The Ethiopian Shipping and Logistic Services Enterprise (ESLSE) awarded Oracle International Corporation a contract to implement its Enterprise Resource and Planning (ERP), with a total cost of USD 11 million.
The Enterprise managed to broker a deal directly with Oracle, unlike previous trends in the industry where Oracle’s local agents in Ethiopia are contracted to implement similar ERP projects.
Previously, a number of state-owned Enterprises usually made an agreement with local IT firms to implement the ERP project and those firms would buy the ERP software from some renowned international companies such as Oracle and SAP.
“We have decided to directly work with those global firms after looking at the track records of similar ERP projects which were implemented by the local companies,” Roba Megerssa, CEO of the Enterprise told The Reporter. He also criticized some previous automation projects done for the Enterprise and implemented by local IT firms for being ineffective and costly.
“We have found limitations to the previous ERP projects which were implemented in different state-owned banks and other enterprises, so we did not invite those local partners of either Oracle or SAP,” he said.
It is to be recalled that ERP projects for Commercial Bank of Ethiopia, Development Bank of Ethiopia and some other private companies were done in a way, where local partners of either Oracle or SAP will be given the contract and implement the project where the two firms provide the product.
This time around, ESLSE floated a tender inviting potential firms to provide end to end ERP system along with both the product and the implementation. However, none of the local firms were able to comply with the demand by the Enterprise. Hence, the Enterprise, after the approval by its board of directors, chaired by Ahmed Shide, minister of Transport, switched to a restricted bid inviting only Oracle and SAP.
Following this, the Enterprise has selected Oracle to take over the contract.
The project, when completed, will atomize many of the tasks of the Enterprise.
“We have around 20,000 file boxes and it is very tiresome to process,” Roba said. This project will help us to have most of our files into the cloud system.
These related problems have also made it difficult for the Enterprise to know its receivable incomes from its customers and services it provides.
Furthermore, Roba added that sensitive data related with finance will be stored in the Enterprise’s server.
This is primarily done to protect the data from being compromised by a third party.
The contract awarded to Oracle will take around two years for implementation. In addition to USD 11 million project cost, the Enterprise has to pay around USD 1.2 million, every three years for license renewal of the products from Oracle.
Oracle Corporation is a US multinational firm, headquartered in California. The company is involved in enterprise software products and cloud engineering systems.
According to Forbes, Oracle in 2017 was among the 25 biggest IT firms. In the same year, its profits reached USD 8.9 billion dollar and assets worth USD 125 billion.
