Saquib Ahmad joined SAP in 2017 and is currently the Managing Director for SAP in Pakistan. He has nearly two decades of experience in the region’s IT and Telecom industries. Before joining SAP, Saquib was Director of Sales & Business Development for Oracle for Pakistan and Afghanistan. Previously, he was the Country Director, Pakistan, and Afghanistan, for Comptel. Saquib began his career with Nokia-Siemens, where he held a variety of roles, culminating in him being named Director of Sales, Middle East. He holds an MBA from the University of Management and Technology, Lahore and a Bachelor of Engineering in Telecommunication and Electronics from the University of Engineering and Technology, Lahore.

Below are selected excerpts from BR Research’s recent interview with the SAP MD. The conversation touched upon a number of themes, including SAP’s business in Pakistan, SMEs’ usage of business software and digital transformation in the times of Covid.

BR Research: Starting off, how do you see the role of a software company in a digitally lagging economy like Pakistan?

Saquib Ahmad: The vision of SAP is to make people’s professional and personal lives easier and better by giving them the tools and solutions. This has been especially true and present during the times of Covid when many people started working form home and we provided the tools that helped businesses remotely, without disruptions. For example, through our ARIBA procurement software, Pakistan’s hospitals were able to connect with global suppliers providing equipment like ventilators and help save lives in a cost-efficient manner during the height of the pandemic.

BRR: There are a number of business software products offered by SAP. Which ones are more relevant for Pakistan’s businesses?

SA: In Pakistan, we are present in every possible industry. For instance, the local automobile manufacturing plants are working on SAP solutions. We are also providing software to major steel manufacturers. The manufacturers of local foods & beverages – from biscuits to spices – are also using SAP solutions in different domains. Many local banks, Disco’s and telco’s are using our software solutions. The government of Pakistan is also using our software. Many educational institutions are also using our services, and our engagement with online education has increased during the pandemic.

We also work with international development institutions, with the aim to improve compliance-related issues like public-sector budgetary controls and AML/CFT monitoring. We carry the experience of helping both the private sector and the public sector in Pakistan. We also provide analytics solutions and software to maximize efficiency and capacity of human resource management.

BRR: That is great. But being a multinational software company, SAP may find less difficulty in serving the software needs of large MNCs in industrials and services sectors as well as large local enterprises and institutions. Please tell us about your business offering for SMEs. And how is the uptake in the down market?

SA: While (globally) we do, in fact, serve the large corporations and over 90 percent of the Fortune 500 companies are SAP customers, the fact of the matter is that approximately 80 percent of our customers are small- to medium-sized businesses. As for Pakistan, we have different solution categories in the market.

For instance, our A-1 solution caters large industries and companies, including the financial sector. Then we have our Business One solution, which caters specifically to SMEs, and even lower general business market. These solutions cost in the range of $1,000 to $20,000, which is affordable in the down market. Let me give you a few examples. Student Biryani is using SAP, and this is not really a company at the scale of the Engro’s or the KE’s of Pakistan. SAP also provides different kinds of cloud solutions to the SME market as well.

BRR: How many clients do you have in the SME sector?

SA: Our engagement with the SMEs is mostly indirect in nature. We work with them through our partners, such as IBM, PWC, EY, Siemens, Abacus, Excellence Delivered, etc. We do transactions with SMEs through these partners. Overall, I believe we are serving about 1,000+ SMEs in Pakistan.

BRR: What are the software requirements of Pakistani SMEs and what are the issues in driving the uptake?

SA: The main insight in the SME market is that it is not the software per se that is critical but the training that the SMEs need to get to operate that software. Therefore, if an SME has already invested in some ERP software, the new software company making the pitch should still be able to offer its HR, procurement, marketing solutions on top of that ERP, instead of insisting an end-to-end deployment. That helps an SME make the best use of an existing investment.

We, at SAP, provide that flexibility. We are interoperable with other ERPs. And this is our competitive advantage in this market. We work with all kinds of software.

BRR: Majority of SMEs in Pakistan are ‘micro’ in nature, and are found mainly in wholesale and retail trade, restaurants, and hotels business. What is the core need for such SMEs for which they should get a software solution?

