Malaysian DX Faces Major HR Headwinds

Malaysian companies are optimistic about digital transformation (DX). In a Workday study titled Digital Dysfunction in Asia Pacific,  58% of C-level executives saw measurable returns from DX. In comparison, only 47% of Singapore executives and 34% of Japanese peers said the same.

The Malaysian government efforts to build a digital economy contributes to this optimism. The government hopes that it will account for 21% of the country’s GDP by 2022.

However, DX projects are facing significant HR-related hurdles. The biggest, according to the study, was organizational silos. Over 73% of HR leaders and 54% of IT leaders in Malaysia cited this as a critical barrier to transformation.

Another hurdle is inadequate cross-functional collaboration. Forty-seven percent of C-level executives cited a lack of common technologies and shared metrics as critical barriers. More than one third (34%) said their organizations needed to invest more in technology.

More than half (52%) said that their digital transformation initiatives are also uncoordinated. The study observed that 73% of HR departments lacked implementation plans for digital transformation. It was the same for half (50%) of finance teams and 38% of IT teams.

"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," said Daniel-Zoe Jimenez, assistant vice president and head of DX, Future Enterprise & SMB, IDC Asia Pacific.

"Key investment in the right technologies will help both increase employee and finance visibility and drive cross-departmental collaboration, accelerating digital transformation success," he added.

Almost all (93%) of HR leaders and 80% of finance leaders in Malaysia agreed that an integrated HR and finance technology solution offers much-needed visibility. The report noted that only 20% of finance teams and 13% of HR teams in Malaysian companies have fully integrated and successfully transformed their systems. The results are similar to other countries in the region.

"Investments in technology can help companies disassemble information silos and reimagine the business in a way that allows an organization 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," said Rob Wells, President, Workday Asia.