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Driving Economic Growth and Innovation through Business Process Management in UAE

Aug 3, 2023 | 0 comments

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Aug 3, 2023 | Essays | 0 comments

Abstract

One of the most known practices considered fundamental in economic growth underpinning is innovation. It has a great capability in the development of solutions for challenges we face socially and economically. It is the key responsible for commercial firms in market environments and businesses of today‘s survival. Most current research on the management of innovation has majorly focused on large enterprises and economies of developed markets ignoring small medium-sized enterprises that have great contributions to the growth of economy and innovation. The main purpose of this work is to make contributions to the literature on innovation management and businesses on Business Process Management (BPM) and their behaviors in the context of socio-economic in Dubai and countries all over the world. The market Dubai can be considered as one of the quickest upcoming economies and markets in the Middle East. With proper government support, it has managed to achieve substantial industrialization and modernization levels.

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Introduction

The most profitable business market and innovative economy in the region of the Arabian Gulf in comparison to all the other Arab nations are The United Arab Emirates. It has been noticed by the World Economic Forum’s report of Global Competitiveness among the other 37 countries as an economy that is driven by innovation (Schwab, p.17). This indicates that 30 percent and above of the activities in this economy is contributed by innovation. As much as the country is considered as a country rich in hydrocarbons, the government of the United Arabs Emirates in collaboration with Vision 2021 of the country has made recognition in the urge to change the economy from where it is to an enlarged knowledge-based to maintain the economic growth that is long term and to create more job opportunities for the upcoming youths and the enlarging population An economy that is considered innovation-driven does not only depend on expenditure but also on investments that are efficiently allocated and their innovation strategies. However, innovation does not only generate from very large corporations but it also comes from Small and Medium Enterprises which in most cases give contributions that are original and positive to the domain of innovation. SMEs have been found to result as main actors in markets that are global chasing their special strategies in innovation (Naidoo, p.1313). It has been noted that there has been a change in the roles of small businesses because the comparative advantages have moved towards knowledge-based activities. In UAE, Small and Medium Enterprises explains almost 92% of the summation of all companies and grants almost 50% of the GDP from the economy. In addition to all these, almost 200000 of the United Arab Emirates SME based are currently offering almost 85% of jobs in the private sector (United Arab Emirates Ministry of Economy p.66).

The benefits that a company enjoys when they have adopted BPM may include the following; first and foremost it is cost-efficient. Most companies have stated that to increase the efficiency of costs, one needs more than slashing budgets. There is a requirement of strategic investment so that an organization can get more material savings. Most companies have also recognized that to achieve savings that are considered efficiently significant in terms that are medium, they have to implement effective techniques and technologies of Business Process Management (Bhagwat et al p.47). When we take a look at countries that research was done on before, most of them are planning on launching initiatives of process management whereby the largest proportion had the belief that the project was going to have a big positive effect to maximize the efficiency of costs. When BPM thinking automates complicated processes and technology is applied, there is a reduction of manual work and duplication of effort elimination. Companies that have launched the initiatives of BPM with the hope of manual work reduction have so far so good given positive results on the business. It has therefore been noticed that one can get similar output with lesser resources or adjust the output amount with the same amount of resources. Therefore, BPM can be considered a fundamental part of the strategy in the intelligent management of cost which gives the business a chance to reduce costs instead of cutting business growth. The Dubai Financial Market is responsible for a value worth 82% of shares that are traded in the capital markets of the UAE.

