Implementing Strategies and Technologies to Strengthen Resilience
Advancing through 2024, companies face the formidable challenge of steering through inflationary pressures, high interest rates, limited access to capital, fluctuating currency values, and persistent supply chain issues amid the dynamic realm of worldwide economic shifts and geopolitical strains. In this period of instability, it’s imperative for businesses to leverage creativity and robust strategic planning to forge their path ahead.
As companies aim to steer through this turbulence, leveraging the right strategies and technologies will be key. Recent innovations have provided new capabilities that firms can harness to drive greater efficiency, insight and value.
Recent technological advancements continue to empower businesses to drive value creation through innovation. During this transitional period of adopting new technologies, all business systems will become more closely aligned with each other and will be proactively managed more than ever before, as forward- and backward-facing processes become more deeply intertwined with a greater set of operating dependencies between them. This will require greater coordination among cross-functional teams.
As the execution of end-to-end processes inevitably receives more senior management scrutiny and as digital enablement activities accelerate to become more pervasive, anticipate the arrival of operational challenges that will demand your focus.
1. Embracing the Digital Frontier
Advancing current business systems presents a challenge for all organizations. Many firms still heavily rely on labour-intensive internal processes, which impede timely access to current data for those in need. Proactively addressing transactional bottlenecks is vital, as is integrating reporting within processes to drive proactive actionable and contextual workflows that emphasize value creation, rather than solely concentrating on reactive end-of-process reporting for decision support, controls, and management activities.
The onward transformation of business operations has prompted a change in the design and application of software in corporate environments. In the past, pre-built vendor software offering some degree of end user configuration predominantly concentrated on distinct core business functions such as production, logistics, finance, and employee management systems.
However, as business processes have selectively become more comprehensive and intertwined, both internally and externally, those responsible for managing these processes are now required to have a deeper understanding of operations. This involves having greater functional domain knowledge, a broader understanding into areas such as privacy, cybersecurity and sustainability, as well as an understanding of how others will leverage the information provided to them and to whom, ultimately leading to changes that will drive value with compliance across the organization.
2. Drivers of Change
The utilization, sharing, and transformation of data between various applications and departments has always been integral to business operations. Yet, even with considerable efforts toward streamlining transactional processes over time, labour-intensive tasks remain prevalent, obstructing the achievement of critical decision-making junctures with up-to-date and detailed information. This not only impacts productivity but also incurs indirect costs in the form of lost employee time, often at senior management levels, leading to sub-optimal decisions based on outdated data and a loss of business momentum.
The issue is further magnified by a lack of proactive process flow management within numerous corporations to iron out transactional friction, with only a minority possessing an exhaustive insight into the specific business actions required to realize their objectives. Those with a deeper understanding typically feature centralized specialist regional units within the corporate framework or external liaison with operations delegated to Business Process Outsourcing (BPO) services. Additionally, granular operational metrics at the process level, encompassing full-time equivalents (FTEs), spreadsheet maintenance, execution timelines, dependencies, and the like, are often not readily available, further complicating the situation.
Looking ahead, changes in attitude seem probable as the economic and technological landscapes continue to evolve, particularly with the advent of AI. This innovation is beginning to prompt managers to gain a deeper understanding of existing processes, essential for driving progress in digital enablement and ensuring their organizations stay relevant and competitive in a rapidly transforming business environment. In other words, software is becoming even more mission-critical across more business areas and, therefore, has to be proactively managed rather than being something that is simply addressed on an ad hoc basis, solely relying on reactively driven vendor updates.
Managers will find that historical application deployments have often limited data flows between systems to only the most crucial data fields— a consequence of the technical limitations present at the time these systems were implemented. In practice, this means that data transfers were restricted, and valuable information was frequently shoehorned into any available spare fields, which might not be indexed or protected by data entry validation. Consequently, this often leads to data that is not readily retrievable in the desired format for reporting and analysis purposes, thereby hindering effective data utilization. Your overall process can only work at the speed of your slowest execution step!
The historical neglect of focusing on detailed process dynamics, paired with the changing landscape of regulatory requirements concerning privacy and data management, has underscored the complexities associated with ongoing process management. It has become apparent that to meet all the intended objectives, existing data sets require substantial transformation—an undertaking that is essential for businesses to comply with regulations, optimize processes, and leverage data effectively. The data is often already in your systems, but is simply not being leveraged for value creation.
