CEO: SAP in ME is ‘less than perfect’

SAP and its local partner SAP Arabia are planning to invest further in the region and strengthen their respective organisations, executives from both companies said this month.

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By  Diana Milne Published  June 18, 2006

SAP and its local partner SAP Arabia are planning to invest further in the region and strengthen their respective organisations, executives from both companies said this month. The disclosure follows concerns expressed by Henning Kagermann, CEO of SAP, that he was not satisfied with the firm’s progress in the Middle East. Speaking to journalists at SAP’s annual Sapphire user event, which was held in Paris, France, last month, Kagermann said that “our business in these areas is not perfect”. He went on to say that the firm is only partially in control of proceedings in the region as its business is done there through SAP Arabia — its sole Middle East distributor. “We decided some years ago to go with a sales partner,” he said. “If you have a partner which has the right to sell in the market, he also has the right to be successful or not,” he added. Also speaking at Sapphire, Ernie Gunst, president of SAP’s Europe, Middle East and Africa (EMEA) operation, said that working with a partner in such a way can lead to a “discrepancy” between the two. “As always in life when you only connect to one and you have visions and potential then there’s a discrepancy between what we think we can do and what this distributor thinks,” he said at the time. When contacted by IT Weekly again last week, Gunst said however that the only area of concern between the two companies was how much more could be done to push SAP’s growth in the region. “Of course we can do even more and that’s I think the context in which Henning alluded to,” he explained. “We are looking with SAP Arabia to see how we can ramp up even more these investment plans,” he added. When working with a partner, getting “alignment” is crucial, Gunst said. “And where we are aligned on many elements the only thing where we have some contention is how much more we can even do,” he added. Khatijah Shah, SAP Arabia’s chief operating officer, said the two organisations were looking at measures to strengthen the partnership and SAP’s presence in the region, such as increased headcount. Shah said: “From SAP Arabia’s standpoint we are very happy with the collaboration we have established with SAP to enable us to focus in the right opportunity areas in the market.” “We have identified key focus industries and we are working together with SAP to actually work on those opportunities,” she continued. “In addition we have had several discussions with SAP about strengthening our organisation further — about increasing the headcount, bringing in the right kind of competence into the organisation as is necessary of any growing organisation,” she went on to add.

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