#49 - May 2016

MAY 2016

WWW.FINANCEMIDDLEEAST.NET ISSUE 49 I MAY 2016

COMIC RELIEF AT YAS ISLAND

We expect by opening our other planned attractions and providing a year-round calendar of events, we should welcome 30 million visitors by 2018. – Mohamed Al Zaabi, CEO, Miral Asset Management

COMIC RELIEF at Yas Island

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INSIDE

Peace of mind Packed with goodness

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I hope you enjoy this issue!

Jessica Combes Read my blog at: http://www.cpifinancial.net/blog/author/112/jessica-combes Follow us on Twitter: @FinanceMidEast WWW.CPIFINANCIAL.NET

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LOG ON TO WWW.FINANCEMIDDLEEAST.NET FOR NEWS, POLLS, EVENTS, ANALYSIS, BLOGS, FEATURES, COMMENTARY AND MORE.

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n light of the ‘skips’ at the end of 2015, totalling AED 5 billion in unpaid debt, the UAE Banks Federation announced at the end of March an initiative to assist SMEs in making their repayments, in an attempt to help these owners meet their financial obligations and sustain their businesses.

Our news analysis looks at this initiative, it’s qualifying criteria and what it will mean for the SME sector as a whole (Pg 5).

This month’s issue is focusing heavily on people–namely developing soft skills and valuing the workforce. Our feature on SME Management has input from Mike Hoff, CEO, Mike Hoff Consulting, Simon Hudson, CEO, Brndstr, and Louay Al Samarrai, Managing Director, Active. They provide input on what is required to build a strong management team, from as early as the start-up stage of the business (Pg 24). Once a company has these people in place, our opinion piece by Imelda Dunlop, Executive Director, Pearl Initiative, discusses how implementing proper corporate governance can improve the competitiveness of a business within its industry (Pg 14).

Our feature on captive insurance looks at how a business management team can ensure the business continues in the event of losing a key member, such as a stakeholder, after certain payouts have been made. It also looks at how businesses can plan for these unfortunate events (Pg 32). Our Facetime feature looks at the growing trend of flexible working conditions, more specifically, the need for employers to offer flexible working arrangements to women re-entering the workforce after period of absence, and how these businesses can benefit from this set-up as well (Pg 40).

We also look at the impact current economic factors have had on the commercial real estate sector and what that means for SMEs–is this a good time to buy office space? Mahmoud Shehada, CEO, Allegoria Capital, Pawan Dhawan, Head of Home Finance, Noor Bank, and Shoaib Al Rahimi, VP of Dubai South’s Business Park, weigh up the advantages of buying versus renting, particularly in light of financial restraints faced by smaller businesses (Pg 28).

For our cover story, we were lucky enough to interview Mohamed Al Zaabi, CEO, Miral Asset Management. He talks about bringing Warner Brothers World to Yas Island as its next main attraction, and on a broader scale, how this will increase visitors to the island and improve Abu Dhabi’s tourism sector as a whole, boosting the economy (Pg 20).

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PUBLISHED BY

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NEWS ANALYSIS SMEs given breathing space

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FEATURE To rent or buy?

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FAST FACTS Saudi SME industry growing

32

FEATURE Protecting human capital

8

5 TOP TIPS Five secrets to website success

36

CASE STUDY Branding, business, and banks

10

40

OPINION The ABC of family businesses in the Arab world

FACETIME Tapping into the talent pool

42

BRAND The moo crew

44

START-UP Meal in a jar

46

AWARDS

14

OPINION Build better business

16

LEGAL FOCUS VAT in the GCC

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CHALK TALK Basak Sen Sasal

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CEO CHAT Comic relief for Yas Island

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FEATURE Mastering management

48 50

ADVERTORIAL TECH FOCUS Better by design

52 TECH FOCUS Manage finances effectively 54

LAST WORD Stay focused

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NEWS ANALYSIS

SMEs given breathing space Banks to give companies a chance to repay their debts

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he UAE Banks Federation announced at the end of March an initiative to assist SMEs experiencing repayment difficulties to sustain their businesses.

The initiative, effective immediately, allows for the companies that have borrowed a minimum of AED 50 million, and are showing signs of financial stress, 15 days to reach a payment restructuring agreement with their

creditors. This is followed by a 90-day grace period where banks will not prosecute.

“The launch of this initiative by the UAE Banks Federation shows their genuine commitment to supporting SMEs that are having difficulty repaying debts, assisting these companies against the possibility of losing their businesses in the long run,” said Massimo Falconi, CEO for Middle East Countries, COFACE, a trade management firm that monitors payment behaviour of businesses in the UAE. The SME sector plays a significant role in the economy and this new initiative aims to help curb the amount of unpaid debts. The total amount owing in these scenarios was just over AED 5 billion at the end of 2015. Falconi added that for the first quarter of 2016, COFACE recorded a three-fold surge in runaway cases by SMEs, compared to figures registered during the same period in 2015.

This initiative should see fewer business owners skipping the country, according to Steve Armitage, Managing Partner of consultancy firm, UAE Business Solutions, as a greater focus will be on cash flow management

and the eventual introduction of a fully formed insolvency law.

He added that the fear of a custodial sentence for a bounced cheque does impact on SME owners’ business decisions, so this initiative should also alleviate some of those concerns.

“Lower commodity prices, a reduction in liquidity in the market and the numerous skips towards the end 2015 have impacted SMEs and the banking sector negatively.

The initiative is an important step to ensure that honest SME owners have the ability to manage their finances during this challenging period.

Under the plan, SMEs facing liquidity pressure due to unsustainable debt maturities will be able to temporarily suspend their debt payments, so that they are able to focus their energies on restructuring their business, with vital support from financiers,” said Sunando Mukhopadhyay, Head of Emerging Corporates, Noor Trade.

However, this initiative should be seen as a last resort solution and it should not be considered an alternative to proper cash and risk management, or business planning, which all SMEs should have embedded into their corporate culture and decision making process, said Armitage.

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FAST FACTS

DUBAI HOLDS SMARTPRENEUR COMPETITION

SAUDI SME INDUSTRY GROWING

In an effort to transform Dubai into a ‘Smart City’, Dubai Chamber, in cooperation with Smart Dubai Office launched a competition for entrepreneurs residing in the UAE. Participants were invited to submit their business ideas based on one of the Smart Dubai strategy dimensions, including smart economy, smart living, smart mobility, smart governance, smart environment, and smart people.

Essa Al Zaabi, Senior Vice-President, Institutional Support Sector, Dubai Chamber of Commerce and Industry, said, “The UAE as a whole is making efforts to help nurture future business talent. For its part, Dubai Chamber initiates strategies to support startups one of which is its initiative of Tejar Dubai entrepreneurship development programme which makes sure that entrepreneurs get the ecosystem they need to build their ideas into a thriving business. This particular initiative holds a lot of promise for start-ups to find their own space and make their mark in the business world while honing entrepreneurial talent to support the Emirate’s SME sector in the long run.”

In Mid-April, MIT Enterprise Forum Pan Arab, in partnership with founding partner Community Jameel and the Zain Group, announced the winners of the MIT Enterprise Forum Arab Start-up Competition from a total of 76 contesting teams from 15 Arab countries.

Hashem Daghestani, Head of MITEF Saudi Start-up Competition said, "The SME industry in Saudi Arabia is growing, as the government plans the Kingdom's transition to a post-oil economy. The private sector is expected to take a leading role in sustaining Saudi Arabia's GDP, through public-private partnership projects and new products and services that are created by innovative SME leaders.”

Daghestani added that the MIT Enterprise Forum Arab Start-up Competition is an example of how young people have the talent to develop sustainable concepts and fill market needs with their ideas and startups, and how they are more than capable of decision-making and contributing effectively to their nation's strategy and vision.

UAE RETAIL SECTOR TO ASSESS IMPACT OF VAT The KPMG Tax seminar, held towards the end of April, focused on the retail sector and how VAT could affect supply chain management, financial systems, and end customer pricing. It was recommended that businesses continually monitor tax developments and updates and assess the financial impact of VAT on their business models.

Nilesh Ashar, Partner, Tax KPMG for the Lower Gulf said, while SMEs will need to be aware of, and deal with VAT while planning their supply chain and business models, there are two key issues for small firms or SMEs when it comes to VAT. First, it needs to be seen whether SMEs will be under or over the revenue threshold, which is to be determined, for VAT registration.

“If a firm is under the revenue threshold, they cannot register for VAT, and cannot recover input VAT on their purchases, unless these are passed on in the supply chain; either to the consumer or the next dealer, through price increase. In this case, VAT becomes a cost for the business and may affect their dealings with certain parties in the supply chain, as these businesses may only want to transact with VAT registered firms, as any input VAT can be recovered by the business, whereas a general price increase by a non VAT registered SME cannot be recovered by a VAT registered business,” said Ashar.

He added that if a firm’s revenue meets the VAT registration threshold, then they need to buy or upgrade their IT and financial systems to deal with capturing VAT, and also increase resources to deal with VAT compliance, which will likely add an additional burden to the SME sector.

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FAST FACTS

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SHUTTERSTOCK.COM

SHUTTERSTOCK.COM

NE RECRUITM ONLI EN AR TA E Y CT ON IV R IT Y EA

KUWAIT UP 26%

UAE UP 24% UAE AND JORDAN AVOID DOUBLE TAXATION In early April, the UAE signed an agreement on the avoidance of double taxation and tax evasion on income with the Kingdom of Jordan.

“Signing agreements on the avoidance of double taxation is of advantage to the public and private sectors as well as for SMEs investing abroad. These agreements play a part in reducing tax procedures and allowing companies to avoid double taxation payments; this enhances the competitiveness level of the sector and raises the effectiveness of its investments. The agreement on the avoidance of double taxation on income works on promoting the economic openness, free movement of factor productions, increasing investment opportunities and creating an environment for attracting public and private sectors’ investments,” said HE Younis Haji Al Khoori, Undersecretary of the Ministry of Finance.

The Ministry of Finance believes in the significant role played by SMEs in supporting economic growth, as they are considered a driving force of local and global economies, he added.

ABU DHABI'S GROWTH UNDER PRESSURE AS PUBLIC SPENDING SCALED BACK Rating agency Moody’s said in its Credit Analysis Report that economic growth in Abu Dhabi could come under pressure this year amid government spending cutbacks in response to lower oil prices. Steven A. Hess, a Moody's Senior Vice President, said that a prolonged period of low oil prices could gradually erode the emirate's fiscal buffers if it does not maintain its prudent budgeting. In 2016, the Emirate's deficit will likely widen to 14 per cent of the GDP. “The knock on effect of scaling back public spending will impact the SME sector. However, given that SMEs are primarily operating in Dubai, and not directly dependent on oil for government revenues, and to a large extent in the core sectors of the economy such as trade, transport and tourism, the impact maybe relatively modest,” said Nitish Bhojnagar wala, AVP-Analyst at Moody’s Financial Institutions Group.