As operational, financial, and HR data become more integrated, this will necessitate stronger alignment and collaboration between different teams within an organization.
3. Deploying Latest Process Technology Enablers
The challenge: given the reluctance of businesses to invest in additional resources due to potential impacts on productivity and the risk of escalating costs, teams often find themselves dedicating many extra hours to develop workarounds to address new operational and regulatory requirements. Each modification or temporary fix can introduce its own set of challenges, potentially demanding comprehensive changes at the base level for companies to achieve compliance with legislative reporting demands. Not only that, but many hours are spent maintaining older spreadsheets and re-learning the intricacies of how spreadsheets were constructed in the first place.
Indeed, the expectation that these supplementary tasks be performed alongside regular duties adds to the burden shouldered by employees, further complicating the work-life balance. The cumulative effect of such additional demands can lead to increased stress and potential burnout, as the workforce stretches to accommodate both the ordinary scope of their roles and the extra requirements imposed by new operational and regulatory changes. Generational changes will add increasingly more urgency to solve these inefficiencies within business processes, as more emphasis is placed by them on achieving a work-life balance.
The solution: however, two core, fundamental, and interconnected issues have been resolved that change the game: firstly, compute power has improved; and secondly, process flows can now be designed more granularly, moving beyond the limited vendor parameter changes within their applications, which means they can be designed and executed with all the necessary transactional transformations.
This means that both complex tasks undertaken by a few people (bond management, lease management, consolidations, segmental analysis etc), or simple / complex processes undertaken by many (FP&A, budgeting, Employee Self Service incl Appraisals, Talent Management etc), can be fully or partially automated as required by the user, noting that complex tasks undertaken by a few people are typically underserved by packaged software vendors as these areas are deemed to be specialist.
A subtle but major advantage with today’s technologies is that both quantitative and qualitative tasks can be handled with the same level of granularity at the same time providing a useful conduit for completeness, accuracy and inclusion. For example, employee related processes can be deployed and managed to constantly reinforce best practices around cybersecurity; procurement processes can be extended to ensure that new assets are insured and that any additions to existing assets results in insured values being correctly updated to reflect this.
Once granular control over data flows is established to provide high-quality and timely data, integrating AI (top-down algorithms, bottom-up algorithms, or generative AI) becomes a logical next step. Businesses will incorporate multiple sequential or parallel rule-based or probabilistic formulae to support the deployment of AI. These algorithms, tailored to specific business needs, can be real-time or updated regularly / periodically to achieve desired outcomes. They can also enhance compliance based processes by identifying data outliers for further investigation. An important takeaway is to ensure that data is not inadvertently shared with public LLMs (large language models eg generative AI), which in essence comes down to the individual licences acquired for each vendor produced AI model.
A major enabler to your business will be using APIs to connect your processes with third-party ecosystems or established service providers that can extend and enhance processing capabilities. Integrations streamline business processes, but it is essential that these are comprehensively managed from a cybersecurity and privacy viewpoint as they increase threat vectors. A more subtle point re privacy relates to cross border data transfers of personal information, so one needs to understand where data is being processed, stored, and for how long etc.
The fast evolving business conundrum going forwards will be to balance the depth and breadth of future projects in terms of change management. Many digital enablement projects currently fail due to i) not having a project team that covers all business domain areas impacted by modified data flows and ii) not having a deeper enough focus on systems integration with regards to “the how” it will work. In other words, the challenges associated with the moving of data across different systems having different architectures, databases, and API linkages etc. Critical judgment capability is crucial in this scenario, as automating existing workflows might overlook opportunities for deeper, meaningful change, while broader changes might prove too disruptive.
How much automation and integration is possible? If it can be imagined, it can be achieved, but assessments are still required as to the economic value, advantages of doing it, risks and “the how”. For example, in certain scenarios by leveraging FinTech solutions, organizations are streamlining operations, reducing costs, and integrating detailed & holistic compliance steps within a single end to end process. Reporting can be at contract or transaction level, with contracts exploded into back office accounting entries, together with amortisations. This means that contract lifecycle accounting entries can be posted automatically and actionable contextual workflows driven on an ongoing basis as required, for example if a payment date is missed. So, to answer the question, the extent of automation and integration is more about building the value proposition that makes sense to you, and is not likely to be limited by technology today, but will be significantly influenced by the experience of the project teams and their ability to work through all the intricacies of the detailed technical integration challenges. It is important to recognize that not all vendors utilize the latest technologies in their solutions, so prototypes are a useful methodology to discern the effective from the ineffective.
