Digital transformation investment will continue in 2021; states reality check by Software AG

Transformation and investment remain common goals, but the best way to achieve them highlights diversity of thinking in tech strategies

Digital transformation investment will continue in 2021; states reality check by Software AG

Riyadh, Kingdom of Saudi Arabia: Software AG (Frankfurt MDAX: SOW) has recently released the global ‘Situation Report’ based on responses from IT Leaders on their views around digital transformation investment strategies. The global COVID pandemic served as a dramatic backdrop for a year of innovation and digitalization in businesses around the globe. Almost all IT directors surveyed said their company went through digital transformation efforts in 2020, and they expect it to continue in 2021.

The research highlighted some priorities and assumptions that companies have in common, and some areas where opinion is divided on the best way forward.

IT leaders were unanimous in their belief that digital transformation is expected to accelerate significantly over the next few years with entities set out to continue investing across data and analytics, simplified processes, customer experience and integration. The predicted growth is attributed to technology implementation strategies in line with goals that include cost efficiency, customer experience, security, employee safety and environmental policy.

The interviewee companies strongly believed that their IT infrastructure and business is resilient, with a split in companies that considered to diversify their technology portfolio and those that preferred consolidating on technologies. A large majority of experts also stated that innovation will play a key role and technologies such as Cloud computing, 5G, Integration, IoT will be vital in tackling challenges as economies move towards a more digital future. In terms of the beneficiary of digital investments, customers, employees and ‘the businesses were all cited as top priority. Simultaneously IT leaders also predicted customer expectations to rise in the next year, given the digital shift new technologies have caused, resulting in a new kind of modern customer.

Commenting on the report, Ahmad Salama, Vice President Software AG Middle East and Turkey said, “As the Middle East’s largest economy, KSA is all set to be the Silicon Valley of the Middle East, and beyond, with its young and educated population, that has the potential to make it a tech innovation hub in line with its Vision 2030. With the country’s ongoing agenda of innovation, we also work closely with key Saudi entities to support them to master their digital transformation goals and turning their data into value. Despite the unusual year in 2020, Software AG grew 60 percent in the country with its digital first approach, and while battling the pandemic simultaneously.”

Expressing views on the trends, Vijay Jaswal CTO Middle East and Turkey for Software AG stated, “While the research was carried out in some countries, these trends are prevalent and applicable in our region too. Unfortunately, it took some to face the pandemic to realize the value that digitalization brings, while many were already equipped to handle the storm. In fact, we must applaud all the government departments whose services were resilient due to their agile approach to business.

Additionally, they have factored in the upcoming generational change and therefore are already ahead of times. These trends are therefore to stay not only in 2021 but for the years to come.”

Of the technologies essential in 2021, global IT leaders listed the following as areas of focus: Cloud computing (67%), 5G (51%), AI (43%) and Integration (43%).

With this faith in technology from the country’s decision makers witnessed through the royal decrees mandating the establishment of the Digital Government Authority in the first half of this year following its predecessor the Saudi Data and AI Authority back in 2019, digital transformation is expected to form the foundation for economic growth in 2021 and beyond.

Neom, the land of dreams and innovation is another example, Joseph Bradley, Head of technology and digital said that "NEOM is not about building a smart city, it is about building the first cognitive city, where world-class technology is fuelled with data and intelligence to interact seamlessly with its population".

A closer look at the trends

  • Transformation is ready to mean transformation again

The pandemic created many challenges and uncertainties for businesses across sectors and categories. However, businesses which showcased agility shifted overnight to an almost fully digital world and remained in service while ensuring safety and wellbeing of employees and customers. The Kingdom of Saudi Arabia showcases as a good model for how a nation can wisely handle COVID-19, as it summoned up and kept its ministries highly responsive to the pressing needs of both Saudis and expats home and abroad.

How telecom operators ramped up their businesses to meet the digital needs and demands of their communities has been remarkable.

In the Kingdom, Saudi Telecom Company (STC)1 introduced initiatives to ensure round the clock services during the pandemic. Initiatives such as raising network capacity, for all customers, free Internet and communication services for citizens and residents in quarantine to ensure work and life continuity and more.

The present disruption will continue to influence future trends for digital transformation agendas which focus on business conduct in a resilient and efficient manner.

  • Generational change will change business behaviour

The Z (the first digital natives) and Y generations are rapidly altering expectations of service models across sectors. Communication and Information Technology Commission (CITC) of Saudi Arabia stated that it had provided extra frequencies for operators and employed Emergency and Business Continuity Plans to avoid interruption coupled with periodical and around-the-clock surveillance and diagnostics of telecom network nationwide. 

The finance sector is also a major example where regional players are rapidly adapting to digital expectations of these new generations aiming to result in significant business benefits in the coming years. The pandemic has only expedited this. This is a major example for adaptation to the new digital trend that gained it more reliability and kept it aloof from the adverse results of the pandemic. Earlier this year, the Saudi Central Bank announced the issuance of the ‘Open Bank Policy’2 in the Kingdom. The issuance of the policy builds on the efforts of the Central Bank in diligently pursuing the strategic objectives of the Financial Sector Development Program, underscoring its commitment to promoting innovation, and trust within the sector, re-enforcing competition and raising efficiency.

As a responsible sector, the Saudi banking industry adopted strict testing effort and re-channelled more subsidies to small and medium size enterprises to surface.

  • Resilience-building technology is more important than big bang innovation

Companies have weathered the COVID-19 storm well. Entities like the Ministry of Education3 and other state bodies in Saudi Arabia exerted huge effort to keep the COVID-19 pandemic in check as they quickly arranged for border closures, suspension of social events and group prayers, shutdown of public places such as malls, restaurants, schools and even workplaces. Smart schooling, teleworking and virtual business meetings were among the options highly deployed by the state and business sectors domestically. The logistics sector also had to ensure that supply chains for necessities such as consumables, medicines and most importantly vaccines could meet the ever-increasing demand.

In line with those steps and initiatives taken by companies like DHL, they were quick on their feet to ensure an uninterrupted delivery channel for the end customer. They also played a role in securing stable supply chains for vaccines and medical goods during the COVID-19 crisis. Partnerships and collaborations facilitated by technology proved to be key to smooth and uninterrupted business channels.



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Software AG reimagines integration, sparks business transformation and enables fast innovation on the Internet of Things so you can pioneer differentiating business models. We give you the freedom to connect and integrate any technology from app to edge. We help you free data from silos so it’s shareable, usable and powerful - enabling you to make the best decisions and unlock entirely new possibilities for growth.

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