Oilfields Supply Centre now has a greater visibility of its entire operations with real time information available as required. Further improvements and refinements will be made over time, as OSC becomes fully acclimatised to the operations of and the benefits of running an ERP solution.
Two years ago, when, first ACN spoke to Industrial and Financial Systems (IFS), the company had just opened its office at Dubai Internet City (DIC). Its objective was to ramp up its regional business, then valued at US$1.5 million per annum, by approximately 25% year on year.
Since then, the company has delivered on its goals, with regional revenues now exceeding US$10 million. Despite relative success, most companies in the Middle Eastern marketplace have never heard of the Swedish enterprise resource planning (ERP) company. Many are surprised that an organisation with such a large global customer base and strong local regional references, can remain such a well kept secret.
However, IFS is slowly starting to gain market visibility. For example, the company has recently completed a US$750,000 ERP implementation at Oilfields Supply Centre (OSC), which is based at Jebel Ali Free Zone.
OSC, which is run under the chairmanship of His Highness Shaikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai and minister of finance and industry for the United Arab Emirates (UAE), was in need of an integrated IT infrastructure to manage its growing businesses.
OSC, which was established in 1962, provides a spectrum of onshore facilities and logistical support to oilfield operators and the power generation sector in the Middle East, India, Pakistan, the Asia Pacific region and Africa. It needed a flexible, integrated ERP system help it move into the 21st century.
The company was operating with a number of independent, custom built, character based systems, supplemented by the extensive use of spreadsheets. As a result, there was a lot of duplication of data entry. OSC needed a sophisticated solution that provided a totally integrated system, removing the need for reconciliation between departments and disparate systems while also removing duplicated data entry and the associated errors. OSC also wanted a strong management reporting capabilities to enable the timely and accurate reporting of information to the management.
In the past, the Jebel Ali-based firm had captured much of its base data on an ‘informal’ system. The goal was to structure and standardise the data input requirements. Ease of use of the selected system was also important to the company. “We wanted a simple solution that fulfilled the requirements of OSC. Our aim was to deploy a solution that was businesses related and IFS provided exactly that. OSC did not have a comprehensive IT infrastructure, so we did not want to deploy an extremely complicated solution,” says John R. Ellis, general manager of OSC.
Once the budget was approved, OSC embarked on an evaluation process, eventually compiling a short list of three enterprise application vendors. Finally, it decided to deploy IFS apps. The assessment was backed up by local IFS reference visits by OSC personnel.
OSC was also impressed by the fact that IFS offered a fully component-based solution and had opened a direct operation at DIC and offered local support, supplementing the international lifecycle support (ILS) system already in place for worldwide customers. OSC selected the components of the IFS solution according to its requirements
“We did evaluate other vendor products, but decided to go with ISF because of its superior functional capability, particularly in the service management arena. The company just had the right suite of applications,” adds Ellis. The selected solution included the following modules: IFS service & project management, financials, logistics, human resources (HR) & payroll and document management.
OSC implemented the new solution in two phases over 10 months, starting with finance, logistics and HR, followed by the service management solution and payroll. In most cases it was possible to synchronise the software so no changes were required to OSC’s business processes. In other cases, OSC took the opportunity to streamline its business processes in order to take advantage of the broad range of functionalities of the IFS apps.
The IFS team played a key role in keeping the implementation on track and within budget. ERP implementations require a strong partnership between the customer and the software vendor.
Any organisation that has completed an ERP implementation knows a strong and knowledgeable customer project team is just as important as the implementation consulting team from the ERP solution provider. In the case of OSC, a strong and committed team was put together.
“The project went smoothly besides the normal implementation issues any company goes through. We had the total support of IFS management. Often one hears of companies being wooed by a great sales team and then let down by a poor team of trainers and consultants; this was not the case with IFS. The company proved itself, working long hours to solve problems and keep the project on target.”
Now the company has the technical finesse, it is starting to reap benefits on several fronts. OSC’s entire database is now coordinated. It is particularly satisfied with the ease with which realtime reports can be compiled and the accuracy of the system, which allows month-end closing and reporting to be complete within six days.
“The new solution has provided the management with the much needed visibility, as well as access to accurate data. We are also in a position to archive data,” says Ellis. “Another major difference with IFS application is that it monitors the company processes independently and sends messages when a predetermined area does not accomplish or exceed missions or programmed goals”.
Having migrated from a non-ERP to an ERP environment, the company’s hardware and software maintenance costs have increased because it had to procure two new servers from HP and extensive desktop PCs from IBM to support the new system.
The cost however, is not a major concern for OSC. It says the investment in the IT infrastructure is reasonable and will lead to significant financial benefits in the future. Besides the agility of the best-practice management enabled by the system, the savings that result from using the system will be sufficient to ensure a rapid return on investment (ROI). It is estimated that the new system will pay back investment costs in as little as three years, including expenditure on hardware, software, the network and training.
OSC has one primary location within its Jebel Ali complex and within these facilities there are several buildings that are served by a LAN connection using fibre-optic cables. These are then connected via switches to various users. The vendor also trained OSC employees so they could use the new system easily.
IFS considers the OSC implementation as a success story. The vendor says such implementations show that businesses in the Middle East are rapidly embracing new technologies in order to run their day-to-day activities efficiently.
“Despite the fact the UAE is a relatively mature regional market for ERP solutions, we see many mid-sized companies outgrowing their existing solutions and looking for more robust, technically ‘future-proof’ applications,” says Ian Fleming, managing director of IFS Middle East.
The vendor focuses heavily on industrial manufacturing, maritime industries, process industries, services and facilities management and telecommunications. The company has also expanded its implementations at existing customer sites such as Persequor (previously known as Brightpoint Middle East) and Hassan Abul Establishment, in Kuwait. Brother International (Gulf) FZE is implementing IFS solution for its distribution operations in the Jebel Ali Free Zone. APM Terminals have implemented IFS apps at Port Said in Egypt.
The company also carries responsibility for activities in North Africa, in particular Libya and Egypt. “With the ending of the IEEPA based economic sanctions we see Libya as a tremendous growth market for the future,” Fleming adds.
“Our focus has been to target specific companies where our product offers a superior functional fit over the competition. For IFS, it is about the success of its implementations in the Middle East. To this end, we will not take on implementations where customer expectations are unrealistic or where we do not have a strong product fit to the customer requirements,” he adds.