Fatihah Ramzi, DigitalCFO Asia | 6 October 2022
Lee Thong Tan, CFO Practice Lead, Asia at Workday
Any organization attempting a digital transformation should focus on digital agility. But as we go into the post-pandemic era, how can businesses empower their staff to innovate at the right pace in tandem with the demands of the company? How can businesses make sure they continue to be digitally agile? How can businesses improve their decision-making processes and ensure a more flexible process?
To address these questions, DigitalCFO Asia spoke with Lee Thong Tan, CFO Practice Lead, Asia at Workday. In this article he shared his insights backed up by studies conducted by Workday as well as his advice on how businesses can pick up their enterprise agility.
Digital Transformation Journey In The Post-pandemic Landscape
The pandemic has undoubtedly accelerated technology adoption across the Asia Pacific (APAC) region, with some markets advancing in digital transformation at a faster pace than the rest. Against this backdrop, Workday recently commissioned a study with IDC to understand the extent to which APAC organisations have progressed in digital agility since the pandemic. Digital agility is defined as the ability of an organisation to rapidly adapt to business disruptions by leveraging digital capabilities to not only restore business operations but also capitalise on the changed conditions.
According to Workday-IDC’s latest Digital Agility Index, more Asia Pacific companies are adopting technologies to become agile in a post-pandemic world, with 38% of APAC companies in the advanced stages of digital agility. This reflects an 18-percentage point increase when compared to 2020, marking considerable progress across the region.
That said, progress in digital agility is uneven across the region, with a widening gap between leading and lagging enterprises.
Agility leaders have a holistic view of their employees for workforce planning and talent development that is also aligned to finance in cost accounting and budgeting activities,” says Lee Thong Tan, CFO Practice Lead, Asia at Workday.
In other words, enterprise-wide functional integration and collaboration between the offices of the CFO, CHRO and CIO is a key enabler for success for businesses embarking on their digital transformation journey.
Reasons Some Companies Are Still Lagging Behind In Digital Agility
The study revealed that more than half (62%) of APAC companies still lag in digital agility. For these organisations, technology adoption is often driven by functional and line-of-business requirements as necessitated by immediate needs such as for ecommerce, safety measures, and remote work during the pandemic. Such a tactical, functional approach to digital transformation inadvertently limits enterprise agility.
For example, the study revealed that only 23% of APAC organisations surveyed currently have a data-driven cost optimisation strategy which allows them to leverage enterprise-wide and ecosystem data, so they can proactively identify opportunities to optimise costs and increase profitability. Further, 37% of APAC companies still manage their costs based only on historical financial data and reports. This means they are often impacted by price increases before any cost management initiatives can be implemented, and when market prices are no longer as favourable. These figures highlight a stark need for organisations to rethink their approach to closing digital agility gaps, so they can emerge stronger in a post-pandemic world.
In addition, some companies may have adopted a “lift-and-shift” approach, migrating processes, reports and rules to the cloud, with minimal streamlining or improvement. With such an approach, companies miss out on the opportunity to move away from legacy, outdated systems to transform and optimise operational processes for greater efficiency.
“By simplifying system architecture alongside the move to cloud, business leaders can boost digital agility and gain increased flexibility to support the business as it evolves and scales,” says Lee Thong Tan, CFO Practice Lead, Asia at Workday.
CFOs In Remaining Agile, Flexible And Adaptable In The Decision-making Processes
Against macroeconomic headwinds and as inflationary pressures continue to rise globally, CFOs will need to be better placed to promulgate data-driven cost optimisation features. The role of the CFO needs to evolve from being the custodian of finance and capital allocation to becoming the arbiter of improved enterprise decision making.
“To remain agile, flexible and adaptable in their decision-making processes, CFOs must develop capabilities to perform continuous scenario planning and leverage data to better detect, if not pre-empt, disruptions and understand their impact on the organisation,” says Lee Thong Tan, CFO Practice Lead, Asia at Workday.
CFOs can build stronger enterprise resilience by moving away from functional, line-of-business needs, towards more strategic, high-level thinking. This means developing a business plan that is underpinned by technological solutions that are incorporated enterprise-wide and work in synergy with one another. Importantly, CFOs need to work closely with other C-suites within the organisation, such as the CHRO and CIO, to integrate cross-functional digital transformation initiatives so that any technology is implemented across the organisation effectively, regardless of function, and that silos are eliminated.
Apart from investing in technology, CFOs also need to invest in the right skillsets to future-proof their workforce for today’s digital-first world. Disruptive skills such as in Artificial Intelligence and Machine Learning technologies, as well as data analytics will become increasingly important. Through the automation of accounting, reporting and financial planning and analysis (FP&A) processes, finance professionals can greatly streamline workflows and become more efficient and agile in their tasks. Further, the power of real-time data and analytics will drive smarter decision-making and sustainable business growth.
The Role Of Digital Literacy In A Business’s Digital Agility
Digital literacy definitely has a key part to play in an organisation’s digital agility. With the acceleration of technology adoption over the last two years, many companies run the risk of simply implementing one application after another, without fully understanding the uses and core needs of the organisation. In such a scenario where the systems and infrastructure are overly complicated, employees struggle to understand and use technology tools, workflows become sluggish, and digital agility of the organisation is impeded.
That is why, having in place a simple-to-use, intuitive technological interface is crucial in an organisation’s digital transformation journey. Further, with hybrid working becoming a norm, having tools that enable mobile working and greater flexibility will be key in supporting employees as they work from anywhere.
“Alongside the adoption of new innovations, organisations need to equip their employees with the right digital skills and knowledge to close the digital agility gap,” says Lee Thong Tan, CFO Practice Lead, Asia at Workday.
With the proper skills and education, and the adoption of digital, agile processes, employees are in turn more empowered to perform the best in their roles and chart their own career within the organisation, thus leading to greater agility and positive business outcomes.