Singaporean organisations are preparing to write significant checks. Against the backdrop of a national S$37 billion Research, Innovation, and Enterprise (RIE) plan, budget allocations for digital transformation are rising. Yet, according to a new ServiceNow study, CFOs may be funding the wrong side of the equation.
The data reveals a dangerous equilibrium: 80% of customers still prefer phone support for issue resolution, yet only 9% of organisations plan to prioritise it. Simultaneously, service representatives are navigating more than four systems on average, leaving them just 35% of their time to resolve issues.
For the CFO in 2026-2027, the inability to measure—and therefore mitigate—operational drag is no longer a minor inefficiency; it is a quantifiable risk to revenue. As the Singaporean market becomes more competitive and customer expectations rise, the disconnect between budget allocation and actual customer service delivery is silently eroding enterprise value.
The 56% Black “The CFO is the custodian of risk within an organisation, whether FX, receivables, or credit. Churn is a financial risk, and this directly ties back to the service delivery the organisation is providing.”
The 56% black hole: Unaccounted labour costs
Most Singaporean finance teams calculate customer service costs based on headcount and technology spend. This is a gross miscalculation.
The ServiceNow study found that agents spend only 44% of their time on resolution; the remaining 56% is consumed by “operational drag”—switching between systems, duplicating data, and searching for information.
Tan advises that CFOs look beyond the fully loaded monthly cost of a service team. “The question is how much of that cost is actually spent resolving customer issues,” he says. “You already have that data through the system and call activity.”
This 56% is not just “busy work”; it is a direct subtraction from customer lifetime value (CLV). When an agent in Singapore toggles between five screens to answer a billing query, the enterprise incurs not just the labour cost of those minutes, but the risk of customer friction.
Research indicates that high-effort experiences drive up support tickets and escalate churn risk. If a CFO is not tracking “cost per resolved interaction” versus “cost per contact,” they are likely overstaffing inefficient processes or worse, under-resourcing resolution capacity.
The empathy accounting gap
The most pervasive blind spot in the CFO’s dashboard is empathy. The ServiceNow survey highlights a striking perceptual gap: 48% of customers cite a lack of empathy as a top frustration, yet only 28% of executives believe it causes serious challenges.
This is not a soft skill issue; it is a financial provisions issue. A lack of empathy directly correlates with repeat contacts, escalations, and compensations (e.g., “Sorry, here’s a S$50 voucher”).
Tan suggests a forensic approach to the P&L: “You want to measure repeated contact for the same issues, unresolved cases, escalations, complaints, and compensations. These are financial burdens that a CFO has to carry.”
Tan draws a critical distinction between functional churn (e.g., leaving due to a product failure) and emotional churn (e.g., leaving due to a bad call).
“Emotional churn is harder to detect,” he warns. “With data coming from different systems, being able to segment the metrics will help the CFO in investment decisions.”
Without segmenting these “leakage metrics,” Singaporean CFOs are flying blind, unable to see that defunding voice channels to save one million might result in a loss of five million in customer asset value.
The “Klarna Trap”: When efficiency kills value
The race to implement AI in customer experience is currently a primary driver of budgets. 91% of CX leaders face pressure to implement AI. However, Tan warns against deploying AI on fragmented infrastructure to cut headcount.
He cites the cautionary tale of Klarna, the fintech giant. “In late 2023, the CEO declared AI could take over. They reduced their workforce from 7,400 to 3,000. Then late last year, he came back and said outsourcing or automation shouldn’t be the predominant determinant, because customer experience dropped significantly.”
This is the “CFO Trap“ of 2026. Investing in AI that deflects calls without solving the underlying systemic friction (the 56% drag) merely automates bad service faster. Researchshows that while AI can handle simple transactions, customer trust erodes when AI cannot seamlessly hand off complex, high-emotion cases to a human.
The resolution disconnect: A silent metric
For years, finance teams have measured “ticket closure.” Tan argues this metric is dangerously misleading. “We also see from ServiceNow customers, cases being closed and reopened because they weren’t satisfied. While the customer service officer says the case is closed, the customer says it’s not truly resolved.”
Industry data supports this: only 42% of customers feel their issue was truly resolved when a ticket is marked “closed“. The rest carry lingering concerns, expecting the problem to resurface.
For a Singaporean CFO, this “false resolution” creates contingent liabilities. The revenue from that retained customer is not secure. Tan advises a shift in governance: moving from siloed KPIs to joint accountability. “An example is customer lifetime value. This is something that could tie everybody together.”
A New Formula for the 2027 P&L
To escape the “Customer Experience Budget Trap,” CFOs must demand a unified data architecture that connects service interactions to financial outcomes. The traditional ROI dashboard, which measures average handle time and cost per call, is obsolete.
Tan concludes that the boardroom needs a “Control Tower” view that measures three things: velocity (speed of resolution), productivity (cost to resolve), and risk (emotional churn indicators).
“Don’t be a solution looking for a problem to solve,” he advises. “Don’t go with a hammer and just say, ‘Where’s the nail?’ The question is: If I don’t fix the fragmentation, does it impact customer retention?”
In 2026, the CFOs who win will be those who stop treating the contact centre as a cost centre to be minimised and start treating the resolution of friction as a revenue retention asset to be optimised. The operational drag is measurable. The only question is whether you will measure it before your customers do.
Click on the PodChats player to get Tan’s full perspective on the customer experience (CX) operational drag CFOs aren’t measuring.
With 80% of customers preferring phone support, but only 9% of organisations plan to prioritise it. How should CFOs re-forecast churn given that 52% of customers would shift brands due to poor service?
With agents spending about 44% of their time on resolution, and 83% toggling between three to five systems, what is the average monthly cost of that 56% operational drag, and why is it missing from customer experience ROI dashboards?
According to reports, 40% of customers cite a lack of empathy as a top frustration, while executives say only 28%. What financial provisions should finance leaders make for repeat contacts and churn, especially when only 11% have made meaningful AI progress on emotional connection?
We were converging on two things here. One is multiple systems—on average, five or more systems that customer experience teams are increasingly using. As we implement AI into customer experience workflows, CFOs will need to start looking at what else and where else to fund. But before funding more digital technologies, what baseline must CFOs demand to reduce agent system complexity from perhaps 5 to 1? And from a budget perspective, how much budget is currently wasted on workflows that force customers to repeat information?
If I could drill down on that 83% that want, that prefers self-service, at what point does the absence of an empathetic hands-off, right, an actual agent, person that’s empathetic to the concerns of the customer, at what point does this absence of empathetic kind of outweigh savings from defunding voice channels?
If you look at operational metrics that are often ignored by the finance team, which one, in your view, should CFOs hardwire into, say, monthly P&L reviews to detect or a deepening empathy gap before it impairs customer assets?
Given that only 30% of executives have connected people, data, and processes on a unified AI-enabled platform, what would you say is a worst-case scenario in 2026? What would it look like, particularly for a return on customer investment around customer experience, then?
What specific board-level governance change is required to force these three operational fixes before CFOs can see better returns?
What is your advice for CFOs to help them get out of this customer experience budget track and move forward to really achieve those targets that the organisation, the business, really wants to achieve?
