Dear Friends,
Over the past two weeks, I had the opportunity to speak about Design Thinking with diverse groups—from enthusiastic school kids in Hyderabad to a dedicated faculty team at Gayatri Vidya Parishad. Today, I had the pleasure of addressing members of the CMA Association (The Institute of Cost Accountants of India, Visakhapatnam Chapter) on the topic “Design Thinking for CMAs.”
In fields like medicine or consumer products, explaining Design Thinking is relatively straightforward. It’s a human-centered approach to experiential innovation—where human centeredness means empathy, and experiential innovation is the confluence of desirability, affordability, and technical feasibility.
But how do we explain Design Thinking in the context of Cost & Management Accountancy? I shared two stories to illustrate. Here’s the first:
Story 1:
A leading pharmaceutical distributor in Andhra Pradesh experienced a steady decline in net margins—despite increasing sales volumes. The finance team dove deep into the P&L, comparing year-over-year costs, vendor discounts, and pricing models. They adjusted overhead allocations, renegotiated logistics contracts, and even restructured sales incentives. But the problem persisted.
Enter Sudha (a fictional character), the company’s CMA—and more importantly, a Design Thinker at heart. She knew the numbers only told part of the story.
Sudha decided to look beyond the reports. She visited major pharmacies the company supplied to. She spoke to doctors—both those prescribing the products and those who weren’t. She interviewed patients about their experiences. She listened to store managers about ordering delays and invoicing issues. She even shadowed the warehouse dispatch team for a day.
What she uncovered surprised everyone.
Sales reps were being incentivized to push slow-moving, high-margin drugs to meet monthly targets. This resulted in high return volumes from pharmacies, which drove up reverse logistics costs. The manual reconciliation process for returned stock led to delays, missed credits, and write-offs. Pharmacies began favoring rival distributors who offered more flexible, responsive systems.
None of this had shown up in the reports.
The real issue wasn’t pricing—it was a broken user experience across the supply chain.
While AI could detect anomalies in the P&L, it was Sudha’s empathetic observations, interviews, and field visits that revealed the underlying problems. That’s the beginning of the Design Thinking approach.
I’ll share the second story in another letter—but it focuses on the idea of upholding trust.
Today, fraud control isn’t just about detection—it’s about designing trust.
When you’re a design thinker or designing a banking product, you face four possible outcomes:
1. You correctly flag a fraudulent transaction (your duty as a banker).
2. You wrongly flag a legitimate transaction as fraud (a failure of empathy—imagine a customer in a hospital being denied a transaction for surgery, or a traveler stranded because they couldn’t book a ticket).
3. You correctly allow a legitimate transaction (also your duty).
4. You wrongly allow a fraudulent transaction (potentially enabling illegal activities).
In short, while AI automates detection, design thinkers elevate prevention—by designing systems grounded in empathy, trust, and user understanding.
Let’s design that trust.
Ravi Saripalle