The dual shock of the COVID-19 crisis and lower oil prices is forcing many governments and companies in the GCC to digitize their operations despite growing pressure on costs. Information and communications technology (ICT) providers are ideally placed to help these organizations secure effective and value for money solutions to this dilemma. To capture this opportunity, they must urgently develop plans incorporating new product development, marketing and operations.
The sudden economic decline will inevitably lead to severe financial restraints throughout the economy, and will affect expenditure on information technology (IT). All sectors, save health and education, will likely reduce IT spending. Cutbacks in the transport sector, for example, may even reach 10% according to IDC.
Despite the necessity for savings, the organizational world has had to make radical changes in the way it operates due to constraints on personal movement and face-to-face contact. Another problem is that the digital market on which it now depends is underdeveloped in the GCC. Technology infrastructure and business regulations have not assisted the development of digital platforms in the region. For example, digital finance is barely present in the region, which lags East Africa in the level of digital payments.
We are entering a critical period. Measures taken in the digital field in the next 12 to 18 months will determine whether businesses can succeed in the new environment. Companies that build the right digital capabilities can survive and prosper.
ICT service providers in the GCC are best placed to support companies and governments during this critical phase. Most of them already have solid relationships with government entities due to their support on recent digital transformations. They have access to talent through contracts with third-party providers, and they specialize in products and services that are now especially relevant. ICT service providers must therefore act in four areas.
- 1. Implement a response plan across the lines of business
- 2. Shape product offerings to support urgent ICT needs
- 3. Overhaul traditional sales approaches
- 4. Step up business agility and operational readiness
1. Implement a response plan across the lines of business
ICT service providers must move swiftly to implement their action plans and seize the opportunity. The main goals should be protecting and revitalizing their core business, alleviating any disruption in their own business, and then developing a strategy to excel once stability has returned.
Plans need to include product development, sales and marketing, and operations. A COVID-19 response taskforce is critical for facilitating the exchange of information, accelerating decision making, and ensuring a consistent approach.
2. Shape product offerings to support urgent ICT needs
With respect to products, ICT service providers need to bolster their analytics and research capabilities to keep pace with rapidly changing demand. In the very short term, products should focus on societal support and urgent ICT needs, such as cyber security and applications to assist government responses to the crisis. New solutions, relating for example to enable remote offices or the digital supply chain, can be repackaged as easily installed versions to help troubled companies.
One pertinent, immediate offering is a remote “task-force-as-a-service.” Through this offering, ICT service providers can put their development and operations teams to good use in helping companies manage their burgeoning reliance on technology while reducing IT costs.
Beyond assisting clients with short-term challenges, ICT service providers need to develop sector-specific solutions to help them succeed in the new environment. They can generate this innovation through exchanging ideas with clients, seeking partnerships with technology and telecom companies, and redirecting resources away from their current major projects.
3. Overhaul traditional sales approaches
To protect the core business, ICT service providers should immediately overhaul traditional sales approaches. They need to train their sales representatives in consultative selling, which involves helping the client understand their technology problems, not just selling technology solutions. They may also need to redeploy these sales representatives. There should be bold moves to retain troubled flagship customers. Potential measures to reduce their IT costs include innovative payment terms and mid-term rebates, offering additional services within existing contracts, and outcome-based fees. It is essential to use detailed projection of ICT demand to support effective sales pipeline management.
Marketing should make better use of digital channels, while focusing on the urgent ICT needs of distressed sectors. In particular, they can organize competitions, hackathons, that crack problems for use cases. These competitions can be done privately with clients or publicly. Marketing can publicize these hackathons digitally through campaigns as they highlight how ICT providers are seeking to help society during the pandemic.
4. Step up business agility and operational readiness
On the operations side, ICT service providers should use resources effectively, closely managing finances through real-time cash monitoring. They have been pioneers in agile workforce management, and now need to implement further flexible work arrangements internally and with contractors. Contractual agreements, such as shared risk-reward models and arrangements with experts to help with industry-specific solutions, will need to reflect uncertain demand.
ICT service providers should accelerate investment in emerging technologies, automation, and big data capabilities to serve clients more effectively. Technological readiness is critical. Elements of key infrastructure should be expanded early on. Operations teams should also be reorganized to serve urgent needs properly.
With these plans for product development, marketing and operations in place, ICT service providers can emerge stronger from this crisis.
About the authors
Jad Hajj is a partner and Hani Zein is a principal, with Strategy& Middle East, part of the PwC network.
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