The process of adopting digital technologies and platforms is neither linear nor straightforward. The journey to digital enablement involves a paradigm shift in processes, workflows and even mindsets, supported by an evolving economic framework, explain James Mathew, CEO and managing partner, and Dr Anuraag Guglaani, partner – strategy, transformation, technology and cybersecurity at UHY James Chartered Accountants, an exclusive member firm of UHY International, UAE
Five of the top 10 companies in the world, in terms of market capitalisation, are digital. Back in 1995, the market capitalisation of the top 15 public internet companies was $16.7bn, by May 2016 their valuation had increased by 125 times to $2.1trn!
The truth is that conversations about going digital have been doing the rounds for quite a few years, but it is only in 2020 that they hit a crescendo – and with good reason. The outbreak of the Covid-19 pandemic led to a dramatic uptick in the adoption of digital technologies across the globe, and it would not be wrong to say that ‘digital’ has been the buzzword of 2020.
Facets of going digital
Broadly speaking, digitisation is a process where digitised information is used to increase efficiency and further empower organisations to drive digital transformation. Digital transformation means bringing about a change in the way a business is conducted; to enable seamless digital transformation it is important to have a constructive digital strategy.
As the global digital movement continues to gain momentum, we turn the spotlight on the metamorphosis of the Middle East region into a digital economy. First and foremost, the following key factors created the need for digital transformation across the globe:
- Increased smartphone penetration;
- Enhanced social media consumption by consumers;
- Convenience and popularity of online payments;
- Massive shifts in consumer behaviour triggered by the outbreak of Covid-19;
- Increased access to data-based insights;
- Improved agility, collaboration, and innovation.
The digital Middle East
The Middle East region holds immense potential as one of the world’s largest repositories of oil and gas, backed by the power of sovereign wealth funds, major tourist attractions and teeming opportunities.
Leading Middle East economies are known to wield a futuristic approach in their policies. Bahrain, Qatar and the UAE rank high in terms of 100% smartphone penetration and over 70% social media adoption in their countries. Saudi Arabia’s Vision 2030 and National Transformation Plan 2020, Smart Dubai, Qatar’s Connect 2020 ICT Policy and Oman’s digital strategy, e-Oman, are solid examples of the Middle East’s focus on building a digitally powered economy. Of these, the UAE rules the roost in digital adoption, and is at par with the world’s leaders when it comes to digital metrics.
Over the last few years, leading economies in the Middle East have taken strides towards digitally transforming their infrastructure. Government strategies are embracing digital adoption to promote sustainability, accelerate economic diversification and tap into rapidly expanding technologies to ensure that the Middle East is well on its way to metamorphosing into a power-packed digital economy.
The digital wave
According to industry reports, growth in GDP tends to catalyse digital adoption as countries aim to increase their ranking on the Digitisation Index.
The digital wave across the leading economies of the Middle East may be attributed to strong GDP growth rates that led governments to introduce initiatives such as smart cities, smart tourism, digital healthcare, classrooms of the future and smart governments. Government authorities in the region are exploring digital programmes that can offer customers a seamless experience. In recent times, with the breakout of Covid-19, customer behaviour has undergone a huge transformation, leading to digital technologies such as cloud infrastructure, social apps and more gaining momentum in everyday life.
The UAE is one of the Middle East’s most digitally advanced economies. Backed by government-led strategies such as UAE Vision 2021, UAE Centennial and Smart Dubai 2021, Dubai has embraced ground-breaking technologies, invested in R&D and implemented processes to establish a strong digital foundation across the city and its infrastructure.
Interestingly, the emirate is digitally enabled in such a way that services such as processing parking tickets, paying fines, applying for residency visas and even setting up a new company can be done remotely to a large extent. As part of the Smart Dubai initiative, the government has been working towards becoming paper free in 2021 and eliminating the use of more than 1 billion pieces of paper that are typically used in government transactions.
