The Organization’s

Heartbeat:
ERP and the way it exists
in the Middle -East
By : Navneet Tandon
navneet@raqmiyat.com
What will we cover today?
ERP Market in the Middle East, Implementation
UAE and Globally Implementation models
Size of market Why do implementations fail?
Major players Like the ERP business?
Vertical sectors Your options
Growth rate: CAGR
The ERP entrepreneur
ERP? Business model and attitude
What is it?
Where does it fit in? Complimentary technologies of
ERP
Benefits of ERP
Primary drivers of ERP in the ME
How does ERP sell in the ME: More Q & A
Vendor go-to- mkt. strategies
Typical sales cycle of ERP in the ME
ERP players and their playing fields
Some SAP and Oracle users
Typical implementation cycle in the
ME
Prevalent ERP technologies in the
ME
Enterprise Applications Software
Market in MENA 2004

Value: $173.72Ml.
Enterprise Applications Software
Market in MENA 2004

Total EAS, CRM, SCM Software Market

by Functional Area, 2004
Value Value
Technology   ($m) Share
8.3%
ERP
ERP   $133.66 76.9% 14.8%
CRM
CRM $25.65 14.8%
Supply Chain 76.9%
Supply Chain Management
Management   $14.41 8.3%

Total:   $173.72 100.0%

Source: IDC
Enterprise Applications Software
Market in MENA 2004
Top 5 EAS Software Vendors According
to Software Revenue

Rankin
Vendor g

SAP 1

Oracle 2
30.3%

People soft 3
Top 5
3i-Infotech 4
Rest of the Market
Sage 5 69.7%

Top 5 69.7%
Rest of the
Market 30.3%
Source: IDC

Total Market 100.0%

Enterprise Applications Software
Market in MENA 2004
Top 5 Vertical Sectors According to
EAS Software Spending in MENA,
2004
Value
Sector Share

Process Manufacturing 25.2%

Wholesale 11.8%
25.2% Process Manufacturing
Discrete Manufacturing 10.7% 37.7% Wholesale
Discrete Manufacturing
Retail 7.8%
Retail
11.8%
Government
Government 6.8%
6.8% 10.7% Rest of the Market
7.8%
Others 37.7%

Top 5 62.3%

Rest of the Market 37.7%

Total Market 100.0%

Enterprise Applications Software
Market in MENA 2004
Forecast EAS Software Spending in
MENA (US$M), 2004 to 2009

CAGR ‘
  2004 2009 04 - '09

Total
Revenue 160.62 284.08 12.1% 300.00
CAGR: 12.1%
250.00

200.00

(US$M)
150.00

100.00

50.00

0.00
2004 2009
ERP Market: UAE
Oracle 11.81 23.20
ICICI Infotech 5.19 10.20
SAP 4.76 9.30
Microsoft 2.65 5.20
Sage 2.02 4.00
Focus Softnet 1.58 3.10
Scala 1.26 2.50
IFS 1.03 2.00
SSA (Incl. Baan) 1.00 2.00
Intentia 0.87 1.70
ACCPAC-Sage 0.84 1.70
New Technology Systems 0.79 1.60
Exact 0.68 1.30
Sun Systems 0.48 0.90
4sight Technologies 0.44 0.80
QAD 0.35 0.70
Samsung 0.31 0.60
Alfa Misr 0.19 0.40
GEAC 0.15 0.30
MAPICS 0.08 0.10
Fourth Shift 0.05 0.10
Eskadenia 0.05 0.10
Epicor 0.05 0.10
IDC:2004
Others ( Taken as 4) 1.66 3.30
Total 50.98 100.00
ERP Market Globally

• Various research figures: Around 16 Billion in 2005

• Gartner estimates that the ERP market grew 4.9% in

Europe, Africa and middle east amounting to 7.5 billion US
in 2005
So What is ERP ?

 Scope and definition increasingly driven by

vendors in order to differentiate their product
 The continuum stretches right from a plain
accounting software like Tally to ERP systems that
offer BI, Document management, Work-flow, CRM,
HRMS, logistics functionality
 The trend is to support the organization’s core
processes. In addition to finance, this includes all the
above mentioned areas
 Arabization and industry best practices a regular
part of the package
Where does it fit in ?
Primary Drivers of ERP in Middle
East

Cost efficiencies
Operational efficiencies
Better co-ordination, control and
organizational effectiveness
Corporate policy from HO in country
of establishment
Hype !
The benefits are obvious ….

• Integrate information (Financial, HR, Customer, Supplier,

Manufacturing) : BRING IT ALL TOGETHER !!
• Standardize processes
• Integrate processes for greater efficiency
• Reduce costs : Lower inventory, faster go to market decisions
• A single system to support rather than several small different systems
• A single applications architecture with limited interfaces
• Increase operational efficiency
• Enhance employee productivity
• Access to best practice systems and processes
How does ERP sell in the Middle East?
ERP Vendors Go – To - Market
Strategies
Strategic accounts handled by own
sales force
Balance mkt. fulfillment through
partners
Even for strategic accounts,
implementation through partners
Limited direct participation by Vendor
professional services
The Benefits….

