution for corporate treasury I’ve seen this year."

Goh Seng Ti, General Manager (Treasury & Accounting), Isuzu Motors Asia

 

Step 5: Educate and inspire

Treasury does not operate in a vacuum and needs to engage proactively with a wide range of stakeholders across the business, including central functions such as legal, tax and other finance teams, as well as operating units. Treasury’s success in meeting its efficiency, liquidity and scalability objectives, and finding new ways to add value, depends on the support of these stakeholders as much as the technical feasibility of a proposed solution.

Treasury management can be opaque and difficult to understand for non-specialists; similarly, it can be difficult to communicate and inspire new employees, managers and remote teams with a single treasury vision.

Treasury Prism enables treasury teams to learn, collaborate and share knowledge easily in terms that are easily understood. This includes dynamic illustrations of account, cash and liquidity structures to demonstrate the benefit and seek support and consensus.

"It’s the first time I have seen a bank making such a system for their clients. It’s very comprehensive. With the search function, knowledge centre, glossary – it really covers all that a corporate treasurer needs in such a tool. We can use it to educate our internal and external stakeholders on cash management, saving time for us."

Henry Ma, Regional Treasurer, Emerson Electric Asia Pacific

 

Treasurers are hard-pressed to keep up to date with both the growing pressures placed on them by the business, and the regulatory, market and cultural conditions in which they operate.

 

Turning ideas into value

Treasury Prism provides a very easy way to create, compare, evaluate and present actionable scenarios quickly and in a visually compelling way to colleagues, stakeholders and senior management. By doing so, treasurers can turn ideas into projects and realise potential value. This is a vital way for treasurers to demonstrate value in quantifiable terms, boosting their profile, authority and career opportunities for the future.

 

Discover a spectrum of opportunities

Explore DBS Treasury Prism today to start building your own cash management simulations and discover opportunities that can shape your treasury strategy. 

 

 

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.