Most M'sian organisations lag digital agility: IDC-Workday

• Eight in 10 organisations in Malaysia lag in digital ability 
• Lack of skills, talent hinder digital transformation

A study commissioned by enterprise software player Workday found that eight in ten (79%) organisations in Malaysia are still lagging in digital agility, that is being in the slow and tactical stages of digital agility maturity. 

In a statement, the company claimed this is despite the opportunity to accelerate digital transformation and increased technology adoption during the pandemic.

It said the study found that the lack of skills in both talent acquisition and talent retention were the biggest challenges cited by organisations in Malaysia in pursuing digital transformation.

Conducted in association with IDC, the IDC-Workday Digital Agility Index Asia/Pacific 2022 highlights the extent to which Asia Pacific (APAC) organisations have progressed in digital agility since the Covid-19 pandemic. 

First started in 2020, the study assesses and ranks organisations on the Digital Agility Index.

From their scores, Workday said these organisations are identified either as “agility leaders” if they are found to be in the agile/ integrated stages of digital agility maturity, or “agility followers” if they are determined to be in the slow/tactical stages.

The study found that across the nine Asia markets surveyed, progress in digital agility is uneven.

It showed that Malaysia ranked seventh in this year’s Digital Agility Index – a position it also held in 2020. 

Organisations in Australia achieved the greatest progress in digital transformation efforts and ranked first this year, the study noted.

Singapore, which ranked first in 2020, dropped to second position, followed by New Zealand, Korea, and Hong Kong, the survey indicated.

Meanwhile, Taiwan, a new addition to the study, ranked sixth whilst Indonesia ranked in eighth position, followed by Thailand, it said.

From a regional perspective, the survey showed only 38% of Asian organisations are in the advanced stages of digital agility.

Still, progress is being made overall as this figure reflects an 18 percentage point increase when compared to 2020, it said.

For the 62% of organisations in Asia lagging in digital agility (agility followers), technology adoption is often driven by functional requirements and business needs such as for e-commerce, safety measures, and remote work during the pandemic, Workday noted.

The survey emphasised that organisations in Malaysia should look to integrate digital tools and processes enterprise-wide to gain a holistic view of resources, enable data-driven insights, and drive greater digital agility. 

However, it said only four in 10 (42%) businesses managed digital transformation initiatives at the functional level, as opposed to implementing such transformations at the enterprise level. 

Additionally, IT and finance leaders also highlighted function-specific challenges.

A high proportion of IT leaders (73%) said they experienced challenges in choosing the right technology solutions that can help drive business agility. 

Similarly, finance leaders (63%) surveyed highlighted challenges in identifying new growth opportunities while driving profitable revenue growth in a rapidly evolving business environment. 

The lack of an integrated finance process supported by an enterprise-wide technology architecture therefore drives fragmented financial reporting and hinders timely business insights and decision-making, the study reported.

It said leveraging digital transformation more aggressively can help companies achieve better outcomes in attracting and retaining talent. 

Over half (57%) of human resource (HR) leaders in Malaysia said they are challenged in identifying the right skills needed to support evolving business needs. 

In terms of skills development, the study also found that about over half (67%) of HR professionals in Malaysia are solely focusing on core skills requirements, as opposed to adopting a holistic strategy based on employee engagement and data analytics to identify training needs and growth areas.

In the new norm led by a digital-first economy, leveraging digital agility can offer competitive advantages, the report noted.

But this is only possible if organisations rethink their approach to closing digital agility gaps through technology and alignment of functional business requirements across the c-suite, the study highlighted. 

The study also showed that for positive business outcomes, not only must organisations accelerate their digital transformation to narrow the agility gaps but also have an integrated approach as a strategic imperative. 

Sandeep Sharma, president for Asia, Workday said, “With agility now a key source of competitive advantage in today’s digital-first economy, organisations supported by data-driven processes and imbued with digital skills and work cultures are best positioned to thrive in today’s changing world.

Lawrence Cheok, associate research director of digital transformation at IDC said, “It is not surprising to see increased technology adoption driving agility improvement.

“However, true digital agility is about capitalising on change in order to thrive - to do so, organisations need to emulate agility leaders and make the leap from tactical to strategic enterprise-wide transformations in their culture, people, processes, and technology implementation.”

Click here to access the full report: IDC-Workday Digital Agility Index Asia/Pacific 2022