Digital transformation in the ME region has gathered momentum with Government initiatives while private businesses are also embracing digital transformation to remain competitive.
“A CTO must be focused on ensuring ROI from technology investment and this is possible only when the focus is on the customers and not just technology per say. Technology deployment must become customer-centric and underpinned by relentless focus on enhancing the customer experience.”
Mohamed Hamed, CTO, Ceramica Platino
Spurred by the pandemic, digital transformation efforts in Middle East have taken off with an increasing emphasis on digitizing internal processes and pushing workloads to the Cloud. According to IDC, overall spending on information and communications technology (ICT) across the Middle East, Turkey, and Africa (META) will top $229 billion during 2022, an increase of 2.7% over 2021 as the market continues to rebound from the turbulence of the last two years.
In the UAE IT spending led by the public sector will continue at a steady pace—IDC forecasts that annual public sector spending on ICT in the UAE will reach $1.6 billion by 2024, up from $1.3 billion in 2019. As the frenzy for digitization increases across sectors, the UAE government has taken the lead in taking digital initiatives.
“The opportunity of digital transformation is unique to each company. Every company has different challenges and needs and the ability to tap the right technologies to address those needs helps ROI realization and extracting technology value in the appropriate way.”
Wissam Al Adany, Group CIO of ADES Arabia
UAEPass, a key government initiative, was launched in GITEX Week Technology 2018 as a collaboration between TDRA, Digital Dubai and Abu Dhabi Digital Authority supported by a range of strategic partners including Ministry of Interiors, FederaI Authority for Identity, Citizenship, Customs & Port Security, Dubai Electronic Security Center, and digital authorities in the seven Emirates to provide a unified digital solution for all service providers in a secure and easy to use manner.
Today the UAEPass initiative has gathered massive momentum and become a success story not just in the Middle East region but is recognized globally. According to the UAE Digital Transformation Enablers Report 2021, the UAE has been ranked among the world’s best in government digital transformation efforts. It is the only Arab country in the government digital maturity report issued by the World Bank and is ranked 21 globally in the United Nations eGovernment Survey, 2020.
The UAEPass is connected with 170 websites and applications, 370 service providers have come onboard, providing more than 8,400 and 2.66 million have registered on the digital platform.
The IT modernization efforts in the region is gathering momentum. Speaking at the recently held conference in Dubai, Abdul Mobeen Khan, Chairman of the 2nd Data-Driven Government Conference, pointed out that the opening up of the Geographic Information System presents an opportunity for governments and businesses to use data as a strategic asset in delivering value to consumers.
“We are leveraging technology to blend physical and digital experiences of customers and using data insights to enhance the customer experience.”
Mohamed Hamed, CTO, Ceramica Platino
Business Transformation Initiatives
Businesses have embarked on a modernization strategy across sectors including manufacturing, retail and the Oil and Gas sector. The pandemic forced companies to adopt digital mediums to facilitate employees to access corporate resources and reach customers via digital means. According to a survey conducted by Statista Research organizations in the United Arab Emirates, 34 percent of respondents had a company-wide digital transformation strategy in place, with good progress in implementing it.
Speaking about the digital acceleration, Mohamed Hamed, CTO, Ceramica Platino says that pandemic forced companies to extend the enterprise to the homes of employees and facilitate remote working. Today as the pandemic ebbs and employees return to work, a major CIO preoccupation relates to the need to modernize legacy infrastructure and continue to extract benefits, while working on strategies to embrace modern technologies such as Cloud, AI and analytics.
“A CTO must be focused on ensuring ROI from technology investment and this is possible only when the focus is on the customers and not just technology per say. Technology deployment must become customer-centric and underpinned by relentless focus on enhancing the customer experience.”
In the case of Ceramic Platino, this has resulted in designing and developing an omnichannel retail strategy wherein the physical stores are bolstered by online stores. Customers get to browse online and make purchases in physical stores and vice versa wherein customers visit physical stores and make online purchases.
Ceramic Platino is heavily leveraging AI and analytics to store fast moving products, manage inventory and supply chain and create new customer experiences. At the same time, the company is also leveraging technology such as RPA to usher in operational efficiencies deployed in tasks such as sorting, handling queries and repetitive tasks that consume human productivity.
