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Zahid Group uses ERP to revolutionise business

As Saudi Arabia sets out to diversify its economy away from oil, the kingdom’s companies are undergoing rapid transformation

Amid the liberalisation of the private sector, Saudi Arabia’s oldest and largest family businesses face increased competition and are turning to large IT  projects to boost performance and productivity.

One such company is the The Zahid Group, a diversified business with 4,000 employees and interests, including machinery leasing, construction, mining and agriculture. It began implementing a multimillion-dollar enterprise resource planning (ERP) project for its Zahid Tractor & Heavy Machinery division in 2013 – its biggest technology investment yet.

Barig Siraj, director of IT and ERP for The Zahid Group, told Computer Weekly that the company’s installation of Infor’s M3 for Equipment solution represented the start of a long modernisation process for the business. “For the next five years our focus will be on replacing our legacy systems, and M3 is a big part of that.”

The M3 solution, composed of scalable applications critical to the equipment industry, including supply chain execution, warehouse mobility, sales management and financial accounting, is expected to help Zahid increase visibility of critical business information, support the smooth flow of data between departments, and streamline business processes across 40 sites.

As national dealer for Caterpillar, Volvo and Renault Trucks, Zahid Tractor and Heavy Machinery Co faces pressure to modernise its systems to ease doing business with its partners and suppliers.

Siraj added: “IT is becoming ingrained with operations as we need to keep up with the vendors and franchise needs. The franchises that we represent are demanding more from us. That’s one reason we moved from the legacy system to the M3 solution – our legacy applications were not responsive enough to what our franchises wanted.”

He said suppliers often had their own technology initiatives and the business needs to be able to respond positively. “For example, Caterpillar is revising its digital strategy for rentals and we are looking at how this coincides with our own digital plans.”

The ERP transformation

Siraj said the first phase of the M3 solution went live in 2014 with few hitches. “We performed that implementation in less than nine months and are happy with the results.”

Subsequent rollout stages, however, were less breezy and involved a few “corrections”. With 50 people working on the project over two years, Siraj said he discovered that that some users were resistant to change and attempted to use legacy systems as well as the new application.

“This discovery meant we made major changes to the leadership of the project. We also chose to augment our staff with more open-minded, adaptive and knowledgeable employees. We let go of the director of the ERP project and I stepped in.”

The IT director now plans to roll out the firm’s ERP system for rentals in early 2017. “We have an ERP community that is 80% users and 20% IT staff and Six Sigma trained, so with that team we’ve gone through the phases with Infor and we are progressing very nicely.

“When we mapped our new processes versus what vendors did, we found ourselves aligning with 70% of the systems on average. We’re on a low modification implementation that is within the benchmarks of international standards.”

Complex challenges

Three and a half years into the job, former IT venture capitalist Siraj said his current role is “never boring”.

“There are a lot of complex challenges, which can stem from the users, the suppliers or from the technology itself. I seldom come to the office when everything is going as usual. And when it’s calm, I actually start to wonder if I’ve missed something,” he joked.

As a director of 50 IT employees, Siraj said his main focus is maintaining and building a technology ecosystem that meets the needs of the business and customers without hindering company operations.

As The Zahid Group makes the transition from legacy systems to app-based technology and cloud computing in the coming years, Siraj predicted that “community change management issues” will rise up the agenda.

He added that his role is becoming ever more complex and ad-hoc.

“The IT department is driving business performance. It’s becoming very regular that I get a call from operations saying ‘the vendors are demanding IT solutions and e-readiness. How do we respond to this e-initiative?’ I need to keep a very close ear to the heartbeat of the business.”

Security focus

Siraj cited security as his most important challenge.

“For the next five years our main focus will be on building up our security level to the extent that it’s giving us the protection we need without hindering operations.”

He is looking at cloud security solutions, but for now the company has installed robust on-premises security measures to combat the growing issue of data leakage.

The Zahid Group recently installed encryption software for notebooks in case of theft. The company also uses Seclore for file encryption and Sophos for media encryption, so all Zahid external drives and USBs are fully encrypted.

Siraj said the company’s data leakage challenge stems from two distinct groups: naïve corporate users who inadvertently leak confidential information, and malicious employees or partners that deliberately leak information.

“To combat the naiveté we have introduced education awareness campaigns. We also believe that encryption is the answer – the files can’t be opened outside the company. It’s not easy, but we’ve started with that. It’s going to take a long time, but we’re trying to implement it in a way that will not impede operations and stop the staff from doing their day jobs.”

Tarik Taman, general manager for Infor’s India, Middle East and Africa division, commented: “In both a cultural and economic sense, Saudi Arabia is ready for transformation. The Zahid Group is a great example of a forward thinking company, they are very progressive.”

 

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