The Balsharaf Group has gone through a technology revolution, investing SAR 20 million in overhauling its IT infrastructure in a bid to expand its business and become a leading manufacturer, distributor and retailer within the FMCG (Fast Moving Consumer Goods) sector in the MENA region.
Based in the Kingdom of Saudi Arabia (KSA), the SAR 1900 million-turnover company operates in the four related and mutually supporting areas of retailing distribution, production and logistics and has harnessed the power of information technology to increase its effectiveness in the marketplace.
However, as Chief Information Officer Sajid Riaz will attest, the IT transformation has provided a whole raft of benefits to the business particularly with its implementation of SAP’s world leading Enterprise Resource Planning software and mobility solution for automating the distribution businesses of the group.
He said: “We are aiming to create a cost effective, performance driven lean organisation and consequently over the past five years we have implemented significant changes in the way we do business, we moved to industry best practices, tried to leverage IT as a key enabler for business transformation. We injected new department heads, including myself, and hired new people within the group to bring in professionals who can act as a catalyst for business transformation.
“We are bringing a new organisation on top of the old one and with a well-crafted strategy in place, we are aiming to achieve continuous growth going forward. As an organisation we are very ambitious and there is also huge potential for us.”
The Balsharaf Group began its life as a small grocery store in Makkah and now boasts a chain of stores in Riyadh, a distribution business serving 17,000 retail outlets across the country and manufacturing operations in Saudi Arabia, Egypt and India. It also has significant market shares as an agent for international brands, private labels and own brands.
The IT investment has provided branch infrastructure, support and connectivity for 50 plus sites across the Kingdom for distribution, retail, logistics, export and manufacturing businesses which now run on world-class industry solutions not just from SAP but also Cisco, HP, Microsoft, Oracle and Intermec.
Introducing SAP ERP Human Capital Management solution has enabled the company to better manage its most important asset - its people. Customers were also a top priority for making the sweeping changes and the new ERP system has provided myriad advantages to help increase Balsharaf’s bottom line.
Riaz joined the Balsharaf Group in 2010 bringing with him a wealth of experience having previously been responsible for multiple implementations of ERP systems while working for Dubai-based Dubai Holding. He has worked closely with Balsharaf Group’s forward-thinking Chief Executive Officer Mohammed Ali Balsharaf to bring about the changes.
Riaz explained: “With the modern day, best of the breed IT infrastructure we have now we can believe we can achieve increasing our 17,000 customers to 20,000 in the next two years. We have the reach and infrastructure with extensive branch network and 40 plus warehouses located across the entire kingdom.
“When I arrived here six years ago, the systems in place were quite primitive and the software in use was not able to handle the business requirements. I proposed we use SAP and at that time we faced the usual resistance and people thought we weren’t ready for this big change, but then we were able to implement the system in just seven months.”
Areas where implementation has had a positive impact on Balsharaf Group’s various businesses include data integrity, improved cash flow, better credit and stock management, reducing inventory holding costs by 40 percent, better customer service and excellent reporting.
An example of an immediate financial gain the new ERP system has provided came with the software system’s data crunching abilities. It allowed the company to significantly close the gap between the little or too much stock it was holding in branches to meet customer demand.
Riaz said: “When we started cataloguing customer’s requirements we realized we needed to change to better handling of stock between branches.
“The gap between the customer order and delivery was at about 16 percent. By improving the movement of stock between branches to get the right quantity at the right time we were able to reduce that gap by 8 percent. For a SAR 800-850 million business that means we are talking about an additional sale of SAR 80 million, so implementation costs paid back in less than eight months.”
With such a vast operations and huge transaction base, dependency on technology is very high and any downtime of critical IT systems could mean substantial loss of revenue, thus the company has also invested in contingency planning by setting up a new DR site to ensure it can cope with problems such as connectivity failure, fire or blast, major power failure in the area, or even natural disasters.
“We have worked with a UK-based firm to implement Double-Take software using which we replicate all the critical data to the disaster recovery data center in real time, this helps us in ensuring that if anything goes wrong with the primary data center we can resume back operations with minimal downtime (seven minutes) with close to zero data loss.” explained Riaz.
“We test it every three months by simply switching off the power. The 500 or so users are automatically switched to the second data centre and don’t even know the change has occurred.”
Balsharaf Group’s innovative and forward-thinking management are ensuring that the company is positioned well to achieve its growth targets and undoubtedly be a force to reckon with during coming years.