Brave New World
‘Going digital’ is top of the agenda for many organisations in the Middle East, but it’s becoming clear that the trend is set to have far-reaching effects outside the IT department
The big trend for 2016, according to the analyst houses, is ‘digital transformation’. In order to stay ahead of the competition — and indeed, in the long term, to stay relevant at all — they say that organisations must begin conducting digital business. For many of the Middle East’s organisations, however, this is easier said than done, and the problem starts with understanding just what digital transformation means.
Gartner defines digital business as the creation of new business designs that connect not only people and business, but also connect people, business and things (physical objects that are active players and contribute to business value) to drive revenue and efficiency. These objects can include anything from sensor devices, asset-tracking devices, smart machines, and smart grids, to 3D printing, robotics, and drone delivery services.
“Digital refers to all electronically tractable forms and uses of information and technology. It is bigger in scope than the typical company definition of ‘IT’ because it includes technology outside a company’s control — smart mobile devices (in the hands of customers, citizens and employees), social media, technology embedded in products (such as cars), the integration of IT and operational technologies (such as telecom networks, factory networks and energy grids) and the Internet of Things (physical objects becoming electronically tractable),” explains Biswajeet Mahapatra, research director at Gartner.
“Digital business redefines the economic playing field as ‘things’ join people and businesses in the connected world; the value of these connected assets expands tremendously. CIOs and IT leaders must apply new approaches to capitalise on the value delivered through the new economics of connections. As per one of our surveys, CIOs globally mentioned the digital business would have huge impact on profitability, revenue growth, sales and marketing operations, expansion of total market size, and on competitive advantage.”
Indeed, because of this shift, the experts agree that there is a pressing need for businesses to ‘go digital’. This doesn’t mean simply adopting technology for every business process, but recognising that consumers live in an increasingly digital world, and adopting strategies that take advantage of that fact. According to Wael El Kabbany, vice president for the Middle East, North Africa and Eastern Mediterranean, BT, this means that technology now has to become a critical consideration for every business — regardless of size, location or type.
“It is critical for existing businesses to think about the rate at which new businesses are starting up and their appetite to embrace a digital existence — in doing so these new businesses are delivering an enhanced customer experience, realising improved productivity and, potentially, a lower cost base,” he says.
“Whether it’s in our capacity as consumers, citizens, workers or patients, to name a few, the way we adopt and use new technologies affects the corporate agenda of digital transformation. Along with changing market realities, disruptive newcomers in many vertical markets, economical challenges and opportunities for optimisation, the need for digital transformations is ubiquitous.”
In the Middle East, several forward-thinking organisations have recognised the need to go digital, and so have begun a journey towards digitisation in order to get ahead of the competition. Stephen Fernandes, executive vice president at TransSys Solutions, names a few projects that speak to a future of digital business.
He says that a leading bank in the region has deployed a cloud-based advanced procurement and sourcing solution, which has dramatically improved the company’s supplier communication and gleaned it better prices. Elsewhere, he says a leading real estate company has cloud-enabled its sales functions and analytics, improving its property booking and lease processes. The company also mobile-enabled the application to increase adoption among the sales teams, he says. Another example he points to is a regional telco, which mobile-enabled its existing self-service HR service to provide anytime access to employees.
Fernandes claims that these are all examples of digital business in action, and that, as a result of these deployments, the businesses in question have shored up their operations against competition, and even helped to protect against being disrupted.
“Companies that implemented digital solutions have grown. They have defined new business and operating models. They have created new revenue streams while cutting back on cost. They have disrupted and redefined the competitive landscape by offering highly personalised services to their clients. In the growth journey they have cut across boundaries and established a global reach for their product and services,” he says.
“Today, a company in the region is able to reach the global market to launch its products and services. They are no longer limited to geographical boundaries. Traditional business models are being challenged and made irrelevant.”
While digitisation is beginning to advance among organisations in the Middle East, with most consumer-oriented industries having adopted some aspect of digital business, there are still plenty of companies in this region that have yet to take their first steps into the digital world. According to the MENAT Business Outlook Survey by the Economist Corporate Network, 60% of business executives in the region agree that technology penetration supports growth, but only one third have adopted consumer-driven technologies. That means a lot of organisations need to think clearly about their strategies going forward, according to Hichem Maya, head of business transformation services at SAP EMEA.