BMME 8 by GDS International

SPECIAL REPORTS Dubai Metro Business intelligence E-learning www.busmanagementme.com • Q1 2010

Bright Lights Big City Why Qatar and its capital are the GCC’s rising stars

PLUS Dr Ayesha Mohammed Abdullah, SVP of DHCC | Khalid Al-Falih, President and CEO of Saudi Aramco | Chandrasekhar Nene, CIO of Wataniya Airways BMME8 COVER2.indd Sec2:5

26/2/10 15:01:37

SWIFT AD_9jan08 25/02/2010 16:55 Page IFC1

SWIFT AD_9jan08 25/02/2010 16:55 Page IFC2

ITS AD (DPS)_9jan08 25/02/2010 16:48 Page IFC1

ITS AD (DPS)_9jan08 25/02/2010 16:48 Page IFC2

Sales Technics DPS AD_9jan08 25/02/2010 16:53 Page 01

CRM Success. Can You Afford It?

It’s unfortunate, but . . . Many companies have reported dissatisfaction with their CRM implementations. Your’s does not have to be one of them.

The Key to Success The key to CRM Success is strict adherence to a sound implementation process. Our’s has been thoroughly tested over more than 500 projects and covers all the critical stages that make the difference between success and failure.

For More Information Contact: Jay Bauer 001.949.361.4070 jay.bauer@salestechnics.com www.salestechnics.com

Sales Technics DPS AD_9jan08 25/02/2010 16:53 Page 02

Yes! Just Do The Math What About the Cost? Compare the implementation costs to potential productivity gains (10% on average) and revenue increases of 3% to 5% perrevenue producer.

Do Your Homework To find out more about the CRM value proposition and its benefits for your organization, read the interview with Jay Bauer in this issue.

CRM Process Experts STI Systems has implemented CRM systems of 50 to 500 seats for more than 500 clients from small companies to large corporations supporting multinational offices. Using a process-based methodology, refined over 20 years, we have achieved a success rate notably higher than the industry average.

Samsung AD_4August 25/02/2010 16:54 Page 1

ED NOTE BMME8_feb10 26/02/2010 17:10 Page 7

FROM THE EDITOR 7

Boom time Qatar is the GCC’s rising star, with economic growth there set to rocket. But what sets it apart from its neighbours? here has been much negative press in recent months about the damaging effects of the economic downturn on the GCC’s growth plans. So it is heartening to read about a country that is not only defying the recession, but is positively thriving in a climate where others, such as neighbouring Dubai, have been close to collapse. This year, Qatar will be one of the world’s fastest growing economies, with growth predicted at 18.5 percent. And last year, while most other global economies contracted, Qatar enjoyed 11 percent growth. What is so remarkable about this success story is the fact that it has remained relatively low key. Ask most people to name a boom economy and India and China will probably spring to mind. No grand announcements or record breaking feats have put Qatar in the media spot-

light. Neither has it attracted hordes of Western tourists to its five-star beach side hotels. But if the developments underway across the country come to fruition it won’t be long before Doha takes its place on the world stage alongside the likes of London, New York and Sydney. In this issue’s cover story we profile this dynamic country and explain the reasons behind its economic growth. Central to the Qatar story are its abundant natural resources, in particular natural gas. It has reserves of almost 26 trillion cubic metres of gas, which represents around 14 percent of the world’s total supplies, while demand for this resource has rocketed, particularly from the emerging economies in Asia and the US. This gas wealth has allowed the Qatar government to invest heavily in infrastructure projects. This year, a massive 40 percent of its budget has been allocated to infrastructure and an im-

Diana Milne Editor

“The DHCC came about primarily be-

"At Meydan, we have facilities that we

“We are in the process of really tight-

cause there was a major gap in the re-

have never had before and will be

ening our belts. My biggest challenge

gion when it came to tertiary

bringing race-goers as close to the action

is cost control and quality maintenance.

healthcare and higher education”

as possible”

I want to get the same or better

Dr Ayesha Mohammed Abdullah, SVP

Frank Gabriel Jr, CEO of Dubai

quality at a reduced cost”

of Dubai Healthcare City

Racing Club

Chandrasekhar Nene, CIO of

(page 46)

(page 40)

Wataniya Airways

pressive list of ambitious projects is slated for completion in the next five to 10 years, meaning Doha’s skyline will be transformed beyond recognition. Meanwhile major international companies are already sitting up and taking notice of Qatar’s potential and are setting up headquarters in the Qatar Financial Centre. The country’s advantage is that its success is based on real natural resources that will sustain its growth for many years to come. Its destiny does not depend on the fickle real estate, tourism or financial services markets; rather these are side effects of its real economic growth.

(page 86)

Cartasite AD.indd 1

25/2/10 16:24:08

CONTENTS_BMME_NEW_feb10 26/02/2010 16:43 Page 9

CONTENTS 9

34 Commercial break Middle East advertising standards come under the spotlight with Saatchi & Saatchi’s former regional CEO Elias Ashkar

Winning streak Business Management catches up with Dubai Racing Club CEO Frank Gabriel Jr to find out about the winning formula at the UAE’s most exciting sports venue

46 Healthy returns Dr Ayesha Mohammed Abdullah, SVP of Dubai Health Care City gives her diagnosis on the future of the UAE’s medical industry

The Gulf’s shining star Qatar is forecast for recession defying growth of 18.5 percent for 2010, making it one of the world’s fastest growing economies. We report on why the world is Qatar’s oyster.?

ITS AD.indd 1

26/2/10 10:01:55

CONTENTS_BMME_NEW_feb10 01/03/2010 09:37 Page 11

CONTENTS 11

Dubai Metro

106

Saudi Aramco

100

Arabtech

54 Building conﬁdence Arabtec’s CFO Ziad Makhzoumi is betting on his company’s sound financials to see it through the downturn. He reveals its survival strategy

60 The big question IT managers reveal their top technology priorities in Ernst & Young’s latest Global Information Security Survey

PROJECT FOCUS 78 Dino Philaretou, Consine Consultants Ltd

INDUSTRY INSIGHT 92 Iliyas Campbell, Diligence Management Consultants 104 Jay Bauer, STI Systems

ASK THE EXPERT 64 Chris Alvord, COOP Systems 84 Halim Belkhatir, BMC Software 90 Derek Strauss, Gavroshe

68 Part of the process John Cowling explains why he believes the risk management industry has come a long way in the Middle East

EXECUTIVE INTERVIEW 72 Abdulaziz Al-Salloum, Duroob Technology 82 Zhang Ping'an, Huawei Symantec 98 Haitham Abdou, ITS 110 David Armitage, Cartasite 120 Satish Babu, Swift Interiors

74 Building up intelligence

86 Setting standards

With BI expert Nishchal Khorana of Frost & Sullivan

Wataniya Airways CIO Chandrasekhar Nene lifts the lid on the luxury carrier’s technology agenda

80 Revolutionising storage networks

96 A force for change

With Andrew Gilman and Eric Schott of the Storage Networking Industry Association (SNIA)

Gary Greenwald, Chief Innovation Officer of Citigroup, reveals how the financial crisis is driving change within the financial giant

LandRover AD_4August 26/02/2010 08:58 Page 1

CONTENTS_BMME_NEW_feb10 26/02/2010 16:43 Page 12

CONTENTS 13

100 On the right track

106 Facing up to reality

Serco’s Ramadan Abdullah reveals how the Dubai Metro is set to revolutionise transport in the emirate

Saudi Aramco President and CEO Khalid AlFalih on the state of play in the global oil and gas industry

SILVER SPONSORS

REGULARS

112 Exploring new horizons With Yoshio Yokoyama, Director of the Arabian Oil Company

114 Urban evolution Meet the man behind some of Abu Dhabi’s most ambitious projects, Aldar Properties’ Talal Al Dhiyebi

122 Hotels with a conscience Noel Massoud, CEO of Jinan Hotels & Resorts explains how his company will help to save the planet

134 Back to the classroom University of Wollongong in Dubai President Professor Rob Whelan takes us on a tour of his campus

16 The brief 18 News 26 In my view 138 On the shelf 140 City guide 142 Objects of desire 144 Final word

Dino Philaretou

120

Satish Babu

Risk management

The Ritz-Carlton Sharq Village & Spa, Doha, Qatar 6th – 8th April 2010

NGO&G Summit 2010 The Next Generation Oil and Gas Summit is a three-day critical information gathering of the most influential and important CIOs from the Oil and Gas industry.

A Controlled, Professional and Focused Environment The NGO&G Summit is an opportunity to debate, benchmark and learn from other industry leaders. It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

Chairman/Publisher SPENCER GREEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS Worldwide Sales Director OLIVER SMART

Editor DIANA MILNE Managing Editor BEN THOMPSON Associate Editor JULIAN ROGERS Deputy Editors NATALIE BRANDWEINER, REBECCA GOOZEE, STACEY SHEPPARD, MARIE SHIELDS, HUW THOMAS, Creative Director ANDREW HOBSON Design Directors ZÖE BRAZIL, SARAH WILMOTT Associate Design Directors MICHAEL HALL, CRYSTAL MATHER, CLIFF NEWMAN, CATHERINE WILSON Online Director JAMES WEST Online Editor JANA GRUNE Project Director RAY DAVIES Project Manager DANIELLE DOCHERTY Senior Sales Executive BECKY BLAKEWAY

A Proven Format This inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning.

Sales Executives JAMES HARRIS, ABIGAIL LABERTON, DAVE EDLER, RICHARD SHORTEN Finance Director JAMIE CANTILLON Production Coordinators LAUREN HEAL, RENATA OKRAJNI, AIMEE WHITEHEAD Director of Business Development RICHARD OWEN Operations Director JASON GREEN

“It’s a great opportunity to meet colleagues, revise technologies and have a deeper insight into the company’s development. And I should say that direct contacts are very useful. I am now in the process of negotiating with four companies, and we have agreed that they will come to us with a presentation. There is another company who wants to exchange experience with us. Thus, it was a very interesting and useful event!” Valery Beskopylny, Belorusneft

Operations Manager BEN KELLY Subscription Enquiries +44 117 9214000. www.busmanagementme.com General Enquiries info@gdsinternational.com (Please put the magazine name in the subject line) Letters to the Editor letters@gdspublishing.com Business Management Queen Square House, 18-21 QueenSquare, Bristol BS1 4NH. Tel: +44 117 9214000. email: info@gdsinternational.com

Legal Information The advertising and articles appearing within this publication reﬂect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or

Find Out More Contact NGO&G at (+44) 0117 921 4000 www.ngomenasummit.com

CREDITS.indd 14

GDS International GDS Publishing, Queen Square House, 18-21 QueenSquare, Bristol BS1 4NH. +44 117 9214000. info@gdsinternational.com

26/2/10 14:54:36

E-SERV AD.indd 1

25/2/10 16:38:35

UPFRONT BMME 8_25 June 26/02/2010 17:32 Page 16

UPFRONT THE BRIEF

THE BILLION DOLLAR CURE

Could a thriving healthcare sector be the cure to the GCC’s economic woes? Swelling Middle East populations mean medical facilities are in higher demand than ever before across the region. In fact, the healthcare industry is currently among the most dynamic sectors in the region at a time when other sectors, such as real estate and hospitality, are floundering. This contrast is most marked in Dubai, where the emirate’s health authority has recently announced

plans to implement AED3.67 billion sector through the formation of worth of healthcare projects. public, private partnerships. The plans envisage inCurrently the private creasing patient capacsector owns around ity in hospitals by 650 57 percent of hosbeds and building pitals in Dubai and Percentage of three new hospitals 54 percent of outhospitals privately and three primary patient facilities in owned in Dubai health centres. A key the emirate. The DHA part of this strategy is to ataims to own and operate tract investment from the private only 30 percent of hospitals by 2015

and for private sector companies to operate 70 percent. Indeed private sector projects that are currently planned will up capacity by an additional 500 beds. The emirate’s commitment to growing its medical sector started with the building of the flagship Healthcare City project, which includes a freezone, the Harvard Medical School Dubai Centre, Dubai Harvard Foundation for Medical Research and a Centre for Healthcare Planning and Quality. The equivalent facility in neighbouring Abu Dhabi is Sheikh Khalifa Medical City (SKMC) which includes the 700-bed Sheikh Khalifa Hospital and the 100-bed Abu Dhabi Rehabilitation as well as 12 specialised outpatient units and nine primary healthcare centres. The Abu Dhabi Health Authority’s long-term aim is to establish a world-class healthcare system funded mainly by employer insurance schemes. With this in mind it has recently signed an agreement with the US-based Cleveland Clinic, one of the top hospitals in the US, to take over management of SKMC – a major investment by a private healthcare provider in the region. Similarly the government has recently signed an agreement with Vienna University and the Phamed Company to help develop Al Ain’s healthcare sector. The UAE is not the only Middle Eastern country where healthcare is big business. Jordan is rapidly establishing a name for itself as an international medical tourism hub. The sector is believed to attract revenue in the region of over US$1 billion a year and a study by the country’s Private Hospitals Association found that 210,100 patients from 48 countries received treatment in Jordan in 2008 compared to 190,000 in 2007. It has been ranked as the top destination

UPFRONT BMME 8_25 June 26/02/2010 17:32 Page 17

UPFRONT THE BRIEF for medical tourism in the region by the World Bank and globally it is ranked the fifth. To boost the sector further, Jordan launched a major marketing campaign last year to attract medical tourists, which included inviting medical experts from all over the world to visit the country’s medical facilities. Meanwhile the government, which has traditionally shied away from helping to promote medical tourism, is now actively marketing it through the Jordan Tourism Board. Part of its enthusiasm is due to the fact that the economic downturn in other parts of the world has encouraged medical tourists to come to Jordan for cheaper treatment. This increase saw revenue increase by between five and 10 percent in the first nine months of 2009 compared to 2008. Qatar, like Dubai, has embarked on a major infrastructure project to group together with its medical facilities – the multimillion-dollar Medical City project. Private backers are behind the project, with the US-based firm Hill International managing and supervising the project. It’s own flagship hospital, the HMC Hospital, will provide care for women and children and will offer 450 beds. Overall there will be four hospitals built within Medical City. With billions of dollars being poured into the sector in the Middle East by private sector operators and consequently hundreds of thousands of employment opportunities being created, it seems healthcare could be the medicine needed to inject new life into the region’s economy. But, like real estate, its future depends on demand equalling or outstripping supply so only strong population growth and a continued influx of expatriates will guarantee its success.

NEWS IN PICTURES

Iranians hold a caricature of the US President Barak Obama during a ceremony marking the 31st anniversary of the 1979 Islamic revolution in Tehran. The country has recently succeeded in producing its ﬁrst batch of uranium enriched to 20 per cent, according to President Mahmoud Ahmadinejad

A young boy rests at the United Nations High Commissioner for Refugees’ main food distribution site where Iraqi refugees are processed and interviewed to receive rations. With a mostly Syrian staff, the UNHCR is preparing to distribute four months of food to as many as 155,000 Iraqis

Jordan’s Queen Rania rallies Support for 1GOAL education campaign at the 60th San Remo Song Festival, Italy. The campaign aims to ensure every child has a school place by the year 2015

Lebanese soldiers stand guard over to the debris of an Ethiopian Airlines plane that crashed in the Mediterranean Sea near Beirut airport. The plane carrying 92 people plunged into the sea shortly after taking off

Iraq soldiers inspect the site of a bomb blast at Iraq’s forensics headquarters in central Baghdad. A suicide attacker blew up his vehicle as he raced it at the building, killing 18 people and injuring 80

UPFRONT BMME 8_25 June 26/02/2010 17:41 Page 19

UPFRONT NEWS ROUND-UP

DUBAI

SAUDI ARABIA

The opening of the Dubai Metro last year has not reduced the number of people using taxis, according to the Roads and Transport Authority. It has released a statement admitting that the number of journeys taken by taxi in Dubai actually increased in the second half of 2009, despite this coinciding with the opening of the Metro. Over 36 million taxi trips were taken, compared to 34 million in the first half of the year. The RTA also claims that operational efficiency rose by 92.6 percent during peak hours in the second half of 2009, compared to 85 percent in the first half.

A continuing slowdown in consumer confidence will lead to plummeting inflation this year. That’s the verdict of the Business Monitor International, which forecasts an end year rate of three percent in 2010 but an average rate of inflation of 2.4 percent throughout the year. The inflation rate in December 2009 was 4.3 percent. Its prediction was founded on “our view that bank lending will remain low and consumers cautious”. The report also states that further falls in oil prices could impact on bank lending and consumer confidence. “This would likely be accompanied by a stronger dollar, which would be a double blow for inflationary pressures”. Around 34,000 jobs are to be created in Saudi Arabia, as part of a plan to transform the country’s airports. Saudi Arabia’s General Authority of Civil Aviation (Gaca) has pledged to make the airports part of ‘airport cities’ that would include five star hotels, shopping malls, recreation centres, tourism facilities, exhibition centres and aviation factories. It has allocated an area measuring around 2.4 million square metres to the projects. According to the Arab News, companies wanting to be part of the project have until the end of May to submit their bids.

UPFRONT BMME 8_25 June 26/02/2010 17:34 Page 20

UPFRONT COUNTRY FOCUS: KUWAIT

KUWAIT One of the richest countries in the world, Kuwait has the world’s fifth largest oil reserves and is one of the most attractive investment destinations in the region. With a per capita income of US$60,800 and a GDP of US$295 billion, the Arab state is one of the fastest growing economies in the region; Kuwait also has the secondmost free economy in the Middle East, according to the 2008 Index of Economic Freedom, making it one of the best places in the region to conduct business. Increasing oil prices since 2003 have resulted in a surge in Kuwait’s economy and a booming construction sector. For instance, with the country’s oil production expected to reach four million bpd by 2020, Kuwait Petroleum Corporation plans to invest US$51 billion by 2012 to upgrade and expand the country’s existing refineries. And with the Central Bank of Kuwait injecting US$5.15 billion into the economy for a muchneeded boost following the financial crises, impressive investment levels look set to continue for the near future at least.

KUWAIT INTERNATIONAL AIRPORT EXPANSION Kuwait Directorate General of Civil Aviation plans to expand Kuwait International Airport to increase its capacity to 20 million passengers a year from six million. The expansion project involves the construction of a new terminal building that will be connected to the existing terminal building via a tunnel, the two existing runways will be extended up to 600 meters and a third runway will be constructed. The electrical infrastructure of the airport will also be upgraded to include a new control and communication system. A new airspace system plan will be developed consisting of a control centre and national meteorology centre to improve the airport’s operating performance and to meet international standards. Project Value: US$2.1 billion Completion: 2013 Sector: Infrastructure Consultant: Joint venture between Dorsch Consult and SSH International

JABER AHMED AL-JABER AL-SABAH HOSPITAL The project calls for construction of Jaber Ahmed Al-Jaber Al-Sabah Hospital in Surra, Kuwait – a 1120-bed facility with a total built-up area of 270,000 square metres. The hospital will provide a comprehensive range of medical services comprising diagnostic and treatment services, a trauma centre and ER facility, outpatient services, dental services, obs/gyn services, inpatient care services, VIP suites for visiting heads of state and also another wing for VIPs. Kuwait Arab Contractors Co. was awarded the main construction contract in August 2009, and construction is expected to be complete by the end of 2012. Project Value: US$1.1 billion Completion: 2012 Sector: Civic Infrastructure Main Contractor: Kuwait Arab Contractors

UPFRONT BMME 8_25 June 26/02/2010 17:34 Page 21

UPFRONT COUNTRY FOCUS: KUWAIT

MADINAT AL-HAREER Madinat al-Hareer (City of Silk) is a proposed 250 square kilometre planned urban area in Subiya that, upon construction, would include the 1001metre tall Burj Mubarak al-Kabir, a natural desert reservation and areas that concentrate on media, health, education and industry. The city will be built in individual phases with total completion within 25 years. Construction on the actual site has already begun, with bridges, highways and roads being laid down as basic infrastructure to facilitate future construction of structures within the city. Project Value: US$27.5 billion Completion: 2035 Sector: Infrastructure/Real Estate Project Manager: Tamdeen Real Estate Company

BURJ MUBARAK AL-KABIR Part of the Madinat al-Hareer project, the Burj Mubarak al-Kabir skyscraper is planned to top out at 1001 metres in order to reflect the Arabian fairy tale One Thousand and One Arabian Nights. The building will include seven vertically stacked 30-storey ‘neighbourhoods’, including apartments, offices and hotels. Linking the neighbourhoods will be several four-storey ‘town squares’. In order to cope with high winds, the building is designed as three interlocking towers, each twisting 45 degrees to help stabilise it. Work on the tower has progressed slowly. It was originally slated to be completed in 2016. Project Value: US$7.4 billion Completion: 2016 Sector: Real Estate/Mixed Use Architect: Eric Kuhne & Associates/CivicArts

AL HAMRA Due to rise to 412m in height, Al Hamra will be the world’s tallest ‘sculpted’ tower and Kuwait’s tallest skyscraper, creating a dramatic focal point that is visible throughout the city. Facilities at the tower will include six levels of retail; a rooftop garden held above the retail sector; the largest business centre within Kuwait at 2400 square metres build-up and 1800 square metres leasable; a Sky Lounge restaurant; 40 elevators to help you reach those dizzying heights; two refuge floors that can be used in an emergency; and a multistorey car park. With the collaboration of project manager Turner International and main contractor Ahmadiah Contracting, Skidmore Owings & Merrill hopes to reach completion by the third quarter of 2010. Project Value: US$543 million Completion: 2010 Sector: Real Estate/Mixed Development Consultant: Skidmore Owings and Merrill

UPFRONT BMME 8_25 June 26/02/2010 17:34 Page 22

UPFRONT COMPANY NEWS

LOOKS MATTER

Phone users in the Middle East are the most fickle when it comes to their mobile phones with fashion being a high priority. Juha Kokkonen, Director of Computer Solutions at Nokia told the Arabianbusiness.com website that Middle Eastern customers change their phones far more often than their Western counterparts. And she said the design of the phone is a high priority for those choosing new models: “I think when it comes to Middle Eastern consumers, for them how the product looks and the design of the product has much higher value than in Western Europe. She said that as a result of this focus on fashion, Middle Eastern users were likely to change their phone models frequently. Despite this however, Kokkonen said Nokia was shifting away from concentrating on the design of its products and concentrating more on the applications and processes inside its smartphones.

FAST FACT

SAUDI ARABIA: A MIDDLE EAST GREEN LEADER? If there are two things the Middle East has plenty of it’s sunlight and oil. The region’s exploitation of the latter is well known and is the reason why it has so much economic promise and is turning out some of the world’s most expensive and outrageous infrastructure projects. But as pressure mounts on the world's largest oil producers and exporters to diversify away from the dwindling fossil fuel, nations like Saudi Arabia must start to shift their energy focus in order to stay among the big players in the globe’s economic future. Saudi Arabia is perhaps one of the Gulf states taking the biggest steps in sustainable, green policies after looking to enter the world of solar energy with the launch of the first of a three-stage solar power initiative. Sun in place of oil The Saudi authorities have also vowed to use the sun instead of oil to desalinise water. Up to now, the more than 28 desalination plants scattered around the Kingdom have had to rely on fossil fuel, most notably fuel oil, to provide power to run the equipment used to extract salt and other minerals from sea water. At the start of February the UAE Top News media site reported that the Kingdom is now planning to build solar-based desalination plants in order to save on energy costs, as well as be in tune with new environmental polices. The move could be perceived as a ploy to secure membership in the International Renewable Energy Agency, otherwise known as IRENA. Plans for a high-speed rail network to carry pilgrims to and from the annual Hajj pilgrimage in the Holy Cities of Mecca and Medina also signify the Kingdom’s willingness to become more environmentally friendly.

Dubai lost

17% of its professional workforce in 2009 with Western expats hit the hardest Source: GulfTalent

Eco-friendly petrol centre Rather ironically, even the petroleum industry in Saudi Arabia looks set to get a green makeover. The King Abudullah Petroleum Studies and Research Center (KAPSARC) (pictured above) designed by Zaha Hadid, is aiming for LEED Platinum status. To be built in Riyadh, Saudi

Arabia, the state of the art campus will house research and development facilities on energy and environmental exploration and analysis. KAPSARC's main building is a crystalline structure composed of modular six-sided cells with many connections between them, as well as a series of shaded outdoor spaces, gardens, and underground tunnels. Nearby, a modern library and conference center will aid in the center’s quest to become a preeminent energy research center, as described by InHabitat. The hot desert climate will be cooled by the use of natural shading and ventilation and natural light will be used for interior courtyards and indoor rooms. Solar power will once again be used to power the building and its extensive use of energy-efficient LED lights. A place where people learn the best ways to find petroleum hardly sounds like somewhere you would find a environmentally-friendly building, but you have to admire the Kingdom’s efforts.

UPFRONT BMME 8_25 June 26/02/2010 17:34 Page 23

UPFRONT NEWS

THE FUTURE’S BRIGHT Tower’s spire visible from

miles away

project cost about

US $4.1bn

million

Khalifa Tallest building in the world

cubic feet of

concrete used in construction

the world’s tallest

million

26,000 glass panels for the exterior cladding

10°C

cooler at the top than the bottom

160

room hotel

the world's highest

nightclub

308.8m taller than Taipei 101 (world’s next tallest building)

you can see I

R A N

height of the

Residential suites

Georgio Armani

3,000

the world’s highest

swimming pool

stairs from bottom to top

US $217m cost of the exterior

Dubai Fountain part of entire new

Downtown Dubai

US $20bn

Three percent of the malware designed to steal users’ passwords originates from Egypt, according to security vendor Kaspersky Lab. Tarek Kuzbari, Managing Director of Kaspersky Lab Middle East told the AME Info news website that Egypt had been identified as the top creator of PSW Trojan malware in the Middle east region. Describing the threat this malware poses, he said: “This can prove very dangerous for unsuspecting and unprotected internet browsers as their online details and other vital information stored online can be compromised and used against them and at their expense by unscrupulous criminals.”

mosque

man hours

spent building structure

THE FINGER OF BLAME

height of the

Armani hotel

COMPANY FOCUS Ever immune to the UAE’s economic woes, facilities management giant Drake & Scull International has announced plans to spend US$136.1 million on acquisitions in 2010. The firm, which listed on the Dubai Financial Market in March last year and specialises in mechanical, engineering and planning businesses, plans to acquire three companies in the next 12 months. These include a Qatar-based MEP business and an MEP and civil construction firm in Saudi Arabia. Zeina Tabari, the firms’s Chief Corporate Affairs Officer, told Reuters: “We are hoping to have the Qatar acquisition in the first quarter, one in Saudi Arabia in the second quarter and the second in the third quarter.” The firm has won three major contracts so far this year for projects in Abu Dhabi and is in the running to win two additional contracts in Kuwait and Abu Dhabi before this year’s second quarter. It is expected that the company’s focus will continue to shift away from Dubai, which accounted for 45 percent of its revenue in 2009, and towards Abu Dhabi and Saudi Arabia instead.

UPFRONT BMME 8_25 June 26/02/2010 17:35 Page 24

UPFRONT NEWS

IT PARTNER FOR SINOPEC

INTRODUCING INTERACTION PROCESS AUTOMATION

China is a relative newcomer to the Middle East, establishing diplomatic relations with Saudi Arabia only in the 1990s, but it has made up for lost time. Chinese contractors have been engaged on some of the biggest projects in the region, from the Merowe Dam in Sudan to the new high-speed railway linking the holy cities of Mecca and Medina to Jeddah, in Saudi Arabia. But the backbone of the relationship is oil. Chinese national oil companies such as SINOPEC and CNPC, its archrival, have been less squeamish than US or European oil majors about doing business in countries such as Sudan, and have beaten Western firms to upstream contracts in Iraq. SINOPEC is a major Chinese oil and gas company listed on international stock exchanges with integrated upstream, midstream and downstream operations, strong oil and petrochemical core businesses and a complete marketing network. It was ranked the 9th biggest company in the world based on market capitalisation (Fortune Global 500). It has an 80 percent market share in China’s oil market around 640,000 employees. SINOPEC contracts directly with governments in many countries for the exploration, refinement, marketing, production and sales of oil and gas and petrochemicals. NVSSoft has been assigned by SIPC, SINOPEC’s subsidiary in Syria, to deliver and implement a number of IT solutions for document management and business process automation. With fierce international competition, it was a great accolade for NVSSoft to be selected as a software and service provider to SINOPEC, having completed an outstanding pilot project at SIPC, SINOPEC’s subsidiary in Syria in cooperation with SETCO, NVSSoft’s distributor in Syria. The OPC project is now underway and SINOPEC has immediately sensed the benefits of dealing with a viable and dynamic vendor like NVSSoft, and NVSSoft on the other hand also sees a great opportunity for growth and knowledge in working with a global name like SINOPEC, and hopes to replicate this success in other countries as well.

Interaction Process Automation (IPA) relies on the power of an all-in-one IP communications platform and offers the ability to associate human interactions (phone calls and voice and screen recordings, emails, faxes) with a business process. Imagine having a consistent way to capture customer dialogue as part of a business process. IPA leverages industry proven technology and techniques for the ‘work centre’ that are designed to remove human latency and optimise resource balancing. Organisations can use those same advanced technologies to optimise how

For more information contact www.nvssoft.com

work gets done in any ‘work centre’. ACD technology is recognised as one of the most powerful in the world to handle distribution, management and reporting of work activity. Contact centres use it to distribute calls, email, web chat and other communications. When this intelligent tool is used with work activities, managers receive insight into work flow and status. It can point out gaps to help management improve processes and reduce cycle time. Workforce management can predict the headcount necessary to complete the anticipated amount of work. Historical data can be used to predict how much work there is to complete. All these advanced technologies result in dynamic work ‘push’ instead of static work ‘pull’. This reduces the human latency inherent in many other solutions where work simply sits waiting for an employee to pick it up and take action. Having these capabilities can help organisations automate business processes, respond faster, control costs and increase customer satisfaction – all without costly custom programming or long implementation times.

CUTTING THE COST AND COMPLICATIONS OF RELOCATING overseas and cheaper than buying from local reWith corporate HR budgets stretched and tailers; no burden on staff or company to dispose the high cost of relocating staff and their famof or remove furniture at the end of the secondilies to the GCC under the spotlight, the option ment; fully flexible lease terms starting from one of furniture rental is increasingly popular month; dedicated client relationship manager to amongst blue chips in the region. UAE-based provide fast and efficient service. Indigo Living’s corporate furniture leasing “When HR departments recogmodel is specifically designed to pronise this, they see the value we vide international companies with The actual can provide them both in an efficient cost-effective service concept of furniture terms of cost savings and takthat negates the need to ship leasing is still relatively ing the sting out of what is personal effects into the region. usually a stressful time for Joe Hepworth, Indigo’s to the majority of their employees and families,” Middle East GM, says: “As the acbusinesses says Hepworth. “We tend to work tual concept of furniture leasing is closely with them on a long-term basis still relatively unknown to the majority of for all future incoming secondments.” In addibusinesses, we usually start by explaining the tion to home furnishings and accessories, benefits to potential clients – once this is Indigo Living also provides the full spectrum of known, the service tends to sell itself.” These kitchenware, bed and bath linen, white goods, advantages include: furnishing accommodaelectricals and curtains, all on a leased basis, tion prior to arrival, avoiding the need for hotel meaning that any home can be comprehensivestays and reducing capital outlay; more cost efly fitted out in this way. fective than shipping personal effects from

unknown

UPFRONT BMME 8_25 June 26/02/2010 17:35 Page 25

UPFRONT NEWS

A BREAKTHROUGH IN PROCESS OPTIMISATION

HIGH FLIERS

Process optimisation company e-Serve has launched Version 8 of its process-optimisation platform e-Serve UP&SM. By this new version, the holistic integration of BPM, software management and learning and knowledge management has been achieved. Unified process and software management (UP&SM) is its fundamental principle merging the two separate worlds of business and software engineering into one unified world with one common language that could be used by both business and IT. Thus the gap between business and technology has been overcome. With e-Serve UP&SM, the business engineers design, model and customise business processes visually by navigating through the space of logic. They refine the logic incrementally and get in parallel, by just executing parts of the business logic, the process model-driven prototypes which they can test. The result is a complete, consistent model of the business processes and business logic together with a set of sustainable, process modeldriven, state-of-the-art software applications that support the business processes in an optimal way. Moreover, based on the modelled business logic, training courses and knowledge bases are built. The architecture enables customers to run projects involving business engineers and business people spread across the world. They work together globally, synchronously and interactively. This new world of business & IT delivers very significant benefits, including cost efficiency, sustainable support of optimal business process and the elimination of the business IT gap. Moreover, investments in traditional software are saved by structuring this software, according to the process model.

Business travel is expected to increase significantly in the next 12 months, with 46 percent of UAE residents expecting an upturn. A survey by YouGov Siraj found that 15 percent of those who responded expect business travel to increase a lot while just 16 percent predict business travel will drop. Jane Wilson, Director of Travel and Tourism Research at YouGov Siraj, said: “It has been a lean year for executives used to travelling for business around the

For more information and for a free trial please go to www.e-serve.ch

FAST FACT

40% Number of UAE residents who believe their country’s economy will have picked up a year from now

world on company expenses, but business travel looks set to take off again. As people are feeling more positive about the economy and are increasingly focused on growth, they are now planning to travel on business more.” Despite this upturn in business travel, the study shows that more people are travelling in economy than on business class compared to a year ago. First or business class travel was seven points higher in January 2009 than January 2010.

RELOCATION, RELOCATION Senior executives are just as willing Giles, Director of BlueSteps, said: to relocate overseas as they are to “The economic crisis has resulted move for new jobs nationally. in many executives extending their That’s according to a survey by the job searches overseas, and the global executive will be well recruitment consultanplaced to take advancy BlueSteps, which tage of the expectfound that 70 According to a survey by BlueSteps, ed uptick in percent of se2010. As the nior execs economy picks would move of senior execs up and opportuoverseas for would move overseas for work nities increase, exwork, while 74 ecutives who are percent would relowilling to relocate, either cate within their own countries. The main concerns cited nationally or overseas, will be at an by the executives when it came to advantage.” The survey questioned relocating, were moving their fam- executives from the Americas, ilies and developing a new support Europe, Africa, Asia Pacific and the network and social circle. Della Middle East.

