SAP: Leading business and digital transformation in Saudi Arabia

Since 2016, the Kingdom of Saudi Arabia has taken initiatives to rebuild its political, economic, and technology blueprint. In that year, the Cabinet of the Kingdom of Saudi Arabia approved the announcement of Saudi Arabia’s Vision 2030, constituting a road map to take the country forward for the next 15 years. The National Transformation Programme, which is also part of Saudi Arabia’s Vision 2030, defines the road maps for individual government entities. Saudi Arabia’s Vision 2030 seeks to take the Kingdom of Saudi Arabia to the next level of economic prosperity, delinking from its dependence of an oil-led economy.

The information and technology industry in Saudi Arabia has not lagged behind in these initiatives, according to global ERP, IoT and digital transformation vendor SAP. Saudi Arabia continues to be SAP’s largest market in the Middle East, with both public and private sector organisations adopting digital transformation. Over the past year, the first Saudi government entity migrated their business systems to the SAP cloud datacentre. Across Middle and North Africa, SAP’s six largest industries are oil and gas, utilities, public sector, retail, passenger travel, leisure, and banking.

“With industry expertise that touches more than 70% of the world’s business processes, SAP is well positioned to deliver tangible progress towards transformation strategy, without jeopardising daily business operations. Customer success is based on having a strong digital core and an easy-to-use system that supports innovation, integration, and scalability. Digital cores that integrate future technologies are the foundation for digital transformation across organisations, cities and countries,” says Ahmed Al-Faifi, Senior Vice President and Managing Director, SAP Middle East North.

On the business side, over 70% of digitally-leading organisations in MENA are investing in artificial intelligence and machine learning, big data and analytics, and cloud in 2018, according to the SAP and Oxford Economics Digital Transformation Executive Study. Digital leaders tend to gain market share and competitiveness.

Products and solutions

“Across the Middle East, we are seeing strong demand for our SAP Leonardo digital innovation system, which can integrate emerging technologies such as artificial intelligence, machine learning, blockchain, cloud, and the Internet of Things to drive new digital business models,” says Ahmed Al-Faifi, Senior Vice President and Managing Director, SAP Middle East North.

SAP is the first multi-national, enterprise application software provider to go live on a cloud datacentre inside Saudi Arabia, which is the centerpiece of its four-year, SAR 285 million investment plan in the Kingdom. The datacentre is part of a wider Digital Hub, which includes: an open digital platform supporting entrepreneurship, co-innovation with customers, partners; ecosystem to leverage cloud solutions; and localisation to support the Government’s vision into digital transformation. The Digital Hub is available for organisations in Saudi Arabia, Middle East, and globally. There is strong demand in nearby markets such as Bahrain and Kuwait.

“In Middle East and North Africa, our medium-to-long term game plan is to be the leading cloud company of choice for Middle East’s public and private sectors. We have launched cloud datacentres in Saudi Arabia and UAE, with customers that have already gone live on their solutions. Our datacentres are open to organisations not only in the country, but also across the region and worldwide,” continues Al-Faifi.

Using the SAP Digital Hub, organisations can adopt opex-friendly and scalable cloud solutions for 25 industries and 12 lines of business. Customers can start their journey of digital transformation by leveraging solutions running on the SAP HANA in-memory database and SAP Cloud Platform, which are available on the SAP cloud datacentre. SAP will be offering its latest cloud ERP solutions, such as the SAP S4HANA Cloud, on its SAP public cloud datacentre.

Market segments

Across the Middle East’s private sector, oil and gas, banking and finance, manufacturing, and distribution are seeing adoption of digital solutions over the past year. One of the biggest trends in the Middle East has been the digital transformation of the government and public sector. There is strong demand inside Middle East and North Africa for SAP’s digital business solutions running on SAP HANA in-memory platform, and SAP S4HANA real-time business suite, SAP C4HANA customer experience solution, and SAP Leonardo digital innovation system.

In Saudi Arabia, 83% of IT decision-makers agree that cloud is important for integrating artificial intelligence, machine learning, Internet of Things, and blockchain to scale innovations in Intelligent Enterprises and Smart Cities, according to YouGov. The same report shows that 66% of organisations plan to accelerate their cloud-based digital transformation journey in 2019, with 59% planning to increase cloud spend in 2019.

