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Digitizing Financial Services Is Not Just About Your Customer Experience

Simon Chmielewski

Digital transformation is ringing in the ears of the C-suite across the world. For established financial services companies, it seems there is a narrow conception about what this really means and they have a sustainable strategy around digitizing their business.

Financial services is certainly an interesting case study. The recent SAP and CIO Magazine ANZ Digital Transformation Research Report shows that all financial services respondents said they were focused on digital transformation to meet the objectives of outcome-based customer experience and improvements across all channels.

It’s clear that customer experience is a key priority for financial services organizations to effectively meet and exceed the growing expectations of their digitally savvy customer base. Falling behind is not an option.

Are you really connected to your ecosystem?

The question arises: with all the focus on the customer-facing experience, shouldn’t companies also be looking at their core business processes? How are they going to keep up with the demanding operational side of delivering success to all parts of the organization’s ecosystem? Has back-office automation, which is vital to an organization’s continued success, been considered in this digital transformation?

Bala Subramaniam, regional head of Business Transformation Services, SAP Asia Pacific Japan, hits the nail on the head with this observation: “How digital transformation affects the business internally – all the back-office systems and how it connects with other organizations in its ecosystem – is not always on people’s minds when they talk about the subject. It’s not just about providing better customer service. It’s about updating IT platforms, preparing core business functions, building business networks, and tooling up internal workers, too.”

Placing a “digital umbrella” over the whole organization, from back to front, is what will truly bring your digital transformation to life. It comes down to rethinking your business processes and fundamentally changing them to enable agility, simplicity, and innovation throughout your whole internal and external ecosystem. This will provide the basis for growth into new products and services and potentially new business models.

The CIO Australia and SAP research backs up this notion, with over half of the respondents reporting the desire to create a more collaborative business ecosystem for staff, customers, and suppliers that is driven by digital technology.

The risk of failure

Financial services organizations need to approach the digital transformation with an integrated, long-term digital strategy and deliver programs that will transform business processes and potentially business models. The research shows only 13% of all respondents admitted they were working with such a broad outlook.

So what is the outlook for financial services organizations if they do not broaden the digital transformation strategy? To put it lightly, organizations will run out of resources and budget, and will end up with a core that is even more complex. Bala Subramaniam emphasizes this point in the research, and it’s a clear scenario we see around the world, with many companies complaining that cost and complexity is the biggest barrier to agility and success.

The next step

Financial services organizations must look outside the customer experience box and ensure that the business comes together to define how the organization can successfully create the “digital umbrella” across the whole organization.

In summary, ultimately the transformational objective should be to become a data-centric organization. I see this happening in two phases:

Phase 1 – Back-office automation to reduce the cost of running the business and support the potential to innovate into new services and business models

Phase 2 – An open digital ecosystem to be open to partnering with external organizations to provide a complete service to customers and employees; not all capabilities need to be built and provided in-house in the digital economy

To learn more from the SAP and CIO Magazine ANZ Digital Transformation Research Report, click here.

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Simon Chmielewski

About Simon Chmielewski

Simon Chmielewski is focused on growing SAP solutions in the financial services industry, covering banking, insurance, and wealth management. He is a member of the industry value engineering team, which works with the broader sales and services teams to showcase to customers the business value of and the road map for SAP solutions to guide them in the relentless transformation to digital in the financial services industry.

The CFO Role In 2020

Estelle Lagorce

African American businessman looking out office window --- Image by © Mark Edward Atkinson/Blend Images/CorbisThe role of the CFO is undergoing a serious transformation, and CFOs can expect their role to continue to evolve, according to a recent CFO.com article by Deloitte COO and CFO Frank Friedman.

In the futurist article, Friedman says one of the biggest factors that will contribute to the CFO’s significant change over the next five years is technology.

Digital technology is obviously expected to drive change in high-tech companies, but Friedman says it’s industries outside of the tech sectors that are of particular interest, as they struggle to understand how to grasp and harness the digital capabilities available to them.

Working with high tech in low-tech industries

Five years from now, a finance team may be defined by how well it uses technology and innovative business tools, regardless of what industry it’s in. The article outlines some examples of ways that digital technology will increasingly be used by CFOs in “non-tech” sectors:

  • Predictive analytics: CFOs in manufacturing companies can forecast results and produce revenue predictions based on customer-experience profiles and current demand, instead of comparing to previous years as most companies still do today.
  • Social media and crowdsourcing: You may not think CFOs spend a lot of time on social media or crowdsourcing sites, but these methods can actually expedite finance processes, such as month-end responsibilities of the finance organization.
  • Big Data: CFOs already have a lot of data at their fingertips, but in 2020 they will have even more. CFOs in both tech and non-tech sectors who understand how to use that data to make valuable, informed decisions, can strategically guide their company and industry in a more digitally oriented world.

