Creating the blueprint for Saudi Arabia’s digital transformation

Smart city specialist NXN is helping Saudi to define the digital plans for many of its biggest development projects

Digital has become an essential part of Saudi government plans, says Obeid.
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Digital has become an essential part of Saudi government plans, says Obeid.

Saudi Arabia’s smart cities are starting to come to life, as the Kingdom’s digital transformation plans and drive for change takes hold, according to Hani Obeid, Senior Partner, KSA and Emerging Markets and Smart Healthcare Practice Lead at NXN.

The smart city digital services provider, which has developed the smart city master plan for Riyadh, digital transformation blueprints for key sectors of the Kingdom’s economy and more, is experiencing increasing demand as programs such as Vision 2030 and the National Transformation Plan put digitisation at the top of the country’s agenda.

The Kingdom is embracing digital transformation, at the national level, as well as at city and district level, Obeid explained, and digitisation has become a key issue for leaders.

“[Digitisation] is becoming more and more a priority across various officials, ministers, and government department managers in Saudi,” he said.

“It has to be embedded as part of their strategy, within the operating structure and objectives of their departments.”

NXN is closely involved with many of the biggest digital transformation projects in the Kingdom. The company worked with the National Digitisation Unit (NDU), to develop blueprints for four key sectors — health, education, e-commerce and smart cities — which have all been signed off by their respective government entities to be translated into strategy.

It also created the smart city master plan for Riyadh, with the Riyadh Development Authority (ADA), and is now working on a similar master plan for the Al Madinah Al-Almunawarah Development Authority (MMDA).

Both cities have a strategic focus on their economies, and on quality of life, although with the key difference that AlMadinah is also focused on the ‘quality of life’ for pilgrims visiting the city.

Other city drivers such as mobility, people, governance, and the environment are more opportunistic factors in the cities’ plans, but in the main, economy and quality of living take the lead.

Creating the blueprint for each city follows a similar process, Obeid explained, with NXN conducting a current state assessment of the staus of digital services and infrastructure, and developing a thorough understanding of the vision for the city, as well as the challenges it faces.

The aim is then is to understand how digitalisation can address the issues for each city, and how within regulation and budgetary frameworks, solutions can be developed.

“We look at the urban strategy, and how urban strategy and digitalisation overlap, what are the common elements we can capitalise on,” Obeid said. “We look at benchmarking and any best practices that may be relevant.”

For AlMadinah, this means how the city can cater to pilgrims. The annual Hajj and Umrah pilgrimages attract well over 2.4m visitors each year, generating revenues of several billion dollars each year for the Kingdom.

Obeid said: “It is all about the pilgrim experience, what digital services can we offer that will enhance that. Every city may look at the same digital journey but the inputs and outputs would be tweaked to address the needs of that specific city.”

One constant in developing these digital transformation plans is data, Obeid added. NXN has participated in various data programs for the Kingdom, including a data classification framework developed with the NDU and Ministry of Communications & IT (MCIT), which has been adopted by various ministries in the Kingdom.

The company is also providing its own data scientists to support city and district projects to understand how they can leverage their data to improve key vectors and deliver better experiences for end users, whether they are citizens, businesses, pilgrims and so on.

Obeid said that while there are still challenges in Saudi Arabia with siloed operations and data sources spread across different entities, he is seeing more and more willingness and openness among government entities to collaborate together on projects. This collaborative attitude is particularly important in realising city- or district-wide plans that need different stakeholders to come together, and where different entities may already have standalone digital projects that need to be integrated into the bigger picture. For a city like AlMadinah, with a mass influx of pilgrims that access services across many different government entities and non-government operators, collaboration is even more important to creating good experiences.

“We face this with all projects. Digitisation is not new to the Middle East, but the aggregation, consolidation and alignment is,” he said.

“For the various entities that have led this transformation, to come together around a table and realise that they have commonalities, many of them have common end-users, they realise they need to share common platforms, common data centres, common services and elements of services to be more effective and streamlined — that is a new reality that a lot of the entities have realised, and due to the country’s leadership, they are very actively executing on it.”

This new spirit of collaboration and commitment is directly attributable to Mohammed Bin Salman, Crown Prince of Saudi Arabia, Obeid added.

“MBS leaves no stone unturned in terms of his determination to actually execute on this digital transformation. Every new city, or Neom or the Red Sea Project, all have MBS’ vision of really transforming these cities into a platform of services that are catered to the target customers.”

While there are still typically very few projects in Saudi Arabia that are driven by the private sector, there is some trickle down of smart city ideas into smaller scale private projects, like the adoption of wayfinding services, building energy management and smart parking in some developments, he added.

What is more noticeable however, is the increasing interest from the government sector in involving the private sector through Public-Private Partnerships (PPP) a relatively new development for the Kingdom, but one which is gaining traction.

Obeid said the old attitude of ‘here’s my budget, come and build the solution for me’ has been replaced with more an attitude of ‘how can we work together, so that we are both happy’.

“This type of partnership, whether it is financing or revenue share, whatever flavour of PPP, I have seen more of it come up with municipalities and other digital agencies. It is a question of ‘here is what we need, will you back up your technology?’”

The pace of change is actually one of the challenges in Saudi Arabia, Obeid said. Change management has become an invisible but integral part of most engagements, as the company has to keep driving awareness with customers of new capabilities and technologies that are relevant to them.

“The key thing about Saudi is change — it is happening at rapid speed. The benefits of digitalisation are eminent, and we continuously educate the stakeholders on the benefits of such a change. That is the biggest challenge and opportunity, to showcase what others have done and realise what can be done as we digitise cities and districts

“PPP is challenging because it’s a new flavour and new way of working with government, a lot of new players coming from abroad understand PPP, but for the region it is a new way of working, and many find it challenging in finding the right balance of the ideal PPP model,” he added.

NXN is involved in a number of other high profile projects in the Kingdom, such as the Red Sea Project and Neom, two projects which represent a diversification into tourism-focused projects for Saudi.

In terms of creating the blueprints for these new projects, the approach is the same as with city projects - defining the current state of infrastructure and services, benchmarking what is being done in similar projects worldwide, and understanding the relevance of these concepts to the goals, key outputs and objectives of the Saudi projects, and determining the financial viability of digital services.

In these large scale district projects however, NXN has gone beyond developing a road map of digital services to look at the functional and technical requirements of the planned services, and understanding the necessary enablers of the digital services as well.

For now NXN is expanding its team in Saudi Arabia and adding new capabilities, as demand increases from vertical sectors such as universities, healthcare and industrial sectors to also leverage the benefits of digital transformation.

“Saudi Arabia is a key strategic country for us, and it has ton of opportunities,” Obeid said. “Change is the key - digitisation is not a ‘nice to have’ in Saudi anymore, it is now a ‘need to have’. It is on the CEO’s agenda, CTOs are looking outside the box, and it is very exciting to be a part of that discussion.”

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