DUBAI, 12 April 2005 — Injazat Technology Fund, the first Islamic venture capital firm in the Middle East and North Africa (MENA), has announced a total investment of $5 million in EJADA, the recently launched integrated IT services and solutions provider formed by the merger of three regional IT companies, Advanced Computer Technology (ACT), Elite Computer Solutions (Elite) and NewTek Solutions International (NEWTEK). With the merger, EJADA becomes one of the largest companies involved in the designing and delivering of integrated IT solutions in the MENA region.
EJADA offers a full range of services to organizations in finance, oil and gas, telecom, government and general business. Its services focus on consulting, application development using advanced methods and technologies, system integration, IT facilities management, enterprise application integration, business service management including IT security and IT infrastructure management. EJADA, headquartered in Riyadh, covers the MENA region through its offices in Saudi Arabia, Dubai, Egypt and Jordan.
Speaking at a press conference held last Tuesday to announce the investment, Hussein Rifai, CEO, Injazat Technology Fund, said: “We are committed to the development and enhancement of IT industry in the region, by supporting companies who have contributed to developing IT resources. The decision to invest in EJADA was taken after a thorough analysis of existing business models of the three constituent companies and the integrated business plans of the merged entity. Through the merger of equally strong partners, EJADA has endeavoured to create one of the largest focused IT services companies in the Middle East and will be offering its services to some of the most strategic industries in the Gulf region, making it a prime choice for investment.”
In its company profile, EJADA’s management explains that the company is “The Perfect Match.” The merger is equated to an evolution of three successful companies that perfectly compliment each other, coming together for greater success than they could have achieved as individual entities. The capital infusion from Injazat will serve to strengthen EJADA’s market position by enabling the firm to scale up operations rapidly and extend its market reach. “Injazat’s support will certainly ensure that our business is based on stronger financial capabilities,” said Mahmoud El Leissy, CEO, EJADA. “Through this merger, EJADA has positioned its services to clients with greater industry focus, while continuing to deliver services of globally competitive standards, services that have become benchmarks in the region.”
The creation of EJADA was due in part to a desire by the management of the three founding companies to present to the market a unified offering. The founding partners were frustrated by the fragmentation of the IT services market in the region, feeling that this fragmentation was causing confusion in the market. This confusion resulted in hesitancy by the local companies to implement a full spectrum of technologies that would efficiently enable globally recognized best business practices. The potential for dire consequences as a result of this deficit are already on the horizon as international firms enter the region in search of new markets.
“In the market today customers want a solid partner who cares about them as they care about themselves. Customers are also really unhappy with companies that just do one piece of the solution and leave. They want a company that is committed to helping them grow and compete,” said Youssef Ward, president, EJADA. “Historically, the three founding companies of EJADA always had the ability to grow vertically with their customers. Their customers were happy and they came back again and again.” Ward pointed out that the merger was a joining of companies that were already familiar to each other. All the firms had done an extensive amount of subcontracting with each other over many years.
“There were a lot of similarities between the corporate cultures, too,” said Ward. “The leaders of the three organizations were working together closely and they had similar ways of perceiving the market. When we merged we took the best from the cultures of each company and now we will build upon that base.”
There are challenges in any merger, even one that is supported by all those concerned. The partners and management of the companies identified the issues in pre-merger meetings that kicked off in April 2004 and all were in agreement when the merger formally took place in December 2004. Ward stated that outside consultants were invited to give their advice, but the final decisions on all issues were made by the partners and management of the three merging firms.
“The merger had implications on corporate as well as personal levels,” remarked EJADA board member Dr. Abdelaziz Jazar. “You are talking about presidents of companies who are now no longer presidents but perhaps vice presidents. In the end the good of the whole was what was behind this merger. Egos and titles were put aside in order to capture a bigger share of the market and create a more powerful company that has presence, that has the customer base and that has the ability to make a difference and deliver what they promise. This is the significance of EJADA.”
Of course customer satisfaction was paramount in the merger. EJADA’s president explained that the customers of all three firms were kept apprised of developments during the merger process, which resulted in customers who fully support the new company. “When we made the announcement of the conclusion of the merger a few months back, we received extremely positive feedback from our customers. In fact, for a while now some customers had been encouraging us to merge,” said El Leissy. “The structure of EJADA did not have a great impact on the staff members interfacing with the customers. We made sure that from the customer’s point of view the merger could only be perceived positively, for instance in the larger unified portfolio of services we now offer.”
El Leissy believes that one of the reasons for the success of the merger and the retention of existing customers was that EJADA’s management is intimately familiar with the local culture across the region including the slight variations from country to country, and the importance of personal relationships in the business environment. Customer facing staff made sure customers understood that while EJADA would be able to benchmark its service delivery against international companies, it would continue to couple that with local reach and understanding.
“The quality of our staff sets us apart from other firms who tout the delivery of ‘total solutions,’” claimed Ward. “Every total solution has a technology component and a business practices component. Before a solution can be considered it is necessary to have a complete understanding of the customer’s needs and requirements. We don’t come as professors telling the customer what is best for him because at the end we must deliver a system to the customer that he can work with. We want the customer to describe to us his business and the way he is doing it. Then we present to him the possible options and help him understand them in real terms. In the end though, it is the customer’s choice what will be implemented.”
Successful implementations of total solutions are what the market wants, but this is a desire that cannot be satisfied by most solution providers.
“Most IT solutions companies focus on either technology or processes,” commented El Leissy. “Our element of success historically has been to involve the customer at the strategic level, at the technology and solutions level and at the processes level, plus we understand the complexity of the customer’s operations. We attempt to implement all solutions as seamlessly as possible. Our customers have repeatedly told us that it is for all these reasons that our integrations succeed where others are challenged.”
El Leissy did note that such an approach costs more initially but emphasized that the end result is a better return on any company’s technology investment.
“If you attempt to build a house without the proper requirement analysis and proper design, the construction will end up costing much more,” he said. “Without forethought you will keep making changes during the construction and this will add to your costs. Even worse, the house will most likely never be as functional as it could have been with proper planning before the construction began. Yes, planning costs some money but in the total lifecycle of an IT project, planning actually contains costs.”
At the press conference last week, it was clear that there is an easy spirit of camaraderie among EJADA’s senior management team. Dr. Jazar said he believes this is because the merger was accomplished with tact and sensitivity to the needs of all those concerned.
“A very important moment was on the first of January when we had the three companies meet,” Dr. Jazar reminisced. “In three separate rooms the management and staff of each of the companies sat together for the last time as separate entities. There were detailed discussions of the new corporate structure and EJADA’s corporate culture. Then everyone came together in one room where we unveiled the logo of the new organization and we had dinner as one company. At the unveiling there was a small elevated area where the new senior management team stood, but El Leissy refused to stand there above the staff. He explained that he was part of the team, all working together for the same goals. This was a sensitive gesture. Small things are important in a people’s company. For an IT services company the desks and computers are not the main asset. The greatest asset of any IT services company is the brainpower of its human resources.”
The president of EJADA agreed.
“The real worth of EJADA is in the excellence of our team and managing talented people is not an easy task,” Ward said. “Talented people must be satisfied. If they get disappointed, they leave you, take their knowledge assets elsewhere and then your company is the loser. When we merged there was no expectation that the staff should prove their worth in the new organization. We respect all our staff. We trust them. We know their capabilities and we want them to get on with serving EJADA’s customers. In a merger it’s not easy to create a dynamic, vital corporate culture but within EJADA we have elevated achievement to an art, not just a goal. That requires us to actively embrace the talent of our people and channel it effectively for both our customers’ and our own success.”
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