70%

UPFRONT BMME 8_25 June 26/02/2010 17:36 Page 26

UPFRONT 26 PAUL BULCKE, CEO OF WORLDWIDE FOOD GIANT NESTLÉ, ON WHY SUSTAINABILITY IS HIGH UP ON THE COMPANY’S AGENDA. We want to be the world’s recognised leader in nutrition, health and wellness, and also the reference for financial performance in our industry. It defines what we want to leverage to succeed. First our product and brand portfolio backed up by strong R&D capabilities, our unmatched global presence in the world and our people, values and culture. At the beginning of the 21st century malnutrition remains one of the most serious problems facing humanity. It is an underlying cause of around 35 percent of death in children under five years old and mainly in the developing countries. Micronutrients deficiencies exist in iron, iodine, vitamin A and zinc in both adults and children. Over one billion Nestlé products are purchased every day around the world, which are or could be carriers of micronutrients We are now mapping out our product fortification efforts against known micronutrient deficiencies across the globe. Working with local health and experts, we are analysing local nutrition landscapes including nutritional status intakes and dietary habits of different populations in order to best target consumer needs Over the 10 years since we created our sustainable agriculture initiative, millions of farmers have benefited from our free technical assistance. This is a strong holistic programme with our agriculture suppliers. It aims to improve efficiency and risk management in the supply chain and it supports sustainable development in agriculture. Today our company provides free technical assistance to over 600,000 farmers. We have invested CHF250 million this year alone in sustainability projects in our own factories and operations. We believe that it is important that our shareholders, consumers, customers, suppliers, other stakeholders and the public at large understand how we positively link up our activities with society in a responsible and sustainable way, and this is what we mean by creating shared value, and the role it plays in the convergence of growth, sustainability, and nutrition. I remember when I was in school we never even had a one-hour course in nutrition, and yet at the same time it’s so important in your life and you have to take nutritional decisions. Everybody has to take on nutrition several times during the day decisions, so we are not prepared for that. Governments are starting to be involved here.

IN MY VIEW

UPFRONT BMME 8_25 June 26/02/2010 17:36 Page 27

UPFRONT COMPANY INDEX

IS IT TIME TO MIGRATE?

with products for pre-migration assessment, coexistence and application rebuilding. In recognition of its track record of migrating more “The current economic climate has produced an than 20 million users to Microsoft platforms in the increase in Lotus-to-Microsoft migrations, as many last 10 years, Quest Software has been named a rec- organisations simplify their enterprise to cut costs, or ommended independent software vendor (ISV) in streamline after company mergers or acquisitions,” Microsoft’s Enterprise Notes Migration (ENM) pro- said Bill Evans, VP of SharePoint and Notes gramme. The ENM programme helps Transition business unit, Quest Software. “To simplify the process of moving from meet this demand, Quest has developed You can Lotus Notes to Microsoft analysis, migration and coexistence tools access and Exchange and SharePoint in the to help customers mitigate risk throughcloud and on-premises, in part out the transition. Through our partyour environment, with an affordable offering of nership with Microsoft and our mutual manage your migraQuest products and support. tion project and certified partners, customers can purrecover and Quest just released a new verchase these solutions and execute a prediscover sion of Quest Notes Migrator for dictable and affordable migration with a Exchange, with support for Exchange trusted migration expert.” For a limited time, 2010. Notes Migrator simplifies the migration Quest is providing free solutions to help manage your process, increasing predictability, mitigating the risks data while you migrate. You can safeguard your data, and reducing the costs associated with Notes migra- secure your environment, even while you migrate to tions. Notes Migrator for Exchange is part of Quest’s a new platform. You can assess and analyse your ensuite of Notes transition solutions. Quest provides a vironment, manage Your Migration Project, and recomplete migration solution to Exchange, cover and discover. SharePoint, Office Communications Server and the For more information or to get started with your migration Business Productivity Online Suite (BPOS), along solution, visit www.quest.com/BMME2010

analyse

COMPANY INDEX Q1 2010 Companies in this issue are indexed to the ﬁrst page of the article in which each is mentioned. Adeptic 45 Airbus 89 Al Tamimi & Company 28 Apple 142 Armani 23 Atlas Copco 113 Birdair 77 Bluecoa 139 BlueSteps 25 BMC Software 84,85,125 Cartasite 8,110 Cisco 52 COOP Systems 64, 65 Cosine 78,79 Dell 80 Denon 142 Diligence 92,94 Double Take Software 62 Dubai Healthcare City 46 Dubai International Academic City 134 Dubai Metro 34 Dubai Racing Club 40 Duroob 72,73 Edutech 128,129 Ernst and Young 144 e-serve 15,25 Ethiopian Airlines 17 Frost & Sullivan 74 Fuji 142 Gavroshe USA 90,91 Global Investment House 28

Global Knowledge 128,131 Gulf Research Centre 28 GulfTalent 22 Hewlett-Packard 144 Hill International 17 Hotel Angleteere 141 Hotel Astoria Huawel Symantic Technologies 82,83 Hyder Consulting 117 IBM 66 IDS Scheer 144,IBC Indigo Living 24,123 Interactive Intelligence 88, 24 iStrategy 93 ITS 2,10,98,99 Juniper Networks 43 KAPSARC 22 Kronos 136 Landrover 12 LG 142 Manchester Business School 134 Mechta Molokhovets 141 Meet The Boss 111 Mercedes 38 Nakheel 34 New Vision Systems Solutions 24, 49, 104 Nokia 22 Proctor & Gamble 34 Qatar Education City 28 Qatar Financial Centre 28 Qatar Science and Technology Park 28

Qatar Tribune 18 Quest Software 27,75 Saatchi & Saatchi 34 Sabre 88 Sales Technics 4,104,105 Samsung 6 Saudi Aramco 106 Shell 28 Storage Networking Industry Association (SNIA) 80 Swift Interiors IFC,120,121 Taelon 141 Tatweer 46 UKS 128,133,OBC UNESCO 141 UNHCR 17 University of Exeter 134 University of Phoenix 134 University of Wollongong 134 Wataniya Airways 86

BULLET PROOF Unemployment is a bigger fear for Iraqis than security issues, according to a survey by YouGov Siraj survey, which interviewed 1561 Iraqi residents. It found that while 36 percent of Iraqis believe economic issues to be the biggest threat they faced, only 16 percent cited security fears. These surprising results bode well for the future of the country, according to YouGov’s Managing Director, Stefan Kazubowski. He said: “Today’s Iraqi’s are looking to the future, gradually their concerns are less about violence and more about ‘how am I going to provide for myself and my family’. There are a number of indicators coming out of Iraq, showing improvements to security. As security conditions improve, the economy takes centre stage. People want jobs, decent services and the improvements to quality of life that these things provide.” The survey also found that there is high demand for reliable internet services in Iraq, with 22 percent of residents saying they use the internet and 79 percent wishing for more reliable and frequent access. “There is significant demand for better internet services in Iraq. Just as mobile phones have been adopted incredibly quickly we expect demand for internet access to grow quickly.”

QATAR_feb10 26/02/2010 17:39 Page 28

COVER STORY

The

Gulfâ&#x20AC;&#x2122;s shining

light

28 www.busmanagementme.com

QATAR_feb10 26/02/2010 17:39 Page 29

It may only an 11,000 square-kilometre peninsula jutting into the Persian Gulf, but cash-rich Qatar is forecast for recession defying growth of 18.5 percent in 2010 – making it one of the world’s fastest growing economies, outstripping even the likes of China and India. But is this boom sustainable and can the government really diversify the country’s economy?

nce a land with an economy based on pearl hunting and fishing, Qatar is capitalising on its gargantuan gas reserves to create a ‘knowledge economy’ as it ploughs billions of dollars into infrastructure projects, healthcare, education and real estate. Qatar’s per capita income is now more than US$70,000 a head, elevating it to one of the wealthiest nations in the world, while the economy grew 11 percent last year – an impressive figure considering the economic maelstrom the world endured. The IMF is predicting the economy to balloon 18.5 percent this year while inflation is expected to be one percent. It seems that although this Arab nation has found itself in the shadow of its near neighbour Dubai and the emirate’s rampant development, Qatar’s transformation has been carefully measured. Much of the recent and predicted growth is fuelled by Qatar’s vast energy reserves, primarily natural gas. It’s oil reserves are 15 billion barrels – a modest figure by Middle East standards – so since becoming the Emir of Qatar in 1995, Sheikh Hamad bin Khalifa Al Thani has invested mammoth sums into exploiting the enormous natural gas fields. Today, the oil and gas industry accounts for around half of the state’s GDP and almost three-quarters of government revenue. But the Qatari government isn’t just sitting idly on an enormous cash mountain – the hydrocarbon revenues are instead being pumped into diversifying revenue streams. This ideology can be seen by Qatar Education City, Sidra Hospital, Hamad Medical Center, Qatar Science and Technology Park and Qatar Financial Center. “The hydrocarbon related revenues are being put to prudent use, in my opinion,” suggests Ahmad Anani, a partner and head of law firm Al Tamimi & Company’s Qatari office. Anani says be believes the gulf state is doing an “excellent job” diversifying its economy: “The country has a highly publicised vision focused at improving human capital, providing regional outstanding healthcare services, developing the education sector, promoting research and development and making the country a regional financial hub and an international financial centre on the longer term.” In order to attract foreign investment, Qatar recently passed a law that allows foreign investors to have up to 100 percent ownership in businesses such as consultancy services, IT, services related to sports, culture and entertainment as well as distribution services. Faisal Hasan, head of research at Global Investment House in Kuwait, suggests the policies rolled out by the government will improve the country’s economic competitiveness. “All round economic developments are underway in Qatar right from core projects in the hydrocarbon sector to infrastructure, real estate and financial sectors.” He adds: “Diversification of the economic base is highly important to reduce its reliance on hydrocarbon assets and the

government is expected to maintain high levels of capital spending on education, health and transport while the population growth is projected to remain strong over the coming years. This in turn will support domestic demand.” Qatar has fairly liberal economic and financial policies that aim to achieve sustainable economic development by diversifying income resources, increasing public sector contribution and encouraging foreign investment. The government is also building up its foreign exchange reserves, improving domestic liquidity and meeting external debt repayments. The government is also expected to continue to inject substantial capital into education health and transport, which will meet the strong population growth projected for the next decade. Infrastructure is a major benefactor of the hydrocarbon revenues, with the government budgeting US$20 billion alone for road projects over the next five years, as well as constructing a 22km bridge between Qatar and Bahrain that is projected to cost US$3 billion. The new US$1 billion airport, due for completion in 2011 with an annual capacity of 25 million passengers, will even include a US$1 billion subsea tunnel linking the airport with the financial centre. With other schemes in development [see page 30] Qatar is joining the likes of Dubai and Abu Dhabi in terms of mega-projects.

“Diversification of the economic base is highly important to reduce its reliance on hydrocarbon assets” Turn up the gas Of course, most of these projects wouldn’t be possible without the backbone of Qatar’s economy – natural gas. This diminutive gulf nation boasts reserves of almost 26 trillion cubic metres, around 14 percent of the world total. It houses the world’s third largest gas reserves after Russia and Iran and is the world’s largest producer of liquefied natural gas (LNG) while its four new LNG plants will double production capacity. In 2008 alone, LNG capacity shot up by 40 percent. This rise, coupled with rising oil prices on the back of a weakening US dollar, will boost revenues and generate “phenomenal growth”, according to analysts. “Qatar’s biggest strength is continuous expansion in its liquefied natural gas (LNG) capacity,” Hasan comments. Qatar currently produces 54 million tonnes of LNG but this is set to mushroom to 77.1million tonnes per annum by 2011. “These figures suggest notable progress, as output capacity amounted to 30.9 million tonnes a year only two years ago,” says Hasan. “The

www.busmanagementme.com 29

QATAR_feb10 26/02/2010 17:39 Page 30

How Qatar is transforming its skyline and diversifying the economy MUSHEIREB Formerly named Heart of Doha, this 35hectare district is the developer Dohaland’s ﬂagship project. It will be home to 27,000 people and contain over 200 buildings and 1000 residential units. The development will be built close to the Souq Watif and Doha’s West Bay business district. Part of the project will feature original buildings, which will form a Heritage Quarter. Construction is currently underway on the ﬁrst phase of the project, which is due to be completed in 2012.

Cost: US$5.9 billion Completion: 2016

THE ENERGY CITY QATAR Energy City Qatar is currently in design as a residential development covering around 700,000 square metres of land including 5000 residential units, marinas, a mall and golf courses. As the Middle East’s ﬁrst energy business centre Energy City Qatar will cater to the commercial, technical and human resource needs of the oil and gas industry operating in the Gulf region.

Cost: US$2.6 billion Completion: 2013

THE PEARL-QATAR A 985-acre reclaimed island off the coast of Qatar, the Pearl-Qatar is the country’s first international urban development venture, its largest urban development and the first to offer international investors freehold. The four-phased mixed use development comprises of 10 distinct, themed districts to be developed over five years, and include beachfront villas, elegant town homes, luxury apartments, five-star hotels, marinas, schools, restaurants and shops.

Cost: US$5 billion Completion: 2011

30 www.busmanagementme.com

QATAR_feb10 26/02/2010 17:40 Page 31

The 2022 dream Qatar throws its hat into the World Cup ring. In 12 years time the greatest prize in world football could be contested on Qatari soil if the Gulf state is awarded the rights to stage the 2022 Fifa World Cup Finals – the first time the tournament has visited the Arab world. Despite this being a tiny nation with an embryonic footballing heritage, the bidders are confident of welcoming fans from all four corners of the globe with state-of-theart stadia and infrastructure. Bid CEO Hassan Abdulla Al Thawadi told reporters last year that now was the time for the world’s favourite game to come to the Middle East. “It’s time and we are ready to make history,” he remarked. Qatar is up against South Korea and Indonesia in the battle to host the 2022 tournament while the likes of England, Russia, Australia, Spain and Portugal are bidding for both the 2018 and 2022 world cups. FIFA has given Qatar the green light to its bid, but perhaps the fly in the ointment to Qatar winning is the sweltering summer heat. Temperatures tend to top 40°C during the day and rarely dip below 30°C once the sun retreats in the evening, hardly conducive end-to-end action on the pitch. However, Qatar’s bid team are confident they can overcome this problem with indoor, air-conditioned, stadia. Scorching hot desert outside; pleasantly cool conditions inside for both players and fans. Indeed, the impressive indoor Aspire Sports Hall in Doha stands as a real-life blueprint for potential world cup venues. If the extreme temperatures can be controlled then Qatar’s chances look favourable. Unlike some other Arab nations, security is not a concern while the government has the financial muscle to pump an almost infinite supply of funds into staging the event. All eyes are now fixed firmly on December 2010 when the right to stage this prestigious and highly lucrative tournament is announced.

country has significant expansion plans to increase production over the next three years.” Qatar is shelling out US$100 billion on boosting capacity and upgrading infrastructure over the next few years. “Qatar has significant growth prospects left, with de-bottlenecking expected to add 12 million tonnes a year of LNG production capacity and a significant margin left to satisfy future domestic demand growth,” explains Samuel Ciszuk, IHS Global Insight Middle East Energy analyst. One of the main earners for Qatar will eventually be the Pearl gas to liquids (GTL) project based in Ras Laffan. Once constructed, it will be the largest GTL plant in the world and will operate under a production sharing agreement (PSA) between Qatar Petroleum and oil giant Shell. It is set to churn out 140,000 barrels a day of petroleum products. Phase 1 of the Pearl GTL is due to come online later this year. Shell senior executive Gerrit-Jan Smitskamp told Reuters that a 50,000-strong workforce is working on the project and that twice as much concrete has been poured compared to that used to construct the world’s tallest building – Dubai’s Burj Khalifa. Qatar’s abundance of hydrocarbons are in hot demand, especially among emerging Asian economies. The US even received its first ever shipment of Qatar LNG in December. This is a process where the gas is cooled to 160°C, shrinking it by 600 times its original size. LNG, which is about twice as clean to burn as oil, is then shipped around the world in supertankers. In order to meet growing demand investment has been made into its fleet of transportation vessels. “This has enabled Qatar to reach new markets that are otherwise not accessible like China, Japan and Europe,” Anani explains. “This is in ad-

dition to positively reducing the heavy cost of transporting LNG due to economies of scale, which in turn made Qatari LNG more competitive.” Dr Eckart Woertz, Program Manager of Economics at the Gulf Research Centre, says Qatar is “heavily dependent” on energy exports. “Its challenge will be to enhance the value chain of its oil production into petrochemicals and heavy industries and prudent management of its foreign assets.” The downside of this growth in the energy sector – coupled with population growth – is the hefty environmental price. Qataris have the highest carbon footprint on the planet – a surprising statistic considering the bulk of its energy comes from burning natural gas, which has half the emissions of coal. Qatar’s carbon emissions have quadrupled since 1990 as a result of its soaring energy use, fuelled not just by population growth but by the demands of its natural gas reserves and the amount of energy required to liquefy the gas. As a result, electricity demand in the country is rising by around seven percent a year. The government is however addressing these issues and at last year’s Carrob World 2009 summit, it unveiled aggressive strategies to reduce CO2 emissions through partnerships

“The hydrocarbon related revenues are being put to prudent use”

between industries and the government. It also launched a US$70 million 10year project with Shell, Qatar Petroleum, Imperial College in London and the Qatar Science & Technology Park, aimed at reducing the country’s carbon footprint.

Storm clouds The strong growth forecast by the IMF and economists for Qatar bucks the trend of modest growth predicted for fellow GCC countries.

www.busmanagementme.com 31

QATAR_feb10 26/02/2010 17:40 Page 32

Undoubtedly the hardest hit by the global recession has been Dubai, which threw billions of dollars at creating an opulent oasis in the desert. Eventually the real estate bubble burst, people lost their jobs and Dubai was forced to accept a handout from Abu Dhabi. Qatar is a different prospect, says Woertz. “It has a solid revenue stream from its energy exports which Dubai does not have and it has less overambitious white elephant projects, because luckily it was a latecomer to the real estate game.” Since the financial crisis, the Qatari government has taken measures to stabilise the economy. This included a financial institution bail out plan, which included purchasing the investment portfolios of all banks on the Qatar Exchange (DSM). Additionally, the government has made several budget cuts that improved the bottom line performance of the economy. Anani says the government’s policies have averted a nosedive in GDP. “The Qatari economy could have been as vulnerable as all the other economies of the region. However, I believe the key to Qatar’s success is the government’s commitment to the development plan, commitment to reform, the private sector’s commitment to growth and the commitment to expand the country’s hydrocarbon infrastructure. This commitment has helped Qatar focus on overcoming the obstacles in its way.” Aasan believes government intervention has been invaluable. “Timely action by the government has improved liquidity and confidence building measures helped the economy to remain on track. Also, key policy initiatives at the right time have always been Qatar’s main strength and helped it to remain the least affected. Qatar is adopting a proactive approach for further liberalisation of the economy.”

Nevertheless, despite the country’s strong economic foundation and the government’s damage limitation strategies, Qatar has not been entirely immune from the economic woes that have befallen its GCC neighbours. Consumer prices across Qatar plunged by 4.9 percent overall in 2009 as the country suffered its first year of deflation due to a slump in property prices. The slump exceeded expectations with Reuters having predicted deflation of four percent. It ended record inflation in Qatar, which peaked at 15.2 percent in 2008. Qatar’s Central Bank, however, predicts inflation will peak at between two and five percent this year. In the first nine months of 2009 house prices across Qatar fell by 20 percent and are expected to ease by a further 15 percent in the country in 2010 due to completed projects flooding the market with property supplies. Keith Edwards, Head of Asset Management at The First Investor Asset Management investment bank told Arabianbusiness.com: “We expect 2010 to be the bottom of the market in terms of prices, but we don’t necessarily see any upturn in 2011 as being aggressive because of the supply coming in.” But while property may be set for a slump this will not endanger the country’s burgeoning construction sector, which is set to grow exponentially this year with a massive 40 percent of the country’s state budget already earmarked for infrastructure projects, as the country works to catch up with its more developed neighbours. With natural gas in demand worldwide and billions of dollars being poured into the creation of a capital city to rival the likes of New York or London, it seems Qatar’s progress is unstoppable. n

“Qatar has less overambitious white elephant projects [than Dubai]”

Qatar’s gas wealth is clearly visible in the capital, Doha

32 www.busmanagementme.com

QATAR_feb10 26/02/2010 17:46 Page 33

PRIME DESTINATION With 41 new hotels set to open in Qatar this year alone, there are high hopes that the country’s rapidly developing infrastructure will make it a global tourism destination on a par with Dubai. Qatar’s government is believed to have set aside US$17 billion to develop tourism facilities and it aims to have a 400 percent rise in hotel capacity by 2012. Qatar Tourism Authority (QTA) Chairman Ahmed Abdullah Al Nuaimi explains how the organisation plans to attract the tourists. Can you describe the main appeal of Qatar as a tourism destination? Ahmed Abdullah Al Nuaimi. Qatar is not looking to attract masstourism, but rather a specific niche within the market. We have built our infrastructure to support a very specific demographic, namely business focused tourism and high-end leisure tourism. More than 90 percent of visitors are coming to Qatar for business purposes. As Qatar has a stable economy and we offer businessoriented tourism, we’ve seen an increase of visitors enquiring about new business opportunities – especially during this challenging economic environment. What differentiates it from other GCC tourism destinations such as Dubai for instance? AAN. We do not compete with our neighbours. Tourism represents for the GCC a field of new and endless opportunities. Having said that, each GCC country offers something different to visitors. What makes Qatar unique is that we represent the bridge between traditional Arab heritage and global innovation. Qatar is a world-class destination that attracts premiere business, leisure, medical, sport and education tourism, while preserving and maintaining our authentic heritage and rich past.

Has the global economic downturn significantly affected the growth of the country’s hotel sector? AAN. The ongoing investment in infrastructure, energy and sports has led to an increase in personnel coming to Qatar, as well as corporate and government officials Ahmed Abdullah Al Nuaimi coming from various countries. Additionally, Qatar’s tourism industry has seen a boost as the result of the rapid expansion of Qatar Airways. Doha has How much potential do you see for the country’s tourism sector become a preferred transit point for passengers from Europe and and how big a part will tourism play in the growth of the country’s Asia. Qatar is expecting a very promising year in 2010 as we economy? continue to invest in the infrastructure of the country and the AAN. Qatar is a country rich in natural resources. The strength and tourism sector. stability of our economy is derived in large part from significant The global economic recession has not affected tourismrelated activities in Qatar, and hotels are still doing good business. reserves in oil and gas. Though Qatar currently has the world’s With the opening of new hotels, the occupancy has been spread. third largest natural gas reserves, economic diversity is a top Hotels have reported an increase in revenue this year, and we priority of the government to ensure future stability for our expect the situation to improve further in the coming year. country. Tourism is one of the important pillars in this economic diversification strategy. Qatar Tourism Authority launched a new strategy in November 2008, which aims to grow the tourism industry in Qatar by 20 percent in the next five years. The strategy includes targeting five percent of the estimated 50 million passengers who will come through the New Doha International Airport when it opens in 2012, to stay an additional 48 hours. In five years time, tourism will be a strong and active contributor to the country’s GDP.

What are the biggest challenges you face when it comes to making Qatar’s tourism sector a success? AAN. It has been a little over a year since the QTA launched our new strategy. We are surrounded by countries who are ahead of us in the game of branding their country. Relative to our neighbours, we are still a young brand and it will take time for us to establish our brand and to reach our goals.

www.busmanagementme.com 33

ADVERTISING

e h T rcial e m com k a e br

34 www.busmanagementme.com

Elias Ashkar.indd 34

26/2/10 16:35:21

Shortly before leaving his post, Saatchi & Saatchi’s MENA CEO elias ashkar, sat down with Diana Milne to discuss the good, the bad and the ugly of the Middle East advertising industry.

s the biggest player in the Middle East advertising industry Saatchi & Saatchi was on the frontline when revenues plunged across multiple industry sectors last year. And with property companies the biggest spenders on advertising in the UAE, the situation represented a sharp U-turn for the fi rm. Saatchi & Saatchi’s outgoing MENA CEO Elias Ashkar describes the situation: “It’s really difficult to measure it with any degree of accuracy but overall it is felt that advertising expenditures are down by about 35 percent in general across the region. There are some sectors that are more severely affected than others; in fi rst place for sure is property. The property market is still yet to pick up.” He goes on to say that the beleaguered auto industry too, cut down its advertising expenditure dramatically.

Signs of the times The clearest evidence of this slowdown can be seen on a drive down any of the UAE’s main highways which, in the days of the emirate’s economic boom were flanked on either side by advertising billboards

www.busmanagementme.com 35

Elias Ashkar.indd 35

26/2/10 16:35:37

each competing to shout the loudest about the latest property developments. But when the downturn struck, with outdoor advertising the worst affected medium, these billboards offered stark evidence of the state of the market, says Ashkar. “Outdoor advertising was the most dramatically affected because it had been dominated by property. I would be driving between here and Abu Dhabi a couple of months back and it was a sad sight with all these empty billboards. I wish they could have been used for free advertising to give them a bit of life instead of leaving all these empty ugly hoardings.” Ashkar says that as well as reducing their advertising budgets companies are changing their marketing strategies and the way in which they target customers. For instance many are focussing on below the line advertising strategies – targeting specific customer groups: “Budgets have gone more broadly into tactical promotional advertising versus above the line.” There has been a shift too in the industry sectors at the forefront of advertising activity. Those most active today, says Ashkar, are the consumer goods and telecoms industries. In fact some have increased their advertising spend to take advantage of lucrative gaps in the market. One such company is Saatchi & Saatchi’s biggest Middle East client, the global FMCG giant, Procter & Gamble. “As a matter of fact some of the brands are actually spending much more than last year. With P&G, it’s all about market share. As a smart advertiser they say there is the opportunity to buy market share even cheaper now because you can negotiate rates and also their return on investment is better because their message is more impactful now.” The economic downturn has also created a new breed of super advertisers in the region – companies whose products have suddenly experienced a surge in popularity due to customers’ spending cut backs. Most notably, says Ashkar, fast food and confectionary companies are experiencing a surge in advertising activity: “Probably one of the businesses that has grown the most is chocolate and confectionary. And as you can imagine people go out less so there’s a lot of home deliveries, pizzas etc.”

Real estate Companies were the UAE’s biggest advertisers, but they have been hit hard by the economic downturn His interest however, is less about the quantity of the advertising the agency produces than about the quality of the work. In the past advertising produced in the Middle East has come under fi re for falling short of standards in more mature markets. Ashkar says that standards have improved greatly but concedes much work has to be done to bring it up to London or New York standards: “Overall I think the work in the region has improved over the last few years. Th is is evident in the work that is being awarded at international festivals such as Cannes.

“I don’t see why, in this region, we can’t produce quality creative work. That’s what Saatchi & Saatchi are trying to do” However, this does not mean that we are there yet because actually the top quality work still represents a minority of the work we see in the region. The vast majority of it is far below what I believe is acceptable by international standards. There are a lot of brands that do a lot of shouting. There is a lot of overselling and very little honesty. Too much information, no insights and not enough entertainment with lots of research.” He believes Saatchi & Saatchi will lead the way in raising

36 www.busmanagementme.com

Elias Ashkar.indd 36

26/2/10 16:35:43

such advertising standards through its Lovemarks philosophy and SISOMO (Sight, Sound and Motion) three step process of engaging with customers: “I don’t see why, in this region, we can’t produce quality creative work. That’s what Saatchi & Saatchi are trying to do.” One campaign that Ashkar is particularly proud of is the one Saatchi & Saatchi created for the Dubai Metro. The year-long campaign was transmitted via television, radio and print media with the key theme for the campaign being the ‘My Metro’ brand. Ashkar says the campaign will set new standards for creativity in the region, in particular when it comes to public sector marketing campaigns: “Probably Saatchi & Saatchi’s star campaign is Dubai Metro. The agency has turned it into a Lovemark in a very short period of time. There was coverage of the campaign every day in the newspapers and everybody loved it even though there were some hiccups and glitches in the beginning. The fact that the whole campaign was built around this ‘My City, My Metro’ theme created a real sense of belonging, rather than it just being about transportation. Dubai Metro is Saatchi & Saatchi’s most recent Lovemark and it’s making a lot of noise and buzz in the market.”

Great minds In order to create such innovative work, creative staff are needed. The agency recently announced the appointment of awarding winning creative Marc Lineveldt from Fortune Promoseven as its new Regional Creative Director and Ben Roberts from Saatchi & Saatchi’s London based agency as its Regional Human Interest Director. He says the appointments have already had a positive impact: “I feel refreshed and rejuvenated by these appointments. Already there’s a different buzz and energy in the agency.” Ashkar concedes however, that recruiting talented creative team members from more established advertising markets is one of Elias Ashkar the biggest challenges he faces: “There are many challenges in this region, but as far as I’m concerned the biggest challenge is talent. Finding the right talent for the market is a very tough task. To fi nd these people in the Middle East is not easy because the industry is still developing. Whereas if you are in

A roadside billboard advertising Emaar’s downtown Dubai development

London or New York you actually have a tough time choosing because they are all so qualified.” He goes on to say that this challenge is greatest in Saudi Arabia, which doesn’t hold the same attractions as a lifestyle destination such as neighbouring Dubai when it comes to attracting staff to it’s Riyadh based office. To help address the talent spotting challenge, Saatchi & Saatchi, in partnership with its client Procter & Gamble, is working with the American University in Dubai to set up an annual competition to fi nd the students with the most creative potential. ExplainSaatchi & Saatchi has grown ing the concept Ashkar says: from a small start-up company “The programme is aimed at set up in London in 1970, to identifying talent in universities a global creative advertising at an early stage, then encouragcompany with 150 offices in 86 ing these people and developing countries worldwide. It is part them. For each competition we of Publicis Groupe, the world’s will develop a case study with fourth largest communications P&G. Th is semester for instance, company. The company it’s based on Head & Shoulders currently has five offices shampoo. The students then in the Middle East/North work on a marketing campaign.” Africa region, with further The competition represents the development planned for the opportunity of a lifetime for asLevant region in 2010. piring UAE-based creatives. And as Middle East based companies start their slow recovery from recession and attempt to fi ll those empty billboards again, creativity and innovation is needed now more than ever before.

www.busmanagementme.com 37

Elias Ashkar.indd 37

26/2/10 16:35:51

MERCEDES DPS AD_4August 26/02/2010 08:59 Page 1

MERCEDES DPS AD_4August 26/02/2010 08:59 Page 2

SPORT

Winning streak 40 www.busmanagementme.com

Dubai Racing Club.indd 40

26/2/10 15:08:36

With Dubai’s forced restructuring of its debt, now wouldn’t seem the ideal opportunity to unveil the government-owned, mega-project Meydan Racecourse. Yet the numbers, and dirhams, involved are quite staggering and Dubai Racing Club CEO Frank Gabriel Jr tells Business Management’s Julian Rogers that this development signals the future for racing in the region.

he starting stalls flash open and the fi llies competing in the curtain raiser to the evening’s racing instinctively react, bursting out onto the smooth virgin surface. A roar goes up from a fervent crowd in which racing’s nobility and wealthy Arabs rub shoulders with ordinary racegoers. All are here to witness another piece of Dubai history and a new dawn for racing in the region: the first ever race meeting at the new behemoth racetrack that is Meydan. Right up until its opening for the Dubai International Racing Carnival on January 28th, labourers were swarming all over the shiny new development as they put the fi nishing touches to what is, without doubt, the largest and most spectacular horse racing venue in the world. And it ought to be, especially seeing as Meydan Racecourse is estimated to have cost an eye-watering Dh10 billion (US$2.7 billion) – around twice the amount shelled out on Dubai’s new Burj Khalifa, the world’s tallest building. Meydan’s gleaming grandstand – the centrepiece of the development – is a quite staggering 1.6 kilometres in length (the world’s longest) and houses 72 luxury suites and restaurants. The whole venue can hold upwards of 60,000 spectators while the rooftop Bubble Lounge can accommodate 4500 people alone. With state-of-the-art surroundings, including the world’s longest LED television screen at 110 metres, this place oozes opulence on a grand scale. And once the sun disappears, Meydan, which means ‘meeting place’ in Arabic, ratchets up its appeal with the white beams of light from the floodlights ricocheting off the gleaming glass-encrusted grandstand. Racing under artificial light at night, and in the desert, adds glitz and glamour to a setting and atmosphere unique to any sport anywhere in the world. The common consensus of opinion from spectators

is that Meydan has raised the bar for racetracks with one trainer’s assistant describing the development as “mind-boggling” in terms of scale. Top Italian jockey and local favourite Frankie Dettori was unequivocal when he labelled Meydan the “best track in the world”. Plaudits like this are music to the ears of Dubai Racing Club CEO Frank Gabriel, who played a vital role in the concerted effort to fi nish the project in time for the Carnival. “We all worked many hours in getting this facility open,” the relieved US-born racing chief explains alongside the track’s azure-coloured rooftop swimming pool the morning after the night before. The original two construction firms were sacked after the development fell behind schedule, prompting fears Meydan wouldn’t be fi nished in time. Fortunately, the substitute builders delivered on their promises. “With any project like this there are a lot of challenges and probably the biggest one was time,” Gabiel ponders. “However, we were able to manage the time to the best of our ability and open on January 28. With Meydan we were asked to look at the future of racing and how we would develop the sport in the UAE in five years. We were also always conscious of the fact that the first priority was to offer a safe facility for the horses and jockeys and a good facility for the media, fans and guests,” he explains. Around 30 horses from Europe and some of the world’s elite jockeys, including Dettori, Kieren Fallon and Christophe Soumillon, made the journey over for the first meeting. And whilst Gabriel says the soft opening produced a “good crowd and good atmosphere to witness the new structure” this was merely the hors d’oeuvre to the main course: the Dubai World Cup in March. Th is meeting includes the world’s richest ever race with a wallet-busting US$10 million prize for the winner. The mountain of cash on offer is certainly a juicy enough carrot to entice owners to jet their horses to

www.busmanagementme.com 41

Dubai Racing Club.indd 41

26/2/10 15:08:42

Dubai from all over the world “The prize money doesn’t hurt,” Gabriel laughs. Indeed, Meydan’s magnetism and the allure of the World Cup has sparked a record number of owners looking to enter their runners. “This eight-race event is a focal point in racing – it’s marked on the calendar and fits very well around global racing,” he asserts. “People around the world point to this night of racing and we have been working very hard to bring over the best horses from around the world and we will continue to maintain our status and push further.”

