SMEs to the Fore as Economic Engines, as Saudi IT Spend Increases 10.7% year on year in 2014
Saudi’s Most Successful SMEs Will Actively Change Business Models, Go-To-Market Strategies and Use Technology to Level Playing Field
JEDDAH, Kingdom of Saudi Arabia — SAP today underlined the growing importance of technology in helping Small and Medium-sized Enterprises (SMEs) shape Saudi Arabia’s future.
Speaking at the SAP SME Summit in Jeddah, Mazen Jabri, Director of General Business and Ecosystem, SAP Saudi Arabia, explained how increased accessibility to technologies has made it possible for small and midsize enterprises (SMEs) in Saudi Arabia to transform themselves, innovate and grow like never before. Developments in this field have markedly bolstered the ability of SMEs to serve as vital economic engines for the Kingdom’s future development ambitions.
“Technology innovations such as cloud, mobile, social and big data are disrupting consumer behavior and expectations, and fundamentally changing how we work and communicate,” said Jabri.
“These innovations and disruptors are also changing how businesses sell to consumers – especially when that consumer is always-on and socially connected. This presents tremendous opportunities for SMEs in Saudi Arabia to evolve, compete and succeed – particularly as they become increasing attuned to the country’s extensive youthful and technologically switched-on population.”
“The SMEs that will truly make an impact on business innovation and job creation in the Kingdom are those that are actively changing business models, go-to-market strategies and, crucially, using technology to level the playing field,” added Jabri.
Jabri’s comments come as Saudi investment in SMEs is expected to grow more than USD 70 billion by the end of 2015, according to data intelligence analysts Zawya. The sector’s contribution to the Kingdom’s gross domestic product could rise to 37 per cent by the end of 2015 from 35 per cent a year earlier. This is in line with forecast growth in the number of licensed SMEs to some 2.5 million by end-2015, up from 1.97 million as of January 2014.
IT Innovation is set to be at the heart of this momentum, with overall IT spending in Saudi Arabia set to increase 10.7% year on year in 2014 to total $11.50 billion, according to the latest forecast from International Data Corporation (IDC). IDC expects IT spending in Saudi Arabia to increase at a CAGR of 8.9 per cent over the five-year forecast period to reach $14.2bn in 2017. From a technology perspective, investment growth will be strongest in IT services and software.
A recent Oxford Economics survey – SMEs: Equipped to Compete – shows that SMEs are likely to be active in this increased IT uptake. According to the survey, 54 percent of SMEs surveyed said they plan on using cloud technologies in the next three years, whereas 53 per cent said they plan on using mobile technologies within the same timeframe.
The importance of social media is also on the rise, with 43 percent saying they would use social media in the next three years.
According to the survey, 66 per cent of Saudi SMEs claimed that they would only invest in technology when there is a clear return on investment (ROI).
“Next-generation business leaders are increasingly setting the standard for easy-to-consume technology,” Jabri said.
“They want technology that works – freeing them up to run their business – and they are looking for technology that will scale with them as they grow.”
More than 80 percent of SAP’s 253,500 customers are small and midsize companies (over 200,000). The majority of those come through partners and other channels. SAP turns to its more than 11,500 partners around the world to work with these SMEs to identify the best solution for their business. The goal is to move 100 percent of SME customers through the channel. Together with partners, SAP will grow its presence in the SME segment to deliver €2.5 billion in revenue by 2017.
Key SAP SME solutions include Business One (a single integrated solution for successfully managing small businesses) and SAP Business All-in-One (a customizable and extensible solution for midsize companies with deep industry best practices built in).
SAP offers solutions specifically built, packaged and priced for the SME segment that are easy to deploy, affordable to implement and operate, and the right fit for every industry and size,” said Jabri.
“We understand and support the needs of entrepreneurs, small and midsize businesses, and we engage with our open ecosystem of partners worldwide to help address a full spectrum of customer needs – from innovation to impact – ensuring customers of all sizes can make the right technology, deployment and market choices to succeed.”
In a move that could have considerable positive benefits for SMEs across the country, SAP is also ramping up its efforts to train local talent and add vital skills the Saudi job market.
Key initiatives include the three-month Young Professional Training Programme (Mawared). Designed for young graduates, the program includes hands-on project experience and spans everything from negotiation and communication to conflict management and “design thinking”. In addition, the initiative offers SAP certifications at associate level in core business and industry solutions.
In order to maximise its ability to engage with local talent, SAP has also launched the 2nd Chance Education Program, which qualifies unemployed job-seekers as SAP certified consultants and users in collaboration with selected partners from government institutions and the private sector.
More established is SAP’s world-renowned University Alliances Program, which continued to extend its influence throughout the region. SAP’s UAP currently counts 64 members across the Middle East and Africa (MENA), 23 of which are in Saudi Arabia. The program incorporates thousands of students and 250 trained lecturers. UAP member schools gain access to the SAP Business Suite family of solutions, including SAP Enterprise Resource Planning (ERP), and gain insight and hand-on experience of how technology can empower businesses to optimize key processes.
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 253,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
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