This article first appeared in Digital Edge, The Edge Malaysia Weekly on February 13, 2023 - February 19, 2023

Finding success in today’s economy takes more than just good fortune and chance. Strategies to thrive in a digital-first economy will be imperative to business growth, agility and resilience as more organisations pivot towards new opportunities and look to harness technology to position themselves for success. According to an IDC study, at least half of Asia-Pacific’s economy will be based on or influenced by digital technologies by end-2022. 

However, digital transformation by organisations in Malaysia has some way to go. A 2022 report by Workday and IDC found that eight in 10 organisations in the country are still lagging in digital agility — 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. 

Six in 10 organisations also drive business growth by performing opportunistic market analysis on an ad-hoc, as-needed basis, which is less optimal than using real-time business data combined with predictive market analysis. 

Against this backdrop, businesses need to double up on efforts to accelerate the digitisation of their operations and adopt modern solutions to transform and future-proof their businesses. The ever-changing environment requires business leaders to think, move and be agile in navigating market disruptions. 

Leading chief financial officers (CFOs) will need to combine real-time market and internal data, using analytics and predictive capabilities, to seize market opportunities, mitigate potential financial disruptions and proactively manage cost drivers. The improved decision-making enables a more agile enterprise, creating first-mover advantages, minimising risk exposure and optimising costs, all of which lead to better financial performance. 

Yet, according to Workday’s CFO Indicator research, half of CFOs continue to make financial decisions based on gut instinct rather than on data to make well-informed decisions. 

To drive success today, CFOs must develop capabilities to perform continuous scenario planning and leverage data to better detect and address, if not pre-empt, potential disruptions and understand their impact on the organisation. Being agile, flexible and adaptable throughout the plan-execute-analyse cycle using a single source for truth will also be key in enabling leaders to turn data into actionable insights for the business. 

To better leverage data, organisations will need to move away from legacy ERP systems that are unable to keep up with the demands of today and hamper the ability to make agile changes to financial and business plans. The management of end-to-end finance operations will require a single, intuitive, data-to-decision cloud platform for finance and broader business users to underpin transformation and harness insights for business acceleration. 

Modern cloud solutions also help data break out of its digital siloes, enabling timely information to be viewed in the right format by leaders, and enhancing an organisation’s ability to make accurate, real-time forecasts for smarter decisions and greater agility. 

In addition, navigating uncertainty today with legacy systems would be akin to using an offline street directory rather than a real-time digital navigational system. Yet, close to four in 10 companies in the region are still managing their costs based on historical financial data and reports, which hinders their ability to predict and prepare for price changes to minimise impact on the business. The office of the CFO needs to move away from such static processes to drive continuous planning using real-time data to accurately model what-if scenarios for better enterprise planning. 

CFOs also need to invest in the right skill sets to future-proof their workforce for the digital-first world. Disruptive skills such as artificial intelligence, machine learning technologies and data analytics will become increasingly important. Through automation of accounting, reporting, and financial planning and analysis, finance professionals can greatly streamline workflows and become more efficient and agile in their tasks, and be empowered by real-time data and analytics to contribute to sustainable business growth. 

In doing so, CFOs can enhance finance’s ability to act as a strategic business partner, stepping up from the traditional role of a custodian of finance and capital allocation to become the arbiter of improved enterprise decision-making. 

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. 

At the same time, CFOs need to work closely with other C-suites within the organisation, such as the chief human resources officer and chief information officer, to close digital agility gaps and integrate cross-functional digital transformation initiatives so that any technology is implemented across the organisation effectively, regardless of function, and that silos are eliminated.

In today’s dynamic operating environment, organisations that stay with the status quo and stick to legacy tools will be outperformed. By simplifying system architecture alongside the move to the cloud, leaders can boost digital agility and gain greater flexibility to support the business as it evolves and scales. 

With digital transformation and an array of modern technology tools to harness the power of data and analytics, business leaders can take the guesswork out of their business decisions so that success is not left to chance.

Lee Thong Tan is the CFO Practice Lead for Asia at Workday, a provider of enterprise cloud applications for finance, human resource and planning

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