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    WDAY   US98138H1014

WORKDAY INC.

(WDAY)
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Global Study: Workforce Skills and Data Access Are Barriers to Digital Transformation

01/20/2022 | 12:41pm EDT

For the third year in a row, we surveyed business leaders about what's driving-or slowing-their quest to create a more agile organization. Early results from our study, "Closing the Acceleration Gap: Toward Sustainable Digital Transformation," finds that their digital ambitions are more measured than they were a year ago.

What we're seeing from the study is that even though the relentless pace of business transformation is slowing a bit, it's not stopping. In fact, the in-person interview portion of our survey indicates business leaders are still firmly seeking ongoing transformation but are looking to do it in a more sustainable way. Our research suggests that leaders recognize that the rate of change adopted during the pandemic is unsustainable over the long term. Nearly six in 10 leaders (58%) say their digital transformation has already slowed or they expect it to slow in the future.

There's also the realization that digital ambitions can be bounded by the physical world, which might also be driving more realistic expectations around digital revenue growth-ongoing global supply chain problems, and the difficulties in finding and retaining frontline workers, have demonstrated this.

And it seems that as ever, the hardest changes to make are the fundamental ones to the culture and structure of a company.

When it comes to anticipated digital revenue streams, leaders are also taking a more pragmatic view of what's possible. In 2020, 36% expected digital to account for 75% or more of their revenue within three years. Now, just 13% of organizations say the same-one percentage point higher than before the pandemic, which suggests expectations are becoming more realistic. It's also worth noting that more modest levels of anticipated digital revenue are up very slightly from pre-pandemic levels.

And fewer businesses are adopting a "fail fast" mentality (53% in 2021 compared with 77% in 2020), which suggests that the culture of experimentation that gathered pace during the pandemic has lost some momentum. Clearly, many companies were forced to experiment in the first year of the pandemic as a matter of survival.

Read on for some of our other key findings that business leaders (C-level executives or their direct reports) shared, and other, more specific insights from the offices of the CFO, CIO, and CHRO.

Biggest Barriers to Transformation

Many companies have prioritized customer-facing digital efforts at the expense of their internal operations. In fact, only 18% say the majority of their internal operations are digitized. This rises to 38% in retail and 33% in the tech industry. The majority of organizations are finding that changing to meet business needs is very difficult when finance cannot get a timely, clear view on the company's finances, or IT is struggling to free data from silos so that business leaders can make more informed decisions.

Interestingly, even though only a small minority (14%) of respondents expect accelerated digital transformation to continue at the current pace, retail (34%) and tech (24%) are again more bullish than other industries.

The biggest barriers to transformation across all respondents are:

  • Workforce skills (38%).
  • Organizational culture (35%).
  • Cybersecurity, compliance, and privacy (33%).
  • Access to quality, usable data (31%).
  • Tech systems/infrastructure (30%).
The Growing Acceleration Gap

The majority (57%) of organizations say their digital strategy is always or often outpaced by the demands of the business. Our Chief Strategy Officer Pete Schlampp has called this disconnect between business needs and capabilities the acceleration gap. This gap is most likely to exist in professional services (74%), hospitality (71%), and healthcare (73%).

On the other hand, 41% of companies are able to keep pace or exceed the demands of the business, particularly those in retail (61%), tech (59%), media (55%), and financial services (52%).

The most important operational capabilities in enabling the team to continually meet the needs of the business are:

  • Fast cycles between planning, execution, and analysis to improve outcomes (36%).
  • Ability to connect operational, people, and financial data to business outcomes (36%).
  • Ability to quickly reorganize the workforce around new initiatives (30%).

And it seems that as ever, the hardest changes to make are the fundamental ones to the culture and structure of a company. The majority (54%) of organizations say that "technological investments ultimately take priority over cultural and structural transformation," and 43% of leaders agree that "our ability to evaluate performance in real time is hindered by operational silos."

Finance: Need for Speed

Finance leaders want clear information that they can act on quickly, which continues to be a struggle. For instance, 64% of finance leaders admit it takes weeks or more to get results at the end of a reporting period, and only 31% are confident in their teams' ability to model multiple scenarios.

When it comes to anticipated digital revenue streams, leaders are also taking a more pragmatic view of what is possible in the medium term.

Finance leaders are split on their planning, execution, and analysis cycles, with just short of half (49%) responding that they're confident in the speed of those cycles. There is consensus among finance heads that technology to unify people, operational, and financial data, as well as tech to break down data silos, are the top ways to improve speed of planning, execution, and analysis cycles, and real-time decision-making.

IT: Tilting at Silos

Although 59% of IT leaders say it takes weeks or more to change an automated business process, 50% say they can usually or always keep up with business upgrade needs, while the other 50% say they can fall into triage mode or find themselves unable to keep up.

Technology leaders are most confident in the speed with which IT resolves issues for the business (48%) and least confident (38%) in security ensuring both business continuity and data privacy/protection.

IT heads agree that greater investment in technology will remove data silos and make usable data available across the business, as will removing reliance on IT for access to data or reports-and the need for better access to data is something finance leaders are feeling acutely.

HR: Supporting Talent

HR heads say a positive employee experience (50%), increased focus on diversity, equity, and inclusion (45%), and policies and practices to support hybrid working (40%) are most important to accelerating business transformation.

Only one in three HR leaders are confident in their ability to identify talent with the skills needed to support new initiatives-33% say they are on track in this area and 37% say they are somewhat or significantly ahead of the business in anticipating talent needs.

Our research finds that, with 64% of HR leaders either confident or somewhat confident in their teams' ability to accelerate transformation across the wider business, HR teams may be in a position to be business change-enablers.

Stay tuned here for more findings and the full report, as well as in-depth looks at the issues that CFOs, CIOs, and CHROs are facing.

Disclaimer

Workday Inc. published this content on 20 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 January 2022 17:40:09 UTC.


© Publicnow 2022
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Financials (USD)
Sales 2023 6 201 M - -
Net income 2023 -365 M - -
Net cash 2023 2 899 M - -
P/E ratio 2023 -123x
Yield 2023 -
Capitalization 42 654 M 42 654 M -
EV / Sales 2023 6,41x
EV / Sales 2024 5,15x
Nbr of Employees 15 200
Free-Float 77,2%
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Number of Analysts 34
Last Close Price 168,15 $
Average target price 250,03 $
Spread / Average Target 48,7%
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Managers and Directors
Aneel Bhusri Chairman & Co-Chief Executive Officer
Chano Fernandez Co-Chief Executive Officer & Director
Robynne D. Sisco Co-President
Doug Robinson Co-President
Barbara Larson Chief Financial Officer
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