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Saudi Arabia’s largest auto company completes SAP project as part of digital transformation

Abdul Latif Jameel Motors wins SAP Quality Gold Award for digital revamp programme that overhauled performance and efficiency across its business

This article can also be found in the Premium Editorial Download: CW Middle East: CW Middle East: SAP drives digital transformation for Saudi Arabian auto company

As Saudi Arabia embarks on an economic transformation in line with its Vision 2030 plan, the nation’s biggest businesses are also evolving.

One of the kingdom’s largest private firms, Abdul Latif Jameel Company, recently finalised a major digital transformation aimed at streamlining processes and improving customer satisfaction.

The Saudi conglomerate’s automobile division, Abdul Latif Jameel Motors (ALJM), was awarded the SAP Quality Gold Award for its digital revamp programme – dubbed JSAP –which overhauled performance and efficiency across the business.

The initiative – one of the biggest SAP projects ever undertaken in the automotive distribution sector – outperformed entries from across Europe, the Middle East and Africa to become the first Saudi company to win SAP’s gold award in this category.

Implemented in partnership with SAP specialist Britehouse, the project saw ALJM introduce a new unified IT infrastructure to replace more than 30 legacy systems in five subsidiary organisations, leading to strategically integrated operations and management processes across more than 100 sites in Saudi Arabia. 

More than 300 staff were involved in the initiative, which took 1.5 million working hours to complete over 22 months. Since its launch in mid-2018, the system has significantly improved performance and efficiency and internal processes at the company, including reducing vehicle sales delivery lead time and customer order conversion time by over 50%.

Abdulla Subhi, head of IT, operations and security at ALJM, said: “We are constantly striving to improve the business and JSAP was a centrepiece of these efforts. It was an ambitious and challenging project and a real test of our ability to implement a complex and transformative initiative. We are already seeing a significant impact on our performance.”

Subhi, who has spearheaded the JSAP project since it began in 2013, said the initiative was the largest SAP integration of its kind in the world.

He added: “As the leading automobile distributor in Saudi Arabia, we realised a long time ago that we have to become more strategic. We created a roadmap with the intention of creating a digitally transformed company. The JSAP project was the biggest contributor to this roadmap.”

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The groundbreaking JSAP initiative spanned all the firm’s main business areas, including job vacancies, customer relationship management and finance.

“The engineering of the JSAP project is meant to improve the customer experience,” said Subhi. “We look at JSAP as a strategic project that has both long- and short-term benefits. So far, we have identified 49 short-term benefits, many of which benefit customer service.

“Because our data and the systems are now unified, we can easily get real-time information and perform analytics in real time. This means our management and business units can make informed decisions because we have unified data in one secure, organised system.”

Challenging times

But the huge JSAP project was not without its challenges, said Subhi. As is common with company-wide IT roll-outs, the implementation team initially faced internal resistance and issues.

“The first phase of the product implementation was challenging,” he said. “Initially, we faced internal challenges within the organisation after starting the project, and had to postpone it for a while, restructure our teams and then start the work again.”

Subhi addressed the internal challenges by creating an agile team structure within top management so they could respond to changes quickly and effectively.

Subhi said it is important to manage handover processes to new systems carefully. “Some of the handovers took time to manage,” he added. “We implemented a strong organisational change management system to ensure that all the 5,000 employees and associates were in line with the management and project strategy.

“We also informed all stakeholders about the scale of the project and communicated that they should expect changes from time to time.”

Subhi communicated the JSAP plan through internal communications during the project, “sending [departments] notes and communications from time to time, measuring their involvement and resolving their issues and ensuring they were involved with each and every bit of the project”.

Benefits of cost and opportunity

ALJM has classified the benefits of the JSAP project into two categories, said Subhi. “Some of the benefits are linked to cost optimisation, while others feed into opportunity creation. It is too early to calculate an exact figure that we are saving, but we are anticipating cost savings of around 30% in the short term.”

Declining to give details of the project cost, Subhi said the spending is not important. “We look for the benefit for our customers,” he said. “We are concerned about how competitive we will be in the market. We are also concerned about the contribution of ALJM and its digital transformation to Saudi Arabia’s Vision 2030. We are conscious that digital transformation is the main pillar of Vision 2030.”

Subhi is confident that the success of JSAP will put the firm on a solid course for the future.

“JSAP has helped us to ensure that data quality is up to the mark,” he said. “We acknowledge data as a very important aspect of our company. We also realise that integration is critical when it comes to digital transformation. With JSAP, we wanted to reduce the complexity of the integration by linking each system with one integration hub to integrate with a third-party system.

“We are confident about our future and have mitigated many technology risks by refining our system with the latest technology.”

Read more on Information technology (IT) in the Middle East

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