Retail studies

Saji Oomen, general manager for the IT Group for UAE retail chain Al Batha Group talks to Imthishan Giado about the difficulties of finding appropriately-skilled Emirati staff, and the need for companies to react in a more agile fashion to business needs

Tags: Al Batha GroupEmiratisationRecruitmentSAP Middle East and North AfricaUnited Arab Emirates
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Retail studies OOMEN: When you look for the right resource, it’s always a problem to get it in the market.
By  Imthishan Giado Published  March 21, 2010 Arabian Computer News Logo

You claimed to have the first regional installation of SAP's retail module at your E-City location in Dubai. What is the current status of the project?

It went live and then we rolled it to three more stores, including one in Mall of the Emirates, Deira City Centre and another in Abu Dhabi in the Al Wahda Mall, in addition to the original Wafi one.

The rollouts have more or less come to the same thing. We have been improving the supply chain efficiencies using different types of reporting and processes. Investment is pretty high - we have possibly the highest investment in the electronics retail area.

Can you put a figure on this level of investment?

I wouldn't like to do that, but as you'd imagine, it's SAP - it's not cheap. The solution has been rolled out in all the four locations but long-term, it's going to bring the money back in returns.

Is it difficult to justify these kinds of large investments in software and infrastructure in the current economic climate?

It's not, actually. If you look at the emerging business models, I could say that quite often, what we need to do is forecast the requirements of the users when making the investments. There are a lot of models coming in and you will be handicapped to accommodate all these types of models within your business solution.

Secondly, there is a lot of competition in the electronics retail sector. What is going to differentiate your business from others? There is going to be some USPs for you and you need to have a system which can support them. In our case it is the service offering; we want to give additional services to our customers. Does your system support that? If you as a customer go to a shop and buy a TV, it is definitely not stocked in the showroom. If it's a Sony TV, in the backend the system will generate a purchase order which is sent to Jumbo. Jumbo will deliver it to you and then report it back to us, so all the details will be present in that PO.

It's an integration of the point-of-sale with the backend SAP system. That gives you a better service. Secondly, the profit margins is very thin so you can improve them through supply chain efficiencies to make sure that you have the right amount of stock - not excess or short. You can also constantly monitor what's moving fast and tailor your product mix accordingly; electronics get obsolete very fast and you don't want to get stuck with old models.

If you look at all these business requirements and also project some of these new business models coming in the future, you can easily justify it. Some of our biggest competition is also now looking at SAP after we've gone live.

Are project delays now a common occurrence as a result of the economic climate?

It's not something that we have experienced from our side. Definitely it can sometimes happen. It does occur for a couple of reasons. First, the scope is not very well defined to start with. Secondly, you come across solutions which cannot deliver the functionality you're looking for. Sometimes the partner cannot bring in the right resource to do the implementation.

How does it affect relationship with the vendors when budget concerns dictate that you cannot buy products at the same rate as in previous years?

I don't think it will have a major impact on the relationship. We have substantial stakes in SAP, because all our systems are on SAP and we have most of their applications implemented such as business intelligence or CRM.

Has our SAP purchase cycle slowed down? Not really. Strategic investments have not been slowed down; it's definitely on the priority list. We are in a yellow-light zone now. We are not spending in an aggressive manner but at the same time, none of the strategic investments are cut. It's not red, but it's somewhere in the middle.

One negative thing is some of the generous investments in IT, such as looking at different options - sometimes we do invest in IT based on certain speculations and take some risks to invest in certain technologies to see the benefits. It's a calculated risk that may or may not bring benefits. Those types of investments will slow down.

To give an example - we have implemented mobile CRM and equipped all the salespeople with tablet PCs. They are going out into the field connected by the corporate GPRS network. When we implemented this, there was nobody in the Asia Pacific region using it. The corporate GPRS was just announced in the market and we didn't really know how much it was going to cost and how it was going to be adopted and received by the salespeople, whether the cultural change will happen or not - there were a lot of question marks.

There is a lot of technology components involved so it's a risk to jump into a solution like that and bring some business value integrating all these components within the landscape. Fortunately for us, everything worked and people have been using it. That's the type of projects we are talking about - sometimes you do some calculated risks on the leading edge of technology. If you win, it brings a lot of productivity and business benefits.

Is SAP expertise widely available in the market?

Not yet. We still struggle with that situation. Of late, there have been some improvements, but again, that's also vanishing now. When you look for the right resource, it's always a problem to get it in the market. If you need three competencies - say A, B and C - and if you don't get a person with all of them, you'll settle for A and B together and train him on C. We sometimes settle for that.

Are you looking to include more Emiratis among your current work force?

We would like to. Actually I have approached the Etisalat College of Engineering to make some presentations at some point of time. But it's very difficult to attract the local talent. Ours is a private entity. There are IT people available from the Emirati community but they are mostly interested in the government organisations like Etisalat. They feel more confident there.

What other concerns have they expressed about working in the private sector?

I think it's a matter of culture also. People feel more secure in the government jobs. I personally do not differentiate too much in terms of security between private and the government jobs. In terms of a lot of fringe benefits they get in government in terms of additional holidays and allowances for dependants - some people get a little bit attracted towards that.

I don't know whether we will be able to win a lot of them over. I feel we still have a long way to go in that area. Initially I was enthusiastic and expecting that some people will get interested, but no. You need to remember that among the nationals, there are not too many people with the proper qualifications. They are very scarce, so they have a lot of choices available.

Even from expatriates, it's difficult to get someone with the right resources - forget about locals.

Eventually, the market will return to its previous levels. How do you plan for these situations as the manager of an IT department?

It's about making our systems more agile. I remember when one of our manufacturing companies started trading in certain goods. We had legacy systems, it took us six months to modify them. Now when one of our companies started, we did it in just two days. Business models change very fast. Companies in the trading business might go into manufacturing and so on.

It's not a question of changing the business process. The business has got all the decision-making power, it's their prerogative to make that decision. We need to adapt ourselves and immediately provide those services - we need to be ready.

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