The Challenger – “Lead” or “be-led”: New Rules of the Game – by Nalin Tripathi at Digital Leadership e-Summit 2020

1. AFG | Group Transformation | APSSC | 27-Aug-20 | 1
Digital Leadership e-Summit on August 27, 2020
Deployment Conundrum of Digital Transformation
- New Rules of the Game
→ Translating Strategic Intent to Execution - Unlearn & Relearn
→ Rapidly shrinking payback cycle & Digital Acceleration
→ Capex to Opex – the age of ‘pay-for-use’
Nalin Tripathi
Finance Leader – Shared Service
Agenda . . . Speaker . . .

2. AFG | Group Transformation | APSSC | 27-Aug-20 | 2
Context is “The Challenger” – “Lead” or “be- Led”
New rules of the game : 9 Key shifts & trends . . .
1. Be Disruption agnostic … key for longevity / sustainability (Product/Service – Dominate market)
2. Blind Spot Thinking …instead of Blue Sky Thinking… “Invisible competition” – Travel industry
3. Re-purpose across the “Value chain” … End-2-End + Top -2- down (“Phygital” Model)…Store Virtualization
4. Information the “New currency” (store of value)…vital input for Analytics, BigData, AI, M-learning (PO terms)
5. Excellence has become an Ingredient/input & not an Outcome anymore – Shift from KPI to KSI (Key
Success Indicator)
6. Growth – Shift from %s → 2X/3X value impact – Revenue/Cost saves/ Productivity / Mkt Cap
7. Variabalize costs … Shrink to Grow (superior Operating leverage)
8. Choice “explosion” everywhere … Substitute/complementary/virtual/Make or Buy
9. More Preventive & Proactive … less Corrective & Reactive…Customer interfaces, Personalization
. . . Helps Diagnose “your” Conundrum

3. AFG | Group Transformation | APSSC | 27-Aug-20 | 3
How to transform the finance function for the digitalized age
Must be Least effort path to Decision Excellence …
- Invoice verification & payments process (VA/NVA)
Complexity  Capacity Efficiency  Excellence Certainty Ops Cost + + + =
Value maximization Equation. . .
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Key principles (WHY?)… common to successful process transformations
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Incremental Change Vs. Transformational change (Quantum LEAP )
- Shift from %s → 2X/3X value impact in Efficiency  & Effectiveness 
- Re-distribution of human effort mix – less transactional more analytical
Complete the Preceding steps (LEAN) before embarking transformation
- Eliminate, Simplify , Standardize, Substitute….then Automate (ESSS -> A)
- Vendor master data cleanup, Fix Policy (Vendor advances)
4 Superior/Enhanced Stakeholder Experience
-  Customer Satisfaction Score/NPS
- Better payment and credit terms, creates new opportunities

4. AFG | Group Transformation | APSSC | 27-Aug-20 | 4
Transforming through Technology
Transformation through Metrics – Moving from KPI to KSI
AP AR Treasury Tax R2R
Blockchain
RPA & Machine
learning
▪ PO to Pay
▪ Inter Company txn.
▪ Vendor Reco
▪ Order management
▪ Credit Insurance
▪ POS/Till tender recons.
▪ Customer Recons.
▪ Sales Return approvals
▪ Letter of credits
▪ Bank Guarantees
▪ Bank a/c admin
▪ Deal Creation &
confirmation
▪ Purchase & sales
reconciliations
w/Suppliers &
Customer invoices
▪ Tax Return filing
▪ Inventory Mgt.
▪ IC Reconciliation
▪ Balance
confirmation for
audits
▪ Vendor Master
▪ Invoice Posting
▪ Payroll Mgt.
▪ Vendor Reconciliation
▪ Chatbot - QMS
▪ Master data creation
▪ SO release
▪ Credit release
▪ CN/DN Posting
▪ Reporting
▪ Bank Stmt. upload
▪ Open item clearing
▪ Cash reporting
▪ Bank Charges
validation
▪ Tax GLs
reconciliations
▪ Exception
management
▪ Closing cockpit
▪ Txn. Posting
▪ SLA assurance
▪ Recurring JVs
▪ System based reporting
▪ BI – System based
reporting
▪ Audit Schedules
▪ B/s Recon
(Blackline, Trintech etc.)
▪ Automated bank
reco thru MT940
▪ SWIFT for Trade
Finance (LC/BG)
▪ GPS/RF ID for Security
monitoring & billing
▪ OCR - VIM/Open text
▪ Tableau
▪ EDI - Vendor master &
Invoice processing
▪ EDI for customer
master creation
▪ Receivables
management
▪ Tax GLs
Reconciliations
(Alteryx, BI)
Outcome
KSIs
✓ % of First Pass Yield
✓ Paid on Time
✓ Zero Debit Balance in
Vendor Ledger
✓ % of Advance Payment
✓ Early Payment Discount
✓ TAT of Order Servicing
✓ Day’s Receivable O/s
✓ % of Delivery Return
✓ Credit Limit control
✓ % of Credit Insurance
Coverage
✓ Late payment penalty
✓ Input Credits availed
✓ Zero Penalty/
Interest
✓ VAT Leakages
✓ Repeat /Zero audit
queries
✓ % of Adjustment
Entries
✓ % Written Off /
Written Back
✓ Balance in CWIP
✓ 100% reconciliation
of bank charges
✓ 100% reconciliation
of interest payments
✓ % of Open items in
bank accounts
Other Intelligent
Technologies
(BI, Alteryx, OCR, EDI,
GPS, BigData etc.)
Choice of Technology . . . few examples in F&A Operations
Technology + Right KPIs… gives real transformation!!
What gets “measured” …gets “Managed”
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“Value Chain” mapping – Creating, Protecting & Enabling
Value
“Creating”
Value
“Protecting”
Value
“Enabling”
Examples from AP Process
1. Invoice verification, Vendor Master Mgm’t
2. Fraudulent payments
3. Excess/duplicate payment controls
1. HelpDesk/Query management
2. Scanning, Indexing, Archival
1. Cash flow controls/optimization
2. Payment term extension
3. Early payment discounts
Classify activities across all Functions…Identify Opportunities
Continue to Invest
Optimize/Automate/Eliminate/Substitute
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Common Traits of processes best suited for Automation . . .

