ALKHOBAR, 25 November — We always knew that a lot less work was done in Ramadan than during other months of the year, but how much less was the stuff of supposition. Well, I have a friend who is the CEO of a very tech-savvy small business. At the end of a day’s work, with the click of a mouse he can bring up all the documents newly entered in the corporate database. Tracking his staff’s performance over the course of a year, he has discovered that on an average day about 40 new documents are to be found in the corporate database.
On the second day of Ramadan, casually checking his team’s efforts for that day, he clicked his mouse and saw that only eight new documents had been added to the database. Horrified, he gave a pep talk to his employees and thought that things would improve. He checked again on the sixth of Ramadan and lo and behold! Only three documents had been newly entered. At which point he sent out a memo to his staff that all those who were planning to take their vacations during Shawwal should instead take them forthwith and return immediately after Eid. After all, it appeared that they were already on vacation anyway!
COMDEX Fall held in Las Vegas concluded immediately before the start of the holy month. There were plenty of announcements about new hardware and software and Microsoft trotted out Bill Gates as usual. Gates sounded less like visionary this year and more like a guy in search of the bottom line. He looked a lot older too and his normal high-energy aura was missing. It’s a pity that there’s no upgrade on the human OS because it seemed as if Gates was in need of it.
Global computing giant Compaq showed off several new hardware offerings. In early 2002, it will begin shipping the Evo D500 ultra-slim desktop which will feature integrated wireless connectivity through Compaq’s MultiPort technology. Weighing just over 11 pounds and 75 percent smaller than the average desktop PC, the new desktop will support Intel Celeron and Pentium 4 processors in a slim package, 2.72-inches in width and just over one foot square. Compaq also demonstrated its prototype Tablet PC. Comparable in size to a standard sheet of paper, the Compaq Tablet PC prototype is a full-function Microsoft Windows XP Pro-based PC that combines the computing power and convenience of a full-featured notebook with the simplicity of a pen interface. Compaq expects to ship its Tablet PC when Windows XP Tablet PC Edition is released in 2002.
While Compaq appeared to be focusing on hardware this really is not indicative of the company’s overall strategy. Like many other IT companies Compaq has had a rough year. Revenue for the third quarter was $7.5 billion, a year-over-year decrease of 33 percent. Net loss from operations for the quarter was $120 million.
"The third quarter was one of the most challenging ever for Compaq and for our industry," said Michael Capellas, chairman and chief executive officer. "IT demand continued to weaken globally, which resulted in aggressive pricing, while the events of September created significant logistical challenges. We did, however, see positive momentum in our Global Services business, and our enterprise technology performed well given overall market conditions."
Capellas’ remarks were puzzling to many in the general public who perceive Compaq to be a vendor of PCs and other consumer computing goods. While the company has no plans to leave those portions of its business behind it is making them less important to its total profitability. Compaq is now trying to position itself as a leading global provider of enterprise technology and solutions. A short investigation of the company’s financial reports shows why.
Even in these difficult economic times, for the third-quarter 2001, revenue in Compaq Global Services was $1.9 billion, up two percent year-over-year, or five percent in constant currency. Operating profit improved to $284 million or 15 percent of revenue. The services business now comprises 25 percent of Compaq’s revenue, up from 23 percent in the second quarter. The company is expanding its service offerings worldwide, and has begun an aggressive campaign to capture market share in the Middle East.
Tom Iannotti, vice president, Compaq Global Services, EMEA, and Fawwaz Qadan, Compaq Global Services manager, Saudi Arabia, discussed the company’s plans for the Kingdom in an exclusive interview with Arab News. Iannotti emphasized that while Compaq is a global company it operates locally in every market that it serves.
"At the highest level the way that Compaq manages its business around the world is by enabling local management to organize and direct the company’s capabilities," he said. "What I mean by this is that it’s not someone who doesn’t live and work in the Middle East deciding what’s appropriate for the Middle East. It’s the company building a strategy; building capabilities, some local, some remote, relying on a person that we call our country or regional general manager to then organize the company’s capabilities in a way that best meets the local market’s requirements. So if that means something different from the company’s strategy that’s perfectly fine. We always say that being a global company does not mean doing the same thing in every single country in the world."
Iannotti pointed out that Compaq felt that the company should be run in the Middle East in the manner that was right and appropriate for the region given the market’s maturity, infrastructure readiness and other relevant factors. He said that it was part of the value of a distributed, managed organization to have the ability to tune the company’s strategy according to local requirements.
Fine-tuning to the local market is a sound strategy to help Compaq grow but how can the company use its staff and resources to enable local companies to go global?
"The fundamental component is first, technology in general," commented Iannotti. "I think one of the things that helps small companies go global is the use of technology and I point to the Internet. On the Internet every company looks large and global. Compaq can help companies use technology to take advantage of their core capabilities. We can help them with technology that will give them access to new markets, give them faster time to market, give them productivity improvements to drive down costs. Where we can help companies is by utilizing technology in ways that deliver a return to their bottom line."
Compaq’s bottom line has been under stress lately but Iannotti gave assurances that the Global Services Division had been largely immune from the belt tightening that was affecting other areas of the company.
"In the service business, unlike the products business, if you don’t have confident and capable service professionals standing in front of the customer you can’t deliver the service," said Iannotti. "People are one of the integral components of the service business. Without them there is no service."
According to Fawwaz Qadan, Compaq Global Services has made the decision to hire 10 additional staff members to enhance its Saudi team, which is already more than 50-strong. And yes, the search is on for qualified Saudis.
"We are in line with the government’s announced Saudization plan," said Qadan. "Our next goal is 25 percent Saudization. We have an active human resources campaign to attract young university graduates. We’re working now on an internship program for Saudis. We are here to stay and that means we have to be a part of the community."
Qadan also wanted to highlight the measures Compaq Global Services is taking to provide service at an international standard in the Kingdom. He explained that in Saudi Arabia, Compaq is using a proven global process known as First Call to deal with service issues. The company feels that the key to solving a problem is diagnosing it correctly first. Once the problem is defined then a solution for it can be delivered rapidly and correctly the first time. Users in the Kingdom can access www.compaq.com.sa/support where they will find a group of tools that help most people fix their problems fast. While Qadan assured me that the tools were "idiot proof," if a person isn’t able or willing to use them then they can contact a service rep by e-mail, log a service call directly from the web or phone. And service calls aren’t merely for the purpose of explaining a problem. In the Kingdom more than 50 percent of all problems with Compaq products are solved over the telephone, which is in line with the worldwide benchmark.
What does the coming year hold for Compaq Global Services in Saudi Arabia? "Over the coming 12 months we’ll be working hard to diversify our offerings to this market," said Qadan. "The Saudi market will see new initiatives in the area of telecoms, local support and customer relationship management (CRM) solutions. We’ll be pushing to bolster local capabilities. In Saudi Arabia we’re growing our systems integration by 100 percent in 2002. We’re growing our overall business by upward of 50 percent for next year. Compaq is in aggressive growth mode and that means not only organic growth but growth through acquisition. In the Middle East we’re out shopping for firms that will add increased quality and value to our resources and help us maximize the benefits we deliver to our clients."