Dealing with diversification

Dealing with diversification

Transforming the IT department of Dubai-based investment conglomerate Al Ghurair Investment (AGI) from a service provider to a business enabler has been a mammoth undertaking.

In the last 15 months the family-owned conglomerate, which was founded in 1960, has completely restructured and revolutionised its IT department, moving it from a fully centralised to a federated organisation with a major ERP programme across all the business units that make up the hugely successful $4 billion group. Business Review Middle East speaks to Mohamed Said, Group Chief Information Officer, who led the technological evolution to find out just how such a feat was achieved.

From the outset Mr Said looks to be the right person for the job. Having started his career in programming, Mr Said, 45, advanced into software and application development until he reached his role at AGI. Prior to joining Al Ghurair, he had extensive experience both regionally and globally where he led large digital transformation programs for major retailer in the US and GCC. At AGI he embarked on an ambitious digital strategy to transform the existing - but basic - IT department as a business partner.

“The most challenging part of the transformation journey was dealing with the diversification of AGI,” he says. “We are a conglomerate with many different industries; properties, food manufacturing, commodity trading, energy, construction, retail and education. For a large and diversified group like ours, it’s a challenge for an IT department to find the right balance between synergy and responsiveness and to be able to speak the business language of all these different businesses.

“The first task in the transformation was to revamp our outdated systems, specifically the ERP which had little standardisation across the group. We embarked on a large digitisation initiative, developed a AED 40 million ERP from scratch and are now sitting on a good infrastructure which is providing real value for the business. Beside the Administrative  ERP which includes Finance, HR, and Procurement systems, the ERP at AGI extends to  cover the Operational systems for different industries such as Manufacturing, Projects, and Property Management ”


Differentiating capabilities

To deliver his new digital landscape for AGI, Mr Said divided his strategy into three different phases.

“The first phase involved creating differentiating capabilities within the IT department, as I felt when I joined that the IT department was too generic for the business. So, my immediate task was to restructure the IT organisation to ensure tight linkage to the business units. We moved from a centralised organisation to a federated organisation, where we focused more on responsiveness to the business demand by having technology experts with relevant industry expertise supporting the business. We have also built a PMO (Project Management Office) within the IT department to ensure we deliver upon our vision and strategic objectives.  

“The second phase was about initiating ERP, Disaster Recovery, enhancing the PMO and building a technology road map for each business unit. Phase three is still ongoing, building on what we have done already and embracing various technological trends, from Mobility and Cloud Computing to Robotic Process Automation and the Internet of Things.”

Mr Said’s work has revolutionised the working day of executives and board members, who now conduct paperless meetings thanks to a leading collaboration solution on Apple iPad that transforms directors’ and executives devices into highly secure digital board and committees meeting packs that can be accessed online or offline from any location.

While these achievements are no doubt numerous, they did not arrive without challenges.

“When you’re making IT organisational changes you need to drive collaboration and interaction with the business CEOs and GMs to make sure they are aligned with you on the strategy. At the end of the day it is a business made up of many departments, so it was naturally a challenge, but we managed to get the business units to realise the business benefit of what the IT Strategy is aiming to achieve. We also managed to hire the right people, despite encountering challenges in finding appropriate caliber across every role.”

Indeed, Mr Said’s understandably high expectations of new hires added an extra element to the recruitment test.

“Finding talent in the Middle East, generally speaking, is a challenge for any CIO,” he continues, “but to add to this, I wanted people capable of reporting directly to the CEOs. And if you’re reporting to the CEO, you have to show them that technology is really adding value to their business. It took time but now we are in a very good position and are executing the strategy as we speak.”


Change management

Establishing a change management framework to lead the ERP programme ensured there was a readiness from the CEOs to adopt the changes to processes and systems.

“We insisted that for every IT project there must be sponsorship from the business and we insisted on a change management plan when it comes to the training, communication, and reassessment of roles and responsibilities within the company,” Mr Said explains.

“For example, one of the major challenges in ERP implementation was to find the right balance of what needs to be customised in the base product package. Many companies fall into this pitfall and end up with highly customised ERP system. Fortunately, that is not the case with our ERP.  What we did was to give the responsibility of customisation to the executive sponsor of each business unit, the CEO, so when any business stakeholder demands to customise the solution, they have to justify, and quantify the benefit. Will it increase revenue or net profit? If you want to change the system, show me how this will reflect to the net profit. This governance model forced people to consider, do we really need this?”

Mr Said encountered expected resistance from some of the business units, but worked through this by collaborating with the executive leadership team, who warmed to the technology road map and reinforced his strategy to any doubters.

“We didn't go at it with a hammer right away,” he reveals. “We looked at why the resistance was there and what was behind it. If customisation was based on true business need with a tangible impact, we would accommodate it, but if it turned out to be a more personal hunch and not really based on any rationale, then we engaged with the CEOs who supported us.”

Another important element related to Change Management was Benefit Realisation. Our governance model emphasis on what we call “Rear View Mirror” where we look back and ask ourselves “Did we realise the benefit of what we implemented?”

“This helps us learn from any negative results, such as when we realised that a percentage of users were not logging onto the system,” Mr Said says. “We are now going back to assess the reason. Are these users following a manual process, do they get their data from outside the system? Answering these questions helps us realise the benefit and enforce usage of the system.”


Vendor Partnership  

Mr Said continues: “The partnerships with our vendors have worked extremely well so far, and we look forward to working with them again in the future on other transformational initiatives.”

As for the next three to five years, the Group CIO is keen to focus on exploring differentiating opportunities and leveraging technology and trends related to mobility, cloud, IoT, robotic process automation and big data.

“We want IT to become a capable organisation and to play a proactive role in providing differentiating capabilities for the business,” he concludes.