As Smart Cities, such as Saudi Arabia’s path breaking NEOM, advance in their vision and development, there is demand across connected transportation and autonomous vehicles, blockchain in manufacturing and supply chain, immersive human resources and talent development. Smart Cities that adopt these technologies can drive diversified economic growth, enhance citizen happiness, attract top talent, and enhance global competitiveness. According to a recent SAP study on Smart Cities, all participants ranked the ability to access current information, via any device, as very important, as well as the ability to pay for services using contactless payment options.

Underlining SAP’s support for the Saudi government to digitally transform, SAP continues to deliver on its Memorandum of Understanding with the Saudi Government. SAP is exploring how to integrate the SAP Public Cloud Datacentre into the planned Saudi Government Cloud.

Globally, SAP is exchanging best practices in Smart Cities from its Future Cities programme, with examples such as:

Buenos Aires, Argentina’s 30,000 connected storm drains
Cape Town, South Africa’s Emergency Policing and Incident Command Centre
Nanjing, China’s Smart Traffic for 7 million residents

70% digitally-leading organisations in MENA are investing in AI, machine learning, big data and analytics, and cloud in 2018.

Drivers and inhibitors

In the Middle East, digital transformation is being driven by both top-down government and ground-up initiatives by Middle East C-suite executives. The recent government transformation initiatives include Saudi Vision 2030, New Kuwait 2035, Bahrain Economic Vision 2030, and Pakistan Vision 2025. While C-suite executives have launched digital transformation plans to optimise costs, assets, staffing in order to transform customer experiences and drive new digital revenue growth. Digital transformation is a top business priority for Middle East organisations, and is amongst the top-three drivers for future revenue in all industries and companies of all sizes.

Globally, 84% businesses say digital transformation is critical for their survival in the next five years. However only 3% have completed company-wide transformation efforts, according to a recent SAP and Oxford Economics study. Amongst the early adopters, 85% have higher market share, 80% have higher profitability, and expect 23% more revenue growth.

Whilst majority of Middle East organisations understand the importance of digital transformation, the biggest challenge is change management and educating the end-users how to achieve successful digital transformation. Amongst CEOs worldwide, 72% see the next three years as more critical than the past 50 years for their industries. At the epicenter of all this is how to leverage digital innovations to transform customer experience.

Organisations need to identify and work closely with the specialised channel partners that can understand the business needs, identify the right technology solutions that can meet those business needs, exchange skills so that organisations can become more self-sufficient, and continually refresh the systems and benchmark against KPIs.

Globally 84% businesses say digital transformation is critical for their survival in the next five years.

Skills development

“Innovation is at the core of SAP’s business in the rapidly-digitising Middle East and North Africa, and even more so in the Kingdom with Saudi Vision 2030 and NEOM Smart City driving government-led innovation. The Middle East’s organisations have the vision and the appetite for innovation to be global digital business leaders,” says Al-Faifi.

Across Middle East and North Africa, SAP is supporting young talent development and workforce of the future through its Training and Development Institute and Next-Gen for Universities, along with Digital Skills for Today for coding across the EMEA region.

SAP’s innovation mindset includes leveraging developments from the following:

SAP Co-Innovation Lab network, which facilitates project-based co-innovation across the partner and customer ecosystem
SAP Next-Gen innovation community for SAP Leonardo that connects innovators with the world’s largest enterprise ecosystem
SAP Innovation Center that provides a working environment conducive to free thinking with the flair and agility of startups

Optimising Smart Cities and smart nationwide development requires partnerships between the public, private, and academic sectors. This brings together public sector vision, private sector expertise, global best practices, and the academic sector’s experience in training young talent for the workforce of the future.

“We are continuing to align SAP with government transformation visions and Smart City initiatives to transform the economy, society, and environment, and to enhance people’s daily lives. We are continuing to get closer to our customers, expand the breadth and depth of our channel partners, and partner with educational institutions to integrate technology into the curriculum,” adds Al-Faifi.

SAP’s Training and Development Institute is committed to supporting the workforce of the future and the next generation of digital talent in the Middle East. Since launching in 2012, TDI has generated an in-country value in Saudi Arabia of $59 million, and $151 million across Middle East and North Africa.

