The State of Digitization in the GCC
Among the global trends shaping business over the next five years, advancement in technology is the top trend that is keeping leaders of companies up at night. During Banking & Innovation Day at ArabNet Beirut, Rawia Abdel Samad, Director at strategy&, chose to share how companies in the region are preparing for the digital age. Below are the key points that were discussed:
Importance of Digitization and Digital Technologies
Executives in the region recognize the importance and benefits of digitization (such as improvements in quality, decision making, resource efficiency and more) and are starting to invest in various digital technologies, especially for customer engagement. Examples of these digital technologies include big data and analytics, IoT platforms, and cloud computing. There is also an extensive usage of digital customer engagement channels such as websites, social media platforms, apps, and digital transactions.
Understanding Digital Transformation in the region
The majority of executives define digitization as the adoption of one technology, leaving a minority that understands digitization in its broader concept as a holistic transformation journey. The majority of companies in the region (45%) do not incorporate digital in their business strategy, and those who do, apply one specific technology, leaving a minority that actually grow their existing business model or disrupt their own or another industry. Moreover, only 1% of surveyed companies have a Chief Digital Officer (CDO).
Key Barriers to Digital Transformation
One of the key barriers to digital transformation is the low availability of important digital skills such as user experience and human-centered design, data analytics, technology architecture and design, prototyping, and evaluating emerging technology. While many companies in the region are increasing spending on digital, CEOs still remain the primary decision makers, which is another barrier. Finally, 87% of survey respondents in Siemens Corporate Digitization Survey believed that limited data security represented a key barrier to digital transformation.
Preparing for the Digital Era
To prepare for the digital era, companies in the region need to tackle these barriers from a holistic perspective. This includes 5 basic steps companies should take:
1) Articulate their corporate strategy for the digital age as well as determine their digital focus areas.
2) Build an engine for driving digital transformation that is based on leadership, an operating model and a culture conducive to experimentation and change.
3) Develop digital skills, by assessing any gaps and bridging them.
4) Combine capabilities and knowledge by establishing partnerships with other stakeholders to maximize innovation
5) Invest in day-to-day digital activities and infrastructure (standard) or new and emerging technologies (disruptive).