JDE creates direct presence in local market

JD Edwards has acquired Dalma Computer Systems to establish a local office in the Middle East. As a result, it hopes to boost both its sales and market share throughout the region.

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By  Matthew Southwell Published  May 25, 2003

|~||~||~|Enterprise resource planning (ERP) giant, JD Edwards, has established a direct presence in the Middle East through the acquisition of its UAE partner, Dalma Computer Systems. The software vendor hopes the several million dollar deal will not only boost its sales and market share in the region, but also improve customer service and introduce local businesses to JD Edwards’ extended product portfolio.

“The Middle East is experiencing a lot of new business opportunities as it opens up to international trade, while industry analysts are predicting that local market demand for business software is going to continue to experience double-digit growth of around 15% over the next several years,” says Fady Sfeir, the newly appointed managing director for JD Edwards Middle East.

“As such, we have decided to open a direct office here in Dubai by acquiring Dalma computer systems and, by establishing an operation here and boosting the quality of our operation, we will be able to close the gap [on our competitors] and become a leading software provider in the Middle East,” he adds.

The acquisition of Dalma is the latest in a string of deals that has seen JD Edwards buy companies in India, China and Sweden. According to Gilles Lambret, vice president & general manager of JD Edwards Southern Europe, such deals have been necessary to ensure that the company keeps growing in light of poor sales within Europe and North America.

“Currently, we are looking to expand our business worldwide… We are struggling in terms of growth worldwide, like most other software companies, and one of the easy answers is to buy some services companies in order to reach critical mass in developing markets. Therefore, this deal in the Middle East is part of our global growth,” he says.

In practical terms, the local deal will see Dalma’s 40-odd employees integrated into a local JD Edwards office and approximately ten international staff will join them. While sales and marketing will be strongly represented in this foreign contingent, the vendor says it is bringing new skills to the operation, such as project management.

“The whole reason for this investment [in Dalma] is to give the market something slightly different. So in addition to bringing sales & marketing people to the market we will add technical and implementation skills. We see this as a differentiator in the local market,” says Tim Caulkett, Middle East regional director for JD Edwards.

Lambret argues that these additional skills will be key as the vendor attempts to grow its local market share as, arguably, the ERP battle is no longer being fought in the back office but in the realm of extended ERP.

“ERP is much more complex now because it is not just back office — you have customer relationship management (CRM), supply chain management (SCM) and business intelligence (BI). It is very difficult for business partners to have skills in all of these areas so the skills that we will bring to the local market are important,” he says.

In addition to bringing product skills to the local operation, JD Edwards’ international employees will also beef up Dalma’s implementation methodologies and help its end users achieve a more tangible return on investment (ROI).

“We will be rolling out JDE’s global methodologies and tools for project management in the Middle East. In addition, we will bring our value assessment tools to the region to help users get as much benefit as possible from [implementations],” confirms Sfeir.

Just how much growth the acquisition will provide is unclear. The additional skills brought to the region by JD Edwards’ international team, for instance, may find fallow ground as SCM and BI have yet to really take off in the local market. Caulkett agrees and admits that extended ERP sales are unlikely to soar for the next couple of years.

“In terms of the local market, the new products [such as CRM, SCM and BI] are gaining interest, but we are not quite there yet. These products have a lot of growth potential for the next two years, but in the meantime ERP continue to make up most of our sales,” he says. ||**||

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