Customers gathered in Germany for the annual SAP users forum last month. Oil & Gas Middle East brings you exclusive coverage on the tailored software solutions for the upstream sector from Berlin.
The software giant SAP specializes in business software solutions. They have recently doubled the size of their Middle East team after deciding to increase their presence in the region.
The recent SAP Sapphire conference in Berlin, was a chance for the company to show how their software could ensure businesses were better and more easily run. But how does, and how will, this translate to the oil and gas companies operating in the Middle East?
SAP MENA (Middle East and North Africa) division has increased in size rapidly since the decision was made to expand the team at the beginning of November last year.
The growth and development in the region has meant that SAP has looked to capitalize by building a team to meet the growing demand placed on the company.
“What we perceive is that the Middle East market is really demanding a lot in terms of presence and in terms of innovation – the growth and demand is fierce,” said Sergio Maccotta, managing director of SAP MENA.
In terms of adapting to the Middle East market, the company has looked to adopt a cautious approach by looking at the industries and geographies involved and what the specific demands each will bring.
According to Kevin Scott, chief operating officer in the Middle East and North Africa with SAP, communication is the key to providing for the needs of the customers.
The development of SAP’s ecosystem, essentially a community of SAP users which enables shared information and knowledge, should according to Scott help SAP adapt to the Middle East market.
“We will continue communicating with the market much more frequently and better now that SAP is represented in the region. We are working very hard on the ecosystem, which is one of the fundamental pillars of SAP’s strategy.
We are basically acknowledging we can’t do it all ourselves: we need to have partners, customers, consultants and resellers working together, and we’re working hard in developing that relationship. The key is understanding the customer and solving their problems,” reveals Scott.
The oil and gas sector currently accounts for 35% of the current SAP MENA operation, the biggest in their portfolio. Maccotta said: “The strategy for many of the oil and gas companies is to bring the second wave of development, so all the companies wish to have their IT approach in an integrated system.
Nowadays they are looking at the second phase which will take them to the next level of efficiency and business intelligence.”
According to Scott, the specific challenges for the oil and gas industry can be addressed through implementation of SAP services.
A number of energy companies are looking to transform their businesses as they are working in globalised markets, they need improved reliability, and they work in an increasingly regulated market, whether it is environmental or legal.
They also need to address risk management, so they can handle protection and insure their supplies,” says Scott.
“There is also the challenge of an ageing workforce, where the knowledge base is in a rapidly ageing workforce. So they are looking for solutions on how they can mange talent, how to do recruitment and how to retain talent,” he added.
SAP’s current customers in the Middle East oil and gas market include: PDO, Qatar Petroleum and Saudi Aramco, as well as partnerships with many of the majors involved in gulf operations.
The company’s strategy to attract more business in the region is to continue enlarging their presence and create a business community with their customers, something that is considered even more important in the oil and gas industry as many of the companies are not vertically integrated and are reliant on their partners.
“Our strategy is to enlarge our presence, to show the customer what they can expect in terms of value from SAP, and to create a community with our customers, that is our basic strategy,” said Maccotta.
Software, such as ERP (Enterprise Resource Planning), will cover the whole running of the business, including lifecycle and risk management. “We actually manage each of those pieces across the design, build, operate, and maintenance aspects of the lifecycle,” explained Ken Evans, senior director for oil and gas SAP.
We can provide the interoperability between those pieces, so we can facilitate the data handover because often there are different companies involved – it is the whole network in involved through the ecosystem, which means we can facilitate the whole process to improve the lifecycle,” says Evans.
Sven Denecken, vice president of ERP market strategy, explained SAP’s role in risk management, which he says is gaining importance in the sector. “I think with risk you need to know where you are to prevent the risks from occurring.
I always say you can’t manage what you can’t measure, and I think with SAP we can offer the analytics to prevent risks. You can then use these tools to analyse and also to manage the actual processes involved – and this has a lot to do with risk.”
Other issues for SAP to consider have been the ease of using the interface for people in the production industry where computer knowledge may be limited. “A more user friendly interface is something we are implementing across the suite.
There are certain blue collar workers who are running around in gloves and for them it’s very hard to have a sophisticated interface to work with, so designing the user interface towards the role is crucial,” said Denecken.
Working with clients to improve shared service centers was also an emerging trend highlighted at the conference. “One of the largest trends we have seen is shared services – so a lot of large customers build up shared service centers to do processes once and to streamline these, the question is do you have the right tool set and right solutions to support that.
In oil and gas there is no oil and gas customer in the last one and a half years who didn’t ask me how can I slash costs, how can I gain efficiency, and how can I create shared service centers, and that’s something we support big time.”
And it is not only the majors and larger companies who seek SAP solutions to improve their businesses. According to Ken Evans, the small and medium sized companies will also benefit if they invest in the SAP brand.
The expertise we have developed over 20 years by working with the oil and gas industry means that we understand the processes very well on a global basis and we understand the differences in all the markets, whether they are a fully open market or a restricted market, so the differences between national companies and international companies and small independents – we have them all in our portfolio” said Evans.
For the forseeable future, SAP MENA will continue to grow and develop its large base of customers and partnerships, which should have a beneficial impact on the ecosysytem platform they provide.
As for the oil and gas sector, SAP will try to be the software company to offer the most viable solutions to the most current problems in the market.
If they can achieve this then they can only be a positive influence for the Middle East’s energy industry.
