Chief executives in Saudi Arabia are optimistic about government’s economic diversity programmes and initiatives to reduce oil dependence, especially National Transformation 2020 and Vision 2030, said an industry expert.

“CEOs are concerned that their organizations are not disrupting business models in the industry. Yet, 83 percent of the chief executives are optimistic about transforming their company over the next three years,” added Abdullah H Alfozan, chairman of KPMG MESA and KPMG in Saudi Arabia, commenting on the first KPMG Saudi Arabia CEO Outlook Survey, which offers insights into the opportunities and challenges faced by chief executives in the Kingdom.

“The First KPMG’s 2017 Saudi Arabia CEO Outlook delves into how today’s CEOs are facing a need to transform their existing business models,” Alfozan said.

“In today’s world, CEOs are aiming to ‘disrupt and grow’ and are also taking steps for their organizations to be disruptors in their respective sectors, instead of being disrupted by competitors. In addition, 95 per cent of the chief executives view technological disruption as a major opportunity and are planning to invest in emerging technologies, such as blockchain, IoT and data analytics over the next three years.”

The report highlights the strategic priorities of CEOs as they run their organizations through a period of uncertainty and opportunity. The report also offers rich insights into how CEOs are responding to challenges and benefiting from opportunities by equipping their organizations to meet these challenges and also by upskilling themselves.

According to the report, CEOs are now responding to the increased uncertainty from geopolitical pressures by fostering innovation, adopting emerging technologies, following a customer-centric approach and transforming business models.

There is a general tendency among CEOs to transform the business models of their organizations. About two thirds of CEOs in the Kingdom - 60 per cent to be exact – acknowledge that the current global geopolitical uncertainty influences them more greatly than ever before.

As a result, 58 per cent of them resorted to re-evaluating their presence outside of their core markets. 95 per cent of them are hiring highly skilled manpower to obtain a deeper understanding of geopolitical threats, and 83 per cent of them are spending more time making plans and studying possible scenarios.

“With the fall in global oil prices, the economy of the country has been facing headwinds,” Alfozan said. “The CEOs are however optimistic, following the launch of various programs by the government including ‘The National Transformation Program 2020’ and ‘The Saudi Vision 2030’ — to diversify the economy away from oil.”

“Hence, 98 per cent of the CEOs see that growth in the Saudi economy in general, and that of their corporations in particular, is on the up and up, especially given that 83 per cent of those CEOs anticipate that the confidence of the Saudi society in their businesses is the reason why they will maintain their growth over the next three years.”

Arvind Singhi, head of Markets at KPMG in Saudi Arabia, stressed that accelerating market shifts today compel CEOs to adopt new business models and methods to cope with the rapidly varying requirements of the market.

He pointed out that 73 per cent of CEOs worry that their organizations may not be able to upgrade and update the business models that have been standard in their respective industries, even though they fully recognize the importance of transforming these business models to become more nimble in a fast-changing environment.

Singhi, however, reiterated that according to the survey, 60 per cent of CEOs are optimistic about the transformation of their companies over the next three years.

“In contrast, 74 per cent of their global counterparts believe that nothing will change, and as many as 63 per cent of them believe that an innovation-oriented, customer-centric business model will truly help their businesses grow and prosper.” – TradeArabia News Service