the most up-to-date Turkish version at thetime – SAP R/3 Release 4.0B. But the up-grade is already in the pipeline. However,Arena wants to thoroughly prepare its sys-tem, which has undergone many modifica-tions, before the upgrade goes ahead.

Asik says that there is no substitute forhaving a robust, integrated back-end systemto support business processes, even thoughthe implementation was not completelypainless. “Internally, our systems were notintegrated. As a result, our integration withthe outside world was not up to scratch ei-ther,” he says, making clear that sophisticat-ed internal processes for enterprise re-source planning (ERP) are still the best basisfor projects where the supply chain extendsbeyond the boundaries of a company.

The improvements at Arena speak forthemselves. Real-time integration, especiallyin sales activities, creates immense savings

HIGH TECH ONTHE BOSPORUS STRAIT

Arena takes the Internet by storm

industry, where product life cycles are threeto four months, if you don’t move forwardyou get left behind. That’s why Arena can’tafford to be a passive observer of new devel-opments – it needs to create its own newbusiness models, and then put them into ac-tion fast. Regular “strategic articulationmeetings” with long-standing consultingpartner Andersen allow the managementteam to make long-term plans for extendingthe company’s market leadership and to setpriorities and trigger actions that supportthese plans.

Integration is the driving force

One of the results of these meetings is theimplementation of a new IT system to makenew business activities possible. “Our PC-based standalone solution fulfilled the re-quirements for our core business, butcouldn’t take us much further forward,” saysCem Asik, manager of the Strategic BusinessDevelopment division, describing what thesituation was like a year and a half ago. “Forexample, we were able to call up our saleson a daily basis, but we had no consolidatedinformation about the stock or receivablesin our branches in Istanbul, Izmir, and Anka-ra. We knew that our future lay only in an in-tegrated solution.”

The search for the right solution startedin January 2000. Arena chose SAP over J.D.Edwards and Oracle because, as Kohen ex-plains, “We thought SAP and its partnerswould be best able to deliver the necessaryimplementation and maintenance support

in Turkey. We were also influenced by thefact that our consulting partner recommend-ed SAP.”

After the decision was made in March oflast year, the implementation team set towork right away. Twenty team members de-voted themselves to the project full-time,with 11 specialists from Andersen and ninespecially selected experts from Arena’s userdepartments, who were trained to be SAPcontact persons for their departments. “Wehad lengthy discussions about when weshould start working with the new system,”Kohen says. In the end, they decided to takea risk: Arena was set on going live with SAP– all solutions apart from SAP Human Re-sources (SAP HR) but including SAP BusinessInformation Warehouse (SAP BW) – beforethe fourth quarter, the most profitable timeof the year. Of course, another factor wasthat a speedy SAP implementation alsomeant a robust back-end system would beavailable when the company went public inOctober 2000.

From SAP R/3 to the external supply chain

On September 1, 2000, the old PC systemwas shut down and the new SAP systemwent live. It has been fine-tuned and is nowstable, even if not everything is perfect, yet.That should change soon. “With R/3 Release4.6C, around 90% of our requirements willbe met,” says Asik. Because this release hasonly been available in Turkish since the be-ginning of this year, Arena had to settle for

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Many people know Turkey only as a holidaydestination, with its sandy beaches, deepblue sea, and bustling Istanbul bazaars. Andthat’s how the colorful tourist brochures de-pict the country that links Asia and Europe.

Hagia Sophia, the Blue Mosque, and theTopkapi Palace are attractions that no visi-tor to Istanbul should miss. But far from thehoards of tourists, this metropolis with apopulation of 16 million has other hiddencharms. In the heart of the city’s pulsatingbusiness district, a local company called Arena Bilgisayar A.S. has established a repu-tation for innovation that would make somehigh-tech giants turn green with envy.

Arena, Turkey’s leading distributor of ITproducts with a U.S.$205 million turnoverin 2000, does not make an ostentatious first

Arena Bilgisayar is moving fast. Turkey’s innovative IT distributor compa-

ny had SAP solutions up and running in six months. It has also shaped up

its business processes, implemented SAP Business Information Ware-

house (SAP BW), gone public, and set up SAP Internet Sales and other

front-end solutions.

impression. The plain company headquar-ters near a busy main street has sober, open-plan offices, where the hustle and bustle ischaracterized by the tapping of keyboards,the ringing of phones, and unidentifiablesnippets of conversation, just like in thou-sands of other offices the world over. Onlyin the separate management conferenceroom do you get an inkling that Arena is acompany not quite like any other. Rows oftrophies cram the shelves, and framed certif-icates bear testimony to the company’s ex-cellent market position. Every year, comput-er journals and IT institutions choose Arenaas the best distributor in Turkey’s IT sector.

How did Arena develop such a good rep-utation? Arena’s CEO Izi Kohen (picturedabove) explains, “We see ourselves as a partof the supply chain that generates value forall participants, and thus increases effecti-venes and efficiency in all processes.” Hecalls this approach “end-to-end integration,”which encompasses all the relationshipmodels for exchanging goods and serviceson the Internet, for instance, business-to-business, business-to-consumer, and reseller-to-consumer.

This approach has proven popular. ButKohen knows that Arena has to work hard tokeep its good name and that standing still islike taking a step backward. In the computer

From its salesbranches in Ankara, Izmir

and Istanbul, Arena supplies more than4,000 resellers throughout Turkey withcomputers, PC peripherals, consumerelectronics, consumables and software.The company is headquartered in Istanbul, where it also has a 8,500square meter distribution center. Arenais the market leader in Turkey, has 170employees and generated a sales volume of U.S. $205 million in 2000.

