Ejada - the next step

Saudi-based Ejada Systems is already a key regional player in the IT services and solutions space. With recent venture cash injections, it is now looking to expand operations throughout the Middle East and North Africa. Colin Edwards reports.

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By  Colin Edwards Published  September 7, 2006

|~|ejadaman200.jpg|~|Abou Nasr: Plans to strengthen
Ejada's core through acquisitions and regional expansion.|~|Ejada Systems is just 21 months old, but already it is living up to its Arabic name - a rough translation of which is "excellence and being good at what you do".

As it enters its third year as an IT services and solutions provider, the company is planning to expand its footprint initially in the Gulf and Levant, and then throughout the Middle East and North Africa.

Armed with a cash injection from Sedco - the Saudi Economic and Development Company - in exchange for 30% of the company, Ejada is taking the acquisition path to give it the rapid enhanced knowledge base and geographical spread it needs to develop new markets both within its existing customer sites and beyond.

"We believe that Ejada has the potential to become the leading IT services and solutions provider in the Middle East, with strong brand recognition and a diversified customer base. We look forward to working with the Ejada management to create the Middle East's own IT powerhouse," says Yousuf Khayat, managing director of Sedco's Direct Investment Group.

According to Fawaz Abou Nasr, Ejada's Corporate Planning executive vice president, Sedco's decision to invest in Ejada as its primary IT investments vehicle gives it financial strength to go ahead with its expansion plans within and beyond its Saudi base. Currently, it has its head office in Riyadh and branches in Jeddah, Al Khobar, Amman, Cairo, Alexandria and Dubai, and partners in Beirut, Kuwait, Yemen and Oman.

"The money invested in this company will be used on multiple fronts including the acquisition of smaller organisations complementing what we are doing. We'll also be using these proceeds to advance our plans internally," he says.

Part of that internal expansion will see its staff of more than 400 top the 500 mark within the year, he adds, confirming the company’s position as a major regional IT force.

"Our plans are not only about enhancing our portfolio, but also strengthening our backbone. At the end of the day we are a solutions and services company. We are not in the physical infrastructure or hardware business. We are truly a services and solutions organisation, which is very different to many others around the region.

"Our assets are people. Our growth path depends on our bandwidth. Some acquisitions will aim at providing us depth in particular offerings that we want to excel. This will complement our efforts in building in-house capabilities. Others might be to achieve a presence in particular countries - people who have strength in a particular country in the region where partnering with them would give us better exposure in that market. So it is a mixture in terms of the criteria we will use to expand," he says.

With its project team specialists making up more than 80% of the total workforce, acquiring the right skills could be seen as a limiting factor to the company's future growth. Abou Nasr, while acknowledging it is an ongoing challenge, believes the company has made sure it recruits, develops and keeps the right level of professional. ||**|||~|ejadadesk200.jpg|~|Abou Nasr: Attracting the right staff has been our core competency. |~|"Attracting the right staff has been our core competency. We have built a culture to attract qualified people. We have a mixed strategy of having experienced people while at the same time attracting junior people on an annual basis.

"We have relations with universities in Saudi and outside. We have been successful in attracting A-class graduates. We were able to grow to more than 400 people today, so while attracting people and satisfying all the bandwidth requirements is always a challenge, it's not a limiting factor. For a services organisation, it’s the core of our business."

The company was founded by the amalgamation of three long-established Saudi IT companies and supported by venture capital from the Injazat Technology Fund. Earlier this year, Qatari group, Salam International, bought a share of Ejada and while this was not linked to any expansion in Qatar, Abou Nasr says the relationship will facilitate and strengthen such an expansion into Qatar.

"Their interest is in the growth of the company. The vehicle behind that is not their presence in Qatar per se. However when we start executing our plans in that market the fact that we have a strong partner there will be a major value add," he says.

What has made Ejada so attractive to investors is its growth over the last year. Its historical user base has been in the financial sector and it can count every Saudi bank, including the central bank, as a customer. Its portfolio includes more than 26 regional banks.

"It has been a very rewarding year for us with a lot of successes. We have made major successes on all fronts during the past year in terms of penetrations. We still have plans to grow vertically within these banking accounts and to penetrate more accounts in that sector, but we've also had major successes in other sectors including telcos, oil and gas and government in particular. These have been rewarding," he says.

The company has recently added GoldenGate to its 30-plus portfolio of partners which include IBM, Microsoft, Oracle, SAS and Informatica. GoldenGate, though a niche player, is a leading provider of technology for capturing, transforming, moving and verifying transactional data in real time across major databases and environments.

While paying more attention to developing its non-banking business further, it is also developing others such as the capital market which it believes has major needs, especially with the advent of new non-banking financial institutions licences. With this in mind it has established strong partnerships in this space such as GL Trade and HeadStrong. Another area where it sees growing demand is EMV and smart cards and Ejada has partnered with SmartSoft, one of the leaders in the EMV space.

So having established this platform for success and attracted significant venture capital to propel growth, an IPO must be somewhere on the company's strategic horizon.

"Yes," says Abou Nasr. “We are looking at that and monitoring what is happening. But at the end of the day if we move in an IPO direction, it has to be at the right time and give the right value to our shareholders and our customers. So yes, it is something we are looking at and we are going to make the right decision at the right time."||**||

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