The Middle East information technology (IT) industry may not have reached full maturity, but it is evolving at a fast pace. Demand for new IT solutions is driven by companies hoping to improve their business performance and competitive edge. But demand is one thing, satisfying it is quite another – which is where companies such as Atos Origin Middle East (AOME) come into the picture.
Based in Al-Khobar in Saudi Arabia’s Eastern Province, AOME provides tailored-to-fit integrated business and technology solutions to regional companies. From enterprise solutions to enterprise applications integration (EAI), e-procurement, content management/catalogue creation, customer relationship management (CRM), finance and banking solutions, managed services and education and training – AOME sells its regional clients the same range of services on a design-build-operate basis as those offered on a global scale by its Paris-registered parent, Atos Origin.
AOME’s decision to come to the Middle East was a natural one. Not only does the region offer plenty of business opportunities in AOME’s key target industries – oil, gas and petrochemicals – but many of the major regional companies do not yet have modern IT infrastructure in place. As a result, the Middle East – and Saudi Arabia in particular – is increasingly emerging as a strategic market for AOME.
‘We plan to be in the Middle East for the long term,’ says Andy Higgins, vice-president of business development at AOME. ‘Oil, gas and petrochemicals are the leading industries for us. But we also focus on the banking and finance, public and telecommunications sectors.’
So far, the Middle East accounts for a small share of revenue at Atos Origin. In 2002, the company turned over Eur 1,086 million, with the Middle East contributing only Eur 80 million to the total. But business in the region is growing fast, at a rate of about 15 per cent, and there is little doubt that a significant amount of work is in the pipeline. ‘Many companies need to set up some reliable core information systems,’ says Higgins. ‘Standard back-office systems are rarely in place.’
The realisation that the need for installation of modern IT systems is unavoidable – to compete on a regional as well as on a global level – seems to have prompted a change in attitude among regional companies, even in areas that were considered non-negotiable in the past. ‘Three years ago, if you talked about outsourcing or getting someone else to manage one’s information, it was unheard of,’ says Higgins. ‘However, I have a feeling that this is becoming more acceptable. Clients are more open to the idea today.’
With deregulation and privatisation initiatives moving ahead – albeit slowly – more regional opportunities are likely. Plans being considered across the Middle East include the implementation of electronic payment and billing systems, and initiatives to utilise e-procurement solutions to reduce cost while at the same time speeding up transaction flows.
AOME has been present in the Middle East since 2000, when Atos Origin acquired a controlling share in Saudi Arabia’s Software Technology Company (SoftTech), then a subsidiary of another Saudi company, the Al-Shoaibi Group. Now registered in the kingdom under the name Origin SoftTech Company, Atos Origin – itself the result of the merger of French company Atos and Dutch firm Origin in 2000 – holds a 75 per cent share in the firm, with SoftTech holding the remainder.
Since setting up its regional headquarters in Al-Khobar and a second office in Riyadh, AOME has handled projects for the kingdom’s largest companies, often involving the implementation of e-business software solutions from long-standing partner company SAP. In March, AOME completed the implementation of a single SAP R/3 platform for Saudi Aramco, replacing about 170 non-SAP systems and serving 23,000 people across all the company’s main business lines in 200 major locations worldwide.
Other major clients in the kingdom have included Saudi Basic Industries Corporation (Sabic), Saudi Aramco Shell Refinery Company (Sasref), Saudi Telecom, Saline Water Conversion Corporation (SWCC), National Commercial Bank and Saudi American Bank.
Like other companies, AOME is affected by the kingdom’s Saudisation policies. ‘We already depend to a great extent on Saudi manpower and have a number of training and recruitment initiatives that we run in conjunction with local universities,’ says Higgins.
AOME has also been active outside Saudi Arabia. The company has implemented IT solutions at companies such as Bahrain Telecommunications Company (Batelco) and Unilever Gulf, and is also running the Jordan and Beirut stock exchanges. To support its regional strategy, the company has set up offices in the UAE, Bahrain and Egypt, and is now planning to open an office in Qatar, the region’s fastest growing economy.