Why GCC enterprises must modernise before AI adoption

The GCC region makes for an exciting case study for artificial intelligence (AI). Not only was the UAE the first nation to establish an AI ministry, but every Gulf country now has a formal AI vision.

Oman has the AI Economies Initiative, Kuwait has the National AI Strategy, Bahrain has the Ethical AI Framework, Qatar has the National AI Strategy, Saudi Arabia has the National Strategy for Data & AI, and the UAE has the National Strategy for Artificial Intelligence.

The AI game is on and everyone in the region has an unwavering eye on the ball.

AI and GCC economies

McKinsey research from 2023 predicted “real value” from artificial intelligence, which may add as much as $150bn (or 9 per cent of combined GDP) to GCC economies. It is worth mentioning that, in May last year when the McKinsey report was published, generative AI (GenAI) was relatively new in the non-tech consciousness. And yet, McKinsey’s researchers still recognised GenAI’s potential to force an upward revision of their impact projection.

One might call the rise of AI nothing less than a “Digital Shift”. The digital transformation must now include AI for the business to remain competitive. But for organisations to get the most out of it they must plumb the depths of value on offer from AI and wring every ounce of value from it. They cannot do this by slapping AI on top of legacy infrastructure like a hot pitch on a leaky boat.

Harnessing AI to its fullest has a prerequisite — the revamp of the IT suite from top to bottom. This enterprise modernisation cannot be undertaken alone. Organisations, their vendors, and all the trusted partners must work shoulder-to-shoulder to build the future.

The road to that future is a de-risked, cost-controlled, accurate, end-to-end system transformation, supported by automated, data-driven decision-making and execution.

Rockets and moonshots

Let’s return to the leaky boat. Patched with AI, legacy infrastructure may remain afloat, but will never be able to take flight. That is because, at its core, the boat is still a boat. To turn it into a rocket ship requires a rethink and a fundamental rebuild, from the bottom up. The rocket will be faster, and more manoeuvrable — able to keep pace with the sprinting technology landscape — but only if it is built with a long-term business strategy in mind.

The GCC is home to many dynamic markets and is part of a global digital economy that is prone to shocks, fluctuating customer demands, and emerging technologies. All this means that you must first step back from the rocket you want, and look at the boat you have.

Often, legacy systems do not capture data in straightforward, homogenised ways. As enterprise modernisation progresses, the organisation will remedy this and introduce new system architectures that make way for rapid deployment of digital experiences. Workflows and business logic will be exposed to new analyses that allow them to be quantifiably critiqued and optimised. You will note that AI has not been mentioned yet because we are still preparing its nest, feathered with up-to-date core systems, rapid-deployment capabilities, and clean data.

Great change is guaranteed to scare. Many see structural overhauls as moonshots with no guaranteed landing. Risk immobilises decision-makers. They ask: “What of the impact on our commercial standing and brand reputation if we fail?”

They declare: “The risk of interrupted service is unacceptable.”

These are understandable concerns and yet competitiveness will suffer if the enterprise does not modernise before introducing AI. Agile newcomers have the opportunity to be modern because their first systems can be what they need them to be. Incumbents can be left behind if they do not face up to this.

Taking flight

Fortunately, change need not be the dark spectre it is perceived to be. Today, organisations have access to data-driven approaches guided by the expertise of partners who know enterprise modernisation starts with identifying the main building blocks for success. We have already mentioned these steps — clean data, composable architectures, and business intelligence about workflows and business logic.

Once transparency and flexibility are in place, the enterprise can derisk the transformation process because of improved system clarity and efficiency. Roadmaps can help by laying out phased projects — cloud migration first, then a rejigging of application architecture, and so on. And finally, AI.

It may seem like a convoluted route, but the AI-less steps on the journey to AI implementation are critical. The rocket has now been built. And AI? AI is the fuel. Many companies desperately want to join the AI race. But trying to catch rockets in boats is impractical. Returning to the basics of one’s architecture and being critical about what you see is what will make the difference in the race. Do you make that moonshot? Do you land in your preferred spot? Many do not. Even organisations that gain some air from AI cannot maintain altitude because of the absence of fundamentals like clean data and agile infrastructure.

And yet, many will continue to introduce AI into an inhospitable tech stack. Perhaps they were put off by enterprise modernisation because it was not the end goal they had in mind.

It can be daunting to be told you must complete an initial journey before you can embark upon the one that interests you. Especially when you perceive the first journey to be both less interesting, and fraught with danger. But as we have seen, enterprise modernisation can, with proper planning, be risk-light. When it is complete, the next phase of digital transformation can commence, and you can start to thrive amid the digital shift.

With clean data access and robust system interconnectivity, AI can finally do what you imagined it could.

The writer is the managing director – MENA, Endava.