Now very apparent across all sectors, the Covid-19 pandemic has stirred rapid transformation globally, and that includes the Middle East – now urged more than ever before to adopt highly sophisticated technologies. Showing no sign of slowing down, digitisation is rapidly gaining momentum every day as technological capabilities are increasing tenfold.
In an effort to gain a competitive advantage, and equipped with future-proof capabilities, digitally mature industries, such as financial institutions and technology, have evolved the most, while the public sector and energy companies are still lagging.
In fact, financial services made the most dramatic progress and now lead regional digital market growth in parallel to the telecommunications industry. Our research shows a clear set of indicators between bionic leaders, large companies and SMEs that set companies apart when aiming to maximise the value of their digital initiatives.
Whereas large companies and bionic companies invest in human capabilities, they do so significantly more than SMEs. Currently, bionic pioneers run the show as they spearhead value from digital maturity, marking them as a leading point of reference to deploy digital maturity.
So far, it has become apparent that bionic companies hold clear investment priorities, which leads towards heightened competitivity as they forego their digital transformation journey. These companies invest in technology to modernise applications, in data for increasing the quality and accessibility, and in their employees to strengthen their digital skills while securing companywide upskilling.
In our research, three out of four bionic companies undergo digital initiatives which account for more than 15 percent of their operating expenses. Of that, 30 percent is spent on increasing data quality and accessibility. Most importantly, these companies implemented a unified data model to create a single source referral across the enterprise.
Companies in our study that aimed to become bionic increased their investment in artificial intelligence (AI) and with it, multiplied their efforts to scale it. Interestingly, when measuring the incremental benefits of each factor, training employees in AI gave companies the biggest boost. In fact, after training employees in AI, 28 percent of bionic companies achieved the outcomes.
When establishing a clear governance, bionic companies have been assigning ownership and accountability for their respective digital initiatives. In that process, they have increasingly established roles of Head of Digital and Chief Data Officer to generate business value from data – together responsible for developing company-wide digital strategies whilst working closely with the technology function.
In a hybrid approach, some digital initiatives have been driven by product teams that take their decisions to business units and functions, while other digital initiatives are centrally driven by headquarters, business units, or functions. Establishing a culture through leadership engagement and incentives for employees to exercise agility with advanced technologies marks another pivotal step for companies wishing to ground their path towards digital maturity.
When this integration is made routinely, a company gains a capability called Human-Tech Augmentation (HTA). HTA has three evolutionary stages: manual work, automation, and optimisation. And, in order to increase digital contribution to their value creation, companies must determine where their organisation stands in their digital transformation and discuss the opportunities and value of applying clear accelerators illustrated above. By doing so, companies can begin piloting and agreeing on a roadmap to accelerate their journey towards digital transformation.
As companies in the Middle East face exponential results in key sectors, digital transformation is clearly rising to the top, showing potential to broaden digital value creation across the regional market. The digital path to value creation is unique for every company, but setting a clear end-to-end approach allows companies to approach digital transformation in a sustained and long-term scope of growth.
In a world of post-pandemic recovery, companies cannot go back to business as usual as the Age of Disruption is well underway. Future competitiveness and resilience will rely on maximising the value from digital transformation to spearhead preparedness and growth. Regardless of where a company is on its digital journey, this approach can help continue the vital work of transforming it into a bionic company.
Rami Riad Mourtada, Partner and Associate Director, Boston Consulting Group (BCG)
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