The first government agency to implement SAP's software will be Egypt Post in a four-year deal starting in 2008, worth $10m.

SAP director Ernie Gunst expects Egypt to make his firm's enterprise-resource planning applications the standard across all government networks. The software system is used to run finance, human resources and payroll functions.

“Egypt Post is the first one; others will follow,” says Gunst. “Under the five-year agreement, we will broaden our presence through other Egyptian government institutions. We will flesh out what that means as this partnership becomes stronger and stronger.”

The Egyptian government will also create a centre of IT expertise in partnership with SAP, enabling it to train large numbers of people with the skills to use and deploy SAP's applications. Egypt needs to increase the IT skills of its workforce if it is to grow its IT outsourcing industry over the next five years.

“Another significant part of the deal is that we are setting up with the Egyptian authorities a centre of competence,” says Gunst. “They are seeing that centre as a major lever for their economic growth.”

Meanwhile, Egypt's Minister of State for Administrative Development Ahmed Darwish says: “Our partnership with SAP will create new and highly skilled jobs, and drive best practices in the public sector from the postal system to many other sectors.”