ALKHOBAR, 5 April 2005 — At the end of March, Sage Software Middle East in partnership with Arabian Computer Projects held road shows in Jeddah, Riyadh and Alkhobar. The company was quite pleased with the audience turnout, attracting over 300 senior managers to the presentations Kingdomwide. The key speaker for the road show was Shishir Srivastava, Sage ME executive director, who put forward targeted information in his interactive discussion on “The GCC ERP Software Market: Overview, Trends and Drivers.”
In the latter half of each seminar the Sage team held a live demonstration of the Sage Business Intelligence tool and showed the audience the kind of information that can be retrieved using an ERP system combined with such a tool. Darren Menezes, marketing manager, Sage Software ME, advised the audience that the key difference between Sage Business Intelligence and third party Business Intelligence tools is that the Sage application comes ready to use with predefined templates and thus can be up and running in a couple of days.
In Alkhobar the seminar kicked off with Srivastava analyzing the Enterprise Resource Planning (ERP) spend of companies in the GCC. One fact stood out — UAE companies spend far more on ERP systems than Saudi companies, especially those in the businesses of Wholesale Distribution, Trading, Retail & Discrete Manufacturing. The reverse should actually be true since Saudi Arabia is a much larger economy and market than the UAE. It was explained by Srivastava to the audience that $17 million of the ERP investment of $53 million in the Saudi market in 2003 was made by Saudi Aramco. If this sum was removed from the overall total, then the UAE and Saudi Arabia were unfortunately on par for investment in ERP systems.
Another interesting statistic revealed by Srivastava was that UAE companies spend several times more on Customer Relationship Management (CRM) systems than Saudi companies. In fact, according to Srivastava, virtually all of the CRM investment in KSA in 2003 came from just two large projects implemented by Saudi Aramco and Saudi Telecom.
“UAE companies are more likely than Saudi companies to face stiff competition which hurts their margins and threatens their customer base,” Srivastava said. “This has forced them to adopt ERP and CRM systems to become more competitive.”
However, Srivastava pointed out that despite the high price of oil, the economic situation in the Kingdom is none too rosy. The unemployment level is rising and the youth population is increasing. If the Kingdom signs an agreement with the WTO, competition will be blistering and foreign firms coming into the Kingdom will be better equipped from a technology and business practice point of view.
“The Saudi government has realized the only way forward is too open the economy and encourage private and foreign investment,” Srivastava said. “Over the last few years it has taken a number of measures to this effect including allowing foreign ownership of business and land, reducing company taxes, improving company laws, investing in improving infrastructure and opening major areas of the economy while selling its stake in numerous firms. We saw a small example of the government’s changes when business visas were issued to us in one day for our road show tour.”
Consequently, Srivastava believes that the “writing is on the wall.” He expects a massive influx of competition from other GCC nations immediately with a wide variety of international firms soon to follow.
“Saudi Arabia is too big a market to ignore,” remarked Srivastava. “And most of the companies entering the Saudi market will be better prepared to compete because they have been operating in open economies. Before you know it, Wholesale Distribution, Trading, Retail & Manufacturing companies in Saudi Arabia will face stiff competition if they aren’t already feeling it. They must rapidly enhance their business practices and upgrade their information and communications technologies in order to meet the challenge.”
From the feedback forms that Sage collected from the audience it was noted that 100 percent of the managers who attended the seminar agreed that competition was going to increase and they needed to become more competitive to survive. They also agreed that using IT systems such as ERP and CRM would help them meet the challenge. They believed that these systems would help them improve efficiency, cut costs and improve customer service. But Srivastava put forward a warning.
“We don’t think that simply implementing transactions systems like ERP will be sufficient to meet the competition from abroad,” he said. “Granted, these do bring in some amount of efficiency to the organization. That is not enough. Companies must go a step further and use information from ERP and CRM systems in way they have never done before. These applications must be turned into weapons to make smart, strategic decisions that will keep the company’s fortunes on the rise.”
That is why Sage is emphasizing the need for managers to turn to tools that provide Business Intelligence.
“ERP systems store far too much data for it to be of much use to managers looking for information to support urgent decisions,” Srivastava counseled. “What managers need is a small amount of key information or performance indicators and an easy way to explore that information. This is where Business Intelligence tools play a strong role. With just a few mouse clicks Business Intelligence tools allow managers to find the information that will give them insights into their business, spot trends and help them make critical decisions rapidly.”
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