Frank Gabriel

Horses for courses You could be forgiven for thinking that a multibillion-dollar racecourse development would be packing meetings into the racing calendar thick and fast. However, Meydan will only stage 21 days racing a year between November and March. This is partly why the whole site, part of Meydan City, will include an iMAX cinema, a five-star hotel (290 rooms with balconies overlooking the track), a racing museum, golf course and marina for 80 yachts. The other elements are there to keep the place open for business 365 days a year – even when the horses are at home, Gabriel says. “With Meydan we had to look at the vision of how to operate a facility that only has racing for 21 days a year, which was why we looked at making sure other parts of the facility were a revenue stream outside of the racing dates.” He adds that the idea of staging more race meetings is trumpeted, although this depends on avoiding the hottest months of the year. While

Sheikh Mohammed bin Rashid Al Maktoum, whose love affair with the sport is only matched by his passion for transforming Dubai into the world’s premier business and tourism hub. Meydan, which boasts a turf and dirt track,

“The Dubai World Cup in March will include the world’s richest ever race with a wallet-busting US$10 million prize for the winner” the limited days of sporting action are sure to draw the crowds, the goal will be to see the hotel and other facilities busy, particularly for corporate events, exhibitions and conferences.

Sprint ﬁnish Not known for their tardiness when it comes to constructing high profi le landmarks, Dubai has taken Meydan from the drawing board to reality in just 34 months. The concept was the brainchild of the Ruler of Dubai,

is built on top of the old Nad Al Sheba racetrack – a sporting arena that had served up some of the best racing in the world but one that had reached its ceiling for attendances. Nad Al Sheba was the stage for the World Cup since 1996. “We were pretty much handcuffed in increasing attendance for the Dubai World Cup because of the infrastructure and the grandstand [at Nad Al Sheba].” Gabriel recalls. “It had served us very well for 14 years and there are some great memories, but we wanted

to take that existing 40,000 to 50,000 capacity and increase it by an additional 15,000, which is why we decided to build Meydan.” According to Gabriel, the experience gained from hosting the World Cup at Nad Al Sheba was used to mould Meydan’s development. For instance, the World Cup has been run on the dirt since its inception but this time it has been superseded by the synthetic Tapeta Footings surface, which the manufacturers claim is the fi nest surface for equine performance. Th is synthetic track will also attract horses suited to turf too. With topgrade racing on offer, Meydan is expected to entice 300,000 race-goers during the Carnival and including the World Cup. On the eve of the racecourse’s opening, Meydan Chairman Saeed H Al-Tayer told reporters: "At Meydan, we have facilities that we have never had before and will be bringing race-goers as close to the action as possible. Meydan was benchmarked against the world’s top racecourses to ensure the best racing experience.”

42 www.busmanagementme.com

Dubai Racing Club.indd 42

26/2/10 15:08:45

Juniper Networks Ad.indd 1

26/2/10 08:57:54

Meydan facts • The grandstand is 5166 feet or 1.6 kilometres • The Meydan Hotel has 290 rooms and suites • Falcon car park has 8622 parking bays • The horse tunnel is 2 kilometres long • The rooftop Bubble Lounge is 787 feet long and has capacity for 4500 people • The racecourse has a turf track and an all-weather track

The facilities outside of the racing will be key to Meydan’s success, with Dubai being the GCC nation hit hardest by the global economic storm during the past 12 months. Maybe if Dubai had foreseen the fi nancial strife on the horizon Meydan would have been shelved. However, if Gabriel is worried about Dubai’s woes affecting the project, he isn’t showing it. “The economic situation has affected everyone in the world, however we were able to main-

tain a good relationship with our partners and sponsors and we hope 2010 will be a successful racing season.”

One vision Sheikh Mohammed, who has been the driving force behind Meydan, is a high-profi le figure in racing breeding, being a leading partner in his family’s Godolphin Stables who has been successful at the highest level all over the

world. And it’s this desire to be the best that has elevated the World Cup to where it is today with the one of the biggest purses in sport. “I think you have to look at first the vision of the Shelkh Mohammed being able to get the horse Cigar to come over from the USA in 1996,” Gabriel says. “They got him here and he won. Th is set the stage for the World Cup and as an event it has grown leaps and bounds.” Th is fascination with thoroughbred racing extends to the UAE population. “You have to look at how the horse has always been in the culture of the UAE and across this region to see how important horse racing is. And you have to respect the Maktoum family and the amount of time they have put into the sport, not just in competing but also the way they have been challenging and competing in the best races around the world, and they have put a lot of effort into their breeding programme in order to maintain that status.”

44 www.busmanagementme.com

Dubai Racing Club.indd Sec1:44

1/3/10 09:20:45

Adeptic Ad.indd 1

26/2/10 08:47:32

HEALTHCARE

46 www.busmanagementme.com

DrAyeesha.indd 46

26/2/10 16:19:09

HEALTHY The healthcare sector in the UAE is forecast to swell at an annual rate of more than 13 percent by 2012, according to research. Meeting this growing demand will be the role of Dubai Healthcare City (DHCC) as Business Management’s Julian Rogers discovered when he books an appoitnment with Dr Ayesha Mohammed Abdullah, SVP of the DHCC.

ying in the heart of the city, Dubai Healthcare City (DHCC) is the world’s first healthcare free zone with 92 clinical outlets. Launched in 2002, the concept of the city was to curtail the flow of UAE residents travelling abroad for operations and treatment. The long-term vision is for it to become an internationally recognised location for quality healthcare, as well as integrated centre of excellence for clinical and wellness services, medical education and research. Dr Ayesha Mohammed Abdullah, who has 18 years’ healthcare and engineering experience, says the DHCC is forging strong partnerships with international pharma companies and universities to turn Dubai into a healthcare hub. How does DHCC ﬁt in with Dubai’s strategic plan for 2015? Ayesha Abdullah. Dubai Healthcare City is the brainchild of His Highness Sheikh Mohammed Bin Rashid Al Maktoum and the goal was to contribute to Dubai’s strategic plan, which establishes Dubai as a global city. And one of the key infrastructures of any global city requires that it includes education on healthcare. The DHCC also came about primarily because there was a major gap in the region when it came to tertiary healthcare and higher education. In healthcare we are providing a platform for international and regional operators to come and set up shop in DHCC where we have a very stringent regulatory function. And we are building a university teaching hospital, as well as several hospitals that are currently under construction and two that are already operational. We have nearly 100 clinics and the goal is that DHCC will contribute to the GDP of Dubai, and we build a healthcare destination.

www.busmanagementme.com 47

DrAyeesha.indd 47

26/2/10 16:19:14

From left to right: His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Saeed Al Muntaﬁq, Former Executive Chairman of Tatweer, Dr Ayesha Abdullah, Senior Vice President of Dubai Healthcare City and Dr Muhadditha Al Hashimi, CEO of Tatweer

What are the key beneﬁts of operating within the DHCC? AA. We like to position DHCC as the quality destination for healthcare. So what’s currently happening is a lot of people from the region are going abroad to get medical treatment, as well as going abroad to get higher education in medicine. For example, if you’re a medical doctor, you go to one of the medical schools in the region but if you wanted to specialise you would have to go abroad. But what we’re doing is providing the higher education in medicine in DHCC, either through our strategic partner, Harvard Medical School, or through some of our other medical education partners. We also have dental education through a collaboration that we have with Boston University. We also have some of our other providers, such as the Royal College of Surgeons in Ireland, which are offering medical education here. We have a diverse group of providers.

“We looked at other countries and very early on we realised that if we were to make DHCC a magnet for healthcare, and really compete in the global arena, it was very important to work with partners who have lot of experience” The other key benefit is that this is a free zone, so there is 100 percent foreign ownership. So if you were an international provider and you wanted to set up shop in DHCC, you wouldn’t need a local partner. We have a onestop shop for clearing visas and all government-related matters. The other

benefit, of course, is as a free zone you can get customs exemptions, if you were to import, say for example, equipment. And more importantly, we make sure that every provider that comes into DHCC meets very stringent international requirements – the same that you would if you were to go to the United States or any European country. There same type of rules would apply. And, of course, having all these policy operators coming together, operating in a cluster, also creates synergy. They can work together, there are networking opportunities and cross-fertilisation of ideas. So you’re working in an environment of like-minded people. What role does the Center for Healthcare Planning and Quality play in regulating the city? AA. When we first conceptualised the idea about a healthcare city it was very important that we would be a quality provider. In order to lay the groundwork for this, we set up the Center for Healthcare Planning and Quality to have an independent regulatory function that serves purely the DHCC. So if we were to bring physicians to DHCC, what would be the licensing requirements? What kind of board certifications would they need? We go back to where they went to school to make sure that they actually graduated or they don’t have fraudulent degrees, to see the quality of their training, to see whether they have any malpractice lawsuits, or whether they’ve had any ethical or professional gaps. We also look at how many patients they’ve seen, their success rate and how many operations they have carried out. And we make sure that there is ongoing quality overview once the clinic is awarded a licence. If you look at patient satisfaction you will see that we’ve had a very high satisfaction rate of 89 percent for several years. This is a good indication that not only is the patient getting quality healthcare, but also that patient experience is important here, everything from the waiting room to the ambulance is about the feel-good factor that the patient will experience.

48 www.busmanagementme.com

DrAyeesha.indd 48

26/2/10 16:57:19

NVS AD_4August 25/02/2010 16:50 Page 1

We do clinical planning to make sure that the entire value chain of healthcare is available in DHCC. So if you needed plastic surgery, dental care, tertiary surgery, cardiac care, fertility treatment or whatever it may be, it is all available. We have a thorough network so we are using very sophisticated IT networks and IT systems that will monitor the quality of care offered at DHCC. So for every physician we could actually go and audit his electronic health record and see whether is he working outside his practice. What’s the success rate? Are there medication errors? That way, we work very closely with our providers so that we make sure that they actually increase the bar in terms of quality. The Center for Healthcare Planning and Quality then benefits the consumers – the patients – in that they know that the units core function is patient safety and prioritising their safety and the quality of care that they get. DHCC has partnerships with the likes of Harvard University, as well the pharma giants Novartis Astra and Zeneca. How does this aid DHCC in its efforts to be a world-renowned medical facility, and also make Dubai the healthcare capital of the Middle East and, perhaps, even the world? AA. When we started working on the concept of DHCC we looked at other countries and very early on we realised that if we were to make

DHCC a magnet for healthcare, and really compete in the global arena, it was very important to work with partners who have a lot of experience. Hence, the collaboration with Harvard Medical School. We also understood that in order for us to build a sustainable ecosystem for healthcare, it’s not enough to just provide quality healthcare, but it’s also important to have education, where you train the future physicians and nurses who are going to work in the system. They need to be of a very high calibre so it is important to build that human capital. Also, this education has to be gained in a research environment, so you have to build a research platform. Initially, of course, we cannot create the work labs that you would fi nd in America. But I think you can bottle what you call ‘translational research’, which is research that benefits the patients directly. Th rough Harvard University and Harvard Medical School we set up a research foundation, which is called the Dubai Harvard Foundation for Medical Research (DHFMR), which is a US$100 million endowment, whereby we train the future primary researchers from the region. Th is foundation is not only for Dubai, but it’s actually for the entire Arab region. Our researchers are awarded fellowships and they go and work in labs at Harvard University and we fund them for the duration of their postgraduate period. But one of the criteria is that the research that

50 www.busmanagementme.com

DrAyeesha.indd Sec1:50

26/2/10 16:19:20

they’re working on has to be relevant to the region. So when they come back, they can actually set up labs, and we assist them with this. The goal is that these kinds of researchers come to DHCC or anywhere in the region, and then we work very closely with them. And, in parallel, we’re setting up a research programme where we’re doing epidemiology studies. Eventually, when most of the hospital is open in DHCC, then we’re going to get to a stage where we could start clinical trials for some new drugs, which is where the pharmaceutical companies come in. We will be in a position then to work with five or six pharmaceutical companies that we have already attracted on clinical trials. So we believe the future of healthcare is going be customised care, which is where the clinical trials and specialised medicine will come in. We are in a position then to benefit from the presence of these pharmaceutical companies.

strategic approach to how we meet these healthcare demands. It’s also about creating public awareness and public health campaigns where we push a lot of these responsibilities back to the patients and educate them about self-help, educate them about the importance of preventive medicine, rather than being reactive and looking after them after they are very sick, which becomes a very costly affair. So what we’re trying to do, as part of social responsibility, is to create awareness. If you have a history of something like diabetes or blood pressure or whatever it may be, because some people are genetically inclined this way, you will be screened way before the disease manifests. We’d help to change your lifestyle, such as nutrition and so on. So we have an entire cluster engaged in working on prevention and this is where the complimentary and alternative medicine are both going to be. I think Dubai and the UAE are very well positioned, not only to meet the demands of its local population, but also to attract people to get medical services in DHCC.

89% DHCC’s patient satisfaction rate

The alternative medicine market has mushroomed in recent years. Do you see this developing in the city? AA. Defi nitely. At DHCC there is an opportunity not only to work on traditional medicine or Western medicine because there’s a big movement, specifically in the West, to go for complimentary and alternative medicines, which is what we call integrated medicine. Th is is another area that we’re pioneering in DHCC. Th rough the Center for Healthcare Planning and Quality we have developed very comprehensive standards and regulations for regulating what is offered in complimentary and alternative medicine. Although there are hundreds of complimentary and alternative medicine disciplines, we’re only concentrating on those that have a track record of safety and efficacy. We also give our patients a variety of choices. If you need a painkiller, you don’t necessarily have to take the traditional, perhaps you could take herbal remedies that will be equally as effective minus the side effects. Just like how we’ve worked with Harvard on the research and education, we set up a high profi le council, where we have the likes of Dr Andrew Weil, a guru in complimentary medicine and integrated medicine. We also have Teresa Hale from the London Hale Clinic and others so these are experts who are there to advise for us in the area of complimentary and alternative medicine. Th is is an industry that will grow because it’s driven by patient need.

How important is medical tourism is to DHCC? AA. Medical tourism is an important component for DHCC. But any healthcare institution has to cater first to its local population because

healthcare is very local. It’s only when people can’t find the services close to home, or it’s very expensive, that people go abroad. Most of these will likely be cosmetic or dental surgeries, where people can actually go as tourists and then go home. There are people who will also go for a bypass surgery or a hip replacement and this requires an extended stay in a hospital because you need time to recover and go through some rehab before you can go home. The UAE spends billions of dirhams sending people for medical tourism. The patient travels with their families and this means a lot of expenses and a lot of money leaves the country. Our first emphasis is to encourage those people that currently go abroad from the region and from the UAE, to stay and come to DHCC. People don’t need to go to Europe or America, mainly because of our partnerships. If you wanted to do a cardiac assessment, then you could come to the Mayo Clinic. A lot of people go to Moorfields Eye Hospital in London for eye operations but Moorfields is here too. For plastic surgery we have the American Cosmetic Surgery Hospital and people can get the same work done as they would in the United States. Demand for healthcare in the GCC is expected So the same surgeries are available in the UAE and Dr Ayesha Mohammed to soar by as much as 240 percent in the next 20 the same thing applies for city hospitals and general Abdullah years, with the bulk of this being in the UAE and hospitals that have centres of excellence in cardiology. Saudi Arabia. Do you think the UAE is in a position So with all these brands, and with all these specialised to cope with this rise and how will DHCC play its part? services, we are in a position then to attract a lot of medical tourism. We AA. The statistics, of course, are driven by a lot of factors such as lifestyle also have niche services, like mental health, that are very difficult to find and an ageing population. If you look at the population of the GCC you in the region, so people will come automatically. And we hope once everywill fi nd it is a fairly young population but with the life expectancy exthing is open we will be in an even better position to attract more and more tended to around 70, we’ll have an elderly population. There are different medical tourism. I would say maybe anywhere between seven to 10 percent ways of looking at this: there will always be demand for healthcare and come from overseas at the moment so we’re already seeing the medical it will keep increasing but I think what’s very fortunate is that we take a tourism. But it will take time for it to become a major component.

www.busmanagementme.com 51

DrAyeesha.indd Sec1:51

26/2/10 16:19:20

CiscoDPS.indd 2

26/2/10 08:51:41

CiscoDPS.indd 3

26/2/10 10:26:48

REAL ESTATE

g n i d l i u B C N E D I F N CO ZIAD MAKHZOUMI ED.indd 54

26/2/10 17:07:11

Crisis? What crisis? With the rest of the UAE reeling in the wake of Dubai’s recent debt concerns, Arabtec’s charismatic CFO Ziad Makhzoumi is betting on his ﬁrm’s sound ﬁnancials to see it through the downturn and beyond.

iven the building (not to mention fi nancial) excesses witnessed in the emirate over the last few years, it is refreshing to hear a Dubai-based senior executive at a major construction fi rm extolling the virtues of a measured approach to construction. And that is exactly what Ziad Makhzoumi, Chief Financial Officer at UAE contracting giant Arabtec, believes has enabled his company to weather the worst of the storm. Since it first opened its doors for business in 1975, the fi rm’s successful execution of a vast array of major projects has forged its reputation as one of the industry’s most respected players. Today, its diverse portfolio spans the sectors of high-rise developments; hotels; residential, commercial and industrial projects; airport developments; stadiums; villa communities; mixed developments; entertainment; and offshore oil and gas installations. Drawing on a multinational workforce of over 70,000 employees, as well as state-of-the-art plant facilities and equipment, Arabtec is uniquely qualified to tackle even the most complex and iconic of projects – including the recently completed Burj Dubai, the world’s tallest building, on which it was the main contractor. Indeed, Arabtec shrugged off a difficult year that included ongoing payment disputes with developers and controversy over living conditions at its construction worker camps (claims vehemently denied by the fi rm) to fi nish 2009 strongly with a rise in its share price and the signing of several new contracts in locations such as Russia, Saudi Arabia and North Africa. And with a sound fi nancial base in place, Makhzoumi hopes for more progress in 2010, as he tells Business Management.

Obviously the last 12 months have been tough for everybody in the industry. What have been your key areas of focus over that period – both as a company, and in your role as Chief Financial Ofﬁcer? Ziad Makhzoumi. Well, there are two issues. We were planning for a downturn from the end of 2008. Around the end of the fi rst quarter of that year we expected things to get worse, and we started planning for them then. But, like most companies, no one could have predicted how fast it would hit, how severe the crisis was going to be, and what impact it would have. Nonetheless, we’re in reasonable shape for two reasons. First of all, we concentrated on managing our cash – our receivables and payables – very well, and are trying to balance those as much as possible. We talked to our banks and confi rmed that there wouldn’t be any

www.busmanagementme.com 55

ZIAD MAKHZOUMI ED.indd 55

26/2/10 17:07:15

restrictions on the movement of cash or extra credit facilities – not that we needed any. So we prepared ourselves from the point of view that you have to be liquid to be able to meet your financial obligations. We talked to our suppliers and we came to an agreement with them in preparation for harder times, and we also talked to the developers and other parties about payment terms. So that was a function of my role as CFO, to manage the present situation and the expected downturn. On the other hand, we knew that Dubai was going to come to a standstill for many reasons. We have a big backlog of work that will keep us going for another two years here, but we’re lucky in the sense that we’re not looking for more work in Dubai. We knew we wouldn’t get any more major projects for the foreseeable future, and we had in fact already taken steps to expand our business during the previous year in Qatar and Abu Dhabi, and we have long been planning for a move into Saudi Arabia. We had previously delayed our expansion there because the Saudi market was not as open as it is now and we were too busy on the numerous projects we were working on in Dubai, but now the timing is perfect for that move. So, these are the two things that really helped us in coping with the disaster that hit the market.

Do you think the slowdown in the property market has allowed developers and contractors to refocus on the infrastructure side of things? ZM. I’m sure it did. The margins were higher on the residential side because people wanted their projects fi nished yesterday and were ready to pay a premium to get things done quickly. They wanted the cash to build bigger, more expensive projects, and that led to the frenzy that caused the prices to go up. At one stage, we were working on many sites seven days a week, three shifts a day. So I think it did lead many firms to focus on the residential sector. Now everybody thinks they can get into infrastructure. It is not easy, however; you need to be qualified for the job and you need to be specified by the government, as most infrastructure work, unless it’s a private development, is government-backed. You can’t just go in as a foreign company and say, ‘I want work’. It doesn’t happen that way. You cannot go in if you’re not specified in Abu Dhabi and bid for work. You have the same issue in Saudi Arabia. So it’s not as easy as just moving the people over from residential to infrastructure projects, because you need the right background skills and qualifications. But having said that, there was defi nitely a movement towards a greater focus on infrastructure

NEW HORIZONS

As Dubai’s construction industry continues to falter, Arabtec has strengthened its position by enhancing its portfolio in alternative markets.

Okhta Social & Business Centre

Nation Towers

Lamar Towers

St Petersburg, Russia

Abu Dhabi, UAE

Jeddah, Saudi Arabia

Situated in St Petersburg, the old imperial capital of Russia and its second biggest city, the project comprises a 400-metre high tower taking the shape of a ﬂame (resembling the logo of its client, Russian gas giant Gazprom), three podium buildings as well as massive underground structures and special external works. The tower will feature ofﬁce space for the client and its subsidiaries, leisure and entertainment facilities, as well as a library and sports centre.

Located on the Abu Dhabi Corniche seafront, the award-winning Nation Towers is a mixed-use development project covering a total built-up area of over 280,000 square metres that is expected to be commissioned by the end of 2011. It features a 64–storey residential tower, a 50-storey luxury hotel and ofﬁce tower and a retail podium. A sky bridge at the 48th level will connect the two towers while an underground tunnel will link the tower to a beach club.

The SAR2 billion Lamar Towers project is an important strategic high-rise luxury project on the Jeddah Sea Front Corniche consisting of two towers of 60 and 68 ﬂoors respectively, and incorporating residential and commercial units as well as a shopping mall. The main investor in the project is Zahran Real Estate Company while the main developer is Cayan Investment & Development Company. The project represents a joint venture with Al Saad Contracting.

56 www.busmanagementme.com

ZIAD MAKHZOUMI ED.indd 56

26/2/10 17:07:16

and the concentration is on that sector now. Oil and gas projects are also seeing a renaissance. When the price of oil was less than US$30, lots of countries held back on spending on maintaining or upgrading their oil and gas projects, offshore platforms and so on. That is moving again, so we see a lot of potential in that, too. Obviously, financials are having a huge impact on the way construction firms are operating through this downturn. So how do you see the role of the CFO changing, and how are you effecting that change at Arabtec? ZM. The CFO can no longer be just a bookkeeper. They have to be a planner, they have to be a strategist, they have to be a supplier of resources. Money is a commodity, it’s not something that grows on trees, so you have to manage it exactly the way you manage your stock, exactly as you manage your receivables. People assume it’s virtual, but it’s not. It’s physically something that can make things better or worse. We are going in the right direction. We do have more sophisticated fi nancial systems that probably were not needed two years ago, but that have put us on a sound fi nancial footing. Now we are expanding, we have to prepare to export that control system to other countries and deal with taxation, import duties, etc. that we didn’t face before. That is the challenge. The CFO also has to act as an advisor or a chief of staff, to tell the board and the CEO whether a project or a decision is viable. Not just because of regulatory reasons, although of course that is one important dimension, but also in terms of what you can afford and what you cannot afford; you need to advise the board on the best way of achieving your goals as a company. So the role of the CFO has to go beyond just historical data reporting. It has to be about planning, it has to be about control, it has to be about governance. It has to be all these issues that we are talking about. That’s how I see it. Do you think it will also involve a greater knowledge and understanding of the technical and engineering sides of the business, and how they impact on the financial side? ZM. Defi nitely. These are business issues and project-related issues. I believe a CFO has to have more actual hands-on business experience and knowledge, and not just behind-a-desk experience of business. We are a public company. I have to communicate with the media, so not only do I have to be a very good numbers man, I have to be a good communicator and I have to be a strategist. Because running in parallel to the commercial strategy is the financial strategy, and you cannot implement one without the other. In this climate – in any climate – there should be no such thing as blank-cheque management. We have to manage our balance sheet. So, it’s not just an accounting function anymore. It’s more of a leadership function, a specialist function, a creative function, to be able to cope with the challenges and obstacles and find ways around them. In some cases, CEOs have not faced such a crisis before, and it is a fi nancial crisis, nothing else. And unless you have that knowledge, you have a problem. On that note, there’s been much in the news recently about various disputes between contractors and developers. What has been your

An icon in the making Burj Khalifa is the centrepiece of Emaar’s Downtown Burj Dubai, a US$20 billion, 500-acre development billed as the most prestigious square kilometre on earth that has provided a number of major construction challenges.

he tower has been designed to manage the effects of wind and seismic movements, with a super-structure made up of high-strength concrete supported by large reinforced concrete mats and piles. The 74,000 square metre foundation slab and 50-metre-deep piling are waterproofed and feature cathodic protection. The steel bars that reinforce the structure weigh a total of 31,400 tonnes, and if laid end-to-end would stretch more than a quarter of the way around the world. The concrete used is equivalent to a 1.5-metre wide pavement over 1900 kilometres long, and is equivalent to the weight of 100,000 elephants. Primary materials of the exterior cladding system include reflective glazing, aluminium, textured stainless steel spandrel panels and vertical stainless steel tubular fins that accentuate the height and slender design of the tower. The structure also poses a number of challenges in terms of energy efficiency. At peak cooling time, for example, the tower will require 10,000 tonnes of cooling per hour, equivalent to the capacity provided by 10,000 tonnes of melting ice in one day. Meanwhile the tower’s water system will supply an average of about 946,000 litres of water per day, the building’s peak electricity demand is roughly equivalent to 360,000 100-watt bulbs all operating at the same time, while its condensate collection system will provide around 57 million litres of supplemental water a year, equivalent to nearly 20 Olympic-sized swimming pools, which will be pumped into the site’s irrigation system for use on the tower’s landscape plantings.

www.busmanagementme.com 57

ZIAD MAKHZOUMI ED.indd 57

26/2/10 17:07:16

experience with that issue in the past 12 months, and how have you managed that process to minimise the impact? ZM. Of course, when things are going well no one gets angry or goes into dispute. And when things are bad, one of the ways of resolving that dispute is go for arbitration or litigation of some sort, in the hope that an official body will arbitrate and try to resolve the issue. And those types of incidents have gone up in the last year or so, because people are panicking about getting their cash – if you don’t get paid, you can’t pay your employees or your suppliers. Your suppliers might then sue you or your workers might go on strike, and then you’re in a difficult position. I think some of the most recent events highlight the fact that we possibly need more clarity on regulation, or even more regulation. I’m not a person who likes more red tape just for the sake of it, but there needs to be some clarity in terms of what-if scenarios. And there are some cases that will test the system that we want to see the outcome of; hopefully it’ll be positive because it’ll add to the image of Dubai as a fair and open and transparent place to work, to live and to do business.

You also mentioned the importance of people in the construction business. How are you driving that culture of people development? ZM. I’ll give you an example. If you pay US$90 million for a jet plane but you don’t have a pilot, it’s just a very expensive piece of junk. So you have to have the right people who will take your assets and maximise their revenue. Yet in many businesses – not in Arabtec, because we value our people very highly – people are not considered an asset. Th is is a mistake. People are the most important asset you have as a company, because it is them who implement the strategy; after all, you can’t do everything on your own. We have 70,000 employees, so we can’t go in and make decisions for each one of those workers. They have to make those decisions on how to build the buildings, how to deliver work on time, how to be safe. We want to ensure that they follow procedures and so on, but unless you train them well and you work with them and incentivise them in a way that will produce that, you will not achieve your aims. And we believe we’re one of the better companies. I’m sure we can always improve. We’ve been in the press recently for the wrong reasons – unfairly in my view, because following all the negative publicity we invited the press to visit our labour camps and they came and saw that much of the stuff mentioned in the programmes was untrue, incorrect and out of context. However, this doesn’t mean we cannot improve. We are always improving. We follow the labour laws and go beyond them. But, we also need guidance. And when you’re growing as quickly as we are – up to 70,000 people from less than 20,000 four years ago – you’re bound to miss some things and not get everything perfectly right. As a result, we always review our processes, and we always talk to

ROOM TO GROW Ziad Makhzoumi outlines Arabtec’s expansion plans for Saudi Arabia, Qatar and Abu Dhabi.

hese are three very different markets in the sense that their dynamics are different to Dubai. For one thing, Dubai is more dependent on foreign investors buying property. In addition, the scope and the ambition of the projects in Dubai is so huge. It has the world’s tallest building. It has a metro which no one else in the region has. They’re talking about building a rail system from scratch. They are already building a new airport, extending the seaport, and so on. And it even has clusters of new islands that have redeﬁned the shape of the coastline. Abu Dhabi is different. The government there is more conservative in its views. Abu Dhabi’s population is growing and there is a shortage of dwellings there, so building affordable housing is increasingly important. A few years ago, people who used to live in Abu Dhabi would come to Dubai, but now it’s the other way around; they live in Dubai and travel to Abu Dhabi. Rates are still higher in Abu Dhabi, because there is a housing shortage, but what is different is that demand is coming not only from external investors or buyers, but also from the people who actually live and work there. So that more conservative attitude to investment has helped. Abu Dhabi is also one of the biggest producers of oil in the world, so they have an income that can support those projects and that expansion. Plus, the infrastructure work that they’re doing is helping. If you look at Abu Dhabi, there

58 www.busmanagementme.com

ZIAD MAKHZOUMI ED.indd 58

26/2/10 17:07:16

our people. My staff have an assessment meeting every three months. We talk and discuss targets. They have access to me whenever they want. We have a hierarchy, accept our responsibilities and are very active in putting things right. Our CEO, Riad Kamal – who is a brilliant and visionary leader, as well as a great communicator – is trying to push that culture all the way down through the organisation. We are close. But, we also accept that everyone must take individual responsibility for what happens in the organisation.

sometimes they complain, but we’re always open. Sometimes they have a genuine grievance, and sometimes they don’t. It’s like a big family, and there are brothers and sisters and cousins; not everybody is happy with everything all the time, and there’s jealousy, there are all sorts of disputes. But there’s also respect, and we try to keep that culture going. We’re always improving, and I hope we can always get better at what we do. And as I said, there are bound to be some mistakes made when you are trying to please 70,000 people. You learn from it, and you hope that it will not happen again.

“In this climate there should be no such thing as blank-cheque management”

And so, going forward, what will be your key areas of focus in the short term? ZM. As a company we have to keep the momentum going and maintain our current business, while at the same time looking at expansion into other areas – be that geographically or in different sectors – which we are doing. We need to excel in certain areas that we’re very good at to ensure that we keep that uniqueness about us, that we deliver quality in everything we do. As a CFO, I need to make sure I support that expansion and give it all the resources I can. It’s not only people; on a strategic level people are extremely important, but to implement the strategy successfully you need resources, and one of them is money. And that’s my job. We’re expanding outside Dubai. And we’re going to areas where they’re many years behind Dubai, like Libya, Algeria and Russia. These are new economies that are oil and gas dependent. They need the infrastructure and they need the skill, so I think for the coming 10 years we’re quite well set. Hopefully, by then, we’ll have new strengths and new skills and new opportunities, and we’ll create new sectors.

So you have quite an open culture in terms of lines of communication between members of the management team, but what about communication between senior management and those people on the lowest rung of the corporate ladder? Is there an opportunity for those workers to have a voice? ZM. There is an official process for that, of course. But in addition to that, every month we go and visit the camps and have dinner with our workers. For instance, we had a big Indian night last month where there were 5000 people, including myself and other members of the management team. And we do talk to them: sometimes they say thank you and

are many projects. There are six hospitals that we are aware of being built. You’ve got two museums that are being built. You’ve got universities being built. There’s also the expansion of the airport, the seaport, the new downtown that they’re talking about. So, the new UAE construction market is Abu Dhabi – and how fast or how slow that grows is a function of how fast the government wants to go. And of course, that will be triggered by the surplus of cash generated by oil prices. Saudi is a completely different story, because they do not build at all for foreigners. Very few people are going to buy a holiday home in Saudi. One the other hand, it’s a very big population and a very big country, and is in greater need of infrastructure development. And it’s not necessarily just roads and airports, although they’re looking at renovating both. We’re talking about universities. We’re talking about developing more opportunities for a sector of society that wasn’t previously as active: women. The government also wants to be a centre of excellence for information technology, so they’re pushing that in Jeddah. You’ve got the development of the economic cities that are happening. So, the market there is completely different, and in theory, it will be much bigger than the whole of the GCC put together. We think that Saudi will be, eventually, the biggest market for us – or any contractor in the GCC.