SAP’s Young Professional Programme has graduated 498 participants in Saudi Arabia with 99% of them successfully finding career placement. SAP’s Dual Study Programme is providing students with the opportunity to take major-specific SAP trainings and certification during academic years, across 5 universities in Saudi Arabia, 12 in MENA region, with a total of 837 students in the MENA region participating in the programme.

In the Next-Gen programme, which supports youth with purpose-driven innovation, connecting companies with the academic world, there are 35 Next-Gen for Universities in Saudi Arabia. Prince Sultan University has both a Next-Gen Chapter and a Next-Gen Hub, and King Abdulaziz University also hosts a Net-Gen Hub.

Next-Gen Chapters collaborate and connect to SAP’s global Next-Gen programme network of nearly 3,600 educational institutions in 116 countries. Worldwide, there are 135 Next-Gen Labs and Hubs with SAP educational partners and customers, along with 100 Next-Gen Chapters. SAP aims to have at least one Next-Gen Chapter, Hub, and Lab in each MENA country.

Digital Skills for Today, which recently rebranded from Refugee Code Week, is helping to reduce the region’s digital skills gap and support youth job creation. SAP joined forces with United Nations, Galway Education Center, ReBoot Kamp, Re:coded, and more than 50 other partners to create one of the world’s largest coding initiatives, training 16,201 people across Middle East, North Africa and Europe in coding. SAP has also partnered with One Million Arab Coders initiative to support 1 million Arabs in becoming professional software developers.

• Next-Gen Chapters collaborate with nearly 3,600 educational institutions and purpose-driven partners to co-innovate in support of the United Nations’ 17 Sustainable Development Goals across the global the SAP Next-Gen network.

SAP’s top end-users in Saudi Arabia

There is strong interest in digital transformation inside Saudi Arabia, where SAP is co-innovating with public and private sector organisations. The 2018 SAP Quality awards recognise this trend and the following end users:

Saudi Arabian Monetary Authority, Awqaf Suleiman Al Rajhi, EA Juffali and Brothers, Global Beverage Company as leading digital innovators in Saudi Arabia.
Al-Rajhi Investments, the real estate and hospitality investment arm of Awqaf Suleiman Al Rajhi Holding, and channel partner NTT Data Middle East deployed SAP SuccessFactors to drive talent development.
Sulaiman Bin Abdul Aziz Al Rajhi Charity Foundation, the charity foundation of Awqaf Suleiman Al Rajhi Holding, and Alwatania Information Systems, an IT transformation company of AWQAF, deployed SAP Business One solution across 13 branches in Saudi Arabia to enhance process efficiency and monitoring of financial transactions.
Conglomerate EA Juffali and Brothers digitally transformed its companies, with channel partner Saudi Business Machines deploying SAP’s enterprise resource planning, GRC, and business intelligence solutions.
Global Beverage Company, the manufacturer and distributor of Berain bottled drinking water, launched its Tarabot digital transformation project, centered on SAP ERP solutions on the SAP HANA in-memory platform.

Key takeaways

SAP is the first multi-national, enterprise application provider to go live on a cloud datacentre inside Saudi Arabia.
SAP game plan is to be the leading cloud company of choice for Middle East’s public and private sectors.
SAP is exploring how to integrate SAP Public Cloud Datacentre into the planned Saudi Government Cloud.
Customers can start digital transformation by using SAP S4HANA in-memory database, SAP S4HANA Cloud on SAP datacentre.
Digital cores that integrate future technologies are the foundation for digital transformation.
SAP’s Training and Development Institute has generated in-country value of $59 million in the Kingdom of Saudi Arabia, and $151 million across MENA.
SAP’s Young Professional Programme has graduated 498 participants in Saudi Arabia.
SAP’s Dual Study Programme is available across 5 universities in Saudi Arabia, 12 in MENA region, with a total of 837 students.
70% digitally-leading organisations in MENA are investing in AI, machine learning, big data and analytics, and cloud in 2018.
Next-Gen Chapters collaborate with nearly 3,600 educational institutions and purpose-driven partners to co-innovate in support of the United Nations’ 17 Sustainable Development Goals across the global the SAP Next-Gen network.
Globally 84% businesses say digital transformation is critical for their survival in the next five years.