KSA DOWN 1%

OMAN

DOWN 7%

QUATAR DOWN 13% Source: Monster Employment Index

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TOP TIPS

IT SHOULD BE INTUITIVE IT SHOULD BE INSPIRING

The content needs to be convincing and of value to inspire people to take action. It should also look great, make a lasting first impression and with a generous use of relevant images, bring users’ emotions into play with visual stories.

Websites should not make users have to think. Users should quickly and effortlessly understand where they are and what is expected of them next.

A website should guide its users, holding them by the hand and giving them what they want, when they want it. Keep it simple.

IT SHOULD BE INFORMATIVE The content needs to be fresh, up to date and relevant. It needs to speak directly to the target audience in a tone that resonates with them. Furthermore, to entice users to come back, it should be updated regularly as well as optimised for search engines so that the content is easy to find.

Five secrets to website success Mark Hirst, Founder and CEO, Blue Beetle, discusses how merely having a website is no good; and once the purpose of the site is known, there are five pillars it must adhere to ensure success

IT SHOULD BE INTERACTIVE

IT SHOULD BE INFALLIBLE

Attention spans are reducing generation by generation, so websites need to be captivating with a rich experience for the user to consume and keep them engaged. Tasteful animations and micro-user interaction effects help to communicate with motion something that would otherwise require words. The use of video does an excellent job of getting a message across efficiently and with the advent of 360-degree videos and interactive virtual tours, one can persuade users to remain and stay absorbed for longer.

Quality execution is paramount to ensure a site is stable, secure, fast, and reliable. Websites need to be in line with all accessibility, content, marketing and technology best practices and be accessible on everything from desktops to tablets to mobile phones.

Coming back to those dwindling attention spans, it's important to focus on speed and performance to ensure users do not have to wait.

It takes time to get everything aligned and working well on a website. It's not something that can be completed in one fell swoop. Think of your website as a living, breathing thing that iterates and evolves over time. What works on one website may not necessarily work on another. Watch how your visitors use your site, review the analytics and try new ideas or test new theories.

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OPINION

The ABC of family businesses in the Arab world Dr. Martin Spraggon-Hernandez, Professor of Management and Director of Executive Education at American University of Sharjah (AUS), considers the role family businesses play in the economic development of the Arab world

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ith 60 per cent formed since the 1970s, family businesses in the GCC are relatively young, yet diversified in the sectors they operate within. More than half of those businesses are involved in trading, financial services, real estate and construction. They are distinguished from their counterparts in other parts of the world because of the diversity of businesses and sectors they operate in, under one larger umbrella. Family-owned businesses have been expanding so much over the years that they now account for 75 per cent of the private sector’s economy in the GCC and employ 70 per cent of the labour force.

There are many reasons behind the success of family businesses in the region. These institutions have a strong entrepreneurial spirit, exceptional leadership, solid political and business relationships, intimate knowledge of regional and international highgrowth markets, limited competition from international companies, access to abundant liquidity and a low-cost workforce, and a unique corporate culture this part of the world enjoys.

Family business could also gain from working with more experienced and established SMEs as many of these small businesses begin as small startup family businesses from scratch.

With all these positive aspects to a family business, there are a

few drawbacks that exist with these types of operations. Right after the economic crisis, strategic and operational flaws in family businesses became visible, which have led them to take the appropriate measures to improve governance, develop business portfolios, cut costs, and increase operational efficiencies.

Family businesses remain a prevalent form of global business, but particularly so in the GCC. This is not a surprise, as it reflects the values and culture of the MENA region, which is built on close bonds with direct and extended family members.

The effect of these values can be clearly seen in the manner the businesses are run and in matters such as succession. cont. overleaf

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OPINION

Many banks in the GCC are now offering SMEs special start up packages to help gain a solid footing in the marketplace and help with early stages of their development.”

– Dr. Martin Spraggon-Hernandez, Professor of Management and Director of Executive Education at American University of Sharjah

Dr. Martin Spraggon-Hernandez cont. from pg. 11

This is starkly different to their counterparts in the West. According to Christopher Everett Tracy’s article, Top 5 Largest Family Businesses in the US , family businesses make up close to 90 per cent of all business enterprises in North America, and only 30 per cent of them end up passing the business onto the second generation.

FAMILY BUSINESSES AND SMES Family businesses are also an essential part of the SME mix in this region. Many banks in the GCC are now offering SMEs special start-up packages to help gain a solid footing in the marketplace and help with early stages of their development.

SMEs continue to thrive in the GCC– with over 350,000 SMEs operating

within the UAE alone. They play an essential role in the competitive private sector and providing a vast number of employee opportunities.

Furthermore, family businesses play an essential role in the economic development in the Arab world. According to a survey conducted by PriceWaterhouse Cooper (PWC) in 2012, most of the region’s GDP outside the oil sector is a result of family-run or family controlled businesses.

It is important for investors that are looking to work in the Gulf to understand this region’s unique business landscape, culture and similarities and differences between family businesses here and elsewhere. Many institutions have recognised the need to provide SMEs, investors and business people from elsewhere with vital information so that they need to succeed in the GCC. This of course is the responsibility of all institutions, as providing guidance will only benefit investors, but ultimately, it will bridge cultural differences and benefit the UAE’s economy as a whole.

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OPINION

Build better business Imelda Dunlop, Executive Director, Pearl Initiative, looks at the risks faced by SMEs if they fail to implement proper corporate governance

Imelda Dunlop

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mall and medium enterprises today reportedly account for more than 90 per cent of all registered companies in most GCC countries. Much of the region’s business is transacted by SMEs and according to industry projections, the

SME sector is anticipated to provide the bulk of economic growth and job creation in the short- to long-term.

SMEs in the UAE contribute to over 60 per cent of the country’s GDP and are responsible for providing about 86 per cent of employment in the private sector. In Saudi Arabia meanwhile, SMEs contribute to about 33 per cent of the country’s GDP and employ 25 per cent of the entire workforce.

Yet, despite the considerable dependence of the region’s economies on the success of the SME sector, the development of corporate governance practices have never been accorded their due priority. The fact remains that corporate governance is as critical to the success of an enterprise as any other goal given its direct link to business performance.

By overlooking this important element, SME owners run the risk of building weaker businesses with fewer opportunities for financing and continued growth.

In addition, a significant number of SMEs in the GCC region are family

businesses, which means they must also deal with ownership and management issues that exist in most family-owned enterprises.

In the GCC region so far, corporate governance practices have been considered mere add-ons by the business community rather than an integral part of an SME’s institutional structure. In 2011, Dubai SME developed a basic framework of corporate governance practices, the Corporate Governance Code, specifically designed with SMEs in mind.

Since the launch of the Code, there has been an increased awareness and understanding of the fact that corporate governance frameworks are crucial if the SME community hopes to build and grow sustainable businesses.

However, there is still some way to go to ensure that corporate governance becomes the norm for business in the GCC region.

There is a clear value proposition for SMEs in the GCC region to introduce robust and effective

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Establishing these structures enhances the competitiveness of a business, reduces its capital costs and increases its long-term access to funding.”

–Imelda Dunlop, Executive Director, Pearl Initiative

corporate governance frameworks to improve standards of accountability and transparency.

Establishing these structures enhances the competitiveness of a business, reduces its capital costs and increases its long-term access to funding–thereby addressing several of the company’s key business objectives.

Yet another business benefit for companies opting to implement corporate governance practices is their increased resilience to fraud, theft or unforeseen financial costs that may otherwise occur due to poor internal controls.

From a regional perspective, the formation of formal corporate governance structures that are aligned with global standards will certainly help raise the competitiveness and credibility of small and medium enterprises to international levels.

IMPLEMENTING CORPORATE GOVERNANCE Corporate governance structures for SMEs in the GCC region must be

carefully designed to factor in the size, maturity, business purpose, region specific challenges and regulations given the fact that priorities and concerns of an SME are vastly different from those of a large business. While there is no universally agreed upon standard model of corporate governance, there are several crucial general elements that should be rudimentary to the corporate governance framework of any SME. Clear reporting lines and a welldefined insight into how business decisions are to be made, who will make them, as well as how risks can be managed and minimised need to be established as a crucial first step.

Any good corporate governance framework should also encourage an understanding of the roles and responsibilities along with the limits of authority within the organisation.

Effective lines of communication need to be drawn between the board and the management, as well as the management and staff. Depending

on the key risks of an organisation, another critical element is the shaping of appropriate internal controls. Given all of the above, a good corporate governance framework should ensure that a board has full visibility and transparency of all management decisions. This will put in place a robust and formal system of checks and balances for the ultimate good of the organisation.

In today’s business landscape in the GCC region, good corporate governance could serve as a yardstick for the survival and success of SMEs. In addition to enhancing the competitiveness of a business, well thought-out corporate governance frameworks help an SME set a clear strategic direction for itself, optimise decision making, attract quality partners, recruit the best talent and achieve greater market penetration. At the end of the day corporate governance is less about monitoring the actions of an SME’s management and more about building businesses that last.

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LEGAL FOCUS

VAT in the GCC

Michael Armstrong, ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA), looks at what implementing value added tax (VAT) in the region will mean for boosting revenue

Michael Armstrong

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ower oil prices are expected to slow down the GCC economies.

However, rather than purely being an obstacle, this should be seen as an opportunity for the region to restructure and broaden revenue sources. GCC countries benefit from having more than $2.5 trillion in reserves and very low percentages of debt. However, for long-term economic sustainability, there is a pressing need to raise taxes in GCC economies in order to diversify revenues and strengthen their fiscal positions. Cutting more subsidies or reducing government spending will be difficult to implement at this stage.

GCC countries have been discussing a common tax framework for the past 10 years. This debate is

now reaching its final stages. Based on the core principles of the framework, each country will have the choice to implement its own tax legislation and system.

Committees and taskforces have been formed by GCC governments to study the anticipated socio-economic impact of a value added tax (VAT) and the proposed rates. Such committees have suggested a VAT rate of between three and five per cent for the various sectors, with the exception of healthcare, education and 94 food items on which there will be no VAT. This is far less than the 20 per cent charged in the UK, for example.

The proposed tax rate is among the lowest in the world so the impact on

prices will be minimal. VAT is, overall, likely to be a positive move for GCC countries as it should help diversify governments’ sources of income – without putting too much burden on business.

Once introduced, VAT could potentially generate around four to five per cent of GDP, according to speakers at a panel discussion organised recently by Institute of Chartered Accountants in England and Wales (ICAEW) Corporate Finance Faculty in the UAE. The countries most likely to impose VAT are the UAE and Oman.

Other GCC countries are also expected to follow, with the exception of Qatar which is unlikely to introduce it at this stage owing to its strong fiscal reserves from liquefied natural gas.

Each country would need to put in place a domestic tax law structure before the GCC-wide implementation of VAT. In the UAE, the tax law is in a preparatory stage and has been approved by local authorities. The draft law has been sent to the Technical Committee for Legislation at the Ministry of Justice.

GCC countries are not ready to start imposing taxes at this point as they are currently at different stages of preparation. The biggest challenges they face are from the lack of necessary infrastructure and expertise.

According to the UAE’s Ministry of Finance, GCC countries have agreed on

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SMEs that register for VAT will be issued a VAT number and may find this inspires greater confidence in the business, as suppliers prefer doing business with companies that are VAT registered.”

