The Middle East presents a vast digital transformation opportunity

The Middle East may lag behind on digital transformation initiatives but it could catch up soon

In order for a business to succeed it must embrace digital transformation. CIOs in the Middle East recognise this and are beginning to respond to the huge challenges ahead of them. If organisations either refuse to embrace change, or are even simply too slow to act, then the results could be catastrophic, as Ziad Salameh, Managing Director – West Region at Cisco Middle East, highlights.

“As leaders, if you don’t reinvent yourself, change your organisation’s structure or talk about speed of innovation you’re going to get disrupted. And it’ll be a brutal disruption – Cisco and IMD Global Center for Business Transformation’s Digital Vortex research predicts four out of ten companies will fail in the next five years due to digital disruption.”

Currently, countries in the Middle East are showing varied rates of digital transformation uptake compared to other regions. Several governments have developed cornerstone visions and strategies and many digitisation initiatives have already been undertaken. According to the Fibre To The Home (FTTH) Council, UAE boasts the world’s highest FTTH penetration and has committed to a number of smart initiatives, plus healthy investment is also being seen in Qatar, Saudi Arabia, and Bahrain.

“Bahrain has established a Supreme Committee for Information and Communication Technology (SCICT) to oversee the e-government strategy for example,” notes Salameh. “In Qatar, the steering committee reports directly to the council of ministers and provides oversight of strategy implementation, resolves issues facing the implementation, coordinates with government agencies, and approves the project plans for Qatar e-Government 2020.”

Many forward thinking organisations in the region are already on their digital transformation journeys, speeding far ahead of their competitors. As Stephen Fernandes, Executive Vice-President TransSys Solutions highlights, certain sectors are leading the way.

“Service-driven industries such as telecom, banking and finance, healthcare, retail, travel and media have been early adopters of digital technology, while governments and public sector organisations in the region have been responsible for setting the pace of digital adoption,” Fernandes notes. “Public and private partnerships have been instrumental in leading innovation,” he adds.

As reported by Computer Weekly, IDC announced at its annual Middle East CIO summit that a survey of Middle Eastern IT leaders highlighted that the three main challenges around digital transformation are innovation through IT, measuring ROI from IT investments and managing growing expectations and service needs.

However, there are also some region-specific challenges. Economic conditions in the Middle East over the last year have impacted on IT spending, for example. There is also the question of security. 

“Due to socio-political challenges, the Middle East has been a hotbed for cyber attacks, many of which are carried out against the largest government and enterprise institutions. Organisations are wary of the extent to which they can digitise their mission-critical operations. They must also ensure a sufficient portion of their IT budget is allocated to cyber security which then restricts their ability to then invest in other technology areas,” highlights Elie Dib, Senior Managing Director MENA at IT firm Riverbed.

For those in the region beginning their challenging digital transformation big questions need to be asked, such as ‘what do you want to be as a company?’ to ‘what digital services should we employ in order to become that company?’. To undertake this work many organisations are creating dedicated digital transformation teams, led by chief digital officers (CDOs), with IDC stating that by the end of the year (2017) 70% of the Global 500 will have such teams in place.

“Business and IT alignment remains a challenge. However, digital transformation is only possible if business and IT have a common view of the outcome they wish to achieve. This had led to some organisations forming teams representing both areas and coming together to focus on digital transformation,” says Megha Kumar, Research Director Software and Cloud, IDC Middle East, Turkey and Africa.

“However, digital transformation is not something that’s initiated and completed with the flick of a switch,” notes Dib. “It is a strategic, gradual process that requires planning and a dedicated budget. I believe that currently the major challenges for businesses lie in defining exactly what they want to achieve via their digital transformation and determining exactly where to start.”

In order to overcome the challenges posed by digital transformation, CIOs and CDOs need to realise their role is not just focused on technology but also on connecting all areas of the business in a synchronised, agile way. Furthermore, this all needs to be done whilst balancing lower or restricted budgets, which can cause roadblocks.

With a strategy in place, digital transformation teams can map out a company’s journey, focusing on people, process and technology. This entails moving away from legacy systems to on-demand, scalable solutions, changing business processes and often most importantly, helping staff embrace the many changes taking place throughout the business.

“Managing organisational change has been one the biggest challenges that has been least addressed,” notes Fernandes. “Its impact is felt during the execution and adoption phase, when the recovery path is at its most critical phase, thereby compounding the business impact.”

According to several organisations including Cisco and IDC, the main technologies and trends CIOs and CDOs need to be looking at include mobile technology, security, hyper connectivity through the Internet of Things (IoT), big data, analytics and cloud.

“The majority of CIOs we’ve spoken to have highlighted security to be a critical technology along with those that enable integration as well as cloud, mobile, big data and IoT,” says Kumar. “It honestly sounds like all technologies are important, but this would vary depending on the goals of the organisation and the industry within which they operate. Security does take precedence given that digital transformation organisations are far more integrated and are part of a wider ecosystem. This makes security a priority since an incident can have a far wider impact,” she adds.

Technology vendors are responding to business needs by supporting customers through a number of means, which includes consulting services as well as technology solutions.

“Vendors are now creating, acquiring or partnering with consultancy firms which understand that digital transformation is not only about technology, but people, process and governance too,” says Clinton O’Leary, Business Development Director of software firm Yvolv. “Some vendors are in the driving seat and will lead many country or industry-wide digital transformation efforts as they have the full suite of services and solutions. But any vendor that says they can do it all, I would take with a pinch of salt.”

Thomas Di Giacomo, CTO of software company SUSE, adds that many vendors believe open standards will be key to digital transformation projects in the coming years and are working closely with the open source community to develop these.

“A broad ecosystem of global industry, technology and solution partners, combined with professional services and support ensures customers can take the best way for their business needs,” he says.

Uptake of digital transformation may currently vary across the region, however, when change does begin it may move more quickly than elsewhere in the world. This is because, as Kumar highlights, the Middle East “benefits from being young in terms of age and technology legacy”.

Unlike mature markets, the region isn’t encumbered by legacy technologies. As a result, new IT solutions can be adopted without large migration overheads.

“Also, younger demographics account for a larger part of the population in many of Middle East countries and this tech-savvy user base shows more willingness to leverage IT in their personal and professional lives,” adds Dib. “Both these are factors that drive digital transformation in the region.”