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The Importance Of Digitalization For SMEs In The UAE Do not be resistant to the new normal. Digitally empower yourself, and your business will perfectly fall into alignment.

By Mouza Obaid Al Nasri

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Traditionally, there have been standardized methods and specific processes that one has to take when starting their own business and entering the world of enterprise. You need a business concept that has demand and a gap in the market for said demand, you need expert knowledge of your concept, you need capital to start and cover your liabilities, you need to understand your marketing plan, you need to be aware of barriers to entry in the sector, and you need a strong sales strategy.

These are basic principles that will be taught by business schools and repeated by famous entrepreneurs in their seminars. These principles are the foundation that SMEs and multinational corporations alike are built upon. However, now there's an additional element that's increasingly recognized as an essential part of establishing a business: digitalization.

When we consider digital practices in business, we cannot simply summarize them by saying it's just "social media marketing," or merely having a website. Digital aspects to business have grown exponentially. What was once deemed as a secondary priority has now evolved into a leading tool for enterprise.

To survive, maintain, and expand, one must utilize every aspect of digital practice. This includes e-commerce, social media, search engine optimization, data analytics, operating business logistics, application services, budgeting, and now more than ever in the era of digital conferencing, meetings.

But what is the rationale behind the imperative need for SMEs to digitalize?

Firstly, in the entrepreneurial world of today, a strong product or effective service alone is simply not enough. A study by the Association of Small and Medium Enterprises and Microsoft Singapore found that due to various positive implications of digitalization, those SMEs that fully embraced the digital transformation were expected to increase their revenue by a staggering 26% and save an average of 22% in costs.

By comparison in the UAE, a study by market intelligence and advisory firm IDC found that 90% of companies in the region are still in the process of evaluating how to digitalize, or are just now beginning to make their first steps. Meanwhile, 5% were currently innovating their operations, and the remaining 5% showed resistance to the concept of digital transformation.

However, SMEs in the region should take confidence in the historical success of UAE businesses that made digital technology an integral part of their business and found monumental success.

Careem, InstaShop,, and Talabat, to name a few, are prime examples of organizations that built their entire business model around the idea of being a digital-oriented company. The blueprint for success in the UAE has been developed; therefore, in 2020, there is no place for resistance against digital transformation.

Although marketing and overall logistics are a huge factor in the need to embrace digital, a primary cause for the urgent need to embrace digitalization lies in the exponential growth of the e-commerce sector.

Related: Winning The E-Commerce Battle In The Post COVID-19 Era

E-commerce has consistently been one of the largest growing sectors for the past decade, and with the unforeseen circumstances presented by COVID-19, it continues to grow exponentially. Consumers that previously disregarded online shopping have been forced into becoming accustomed to it, and now there's no turning back. SMEs need to be prepared to digitize in all forms, but the capacity to drive sales through e-commerce is possibly the single most important aspect of the digital transformation.

With regards to this, the UAE government has provided tremendous support for SMEs impacted by COVID-19, which has resulted in tremendous outcomes for the companies who were able to adapt with their flexible business models.

We at Khalifa Fund have aligned themselves with the UAE government's notion of supporting business by ensuring that SMEs are equipped with the knowledge and resources they need to be fully functioning during this period, and ones to come.

Due to the aforementioned impacts of COVID-19, and the belief that all SMEs should go through a digital transformation, in September 2020, Khalifa Fund launched e-Empower, an initiative that aims to support and develop Abu Dhabi-based small and medium-sized enterprises and entrepreneurs by providing interactive e-learning content that will help small businesses thrive in the digital economy, as well as special benefits with Amazon and, created and reserved specifically for entrepreneurs registered for e-Empower. Being part of e-Empower also grants entrepreneurs with tools and insights into how they can expand their businesses to reach millions of customers on the aforementioned market-leading e-commerce platforms.

Through e-Empower, we aim to allow a smooth transition into the digital-era for all Abu Dhabi SMEs. I'd urge all SMEs to embrace digitization and begin the process as soon as possible.

This may seem overwhelming to some entrepreneurs and perhaps out of their comfort zone. However, it is entirely possible and only requires a three-tiered checklist of: engaging customers, optimizing business logistics, and last but certainly not least, empowering the company from within by enabling your employees with digital technology.

With regards to this three-tiered checklist, the concept of engaging customers is rooted in social media marketing, but doesn't end there. The outcome of customer engagement is data, which is undeniably powerful. Data generates insights for you to analyze, which in turn gives you an understanding of who to target, where to place communications, the interests of your audience and so forth. The information you obtain can be translated into valuable insights. That is the precise reason behind the largest organizations in the world farming, buying, and collecting data. Don't underestimate the importance of consumer data!

With regards to the second point, optimizing logistics, there are a wide abundance of digital services available to businesses. Traditionally, cloud services, online work platforms, and internal and external communication software was accessible to large organizations that could finance an IT department. Those days are long gone, and thanks to the various creations of digital software, SMEs can thrive in a digital sphere.

Moving onto the third point of empowering employees for internal gains, it's entirely possible to actively reduce the workload and increase productivity through the means of digitization. In conjunction with the aforementioned optimization of logistics, digital software is available to support companies with tasks that no longer require tedious physical or manual input. The adoption of technology will continue to revolutionize the entire SME sector and empower entrepreneurs to achieve greater success, and thus contribute to the expansion of the global economies.

As both a leader and a dedicated member of the SME community, I encourage all SMEs to adopt a business strategy which embraces digital best practice. 2020 has been a testing time for SMEs all around the world. The pandemic has caused an immediate need to adopt digital elements, of which some organizations have not had the opportunity to understand and fully optimize them.

As we enter the Fourth Industrial Revolution and witness international barriers be broken down in the way we work, the way we communicate and now, the way we purchase through e-commerce, it's thoroughly imperative that SMEs understand the technologies that will aid them in a more globalized world economy.

Do not be resistant to the new normal. Digitally empower yourself, and your business will perfectly fall into alignment.

Related: Entrepreneur Middle East Hosts Round Table, Presented By Du, On Accelerating Digital Transformation

Mouza Obaid Al Nasri

Acting CEO, Khalifa Fund for Enterprise Development (KFED)

Mrs. Mouza Al Nasri is the Acting CEO of Khalifa Fund for Enterprise Development (KFED), Abu Dhabi, a government entity established in 2007 to foster entrepreneurship and develop thriving and competitive SMEs in the UAE. Prior to becoming the Acting CEO, she has been heading the core functional departments at KFED.

Mrs. Mouza has been an active member in the growth and success of Khalifa Fund. She has been involved in planning and spreading the awareness of entrepreneurship culture in the country, developing strategies and initiatives to foster entrepreneurship, setting up processes and support structures for entrepreneurs and SMEs.

Mrs. Mouza is a board member of Sougha Establishment, a social enterprise fully owned by KFED aimed at creating market links that improve the sustainability of Emirati micro-businesses, the preservation of heritage, and socio-economic development in opportunity-scarce regions of the UAE. Mrs. Mouza is also a board member at the Khalifa Innovation Center, an incubator that focuses on promoting innovative projects. In addition, she is a board member in the UAE Franchise Development Association.  

Mrs. Mouza graduated with a Bachelor’s degree specializing in Management Information Science from the Business College, Zayed University. In addition, she has an Executive MBA degree from the Zayed University.

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