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Mon 26 Feb 2018 01:00 PM

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Interview: How Dynamics 365 helps UAE businesses with VAT and the digital transformation

Brand View: Keith Fenner, Dynamics 365 Business Group Director, Microsoft Middle East & Africa

Interview: How Dynamics 365 helps UAE businesses with VAT and the digital transformation
Keith Fenner, Dynamics 365 Business Group Director, Microsoft Middle East & Africa

Now that VAT has been introduced. what’s the likely impact for businesses in UAE?
The business owner with an annual turnover greater than AED375,000 will feel the greatest impact, as they are likely to move from a system of no record to a computerised solution. 

Combine this with the transition from working in a low-tax world, and the added overheads of VAT filing and reporting, and you can see we will encounter some major shifts in the use of software in business. These indirect costs include pricing, reporting, filing and other associated compliance processes, all of which will be new to many business owners.

How does Dynamics 365 help businesses?
The requirement for VAT compliance is an opportunity for organisations to refresh existing investments in business applications and begin their digital transformation journeys.

There are inevitable additional costs associated with compliance, but by balancing this with the promise of new business efficiencies, better customer engagement, employee empowerment and potential new business models, the implementation of VAT can be a catalyst for migration to the cloud.

In larger businesses, complexities may arise in group companies’ trading and this may result in devising a new structure that again can drive more process efficiency, and remove silos, to aid digital transformation.

If a business has an existing system in place, how does Dynamics 365 integrate with that?
Microsoft has a very inclusive approach when it comes to integration, especially on the Azure Cloud where we bring many vendors and solutions together. 

As such, Dynamics 365 is often used as a solution that surrounds existing application investments and brings them together as an integrated cloud suite. While this may not deliver a perfect journey to the cloud, it’s a very feasible option to select a project and function of service, and use Dynamics 365 to add business value to the existing investment, via integration.

Is there an issue with the pace of digital transformation?
The pace of digital transformation varies with industry and size of the market opportunity, as well as the scale of the business. Disruptors can be big or small and they can undertake largescale transformation end to end or implement bite-sized projects.

It’s always important to assess what change does for the customer and which technologies provide them with the greatest value creation.

Some industries, like information technology, telecommunications and financial services, offer digital products so transition is easier as it is already part of the company’s DNA. Industrial companies that are asset-intensive need to review productivity by optimising use and operations through automation. Service companies look at the transformation of customer experience to improve engagement.

It’s useful to think of disruption in three ways and assess the impact that has. Marketplace disruption looks at shared access models where assets are rented or consumed; product disruption looks at the evolution of products becoming services, through the adoption of intelligence; and channel disruption examines how products reach consumers and how they are serviced.

So the pace all depends on how imminent the threat of disruption is, and how seriously you perceive that risk.

For SMEs, is that transformation process slightly different?
Based on the narrative above, it’s threat- and industry-dependent, not size-dependent. The way SMEs handle the threat is different, as they typically don’t have the ability to change as quickly as a larger enterprise. The SME has to adapt by establishing a digital vision based on remodelling the core business.

This requires a review of skillsets and ambition, but the key thing to remember is, if you do nothing else, at the very least digitise core systems. SMEs need to reimagine the internal and external business processes. Think of VAT as a disruption catalyst for all SMEs to commence the transformation process by digitising the business applications.

How can Dynamics 365 help with that process, particularly when it comes to implementing VAT?
Dynamics 365 was designed as a holistic suite of end-to-end applications that work superbly on their own, but even better together, as a modern business platform. 

As such, VAT compliance becomes part of the financial and operations suite, providing all the integration and reporting expected to comply with FTA rules. By starting with the components that meet your unique needs (as well as complying with VAT) and then extending to build apps, automate workflows and provide real-time data insights, it is possible to start the digital transformation journey one step at a time.

What solutions are your partners providing to support SMEs on implementing VAT, Improve customer service or sales cycles?
Microsoft partners like Crayon are working hard to develop a strong partner ecosystem that can support SMEs on not just their VAT-implementation journey, but also on their digital transformation journey, with Dynamics 365.

It is not just about implementing a VAT system into your business, it’s about seeking out ways to automate business processes within your organisation that truly transform how you are engaging with your customers, connecting with your employees, optimising your operations and transforming your products.

This form of digitisation will give you a competitive edge within the Gulf region – enhancing future revenue performance and market-share aspiration. Cobweb, another Microsoft partner, has developed a solution called Complete Finance that enables a company of any size to own an intelligent and affordable cloud solution that enhances the productivity of all teams, from sales to finance.

Complete Finance also empowers a company to develop a strong customer acquisition and retention strategy, and simultaneously manage the new VAT process.

Why is it important to embrace the transformation process?
Digital transformation requires vision and must be embedded in the strategy of the business from the very top, in order to unlock innovation. Once a project has been launched, it should observe traditional best practices, but in a more agile way, giving innovators the freedom to adapt as they go along. Also, once a project is implemented, it must be repeatable and scalable, so it is important to ensure that any silos in the business are removed.

Sometimes a change in leadership, or the need for specialist consulting services, may be required. However, you cannot transform on the fly without a plan and a direction. As my IoT MIT professor said, “We should not be trying to make faster caterpillars when we need to become butterflies.”

When it comes to cost, what can customers expect?
The cost of digital transformation is difficult to quantify as it is essentially unique to each business, in terms of both scale and industry. As for VAT compliance, alignment with requirements will likewise be determined by both size of business and specific industry and operational model.

The advantage of digital transformation, is that it presents an opportunity to remodel costs along with operations. Because a digitally transformed business will pay for their technology function on a cyclic basis rather than large, up-front capital expenditures, they will discover welcome dimensions of control and predictability in their ongoing IT costs.

What should customers prioritise first?
Of course, VAT compliance is a regulatory requirement, so the compliance itself must take precedence. But if a business application investment is required to achieve this, then it is a great time to consider a wider digital-transformation strategy and choose a platform that has the potential to rapidly unlock business innovation and allow you to adjust your technology mix as you grow and change.

What can we expect in the future, in terms of new tech and solutions?
The promise of the business-ready platform is baked right in to the cloud-based Dynamics 365 experience. This initial step into the Azure cloud brings customers into a rich technology space, where they have access to intelligent AI-driven tools.

Smart solutions, driven by machine-learning, cognitive-reasoning, natural-language bot platforms, predictive analytics, the Internet of Things, and more, are embedded in the Microsoft cloud. They allow you to amplify the efforts of your workforce across multiple channels and engage deeply with customers, based on new dimensions of location and context.

The Fourth Industrial Revolution has fused the digital with the physical. Consumers expect their daily lives to be reflected in their digital ones. They want to be defined in terms of segment and persona and customer experiences need to be contextual – at work I am a VP and decision-maker; at home I am a parent worrying about the content delivered to my children; I like playing rugby, Xbox and watching F1.

A competitive business will understand all of that and be able to convert it into an opportunity for engagement and loyalty. Welcome to the intelligent cloud. Machine-learning can drive business efficiency and behavioural marketing gives return on engagement rather than investment.

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