UAE's Digital Transformation In 2026: The Performance Year

(MENAFN- Khaleej Times)

After a decade of vision statements and pilot programmes, 2026 is shaping up to be the year the UAE judges digital transformation by outcomes rather than ambition. Industry leaders say the decisive shift will be from strategy decks to delivery at scale, powered by unified data and practical AI embedded in everyday work.

“The buzzword would be execution, more than planning and strategy - the speed and consistency of execution will determine success. Usage of AI needs to be tied to productivity and customer value,” says Sanjay Raghunath, Chairman & Managing Director, Centena Group. Echoing that urgency, Prem Anand Velumani, Associate Director, Strategic Alliances, Zoho Middle East & Africa, adds:“The region must move beyond digital transformation slogans and focus instead on business redesign driven by measurable results.”

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Both executives argue that transformation fails when treated as an IT upgrade rather than an operating‐model change. Raghunath warns that many organisations“have mistaken digital transformation as investing in ERPs and CRMs without redesigning decision‐making rights, processes and mindsets - which results in digitizing inefficiencies.” Velumani points to the same root cause from a systems lens: fragmented architectures limit automation and slow decisions, while legacy platforms, skills shortages and governance gaps keep projects in pilot purgatory. Heightened concerns around data privacy and infrastructure sovereignty are also making firms more selective about platforms and AI models, he notes.

Cultural factors compound the technical ones. In Raghunath's view, risk aversion, centralised approvals and founder dependency can paralyse change. Success in 2026 will hinge on empowered second‐line leaders and organisations that“scale without control,” backed by unified data foundations and stronger change management, Velumani says.

The technology stack that matters now

Across infrastructure‐driven sectors - energy, maritime, utilities, logistics and manufacturing - the gains will be won by operational AI that converts data into action. Raghunath sees a decisive move from reactive repairs to failure‐preventive maintenance, using AI and machine learning to cut downtime and optimise capex. He expects Industrial IoT to be the differentiator for real‐time operations, with robotics deployed in hazardous, labour‐constrained or repetitive tasks (pipeline inspection, automated warehousing) and drones accelerating surveying and asset monitoring. On the commercial side, AI‐driven demand forecasting will tighten working‐capital management.

Velumani's technology priorities align and deepen the picture: agentic AI, unstructured‐data intelligence tools and IoT will drive accurate forecasting, anomaly detection, autonomous workflows and tighter cost control. He also highlights secure enterprise browser technologies and low‐code development as enablers for resilient digital operations at scale - especially where talent is scarce and speed matters.

Leaders and laggards

Financial services retains the regional lead in adoption, Raghunath says, propelled by real‐time payments, fraud detection and regulatory demands. Velumani adds telecoms and retail to the front‐runner list, citing stronger data maturity and customer‐centric transformation models. Beyond these, critical infrastructure sectors are gaining momentum as AI‐based project and operational systems become more accessible.

The gaps, however, are clear. Raghunath points to construction and fit‐out as persistent laggards, held back by a project mindset, fragmented value chains and heavy reliance on manual labour. He also flags parts of healthcare and public infrastructure where cost inefficiency is hidden and leadership hasn't reframed digital as a decision capability. Velumani's list overlaps but zooms in on traditional manufacturing SMEs, food and agriculture supply chains, and smaller construction contractors - often dependent on spreadsheets and legacy systems that block effective AI and automation. Regulated sectors like healthcare and education face additional headwinds around privacy and infrastructure readiness.

Progress in these segments will depend on industry‐specific digital programmes, secure AI applications, low‐code platforms that reduce technical barriers, and stronger government‐private collaboration, Velumani says. For construction specifically, Raghunath argues for end‐to‐end data visibility, contract structures that reward digital outcomes, and distributed decision‐making on site.

The leadership mindset for 2026

If technology is the engine, mindset is the ignition.“Leaders must understand where humans stay in the loop. Upskilling the workforce will become equally important,” Raghunath notes, advocating a shift from command‐and‐control to servant leadership: setting guardrails, enabling experimentation, and making it“okay to try, fail, and learn.” Velumani frames AI as a collaborative capability - not a distant black box - requiring explainability, transparency and security. He urges leaders to prioritise data ownership, privacy and sovereignty, and to empower teams through citizen development and a low‐code culture to overcome talent shortages.

The 2026 checklist for UAE boards and CEOs

1. Tie AI to P&L: Prioritise use cases with measurable productivity or customer value; end pilot purgatory.

2. Redesign the business, not just the stack: Update decision rights, processes and data governance alongside tech.

3. Unify data foundations: Break silos to enable automation, trustworthy analytics and faster decisions.

4. Empower the middle: Build strong second‐line leaders; decentralise approvals to accelerate execution.

5. Operationalise AI + IoT: Push predictive maintenance, anomaly detection, robotics and drones where risk and repetition are highest.

6. Build trust by design: Embed privacy, sovereignty and explainability into AI and platform choices.

7. Scale skills and citizen dev: Upskill for human‐in‐the‐loop roles; use low‐code to extend capability across functions.

In short, if 2025 was about building capacity, 2026 will be the performance year - where the UAE's digital transformation is judged by execution quality, unified data and human‐centred AI, with leadership mindsets as the ultimate differentiator.

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