SME Advisor Middle East - December 2013 by SME Advisor Middle East

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Issue 97 DECEMBER 2013 EXCLUSIVE TELECOM PARTNER

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The Chemistry of Success

First class An IPO blueprint from London Business School

Changing times Strategies for managing change and reducing risk

Marwan Abdulaziz and the power of DuBiotech

A starry

night

The galaxy of winners at the ADCB Stars of Business Summit and Awards

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Chairman Dominic De Sousa Group CEO Nadeem Hood Managing Director Richard Judd richard.judd@cpimediagroup.com +971 4 440 9126 EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Group Managing Editors Melanie Mingas melanie.mingas@cpimediagroup.com 971 4 440 9152 Georgina Wilson-Powell georgina.powell@cpimediagroup.com 971 4 440 9105 Sub Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 ADVERTISING Group Sales Director Carol Owen carol.owen@cpimediagroup.com +971 4 440 9110 Commercial Director Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 Media Sales Executive Emma Hughes emma.hughes@cpimediagroup.com +971 4 440 9120 Events Sponsorship Manager Gill Fairclough gill.fairclough@cpimediagroup.com +971 4 440 9148 PRODUCTION AND DESIGN Production Manager James P Tharian james.tharian@cpidmediagroup.com +971 4 440 9146 Circulation Manager Rajeesh M rajeesh.nair@cpimediagroup.com +971 4 440 9147 Head of Design Fahed Sabbagh fahed.sabbagh@cpimediagroup.com +971 4 440 9107 Designer Froilan A. Cosgafa IV froilan.cosgafa@cpimediagroup.com +971 4 440 9107 Photographer Jay Colina Abdul Kader Pattambi DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developer Abey Mascreen online@cpidubai.com +971 4 440 9100

The changing face of SMEs

’m delighted to say that this year’s ADCB Stars of Business Summit and Awards was quite simply the most successful yet, attracting 4,947 entries across 26 business categories. This vast demographic catchment means that this is in fact the largest awards competition of any kind in the Middle East region. Yet when I’m asked why ourselves and our valued Platinum sponsor, Abu Dhabi Commercial bank (ADCB) host this event - which of course takes considerable energy, initiative and sheer logistical planning – the answer I give often surprises our readers and contacts. It’s not purely about market exposure, for example, nor is it about wanting to drive the agenda in the incredibly important SME sector (significant though these aspects also are). No, it’s actually about something a lot more fundamental than this: it’s about building a deep and genuine understanding of the SME space, and its trends, influences and emerging directions. For example, among the 4,947 entries, we were able to detect a number of fundamental shifts of emphasis which we haven’t seen in the SME sector before. These included – • The first appearance of the ‘Techno-SME’ - the category that is so popular in Singapore and the USA but has hitherto been rare in the Middle East. • A far stronger emphasis on corporate governance and Best Practice. • An awareness that it can be very advantageous for a business to have a commercial template designed to facilitate rapid expansion. Just look at several of the Top 10 businesses in the Dubai SME 100, for example, and you will see this expansion template very clearly – they are all well-placed to roll-out an international branch network. In all of the cases above, we see a growing trend towards sophistication: the SME space simply wasn’t like this even four or five years ago. As part of this trend, we also see two other factors becoming more dominant – • Firstly, a focus on innovation. Businesses of all shapes and sizes now aspire to be keynote innovators - this applies as much to those offering a brand new retail concept as it does to businesses offering unique print processes. • Then, a willingness to empower staff and encourage point-of-sale decision-making something that has historically been very rare amongst SMEs in the GCC. In fact, about 20 per cent of all case studies submitted as part of awards entries spoke about encouraging staff empowerment. Taken collectively, these are signs of a major sea-change. A change that is likely to mean that businesses are more effective, more efficient and are starting to operate much more like their bigger, richer cousins in the large business sector. I’m sure you’ll agree that market intelligence of this kind is just about the most welcome benefit that could ever derive from an awards contest – and I look forward to seeing the fruits of these changes in the way that SMEs interact with their customers and the business world at large. Enjoy this issue of SME Advisor.

