The road ahead: AI, analytics and automation trends for agility and resilience
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The road ahead: AI, analytics and automation trends for agility and resilience

The road ahead: AI, analytics and automation trends for agility and resilience

Businesses can leverage AI and automation to streamline their operations, reduce costs, improve efficiency and unlock new revenue streams

Gulf Business

Operational excellence is a necessary imperative for organisations to gain a deeper understanding of their customers and to build a resilient organisation that can weather future disruptions.

By gaining a holistic understanding of their customers, organisations can tailor their products and services to meet 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 be better prepared for any future challenges that may arise.

Businesses can leverage AI and automation to streamline their operations, reduce costs, improve efficiency and unlock new revenue streams by harnessing data insights to identify new market opportunities, all critical factors for staying competitive in today’s fast-paced business environment.

Companies across the Middle East are adopting AI, intelligent automation and actionable insights derived from the analysis of organisational data.

Spending on AI in the Middle East and Africa (MEA) will reach $3.0bn in 2023, according to the latest Worldwide Artificial Intelligence Spending Guide from International Data Corporation (IDC).

While this will account for just 2 per cent of the global total for 2023 ($151.4bn), the region will see the fastest growth rate worldwide over the coming years, with IDC forecasting that AI spending in MEA will increase at a compound annual growth rate (CAGR) of 28 per cent over the 2021–2026 period, reaching $6.4bn in 2026.

In the digital age, the use of these technologies is expected to increase significantly as companies enhance customer experience by making data-driven decisions.

Multiple healthcare organisations in the Middle East have embraced AI-enabled robotic process automation (RPA) to expedite the medical insurance claim process. In recent years, AI, RPA, and big data have been widely adopted, particularly in trade (retail and wholesale), shipping and logistics, travel, and transportation.

Banking, retail and federal/central government will be the MEA region’s biggest spenders on AI in 2023, followed by discrete manufacturing. Together, these four industries will account for nearly half (44 per cent) of the region’s total AI spending in 2023. However, IDC expects professional services and transportation to be the fastest-growing industries over the five-year forecast periods, with respective CAGRs of 36.4 per cent and 33.9 per cent.

Technology companies and their business partners are focusing their business development efforts on expanding markets, such as the Middle East and Africa.

ServiceNow has expanded its market presence in the UAE and Saudi Arabia, while Salesforce has opened an office in the UAE. A significant number of additional SaaS vendors have decided to establish a presence in the Middle East region.

In the UAE and Saudi Arabia, many AI startups utilising conversational AI, machine learning, and other AI technologies have emerged with expansion plans in these markets.

As organisations in the Middle East prioritise their IT spending on key digital initiatives such as customer excellence, operational excellence, and deliberate innovation, it is anticipated that spending on AI, RPA, and big data will continue to rise over the next four to five years.

Key spending areas and forecasts

Key areas of expenditure include customer excellence – the process of driving a transformation in the customer experience through activities such as customer journey analysis, customer listening, sales and marketing campaign management, sentiment analysis, and analysis of customer transaction behavior.

Secondly, driving improvements in operational efficiency, process reengineering, and financial operations initiatives as part of investments committed to operational excellence.

Thirdly, budgets allocated to innovation include the development of new business models, the conception of new products and services, the launch of new business process initiatives, the expansion of ecosystem partnership opportunities, and the introduction of new revenue streams.

In terms of expenditure, below are our top predictions for AI and automation in 2023:

  1. The cloud-based deployment of AI, RPA and Big Data will grow over 20 per cent between 2022 and 2026 as compared to the non-cloud deployment of these technologies.
  2.  Use-cases of AI such as augmented customer service agents, sales process recommendation, IT process automation, and fraud analysis and investigation are expected to get even more popular.
  3. RPA’s adoption in the IT and certain isolated task automation is seen to be maturing across industries and gradually moving from task automation to process automation but RPA adoption is still a blue ocean.
  4. IDC expects the spending on RPA to be over 20 per cent on the next four to five years.
  5. Big data and analytics spending on cloud-based deployments is also expected to grow around 21 per cent between 2022 and 2026 in the Middle East.

Facilitators and deterrents for AI adoption

In terms of facilitators, the UAE, Saudi Arabia, Qatar and Kuwait have ambitious digital transformation plans. AI, big data and cloud can support the digital economy the leadership wants to create. These nations must digitalise to diversify away from oil revenues and create predictable revenue streams from digital products and services. The digital pillars of these countries’ national visions inspire organisations to adopt these technologies and transform more rapidly.

Technology vendors and their partners are helping businesses accelerate digital transformation by establishing Innovation Hubs, Garages, Centers of Excellence, Cloud regions, and other strategic investments in the region.

Most hyperscalers and technology vendors already have a presence in the UAE. Microsoft and Google have established operations in Saudi Arabia and Qatar. Oracle operates in Saudi Arabia and the UAE. In-country cloud data centres accelerate cloud-hosted AI, RPA and big data platforms.

In terms of deterrents, talent mismatch or limited availability of tech talent is increasingly becoming a major concern for the organisations in the Middle East region to drive their digital initiatives.

Additionally, the ‘Pause AI’ conversation that has recently emerged is mainly due to the dangerously significant acceleration of the capabilities of AI, especially generative AI that can cause harm to the society and raise ethical questions.

Developments like deep fake, plagiarism and AI voice recreation can be extremely dangerous to the social harmony. It is necessary to ensure that the use of AI technologies is ethical, transparent, and accountable, while minimising potential risks such as bias and privacy violations. Hence, establishing policies and regulations to develop and use AI responsibly must be discussed before these technologies become mainstream. It is crucial to establish regulatory frameworks that balance innovation with responsible AI practices.

Harish Dunakhe is the senior research director – Software and Cloud (META) at IDC

Read: Google to revamp search with generative AI tools

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