The two global IT giants, the German SAP and the
American Oracle Global, find themselves in another
battleground in their respective bids to bag a
multimillion dollar contract from a state
enterprise. The two companies are now fighting to
get the contract from the state owned telecom
monopoly, the Ethiopian Telecommunications
Corporation (ETC), estimated to be worth over 85
This is the second bid for a state owned company, in
Ethiopia, trying acquire and implement an
application dubbed Enterprise Resource Planning (ERP).
It is a company-wide computer software system used
to manage and coordinate all resources, information,
and functions of a business from a shared database.
It has a hardware and software components that
communicate using local area networks.
ETC wants to acquire technology in order to
integrate the systems of its procurement, warehouse
administration and supply chain operations, a senior
manager at the company told Fortune. Oracle
and SAP are the two leading manufacturers of the
product in the industry.
Oracle is bidding in partnership with WIPRO
Technologies, India's third largest IT exporter.
This consortium has offered 6.1 million dollars.
"But they have a huge amount of bill to charge ETC
in annual license fees," said a source knowledgeable
of the project.
This offer is 300,000 dollars less expensive than
what its bidder, the consortium of SAP and Ernst &
Young (E&Y) has offered, sources disclosed.
E&Y is an American audit and consulting firm whose
office in Addis Abeba is run by Zemedeneh Negatu It
is also a partner to SATYAM, another Indian IT firm
hired by the Ethiopian Airlines to provide
consulting services in the acquisition of back
office information system to integrate its finance,
human resources and supply chain departments.
SAP is now the lone bidder negotiating with the
Ethiopian Airlines to sign a contract after the
latter re-tendered the project in May 2009. The
management of the Ethiopian Airlines had cancelled
the first tender in last week of April 2009, after
an issue of a potential conflict of interest
surfaced due to the association of Zemedeneh with
both E&Y (the consulting partner) and Fairfax Global
Investment, SAP's partner in the bid.
Nevertheless, Oracle did not make it to the second
tender because Ethiopian had declined to
extend the bid opening date to June 8, 2009 from the
originally scheduled deadline of May 8, 2009 as
requested by Oracle. However, Ethiopian's
management had extended the deadline by 10 days.
The technical committee formed at the ETC to
evaluate bid proposals from the contending companies
has submitted its findings to the management board
last week, sources disclosed.
"I have sent it back to them [the committee] with my
suggestions for further consideration," Amare Amsalu,
chief executive officer (CEO) of ETC, confirmed to
Amare, however, has
declined to comment any further before the
completion of evaluation process and decision to
select the successful bidder is made.