Paul Godfrey Senior Editor

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December 2013

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Issue 97

December 2013

CONTENTS

39 A STARRY NIGHT The galaxy of winners at the ADCB Stars of Business Summit and Awards

Editor’s note 03 Paul Godfrey highlights the changing face of SMEs. SHOPTALK 08 News and developments impacting SMEs in the region. Finance Focus 14 The latest financing opportunities for SMEs and allied financial services. SME ABOUT TOWN 18

Key events attended by SME owners and managers.

BANKING FOR BUSINESS 22

20/20 vision. We ask our SME champions to explore the opportunities (and challenges) that come as part of Dubai’s Expo 2020 victory.

Movers & Shakers 26 The chemistry of success. We speak to a key personality empowering significant progress in the Life Sciences industry – Marwan Abdulaziz, Executive Director of Dubai Biotechnology and Research Park.

22 December 2013

CONTENTS

Getting Finance 30 Ready, Set, IPO! Professor Florin Vasvari of London Business School analyses the profits and pitfalls of the IPO process. 36 Calling in the pros. Peter Beynon, Regional Director, ICAEW Middle East, on how a skilled finance professional can take your business to the next level. SME Summit and Awards Special 39 The ADCB Stars of Business Summit and Awards proved to be a ‘milestone’ in the yearly calendar of an SME. Find out which businesses scooped the key honours of the year… Managing Risk 44 Better safe than sorry. Are you aware of the dangers lurking around your cash office? Senior Editor Paul Godfrey offers top tips to safeguard your business…

Workspace 48 A recipe for growth. Experts from Servcorp offer expansion strategies that can supercharge business growth. 52

On Cloud No.9. Vikram Chadha, Vice President – SME Marketing, du, enlists the benefits of Cloud technology.

P for People, P for Progress. Nurturing your ‘People assets’ can reap long- term benefits for your business.

Legal 60 Dubai’s New Hotel Classification Scheme: a review of implementation and scope. Clyde & Co.’s Alexis Waller and Sarah Khalifa explain the changes. Industry watch 62 ICT trends in 2014. 63

New VC firm eyes MENA.

Developing Dubai’s Islamic economy.

Encouraging energy conservation.

Shift to ‘Smart City’ infrastructure.

Handling trademark disputes

TECHNOLOGY FOR BUSINESS 70 IT trends and tools that are reshaping business in the region. The next level… 76 Change management: the role of strategy making. Our detailed guide will ensure your business develops a progressive, proactive approach to change.

SHOPTALK

UAE

DBWC partners with Unilever

During the ceremony

ubai Business Women Council (DBWC) signed a strategic agreement with Unilever under which both parties will collaborate on cross-functional business development to promote each other and provide mutual access to their services. The partnership took shape at a recent signing ceremony held at The Dubai Chamber of Commerce and Industry – in the presence of Raja Easa Al Gurg, President of the DBWC, and Arijit Ghose, Managing Director, Unilever Gulf.

New networking platform for export companies Dubai Exports announced the launch of a new networking platform – The Dubai Continental Networking and Referral Group. Based on a system similar to Business Network International (BNI), a global business networking organisation, the Group is the perfect platform for

Raja Easa Saleh Al Gurg, President, DBWC, said: “It has always been our endeavour to partner with leading firms that can add value to our members by offering business opportunities and appropriate exposure. Through our partnership with Unilever, we will be able to leverage their brand value to promote women entrepreneurship and encourage young women to make productive contributions towards the social and economic development of the country. Unilever is a valuable

export-oriented companies to gain valuable insights, enjoy added exposure, and get referrals leading to new contracts and customers in overseas markets. That’s not all. The Group provides the local exporter community with an innovative avenue to expand their exports by leveraging their knowledge and contacts within the community. With the information they receive as part of their membership, companies will be able to overcome challenges posed by export barriers, customs issues, transportation and logistics or lack of local knowledge.

addition to our growing list of strategic partners and we look forward to a fruitful relationship with them.” Unilever, in collaboration with DBWC, aims to encourage young female university students and mid-career women to be successful entrepreneurs and business leaders so that they make worthy contributions towards the social and economic development of the UAE. The company will leverage the platform offered by the Council to create a positive impact and further empower young female students at universities across the UAE as well as DBWC’s members through their training modules, internship programmes and presentations of inspiring case studies. Arijit Ghose, Managing Director, Unilever Gulf, said: “To achieve our ambition of doubling the size of our business whilst reducing our environmental impact and increasing our positive social impact, Unilever is committed to building a diverse and engaged workforce. In Unilever Gulf, we are well on track in creating an enabling environment for women with the rollout of our agile working policies and mentoring programmes. This strategic collaboration with DBWC will help further strengthen our diversity agenda to assist in empowering our current and future female employees.”

