Most Asia Pacific organisations unable to adapt during Covid-19 pandemic, says Workday study
By Tan Jee Yee July 24, 2020
- Owing to a lack of digital agility, 90% struggled to change financial plans
- 69% of Malaysian organisations lack an enterprise-wide culture of agility
The Covid-19 pandemic has been a tremendous challenge for most businesses in Malaysia. It has, however, been a catalyst for change, especially in accelerating digital transformation. But is it fast and widespread enough? At the same time, what are the challenges plaguing organisations in their rapid journey in digitalisation?
Perhaps not enough organisations are digitally transforming. According to a recent Workday study, 25% of Malaysian organisations have accelerated their digital transformation plans due to the pandemic, while 60% have actually slowed down.
The study, titled the Workday Digital Agility Index, was conducted in partnership with IDC. It surveyed nearly 900 senior business leaders and C-suite executives in HR, finance and IT across nine markets in Asia Pacific: Hong Kong, Singapore, Thailand, Indonesia, Malaysia, Japan, Korea, Australia and New Zealand.
What they found is that most organisations are unable to adapt during Covid-19. According to the study, owing to a lack of digital agility, 90% have struggled to make changes to their financial plans for the year, with 83% unable to realign their organisational structures.
In terms of people and processes, almost four in five (79%) organisations have been unable to track their people’s skillsets to form special taskforces in response to the pandemic, and more than half (56%) were not able to manage new approval and business processes.
It would seem that customer engagement is the area of a business that is hit the hardest. 65% of Malaysian organisations cite that as their most affected area, while 52% cite it as “the workplace”. 38% identified human resources function as one that is most affected.
Skill shortage issue
According to the study, a short fall of digital skills is a significant barrier for organisations in faring better with digital agility amid Covid-19. 69% of Malaysian organisations lack an enterprise-wide culture of agility.
In the meantime, 67% of organisations also say that less than half of their people are equipped with digital skills and capabilities. A staggering 13% say that they have almost no employees with digital experience or skills.
The study notes that the lack of digital expertise may be due to a prevailing mindset within Malaysian organisations of not viewing talent as a source of competitive advantage and therefore not investing in finding and nurturing it.
As it turns out, 79% of Malaysian organisations do not see talent as an important strategic asset and lack the proper tools and processes to manage it. This mindset, the study adds, has a spill-over effect for organisations’ employee experiences. Less than half (42%) see the employee experience as an essential consideration in their decision-making.
If anything, at least a large majority of the surveyed companies believe that digital transformation is important. 92% see digital transformation as a priority, with 96% using digital technologies to execute their business continuity plans.
What are Malaysian organisations more focused on in their digital transformation plans for the next 12 to 18 months? According to Workday’s study, 60% are most concerned with front-end revenue generating systems, while 52% view back-end finance systems as a priority. 50%, on the other hand, will focus on front-end customer touchpoints (50%).
However, these focus areas are relatively evenly spread with least important being front-end customer service systems (48%) and back-end HR systems (33%).
“Recent events have brought into focus the importance for businesses be digitally agile. Without the right technological backbone, organisations can no longer move quickly to adapt to rapid change,” says Workday Asia president, Rob Wells (pic).
“Most companies this year have had to make significant changes to their financial and human resourcing plans, at quick notice, and our research shows offline processes have hampered this. I hope this study will encourage more leaders to think seriously about how they approach digital transformation and invest for the sake of the long-term health of their organisations and workforces.”
Against the region
It would seem that markets in the Workday Digital Agility Index all faced challenges in adapting to Covid-19. 76% of CFOs struggled to revise their financials plans, budgets, and forecast in response to the pandemic, while 60% of CHROs struggled to realign organisation structures, or to track people skillsets for special taskforces.
In fact, 45% of organisations surveyed are not able to adapt their business processes in response to Covid-19. 75% of those organisations’ found that their processes are not yet fully adaptive and agile.
What are their barriers of success? 60% of C-level executives say that their organisation lack an agile enterprise-wide culture – only 19% of CFOs say that their processes are fully automated, adaptive, and agile. On top of that, 68% of CFOs say they are still making decisions based on ad hoc reports with a dependency on IT to generate them.
Only 25% of organisations are operating over a single enterprise-wide technology platform.
Daniel-Zoe Jimenez, Associate Vice President & Head Digital Transformation, Future Enterprise & SMB, IDC Asia/Pacific says: “The survey findings are aligned with IDC's research around digital transformation (DX) and the impact of Covid-19 on Asia Pacific organisations. DX is no longer an option, it's a matter of survival.
“This crisis has not only brought about new challenges, but it has also intensified existing inefficiencies, making more evident the need for organisations to focus on becoming agile and adaptable. Those organisations that see the crisis as an opportunity to transform and accelerate the digitalisation of their businesses will emerge stronger and more relevant in the next normal,” he concludes.