Turning digital disruption into opportunity

Despite New Zealand’s economy continuing to experience a period of continual disruption by digital technologies, many are seeing this as a significant opportunity.

“In some ways, ‘Digital Disruption’ is just today’s innovation,” says Neel Singh and Jon Bradley, who lead the franchise team at Deloitte Private.

Deloitte Private, digital

“The rapid uptake of broadband, smartphones, and doing business in the cloud is evidence of disruption. All these are just extensions of the computing and online advances of the past few decades, yet it is a mistake to see the digital revolution as a function of technology, rather than one of business evolution.”

Disruptive innovation is powerful - it reduces barriers to entry, blurs category boundaries and opens doors for a new generation of entrepreneurs and innovators.

So how do a franchisor and the individual franchisees within a network go about assessing the threats and opportunities of digital disruption against other businesses, including other franchised businesses? Neel and Jon have some suggestions.

1. Recalibrating cost structures. Digitally-powered, low-cost businesses will have distinct advantages moving forward. To compete, leaders will have to consider their people, supply chains and overheads.

2. Replenishing revenue streams. This means building new sources of revenue across segments, geographies and business models as legacy streams dry up in the wake of digital disruption.

3. Reshaping corporate strategies. This is a response where the business reconsiders assets, risk and corporate agility to position the organisation for success in an increasingly digital world.

The cloud - a major headache for franchises

A major disruptor for many businesses has been the rapid adoption of the cloud and cloud technologies.

“A couple of years ago we recognised how much cloud-based accounting software packages such as Xero have changed the face of service and interaction with business advisors,” says Neel.

Deloitte, the cloud, Deloitte Private

In response, Deloitte Private established Deloitte Private Connect, which was then adapted for the franchising sector. The Deloitte Private Connect offer provides tailored virtual financial services to franchisors or franchisees on a real-time basis, supplemented by a strategy framework for growing the value of that business.

Neel explains that in the past, accountants have been reactive instead of proactive.

“For many of their clients, particularly for businesses the size of a typical franchisee, a review of the year’s trading does not occur until anywhere from 2 to 11 months after year end. With the adoption of cloud computing, this has changed forever. Now the accountant can work in a real-time environment with the client.

‘Xero’s approach in the cloud has also enabled other third-party suppliers to innovate plug-in modules across point of sale, payroll, inventory etc. In particular, there are a number of products that deal with data analytics.

Greater benefits - same cost

Jon says that the benefits are clear. “In our experience, these tools allow Deloitte Private to act for the franchisee as the bookkeeper, external accountant and strategy partner all in one.”

“For no greater cost than what the business owner is already paying their bookkeeper and external accountant, the franchisee can now also receive base data analytic reports. This is a prime example of the opportunities digital disruption can provide for both the service provider and for franchise systems.”

Digital disruption is pervasive. Preparing for and reacting to change has always been a part of business and it’s never been more apparent to do so than now with the wave of digital disruptions.


Neel is committed to helping his clients along their journey of growing their small businesses into big ones. He aims to understand what is relevant to them and then draw on his team's combined expertise to deliver the best practical, commercial and business solution.