NEARLY a quarter of Southeast Asian businesses are blazing new horizons in corporate performance as a result of having a digital strategy, according to study by SAP SE and Oxford Economics released on Friday.
The “Leaders 2020 study” noted the global average of such companies is 16 percent, saying these new class of high-performing companies are reporting stronger profit growth, higher employee engagement, and are more inclusive when it comes to cultural diversity.
These high-functioning organizations have executives who communicate a company-wide digital strategy, keep worker and management and skills up to date and streamline organizational structure, the study showed.
At 66 percent, Southeast Asia companies are more likely to recognize diversity’s positive impact on culture compared with a global score of 62 percent. But only the true digital leaders are likely to see the benefits in terms of financial performance (37 percent vs 25 percent).
Companies have become more diverse in Southeast Asia than in other regions over the past three years, with 75 percent of Southeast Asian respondents experiencing the impact of diversity in improving the general well-being of the workforce within their respective organizations, while 42 percent saw better performances at the board and senior leadership levels. Companies in the rest of the world scored 67 percent and 34 percent, respectively, in those areas.
However, less than 40 percent of Southeast Asia companies have an effective diversity program in place, signaling more could be done, especially at the senior executive and corporate board levels.
The Leaders 2020 study found that only 61 percent of Southeast Asian executives (vs 55 percent globally) are making data-driven decisions, a key factor that makes a Digital Leader. It is of little wonder that only 62 percent of Southeast Asian executives (vs 59 percent globally) feel that employees are equipped with the skills necessary to keep up with digital technology.
“A diverse workforce encourages bold, innovative ideas to flourish and in turn, presents insights which are only made possible through that diversity. It is of little coincidence that these two capabilities – leveraging data for decisions and maintaining a diverse workforce—both occur for high-performing organizations,” said Scott Russell, president and managing director of SAP Southeast Asia.
The study also showed that it pays to be a Digital Leader, primarily because of stronger financial performance, with 76 percent of executives characterized as Digital Leaders reporting strong revenue and profit growth, compared with 60 percent of all other Southeast Asian executives.
Also, effective Digital Leaders drive more than financial performance by creating healthier cultures.
Eighty-seven percent of Digital Leaders have employees who are more satisfied, compared with 51 percent for respondents in Southeast Asia.
At 75 percent, Digital Leaders also have employees who are more likely to stay in their jobs even if opportunities to leave are present, compared with 45 percent in the region.