– Michael Armstrong, ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA)

key issues for VAT implementation in the region, which is expected to be completed in 2018. The leaders of the GCC have tentatively approved the plan and are expected to meet this quarter to discuss which industries will be subject to tax. The UAE Ministry of Finance expects to make around $3.3 billion in revenues collected from VAT in the first year of implementation alone.

Most recently, Saudi Arabia’s Deputy Crown Prince, Second Deputy Premier and Defence Minister, Mohammed bin Salman Al Saud, confirmed that the Kingdom was gearing up for the introduction of VAT. However, he ruled out the imposition of any income or wealth taxes in the country. He said that the Kingdom is trying to expedite the implementation of VAT and plans to introduce it by the end of 2016 or 2017.

While taxes will generate revenues for GCC countries, it is critical that the way they are designed mitigates the potential for aggressive tax avoidance, as has been seen in some countries in the west. The GCC governments will need to educate businesses and reposition themselves globally since they will no longer be tax-free domiciles.

The concern is whether introducing VAT could deter consumer spending.

Prices are likely to increase as businesses will be unwilling to absorb the extra cost, shifting the burden

onto the consumers. However, if it is implemented in phases, starting from a low value of five per cent, for example, the negative effect is not expected to be significant. What is more, redistribution of revenue from international visitors is likely to bring further benefits.

These are usually wealthy individuals travelling to the country for leisure or business, purchasing expensive goods. They are not likely to be majorly affected by VAT introduction as an increase in prices will not put them off from paying for services and goods they require. Re-distribution of income could help close the gap between rich and poor.

The biggest impact of any introduction of VAT in the GCC is likely to be felt by businesses, especially SMEs. This is not necessarily because of the taxes themselves, but as a result of the extra time and money they will have to spend to ensure they are compliant with the new rules. Systems, technology, personnel and training will need to be introduced to enable SMEs to comply with the new tax regime.

Experience shows that even if the tax itself is not a significant cost, the compliance burden may be substantial.

BENEFITTING SMES However, there are several benefits of VAT registration for SMEs. While

the design of the VAT system has not been announced, typically suppliers and organisations prefer doing business with companies that are VAT registered so they can issue VAT invoices. SMEs that register for VAT will be issued a VAT registration number and may find this inspires greater confidence in the business.

Another advantage of VAT registration might be the ability to claim VAT on goods and services purchased for the business. For example, if an SME is selling one sort of VAT rated product that is zero rated while buying another that is standard rated the company may actually receive money back in VAT refunds.

Implementing VAT is likely to attract a certain degree of criticism as few people become enthusiastic about paying more tax. However, considering that GCC countries need to diversify their economies, the move is a positive one. More money means greater investment possibilities in other projects, employment opportunities and further development of the infrastructure. Long term the move should have a positive impact on the GCC countries; as long as it is replicated across the region.

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CHALK TALK

At the end of the day it’s your choice; you either want to be happy or unhappy.

I choose to be happy every single day.

– Basak Sen Sasal, General Manager of Snapsights

BASAK Sen Sasal

The General Manager of Snapsights, one of the only companies in the UAE to provide active remote monitoring service for the home, talks career highs and lows, and peace of mind

I

was a hardworking student but I wasn’t a nerd. I would study the night before a test and still pass, which is a very bad habit. My father told me nothing was going to be given to me on a platter. I come from a family with a wealthy background, but my parents wanted me to work hard to get the things that I wanted.

In Turkey, when you are 18, you have to take a university entrance exam. About 2.5 million students take the same exam and only 10 per cent will go to university. I realised I would have to work hard if I wanted to have a bright future.

My motive was to make my parents proud of me.

I did not graduate as the top student from my high school and I saw how my parents wished for me to achieve that award, and that stayed in my memory.

In the Turkish system if you’re at a certain GPA level, you can do two degrees simultaneously.

I studied international finance and business economics as my

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undergraduate degrees, and I graduated as the top student for both of my degrees.

Right after college I started working at Deloitte in their auditing and financial consulting department. We started from the very bottom, but I never made any coffee! I serviced clients such as the biggest banks and telecommunications companies in Turkey. That was the best time of my life in terms of corporate culture and working in a ‘grown up’ multinational company. After two years at Deloitte I decided to pursue my Master’s degree in the UK. During my studies I had the opportunity to take up a part-time role in a manufacturing firm. The role came about because they contacted my professor and said they needed one of his students to manage their marketing and strategies in Brazil.

They sent me over to Brazil for a couple of months. It was very exciting and challenging because I was suddenly in a very different culture. My jetlag was fine though; I had the opportunity to travel business class!

That experience really taught me about being adaptable. At the end of the day it’s your choice; you either want to be happy or unhappy. I choose to be happy every single day.

After that project, I started looking for a job in the UAE. My boyfriend, who is now my husband, was already living here. I wanted to come across as a strong woman who would not move countries just for a man, so I was determined to find my own job here first.

In 2011, one of the London firms called. They had the same role available in the Dubai branch and asked if I would consider it. So I came to Dubai and I loved it. The trio of sun, sea, and sand was here. Plus there is the tax-free income.

I started working at Groupon.

On my first day, coming from my Deloitte background, I suited up and wore my heels and I did not fit in. I saw them in their jeans and trainers and big, bulky headphones, shouting at each other. It was a start-up environment, which I wasn’t familiar with at that time.

Groupon really helped me see things from a different perspective. We had to act on things and be go-getters; we did not ask permission, we showed initiative and did it. My time at Groupon taught me that I could also set up my own business.

Groupon’s stock price was falling in the States. We learned that Andrew Mason, the founder, was let go by the board of directors. I was brought into a room with the CEO and the head of HR and they looked really unhappy as they conveyed the message that I was laid off. All the non-sales related personnel had to be phased out. I was the first one.

That weekend was full of tears, of course. I told my husband I felt like life was punching me. He said ‘You have to punch back.’ That was one of the most important experiences I had and I’m so glad I had it.

My husband and I set up three e-commerce businesses–two in the UAE and one in the UK. In the first couple of months I was making more than what I was making in Groupon. I was working flexible hours, and whatever was coming in, after expenses and salaries, was 100 per cent ours.

After several months, a gentleman approached us to purchase all three companies. I had a job offer from Al Tamimi Investments so I did not want all of that on my plate at the same time, so we sold them.

After a year with them I came up with the idea for Snapsights.

That was based on my personal

experience with my mother as well as the needs and requirements in the region. I was raised by my grandmother.

When I was 18, my mother told me regardless of how successful she had been in her career, she regretted missing all the milestones in my childhood.

About 90 per cent of the population here is made up of expatriates, and we do not really have our support system around us.

Snapsights makes use of surveillance technology to keep an eye on the children while with a caretaker. This ensures childcare is in line with the rules of the parents. We also capture the happy moments for the parents and compile them in to a short video of a few minutes which we send to them every Thursday so they do not miss any milestones.

The Dubai authorities were supportive from the beginning. They helped us with our contracts, advised us how to shape the business, and suggested other services we should provide. It’s been two years now and we have expanded our business to include corporates, SME businesses and retail chains or manufacturing companies with warehouses.

The first couple of months were the hardest. I was setting up the team, operations, tasks, and workflows. Now I’m working with an agency in the States, so their morning is my evening and I have to be available to work with them. Sometimes I mind; but most of the time I do not because it is for my company’s future. My team members have all poured their hearts into this business. We all work for the same goal.

Sometimes I have to work over the weekend. I try to plan ahead so I can still spend some time with my husband and dog. We like going dune bashing in the desert. We also enjoy going to the beach. I love to have our family brunch at home where we enjoy Turkish specialties round the table for four or five hours. We just converse.

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CEO CHAT

COMIC RELIEF AT YAS ISLAND

Mohamed Al Zaabi, CEO, Miral Asset Management, talks about bringing Warner Brothers World to Yas Island, Abu Dhabi and increasing tourism numbers to 30 million by 2018 Mohamed Al Zaabi

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Construction is underway and the park is set to open in 2018.

W

arner Brothers World, Abu Dhabi, is a partnership between Warner Brothers Entertainment Inc. and Miral Asset Management that will bring a fully branded theme park to Yas Island. The park, fully funded and owned by Miral, will be situated in the vicinity of Ferrari World, Abu Dhabi and Yas Waterworld and is set to open in 2018.

Mohamed Al Zaabi, CEO, Miral Asset Management said the vision of developing Yas Island as a leading leisure and entertainment destination started in 2006 with the construction of the Formula One circuit. This attracted more entertainment to the island, including the first Ferrari-themed theme park, Ferrari World, Abu Dhabi, followed by water megapark Yas Waterworld. Other attractions

in the portfolio, also developed and managed by Miral, include Yas Links Golf Course, Yas Mall, Yas Marina Curcuit, seven hotels and over 100 cafés and restaurants.

Al Zaabi said that while Warner Brothers has extensive experience in setting up theme parks, the company showed enthusiasm for Miral’s plan to bring the brand to Yas Island. He added that the addition of Warner Brothers World will meet the demand of families in the region who enjoy theme parks with their children, by offering a complete destination package.

“The park is going to be the first Warner Brothers integrated destination with a hotel, which will be attached to the theme park.

Guests can walk, or take a bus, from the hotel to the theme park.

We have also signed an agreement

with Etihad to extend our package to include air fares as well,” said Al Zaabi.

The park is going to be built completely indoors so visitors can enjoy the experience year-round, even during the UAE’s summer months. As part of the agreement, Miral has full use of all the Warner Brothers characters. As such, the hotel and restaurants are also going to be fully themed. Al Zaabi said the idea is for a visitor to go to a restaurant and feel like they are inside a Warner Brothers movie, enjoying their food surrounded by all the Warner Brothers characters.

The wait staff will be in costume, and the surroundings and décor will be decorated down to the last detail.

One of the main benefits of partnering with a global brand like cont. overleaf

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CEO CHAT cont. from pg. 21

Warner Brothers is that adding the attraction to the island will attract new and returning visitors, which will further aid the Emirate in diversifying its economy.

“Looking back over the last five years in Abu Dhabi only, tourism has jumped from 1.5 million to 4.5 million visitors staying in Abu Dhabi

hotels. Last year we had almost 24 million passengers at the airport.

That is a small indication of Abu Dhabi’s popularity as a destination.

Last year Yas Island welcomed 25 million visitors. We expect by opening our other planned attractions and providing a yearround calendar of events, we should

welcome 30 million visitors by 2018,” said Al Zaabi.

He added that Yas Island is an ideal location to develop the leisure and entertainment sector, given its location–a few minutes away from Abu Dhabi airport, 25 minutes away from downtown Abu Dhabi, and 40 minutes from Dubai.

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maintain their intellectual property.

Their input was invaluable to us and another big advantage of partnering with Warner Brothers is being able to use the characters, which included characters from the DC universe, such as Batman and Superman,” he added.

To accommodate the anticipated surge in visitors to the island, the design of Warner Brothers World is able to be expanded in the future.

“We always keep our theme parks up to date. We have just added 11 new attractions and rides to Ferrari World.

The same applies to Yas Waterworld.

