Digitization and Automation for Performance Management and Finance Function
I am excited as an Indian. We are at a very interesting stage of development. While the economic growth rate has been below expectation within India, it has been higher than world average and even higher than emerging market economies, over the last three years. The digitization transforming the country is unprecedented and the scale of it is often not realized. On the economic front, the wheel has started turning with leading certain sectors like cement, automotive, financial services and some others have started reporting sales growth. The times of low sales growth have taught Indian businesses to be frugal and improve efficiency, which show up in profitability improvement. Now as business sectors start growing, we will see efficient growth, with higher value addition. At this stage, Performance Management is critical for business. We are now tuned to the digitization era and eagerly looking at the scope for using automation and digitization for business Performance Management. I would like to dwell on this topic.
The first step is to determine, “What do I really need to know ?” for better performance management. The answer is not obvious as there is a deluge of information. “Chicken and egg” as it is, we often need analytics to understand what is the most critical information that we need. In market access, or “Go To Market” as it is often called, there are influencers and there are executors. We need to know who the influencers are. We want to know what drives their opinions? In the cosmetics industry for example, an influencer may be a young Youtube icon with a large follower community. In technological goods in business to business selling, the influencers could be experts, specialists and consultants. In yet other segments, it may be the child in the household. Data analytics can be used to ascertain the key influencers and their drivers for a business.
For targeting and for lead generation, we can now expect precision marketing. Using the analytics asabove, how can weuse digitized tools to target the influencer or the consumer precisely ? Equally, for performance management, we should be able to measure the performance of marketing initiatives and projects and therefore the ROI. The results are not fuzzy anymore. I can measure brand awareness in comparison with competition. I can know how many leads a marketing event generated and how many of them converted to orders. I can also measure the proportion of partners, influencers and customers who are connected with the company digitally, how many of them can configure their desired solution using a company tool and how many close an order online.
Performance management is about awareness, focus and driving behavior. Partners have to be educated so that they understand that sharing of information means opening the information to analytics and therefore enjoying the benefits of the analysis. If there is a digital platform for sharing data for partners’ onward sales, that data enriches the analysis on end consumers. Business Intelligence Tools are now available for application in different processes; they connect easily with the ERP. Cloud based hosting and pay for use are also making it easier to adopt. Still, the cost of implementation and maintenance can be daunting at times. Automation and digitization are making inroads into conventional Finance domains. In transaction processing, accounting, preparing financial statements and in financial planning and analysis, automation can be used extensively. RPA is being used in transaction processing by large finance shared service centers, banks and finance companies. AI can be used for planning and forecasting and for risk assessment in contracts. Natural Language Generation and Natural Language Processing can be used for smart reporting and for query enabled dashboards. For transactions between entities, Blockchain can bring revolutionary change, as it enables the recording of information which is instant and non editable, therefore creating cent percent authenticity and audit trail.
The implementation should take a Design Thinking approach. Identify areas in the operations of the business, which if improved or changed radically can change the outcome significantly. This is different from starting with “which are the digital tools available in the market”. Identifying areas of significant change needs the context of the market and competition. If we would like to capture a much larger share of the market and wallet of customers and if we would like to be far more efficient than our competitors, then we need to go deeper to identify which are the critical areas to take up. Our Digital Strategy should build from the market side and flow towards the inner workings of the business, as in manufacturing, supply chain, information processing, transaction recording, planning and analysis. In each identified area, we develop a pilot after engaging with the critical stakeholders in that area. We then test it, modify with feedback, sharpen and launch.
It is an exciting era for India economically and digitally. And we are therefore at the right place and the right time to explore what we can make of it !