PROFILE

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Arena's CEO Izi Kohen

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The Dutch company KCF Products B.V., one of Europe’s largest

suppliers of promotional business gifts and premiums, is busy

expanding its distribution channels. It is now set to enable its

customers to buy its products on the Internet using mySAP

CRM Internet Sales, and plans are also underway for its sales

department to work with mySAP CRM Mobile Sales.

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and product allocation, order products, andpay using different methods of payment. “All the information displayed on the Web ismapped directly and without exception to theinformation and processes in SAP,” explainsKohen. To support the Internet sales channelPencer-e.com, Arena uses Cercev-e.com. Withthis unrestricted portal, customers and con-sumers can, for instance, view guarantee in-formation. They can also track their order’sprogress using an identification number,and unlike Pencer-e.com, this function inCercev-e.com does not require users to enterany other background information.

Arena is currently working on Tencer-

e.com (“tencere” is Turkish for “saucepan”),a portal for exchanging goods and informa-tion between Arena and its and suppliers. Inthis portal, suppliers will be able to monitorthe backlog and stock of their products inArena and enter delivery schedules. The sys-tem will allow Arena to engage in stock re-plenishment and profit sharing agreementswith its suppliers. Also under developmentis Sonda (“sonda” is Turkish for “probe”), aplatform which extends all business process-es of the company to the outer world usingXML technology. The document exchangestandards are being developed togetherwith leading e-commerce companies whoare so eager that they are using Sonda evenin its development stage. And that’s not all.

and logistics advantages, for example in theform of optimized flows of goods. Now or-ders can be transferred from one salesbranch to another. Because the systems areintegrated, the outsourced forwarder canplan exactly how much capacity is requiredin each delivery region. If necessary, deliver-ies can be made three times a day. Arena’scustomers – the computer resellers – caneven display the driver’s mobile phone num-ber, as well as the current status of an order.

“We now have our inventories undercontrol and can promise products to our cus-tomers based on future availability. We cancontrol our business much better and aimfor higher customer satisfaction,”says Kohen. In addition, Arena hasdefined Key Performance Indica-tors (KPIs), which give a break-down of business performanceand set objectives for the individu-als and departments. With SAPBW, all the hidden factors andcosts that influence sales volume,profits and service levels are nowvisible.

Kohen also appreciates SAP’smulticurrency capabilities. Arenaimports almost all products andparts. The company pays for themin foreign currencies, invoices itscustomers in Turkish Lira and bal-ances the accounts in dollars. Soft-ware that can manage several currencies inthe same account is therefore indispensable.

Internet portal for customers

However, there is much more to this promis-ing new solution. While SAP is working inthe background, Arena has provided its cus-tomers and partners on the front end witheasy access platforms that allow businessprocesses to be controlled automatically.One such development is Pencer-e.com(“pencere” is Turkish for “window”), a busi-ness-to-business portal for customers. Com-puter resellers have a password to access thesite, where they can see their specific prices

>>KCF Products implements SAP Internet Sales 2.0B

Based in Barneveld, Netherlands, KCF is a subsidiary of the Mid Oce-an Group, one of the market-leading groups in this sector. The giftcollections it creates for customers include a full range of productsfrom travel accessories, through pocket calculators and corkscrews,to watches and toolboxes, mostly sourced in the Far East. It sellsexclusively to distributors who then market to their own customernetworks.

Service makes KCF a front-runner

The key to KCF’s success is customer focus – for example, when it co-mes to ordering. KCF’s customers can now check the status of theirorders using the Internet. That’s because Internet Sales 2.0B, part ofmySAP Customer Relationship Management (mySAP CRM), has beenup and running since February 2001, making KCF one of SAP’s firstEuropean customers to go live with Internet Sales. “It’s not just thatactivities will soon be processed in real time, and so become muchmore transparent, but KCF will also be able to react to customer wis-hes much more quickly and appropriately,” explains KCF ManagingDirector Bert Pennarts. “But at the moment, our main focus is on theopportunities presented by a new distribution channel.”

In reality, the Internet is not that new to KCF as it has been sell-ing products via the SAP Online Store since April 2000. But the newsolution is more user-friendly, with functions that are more modern.

Arena is also building a portal for computerretailers and other resellers that want to selltheir goods direct to the consumer over theInternet.

Finally, Kohen takes his Palm Pilot out ofhis pocket. “We developed POP ourselves,”he says proudly. POP (which stands for Price-list On Palm) is an application developed onPalmOS, and contains Arena’s up-to-dateproduct specifications, prices and inventorylevels in categorized order. Resellers can al-so order from within POP. “Simply fill yourshopping basket and send off your order,”says Kohen. When Pop is synchronized fromthe Internet via a PC, not only is the data

updated but the order goes intoSAP. With every order, the personwho places the order automatical-ly receives confirmation by e-mail.

But life can be tough at the top.When Arena was looking for servicepartners for its Internet services, itfound hardly any companies thatcould meet its high technical re-quirements. The search for partnerswas a long one, and Asik says, “Wehad to push them forward.” On thepositive side, Asik sees this as away of leading the change and set-ting up their own standards in Tur-key. “We will start to enjoy theadvantages of being the first moverin a very short time,” Kohen adds.

Arena’s plans for the immediate futureinclude enhancements in customer relation-ship management (CRM). High on the list ofpriorities are telesales functions, as well asthe integration of language and telephonyservices with Internet services for an Arenacall center. The company has not yet decidedwhich software provider to opt for, but Asiksays one of the deciding factors will be thesolution’s ability to integrate into the exist-ing system landscape. He stresses the newproject’s urgency, but even with a tight timeframe, Arena will no doubt approach this de-cision with the same high-speed profession-alism as ever.

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SMALL GIFTS –BIG IMPACT

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