SAB Holding’s construction services company RCC struggled to manage finances, inventory, projects and people. With data and documents held in separate systems, how could SAB Holding grow the business?
SAB Holding deployed SAP S/4HANA® as its digital core to create a tailored, end-to-end business management solution, running on the IBM® Cloud for SAP Applications platform.
Createsnew line of business for SAB Holding
90% cutin workload for infrastructure management by handing off tasks to IBM
Offersmassive potential for growth thanks to the seamless scalability of the IBM Cloud
Business challenge story
Designing a new way to serve construction
In major construction projects, the budgets are big and the stakes are even higher. To ensure that building projects are completed on time and to a high standard, construction companies depend on a clear view of finance, materials, people and project status.
Leading Saudi conglomerate SAB Holding realized that information management at its own construction subsidiary, Ruwad Civil Construction (RCC) could be improved. Data and documents were held in multiple separate systems, leading to delays and extra administration work.
Dr. Hatem Bakheet, CEO of SAB Innovation, explains, “Our construction services company was at a disadvantage, because it operated separate systems for finance, payroll, inventory and so-on. To provide month-end closing or any similar reports, employees had to gather information from each area and consolidate and validate the data manually.
“For example, in construction it is essential to procure materials at the right time, at the right price. To run projects effectively, RCC needs to know what materials are needed – and when they are needed – with the projected and actual costs. In the past, we managed materials procurement using a standalone system, so if factors such as budget or staff availability changed, we had to separately update our orders of materials. As a result, insight into raw-material requirements was slow – and to compensate, RCC held large quantities of stock at multiple locations, which was a costly, inefficient way of working.
“Similar challenges affected personnel planning and finances. Connecting the number of employees to the planned project work and to the payroll was not automatic. Combined with materials procurement, paying suppliers and being paid, it could take more than two months for agreed monthly finances to be closed off.
“Ultimately, siloed back-office systems and inefficient ways of working impacted project profitability. We wanted some way to gather data automatically and enable prompt, accurate reporting to help RCC and SAB Holding to improve efficiency and productivity.”
Laying the foundation for integrated finance
To enable integrated operations, SAB Holding began looking for a new business suite for its construction subsidiary, and selected SAP S/4HANA.
“We realized that the SAP S/4HANA processes for engineering, construction, and operations matched our business objectives and would be very close to our ideal requirement,” says Dr. Bakheet. “At this point we knew that we wanted our new platform to be capable of handling rapid growth, and offer high performance and scalability. SAP S/4HANA provides excellent future capacity, with very fast response times and seamless scalability. Additionally, we selected SAP BusinessObjects Business Intelligence for rapid analytics and SAP Solution Manager for business control.
“Next, we had to choose between an on-premises or cloud deployment. We selected the cloud option, because it allowed us to avoid the cost of building and managing our own data center, and leave the administration and maintenance of physical systems to a third party. We opted for the IBM Cloud for SAP Applications because it provided exactly the tailored hosting and application environment we wanted, and enabled us to move forwards at a very fast pace.
“To keep our in-house workload to a minimum, we decided to purchase IBM Cloud Managed Services, which provides an additional management layer for service quality and administration. IBM Cloud Managed Services enables us to spend less time on IT infrastructure issues and more time on delivering great results.
“If you opt for a cloud deployment, choosing the right provider is key, because dips in service quality can jeopardize your business. Some providers were 40 percent cheaper, but we decided to partner with IBM because we knew that IBM would fulfil its obligations, and not abandon us if we hit problems down the line.”
As a first step, SAB Holding started with the SAP HANA® Startup Bundle from IBM to meet the timeline requirements, as this can be delivered in three days. The outstanding SLA for application availability, including 24/7 support for SAP production applications, gave SAB Holding the confidence to extend the full workload of SAP S/4HANA and SAP® BusinessObjects™ Business Intelligence on IBM Cloud Managed Services.
Consultants from within the SAB Holding group were assigned to the implementation project, combined with support from the IBM Cloud Solutions team.
Ahmed Abdul Rahman, SAP Technology Team Lead at SAB Holding, comments, “We chose a short timescale because we had a very large new project on the horizon, and it made sense to start using the new system as soon as possible. With skillful support from IBM, we deployed SAP S/4HANA in the cloud in just one week.
“First, we migrated the data and implemented the new solution. Next, we deployed separate SAP HANA databases for development, quality and production on the IBM Cloud, supporting an initial 15 users. Full production will see approximately 200 users, accessing around 256 GB of data that grows at some 5 percent a month.”
Laying the cornerstone of future success
The new solution, delivered by IBM, enables integrated end-to-end business processes and rapid reporting at RCC. By accelerating time-to-insight for finance, procurement, human resources and more, the company is fast recouping a return on its investment.
After witnessing the benefits of the new SAP S/4HANA solution at RCC, 15 additional SAB Holding companies decided to make the switch to the solution.
Building on its own success, SAB Holding decided to launch SAP S/4HANA powered by the IBM Cloud as a commercially-available offering.
Dr. Bakheet continues, “Our plan is to go into the market with a ready solution for construction, which is really lacking in our industry. Our plan is to have the complete end-to-end solution as an offering, handling the core reporting, financials and management capabilities. As we progress we will tailor the applications, to help maximize the benefits for each sector.”
To take the offerings to market and open up an entirely new revenue stream for the group, SAB Holding created The Innovation IT Company. The IBM and SAP solution brings a scalable, repeatable, industrial-strength solution within reach of potentially thousands of small- and medium-size enterprises. The great advantage of the IBM Cloud is that SAB Holding can quickly and easily scale up capacity to meet growing demand, with full service and support from IBM. By handing off tasks to IBM, SAB Holding has cut the time spent by its in-house team on infrastructure management by almost 90 percent.
Dr. Bakheet concludes, “SAP S/4HANA is helping us with the digital transformation of our business to become smarter, leaner and more efficient. By bringing our offering to market, we can enable other organizations to enjoy similar benefits, while forging a new revenue stream for our own business.”
About SAB Holding
SAB Holding leads investment in and development of new services across the communications, construction, distribution, media, logistics, real-estate and retail sectors. Formed in 1990 and headquartered in Jeddah, Kingdom of Saudi Arabia, SAB Holding continues to be a family-owned business, dedicated to delivering exceptional products and services.
- IBM Cloud Managed Services for SAP Applications
- IBM-SAP Alliance
- IBM Cloud Managed Services