UAE businesses are losing millions of dollars of potential revenue by failing to correctly implement IT solutions aimed at reducing stock wastage and improving capital investments, technology experts have warned. The full impact of the spend on IT products to meet business challenges, which for the UAE, Kuwait and Saudi Arabia stood at $3.3 billion (Dh12.1bn) in 2007, is not being felt due to lack of training, said Gaby Matar, Group Managing Partner for eSolutions.
“We come and install the software and give the companies the consultancy and it’s up to them to use it to their maximum. The challenge the region is facing is that although the software and business structure is there, they are not utilising the software to its maximum. Therefore, more training, attention and enforcement is required.” Matar said the effect of the lack of training translates into inefficiency and a loss of revenue, and added: “In the UAE, this inefficiency is costing companies millions of dollars, not thousands.”
According a report from global market research firm International Data Corporation, the total IT spending on software alone for the UAE, Kuwait and Saudi in 2007 was $433 million. “When you have the software implemented appropriately it means that all your business processes are fine-tuned and you are able to go to market faster,” said Matar.
He argued manufacturers could limit wastage in sitting stock by implementing an IT infrastructure that more efficiently manages their inventory. “In the oil sector, you could be lacking 100,000 barrels because you have one machine down. This will mean a loss of revenue just because you do not have the appropriate maintenance programme for each production line. For companies that generate electricity, it ensures that production is properly maintained, so they know when to do the preventive maintenance, they know if there is any break-down and who the appropriate engineer is,” Matar said.
Latest reports estimate the global market for enterprise asset management use of IT solutions at $1.5bn, out of which $400m is for Europe, the Middle East and Africa, and 10-15 per cent, or about $50m, is for the Middle East alone. Revenues from IT solutions in the Middle East have grown at the rate of 26.5 per cent over the past five years.
ESolutions has clients in the UAE oil and gas, utilities, transportation and IT sectors. The firm recently showcased its latest product, Maximo, at the eSolutions Maximo Middle East User Group conference in Dubai, an event aimed at helping companies manage technology to meet business challenges.
Speaking at the conference, Sheikha Lubna bint Khalid Al Qasimi, UAE Minister of Economy, stressed the importance of IT products such as Maximo for supporting key non-oil industries in the UAE, as the country continues to diversify its economy. “These revolutionary tools that facilitate asset and service management are of particular significance in the Middle East. Maximo already provides services to over 18,000 corporate end-users in the Middle East and North Africa, and this tells of the relationship between the growth of this industry and the continued progress of the region’s business community, especially with emerging role of non-oil industries.”
She added that in the real estate sector, which incorporates the booming tourism and hospitality sectors, around Dh500bn worth of development projects are under way within the next five years. And the value of active construction projects in the Gulf has already exceeded Dh3.7 trillion, with the UAE contributing more than $811bn of this.
Matar said the UAE’s standing in the appropriate use of up-to-date technology was still behind Western businesses, but improvements were beginning to be felt. “The gap is narrowing now. Whereas the UAE and the region used to be a year behind the west to get the technology and implement it, now it is only a few months. Some organisations here are getting up to speed.”
He highlighted the oil and gas and utilities sectors as taking leaps forward, but added: “The government’s systems are behind but facilities are getting there too. The IT companies in the region needed to support the construction boom is not there yet,” he said.