We are very excited about this new project and we have no doubt the Warner Brothers partnership will help make Yas Island a top leisure and entertainment destination,” said Al Zaabi.

ABU DHABI’S 2015 TOURISM IN NUMBERS 3.49 million visitors to the Emirate in 2015, up 25 per cent.

1 million visitors from other Emirates, up 20 per cent from 2013.

2.99 Average number of nights spent in hotels, down from 3.13 nights in 2013.

Warner Brothers World will be fully enclosed to accommodate guests during the summer.

THE FINER DETAILS After extensive planning stages, construction began in May 2015, and to date 30 per cent has been completed, putting the project on track for its 2018 opening. Miral has contracted the same construction teams that built Ferrari World and Yas Waterworld, along with international

construction company Six Construct.

The rides will be built by contractors from Europe and the US, owing to their years of experience in construction of theme parks around the world.

“Warner Brothers was very involved with the design aesthetics to make sure everything was up to their standards, because they have to

231,702 number of hotel guests from India, up 32 per cent from 2013.

AED 442 the average room rate, down from AED 448 in 2014.

75% room occupancy rate, up six per cent from 2014.

AED 6.28 billion total hotel

revenue, up 15 per cent from 2013.

AED 2.33billion revenue generated from food and beverages, up 11 per cent from 2013.

Source: Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi)

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SME MANAGEMENT

mastering MANAGEMENT Mike Hoff, CEO, Mike Hoff Consulting, Simon Hudson, CEO, Brndstr, and Louay Al Samarrai, Managing Director, Active, look at what entrepreneurs need to consider when developing their management skills, and their team

A

Mike Hoff, CEO, Mike Hoff Consulting

ccording to the statistics issued by the Dubai Chamber of Commerce and Industry, SMEs contribute 86 per cent of employment in the private sector and 60 per cent to the country’s GDP. However, there are certain factors that are hindering the growth of SMEs in the Middle East.

Aside from the two oftendiscussed issues of funding and cash-flow management, one often overlooked factor is the lack of management skills of the entrepreneurs. As the business grows, different skill sets are required to manage business operations and employees.

Just as having a sound business plan in place will instil confidence in investors, having the right organisational infrastructure in place will set a strong foundation to allow staff members brought on board to help the business to grow.

“You need to make sure you have the right people sitting in the right seats, doing the right things to the standards you are expecting,” said Mike Hoff, CEO of business management firm, Mike Hoff Consulting.

For Simon Hudson, CEO of content marketing platform Brndstr, the management approach was a lot more hands on.

“From my experience it was a top down approach. When starting a company you have no teams or processes. Building a strong team requires strong processes. At Brndstr I spent time as the manager in each area, and as the role became busier, I recruited to delegate,” he said.

When recruiting new members, particularly in the case of a startup, team members have to buy into the dream and the vision of the entrepreneur and see how they want the business to grow, particularly when the company is still being established.

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When a task is delegated, your staff then becomes fully responsible; not only do they take credit, but they are also responsible to fix things if they go bad.

This helps them grow confidence.”

– Simon Hudson, CEO of content marketing platform, Brndstr

Recruiting in line with the core values of the company is the nonnegotiable for Louay Al Samarrai, Managing Director at marketing and communications firm, Active. He has learned over time that taking account of the company’s required elements and traits during the hiring process is key, so much so, that if a few of them are missing from the individual, the working relationship tends not to be long term.

EFFECTIVE DELEGATION Once the right people are in place, business owners have to begin the delicate balancing act of relinquishing the authority to allow team members to make certain decisions, while still managing the company as a whole, said Hudson.

Transparency seems to be the key, as Al Samarrai said that by making the team aware of the bigger picture, they then have a definitive reference when confronted with the task of making certain

decisions, and can make those decisions with confidence. Hudson added that this transparency allows for team members to have a clear vision of the brand and how the company is to be portrayed; and the team can relay this image the way a business owner would like.

“Delegation is one of the most difficult things a business owner can do. In order to ensure that the right tasks are delegated to the right person, we would encourage owners to gain insight into their own strengths and weaknesses so they understand which ones they are better suited to carry out until they hire someone who is better suited to them at that skill. Business owners should gain these same insights into the talents of their team they wish to delegate to so they can hand over the right tasks,” said Hoff.

However, entrusting certain tasks is only one aspect of the broader term of ‘delegation’. The second, equally important part is giving team members

the autonomy to run with the decisions they make. The boundaries of each person’s responsibilities need to be made abundantly clear, to allow for the individual to execute their task effectively.

Hudson said that when he first started to delegate to other people he didn’t give full ownership of the tasks to them which had the result of his team not running at its full potential.

“I made the choice to remove myself completely–which was helped by having to travel extensively–and when I came back, things were a lot smoother. As a start-up, business owners are often scared to make mistakes, but mistakes will always happen and sometimes it is good that they do. When a task is completely delegated, your staff then becomes fully responsible; not only do they take credit, but they are also responsible to fix things if they go bad. This helps them grow confidence,” he said. cont. overleaf

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SME MANAGEMENT Simon Hudson, CEO, Brndstr

Louay Al Samarrai, Managing Director, Active

cont. from pg. 25

Hoff listed some potential delegation pitfalls business owners need to look out for.

The first is to take care not to provide a vague brief on what has to be done. Management needs to communicate clearly what a good outcome should look like.

Second, an owner should be careful of assuming that the individual can perform the task by mistaking enthusiasm for ability, particularly in the case of new comers to the company.

Finally, Hoff said companies should set SMART (specific, measurable, achievable, realistic and time bound) goals.

CALLING IN EXPERTS Opinions are split on whether or not SME owners should use the services of an external trainer for their management teams, particularly as the needs and speed of growth vary from one business to the next. Some business owners may have a certain point in their business plan to include

training; others may only consider it once they become too overwhelmed by the tasks at hand.

Hoff said, “Processes not running smoothly are an indicator that external help would be an advantage to help see the wood from the trees. The skills to start up are different from those required to scale up, so as growth increases, so does the pressure on the owner and the team to develop advanced skills, and outside support can assist here.”

For the team at Active, Al Samarrai said that time was when the company reached a critical mass of people which meant that management suddenly had teams to manage, not merely one person supervising another.

Hudson, on the other hand, elected not to invest in external training for his team and instead brought advisors onto Brndstr’s board. He added that he doesn’t see the benefit of external training until the company is much bigger. Even then, he said it was unlikely he would invest in it.

TOP TIPS FOR EFFECTIVE DELEGATION

1. Do not be pushed into delegating It needs to be done, but only when it feels right.

2. Have confidence in the abilities of the person being delegated to When delegating, give 100 per cent ownership of the tasks. Do not hand over the responsibility and still try to have the final say.

3. Do a dry run Make sure the correct processes are in place and you know what needs to happen.

4. Look inward Promoting internally is usually the best option as existing employees are familiar with the company and they know the processes.

5. Do it!

Procrastination on the delegation decision causes bottlenecks in the company Source: Mike Hoff, CEO, Mike Hoff Consulting, Simon Hudson, CEO, Brndstr, and Louay Al Samarrai, Managing Director, active

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REAL ESTATE

TO RENT OR BUY? THAT IS THE QUESTION

Mahmoud Shehada, CEO, Allegoria Capital, Pawan Dhawan, Head of Home Finance, Noor Bank, and Shoaib Al Rahimi, VP of Dubai South’s Business Park, look at the viability of SME owners investing in commercial real estate

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Most smaller SMEs need to devote most of their cash flow towards day-to-day operations and the growth of the business, so it would be more economically viable to rent office space than to buy.”

– Shoaib Al Rahimi, VP of Dubai South’s Business Park

A BUYER’S MARKET?

Mahmoud Shehada, CEO, Allegoria Capital

T

he fundamental drivers of Dubai’s real estate remains strong, despite the world economy being slightly shaky in the aftermath of political unrest that has swept the MENA region since 2011, according to Pawan Dhawan, Head of Home Finance, Noor Bank.

He added the UAE, a safe haven within a volatile region, has cemented its place as a business and financial hub with investors and small business owners in for the long haul. Businesses continue to factor in promising capital gains from Expo 2020 and the development of Dubai as the centre of Islamic finance.

Whether an SME owner should rent business space or take the plunge and buy commercial real estate can only be determined on an individual basis. Factors that will determine the decision include the company’s cash flow and what its affordability threshold is.

“The cyclical nature of the real estate market, at this juncture, is particularly conducive for buyers. As the market corrects further, potential buyers can hone their bargaining skills and grab lucrative offers,” Dhawan added.

Shoaib Al Rahimi, VP of Dubai South’s Business Park, added that SMEs should undertake a feasibility check and consider their business model, the status of their cash flow, distance from their clients and suppliers, and the physical location of the office space. In the end, the decision should be economically practical and allow operational growth.

“Most of the smaller and younger SMEs need to devote most of their cash flow towards dayto-day operations and the growth

of the business. For such SMEs it would be more economically viable to rent office space than to buy,” said Al Rahimi.

Costs involved in purchasing are on the higher side versus leasing because of the down payment required for financing, which is often not taken into account, said Dhawan.

He added that usually the down payment for commercial finance can be 30 to 40 per cent. However, given the current market scenario, with attractive property prices and the fact that the market has now reached a level where various options are available to purchase, along with financing available from key financiers, the time may be suitable to consider purchasing commercial space.

Assuming the company takes a mortgage, a further consideration is the interest rate, usually four to six per cent, which is generally higher than residential mortgages. Taking the above into account, Mahmoud Shehada, CEO, Allegoria Capital says making decision becomes much simpler for each business owner.

With the current drop in commercial cont. overleaf

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REAL ESTATE

ADVANTAGES OF BUYING

Pawan Dhawan, Head of Home Finance, Noor Bank

Shoaib Al Rahimi, VP of Dubai South’s Business Park

cont. from pg. 29

real estate prices, investment opportunities have become more and more attractive, as one of the largest expenditure SMEs spend their resources is on rent, according to Shehada.

“For more mature companies, if an SME can source a commercial mortgage to acquire the office space it wishes to work from, they have just converted that expenditure into an asset. Aside from the down payment placed on the property, they will no longer be forced to pay in one, two, three or four cheques. They will gain the flexibility to pay in 12 cheques, as their mortgage instalment will be monthly. Not only will they benefit from the easier instalments but they will also have value, an asset which the will most likely

increase as we head towards 2020,” Shehada added.

The upfront payment of a lease in a few cheques can really hinder a business’s cash flow and many SMEs do not have a year’s rent available in advance, said Dhawan. He added that as the market softens, with supply coming into the market, landlords have started offering relaxed terms on rentals, such as rent-free periods, pre-fabricated office fit-outs, as well as free chiller services in order to protect rate and occupancy levels. He added that while SMEs are in a better position to negotiate on leasing terms, this also depends on the location as clients have better bargaining power when it comes to secondary versus primary locations.

• SME owners can convert their expenditure on rent into a sound investment.

• Property owners enjoy the freedom of design and setup.

• Costs decrease as mortgage instalments are generally lower than rent payments.

• As the business owner no longer has the worry of an increase in rent, they will be able to better gauge their financial forecasts.