As previously mentioned, technologies can simultaneously handle complex tasks undertaken by a few people, or complex tasks undertaken by many, providing deep flexibility to improve underlying compliance. For example, payment processes within a company can be augmented with extra steps to avoid Business Process Compromise, where threat actors attempt to divert your supplier payments, executive bonuses, procurement dollars to their own bank accounts.
Bad actors are also using latest technologies. You probably saw the news that in Hong Kong one corporate in 2024 was duped out of HK$ 200m, but how it was done might surprise you. https://www.thestandard.com.hk/breaking-news/section/4/213122/HK’s-first-deepfake-video-conference-scam-involving-HK$200-million
The opportunities to add value or enhance compliance are endless. HR data combined with operational data for workforce planning, together with the required controls to protect privacy of sensitive data. Or something that is grabbing the attention of privacy regulators in some jurisdictions, for corporates to ensure that the visibility of doctors notes in HR ESS processes are limited for purposes of privacy to certain user types, excluding line managers.
As one can start to see, with the above examples, demarcation lines / gaps within and between domain areas are in fact shrinking. Front office processes are “connected” with back office processes and vice versa to drive deeper value creation, with more interconnections to other domain areas, such as compliance, treasury etc.
Another dimension and thinking more broadly, is that regulators are also aware of how technologies can now be leveraged to help them ensure that you are compliant with appropriate regulatory frameworks. The same goes for threat actors, although motives are different.
Meeting these challenges will need cross-team collaboration within organizations.
4. Aligning Different Teams within and across the C-Suite
With data and processes becoming more interconnected across departments, organizational structures and relationships will need to evolve accordingly.
In the future, organizational structures and relationships will undergo significant change, driven by various interconnected dynamics as discussed earlier. Data will become more timely, contextual, and actionable, leading to increased operational involvement and accountability among domain stakeholders. Overall processes will become faster due to automation, more focused as a result of ultra-granular data transformations, which in turn will reduce human interaction for improved efficiency, and be consequently more streamlined from start to finish, all while maintaining a backdrop of auditability and repeatability.
In the future, operational, financial, and HR data will be collaboratively utilized, with a stronger focus on compliance to safeguard the privacy of specific information types. This collaborative approach aims to optimize business processes, make sustainability a focal point, and will integrate both granular and holistic compliance controls. This shift will necessitate domain areas to elevate their performance and will emphasize productivity to facilitate a deeper level of ongoing proactive analysis within and across domain areas, particularly concerning execution costs and FTE’s utilised within processes. It is important to note that data management regulations, particularly within financial services and across various geographies / trade segments, are pushing for a more detailed integration of compliance processes, signalling a shift towards more meticulous compliance management at a data field level.
Relationships between and across domain areas will need to improve as data further reveals discrepancies to the C suites, core stakeholders, and activists. The fact that this is the case should not be a surprise as it has already been documented, for example, that finance costs within the same industry group can be very different. This was explained at the time by being down to focus given to it by managers, with some managers being focused on driving out transactional friction and others not so much (Source: https://www.apqc.org/).
Within any comparative peer group, any published breakthrough operational efficiencies (direct or deduced from financial statements) will further put additional pressures on the C-suite to catch up with their peers. These pressures are not new, but technologies have reached a tipping point to make improvements more visible than ever before and at a faster pace. Artificial intelligence is going to widen gaps.
Furthermore, the changes taking place will help support more proactive risk management. Amidst these structural realignments, ethical leadership principles will be essential to shape organizational culture.
5. Risk Management
Within today’s volatile economy, characterized by having to manage external economic pressures, it’s vital to understand and neutralize global risks. These will also include cyber threats, data leaks, business disruptions, and ever-changing regulations.
Companies need to scrutinize their financial health with precision, looking into the past and forecasting the future with equal clarity, right down to segment-level impacts in their financial reports, especially in light of paying for higher financing costs. Initiatives like carbon accounting, an evolving requirement in many jurisdictions, are introducing firms to new tech solutions that assist in evaluating and prioritizing projects and business units. Despite being available for some time, these advancements are often underused in process technologies. Why? A mixture of managers not being aware of what latest technologies can do, and also how to leverage them in the field and for what purpose.
