How does a company go about defining exactly what digital transformation means?
I think digital transformation is one of those buzz words that comes up in every conversation you have these days. Not just with CIOs and technology leaders but with any business executive. And I think a lot of the traditional IT work is now being rebranded as digital transformation. But in reality, digital transformation actually refers to significant receptive transformation in business courses and models. It entails the use of advanced technologies, such as AI and blockchain, cloud and big data analytics and so on to disrupt business to redesign customer experiences. To develop new revenue streams and business models and to monetize organizational and eco-system data to drive change within industry. So, it means quantum improvements and step changes in customer experiences, in operational efficiencies and in business models.
Once upon a time digital might’ve been left to an IT guy or a tech division and now it seems everybody needs to have an understanding on it…
Business leaders have become much more aware of the possibilities that technology can offer and so they are able to look at technology from the prism of business outcomes. And then on the other, the advancement of technology and the emergence of technology such AI, blockchain, robotics and 3D printing have created such new youth cases which were not possible before. And because of that, these cases are largely industrial and business use cases, and so therefore, it now gives an opportunity for the technology leaders to reach out to business and tell them that they can leverage these technologies.
At the same time, from the business’s point of view, from the line of business executive standpoint, he or she can now is much more aware of what is possible with technology. And therefore, he or she’s now proactively reaching out to the technology leaders and asking them for ideas and suggestions. So, it’s working both ways now and there’s alignment between the CIO and the IT department and the line of business executive, which is absolutely critical for success of digital transformation.
Jobs have been essentially redefined through technology, so how do you go about navigating that change and ensuring they are brought along on these journeys?
So, what is happening within organizations has been greatly influenced by how employees use technology in their personal lives or how technology has been impacting the personal lives of employees as individuals. Our personal lives have been transformed by technology such as smart phones and mobility, by the use of social media. By these applications that we use and how we interact with our service providers, with your consumer services organizations, the government, etc. Now, because of that, employees now, when they go to their workplace, they are looking at technology differently. They want to have the same experiences they have in their personal lives at the workplace as well. So now they are demanding that they have similar kinds of experiences at the workplace. And that is increasing pressure on the technology departments and senior executives to transform policies and services within the organization. And of course, the customers of the organization are also demanding greater use of technology in their services and products.
And of course, customer expectations of that journey are changing too…
The pressure on organizations today is tremendous. On the one hand you have customers demanding more; their needs are constantly changing, they are heavily influenced by technology. And so you have to step up and offer services which are augmented by technology. And you have to offer them at the service level that is being offered by the large digital services companies and social media networks like Facebook and Google. So, you have to offer services on a par with those; at the same time your employees are also consumers of these technology augmented services. On both sides you are under pressure.
How do you stay abreast of exactly what that customer wants?
It is indeed challenging. Your customer needs are constantly changing and the way a customer uses technology and how they utilise a service is also constantly changing. And so therefore, organisations need to be very agile, very flexible, and constantly on top of what those customers’ needs are. And this has to be done at the level of single, individual customers. You have to look at your hyper-personalisation and offer individualised services. And that is now possible with technology. It is possible by leveraging technology such as big data analytics and artificial intelligence. You’re now able to understand the needs of a customer as an individual, at an individual level and offer hyper-personalised services to that customer. The question is, how many organisations are really doing that? And how many of them have a strategy to do that?
As a business looking to embrace this digital innovation curve and digitally transform, how do you go about understanding what the right technology is?
I think there has to be a long-term strategy to look at the business overall. Look at those customer touch points that create the maximum level of friction for customers. And then try to make them frictionless. So what progressive organisations are doing is looking at their customer life experiences and creating customer journeys. So, it’s not just about providing an individual service to a customer, it’s about tying those services together to address a particular customer life experience. And therefore, creating a customer journey. Once you do that, then you kind of look at which technology makes sense in order to create less friction at various customer touch points. Now in some cases it might be AI, that could work, in some cases it could be some other technology. But then you build your technology’s story from the customer experience story.
What other challenges does a company face as it looks to begin and embrace a digital transformation journey?
Well there are several challenges for organisations that have been around for a while and play the legacy systems. And not just legacy systems, but also legacy processes, the organisation culture, mindset of the employees; all of them are hurdles to transformation. Often times, organisations are having to be built in certain ways because they have silos of innovation, they have data silos, each department has its own data sets that are not shared across the organisation. They have old technology that is perhaps not amiable to change and transformation. And so there are a number of hurdles that organisations need to overcome while they transform. It can’t be done overnight and they have to start working on each of these issues along the way.
But, in terms of technology itself, I think it’s important for organisations to consider developing a single unified architecture, wherein they can then plug in various new technologies that they want. And that architecture will need to enable flow of data across departments and businesses within the organisation. It should also enable the augmentation of their data with intelligence using AI, machine learning and all of that. And should also be able to integrate customer experience applications and services, easily.