• Purchasing commercial space tends to give SMEs more space for future growth, and provides businesses with a permanent location.

• When the finance is paid off, business owners can eliminate the monthly payment and even consider taking equity on a fully paid commercial property thereby freeing up capital which can be capitalised in the business.

ADVANTAGES OF RENTING

• Renting office space offers SMEs mobility and manoeuvrability. If an SME tenant needs to expand its office space, it is generally easier to move to a new, larger location.

• There is the factor of hidden costs associated with buying office space. Overheads including expenses related to repairs, facilities management, property insurance, and sinking funds represent a significant expenditure for the office owner. When you rent, on the other hand, the landlord shoulders such expenses, enabling the tenant to use the cash for business advancement that yields a higher return on investment.

Source: Mahmoud Shehada, CEO, Allegoria Capital, Pawan Dhawan, Head of Home Finance, Noor Bank, and Shoaib Al Rahimi, VP of Dubai South’s Business Park

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CAPTIVE INSURANCE

PROTECTING HUMAN CAPITAL Rakesh Rachwani, Founder, Compass Finanical Solutions and Scott Hood, Regional Technical Manager, Friends Provident International, Middle East look at how insuring business leaders can ensure the continuation of an enterprise

S

ME businesses are focussed on products, customers and competition, but, they have to keep in mind that perils such as natural disasters, accidents and legal conflicts can lead to incapacitation of their strategic assets and wipe out many growth efforts.

Aside from risks specific to industries SMEs are operating in, they are just as vulnerable to the global economy, fluctuations in supply and demand, technological developments, and banking policies; and even more so in the cases of liquidation, loss of business, and the non-availability of the head of the organisation for health or personal reasons, according to Rakesh Rachwani, Founder of wealth management firm Compass Financial Solutions.

Furthermore, the consensus among many SME owners is that

insurance makes up a decent percentage of their business running costs, which include cover for assets such as buildings and contents, key equipment, stock, vehicles and public liability, said Scott Hood, Regional Technical Manager, savings and investment firm Friends Provident International, Middle East.

“Despite having cover in place for their physical business assets, many SMEs have not even considered protecting what we believe is their key asset, the people,” said Hood.

WHAT TO CONSIDER Businesses are affected by a number of different factors, and these vary from business to business and differ within varying industries and sectors.

Understanding these influencers and assessing them regularly will

give business owners a clear picture of their portfolio and enable them to plan ahead.

Rachwani said that SME owners need to have an understanding of the insurance market in terms of who the main service providers are and what products and services are on offer.

“It is normally advised to consult an experienced insurance consultant who has an understanding of the business and the business environment the organisation is operating in, along with in-depth knowledge of the insurance industry,” he said.

Rachwani added that ignoring the importance of human capital to an organisation can be catastrophic in the event that this asset is lost; as businesses are sometimes over reliant on individuals.

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Despite having cover in place for their physical business assets, many SMEs have not even considered protecting what we believe is their key asset, the people.”

– Scott Hood, Regional Technical Manager, Friends Provident International, Middle East

Operations will be adversely affected in the event a key player meets with an accident, suffers a critical illness, or in the worst case, dies.

Losing these people can impact the confidence of investors and affect the company’s likelihood of obtaining finance. Hood added that a business owner’s share in the company is likely to be their biggest asset, so the onus rests on them to protect it; not only for the sake of their family, but for the benefit of the business’s major shareholders to ensure the continuation of the business.

He cited an example of an IT company in the UK where one of the partners, who happened to be the technical expert in the business, died. The deceased’s family had no desire to be involved in the continued running of the business and unfortunately, the business only had a

few assets to liquidate in order to pay his family for his share of the business.

In this case the bank was unwilling to grant a loan, as without the expertise of the deceased, the business was not considered viable. The end result was the business had to be wound up, which meant the remaining business owners, the employees and the deceased’s family all lost out financially.

“Business protection plans, based on a suitable legal arrangement, can provide a simple way to protect the interests of everyone connected with a business. With key person cover in place a business can ensure that, on death or serious illness of said person, it can pay its debts, replace employees as needed, protect its profits, let partners and shareholders retain control of the business, and provide support for the family of the deceased,” said Hood.

FINDING THE RIGHT FIT Determining the best asset cover is not a one-size-fits-all solution and the way for SME owner to assess their asset portfolio can best be done utilising internal and external measures.

Rachwani said that by streamlining the finance and human resources departments, SME owners can have a clear idea of their fixed, liquid and human assets.

He added, “Externally, a specialist business consultant and/or insurance professional can help business owners analyse these assets and make informed decisions how to protect them against the vulnerabilities that accompany them.”

The best way stakeholders can identify how to reduce the impact of unforeseen situations that could potentially be brought about is to ask cont. overleaf

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CAPTIVE INSURANCE

C

M

Y

CM

MY

CY

CMY

Rakesh Rachwani, Founder, Compass Finanical Solutions

Scott Hood, Regional Technical Manager, Friends Provident International, Middle East

K

cont. from pg. 33

what the anticipated business loss is in a number of scenarios, regardless of their likelihood.

Hood said that by major players in the company having life insurance, the business is protected from problems pertaining to their health and would be able to continue. He added that a popular policy used is Term Assurance which allows for the duration to be tailored to the relevant individual on a case by case basis. “For example, if the person in question is a project leader it should be possible to identify how long they will remain in their role, and a policy effected for that length of time. For other employees it may not be so easy to identify how long they are

likely to remain fundamental to the continued success and profitability of the business; and they may not stay in the same position for a long period of time as assistants, successors, or other experts may join the business to share their responsibilities,� said Hood.

However, it is not enough simply to put policies in place and forget about them. As the company grows and the structure changes, the management team should reassess its asset portfolio regularly, to gain up-todate information pertaining to any risks as well as taking the necessary preventative measures. Rachwani said this should be done at least on a quarterly basis with meetings between stakeholders scheduled in advance.

A LOOK AT THE NUMBERS

According to the World Health Organisation 9,700 people died on average, annually, in the UAE between 2000 and 2012, due to three main causes: 30 per cent - cardiovascular disease 23 per cent - accidents and injuries 13 per cent - cancer In 2011 the Dubai Health Authority said that cardiovascular disease was the leading cause of death in the Emirate, with one in every five deaths attributed to it.

Source: Scott Hood, Regional Technical Manager, Friends Provident International, Middle East

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CASE STUDY

BRANDING, BUSINESS AND BANKS

James Pass, Managing Director and Creative Principal, JPd, talks about building his business and the tenuous relationship SMEs have with banks

J

Pd, a branding and communication agency, and recent winner of the Best Business Consultancy in our inaugural Business Vision Awards, was launched in early 2013

by Managing Director and Creative Principal, James Pass, after a career of working for large, corporate branding agencies.

“When you work in a big corporate it can become tiresome sometimes; you can feel like a cog in the machine, like you’re not doing anything worthwhile or affecting any actual change,” said Pass.

Pass started developing a freelance base of work with start-ups and SMEs where he could see tangible change in their business development. He knew he wanted to run his own business and felt a need to help SMEs and start-ups as he said there was nobody in town that could focus on helping them.

The six months prior JPd’s launch was spent setting up the company, researching what was available in the market and competitors’ pricing, acquiring a business licence, and lining up projects.

Pass considered different options, from Creative Zone to Media City to find the best solution for the business. At the time JPd had just

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We have a number of business suppliers who have had their bank accounts closed, not because they bounced cheques or are bad creditors; in fact some of these businesses have had bank accounts for ten years, but the bank did not want to deal with SMEs anymore.”

– James Pass, Managing Director and Creative Principal, JPd

won an account with the Dubai Government and he needed all the paperwork in place and the ease and speed in turnaround of getting the licence made Creative Zone the best solution.

Pass’s original business plan saw him and two designers sharing a small office in Creative Zone for two to three years. He intended to do the business development and client management, leaving the creative work to his team.

Within that scope Pass wanted to focus on helping businesses establish themselves by defining their position, doing brand strategy, helping them find their place in the market as well as develop their identity and the look and feel of the brand. That included designing the stationery, brochures, and sometimes the websites, which he said is where branding usually tends to stop. From that point, he referred clients to larger agencies.

SUDDEN GROWTH But clients, particularly the start-up clients, kept returning; and it became necessary to add more people to the team. Public Relations (PR) was a necessary addition to the company structure, so Pass brought a PR director on board to develop the team. He did

the same for the web development and social media departments. In the space of the last year, the company has grown from a team of three to a team of ten.

This quick growth meant he had to terminate the Creative Zone licence early to open his current, bigger, office.

He decided to relocate to Media City, because he felt the company needed a more ‘in town’ solution, it worked out better cost-wise, and the location felt a bit more established than everywhere else.

Pass said he did his due diligence by researching the market, the competition and what services they were offering, and how much they were charging. In the case of an economic downturn, Pass said these are strategies that have helped him to get ahead of competitors who have perhaps just sat around or merely gone to a networking event and just handed out their business cards.

“I took the same approach to growing my business and attracting clients. I did not have a huge advertising budget, so I had to look at how I could compete because the creative industry here is so saturated. In Media City I can throw a stone and hit ten different agencies, so I had to look at how to

market my company differently. I invested a lot of time and money in joining and developing networks from which to promote the business. Our clients are either referred to us or they come to us after they have visited our website. We have not had to advertise, knock on doors, or do pitch work. We are fortunate that we have referred actively,” said Pass.

In the early stages Pass looked for investment from a number of different channels, such as bank loans and angel investor platforms. But for a startup, he said banks are a no-go area, because even in the unlikely event they do grant a loan, the interest rate would be very high. Angel investment was an attractive option but he decided to keep the company independent.

“All JPd’s growth has been selfinvested, either through my personal funding or by acquisition of new clients.

Winning a big account means growing the team or moving into a bigger office space, so financing has happened through those tiers,” said Pass.

APART FROM THE PACK Pass said what sets his agency apart from the competition is that his focus is on SMEs and start-ups, but just because a company is an SME does cont. overleaf

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not automatically mean he will work with them. He cited an example of walking out of a meeting with a startup because the company values did not line up with the agency’s ethics.

“The company had a sizable budget and was willing to spend the cash, but its business was hunting and this meeting took place during the time of the controversy surrounding Cecil the lion [a Zimbabwean lion poached in 2015]. We do take into account what a company is doing and what its ethics are,” he said.

Although Pass prefers working with SMEs, and turns away a lot of corporate work, he does take on corporate clients if he feels the working relationship with the client’s team would be a good fit or if the project would be interesting to work on.

“One major benefit of working with corporates is it allows us to give back by doing a lot of pro bono work for charities. They may come to us for help with their brand, or touch points or any other areas we can assist; because they are businesses that need to attract money from donors, so they do need a brand people can connect with. We’ve just finished working with a charity in Chicago which works across the third world in education and implementing water purification treatment,” he said.

SMES AND BANKS Pass said dealing with banks, as an SME owner, is made difficult by how the bank treats the owner as an individual.

He cited his own experience with the bank that held his personal account for 18 years as an example.

