Taming the IT monster

KSA's Al-Zuhair Group had fundamental business requirements that weren’t being met by its IT systems, so group partner, Talal Al-Zuhair, decided to try out a very radical solution.

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By  David Ingham Published  May 15, 2001

IT headaches|~||~||~|Like every business operating around the world, KSA-based Al-Zuhair Group has had its fair share of IT challenges. Talal Al-Zuhair, partner, had long wanted to do something about the cost and complexity of maintaining corporate information technology systems. But he also wanted the IT systems to be able to more easily support mobile workers and be able to scale rapidly to support the company’s growth.

His solution was radical and daring: outsource the entire management of the group’s business software, such as accounting and inventory management, to a third party. Not only that, but give it to a third party located off-site in another country.

The result, Al-Zuhair says, is a halving in IT costs since initial trials began last December, and a system that can more easily cope with growth and changes in the business. “It gives you so much flexibility; it allows you to do things that you didn’t even imagine doing,” says Al-Zuhair. “It saves costs as well.”

So how does it all work? Think of all the software, such as accounting and human resources, that you currently use to run your business. Right now, that software is all run on computer systems in your offices and managed by people physically located in your offices.

It’s a hassle, right? IT people keep jumping ship, causing you endless troubles with recruitment and retention. The software often isn’t configured the way you want to it to be and can’t adapt to changes in your business. On top of all that, IT costs seem to be spiraling despite your best efforts to keep them in check.
||**||The solution|~||~||~|
The potential solution to the problem is to hire the services of an application service provider (ASP.) This ASP takes all of the business management software and related data that’s running on your in-house computers and puts it onto its own, highly secure servers.
You then access those servers over Internet connections, with the Internet effectively becoming your network. You pay the ASP a fee for the service, and all of the bother involved in managing those IT systems is taken away.

That’s the vision, but surprisingly it’s one that very few companies, anywhere in the world, have so far bought into. But more on that later. For now, Talal Al-Zuhair is very pleased with what he’s got.
The great benefit of the system he’s chosen, which is a combination of Sage’s CS/3 business software and Comtrust’s secure server facilities, is that it allows him to operate without borders.

Al-Zuhair Group (turnover approximately SR 100 million) has three group companies, involved in trading (EEMCO), construction services (CONSECO), and refrigeration (OMEGA Engineering.) A growing number of the company’s projects are in remote locations where the company doesn’t have a physical presence.

With the new, Internet-based system in place, those employees out in the field can log on to corporate information systems at any time to access and upload sales information. In the case of the company’s trading division, product inventory can be monitored on the move by mobile salespeople.

Or in the case of Talal Al-Zuhair himself, who travels a lot with his notebook, all he needs to call up corporate information is access to an Internet connection. He can be in total touch with the business wherever he is. “If members of the management team are traveling within the Kingdom, and within the Gulf, they can see exactly what’s happening on the accounting side on their PCs over the Web,” says Al-Zuhair.

The system could also help the company manage its future growth more effectively. The company already handles refrigeration projects in Qatar and the UAE and is considering regional offices outside KSA.
If it decides to do so, opening up those offices will be a great deal easier with the new system. No need to put servers and IT support teams in every new location: just equip workers with notebooks, Internet access and user rights and they are ready to go. “I can look at the whole Gulf as my market now,” says Al-Zuhair. “I can set up an office in any country, but have the power of Sage with me. I wouldn’t need to have another server and another support team.”

What Al-Zuhair is saying all sounds like an incredibly compelling bunch of reasons to embrace the ASP formula. But as far as Arabian Business.com knows, he is the very first customer in the entire Middle East to formally go live with such a solution.

The reasons are both psychological and practical. The concept is certainly a new one and new ideas take time to catch on. But what has really been holding the idea back is reluctance on the part of businesses to hand over such a core function as IT and responsibility for corporate data to a bunch of outsiders. On top of that are genuine concerns that Internet connections are not yet fast enough and reliable enough to support such a model. Talal Al-Zuhair, a tech-savvy business manager, is aware of all these issues, but has still gone ahead with the ASP solution.

In terms of security, he says that he has no qualms in putting his corporate information systems on the servers of Comtrust, an e-business subsidiary of the UAE’s Etisalat. He also rates Comtrust’s customer service, which will be music to the ears of a company that can all too easily be associated with Etisalat’s occasional hiccups. “From the security aspect, that was the reason I chose Comtrust,” Al-Zuhair says. “They’re a very professional outfit. I don’t know of anybody else offering this service in the region.”

In fact, he regards the Etisalat link as a plus because of the UAE telco’s enormous financial might and its willingness to invest in emerging technologies and ideas. Al-Zuhair is also unconcerned by the fact that Etisalat’s ISP, Emirates Internet & Multimedia, has been brought down by hackers.

“Everybody gets hacked,” Al-Zuhair points out. “You want to make sure that the person getting hacked has the ability to stop it, has the ability to analyse it and has the ability to fight it,” he adds.

The question of Internet connectivity is a little more difficult. An ASP’s services are accessed over the public Internet and everyone knows KSA has had some big problems with the quality of Internet connections. Add to that the fact that Comtrust’s servers are located in the UAE, which means that Al-Zuhair Group is accessing its information systems over an international connection. That all adds up to potentially very poor performance. Al-Zuhair admits performance isn’t perfect but says its satisfactory and getting better.

“With the Internet, there’s always going to be a lag and a delay,” he says. “Give that to a user and immediately he’s going to say: ‘This thing’s too slow. I can’t work.’ As the owner of the idea, you’ve just got to encourage users that that’s the speed the Internet works at and to get used to it.”

He says that the Internet is also improving rapidly in Saudi Arabia. “Of course, there are times when the Internet gets busy… but it’s satisfactory and the Internet has been improving dramatically in Saudi Arabia,” says Al-Zuhair. “It’s what I would call ‘stable’ now.”

Another surprising fact about Al-Zuhair Group’s solution is that the company is using the most basic analogue Internet dial-up connection to reach Comtrust’s servers. Here, Al-Zuhair praises Sage’s product. “You have to take your hat off to Sage,” he says. “The product works very well over the Internet.

The reason is that the only data passing back and forth between Al-Zuhair Group and Comtrust’s servers is the incremental changes that a person makes to a file as they work. This data requires very little bandwidth to pass across the Internet. To speed things up, however, Al-Zuhair Group will move to a superior ISDN connection when the technology becomes available in the Kingdom.

All in all, Sage and Comtrust have delivered Al-Zuhair Group with a technology solution that has significant benefits for the business. Talal Al-Zuhair has not only released himself from the headache of managing IT systems, but he’s saved money. He reckons he’ll save around $50-60,000 this year, about half what we would have spent on IT.He also has a system that better supports the way the company wants to work, and that can more easily be adapted as Al-Zuhair Group’s business changes and grows.

So would Talal Al- Zuhair advise others to follow him into the world of ASP solutions? “I’d recommend people go for an outfit that has the muscle to do what it sets out to do,” he says. “As long as you’re dealing with a professional company like Sage that has developed products for the Web, and you’re dealing with a professional company that hosts your servers [Comtrust] and has the ability to defend itself from being hacked, I would encourage people to do it.”||**||

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