by Babar Khan Javed

GCC CIOs prioritize optimization over transformation

News Analysis
Aug 05, 2019
AnalyticsCloud ComputingIT Strategy

Tech leaders should think of business outcomes first and technology second, advises Gartner.

CIO | Middle East  >  Collaboration / teamwork / meeting / planning / strategy
Credit: RidoFranz / Getty Images

CIOs in Gulf Cooperation Council enterprises focus heavily on optimization rather than transformation, while being less aware of business strategy compared to global counterparts.

That’s the conclusion drawn by Gartner from market research that looks at GCC CIOs as well as tech executives from around the world, and practitioners in the tech arena generally agree. The good news, however, is that some recent tech projects, such as a string of corporate data-analysis initiatives, suggest that a growing number of tech leaders are starting to bring new business value to their enterprises.

On its part, “Gartner’s 2019 CIO Agenda: A GCC Perspective” reports that GCC CIOs focus on driving operational effectiveness. Covering the perspectives of 106 CIOs from 15 industry verticals in the GCC, the findings are part of the global 2019 Gartner CIO Survey designed to help CIOs and IT leaders set management agendas.

With 84 percent of the respondents from the GCC representing companies with more than $50 million in annual revenue, the study is meant to help CIOs see how they compare with their peers in the region and globally.

CIOs need to demonstrate business value

CIOs in the Gulf nations need to demonstrate the business value of IT in order to have a greater impact on their enterprises, said Partha Iyengar, a research analyst at Gartner and author of the GCC Perspective study.

“Revisit IT strategy as an integral part of business strategy, as a means to get greater visibility and input to the business strategy,” she said in the report. “Identify compelling business use cases for emerging technologies and develop strong competencies in them.”

The Gartner study found that while CIOs in the GCC predominantly focus on achieving operational excellence (27 percent), they also value digital initiatives that contribute towards revenue and business growth (17 percent), enhancing the customer experience (14 percent), and reducing costs around operational expenses (9 percent).

The lowest priority outcomes for IT projects in the GCC region, according to the report, pertain to integrating data and analytics (3 percent), changing the business model (3 percent),  introducing artificial intelligence or machine learning (2 percent), and launching new products and services (1 percent).

“Most organizations in the GCC utilize digital transformation to modernize their traditional systems,” said Michael Maksoudian, the managing partner at Netizency, a digital strategy consultancy. “In effect, they are trying to catch up with global progress.” Few organizations in the region look to employ cutting-edge technology and long-range roadmaps when implementing IT initiatives, Maksoudian said.

Companies in the region often launch information technology initiatives to improve operational efficiency, agreed Amol Kadam, co-founder of Red Blue Blur Ideas, an analytics, marketing and tech consultancy with offices in Dubai. He added that other goals include headcount reduction and automation.

Don’t forget the customer

“All of these are really great reasons for such a program and can translate into very tangible KPIs or metrics to measure,” Kadam said. “Where I see the problem with this is that these are very inside-out ways to look at these transformations,” rather than looking at the company from a customer perspective.

While IT plays a role in driving transformation, the importance of customer and user experience is often ignored by the technology, Kadam said.

 Even though broad transformational projects may not be at the top of every IT executive’s priority list, there are plenty of technology leaders in the region who partner with a line of business managers and demonstrate value to other members of the C-suite, say tech-market insiders.

For example, even though data and analytics integration was scored low by Gartner survey respondents, CTOs and CMOs often work together, using information gathered and processed to correlate with existing campaign data targeting, said Wyze Siddiqui, business director at MWM Studioz.

“The most common demand from CTOs pertains to enabling the marketing function and executing omnichannel ambitions,” said Siddiqui, who works primarily with luxury retailers in the MENAP region. “We work to update legacy systems so they can collect first-party data at the point of sale and port into our marketing software.”

Recent projects in the region point to the increasing use of analytics. In Kuwait, for example, Dhaman Health used a cloud analytics tool that pores over patient data to predict health issues, offer prevention tips through a content management system, and alert relevant medical professionals. In the UAE, Aldar Properties has started using an analytics tool that can distinguish between marketing qualified leads and sales qualified leads, in order to boost effectiveness for the sales and marketing teams.

CTOs are being seen as a resource to help derive value from data as well as, more generally, capital and operational expenditures, Siddiqui said. The efficacy of tracking mechanisms, sensors, and bots have enhanced this.

Barriers to CIO success, and recommendations

Gartner survey respondents report that culture and governance are the biggest barriers to GCC companies adopting new technology, taking large risks, and experimenting with untested models.

In order for GCC CIOs to effectively overcome barriers to the risk and clarify the business impact of IT, it is imperative to revisit the digital ambitions of an enterprise by preparing a roadmap for digital transformation, Iyengar said. As a follow-up to optimization, Iyengar said that GCC CIO’s need to work on building strong business stakeholder relationships and credibility.

“Educate business stakeholders on digital business opportunities and drive efforts to (re)define the digital ambition of the enterprise to focus on ‘outside-in’ digital-revenue-focused goals,” Iyengar said. “Leverage the CEO reporting role and (presumably) a seat at the executive table, to project personal business credentials and knowledge and establish business credibility by consistently speaking the language of business, not technology.”

She concluded that GCC CIOs need to change the mindset within IT by thinking of business outcomes first and technology second, to more effectively drive the business value of IT discussions with peers at all levels.