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.

Treasury: Technology is key to thrive in current environment

By Andrew Deichler, The Association for Finance Professionals

Although the COVID-19 pandemic has clearly disrupted operations for many organizations, new technologies have allowed some treasury and finance departments in the Asia-Pacific (APAC) region to thrive in the current environment. However, companies who lack key technologies are faced with a number of new challenges.

 

TECHNOLOGY: PROS AND CONS

During a webinar last week, AFP President and CEO Jim Kaitz moderated an expert panel on what the CEO and the board are expecting from the finance in the Asia-Pacific (APAC) region. He began by asking the panel what they are focusing on in the current environment and found that practitioners are identifying new ways to innovate wherever they can.

Jessie Toh, Treasurer for Coda Payments Pte. Ltd., began by explaining that her company primarily provides payment options for emerging markets where most citizens do not have credit cards. Many of the payments that Coda collects are for mobile and online video games. As such, Coda has seen less of an impact than many other companies in Singapore.

Furthermore, with many people staying home, online and mobile gaming is performing exceptionally well. As such, senior leadership is asking treasury to look for new ways to be successful. “I think, right now, it's a great opportunity for us to look out for market opportunities, given the current scenario,” she said.

Sereen Teoh, CFO for AirAsia BIG Loyalty, noted that her company began as an airline loyalty program but has grown into a comprehensive lifestyle platform. Members earn and redeem BIG points that can be used at any of the company’s 300 partners. Because the economy is hurting and many people are out of work, AirAsia BIG Loyalty is looking to make BIG points into a digital currency that can be used across the APAC region.

Teoh added that finance chiefs are playing bigger roles in this environment, as they seek to find new opportunities. “You need to be actually now become the innovator and instructor to actually go through this turbulence,” she said.

And while the airline industry has been hurt badly by the pandemic, AirAsia BIG Loyalty’s expansion to the lifestyle sector has helped immensely, allowing the company to focus on expanding its e-commerce business. “Currently airline revenue maybe accounts for about 20% of our revenue,” she said. “So the rest of it is actually on the e-commerce side. So this lockdown has given us the opportunity to accelerate our global digitalization journey.”

Joseph Lee, Group Head of Treasury and Working Capital Advisory and Solutions for DBS, noted that many corporate treasury departments that he’s spoken with are focused on their longer-term business continuity plan (BCP) so that they can continue operations. “It is a BCP but it is for a long-term basis,” he said. “So it's not a single day, it's not a week. It's actually been two months. And as such, there are many moving parts that they need to get on with.”

Perhaps most importantly, treasury and finance departments need to ensure that the customer experience and operations are not severely impacted, and that is where technology can really come into play. “So to that extent, it's really around understanding how certain solutions, especially digital solutions, come in to play to bridge the gap that sort of is created when people are not able to come together,” Lee said.

However, companies who are a bit behind from a technology standpoint have had difficulty adjusting to a situation where interactions with people are limited or restricted, Lee added. “Certain processes within business operations or within the customer experience often need to be revamped,” he said. “I think that sort of led to a bit of a scrambling for some companies who are not really quite prepared for a digital experience to quickly onboard solutions into their offerings,” he said.

Wolfgang Koester, Chief Evangelist and Global Head of Financial Institutions for Kyriba, noted that many of his customers looking for technology solutions that provide access to data and decision-making capabilities. “That can be as fundamental,” he said. “How well is one set up via their VPN to actually get at the data? And then secondly, how well is one set up to get at the data from their individual financial institutions, where their cash is?”

Furthermore, once treasury and finance teams have access to that data, are they transmitting it in a secure, efficient way? They may gather it in Excel and share spreadsheets via a secure VPN, but that can cause its own problems. “Often these VPNs, as fundamental as they may sound, have really caused some slowdown and, therefore, competitive disadvantages for companies. That, quite frankly, has really disrupted business continuity,” he said.

FOCUS ON LIQUIDITY

Given the uncertainty in the market, even companies who have weathered the storm well like Coda Payments are making sure that they have sufficient liquidity. While many people are

playing online games right now, as the economy worsens, they will have less disposable income and will therefore be less likely to spend money on fun activities. As such, Coda is keeping a close eye on its clients and will make adjustments accordingly.

Lee has also observed companies prioritizing liquidity. “As soon as they realize that the business is impacted on a sustained basis, for which they do not know how long, they look into their pockets and they realize that the cash is going to be something that they need to forecast better,” he said.

Many companies that Lee works with have been drawing down their revolving credit facilities whether they need the cash or not. That way they can ensure that they don't have that variable coming back to haunt them in the months ahead.

Koester noted that there are several important factors when it comes to liquidity, and technology can help with all of them. Treasury needs to consider how accessible the information is, how confident they are in that data, and how fast they can get it. “Speed is of the essence,” he said. “If somebody says, ‘Well, I'll have it within three days,’ whereas others have it at their fingertips, that will be a competitive disadvantage.”

Additionally, scenario capabilities will continue to be essential. He noted that CEOs and boards are asking all sorts of scenario questions of treasury and finance. “’Where do we need cash, and how do we need to move it around?’ And the whole scenario analysis—if somebody's still trying to do that in Excel spreadsheets, they're well behind and probably are frustrating the boards and the investors at this point,” he said.

Added Koester: “It’s all about liquidity. Period.”

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 The Association for Finance Professionals on 27 May 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.