ALKHOBAR, 24 September — What do you know about ERP? I hope you don’t know anything about the subject. If you’re clueless it means your company is lucky and probably hasn’t spent a lot of money on applications that don’t deliver value. For years I have viewed ERP as potentially the most expensive quagmire any company could choose to sink into. I’ve heard of Saudi companies that are not even actively using e-mail, being approached by consultants trying to sell them SR5 million ERP solutions. ERP implementation failures in the Saudi market have become the stuff of legends.
ERP or enterprise resource planning is a collection of integrated applications or modules, with accounting at their core, that generally are used to manage an entire business. But make no mistake. There is a big difference between applications that work with a common interface and those applications that are integrated. Users of applications that are only interfaced can share information — that’s all. However, integrated applications or software modules are those in which a change in the information entered in one is reflected in the information provided by all the others, that are in some way related. A properly integrated ERP system will allow all modules to share a common database and business analysis tools.
For example, a manufacturer could use an ERP system to plan products, purchase materials, manage inventory, interact with suppliers, provide customer service and track orders, among other functions. From the moment a sale is entered into that manufacturer’s ERP system, the sale should be reflected throughout all associated modules of that system, such as inventory control and accounts receivable.
Putting an ERP system in place requires more than software implementation. Business processes must be analyzed and optimized. Employees must be retrained, both on the new business processes and the new applications. The way work is done will change. Some procedures may no longer be needed and certain staff will become redundant. This will cause staff duties to be reassigned. For example, instead of staff entering data, they may be used to analyze trends.
While higher management is often eager to embrace an ERP system, because it is perceived as a way to manage costs and increase profitability, many management teams have neither the will nor the skill to do the corporate re-engineering necessary to make an implementation a success. In the Kingdom, due to a lack of experience in IT, ERP may be perceived as a magic technology. It is not. There is no one ERP system that will suit all companies. ERP implementation disasters occur when the technology has been chosen without the correct understanding of the requirements it must meet.
“That is why two years ago we came into the Middle Eastern market very cautiously,” said Mark Van der Ven, general manager, ACCPAC Middle East. “ACCPAC’s model is based on using local partners as solution providers to do local implementations of our business management solutions. I came to the area and saw the difficulties that businesses were having implementing ERP solutions successfully. I communicated these issues to David Hood, ACCPAC’s CEO, and explained the steps I felt would be necessary to add value to this region. We had a limited number of partners who had been implementing our accounting solutions but now we needed to grow that partner base, looking for partners who would be interested in concentrating exclusively on ACCPAC. Then we worked together with our local partners to provide them with training to an international standard and total understanding of our solutions. We also listened to them discussing market requirements and did some immediate upgrades to suit local needs. For instance, accounting reports created using ACCPAC are all Arabized and meet the requirements of both the Ministry of Commerce and the Ministry of Finance.”
ACCPAC International is an independently managed division of Computer Associates. When ACCPAC began, it was an industry leader in creating accounting software. As ERP solutions developed, ACCPAC realized that its award winning accounting applications could be used as the core of an end-to-end business management system created to suit the needs of small and medium-sized companies. Now, ACCPAC has more than 500,000 registered clients and 5,000 business partners in more than 100 countries worldwide. In the Middle East, ACCPAC has installed business management solutions in companies located in the United Arab Emirates, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Pakistan, Qatar and Saudi Arabia.
“Far from being one of the last regions served, the Middle East is one of the first that ACCPAC has focused on as a company, mostly because of my previous experience there while I was with Computer Associates,” said Hood. “I know the market opportunities. I know the promise that the Middle East brings from a business perspective. We have had partners in the region for a decade but my experience is that you have to show commitment to the region by being there directly. So that’s why we set up an office in Dubai.”
Hood explained that ACCPAC has always had a commitment to being international. This means that from the planning stage, its solutions have been developed to adapt to different cultures and different ways of doing business. Setting up local offices ensures that customer concerns can be addressed quickly and clients have the knowledge that local partners are backed up directly by corporate resources. It was emphasized that if for any reason an ACCPAC partner did not perform to the highest level of customer satisfaction, ACCPAC corporate would step in to fill the gap.
