Australian companies can leverage digital business spend capabilities to maximise impact for the business and its environmental, social and governance (ESG) priorities, at the same time.
When it comes to business technology, there’s no going back to pre-COVID-19 times. Rapid digitisation and remote-work productivity happened. We don’t have to imagine a new business “normal”. It’s already begun.
Companies are deciding what their remote vs office work structure will be and sorting out how to manage hybrid workforces. The public and private sectors are continuing to diversify and strengthen supply networks, digitise, and modernise back offices and strengthen digital capabilities, overall.
Among all this change, new priorities have emerged. Customers, investors, and employees are holding organisations accountable to more than just financial success. They’re increasingly expecting them to deliver against key social and environmental metrics as well.
Whether or not Australia will demonstrate digital and ESG leadership in a changed global economy will depend not only on our digital capabilities but also on how we use them.
A Focus on ESG
Based on the collective response to the global pandemic, there’s a lot of digital transformation success on which to build better, more socially responsible, sustainable and resilient operations.
The “Building Back Better” disaster recovery mantra has taken new hold and, with it, a critical focus on ESG – Environmental, Social, and Governance priorities.
However, ESG on an enterprise scale has not been easy. It adds measurement to the Corporate Social Responsibility approach of the past, and needs updated processes and tools to suit. It demands modern, cloud-based solutions that align ESG factors to the crucial decisions business leaders need to make – including how they direct and spend corporate dollars – to ensure every dollar can be spent more meaningfully.
Is Australia a Taxi or an Uber?
For enterprise technology solutions, better user experience means matching the high expectations created by apps and tools that we as consumers use every day. We like to say, “It has to be as easy as buying with Amazon on the weekend and buying with Coupa at work on Monday.”
For example, Uber didn’t disrupt just because it created an app that allowed cars to be tracked and simplified payment. The x-factor from a passenger perspective is the improved experience. Clean cars, treats and amenities like bottles of water and tissues have become the bare minimum expectation, with some Uber drivers elevating the experience with entertainment, local expertise and extras like umbrellas and chargers.
Try as they might with shiny new apps, taxi companies haven’t yet won market share back from Uber because they’re still offering the same old experience.
Let’s take that lesson into the enterprise technology realm. As your business improves digital capabilities in support of financial and ESG initiatives, don’t forget that the user experience can make or break the adoption and success of a tool or app.
Australian Supply Chain Priorities
As organisations prioritise the business and ESG values they deem most important, supply chain and spend management offer a timely illustration for what that could look like in action.
Supply lines are still uncertain, so supply chains need to be diversified. Since further digitisation and greater investment in analytics, cloud, and machine learning are already happening, these tools should be extended to support effective and efficient supply chain management. Assuming you are spending this time shoring up your supply chain capabilities, the time is right for ESG objectives to be put into action as well.
Many Australian businesses will look to work with suppliers they can identify as Sustainable, and those that prioritise Diversity, equity and inclusion (DEI). And as our country focuses on building sovereign capabilities, Australian businesses are increasingly looking to add more Domestic and Indigenous Suppliers to their chains.
Australia is already leading the way when it comes to working to remove Modern Slavery from the supply chains of Australian businesses. Many organisations are establishing Modern Slavery policies and are required to submit annual Modern Slavery statements.
What does it take to effectively accomplish objectives such as these?
- Alignment: Historically, ESG initiatives, as well as the various aspects of spend – supply chain, sourcing, procurement and payments – have all been siloed. Aligning ESG functions with processes and tools will allow leaders across an organisation to ensure every dollar is spent with intent to benefit the business and the community.
- Tools: What systems and solutions will you use to digitise the process of managing annual statements from your suppliers, and their suppliers, to deal with risk and comply with regulations such as Modern Slavery reporting? Look for a platform that allows your people to find, select, and direct spend to diverse and sustainable providers at scale so that doing well and doing good go hand in hand.
- Visibility: The ‘back office’ and finance functions of the business were called upon during the pandemic to rapidly provide visibility on companies’ financial situations, cash flow availability, accounts payable, and planned spend so decision makers could react to the emergency. This has created a new expectation of visibility. Thankfully, technology can play a huge role to provide a real-time picture of all aspects of spend. You’ll need a 360-degree-view of each supplier, with ESG alongside risk, performance and spend.
- Ease of Use: The new digital tools you give your people have to be the easiest way for them to get the job done and should be based on updated processes designed to take most advantage of digital capabilities. Usability in enterprise software matters.
- Community Intelligence: A huge benefit of our amazingly connected world, is that the potential is there for world-wide users of the same platform to share reviews, recommendations, and experience. It happens on travel sites and online shopping platforms, and it happens with procurement and spend management as well. You can draw on data – what we like to call community intelligence – from other organisations working towards similar goals, benchmark your efforts against theirs, and learn what suppliers have been identified as aligned with your business values around things like sustainability, diversity, sovereign capability building and stamping out modern slavery.
Spend as a Transformational Tool
Part of the new normal is that every company will decide what values are to be prioritised, and how effective digitisation, automation, and visibility can help bring them to life.
When we look at it from a business spend management perspective, it’s possible to put digital capabilities to work as a reflection or manifestation of values, priorities, and leadership potential.