Key barriers identified by finance and IT leaders include the lack of alignment between the offices of the CFO and CIO, as well as cost and budget issues

A MAJORITY of Malaysian companies are still lagging in finance digital transformation, with only 2% of Malaysian finance and IT leaders reporting that they currently have a robust digital finance transformation strategy.

A latest survey by Workday — The CFO (chief financial officer) and CIO (chief information officer) Indicator Study — examined the state of digital finance transformation and how these efforts are impacted by the finance and IT functions.

“The power of data is becoming increasingly apparent in this digital age, but many organisations still face challenges when it comes to managing and harnessing the value of vast amounts of data,” said Workday CFO practice lead Asia Lee Thong Tan (picture).

“As the finance function evolves to take on an increasingly strategic role that propels the organisation forward, it is key that IT and finance leaders work closely together to deliver on a finance transformation strategy that leverages analytics and actionable insights for smarter business decisions in a fast-evolving environment,” he added. 

Based on the survey of 1,060 finance and IT leaders globally, including in Malaysia, Workday said it is evident that the lack of alignment between finance and wider business transformation goals is the biggest barrier towards achieving finance transformation.

Other barriers faced by companies in Malaysia include cyber security challenges, as well as cost and budget issues. 

In fact, less than half (43%) of those surveyed are confident in the agility of their finance technologies to facilitate organisational pivots during a crisis.

Close to one in two (48%) finance leaders in Malaysia also said they are forced to make financial decisions based on gut instincts despite having the data they need, because it is siloed, not in the right format, or not readily available.

According to Workday, the ability to make data-driven decisions at speed is critical for businesses today. Yet, the survey highlighted three major challenges Malaysian companies face when it comes to data confidence and agility, all of which are important for successful digital finance transformation:

• Lack of alignment makes transformation difficult. Almost half (47%) of respondents indicate that finance and IT rarely align on the value drivers for technology investments. Among IT leaders in Malaysia, 52% believe their aim to eliminate IT complexity is directly at odds with the expanding scope of the company’s finance function. 
• Challenges with existing technology infrastructure hinder transformation. There is currently a technological gap between what CFOs and CIOs know they need and what they currently have. Close to seven in 10 (65%) respondents surveyed indicate that their Enterprise Resource Planning (ERP) systems are not flexible enough to meet the needs of today’s business environment. 48% said that they require improved finance systems that allow them to seize new business opportunities within weeks, instead of months.
• Need for an increase of cross-functional finance and IT skills. Developing cross-functional literacy skills will be important in improving synergies between the offices of the CFOs and CIOs. However, only a small percentage of Malaysia business leaders (10%) indicated that investments should be made to upskill and hire IT talent with financial literacy skills as a top priority. This is despite 59% of Malaysian companies saying that they are under pressure to innovate finance technology despite limited financial literacy. This reveals an opportunity for greater cross-functional training and partnership between IT and finance. — TMR