Operational excellence is essential for organizations to better understand their customers and build resilient organizations that can withstand future disruptions.
A holistic understanding of the customer allows companies to tailor products and services to their specific needs and preferences, ultimately leading to increased customer loyalty and satisfaction.
Artificial intelligence (AI), analytics and automation are at the forefront of digital transformation, helping businesses stay ahead of the curve and prepare for the challenges of the future.
Leveraging AI and automation, businesses can leverage data insights to identify new market opportunities to streamline operations, reduce costs, improve efficiency and unlock new revenue streams. I can. These are all key factors in staying competitive in today’s fast-paced business environment.
Businesses across the Middle East are deploying actionable insights from AI, intelligent automation, and analysis of organizational data.
According to the latest Global Artificial Intelligence Spending Guide from International Data Corporation (IDC), spending on AI in the Middle East and Africa (MEA) is expected to reach $3 billion in 2023.
Although this represents only 2% of the global total ($151.4 billion) in 2023, the region is expected to show the fastest growth rate in the world over the next few years, with IDC predicting that AI spending in the MEA will grow It is expected to increase at a compound annual growth rate. (CAGR) will be 28% from 2021 to 2026, reaching $6.4 billion in 2026.
In the digital age, the use of these technologies is expected to increase significantly as businesses improve the customer experience by making data-driven decisions.
Several medical institutions in the Middle East are deploying AI-powered robotic process automation (RPA) to expedite the medical insurance claims process. In recent years, AI, RPA and big data have been widely deployed, especially in the fields of trade (retail and wholesale), shipping and logistics, travel and transportation.
By 2023, banks, retailers, and federal/central governments will make the largest spending on AI in the MEA region, followed by discrete manufacturing. Together, these four industries will account for almost half (44%) of total AI spending in the region by 2023. However, IDC expects professional services and transportation to be the fastest growing industries over his five-year forecast period, with his CAGR of each growing. 36.4 percent and 33.9 percent.
Technology companies and their business partners are focusing on business development for expanding markets such as the Middle East and Africa.
ServiceNow has expanded its market presence in the UAE and Saudi Arabia, and Salesforce has opened an office in the UAE. More of his SaaS vendors have decided to establish a presence in the Middle East region.
The UAE and Saudi Arabia have seen the emergence of many AI start-ups leveraging conversational AI, machine learning and other AI technologies with plans to expand in these markets.
Spending on AI, RPA and big data will continue to grow over the next 4-5 years as Middle East organizations prioritize IT spending on key digital initiatives such as customer excellence, operational excellence and intentional innovation is expected.
Key spending areas and forecasts
A key area of spending is customer excellence, the process of driving customer experience transformation through activities such as customer journey analysis, customer listening, sales and marketing campaign management, sentiment analysis, and analysis of customer trading behavior. included.
Second, drive improvements in operational efficiency, process reengineering, and financial operations initiatives as part of our investment in operational excellence.
Third, the budget allocated for innovation includes developing new business models, envisioning new products and services, initiating new business process initiatives, expanding opportunities for ecosystem partnerships, and introducing new revenue streams. .
In terms of spending, here are the key predictions for AI and automation in 2023:
- Cloud-based adoption of AI, RPA, and big data is expected to grow by more than 20% between 2022 and 2026 compared to non-cloud adoption of these technologies.
- AI use cases such as empowering customer service agents, recommending sales processes, automating IT processes, and analyzing and investigating fraud are expected to become even more popular.
- The adoption of RPA in the IT sector and the automation of specific individual tasks has matured across the industry, and although there seems to be a gradual shift from task automation to process automation, RPA adoption is still a blue ocean. is.
- IDC expects spending on RPA to grow by more than 20% over the next four to five years.
- In the Middle East, spending on big data and analytics for cloud-based deployments is also expected to grow by about 21% between 2022 and 2026.
Accelerators and deterrents of AI adoption
From a driving country perspective, the UAE, Saudi Arabia, Qatar and Kuwait have ambitious digital transformation plans. AI, big data and cloud can support the digital economy that leaders want to build. These countries need to go digital to diversify from oil revenues and generate predictable revenue streams from digital products and services. The digital pillars of these countries’ national visions will encourage organizations to adopt these technologies and transform faster.
Technology vendors and their partners are helping companies accelerate their digital transformation by establishing innovation hubs, garages, centers of excellence, cloud regions, and other strategic investments in the region.
Most hyperscalers and technology vendors are already based in the UAE. Microsoft and Google have established operations in Saudi Arabia and Qatar. Oracle has operations in Saudi Arabia and the UAE. Domestic cloud data centers accelerate cloud-hosted AI, RPA, and big data platforms.
From a deterrent perspective, talent mismatches and limited access to technology talent have become major concerns for organizations in the Middle East to pursue digital initiatives.
Moreover, the recently surfaced “pause AI” conversation is largely due to the dangerous acceleration of the capabilities of AI, especially generative AI, which can harm society and raise ethical questions. is.
Developments such as deepfakes, plagiarism, and AI voice reproduction can be extremely dangerous to social harmony. We need to ensure that the use of AI technology is ethical, transparent and accountable, while minimizing potential risks such as bias and invasion of privacy. Establishing policies and regulations to develop and use AI responsibly must therefore be debated before these technologies become mainstream. Establishing a regulatory framework that balances innovation and responsible AI practices is critical.
Harish Dunakhe is Senior Research Director, Software and Cloud (META) at IDC.
