Transformation offices play key role in helping companies

Sameer Saleh, Transformation Management Unit Lead Partner at PwC Middle East, speaks to Economy Middle East about why companies should set up transformation offices, how they can identify verticals that need transformation and the role decision-makers play in ensuring the transformation is embraced within the organization.

Which industries are seeing the maximum adoption of transformation offices to deliver value and sustained outcomes to clients?

According to our research, top-tier Transformation Offices (TOs) that are driving significant contributions to their organizations’ success and competitiveness are found in various industries.

The data of our survey showed that there was no significant variance to suggest that a particular industry was more likely to be producing top-performing transformation management offices. But leaders in industries such as technology, construction and financial services are among the top-tier TOs.

This indicates that these industries have seen significant adoption of TOs to deliver value and sustained outcomes to clients. However, it’s important to note that our research did not provide a comprehensive list of industries. The adoption of TOs may vary across different sectors.

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It is also crucial to highlight that, based on our experience in the government sector, we have seen many examples of highly successful adoption across governmental entities that are delivering towards their ambitious 2030 transformation mandates in Saudi Arabia. In our published report, we have chosen a specific example in Saudi Esports Federation. As a relatively new entity, they have managed to bring substantial value to their community.

It’s important to note that while these industries were covered in our research, the adoption of TOs is not limited to them. TOs can be found in various other sectors such as healthcare, manufacturing, retail, and more. Seventy-right percent of respondents from the financial services sector reported having established TOs as a strong commitment to driving organizational change and delivering value to clients. The adoption of TOs depends on the specific needs, priorities, and transformation initiatives of individual organisations within each industry.

What could be the major factors preventing companies from adopting this new model?

According to the latest ‘Transformation and Project Management Survey’, there are several key factors that hamper the adoption of this model, particularly within the context of Saudi Arabia’s Vision 2030.

Some of the important factors are:

• Proper communication of value in the organization that will ensure a consistent understanding of what value means across the business. Companies may be unaware of the benefits and value that TOs could bring. Lack of awareness can hinder the adoption of this new model.
• The ability to adapt to a value-based delivery approach which requires a cultural shift to outcome-based ways of working. Employees and stakeholders might resist change due to fear of the unknown, concerns about job security, or discomfort with new ways of working. Resistance to change can be a significant barrier to adopting the TO model. The survey shows that 65 percent of local respondents found organizational culture concerns as a hindrance to transformation. This data represents the challenge of aligning traditional values with the demands of a rapidly evolving business landscape.
• Without strong leadership support, the adoption of a new model like TOs can face obstacles. If executives and senior management are not fully committed to the idea or fail to provide the necessary guidance and resources, it can hinder the adoption of the TO model. Seventy-two percent of respondents believe talent shortages are a key barrier to transformation. This finding emphasizes the urgent need for investment in education and training programs to equip the local workforce with the skills needed to drive innovation and technological adoption

While Vision 2030 presents a proactive change for the future of Saudi Arabia’s economy, companies may face challenges in fully embracing the Kingdom’s new business model. These could be cultural, infrastructural, skills-related or economic factors. In order to address these concerns, companies will be required to provide training and education and demonstrate successful case studies to help organizations overcome resistance and embrace the TO model.

How does one identify the verticals within a company that would need transformation?

Identifying the verticals within a company that would benefit from transformation requires a systematic approach and a deep understanding of the organization’s operations, goals, and pain points. Here are some steps to help in the identification process:

• Assess current performance: Evaluate the overall performance of the company and identify areas that are underperforming or facing challenges. In our published report, we have followed a number of indicators to support us in identifying the top-tier organizations e.g. revenue, alignment with ESG, customer satisfaction, etc.
• Engage stakeholders: Involve key stakeholders, including department heads, managers and employees, in the identification process. Seek their insights and perspectives on areas that require improvement or transformation.
• Prioritise impact and feasibility: Prioritise the identified areas based on their potential impact on the organization. Also consider the feasibility of implementing transformation initiatives. Consider factors such as the potential for cost savings, revenue growth, customer experience enhancement, or strategic alignment.
• Seek expertise: If needed, consult external experts or consultants who specialise in business transformation or process improvement. Their expertise and experience can provide valuable insights and help identify the verticals that would benefit most from transformation.

Remember that the identification of verticals for transformation is not a one-time process. It should be an ongoing effort, continuously reassessed based on evolving business needs, market conditions, and strategic priorities.

Is it possible to train staff to embrace and implement transformation strategies? Or is staff replaced to some extent to get new ideas on board?

The survey findings show that 68 percent of respondents from the MENA region find that upskilling their workforce is essential for delivering successful transformation outcomes.

Training staff to embrace and implement transformation strategies is crucial for the success of any transformation initiative. To maximise the impact of training it needs to be regularly assessed and adapted. Among top-tier TOs, the most effective ways to upskill and enhance employees’ understanding and implementation of value-based approaches are adapting training to the specific needs and context of the organization/project team, on-the-job coaching/mentoring, and carrying out regular skills assessments and identifying areas of improvement.

By investing in the right training programs and fostering a culture of continuous learning and development, organizations can empower their workforce to adapt to new challenges, obtain new opportunities, and contribute to the achievement of strategic objectives in alignment with Saudi  Vision 2030.

How much of a role does AI play in this transformation?

The Kingdom has identified AI as a key enabler in its economic diversification strategy. Initiatives such as the National AI Strategy and the establishment of the Saudi Data and AI Authority (SDAIA) reflect the government’s commitment to harnessing AI’s full potential for sustainable growth. Digital transformation will continue to be a critical part of transformation management.

AI is still an emerging influence but will continue to grow in importance. It can play a significant role in aspects such as data analysis, process automation, decision-making and customer experience enhancement. AI technologies can help organizations optimize operations, improve efficiency, and drive innovation.

Our survey has identified some of the most prevalent uses of AI currently. These include: Resource management AI; natural language processing, e.g. ChatGPT, and risk management AI.

AI plays a crucial role in the transformation journey outlined in Vision 2030. It offers many opportunities for innovation, growth and competitiveness.

Can you de-jargonise the case study of the Saudi Esports Federation? How did they bring about the transformation?

The Saudi Esports Federation is an entity with an ambitious agenda. You can attribute their success to many factors. One key factor was keeping their community’s or customer’s needs at the forefront of their strategy. They did extensive research, benchmarking exercises and workshops to ensure that their strategy is delivering the best value to their community.

This aligns with our identified top-tier transformation management offices, where they have delivered 2.5X times better outcomes to their organizations in terms of customer satisfaction. Therefore, focusing on the value you bring to the end user is a crucial part of any organization’s success.

About Sameer Saleh

Sameer Saleh is Transformation Management Unit Lead Partner at PwC Middle East.

He has more than 20 years of consulting experience, including expertise in design and implementation of large government transformation programs and setting up of strategy management offices.

Sameer has led flagship programs in the GCC, such as the implementation of unemployment assistance programs, national labor gateways, and designing strategy management offices for multi-organization ecosystems. He has also led many IT and telecom transformation programs.

He holds a BSc in Electrical Engineering, along with qualifications in information systems security.