To ensure operational continuity, adaptability, and long-term viability, businesses are navigating these risks even amidst economic instability. Yet, they are constrained by time and also by the fact that many risk processes are not integral within business operations, often wishing for more time to probe these complex issues more deeply—a luxury rarely afforded by the relentless pace of daily operations.
New technologies are going to help in a number of ways:-
i) Time is going to be freed up by removing transactional friction, providing timely accurate reporting for decision making. There is a multiplier effect on work executed each and every month, plus the potential to leverage any process advancements across other company entity operations. Processes more prone to error, or that require specialist attention, can be proactively driven by centralised specialists who can deploy them electronically to each entity, rather than having to replicate these specialties to each location ie the process logic is centralised.
ii) Procurement processes can ensure that transactions are driven within company policies, discounts maximised and for high value payments, extra steps can be put into place to avoid business process compromise.
iii) Payroll compensation processes for commissions can be automated on a repeatable, auditable basis, giving more time for compliance checks to ensure a consistent approach / interpretation of the same policies across operations. Think more broadly here, in that commissions can be a painful area, so if they can be controlled more granularly, then from a business operations viewpoint there is an opportunity to manage staff with more agility eg retail staff working across locations and brands with agile rewards based management.
iv) T&E expenses can be kept within company policies and outliers checked in the context of all claims ie holistically, or subsets thereof.
As touched on above, modern processes can handle both qualitative and quantitative processes with the same level of flexibility. Focusing on the former, a few more examples over and above those mentioned above: i) supplier management can be more tightly integrated into operational management on an on-going basis, also meaning that alternative supply points can be quickly engaged should there be supply chain disruptions. This will include monitoring their cyber security readiness; ii) Employee Self Service can be expanded to include information portals, newsletters etc to improve communication on important key initiatives, such as sustainability, or employee interest groups.
Meeting these compliance demands will need cross-team collaboration within organizations.
6. Achieving Digital Fluency with Trusted System of Record
Businesses want to achieve digital fluency, which means providing employees with controlled capabilities to push or nudge forwards their operational boundaries. Building blocks continue to be put into place, even though sometimes progress is not quite as fast as expected.
For example, visualisation tools are very powerful today, as long as core end to end processes can operate at a granular enough level to deliver timely relevant data for analysis. Generative AI is enabling computer code to be written by non-technical people, but safe deployment of it, regarding security, privacy and IP, can be an area of concern.
So, employee education about how to leverage technology to facilitate their work is going to be important going forwards, as employees will need a greater understanding of the risks, opportunities and threats from using such technologies.
Corporates will benefit greatly as they push to keep deployments under control, having learnt a valuable lesson from out of control cloud deployment costs in the form of shadow IT projects, and weakness from new process deployments that did not contain reliable “Systems of Record” for audit purposes, nor were in compliance with cybersecurity and privacy rules / policies. Some corporates are deploying quick action digital teams and quality control teams to help as they wish to encourage skunk projects that pushed a company forwards, but with some minimum level of checks n’ balances. This should not be viewed as a one-time exercise, as business cultures need to change so that systems are proactively, not reactively managed on an ongoing basis.
Importantly, the composition of project teams and the integration of systems play crucial roles in the success, failure or risks associated with projects, noting that every process has a lifecycle, as do the systems and dependencies they count on. Once established, these processes require ongoing management to adapt to subsequent changes. While the concept is simple, the rapid pace of technological advancement across a multitude of different vendors that use differing technologies continues to make this an ongoing challenge.
This technology-driven transformation calls for ethical stewardship to ensure companies stay grounded in core values. In addition to managing operational risks, ethical practices help companies mitigate reputational risks and foster trust.
While technology can enable progress, ethical leadership ensures human values remain at the core.
7. Ethical Leadership for Sustainable Growth
Alongside digital fluency and risk management, ethical practices are key for sustainable growth. Ethical practices are essential for companies to have in place, particularly when navigating tough economies, fostering trust, and promoting enduring growth. They directly impact business outcomes like risk reduction, profitability, employee retention and hiring, but moving forwards being more tightly integrated into daily business practices will make a difference.
Employee Self Service systems can be further developed with managed processes to engage staff with employee surveys (whole company or focus groups), information sharing, and culture surveys to track changing attitudes over time and the operating pulse of the company. Sharing holistic information back with employees fosters deeper engagement.