When JPd moved from the Creative Zone to Media City, Pass had to submit new visa documentation to his bank.

Once it showed up on the system that he was self-employed, all his bank accounts were frozen; because

in the eyes of this particular bank, he was unemployed.

“I own a company of ten staff that generates revenue, with audited books.

Every month the corporate account, held at another bank, transfers my salary, yet I was considered unemployed,” he said.

Pass’s bank account was frozen for about three months, resulting in two bounced cheques for which the bank agreed not to prosecute him, although he had to pay a fine of AED 100. He added that that this attitude towards business owners as individuals is one of the biggest challenges facing SMEs. “A number of banks have, over the last year, caused more difficulties for SMEs by closing their bank accounts without any notice. We have a number of business suppliers who have had their bank accounts closed, not because they bounced cheques or are bad creditors; in fact some of these businesses have had bank accounts for ten years, but the bank did not want to deal with SMEs anymore. Banks like to say that they deal with SMEs, but the reality is they do not,” said Pass.

In spite of the number of SMEs in the GCC region, Pass said it was possible that banks are reluctant to fund smaller businesses because they may feel corporate clients are a safer investment by having an office elsewhere in the world or a number of tangible assets on which they can fall back in the event of falling into financial difficulty.

“I think there are a lot of changes and initiatives by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai to push banks and seed funds to open up. There are great opportunities for Emiratis to start businesses with funds here in Dubai and Abu Dhabi. We work with Emiratis who have start-ups and small

businesses that use those available funds to help them establish and get their businesses going. It is fantastic that they have that opportunity; it would be nice if the rest of us could have a bit more of a chance,” he added.

WHERE TO NEXT? Pass would like the agency to remain at its current size and would rather focus on the developing the strength of the team. Even though JPd is a home-grown Dubai business with a multi-cultural team, clients are from Asia, namely China, Indonesia and the Philippines, as well as North America and Europe.

“I think some of these clients see Dubai as a hot spot for great, creative talent and branding outside of New York and London, because they see what amazing things are launched and promoted here. Also, we find that many people want to start their business here since there are so many nationalities to provide feedback on their brands and products,” Pass said.

BUSINESS VISION AWARDS BEST BUSINESS CONSULTANCY

“We are thrilled to be presented with such an honourable accolade and to be recognised for our hard work and expertise as an SME. At JPd, we are committed to supporting our fellow SMEs, entrepreneurs and start-ups through creating strong brand identities and building brand awareness through our services; which helps to differentiate them from others in their often saturated markets. The FinanceME Business Vision Awards is a fantastic platform to help promote Dubai SME's across the region and a great opportunity to celebrate the entrepreneurial spirit,” said Pass.

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FACETIME

Tapping into THE TALENT POOL Helen McGuire, Co-Founder, Hopscotch and David Mackenzie, Founder, Mums@work discuss the growing need for part-time employment for women re-entering the workplace after a period of absence

F

lexible working is a growing sector in the GCC, among both SMEs and larger companies, as it provides niche skills and short-term, easy hire solutions in the precarious economy, according to a recent study conducted by recruitment consultancy MCG Group.

Key clients were surveyed and 92 per cent of the respondents require employees to work flexible hours, and 80 per cent encourage flexible time management among their staff.

David Mackenzie, Founder of Mums@work, a subsidiary of recruitment agency, Mackenzie Jones, said approaching companies to take on part-time employees resulted in mixed reactions.

“Some have been great. Others have been a bit lukewarm about flexible employment and the usual questions were raised about mothers going home because their children are sick, and how they employ people part-time, legally, given the UAE

visa restrictions. But I feel we had a receptive audience,” he said.

Helen McGuire, Co-Founder of Hopscotch, a recruitment consultancy that helps women re-enter the workforce, had a similar reaction because part-time employment is a new offering and companies did not understand what they would be getting from it.

Both Mackenzie and McGuire say mums have a lot to offer the workforce, given the demands on their time between managing employment and looking after a family.

“Working mums come into the work place with the mind-set of having a job to do and then they still have a job to do after that. Their first job is at the office and they have finite amount of hours to do it in, so they have to work that much harder. Their application is amazing–they sit and they focus,” said Mackenzie.

McGuire added that by leaving work to go home and take care of

a family, these women learn more ways of juggling tasks, more ways of rearranging their time, and more ways of prioritising things as well.

THE LEGALITIES At the moment, given the visa requirements in the region, both Mums@work and Hopscotch can only consider women who are in Dubai on spousal visas.

“Dubai has more stay-at-home women than many other places. If you are a professional who relocates here with your husband; you might not be able to find work here immediately, or you might want a break, or you might only want to work part-time.

These women are an untapped pool of potential and talent. It’s not a difficult process for a woman on a spousal visa to get a labour card to allow her to work part-time and that responsibility lies with the hiring company,” said McGuire.

There are other concerns facing women who have been out of the

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Working mums are highly skilled at juggling tasks and managing their time.

workforce for some time. Mackenzie said Mums@work ran focus groups for these women, expecting them to worry about money, their position or status.

“These women are worried about how they’re going to get back into work. For example, the development of social media over the last five years has been so rapid, that many of these women who have been away from the workplace feel completely out of touch. Some are so lacking in confidence that they are even unsure of how to dress for the office, or how to present themselves in an interview.

Many need assistance with how to update their CV,” he said.

The benefits are available to companies as well, said Mackenzie, as they would be able to hire an experienced professional on a parttime basis that may be more in line with their budget. This is a win-win situation as the solution offers savings to employers while bringing more talent to the job market.

WOMEN IN THE WORKFORCE 77% would like to return to work.

49% would return if more flexible options were available.

38% claimed they could not juggle family and workplace commitments.

19% returned to work for the independence it affords.

Source: Mums@work survey in partnership with YouGov with over 1,000 respondents

98% would return if more flexible options were available.

76% said they have not returned to work due to lack of flexible options.

33% said they would start work tomorrow if flexible options were available.

5% would be added to the GDP if women participated as much as men in the workforce.

Source: MCG Group survey of approximately 250 respondents

WWW.FINANCEMIDDLEEAST.NET

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FRANCHISE

THE MOO CREW Siyuan Zhang, Managing Director, Milkcow UAE, discusses launching the Soth Korean ice cream brand to the UAE

Siyuan Zhang

M

ilkcow, the South Korean café franchise, founded in 2014, which specialises in homemade ice-cream, opened in Jumeirah Beach Residence in January 2016. With more than 50 branches around the world, this is the first branch in the Middle East.

Currently, the brand has branches in most Asian countries, the west coast of the US and will soon open in Australia.

The Milkcow master franchise in the

UAE is owned by Milkcow UAE, which has the monopoly for the franchise in the Middle East, though any company or individual who is interested in becoming a franchisee can contact Milkcow UAE directly.

To qualify, potential franchisees must have experience in franchising other food and beverage brands, whether in the capacity of the outlet’s owner or manager. This experience will help them to grow the business quickly, with minimal issues, after receiving the franchise guidelines, according to Siyuan Zhang, Managing Director, Milkcow UAE. “We will consider, in exceptional circumstances, a company or individual who is extremely passionate about the Milkcow brand and its products. In this instance, we will provide additional support to make sure the franchise can be developed properly during the initial stages,” he said.

Zhang added that the most important criterion required to begin discussions with a potential franchisee is a signed and secured outlet location.

Locations have to be approved by Milkcow UAE and should a potential

franchisee require information or support in leasing outlets, Milkcow UAE can provide it.

“Franchisees need to prove they have enough funds to support the store’s preparation and its first year of operation; and they need to have passion and energy to set up the brand in this region,” said Zhang.

BY THE BOOK Milkcow UAE provides a complete operations manual as well as full support to help franchisees step into their role; which includes outlet design, purchasing instructions, retail, marketing and brand strategy, and human resources.

The company will also provide on-site support with regular visits during the construction phase and well as technical skills and service training. Once the outlet is open, management will be on hand to deliver two weeks’ on-site support.

To ensure the quality of the products and services, the management team will also arrange inspections at the store and random mystery customer visits. With this support, the franchisees will always be able to assess the performance of their stores.

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There are not many Asian brands in the market, and milkcow has been welcomed positively, with many good reviews and encouraging feedback on social media channels and from local food bloggers.”

– Siyuan Zhang, Managing Director, Milkcow UAE

Zhang said that the décor is supervised with Milkcow UAE providing a preferred list of contractors and suppliers, as attention to detail, down to the electrical sockets, is monitored quite closely.

“The whole environment has to be very welcoming and comfortable for our customers who like to relax, read books or work here. To continue this culture, the management team will work with the franchisees to make sure every Milkcow outlet in UAE is a place where our customers can relax,” said Zhang.

The selection of employees for Milkcow UAE is stringent to comply with Milkcow’s standards of friendly, helpful, and energetic ‘moo crew members’. The UAE franchise management team will provide the criteria of employee selection to franchisees, and will take part in the interview process when finding employees for the different outlets.

To align the quality and service standards of the brand, technical and service training is provided for all employees.

“Practical training includes how to make the different ice creams and beverages on the menu, as well as some of the bespoke products we sell. Service training includes soft skills such as how to handle complaints and ensuring the service remains at a high standard across all the branches,” said Zhang.

One of the challenges facing the company was finding the right location for the first outlet as considerations that had to be taken into account included the weather conditions of the region and the clientele, which meant confirming a store location took longer than anticipated. The team had to go to different areas of Dubai to assess the market and the type of customers that would be local to Milkcow. Eventually, they chose the location at JBR as the indoor space was seen as a bonus to accommodate the hot weather during the summer.

A further concern was how to appeal to residents while surrounded by a selection of luxury and modern cafes and confectionery outlets from Europe or the US.

“Taking time to learn the market worked in the brand's favour as there are not many Asian brands in the market, and Milkcow has been welcomed positively, with many good reviews and encouraging feedback on social media channels and from local food bloggers,” said Zhang.

SPREADING OUT Further franchise expansion is expected to take place in Abu Dhabi and Dubai with one and two stores opening respectively, with future consideration given to the possibility of outlets in Sharjah and Ajman in 2016 alone.

Expansion in to the GCC is expected to happen over the next three years, though this will hinge on the brand’s performance in the UAE. “We are interested in expanding into Saudi Arabia, Qatar, Oman, Bahrain and Kuwait in the future. We don’t have a cap on the number of outlets we can open, and we want to make the brand accessible where residents can use Milkcow to work, relax or simply enjoy their ice cream,” said Zhang.

WWW.FINANCEMIDDLEEAST.NET

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START-UP

MEAL IN A JAR Danielle Sallam, Founder, The Salad Jar, talks about the challenges of setting up her business

Danielle Sallam

T

he Salad Jar, a gourmet salad company that delivers salads in a jar throughout Dubai, was started by its founder, Danielle Sallam, in her kitchen almost two years ago. Sallam regularly made them for her husband to take to work, and she also made a few to take to her gym for her friends.

“Suddenly I found myself making 30 to 40 jars a day out of my home kitchen in JBR. I realised I could not continue to subject my family to living in a salad factory much longer, so I decided to commercialise the idea and search for a better kitchen,” she said.

