ESAG unlocks a world of opportunities with SAP Ariba

UAE-based conglomerate gains access to the Ariba Network, the world’s largest business network with over 2.5 million buyers and sellers

Tags: Easa Saleh Al Gurg GroupSAP Middle East and North AfricaUnited Arab Emirates
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ESAG unlocks a world of opportunities with SAP Ariba SAP Ariba alongside SAP ERP system is helping ESAG drive a more transparent and collaborative sourcing process, Al Gurg said.
By  David Ndichu Published  March 12, 2018

Easa Saleh Al Gurg Group (ESAG), a diverse conglomerate based in the UAE, lacked a cohesive single platform for its procurement data management. Additionally, the company was restricted to a tight group of traditional suppliers.

ESAG, one of the top four companies in the Arab world according to Forbes Middle East, then sought to modernise its procure-to-pay system, replacing several point applications with SAP Aribas single, integrated platform, to be used alongside its SAP ERP system.

Emirati family businesses, such as ESAG, are the backbone to the economy of the country. Embracing technology is key to help fuel business innovation and growth.

With SAP Ariba, the group is moving to a new model in supply chain management that will allow its subsidiaries and suppliers to interact via a single electronic channel. SAP Ariba has then become the companys main database for all supplier related information while also helping in in VAT implementation, as the UAE moves to implement VAT this year.

SAP Ariba provides cloud-based solutions to make it easier for businesses to collaborate and compete. Installation requires no costly hardware or software, and no upgrades are expected on the users end. Companies can simply access it on a multi-tenant platform through a web interface, wherever they may be, or whatever browser they are using. It can also be integrated to any existing ERP or back-office system as it extends their functionality, and allows users to share processes and collaborate with trading partners globally.

SAP Ariba offers spend management solutions that can uncover a companys spending habits and customers can use that knowledge to help negotiate better deals. Users are also connected to a diverse network of competing suppliers who can lower costs for goods and services while ensuring compliance.

ESAGs collaboration with Ariba also provides the company access to what is reputed to be the worlds largest business network, the Ariba Network, made up of 2.5 million buyers and sellers globally.

Ariba Network is a digital platform that brings together millions of trading partners, operating in 190 countries. According to the company, the platform facilitates US$1.25 trillion in commerce each year. Ariba Network makes it easy for buyers and suppliers to collaborate on transactions, strengthen their relationships, and discover new business opportunities. Buyers can manage the entire procurement process from source to settle, while suppliers can help buyers transform their procurement and simplifying the sales cycle, potentially helping them substantially improve their cash flow.

Business need

A set of IT & Business challenges necessitated the decision to implement SAP Ariba, explains Abdulla Al Gurg, group general manager at ESAG.

First, the companys then existing SAP ECC landscape did not provide a single platform for procurement data management. Multiple reports had to be run and compiled manually to prepare planning data and management reports. Secondly, there was no real-time visibility of spend category wise or project wise.

The companys registration process was also tedious, wholly running on manual processes with no supplier selection criterion or vendor data management. Sourcing was done using traditional tools restricting ESAG to dealing with selected suppliers. Hence, there was no leverage or access to a worldwide database of suppliers offered by procurement software platforms such as SAP ARIBA.

The manual procure-to-pay process resulted in slow and cumbersome source-to-pay cycle. Finally, contract management was entirely manual, with no link up to procurement processes.

ESAG has deployed the SAP Ariba Collaborative Sourcing solution comprising of Ariba On-Demand Upstream solutions, broken down into the following two tracks: Sourcing and Supplier Information & Performance Management; and, Ariba Contract Management.

The implementation took four months, going live in August 2017. The deployment took record time, with ESAG even getting recognition by SAP ARIBA, by winning the award for the fastest and seamless implementation in the region Al Gurg reveals. 

Al Gurg admits some glitches during the implementation process. As could be expected with a project of this nature, ESAG faced several challenges, technical as well as business. A major challenge was the change management process. The Sourcing and Contract management processes were manual, unique to each group company of ESAG. Replicating and combining them as one single process in ARIBA was another major challenge. ESAG had 9,000 registered suppliers in SAP ERP migrating them to ARIBA was an onerous task and continues to be so, says Al Gurg.

To address the changes, ESAG Supply Chain team embarked on training and information sessions for various stakeholders starting from procurement executives to finance team and then on to business and corporate department heads. The supply chain team also formed a task group interacting with the IT team, treasury team and procurement teams of various entities while migrating suppliers and getting them registered in SAP ARIBA.

Business benefit

Al Gurg says ESAG chose SAP Ariba due to its wide supplier network that offers access to 2.5 million suppliers worldwide, existing SAP support, easy integration with SAP Materials Management (MM) module and price advantage while procuring licenses in bulk for other existing modules. SAP ARIBA also offers end-to-end system with one user interface enabling ESAG to automate its multiple legacy system into one platform without disruption Al Gurg adds.