Qatar is in a unique situation in that it has gas, and is the third biggest producer in the world. Again, they are trying to emulate Dubai, but I think that is going to slow down as a result of the current confidence in the market. I don’t think growth there will be stopped, but it’ll be slowed down. So, instead of finishing projects in two years, they might finish in four or five years. As far as we’re concerned it doesn’t matter, because somebody has to finish those projects and we are there to help them. And plus, with all the infrastructure work that they need on the gas side, there will be plenty of work. North Africa is also big for us. Libya, we think, is a very important market. We’re pursuing some projects there. Algeria is a very big market. Egypt has always been interesting, but only if there is a specific project where we have a competitive edge; we can’t compete on price because the locals will be cheaper. We have projects in Syria and I think, again, that’s a very interesting market for us. We have a project in Jordan, but I think that will be affected by the economic recession and the political situation in the area. Plus we have a major project in Russia, which we were invited to bid for and were awarded the project because of our experience and reputation. So, we have a brand name. We have credibility. We have a very good product and service that we can build on, and that is basically our strategy for extending our operation outside Dubai.

www.busmanagementme.com 59

ZIAD MAKHZOUMI ED.indd 59

26/2/10 17:07:18

ERNST & YOUNG_feb10 26/02/2010 16:56 Page 60

IT SECURITY

THE BIG QUESTION Senior IT professionals from 1900 organisations in over 60 countries were interviewed for Ernst & Young’s 2009 Global Information Security Survey. Here Business Management reports the survey’s main ﬁndings and the pressures currently being faced by IT security managers.

ow do you protect your organisation’s brand and reputation in an environment of change? How do you identify and manage new risks? How do you overcome increasing challenges to deliver an effective information security programme? How do you comply with new regulations and industry requirements? These are just some of the questions that information security leaders are struggling with – and must find answers to – if they are going to outpace change and protect their organisation’s most critical information assets. Over the last year, we have witnessed a global economic downturn become a crisis for many countries and many organisations and we have seen the competitive landscape drastically altered for many industries. Although there are signs of economic recovery, the impact of these difficult times will continue to be felt by many companies as they reshape, restructure and reinvent themselves. Information security leaders are facing considerable challenges as a result of the current environment. It would be naive to think that information security has not also been impacted by economic pressures; the need to reduce costs and provide more results from investments already made extends to all areas of the enterprise, including the information security function. To support this statement, there is evidence from the survey that many more organisations are struggling with a lack of skilled and trained information security resources. Survey respondents are also reporting that finding adequate budget for information security is a major challenge for the coming year. These are clear indicators that information security is not immune to external economic forces and must find ways to improve efficiency and effectiveness while keeping spending to a minimum. The current environment is also producing a rise in both internal and external threats. The survey participants reveal a growing concern with reprisals from recently separated employees as well as noting an increase in external attacks on their company websites and networks. Regulatory compliance is also top of mind for information security leaders, and the survey confirms that it continues to be an important driver of information security improvements. Several industries and countries are moving toward more regulation, primarily related to data protection and privacy. Correspondingly, com-

60 www.busmanagementme.com

panies are reporting an increase in the cost of compliance as the complexity and the number of regulations also increases. The 12th annual global information security survey takes a closer look at how organisations are specifically addressing the changing environment, including the risks, challenges, increasing regulatory requirements and new technologies.

Managing risks In the last several years, we have seen a shift in the way technology is being deployed to support the flow of information. The increasingly mobile and global workforce, coupled with the rapid adoption of broadband and over-the-air technologies, has changed the way many organisations use technology and information. As a result, it has expanded or perhaps even eliminated the traditional borders of the organisation and the conventional digital perimeter paradigm. Organisations must now adjust their information security risk management approach – from ‘keeping the bad guys out’ to protecting information no matter where it resides. We consider this to be a more

ERNST & YOUNG_feb10 26/02/2010 16:56 Page 61

Survey Results ‘information-centric’ view of security and a more effective approach. Not surprisingly, improving information security risk management was the top security priority for survey participants, with 50 percent of respondents indicating that they plan to spend more and 39 percent planning to spend relatively the same amount on this initiative over the next year. In addition to the technology shift, the current economic environment is fuelling an increase in the number of threats organisations are facing. The increase is driven not only from external sources – the survey found that 41 percent of respondents noted an increase in external attacks – but also from within the organisation: 25 percent of respondents witnessed an increase in internal attacks, and 13 percent reported an increase in internally perpetrated fraud. A structured and repeatable risk management approach is the core element of an information security management system (ISMS). It is also the approach chosen by a majority of companies to address their information security risks. The survey results show that 44 percent of respondents currently have an ISMS in place or are in the process of implementing one, with another 32 percent considering an ISMS solution. Information security standards are also playing an increasingly important role in shaping the ISMS for many organisations. Although only eight percent of respondents have achieved formal certification, 36 percent of respondents indicated that they are using the ISO/IEC 27001:2005 security standard as the basis for their ISMS. Standards can provide organisations with a set of leading practices related to information security risk management and are a logical starting point in developing an effective and comprehensive ISMS. In 2009, the primary challenge to effectively delivering information security was the lack of appropriate resources, with 56 percent of respondents ranking this as a high or significant challenge; this is an increase of eight percentage points compared to our 2008 survey results (48 percent). In somewhat of a contradiction, the respondents indicated that the two leading areas for reducing spending over the coming 12 months will be for outsourcing services (18 percent) and in-house staffing (16 percent). It appears that although organisations recognise the availability of resources to be their most significant challenge, only 20 percent of respondents plan to hire more in-house resources and only 14 percent plan to spend more on outsourcing to help alleviate this issue. Allocating adequate budgets to information security was a challenge in 2009, with a total of 50 percent of respondents ranking this as a high or significant challenge; this is a very notable increase of 17 percentage points over 2008 (33 percent). This is also particularly interesting in light of the fact that 40 percent of respondents indicated that they planned to increase their annual investment in information security as a percentage of total expenditures, and 52 percent planned on maintaining the same level of spending. The survey results clearly show that information security budgets are not being significantly reduced, nor is the security

Does your organisation have a documented information security strategy for the next one to three years?

44%

Yes No

56%

Has your organisation implemented an information security management system (ISMS) that covers the overall management of information security? Yes, implemented and formally certiﬁed Yes, without certiﬁcation objective Yes, currently in the process of implementing No, but considering it No, and not considering it

What is the level of challenge related to effectively delivering your organisation’s information security initiatives for each of the following?

Availability of resources Adequate budget Organisational awareness Assessing new threats and vulnerabilities Organisational change Business uncertainty Regulatory change or uncertainty Understanding emerging technologies Management sponsorship

Signiﬁcant challenge

Not a challenge

www.busmanagementme.com 61

Double take SOFTWARE AD.indd 1

25/2/10 16:37:00

ERNST & YOUNG_feb10 01/03/2010 09:35 Page 63

function being asked to take on more responsibility than in previous years. So why do organisations continue to struggle to find adequate security budgets? One contributing factor may be that 44 percent of the organisations that participated in the survey still don’t have a documented information security strategy. In the absence of a well-thought-out information security strategy, it will continue to be difficult to articulate and build the business case for an appropriate budget allocation, particularly in today’s economic climate. The lack of a cohesive strategy also makes it difficult to prioritise spending decisions and to ensure that scarce resources are being allocated to where they will provide the most benefit. It is more important than ever for organisations to develop comprehensive, risk-based security strategies, prioritising spend based on the value of the assets at risk, both in order to justify budget requests and to make sure that they are getting maximum benefit out of those budgets. It has long been generally accepted that authorised users and employees pose the greatest security threat to an organisation and that raising and maintaining the awareness level of those people is a crucial part of an effective information security strategy. In spite of this knowledge, this remains a

“Data protection and privacy are key components of regulatory compliance and are gaining more attention from governments and regulators” significant challenge and a significant issue for many organisations. While most organisations (74 percent) have a security awareness programme, less than half of all respondents indicated that their programme includes such things as: updates and alerts on current threats (44 percent), informational updates on new hot topics (42 percent), specific awareness activities for high-risk groups such as social networking users (35 percent). Furthermore, only 20 percent of respondents indicated that they measure the effectiveness of their awareness programmes and modify those programmes based on the results. Given that the challenge associated with organisational security awareness has not been reduced over time, it can be concluded that many current security training and awareness programmes are not working as well as they could be. It should also be noted that 73 percent of respondents have no plans to outsource their security training and awareness programmes. Yet, when we look closer at the 12 percent of respondents who currently outsource this activity, we find that organisational awareness is less likely to be a significant challenge. In fact, it does not make it into the top three challenges for these organisations. This may illustrate the fact that more organisations should begin to look for outside help to design, execute, monitor and (or) measure the effectiveness of their security training and awareness programmes. Regulatory compliance continues to be one of the top priorities for organisations and an important objective of the information security function. When asked about the importance of specific information security activities, 46 percent of respondents indicated that achieving compliance with regulations was very important with an additional 31 percent considering it impor-

tant. This is not surprising, given the considerable attention and focus on compliance efforts over the last several years by most organisations. When companies were asked how much they were spending on compliance efforts, 55 percent of respondents indicated that regulatory compliance costs were accounting for moderate to significant increases in their overall information security costs. While this number is down from 65 percent for the preceding three years, only five percent of respondents plan on spending less over the next 12 months on regulatory compliance. This may be an indication that organisations are spending too much of their security budgets on demonstrating point-in-time compliance as opposed to implementing a comprehensive information security programme where compliance is a by-product and not the primary driver. The point is further supported by the fact that only 36 percent of survey respondents have deployed a solution for continuous monitoring of security controls. Moving to a more risk-driven security programme and leveraging continuous compliance monitoring technologies may allow organisations to reduce the amount they spend on demonstrating compliance and either reduce their overall security investment or focus it on more value-added information security services. Data protection and privacy are key components of regulatory compliance and are gaining more attention from governments and regulators. The number and complexity of privacy-related regulations is increasing; yet, 68 percent of respondents stated that they have a clear understanding of the privacy laws and regulations that may impact their organisations. In addition, 63 percent of respondents indicated that they include privacy requirements in contracts with external partners, vendors and contractors. Although it is encouraging that companies are recognising their privacy requirements, it is also clear that far too few organisations have taken the necessary steps to protect personal information. Only 32 percent of respondents have produced an inventory of information assets covered by privacy requirements, and an even fewer number (26 percent) have conducted an assessment of the personal data life cycle (gathering, using, storing and disposing). The 2009 survey shows that companies and information security leaders are facing an environment of change; escalating levels of risk, new challenges and increasing regulatory complexity are now driving information security decisions. Companies are also struggling to leverage new technologies – to get the most benefit and cost savings possible – while understanding the potential security impact to the organisation. The survey also revealed that many organisations continue to be challenged by a lack of skilled information security resources and inadequate budgets. These challenges have been identified in the previous surveys, but this year, they have become more significant, driven by heightened economic uncertainty. To address the risks and challenges of the changing environment, information security leaders are abandoning the old paradigms and taking a more information-centric view of security. It is a more flexible, riskbased approach that is focused on protecting the organisation’s critical information, and more suited to supporting a connected business model and today’s increasingly mobile and global workforce. By leveraging the information in this survey and taking action on the suggestions for improvement, organisations can achieve more effective information security and continue to outpace change. n Visit www.ey.com/lessons-from-change to learn more about Ernst & Young’s recent research and the resulting eight performance goals that companies are, or should be, adopting to prepare for the rebound.

www.busmanagementme.com 63

ASK THE EXPERT

Fail to prepare and prepare to fail COOP Systems’ Chris Alvord discusses business continuity strategies for today’s global organisations.

How has the issue of disaster recovery and business continuity increased in signiﬁcance in recent years? Chris Alvord. The biggest change is that many organisations are reviewing business continuity management (BCM) practices at the group level. Th is is a clear reversal of the past, where these programmes tended to fragment along geographical, functional and business lines. There were many reasons for these past practices. Disaster IT recovery and business continuity reported to different people. Individual business units had enough power to go forward alone. Various country-specific units had special needs. There was no C-Level executive responsible at group level for the whole BCM programme. Soft ware wasn’t commonly available to pull all the pieces together. Powerful new forces have caused a review of these old practices. Global supply chains can’t tolerate weak links in the enterprise. Overall BCM administration costs are too high if programmes are uncoordinated. An appreciation for the benefit of risk management at the group level has arisen. A new generation of soft ware can now pull it all together. There is also a new C-level officer who can enforce and fund necessary changes, the Chief Risk Officer. For whatever reason, the result is the same. Group level wants all BCM practices in the organisation to coordinate their activities for a comprehensive organisation-wide view of operational risk. What challenges do they face? CA. The biggest difficulties are organisational resistance, local standards, information requirements and supporting soft ware. Most large organisations have never centralised all

BCM authority. As with most fundamental changes, there is organisational resistance. Executives are threatened by a reduction in their authority. Existing staff are not used to crossing corporate boundaries. More funding is needed to support central staff and infrastructure. BCM at group level may lack expert BCM staff used to working across business and functional lines. BCM standards can vary widely. A global survey in March 2007 showed several commonly used standards. Depending on the country and professional focus of the respondent, these were BS25999, NFPA 1600, HB 221:2004, HB 292-2006, BS ISO/IEC 17799:2005, and SS540 Local differences in key data in one market may be useless in another. A small example would be the Social Security Number,

runs out of time, money and/or expertise as they try to accommodate the endless number of local and regional group needs. What are the common mistakes with business continuity? CA. First, BCM is, like other large, complex projects, often viewed as an all-or-nothing effort which creates great risk. The Standish Group International is a well-known firm based in Boston that for years has tracked large scale project successes and failures. Their 2009 CHAOS Survey found that 24 percent failed, 44 percent were challenged and 32 percent were successful. The antidote is to organise a large project as a series of efforts over time, with incremental deliverables and measurable success. Paired with agile implementation methods, putting a premium on speed and flexibility, this segmented view of projects has a better chance of success. Second, procuring software with a rigid central data model to manage decentralised group BCM needs makes no sense. Instead, use soft ware that can enforce a central set of organisational requirements while permitting the addition of local aspects (data, design, languages) by local administrators. This also avoids the ‘boil the ocean’ tendencies of older methods. Third, look for an existing support network from vendors and their partners that allows for group-wide needs at any time of the hour or day. After all, users can never tell where or when a disaster will strike.

“Older BCM software is not designed to manage the diversity of group level activities managed with decentralised processes” crucial in the United States, where the United Kingdom uses the National Insurance Number instead. Even more problems are created by language, currency, time zone and data convention differences. Older BCM soft ware is not designed to manage the diversity of group level activities managed with decentralised processes. Their central data or process model means that all changes need to be done by an expert central group. Inevitably such a group

Chris Alvord, CEO of COOP Systems, has designed a global BCM software package, been a Certiﬁed BCM teacher and Adjunct Professor at NYU, and has published widely. He has a BA from Harvard College, MBA from Harvard Business School and has done doctoral course work at Virginia Tech.

64 www.busmanagementme.com

CoopSystems.indd 64

26/2/10 16:17:26

COOP SYSTEMS AD.indd 1

25/2/10 16:29:08

IBM AD IFC-1.indd Sec1:2

26/2/10 08:52:40

IBM AD IFC-1.indd Sec1:3

26/2/10 08:52:45

JOHN COWLING_feb10 26/02/2010 17:03 Page 68

RISK MANAGEMENT

Part of the

PROCESS Is risk management ﬁnally being fully embedded in the way projects are planned and managed? Faithful+Gould’s John Cowling explains why he believes the industry has come a long way in a short time.

ithout doubt, enhanced collaboration across project teams and disciplines is transforming the construction industry – and nowhere is this being illustrated more clearly in the Middle East region than at Faithful+Gould. Whilst the company – a subsidiary of Atkins – is globally recognised in the construction industry for cost management and quantity surveying services, the firm also offers additional value-added services including project and construction management, strategic facilities management, asset management, risk and value management and sustainability. John Cowling, Head of Risk at Faithful+Gould, believes this depth of service is one of the keys to the firm’s success. “Whenever I require assistance, such as an enquiry outside my remit, I know I have this comprehensive knowledge base I can call on from across the broader global Atkins Group,” he explains. “I can

68 www.busmanagementme.com

receive very positive, rapid and accurate responses from across the worldwide Atkins business, which comprises around 16,000 staff.” Risk management is one area that has benefited from this more collaborative approach. Faithful+Gould sees integrating risk management into organisational processes as an important part of any company’s continuous improvement cycle; often clients have a need to integrate risk management with value management and value engineering, because the two dovetail really well together. And as the market matures, Cowling believes there is significant potential for clients to further enhance their regional capabilities through the application of risk management systems, tools and techniques. For many people, managing projects means managing risk. What kind of approach do you take to risk management, and how do you embed that into the project management aspect?

JOHN COWLING_feb10 26/02/2010 17:03 Page 69

John Cowling. Firstly, it must be said that Faithful+Gould has risk management embedded as a key component of our project management process. However, we also offer complete consultancy services across entire client enterprises. We are grateful that many of our clients consider the benefits that flow from implementing a risk management framework in enhancing their existing business processes and the decision-making process. We often talk in terms of the concept that risk management enables you to operate with ‘your eyes wide open’. When our clients commence a project with their eyes wide open they usually have a clearer understanding of the issues, resulting in more informed decisions being made and a lesser likelihood of falling into the normal sort of problems or issues that you might otherwise encounter. We find that as the expatriate community often has a higher turnover of personnel then perhaps in other more established parts of the world, it is more important to have robust processes in place to ensure that there will be a legacy of continuity within the client’s operation. It’s very important to get these processes embedded early throughout the organisation as the benefits have potential to extend beyond current projects – and by integrating lessons learnt into their processes, their continuous improvement cycle continues, which adds further value to their organisation. So it becomes a cultural element as opposed to just a project management element? JC. Exactly. A large part is about change management, and managing the risks inherent in changes to an original project plan. People have been using risk management on their projects for centuries, from the building of the pyramids and the aqueducts in ancient civilisations, to the building of the Burj Al Arab. They all applied risk management in their processes. It’s just that in recent years we’ve developed more sophisticated models that produce more

“When our clients commence a project with their eyes wide open they usually have a clearer understanding of the issues, resulting in more informed decisions being made and a lesser likelihood of falling into the normal sort of problems or issues that you might otherwise encounter” consistent results. These make it easier to determine the likelihood and impact of negative risks, and what we could do subsequently to transform these threats into opportunities. For us here at F+G, it’s about how we can do it better, as well as making it easier and more user-friendly. Our client-focused philosophy is for making risk management more of a process driven and scientific model that produces tangible results. This ensures that collaboratively, with our clients and stakeholder, we improve consistency. Now, obviously, the last 12 months have been tough. Have you seen attitude to risk change during that period? JC. I look at the construction industry in the last few years as a bucket full of holes, but instead of being filled with water it’s been full to the brim with

John Cowling money. But the water or money level never got down as far as the holes because no matter how many holes you had, there was so much money pouring in with the pace of development that it really didn’t matter. Well, now it matters. Now, I find clients looking for ways to ‘plug the holes’, and one of the tools they can use to do this is to employ risk management which proactively assists them to more efficiently use their resources. Clients are much more receptive to the concept of managing risk now than they were perhaps two or three years ago. They’re saying, “We need to work smarter, not harder – we need to also stay one step ahead of the rest.” And that’s what I see as being the opportunity right now. Our risk management philosophy has always been ‘think, plan, do.’ When we enhance our thinking and planning stages, we significantly enhance the efficiency of the doing stage. So really, managing the risk has become a way to drive value and reduce a lot of those inefﬁciencies? JC. That’s right. Recently in discussions with a client we were evaluating risks in their supply chain and procurement. As they were sourcing their sanitaryware from an international firm outside the region, we had identified several project risks that included disruption to the manufacturing process, currency fluctuations, and transportation / logistical concerns, all of which could cause delays and increase costs. As we considered how we could mitigate these risks, and balance the function of the required items versus costs, we discovered that there was a local manufacturer who could directly supply the specified quality and quantity within a 30-minute drive. We had effectively mitigated the risks associated with the potential impact of currency fluctuations and the potential impact of transport delays. At the same time, we iden-

www.busmanagementme.com 69

JOHN COWLING_feb10 26/02/2010 17:03 Page 70

tified how the client could save a significant amount of his budget, which also allowed him the opportunity to use these funds elsewhere. An additional benefit was that this allowed the client to increase his percentage of locally manufactured materials assisting with the local economy, one of the key drivers of the overall project. This is one example of why we at F+G prefer to embed risk management with value management (value engineering), as they are not standalone processes and their integration into a project process can have significant benefits for the project as a whole. We believe risk management is about seeking opportunities for solutions. Our clients often ask us for assistance to further empower their personnel through training and the provision of processes and tools, such as a userfriendly risk register that includes a reporting capability that enables their project teams to track and monitor their progress. In many instances these additional services provide our client’s teams with extra competencies that enable them to achieve enhanced management skills. This region is renowned for the pioneering nature of the projects it undertakes; they’re daring and ambitious, both technically and in terms of their scale and scope. And obviously, the industry as a whole needs those innovative approaches in order to grow and to develop further. But, having said that, many ﬁrms are understandably wary of embedding innovative new processes if they’re not proven; they’re wary of jumping into the unknown. So, how do we balance that risk/innovation equation – or better still, take risk out of the innovation process altogether? JC. When we initiate a project, often in a workshop together with the client and their major stakeholders, we’ll look at project objectives, stakeholder engagement issues and a whole range of defined criteria. This process efficiently assists us all to define the project specifications and provides us with an accurate overview of what the client actually needs and wants – for example, whether they desire their project to be perhaps iconic or purely functional. We find it critically important to thoroughly understand our client’s needs, and understanding what our client wants to achieve through this specific project. Communication has to flow across all aspects of the project, and is essential to assist in the mitigation of potential risks. As the market matures, particularly within this region, clients and developers are increasingly looking for best practice, world-class methodologies. With the publication of the recent ISO 31000, the new international standard for risk management, many industry leaders not only recognise that risk management is a standard international best practice, they also demand that risk management processes be implemented in their businesses. This region thrives on innovation and new ideas, and often once we demonstrate how implementing a risk management system delivers tangible benefits, such as assisting as a tool for measuring the likelihood of success for innovative options, our clients immediately understand how these processes provide them with greater comfort when making early stage decisions. The idea of sustainability has been around for a while. What challenges do you think need to be overcome for sustainability to become part of the fabric of everything we do as an industry, rather than as a standalone topic in its own right? JC. It’s interesting. From a risk point of view, if governments regulate the need for sustainability then it becomes part of the project objectives. And it will as-

70 www.busmanagementme.com

sist in reducing some of the risk, because right now there’s a lot of discussion about whether or not to include sustainable thinking and specifications in your design, and how far to go in terms of implementing standards, of which there are many. Design standards are, in part, still in the development phase in certain emirates and once all standards are fully enforced, design teams will have no option but to embed sustainable solutions into their designs. This is a good example of where a perceived threat can be turned into an opportunity as innovation in sustainable solutions may impact on the desirability of completed projects. A perceived restriction can be turned into a positive outcome in terms of environmental impact, commercial return and brand desirability. Once financiers, clients, developers and designers grasp this opportunity, the challenges may be mitigated somewhat. How much do you think the region is really embracing the idea of sustainability? Given the huge development that’s taken place there over the last 15 years, do you think Dubai, in particular, has missed a trick by not embedding the concept of sustainability into all its processes from an earlier stage? JC. It would be inappropriate and unfair to focus solely on Dubai in terms of the idea of embracing sustainability, as over the last 15-year period the implementation of sustainability varies broadly across both the developed and developing world. What is clear from our experiences in this region is that sustainability, facilities management and asset management have become far more embedded into design team solutions. There does seem to be a positive shift in thinking towards whole-life appraisal rather than the previous norm of the short-term view. Many currently consider the financial cost of sustainable or ‘greenfriendly’ items as somewhat prohibitive. Once the cost of such items significantly reduces, then the implementation of sustainability will increase. From a risk perspective, the benefit of a greater focus on sustainability is that we will have less risk attached to the supply of energy, because we’ll use more renewable energy techniques, energy-saving processes and materials. Over the longterm the application of sustainable infrastructure will actually reduce risks associated with utilities, which is a positive outcome. Our in-house sustainability experts are working with several large regional clients to determine the cost benefit ratios attached to a number of sustainable applications, which in turn often leads to life cycle modelling to ensure the most cost efficient solution is implemented. Do you think it’s still the case that if people are given the option of specifying a sustainable product or a cheaper product, then they’re still going for the cheaper product? JC. It really depends on how people perceive cost and whether a developer, for example, is going to retain the management of the completed asset. Obviously there is the one-dimensional financial cost consideration but this needs to be balanced against the social and environmental savings that can be had. A ‘cheaper’ option in financial cost terms can in fact be the more expensive option over the whole life cycle and we see more organisations investing in greater strategic long-term planning and modelling. Society as a whole can have a great impact on the built environment if they direct their choices towards developments that can demonstrate ‘green’ credentials. If we, as a society, strive to make our choices based on strong sus-

JOHN COWLING_feb10 26/02/2010 17:03 Page 71

RISK MANAGEMENT: A DEFINITION Risk is defined in ISO 31000 as the effect of uncertainty on objectives (whether positive or negative). Risk management can therefore be considered the identification, assessment and prioritisation of risks, followed by coordinated and economical application of resources to minimise, monitor and control the probability and/or impact of unfortunate events or maximise the realisation of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary. Several risk management standards have been developed including the Project Management Institute, the National Institute of Science and Technology, actuarial societies and ISO standards. Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety. The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk. Certain aspects of many risk management standards have come under criticism for having no measurable improvement on risk, even though the confidence in estimates and decisions increases.

tainable principles, the built environment and those responsible for it will have to rise to that challenge. The client’s vision for the project is paramount. In our workshops, defining and confirming with a client what their objectives are is key to defining the terms and direction of the project. We’ve been called in to help on projects that were experiencing difficulty both with programme and budget – yet when we facilitated a risk and value management workshop with the client and their major stakeholders and defined the client’s objectives, we achieved a moment of clarity for everyone in the room. Suddenly you could see all the different stakeholders comprehending what the client wanted and needed from the project, and then we worked with all the participants to ensure an agreed course of action to ensure the project would have a greater opportunity for success. We find these moments exceptionally rewarding as we are actively assisting clients in achieving their goals and objectives. When client objectives include sustainability parameters, then we can ensure that all stakeholders understand their deliverables and thus we can ‘plan, design and enable’ accordingly. If the client’s objectives don’t include sustainability, then obviously those considerations become less important in the overall delivery of the project.

What are the biggest challenges the region faces in terms of its future development? JC. One of the great regional challenges includes transportation, both domestic and international. Many of the countries in the region are experiencing tremendous growth in population which demands a corresponding increase in their role as a major hub for people and freight to move in and out of the region. Whilst transportation is going to be a huge challenge, the GCC rail proposals will address several of these issues. Currently, the UAE is leading the region, with Dubai one step ahead in the opening of the Dubai Metro. What opportunities does the transportation sector present to contractors and construction ﬁrms within the region? JC. The opportunity for the F+G/Atkins group is certainly to participate in world-first infrastructure projects, to do things that haven’t been done before and to be instrumental in delivering a tangible benefit not only for government, but also for the community. Within the F+G/Atkins group we’ve had the opportunity to be involved in major transportation projects across the region, including the Dubai Metro here in the UAE, the Makkah Metro in KSA and the Gautrain in South Africa. We’re also active in a broad range of coordinated services covering planning, infrastructure, utilities and buildings across a number of market sectors. These all provide us with the opportunity to provide tangible benefits to local and global communities. We can proudly state that what we have achieved has actively improved people’s lives. We all work collaboratively together and the opportunities for everybody are amazing. There are a considerable number of regional mega projects still being constructed, which equates to considerable opportunities and rewards for all concerned.

And as the risks come down, those projects become more attractive. JC. Our aim with project risk management is to assist our clients to identify and manage the likelihood and the impact of threats to the project. When we reduce either the likelihood or the impact – or preferably both – then effectively we are making the project more attractive to our client, their investors and their customers. We encourage our clients to engage in our processes – to identify, analyse, evaluate and control or mitigate their risks. Once we have mitigated those risks, they invariably find that the potential for cost overruns or project delays have also been reduced. With these demonstrable tangible benefits of risk management, not only does our client reduce the risks to their project or business, they’ve also opened up avenues for greater opportunity and greater success. It’s the F+G/Atkins formula – to take enormous pleasure in assisting our client to achieve greater success, as everybody wins. We aim to have our processes embedded in our client organisation’s culture and processes to ensure their greater success – not just for this project today, but for their projects of tomorrow. Our risk management philosophy is really about assisting our clients to plan for success. n

www.busmanagementme.com 71

DUROOB_feb10 26/02/2010 17:19 Page 72

EXECUTIVE INTERVIEW

Preparing for the worst Abdulaziz Al-Salloum of Duroob Technology advises Middle East companies on why they should deploy business continuity and disaster recovery solutions and how to choose the best technology. Are enough companies in the Middle East sufﬁciently aware of the need ronment while improving efficiency and flexibility. Disasters can be costto have robust disaster recovery and business continuity procedures in ly in terms of downtime and manpower, so if a company has a business place? continuity solution that can alleviate the unexpected costs then the investAbdulaziz Al-Sallou. In the past, a business continuity infrastructure has been ment will pay for itself. looked at as an insurance policy that should be there in case of a disaster. Nowadays, more and more companies are trying to make their business conWhat particular events should companies be preparing to guard themtinuity infrastructure dynamic – using it every day of the week to move inselves against using disaster recovery solutions? formation technology systems anytime, anywhere and for whatever purpose. AAS. There has never been a good time to put off implementing a business Organisations in the Middle East find data volumes concontinuity or disaster recovery plan. However, in these tinuing to grow, service level and compliance requiredifficult times it could be even more important to imments increasing and costs rising. Awareness is rising as plement a solution and ensure that your business can disaster recovery and business continuity solutions can continue in the face of a disaster. Dynamic infrastrucdramatically improve operations, making data easier to ture ties in all of the benefits of business continuity, share and manage with less disruption. Over the last sevwithout restoration times. Companies should ensure eral years, organisations have learned that this comprethey protect themselves in the following events in parhensive solution not only simplifies complex ticular: exponential data growth; compliance requireenvironments, but also improves utilisation and boosts ments and service level agreements; system or power productivity – all resulting in a lower total cost of owneroutages; natural disasters; internal sabotage or cyber atship. Companies in the Middle East are now mature tacks; government conflicts. enough to understand that users require solutions that Abdulaziz Al-Salloum owns and are easy to use and feature advanced capabilities that enWhat factors should companies consider when seoversees Duroob Technology’s business units and has 20 years of experience lecting a disaster recovery or business continuity soable them to remain competitive in the marketplace facilitating international business and developing strategies to promote new lution? while meeting IT infrastructure demands and reliability. technology and solutions into Middle AAS. The overall goal is to minimise business disrupEast markets. Prior to establishing Duroob Technology, he was the tions and maintain a high level of confidence in the abilHow can CIOs justify investment in disaster recovManaging Director for leading entire operations of CA Middle East, ity of your company to resume working in a timely ery solutions to their management boards when headquartered in Saudi Arabia and manner. Companies should ensure they consider cerno immediate return on investment is obvious? ofﬁces throughout Gulf regions. He has completed his Masters from the tain key aspects of a disaster recovery or business contiAAS. As always, system reliability is critical for any orUniversity of Florida and successfully managed partnership responsibilities nuity solution while carrying out their evaluation of it. ganisation and the importance of continuous informaof his family business in the US. Business agility, superior application uptime, simtion access has never been greater. IT architectures that plicity of management, and breakthrough value for your fail to deliver high availability will impede business openterprise is a key factor as is the achievement of performance objectives for erations. Disaster recovery and business continuity solution capabilities all application tiers at the lowest TCO. The solution must provide the highest make it easier to meet required service levels while improving efficiency levels of system availability and data protection as well as enhancing backup and providing the ability to place information in storage tiers that can sigand recovery processes while reducing associated costs. Proactive service and nificantly reduce costs. Easy-to-use tools that work across the information support to quickly resolve potential issues and minimise both planned and infrastructure help to utilise best practices for backup and recovery manunplanned outages must be a feature. And companies should have the abiliagement and operations. Also, another key tool when it comes to meeting ty to avoid penalties due to loss of information using the solution. Solutions service levels is intelligence in the environment, including the ability to prishould feature advanced business continuity via array based replication techoritise workloads at different times during the day to meet application renologies to protect and move critical information and should be able to use quirements. In the long term, organisations should have the ability to move the solution to help reduce the cost of power, cooling and rack space. n data among various drive types and RAID levels, streamlining their envi-

72 www.busmanagementme.com

DUROOD AD.indd 1

25/2/10 16:37:50

BUSINESS INTELLIGENCE

spending budgets, which in turn is a factor of the overall economic scenario. The revival of the global economy thus makes it a conducive environment for an uptake of BI and related tools.

Regional adoption levels At a very basic level, analytics enable enterprises to analyse the correlation that may exist between various data points. It is thus imperative, that as the volumes of data captured increase, the need and adoption of BI soft ware will become increasingly critical. In this context, it is worth noting that the Middle East markets are showing a steady rise in adoption of business applications across product segments (ERP/ CRM/ SCM). A study carried out by Frost & Sullivan shows that both the UAE and Saudi Arabia (two key markets in the region) are showing traction in the adoption of business applications. The UAE enterprise application market is growing at a Compound Annual Growth Rate (CAGR) of 31.1 percent and in the Saudi Arabia market at 30.3 per-

“The unified communication market is likely to grow at six percent in the UAE, 8.1 percent in Egypt and 5.2 percent in Saudi Arabia”

Building up intelligence Nishchal Khorana of Frost & Sullivan on the application of business intelligence in the Middle East.

he most interesting aspect of Business Intelligence (BI) for enterprises is that every enterprise uses it. What varies is the extent and sophistication of tools implemented and used. It can vary from using excel macros to analyse data to highly sophisticated and expensive applications churning out insightful reports. BI soft ware is thus an umbrella term for a set of soft ware and applications that allow corporate decision makers to gather, organise, distribute, and act on critical business information. The most important point highlighted from the above fact is that the spending on sophisticated BI tools is directly pegged to overall IT

cent. The increasing adoption of integrated business applications in the region will drive enterprises to seek BI soft ware, as it would facilitate managing and analysing the voluminous data generated by these applications and thereby enhancing customer satisfaction. Apart from business applications, Middle East based enterprises focus on solutions to enhance productivity is evident from the increasing adoption of unified communications solutions. The unified communication market is likely to grow at six percent in the UAE, 8.1 percent in Egypt and 5.2 percent in Saudi Arabia. The above spending patterns on business applications and unified communications are a clear indicator of enterprises using information technology to gain operational advantages. Global competition is forcing enterprises not only to streamline and re-engineer their business operations, but also to adopt a customercentric approach. BI soft ware helps to monitor business processes, and identify customer behaviours and preferences. Globally, government has been a key vertical for the adoption of data warehousing and BI tools. Extensive focus of governments on infrastructure and related ICT spending, along with the private sector adoption of informational technology as a strategic tool to gain advantage, will drive the BI market. With improving economic conditions and the increasing focus of soft ware vendors in the region on creating awareness about the business impact and benefits of BI tools, the soft ware segment is bound to witness traction.

