Digital Essay 2019: Digital Transformation: Why the region is struggling to change, by Saadeddine Nahas, Initiative

By Saadeddine Nahas, Regional director, Initiative

Digital transformation is the latest buzz phrase in this region. We get quick-to-digest newsletters on a daily basis with “digital transformation” plastered all over in big fonts. Every corporate meeting at a certain level features a discussion on transformation. And it’s been the key theme at most marketing and media conferences this year.

Yet since the “digital transformation” concept came to prominence in 2011, and until today, the MENA market continues to lag well behind. Before considering the challenges and obstacles in the region relating to digital transformation, it’s worth defining what it actually is. It is a customercentric approach, where brands use tech and data to deliver a better product and customer experience.
It is not a time-bound project and it does not have an end date. It is neither a new website nor an app. It is a corporate attitude embracing change, with customers at the centre of all decisions.

So what about those customers? Today, they are more advanced than the brands themselves, and the gap between what they want and what the brands are offering is growing wider as this predominantly young population in the region enters the workforce. Their resulting higher disposable income fuels a technology-driven expectation of seamless personalised experiences.

In short, millennials and Gen Zs are looking for convenience above all else, and this is particularly prevalent in their growing shopping activity through social platforms and apps. Contactless and mobile payments are simply the latest evidence of this trend.

Therefore, if the audience is moving so fast, what is holding the brands back?
• A low sense of urgency for a start. The necessity for rapid transformation is often measured by comparing your brand to your competition. If you are being chased by a bear, you don’t need to outrun the bear, just the person running with you. Today, since everyone is late, no one is in a hurry.
• Digital transformation in this market is driven by the tech giants offering product solutions to individual departments – who are sometimes quick to invest without clear alignment throughout the organisation on the why of the investment, or before reviewing the readiness of corporate processes and structures for change.
• The economic slowdown is also negatively affecting transformation progress. Change in order to achieve long-term big gains. As a result of the financial pressures, most senior executives today are looking for short-term wins over long-term growth.
• Talent and resources: Most digital teams are running at full capacity with very little time to allocate to the digital transformation process that should run in parallel with their day-to-day tasks and requires extensive work. Digital talent is expensive and many brands and agency partners today do not have the required talent in-house. Growing that talent or recruiting from outside is an essential element for the success of the transformation.

Finally, agencies are a central part of the transformation yet they face challenges of their own. Given the times we are in, all agencies are striving towards cutting the fat and having more lean teams. Traditional remuneration models are based on retainer or commission for media or creative services. These structures need to be revisited to support the talent that can work with clients to drive the transformation and implementation for the brands – be that temporarily or permanently filling gaps within the client and agency team structures. Clients need to reconsider their agency remuneration models to account for the cost of this talent.

Today, media agencies are in a privileged position to be the primary partners to drive transformation. They have a strong understanding of the brand’s audiences, they deploy the brand’s communication budgets, they have access to a wealth of data (including client data that can be kept secure with proper processes in place, considering different levels of sensitivity), and are positioned between client-owned assets, creative and media communication.

It’s therefore imperative that clients revisit their partnerships to break silos and extend relationships to measure success on true transformation KPIs relevant to the individual organisational objectives. Only then will we truly realise the benefits of real transformation.