Secondly, we have business agility. In surveys and researches that have been done before, most people from different organizations expressed that their organizations would take a step in increasing the investments in their capabilities to act to various marketing conditions that are changing in a period of 12 months. Brighter organizations notice bigger margins on the services and goods they have by taking advantage of the opportunities in the markets. Most business people have recognized time to market optimization as a very crucial business driver. BPM has been found to enhance the ability of various businesses for to react to differences that are available in the environment of business. 78% of people who have introduced BPM to increase the organization’s flexibility have so far given positive feedbacks on the effects it has on the business. For a company to achieve business agility, it requires three major concepts (Dumas et al., p.2). These are; process management, Integration and automation, and lastly Rule management. In process management, the organization must be in charge of its process assets to be agile. The processes must be understood well and documented. Their visibility is a must and should be measured in real-time and continue to have compliance with regulatory objectives and the shifting market. In this case, BPM offers modeling capability solutions that ensure processes are very explicit. It is possible for these models to be updated by users and that is a very important factor as Information Technology’s recourse is not needed.

In rules management, organizations are in the management of the interactions they have with the outside world via procedure and policies that they have agreed on and documented. These rules can easily be adapted to follow the market pressures and therefore can be labeled as a competitive advantage source. Organizations that are aware of rule values in most cases use decision engines to find, deploy, update, and maintain rules all over processes in life. BPM on the other hand is moving towards collaborative and unstructured age. For an organization to stay well-governed compliant and visible, as it keeps dynamical processes on track despite the changing outcomes and goals, rules management will be the only way to do so. For a company to be able to manage BPM for it to acquire increased agility, it is very important to have rules. In cases of premium on uncertainty management, and better decision making on rules of businesses, optimization and simulation techniques can be put into practice and the use of responses and analysis of real-time.

The adoption of BPM enhances the innovation capability and productivity of MNEs by helping MNEs play a major role in innovation technologies, patenting, and investment in research and development. When MNEs adopt BPM policies, they can provide services of different kinds to the markets available despite their sizes. When these markets are served, they have a lot of benefits from scope and economy of scale and enable them to build a stronger capacity of finances for them to have investments in innovation which includes projects considered risky. It puts them in better and greater positions than smaller firms when attracting talents, adopting management tools for technologies considered comprehensive, acquiring equipment that is regarded as sophisticated, and building innovation networks with their strategic partners, suppliers, customers, research institutes of the public and universities. It has helped in the modification of spatial organizations and strategies in MNEs. When we take a look at how changes are happening, research currently done is indicating that there is an evolution of innovations in MNEs from hierarchical and centralized functions in the direction of one that originates from geographically disperse network center.

Firms with high innovation have been found to have the potential of turning into high growth firms. However, only 12.2% of Emirati entrepreneurs are expected to introduce or use new forms of technology as a major strategy in their growth (El-Sokari et al., p.76). In a survey done by Global Entrepreneurship Monitor, it was found that there can only be two ways of assessing innovation and these are; business competitiveness degree and product originality. The table below will show the technology of product level for a few years 2006, 2009, 2007, and 2011 in the UAE.

YearNo/Low Technology (%)Med technology/ High Technology (%)Total (%)
200696.93.1100
200799.30.7100
200999.01.0100
201197.62.4100

This table indicates that in2011, almost every new business that was started in UAE had none or very little levels of technology with only 2.4% as medium or high technology. This was found as the second least rate when compared to other economies that are driven by innovation and when separated from countries that perform the best a good example is Norway which is at 14.3% (El-Sokari et al., p.81).

In recent years, MNE has come to play a very active role in collaboration with BPM in innovation networks that are global and involve innovations defined as incremental. It also takes part in the development of multi-technology products. However, as the number of R&D supply-driven centers increase, MNEs only work with a few global labs in locations that they select carefully and have a historical core unit. In the last decade, international innovation networks are increasingly becoming multipolar and on the other hand, MNEs are locating an increase in the number of selected centers in emerging countries. On the contrary to internalization, the innovative activities of MNE as an organization is what they rely on when it comes to acquiring knowledge from external sources. In a situation where R&D activities are increasingly internationalized, there is a rise in competition in the regions and countries so that these corporation activities attract R&D (OECD, p.15). The innovations can also result in spillovers and indirect effects in the country which can lead to improvements in productivity. It can be recommended that policies of national innovation should consider ways of attracting MNEs innovative activities and find ways of encouraging current affiliates of MNE so that they can have domestic innovations.

