I became curious about the processes and strategies that underpinned all those financial statements I was required to audit. The numbers are fine, but they only tell a small part of a very interesting story. I wanted to know everything - Teoh
Joon Teoh, founder and CEO of shared services consultancy and robotic process automation (RPA) specialist Agos Asia Sdn Bhd, has a couple of mentors to thank for the overall trajectory of her career thus far.
“My father was a teacher in our hometown of Kuala Kangsar, Perak. He taught science in school. He is my biggest mentor and influencer,” she tells Enterprise.
Teoh describes her father as an intelligent and eminently patient man — one who always went the extra mile for his students, even after they graduated. “Over the years, I have lost count of just how many times parents and former students looked him up to thank him,” she says.
Many small business owners tend to have gregarious personalities and generally stand out in a crowd. Teoh, on the other hand, takes the time to think through her opinions and does not allow herself to be press-ganged into making a response. When she gets drawn into a discussion, she quickly and calmly breaks down the more abstract concepts, drawing from her more than 20 years of experience to paint real-world examples.
She attributes this particular quality to her father. “My dad had this deliberate, patient and nurturing streak. I have always been grateful to have picked up these traits from him.”
A chronic overachiever, the Public Service Department (PSD) scholar graduated from the London School of Economics with a degree in accounting and finance. Upon her return to Malaysia, she worked with one-time professional services giant Arthur Andersen before deciding that being a chartered accountant was somehow not enough of a challenge.
“I was so lucky to have had great mentors at Arthur Andersen. But after two years, I became curious about the processes and strategies that underpinned all those financial statements I was required to audit. The numbers are fine, but they only tell a small part of a very interesting story. I wanted to know everything,” says Teoh.
It did not help that, as a junior member of a high-performing auditing team, there were times when she had to work 36-hour shifts.
At the turn of the millennium, Teoh joined British American Tobacco Bhd’s (BAT) burgeoning operations in Malaysia. It was here that she really came into her own as a leader and strategist.
“I was recruited by finance director James Irvine, a UK national. He believed in me and threw many challenges my way over the years. I quickly toughened up and honed my problem-solving and critical-thinking skills with him,” she says.
“I recall that despite still being very junior, I was tasked with managing the disposal of an old asset, a printing press. I had sleepless nights as I did not know how to begin. But gradually, I got through the disposal and picked up valuable experience in the process.”
It is hardly surprising then, that after a long and successful career in the corporate world, Teoh decided to branch out on her own to impart knowledge and insights to others. By the end of her stint at BAT, she had gained significant experience in internal auditing, corporate finance, mergers and acquisitions, supply chain finance, marketing finance and taxation.
Incidentally, it was also at BAT that she first noted the benefits of shared services. “I recall that when I joined the company, Malaysia had been selected as BAT’s global shared financial services hub,” she says.
Having mastered the ins and outs of the space, Teoh realised there were lucrative opportunities in bringing shared services to the other companies operating in the country. These days, she brings her considerable finance and corporate expertise to bear as a shared services and RPA consultant.
The company has been up and running since November 2015 and while Teoh initially targeted large multinational corporations (MNCs) and government agencies, she has gradually diversified into consulting services for privately owned mid-sized enterprises as well. “Right now, I would say that 70% of my clients are MNCs and government agencies while the other 30% are private businesses with roughly 50 employees and making high seven-figure revenues,” she says, adding that she has serviced 26 clients to date, many of whom have become repeat customers.
Shared services refer to the corporate practice of centralising foundational business functions. This typically has significant merit for large companies with substantial global footprints, a large number of subsidiaries, or both. Traditionally, subsidiaries would have their own accounting, human resources and IT departments, each replete with their own internal practices and idiosyncrasies.
Over time, larger businesses have consolidated these functions and placed them in one location. This centralised shared services location are then tasked with servicing the business’ subsidiaries all over the world. The cost and efficiency gains of this arrangement have long been recognised.
As technology went mainstream, enterprise resource planning (ERP) marked the next evolutionary stage for businesses looking to efficiently manage day-to-day functions. ERP is simply an umbrella term that refers to a suite of software that helps businesses manage their accounting, procurement, compliance and supply chain needs, to name a few.