“The UAE enterprise application market is currently growing at a CAGR rate of 31.1%”

Nishchal Khorana is Programme Manager, Information & Communication Technology Practice, Frost & Sullivan. For more information contact tanu.chopra@frost.com

74 www.busmanagementme.com

Frost and Sullivan.indd 74

26/2/10 16:21:58

QUEST_AD.indd 1

25/2/10 16:51:42

Birdair Ad.indd Sec1:68

26/2/10 08:49:06

Birdair Ad.indd Sec1:69

26/2/10 08:49:11

COSINE_oct09 26/02/2010 17:18 Page 78

PROJECT FOCUS

The smart decision How one company developed a packaged business intelligence (BI) solution for the maritime industry.

DINO PHILARETOU

osine Consultants Ltd is a Cyprusbased consulting company, established more than a decade ago, specialising in packaged solutions. It has developed and enhanced its extensive knowledge of various industries, and custom enterprise solutions developed according to specific customer requirements, such as database-driven and BI solutions for small and medium businesses, multinational organisations and the government. BI, in particular, is an area in which considerable experience and expertise has been acquired. There are several reasons why BI solutions are custom solutions. First and foremost, they must provide a consolidated view over the data of an organisation. This view should conform to the organisation’s reporting and performance moni-

toring needs. Given the disparity of these needs, arising from differences in organisational structures, legal requirements and established processes, no one-size-fits-all solution can be devised. Moreover, in order to obtain the necessary data from the organisation’s operational systems and massage it into an appropriate presentation form, an extract transform and load (ETL) process needs to be implemented. Again, given the diversity of data sources at different organisation sites, often including several systems, databases and spreadsheets, custom development becomes imperative. This, however, invariably means increased implementation costs. In the current challenging economic climate, it is both ironic and unfortunate that the companies that stand to gain the most from the deployment of a BI solution are also the ones who are most reluctant to shoulder this cost. Consequently, BI solutions can no longer be promoted on their merits alone, such as better resource utilisation and planning, improved operational efficiency and increased customer satisfaction, to name but a few. Steps must also be taken to reduce the cost of providing a BI

solution to such increasingly reticent clients. That is why we have made a strategic decision to develop the CUBIQ family of packaged BI solutions aimed at specific industries. One of the first members of this product family, CUBIQ:Maritime, is aimed – as the name clearly indicates – at the Maritime industry. During the design and development of this as well as all other CUBIQ products, several decisions were made in order to reduce the implementation cost. The most important of these decisions was to develop the product around a fixed view, in the form of a dimensional model, over the data describing the business areas of a typical maritime company, such as financials, vetting, crewing, marine and safety and operations. For each area, a set of key performance indicators (KPIs) is also provided, along with a selection of interactive dashboards incorporating powerful data visualisations and drill down capabilities. All of these were developed through a combination of experiences accumulated during the development of BI solutions for maritime companies, a survey of international environmental and safety maritime standards and, last but not least, the input of academic experts. The goal was to cover the needs of most maritime customers without resorting to customised implementation, save for the development of the ETL process. Moreover, in areas where most maritime companies are not expected to capture any data electronically, such as vetting inspections, special data capture screens have been developed. Although CUBIQ:Maritime was designed as a quick and cost-effective way for deploying a BI solution in an organisation, it is by all means an enterprise-level solution. Special care has been taken to optimise both its performance and scalability, allowing it to handle large volumes of data in a short amount of time. Moreover, it has been designed with extensibility in mind. As customer needs evolve, the product can be enhanced with custom extensions, something that is still cheaper than a fully customised BI solution. In conclusion, we believe that packaged BI solutions will provide a cost-effective – yet in no way compromised – option to cost-conscious customers, allowing them to start reaping the benefits of BI in a relatively short amount of time. n Dino Philaretou is a Senior Consultant with more than 28 years of experience in the IT industry. Since 1994, he has been involved in the development of several BI solutions for the public sector as well as the retail and maritime industries. He currently heads the BI division at Cosine Consultants Ltd.

78 www.busmanagementme.com

Cosine AD.indd 1

25/2/10 16:31:33

INDUSTRY INSIGHT

REVOLUTIONISING

STORAGE NETWORKS Andrew Gilman and Eric Schott of SNIA (Storage Networking Industry Association) discuss how storage network technology is evolving.

s economic conditions recover in 2010 many organisations will be looking to evolve their IT operations with new data centre technologies while enhancing business processes. Server and storage consolidation through virtualisation technology has been an essential element to this evolution by helping administrators contain operational expenditures (OPEX) and capital expenditures (CAPEX). However, as IT consolidation increases overall utilisation and I/O density of our virtualised data centres, the network is emerging as the new bottleneck and an area primed for innovation. In short, we simply need a larger â&#x20AC;&#x153;pipeâ&#x20AC;? for communications to extend the benefits of IT consolidation through virtualisation to the network.

80 www.busmanagementme.com

Storage article.indd 80

26/2/10 16:29:30

Fortunately, new networking protocols have been swift ly making their way through the standards committees including 10 Gb Ethernet and Fibre Channel over Ethernet (FCoE). These new standards go by several names: “Converged Enhanced Ethernet,” “Data Centre Ethernet,” and the industry-standard term “Data Centre Bridging,” or DCB. Vendors are increasingly integrating these networking capabilities in new server, switch and Storage Area Network (SAN) designs that will lower overall deployment costs in 2010 and beyond. This article will provide an overview of the reasons DCB is being developed and how it can improve storage networking. the data centre for applications, servers, and storag

Why ethernet requires TCP for reliable communications While ethernet is generally a reliable technology, data packets can be dropped in transmission due to network congestion, traffic load balancing, and loads on servers and switches. Dropped packets typically don’t cause big problems, but they can result in performance variations for applications. Protocols such as TCP are run over IP on top of ethernet to ensure seamless communications. TCP understands if packets were dropped during the communication; if so, those packets are re-sent, and if not, confirmation of a completed transmission is returned. With this “handshake,” TCP delivers reliable communications. TCP also provides routing capabilities so that communications work seamlessly across different networks.

DCB delivers reliability and predictable performance DCB extends ethernet by providing a network infrastructure that minimises packet loss, enabling improved data networking and management within the DCB network environment with features for priority flow control (P802.1Qbb), enhanced transmission selection (P802.1Qaz), congestion notification (P802.1Qau), and discovery. The result is more deterministic network behaviour. DCB is enabled through enhanced switches, server network adapters, and storage network adapters. One component of the DCB framework is class-based pause (an extension to the IEEEP802.3x™ definition) that makes network performance extremely predictable by delivering “lossless” network traffic. While standard

ethernet performs very well, its performance can vary (see graphic). With DCB, the maximum performance is the same, but performance varies very little. This is extremely beneficial for data centre managers, enabling them to better predict performance levels and deliver smooth traffic flows.

Segregating and prioritising trafﬁc Storage networking best practice recommendations include physically separating the data network traffic from the storage network traffic. Because today’s devices commonly have multiple 1Gb ports, segregating traffic has been easy – for example, two ports can be assigned for storage networks and two for data networks. However, consolidated server environments have a different circumstance. These environments generally use server virtualisation software with large servers, and can simplify connectivity with multiple 10 Gb ports – consolidating bandwidth instead of distributing it among multiple 1 Gb ports and a tangle of wires. These 10 Gb ports handle all the traffic – database, web, management, and storage – improving infrastructure utilisation rates. But with traffic consolidated on fewer larger connections, how does IT segregate the storage and data networks, prioritise traffic, and guarantee service levels? Data Centre Bridging (DCB) includes a prioritisation functionality, which improves management of traffic flowing over fewer, larger pipes. In addition to setting priority queues, DCB can allocate portions of bandwidth. For example, storage traffic can be configured as a higher priority than data traffic – but the administrator can allocate 60 percent of bandwidth to the storage traffic and 40 percent to the data, ensuring operations and predictable performance for all.

Storage networks and “lossless” communications The two primary storage networking protocols are Internet SCSI (iSCSI) and Fibre Channel (FC). In an iSCSI storage network, SCSI commands are sent via TCP/IP to ensure “lossless” communications. In a Fibre Channel storage network, SCSI commands are sent using the Fibre Channel protocol; however, Fibre Channel sends frames with a “handshake” that does not expect packets to be lost. The FC protocol presumes a “lossless” network infrastructure and therefore requires spe-

cialised HBAs and switches to provide reliable physical communications.

Unifying the network: FCoE requires DCB For unified networking, iSCSI works well with 10 Gb ethernet. To bring the FC protocol onto this unified 10 Gb infrastructure, the industry is creating Fibre Channel over Ethernet (FCoE). Because the FC protocol requires a “lossless” network, Data Centre Bridging is required for FCoE deployments. FCoE will work only with end-to-end DCB-enabled components; no intermediate, non-DCB enabled switches or devices can function with FCoE. Devices that support both standard ethernet and DCB will interoperate easily based on the switch settings on the network ports. For example, an iSCSI storage device that supports DCB, and is connected to a DCB switch, can communicate with all devices on the network without re-configuration or intervention. Components communicate ubiquitously, since iSCSI networks can go into and out of DCB portions of the network without packet conversion. In iSCSI environments administrators can start with a small DCB implementation and expand as desired. Conversely, FCoE environments require DCB, necessitating an end-to-end data centre network conversion.

How DCB brings consolidation beneﬁts to networks Data centre bridging is a new network framework based on extensions of ethernet standards that can bring to networks the same IT consolidation benefits that storage and servers have enjoyed in recent years – higher utilisation rates, simpler management and lower total cost of ownership. It is reliable, offers predictable performance, and can segregate and prioritise traffic. Administrators can now implement standard ethernet, Data Centre Bridging, or a combination of both.

The SNIA Ethernet Storage Forum is a resource available to end-users who have questions about how to integrate established and emerging storage networking technologies. For more information log onto www.snia.org/esf.

www.busmanagementme.com 81

Storage article.indd 81

26/2/10 16:29:32

EXECUTIVE INTERVIEW

A dedicated business solution Zhang Ping’an, Huawei Symantec COO, speaks to Business Management about enterprises’ growing network security and storage needs.

Can you tell us more about Huawei Symantec? Zhang Ping’an. The Huawei Symantec joint venture was announced in May 2007 and officially established on February 5, 2008. Huawei and Symantec established this partnership to develop and distribute worldleading security and storage solutions to enterprises. Our portfolio of end-to-end solutions serves customers ranging from SMEs all the way to large enterprises across industries such as government, fi nancial services, oil and gas, healthcare and telecommunications, amongst others. Headquartered in Chengdu, China, Huawei Symantec has more than 3800 employees. Because of our dedication to continuous innovations for our customers, Huawei Symantec has applied for more than 500 patents and the company has opened R&D centres across China, in Chengdu, Beijing, Shenzhen and Hangzhou. Our company has formulated major standards for and on behalf of domestic and international security and storage standardisation organisations. Huawei owns 51 percent of the joint venture and Symantec owns 49 percent. Huawei Symantec has more than 140 service branches around the world to fully support the needs of our global partners. What are major storage issues that are affecting enterprises today? ZP. Today, there’s a growing need for high performance systems and networks as balanced by system availability and data integrity. That is why Huawei Symantec has developed its Secospace and Oceanspace portfolio of solutions to address needs across virtualisation, cloud computing, security and data storage. Virtualisation: The proliferation of data, devices and networks has increased the storage and security requirements for enterprises. It is necessary to integrate hierarchical storage devices, simplify management, and construct multi-level disaster recovery systems. Huawei Symantec’s product solutions meet these requirements and enable the implementation of uniform management, data transfer and data protection. Cloud computing: According to IDC’s Digital Universe report, the volume of data created by individuals and enterprises is doubling every 18 months. It will simply become too expensive for companies to store all of this data on their own servers. Huawei Symantec not only offers the most advanced storage node devices in the industry, but we also have designed our distributive storage systems and cloud storage services to ensure a substantial decrease in total cost of ownership for our customers through innovations like a standby hibernating storage mode.

Security: The threats facing internet service providers are changing from pure network risks to network and content combined risks. In addition, threats are transmitted at a faster pace through more extensive channels, generating greater impact. Therefore, security must be fool-proof for network applications. Enterprises of all sizes today need to be more proactive and should establish a deep defense system. Data storage: The exponential growth of data has put pressure on enterprises of all sizes, and as a result they seek greater storage space and efficiency. Huawei Symantec’s approach is to provide cutting edge technology and modular designs to create a professional,

“The threats facing internet service providers are changing from pure network risks to network and content combined risks. In addition, threats are transmitted at a faster pace through more extensive channels, generating greater impact”

integrated storage solution for our customers that highly utilises storage resources. Similarly, our portfolio includes storage systems that are economical and effective in data protection for small and medium enterprises. What is Huawei Symantec’s outlook for this region in 2010? ZP. Globally, Huawei Symantec retained 80 percent annual growth and became a key player in security and storage markets, with annual sales in 2009 exceeding US$300 million, despite competing in markets dominated by global brands. Our business in MENA is an important part of Huawei Symantec’s growth. IDC forecasts that IT spending in the Middle East and Africa will reach US$49.77 billion in 2010. To meet this demand, Huawei Symantec will continue to introduce our innovative network security and storage solutions into the region through our authorised distributors, such as Mindware and Tech Access, to grow our network of partners and expand our business here.

82 www.busmanagementme.com

Huawei.indd 82

26/2/10 16:28:40

HUAWEI SYMANTEC_AD.indd 1

25/2/10 16:43:28

BMC_co proof 26/02/2010 17:06 Page 84

ASK THE EXPERT

The right remedy Halim Belkhatir suggests that prevention is better than cure when keeping down the cost of compliance.

hat do you do when the ‘check engine’ light comes on in your car while you are driving down the road? Do you need to immediately pull over and call a tow truck? Probably not, but you should get the engine checked and the issue resolved as soon as possible. If you address it in a timely manner, it may be a routine repair. However, if you ignore the light and keep driving day after day, you may cause serious damage to your engine, resulting in an expensive repair or replacement. It’s the same principle with data centre compliance. Achieving and maintaining compliance with government regulations and industry standards can prevent a small issue from causing major damage to your company’s financial well being or reputation due to security breaches and outages. These actions can apply to Sarbanes-Oxley 404, Statement on Auditing Standards (SAS) 70, the Personal Card Identification (PCI), Health Insurance Portability and Accountability Act (HIPAA), Basel II, and other regulations and standards. Achieving and maintaining compliance can help your organisation avoid the high cost of recovery and repair that goes along with unfavourable audit findings or having your business compromised. Some companies have had breaches that have resulted in losses of millions of dollars. Practicing continuous compliance is also vital to ensuring credibility and profitability. Have the right controls, know when people aren’t following the rules, and find out where and why this is happening. IT control deficiencies are the most costly and difficult to identify and, therefore, bring into compliance. The key is to focus on prevention while taking advantage of automation to lower compliance cost. The below best-practice approach provides a roadmap for achieving continuous data centre compliance. Definition and Goals: Start with your vision, and a clear definition of compliance and the compliance goals you want to achieve. Firstly, create a compliance definition, making sure you address security, configuration assurance and verification

84 www.busmanagementme.com

support. Then establish your compliance goals, covering standardisation, accountability, transparency and measurability. Implementation: Automation is critical for ensuring continuous compliance with policybased operations. There are three parts to the implementation step: choosing and implementing a governance framework, identifying and implementing controls and adopting a platform to ensure continuous compliance. Measurement: Along with implementing the platform and controls, you need to put a mechanism in place to measure performance so that you can assess the effectiveness of the implementation. The specific metrics you choose will depend on your organisation and the particular compliance objectives. Enforcement: Maintaining continuous compliance is critical. Look at deviations to determine if they are more prevalent on a particular platform, role, or service. Investigating these areas guides you in applying resources to correct the deviations and ensuring that systems are always operating according to policy. Monitoring: Monitoring is about providing insight into whether your environment is becoming more or less compliant and reporting any

findings to management. It shows you how well controls are working and what activities are taking place. Management reports provide data for creating scorecards and identifying trends. Just as spending what’s needed to keep your automobile in good repair will improve its overall value, making an investment to implement these best practices for a continuously compliant data centre will ultimately improve the value of IT to the business. The effort you invest in these best practices will pay many dividends beyond compliance. To assist you in this effort, automated processes and tools help to eliminate human error, free up staff time, and bring greater stability to your IT infrastructure. All of these benefits can translate into lower costs, greater efficiency, and a good corporate image with customers — benefits that will position your company to compete more effectively now and when the economy rebounds. n For more information about BMC solutions to help maintain continuous compliance, visit www.bmc.com/bsm. Halim Belkhatir leads BMC Software's Middle Eastern sales operations. He has 12 years of international sales and sales leadership experience and speaks four languages (French, English, Arabic and Spanish). He has a strong business and technical understanding of industry trends, demonstrating in-depth knowledge of cloud computing, data centre operations, grid, networks, IP voice and telephony and management software.

BMC AD.indd 1

25/2/10 16:23:20

AVIATION

Setting standards Despite having launched in the midst of an economic downturn Kuwait’s Wataniya Airways has already smashed its own targets and is now expanding to Europe. Business Management met the airline’s CIO Chandrasekhar Nene to ﬁnd out how technology is supporting its ambitious expansion plans.

86 www.busmanagementme.com

Chandrashekhar Nene.indd 86

26/2/10 16:15:08

he timing of Wataniya Airways’ launch one year are never out of touch with their offices. It’s a big differentiator. Lots ago could not have been worse. It collided headof travellers say ‘my goodness why don’t others (airlines) do that’. It’s on with the worldwide economic downturn and a required thing in today’s business climate,” says Nene. In order to for an airline providing premium only services, facilitate the use of mobile phones onboard fl ights, Wataniya’s planes this could only spell disaster. But there was no are equipped with an antenna which is linked to satellites around sign of gloom on the horizon at the Kuwaitthe earth that then bounce the signal back to the passenger’s service based airline’s fi rst anniversary celebrations. In provider. “The quality of the calls is so good that the person on the fact the carrier issued a jubilant press release celebrating the fact that other end of the line would never know you are talking to them from within its fi rst year it had carried a quarter of hundreds of miles up in the air,” says Nene. a million passengers, launched a frequent flyer He goes on to say that the annoyance factor The Wataniya story programme and put in orders to purchase a of passengers chatting on mobile phones has further three aircraft in 2010 bringing its fleet not so far proven to be a problem: “We had The idea for Wataniya Airways was first size to seven. apprehensions that when people started talkconceived following the liberalisation ing loudly others would not be happy but that of aviation services in Kuwait by the Unique selling points has not happened. You have to believe in the government in 2005. It was funded The airline’s CIO Chandrasekhar Nene guests also. They know they are in an enclosed through the proceeds of an IPO launched puts the airline’s surprising success down to space so they talk soft ly. Plus they oft en just in 2006. The aim was to provide a the fact that its passengers – or guests as he use chat or email anyway which doesn’t make premium service for travellers flying likes to refer to them – have a very different any noise.” from an exclusive terminal at the experience onboard a Wataniya Aircraft comSheikh Saad Terminal, which provides pared to rival carriers. For a start, Wataniya’s Expansion plans personalised check-in services and fast Airbus 320 aircraft only carry 122 passengers Earlier this year, the airline relaunched track immigration procedures. The airline and even the economy seats are of the “premiits website, as part of its aim to attract more currently flies to eight destinations; um variety”. The airline also operates from its online bookings. The site, www.wataniyaairKuwait, Dubai, Bahrain, Beirut, Cairo, own exclusive terminal, the Sheikh Saad Terways.com now has a new look and allows pasJeddah, Damascus and Sharm El Sheikh. minal in Kuwait International Airport, which sengers not only to book and check in online The Chairman of the airline is Abdul means its customers don’t face lengthy queues but to chat with the airline’s travel consultants Salam Mohamed Ahmed Al Bahar, who to get through passport control. The biggest to get instant answers to questions about their joined the Wataniya board in 2006. Prior difference however, is the fact that it is one of reservations. Currently, says Nene, around to this he was a board member of several the world’s only commercial airlines to allow 25 percent of fl ights are booked online. Howorganisations including Tamdeen Real passengers to use their mobile phones onever the airline aims for 40 percent of tickets Estate Company, Wataniya Telecom, board. “Th is is not only unusual but it’s a very to be eventually booked via the website. He Bank of Bahrain and the Middle East and big hit with our business travellers because says however, that there still remains a high Tunis International Bank. they like to be in touch when they are flying demand for telephone or over the counter and it really helps them out a lot. It means they bookings: “The target is to take it up to 40 per-

www.busmanagementme.com 87

Chandrashekhar Nene.indd 87

26/2/10 16:15:11

Interactive intelligence AD.indd 1

25/2/10 16:47:20

cent by the second quarter. But I’m not very glued into targets. It’s more important for us to monitor the way bookings are made. Because there is another aspect to this. When you book through a travel agent, for example, if you are a corporate traveller, you get service also, whereas on the web you only get a limited service. Corporate travellers are probably less concerned about controlling their own travel experience and would prefer for a travel agent to ensure the booking is to their satisfaction and then to facilitate any changes that need to be made.” Nene adds that to back up his theory, the bulk of online bookings are currently made by leisure not business travellers. Wataniya’s website is however a work in progress and must be continually updated as the airline adds new destinations to its rapidly expanding network. The airline currently fl ies to eight destinations across the Middle East and there are plans this year for it to enter Europe with the fi rst destination being Istanbul. Nene’s job is to ensure that the IT infrastructure is in place to support the airline’s operations and booking-in procedures and to be compatible with the Sabre reservations systems that are in place at each new airport it fl ies to. “The service levels and availability of IT support is different in each area. I have to make sure that in each market I have a good partner to provide services. Like in any other business the most important aspect is the booking in. One side of this is the website that we see, the other is the whole Sabre mainframe, which is located in the US and does the back end work. I have to make sure that the Sabre system is available in all the destinations to which we fly and that it should be accessible to all travel agents wherever they are located,” says Nene. Th is, he says, can be a challenge, at destinations with less sophisticated IT infrastructures or at already overcrowded airports: “We are more vulnerable in some airports which have not been expanded and where getting a good communication line can be difficult because the airport is already at full capacity. There are two different problems you can face. One is the availability of physical resources such as telephone lines and network lines. The other issue is the availability of human resources. I send people from the head office to work on the installation and starting up of new offices. IT support later on though, is a challenge. I make contacts with some local companies there but for specialised help I might supply one of my experts to that station.” Nene’s job is made ever more complex by the fact that the very process of starting fl ights to new destinations is further complicated by the process of gaining permission from civil aviation authorities and co-ordinating arrival and departure slots. “It’s very difficult to get a slot. And apart from that you have to make sure that whatever

slot you are getting fits into your schedule so that your aircraft can be utilised to the maximum.”

Succeeding against the odds The ever-expanding Wataniya network is all the more impressive given the pressures of the economic downturn. Nene admits that the airline was affected by the downturn but says it made a good enough fi rst impression on passengers to see it through the crisis: “If I said we were not affected I would not be telling the truth. Every business has been affected and Wataniya was affected a little more because it was a premium service carrier. In recessionary times this always takes a hit. But fortunately, by the time it had happened, Wataniya had made a name for itself and people had started to choose it for its quality. We also dropped our fares to make sure we were in line with the inflationary situation.” He goes on to say that the airline’s plans to increase the size of its fleet were not affected by the downturn and that it is still on track to purchase an additional three aircraft s-. He is however, in a situation where he is being required to make cost savings while maintaining the airline’s quality of service for passengers: “What has really changed is that we are in the process of tightening our belts. My biggest challenges are cost control and quality maintenance. I want to get the same or better quality at a reduced cost.” As part of this process he and his department are reassessing existing outsourcing contracts to work out where savings can be made: “There are only seven people in this department so we do a lot of things by outsourcing. I have asked these outsourcing partners to redraw their contracts so that we can get the same or better service at a lesser cost. It is tough but it makes the job interesting.” The next big IT job on Nene’s list is to create a data warehouse in which to store customer data and therefore improve customer relationship management. Th is is particularly important given the airline’s frequent flyer programme: “We launched the programme in our fi rst year of operation. Airlines usually wait until they’ve done three to five years of business fi rst. Our current focus is to make sure we provide an exclusive service to our passengers. We use the database to work out exactly the services that our frequent travellers want. I want to reach a stage where we greet guests at the airport and on board by their name and according to their previous details. We are in the process of creating that data warehouse then utilising it for the best customer relationship management that we can.” And in an industry where the customer comes first – particularly in such a tough economic climate – Nene and his team must work harderthan ever to ensure these frequent flyers keep coming back for more.

“The quality of the calls is so good that the person on the other end of the line would never know you are talking to them from of miles up in the air”

www.busmanagementme.com 89

Chandrashekhar Nene.indd Sec1:89

26/2/10 17:01:04

ASK THE EXPERT

Storage in the 21st century Derek Strauss says DW2.0 will provide the architecture for the next generation of data warehousing.

ata warehousing has been around for almost two decades and has become an essential part of the information technology infrastructure. A data warehouse contains integrated granular historical data. First generation warehouses have addressed many information requirements. However, several challenges are facing these warehouses today. For first generation data warehouses, deriving value meant integrating numeric based, transaction data. Today, deriving maximum value from corporate data means taking all corporate data and deriving value from it. This includes textual, unstructured data as well as numeric, transaction data. In the 1990s, the cost of data warehousing was almost a non-issue. In today’s world, the cost of data warehousing is a burning issue, and with volumes of data increasing exponentially, better data management solutions are vital to cost containment. Metadata, master data and data quality were neglected in early warehouses. Today, data quality, the business meaning of the data, business rules related to the data, the cohesive management of enterprise master data (customer data) and reference data are all critical to the data warehouse. In today’s world, data warehouses are recognised as being the foundation for the competitive use of information – and not simply from a strategic decision support perspective, but also as a key component in operating the business. The rate of change in the business environment has consistently increased year-on-year. Today, it is recognised that the data warehouse needs to be malleable so that it can keep up with changing business requirements.

DW2.0 – addressing the challenges DW2.0 recognises the data lifecycle. Once data enters the data warehouse it starts to age and in time the probability of access diminishes. This has profound implications on the technology that is appropriate to the management of the data. Another notable phenomenon is that as data ages, the volume of data increases (in most cases, dramatically). DW2.0 highlights the special design considerations for handling large volumes of data with a decreasing probability of access. The data warehouse is most effective when containing both structured and unstructured data. Classical first generation data warehouses consisted entirely of transaction-oriented structured data. A modern data warehouse

should contain both structured and unstructured data. Unstructured data is textual data that appears in medical records, contracts, emails, spreadsheets, and many other documents. There is a wealth of information in unstructured data. But unlocking that information has been a real challenge. DW2.0 describes in detail what is required to create a data warehouse containing both structured and unstructured data. For a variety of reasons metadata was not considered a significant part of the early data warehouses. DW2.0 recognises the importance and role of metadata. The issue is not the need for metadata. There is metadata everywhere – in local repositories such as DBMS directories, ETL tools, data modeling tools and so on. What is needed is a cohesive enterprise view of metadata. All of the local metadata stores need to be coordinated such that they can work together harmoniously. In addition, there is a need for the support of both technical and business metadata in the DW2.0 environment to enable such things as data lineage (understanding the origins of the data), voice of data (focusing on data quality) and change impact analysis. Data warehouses are ultimately built on a foundation of technology. The data warehouse is driven by a set of business requirements against the backdrop of a corporate data model. Over time the business requirements of the enterprise change. But the technical environment and its data structures traditionally have not been easy to change. DW2.0 provides two solutions to this dilemma. One solution is soft ware based, using technologies that provide a malleable foundation for the data warehouse. The other solution is the design practice of separating static data and temporal data at the point of database definition. Either of these approaches has the very beneficial effect of allowing the technical foundation of the data warehouse to change in step with business changes.

Derek Strauss is founder, CEO and a Principal Consultant of Gavroshe. He has over 30 years of IT industry experience, including 24 years working in the data resource management and business intelligence/data warehousing ﬁelds. He is a co-author of the book DW2.0 – The Architecture for the Next Generation of Data Warehousing, Morgan Kaufmann, 2008 (W.H. Inmon, D. Strauss, G. Neushloss)

90 www.busmanagementme.com

Gavosche.indd 90

26/2/10 16:28:01

GAVROSHE_AD.indd 1

25/2/10 16:41:21

INDUSTRY INSIGHT

Uncovering the truth Iliyas Campbell outlines the misunderstood business risks in an often misunderstood region.

he Middle East is an often misunderstood part of the world in terms of culture, politics and religion. Likewise, the business environment is similarly misunderstood by organisations outside the region and misrepresented by reporting that often falls short in the depth of research. Many look at the region as a hive of activity that is unpredictable, difficult to understand, and high risk due to the reporting of confl icts and regional business concerns that we see today. Adding to this, there has also been the recent spate of press coverage targeting Dubai’s debt concerns, and various fraud and corruption cases in the region leading to some significantly negative reporting and adverse speculation on the future of the region’s main business centres. The reality of the region is somewhat different. Granted, there are confl icts and a number of flash-points to consider, and economies have slowed from the pace set over the previous decade but the grim picture being portrayed in much of the

media is not closely aligned with the reality of business and actual risk in the region. Are these therefore a true indication of increased risk to businesses in the region or to an investor looking at future opportunities? What does it all mean for business leaders and risk managers? Often one of the most difficult things for an organisation is identifying the risks that are relevant to their business. Flooded with a plethora of information, statistics, numerous vendors, distributors, clients and stakeholders, risk managers can become swamped with data that becomes increasingly difficult to rationalise. Many of the risks will be obvious, fi nancial models and regulation may determine risk tolerances and many risks will have been long-term. These known risks do however threaten to obscure newer, less obvious risks. These could be an internal part of the business process that has become institutionalised or part of the organisation’s operating culture, or an external risk from new ventures, partners or vendors or geopo-

litical changes. For organisations outside of the region and at a distance from the dayto-day realities, this can be a daunting challenge particularly when considering the often skewed reporting on the region. Much has been said of the rising cases of corruption in MENA – debt concerns in Kuwait, Saudi Arabia, Dubai, and the crash of real estate markets. Numerous high-profi le business names have been mentioned in this apparent increase but, what the statistics often used in the media and presented by analysts don’t often taken into account is that previous years have not seen the same focus on anti-corruption. It goes without saying, therefore, that any anti-corruption effort will see a significant increase in the number of cases reported compared to previous years. Although there has been an increase in cross-function risk assessments, with fi nance, operations, administration, IT and management all taking a responsible role in the process, it is still common for risk assessments to fail on some points. Common failures include the cross-pollination of information between business units, which may lead to an increased level of overall exposure to a particular risk item. Other areas include a lack of alignment with the business model and objectives. Th is may not directly influence the assessment of risk in all cases but can have an effect on management acceptance of the risk assessment and their buy-in to any subsequent mitigating strategies, which could result in detrimental effects on the business. It is in to this labyrinth of processes and functions that perceptions fuelled by exaggerated reporting are led. Considering the most recent reporting on issues such as the debt restructuring in Dubai, corruption linked to real estate, debt at prominent Saudi conglomerates and Kuwaiti investment houses, it isn’t surprising that optimism has waned in the region, particularly from the outside. Heavily leveraged businesses may be restructuring, corruption cases may be increasing, but business and investment goes on as usual. Iliyas Campbell is the founder of Diligence Management Consultants. Campbell has worked within the MENA region for 14 years and has been an instrumental part of the development and management of risk and crisis management programmes for numerous multi-national and regional organisations across many industries.

92 www.busmanagementme.com

Diligence.indd 92

26/2/10 16:18:12

iStrategy Europe 5th-6th October 2010 London, UK At a 5 star venue TBC Transforming the Enterprise with Digital Expertise

Participation in Social Media and Interactive Marketing is no longer revolutionary.

it’s crucial.

In 2009, companies with dedicated social media activity boosted sales by over 18%, while those with minimal or no presence saw a 6% decrease. As 2010 marks a shift in consumer mentality from recession to recovery, companies must adjust their strategies according to how customers make purchasing decisions. Brand differentiation will be key, and companies must be at the forefront in areas like social web, mobile apps and SEO in order to create a distinguished customer experience. iStrategy October 2010 marks the next step in your marketing strategy. Here, you will learn: • The biggest trends in consumer spending online • Innovative technologies for communicating with customers and how to best implement them

• The top 10 most important factors in your social media strategy • How to measure your social capital and monetize your efforts • Hot buttons to bring people to your web store front • How to find your best fit in integrating email and social media • How to deliver a response-driven, relevant message The simple truth is that there is no magic one-sizefits-all marketing mix. iStrategy will arm you with the deep understanding of aligning social media and digital strategy according to your organization’s processes and operations to achieve the objectives you’re after. Join us in October to network, share ideas, and most importantly find out how to build your marketing strategy to its fullest potential.

