A recent study conducted by a global leader in enterprise technology for finance and human resources has reportedly found that Malaysian companies are leading in the Asia Pacific in terms of quantifying the return from their digital transformation initiatives.
The numbers show that 58% of C-Level executives are seeing measurable returns. Comparatively, only 47% of companies in Singapore and 34% in Japan have seen returns.
The study, titled ‘Digital Dysfunction in the Asia Pacific’, looks at the barriers to digital transformation from the perspectives of 1,000 C-level Executives and business leaders in Human Resources (HR), Finance and IT.
The findings come as the Malaysian government has announced commitments to digitalisation this year and driving the Malaysian digital economy forwards. Malaysia’s digital economy is projected to contribute 21% of its GDP by 2022.
When looking at the key challenges to digital transformation, almost half (49%) of C-level executives in Malaysia see organisational silos as a key challenge – an environment where a company’s departments do not share operational information with one another.
Frustration with organisational silos was also felt by the other business leaders surveyed, with 73% of HR leaders and 54% of IT leaders in Malaysia highlighting this as a key barrier to transformation.
The President of the firm that conducted the study noted that as Malaysia’s digital economy rapidly expands, it is great to see that local companies are keeping pace and leading the region in their efforts to digitally transform. Despite this success, there still remains work to do to break down company silos to effect change at an enterprise level.
When it comes to measurement, more than two-thirds (69%) of C-level executives in Malaysia say they do not currently have a balanced scorecard approach to align and measure digital transformation initiatives.
Forty-seven per cent of C-level executives also cite a lack of common technologies and shared metrics as key barriers to cross-functional collaboration, with more than one third (34%) saying their organisations need to invest more in technology.
Investments in technology can help companies disassemble information silos and reimagine the business in a way that allows an organisation to stay competitive in a disrupt-or-be-disrupted world. The advent of cloud technology in Financial and HR management will allow business planning to be more strategic, collaborative and real-time, especially if brought together in one single system for maximum benefit.
More than half (52%) say that their digital transformation initiatives are uncoordinated, with three quarters (73%) of HR departments lacking implementation plans for digital transformation, along with a half (50%) of finance teams and 38% of IT teams.
From the perspectives of HR and finance leaders, almost all (93%) of HR leaders and 80% of finance leaders agree that an integrated HR and finance technology solution is needed for greater visibility – the highest in the Asia Pacific region.
One in five (20%) finance teams and 13% of HR teams in Malaysian companies have systems which are fully integrated and have been successfully transformed – which was similar to other countries in the region.
A high-ranking leader from the partnering firm on the study noted that the survey results are consistent with its research, and show that while 93% of organisations in Malaysia are undergoing digital transformation, 55% are stuck in their digital transformation journey.
The key theme that comes through in this research is the lack of collaboration and integration among different functions across the region. Digital transformation is a team sport and requires strong support from the top and close collaboration among team members, from HR and Finance to IT and digital teams.
Key investment in the right technologies will help both increase employee and finance visibility and drive cross-departmental collaboration, accelerating digital transformation success.