SA: What the SMEs need the most is to adopt best business practices, for which a software product can prove beneficial. About 80 percent of a software requires no changes and can work best for any firm within an industry, and the rest, 20 percent, is where you need to make some changes to suit the firm’s circumstances. SMEs need to change their way of doing business, and not the other way round where a firm expects a software to be customized as per the way the firm has worked for many years.

BRR: Many informed observers had predicted around the time of Covid-19 onset that the lockdowns and mobility-cum-interpersonal restrictions would hasten the process of digital transformation in Pakistan. But it appears that the supply and demand-side constraints are still in place, something that is corroborated by latest data on digital payments during the peak pandemic earlier this summer. How has your experience been in the last six to eight months vis-à-vis digital transformation in Pakistan? What have you heard from the market?

SA: Before Covid-19, digital transformation was already happening in different industries, from large enterprises to medium and small entities. But they were working on their own pace, depending on a particular industry’s pace and a particular business’s speed. Some were fast in their digital transformation journeys, some were slow, and some were intermittent. However, since Covid-19 has hit, I believe that there is now a universal realization that the transformation to digital solutions and services has become essential for businesses to survive, let alone thrive.

The companies that were already in the midst of this transformation were able to do it faster during the pandemic, realizing the impact on social and economic lives. Question is how to embark on this digital journey for rest of the organizations that have now realized the need for transition but do not know the best way to move forward.

BRR: In terms of training and development of human resource in Pakistan, what is SAP’s role in regulating SAP-related certifications that are being offered by many entities in the market? Does SAP Pakistan have a role in developing that certification ecosystem or ensuring that a certain level of quality control is maintained?

SA: There are two kinds of streams – internal and external. Internally, our Young Professional Program takes 80 to 90 people, trains them for free in different certifications so these young professionals can then go into the market and make careers for themselves in government and private sector. Another initiative, SAP Academy Graduate Program, sends top Pakistani graduates to Silicon Valley and then they come back to work for SAP Pakistan.

Externally, we do not regulate the certification ecosystem, but we do guide its development and best practices. We can only control the software and the education that software can provide to the people in the market. We cannot control quality or costs of these certification centers because these are independent entities who charge on their own. We try to educate them, but pricing is one area not in our control. Sometimes we get complaints directly from individuals, after which we review the feedback and then take corrective actions against certification providers against whom there is a pattern or high number of complaints.

Some universities are starting SAP Diploma Programs, and we are helping the academia in that regard. Going forward, we would like that some form of training becomes part of the curriculum at some level.

BRR: Let us pivot to SAP’s operations. How is SAP structured in Pakistan, from an organization perspective?

SA: It is a mix of global structure and Pakistan-specific structure. SAP Pakistan reports to the sub-region, which is called “Middle East North” that eventually reports to EMEA (Europe, Middle East, and Africa), and also to the HQ. On top of that, we have our industry and solution focus as well, where we have experts in both domains working for us. We have separate teams focusing on large enterprises and the SME market. Our internal structure is designed such that we have different targets for large enterprises and SMEs.

Three and a half years ago, SAP identified Pakistan as a growth area in the region and later they started investing heavily in Pakistan. As a result, from a team of 5 people, we have now grown to an organization of 60 people in that time frame.

BRR: Tell us a little more about this recent expansion.

SA: We expanded mainly from a human resource perspective. We got new office setups in Islamabad and Karachi. We were careful to take care of two things before we started growing our setup in Pakistan. First, we started hiring those IT professionals who were themselves well-versed in SAP solutions and their implementation purely in the Pakistani context. And second, we also hired people who were in the different industries, who probably did not know much about SAP but who knew very well the pain points of different industries in Pakistan.

So, we hired both these kinds of professionals and then put them together under one roof to take a better shot at the market. This whole concept has really worked for us. Our target market focus in the domestic market was mainly in areas of public sector, oil and gas, telco’s, financial sector, and manufacturing. As a result, we have made breakthroughs with organizations like OGDCL, KE, Engro, etc.

BRR: What is your revenue model?

SA: We work on all different models that exist in the ecosystem of any software company. We provide subscription model and cloud model on different services. We provide different revenue-sharing models as well, which are more suitable for some industries than others. We also provide solutions on non-SAP clouds and data centers. We do small deals starting from $1,000 for our SAP Business One software, and also do large deals on A-1 software going all the way beyond $1 million. We have solutions for all segments, and we provide all kinds of pricing models.