“Our partners and customers are the driving force behind this company,” said Mike Bongiovanni, senior vice president, Sales, ACCPAC. “When we started out with our mid-market customers there was not one vendor offering them an end-to-end business suite. Medium-sized companies were forced to use a patchwork of products. We have changed that. Now, our latest offering for the mid-market in our Advantage Series is the first 100 percent web-based accounting solution that can be accessed through a standard web browser. We believe that enabling mid-sized businesses to have unlimited anytime, anywhere access to their data will dramatically change the way they do business.”
All this sounds excellent. But sometimes business solutions that work in the United States and Europe aren’t effective here in Saudi Arabia. That’s why it was a significant point of interest when MonU-Tech Information Systems, an ACCPAC partner in Alkhobar, took the award as ACCPAC’s Best Business Partner-Middle East for 2001-2002.
In congratulatory comments on the occasion, Van der Ven, underscored the fact that the award won by MonU-Tech was for more than simply hitting a sales target. “MonU-Tech won the title of 2001-2002 Best Business Partner of ACCPAC in the Middle East because of their commitment to offering total customer satisfaction by investing in good people,” he stated.
Muhammad N. Al-Utaibi, managing director, MonU-Tech, was forthright in explaining why ACCPAC is doing so well in the Kingdom.
“Saudi Arabia is a challenging market to serve because over the years, businesses have invested in solutions from so many different vendors,” he said. “ACCPAC can work with any of five different databases, including Microsoft SQL server, IBM DB2 and Oracle 9i. In addition, while small and medium-sized enterprises (SMEs) in the Kingdom have largely been operating in a Microsoft environment, there is a growing awareness of the Linux operating system and the advantages it offers. This year ACCPAC became the first company to release an accounting application to support deployment on both Linux servers and Linux desktops. This gives SMEs a non-Microsoft choice and the potential for significantly reduced total cost of ownership (TCO) in managing their accounting systems.”
MonU-Tech became an ACCPAC partner in the first place because of the personal experience Al-Utaibi had in implementing ACCPAC at one of the firms he owned. He went from having to wait months to get the closing figures on his yearly accounts to being able to know his exact financial position daily. He found that tracking his inventory and orders in real time meant improved customer satisfaction and consequently, increased sales. In less than six months, Al-Utaibi completely recouped the investment he’d made in the ACCPAC system. He had so much faith in ACCPAC that he decided to become a partner in order to be able to make the total ERP solution available to other businesses in the Kingdom.
“ACCPAC creates solutions for SMEs,” Al-Utaibi said. “Nearly all Saudi companies are medium-sized or smaller according to the US definition of medium-sized companies. But, interestingly, most of the ERP systems being sold here were for large enterprises and they had prices to match. Solutions for smaller enterprises either handled just a portion of the business requirement or didn’t create Arabized reports.”
According to Al-Utaibi, the biggest problem in the market now is educating clients. Managers think that ERP solutions are expensive. This is not the case with ACCPAC. Modules can be implemented one by one as the need arises. The products are fully scaleable with auto-conversion features so there is no need to be concerned about future growth issues. Upgrades on the individual ERP modules are made according to market requirements. Last year, MonU-Tech sent nearly 70 customer suggestions to ACCPAC corporate developers and every suggestion was incorporated in the latest ACCPAC upgrades. ACCPAC also actively encourages local development and MonU-Tech is at the Beta stage in creating a human resources module to handle the unusual requirements of Saudi HR departments such as the tracking of visa and iqama information.
“We have seen that in this market, service and personal attention are key factors,” said Al-Utaibi. “Few companies approach us knowing their needs in regards to ERP. Perhaps they have an idea about improving their accounting or reducing overhead, but not many managers here understand exactly what ERP is and how to make it work successfully. So, we have to be much more than a solution provider. MonU-Tech staff must sit down with managers and help them through the planning phases. We provide these consulting services free of charge, because they are a necessity. Only after the proper planning has been done can we understand what the company’s requirements will be, so our implementation will be a success. We do all the bilingual staff training, too. It is our goal that our customers never feel alone. We are not selling boxes here. As a Saudi, I must be proud of the services my company is bringing to the market. With every successful ACCPAC implementation we are helping another company step out into the e-age in total control. As a businessman, I can’t imagine a better, more productive activity.”
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