For More Information, Please Call: Max Ford, Global Event Director. Tel: +44 (0) 117 915 4753. Mobile: + 44 (0) 7798 820 711

iSTRATEGY AD P87.indd 1

22/1/10 16:15:08

Diligence AD_9jan08 25/02/2010 16:34 Page IFC1

Diligence AD_9jan08 25/02/2010 16:34 Page IFC2

BANKING

A force for change The financ cial crisis forced internationall b anks to rethink the way they have functione ed ffor or decade financial banks functioned decades and to face new levels of scrutiny and regulatory compliance. But, says Gary Greenwald, Chief Innovation Officer of Citigroup, it has also ushered in a new era of forward thinking when it comes to technology. He tells Business Management why. How did the financial crisis change the way banks use technology to drive business? Gary Greenwald. I think last year and the crisis we’ve faced has brought to the surface some inherent challenges around how technology is impacting or has impacted our ability to respond to the crisis. If you look at how banks are organised, particularly global banks like Citi, disparate systems and platforms in many countries have to come together to make the payments and transactions banking system work. When you have an event like the Lehman bankruptcy, being able to show where the exposure is and where the unsettled trades are, ends up being very complex.

the investment because my view of regulatory spend is that it is not a competitive differentiator. The goal should be to do it to meet whatever requirement is on the table, but to do it cost effectively and hence free up capex and investment bandwidth for things that do drive business such as new markets and differentiation with clients. We’ve been lucky at Citi to have an investment budget that has obviously accommodated the regulatory requirements. But given the importance of transaction banking, people are innovating and getting to spend on building things over and above just the regulatory things. So I think this has been a good year, and a surprising year for innovation.

What did the crisis highlight as the most important technology requirements in banking? GG. It brought to the surface several technology imperatives. One is the ability to track the flow of data in the same way that say, FedEx can track the delivery of a package. We have to have more activity monitoring software in order to do that. Another technology imperative it has brought to the surface is the need for standardised data. If someone asks the question, ‘what is my exposure to Counterparty X?’ we have to have common identifiers and data nomenclature so that we can put that information together. And without that you’re flying blind and you can’t react to those events or really understand the risks you face.

How would you say the economic downturn has affected the management of businesses both globally and locally and how has it changed the way banks approach innovation? GG. I think it was a Stamford professor who coined the phrase ‘crisis is a terrible thing to waste’. Th is has shown up a lot this last year. I don’t think we wasted this year, in terms of innovation. I think we’ve actually found the real pain points of clients, corporates and counterparties and have worked with them to fi nd solutions, many based on technology crisis. We’re doing work around online analytics and digital signatures. The need has been there, even with this economic crisis, to do that innovation. In terms of the global versus local markets, it’s always a balance of how you run a global market and respond to local nuances market by market, yet get scale. I think what the crisis may have forced is a little more discipline. I see discussions going on within Citi and also in other banks around how to innovate with scale, allowing last mile customisation input from people on the ground. But this means doing it on a global platform with a common infrastructure because otherwise you have a

How do you think regulatory compliance in the wake of the ﬁnancial crisis will affect banks’ spending? GG. I think there are opportunities to do regulatory spending in a smarter way. Perhaps banks could share the costs of that regulatory spend with other like-minded institutions. Maybe banks could do it once then share

96 www.busmanagementme.com

Gary Greenwald.indd 96

26/2/10 16:47:33

thousand flowers blooming. That’s a very expensive non-scalable way to do innovation. What’s been learnt from the ﬁnancial crisis in terms of risk management? GG. One of the issues that I like to talk about regarding banks repositioning comes back to digital identity. Think about the growth in the world of credentialing people for online healthcare records access or access to ecommerce sites. That’s a core competency of banks. We are trusted third parties, we know your customer-type processes and we know about the safe and regulated storage of information. I think banks pushing out in that space is a way, in the minds of consumers or businesses, to retake or make sure we properly claim ground that is a core competency of banks. I think if you’re a student of that space you’ll see more and more activity by banks in this world of digital identities and online credentialing. How do you think the globalisation of ﬁnancial services will evolve in the next decade? GG. As an innovation guy with a technology and analytical bent, the last thing I want to do is be the crystal ball predictor of what governments will do. Clearly the crisis of the last year has pointed out the interdependency across financial markets. And the need for transparency and importance of governments allowing trade to flow. If I were a wishful thinker, I would say we would like to see that continue. The cost of doing business where there are hundreds of disparate regulations as opposed to fewer that are homogenised, clearly makes sense for many parties, like banks.

Citigroup is one of the world’s biggest ﬁnancial services institutions with 350,000 employees worldwide and 20 million customer accounts based across over 100 countries. It is made up of 15 different brands, including Citibank, CitiFinancial, Citi Institutional Clients Group and Citi Private Bank. It is organised into two main segments into which the different brands fall; Citicorp and Citi Holdings. The organisation originated in 1812 when Citibank was ﬁrst set up.

ers in the ecosystem get together to work out how we can deliver value to the different constituencies. As a bank we need to be very much involved in and at the forefront of innovations in mobile banking. It is going to be part of a critical reinvention of core aspects of banking, both on the consumer and institutional side. Do you think non-banking companies will use mobile banking technology to challenge banks with new payment service businesses? GG. Banks have to be paranoid in thinking through threats to business models. We need to be forward thinking, forward looking and at the same time work backwards from where value can be created and turn that into a business model. So I think mobile and other technology is bringing in a broader set of players to the payments industry but that does not mean there’s no role for banks. What it means is that we have to be very creative and innovative in terms of technology but also business models.

Is there a danger that the banking industry could become over regulated, hence risk averse? GG. I think that in the transaction banking industry, the risks are both well understood and reasonably well What particular areas of innovation are you focusmanaged. The crisis in the last year was not in transacsing on at present? tion banking. I spend a lot of time with our regulators. GG. One of the interesting statistics at Citi is that They like that we’re innovating, because where we’ve Gary Greenwald year-over-year in our transaction banking business innovating is tied to the re-engineering of processes our investment in new technology is up significantly. that result in control and efficiency in the whole finanWe have just announced the launch of a new online banking platform cial supply chain. The regulators are supportive of innovation and they for corporates called CitiDirect BE for Banking Evolution, which brings understand that it’s critical to the business model of a transaction services together input from our clients on the pain points they have in running business. their treasuries. It uses visibility, control, working capital efficiency, process simplification and new technologies to create a next generation Transaction banking has been the most resilient area of banking online experience that really tackles the next set of problems in an open during the ﬁnancial crisis. Would you put this down to innovation? architecture way. It operates with an open portal connected to SWIFT, GG. I put it down to a number of things. Clearly innovation has been very messaging and mobiles. We see this as core to Citi’s continued innovamuch part of transaction banking over the years as technology has allowed things to be done that couldn’t be done in the past and as regulations have tion in the transaction banking market. changed to allow globalisation. And client requirements have evolved to more sophisticated management of liquidity and working capital. So I Currently around six out of seven payments in euros are made using think part of it is tied to innovation and another part is tied to the busicash. How important is it to focus on epayments and mobile payness model of what transaction banking is about as a collector of liabilities. ments instead? As a collector of fees in a very predictable way, that’s in contrast to other GG. I think it’s very important. It’s at the stage where there have been lots businesses that have a little bit more volatility. Having a transaction and of controlled experiments, pilots and discussions with partners. I think the relationship between mobile technologies, mobile capabilities and bankservices business at the core of a bank is a very important thing. Citi, with ing is here to stay. What needs to change are the use cases, value proposiits renewed focus, understands that. One of our aspirations is to build up tions and business models around those. That’s going to take a little time as payments and transaction banking to be an even more important core of banks, mobile network operators, handset manufacturers and other playthe company.

www.busmanagementme.com 97

Gary Greenwald.indd 97

26/2/10 16:24:22

EXECUTIVE INTERVIEW

Keeping your banking options open Following the worst economic crisis for a generation could Islamic banking go global? We hear from expert Haitham Abdou. Why are leading ﬁnancial institutions increasingly looking to open an Islamic ‘window’? Haitham Abdou. The global economic crisis that rose in mid 2007 toook many shift s in 2009. Among the global uncertainty, the outlook for Islamic banking in the Middle East and emerging markets remains relatively bright. Most of the emerging markets in Asia, Africa, Europe, Latin America and the Islamic countries sustained relatively high GDP. During last year most of the fi nancial institutions adopted cost cutting, capital investment reduction and headcount strategies to survive the worst economic shock in years. However the Islamic banks were expanding into the African, Asian and European emerging markets. The leading fi nancial institutions realised the investment potential in Islamic banking and specifically within the emerging and Islamic countries as one possible option to get over the current economic situation and to retain levels of growth and expansion.

ganisations who use it to innovate and focus on creating new products and services and market them in record breaking time. The concepts of short ‘Time to Market’ and ‘Low Cost of Ownership’ were some of the main concepts that went into the design of IBS. Organisations who decide to use IBS will have the edge of swift adaptation in this dynamic industry. ITS Islamic Banking Solution has been developed to comply with various Shariah rules and Ijtihad, taking into consideration country specifics and central bank rules. How are your services catering to the banks in the Middle East and where in the world do you see as having potential for your business? HA. ITS adopted a global expansion strategy several years ago. Presently, ITS offers services in more than 35 countries worldwide. ITS offers a high level of technology, that can run on various platforms, support most major server operating systems, and use multiple and modern relational databases. Furthermore, ITS has been built on service-oriented architecture (SOA), which is a set of loosely coupled modular services to support both business and IT requirements. ITS is differentiated through its client services, which include training and support services, as well as improved offerings such as consulting services, facility management, remote infrastructure management, and project management.

With banks sometimes interpreting Shariah compliance rules differently, what challenges does this mean for ITS when creating a robust IT platform? HA. The Islamic banking philosophy is based on Shariah compliance, which guarantees purity of transactions and builds reliance on Islamic banking. Shariah scholars put a lot of effort into standardising the Islamic banking practices that are followed by several fi nancial institutions worldwide. AAOFI and IFSB are adding great effort towards the standardisation of Do you see the growth of Islamic banking slowHaitham Abdou is Group director of Marketing at ITS. He has over 15 the Islamic banking products and accounting. ITS has ing down in the future, both in the Middle East years of IT experience in the Banking realised the model of defi ning Islamic banking prodand globally? If not, why? and Finance Industry. Abdou also has Expertise in IT strategies for ﬁnancial ucts and work flow and the importance of harnessing HA. The Islamic banking market has grown over institutions, based on the latest service-oriented architectures, as well the technology to provide the Islamic fi nancial instithe average growth rate of the countries that have as in architecting technology to meet tutions with a tool that enables the banker to defi ne implemented Islamic banking over the last decade the requirements of Islamic ﬁnancial institutions. and innovate Islamic products in a timely manner to and will continue to increase. The emerging counmeet the Shariah board and the market needs. tries in Asia, Europe, Africa and Latin America and ITS innovated the fi rst Islamic Product Engine – backed up by its the Muslim countries are the main markets. However, the untapped long and extensive experience in the Islamic banking sector. The ITS markets like North America and also in non-Muslim countries are poIslamic Banking Solution (IBS) is a revolutionary application that is tential markets, where this new way of banking appears safer than the fully flexible, easy to use, adaptable and user configurable to allow orconventional system.

98 www.busmanagementme.com

ITS.indd 98

26/2/10 16:29:08

ITS AD.indd 1

26/2/10 10:01:55

DUBAI METRO_feb10 26/02/2010 17:20 Page 100

TRANSPORT FOCUS

On the

RIGHT TRACK One of the most advanced metro lines in the world and the ďŹ rst urban metro network in the GCC, the Dubai Metro is set to revolutionise the public transport system in the emirate. Sercoâ&#x20AC;&#x2122;s Ramadan Abdullah, Director of the Rail Operations Department, explains the unique challenges and reveals the crucial role of technology for the network.

100 www.busmanagementme.com

DUBAI METRO_feb10 26/02/2010 17:20 Page 101

Full speed ahead The RTA is also addressing transport issues through a renewal and expansion of the bus ﬂeet, low-emission vehicles for taxi operations, and, most recently, the Al Safooh tram project. First announced in April 2008, the Al Safooh is yet another world ﬁrst for Dubai, featuring an open tramway of all stops equipped with platform screen doors, permitting full airconditioning. Allowing for consistency with other RTA modes of transport, including bus shelters, air-conditioning adds to customer appeal in regular temperatures of around 40 degrees Celsius. The full scheme is for 14 kilometres mainly following Al Safooh Road, linking Madinat Jumeirah and the Mall of the Emirates with Dubai Marina and the Jumeirah Beach Residence. Phase 1 will create a twin-track 10 kilometre line with 13 stops, with a standard platform length of 44 metres. Mainly at surface level, there will be some elevated track near the Marina. To encourage overall public transport use, interchange with Dubai Metro’s Red Line will be provided at three points. Phase 1 of the project is due to start commercial services during 2011. Phase 2 would add a further 14 trams and four kilometres of line with another six stops. Source: www.railway-technology.com

ubai’s economy is based on finance, air transport, property development and tourism. However, the rapidly increasing population and high number of tourists is causing severe traffic congestion problems. Indeed, the population is forecast to grow by 6.4 percent annually to reach three million by 2017, and tourist numbers are projected to reach 15 million this year. The Dubai Municipality identified the need for a rail system to relieve growing motor vehicle traffic and support continuing urban development from research that started back in 1997 and came up with the Dubai Metro transport system. When completed the Dubai Metro will have 70 kilometres of lines and 47 stations – including nine underground. Two lines are currently under construction – the Red and Green Lines – with three more in the pipeline. Fully integrated within the network operated by the Roads and Transport Authority, a body created in 2005, the masterplan includes 320 kilometres of metro lines by 2020 to cater to the expected 3.3 million population. There are also plans for 268 kilometres of light rail tracks to act as a feeder system for the metro. Ground works for the metro system started in February 2006, centred around the 52.1 kilometre Red Line, with a contract worth US$12 billion awarded in the August of that year to start building the Green Line. The Red Line has 29 stations, four of which are underground, although only 10 were ready for the September opening date, and it runs from Rashidiya to Jebel Ali, passing the American University of Dubai. The entire length is expected to take an hour to travel, with an estimated 32,000 passengers an hour. The 22.5 kilometre Green Line will have 18 stations running from Al Ittihad Square to Rashuduya bus station through Deira City Centre and Dubai Airport Terminals 1 and 3. Trains run on elevated viaducts with the design and aesthetics developed specifically to enhance the urban architecture along its corridor. In no location will tracks cross highways, ensuring full mode segregation. Although taxi, bus and water taxi feeder services are being structured to encourage end-to-end use of public transport, the RTA is also creating three park and ride sites – the largest with 6000 places. A third-rail power supply was chosen to avoid the visual intrusion of overhead line equipment, and all stations, elevated and underground, will feature platform screen doors for passenger safety and to facilitate air conditioning. In June 2007, Serco (operator of the London Docklands Light Railway) was named as the preferred bidder for initial consultation and the system’s operation and maintenance. The UK£400 million five-year contract, relates to the first two lines as assigned by the RTA. Ramadan Abdulla, Director of the Rail Operations Department at Serco, believes that the introduction of the Middle East’s first automated rail transport system has had a positive impact on the emirate alongside the RTA’s full transportation system for the public, including taxis, buses, the marina and modern road network. “The metro has meant that the residents of Dubai can move around much more easily and safely,” he explains. “In the near future – after opening the Red and Green Lines and the Tram Al Safooh network – the Dubai Metro will become the core public transportation system, as proved in the last three months with more than six million passengers using the service.” Before the launch the Dubai Municipality Public Transport department expected the metro to carry 1.2 million passengers on an average day, 27,000 passengers per hour for each line and 355 million passengers per year once both the Red and Green Lines were fully operational. It is also expected to provide transport for 12 percent of all trips within Dubai. And since Dubai inaugurated its metro network on September 9, 2009, the metro has served an estimated 57,000 passengers per day. Indeed, after the first month of operation – on a limited network – the actual rider-ship was 1,740, 578, equating to just under 60,000 passengers per day.

www.busmanagementme.com 101

NVS AD_4August 25/02/2010 16:50 Page 1

DUBAI METRO_feb10 26/02/2010 17:21 Page 103

viduals have entered a restricted area. “All these systems are integrated into a state-of-the-art control and command system. This enables important information to flow as and when required whilst at the same time providing Senior Operations Management within the RTA Rail Agency, together with Dubai Police Senior Officers, with clear and concise information at all times. The heart of the Control and Command Centre is advanced communications, detector and video technology thereby ensuring that the Dubai Metro remains a safe and secure transport network for both staff and the public at all times.”

UNDER CONSTRUCTION Dubai Metro in numbers With the Red and Green Lines currently under construction there are a number of other proposed lines on the drawing board: Purple Line: 49 kilometres long, the proposed line will run from Dubai International Airport to Al Maktoum International Airport along Al Khail Road. Construction started in 2009 and it is due to be operational by 2012. It will have about eight stations on the route, three with check-in facilities. Blue Line: The Blue Line will be 47 kilometres long and also run from Dubai International Airport to Al Maktoum International Airport, along Emirates Road. This was originally proposed with construction starting along with the Purple Line and completion in 2012, however, due to the recession it was taken under reconsideration and now has a deadline of 2014. Yellow Line: In April 2008 the RTA announced plans for a Yellow Line, a light rail operation, although details about where it would run have yet to be released. Red Line extension: An extension to the Red Line this will be 15.5 kilometres long and include six new stations, terminating at the border with Abu Dhabi. Dates for completion have yet to be announced.

Technology There is no doubt that cutting-edge technology had a huge role to play in ensuring that the metro system has been successful in its operation to date. Technology has played a part in tightening security in particular, with over 3000 CCTV cameras deployed at stations, depots and on trains, forming the core of the Dubai Metro safety and security regimes. Images from each camera deployed are recorded 24 hours a day, seven days a week. “In addition to using CCTV and CCTV recording,” explains Abdullah, “the Dubai Metro also has a comprehensive integrated access control system which is to ensure that only approved staff and personnel are allowed to gain access to operationally sensitive areas, such as the control and power rooms.” Abdullah goes on to explain that a wide range of intruder detectors are deployed across the metro to detect and advise the control room staff if indi-

Six million passengers in first three months 11,675 passengers per direction per hour on the Red Line 518 buses will be in operation by April 2010 87 trains in the metro system 75 kilometres in total 47 stations 9 underground stations 5-car trains 3 classes; Gold, Silver, Women and Childen 2 transfer stations

Occupying 10,000m2, the system’s control centre is at Rashidiya depot. The project’s signalling system is a moving block and fully automated with in-cab signalling. The driverless, fully automated trains are fully air-conditioned and offer three classes of travel; the standard ‘silver’ class, a women and children only section, plus a first –class ‘gold’ section. The five-car sets are approximately 75 metre long, seating around 400 passengers, plus standing room. Despite the main control room in Rashidiya not being fully ready for inauguration on September 9, which meant the back-up room in Jebel Ali was used to run trains on the first day of operation, the first three months of operation ran very smoothly in regards to operational aspects, says Abdullah. He explains that the rider-ship figures were excellent, particularly for the weekends and public holidays. “We faced a few tiny problems that were solved easily,” he admits. “One big problem, we had was when the passengers pushed the emergency button and stopped the service in mid-track, disrupting the service for a long time. There was no actual emergency at the time but one passenger pushed the button by mistake. Otherwise, the operation in the first three months was reliable.” Abdullah reveals that the rest of the stations will be ready soon, despite recent disputes over contract payments, and will be launched throughout the second quarter of 2010, depending on the rider-ship demand and through the strategy that has been implemented by the RTA. “In addition, the Green Line will be ready in 2010 and we also predict the Green Line extension and Tram Al Safooh coming on line this year – in other words, there will be many projects that will be in operation this year, serving the residents of Dubai.” n

www.busmanagementme.com 103

STI_oct09 26/02/2010 17:03 Page 104

INDUSTRY INSIGHT

Putting CRM to work STI Systems’ Jay Bauer explains how to defeat the risks associated with CRM.

here may be a highly virulent and widespread tendency spreading through your organisation. For more than 20 years, I have observed it in many corporations, particularly banks and financial institutions. It is something that must be brought under control as quickly as possible if you want to have a healthy, sustainable CRM system that delivers true competitive advantages and on-going profitability improvements. This threat has many variations, but they all fall within an innocent sounding category called ‘application islands’, There may be many of these within an organisation. They are generally born out of a mid- to upper-management level initiative to achieve some specific result. Fair enough. Over time, application islands grow through an unending series of simple modifications while they accumulate a retinue of developers, support people, trainers and so on. In other words, they take on a life of their own. Soon their champions are attempting to bend their pet application islands to solve problems they were never intended to solve. CRM is often one of these. A few common examples of application islands include: financial planning, monthly reporting and yearly planning systems. They have one important thing in common. They were conceived and implemented from the top of the organisation without taking into account the needs of the frontline, customer-facing revenue producers at the bottom. Let’s take yearly planning as a case in point. Rather than creating tools within the CRM system used by the workers in the trenches, this high level planning system swoops down from above to strong-arm data from a variety of sources. It then compiles the data in the form of reports, which are printed, collated and assembled into copious three-ring binders. These are quickly browsed, admired and shelved for the remainder of the year because they present no clear method to implement the plan. The problem is that these systems produce a static collection of abstractions that do not tie back into the systems that the end users actually employ

104 www.busmanagementme.com

“The problem is that these systems produce a static collection of abstractions that do not tie back into the systems that the end users actually employ to produce revenue for the company” to produce revenue for the company. Since it is not live data, managers cannot do ongoing analysis against it. Even worse, this application island provides revenue producers with no tools they can use to implement plans promulgated from on high. That’s because there is no live, integrated data that can be captured, analysed and modified during the day-to-day workflow of the organisation’s actual business processes. Now I have a secret that you are not going to like. Your revenue producers hate these application islands. They resent the time and energy that must be expended feeding data into them. They are not tools end users can employ to do their own jobs better and produce more revenue for the organisation. So what should you do about this threat to your corporation’s profitability?

First, if this really isn’t a problem for your organisation, congratulations. Celebrate, and remember, don’t let it become one. If your organisation does have some of these islands, don’t even think about modifying one of them into a CRM system. Double back and perform a system-wide review of all your applications to find out which ones you actually need. Then redesign these to integrate with live information from your CRM system. Third, design or redesign your CRM system twice: first from the bottom up, taking into account all your revenue producers’ needs for doing their jobs better. Then design it again from the top down, incorporating the same live data functions to build management tools for analysis and reporting. The ‘top down/bottom up’ approach will give both management and end users what they need most: actionable information and lively tools for responding to it. n Jay Bauer is President and Chief Process Analyst for STI Systems, a CRM consultancy with a success rate substantially higher than industry averages.

OFIS AD_4August 26/02/2010 14:20 Page 1

FACING UP TO REALITY

OIL

The ﬁnancial crisis created a new world order in which oil and gas, like every industry, faces a whole new set of challenges. Saudi Aramco President and CEO khalid al-falih reﬂects on these changes.

he recent World Oil and Gas Assembly theme, “New Realities and New Challenges,” assumes special significance in the midst of the fi nancial and economic turmoil that the world is going through. In fact, this backdrop is recasting the ups and downs that have always characterised the oil and gas sector. I would like to offer my perspective on how the fi nancial upheaval and other dynamics we will be exploring are changing the way our sector does business, and how their implications must factor into our forging a brighter, more secure energy future. It is difficult to approach any business discussion today without fi rst talking about the fi nancial and economic crisis. Like an earthquake, the crisis rocked much of the fi nancial sector, and its far-reaching waves shook economies and markets around the world. It is germane to my remarks today to point out that while oil and gas were impacted by the crisis, our industry fared better than many other economic sectors. While not immune, the performance of oil and gas speaks to petroleum’s fundamental nature, and its importance as an essential commodity to virtually every aspect of modern life. Likewise, no geographic region or country has been unscathed by the deep recession, but fortunately, some emerging economies, such as India’s, were positioned to fare better. I believe India’s ability to weather a storm of such enormous proportions is a testament to the strength and breadth of its economy, the talent of its people, and the wisdom of its business and national leadership.

The road to recovery Some say that the economic recovery has begun; others say we have a way to go yet. Th is latter viewpoint would certainly apply to harder-hit industries and countries. However, this much is certain: the world will emerge. After the downturn, and as economic expansion resumes, so will the need for energy – especially petroleum – to fuel economic activity. Two primary reasons for this demand are global population growth and rising living standards, closing the gap between the industrialised and developing worlds. My earlier remark about India’s favourable positioning during this fi nancial crisis leads me to the fi rst of four reality checks that I would like to highlight in seeking greater clarity on the role of oil and gas in the world energy future. Our fi rst reality check is the growing shift of the economic centre of gravity towards the East – a phenomenon given even greater momentum by Asia’s dramatic population growth. Together, these economic and demographic trends are resulting in the emerging East accounting for a steadily-rising share of global energy and petroleum demand. The developing economies of the world, including India’s dramatic human and economic growth, are at the heart of the International Energy Agency’s

106 www.busmanagementme.com

Khalid Al-Falih.indd 106

26/2/10 16:45:41

forecast that world primary energy demand will increase by close to 40 percent by the year 2030, growing on average at 1½ percent per year, with oil remaining the single-largest fuel in the energy mix. To put things in perspective, consider that in 1949, world population stood at about 2.5 billion. By 2050, global population is expected to exceed nine billion, with most growth occurring in developing nations. The challenge will not be the number so much as the drastically escalating need for energy to help people realise their economic aspirations and lifestyle goals. Considering the vast future energy demand, the world will clearly need the contributions of all viable energy sources, including renewables, but the industry must help bring greater clarity to public perceptions about the factual future roles of various sources in the energy mix. Th is brings us to our second reality check: for a long time to come, the world won’t be able to survive without fossil fuels. For the next few decades at the least, as the contribution of renewables increases from a small established base, fossil fuels will continue to dominate the world’s energy picture, accounting for a more than a three-quarters share among oil, gas and coal. As a proven and reliable resource whose accessibility and sustainability continually increase thanks to research, development and innovation, petroleum will remain indispensable to the world economy, and vital to nations reaching for a better way of life.

over-confidence in alternatives could also distract from much-needed investment in oil and gas – and thus be severely counter-productive to energy security. While alternative energy sources are being brought along, we mustcontinue our efforts in making the production and uses of hydrocarbons cleaner and more efficient. Another new reality is evident in the growth in oil supplies – and this constitutes our third reality check. With supplies of conventional oil maturing in many basins, the contributions of niche non-conventional oil sources are expected to continue rising, complementing the growing supplies of conventional oil from mostly major producers in developing nations. By unconventional oil resources, I mean natural gas liquids, condensates, heavy oils, and oil from extreme locations, like deep sea and the Arctic region, that carry very high development and operating costs due to their difficult environments.

New discoveries

Technology has played a central role in making economically viable many of the non-conventional areas of oil and gas and has added enormous reserves to the industry’s portfolio. Some relatively recent examples of massive but expensive new discoveries include the Carioca and Tupi fields offshore Brazil, which alone reportedly hold close to 20 billion barrels in reserves. Likewise Saudi Aramco will also be venturMeeting global demand ing into the deep waters off the Red Sea coast over the next few years, In response to this long-term call for petroleum, Saudi Aramco is including sub-salt plays. Similarly, our Indian colleagues are looking at aggressively ramping up exploration, improving recovery and building new opportunities both onshore and offshore, including deep-sea, folour reserves year after year – indeed, increasing our capacity all along lowing Reliance’s major gas discovery in the Krishna Godavari basin. the value chain. While oil fields in many basins throughout the world These examples demonstrate that there is no shortage of oil potenare becoming increasingly mature, the share of the Middle East in global tial – as we know, the world’s oil reserves are abundant – but the comoil supplies will steadily rise. I am proud to say that Saudi Aramco has plexity of bringing oil online increases significantly as we tap into more played, and will continue to play, an even bigger role as one of the key difficult conventional and non-conventional oil resources. suppliers of oil to India, Asia and the whole world. At Saudi Aramco, The unique circumstances and challenges that can be associated our message of reliable and abundant petroleum supplies is substantiwith more complex conventional and non-conventional oil set the stage ated in the expansion of our crude oil production capacity to 12 million for our fourth and fi nal reality check, which highlights the rising costs, barrels per day; the increase in our production of wild swings in oil prices and lengthy lead times innatural gas and gas products; our increasing refi ning volved in developing energy projects in general. For capacity; and our expansion into the petrochemicals illustration, I would like to share with you some sector. In addition, our company’s spare production compelling examples of this phenomenon from our capacity plays a vital role in promoting oil market own Khurais and Manifa mega-projects. At 1.2 milstability, as it has done in times of market turmoil or lion barrels per day capacity, the recently completed disruptions elsewhere to global supply. Maintaining Khurais programme is the single-largest crude increthis spare capacity is a huge commitment for Saudi ment ever commissioned by the industry. When we Aramco, costing us tens of billions of dollars to build, made this investment decision, oil prices were in the and billions more to maintain – but this is an oblirange of US$55 per barrel with expectations of strongation we undertake responsibly, in the interest of ger prices; oil demand projections were healthy; and global market stability. costs were in the usual range. Mid-program prices While there is a good deal of euphoria around peaked at around US$140 per barrel. And yet toward alternatives in many camps, over- promotion is a conthe end of the program, prices had fallen to below Khalid Al-Falih cern, given the likelihood that they may not be ready US$35 and demand had tumbled due to the fi nancial to shoulder a sufficiently large burden of world energy crisis, while costs spiraled, doubling our investment. demand, because of inherent technical, commercial and economic viOur Manifa project, at 900,000 barrels per day capacity, is one of the ability challenges. It would be imprudent to assume that subsidies could largest heavy crude oil increments ever commissioned by the industry, be the acceptable basis for the long-term and large-scale application but distinctive aspects of the field made for costs not typically associated of alternatives. Of particular concern to our industry is the risk that with development. Manifa lies in shallow waters in the fragile ecology of

www.busmanagementme.com 107

Khalid Al-Falih.indd 107

26/2/10 16:30:04

the Arabian Gulf, requiring unique access solutions involving drilling islands. When we made this investment decision, oil prices were above US$70 per barrel, and as in the Khurais example, demand prospects were strong. After contracts were awarded, however – again as with Khurais – prices declined to below US$35, demand projections fell, but costs did

ments, must jointly address. Because capital prefers certainty, a vague global energy future would discourage essential investments across the energy value chain. Th is scenario applies especially to fossil fuels in general, and to petroleum in particular, which is being singled out for harsher treatment in the global energy policy agenda. Unless addressed expeditiously, this environment will cause investment to fall behind demand growth, with negative implications for global energy stability. The confluence of three prominent factors is influencing the uncertain environment in which petroleum investment decisions must be made. These factors are: the absolute level of oil prices and their volatility; an uneven regulatory playing field for competing energy sources, including carbon taxation plans; and political agendas and rhetoric impacting national and international energy policies, such as talk in some quarters of energy independence. When it comes to price, excessive levels on either side are damaging. Prices on the low side discourage investments, especially in light of rising costs. On the other hand, excessively high prices impact economic growth, limiting the aspirations of people seeking better lives for themselves and their children. Financial speculation has played a detrimental role in amplifying price volatility, which is problematic to both producers and consumers. Efforts to minimise excessive speculation are a step in the right direction. The long-term nature of our industry and investments; the increasing complexity of our operations; and the various geopolitical, environmental, regulatory, cost and other concerns that factor into shaping the industry landscape, underscore the need for jointly creating a climate that makes worthwhile significant commitments of capital and time that span decades. Thus I would urge decision makers across the globe to help create such a favourable investment climate to grow petroleum supplies in a timely fashion, which I consider to be a critical factor in enhancing energy security in general, and the security of petroleum supplies in particular. Another of the industry’s biggest challenges is also one of humanity’s most pressing concerns, as environmental pressures, especially those related to greenhouse gas emissions and global warming, continue rising. Societal expectations on climate change are real, and the industry is expected to take a leadership role. At Saudi Aramco, one of our key corporate strategies is the pursuit of innovative research and technologies to minimise the environmental impact of our petroleum operations, with areas of focus including the desulfurisation of whole crude oils, cleaner-burning fuels, smokeless flares, and lower carbon release. Th rough the establishment of our master-gas grid, we were able to eliminate gas flaring from most of our facilities. We also recognise the need to help develop cutting-edge carbon capture and sequestration technologies, and are actively involved in promoting technical solutions that reduce CO2 emissions from petroleum use. To help shoulder pragmatic climate-change research efforts, we are carrying out research and development in enhanced oil recovery using carbon dioxide flooding

“Our Manifa project, at 900,000 barrels per day capacity, is one of the largest heavy crude oil increments ever commissioned by the industry, but distinctive aspects of the field made for costs not typically associated with development” not proportionally decrease, clouding the robustness of the investment. We reviewed the program, and with some execution plan modifications, including deferring completion by two years, decided to continue. We pride ourselves in our ability to complete major projects such as these in record times. From conception to completion Khurais took six years while Manifa will take nine years, partly due to its complexity. Our own experience with costs is consistent with the industry’s rapidly rising cost trajectory. For example, our brownfield Haradh III crude oil increment that came on stream in 2006 cost us about US$2500 per daily barrel. The cost of the grass-roots Khurais increment that has been recently completed was almost four times higher, while the cost of the more complex Manifa field, which will begin production in 2013 and be completed two years later, is expected to be more than seven times higher than the Haradh cost. Besides greater complexity, the rising capital cost trend has played a distinctive role in these higher costs. Of course, non -conventional oil costs substantially more to develop. Now considering the typical project cycle in our industry, there is an orderly progression of events from leasing of acreage to exploration to development, and that takes a long time. With environmentally-sensitive, harsh locations and conditions, such progression can take up to 15 years or more. These long lead times can result from geographic and geologic challenges, concerns for protection of the environment, as well as regulatory requirements. And as the Khurais and Manifa examples I cited show, a host of key economic factors can change, impacting a project’s profitability or even its viability. In the wake of the four transformative realities that I have discussed to this point, let’s turn our attention to how they relate to challenges facing us; and explore how we can effectively respond; or better yet, proactively work with various stakeholders to achieve optimum results for both consumers and producers.

