Steve Cox suggests that organisations will realise their new mission, with the help of technology.
On 20 August, CFO South Africa, in partnership with Oracle South Africa, hosted a webinar in which Oracle vice president and head of customer marketing for ERP and finance Steve Cox explained the unprecedented changes businesses are going through thanks to Covid-19.
“According to a survey taken just before the global pandemic, 56 percent of South Africans had bought something online in the prior month, which is partially accredited to a fairly high adoption of mobile money” he said. “But what we’ve seen from the crisis is that online purchasing is almost dominant now. Traditional retail outlets have become, for some, almost unreachable. We’ve all switched to buying online.”
He then predicted that, when this is examined again in January 2021, that 56 percent is probably going to be 80 percent or higher.
The survey also revealed that South Africans spend, on average, nine hours and 22 minutes on the internet per day, and 3 hours and 33 minutes of this time is spent watching TV. Seventy percent of South Africans are concerned about whether what they watch is fake or real. Sixty nine percent of South Africans are concerned about how companies use their data. “We would expect all of this to have evolved over the past six months because of the uncertainty around Covid-19,” Steve said, adding that the virus is fundamentally changing everything.
“There is not a single industry that has been insulated from the fundamental change that has been forced on us by this tragedy,” Steve said. “We’ve seen high impact in certain industries, like healthcare, the public sector, travel and retail. And no one has seen more immediate impact than our manufacturing industries, where whole supply chains have been completely disrupted.”
He explained that companies are now looking at multisourcing, which means having more than one supply chain for multiple components, moving production back to South Africa from overseas. “They’re looking at supply chains in an entirely different way. Not only do we have to have supply chains that are demand driven, they need to be supply driven as well. We need to respond to changes in our supplier network that are forced upon us by the crisis.”
There is also a small group of industries that have seen a positive impact from the pandemic, primarily in the online space. “If you look at asset and network-based sectors, like the telecoms industry, they’ve moved from being something that is nice to have to an essential service.
Steve explained that, because of this, a lot of industries are now looking at new business models.
He referred to a company in the UK that makes bicycles, which will be offering a bicycle as a service this year. You will no longer buy a bicycle, you will rent it. Similarly, insurance companies are now offering insurance as a service.
“You might have a vision document for 2025 or 2030 where you have outlined your strategy,” Steve said. “You’ve worked out where you are now, where you want to be and how you want to get there. You’ve laid out what you are going to implement, what technologies you’re going to use, and then you monitor it.”
However, he explained that the crisis has stood this change management model entirely on its head. “Businesses, in some ways, have fundamentally changed functions, replacing their strategy with continuity planning.”
He adds that some businesses have transformed their activities, such as in banking and education, which have had to respond to everyone working from home and needing access to their accounts or information. “It’s technology’s job to play catch-up now and, in a new world, we’re going to need new KPIs and new measurements. Instead of just a simple programmer project management, we need parallel project management, because you’re going to do a lot of things at once.”
Steve said that, in order for businesses to change their business model, they not only have to change the way they work, but need the technology to support it,” he said. “And sadly, old ERP systems won’t be able to cope with this change.”
He stressed the importance of switching to new-generation, on-cloud ERP software, which offers continuous and easy quarterly adoption, rapid transition without disruption, immediate feedback loops, extensions and configurations, as well as embassy-grade security. “All of these features enable companies to make that quick change that Covid-19 has forced upon them.”
The impact of emerging technology on work
According to a report by McKinsey, 77 percent of general finance activities can be automated. “I think the total should be closer to 90 percent, and if these activities can be automated then, in my view, they should be,” Steve said.
In organisations that have adopted AI and machine learning in their supply chain, 61 percent have seen decreased costs.
Steve believes there will be five major impacts of emerging technologies on the way we work, particularly on finance:
- Improved decision making
- Simplified processes
- Automated common tasks
- Better managed risk
- Optimised assets
“At Oracle, we recognise the need to plan workforce changes to fit a new environment, to model what-if scenarios and to understand the financial implications of what you do,” Steve said. “When you look at how supply chain has changed to be both demand and supply driven, you can manage the multiple signals and dynamically segment your supply base.”
He explained that the software also enables businesses to capture insights they didn’t have before, on any device.
Steve reassured the audience that, despite all these changes being forced upon them due to Covid-19, there is hope. “Things will get better and technology has a role to play. It’s going to help organisations realise either their new mission because of the crisis, or a different version of their current vision.”
You can watch the full webinar here.