According to Gartner's 2024 Mid-Year IT Spending Report, technology investments in the Middle East are expected to increase by 8% in 2024. This growth reflects a broader trend where regional Chief Information Officers (CIOs) are increasingly using digital infrastructure to boost business performance and enhance resilience. The shift aligns with global investment patterns, where technology is seen not just as a tool for improving business efficiency, but also as a crucial element for fostering innovation and gaining a competitive edge in the market.
Investments in five key tech areas— Data & AI, Automation, CX, Managed Services, and Cybersecurity—are being increased by Middle Eastern CIO/CTOs, in order of relevance. These investments are aimed at boosting productivity, enhancing security, improving decision-making, increasing customer satisfaction, and optimizing operations.In course of our continuous market outreach, we at Aspire have been interacting with dozens of Tech & Business executives in the region. Our own findings echo the Gartner reports with some insights:
Data & AI:
Customers are investing more in Data & AI as this investment, helps push towards faster and more accurate business decisions. The flip side is that not all companies have their Data ready for the AI revolution. The fundamental Data engineering frameworks supported a strong data governance foundation which is essential for successful data quality needs to be in place to ensure companies can leverage the full benefits of the AI revolution. For instance, a leading telecommunications provider in the region has deployed AI-driven customer analytics platforms, resulting in a ~30% increase in customer retention by predicting and addressing service issues proactively.
Automation:
Automation in some form has been in vogue for a decade or more. However, we see automation initiatives adapting to the changing technology landscape with enhanced adoption & accuracy (using intelligent automation in different forms) and lower time to market (using lo-code platforms and AI frameworks) is now making true business automation a reality. Strategic allocation of funds to automation technologies has helped organizations to focus on solutions to boost productivity in manufacturing and logistics. For example, in Dubai, major logistics companies have implemented robotic process automation (RPA) to streamline supply chain operations, resulting in a ~40% reduction in manual processing time and a ~25% increase in overall efficiency.
Managed Services:
Technology services have traditionally suffered the pain of whether to in-source or out-source the work. Smart investments in internal technologies such as modern Service management tools, communication platforms and monitoring software, has enabled large companies to strategically leverage lower-cost locations to outsource Software functions in an efficient managed services modern. This is allowing organizations to optimize operations and enable their onsite staff to focus on more urgent and value-added operations across various functions. On average Dubai based leading conglomerates have embraced managed services for IT support and cybersecurity, enabling them to focus on core business activities. Leading to reduction in operational costs and better service reliability.
CX:
Customer Experience is increasingly becoming the core aspect of consumer behaviour. Utilizing enhanced omni-channel CX technology result in quick wins when it comes to enhancing customer satisfaction, especially in retail and e-commerce. Customer data acquired is being fed onto CDPs to understand customer buying behaviour quicker and with more accuracy, thus providing a more enhanced and personalized omni-channel customer experience. A prominent e-commerce company in the UAE has integrated AI chatbots and personalized marketing, improving customer engagement scores by over ~30% and increasing sales conversions.
Cybersecurity:
Cybersecurity is no longer a CISO agenda only. The direct impact of cyber-threats and their impact on business operations, along with increasing regulatory requirements and awareness around Personal and Corporate Data protection is driving a fast-maturing cybersecurity investment. Cyber security paradigms are rapidly become pro-active instead of reactive measures with DevSecOps principles being used extensively in agile software lifecycles. In Saudi Arabia, financial institutions have adopted advanced threat detection systems that use AI to predict and neutralize cyber threats, reducing breach incidents by ~35% and saving millions in potential losses.
However, these success stories necessarily do not mean easy pickings for the business. There are a multitude of choices and decisions, lingering on the CIOs’/CTOs’ desk on how best to prioritize their investments. Key questions to consider include:
What is the expected ROI for each investment area? How will each technology investment contribute to the financial health and growth of the organization?
How easily can the new technologies be integrated with the existing IT infrastructure? Is the most critical data for business decisions identified and regularly utilized?
What is the expected impact on current operating model? How much training and change management will be required to ensure successful adoption, utilization of the new technologies along with business continuity?
How will the investment affect the customer experience? Will it lead to improved satisfaction, engagement, or retention?
Based on our market research, the MENA CIO/CTO’s face the similar set of constraints noted above, as their Global counterparts: around budgets, utilization, compliance, change and integration with existing priorities built into their digital road maps. We have been successfully helping CIO/CTOs, navigate these by using our LEAD Framework:
- LEVERAGE: Utilize current IT expenditures in key areas like Data & AI, Automation, CX, Managed Services, and Cybersecurity to maximize investment efficiency. This step ensures optimal allocation of resources to technologies with the highest returns in productivity and security.
- EVOLVE: Cultivate detailed business cases for each key technology area. Understanding the impact of these technologies, for e.g., Automation in logistics or AI in customer analytics or other use cases that enables CIOs/CTOs to implement initiatives that significantly boost system efficiency and user satisfaction.
- ANALYZE: Conduct rapid assessments to identify probable enhancements within existing technology landscape. This includes examining how existing technology measures can be extended or improved to address new challenges and seize opportunities.
- DELIVER: Execute targeted solutions within six months, prioritizing initiatives that offer immediate benefits and align with strategic goals. Projects might include deploying advanced AI analytics or broadening automation applications to cut costs and enhance decision-making.
Lead by Aspire, these initiatives focus on COGS to reducing non-essential expenditures, ensuring CIO/CTOs achieve targeted cost reduction. This could be attained through streamlined operations, optimized IT spending, automated processes, or reallocated resources towards innovation and strategic growth. Second, leverage scalable digital solutions like cloud computing, advanced analytics and process automation to enhance current IT infrastructure efficiency. Lastly, develop the next generation talent supported by our capability development center in Amman, providing a niche mix of high-quality Arabic speaking technology talent well versed in fostering innovation.
While, we look towards a rapidly evolving digital landscape in 2024, we firmly believe Middle East CIO/CTOs are uniquely positioned to steer their organization towards substantial growth and resilience through strategic technology investments. Aspire, remains committed to supporting these leaders by employing the LEAD Framework, not only meet their current operational needs but also strategically prepare for future challenges.