Innovate Or Fail: The Cost Businesses Will Pay For Doing Nothing In An Era Of Accelerated Change Over the past year, enterprises have needed to adapt constantly, as guidance on the COVID-19 crisis and government rules on economic activity have changed.

By Ali El Kontar

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"We didn't do anything wrong, but somehow, we lost."

This is how Nokia CEO Stephen Elop ended his speech on Feb 2016 to announce Microsoft's acquisition of Nokia. Nokia's fall is just one of many that we've witnessed over the last decade. There are definitely several factors that contributed to the inevitable fall, but the fatal and most lethal one is the lack of disruptive innovation.

We've learned that if you don't change, you will be removed from the competition. If you insist to do things the same way and never catch up with time, you will be eliminated. The advantage you had yesterday will be replaced by trends of tomorrow. Even if you do not do anything wrong, you will be behind, lose out, and/or fail.

The spring of 2020 was a watershed moment for business leaders. In the space of just a few weeks, they were forced to cope with unprecedented upheaval, as the COVID-19 pandemic took hold. In a difficult and testing time for the world, we witnessed the beginning of a new kind of enterprise– one that's more agile, secure, resilient, and customer-centric in its approach. These enterprises are more confident about their ability to respond to and navigate changing circumstances.

"We've seen two years of digital transformation in two months," said Microsoft CEO Satya Nadella. Over the past year, enterprises have needed to adapt constantly, as guidance on the COVID-19 crisis and government rules on economic activity have changed. Reading the feedback of 10,000 leaders across enterprises in five countries, recent research by Amazon Web Services (AWS) shows that 94% of business leaders have adjusted their business model since the start of the pandemic, and 56% made a significant change.

Remarkably, these decision-makers accelerated planned digital transformation initiatives by almost two and a half years. As a result, they are now more optimistic about the year ahead, with 89% saying that they expect their revenues to grow on average by 21% over the next year. This is too much of a prize to leave on the table in favor of returning to the old ways of working.

Managing these changes is a challenge for any organization, and according to the research, the way almost all business leaders navigated this successfully was by speeding up their digitization program– in particular, by investing in cloud computing technology.

Related: Accor's MEA CEO Mark Willis On How His Hospitality Brand Handled The Impact Of The COVID-19 Pandemic

Seera, one of the Middle East's leading travel and hospitality businesses took advantage of this quieter period to work with AWS to re-engineer a large part of its internal operations, shift to micro-services, and optimize costs. It also took the opportunity to train and empower its team with the latest technologies to accelerate innovation so that it could be ready when travel resumes.

Emirates Group owns and operates Emirates, the Middle East's largest airline and recent winner of the 2020 Airline of the Year. In a normal year, it boasts of 300 aircraft carrying 56 million passengers. In a sector known for thin margins, maintaining an edge isn't an option- it's a necessity. In 2020, that pressure was even greater after COVID-19 struck.

Emirates Group successfully migrated both its e-commerce and corporate communications platforms to AWS, with the move helping to cut costs dramatically, when demand for services fell sharply because of the pandemic. For Emirates customers, there were noticeable improvements in service. Emirates' Internet Booking Engine now responds far more quickly, and an end-to-end transaction can be completed 12 seconds faster than before. Mobile performance has also improved- search results are returned five seconds faster.

A recent IDC survey shows that 49% of CIOs believe that cloud will drive innovation. Cloud-native technologies, often referred to as native clouds, will enable their organizations to create new products, adopt new business models, and open up new revenue streams.

Adapting to cloud native development will shorten the development cycle, and it will give organizations the leverage of faster time to market, which is a critical metric when it comes to staying ahead of competitors. Adopting to microservices, containers, and event-driven architectures has become way easier and much faster with cloud-democratized technologies.

Internet of things (IoT) and edge innovation is also another driver for cloud adoption. With the 5G rollout and the maturity of IoT frameworks offered by the cloud, more use cases are becoming achievable. Moreover, cloud technologies are enabling organization to adopt data-led innovation through rapid creation and consumption of data, where data analytics is driving new use cases.

An International Data Corporation survey of 130 Chief Innovation Officers in the UAE shows that 60% of respondents believed that the functionality and services required for innovation are only found in cloud offerings. 50% confirmed that another driver for cloud adoption is the cloud-friendly data regulations in their industry, while 44% considered the cloud as an enabler to support the distributed workforce. The survey shows that 50% of respondents were driven by the increased pressure and push from customers, suppliers and technology vendor for faster innovation and agility in information technology.

Amongst the rush of reinvention, there are also warning signs that internal obstacles could hinder future digital transformation. Perhaps due to the speed of change during the pandemic, digital knowledge and employee skills are two such issues: 50% of business decision makers say their organizations still lack an understanding of how to link business problems to technical solutions, while 42% believe a lack of skills will hold them back. Culture represents another challenge, as 47% of decision makers believe employees are resistant to change, while 34% say the C-suite is also resistant to change.

Transformation will not remain a priority beyond the pandemic for all business leaders, and only 50% expect to continue transforming post COVID-19. These enterprises will face pressure on multiple fronts. In many established enterprises, the pandemic has created a new spirit of reinvention, which has accelerated transformation by years, while new entrants –disruptors– were quicker to adopt cloud technologies and have seized the opportunity to take market share. Combined with more demanding customers, those enterprises unable to overcome internal hurdles are left playing catch-up to a market accelerating away from them.

Related: Entrepreneurship, Community, And Confronting The Fear Of Failure

Ali El Kontar

Founder and CEO, Zero&One

Seasoned entrepreneur and cloud technology expert Ali El Kontar is the founder and CEO of Zero&One, a cloud native services provider and native Amazon Web Services (AWS) consulting partner that leads complex technology projects across the Middle East and North Africa. Zero&One helps organizations through their digital transformation journeys by leveraging the cloud’s innovative capabilities to build new revenue streams, reduce costs, increase operational efficiency and agility, and deliver incredible customer experiences and engagement.   

The holder of a MBA from the American University of Beirut and a Bachelor’s in Computer Engineering, Ali has worked both in the MENA region and the USA leading private and public IT projects at major industry names including Orange Business Services and Cisco. Ali, an AWS Instructor Champion, has earned the coveted Amazon Partner Network (APN) Ambassador status, joining an elite, worldwide network as its first MENA representative. As an APN Ambassador, Ali is recognized as a skilled 10x AWS certified expert with a passion for sharing his AWS technical expertise and empowering MENA’s tech communities by conducting regular trainings, facilitating group meet-ups, and the publication of thought leadership materials, best practice guidance, and detailed technical write-ups. 

 

 

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