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Dealing with digital disruption
As digital technologies continue to reshape industries and companies in Singapore at an increasingly rapid pace, many business leaders here have put digital transformation at the top of their to-do list.
A recent survey by CPA Australia and PwC found that many organisations in Singapore are developing plans to address both the challenges and opportunities arising from the impact of digital disruption. Some 83 per cent of respondents indicate that their organisation has either been through a transformation journey or is in the midst of one. They also expect significant investments in transformation initiatives over the next 3 years and beyond.
The results of the survey are contained in the State of Digital Report 2018, which aims to assess the current impact of disruption on their organisations and develop a sense of what the future could look like. The report’s findings are based on the responses of 120 CEOs, CFOs, VPs, Directors and Finance Professionals from more than 13 industries in Singapore.
The report also found that companies are no longer being disrupted just by competition within their own fields, but also from players from other industry sectors. Some 53 per cent of executives say they are also currently being disrupted by companies from outside their industry.
Greg Unsworth, partner and digital leader, PwC Singapore, says that companies who want to thrive in the digital age must be prepared to transform the way they operate. “Digital disruption is creating significant opportunities and challenges for all organisations. Whilst the willingness to invest for the future is important, the requirements to build a successful digital led enterprise goes well beyond this,” he says.
“It requires understanding your own organisation's current readiness to go digital, and then agreeing on priority areas to invest; enhance the business and enable teams to operate in new and better ways. It is not about a digital strategy per se but about a business strategy fit for a digital world.”
To prepare themselves for the future, many Singapore-based companies are already investing to position their businesses for a digital future. According to State of Digital Report 2018, around 62 per cent of respondents say their top priority for investment was to enable enhanced use of data and analytics to support the business. This was followed by plans to invest in the increased use of machine learning and artificial intelligence solutions. Greater use of automation, particularly through use of robotic process automation, was also identified as an area of interest to drive greater productivity and effectiveness of organisational workflows.
Samuel Chong, group chief technology officer at Fullerton Health, says before embarking on transformation, an organisation must first define and be clear on its digital vision should be. “Start with the end goal in mind. Subsequently, develop a technology roadmap with clear identifiable projects that map to that goal. Create an environment for agility and innovation to thrive, including creating cross functional KPIs (key performance indicators) that encourage silos to become co-beneficiaries of digital transformation,” says Dr Chong, who is also acting CEO at Fullerton Systems & Services.
Demand for talent
To optimise the use of technology, companies must also consider the talent and skillsets required to successfully navigate digital transformation. Against a backdrop of disruption, specialist technology and digital skills are in demand, with 50 per cent of executives surveyed indicating they are currently hiring new talent with digital skills. Interestingly, the report notes that more than half of these new digital hires are being sourced from local experienced hires, rather than directly from educational institutions or from overseas.
Furthermore, around 60 per cent of firms surveyed have put in place training and development programs to enhance a wide variety of different digital capabilities as they seek to upskill their existing employees.
Agile and effective leadership will also be key in managing the level of change required in a digital transformation journey. However, the report found that companies are still evolving their approach and considering the leadership roles that will be important for their future. For instance, only 30 per cent of organisations surveyed in Singapore have appointed a Chief Digital Officer.
While the need for digital transformation is clear, the road to achieving contains a number of roadblocks for businesses. According to PwC’s 2017 Global Digital IQ Survey, some of the top barriers that could stall transformation efforts include a lack of properly skilled teams, inflexible or slow processes, or a lack of collaboration between IT and the business.
“Organisational silos and traditional performance metrics often create collaboration barriers to deliver digital transformation. Other factors such as the lack of clarity around data protection, cybersecurity risks, and legacy systems lock-in also inhibit rapid progress. Whilst business is trying to innovate as fast as they need to, the challenge really, is in the ability to convert as many new ideas into commercialised offerings,” says Dr Chong.
To help overcome some of these challenges, companies are developing and deploying new tools to ease the transition to be a digital-led organisation. These are designed to help employees and management to embrace the digital movement, increase work efficiencies and inculcate a digital mindset and culture.
Some examples of such tools include platforms for employees to suggest and post their ideas, allowing them to collaborate with other individuals to refine ideas; as well as apps that give employees control over their work environment through booking of seats and meeting spaces, as well as syncing up calendars and contacts.
Amid the various challenges brought about by disruption lies an opportunities for executives, particularly those in the finance function, to play a key role in helping their organisations not only survive but thrive in an increasingly digital world.
The digital journey ahead for finance professionals
The role of finance professionals across all sectors will not be spared disrupted by emerging technologies and new business models that are sweeping over the entire business landscape. According to the State of Digital Report 2018 by CPA Australia and PwC, organisations in Singapore will increasingly enable this change through:
- Automation: With the automation of business processes, less human intervention is required, resulting in greater efficiencies and productivity. Adoption of Robotic Process Automation (RPA) will become more prevalent, for instance.
- Real time reporting and monitoring: Adoption of business intelligence tools and cloud platforms provides real-time visibility into business and financial risks, allowing for faster remediation and facilitating real-time reporting with management.
- Enhanced use of data and analytics: Data can provide real-time insights to businesses. However the challenge is not in collecting data, but rather, to identify the data you need that can help deliver value and insights and maximise that value for the business.
- Cloud-based systems: These facilitate more flexibility and agile approaches to deploy technology.
- Financial professionals’ evolving role: As digital technology accelerates the pace of change, it is crucial for employees to be equipped to identify, access and manage innovation to create value. Examples include:
- Leadership & Culture: Appointing innovation champions to spearhead innovation, deploy and incubate new ideas and scale the benefits across the organisation.
- Upskilling employees’ with new skills and competencies to prepare for and embrace new technology and better address associated risks.
This article is part of a series brought to you by CPA Australia to share knowledge on topical issues relevant to business, finance and accounting.