Qatari conglomerate gets deeper insights into profit margins, sales, procurement, and staffing with Oracle Cloud ERP and Oracle Cloud HCM.
“With Oracle Cloud ERP running our core processes, we are in a better place to understand that there is another way of doing things. At last, we are in control of our supply chain, of our cost of sales, and we are closing our books much faster than before.”
From its beginnings in the 1960s as a dealer of tires, Almuftah Group has evolved into one of Qatar's largest, most diversified enterprises and one of the top 100 family businesses in the Middle East.
The company works with a network of foreign partners, government institutions, and local businesses to execute major building, civil, and industrial engineering and construction projects as part of the construction boom in Qatar. In addition, Almuftah owns businesses in a wide range of other sectors, including automotive and transport, industrial equipment, cable and satellite TV, education, restaurants, travel and recreation, real estate, and personal products such as electronics, furniture, jewelry, watches, and cosmetics.
Almuftah lacked a modern ERP application to help manage its sprawling, growing businesses. Its legacy home-grown systems, including spreadsheets, weren’t integrated with one another, providing little financial visibility across divisions. Almuftah needed an application to help it integrate processes, drive down costs, improve data analysis, and allocate resources more efficiently.
Why Almuftah Group Chose Oracle
Almuftah engaged an Oracle Insight team to analyze the organization’s technological and business challenges and make recommendations for replacing its legacy systems. Oracle Insight proposed a three-phase digital transformation based on automation and integration of the company’s financial, supply chain, and HR processes.
Khaled Elhusseiny, Almuftah’s chief financial officer, had previously implemented the Oracle E-Business Suite on-premises application at two other companies in Qatar. Based on his experience with those applications being customized over time, and on the advice of Oracle Insight, he proposed a cloud solution for the group’s digital transformation.
“I have lived through the nightmare of customizations and will never go there again,” Elhusseiny says. “And the other headache we avoided by going to Oracle Cloud is not having to bear the expense of on-premises hardware and other hidden costs. All I need to pay is a yearly subscription, and that’s it.”
Almuftah was able to go live with the applications at 36 of its companies in only 12 months.
Almuftah’s group finance department is now providing divisional managers with monthly profit margin reports, as data from Oracle Cloud ERP’s financial module, coupled with Oracle Cloud HCM’s payroll module, provide real-time visibility into sales and the cost of sales. Sales and collection cycle reporting has become daily.
Group finance also closes its monthly books much faster than before—in as little as a week, on average, compared with two weeks previously—enabling the department to deliver reports to management in a timelier manner. And it now takes just four weeks instead of eight to prepare the annual budget. With tighter cash management, Almuftah can pay its employees, suppliers, and subcontractors more promptly.
The group’s use of Oracle Cloud ERP’s procurement module has cut purchase order approval from two weeks to three or four days, while the procure-to-pay cycle, previously hampered by bottlenecks, flows smoothly. Furthermore, Almuftah has put an end to duplicate orders and misunderstandings by automating purchasing transactions and adopting online project collaboration and document management.
For HR management, Almuftah focused first on payroll. Oracle Cloud HCM’s payroll module allocates every employee to a profit center and generates the costs on a monthly basis. Integrated with Oracle Cloud Financials, the new system has eliminated overlap between finance and HR, rationalizing staff costs previously running at 70% of operating expenses in some parts of the organization.
Almuftah’s rollout of the cloud applications has freed staff in finance, accounting, and HR to focus more on business analytics and less on manual tasks. Under the legacy system, the ratio of clerical work to higher-level analysis—of profit margins, sales strategies, and other key business factors—was about 80:20. Today it’s more like 20:80.
Almuftah is planning to implement additional application modules, including budgeting and planning, strategic workforce planning, profitability and cost management, learning management, and manufacturing costing. A third phase will focus on sales, marketing, and customer service.