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Gartner Says GCC Enterprises Must Seize the Digital Ecosystem Opportunity

CIOs in the Gulf Cooperation Council (GCC) are ideally positioned to become global leaders in digital transformation and innovation, according to Gartner, Inc. As enterprises in the GCC nations of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) grow and find their place on the world stage, digital ecosystem* participation will be a vital element in their success.

“CIOs must take a lead in assessing their organization's current ecosystem involvement, and investigating the strategic value of digital ecosystems,” said Ed Gabrys, research director at Gartner. “.”

“In the GCC, there has been adoption of locally provided, shared services within government agencies – such as Smart Dubai Office, the Tejari eSupply portal and Oman's G-Cloud - and an increased interest in cloud-based ERP services,” Mr. Gabrys said. “Although these are encouraging preliminary steps in a broader adoption of digital ecosystems, participation in more advanced digital ecosystems will be increasingly important for private-sector organizations to remain competitive and for public-sector organizations to fulfill their mission.”

Although cost reductions and optimization efforts will remain a priority for many GCC IT organizations, top-performing organizations worldwide have shed a light on an alternative approach whereby budgets and value are treated differently. Adoption of similar practices can help GCC CIOs shift their IT organizations from being perceived as a cost center to being treated as a strategic value generator.

As IT begins to differentiate its portfolio of assets by commoditizing "run-the-business" services and increasing value-generating solutions, those value-generating related costs could be shared more broadly. The technologies, and the related benefits of increased digitalization, are no longer an IT-only affair.

“This requires a multidisciplinary team approach that expands far beyond the borders of IT, into a broader digital ecosystem that includes internal-business partners, vendors, and in some cases, even competitors,” Mr. Gabrys said. “As digitization evolves, it will become easier to share expenses, and grow the amount of spend. Value will be expressed beyond pure ‘run-the-business’ costs and can be more directly linked to the things executives will appreciate and fund: growth, cost management and risk management.”

While global top performers are redirecting funding to technologies that support digitalization, in the GCC many CIOs still plan new investments in “cold spots” such as enterprise resource planning (ERP). Although ERP remains relevant and an important asset for running the business, it typically does not warrant the same levels of funding as in recent years. Gartner recommends reviewing these "cold spots," which are ripe for investment reductions and commoditization, and directing resulting savings toward renovating the core and value-generating services and technologies.

“CIOs in the region should look for opportunities to divest from ‘cold spots’ and redirect funding into areas that can derive superior strategic value for the enterprise and serve as a platform to build, run or otherwise participate in the most beneficial digital ecosystems.”

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