This article first appeared in Digital Edge, The Edge Malaysia Weekly on October 18, 2021 - October 24, 2021

The pandemic has escalated the digital race into a digital stampede. Where before it was only a few large entities at the forefront of technology adoption, the arena is now flooded with organisations — both large and small, public and private — scrambling to get on board. 

While some digital transformation journeys are deliberate, many were done in a rushed manner — forced, so to speak, by the circumstances brought about by the pandemic.

Workday president of Asia Sandeep Sharma points out that there is a difference between digital transformation and digitisation, and that many companies are approaching the subject in a less-than-ideal manner.

“Many companies are just migrating whatever they have on-premises onto the cloud. This is essentially just taking what has existed and running it on a cloud platform. This is not really transformation, because you are doing exactly the same thing as you were before,” says Sandeep.

“Every company is digitising in some way, shape or form. But in the context of true digital transformation, the journey here in Asia is still fairly nascent. True digital transformation involves deconstructing existing processes and putting them back together in a manner that is automated, eliminates human touchpoints and leaves a digital footprint.”

During the pandemic, organisations have rushed to digitise their operations by department or business function. At the top of the priority list would be enabling a remote or hybrid working environment. New digital initiatives typically sprang from that point, if there was no existing digital transformation plan in place.

As organisations rush to adopt new software, workflows and subscriptions, the employee working environment has become more complicated than necessary. In addition to the Google and Microsoft suites of products, solutions such as Slack, Zoom and Trello now populate their day-to-day lives.

“A Frankenstein monster is where you put different pieces together bit by bit. You start by working on one part and move on to the next. At the end of the day, you end up with a body you barely recognise yourself,” Sandeep explains, alluding to the disjointed state in which many companies find themselves.

There are two reasons that approaching digital transformation in such a manner can be detrimental to an organisation. First, the new economic landscape demands that organisations be more agile and digitally oriented — something that pure digitisation exercises alone cannot resolve.

For example, historically, financial plans are made annually. This is because the process tends to be time-consuming: gathering the necessary data, cleansing, integrating and analysing it, and then having multiple stakeholders review and participate in the planning exercises. Producing the final document typically takes three to four months.

Owing to disruptions over the past 20 months, organisations may need to review the same plans every week to keep up with the rapid changes in the industry. For some business operations, the review process needs to be done continuously in real time. As business cycles shrink, the need for organisations to be more agile increases exponentially.

Second, ineffective digital transformation journeys might go some way towards explaining the “great resignation” that is happening now. Microsoft’s 2021 Work Trend Index states that 41% of people are likely to consider leaving their jobs within the next year.

The “great resignation” might be more of a “great discontent”, according to a July article by US-based analytics and advisory firm Gallup. “It is not an industry, role or pay issue. It is a workplace issue —because the highest quit rate is among not engaged and actively disengaged workers,” it states. 

Sandeep points out that we are living in an age in which customer experience matters, with mega apps such as Facebook and Grab consolidating multiple features into a single, easy-to-use platform. Contrast this with the current working experience of a typical employee, where a mix of legacy and new solutions is used to fix a singular business problem, many of which do not sync well with each other.

“Employees in an organisation are no different [from consumers]. Our experiences are shaped by brands such as Google and Netflix, and we bring those same expectations to work. If the company is not investing in improving the employee experience, they will disengage and look for jobs elsewhere,” he says.

“The great resignation is already here. A company might want to digitally transform as a way to retain talent. If it takes a year for the company to digitally transform, however, perhaps 40% of the employees would have already left [by then]. Organisations cannot hire their way out of this problem. It is almost impossible to replenish the 40% gap effectively in a short period of time.”

Sandeep also warns against a corporate disease called “not-invented-here” syndrome. It is where decades-old institutions adversely reject technological solutions not tailor-made to suit the organisation. 

They have their current work arrangements so ingrained into their corporate identity that, even if they embark on a digital transformation journey, the newly adopted technology must conform to the way in which the business operates.

This results in the company extensively customising new technological solutions, resulting in a process Sandeep refers to as “system calcification”. It is akin to one subscribing to Netflix but demanding that the service provide DVD support because of one’s large DVD collection accumulated over the years.

Conventional belief states that working tools should fit the user, instead of the other way around. However, if companies adopt a custom software approach towards digital transformation, the technological solution would calcify in place and further changes to the software would be difficult to make. 

Sandeep says that instead of customisation, organisations should focus on software configuration, similar to how different Netflix users have different recommendation feeds despite being on the same platform.

“Software customisation typically takes several months, but configuration requires only a few days. Take, for example, our clients, Sime Darby, which runs several business operations, and Maxis, a telecommunications operator. We have 9,000 customers globally, but they are using the same cloud-based delivery platform,” he explains.

Despite these challenges, Sandeep remains positive about the outlook for the local digital adoption landscape. This optimism is founded on a steadily recovering economy, as evidenced in Malaysia’s 16.1% increase in GDP in 2Q2021. 

On top of that, solutions like Workday have seen rapid adoption during the pandemic. The financial and human capital management software provider was founded 16 years ago, but the past quarter was one of the best-performing throughout the company’s history, Sandeep says.

“We’re expanding our headcount to keep up with this surge in demand, and there is a lot of excitement within this space. With respect to change management and calcified processes, we are still optimistic. One thing that companies have learnt during the past two years is that uncertainty is here to stay, and they cannot be caught off-guard with inefficient back-end system processes.” 

In terms of change management best practices, Sandeep says it needs to start from the top, with company chiefs leading the initiative. Still, leadership mandates alone are not enough, requiring the buy-in from stakeholders from all tiers in the organisational ladder.

Constant communication is the best way to facilitate this process because digital transformation involves not only the technological systems but also the people who operate them, Sandeep says. There are also many project management methodologies that business leaders can reference online, such as internally appointing digital advocacy champions and having rewards tied to tiers in digital adoption.

“It does not take much to get everyone on the side of digital adoption. Like we’ve mentioned, employees appreciate having a better working experience using one streamlined solution instead of 15 different ones,” he says.

“If the digital solution prescribed is beneficial, you are not going to get much pushback from the employees. In fact, they might be excited to be part of the company’s transformation journey, because the company is actively investing in their future.”

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