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Author's profile photo Jennifer Scholze

Steel pipe manufacturer JESCO using Enterprise Cloud for flexibility and cost

First a few words about why to consider an Enterprise Cloud approach –  then more about steep pipe manufacturer JESCO – that is doing just that….


What is the benefit of going with an Enterprise Cloud approach?


As we all know – the business environment is changing fast. Speed is a competitive, strategic weapon, and companies are driving constant and uncompromising change into their business to expand, grow markets, develop new products, etc…

There is the trade off between IT complexity and trying to quickly meet the expectations of the business. Demands for faster, bigger, and more flexible conflicted with the risk of ‘breaking’ something in an IT landscape that became increasingly more fragile with each new change.

CIOs are trying to figure out if the following benefits can really be achieved:

  • Core not context – Outsourcing  operations and application management to free-up resources that can then focus on core competencies such as creating business value and strategic advantage, rather than operations, management and maintenance.
  • Business Relevant – Supporting the business’ needs for continuing innovation, change, expansion and growth. Everything the business does today is enabled by IT.
  • Cost Reduction – Driving cost out of the IT landscape and operation is a huge concern and focus for today’s CIO


So what can we do?  there are two strategies to consider (and maybe more)

  • Strategy 1: Form true partnerships with companies to enable ‘Closed-Loop Support’, whereby the teams that develop, build and maintain the applications on which you depend, become an extension of your IT department – your virtual support organization.
  • Strategy 2: Implement ‘Leveraged Innovation’, whereby customers can test, and trial the latest innovations in a sandbox Enterprise Cloud environment, to ensure the best fit and the maximum innovation potential before they purchase.

What are 6 ways this can give you ROI and value?

1. Free-up Customer’s IT Resources – leverage the enterprise cloud platform to free-up customer’s resource and IT staff to better drive value creation activities, focus on business innovation, and drive revenue

  • Free-up IT staff
  • Reduce the Investment Capital Required
  • Reduce and Avoid Energy and Data Center Costs

2. Respond faster to the business’ need to innovate, change and deploy new systems the business will have literally hundreds of smaller projects each year – some large, some small. These can range from deploying a new system for a company that’s been acquired, to expanding an existing system to new geographies, groups of users, and so on. Separate topics that are integral to the ‘respond faster’ value driver are agility and (ii) elasticity.

3. Agility refers to the capability of the IT department to best respond to the needs of the business by delivering the systems and hardware the business needs to drive revenue.

4. Elasticity is the term given to the customer’s IT landscape, and how easily to can expand and contract to meet the needs of the business. For example, if the business needs a new system stood-up for a new project or acquisition, does the existing hardware have sufficient capacity to enable that, is the data center big enough, what about wiring and cooling requirements? These are all factors in the elasticity equation.

5. CAPEX to OPEX – the ability for a CIO to be able to purchase HEC as an operating expenditure (OPEX) rather than as a capital item (CAPEX, CAPital EXpenditure) is a very significant win. The ability for a CIO to pay a monthly fee from their operating expense (Opex) budget means they won’t need to have capital approved – the process is far easier and has less all-round risk.

6. HEC is the Low-Risk Deployment Option – For both business and IT executives, choosing the right deployment is all about risk reduction and cost avoidance, and HEC enables customers to avoid ‘all or nothing’ decisions. With HEC, the customer could avoid both the capital cost and its resulting depreciation expense. This enables the financial risk to be avoided.

Now a bit about Steel Pipe manufacturer JESCO…. and their approach


The oil-and-gas drilling industry depends on Jubail Energy Services Company (JESCO) – Saudi Arabia’s leading and first global seamless steel-pipe manufacturer – for more than 400,000 metric tons of pipeline per year. With the Middle East and North Africa currently the fastest-growing region for oil and gas exploration, development, and production, it benefits from a local supply of pipelines. After a period of growth in terms of output and employment, JESCO urgently needed to improve real-time visibility and transparency into many of its key processes. The company deployed SAP using SAP HANA Enterprise Cloud to automate fundamental processes such as HR, finance, and manufacturing. This dramatically improved transparency and the ability to make swift, impactful decisions in real time while slashing inefficiency across the company.  Below is more information about their work:



  • Enhance its position as a pioneering and vital business in domestic and export markets
  • Move from a SQL database and Windows platform to an in-memory database pllatform
  • Better monitor its plant, reaping the benefits of in-memory computing



  • Two-month implementation
  • Servers, backups and updates operated  and managed by SAP
  • Perform audits to see if JESCO is using the software in the right way, to align it with the business and enable additional features
  • Move users from a traditional GUI to next generation user experience


What were the immediate benefits?


To read the whole story click here.



For more information about how SAP supports the metals industry click here


The global Mining and Metals industry is going to come together to talk  about digital innovation impacting the mining industry July 12-14 at the International SAP Conference for Mining and Metals in Frankfurt, Germany.  Click here or below to find out more and register. Don’t miss this opportunity to meet with world leaders and learn how your organization can become a connected, digital enterprise.


Follow who is coming and speaking and pre-event activities by following sapmmconf and @sapmillmining on Twitter



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