“A key concern is health and safety of our people at the oil rigs and we are leveraging AI-based sensors to study patterns, detect violation in norms and behaviours which will raise alerts and enable us to take remedial measures at within the shortest possible time.”
Wissam Al Adany, Group CIO of ADES Arabia
Cloud As a Business Enabler
Cloud is seeing rapid adoption to achieve agility and flexibility and thereby remain competitive. According to Mohamed Hameed, game changing capabilities of Cloud can be realized only when Cloud is embraced as an integral part of business operations. Government initiatives such as Bahrain’s Cloud-first policy, UAE’s Vision 2021, Saudi Arabia’s 2030 Vision and New Kuwait Vision 2035 are bolstering Cloud adoption.
While the momentum is evident, absence of hyper scale data centers in hampering Cloud adoption. AWS has a Region in Bahrain and is due to open its second in UAE shortly. But that has not stopped private companies in Cloud adoption journey for dev and test workloads.
First Abu Dhabi Bank (FAB), which is the UAE’s largest bank, has put in place a cloud-first approach and has been using AWS Outposts for development, test, and production workloads, which has accelerated its digital transformation in the cloud and on-premises with 50% improved time-to-market. The upcoming AWS Region in the UAE will help FAB realize their cloud ambitions while being fully compliant with local regulation.
Another large AWS deployment in the UAE is Hamdan Bin Mohammed Smart University (HBMSU) which is all-in on AWS after migrating its systems and applications from its on-premises data centers. This has enabled the Institution to take advantage of security, scalability, flexibility, and cost savings of up to 30%, while also opening up new opportunities for innovation, research, and global expansion.
One of the largest exploration companies in the region, ADEA Arabia is exploiting a hybrid strategy to harness different objectives such as a private Cloud to store critical data while consuming public Cloud to access new applications and functionalities quickly and easily.
Says Wissam Al Adany, Group CIO of ADES Arabia, “The opportunity of digital transformation is unique to each company. Every company has different challenges and needs and the ability to tap the right technologies to address those needs helps ROI realization and extracting technology value in the appropriate way.”
For instance, he pointed out that a key challenge for companies in the Oil and Gas sector was absence of network connectivity and so designing technology architectures that take in account such latencies will result in a successful IT strategy.
Today a major initiative at ADES Arabia is to ensure employee health and safety as its employees work in remote locations in hazardous conditions. Says Al Adany, “For us a key concern is health and safety of our people at the oil rigs and we are leveraging AI-based sensors to study patterns, detect violation in norms and behaviours which will raise alerts and enable us to take remedial measures at within the shortest possible time.”
Consumer Behaviour – Digital First
Pandemic induced consumer behavior where online shopping became routine has provided a fillip to the e-commerce market in the UAE. The UAE is the leader in e-commerce market amongst the Gulf Cooperation Council members registering USD 3.9 billion in sales and the Dubai Chamber of Commerce and Industry forecasts a sale of USD 8 billion by 2025, buoyed by 100% penetration of mobile phone and Internet penetration.
Another report by EZDubai in partnership Euromonitor finds that more consumers in the UAE made online purchases across all categories during 2021, compared to 2020, with three in four respondents making online purchases.
According to a survey published by Statista Research on the future of e-commerce after the COVID-19 pandemic, the most used online shopping platform in the UAE was Amazon.com at about 65 percent of respondents. At the same time, approximately 90 percent of respondents in UAE and Saudi Arabia decreased their spending to prioritize needs over wants following the economic pressures of the pandemic.
UAE consumers purchase from cross-border retailers to access a wider range of products or search for lower prices or higher quality products not offered locally. This is also because the UAE offers shipping costs for consumers looking to purchase outside the region including India, China and the US. Top purchases include footwear, apparel, beauty and personal care products.
Stepping on the Pedal
Digital transformation in the ME region has gathered momentum accelerated by the pandemic. Government initiatives have provided a major boost, while private businesses are also embracing digital transformation to remain competitive and take advantage of modern technologies to solve business challenges. Global hyper scalers such as AWS and Google Cloud have announced plans to ramp up presence in the ME region and this is expected to become the force multiplier to move critical workloads to the Cloud and bolster digital transformation efforts. Meanwhile the spade work has started by digitizing internal process and automating regular repetitive work with RPA, putting in place a data strategy to leverage AI-based insights to achieve business objectives such as delivering better customer experience and ensuring the health and safety of employees working in remote oil rigs.
