SAP’s Solutions for Kazakh Business
The Kazakh economy develops energetically, multinationals are entering the local market, and the country is preparing for the WTO membership: these are all good reasons for domestic companies to react swiftly to tough changes in their business environment. How can they address these challenges? International practice shows that introducing up-to-date information technology and automated management solutions can seriously improve a company’s competitive edge. A pioneer in modern ERP-systems, SAP has become a trendsetter among providers of integrated business solutions. Head of the SAP Kazakhstan office Jacob Korobko and Manager for Contacts with Partners Alnur Zhetbayev speak about the SAP products available in the Kazakh market and the corporate philosophy.
Jacob Korobko: In fact, when our company developed the first enterprise resource planning and management system, there was no such term as ERP. This integrated software capable of controlling business processes in real-time marked the beginning of a new era. SAP literally founded the market in ERP systems.
Initially ERPs were relatively "restricted" systems that only helped optimise the production process by connecting it to stock control, distribution, procurement, and so on. As new functionality appeared, it was understood that the system could be universal. Today ERP systems provide integrated management of the key aspects of financial, production and commercial activities of an enterprise covering manufacture, planning, finance and accounting, logistics, human resources management, distribution, inventory control and the provision of services. These systems provide a company’s management with complete, up-to-date information which is essential for analysing and making management decisions and maintaining an effective data exchange with partners.
I would like to emphasise that SAP offers software solutions covering the cluster of business processes typical of the modern management of private ventures and public organisations. I believe our products are unmatched in terms of localisation level, depth, and accuracy of business processes, as well as customisation and business scenario options. This is the cutting edge of SAP’s products. Another strength is our significant expertise in developing tailored solutions for specific sectors. As a result, we currently account for around 48% of the global market in ERP systems. More than 91,500 SAP systems are now running at over 27,000 companies in 120 countries. As many Kazakh companies have entered a new phase of business management, we are ready to offer our latest products to this market.
How does your company operate in Kazakhstan? What sectors are the particularly avid consumers of SAP’s solutions?
J. K: SAP has been operating in Kazakhstan since 1997. Initially, a small team of professionals adjusted a range of SAP’s solutions to suit Kazakh conditions. This strategy of accessing foreign markets is typical of German companies: they never release "raw", unlocalised product into a market. Of course, this took considerable investment and time. Only after that, did SAP actually enter the market. In 2004, a subsidiary company of SAP was established: SAP Kazakhstan. Today it covers not only Kazakhstan, but the entire Central Asia region. Kazakhstan itself accounts for 80% of SAP’s sales in the region.
We have gained more than 20 large partners over eight years of operation. These are primarily oil and gas companies, which is not surprising: SAP boasts 20 years of experience of working with the petroleum industry and our solutions for the sector are considered an international standard. Currently 33 out of 34 oil companies represented in the Fortune-500 list are SAP’s customers. More than 40 enterprises in the CIS and Baltic involved in the production, processing, transporting and distribution of hydrocarbons use our solutions. Our Kazakh customers in this sphere are KazTransOil, Intergas Central Asia, PetroKazakhstan, KazMunaiGaz, and Shymkent Refinery. We pin special hopes on KazMunaiGaz: we wish to see this major Kazakh holding as a model project for introducing SAP’s solutions.
What other fields in Kazakhstan is SAP interested in?
J.K: Our products are currently used in telecommunications, transport, mining, banking, and finance. Our most active customers include GSM Kazakhstan, Kazakhstan Temir Zholy, International Airport of Almaty, Zhairemsky GOK, and Mittal Steel Temirtau. Co-operation with Kazakhtelecom, a strategically important partner, has also been successful. At present more than a thousand of its staff use our solutions managing all flows of finance and materials in this company in real-time.
Some people think that SAP’s solutions are only suitable for the manufacturing sector. This is not true: last year, we began informing the Kazakh business community of other interesting and useful sector-specific solutions. In particular, last year we signed a deal with Halyk Bank, which was SAP’s first banking contract in Kazakhstan.
Our so-called referential clients – companies that have successfully mastered our system and undertaken the mission of demonstrating its operation to other potential customers – play a crucial role in promoting our products. Lately we have organised a trip to Zurich Cantonal Bank, one of our referential clients, for a group of Kazakh bankers. Representatives from Switzerland’s third largest bank not only showed their colleagues how the system works, but also focused on plans for upgrading it. In Kazakhstan, our referential clients are Kazakhtelecom and International Airport of Almaty. We also plan to sign a corresponding memorandum with Intergas Central Asia.
Cooperation with public agencies is another promising avenue. Lengthy research has helped us become a leader in IT systems for state governance. SAP solutions are used by the governments of Switzerland and Canada, Finance Ministries of Germany, Austria, Denmark and Bulgaria, British, US and Canadian postal services, US Army and Navy, and Germany’s Defence Ministry. In the CIS and Baltic area, these solutions are used by the Russian Education Ministry and Atomic Energy Ministry, Russian Fund for Federal Property, Ukraine’s National Bank, and Finance Ministries of Latvia, Estonia, and Azerbaijan. I am pleased to note that Kazakhstan is also in the list: we have begun cooperating with the Customs Committee in the Finance Ministry of Kazakhstan. I believe this is not our only project in the public sector of this country.
SAP has been expanding its coverage of small and medium-sized businesses. What is the product range for this economic sector?
Alnur Zhetbayev: Indeed, we have been paying close attention to this sector lately, which I can explain. Small companies worldwide develop more dynamically than large businesses. To do this, they demand low-cost, rapidly deployable solutions for effective management. Especially for this category of customers, SAP has developed mySAP All-in-One and S?? Business One, designed for medium-sized and small-sized businesses respectively. Both products reflect the logic and business processes successfully used in SAP’s solutions for large companies. The only difference is lesser functionality tailored to small and medium-sized businesses' specific needs. These solutions may be deployed in separate small companies and holdings comprising large and small affiliates.
SAP first approached the small and medium-sized business market in the CIS about one and a half years ago. Last year, our office signed the first two contracts for introducing mySAP All-in-One in Kazakhstan and Uzbekistan. As for SAP Business One, we expect it to be available to the local market at the end of this year. The product’s localisation and adjustment to Kazakh standards is currently nearing completion. I would like to note that SAP Business One will be sold through our partners. This approach will foster the development of SAP practices and expertise in Kazakhstan and ultimately result in lower deployment costs. It is important that partners are able to create pre-customised solutions based on the product to meet the requirements of any sector. This is an additional advantage for our customers.
As you can see, our business growth in Kazakhstan directly depends on our partner’s infrastructure. So far, there are only five companies in SAP’s partner list; we plan to increase this number. At the same time, SAP offers high-tech products; therefore, partners should have corresponding skills. We strive to help them in this, too. For instance, in Russia we are implementing the Partner Academy initiative where staff of the partner companies are trained and certified at special, discount fees. Kazakhstan has seen some progress in this direction too. Several workshops for partners in the petroleum sector have been held at our Training Centre in Almaty.
I hope these efforts will considerably expand our client base in Kazakhstan. At the moment, 30-40% of SAP’s profits in other countries are accounted for by small and medium-sized businesses. We will strive to achieve similar numbers in our country too.
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