Challenges ahead I would like to highlight two broad challenges: fi rst, the highly uncertain future energy environment and its implications for petroleum investments in particular; and second, ecological issues, including global warming. The uncertain and unattractive environment that is discouraging timely petroleum investments poses a critical challenge which the various concerned stakeholders, including the industry and govern-

108 www.busmanagementme.com

Khalid Al-Falih.indd 108

26/2/10 16:30:05

and long-term carbon dioxide storage as part of our own carbon management research programme. Saudi Aramco’s environmental focus is not only reflected in our development and management of God-given hydrocarbon resources for economic and social benefit at home and abroad – we are also leveraging our natural environment in other ways to develop future energy sources, as I will explain. Saudi Arabia is richly endowed with oil and a highly favourable geology. But the Kingdom is also beginning to leverage another of our prime competitive advantages: plenty of bright sunshine; vast, open spaces of desert; and miles upon miles of clear sand. I invite you to re-imagine this desert environment’s roughly 3000 annual sunshine hours, in contrast to geographic areas with cloud cover during long periods of the year, which gives us solar potential among the highest in the world; stretches of desert, where vast arrays of mirrors can concentrate solar energy; and deposits of clear sand, which can be used in the manufacture of silicon photovoltaic cells. Saudi Aramco is partnering with one of our affi liates—Showa Shell, a leading advanced photovoltaic cell manufacturer—to build two pilot solar plants. Concentrating Solar Power, commonly referred to as CSP, or the thermal approach, is another solar technology area that Saudi Aramco is helping promote. The King Abdullah University of Science and Technology, or KAUST, the new international research university on Saudi Arabia’s Red Sea coast that our company was privileged to help build, was established for the very purpose to explore solutions to global challenges. KAUST has created the Solar and Alternative Energy Science and Engineering Research Centre to support solar as one of its core research areas. These activities demonstrate a commitment to ameliorate the environmental footprint of our operations and products through both conventional and unconventional routes. What is more, they underscore a long-term strategy to offer a wider energy portfolio to serve burgeoning global demand. It is my earnest hope that such considerable investments of capital and human ingenuity in both the petroleum and solar arenas will help recast some public misperception regarding our industry’s approach to energy and the environment.

a billion cells and describing the reservoir in great detail. Another technology that we have deployed as one of the largest users in the industry is the Intelligent Field concept, which affords us better control and versatility in producing and managing our hydrocarbon reservoirs. Technology is vital for maximising exploration successes, enabling increased ultimate recovery, and ensuring more efficient, profitable and safe operations. However, even the most exciting, most advanced technology hinges on the second “T” of our tripod: Talent, one of our most important and differentiating competitive advantages. Thankfully, one of the biggest industry human-resource issues, the Great Crew Change, as mature engineers, geologists, senior scientists and other highly specialized workers retire en masse, is not so much a concern here in India, or in Saudi Arabia, as it is in the West. In fact, Saudi Aramco is fortunate in having a pool of talent developed through a range of long-term corporate educational and training programs that are part of our legacy. Saudi Aramco invests heavily in professional development at all levels, and cultivates a corporate environment that stimulates and rewards excellence and innovation, leading to effective solutions for the range of challenges we have discussed today. The third “T” in the tripod, Teaming, is closely tied to the value placed on talent as well as to the purpose of this gathering. Our increasingly interdependent and interconnected world underscores the value of joining forces for shared goals and mutual benefit. At Saudi Aramco team work is both a corporate culture and a partnership strategy, reflected in joint ventures with leading global petroleum and chemical companies, and in carefully nurtured relationships with customers at home and around the world. From joint industry projects to collaborations with producers, refi ners, service providers, research institutions, academia, fi nancial institutions, and many other partners, Saudi Aramco works hard to identify and develop strong alliances that multiply the strengths of all parties far beyond what any one of us could achieve alone. In fact, we see our relationships in India as just such an alliance. Beyond our role as an economic partner helping to meet India’s energy needs, our friendship extends to a mutually beneficial exchange of views through meetings such as WOGA; in contributions of talented Indian nationals, who are an important part of not only Saudi Aramco’s workforce but indeed the Kingdom’s as a whole; and in the goods and services provided by Indian companies. I believe that looking at this brave new world through the prism of new realities will give us a fresh perspective on how the oil and gas industry can transform challenges into opportunities as we have done in the past again and again. Such a viewpoint will help us bring greater clarity and rationality to the future of global energy, and promote an environment that enables timely investments across the oil and gas value chains. I hope that my perspective will give us all a fresh incentive in our commitment to deliver – reliably, economically and with due concern for the environment – the energy that enables growth, prosperity and hope here in India, in the emerging East, and all around the world.

“Saudi Aramco invests heavily in professional development at all levels, and cultivates a corporate environment that stimulates and rewards excellence and innovation”

The three T’s Our resilient and enduring industry boasts an admirable track record of overcoming challenges via innovation and technology, so that they are not so much obstacles as windows to improvement and growth. I would like to conclude by sharing with you what I consider to be a core strategy for rising to challenges and opportunities across the value chain – a tripod model I call The Th ree T’s—for Technology, Talent and Teaming. Technology, the fi rst “T,” is a great enabler both for our unique challenges at Saudi Aramco, and for the benefit of the broader industry. Our emphasis on this key enabler has taken our company from a user of commercial technology to leading industry innovator. We have developed a reservoir simulator, for example, that can model the giant Ghawar field, by far the largest oilfield in the world, in a single run using

www.busmanagementme.com 109

Khalid Al-Falih.indd 109

26/2/10 16:30:05

EXECUTIVE INTERVIEW

The intelligent solution We speak to David Armitage, about helping energy companies to increase safety, asset security, and operational efﬁciency through ‘realtime operational intelligence’.

What does Cartasite mean when it uses the term ‘realtime operational intelligence’? David Armitage. We believe that to prosper today modern enterprises need to be highly responsive and efficient at deploying and monitoring resources, personnel and assets. The old expression that ‘time is money’ has never been more true. The convergence of cost efficient wireless transmission of data, affordable and manageable GPS equipment and high-speed online geospatial dashboard technology mean that we really can make operational decisions and adjustments in near realtime. What aspects of the energy industry can beneﬁt the most from realtime technologies? DA. Realtime technologies are currently being used everywhere there are remote, valuable assets and where there are serious consequences if those assets are not safe and/or monitored. For example, for tracking personnel in dangerous work environments, for tracking rental or other valuable field equipment like production rigs that move around frequently, for monitoring driving behaviour of field personnel to minimise motor vehicle accidents and even for monitoring production related equipment in remote well sites.

Tell us a little more about Cartasite’s unique approach to improving driving safety. DA. A few years ago, Cartasite conducted a groundbreaking study on 400 city and

David Armitage

county vehicles to determine the effect of regularly providing timely driving behaviour data back to drivers. We found that given the opportunity, the vast majority of drivers self-correct and voluntarily improve, and that the improvements are long lasting. Based on this year-long study, Cartasite developed a very unique telematics solution that provides a driver scorecard to each driver automatically via email every week to help the driver understand his/her habits in the areas of hard braking, rapid acceleration, overspeed, idle time and MPG. Th is approach, which emphasises safety and self-improvement, garners tremendous acceptance in corporations. Cartasite has deployments of this driving safety solution in the US, Canada and the UK.

Are there new enabling technologies which are transforming energy operations? DA. There is a new class of sensors beginning to appear that do not require expensive, complex radio networks. These sensors broadcast realtime data directly to geostationary satellites and require no external source of power. They can be deployed on a remote location such as a wellsite in a matter of minutes to report critical realtime information related to uptime and production. What other industries are benefiting from these same realtime technologies? DA. Virtually any industry that has remote field workers and widely distributed assets will see huge safety, security and operational benefits from remote monitoring. Power utilities, transportation and construction segments are rapidly deploying these technologies with very positive results. What direction do you see remote monitoring going towards in the next few years? DA. As with many consumer technologies like cellphones, realtime technologies will also become more and more cost effective as more companies begin to adopt them, with regards to both the hardware and the transmission services. Devices will become smaller and more covert. The evolution of new technology will accelerate a corporation’s ability to cost effectively ‘tag’ every remote asset, improving operations, optimising inventory and streamlining the procurement process. The hub-and-spoke technology will integrate RFID with devices like Cartasite’s asset monitoring globalTAG solution to monitor site inventory. Soft ware systems will interface with supply chain and business intelligence applications to provide ultimate realtime operational intelligence to the enterprise. Th is is an exciting time for us all and there are many ways today – and in the days to come – that realtime technologies can improve operational intelligence in the energy industry. Visit www.cartasite.com for details. David Armitage is renowned for introducing game changing technologies to the energy industry. In 1984 Armitage founded GeoGraphix, one of the world’s first GIS companies. With realtime remote monitoring systems deployed throughout the world, Cartasite is spearheading a revolution in energy production and fi eld operations.

110 www.busmanagementme.com

Carasite.indd 110

26/2/10 16:06:56

B2B SINGLE OUT.indd 1

26/2/10 09:12:13

OIL

e h horizons o o s Exploring oring new Arabian Oil Company has ambitious plans to expand its Middle East oil operations and boost exploration and production on the Norwegian North Sea. Business Management caught up with AOC Director Yoshio Yokoyama to ﬁnd out more. What Middle East oil operations has the Arabian Oil Company been involved in both currently and in the past? Yoshio Yokoyama. We have operated between Saudi and Kuwait as part of a joint venture since 1960. It operated for almost 50 years producing oil to export to Japan mainly. But this concession agreement between Kuwait and Saudi has already expired, so at this moment, we are not operating anymore in Saudi. We currently have one project in Egypt, which is in the Gulf of Suez. We drilled one well, and it was successfully completed and produces 5000 barrels per day. So now we are planning to drill seven more wells.

About Arabian Oil Company Arabian Oil Company was formed in the 1960s after its engineers discovered oil in the Khafji oil ﬁeld in the offshore neutral ﬁeld between Kuwait and Saudi Arabia. Exploration activities began under the concession agreements maintained by both countries. AOC maintained operations there for 40 years. Although the original concession agreement ended, AOC continued to operate there through a technical services agreement with Kuwait until January 2008. The company is currently exploring new commercial opportunities in the Middle East and in the Norwegian North Sea. It is currently participating in crude oil producing operations in the Norwegian continental shelf and is exploring for crude oil in the Gulf of Suez in Egypt.

How did your company help to build business relationships between Japan and Saudi Arabia as a result of your Middle East operations? YY. Actually, we were stationed in the city of Khafji, and that’s close to the border with Kuwait, about 10 kilometres away. Before we arrived there was nothing there, just desert. When we arrived there in 1960 we built up more facilities and organisations, and we helped the Saudis to build a community there and we helped to create jobs and build schools. It has now become a big town. And the community was not just for the oil industry.

What other international operations is your company currently working on? YY. In the Gulf of Mexico we had gas production operations but this was almost four years ago and we have already sold out to another company. We are working alongside the Chinese Petroleum Company in the South

China Sea, which is a great project. We have used horizontal drilling techniques there and as a result production there doubled. We produced oil from there for 15 years. Which parts of the world does the Arabian Oil Company plan to target as part of its quest for new exploration opportunities? YY. We think our priority area is the Middle East. So in addition to Egypt, we are investing in Turkey and Qatar. We will be looking particularly at gas production, maybe involving clean energy. Th is is because in many GCC countries, such as Saudi Arabia or Kuwait, there is a great shortage of gas. So those countries have to import gas as well as other forms of energy.

112 www.busmanagementme.com

profiles.indd 112

26/2/10 16:28:55

Atlascopco AD.indd 1

26/2/10 08:48:28

INFRASTRUCTURE

The man responsible for undertaking multibilliondollar civic projects to help develop Abu Dhabi into an international business magnet and tourist destination, Aldar Properties’ Talal Al Dhiyebi reveals the ﬁrm’s outlook for 2010.

s Abu Dhabi undertakes its 2030 Urban Structure Framework, which has been developed by the Urban Planning Council to optimise the city’s development, infrastructure has become an increasingly essential part of the transformation. In essence, Plan Abu Dhabi 2030 sets out a roadmap for sustainable urban evolution to create a socially cohesive and economically sustainable community that preserves the emirate’s unique social heritage. And as Aldar is Abu Dhabi’s leading property development, management and investment company, the plan and its guiding principles are central and critical to the entire development process.

Talal Al Dhiyebi, Director of Planning and Infrastructure for the fi rm, explains that creating developments that are truly integrated and ‘future-proofed’ means that infrastructure considerations for 2030 and beyond, “must be at the very heart of what we do”. And to that end, Aldar’s approach to planning and developing infrastructure involves high quality real estate, catering for a wide range of customers, across the spectrum of property types and sizes, for the long-term benefit of Abu Dhabi. “We are committed to delivering communities – integrated and sustainable developments that meet the demands of a growing and developing population,” says Dhiyebi. “In terms of specific infrastructure planning, this is very much a part of the detailed Master Planning carried out on our developments. Aldar ensures that its infrastructure is in line with the latest sustainability and Estidama guidelines. And this is done by utilising

URBAN EVOLUTION

Talal Al Dhiyebi.indd 114

26/2/10 17:04:47

the latest management tools to ensure that the level and quality of the infrastructure is equipped to handle future expansion.” With experience that spans every type of project, from commercial and cultural to retail and residential, Dhiyebi explains that working on such a variety of development projects is a challenge in itself, particularly given the sheer scale of some of the projects. At Yas Island, for example, Aldar recently delivered all the elements required for the inaugural Formula 1 Abu Dhabi Grand Prix, including Yas Marina Circuit, Yas Marina and seven hotel’s plus all the infrastructure requirements to cater to not only the fi rst stage of the project but also future elements that will include the world’s fi rst Ferrari theme park, the Middle East’s first Links golf course, and commercial and residential developments. As part of this project, Aldar delivered a major section of a new highway connecting Yas Island to the heart of Abu Dhabi and was responsible for the delivery of a 23-kilometre section that including 22 highway bridges, 17 entry/exits and four underpasses, as well as a light rail transit bridge in preparation for the future transport requirements of Yas Island. “Delivering to a fi xed deadline and coordinating the sheer volume of people working on the project was the main challenge we faced,” reveals

Talal Al Dhiyebi.indd 115

Al Raha Beach Eventually home to 120,000 residents, Al Raha Beach is a mixed-use master development in a sunny waterfront location. Stretching over 11 kilometres, 11 precincts are designed to appeal to various clients; some feature quiet family villas while others are more vibrant with up-market apartments in lovely districts offering retail outlets along with galleries, restaurants and cafes. Residents also have the ideal opportunity to enjoy the beaches and all kinds of marine sports. A central business district pierces the skyline, where iconic ofﬁce towers and residences are set around an impressive circular marina – home to the new World Trade Center building.

26/2/10 17:04:51

the location of the original Abu Dhabi souk and this permeates through all elements of the redevelopment; this is particularly true of the new souk, which embodies the heritage and architecture of the original, albeit in a modern setting. Examples of this lie in the ornate external mashhrabea screens, creating a powerful visual impact, whilst serving a practical cooling effect; the colonnades with spill out areas for tenants; central squares that bring a meeting point and sense of community to the local area; a strong mix of tenants arranged to provide concentrated uses; winding internal streets to enhance the sense of discovery; roof gardens, high ceilings, ornate timber, bronze fi nishes and water features.”

Tightening the belt

Opening this year, Ferrari World Abu Dhabi is set to be the world’s largest indoor theme park

Dhiyebi. “With 68 different contractors and close to 50,000 workers involved, this project required the logistical organisation of a military precision – keeping communication channels open was vital in this process.” Beyond project delivery, Aldar is working to improve and innovate approaches to project management as well as ensure that the region’s cultural heritage is maintained in the face of all the new developments. “We have expanded our project teams to include all stakeholders from an early stage in order to fully engage them throughout the entire design process,” explains Dhiyebi. “Project managers attend corporate level strategic planning sessions in order to get acquainted with the organisation’s long-term goals and understand how to implement these at the project level.” Dhiyebi goes on to explain that the culture of the UAE plays an integral part in the planning of all Aldar developments, and that the company works closely with the Abu Dhabi Authority for Culture and Heritage (ADACH) to ensure that the cultural aspects of the development are integrated at the master planning stage through a Preliminary Cultural Review (PCR) process. The redevelopment of Central Market is an excellent example of how Aldar integrates UAE heritage with architecture into a modern development, says Dhiyebi. “The site is historically and culturally important, being

While no-one has been immune to the global economic crisis, Abu Dhabi was and is particularly resilient. Dhiyebi believes that the underlying economic strength of the emirate has been a major factor, but as the leading developer in Abu Dhabi, the visionary approach to urban development that is Plan Abu Dhabi 2030, means that the organisation is working towards long-term strategic goals. “Despite the economic crisis our mission remains the same: Aldar has a mandate to build the nation and that means focusing on creating communities where local emirates and expatriates alike can create their lives and those of their families,” states Dhiyebi. “Aldar is a flexible business that responds rapidly to changing market demands and as such this has led us to adapt some of our development to cater to a broader range of customers, allowing for easier access to property ownership for new segments of the population.”

“With close to 50,000 workers involved, this project required the logistical organisation of a military precision”

Dhiyebi goes on to explain that the company’s strong position allows it to meet all current and potential further commitments as well as chart a clear and confident course through the prevailing turbulence, whilst actively preparing for future success. Indeed, back in April 2009, Aldar CEO, John Bullough, said that it would be around six to nine months before any major improvement would be seen in the market. While Dhiyebi doesn’t

116 www.busmanagementme.com

Talal Al Dhiyebi.indd 116

26/2/10 17:04:53

Hyder AD.indd 1

26/2/10 08:52:12

Central Market

Yas Island

Designed by Foster + Partners, the former trade hub combines traditional charm and modern architecture culminating in three towers. The new Central Market will dominate the prestigious downtown neighbourhood with an integrated mix of up-market retail, business, residential and leisure facilities.

Located on the North East side of Abu Dhabi’s mainland, Yas Island is approximately 7.5 kilometres long by 6.5 kilometres wide and offers 32 kilometres of waterfront. An unrivalled destination with over 20 hotels, three theme parks, golf courses, six marinas, commercial and residential developments, the ﬁrst phase of development was completed in 2009.

wish to make predictions on the state of the market he does concede that Abu Dhabi will continue to remain attractive because of the underlying fi nancial strength of the economy, the planned and controlled approach to development and the plan for diversification away from oil dependency. “Abu Dhabi has always been a great believer in infrastructure projects and with the comprehensive development programme in place – Abu Dhabi 2030 – many infrastructure projects have already been launched such as the Sheikh Khalifa Freeway, Yas Southern Tunnel, Salam Tunnel, Al Raha Beach Interchanges, Mid-Field Terminal at Abu Dhabi International Airport and the new port at Khalifa Port & Industrial Zone – and we can expect to see many more in the years to come,” says Dhiyebi.

Sustainability and innovation While Aldar is continuing to roll out a high number of projects, the continuing objective is to create sustainable communities that meet the needs of current and future generations, and balance economic, environmental and social requirements. And as an increasing number of companies are championing the importance of sustainability, Dhiyebi explains that Aldar is continuing in its quest to bring a green focus into its design and development processes and reduce the environmental impact of large infrastructure projects.

“Abu Dhabi has always been a great believer in infrastructure projects” Dhiyebi goes on to reveal that Aldar is endeavouring to incorporate the principles of sustainable development throughout the key stages of development; from conceptual master planning, through to detailed design and onto operation and management of assets and facilities. “We recognise that this is a labour and time intensive process, but we feel we are starting to see the fruits already,” he says. “For example, through our formalised Development Control Process we are engaging Aldar’s multi-disciplinary teams to ensure technical, commercial, environmental and social aspects are taken into consideration at each development stage. We are also supporting the Urban Planning Council’s Estidama initiative and seeking to use the draft guidelines that they developed to inform our design, where possible.” There is no doubt that sustained innovation is also critical to the industry’s growth and development, particularly when improving green concepts, yet many firms are understandably wary of unproven techniques and approaches. Not so at Aldar. Dhiyebi says that innovation

118 www.busmanagementme.com

Talal Al Dhiyebi.indd 118

26/2/10 17:04:55

in infrastructure is essential to creating developments is a natural gas network that consists of an intricate 28 kithat will stand the test of time. And, using Yas Island as lometre network of polyethylene and steel pipelines with an example, says that the implementation of world-class a future capacity in excess of 60,000 m3/hr to cater for all and environmentally friendly infrastructure systems not current and future developments on Yas Island.” Indeed, only benefits the operation of current facilities, such as the clean burning natural gas is used to supply energy for the hotels and Yas Marina Circuit, but also the future cooking and hot water and is the preferred fuel of choice phases that will open over the coming years. for the many new restaurants now open at the is“For example at our Yas Island develevelland’s sseven hotels, says Dhiyebi. The system opment we have installed two stateewill also cater to residents at Aldar’s Al s e id v of-the-art systems to benefit both R Raha Beach development following the ro p HQ l a n o ti current and future users. The first completion of an extension. c n flexible, fu e c ffi The second state-of-the-art o lan and open-p n built system is an Envac vacuum waste atio accommod handling system, explains Dhiyebi. onal to internati Waste is transported at an average Grade A speed of 75 km/h through a sealed n underground network of pipes to a un specificatio cent central collection point, located approximately three kilometres away, where it is sorted automatically. As well as the environmental benefits of waste separation and recycling at source, the Envac system can also help reduce traffic volume, provide a cleaner living and working environment and reduce operational costs. “Th is is the fi rst vacuum waste handling system in the world to service a major motorsports circuit – the system can handle up to 30 tonnes of waste per day, deposited at any one of the 36 inlet points currently located within the Yas Marina Circuit paddock, Yas Marina and the seven hotels. As with the gas network, the Envac system has been designed to cater for all future phases of the Yas Island project.” While there is no doubt that Yas Island was Aldar’s most high profi le project in 2009, the developers have also delivered projects including Al Raha Gardens, a major residential project, Al Muna School, the third Aldar Academy and high quality office developments like Mamoura. Looking forward into 2010, Dhiyebi hopes to continue this track record of delivery with the completion of aspects of the major residential and commercial projects such as Al Raha Beach – a major waterfront development – and Central Market – a major redevelopment of the traditional commercial district of Abu Dhabi – as well as the completion of the HQ premium office building. At Yas Island there will be the addition of Yas Yacht Club, Yas Links golf course and HQ Ferrari World Abu Dhabi ahead of next year’s race. “In Voted ‘Best Futuristic Design 2009’ by the Building Exchange Conference, total, we are going to deliver 3500 residential units and HQ represents a striking addition to the Abu Dhabi skyline. Part of the 140,000 square metres of commercial space in the next Al Raha Beach project, HQ provides flexible, functional and open-plan 18-24 months,” says Dhiyebi. “Consequently 2010 is office accommodation built to international Grade A specification. Set going to be a very important year and one in which there upon an elevated peninsula affording spectacular views of the city, canal will be lots of activity coming to fruition.” and sea, HQ’s location provides an unparalleled working environment.

www.busmanagementme.com 119

Talal Al Dhiyebi.indd 119

26/2/10 17:04:58

EXECUTIVE INTERVIEW

Looks matter Satish Babu of Swift Interiors explains why great ofﬁce designs can make a difference to a company’s business.

How high is demand from commercial companies in the Middle East for bespoke interiors and how can this help to enhance a company’s brand reputation? Satish Babu. Commercial companies have a statement to make, and this comes not only from quality products and/or services they offer, but also the offices they operate from. Office interiors portray an organisation’s dynamic outlook and futuristic plans. Office interiors are looking better and more opulent with every passing day and good interiors are an essential element of most office spaces today. It is a fact that attractive interiors put employees in a better mood, generate more interest in the working environment and increase overall productivity. Office interiors are therefore growing rapidly into designer work spaces that stress the need for facilitating efficient working environments capable of captivating the employees’ attention and concentration.

What current interior design trends are you witnessing in the region? SB. The current interior design trend in one word is sustainability. The emphasis is on a clean, simple and natural style, with colours in the yellow, orange and green family. Simplification is a keyword for many in the anti-clutter movement that is taking over today. Clean surfaces and clean lines are seen as soothing and preferable in this stressed out, over-worked society. Mirrors and windows are also used frequently in tandem. This is a great design technique, with the natural and reflective light adding to the open feel of a room. With furniture the lines are bold and wood veneer is most preferred. All colours of wood and several grains are used and available. Energy saving and LEED certified products are becoming the norm. Earth tones of burnt orange, golden yellows and lime greens are all very popular in the design world today, much as they were three decades ago. Fashionable feature colours on the wall are of varying earth tones, ranging from browns, reds, etc.

120 www.busmanagementme.com

Swift Interiors.indd 120

26/2/10 16:29:59

create eco-friendly solutions that are popular. We stick to the following guidelines and offer the same to our clients: · Buy from local producers and suppliers to reduce the carbon footprint and lower the impact on the environment as much as possible. · Consider the type of materials we choose and ensure they come from renewable, sustainable energy sources. · Avoid materials that contain chemical additives or that use a lot of energy during the manufacturing processes. · Specify products that can be readily recycled aft er use or that can be disposed of in an environmentally friendly manner. · Consider low energy or energy saving devices and buy as much as you can from recycled or reclaimed materials. · Specify technologies to reduce electricity and water usage.

Satish Babu is an industry veteran in the area of design and build. He honed his skills while working for one of the more aggressive design and build companies in Dubai. However, facing challenges and developing new opportunities is his passion and that is what inspired the setting up of Swift Interiors. The company is now known for its commitment to customers and for its professional workmanship. Babu believes in giving his team a lot of space and freedom, while encouraging them to come up with innovative ideas. His team is now solid with dedicated and loyal professionals.

Finally, as a result of the massive amount of publicity given to global warming and the need for conservation of energy, many producers make claims about their products that are misleading or even false, hence we check out the credentials of all suppliers claiming that their products are certified as natural, organic or eco-friendly.

“In the Middle East, the design and build industry is extremely competitive by virtue of the number of players here” How concerned are your customers about environmental considerations such as the sustainability of their ofﬁce designs? SB. Sustainability is the imperative keyword. It is no longer just hype, but is actually being acted upon. Clients are very conscientious while making decisions. Without compromising on quality, we strive to

What is unique about the service your company provides compared to others in the region? SB. While sustainability is the imperative keyword, performance and maintenance is central to the interiors world. Along with these integrated capacities come aesthetic and design treatments. And this is where we excel. The expression ‘added value’ when talking about design is still magical. While we offer customised design solutions to fit the client’s budget, we are extremely flexible with our approach. Ours is a very professional organisation, and we are very passionate about the work we do. Th is is the thread that links all of us in the organisation, right from the technical staff on-site to me. What this translates to is that every individual, especially those on-site, makes sure that only the best materials and workmanship are used and further make sure that they are satisfied with the end result before handing over the premises to the client. Th is has ensured that our clients are totally satisfied by our deliverables and we have a great record on retaining our partnerships with our clients.

www.busmanagementme.com 121

Swift Interiors.indd 121

26/2/10 16:30:02

HOSPITALITY

Hotels

with a conscience Is it possible to combine ﬁve star luxury with saving the planet? Noel Massoud, CEO of Jinan Hotels & Resorts, thinks so. He sits down with Diana Milne to explain the company’s eco strategy.

he news of a new hotel management company opening for business in the GCC is hardly headline grabbing, but there’s something quite unique about the concept envisaged by Noel Massoud. As CEO of Jinan Hotels and Resorts, he aims to build the Middle East’s fi rst green hotel chain with an emphasis not on luxury, but on health, well-being and eco-friendliness. It’s a far cry from the brash glitziness of many of the region’s more established hotel chains. But Massoud says he foresees high demand for such a concept in the Middle East: “I think there is big potential in the Middle East and everywhere else because I think everybody is going in that direction and awareness of environmental issues is growing worldwide. People are aware that they need to change some of their habits and that it is everyone’s responsibility to cut waste and reduce emissions. It is not just the responsibility of one organisation or country.”

The green agenda Jinan is part of the Al Dhiyafa Holding group and will live up to its green principles by minimising its carbon footprint and waste production while conserving energy sources within its hotels. Guests will be encouraged to eat healthily and to take part in exercise and spa activities at the hotels and to embrace what the hotel is calling its Livingmore

122 www.busmanagementme.com

Noel Massoud.indd 122

26/2/10 16:27:35

Indigo Living_AD.indd 1

25/2/10 16:46:02

be Masdar City, which will be the world’s fi rst carbon-free city and a hub for scientists from all over the world. Massoud said Jinan has already formed a partnership with the developers behind Masdar and that he Despite having only been set up last year, Jinan Hotels is hopeful that one of his hotels could form part of the project: “We are & Resorts has already received a prestigious award from in direct contact with the people from Masdar and the people from the the Middle East Hotel Expansion Congress’ Excellence in environmental agency in Dubai and the environmental agency in Abu Hospitality Awards. It was given the Best Tourism Initiative Dhabi in order to work with them to see how all our efforts could bear award in recognition of its green credentials. Speaking after fruit for them. We are in contact with them and hoping that they will the receiving the award, Noel Massoud, said: “Our goal has take us on board with them.” always been to associate the Jinan brand with excellent Any partnership with Masdar would be a great coup for Jinan which quality, exceptional service and environmental sustainability. must compete in an already overcrowded hospitality market against a With the increasing social and environmental responsibility backdrop of tough economic conditions. According to Abu Dhabi’s among people globally, we are honored to be at the forefront Planning and Economy Department, the emirate’s government is deof this wave in the Middle East region.” veloping hotel projects worth an estimated value of $62 billion over the next five years. And an additional 3000 hotel rooms were added in the emirate by the fi nal quarter of 2009. Massoud denies however, that he is concerned by the situation: “We’re not worried. Everybody is affected in concept. Describing some of the green measures the company will be the world but it’s all relative. What Dubai and Abu Dhabi have achieved taking, Massoud says: “First of all we hope that our hotels will all be in the last two years has been phenomenal and still the business is there. LEED certified from the beginning and for the hotels that are not built as Tourists are still coming, the hotels in Abu Dhabi are still enjoying high green or sustainable buildings, we will introduce the maximum activioccupancy. In Dubai they are enjoying good occupancy, not as good as ties or maximum applications to reduce energy whether it is water, gas last year, but it is still acceptable and good if you take the worldwide or electricity, try to cut all the extra waste that is consumed using new economic situation into account.” He goes on to say that he believes technology and control recycling as well.” there is space in the Middle East hotel market for its hotels and resorts The first Jinan resort, the Jinan Al Dhafrah Hotel and Resort, will be because of its environmental theme: “In the hotel or hospitality business, built in Zayed City – a development situated around 140 km from Abu everybody is competing with everybody but we feel that we will take our Dhabi. It will be four-star hotel consisting of 84 duplex apartments and part in the market hopefully. There is enough room in the market. The six suites set in 50,000 square metres of grounds. Massoud describes why more people talk about awareness and alternative energy, the more push this was Jinan’s choice as a fi rst venue: “Th is city needs hotels and other that gives us because while everybody is talking about it, we are trying accommodation facilities and because it will be on the outskirts of the to make it real.” city, it will be a kind of oasis with lots of trees.” Jinan has also signed its Once Jinan has established a strong presence in Abu Dhabi, it hopes first international deal to manage a hotel for Egypt’s Minerva Travel, the to conquer Dubai before spreading out to other parts of the Middle East, Ein Shanda Hotel, which covers an area of 32,892 square metres and is including Qatar and Jordan, having already started management of a made up of 25 suites, 40 rooms, 10 tents, shopping centres, a swimming hotel in Egypt: “We hear that things will be better. So at least we will be pool, food outlets and a bar. It will provide guests with a sustainable ready to take it over when the tide goes up.” He says that service at his desert tourism experience. hotels will be of a high enough standard to compete with its rivals in Massoud says guests at the Jinan hotels won’t be expected to comply those markets: with strict rules and regulations when it comes to the fulfi lment of the “Don’t forget that at the end of the day it’s all about service. And firm’s green ideal, but that the hotels will be equipped with facilities to good service goes back to basics. Keep it simple and ensure sustainability is an ever present process behind basic.” Massoud himself should know a thing or two the scenes at Jinan’s hotels and resorts: “Our guests about good service. He has a long career in hospitalwill not be penalised or told off, but the equipment ity, having studied hotel management in Germany, that will be used will automatically be reducing before working for 28 years for InterContinental energy,” he says adding: “And besides, just the idea Hotels. In his previous role he was General Manager that these hotels are eco friendly will encourage other of Abu Dhabi’s prestigious Emirates Palace Hotel, hotels to follow suit. At the end of the day it will also which he said is his most favourite he has worked in: give you good fi nancial results because as long as you “I think every hotel has its own charm but naturally use less energy you have less costs.” Emirates Palace was the top.” He’ll be applying many Winning partnerships of the lessons he learnt from his career in the luxury Jinan’s environmental credentials echo the work hotel sector to Jinan Hotels & Resorts. But with the of the Abu Dhabi government to establish the emircompany taking the lead as the region’s fi rst ecoate as a leading centre of research into environmental friendly chain, there will be plenty of new standards Noel Massoud technology in the region. The biggest such project will to be established and lessons to be learnt.

Award winner

124 www.busmanagementme.com

Noel Massoud.indd Sec1:124

26/2/10 16:27:37

BMC AD.indd 1

25/2/10 16:23:20

TANDBERG DPS ADS X 2.indd 2

26/2/10 14:18:42

TANDBERG DPS ADS X 2.indd 3

26/2/10 14:18:48

ROUNDTABLE

NEXT GENERATION EDUCATION We sit down with three experts in the ﬁeld of online learning to ﬁnd out how it beats classroom-based teaching.

