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A new IBM study of C-suite executives based in the United Arab Emirates (UAE) revealed that nearly five in ten responding organizations have are increasingly prioritizing digital transformation over the next two years due to the COVID-19 pandemic.

According to the study, participating businesses are also seeing more clearly the critical role people play in driving their ongoing transformation. Leaders surveyed called out organizational complexity, inadequate skills and employee burnout as the biggest hurdles to overcome — both today and in the next two years. In the UAE, 76% of the executives surveyed believe they have been helping their employees learn the skills needed to work in a new way and that they are supporting the physical and emotional health of their workforce. However, the study finds a significant disconnect in how effective leaders and employees believe companies have been in addressing these gaps.

The IBM Institute for Business Value (IBV) study “COVID-19 and the Future of Business,” which includes input from more than 3,800 C-suite executives in 20 countries, including the UAE, and 22 industries, shows that executives surveyed are facing a proliferation of initiatives due to the pandemic and having difficulty focusing, but do plan to prioritize internal and operational capabilities such as workforce skills and flexibility – critical areas to address in order to jumpstart progress.

“Over the past eight months, we have seen the UAE utilize the catalytic effect of the COVID-19 pandemic to enact, initiate and plan for digital transformation programs and further develop and accelerate the pace of existing initiatives,” said Hossam Seif El-Din,General Manager, IBM Middle East and Pakistan. “According to the study, businesses today are also more clear than ever about the role people play in their ongoing transformation.Organizational complexity, inadequate skills and employee burnout were identified as some of the biggest hurdles to progress.”

The study reveals three proactive steps that emerging leaders surveyed are taking to survive and thrive.

Improving operational scalability and flexibility

The ongoing disruption of the COVID-19 pandemic has shown how important it can be for businesses to be built for change. Many executives are facing demand fluctuations, new challenges to support employees working remotely and requirements to cut costs.

In addition, the study reveals that the majority of organizations are making permanent changes to their organizational strategy. For instance, 91% of UAE executives surveyed plan to participate in platform-based business models by 2022, and many reported they will increase participation in ecosystems and partner networks.

Executing these new strategies may require a more scalable and flexible IT infrastructure. Executives are already anticipating this: the survey showed UAE respondents plan over a 26 percentage point increase in prioritization of cloud technology in the next two years. What’s more, UAE executives surveyed plan to move more of their business functions to the cloud over the next two years, with customer engagement and marketing being the top two cloudified functions.

Applying AI, automation and other exponential technologies to help make workflows more intelligent

The COVID-19pandemic has disrupted critical workflows and processes at the heart of many organizations’ core operations. Technologies like AI, automation and cybersecurity that could help make workflows more intelligent, responsive and secure are increasing in priority across the board for responding global executives. Over the next two years, the report finds:

• Prioritization of AI technology will increase by 21 percentage points in the UAE
• UAE executives surveyed say that they have plans to increasingly apply automation across business functions
• 83% of UAE executives surveyed plan to prioritize cybersecurity

Leading, engaging and enabling the workforce in new ways

The study showed placing a renewed focus on people may becritical amid the COVID-19 pandemic while many employees are working outside of traditional offices and dealing with heightened personal stress and uncertainty.

OngoingIBV consumer research has shown that the expectations employees have of their employers have shifted amidst the pandemic – employees now expect that their employers will take an active role in supporting their physical and emotional health as well as the skills they need to work in new ways.

To address this gap, IBM recommends executives place deeper focus on their people, putting employees’ end-to-end well-being first. Empathetic leaders who encourage personal accountability and support employees to work in self-directed squads that apply design thinking, Agile principles and DevOps tools and techniques can be beneficial. Organizations should also think about adopting a holistic, multi-modal model of skills development to help employees develop both the behavioral and technical skills required to work in the new normal and foster a culture of continuous learning.