Axcelasia is an integrated professional services group providing tax advisory, business consulting, enterprise management system applications and business process outsourcing services to public listed companies, private companies, multinational corporations and government-linked entities.
We are pleased to provide our insights on Digital Transformation.
Digital Transformation refers to the integration of technology with business strategy and experience to achieve efficiency and growth.
We are moving into a digitised era and so should you. Here is why:
“Intelligent processes have been made possible by the evolvement of digital technologies which are set to benefit much of the way that an organisation is run. Intelligent processes monitor all moves and feeds the observations into refined models that enable individuals and software to make real-time decisions and swift processing. It has the capability via analytics to identify opportunities for improvement.”
What is digital transformation?
This refers to a sequential transformation of business activities, processes, competencies and models to fully leverage the opportunities of digital technologies. In summary, applying technology to improve overall performance throughout your organisation.
It is the way to move forward as many organisations across the globe are reaping benefits from the transformation. Executives in all industries are implementing digital advances such as analytics, mobility, smart devices, etc. to convert manual intensive processes. Transformation would lead to reduced costs, enhanced efficiency of internal processes and greater accuracy of information captured. Data and information have become core business assets, sources of revenue and critical enablers in this information age.
According to IDC Worldwide, the forecasted spending on digital transformation technologies encompassing hardware, software and services is expected to reach nearly USD 1.3 trillion this year. This is an increase by 16.8% over the previous USD 1.1 trillion spent in 2017. Analysts predict by 2021, digital transformation spending will nearly double to more than USD 2.1 trillion.
Why move towards digitalisation?
According to research done by Microsoft, digital transformation has increased profit margins, productivity, revenue from new products and services, customer advocacy, and reduced cost significantly.
Digital transformation goes beyond cost cutting and financial improvement. It enhances other business processes such as:
· Evolving customer behaviours and preferences;
· Growth opportunities into new markets as organisational capability increases;
· Compliance with laws and regulations; and
· Increased staff competitive pressure as the transformation engages people in changing their mindset and behaviour to suit the new culture.
Capabilities of digital transformation
Benefits of digital transformation
Cost reduction: Optimising business and operations by way of digital technology will lead to cost savings per transaction.
Improved customer strategy: New technologies create capabilities that can help an organisation acquire, retain, and assist customers while simultaneously reducing marketing spend.
Consolidated operations: The introduction of cost-effective, customer-focused digital task streamlines business workflows and eliminates overheads associated with outdated solutions.
Analytics: Digitalisation allows companies to combine data from all customer interactions and formerly structure these sources into useful, actionable format to optimise customer experiences at a reduced cost. It also collates various information from the ERP system as well as other sources and presents it in a simplified dashboard or other preferred manner for effective and efficient decision making.
Customer-centric focus: Key aspect is the ability to use the technology to enhance customer experience. Service is improved consistently across all touchpoints by shifting focus to customers.
On-point market segmentation: New technology enables organisations to discover more adaptive and agile models based on customer parameters that were impossible to uncover and/or track in the past.
Eliminating silos: Silos that span multiple functions and processes are simplified, allowing organisations to increase its efficiency and impact.
Processing time: Digitalisation eliminates manual processes allowing an organisation to benefit from quicker processing time and reduced staff time cost.
Paperless: An electronic document management system manages the creation, capturing, indexing, storage, retrieval, and disposition of records and information which can be searched easily resulting in lesser time taken to find documents and reduces the need for physical storage space.
Reduced inaccuracy: Through the reduction in human intervention, inaccuracy of information and bottlenecks in process flows would be reduced.
Digitisation case study (based on actual implementation)
Company A engages in the manufacturing and distribution of beverages. They process approximately 24,000 invoices monthly from as many as 2,000 active partners nationwide. Prior to the transformation, paper and people-based processes led to high accounts payable transaction costs and missed business opportunities for the Company and its business partners.
Errors in manual data entry, missing invoices, high number of discrepancies, and limited visibility on outstanding liabilities were some of the frustrations encountered by the Finance Team.
The transformation involved:
· Accounts payable automation – incoming invoices were automatically captured and sorted according to pre-specified rules set;
· Down to line-item level – relevant information was extracted and matched up to purchase order and automatically posted for payment;
· Exception handling – unmatched items were routed to a workflow where assigned personnel would be alerted; and
· Supplier web-based portal – suppliers submitted invoices, inquiries, disputes and requests for information online. It would let suppliers see the status of each supplier invoice and facilitate resolution of billing issues requiring their action.
With the completion of phase one of the project, the department has improved goods receipt on time to 99% in less than 18 months. There was also a significant reduction in invoices with issues from 25% per month to below 10%, out of the approximated 24,000 invoices processed monthly. 93% of its 2,000 active suppliers now receive payments within the approved payment terms. There was a 20% increase in invoice processing productivity with the introduction of a 3-way invoice matching.
Personnel handling low-value activities are freed up to handle complex, higher value-add tasks such as resolving invoice-related issues, root cause analysis, and process improvement projects including change management. The team has improved transparency by giving business units access to accurate and up-to-date information. There is also enhanced ability to monitor billing discrepancies and overpayments, as well as recognise unclaimed negotiated discounts. Armed with such data, business managers can more effectively manage working objectives.
How can Axcelasia help you?
Our dedicated professional executives will be able to assist you in the following areas:
Should you have any queries with regards to the above, kindly contact:
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+6012 988 0400
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