Advancing Middle East economies through digital procurement

Digital procurement tools and platforms can help to create new efficiency for government

Tags: Procurement managementTejari - UAE
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Advancing Middle East economies through digital procurement Technology and procurement should work hand-in-hand to benefit government, says Quinn.
By  Dan Quinn Published  September 19, 2017

We are currently experiencing a revolutionary digital transformation the world over. In the Middle East, digital technology and the Internet of Things (IoT) are deeply transforming businesses and governments. It is apparent that this technology and digital transformation is becoming increasingly crucial for competitiveness and economic growth in the region, and capitalizing on this has the potential to add trillions to the GDP of economies and revenues of companies operating in the region.

The proliferation of digital transformation initiatives across the Middle East spurs spending on IoT. According to IDC, the premier global provider of market intelligence for IT, IT spending in the Middle East, Turkey, and Africa (META) is forecast to increase to total $243 billion in 2017. This is following a tough economic year during 2016 caused by market volatility and low oil prices.

An economic slowdown presents an opportunity for companies to invest in strategic technologies that ultimately bring down costs in the long-term and drive growth and ROI. Technology enables productivity, and productivity is at the core of economic growth, i.e. ‘doing more with less’.

If technology is at the heart of productivity, then the procurement function are the lungs of it. Procurement manages the acquisition of assets and the management of service organisations in meeting their mission requirements.

Both technology and procurement can and should work hand-in-hand to drive value for governments and businesses. This is because it has the power to impact spend across every operating arm of a business. In tough times, forward-thinking organisations invest in procurement to reduce spend across all areas of their business without compromising on quality.

Procurement drives value in a number of ways, it helps organisations identify sources of additional value, to unlock that value, and retain it within the organisation. Even a slight reduction in overall spend which can be achieved through procurement excellence can impact the bottom line for the better.

In fact, according to McKinsey & Company, a 1% reduction on spend through procurement excellence can yield a 5% bottom-line improvement for organizations. Government procurement/spend is a large and important part of a nation’s GDP, and is therefore a tool for managing the macro-economy.

Due to this, there has been a great deal of innovation in procurement technologies that drive value in both public and private sectors. In particular, these digital innovations increase transparency and productivity while engaging healthy competition. Very importantly, and all at the same time, organisational fraud, corruption and risk is reduced.

Digital innovation comes in all shapes and sizes, and those that are proven to impact the bottom line have the greatest influence in positively contributing towards the growing economy – organisations that make strategic IT investments considerably strengthen their business outlook. The Middle East’s hunger for innovation makes it particularly well-positioned to reap the benefits of digital opportunities and in doing so, sets the region on an exciting path of continual economic growth.

Dan Quinn is Senior Vice President at BravoSolution MENA / Tejari.

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