By connecting to SAP Aribas vast business network and using the in-built cloud applications, ESAG has modernised its entire procure-to-pay system. For example, we can now connect and collaborate with more than three million associated companies on the Ariba network around the globe, including more than 3,000 in the Middle East. Also, our supplier registration process has become completely automated with no manual intervention. This provides us with one single platform to collaborate with our supplier base and tools to store all vendor related date under one platform, Al Gurg says.

This integration has gained more significance due to the recent VAT implementation in the UAE. ESAG has collaborated with suppliers using this system to collect all VAT related data, Al Gurg says.

ESAG will also benefit from a predictable pay-as-you-go model through the subscription-based platform.

The solution is delivering on the original objective of automating ESAGs procure to pay processes, says Al Gurg. ESAG is further evaluating how to manage all the data complied using this system and bring in data analytics, he adds.  

Beyond IT, the solution is also helping the business reach its objectives. Using SAP Ariba alongside our SAP ERP system is helping us drive a more transparent and collaborative sourcing process. And, were achieving cost savings across several key categories, Al Gurg says.

SAP Aribas single, integrated platform has replaced several point applications the company was previously using. This allows us to drive a simpler, more efficient and unified procurement process thats fuelling business innovation and growth, says Al Gurg.

Because its a subscription model, ESAG did not need to purchase any equipment or install any new software.

Just one year in, Al Gurg says the company has already achieved its ROI for the first year investment and subscription.

ESAG already uses SAP as its ERP system, and has now integrated many other systems like SharePoint, Ecommerce Portal, OpenText etc. with SAP by using the SAP PI system which works as a middleware between two systems. Integration with Ariba was a bit of a challenge as it was pretty new from a technology perspective and a fully cloud solution. Our partner, Bristlecone, a supply chain process expert chipped in to assist with the integration.

Currently, ESAG has integrated the supplier registration part, in which any vendor registered in the system, will be transferred to SAP, if approved in Ariba. In the future, we have plans to integrate with other solutions, particularly sourcing, Al Gurg says.

ESAG operates a centralised in-house IT infrastructure covering the Groups multiple business locations and diverse applications. All ESAGs solutions are on-premise except SAP Ariba, the companys very first cloud solution, explains Al Gurg.

To secure its environment against cyber threats, ESAG recently conducted a security assessment of its IT infrastructure with a leading security consultant in the MENA region. Areas that need greater focus on were identified. We feel this is a journey instead of a one-time exercise, Al Gurg says.

Security

Given the sensitive nature of banking operations, robust security for wireless connections was understandably crucial. "While we wanted to enable our customers and partners with a whole new level of access and convenience, we were concerned about security, which was also a key reason we chose Aruba," Mohammed says.

The security controls inherent in Aruba's WiFi solution offers the IT team vital peace of mind, says Manivannan. Aruba's Network Access Control (NAC) ensures only authorised devices can connect to the network while all others are automatically quarantined into corporate VLAN, where only internet access is allowed and no access to the network. The Wireless Intrusion Prevention Systems (WIPS) feature scans for rogue access points and in detecting them, automatically contains them.

The solution also integrates seamlessly with the bank's firewall and endpoint security solutions, thereby delivering a comprehensive security framework, says Mohammed. "We have full visibility into our entire WiFi infrastructure and have now consolidated our systems such that our service provider's ADSL lines now only connect to our main branches. This has massively reduced our connectivity costs," said Mohammed.

And this is only the beginning, says Mohammed. "We are just at WiFi 1.0; in our WiFi 2.0 phase, we want Mashreq to be the showcase for next-generation connectivity," he added.

Manivannan says future plans include connecting stand-alone ATMs via Aruba Remote Access Points (RAPs) rather than via traditional 3G or 4G networks. RAPs allow AP users, at remote locations, to connect to an Aruba controller over the Internet. Since the Internet is involved, data traffic between the controller and AP is encrypted.

Mashreq Bank is also looking to leverage the RAPs to establish secure home office connectivity for employees on extended leave periods that connects back to the secure Mashreq network.

Mohammed is confident that Aruba's solution will serve the needs of his organisation for at least the next five years. In that time, Mashreq Bank will continue to expand the WiFi infrastructure across its branch network, including its international offices in India, Egypt, Qatar, Bahrain, Kuwait, the US, and the UK, Mohammed explains.

"Aruba has delivered a robust wireless ecosystem, incorporating the very best WIPS, controller, and administration and monitoring tools into a single solution. They have thus provided the cornerstone for Mashreq Bank's digital strategy," Mohammed concludes.

 

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