Finding the kitchen proved to be a bigger challenge than anticipated as she had to factor in the area to which deliveries were being made, so the business had to be close enough to main roadways to allow for drivers to

get in and out quickly. Sallam also did not want anywhere high profile as she was conscious that a high rent could negatively impact the business’s cash flow. Finally, she wanted a bright, open space that would allow for significant company growth. After a five-month search, she settled on her premises in Al Quoz 4.

There have been a number of challenges to overcome, though Sallam said she thinks the process went as smoothly as it could have. The first trial involved the bureaucratic requirements of setting up the business.

“We are lucky to have an amazing local sponsor and corporate business solutions partner to support us in the business set up. However, the timelines to get the kitchen inspected and signed off by various government departments has taken a long time. To overcome these hurdles, you really just need a lot of patience,” she said.

The second challenge came about because of the immensely positive response to the product, which is a good problem to have.

“The delivery logistics has been something completely unexpected. We now have 10 full-time delivery drivers and we currently process and deliver over 200 salads in a four-hour window and we are planning to expand from being a lunchtime–only service soon,” she added.

One way to manage and control the delivery process was to develop an app, which allows the team to engage with customers, since the company

does not have front of house staff to provide customer service. However, The Salad Jar does also use the app ‘Food on Click’ and will soon sign up for ‘Deliveroo’ as well, as they will both supplement the business’s marketing and logistics efforts.

Although she was aware of the fund raising process, she was able to leave that side of the business to her husband, who has gone through a similar process several times and was able to handle any of the challenges that arose in that regard.

“I was able to focus on developing the business while he made sure there was enough money in the bank to support it,” she said.

While a salad in a jar is not a new concept, Sallam said two factors that set hers apart are that first, they are a meal, not a side. She doesn’t use lettuce as a filler, and the salads are packed with healthy fats that are plant strong and nutrient dense. The second distinguishing feature is the way the salads are packed and able to be eaten directly from the jar.

Sallam intends to expand the business into certain regions and franchise into others, but not before ensuring all the necessary business and delivery logistics are in place; as rushing into expansion before all the systems can be effectively executed could really hurt the business “I need to be able to look a potential franchisee in the eye and tell them that what they’re paying for has been tried and tested, and if replicated, will be successful,” she said.

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5/4/16 12:56 PM 21/04/2016 17:33

AWARDS

Banker Middle East Industry Award winners announced!

E

mirates NBD was revealed as Best Bank in the Middle East at the Banker Middle East Industry Awards’ Gala Dinner, held at Jumeirah Emirates Towers in Dubai on 12 May. Emirates NBD took home two further awards, Best Bank in the UAE and Best Retail Bank in the UAE. An audience of 400 senior bankers and financiers from around the region also saw Warba Bank named as Fastest Growing Bank in the Middle East. The bank also took home Fastest Growing Bank in Kuwait and Best Investment Bank Kuwait.

Among other winners on the night, Dubai Islamic Bank performed strongly in the Awards voted for by the industry, bagging four corporate awards. That performance also saw the bank’s Group CEO, Dr. Adnan Chilwan, personally recognised with the Award for Best Strategic Vision.

Other personal awards went to Chaouki Daher, Head of Private Banking, International Bank of Qatar, who was named Private Banker of the Year. Salim G. Sfeir, Chairman of the Board & CEO, Bank of Beirut, was recognised for his Outstanding Contribution to Banking & Finance while Patrice Couvegnes, Group CEO & Board Member, Banque Saudi Fransi, received a Lifetime Achievement Award.

Banker Middle East’s Banker of the Year is Michel Accad, Chief General Manager & CEO, Al Ahli Bank of Kuwait.

Among the Awards voted for by the readers of Banker Middle East and the 68,000 registered users

of financial news website www.cpifinancial.net, institutions in the UAE dominated with 27 Awards while six Awards went to Qatar and five each to Kuwait and Lebanon. The ceremony also recognised institutions domiciled in eight other countries.

“Each year, the Banker Middle East Industry Awards reward excellence in financial services, identifying the key players working to help create a prosperous diversified future for all the MENA economies,” said Robin Amlôt, Chief Executive Officer of CPI Financial.

CPI Financial’s continuing commitment to raising standards in the Awards process once again saw 18 Awards being presented to banks in nine countries as a result of the analysis of financial performance carried out to create the BME 100.

The BME 100 is calculated using banks’ own published financial metrics. Statistics compiled for this exclusive listing of the top 100 banks in the Middle East, show the region’s leading banks controlled assets totalling $2.094 trillion at end-2015, up 5.4 per cent from $1.987 trillion in 2014. Together the top 100 banks made aggregate net profits of $35.3 billion in 2015, rising four per cent on the previous year ($34 billion).

“Our research based on financial institutions’ own published, audited results demonstrates clearly which banks are outperforming their peers. In a challenging year for the region’s economies it offers unarguable proof of continued growth and the health of the industry,” said Amlôt.

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The region’s most transparent awards

The BME100, a list of the region’s top-performing banks, is not only a benchmark in bank performance, but the judging process is unequivocally transparent. Each bank is ranked according to its financial performance relative to other regional banks, there are no grey areas.

Every bank’s financial data is carefully scrutinised by our in-house analytics team and each bank is ranked in our BME100 list according to that financial data. Our analysts use the Data Envelopment Analysis (DEA) method for analysing the efficiency of the banks in the BME 100.

The analytical framework of our BME100 reports is based on secondary data drawn from the annual reports of the major financial institutions and Islamic windows around the MENA region. In our analysis we measure the performance of the whole banking sector of the countries against each other and compare the best banks of each country against each other.

Where annual reports are not publically available on the institution’s website for the year in question, the institution is not included in the analysis.

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Results are collated in the currency in which they are originally published and are then converted into US dollars and normalised before the institutional rankings are calculated. The currency conversions are carried out using the prevailing exchange rate at the end of each year and as published by the relevant Central Bank.

The institutions are ranked according to both the absolute size of and the dollar value increase in size of the following: Assets Liabilities Income Net profit The rankings obtained within these areas are then combined to create an overall ranking.

CHECK OUT OUR LATEST BME100 HERE:

http://www.cpifinancial.net/flipbooks/SUPPLEMENTS/ 2015/BME1002015/

5/4/16 1:26 11:17 PM 28/01/2016

ADVERTORIAL

COMPANY PROFILE A brief look at Bahrain’s GFH Financial Group

G

FH is a renowned financial group in the GCC region, with a diversified offering and pioneering track record. Headquartered in Bahrain, GFH’s innovative approach to Islamic investment banking services has been recognised internationally for over a decade. GFH has developed a strong and consistent ability to identify, successfully bring to market, and capitalise on a wide range of solid investment opportunities in some of the world’s most dynamic markets and sectors. This approach signifies the group’s investment insights and commitment to increase the value of its assets, and financial returns to its investors and shareholders.

GFH is listed on three stock exchanges in the GCC, including the Bahrain Bourse, Kuwait Stock Exchange (KSE) and Dubai Financial Market (DFM) where it is one of the most liquid and actively traded stocks. GFH’s operations are principally focused across the GCC, North Africa and India, along with strategic investments in the US and the UK.

Recognition GFH has consistently been widely recognised by various industry stakeholders for its innovative approach, investment prudence and overall achievements in Islamic finance, wealth management and investment banking.

In 2015, the group was awarded the ‘Best Investment Bank–Middle East’ at the 10th Islamic Business & Finance Awards. In 2014, GFH was recognised as the ‘Fastest Growing Bank in Bahrain’ and ‘Best Wealth Management Firm’ by CPI Financial and Banker Middle East.

Hisham Alrayes, Chief Executive Officer of GFH Financial Group

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Earlier in 2012, the company won the prestigious award for ‘Best Islamic Investment Bank, Bahrain’ from Capital Finance International (CFI). Other awards include Banker Middle East’s ‘Deal of the Year 2008’, Euromoney’s ‘Best Investment Bank’ in 2005, 2006 and 2007 and ‘Best Islamic Investment Bank’ in 2005.

Creation As an innovative investment group, GFH has an enviable track record in conceptualising and establishing a large number of pioneering financial institutions in the GCC. GFH was instrumental in the creation of First Energy Bank, the world’s first Islamic investment bank focusing exclusively on the energy sector.

The group also established various cross-border entities including Khaleeji Commercial Bank in Bahrain, QInvest in Qatar, Arab Finance House in Lebanon, First Leasing Bank in Bahrain, Asia Finance Bank in Malaysia, and Gulf Holding Company in Kuwait.

GFH has also successfully conceived, funded and developed large, complex and innovative real estate and infrastructure projects in the GCC, MENA and India.

Residential and commercial projects include Bahrain and Tunisia’s iconic Financial Harbours, and Energy Cities in Qatar and India. These developments are eventually expected to be key economic drivers and commercial business hubs of note. The group has also acted as the master developer for luxury lifestyle developments such as Royal Ranches of Marrakech in Morocco. More recently, the group has led the revival

of the prestigious Bahrain developments multi-million dollar Villamar project and the development of the Harbour Row project.

Diversification As part of GFH’s vision, the group adopted a dynamic, entrepreneurial investment approach underpinned by solid professional credentials.

Furthermore, the group pursues a diversified asset allocation strategy to adapt to the multitude of challenges in an ever changing macro environment whilst working closely with our stakeholders to realistically meet expectations.

In terms of asset class diversification, GFH has participated in and brought privileged access to unique private equity investments and in wide-ranging sectors such as real estate, consumer goods, retail, healthcare, industrial, education, technology and sports. Geographically, GFH initially had an investment focus on the Middle East, North Africa and India, but in recent years the group has further diversified its holdings across the US, UK and Turkey to take advantage of emerging opportunities in these markets.

Since the Group’s inception in 1999, GFH has raised over $5 billion in equity from its strong client base in four main activities: • Wealth Management; • Commercial Banking; • Asset Management; and • Real Estate Development.

Source: GFH Financial Group

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TECH FOCUS

BETTER

BY DESIGN Alessandro Evangelisti, ERP Sales Development Leader, Oracle, Italy, looks at how a company can stay on course for continuous improvement

Alessandro Evangelisti

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here is a concept in Japanese business called kaizen . It can broadly be encapsulated by the words ‘continuous improvement’ although it more specifically represents a broader philosophy of incremental advances across all aspects of the enterprise to steadily improve operational efficiency.

Properly implemented, kaizen applies to all employees from the intern to the CEO, and to all departments. It is an approach observed by companies worldwide

and that has bred respected business approaches like ‘lean manufacturing’ and ‘just-in-time’ production.

As a concept kaizen has a lot going for it. What company doesn’t want its full team of staff to feel ‘at home’ with their organisation and that approach each day with an ethos of continuous improvement?

Not only does this lead to improved productivity, it also helps drive overall profitability.

Implementing a ‘continuous improvement approach’ requires a more in depth view of the business, one that provides decision-makers with insight into every process that can be improved. For me, the CFO is best-placed to have and make the most of this visibility across the organisation.

We know that financial planning is central to a business’s future strategies and success, both in the long and short term. But CFOs are

also under increasing pressure from external forces. For example, I read with interest the Financial Reporting Council’s (FRC) recent advice on market volatility and the new factors that audit committees must now consider before issuing their financial reports and accounts.