Yes, the elements of BPM have a positive relationship with innovation capability and productivity. Innovations tend to have an incremental and radical relationship which has interestingly contributed to various performances in the firm. It is a very important business performance determinant despite the upheaval of markets which is conducted by the firm. The process of innovation can be seen as effective drivers that assist in innovation enhancement and performance of trade in an organization (Alpkan, p.740). To have expansions of new services and product quality, newness, exceptionalities, and reliability coming from their competitors lead to innovations of services instead of enhancing the overall performance of organizations inclusive of financial and marketing. The research was done in Taiwan in the determination of the relationship between service innovation, market orientation, and innovation performance shows that innovation has mediating results in the performance of innovation. This study showed that the innovation of products increases the profit rates while the innovation process increases both efficiency and profits. Product implementation, the innovation of institutions, and process enable flexibility of organizations in their various operations and it enables companies to improve the product quality and the competitiveness of the technology.

A handful of research has shown that innovation from the organization is associated positively with performance innovation and assists in understanding best which capabilities have the potential ability to affect competitive advantage that can give economic rent. Other research indicates that either organization or administrative innovation has a significant and positive impact on the performance of a company in terms of growth, financial, internal process, and customers. Furthermore, the innovation of process and product has been found to have a very important role in the performance of an organization. Generally, innovation is taken as an important factor that can help in the generation of lots of benefits for an organization for it to get a competitive advantage.

The new BPM approach suitable to enhance the innovation and productivity of MNEs in Abu Dhabi, considering that BPM is dependent on the different contexts, cultures, and nature of the organization may include; first and foremost we have the creation of clusters fostering linkages and around MNEs. As MNE seeks to rationalize the various activities they have, decisions in regards to local linkages are never made at the lowest level but the headquarters by having comparisons of available options globally. Therefore, regarding this, governments are required to come up with incentives for MNE to put local partners into considerations and not have expectations for this to occur naturally. In most countries, there are existing organizations that do not meet the reliability and quality requirements needed for MNE. As a result of this, policies that help local firms and organizations in the upgrade of quality and reliability are regarded as very important. Apart from building the required technical capacity to benefit from externalities that come from MNE activities, the government always put ready programs to help investors from foreign countries to get the best local partners and suppliers. This shows that, for outsiders to familiarize with local institutions and firms and become members of the club of the system of innovation, they are required to make greater efforts for this to happen. This approach will help in productivity in every country that puts it into practice as relationships will be built and unbreakable bonds too.

The second approach is upgrading demand-oriented public R&D and human capital. When talking about construction in the public sector as a research capacity, one must consider two major aspects. The first aspect is the availability of an investment in the R&D generation supply side. This majorly comprises research of long-term investment projects in given areas for example national laboratories and laboratories. These provide an academic publication as outputs which are important knowledge sources for bigger establishments of research by domestic organizations and MNEs. These public institutes also help in the provision of technical services and as services of consultancy to organizations as infrastructure part for standards and testing. The second aspect is demand-driven institutes for the public which work in various sectors with the primary aim of developing innovations that are specific and majorly focuses on meeting the different needs of a group of organizations or a particular sector. When we take a look at the current development stage of systems of national innovations, it can be suggested that BPM should put their focus on the second aspect. When this is done and followed from a perspective of technology foresight and intelligence gathering by government strategies and actions, there will be a better enhancement of innovation and productivity.

