Finance 2.0 – Machine Wars: “Terminator” vs “Enabler”

29 April 2016


Since calculator watches first appeared in the 1970s, we have been obsessed with digital and technology. The world is now in Beta. Technologies, trends, markets and economies are in a constant state of flux. Long term strategies can no longer help a business sustain its competitive advantage. Right now, competitive advantage is transient. Organisations must have the agility, empowerment, and the confidence to change and better address the needs of their customers and other stakeholders. 77% of CEOs believe that technology will transform stakeholder expectations of business in the next 5 years, according to the 19th Annual Global CEO Survey by PwC. Some call it digital revolution, while others simply call it man vs machine. However, fret not, we won’t be seeing the former California governor appearing at your office reception asking for John or Sarah just yet, but perhaps he will be back.

Finance functions will struggle to move towards robotics or full workforce digitisation, but it’s not because of a lack of appetite.

What we are seeing is an increasing demand from leaders asking not when but how they should embrace digital. We are all well aware of how the advent of digital channels has changed the way consumers communicate and search for services, but what about digital transformation within the organisation? In all the conversations I have been in from “cloakroom to boardroom”, a theme is fast emerging: Finance functions will struggle to move towards robotics or full workforce digitisation, but it’s not because of a lack of appetite. The difficulty arises from the lack of change readiness stemming from legacy operating models and management structures

There are three common challenges:

  1. Perception: Digital significantly improves quality and value but it is still a relatively new agenda with few having walked the path. Consequently, some shun making digital investments, as they hastily associate it with cost optimisation, replacing labour with machine. However, digital transformation is not necessarily always a cost driven agenda. Instead, it can act as a value creator, drive accuracy and compliance in the business and enable employees to perform their tasks better. Leaders need to change their perception that digital is more than cost optimisation in order to fulfil the full potential of a transformation programme. Even with the increased focus on digital, companies must continue to increase investments in talent and workforce in order to retain their competitive edge.
  2. Management structure: Currently, frontline managers supervise employees using management principles we are all too familiar with from the past century. Managing digital solutions and by implication, new service providers will require an entirely different skillset and approach. Furthermore, most companies are still far from having a single and uniform strategy and execution for initiating and driving a digital transformation. This is not surprising given that nearly a quarter of CEOs (24%) feel they don’t have enough information about what customers or other stakeholders want, and a recent PwC survey showed that the top-three challenge most cited by global operations leaders (63%) is understanding what customers value.
  3. Outsourcing contracts: Many organisations are tied in long term Full Time Equivalents (FTEs) based contracts with their strategic outsourcing partners. These deals are often high value, complicated and therefore, bearing high risks. The move towards digital would require significant management attention to restructure the arrangements. However, a digital FTE is 1/3 the cost of an offshore FTE and 1/9 the cost of an onshore FTE, which will alter the cost structure of any organisation significantly.

All that being said, does it mean Finance Leaders should hold back on their Digital Transformation and wait until it is proven before they follow the path? Is it something for their strategic outsourcing partner to introduce and for them to benefit? Quite the contrary. While digital is indeed a revolution, people and organisations need to go through a slower and more organic process of evolution. To start a successful digital journey, companies need to fully embrace the idea of a transformation that extends across all parts of the organisation, including the establishment of a rapid decision-making and escalation process to match the digital way of working. The following is a simple 5 step process to get your organisation ready for Digital:

  1. Understand what drives value in your eco-system
  2. Connect the value of digital to the current pain points
  3. Understand the change impact on the immediate and peripheral parts of the business
  4. Equip your organisation with the right skills to work with and manage digital
  5. Understand what drives value in your eco-system Make it a “way of life” not “a point in time”

Organisations need to embrace the digital revolution now and get rid of the misconception that it’s all about robotics replacing humans. Let the “Terminator” be the “Enabler” in your business today by allowing robotics to add value to your business, before your competitors beat you to it.

About the Authors:

Clement Chan is a leading Business Transformation Senior Consultant in the Retail & Consumer sector, with over 12 years of experience. He specialises in Digital in Finance and Finance Transformation, helping clients improve their Business Operations through process, organisation and technology change.

Ashleen Ngion has worked on several large scale Finance Transformation projects in FTSE 100 companies. She finds the digital disruption across the Retail & Consumer and Financial Services fascinating and is constantly thinking of new ideas to be part of the Revolution.

To discuss any of the content in this article, please contact Clement or Ashleen via email at [email protected] and [email protected]


Clement Chan.2pngClement Chan
Senior Manager, Finance Consulting


Ashleen Ngion3Ashleen Ngion
Associate, Consulting



Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated and will not appear until the author has approved them.