Stepping into the New Normal: Changing Business Dynamics in India

With the unprecedented number of people working from home, 2020 has turned out to be a watershed year for companies to manage employee productivity.

While we marvel at the maturity of cloud services and digital technologies that have enabled this massive migration of work from office to home, many business processes and policies remain old world, paper based and manual, especially administrative and finance ones. Such administrative and finance processes, mainly expense claims and invoice processing, are mandatory but take up plenty of the employee’s time which can otherwise be used to deliver more meaningful work. This inflicts significant costs on businesses and the economy and causes frustration for the employees at the same time.

Good employees are hard to come by and firms should do their best to retain them. However, the irritation that Indian employees are reportedly feeling, stems from the fact that most expense claims systems are not supportive of the usual practices they follow in their daily lives, such as making cashless transactions with mobile wallets and super apps (umbrella apps containing other apps).

Almost half of the employees in India (49%), expect their firms to cut the unproductive time they spend on managing expenses and better support the digital work and lifestyles they are accustomed to today as per a SAP Concur study in May 2020 - Finance in the New World of Work

Huge Gap in Financial Transformation in India

The study shows that while many organisations have embarked on digital transformation over the last few years, many firms still handle expense claims manually. This is perhaps unsurprising given that digital transformation has tended to focus on high-profile projects And prosaic functions like expense management could easily have been overlooked.

A significant 36 percent of respondents in India say they submit expenses manually by filling out a form and enclosing physical receipts. Such a manual process is tedious, error prone, and ill-suited to the modern digital workplace.

Little over half (53%) of the respondents use a semi-automated tool, where they key in the expense claim items digitally but enclose physical or scanned receipts. Only 11 percent of respondents have a fully automated, intelligent expense claim solution.

Additionally, employees and managers spend a substantial amount of time submitting and reviewing or approving claims, that significantly impacts their business productivity. Employees spend an average of 6.1 hours per month filing expense claims, or half a typical workday. Managers have it worse – they spend 7.3 hours reviewing and approving expense claims, plus another 6.1 hours submitting their own claims.

This time really adds up. The study used International Labour Organization (ILO) data to calculate that saving just 10 percent of the time spent on filing and approving claims would translate to US$2.25 billion1 of potential GDP revenue gain for India each year, assuming all the lost hours are diverted to productive work.

Beyond the tediousness and inefficiencies, the study also found that current expense management systems’ support for modern payment methods is inadequate. More than a third (39%) of respondents say they want their expense management software to be able to integrate with external apps to enable added functionality like reimbursement of payments made through super apps.

There is also clear potential for mobile wallets to become a more dominant payment mode for business purchases, given that mobile wallets were found to be a significantly more preferred payment mode for personal purchases, vis-à-vis company purchases.

Employee Satisfaction Linked with Finance and Administrative Processes

More than three-fourths (79%) of the Indian respondents made a very strong link between their overall experience of finance and administrative processes to their overall satisfaction of working for their organisation.

Around one-third (34%) of office workers are less than satisfied with their firm’s current expense claims process. Around 29% feel the same about their expense management software.

Employees want to be able to speed up the entire expense claim process; fill up expense line items progressively over the month and have them consolidated automatically into an expense report; and submit expenses anytime and anywhere via mobile apps, in that order of priority.

Managers want to be able to spend less time reviewing and approving expense claims; detect expense and receipt data for fraud, mistakes and policy violations before reimbursements; and review and approve expenses via laptops and PCs, in that order of priority.

Automation and Digital Adoption – A Must for Indian Organisations

As the world starts to normalise, businesses will change their focus – from crisis, to recovery, to growth and resiliency. In the coming months, organisations will re-think and in many cases, re-invent, the way they run.

Efficiency, agility, and the ability to innovate are going to be more important than ever and automation will be central to helping organisations achieve these three qualities.

Automation takes repetitive, manual aspects out of routine finance and administrative tasks, saving employees time so they can focus on meaningful work. It also saves time for the finance team by eliminating paperwork and detecting erroneous or fraudulent claims.

I am thrilled at how much more effective automation is, at providing visibility and control and driving compliance. Manual reporting processes are inherently opaque − the lack of integration between systems makes it impossible to track spending effectively, to manage regulatory compliance, or to enforce basic policies.

Modern automated solutions also come with digital and mobile functionalities, and broader integration with the world’s payment platforms, to boost employee experience and satisfaction.

All in all, digitalisation will be vital to building a finance organisation that can truly support the business in delivering value to customers, enabling it to become more resilient for the new era. As we look ahead, lets change the game, and not have the game change us.

[1] To calculate the savings to be reaped from automating manual expense claim processes, Asia Insight created an economic loss model based on macro-economic data compiled by the International Labour Organization (ILO). This model divides the GDP of each market by its total number of workers to derive the average output per worker. The model then assumes a 10 percent reduction in wasted expense submission/review/approval time, and multiplies it by the number of information workers in each market to get the economic gain per market. These market gains are then aggregated to project the overall India gain of US$2.25 billion.