The phrase ‘digital transformation’ was the most overused buzzword of 2016, but not without just cause. The concept of a ‘transformation journey’, centred around making enterprises ready for tomorrow’s consumers and business models, is one that many companies claim to have embarked on. However, in some cases, organisations seem to have stalled in pursuing the progression of this journey.
That’s not to say that the the right intentions aren’t there, particularly in this region. National transformation agendas, such as the UAE Vision 2021, Saudi Vision 2030, and Qatar National Vision 2030, are all driving the adoption of innovative technologies to push companies forward in their digitisation process. But how many companies that claim to have “gone digital” at this stage, actually have?
The benefits of a business digitising information-intensive processes are well known. First and foremost, the ability to cut costs is music to company’s ears, but digitisation can also help employees improve productivity levels, gather useful market insights and improve the integration of processes and operations. “With real-time insights of smart city data and citizen services, customer purchasing history and employee habits, organisations can be more responsive to citizens and customers, be better able to drive process improvements and innovation, and save time and money,” says George Riding, chief operating officer, SAP MENA.
Automating business processes and workflows with a clear approval sequence will also help eliminate unnecessary human mistakes, believes Sobhi Shashaa, vice president, Enterprise Technology Solutions, Raqmiyat.
The real imperative in a world where ‘everything’ is digitised is that businesses need to pursue innovation to disrupt their own business model before the competition does. “Every industry sector is moving from the information age to the digital age,” says Mike Weston, vice president, Cisco Middle East. “By 2020, 75 percent of businesses will be a digital business or preparing to be one.” But the stakes for not making this transition fast enough are high, and Cisco and IMD Global Centre’s latest research predicts that four out of ten companies will fail in the next five years due to digital disruption.
In order for businesses to survive in this new era, a ‘digital-first’ approach across all verticals is a must if an organisation’s IT is to broadly transform. “This is only possible if an interconnected orientated architecture is adopted,” says Jeroen Schlosser, managing director, Equinix MENA. “Studies have shown that countries that have more open data ecosystems and competitive ICT infrastructures are better positioned to leverage digital technologies for business. However, organisations in the MENA region are yet to fully embrace the digital opportunity.”
The adoption of the latest technologies is critical to driving transformation, but it is not the only factor. Creating new strategic directions, and ensuring the right culture of innovation is felt throughout an organisation is crucial in accelerating the pace of change. Stephen Fernandes, executive vice president, TransSys Solutions, believes this is only achievable through a top-down leadership approach. “Taking this approach to relook at the organisational structure, executive roles, departmental processes, technology decisions, and finally the basis of organisational culture, is fundamental to success,” he says.
Having the right technology in place is all well and good for a company looking to progress in the digital era, but it’s no use if the organisation’s workforce can’t comprehend the technology fully to maximise its potential. “Business transformation requires a next-generation workforce that is digitally-savvy, creative and accustomed to constant change,” Weston adds. Luckily, it appears that the Middle East’s increasing population is bringing with it a whole host of tech-savvy individuals, according to a recent “Workforce 2020” survey conducted by Oxford Economics and SAP. The research shows that cloud skills in the UAE over the past three years have grown by 160 percent, analytics skills by 88 percent, mobility by 58 percent and social media by 28 percent.
‘Generation Y’ already play a major role in accelerating the emergence of a new, digital world, and their impact is impossible to ignore. The explosion of interconnected devices, platforms and channels has produced a generation who are consistently plugged-in.
However, a recent report by McKinsey confirms that despite this, the Middle East is lagging far behind in digitisation when compared to the likes of Norway, Singapore, South Korea and the United Kingdom. Nevertheless, predictions estimate that there will be a massive increase in the amount of data circulating the region by 2020 – 2 zettabytes to be exact. But according to the report, the Middle East is not advancing quickly enough to capture anywhere close to the full potential of digital.
When analysing the industries in this region that have begun to showcase results in their journeys, government and public sector organisations are the primary drivers setting the pace of adoption. According to a Cisco Consulting Services study, Dubai’s public and private sectors, driven by the Smart City initiative, can achieve a potential AED 17.9 billion ($4.87 billion) in value by 2019 through utilising the Internet of Things. Where private sector organisations are going wrong, according to Weston, is they are “failing to recognise that their digital strategy and business strategy are becoming one and the same.”
However, aside from government entities, we have seen strong interest in digitisation from industries such as healthcare, education, and transport and logistics. In the oil and gas space, ENOC and EPPCO have developed an RFID-enabled prepaid fuelling system, that allows a fully automated and paperless service that optimises drivers’ time by eliminating the need for cash, fuel cards and receipts.
As the pressure continues to mount on organisations to push forward in their digitisation efforts, it is guaranteed that we will see further developments before too long. “Digitisation is not a passing trend; it is a revolution that is taking place at this very moment,” says Schlosser.