Cloud spending a top priority for CEOs in Saudi Arabia

Covid-19 is accelerating digital transformation efforts in Saudi Arabia, with cloud investments taking centre stage. According to a KPMG survey of business leaders, 98% are planning to increase their cloud spend.

KPMG surveyed hundreds of CEOs from some of the largest companies worldwide, many of them based in Saudi Arabia. The goal was to examine the business response to continual and fundamental changes through the Covid-19 journey, and the core strategy appears to be transformation.

“Considering the state of the global economy and how their priorities have changed – in addition to changing consumer behavior – CEOs are accelerating organisational change to meet the demands of an evolving marketplace,” noted KPMG Saudi Arabia chairman Abdullah Al Fozan.

Driving this change is technology. Per the survey, 75% of Saudi businesses have accelerated their digital transformation since the pandemic, while nearly 90% see tech as an opportunity rather than a threat.

The feature story here is cloud spending – due for an increase at 93% of global organisations, and a staggering 98% of Saudi businesses. And this jump will be “very significant” for nearly third of CEOs in the Kingdom, compared to less than 25% globally. Most of the rest will still see significant or moderate increases in cloud spending.

Cloud takes centre stage for several reasons – most notably its role in facilitating a transition to an increasingly prevalent remote working paradigm. Working on the cloud can enable speedy and secure collaboration, even among a dispersed set of professionals. For the rest, cloud is valuable for its cost and efficiency benefits – core priorities among crisis-hit businesses.

Accelerating transformation

That said, cloud is not the only tech transformation underway. Other digital tools such as artificial intelligence, machine learning, robotic process automation and 5G are all drawing more business funds – both in Saudi Arabia and around the world.

The fact is that digitalisation is not only a key to survival amid the crisis, but a crucial ticket to resilience in the post-pandemic world. Applications for remote working and efficiency aside, digital offerings have also taken a near monopolistic position in the consumer engagement space.

Take banking for instance. CEO of National Commercial Bank Faisal Alsaggaf – among the leaders surveyed by KPMG – reports a near 35% jump in the number of online banking users. In short, an already vibrant FinTech landscape has been turbocharged by the closure of physical branches.

Then there is the e-commerce revolution. Equally eye-catching from Alsaggaf’s observations is a 200% plus jump in the number of online purchases since the spread of Covid-19 – a response to lockdown and infection risks at public market stores.

So business for most organisations has moved online during the crisis. If and when the pandemic does blow over, consumers will likely still favour digital avenues, while the still relevant brick & mortar world will become a facilitator of the omnichannel experience.

The red line across all these factors is advanced technology, which explains the rapid climb of digital transformation up the corporate agenda.