Key findings: GCC is positioned to embrace the disruptive potential of digitalisation
Business Reporter -
Dec 19: A joint study conducted by Siemens and the Ideation Centre at the management consultancy Strategy& (formerly Booz & Company), part of the PwC network, has emphasised the benefits businesses in the GCC stand to gain from digitalisation, and outlined a road map of how they can undertake a fully holistic approach to embarking on a digital transformation.
Senior executives from Siemens Middle East and Strategy& launched the “Preparing for the digital era: the state of digitalisation in GCC businesses” report, highlighting key findings from the joint study that are intended to help encourage the progress and evolution of digitalisation among the region’s businesses.
Of the 300 companies surveyed, 60 per cent believe that digitalisation has the potential to create new business models or lead to a more open culture of innovation.
However, only 3 per cent of organisations believe they are at an advanced stage of their digital transformation process, with only 18 per cent using the cloud and 30 per cent using big data and analytics specifically. The study also found that GCC companies are lagging behind their government and consumer counterparts when it comes to using digital technologies.
For example, GCC governments have acknowledged the economic and social benefits of digitalisation, incorporating them into their ambitious strategies. Saudi Arabia’s Vision 2030 and National Transformation Plan 2020, Smart Dubai, Qatar’s Connect 2020 ICT Policy, and Oman’s digital strategy e-Oman all stress the importance of the use of digital technologies. Similarly, GCC consumers are among the most tech-savvy in the world.
The UAE, Qatar and Bahrain have more than 100 per cent smartphone penetration rates and young people across the region are playing an important role in influencing the development of new technologies.
“Governments and consumers in the GCC have been rapid adopters of digital technologies, and our report tells us the benefits of digitalisation are widely acknowledged by the majority of organisations,” said Dietmar Siersdorfer, CEO, Siemens Middle East and UAE.
Though GCC company executives show great enthusiasm for going digital, many are still coming to grips with its full meaning and potential. In general, executives have a narrow view of digitalisation which often ignores the far-reaching benefits that moving towards digital can bring, such as problem solving, reinventing business models, re-imagining the customer experience, inspiring trust and accelerating change. The fact that many organisations have a partial understanding restrains the uptake of digital technology and obstructs the formulation of effective strategies.
Discussing the use of digital technology in the GCC, Samer Bohsali, Partner with Strategy& in Dubai, said: “Executives in the GCC are excited by digital. They recognise its benefits, such as stronger customer orientation and increased efficiency, which is vital in an era of budget constraints. Many companies, however, perceive the process of going digital as the adoption of a specific technology, rather than a transformation journey.”
While many organisations are gradually building technology capabilities, some lack the vision and the necessary leadership to drive their digital transformation. Taking practical steps forward can often be beset by internal obstacles, be they cultural, organisational, people-related or financial. For example, 40 per cent of companies in the region have allocated less than 5 per cent of their total investments to digitalisation activities. Only 37 per cent of companies have a strategy for going digital, and less than 1 per cent of companies have a Chief Digital Officer.