Three ways in which digitalisation will drive economic value for UAE organisations

This month marked another milestone on the UAE’s ongoing transformation into a knowledge-based economy as the government unveiled its plan to foster the foundation of 1,000 new digital businesses. This vision of digital-first companies contributing a growing share of the nation’s GDP is commendable, and one that is based on proven principles. According to the Harvard Business Review, only 23 per cent of companies today are non-digital. This is contrasted by the vast majority that are technology organisations who no longer see IT as a cost centre, but rather recognise its ability to enable them to operate faster, better, and more cost-effectively.

In a 2020 Deloitte survey, digitally mature companies were three times more likely to report annual net revenue growth significantly above their industry average—across verticals. And it’s not just about top line growth. Digital technologies create economic value in multiple ways. Here are three examples:

Improving efficiency
All too often, technology is positioned as an enabler of innovation. While this certainly holds true, it can limit the ways in which businesses look to utilise technologies, even obscuring their ability to recognise areas wherein technology could drive the greatest value, albeit in potentially mundane ways.

Consider the Internet of Things (IoT) initiatives that many of the region’s leading manufacturers are rolling out. From a technical standpoint, the vast array of sensors deployed at these facilities, that then feed into state-of-the-art monitoring and control systems are truly impressive. However, on-ground teams and plant workers don’t care about the latest silicon chip the sensors use, or what methods are used to collect packet information for the visibility tools. Instead, what plant managers care about is how these technologies reduce risk and improve operational efficiency.

As the UAE moves further along the digital maturity curve, organisations that deploy technology for technology’s sake will do little to impress key stakeholders or drive their bottom-lines. Instead, companies that diligently digitise aspects of their business, with the intent of streamlining fundamental operations, will see an enhanced ability to excel at what they’re good at and thus further strengthen their value proposition.

Reducing costs
The regional adoption of cloud technologies was tremendously accelerated by the challenges introduced as businesses responded to the working environment amid a global pandemic. Middle East organisations which once cited security and performance concerns as barriers to the cloud, quickly realised that the agility and flexibility that cloud offerings provide aren’t just a benefit for the IT team. Through economic uncertainty, the ability to pay just for what you consume, scale capacity either up or down, and most importantly, swap daunting capital expenses for more manageable operational costs, proved to be compelling business benefits.

As we emerge out of the pandemic, many organisations will realise that technology isn’t necessarily a profit centre in the sense that it directly generates profit for the company. Instead, technology, not only ensured relevancy in the new age of conducting business but is a contributor to decreasing risk and cost of doing business in the first place which is fundamental to constantly evolving and adapting to unpredictable market conditions.

Competing on the world stage
With initiatives such as the Dubai Future Accelerators, and economic support for SMEs, the UAE has provided the platform and framework for local organisations to thrive. For these businesses to now elevate themselves on the global stage and thus become true drivers of the country’s digital economy, they must rethink how they use technology to compete with multinationals and generate more profit for the business.

The new breed of ‘as-a-service’ offerings, give even the smallest of business access to the same world-class technologies as their enterprise counterparts. The ability to adopt enterprise-grade software without traditional cost or management overheads means these businesses can stay small and nimble and maintain focus on the core aspects of their operations. Moreover, in a world where customers expect, if not demand, the ability to interact with businesses and access services via the convenience of their smart devices, the drastically lowered entry point to delivering top-grade digital services puts the UAE’s new group of digital startups on the same stage as the global companies they intend to compete with.

As digital organisations of all sizes move applications to the cloud, they gain the ability to sell and process transactions for any product, for any customer, from any location giving them truly limitless global scale.

Digital Transformation to Transform the Business
Digital transformation used to be centred on adopting the latest and greatest technology. This mindset is changing, and today companies are laser-focused on deploying only those technologies that will improve business operations, increase efficiency, decrease unnecessary expenses, and generate revenue. In other words, today’s digital transformation champions recognise that technology is no longer a cost centre. Indeed, it is one of the main tools to help businesses do things faster, better, and more cost-effectively.

Mena Migally is the regional vice president, META at Riverbed Technology