Companies in Saudi Arabia are moving faster when it comes to adopting cutting-edge technologies compared to their global counterparts, according to new study by KPMG.
About two thirds of respondents in the kingdom said their organisations are either extremely or very effective at using technology to advance their business strategies, the global financial services firm said in the report released at the Leap technology exhibition in Riyadh.
About 80 per cent of enterprises in the kingdom are at an advanced stage of their digital transformation strategies, the KPMG study said.
However, although 41 per cent admit that progress is slower than expected, Riyadh's digital transformation programmes have positioned them well to adopt new technologies, it said.
“Public and private sector organisations in Saudi Arabia have been investing heavily in digital transformation. Inspired by Vision 2030 and government digital transformation initiatives, companies have set their ambitions high,” Robert Ptaszynski, head of digital and innovation at KPMG wrote in the report.
“Aiming to harness technology to outperform their global counterparts, they have been quick to embrace artificial intelligence, data transformation and emerging technologies.”
Saudi Arabia has introduced several projects to promote the use of technology as it prepares for the future economy.
The implementation of digital transformation in the past two years has also positively impacted the bottom line of Saudi companies, the KPMG study showed.
Around 18 per cent of respondents said that their return on investment has increased 11 per cent or more, while 37 per cent saw a rise of between 6 per cent to 10 per cent, and 45 per cent said it was at between 1 per cent and 5 per cent, the report said.
The global digital transformation market is projected to hit about $3.95 trillion by 2030, from about $608 billion last year, growing at a compound annual rate of more than 23 per cent, data from Grand View Research indicates.
Sector-wise, the metaverse is one of the areas Saudi companies are pressing further ahead in comparison to their global peers, with 22 per cent of respondents claiming that they are already implementing the technology, compared to a global average of 10 per cent.
The emerging technology — the virtual space where people represented by avatars can interact — also received a boost this week when Meta Platforms announced that it will be launching the Middle East and North Africa's first metaverse academy in Riyadh.
“Some government organisations and companies in Saudi Arabia have already identified metaverse and Web3 as a new potential channel to deliver services to their customers,” Maz Hussain, head of KPMG's Digital Lighthouse centre of excellence, said in the report.
“However, government departments are naturally being careful to be sure that they pick the right pilot projects.”
In cloud technology, 9 out of 10 Saudi businesses said they are already advanced in their adoption of the technology, the study said.
Positive returns are also being reflected in the adoption of the cloud, particularly when it comes to total cost of ownership (35 per cent) and efficiency gains (33 per cent), it said.
Furthermore, 35 per cent of those surveyed said they are highly satisfied, having fully met or exceeded objectives and realised substantial return on investment.
The technology is expected to further gain traction, especially with Microsoft, Oracle and Huawei announcing billions of dollars worth of cloud investments at Leap.
“Cloud adoption is now considered the logical next step in the playbook of the technology leader; how they advance to substantiate the desired outcomes remains the key strategic imperative,” Adib Kilzie, head of customer experience at KPMG's Cloud and Enterprise Solutions, wrote in the report.
However, the biggest challenge businesses in the kingdom face in their adoption of digital technologies is a lack of talent, KPMG said.
About 41 per cent of respondents said the lack of capable talent to carry out key roles is one of their biggest hurdles, which was broadly in line with the global average.
Major Saudi companies are taking a proactive approach to acquiring talent, investing heavily in programmes to train and develop local talent, the study said.
The government is also lending its support for this endeavour. At Leap, the National Technology Development Programme launched the $78 million Tech Crew, which supports the recruitment of technology employees by offering salary subsidies.
This was part of the NTDP's six new services and a slew of further announcements made at the event to prop up Saudi Arabia's technology ecosystem.
“Top organisations recognise that talent is going to remain one of IT‘s greatest challenges for the foreseeable future and are investing heavily in developing their own talent,” said Fadi Alsheikh, head of KPMG's CIO Advisory and Business Continuity Management, in the report.