To do this, Friedman says CFOs can lead the way by addressing some critical areas:

  1. Know the issues: Gather the key questions that leaders expect Big Data analytics to answer.
  1. Make data easily accessible: Collect data that is manageable and easy to access.
  1. Broaden skills: The finance team needs people with the skills to understand and strategically interpret the data available to them.

The tech-savvy CFO

The role of today’s CFO has already expanded to include strategic corporate growth advice as well as managing the bottom line. In 2020, Friedman says expectations placed on the CFO are presumed to be even greater, and CFOs will likely need a much more diverse, multidisciplinary skill set to meet those demands.

The article details several traits and skills that CFOs will need in order to keep up with the pace of digital change in their role.

  1. Digital knowledge: CFOs must be tech-savvy in order to capitalize on technical innovations that will benefit their company and their industry as a whole.
  1. Data-driven execution: CFOs will need the ability to execute company strategy and operations decisions based on data-driven insights.
  1. Regulatory compliance: Regulations continue to be more stringent globally, so CFOs will need to be proficient at working closely with regulators and compliance systems.
  1. Risk management: With the growing global economy comes increased cyber and geopolitical risks worldwide. The CFOs of 2020, especially those in large multinational organizations, will need to have the expertise to monitor and manage risk in areas that may be unforeseen today.

The future CFO’s well-rounded resume

By 2020, the CFO role will require much more than just an accounting background. According to Deloitte’s Frank Friedman, “CFOs may need to bring a much more multidisciplinary skill set to the job as well as broader career experiences, from working overseas to holding positions in sales and marketing, and even running a business unit.”

So if you’re a current or aspiring CFO, you have five years to round out your resume with the necessary skills to be ready for the digitally driven role of the CFO in 2020.

The above information is based on the CFO.com article What Will the CFO Role Look Like In 2020?” by Deloitte COO & CFO, Frank Friedman – Copyright © 2015 CFO.com.

Want to learn more about best practices for transforming your finance organization? View the SAP/Deloitte Webinar, “Reshaping the Finance Function”.

For an in-depth look at digital technology’s role in business transformation, download the SAP eBook, The Digital Economy: Reinventing the Business World.

To learn more about the business and technology factors driving digital disruption, download the SAP eBook, Digital Disruption: How Digital Technology is Transforming Our World.

To read more CFO insights from a tech industry perspective, read the Wall Street Journal article with SAP CFO Luka Mucic: Driving Insight with In-memory Technology.

Discover 7 Questions CFOs Should Ask Themselves About Cyber Security.

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Estelle Lagorce

About Estelle Lagorce

Estelle Lagorce is the Director, Global Partner Marketing, at SAP. She leads the global planning, successful implementation and business impact of integrated marketing programs with top global Strategic Partner across priority regions and countries (demand generation, thought leadership).

Get Your Payables House In Order

Chris Rauen

First of 8 blogs in the series

Too many organizations ignore the business potential from streamlining accounts payable operations. In a digital economy, however, this may represent one of the best opportunities to improve financial performance and boost the bottom line.

In its recent report, ePayables 2015: Higher Ground, the research and advisory firm Ardent Partners made a strong case for accounts payable transformation. “In 2015, more AP groups are accelerating their plans to transform their operations and scale to new heights,” states the report.

The digital makeover

From a payables perspective, how you go about fixing outdated procure-to-pay (P2P) practices is much like the decision to improve an aging home. Do you tear your house down and build a new one, or leverage as much of the existing structure as you can and begin a major home improvement project?

There is, of course, a third option. Take no action and make calls to plumbers, electricians, roofers, and other specialists as needed before the house falls apart altogether. While few organizations would consider a “triage” strategy the best option to address deficiencies in P2P operations, many still do. (Just don’t share that with your CFO.)

This blog post is the first in a series that will examine options for upgrading procure-to-pay processes from outclassed to best-in-class. Continuing to focus time and effort on managing transactions just doesn’t make sense. With today’s business networks, organizations have new ways to collaborate with suppliers and other partners to buy, sell, and manage cash.

Automation handles low-value activities, eliminating data entry, exception management, and payment status phone calls. That leaves more time for benchmarking operations, monitoring supplier performance, expanding early payment discounts, and improving management of working capital – the kinds of things that can dramatically improve business performance.

Where do you start?

To begin, you have to recognize that getting your payables house in order is much more than a process efficiency initiative. While cost savings from e-invoicing can be 60% to 80% lower than paper invoicing, there’s much more to the business case.

Improving contract compliance and expanding early payment discounts are other components of a business case for P2P transformation. According to various procure-to-pay research studies and Ariba customer results, the cost savings from getting your payables house in order are conservatively estimated to be $10 million per billion collars of spend. We’ll break down these ROI components in greater detail in future posts on this topic.

The value of alignment

Another important first step, validated by the Ardent Partners report, is getting procurement and finance-accounts payables in alignment. As this is a holistic process, you’ll need to make sure that both organizations are in sync, and you have support from upper management to make it happen.