However, both systems — the entirely analogue shared services model and the ERP model that gradually merged into shared services — were only as efficient as the human operators. Ultimately, both models still required a significant amount of human intervention in the form of often tedious and repetitive data entry and processing functions.
While ERP has marked a substantial improvement in efficiency over the hitherto manual and hands-on shared services, the modern iteration of ERP tools date back to the early 1990s, if not earlier.
The next wave
To this end, RPA has the potential to be the next big thing in the shared services space. The numbers tell a very encouraging story.
According to data from research giant Gartner, RPA software revenue grew a whopping 63% to US$846 million in 2018. This made it the fastest growing segment of the global enterprise software market. Revenue is projected to reach US$1.3 billion this year.
Teoh explains, “Consider the finance function along a curve populated with varying levels of value-added, finance-related activities. At the lower end of this curve lies the very repetitive, voluminous and mundane tasks that every organisation must perform — things like purchase orders, invoice processing and supply chain payment functions. Although these are mostly done via soft copies now, human operators are still required to print these out, make calculations, input the company records and execute.
These are key business functions to be sure. But the tedious and never-ending nature of the work means that finance staff hardly get to participate in the longer-term, higher value-added finance functions (such as long-term investment planning), she points out.
This is set to change, however.Today, there are RPA tools that build smart “robots” capable of running those exact functions on the computer, independent of human operators, says Teoh.
“Thanks to advanced RPA software from vendors such as Softomotive and UiPath, we are able to build intelligent, pattern-sensing robots into any number of finance-related functions. So, instead of a human operator having to recognise and tabulate arguably thousands of invoices a week, these virtual robots can be calibrated to run through just as many invoices in a day.”
She splits a company’s functions into three “buckets”, as she puts it — the process, people and technology. First, she and her team take into account the client’s problem statements and its key business objectives. Then, she designs a series of processes and reporting lines in such a way that these play to the client’s strengths.
After that, she proceeds to get the buy-in from management and communicates the new processes throughout the organisation. Finally, she and her team use RPA technology to bring these processes to life on the client’s computer networks.
“We were engaged by a government agency to automate everything from its procurement to its payment processes. Initially, we were informed that the agency was plagued by an overload of paperwork, which often resulted in significant delays in payment to its network of suppliers and contractors. Our key objectives were to drastically reduce payment terms as well as strengthen risk management controls and increase overall transparency of the processes,” says Teoh.
“We evaluated its processes and acquired projections for the kinds of volumes it had to process over a period of time. We then took stock of the agency’s workforce, being sure to identify talent gaps or redundancies. At this juncture, we recommended technologies that would streamline and strengthen the entire process.
“For this client, we had to set up a vendor portal with RPA capabilities. Approved vendors would be assigned unique user log-ins for easy access to the portal. They would then submit all the relevant documents as prescribed by the agency, drafted in a format that would be standardised for all vendors.
“Virtual robots built into the portal could recognise key patterns and data in these standardised online forms and process payments automatically. We achieved a very high accuracy rate. Those forms that stood out or could not be immediately recognised by the virtual robots were automatically forwarded to a human operator at the agency for manual processing.”
But for all the potentially exponential efficiency gains the RPA promises, Teoh cautions against blind optimism. Malaysian businesses are increasingly participating in the digital transformation movement and more than ever, business owners are excited about the possibilities the new technologies can create for their companies.
She advises businesses to lead the technology, and not the other way around. “A salesperson’s objective is to sell his product. Excited business owners may well be given a laundry list of possibilities and efficiency gains early on. However, it is only at the implementation stage that businesses truly understand — and regret — the practical implications of their choices,” she says.
“Without having a detailed look at your processes, as well as considering any talent gaps you may have, you run the risk of creating RPA processes that do not conform to your organisation’s ideal processes and reporting lines. Over time, a business ends up having to restructure its processes to suit the finalised RPA processes, and not the other way around.
“This results in a significant decrease in cost and time efficiency. But even worse, attempting to undo the RPA processes could be very costly as well.”