GCC companies not digital savvy: Report

Manama : The companies in the Gulf Cooperation Council nations are lagging behind their government and consumer counterparts when it comes to using digital technologies, a study finds. 

The study by Siemens and Strategy& also holds narrow digitalization view of executives as well as partial understanding of organisations as the culprit. 

The study report titled “Preparing for the digital era: the state of digitalization in GCC businesses”, however, places GCC consumers among the most tech-savvy in the world, with the UAE, Qatar and Bahrain have more than 100 per cent smartphone penetration rates. Governments and consumers lead the digital uptake in the GCC, the survey finds. 

“The executives, in general, have a narrow view of digitalization which often ignores the far-reaching benefits that moving towards digital can bring,” the report states adding that some lack the vision and the necessary leadership to drive their digital transformation. 

According to the report, of the 300 companies surveyed, 60pc of the respondents believed that digitalization has the potential to create new business models or lead to a more open culture of innovation. 

However, only 3pc of organisations believe they are at an advanced stage of their digital transformation process, with only 18pc using the cloud and 30pc using big data and analytics specifically.

“The GCC is taking great strides towards economic diversification, and digitalization is a key driver of globally competitive business, industry and infrastructure. However, many companies in the region have some catching up to do,” said Dietmar Siersdorfer, CEO, Siemens Middle East and UAE.

The report further finds that 40 per cent of companies in the region have allocated less than 5pc of their total investments to digitalization activities. Only 37pc of companies have a strategy for going digital, and less than 1pc of companies have a Chief Digital Officer. 

Recommendations

The survey suggests developing a business strategy that fits the digital era, as one of the requirements to fully realize the benefits of digital technologies. 

Stressing to identify those areas where digitalization can help the most, the survey also highlights the need to develop an organisation-wide collaborative effort as a way forward for GCC companies. 

The need to develop digital skills, in IT and across the organisation is put forward as a must by the report. 

When it comes to spending, the survey suggests to invest wisely, by considering the risk involved. 

“Companies can achieve savings by outsourcing commoditized technology services, including the adoption of cloud and virtualization, and invest the savings in differentiated value-adding digital capabilities,” the report points out. 

Finally, the report also requires companies to collaborate with digital players and disrupters, government entities and academia, embracing open innovation.