The “Power of Small” to Drive Job Creation and Innovation and Growth in UAE

May 22, 2012 by SAP News 0

IT Adoption by SMEs Seen as Foundation of Country’s Plans to Stimulate Economy, Mentor Youth and Entrepreneurs

Dubai, United Arab EmiratesSmall and Medium-sized Enterprises (SMEs), particularly those punching above their weight thanks to empowering IT solutions, were today identified as key to the UAE’s future prosperity at a round-table event hosted by SAP.

“Information technology is a key pillar for SMEs to become a prime engine of economic growth in the UAE, ” said Luis Murguia, SVP Ecosystem and Channels, SAP Europe, Middle East and Africa.

“The advances in business-oriented solutions for Mobility, Analytics and Cloud, are driving the competitiveness of SMEs by empowering business leaders and entrepreneurs with the best in class technology innovations to gain clear insights of the business dynamics at their finger tips, any time, any place.”

Key to economic recovery around the globe, SMEs have historically driven innovation and invention. In the United States and other developed markets, SMEs commonly account for half or more of gross domestic product, while a recent study from the European Commission indicated that SMEs generated 85 per cent of all new jobs in the European Union from 2002 to 2010. In Germany, almost all of the 1.8m new jobs created during the last 5 years came from SMEs.

The “power of small” is particularly pronounced in the UAE, with the Government recently calling for the creation of 20, 000 jobs over the next decade, and an Emirati unemployment rate hovering around the 13 per cent mark according to the Federal National Council – ; a situation exacerbated by the fact that less than eight per cent are currently seeking careers in the private sector.

“The UAE needs to stimulate the development of existing SMEs, beget new companies through better financial solutions, provide greater access to markets, and facilitate targeted mentoring of youth and entrepreneurs, ” said Dhiraj Daryani, Research Manager, IDC MEA

“The best way that SMEs are preparing for growth is to have sophisticated business systems in place that allow small companies to operate like big companies, and ultimately compete and win business. But it doesn’t end there. Smart SMEs are also standing out from the crowd by investing in the big trends of 2012: mobility and cloud. In doing so, progressive companies are not only investing in technology innovations but are garnering results in terms of higher revenue expectations to drive impact.”

SMEs are critical to SAP’s long-term growth strategy, which includes doubling its addressable market, reaching 1 billion people and achieving global revenues of € 20 billion by 2015. Nearly 80 per cent (98, 500) of SAP’s customers are small businesses and midsize companies.

79 per cent of all SAP SME customers originate from over 3, 000 value-added reseller (VAR) channel partners (the goal is to increase that to 100 per cent in the coming years) that provide localization, regional and industry expertise and support. Currently, there are over 1, 100 partner-developed add-on solutions for SAP Business One and SAP Business All-in-One.

Moving forward, there are big profits to be had. According to Gartner, the global SME market is projected to grow more than $1 trillion by 2014, with a five-year compound annual growth rate (CAGR) of 5.7%. This means big opportunities for those offering the latest IT solutions, with Forrester noting that the SME ERP market alone is expected to grow to $31.3 billion by 2014 (CAGR 6.1%).

“SAP understands the unique needs of small and midsize businesses and entrepreneurs, ” said Mazen Jabri, Head of Channels and Ecosystem, SAP MENA.

“This is a company that was started 40 years ago by five entrepreneurs and is now a trusted and reliable partner for SMEs with a long-term growth plan.”

“We want to see SMEs that are more agile and able to operate around the clock. We want to see SMEs with enhanced visibility and decision making that can not only lead to better employee productivity, customer engagements and responsiveness, but also help them keep pace with larger companies and gain a competitive edge in their marketplace.”

SAP solutions for SMEs include SAP Business One, a single integrated solution for successfully managing small businesses, which gained over 14 customers per working day in 2011 (35, 000+ customers to date); and SAP Business All-in-One, a customizable and extensible solution for midsize companies with deep industry best practices built in.

Formed in the UAE in 1976, house-ware and consumer goods wholesale and distributors Mansoor Ahmad Mohammad Co LLC is a recent convert to SAP Business One, which was implemented by SAP partner Procons4IT, and has placed it at the core of its expansion strategy.

“As a business grows, more and more pressure is put on existing systems to support the day-to-day operations. If these systems are inadequate, the skilled employees who have helped grow the business are swamped with time-consuming administrative tasks, ” said Nima Mansoor Faqihi, Managing Director, Mansoor Ahmad Mohammad.

“As a company that represents some major global brands, we were looking for an integrated solution to serve our current requirements and enable continuous growth. SAP has given us the visibility to run our operations better. We are now able to know the status of our orders, we have reduced overstocking and achieved better cash flow control.”

Flemingo International Ltd, a Dubai-headquartered company that owns and operates travel retail shops and provides supplies to travel retail operators, also turned to SAP when it needed to take the company to the next level.

Implementing Business All-in-One with SAP partner NTT DATA, the company’s package includes Business Intelligence, Best Practices for Wholesale – ;Distribution Industry, as well as solutions across Finance, Supply Chain including Warehouse Management and Business Intelligence.

“Today, an SME like ours needs it all: a business solution that is flexible to meet the current and future needs while being affordable, quick and easy to implement, configure, maintain and provide the transparency into business information as the foundation for smart decisions, ” said M. Shailesh, Head of Information Systems, JAFZA Business Unit, Flemingo International.


From Left to Right: Mazen Jabri, Head of Channels and Ecosystem, SAP MENA; Ravi Mahalingam of NTT DATA; M. Shailesh, Head of Information Systems, JAFZA Business Unit, Flemingo International; Luis Murguia, SVP Ecosystem and Channels, SAP Europe, Middle East and Africa; Nima Mansoor Faqihi, Managing Director, Mansoor Ahmad Mohammad; Wassim Hassanieh of Procons

About SAP
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