While assessing external risk and managing the creation of value within the company may seem mismatched, they are in fact highly attuned. Just as there is no point improving a business process if it hits a bottleneck further along the chain, there is little to be gained from implementing streamlining or enhancement strategies if they may fall foul of volatile oil prices or fluctuations on financial markets, for instance.

CFOs are unique in their ability to fully interpret the interactions of both internal and external forces on the business, and so only the CFO can ensure that all continuous

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What company doesn’t want its full team of staff to feel ‘at home’ with their organisation and that approach each day with an ethos of continuous improvement?”

– Alessandro Evangelisti, ERP Sales Development Leader, Oracle, Italy

improvement initiatives are both effective and strategic in light of the external risks and challenges their company faces.

It also falls to the CFO to ensure the data the business collects on its business processes can inform its drive towards efficiency. Companies sit on a wealth of relevant information but do not always use it to its full advantage.

For instance, different departments often plan, execute and report results on their activities in different ways which makes the extraction of insight from the company’s finance and performance data an operational nightmare. Setting consistent target KPIs and reporting practices for every department is a crucial first step in streamlining this process and making it easier to pinpoint areas for improvement.

I have worked with organisations across a number of industries that

were keen to apply their analytics to develop a more efficient way of working and simplify enterprise planning.

For example, Lending Club, one of the world’s biggest online marketplaces connecting borrowers and investors, has embedded data analytics into its back-office software.

This means every transaction Lending Club processes can be stored and analysed, giving it a better understanding of market trends so it can tailor its processes to match.

Another business in the food and beverage industry understands it needs a constant pipeline of new products to keep growing its profit margins, particularly because its rival release copies of its wares as they are typically not protected by patent. Our applications allow the organisation to ‘map’ its products– essentially working out which are the most successful and why–so it can

commercialise them more quickly.

I like to think of it as a form of ‘innovation management’.

It is this kind of multifaceted approach to analytics and data driven execution, along with cloudbased tools for data sharing, analysis and interpretation that allows the business to identify its strengths weaknesses and intelligently recognise where to focus its efforts towards continuous improvement.

The concept of kaizen is simple on the surface, but with so many pressures placed on businesses today it has become increasingly difficult to implement. Continuous improvement requires meticulous planning and a strategic approach, not to mention buy-in from everyone in the business.

As the department with the most complete view of performance across the organisation the finance team is an ideal position to keep the organisation on course, with the CFO at the helm.

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TECH FOCUS

MANAGE FINANCES EFFECTIVELY Monzer Tohme, Country Manager, Middle East, Infor, explains how the right system can help business owners keep control of their transactions

Monzer Tohme

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id-market finance and insurance companies are increasingly finding that bestin-class financial management solutions paired with line-of-business applications deliver the strongest capabilities and the greatest flexibility.

Still, finding a system capable of operating effectively in such a dynamic and complex environment can be a challenge. To ensure business owners get a system capable of meeting their needs, there are five criteria, plus one that is really nice to have that should be on their checklist. A system that can adhere to these standards should put your business firmly on the road to success.

First, a unified ledger is an essential requirement for a financial management system because it simplifies multi-source transaction processing, while simultaneously opening up the possibility of more sophisticated analysis. In addition, a unified ledger can leverage smart transactions, allowing rich analysis to be added and maintained on demand in one place, without the need to move details to sub-ledgers.

The unified ledger has also proved to be particularly valuable in the context of IFRS and multi-generally accepted accounting principles (GAAP) reporting regimes, as it can provide significant flexibility around the length and segmentation of account codes.

This flexibility of the unified ledger also has profound implications for segmental reporting, which may vary between different GAAP regimes and possibly between management and statutory reporting.

The analysis structure also provides the basis for dealing with some of the complexities of Solvency II, which is more demanding about which assets can back which classes of liabilities, together with capital requirements that are different from those under current solvency rules.

Finally, a unified ledger accommodates multi-company structures, or entities, within the unified database, each configured to suit different geographies as desired, or multiple entities within one entity.

The second requirement is smart transactions–a type of analysis that provides a deeper level of granularity, allowing a business owner to add dimension and context to transactions that are important in performance management and vital to aspects of regulatory and compliance reporting.

Not widely available in traditional financial management systems, smart transactions are nevertheless becoming a must for companies that face complex regulatory requirements.

The third requirement for midmarket companies that want to leverage the capabilities of a best-inclass financial management solution is integration. The ability to integrate the system across other core business applications is critical to its ultimate success. The rising popularity of cloud technology is compounding these concerns.

With more and more companies allowing at least some of their business systems to reside in the cloud, integration across systems takes on

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An effective financial management system should be able to allow users with relatively modest IT skills to navigate through data and produce meaningful reports on their own.”

– Monzer Tohme, Country Manager, Middle East, Infor an additional level of complexity. To be effective, a financial management system must be able to securely incorporate data from other systems– whether on-premises or cloud-based– or link to a unified database, all while preserving the same level of control for other organisational systems.

The penultimate requirement for an effective financial management system is robust reporting; but capabilities of financial management systems vary widely in this area.

An effective financial management system will ideally be able to reach across the data model of your entire organisation, allowing users with relatively modest IT skills to navigate through data and produce meaningful reports on their own. Tight links to the Microsoft Office environment are also beneficial, as they put a variety of familiar tools at the disposal of users. Access to integrated performance management tools (budgeting, planning, forecasting, and consolidation) is also a major plus.

Finally, the worst outcome of a financial management system implementation or switchover is to discover in a few years’ time that the system no longer meets the business's needs. For mid-market finance and insurance companies, options exist that provide excellent global finance capabilities while delivering all the other core functionality required.

The best option is to take a strategic

approach that allows owners to handle the ‘now’ but be prepared for what’s around the corner.

COMMON USER INTERFACE A common user interface across applications has long been greatly desired but largely unattainable. Given the way that both technology and companies evolve, it’s very rare for an organisation to have a single, company-wide system, and, therefore, a single user interface.

Because a limited number of systems have this capability today, it can be classified as a ‘nice to have’, but it will likely become a requirement in short order. User interfaces do far more than just deliver a positive user experience. They increase productivity, reduce errors, and make it easier to get a single view of data, organisationwide. This combination of usability and bottom-line impact will lead to the common user interface being de facto for enterprise software applications, leaving us to marvel one day at the way things used to be.

In recent years, the financial services and insurance industries have been subjected to continuous changes in the global economy, regulations, and compliance. In the face of this turbulence, more and more mid-market finance and insurance companies are deciding that a hybrid approach is the optimum way forward. By leveraging best-in-class financial management systems that have robust integration capabilities, they

can leverage third-party applications without jeopardising data accuracy, reporting, and control. The result is the best of both worlds—applications that are the best in class for their specific business area and able to work seamlessly together.

When evaluating financial management systems, business owners must get beyond today’s needs and keep an eye on what’s coming, both in terms of the organisation’s needs and market trends. The right decision will put the owner in control and ensure that they have a finance department with the tools and resources to handle anything that comes its way.

BUSINESS OWNERS SHOULD LOOK FOR A SOLUTION WITH THE GLOBAL ESSENTIALS, INCLUDING • Multi-currency, ideally up to four currencies at the transaction level, • Multi-language, • Multi-calendar, • Multi-company, independent locales, meaning the ability to create as many companies as required within one installation, • Multi-tax, • Parallel chart of accounts, • Parallel books for different accounting treatments, • Localised reporting, and • Global access.

Source: Monzer Tohme, Country Manager, Middle East, Infor

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LAST WORD

Stay focused

Edward Gallagher, Business Development Director, De Boer Middle East, talks about his role and how he keeps track of everything at once WHAT DOES YOUR CURRENT ROLE INVOLVE ON A DAY TO DAY BASIS?

WHAT PLANS DO YOU HAVE FOR THE BUSINESS OVER THE NEXT 12 MONTHS?

I am responsible for the De Boer business unit, which covers all markets outside of Western Europe. I spend my days directing and focusing our sales efforts within our broad territory, leading a great team. I am also committed to ensuring our customers get exactly what they want, when they want it. That might mean working with our designers and engineers on the development of a bespoke temporary structure for a Formula One customer one day, and chairing a project meeting the next.

It has been an exciting period of growth and successful performance for De Boer since I took on this role in 2013. Now that we have built up some momentum, I expect us to capitalise on that–more temporary structures that look, feel and perform like permanent buildings, but can be built in weeks not months.

The De Boer base in the UAE is a fantastic hub from which to travel and service our global customers, so we plan to continue our expansion in this region due to its growth potential.

This will include bringing new temporary structure products and technology to this region that have never been seen here before.

WHAT IS THE MOST CHALLENGING ASPECT OF WHAT YOU DO? With such a broad remit, focus is the key to success and the biggest challenge. De Boer provides temporary structures for the world’s leading oil and gas companies, semi-permanent extensions to schools and colleges, high-end sales centres for property developers, and baggage handling, storage facilities and temporary terminals for some of the world’s busiest airports. We also deliver structures for major international events such as the Olympic Games, Expos and World Cups. So keeping focused on the end result is the key to success with these large-scale projects.

HOW DO YOU PREPARE FOR THE DAY AHEAD? I always prepare the evening before.

I keep a single page, mind-map style sheet of key current issues, prospective market opportunities, and new ideas, which goes everywhere with me.

I even use it at home, much to my wife’s surprise when I hop out of bed at midnight to add a new idea.

HOW DO YOU STRIKE A WORKLIFE BALANCE? It is a real joy to watch my son with my wife. He is a year old now, and seeing many things for the first time.

Edward Gallagher

So we try to take him out to experience something brand new every week.

Spending time with him and watching his eyes widen as he points at something he’s never seen before is a great way to put the things into perspective.

Beyond that, we love to travel and it helps in much the same way. Getting a taste of very different cultures in places like Japan and rural Vietnam, I believe are valuable life experiences.

Define success in five words?

Pushed, failed, evaluated, tried again.

What is the best advice you were ever given?

If you want what I have, be prepared to do what I have done. You are not ambitious if you want to be wealthy, have a great house and a nice car– everyone wants that–ambition is not about what you want; it is about what you’re prepared to do to get it.

What is the one quality a potential employee should have?

They must always have the attitude of going the extra mile when required, to get it done and done right.

What television, movie or novel character do you most identify with?

Josh Lyman from The West Wing.

He has the sharpest and wittiest mind on the president’s staff.

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“ONE OF THE BEST PLACES IN THE WORLD TO WORK” - GALLUP

2014

2015

2016

Winner of the Gallup ‘Great Workplace’ Award, for the 3rd year in a row.

The Gallup ‘Great Workplace’ Award is the benchmark in ‘Employee Engagement’ around the world. And by winning it three years in a row, Mashreq has proved that it has successfully maintained excellence in creating a great work culture.

A feat no other bank in the region has ever achieved. At Mashreq, we strongly believe that only the highest level of employee engagement can deliver what our customers truly deserve – the best customer service in the world. That’s because at Mashreq – We Make Possible.

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