The challenges faced for not adopting BPM may include the following; first, without Business Process Management, an organization will be extreme slowness in an organization. This is because; organizations in almost all cases always experience the need to constantly change. These changes mostly are caused by market demands, new regulations, or the introduction of new working ways. One major importance of BPM is its aid in the facilitation of processes of designs considered flexible. When BPM is applied, one can get the chance to make changes to give minimal costs. Therefore without the adoption of BPM, the facilitation of processes will be slower and processes will not be customized easily for them to suit an organization’s requirements. The second challenge is low productivity. BPM aids the automation of different elements in workflows which are repetitive. It assists in improving processes for example bottlenecks removal, elimination of steps that are redundant and parallel processing. This gives employees enough time to spend on other organizational activities as the main activities are already handled. This in return gives good productivity and reduces wastes. Without BPM adoption, the employees will spend most of their time doing things that would have been handled easily by this management and therefore productivity will go down.

The third challenge faced by organizations is inefficiencies and an increased number of risks. BPM offers organizations an opportunity to efficiently engage in work and this helps in saving the organization’s resources (Prugsamatz & Raphaella, p.252). It also allows an organization to come up with better designs and processes monitored to help in the reduction of fraud. It can therefore be stated that, without BPM, the risk of fraud will go higher and those inefficiencies. Another challenge faced by organizations in failure to adopt BPM is hostility and vaguely in an organization. Every organization is required to be compliant with the regulations of the industry. With the help of BPM, it makes sure that every organization can put into action regulatory requirements and hence helps in delay prevention in compliance and fines associated with it. When an organization adopts BPM, it puts together compliance into the life process. Without this application, the processes of organizations cannot be visible and transparent enough to the employees, and therefore cases of hostility and vaguely will be high in the organization. Lastly, I will talk of reduced customer focus as a challenge. With increased services and goods produced, employees have it easy when it comes to focusing on clients. This causes increased despondence capacity and better ways of problem-solving. BPM has the capability of bringing technology and people together and this aid in customer satisfaction. Therefore, it can be noted that without the adoption of BPM, customer satisfaction will go done as the employees will have to focus on what it would have done already. They will not have time to come with better and greater ways of satisfying their stakeholders and customers.

Conclusion

In conclusion, organizations and companies should adopt Business Process Management to offer the very best services in a given country. This is due to its many advantages over disadvantages which include high productivity and customer satisfaction. This is all an organization requires to do well in various businesses and be in a position to maximize the profits. For a company to be able to manage BPM for it to acquire increased agility, it is very important to have rules. Rules will keep the company on toes and keep it running and will help deliver good results to the customers.

Acknowledgments

This research paper has been done with the help of various sources acquired from the internet and the library. The work of these authors cited down here has assisted me in this work and I would like to give them lots of appreciation for the good work they did.

Works Cited

Alpkan, Lutfihak, et al. “Organizational support for intrapreneurship and its interaction with human capital to enhance innovative performance.” decision 48.5 (2010): 732-755.

Bhagwat, Rajat, and Milind Kumar Sharma. “Performance measurement of supply chain management: A balanced scorecard approach.” .

El-Sokari, H., Van Horne, C. Huang, Z., & Al-Awad, M. Entrepreneurship. An Emirati Perspective, Abu Dhabi (2013).

Khalifa Fund for Enterprise Development & Zayed University. (PDF) Innovation in Small and Medium Enterprises in the United Arab Emirates. Available from: https://www.researchgate.net/publication/280836945_Innovation_in_Small_and_Medium_Enterprises_in_the_United_Arab_Emirates [accessed Oct 01 2018].

Dumas, Marlon, et al. Fundamentals of business process management. Vol. 1. Heidelberg: Springer, 2013.

Naidoo, Vikash. “Firm survival through a crisis: The influence of market orientation, marketing innovation, and business strategy.” Industrial marketing management 39.8 (2010): 1311-1320.

OECD (2011) “Location factors for international investment in innovation: Attractiveness for innovation.” Organization for Economic Cooperation and Development, Paris.

Prugsamatz, Raphaella. “Factors that influence organizational learning sustainability in non-profit organizations.” The learning organization 17.3 (2010): 243-267.

Schwab, Klaus. “The global competitiveness report 2010-2011.” Geneva: World Economic Forum, 2010.

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