For example, consider sustainability. Openly sharing these objectives not only engages employees, but also signals a firm’s dedication to sustainable progress to its stakeholders. It is interesting to contrast how today compared with the past, that society expects a corporate to take and stand by its stance on a particular topic as it is seen to further cement this commitment. Aiming for lasting value drives innovation in sustainability, aligning eco-friendly initiatives with financial health, so it isn’t just short-term but is woven into long-term planning, setting a strategic direction that resonates across the entire organization.
From a risk perspective, recognizing generational values, particularly the environmental focus of younger employees, is crucial. Managers must align with these values to truly lead with impact and drive the company’s ethical and sustainable mission forward.
8. Long-term Investment and Cost Effectiveness
In fluctuating economies, savvy management of capital is key to maintaining a competitive edge. Advanced technology has become essential, offering compliance-aligned, real-time insights and process streamlining with actionable data across all areas of operation.
Process technology is advancing rapidly, becoming more sophisticated and connected, capable of transforming data consistently and transparently while easing bottlenecks. This new approach boosts operational momentum and enhances decision-making with timely, pertinent information.
As processes integrate more closely, they bring greater complexity for workers and leaders, as well as visibility. Continuous process oversight is invaluable, moving away from infrequent, major updates of core systems.
Recognizing the distinct roles of process owners versus process users is critical. Owners must have an overarching vision that extends beyond their direct control to adjacent business areas, understanding the wider implications of their decisions. Investing in staff expertise and technology for detailed process management is vital to navigate this complexity.
Conclusion
In an era marked by economic volatility, with challenges such as inflation, supply chain constraints, and limited capital, the importance of resilience planning cannot be overstated. Embracing digital processes, mastering data management, and enhancing operational risk management are key to improving efficiency and agility. Moreover, fostering cross-functional teamwork and strategically deploying technology can unlock new opportunities. When combined with principled leadership that ensures alignment, organizations can gain a competitive advantage, ensuring long-term stability even in the face of immediate uncertainties. Innovating through these disruptions not only sets companies apart but also opens the door to growth opportunities, despite the persistent economic headwinds.
Call to Action
Launch a Digital Process Taskforce within each functional domain – Assign a dedicated team to conduct an operational analysis of core processes, and critically on an ongoing basis to regularly train / motivate / feedback / upskill employees on how to use, leverage latest technologies, and implement pilot projects. Their buy-in is essential. Identify pain points, transformation opportunities, and quantify potential ROI or other metrics of success, recognising that ROI is not always easy. A project might look instinctively right, but may not seem to cut-it in pure terms. This is perhaps down to the points discussed above, where detailed process parameters are not understood nor managed. Corporates, to get around this, sometimes give “numerical points” to each aspect of a project, but also have in place a point’s multiplier section within their ROI calculation methodology to raise the profile of these types of projects. Ensure that the Taskforce is helped by internal / external specialists who understand the strengths, weaknesses, opportunities, and threats associated with modern technologies. Task force reviews should be annual in order to facilitate the cultural change of moving to proactive process management.
Prioritize Process Automation – Leverage intelligent automation and some types of AI, like document recognition, to eliminate repetitive manual work, reduce costs, and speed cycle times. Target high-impact areas like order-to-cash, source-to-pay, and employee self-service. Focus particularly on achieving timely, accurate and meaningful reporting processes for decision support, management activities and operational controls / compliance. Focus on driving contextual, actionable workflows. Many CFO’s spend a lot of time on time producing reports / reporting packs that are not utilised in the field, which is probably down to the level of detail not provided within them, and the fact that they are too broad and not focused on the core issue.
Break Down Data Silos – Consider APIs to connect disparate systems, but recognise increased risk in some areas like payments execution, which can be mitigated by having more extensive integrated parallel sign off processes to avoid Business Process Compromise. As seen above, threat actors are also leveraging latest technologies to overcome and nullify your controls.
Champion Data Management Compliance – Regulatory environments continually tighten, meaning that data management flows from a compute and storage viewpoints need to be fully understood, particularly understanding the same points when APIs are in use , and also in the context of ensuring that cross border data transfers are not breached.
Maintain Focus on Change Management – Mitigate disruption through continuous training, transparent communications, and inclusion of all impacted teams in process redesign. Pay particular specific attention on all aspects of system integration, as they are multiple detailed areas that can trip up an implementation, and also the published life cycle of vendor solutions involved to ensure that you can meet your own planned life cycles.
Vendor Divorce Rules – Ensure that you have a path to receive your data in an agreed format within specific time frames at the end of any business relationship, so that you are able to engage other software providers as appropriate.
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