Now, back to the question: Do you approach a payables makeover to support P2P transformation as a tear-down or a fixer-upper? If your procurement-accounts payable teams are out of alignment, your P2P processes are predominantly paper, and decentralized buying leaves little control over spend, you’re looking at a tear-down to lay the foundation for best practices payables. We’ll share a blueprint with you in the next post in this series.

Chris Rauen is a solution marketer for Ariba, an SAP company. He regularly contributes to topics including e-invoicing and dynamic discounting as well as the value of collaborating in a digital economy. 

Learn more about how to take your payables to the next level of performance in Ardent Partners’ research report “ ePayables 2015: Higher Ground.”

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Chris Rauen

About Chris Rauen

Chris Rauen is a solution marketer for SAP Ariba. He regularly contributes to topics including e-invoicing and dynamic discounting as well as the value of collaborating in a digital economy.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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Unleash The Digital Transformation

Kadamb Goswami

The world has changed. We’ve seen massive disruption on multiple fronts – business model disruption, cybercrime, new devices, and an app-centric world. Powerful networks are crucial to success in a mobile-first, cloud-first world that’s putting an ever-increasing increasing amount of data at our fingertips. With the Internet of Things (IoT) we can connect instrumented devices worldwide and use new data to transform business models and products.

Disruption

Disruption comes in many forms. It’s not big or scary, it’s just another way of describing change and evolution. In the ’80s it manifested as call centers. Then, as the digital landscape began to take shape, it was the Internet, cloud computing … now it’s artificial intelligence (AI).

Digital transformation

Digital transformation means different things to different companies, but in the end I believe it will be a simple salvation that will carry us forward. If you Bing (note I worked for Microsoft for 15 years before experiencing digital transformation from the lens of the outside world), digital transformation, it says it’s “the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.” (I’ll simplify that; keep reading.)

A lot of today’s digital transformation ideas are ripped straight from the scripts of sci-fi entertainment, whether you’re talking about the robotic assistants of 2001: A Space Odyssey or artificial intelligence in the Star Trek series. We’re forecasting our future with our imagination. So, let’s move on to why digital transformation is needed in our current world.

Business challenges

The basic challenges facing businesses today are the same as they’ve always been: engaging customers, empowering employees, optimizing operations, and reinventing the value offered to customers. However, what has changed is the unique convergence of three things:

  1. Increasing volumes of data, particularly driven by the digitization of “things” and heightened individual mobility and collaboration
  1. Advancements in data analytics and intelligence to draw actionable insight from the data
  1. Ubiquity of cloud computing, which puts this disruptive power in the hands of organizations of all sizes, increasing the pace of innovation and competition

Digital transformation in plain English

Hernan Marino, senior vice president, marketing, & global chief operating officer at SAP, explains digital transformation by giving specific industry examples to make it simpler.

Automobile manufacturing used to be the work of assembly lines, people working side-by-side literally piecing together, painting, and churning out vehicles. It transitioned to automation, reducing costs and marginalizing human error. That was a business transformation. Now, we are seeing companies like Tesla and BMW incorporate technology into their vehicles that essentially make them computers on wheels. Cameras. Sensors. GPS. Self-driving vehicles. Syncing your smartphone with your car.

The point here is that companies need to make the upfront investments in infrastructure to take advantage of digital transformation, and that upfront investment will pay dividends in the long run as technological innovations abound. It is our job to collaboratively work with our customers to understand what infrastructure changes need to be made to achieve and take advantage of digital transformation.

Harman gives electric companies as another example. Remember a few years ago, when you used to go outside your house and see the little power meter spinning as it recorded the kilowatts you use? Every month, the meter reader would show up in your yard, record your usage, and report back to the electric company.

Most electric companies then made a business transformation and installed smart meters – eliminating the cost of the meter reader and integrating most homes into a smart grid that gave customers access to their real-time information. Now, as renewable energy evolves and integrates more fully into our lives, these same electric companies that switched over to smart meters are going to make additional investments to be able to analyze the data and make more informed decisions that will benefit both the company and its customers.

That is digital transformation. Obviously, banks, healthcare, entertainment, trucking, and e-commerce all have different needs than auto manufacturers and electric companies. It is up to us – marketers and account managers promoting digital transformation – to identify those needs and help our clients make the digital transformation as seamlessly as possible.

Digital transformation is more than just a fancy buzzword, it is our present and our future. It is re-envisioning existing business models and embracing a different way of bringing together people, data, and processes to create more for their customers through systems of intelligence.

Learn more about what it means to be a digital business.

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Goswami Kadamb

About Goswami Kadamb

Kadamb is a Senior Program Manager at SAP where he is responsible for developing and executing strategic sales program with Concur SaaS portfolio. Prior to that he led several initiatives with Microsoft's Cloud & Enterprise business to enable Solution Sales & IaaS offerings.