7. APPENDIX

8. How to transform the finance function of the future for the digitalized, GBS age
First things First (How ?) . . . 3important considerations
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Relevant Expertise -“Invest in Best” … overdose is fine in Transformation (one-time)
- Build Digitalization CoE (DCoE) organization & capability
- Tax return end-2-End automation
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Choice of technology intervention /solutions … Assess Best-in-context
- Macros, ERPs, EDIs, OCR/ICR, GPS, Bots/ RPA, Blockchain, AI , Machine learning (ML)
- Buy or Make or Hybrid
Scope of digitization… “What” will be the Scope ... In/Out of Scope
- End 2 End process P2P, O2C, R2R, BRS etc. / Specific Jobs/ tasks / activities
- Assess pain points / challenges/opportunity/Variances in current processes
- Activity grouping – Validation, Verification, Computation, Data entry, follow-up etc.
… Critical for sustainable success of Digitalization

9. AFG Group Finance | SSF | SSON Dubai | DEC 2019
“Why”
Need
Establishment
“How”
Execution
• Processes are time-consuming and time-critical, Hight Cost/Txn
• Prone to mistakes and quality issues (SLA risks) …manual checks/validations
• Many disintegrated systems that use the same data, Load leveling
• Multiple touch-points and interfaces, multiple teams by Division
• Advocate the benefits of automation with stakeholders ...upfront
• Selection of right tools (RPA, IPA, Blockchain, OCR etc.)
• Dedicated team to support automation & Change management
Creating “Scalable” & “Sustainable” automation for Service Excellence
How to establish a clear strategic vision for finance process automation and
finance process management
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“What &
Where”
Opportunity
Identification
• Select a process that is rules-based… Early Wins Key
• Process is routine, well-defined and high volume
• Applications involved (MS office, SQL, ERP etc.) & IT Support
• Perform cost benefit analysis / Payback
3 Key considerations in shaping the Vision
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10. AFG Group Finance | SSF | SSON Dubai | DEC 2019
Big Data Analytics …. Tremendous potential for Foresight
Making better use of big data and analytics to drive predictive decision making
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Few use cases in Big Data Analytics . . .
Retail 1. Facial recognition …search history … real time marketing
2. Customer Relationship & Engagement Management (Amazon)
3. Store formatting, demand planning and stock optimization - JIT (AV data)
4. Dealer/distributor Delinquency management (predictive analytics)
5. Predict customer loyalty and consumer behavior (Amex)
6. Personalization- faster service, more relevant options (Starbucks)
Banks 1. Predictive Credit card fraud prevention with GPS data, Money Laundering
2. Predictive Closed Loop rewards program, Lifetime customer value
3. Credit risk management – Early warning system (EWS)
4. GPS enabled Customer collections management
3 Healthcare 1. Preventive diagnostics with patient’s medical data (lower diagnostics costs)
Others 1. Energy efficiency management in commercial assets (offices/hotels etc.)
2. Social media data analytics for risk/threat management (plants/factories etc.)
3. Logistics – Optimal route planning for least wait time (DHL)
4. Identifying financial risk and fraud during Stat audits (BDO)
5. Machine reliability & preventive maintenance- Gas turbines, Jet Engines (GE)