Saudi services market shows promise

A number of Saudi IT companies are beefing up their service offerings as the Kingdom’s end users appear more willing to outsource their information technology requirements than ever before.

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By  Matthew Southwell Published  July 2, 2003

|~||~||~|A number of Saudi IT companies are beefing up their service offerings, both in terms of the number of consultants they have and the skill sets they offer. Al Alamiah, for instance, currently has around 380 staff in the Kingdom that specialise in installation, support and turnkey projects, while Specialists for Computer Systems (SCS) is focusing on adding value to implementations through its services arm.

“Our vision is to help our customer to achieve their business goals by using IT. By using professional consultancy services, customers can speed up their business processes and increase their productivity,” says Ammar Sedki, director of operations at SCS.

Another company that is ramping up its service operations is Alnafitha Information Technology. The Microsoft partner already serves more than 200 clients throughout Saudi, but in the coming months it will be expanding its service offering to target the Kingdom’s small-to-medium sized businesses (SMBs).

“For the coming year, we will focus heavily on software and solution services. We want to be a unique company that provides professional services for SMBs. We are investing in the area, by building our team and looking at things like 800 numbers, to make it happen,” says Mohammed Muhtasib, managing director of Alnafitha.

Key to this services drive will be Alnafitha’s new initiative, called the ‘affordable services model.’ According to Muhtasib, this is services with a minimum charge whereby smaller companies can receive high quality help at a price they can afford.

“If a company has only 25 PCs or so then instead of hiring a person to manage those, and yet another person for their help desk, they can come to us. We will be able to support all their needs at an affordable cost so that they will be able to benefit from implementing IT,” he says. “Services are the important thing because companies have to make sure that their IT works and is delivering benefits, rather than just buying hardware and software,” he adds.

While the SMB services market remains largely untapped in Saudi Arabia, there are signs that the Kingdom’s larger organisations are opening up to the idea of outside assistance. Ifitkar Nadeem, senior e-business analyst at the Centre for Economic & Management Systems, King Fahd University for Petroleum & Minerals (KFUPM), believes there are a number of reasons for this growth.

“The biggest chunk of IT services in Saudi Arabia is [still] implementations and support. The reason for this is the complexity of many projects and the lack of expertise,” he says. “Many companies do not have the capacity inhouse for these projects because maintaining the [necessary] skills is costly. Also, some companies cannot hire a person for specific projects because it is difficult to recruit people, due to the local skills shortage and other things such as visas [ex-patriots],” he continues.

Another driver for the growing adoption of services in Saudi Arabia is the current drive for standardisation, says Nadeem. “Companies have realised that they need international standards. Therefore, while they are buying tools to enable this, the tools have actually become a smaller part [of the purchase], perhaps only 10%, and the real product they are buying is the services, as it is these that help them standardise,” he explains.

While the evidence points to an embryonic but burgeoning services market in Saudi, just who will be servicing the Kingdom’s companies is another matter. While the likes of Alnafitha, Al Alamiah and SCS are building up their services divisions, Nadeem argues that they will not be truly Saudi services companies, but more front offices for non-local talent.

“The local [services] companies do not have the resources in house. They have an external partner that supplies them. The local operations are more front offices that don’t have people inhouse, but they mobilise people from outside the market. Whoever has the most visas wins in this market,” he says.||**||

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