Strategic planning: Facilitate decision making by providing a

decision support system – any information any time! Any analysis
any time!!
Supply chain efficiencies:
Reach more vendors, produce more competitive bids and
widening participation, lowering the cost of products and
services purchased
Automated ordering and payment, lowering payment
processing and related costs
Monitoring and control: Alerts
Repository
A typical sales cycle of ERP in the
Middle East:
The following steps:

 Lead generation
 Product manager/pre sales qualifies lead. Develops
solution
 Sales person follows up lead jointly with product
manager/pre sales
 Sales process of demo/positioning/ mapping/objection
handling/referencing etc etc.
 Estimation of customization if any + High level
functionality frozen+ High level project plan and time
lines+sizing of the solution
 Proposal – negotiation – Ts&Cs
 Sale!!

Typical cycle time: 3 – 6 months

The ERP players and their playing
fields
Tier 1:
SAP: Large Enterprise. Popular in
Manufacturing
Oracle E-Business suite: Large Enterprise.
Popular in Govt. and corporates.
Tier 2:
Microsoft: GP, Navision, Axapta
Sage
3i Infotech
Tier 3
Numerous (focus, locally developed brands,
Brands from India)
The ERP players and their playing fields
Discreet Assembly, Heavy & Light Engineering, Transformers, Steel, Garment, Cable, Jewellery, Can, Marble & Tiles , Fabrication,
Scaffolding, Automotive
Process Dairy & Juice, Cement, Chemical, Mineral Water, Soft Drink, Plastic & Paper, Packaging, Pharma, and Oil & Gas
Trading Major Distributors of IT/Electronic appliances / Food, Major Supermarkets, Business Groups
Government Local Government Department

SAP
Oracle
Market Positioning &
ERP Space Cost & Features ERP Budget

.7 ml. to 1 m.+
Navision/ Axapta
Oracle SE, Orion,
.2 ml. to .5 ml Ramco,Epicor Scala
Sage
Great Plains

Exact
Vision 2000
.05 ml. to .2 ml Focus
FACT
Wings
In-house Development
Alpha
New / Others

Area covered by section of pyramid shown above represents total size of market.
Some SAP and Oracle Users ( ME)

SAP
Al Futtaim
ADGAS
DPC
Kodak
Samsung

Oracle
Al Tayer Group
Grand Stores
Arabian Automobiles
Juma Al Majid
DAMAC
A typical implementation cycle of
ERP in the Middle East:
Order received by Delivery team
Kick off meeting: Key stakeholders identified.
Project manager from both sides agreed.
Requirement study initiated to freeze detailed
(lower level) specs and functionality
Requirement document sign off.
Project plan document plan sign off
Change management, escalation and other
processes agreed
Delivery of each phase
Testing of each phase + User acceptance sign off
User training
Project sign off after completion of all phases
ERP: Prevalent Technologies in the
Middle East
J2EE, Java
.Net, VB
SAP
Cobol, Foxpro
Oracle Developer (Forms&Reports)
Databases: Oracle 9i, 11i,10G, MS
SQL, Informix,
OS: Windows, Linux, Unix
Web servers: Oracle App. server, IIS,
Jboss
Implementation Models

Onshore
Offshore
A combination of both
Why do implementations fail?
Lack of understanding of the customer’s requirements
Inadequate requirements definition
Specification Creep: Lack of proper project management -
"toybox effect" can take over. Users see all the
functionality available and suddenly they want it now.
Scope can get out of control.
Lack of a structured PM (PMI steps, documentation etc )
Lack of co-ordination between implementation and dev.
teams
In Project Manpower turnover
Lack of management commitment: Involvement Vs
Dedication
Inadequate resources deployed by the client
Resistance to change: Managing organizational culture
change of the client
Too much change in the core processes of the company Vs
too much customization….
Unrealistic timelines
Unrealistic expectations of benefits and ROI
Like the ERP Business? Your
options:
Sales: consultative selling, but no
substitute for the ‘Fire in the Belly’
Marketing
Product development and research
Pre Sales
Domain specialist
Functional consultant
Project Management
Implementer
Developer, Tester
The ERP Entrepreneur: The
business model and attitude
Understanding of the business: Long
selling and realization cycles
Adequate funding and people handling
skills
Passion for the business – Even curry
shops make money!
Revenue streams:
License revenue
Up-selling and Cross-selling opportunities
Services revenue
AMC revenue
IP revenue : Selling your IP
Implications of up-grading ERP

All the challenges faced by a fresh

implementation
Skill bottleneck in the company
Re-engineering of resources
Changing vendors, partners,
infrastructure poses challenges
Data integrity
ERP – Complimentary technologies

Mobility solutions
CRM
BI
Asset Management
– RFID applications
Industry specific
packages
 Q&A

My contacts: Navneet@raqmiyat.com
Cell: +97150 7273653