How Gulf SMEs are constructing digital resilience amid the pandemic

It’s one yr on for the reason that pandemic, and small and medium-sized enterprise (SME) house owners within the Gulf area face a remodeled financial panorama. 

In these unsure instances, firm house owners are turning to know-how to maintain their companies afloat and resilient. 

SMEs make up greater than 98% of corporations within the United Arab Emirates (UAE) and contribute greater than 52% to GDP, based on authorities knowledge. In Saudi Arabia, SMEs comprise 99% of companies, offering 64% of complete employment within the nation. 
 
Smaller companies throughout the board have been hit exhausting by the pandemic, in comparison with bigger corporations which have been higher financially and strategically insulated towards the disaster, mentioned specialists. 

“Small companies that weren’t digitally prepared have been closely affected and lots of went out of enterprise,” mentioned Alaa Khattab, director of consulting and know-how companies at Abu Dhabi-based software program consultancy Know-how Methods Center East (TSME). 

Khattab has witnessed a surge in demand from SMEs seeking to harness digital applied sciences to allow company-wide resilience.  

“Native SMEs are starting to develop overarching digitisation methods  in various levels. Furthermore, they’ve realised that inbuilt digital resilience is crucial, and modernising processes and operations to extend effectivity is now needed,” Khattab added.  

In response to Harish Dunakhe, IDC analysis director for software program and cloud for the Center East, Turkey and Africa, the pandemic shook each Gulf-based organisation no matter dimension and the sector, however Covid-19 was “significantly devastating” for SMEs.  

“A digital infrastructure that helps distant operations and digital enterprise fashions is a must have for SMEs within the ‘new regular’. That is significantly important for organisations within the commerce worth chain – manufacturing, logistics, wholesale and retail sectors – the place most Gulf-based SMEs sit,” mentioned Dunakhe. 

Extreme operational disruptions have pressured SMEs in commerce worth chain sectors to reply rapidly by growing effectivity, embracing digital enterprise fashions, creating new partnerships, creating new income streams and containing prices, he mentioned.  

“Resiliency has develop into the key phrase, with optimisation and visibility the important thing overarching focus factors,” mentioned Dunakhe.

He added that SMEs ought to focus their digital initiatives on enabling distant working via collaboration instruments, constructing scalable and resilient IT methods by investing in cyber safety and cloud, and enhancing provide chain visibility via rising know-how, such because the web of issues (IoT) and analytics. 

In response to Khattab, TSME has witnessed native demand specifically for platforms that concentrate on robotic course of automation (RPA), chatbots, synthetic intelligence (AI), integration servers and utility programming interface (API) administration platforms. 
 
“Applied sciences akin to automation, machine studying, analytics and distant collaboration, together with rise of cloud, empower SMEs to convey modern options to improvise operational efficiencies and facilitate distant operations,” mentioned Vishal Manchanda, regional enterprise improvement supervisor at Saudi Arabia-based digital consultancy Confirmed Seek the advice of. 

“Most repetitive, handbook and data-intensive duties can now be fully automated with out the necessity for human intervention, therefore ensuring fundamental operations run continuous no matter a pandemic,” he mentioned. “Native SMEs have realised they require a sturdy infrastructure setup for these methods to maintain working with no interventions.” 

Digital commerce adoption 

Latest analysis from IDC reveals that digital commerce, buyer relationship administration (CRM), and cloud-based analytics options noticed accelerated adoption in 2020 amongst regional SMEs. 
 
“SMEs used digital commerce to enhance their order acceptance, total supply effectivity and integration with provider portals,” mentioned Dunakhe. “Along with massive retail chains within the Gulf, many mid-size retailers noticed a surge in orders positioned utilizing cellular apps.” 

In response to Wes Schwalje, COO of Dubai-based analysis agency Tahseen Consulting, a big proportion of Gulf-SMEs in pre-pandemic instances considered digital transformation as a “nice-to-have” performance. 

“Lockdowns and protracted financial slowdown have pressured SMEs to acknowledge that digital transformation is now a strategic crucial somewhat than a company buzzword,” he mentioned, including that the worldwide disaster has introduced regional SMEs with a chance to discover a variety of applied sciences to construct resilience.  

“For instance, SMEs have gone past easy video conferencing to have a look at digital headquarters that mimic bodily workspaces by way of options like Tocca. Social commerce by way of chat instruments akin to Businessonbot is now enabling native companies to speak with clients on WhatsApp,” he mentioned.  

“A complete vary of B2B instruments for enabling cornerstores to order stock, promote on-line and discover embedded finance have emerged. Curiosity in micro-fulfillment and contactless funds applied sciences has additionally been accelerated considerably.” 

Particularly, Gulf-based SMEs in sectors reliant on on-line aggregators and bodily distribution channels at the moment are dealing with a “pivot-or-perish” second, Schwalje mentioned. 

“There may be an pressing want for SMEs, which have develop into over-reliant on aggregators for buyer acquisition and fulfilment within the pandemic, to transition in direction of direct-to-consumer provide chain methods,” the COO mentioned. 

He added that Chatfood within the restaurant house is an fascinating instance of an anti-aggregator know-how that places extra management again into the palms of eating places and stronger order economics. 

Various digital maturity 

Regardless of a region-wide recognition of the pressing must digitally remodel, regional ranges of maturity range throughout the Gulf. 

A latest IDC survey reveals that 41% of UAE organisations are dealing with silos of innovation, the place departments compete with one another and drive innovation with out having an enterprise-wide strategy.  

In Saudi Arabia, IDC studies that 38% of organisations have “restricted capabilities” to drive their digital initiatives.  

“The lack of organisations to seize and analyse knowledge to derive actionable insights on time is the most important obstacle to their journey in direction of resilience,” mentioned IDC’s Dunakhe 

“This obstructs their journey to undertake RPA and AI. Resilience calls for organisational agility and it’s a important psychological shift the place companies must be taught to reply quickly to evolving realities,” he added. 

TSME’s Khattab mentioned Gulf SMEs would face “many challenges” on their transformational journey to creating resilience.  

“Challenges embody operational hindrances, mapping the ability hole, coaching, coping with resistance to alter and concern of job loss, in addition to finances availability,” he mentioned. 

“However regardless of the challenges, digital transformation is not an choice however a norm to function on this dynamic enterprise world,” he added. “Organisations are investing closely with a view in direction of goal-oriented methods that elevate the present working mannequin to consider future inner and exterior necessities too.”  

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