Engineer Saed Al Awadi, Chief Executive Officer of Dubai Exports, said: “Referrals are an important part of any company’s success and growth strategy. In fact some non-service companies derive up to 20 per cent of their business through referrals. The Dubai Continental Networking and Referral Group allows companies to add a referral strategy to their export marketing mix.” “When it comes to export there is nothing like talking to someone who has already exported to a target country. Our objective is to provide an environment to

bring together like-minded companies that may not know each other otherwise and leverage the different kinds of experiences they all have for the benefit of the industry.” The networking forum will consist of 19 manufacturers from different sectors and will hold weekly meetings in addition to the monthly training sessions to be offered by Dubai Exports. Dubai Exports will collectively interact with the Group to identify challenges and advocate necessary changes on behalf of the industry.

Under the directive of His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum Crown Prince of Dubai and Chairman of Dubai Executive Council

Acknowledgement Za’abeel Palace Hospitality extends its deepest thanks and gratitude to:

His Highness Sheikh Mohammed bin Rashid Al Maktoum UAE Vice President, Prime Minister and Ruler of Dubai

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum Crown Prince of Dubai and Chairman of the Executive Board

In appreciation and recognition for their Highness’ wise guidance that has had a profound impact on the success of the Dubai World Hospitality Championship as well as promoting the hospitality sector in the United Arab Emirates.

Za’abeel Palace Hospitality would also like to extend its sincere thanks to all the people who contributed to the success of the championship that was held at the Dubai World Trade Centre from 16 - 18 November, 2013.

Organised by

Supported by

Official Sponsors

Strategic Partner

Official Media Partner

Supporting Partner

Government Support Partner

Support Partner

Official Hotel Partner

Official Publisher

Official Event Magazine

Supporting Media

December 2013

SHOPTALK

du joins hands with AFZA

n a recent partnership with Ajman Free zone Authority (AFZA), du introduced new initiatives focused on the SME sector. The partnership will see du establish a kiosk staffed by trained personnel at AFZA to assist customers in purchasing the right plans and SME solutions from du’s extensive portfolio. du has appointed its existing channel partner, Brandz Management Consultancy, as the account manager for Ajman Free zone Authority to provide single window services to its companies.

Mahmoud Al Hashimi, General Manager, AFZA, said: “Our vision is to be the free zone investors’ choice in the UAE, and our new partnership with du will contribute to achieving this vision. There are a great number of SMEs stationed within AFZA, and by choosing du – a leading provider of SME connectivity solutions – as a partner, we are providing entrepreneurs with the tools they need to succeed.” Osman Sultan, CEO, du, added: “We are proud to be able to reach out to even more of the UAE’s SMEs through our strategic partnership with AFZA. Our presence will give SMEs in Ajman direct access to our experts and services, allowing us to provide them with our SME-specific

From L to R: Osman Sultan, CEO, du, and Mahmoud Al Hashimi, General Manager, AFZA

mobile plans, designed to meet the needs of new businesses by providing the ultimate in connectivity, with minimum cost.” AFZA tenants can also enjoy an exclusive introductory offer: when subscribing to the Executive Plan Plus, Business Advantage Plan

Unlocking e-commerce potential The first Middle East e-Commerce Conference 2013 tackled several pressing industry issues and shed light on key topics surrounding e-commerce in the region. Organised with the theme, Tap into the Golden Opportunity to Become Successful Online, the conference urged business leaders to capitalise on the vast opportunities currently available in the e-commerce space. Held by the Dubai Chamber of Commerce and Industry in partnership with alibaba.com – the e-commerce platform, the event imparted e-commerce know-how and highlighted the benefits of trading online through the portal – www.dubaichamber.com/alibaba. This portal, developed by Dubai Chamber along with alibaba.com, allows cross-border trade and helps

