Pay-as-you-go model cuts upfront costs



There was a lot of hype about digital transformation in the UAE last year as consumers became more digitised with digital payments reaching record adoption rates.

The hype will continue this year. Online searches for “digital transformation” have grown four-fold in the past two years and more technology companies are capitalising on this interest. Here are five reasons why your company should be prioritising its own digital transformation:

1. To meet customer expectations

The rise of marketplace platforms such as Alibaba, Careem or Airbnb have set a very high bar for customer-facing businesses to deliver an instantaneous and smooth experience to customers. Digital transformation can have a positive effect on your business, widening the reach of the information you share in terms of volume, customisation and interactivity. In a study by Bain & Company, the trade-off between scale and intimacy to the customer is no longer viable. Giants such as Starbucks are investing in superior mobile experiences, personalisation and value based on loyalty insights to bring them closer to their customer. A quick scan of the market shows that technology-orientated companies are steadily eating market share away from incumbents across all industries. The likes of WhatsApp and Skype, for example, have shaved off more than US$385 billion in revenue from big telcos around the world, according to the Indian School of Business lecturers.

2. It’s a great marketing tool

Customers expect businesses to invest and advertise in innovation to bring them more convenient solutions. Emirates NBD, a regional pioneer, has launched its Future Lab platform to provide customers with innovative banking products and services through a range of channels. Another is Dubai Electricity and Water Authority (Dewa), which has also implemented a robust digital transformation. It aims to install one million smart meters across Dubai by 2020 (of which 200,000 have already been installed). It means customers are served quicker and more efficiently and satisfaction improves.

3. No more constraints

Digital transformation allows businesses to transform into cloud-based enterprises, which rids them of resource constraints and reduces their capital expenditure in technology. Across the value chain of computing, business is choosing to adopt a pay-as-you-go model rather than an upfront cost model. The days of maintaining a server room in the company headquarters or buying hardware like computers or smartphones are long gone; even telcos such as the UAE’s du provide office devices on a monthly lease basis. Similarly, Alibaba Cloud, through its UAE data centre, allows businesses to migrate computing workloads to the cloud without any upfront fees. Service-orientated or digital goods businesses can benefit from the upwards and downwards scalability of the cloud to minimise their expenses. This creates a fluid manner of billing that moves with the company’s needs.

4. The value of data

Many industries understand the value of the data they acquire about their customers or internal processes. The reasons are simple. Firstly, data is becoming a profit centre rather than a cost centre: for example, the Starbucks app in the US enables the company to serve more customers through pre-ordering and store pickup, gather more data through their loyalty programme and promote new products to select customers based on their purchasing habits. Secondly, data provides facts rather than opinions; businesses can now optimise their product portfolio and investments by tapping into instantaneous information. For example, Alipay – the leading mobile wallet in China – lets users receive instant microloans through the app with no human intervention or approvals based purely on big data analytics of their previous transactions.

5. Lower costs and instant upgradability

Digital transformation allows businesses to reduce their operational costs over the long term. By migrating to the cloud, funds allocated for technology capital expenditure can then be diverted to other needs and changes can be made instantaneously.

Amir Atiatalla is the strategy manager for the cloud computing, managed services and digital transformation company Yvolv, a JV Company by Alibaba Cloud and Meraas.

business@thenational.ae

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Dates for the diary

To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:

  • September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
  • October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
  • October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
  • November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
  • December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
  • February 2, 2018 Bodytree will host its 4th annual yoga market.
Score

New Zealand 266 for 9 in 50 overs
Pakistan 219 all out in 47.2 overs 

New Zealand win by 47 runs

New Zealand lead three-match ODI series 1-0

Next match: Zayed Cricket Stadium, Abu Dhabi, Friday

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Inside Out 2

Director: Kelsey Mann

Starring: Amy Poehler, Maya Hawke, Ayo Edebiri

Rating: 4.5/5

UAE currency: the story behind the money in your pockets
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi

Yadoo’s House Restaurant+& Cafe

For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.

Golden Dallah

For the cappuccino, luqaimat and aseeda.

Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Salah in numbers

€39 million: Liverpool agreed a fee, including add-ons, in the region of 39m (nearly Dh176m) to sign Salah from Roma last year. The exchange rate at the time meant that cost the Reds £34.3m - a bargain given his performances since.

13: The 25-year-old player was not a complete stranger to the Premier League when he arrived at Liverpool this summer. However, during his previous stint at Chelsea, he made just 13 Premier League appearances, seven of which were off the bench, and scored only twice.

57: It was in the 57th minute of his Liverpool bow when Salah opened his account for the Reds in the 3-3 draw with Watford back in August. The Egyptian prodded the ball over the line from close range after latching onto Roberto Firmino's attempted lob.

7: Salah's best scoring streak of the season occurred between an FA Cup tie against West Brom on January 27 and a Premier League win over Newcastle on March 3. He scored for seven games running in all competitions and struck twice against Tottenham.

3: This season Salah became the first player in Premier League history to win the player of the month award three times during a term. He was voted as the division's best player in November, February and March.

40: Salah joined Roger Hunt and Ian Rush as the only players in Liverpool's history to have scored 40 times in a single season when he headed home against Bournemouth at Anfield earlier this month.

30: The goal against Bournemouth ensured the Egyptian achieved another milestone in becoming the first African player to score 30 times across one Premier League campaign.

8: As well as his fine form in England, Salah has also scored eight times in the tournament phase of this season's Champions League. Only Real Madrid's Cristiano Ronaldo, with 15 to his credit, has found the net more often in the group stages and knockout rounds of Europe's premier club competition.

The five pillars of Islam