Riding the ERP wave

IT Weekly met up with Satyam’s Virender Aggarwal to talk about what effect the current boom in the region’s enterprise applications market is having on the IT services firm.

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By  Published  November 17, 2006

IT services giant Satyam Computer Services has had a busy 12 months in the Middle East keeping up with demand for its services as the region’s enterprise software market continues to expand

The Indian firm offers a whole range of services from application development to managed IT services, but much of the business it has done in the region recently has been in implementing big enterprise software solutions like enterprise resource planning (ERP) from vendors such as Oracle, SAP and IBM.

Satyam has made a number of changes to its Middle East operation to better capitalise on business opportunities opening up in the region due to the software boom, so IT Weekly caught up with Virender Aggarwal, the company’s director and senior vice president for Asia Pacific, the Middle East, India and Africa, to find out what steps have been taken and what this will do for the company going forward.

What has Satyam been doing in the Middle East over the last year?
We have expanded in the region during the last year in about five more countries. We have set up a registered company in Saudi Arabia that is directly incorporated without a local partnership. We have also set up sales offices in other countries and are moving the sales force to Bahrain, Kuwait, Qatar and Oman. All sales had been centred in Dubai and people would travel around, but to give us a greater local focus we have relocated our sales teams across the region.

When did all this happen?
It has been happening in phases. Kuwait happened almost a year back, Qatar happened about six months back, Bahrain maybe about three months ago and the last to happen was Oman earlier this month.

What effect has this expansion had on Satyam’s business in the region?
Opening the offices in various countries has made a massive difference. Instead of being a Dubai-centric organisation we have become an organisation more responsive to the local needs of the respective countries and we hope that will give our customers a lot more confidence.

We moved into Kuwait a year back and we started getting a lot more business from there. We moved into Bahrain and immediately started to see an improvement in our business. We made around US$3million of extra business in the past eight or nine months, around a 20% increase in new business in the Middle East region.

Why did Satyam set up a registered company in Saudi Arabia and not just move its sales force to the Kingdom?
Saudi Arabia is the largest market in the Middle East and it was a market we were not serving much. With this incorporation of the company I think we are much better placed to serve the Saudi Arabian market and I think we can leverage the demand from the market a lot better with the physical presence that having a registered company gives us.

We think that Saudi will become the largest market for us going forward in the Middle East. Maybe it will take around 12 months time before it matures to a reasonable size.

Where else in the region is Satyam looking to expand?
The next step would be possibly Egypt or Jordan. I do not think we are looking to open another office in the Middle East other than Egypt or Jordan.

What other factors do you think have led to the impressive growth Satyam has experienced this year?
Business for everyone is growing in the Middle East and companies want to modernise their organisations and use technologies to get control of what is going on. When the times are good I think companies do spend money to bring their IT systems up to date.

How is Satyam’s Middle East operation doing compared to the company’s performance globally?
The Middle East is outperforming the rest of the world, but given the high prices of oil we have seen in the region we have seen a lot of spending and that is going to help the Middle East outgrow or outperform other regions.

By how much has Satyam expanded its regional employee base to meet the growth in business?
We have increased our workforce in the region by about 40% year-on-year. We are going to see the same sort of growth this year as well. The growth is more on the technical side. The sales force has not grown that much because when there is good demand in the market we don’t need to increase the sales force.

Has Satyam had difficulties finding enough adequately qualified staff with such a rapid expansion of its workforce?
I think manpower challenges are always there, but it is not really a problem finding good people at the moment. We have got people coming from India, Pakistan, Jordan, Egypt and Lebanon. We are also talking to respective governments about how we can hire the local people to deploy on technical projects.

What are the main sectors Satyam is present in?
Banking, retail, oil and gas, these are the main sectors. We are working with a lot of the airlines in the region and we are also working with telecom companies in the region.

What deals has Satyam won that have contributed to its growth?
In Bahrain we got a success with the Bahrain Maritime and Mercantile International (BMMI) recently. We are implementing Oracle’s ERP solution for them.

This happened a few weeks ago. Moving to Bahrain seems to be paying off and we have some more clients that we will sign up pretty soon. We have signed a few deals in Saudi. We have signed up the Islamic Development Bank. We are going to implement an ERP solution from SAP at the bank. That was signed a few weeks ago as well.

We also have Al Rajhi Bank — we have been working with them for about a year or so. The banking sector is quite a big sector for us in Saudi. We recently won a contract in Qatar with Gulf Drilling International (GDI), which was signed in the last month. We are implementing Oracle’s ERP solution there as well. We are working with the National Bank of Kuwait and four other banks in the country. All the banks have come on board in the last year.

Is it primarily the big enterprise system implementations that you deal with?
It is mainly the enterprise systems such as Oracle and SAP. We do Oracle portals, we do content management, and we do banking applications like core banking systems. But we also do data warehousing, business process management (BPM) and business intelligence (BI).

What are the benefits to companies such as BMMI of implementing ERP?
The benefits include companies being able to get a better hold of their financials, being able to produce balance sheets on time, to uniformly process accounts, control receivables, payables, inventory, stock ordering and so on. In short, these applications can cut the cost of doing the back office processing.

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