And the other thing that’s important when you look at this is that organizations, which no longer exist in silos within industries, are part of larger ecosystems. And it is really the power of the ecosystem that matters to the end of the day. And so therefore, organisations need to have a technology strategy or technology architecture, to which other entities within the ecosystem can easily integrate and seamlessly transfer data and do transactions. And so therefore, for organisations which have legacy systems, it would take time for them to move and overcome these hurdles.
Obviously, you’re not just going to progress in a straight line, and there are going to be hurdles…
I think organizations need to understand that digital transformation is not a single project. It is not something that can be done within a few months. For medium to large size organisations, digital transformation will probably take years. And it is an ongoing process. And so, organisations need to have a longer-term strategy for digital transformation. So, the CEOs and the CXOs and the other members of the board need to outline a longer-term strategy and then kind of break it down into shorter term flexible goals. It is important for organisations to have the strategic agility when they have these longer-term goals and visions. But at the same time, have shorter term projects and initiatives. But the most important thing is to communicate this effectively.
Now you have specialisation and you’re very knowledgeable and experienced in the emerging markets of the Middle East and Africa. I want to zoom in a little bit in terms of the innovation and digital curve of the UAE…
Well the story of the UAE is a fascinating one. UAE is a fairly, relatively young country. It was formed in 1971 with the unification of various Emirates as states within the religion. Originally the UAE depended heavily on oil resources, so a large part of the GDP of the UAE was driven by oil earnings. But over the years, over the decades, the UAE has been very strongly focusing on on diversifying its economy away from oil. So, the UAE kind of realises that one day it will run out of oil and that they have to develop other resources.And so over the years the UAE has come out with several strategies to diversify. I just published a book called The Digital Nation, which kind of traces and monitors the development of the digital transformation within the UAE. And what has happened is that over the last decade or so, the UAE has been increasingly focused on developing its digital capabilities.
We had the vision 2021, which was launched in 2010 and that increasingly focused on developing the UAE as a knowledge economy, diversifying it away from oil. Right now, the UAE has about 70% of its economy is based on non-oil revenues. And so, it wants to further diversify and sees this opportunity. It sees this opportunity to leverage this destruction that we see around the world. That it can leverage that to create a mark for itself in the world. And so, a lot of strategies that have emerged over the last decade or so, have been focused on leveraging technologies such as AI, blockchain, IOT, etc, to drive these facets of the economy Including, transforming the public section and driving better citizen experiences and services but also transforming from the private sector. And also making the UAE an attractive destination for foreign investment, attracting talent from all over the world, driving innovation etc.
Tell me a little about Vision 2021, and how far along that journey the UAE is, currently?
It focused on several key areas, including education, health care, economics, etc. But, as I said, there has been a great focus on building knowledge industries. And as part of that, technology has been a core pillar or underlying foundation for that Vision 2021. The leveraging of technology has been one of the key elements of the vision. You see the focus on exploring technology to drive education, enable health care, better citizen services and supporting the private sector.
So technology has been at the core of Vision 2021. And as we get close to the end of the Vision 2021 strategy, we see a lot of developments that have happened which have technology at the centre of them. You see the launch of a number of technology related strategies and so we have the UAE AI strategy 2031, which aims to reduce government costs by 50% by leveraging AI and also fostering the development of AI within the UAE across sectors, and the use of AI across sectors. We see the launch of the UAE IOT strategy, the UAE fault and revolution strategy, blockchain strategy, etc. This hue of technology strategies have been launched by the government, which essentially focused on leveraging these technologies to drive government services, also supporting private sector and running innovation within the country.
The UAE’s leaders have been very effective in communicating their digital vision to the senior executives within the government and the private sectors and also to the citizens. It’s as if this is a personal quest for these leaders. When these strategies are launched, for example, the AI strategy, the UAE AI 2031 Strategy, which I spoke about earlier, the UAE immediately appointed a Minister of AI. So, it’s coming right from the top. They appointed a Minister of AI and that ministry now oversees the roll out of AI across public sector organisations. It oversees the education and wellness building around AI. It focuses on driving innovation around AI, etc. So, that’s just the example of AI.
Similarly, the UAE has known strategies related to the fourth industrial revolution: blockchain, IOT, etc. Now for each of these strategies, the communication of the vision comes right from the top. It’s the senior leaders of the country, the prime minister of the country, for example, Sheik Mohammed bin Rashid, who’s been very vocal, in terms of telling the government, the businesses and the citizens and residents of the country that this is something that we have to leverage. This technology disruption is something that we can harness to create a better country, to offer better services. One of the things that has been brought together to focus upon is happiness. Sheik Mohammed bin Rashid, the prime minister, has been talking about making UAE the happiest nation in the world. And a lot of these technology strategies kind of come together and focus on the happiness agenda of the country. So, it’s a national agenda for happiness and wellbeing and technology and the UAE has been very effective in doing that.