Committed to technology-led transformation within business, Dubai and Abu Dhabi have also invested heavily in fintech. The Dubai International Financial Centre is seen as the first and largest fintech accelerator in the Middle East, Africa and South Asia region.
In recent years the Middle East’s healthcare sector has witnessed the emergence of digitally driven solutions; however, it is the outbreak of Covid-19 that ushered an new era of telemedicine that will revolutionise the sector across the region.
Healthcare providers rely on digital services – from recording compliance to treatment regimens and tracking progress – to help patients combat lifestyle ailments while adding value to the overall healthcare experience. Leading Middle East economies such as the UAE, Qatar and Saudi Arabia are working towards establishing high-tech medical cities that promise to deliver services at par with global standards.
According to industry reports, artificial intelligence, Big Data, 3D diagnostics, augmented reality and virtual reality will drive innovation in the Middle East healthcare sector. Cutting-edge digital technology will increase accuracy in diagnosis through sophisticated imaging, providing insights into community health and enabling patients to be monitored remotely.
From a geographical standpoint, the Middle East is a major link between the East and West, hence trade and logistics contribute significantly to the region’s growth. Supply chain ecosystems typically depend on the seamless functioning of exporting countries and their import trading partners to run efficiently. However, the Covid-19 pandemic resulted in production halts and lockdown restrictions that completely disrupted the global supply chain, leading to unprecedented losses for stakeholders.
Assessing the impact on the sector, the region brought into play blockchain technology and automated toolkits to shape the future of the logistics sector. As a key trading hub in the Middle East, the UAE tried to cut losses by turning the spotlight on breakthrough technologies and tools to fortify the supply chain industry and drive continuity in trade. In April 2020, UAE-based DP World, one of the region’s busiest port operators, launched an online logistics tools and services platform to manage sea, land and air shipping across the world.
Investment in tech
UHY James is effectively helping organisations to turnaround the accounts, audit and finance functions through the deployment of an artificially intelligent digital workforce to achieve increased efficiency, reduce costs and add enhanced value to the roles of accountants, auditors and finance professionals.
Effective deployment of a digital workforce in the accounts, audit and finance functions plays to both robotic and human strengths and creates a perfect synergy:
- Artificially intelligent digital workers efficiently deliver the mundane, repetitive, deterministic, voluminous, error prone, rule-based tasks requiring multiple systems interaction;
- Emotionally intelligent humans build relationships, provide subjective judgement, deliver low-frequency and exception tasks, and manage change and improvement.
The predominance of digital workers in the realm of finance, accounting and audit plays a pivotal part in enhancing the roles of finance and audit leaders. Most importantly, there is no escaping the fact that digital transition at an organisational level goes a long way in enhancing profitability. Within the space of automation in accounting and auditing, digital workers prove to be an asset, as efficiency, effectiveness and accuracy ultimately impact profitability and productivity.
At UHY James, we are on a relentless pursuit to enhance audit and finance functions delivery. With digital taking global centre stage, it is imperative that organisations look at the bigger picture and leverage our expertise in driving technological transformation to enhance their organisational efficiency.
In a nutshell, 2020 literally and figuratively changed the rules of the game and accelerated the process of digitisation to ensure governments and businesses could mitigate the disruption to critical workflows.
Amidst the Covid chaos, the Middle East could hold its own as most of its leading economies were already in the nascent stages of digital transformation. According to the IMD’s World Digital Competitiveness Ranking 2019 Report the UAE ranked second for its technological progress, ninth in the future-readiness factor and 35th in the knowledge factor. The UAE’s visionary leadership deserves to be applauded for its foresight in investing and nurturing a digitally enabled environment that ensured the cogs of the economy were functional amid lockdown measures and stringent restrictions.
While digitisation proved to be a saviour for countries reeling under the impact of the global pandemic, let us not lose sight of the fact that core digitisation initiatives are central to the growth and progress of enterprises and governments.
As the sun sets on 2020, the popular adage ‘change is constant’ rings true: we are witnessing the world embracing and adopting the digitisation era while fully believing in the promise of a sparkling future.