His Excellency Abdul Rahman Saif Al Ghurair during the conference

small businesses operate 24/7 in over 240 countries while gaining competitive advantage in global markets. A key presence at the event was His Excellency Abdul Rahman Saif Al Ghurair, Chairman, Dubai Chamber, who stated that Dubai Chamber was working with eminent global organisations to bring new opportunities to its members and stakeholders, in line with its mission to represent, support and protect the business community.

or International Business Plan, customers will receive their SIM card for free, saving up to AED 55 per line. Additionally, customers will also receive free LTE data dongle and 10 GB data at a price of AED 200 per month. This amounts to a total saving of AED 1,000 for AFZA customers.

He said: “Dubai Chamber has organised this first ever e-Commerce Conference as we see this as a vital part of developing the business climate by creating new market opportunities and making our companies open and accessible to a wide range of global customers as the Emirate is a strategic business hub catering to the MENA region as well as major world markets.” He added, “Today, traders very well know the importance of operating a modern business as well as having an online presence which gives maximum exposure to their products 24/7. Also, the ability to spend online has created a profound advanced effect on the broader economy while improving the efficiency and availability of products without the need to build extensive networks of physical stores.”

December 2013

SHOPTALK

UAE

The World Entrepreneurship Forum: an entrepreneurial exchange

Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME

he World Entrepreneurship Forum’s UAE chapter, hosted by Dubai SME and held at the Dubai World Trade Centre, concluded successfully. Attended by policymakers, angel investors, mentors, SME owners and directors, and other key players in the SME ecosystem,

the two-day Forum highlighted crucial issues within the SME sector. The Forum was also successful in bringing together a strong panel of speakers that facilitated constructive discussions and encouraged knowledge-exchange. Abdul Baset Al Janahi, CEO, Dubai SME, said: “I am delighted that the World Entrepreneurship Forum is serving as a virtual ecosystem and hub for various streams of discussions and platforms all connected by the vision to serve and develop entrepreneurs. All the stakeholders represented here are discussing and sharing their ideas to make the entrepreneurial ecosystem a better one. Hopefully, actions will follow to start a business project, implement a business-friendly rule, launch an initiative to encourage startups etc., by any stakeholder.” The first day of the Forum focused on idea-exchange and offered

valuable insights on mentorship strategies. In fact, new entrepreneurs got the opportunity to interact with experienced entrepreneurs and angel investors. The concepts of crowd funding and crowd investment, which are relatively new to the region, were also explained for the benefit of entrepreneurs seeking funds to implement their business projects and growth plans. On the second day of the Forum, a special Policy Lab session was held with the intention to crowd-source feedback and ideas on making entrepreneurial ecosystems friendlier to entrepreneurs, startups and SMEs. “The World Entrepreneurship Forum aims to showcasing best entrepreneurship practices worldwide. Dubai SME’s initiative to create the first UAE Chapter in Dubai is very relevant due the countless efforts of Dubai to support and encourage entrepreneurship through better infrastructure, policies and access to capital. We really look forward to listening and learning from Dubai and the UAE and sharing the inputs with entrepreneurs worldwide,” said Tugrul Atamer, Executive Chairman of the World Entrepreneurship Forum.

Online payment made easier Dubai’s premier trade facilitation entity, Dubai Trade, has partnered with Network International to provide customers with a speedy, secure and efficient payment processing solution. As part of the agreement, Network International will provide an online payment solution called ‘NI Pay online’ for Dubai Trade’s Rosoom platform. The partnership will enable Network International to facilitate the growth of electronic commerce by increasing card acceptance and encouraging greater use of card payments.

