Fall event highlight - Obeikan Investment Group shares transformation field lessons, and results to date

Profile picture for user jreed By Jon Reed December 4, 2019
Summary:
Transformation projects are generally too modest for my taste - but that's not the case for Obeikan Investment Group. Next up in my event highlights series: an Inforum 2019 interview about a transformation project worthy of the name.

Mushtaq Khan of Obeikan at Inforum 2019
Khan of Obeikan Investment Group at Inforum 2019

For all the talk about digital transformation - and we do plenty of it on diginomica - it's still rare to talk to companies engaged in an "all-in" transformation.

Usually, companies are working on a customer-facing project. Or maybe a digital supply chain initiative.

But at Inforum 2019, Obeikan Investment Group gave a memorable look at a change effort worthy of the "transformation" tagline.

Obeikan's Mushtaq Khan certainly has a lot at stake here - he's got the project right in his job title. As Group IT Director and Head of Digital Transformation at Obeikan Investment Group, he has a motherload of ambitious responsibilities. Here is just one:

  • Implementing RPA (UiPath) to automate all major finance, HR, Sales and Marketing, Engineering, Maintenance and Supply Chain processes, this will reduce 30-40% manpower and will give 25-30% saving overall.

Transformation starts with automation

That's not what you'd call dabbling in RPA - Khan's got five team members on RPA full time now. Since Khan embraces digital transformation as a core focus, I wanted to know: what does the word mean to him? The answer: it starts with eliminating bulky and paper-based processes, automating wherever you can. As he explained:

Let's take a journey from the beginning. When I joined about six years back, we had a lot of manual or people work around the company.

Such as?

Let's say you have a production order you need to produce: let's say you want to produce 100,000 or 1,000,000 fans. Everything was [paper-based]... That job goes through 1, 2, 3, 4, 5 steps depending on what kind of a product or what kind of order. Particularly in the last three years, we are moving into digital transformation. We are automating a lot of things.

Yes, spreadsheets are on the list:

We eliminated Excel. Excel is a killer.

Efficiency is not the digital end game

By my definition, digital transformation must be more than an efficiency/automation play. That's the case here. Six months ago, Obeikan added a fourth division: Obeikan Digital Solutions (ODS) - that includes a partnership with GE Healthcare to digitalize the healthcare industry, as well as smart factory initiatives. Announced in 2017 as a partnership with GE Digital, a core ODS objective is to provide digital transformation services to other food and beverage industry leaders.

Typically, a digital transformation lead would be accountable to one CEO - Khan supports three. The other three divisions of Obeikan - the plastic division, the paper division, and the liquid packaging division, all have their own CEOs. Globally, 4,000 employees are impacted by these initiatives, with 80 percent of them based in Saudi Arabia. Obeikan exports its goods to more than 75 countries.

A company-wide transformation brings data integration challenges. That's one factor that influenced Obeikan's implementation of Infor LN, which Infor bills as a "global ERP cloud solution for complex small and large manufacturing companies." Why Infor LN?

We were in search of a solution that would integrate data across our major operations to increase operational excellence, and enhance service levels to our large customer base.

Software choices and the role of Infor

Given that many of Obeikan's new projects are running Infor software, I was curious about why the Infor platform was the best option. Khan said that Infor's expanding presence in the Middle East really solidified the partnership.

When we started up on Infor, they had no existence in the Middle East... About three years back, Infor set up a big office in the Middle East.

When it came time to upgrade or add software, confidence in that regional relationship was big. After that, Obeikan Investment Group moved to a range of Infor products, including Infor OS, Infor supply chain management, and Infor CRM. But Khan made it clear: they move to new software when it fits their transformation plan, and when the software is robust enough to meet their needs. It's all about applying the data:

We have a team of data scientists, and we were like, "Okay, let's make this data meaningful." We had a lot of data coming in, 500 machines working 24/7, generating 12 terabytes of data every month. We need that data to convert into meaningful decision making.

Whether you're talking about internal transformation, smart factories, or supply chain collaboration, change management is a constant. I joked with Khan about the resistance he must have faced taking away his users' spreadsheets. In truth, he didn't take them away - he sweetened the deal by offering them something better:

We got a lot of resistance from people who had been working here for years. They were used to Excel; it was in their comfort zone. To help them evolve, we gave our workers Office 365 F1 licenses, to get all their work online.

Results fuel the forward effort

To keep momentum during a transformation, you need to point to results. Khan cited a number of examples where workflow automation has paid off. Bank reconciliation is one:

We have a big team who is doing bank reconciliations... Every day you have a bank statement; you are cashing checks; you are receiving payments. That team was doing the bank reconciliation manually. We are fully automated now. It is just a click of a button to connect to the system. The system does a reconciliation, but there are gaps you need to fill in.

Another finance example: balance sheet coordination, across 22 corporate balance sheets. Month-end close used to take 15 days, with 5-7 people to complete the job:

Now, there is one person to just review and send it. One. So this is digital transformation for us.

Khan's team has accomplished similar things on the supply chain side, improving supplier communications with 1,000+ suppliers. They've now got their suppliers on Infor's Supplier Exchange. Now, all the supplier negotiations (e.g. delivery dates) happen through the Infor portal.

The wrap - customer-facing projects on deck

The next phase? Taking the transformation to customers. As Khan acknowledges, that brings new challenges:

With suppliers, you can say, "You have to use it"... You can get another supplier, no problem. With the customer, you must give them value. So for customers, we looked into multiple options - there's another piece of the digital transformation. It's not 100% done.

On the customer side, Khan is looking at Infor Rhythm for e-commerce. At Inforum 2019, Khan was taking the opportunity to meet with Rhythm product leads, hoping to sort some questions about Rhythm functionality and tech.

A big principle on the customer-facing side is: empowering the customer with transparency and self-service. Khan wants customers to be able to log in and see their order status, quickly change the order, or, if needed, handle a large return:

This will enable a customer to manage everything on a single platform...  We want reduce the cost and [achieve] excellent customer service.

Khan knows time is of the essence:

We need to do very fast, because our market is very competitive.

Add this to my customer update list for next year - this is one worth tracking.