Vertically challenging

SAP’s focus on industry specific solutions is paying dividends with a number of companies, including luxury goods chain Paris Gallery, implementing its software

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By  Published  November 10, 2006

ERP SOFTWARE is experiencing something of a renaissance, according to SAP Arabia’s sales director Phil Blower.

He believes the traditional onesize fits all approach to ERP is no longer enough to meet increasingly sophisticated customer demands.

The way forward, he believes, is to provide solutions tailored to meet the needs of specific industry verticals.

Industries in the region, such as the oil and gas, retail and banking sectors can no longer rely on just the basic core ERP accounting and HR modules, according to Blower.

They require solutions, which fit their specific needs — such as billing solutions for utilities companies and project management modules for the construction industry.

“All industries here are developing very quickly — the obvious ones like the construction industry and retail are developing both in the scale and sophistication of those industries. And the requirement for enterprise asset software to manage that growth is also growing in sophistication,” he comments.

“Our focus here in the region is to not only to deliver the very best core financials and HR management but also that specialist functionality that the construction industry needs for managing the project that it is building. You cannot do that with a piece of general software — you need very specific industry focused software for that,” Blower claims.

At its Sapphire user event in Paris in May SAP AG announced plans to introduce around 80 industry and market specific solutions this year and eventually create a portfolio of 650 such solutions to be available worldwide. One solution that is already available and widely used across the region is SAP for Retail.

This was enhanced last year by the acquisitions of Triversity – which connects data from the point of sale through to the retail supply chain – and enterprise software solutions provider Khimetrics which provides solutions to allow retailers to better forecast profits. One Middle East company which has taken advantage of SAP’s focus on industry specific solutions for the retail industry is Al Fahim Enterprises – owner of 25 Paris Gallery stores in the UAE, four in Saudi Arabia and two in Qatar as well as two distribution businesses and additional retail franchises.

The firm revealed to IT Weekly in April that it planned to deploy the SAP for Retail solution across its operations in a multimillion dollar deal and has recently completed the implementation project.

The group has initially deployed SAP for Retail across its companies in the UAE including Paris Gallery and has implemented mySAP ERP 2005, SAP NetWeaver Business Intelligence and SAP NetWeaver Portal.

This will be followed by the implementation of further applications including mySAP CRM, SAP Forecasting and Refreshment and SAP Extended Warehouse Management.

Previously the Sara Group division of the company, which runs the Paris Gallery in Saudi Arabia, had used an JD Edwards ERP solution but decided to replace it with SAP’s solution citing the fact that this offered unified and retail specific technology.

“It [JD Edwards] was strong enough but since we are going to have a unified a solution we felt that SAP was a better option,” Sherif Sadek, IT manager for the Sara Group told IT Weekly at the time.

The company hopes to use the solution to support its aggressive growth plans and to maximize its profitability.

Essam Enany, president of SAP Arabia, believes Al Fahim Enterprises will benefit from deploying a retail specific, rather than a generalist ERP solution. “SAP understands that retailers need the ability to quickly adapt and innovate to continue to create value for their customers,” he says. “Our solutions allow companies like Al Fahim Enterprises to flexibly design, implement and execute new, agile business strategies and processes.”

While expanding its portfolio of industry specific solutions is a key focus for SAP — the core of its business strategy is to drive the development and adoption of ERP software based on serviceorientated architecture (SOA).

SAP has hyped SOA as the technology that will transform the IT industry by allowing businesses to respond far quicker to business changes, giving them greater agility and flexibility.

SOA is made up of a set of linked repeatable business tasks, which are self-contained and reusable software modules that are independent of applications and the computing platforms on which they run.

Using this technology the user can focus on the type of business services it wants to deliver and does not have to change the underlying technology behind it.

Earlier this year SAP announced the release of mySAP ERP 2005 – its flagship SOA ERP product that it believes will pave the way for widespread adoption of the technology. According to Blower, businesses simply have no choice but to adopt SOA if they want to keep up with the pace of change in the IT world. “SOA as a backbone technology is a given and if you don’t have it then you can’t service the future requirements in our software industry,” he says. “The business world is changing incredibly fast and the requirements of the end customer of the SAP world are changing.”

One regional company, which has already jumped on the SOA bandwagon and upgraded to ERP 2005 is the Saudi utility firm Marafiq. In 2003, the firm, which is the power and water utility company for the cities of Jubail and Yanbu in Saudi Arabia, implemented the HR, Plant Maintenance, Materials Management, finance and controlling and SAP Industry Solution for Utilities (ISU) modules of SAP’s ERP R3 solution.

It is now in the process of upgrading to ERP 2005 and deploying the additional modules, CRM, Strategic Enterprise Management (SEM) and implementing an enterprise portal.

Ahmed Al-Kahrs, manager of Marafiq’s IT department, believes an SOA approach to ERP will benefit his organisation. “Our aim is to deliver a better service to our customers and for speedier delivery of customer services this is the right way to go,’ he explains. “We want to keep our customers and to be ready to compete against any other competition. One way this new technology will help us to do this will be by providing us with more services — for example a self-service module where you can deliver your reports to your customers.”

Blower adds that the deployment of an SOA based ERP system would greatly increase the speed with which Marafiq could respond to customer demands.

“This is a good example of where we’ve got a customer who’s using software they deployed in 2003 — and he’s now able to seamlessly upgrade to the new level of software,” he says.

“The speed with which he can respond to their customer requirements – that’s the new world for the IT department.

“The business user has to respond to ever changing, ever more demanding customers and competition. And the speed with which you can deploy software to do that in the SOA world is just totally different to the old world,” he adds.

Marafiq is also an example of a company that has taken advantage of SAP’s industry specific solutions, having deployed the ISU module.

Al-Khars says the firm had selected SAP’s ERP originally because of its ability to provide a customized solution for utility companies.

This, he says, was crucial in helping the organisation to improve customer services — in particular billing services.

“From day one we were able to bill all our customers — it was accurate billing on time without major problems,” he comments.

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