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Digital transformation - A new wave of evolution in the Middle East

In today’s fast paced world, organizations which are undertaking digital transformation initiatives are reaping maximum benefits of business continuity and increased investments. Digital transformation is a top priority for most of the firms. Post the pandemic, businesses across the globe are undergoing sea through modifications to adapt to the new industry requirements and technology trends to stay abreast and competitive.

Digital transformation consists of two terms: digital which is co-related to technology, processes and products and is faster to adopt and transformation which is co-related to people, culture and skills and is, at times, extremely slow and complex. Hence, for most of the organizations, they may become digital very fast, but transforming in true sense mite occasionally fail.

Although most of the organizations are becoming digitally sound and prioritizing innovation, research, and development, yet they miserably fail in terms of total transformation. Most of the organizations centre their strategy around its infrastructure, solutions, and processes, often neglecting their culture and people. Transformation in true sense can only be realized when the thought leadership of an organization works towards tailoring and coaching its employees to perform and behave in a certain conduct. Further, transformation has deeper meanings and needs to be initiated from the grassroot level within an organization. It becomes imperative that if businesses need to transform, then it can’t overlook amending its core culture, ingrained values, and organizational vision.

Transformation from within is what should be primary objective for any organization. There are five core principles which every organization needs to emphasize on before starting their digital transformation journey. These include the following:

Overcoming legacy and focus on innovation: In present times, every organization needs to focus on innovation. For this, they need to overcome their legacy infrastructure, re-evaluate their conventional wisdom and encourage their people to think more. A conducive environment fostering the spirit of entrepreneurship, act of togetherness and sensitivity becomes an upmost priority for any organization.

Freedom for the employees to think beyond: It has been witnessed that free spirited minds are better able to deliver, compete and excel. In todays’ world, only when the freedom is given to the employees to innovate and think out-of-thebox, only then can they succeed and become successful entrepreneurs.

Strong leadership team: A top-down approach needs to be undertaken by an organizing to transform in an apt way. The employees imbibe the values passed on by their leaders. The commanders or the heads of the businesses need to be empowered, committed, and self-driven to be able to lead the pack. The leadership team should be strong enough to brace the impact of any external as well as internal challenge.

CEO to act as a CTO: When it comes to bracing innovation and changes, it is expected that the CEO wears the cap of the Chief Transformation Officer (CTO) and steers the business towards the right path. He should be the correct go-to person to make decisive strategies to bring about innovation and transformation within the organization.

Superior role of the Chairman and the Board of Directors: The Chairperson’s as well as the Board’s participation should act as a catalyst in evaluating risks and accelerating the process of digital transformation. Their involvement should be such that it gives a boost to the CEO as well as the entire organization to take their steps forward towards innovation and transformation.

Thus, modern operating models of most of the organizations are focusing on transforming from within – transforming from traditional methodologies to undertaking best practices suiting to the present needs and aspirations of its people, and customers. Organizations are required to take a customer-centric approach, have the right set of goals and aspirations, and imbibe a governance structure which is stringent as well as easy to do the right thing. Organizations need to constantly update and upgrade its employees through trainings and value-added services to keep the pace of the momentum on the floor. Businesses thus, need to change their culture to be able to take the bold steps towards digital transformation.

The MEA region is witnessing digital transformation at a very fast pace

The MEA region is shifting its focus from oil-producing countries to countries focusing on digital investments and innovations. According to IDC, MEA government entities are expected to spend over USD 15 billion by 2023 on ICT technologies to become more efficient and effective. Technologies like robotics, IoT, AI/ML, 5G, Blockchain, Metaverse, AR/VR, Cloud, Digital Twin, etc. are key to drive digital innovation and transformation across the region. Consequently, the pandemic also has been a significant catalyst for the MEA regions to push forward such initiatives across sectors like banking, healthcare, public safety, retail, online education, manufacturing, tourism, and media & entertainment, etc.

According to Abu Dhabi Digital Authority, digital transformation is becoming a top priority for leading organizations across the region with annual spending on digital transformation initiatives expected to surpass USD 40 B by 2022.

Further, as per UnivDatos Market Insights, MEA digital transformation market is expected to reach USD 254 B by 2027 from USD 91 B in 2020, growing at a CAGR of 16% during the forecasted period. The widespread use of digital services such as mobile money and digital payments along with government initiatives and investment in AI, Metaverse, Cloud, 5G, smart cities are further providing a boost to the overall economic growth. Also, robotics, an emerging technology in the region is being applied across various industry verticals to reduce the rate of human errors. It is being implemented across smart buildings, smart factories, and smart cities through remote-controlled electrical equipment to reduces carbon emissions and lower energy consumption.

Saudi Arabia’s National Transformation Plan 2020 (NTP) highlights essential digital initiatives for key sectors as well as funding for national digital assets. The Qatar Digital Government 2020 Strategy targets the efficient and transparent delivery of government services, supported by a world-class ICT infrastructure. Dubai, also through its transition to e-government services, is making huge savings. Also, various significant investments in digital transformation programs are taking place in mega-events like Dubai Expo 2022, Blockchain Economy Expo 2022, Finnovex Middle East 2022, etc.

Further, there are various organizations which are collaborating with major ICT players in the region to define next-gen policies for emerging tech. Most of the organizations are creating a governance body in charge of the digital agenda, empowered with special capabilities to execute and develop national platforms to facilitate integration.

Recently the MEA region is witnessing a boom in neo-banking services, which are digital-only banks offering services remodelled solely to meet the ever-changing expectations of the customers. Such banking services are emerging as a strong alternative to the traditional banking practices which have been followed in the region since decades.

Further, the retail segment in the region is also witnessing a boom owing to the growing number of digital youth and Gen Z population. The consumers in MEA are more digitally adept and demanding for digital products and services. Post the pandemic there is rise in online shopping being witnessed across the region, further giving an impetus to the digital transformation initiatives across the region.

The Way Forward with Xebia

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