What are the beneﬁts to employees of receiving education online rather than classroom-based teaching? Maher Thompson. The benefits of online learning are not only felt by the employee but also the employer. There is a mutual benefit to both parties, especially in the context of the current global economic scenario. Employees really benefit from online learning where consideration has been given to the contents pedagogy. Factors such as time efficiency, the structure of objectives and sub objectives and pre and post assessments to measure the assimilation of knowledge by the learner lay the foundations for successful online learning. When the employee engages with content that is learner centric the employer is further reassured that the learner is immersed in the experience as an active participant; ensuring an experience that can be measured in terms of its ROI. This is achieved by embedding dynamic activities that utilise a full range of media including, but

128 www.busmanagementme.com

education roundtable.indd 128

26/2/10 16:42:26

Edudech AD.indd 1

25/2/10 16:39:36

not limited to, audio, video, reading and writing, that report back a user’s experience to a learning management system for further analysis. Mazen Jabri. Employees can save time and money by combining the convenience of training at the place of their choice with the excellence of instruction. They can learn from their desktop, conference room, or anywhere with global knowledge assurance of a consistent and exceptional learning experience. What’s more, training without travel is a great way to support your organisation’s green initiatives. Within the majority of organisations, e-learning is now a well-accepted means of increasing skills and knowledge across the enterprise. Early adopters no longer think of themselves and their organisations as pioneers of a new and unproven method of training. For the most part they have seamlessly integrated e-learning into their training strategy along with all the other methods of delivering training available to them. Even those organisations that waited until e-learning was proven are now enjoying cost efficiency, accessibility, flexibility and the many other benefits that e-learning brings. To sum up benefits, you can save time and money by training without travel, learn from the convenience of your desktop, interact with peers and expert instructors, support corporate green initiatives, gain consistent high-quality instruction for a geographically distributed workforce, and fi nally get hands-on labs practice.

More than half pass on what they learn to someone else. The whole e-learning experience is engaging, with 98 percent saying they would recommend e-learning to a colleague. DK. The demand for e-learning among companies in the Middle East is high on account of the region’s potential for economic growth. The recent global fi nancial meltdown has further enhanced the need to stay competitive in the changed economic order. Organisations are looking at strengthening their market positioning by focusing on strategic initiatives like incorporating best practices and inculcating quality improvement processes. In this context, most organisations have also understood the merits of having a knowledgeable workforce and have started looking at learning and development as a strategic initiative. Companies have also realised the significance of standards based education/ training, which is a pre-requisite for student success. In sectors like BFSI where there is a renewed focus on statutory and compliance norms (like BASEL II, AML, etc) the need

E-learning grew by 10 percent in 2008

Dr Demetra Katsiﬂi. The benefits to employees in receiving online education as opposed to classroom-based teaching are manifold. For one, learning online is more effective because it caters for employees’ diverse learning styles and objectives. The actual learning can be carried out at convenient times for both the employee and the employer. It can even take place in the learner’s home, which can be a more relaxed environment than the office. As the whole experience is self-paced it allows the employee flexibility over time and a number of attempts to acquire the necessary knowledge and skills. Online education also saves significant training costs because employees learn to help themselves and each other. Moreover, participating in a peer network over a significant period of time is very valuable to learners. An additional benefit in an online learning environment is that supervision and mentoring will be carried out over a longer period of time than a classroom-based scenario, allowing for better reflection and feedback mechanisms. It also helps the employees to improve their effectiveness as they learn from their own work experiences and actually apply their learning in their places of work. How much demand is there for e-learning solutions from Middle East companies? MJ. E-learning grew by 10 percent in 2008, and by 2011 the e-learning market is expected to increase at a compound average growth rate of 32 percent. Middle East employees genuinely like e-learning and the experience is enjoyable – research proves this. And 93.5 percent have enjoyed the e-courses they have taken while 87 percent can give tangible examples of how they have applied their e-learning application.

Mazen Jabri is the Managing Director for MEA & Emerging Markets at Global Knowledge. He joined the company last October, coming from 12 years’ experience at Cisco UAE. He started his service with Cisco in 1998 as Account Manager and ended as General Manager & Operations Director for UAE.

for e-learning is quite evident. ‘Assessments’ is one another area in the e-learning eco-system that is gaining prominence amongst organisations. Th is is on account of the huge demand for a certified workforce. MT. UKS has worked with a number of major national and international brands to provide solutions that meet their e-learning requirements. Middle Eastern companies are now looking at e-learning as a viable solution that addresses the need for training and development whilst reducing cost. Another major factor besides cost is the logistical hurdle faced by many organisations when training a large workforce; especially those organisations that have a number of employees in the field. Since the onset of the current global financial scenario that most organisations are battling, UKS has seen a significant increase in the enquiries for online learning. The UKS portfolio supports organisations with comprehensive e-solutions to map, diagnose and monitor skills and competencies for improving personal and company development plans, and compliments that process with tools for creation, development and management of content for the enhancement of skills and competencies. What factors should companies take into account when choosing their e-learning provider?

130 www.busmanagementme.com

education roundtable.indd Sec1:130

26/2/10 16:42:30

Global Knowledge AD.indd 1

25/2/10 16:42:12

Maher Thompson. UAE-born received a BA in Digital Practice and Design from the University of Hertfordshire and returned to the UAE in 2004 to start a career in education and training. He is the Regional Sales and Marketing Director for Universal Knowledge Solutions.

DK. The fi nancial stability, subject matter expertise, strength and quality of workforce, market share in terms of the established list of satisfied and reference-able customer bases are some of the factors that need to be considered while selecting an e-learning provider. Other factors include the provider’s product knowledge and its ability to easily integrate the solution with the company’s existing management information systems, capability to customise the solution to extend and add functionality seamlessly without affecting its core code etc. The provider should also be able to predict and manage the costs associated with maintaining the solution and delivering the required level of service. At the product level, one should take in to account factors like ease of use, scalability, resilience and supportability while selecting the solution provider. MT. As mentioned in the answer to the fi rst question an organisation should assess their e-learning provider on the benefits to the learner. Pedagogy is crucial to how the learner engages with any material, be it off the shelf or bespoke. Many learners that have already experienced e-learning normally report a linear experience that becomes more of a page turning exercise without much interaction. The content should be up to date and current with business practice either in the context of the theories and ideas presented or even simply in the imagery and presentation of the material. An e-learning provider should be able to adapt to your technical environment to provide a solution that can be accessible to existing infrastructure as well as interoperable with future ones. MJ. Important factors to consider are credibility of the institution offering e-learning, quality assurance or quality management systems, pre-enrolment information and guidance, course costs, support for the elearner, individual preferences, certifications, content and course design. How much of a return on investment can companies see from investing in e-learning solutions for their employees? MJ. Without effective ongoing training, the ability of any organisation to compete successfully is under threat. Its competency and efficiency is reduced and the development of its intellectual capital is restricted. In an ideal world, a mix of classroom and online learning is acknowledged as the preferable route for employee development. But these are not ideal times, and the undisputable fact is

that e-learning can equip far greater numbers of employees with the skills and knowledge they need than the classroom alone. It should come as no surprise, therefore, that e-learning continues to grow across the enterprise. But the important fact for organisations to bear in mind is what research proves; that e-learning really is delivering. And it is delivering because it offers good ROI; employees like it and, most important of all, it works. DK. As digital learning has become increasingly commonplace, organisations have been tackling the complex area of calculating their ROI. The Total Cost of Ownership model has three components to be measured to yield the ROI: · Hardware, soft ware, human resources costs · Level of use by learners and those who contribute to learning · Level of result / learner outcome Only the fi rst tends to be measured successfully, as for example, measuring the costs associated with course development and course delivery, which includes the cost of initial development, instructor’s time, material, travel, and opportunity cost of the learner. The second and third measures around the level of use and the level of result would involve a very complex and time-consuming analysis, which organisations tend not to carry out. Th at said, we have substantial evidence from formal research on the benefits of online education, and in addition, it has also been shown that online course development and delivery are more cost-efficient than classroom-based delivery as the number of course learners increases and the course/training is delivered over a number of years. MT. An example of the impact of e-learning on the ROI of an organisation for UKS was for a project with Abu Dhabi Oil and Gas Company (ADCO). They approached UKS with a brief to develop a web based and intranet-based course for their Coiled Tubing division. Universal Knowledge Solutions utilised its bespoke e-Learning skill-set and expertise in addition to its nine years of regional experience to develop a course that is interactive in nature but at the same time providing effective instruction to the learners taking the course. ADCO was subsequently able to save hundreds of thousands of dollars normally invested for classroom-based training, as well as reducing the operational costs of taking their employees out of the field for training.

Dr Demetra Katsiﬂi is Senior Director of Academic Innovation, EMEA at Blackboard. Her research and professional career in education spans 30 years of managing strategies and enterprise technologies that underpin the core business of education. She is qualiﬁed in mathematics and computer science, and her research background is in e-learning.

132 www.busmanagementme.com

education roundtable.indd Sec2:132

26/2/10 16:42:31

UKS AD.indd 1

25/2/10 16:55:58

EDUCATION

Back Education is becoming big business in the UAE with institutions from all over the world setting up shop in Dubai’s International Academic City development. But for Dubai veteran, the University of Wollongong, training the UAE’s ﬁnest young minds is nothing new. Business Management goes back to the classroom and meets UOWD President Professor Rob Whelan.

he University of Wollongong in Dubai may only have opened its doors in 1993, but by UAE standards, it is a veteran of the country’s burgeoning academic sector. As a branch of the University of Wollongong in Australia it benefits from the patronage of an institution with a long history of academic excellence and the teaching resources required to replicate those standards anywhere. But as UOWD President Rob Whelan explains, running a university in Dubai presents its own unique challenges that no amount of experience on its home turf could have prepared the university’s academics for. The science professor, who specialises in bush fire ecology and was previously Dean of Faculty Sciences at the University of Wollongong in Australia, came to the post at UWOD in 2008. He says: “There’s no difference here from operating in America or Australia for instance. What is interesting and unique though is the fact that Dubai is central to so many countries so it is a veritable multinational hub for higher education in the region. So we’re teaching degree programmes where there might be 20 or 30 nationalities in the classroom. That’s very exciting but it has its challenges because there are so many different languages spoken and different cultures potentially clashing.”

134 www.busmanagementme.com

Prof Rob Whelan.indd 134

26/2/10 16:28:05

to the classroom Local appeal Although UOWD’s student population, like the rest of Dubai, represents a melting pot of different cultures, a significant number – around 18 percent overall – are UAE nationals. Approximately 25 percent of post-graduate students are UAE nationals and they make up the bulk of its masters students according to Whelan. He says the participation by UAE nationals in such programmes gives an indication of the efforts being made in the country to establish a larger skilled workforce of its own. “This is being driven by the individuals themselves who are seeking university level qualifications. It’s also being driven by their companies and agencies who know they need to build the skills in the Emiriati workforce in business and pretty much every other sector.” Another strong indication of this willingness is the fact that due to popular demand from UAE national graduates, the UOWD will this year become the first university in Dubai to offer doctoral programmes, in addition to MBA and Masters programmes in international business and quality management. Whelan explains the origins of the idea: “Over the years we’ve accumulated a very significant alumni of graduates from the degree programme and so initially the demand was coming from our own graduates and they were working in government agencies. Many of them were UAE nationals in Dubai and Abu Dhabi and they were feeding back to us the fact that because they were working full time there was no option to go overseas for a doctoral qualification. But they felt that they needed some research skills in their current job. As a result of that we surveyed widely throughout the UAE using a commercial survey company and discovered that over 90 percent of UAE graduates would contemplate and were very keen on an opportunity to do doctoral studies in the UAE.”

Shifting focus The university currently offers degree programmes in predominantly business related subjects as well as accounting and finance, computer science and engineering management. Whelan is keen however, for the university to broaden its curriculum and start to offer a more comprehensive range of subjects encompassing the humanities and social sciences: “One thing that is different for me but is common is that most universities that are offshoots or have been spawned by the overseas universities are gener-

ally focussed on business and management and finance and accounting, because that’s what Dubai has been doing most of. But I’m used to a comprehensive university, which has a range of disciplines. So during my time here two of my key objectives are to first enhance the research and training programme of what we do and also to broaden the university out beyond finance and accounting to make it more comprehensive in this region.” The first steps he has taken towards this have been the introduction of telecoms and engineering courses at the university. This will be followed by the introduction of humanities and social sciences courses. Whelan says, however, that one of the obstacles that he might face when introducing these courses will be recruiting experienced teaching staff for the new

“We surveyed widely throughout the UAE using a commercial survey company and discovered that over 90 percent of UAE graduates would contemplate and were very keen on an opportunity to do doctoral studies in the UAE” courses: “The challenge here is that if you bring in a new degree programme it’s a gamble because you then have to hire the staff to teach it. Attraction and retention of qualified staff is challenging in any rapidly developing region.” UOWD has a strong advantage in this area in the sense that it is able to bring academic staff over from its home base in Australia. And, says Whelan, many staff have been here from the start for over 15 years on three-year visas that are continually renewed. “This is a testament to how strong the university is,” he says. But despite not having faced recruitment challenges so far, Whelan says the university is keen to focus on HR issues, in particular, the continued training of its existing academic staff. With

www.busmanagementme.com 135

Prof Rob Whelan.indd 135

26/2/10 16:28:06

Kronos AD_4August 25/02/2010 16:49 Page 1

Case study One of the biggest projects Rob Whelan and his team will be working on in the year ahead will be the putting together of a series of Middle East based case studies for use by students studying business courses at UOWD. A gap for such case studies exists, says Whelan, because those currently available in the UAE are based predominantly on US businesses. He says: “We’re at a stage now where we have a whole range of industry partners that are willing to be partners in this enterprise. We’ve got about nine or ten cases that they are willing to be involved in and we’ve now developed them into publishable units. We’ll be bringing out a book of those ten cases and hopefully that will be the start of bigger things to come.” To date a senior member of the Richard Ivy Business School at the University of West Ontario has trained the staff in putting together business cases. The aim is to make these available to other business universities in the region for MBA students.

this in mind, last October it set up a centre for the training and development of its staff, the Centre for Academic Staff Professional Development, which has been tasked with setting up programmes to boost best practice in teaching and learning at UOWD. Explaining the thinking behind the centre, Whelan said: “My feeling was, when I came here, that because universities are and ought to be strong in teaching, learning and research, the first way to achieve that is to make sure you hire very good staff. But of course all those disciplines change rapidly and the latest theories in learning for young adults change very rapidly. What I wanted to do within the university was to take the opportunity to capture the latest in good practice in teaching and learning and good practice in research and make sure all our staff have access to what is latest in that area. So I see it in a sense as a continuing education programme, but it’s an in-house one for our own staff.” As well as coaching its staff, UOWD’s training and development centre will run a series of seminars taught by experts in staff training, to which staff from other Dubai-based academic institutions will be invited.

advantage of the facilities soon to be offered at the Dubai International Academic City project. Th is ambitious 25 million square foot development will be a free zone, which is dedicated to higher education institutions. To date it has attracted the likes of the University of Phoenix, the University of Exeter and the Manchester Business School. However, Whelan says he is reserving judgement on how the concept of grouping rival academic institutions together on one giant campus will work in practice: “I think it’s a very interesting experiment actually because what they’re trying to do there is apply a business cluster model that has been used in other business sectors, to higher education. And by putting a lot of institutions together and providing shared infrastructure, that’s a really interesting concept that is well worth exploring. I think it’s already positioning Dubai as a local hub for higher education because it’s providing a lot of options, but whether it’s viewed as a good thing by the universities that are there, remains to be seen. It will be very interesting to see how this turns out.”

Economic pressures Given the current unstable economic climate in the UAE, and correspondingly, the dwindling expatriate population, the future of Dubai International Academic City looks even more uncertain. Whelan says the downturn has not affected intake at the university so far, but that the situation remains an ongoing concern for him. “The biggest uncertainty in this region is what the impact of the global fi nancial downturn will be on demand from students. At the moment our spring semester intake looks pretty strong, so we’re holding our own which is good. But of course everybody is nervous because, in this sort of downturn, the concern is that a lot of expats would leave to go home and that has happened in Dubai. But that doesn’t seem to have affected the demographic we are attracting, so I’m pretty confident it’s not going to have a big impact on us. Th at’s the biggest risk factor for any university here.” Today though, Whelan is looking forward to a year of exciting fi rsts at the UOWD, in particular the introduction of the country’s fi rst doctoral programmes which will open the doors to a whole new world of opportunities for UAE students. And he says that what is most exciting about his job is that the UAE’s education sector is on the cusp of so many exciting changes: “Like many Australians I didn’t know a great deal about the Gulf region before I came here and what I found most exciting is the fact that it has jumped from being a nomadic culture to being on the forefront of business and commerce in just a generation and a half.”

“The biggest uncertainty in this region is what the impact of the global financial downturn will be on demand from students. At the moment our spring semester intake looks pretty strong, so we’re holding our own which is good”

Retaining individuality While UOWD hopes to remain a hub for academic excellence in the region, it will not, like many other academic institutions, be taking

www.busmanagementme.com 137

Prof Rob Whelan.indd Sec1:137

26/2/10 16:28:06

IN REVIEW 138

On the shelf From hunting down the perfect job, to the unconventional wisdom of economics and an insight into the credit crunch, Business Management reviews the best of this quarter’s business book releases.

The 50th Law By 50 Cent and Robert Greene Part strategic manual and part rags-to-riches memoir, The 50th Law is a unique project combining rapper 50 Cent and author Robert Greene who offer unique advice on how to win in business and in life. The book shows how power and success can be yours if you overcome your fears and features 50 Cent’s incredible life story interwoven with practical business lessons and wisdom from history’s most remarkable figures, including Catherine the Great, Confucius and Napoleon. BM SAYS: A sequel to Greene’s successful 48 Laws of Power, The 50th Law is a fantastic follow-up and an interesting mix of self-help and historical analysis. A thoroughly remarkable perspective from which to view both business and life.

The Future of Work By Richard Donkin The Future of Work presents a cohesive argument for a fundamental change in attitudes to work – one that could create a healthier society capable of meeting the expectations and concerns of a developing economy. By looking at the forces shaping the future of employment, this book concentrates on seven significant themes underpinning change in the modern workplace: demographics, talent, measurement, networks, health, age and leadership. BM SAYS: Separating popular myths from truly transformational trends, Donkin has produced a fascinating read for anyone with responsibility for people at work. An essential guide for using technology to intelligently manage your staff.

The 100 by Simon Maier and Jeremy Kourdi An insightful guide to the greatest speeches ever delivered, The 100 addresses the important subject of communications by showcasing the best communicators of all time and explaining what they did, what happened as a result and why they succeeded. Barack Obama, Jack Welch, Aung San Suu Kyi, Socrates and Charles Dickens are just some of the great communicators featured in this book. BM SAYS: Even in today’s high-tech world words remain a powerful tool, and the way they are used can still mean the difference between success and failure. The 100 provides invaluable insights into how to become a skilled orator.

BOOK REVIEW ED P138.indd 138

26/2/10 17:11:30

Bluecoat.indd 1

26/2/10 08:50:11

CITY GUIDE 140

St Petersburg Time: + 3hrs GMT | Currency: Russian Ruble | Language: Russian | Population: l Six million ll

St Petersburg may have lost its crown as the capital city of Russia after the Russian revolution, but vistors to this cultural landmark will enjoy an experience that parallels any trip to Moscow. Business Management gives you a whistle stop tour of Russia’s most diverse city.

The Isaac cathedral in St Petersburg

The Samson fountain

Ballet of the Mariinsky Theatre

About St Petersburg was established on the site of a swamp by the emperor Peter the Great, who then declared it the new capital of the Russian Empire. It remained the capital for more than 200 years until the 1917 Russian Revolution. Today it remains Russia’s second largest city and is home to six million people. As well as being a major European cultural city it is also a strategically important Russian port on the Baltic Sea and often described as the most Western City in Europe. The city draws visitors to its myriad cultural attractions all year round but the summer is a particularly popular time to visit, as this is when St Petersburg’s White Nights occur. On these occasions the sun shines for almost 24 hours a day and city life continues around the clock. What could be more bizarre than a walk along the city’s canals in bright sunlight at midnight?

Getting around St Petersburg has Russia’s second largest airport and is well connected to Europe and the former Soviet Union. Travellers from Asia, Australasia or the Americas may have to arrive via Moscow however. When you reach St Petersburg there is an extensive public transport network including

CITY GUIDE ED P140.indd 140

TOURIST TIPS • Don’t travel to St Petersburg on a tight budget. The city is the second most expensive in Russia and the 12th most expensive in Europe, putting it ahead of Paris, Singapore and New York. Cheap accommodation is hard to ﬁnd but public transport offers a way to save the pennies. • Don’t forget that all visitors to Russia require a visa. This is usually only issued to travellers with fully booked and conﬁrmed travel arrangements. The processing of visa applications can take anything from 10 working days so arrange this well in advance. • Contact your doctor or a travel clinic for up to date information on vaccines before you travel to Russia. Generally travellers are recommended to be vaccinated for diphtheria, polio and tetanus. Food and waterborne diseases are common so typhoid and hepatitis A vaccinations are also recommended.

26/2/10 17:12:09

CITY GUIDE 141

Relax A great way to explore the city, particularly in summer, is to tour the canals by boat. The typical tour is through the Moika canal then out along the Neva to see the Peter and Paul Fortress before returning through the Fontanka to the Mariinsky Theatre. The majority of tours are in Russian and start from around $13. If the weather permits, consider an excursion to Pushkin, formerly the summer residence of the imperial family. The Catherine Palace is surrounded by lush parkland filled with waterfalls, boating ponds and statues. It’s the perfect place to enjoy a picnic and escape the city bustle.

Astoria Hotel

SLEEP Hotel Astoria and Angleterre Hotel These adjacent hotels occupy an unrivalled setting in St Isaac’s Square in the city centre. This is just a short stroll from St Petersburg’s most popular attractions, including the Hermitage and the Mariinsky Theatre, home of the Kirov Ballet. Both hotels are managed by the Rocco Forte Collection and combine traditional Russian with exceptional international service. There is a choice of luxurious suites, while guests can enjoy six restaurants and bars, a spa and beauty studio, fitness centres, swimming pool and business centres. There is a choice of stunning banqueting suites for up to 450 guests, a conference room for 205 people and meeting rooms that can accommodate up to 100 participants. Rates: From $270 a night Grand Hotel Europe Th is hotel is steeped in history having been a fi xture in St Petersburg for over 130 years. According to its website, it was where the composer Tchaikovsky spent his honeymoon and where George Bernard Shaw once dined with Maxim Gorky. It is situated on Nevsky Prospekt, one of St Petersburg’s most impressive avenues and is a stone’s throw from the city’s most prominent cultural landmarks, including the Russian Museum and the Mikhailovsky Theatre. There are five restaurants to choose from and a health club that includes a gym and plunge pool. Rates: From $345 a night suburban trains running to most destinations within 100km or 200km of the city centre. Buses run within the city and as far afield as Moscow and the Baltics. Cars are available to hire for around €70 a day though for newcomers to the city this is not recommended as the roads are in a poor condition and there is a distinct lack of signposting. The most convenient way to travel however is on the St Petersburg metro, which covers a network of 58 stations. The entrance to each metro station is marked with a blue M and the flat fare for all journeys is around 70 cents. Smart cards can be purchased then topped up to pay for multiple journeys over a fi xed time period.

CITY GUIDE ED P140.indd 141

See The historic centre of St Petersburg has been listed as a UNESCO world heritage site and with good reason. Its highlight, the Winter Palace, is actually a vast museum showcasing a collection of over three million artefacts from across the world. The collection includes works by the likes of Rembrandt, Da Vinci, Michaelangelo and Rubens and visitors are recommended to get a tour guide to avoid missing out on the best bits. After a day spent exploring the Winter Palace’s gems, no visit to St Petersburg is complete without an evening at the opera. The Mariinsky Theatre, formerly the Kirov, offers world-class performances of both ballet and opera, including those sung in English. For a more intimate experience visit the St Petersburg Opera which features just 200 audience seats and puts on cheaper performances.

EAT Taelon For a true taste of new Russia, visit this ultra exclusive restaurant, which is housed in an opulent mansion house in the city centre. Dress to impress in this glittering setting which features marble fireplaces, gilded ceilings and an adjoining private club and casino. Specialities include caviar, oven-baked partridge in coriander sauce and baked dorade with ragout of spinach and snails. Sunday brunch comes with black and red caviar, lobster and champagne. If you’re feeling flush enjoy a glass of cognac for €215. Mechta Molokhovets Gourmands will delight in this intimate restaurant which has a menu based entirely on a famous 19th century Russian cookbook entitled A Gift to Young Housewives. The title of the book may be old fashioned however the menu in the restaurant is anything but. Cooking is state-of-the-art and includes dishes such as venison fillet accompanied by baked pears filled with cranberries and soaked in chanterelle sauce. There are only six tables in the restaurant though so booking is highly recommended.

26/2/10 17:12:13

OBJECTS OF DESIRE 142

Technology for today’s executive <<< Apple iPad After months of fervent speculation and rumour, Apple has fi nally unveiled its latest piece of shiny new tech – the unimaginatively named iPad. Apple believes its new tablet-style device will occupy a gap in the market between an iPhone and a MacBook. For the critics (of which there are many), therein lies the problem; it’s too big to fit in your pocket and too impractical to replace a laptop. There’s no denying the iPad’s seductive curves and glorious 9.7-inch screen will have Apple fans’ palms perspiring, but its ability to garner mass-market appeal looks unlikely. For starters, it cannot run Flash and it won’t even allow you to multi-task. It also has no USB port, no SD slot, no camera and no GPS. In essence its an iPhone on steroids.

Desirability rating: aa >>> LG GD910 A watch that doubles as a mobile phone; what’s not to love? Thanks to LG and its futuristic-looking watch phone, the stuff of dreams when you were a kid is now a reality. As a wristwatch it’s on the chunky side, but its pleasing looks more than compensate. It boasts a touch screen, high speed internet and video calling capabilities. Oh and it also displays the time too. The GD910 comes bundled with a Bluetooth ear-piece, meaning you won’t have to whisper at your wrist during the daily commute, thus avoiding the embarrassment of looking like somebody with delusions of being James Bond. A sim-free unlocked version will set you back around US$800. Overall, a niche product and a bit of a gimmick but we still crave one strapped to our arm.

Desirability rating: aaaa

>>> Denon AH-D7000 headphones Can you ever justify shelling out US$1080 on a set of headphones? Denon thinks you can, which is why its premium AH-D7000s have been receiving critical acclaim from both tech experts and audiophiles. These lighweight cans produce stunning sound quality across all genres, be it rock, pop, electronic, classical and metal. Users claim these headphones are the most comfortable on the market and are easily suited to hours of continuous listening. As you would expect from a pair of headphones the price of a bespoke Saville Row suit, the build quality is sumptuous – personified by the glossy mahogany enclosures and soft leather earcups. Even the elastomer cabling is less likely to end up tangled during use and when packed away.

Desirability rating: aaaa

>>> Fujiﬁlm Finepix REAL 3D W1 Since the blockbuster movie Avatar hit the silver screen late last year, 3D technology has become the toast of Hollywood. Despite having to don the silly glasses, we flocked to cinemas in our droves, catapulting Avatar to the top of the list of highest grossing movies of all time. Camera manufacturer Fujifilm has capitalised on the 3D hype with the world’s first digital camera with three-dimensional imaging. The W1 uses two lenses and two sensors, which take an image of the foreground and background. This is processed to create an image that jumps out at you. Users can either view the image on the camera’s 2.8-inch screen or buy a special eight-inch digital photo frame (sold separately). Expect to pay around US$500 for the camera and another US$400 for the frame.

Desirability rating: aaa

Gadgets.indd 142

26/2/10 16:22:43

Your World. COVERED From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Business Management What business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets? Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision makers in government and private enterprise. ALSO AVAILABLE FOR: US & EU

EU Editition ion ition

d US E

Find out more: www.busmanagementme.com

Next Generation Pharmaceutical

Next Generation Power & Energy

Approximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. It is committed to providing information for every step of the pharmaceutical development path. Available for: EU

A poll of 4000 utility executives posed the simple question: what keeps you up at night? The answers were costs, new technologies, ageing infrastructure, congested transmission and distribution, viable renewables and inadequate generation capacity. Available for: US

Find out more: www.nextgenpe.com

Find out more: www.ngpharma.com

Oil & Gas

Infrastructure

Collaboration between Government and multinationals to ensure the energy supply is developing on two fronts. O&G is the definitive publication for stakeholders and service companies to read about the regional projects, technologies and strategies affecting their group. Available for: MENA, US, Russia

Infrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility. Available for: US, EU

Find out more: www.menainfra.com Find out more: www.ngoilgasmena.com

cataloguepage.indd 143

26/2/10 16:03:27

FINAL WORD 144

Effective process management Grzegorz Gruchman of IDS Scheer, outlines today’s BPM trends and what the future holds for the technology.

process is a set of human and/or automated tasks, performed to deliver a product or a service to customers. When you look at processes, you see how the work is really done in agencies or companies. However, most agencies and companies manage mostly their departments. Processes as such are rarely organised and monitored. Therefore, most agencies and companies do not manage how they provide products and services to their customers. Most organisations still use a traditional approach to management, based on organisational structure. Such an approach emphasises management of people and IT resources within departmental boundaries. Less attention is being paid to how those resources need to be organised and coordinated if several departments are involved in process execution. More attention in this respect is needed if an agency or a company wants to satisfy its customers in a dynamic, permanently changing environment. Business Process Management (BPM) is fundamental to long-term agency or company success.

projects, when properly defi ned and executed, reward companies with many tangible results. For example, successful process projects reduce process costs, errors, customer complaints and/or process cycle times by 10-30 percent. Practice demonstrates time and again that such ben-

Deﬁning ROI for BPM

Common challenges to BPM adoption

Contemporary BPM discipline distinguishes between BPM process change projects and continuous process management. Process change

Process change projects encounter the same problems as any other organisational change or IT application implementations. Factors such as lack of sufficient managerial support, resistance to change and inertia, lack of clear requirements, business and IT gaps are frequently encountered in process change efforts. However, different challenges arise during implementation of continuous process management. Here a traditional managerial mindset and incompatible company culture are to blame for failures. Implementation of true process management requires adding an additional, horizontal dimension to hierarchical structures. Th is runs contrary to classic managerial practice and needs a serious shift in the way companies are managed. There was some impact on BPM adoption from the recession but a modest one it seems. A BPM survey conducted by BPTrends in 2009 indicates some companies put their BPM projects on hold, reduced their scope or cancelled them. However, a majority of respondents indicated there was no change in their BPM efforts, either planned or under execution. Most of the respondents expected also to spend on process projects in 2010 the same amounts as in 2009 or more.

The road ahead BPM as a managerial, IT-enabled discipline is condemned to continuous growth. More and more organisations will feel increased pressure to improve performance and BPM process change projects will be increasingly popular. More and more organisations will also implement continuous process management and achieve a higher level of BPM maturity as a result. The most exciting future developments in the BPM area lie however in process execution middleware. A few years ago, Business Process Management Systems (BPMS) were born to support the whole process management cycle. Unfortunately, till now this software has been used mostly for automation and management of small-scale processes. This should change however in the coming years, as more and more organisations will increase their sophistication through practical use of BPM concepts.

Final Word.indd 144

“Most companies still use a traditional approach to management, based on organisational structure” efits tend to disappear, if the processes are not continuously managed. ROI of continuous process management cannot be demonstrated easily, however some hard data exists to support a claim that process management is profitable in the long run. Research indicates that companies which implemented process-based supply chain management have a higher market value than other companies. Th is reflects their market leadership, as well as excellent fi nancial results.

Grzegorz Gruchman acted as a consultant in such global companies as Ernst & Young and Hewlett-Packard. He joined IDS Scheer in 2001 as a Vice-President at IDS Scheer Poland then spent more than 10 years in the Middle East. He is now a Managing Director of IDS Scheer Saudi Arabia LLC.

26/2/10 16:40:54

UPFRONT BMME 8_25 June 01/03/2010 11:33 Page 18

UPFRONT NEWS ROUND-UP

QATAR

BAHRAIN

The US$2.6 billion Energy City Qatar development will be completed by 2012, according to its developers. They have announced that most of the ECQ’s tenants will move in within the next two years following project delays due to the rising costs of building materials. ECQ CEO Hesham al Emadi told the Qatar Tribune newspaper: “There were some delays last year because of the economic downturn and rising cost of raw materials, but we are confident that the ECQ will be completed by 2012.” He went to say that 60 percent of the project would be completed by the end of 2011.

New regulations tightening limits on banks’ credit and asset exposures could be launched by the Central Bank of Bahrain. It has announced on its website that there are plans to impose an upper limit on commitments to underwriting securities or syndicated loans worth 30 percent of bank’s capital to a period of 90 days. The regulations also include a new definition of credit underwriting and caps to be introduced on banks’ exposures to assets they plan to securitise or hand to investors. Consultation papers on the proposed regulations have been published and banks licensed by the Central Bank have until mid March to submit responses to them.

KUWAIT Plans for a US$25 billion railway line linking Kuwait and Saudi Arabia have reportedly been approved though further studies are needed before work can begin. The Kuwait Times has reported that senior officials from the ministry’s transport department will now hold meetings before publishing tenders for the project. Studies on the location of branch stations and manpower numbers for construction are needed before the work canbegin. Ultimately the plan is for a full GCC network to be established, connecting all countries by a 2117km long network. The first 135km long line between Kuwait and Saudi Arabia will be at Sulaibiya and end at Nuwaiseeb.

IDS SCHEER AD.indd 1

25/2/10 16:44:33

UKS AD.indd 1

25/2/10 16:55:58