Digital transformation is not a project or a one-off installation, but it is a continuous and continuous evolution, according to a sector expert.
It (digital transformation) disrupts the entire economy and influences all sectors. All sectors must automate to save costs, stay competitive and improve the customer experience.
"It is gaining strength in the Gulf States, but at different levels for different entities. The pace of technological development has ignored industry acceptance, meaning there is now an industrial gap," said Jay Srage, CEO of Centrogent , technology consulting firm and head of operations and teacher at the Michigan Ross Business School, at TechRadar Middle East.
Centrigent was launched in 2017 to help companies and governments accelerate the adoption of emerging technologies, while the school trains top executives to prepare sustainable strategies to prepare for the digital age in healthcare, retail and the financial sector.
Srage was the former president of Qualcomm for the Middle East, Africa and Eastern Europe.
What is digital transformation?
Srage said digital transformation goes beyond 5G and includes data science, AI and cloud computing. The whole idea of the UN and the WEF (World Economic Forum) is to connect every person on earth, but now there is an "industrial digital gap".
"Regulation and education are the biggest obstacles to digital transformation in the region. Self-driving cars are there in 2017 but not here yet and people don't know what machine learning is and don't know the difference between machine learning and deep learning. Emerging technologies are very complex and hard to understand, "he said.
He praised the EU for drafting regulations on AI, drones, data privacy and 5G much faster than other regions.
"In the Arabian Gulf, regulation is not yet in place, but they are taking small steps. In the UAE, one of the mandates for AI is to stimulate their ecosystem and require regulation. RTA (Road and Transport Authority) of the UAE is talking about "Flying taxis and it requires regulation before implementation," he said.
In the UAE, he said that digital transformation has already begun, but at different levels.
"The sectors with the highest digital maturity worldwide are telecom, banking and the automotive sector, while in the UAE, it is telecom, banking and oil and gas," he said.
Four technologies that determine digitization
At the moment, Srage said there are multiple technologies, but the four technologies that have emerged to define digital transformation are 5G, AI, data science and cloud computing.
He said that AI is the most prominent.
According to research agency International Data Corporation (IDC), the AI investment in the Middle East and Africa is expected to be $ 263 million this year, compared to $ 200 million last year. This investment is expected to grow between 25 and 30 percent per year.
The AI investment in the UAE is expected to be $ 56.03 million this year, compared to $ 37.54 million last year, with growth of more than 49 percent.
Srage said that 5G will be the most "disruptive technology" this year, but machine learning has entered the second phase of disruption.
"The first phase is the hype and the second phase is where you have products but that are not relevant and cannot be applied. The third phase is when you receive relevant products.
"5G is more mature but you will not see it at an industrial level soon. It will benefit consumers because of the speed. When the integration of AI with 5G takes place in the next two years, you will have safe, self-driving cars ' s and this will spread to other sectors with relevant and powerful applications, "he said.
5G becomes the catalyst for IoT
When asked about the internet of things (IoT), he said that IoT has been there since 2008.
"It never picked up the power because the network did not offer sufficient security and latency. 5G becomes the catalyst for IoT. The IoT was seen as a stand-alone technology, but now it is an application via hardware or software," he said.
According to IDC, the digital transformation in the Middle East will increase by 19.55% to $ 24.84 million this year, compared to $ 20.79 million last year.
"You have digital transformation solutions at stake and the industries want to adopt it, but they are not fast enough or do not know how to do it. It can be divided into two sectors, those who want to perform digital transformation and do not know how and those who decide to just move. "
Moreover, he said that those who are adopting are also very few and the third category is who does not know how to start.
Lack of industrial AI solutions
Over the past two years, Srage has said that really good solutions are available in the market, but many industries have never heard of these solutions and do not know where and how to apply them.
He said, however, that 60 percent of the claimed AI solutions are not "true AI" and are just automation or rule-based solutions.
"Today, there are few AI solutions available for commercial or industrial applications. For AI to work, you need a high-quality data set for machines to learn, and for that you need one to two years of data for AI to make accurate forecasts. Accuracy is very important when it comes to AI, "he said.
The big question, he said, is how we can bridge the availability of solutions on the market.
In the Middle East, the UAE has set a very high digital agenda and the sector has outpaced digitization.
"You have AI solutions in health care, but you don't see it in hospitals. There are VR and AR solutions for retail, but you don't see it in malls," he said.
According to Srage, the top three industries – telecom, banking and automotive – are applying these technologies at a faster pace, but within these sectors, some are changing and some are not.
"Automotive manufacturers such as Audi, BMW, and Mercedes Benz are very active in connecting cars with 5G and AI, and processing the data via cloud computing solutions, but other car manufacturers are not adapting quickly enough," he said.
Different levels of acceptance
The UAE government is boosting momentum for AI integration, Srage said, but "if you look at the industries, you see different levels of acceptance."
In the telecom sector, the most important players in the Gulf states, such as Etisalat, du and STC, are at the forefront of adoption, he added and added that the banking sector has begun adoption, but in certain key areas.
In addition, he said that there is a strong government framework in the UAE to become paperless by 2021, the UAE Centennial 2071 project and Saudi Arabia's 2030 vision, but the industries are not keeping pace.
"The UAE government has in mind smart city, education and digitization of services when it comes to digital transformation, while the education sector is for Saudi Arabia.
"When it comes to industries, they are the first to digitize because they receive a lot of consumer data. It's different for different industries, some see the internet as a digital option and some telecom operators see data as an option. Every industry digitizes in its own way, "he said.
Who is responsible for digital transformation?
Digital transformation rests on C-level executives and not on chief information officers.
It starts with the CEO, Srage said, and the CEO needs to connect to different departments to understand.
"You can't have someone from the company doing this because they don't have the background. So you need a consultant 4.0 to come in and work with all sections to get a strategy, digital audit, plan, integration and then create education, "he said.
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