Spend Matters in Dubai – growth and a buzz around Tejari

As regular readers know, I was in Dubai last week presenting our first “Real World Sourcing” event outside the UK with BravoSolution. We’ll have several articles on the visit, and in this one, we’ll take a look at Tejari, the BravoSolution joint venture with Istithmar World (a leading UAE investment firm) in the region. Then we’ll discuss some wider procurement aspects and issues in the region, followed by a collection of random thoughts about Dubai based on my extensive (two-day!) visit there.

Tejari was until a couple of years back an existing Dubai based firm offering a range of procurement software and services in the procurement field. Their management made a decision to seek a partner with strong existing capability in this area, and chose BravoSolution.  There is still a major shareholding from local owners, and that has proved a key fact in the recent success of the firm. There is no doubt that "wasta" - having the right contacts in the right places (ideally covering both major businesses and the ruling families) still helps in the Emirates, and Tejari have that backing.

But Bravo have contributed their well-established product suite, and key management, including Nader Sabbaghian, the firm’s global CEO,  who is based in Dubai now.  There is also the impressive Asif Khan, who was in the BravoSolution UK firm for some years, but is now Account Director in Dubai. They’ve also recruited extensively, mainly from a range of other countries (not just UK, but Syria and other Middle Eastern countries), so now have around 40 staff in Dubai. That’s quite a presence by the standards of procurement solution providers in the  region.  But resourcing is an issue for the firm ( and many others); the younger Emiratees sometimes lack a strong work ethic, not a shock perhaps given the wealth of most local families. Hence the reliance on ex-pats from around the world.

Tejari have 18 customers and not surprisingly, their key target sector is Oil and Gas, although at our event last week we had delegates from travel and tourism, government sectors, the metals industry (a huge aluminium plant was visible from my hotel window), and property. Tejari see Dubai and Abu Dhabi as the most important countries, although they‘re active pretty much everywhere from  Pakistan , through the Gulf states and into North Africa.

One difference from the European BravoSolution model is that Tejari historically had awarded franchises in various countries including Kuwait and Pakistan, where local firms sold their products. That has continued under the new management, which provides both some interesting opportunities and of course some challenges in keeping franchisees motivated and aligned.

Tejari also runs the Dubai government’s supplier registration system. Suppliers pay, which causes some tensions, particularly when a lot of government procurement is still fairly tactical and low value in nature. But Tejari are offering those suppliers additional services to give them more value for their subscription, such as providing a service that “matches” potential bidders to government opportunities.

What about competition? The large corporates in industries such as oil and gas tend to be users of major ERP systems, with Oracle and SAP dominant as you would expect. So Tejari compete against the sourcing and spend capability those providers offer. Ariba is now linked into that proposition of course since the SAP acquisition. Zycus are also  “beginning to get some visibility” now, not surprising given their Indian heritage and the proximity or that country. And interestingly, Coupa are sponsoring the CIPS conference (more on that tomorrow).

But Tejari have advantages, with their Dubai team giving them real procurement people on the ground, whereas (according at least to Tejari), Ariba and Oracle have only a handful of procurement sales or support people in the region.  Tejari also position themselves as “solution providers”, with an offering that also can include professional services, which is a differentiator.

All in all, Tejari looks like a smart move for BravoSolution. Growth is healthy, and there is a distinct “buzz” around the firm, with lots of opportunities and interest from potential clients. It’s not only the direct UAE business, but also the potential to use this as a stepping stone to the wider Middle East, North Africa, India and even other Asian countries. I suspect Tejari may have been an opportunistic venture when it first presented itself, but it may prove to be a strategically excellent move for the firm.

More in part 2 ...

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