“Businesses today are on the lookout for technologyfocused solutions that will enable them to operate faster, smarter and more efficiently in the online commerce arena,” said Bhairav Trivedi, Chief Executive Officer, Network International. “As the leading infrastructure provider for the payment space, Network International is committed to enabling the growth of e-commerce in the country, and is honoured to partner with Dubai Trade to provide them with a speedy and secure payment processing solution.”

comes through discussion of policies and growth plans as well as provision of secure and scalable solutions to the users of Dubai Trade e-Services. Eng. Mahmood Al Bastaki, CEO, Dubai Trade, with Bhairav Trivedi, CEO, Network International Signing with Network International, one of the leading payment Eng. Mahmood Al solutions providers in the Bastaki, Dubai Trade CEO, Middle East, will strengthen said: “We’re proud to have the objectives of both Network International entities toward Dubai’s as our genuine payment economic development.” partner. This partnership

Top success for eMart

he launch of Dubai Land Department’s eMart was received with a lot of enthusiasm and fervour. The online platform was able to achieve AED 74,560,000 worth of sales across the 11 residential and commercial properties on offer in its first online auction. This staggering figure reflects the strong demand and popularity of the online auction concept. These figures indicate the strong demand for services such as online auctions as they offer property investors and owners superior transparency, security, efficiency and speed. These factors have been the primary motivation behind Dubai Land Department’s launch of eMart. The auction marks a highly encouraging start for eMart, which was launched at the beginning of November

2013 to advance Dubai’s goals of efficient real estate operations that fulfill the highest levels of transparency and stakeholder rights. Property analysts also anticipate that eMart will greatly help in boosting awareness of the superior benefits of Dubai’s property

AED 74.5 million, indicating a substantial increase of AED 14.5 million. The portal already received over 1,100 visits in the early hours of the first day of bidding, reflecting the high interest among real estate investors who gathered in the special lounge hosted by Dubai Land Department. Several large screens were set up to display the live auction and to brief guests on the user-friendly new interface

from various perspectives. This is what made the auction process simple and convenient for everyone involved. Many of the bidders are expected to participate in future auctions as well, primarily because as a result of the high user satisfaction from the first auction. Property analysts anticipate that eMart will be the gateway for Dubai to raise the standards of smart

investments, in line with the Emirate’s aspiration of becoming the world’s leading destination for property investors. The residential and commercial properties in the auction had a starting price of AED 60 million and gradually growing to exceed

that they can use online to make their bids. Participating bidders pointed out that the innovative auction provided complete details and specifications along with uploaded photos of the property, location maps, and other useful information

real estate services, giving the Emirate a worldwide reputation for safeguarding the transparency and security of all transactions, while increasing access to the real estate market to a much wider audience of investors and other stakeholders.

such as this are vital for developing sustainable business relations that foster growth.” du has provided support to the UAE’s entrepreneurial scene in various ways since the company was established in 2006. The company has created tailored telecommunications solutions for SMEs such as the Entrepreneurial Plan and has launched several initiatives – such as ‘The Entrepreneur’, a reality TV show aired in 2012. Additionally, du has also supported events such as the Young Entrepreneur Competition for three consecutive years,

and constantly provides expert advice to SMEs on procurement and contracting procedures.

du’s SME initiatives In line with its commitment to provide continual support to SMEs in the UAE, du has joined forces with TiE Dubai. The telecom company will be seen as a valued Gold sponsor of the initiative and will help boost entrepreneurship across the country. Through the collaboration, du’s executive management will be present at various TiE workshops and events as guest speakers. Their talks will encourage knowledge exchange amongst the community,

which will, in turn, support entrepreneurs by providing them with access to du’s professionals. Hala Badri, Executive Vice President, Brand and Communications, du, said: “Since inception we have committed our efforts to supporting the UAE’s entrepreneurs. By partnering with TiE Dubai as a Gold sponsor, we are able to extend our reach by supporting events that bring entrepreneurs together with members of the business community. Networking opportunities

December 2013

FINANCE FOCUS

ISO honour for Network International

Bhairav Trivedi, Chief Executive Officer, Network International

he payment solutions provider Network International has achieved a major quality milestone as its Issuing Operations Division was awarded the ISO 9001: 2008 certification.

“Continuous focus on quality is the hall mark of a successful service provider, and we at Network International, believe that this excellence can be achieved only through high intention, sincere effort, intelligent direction

and skilful execution,” said Bhairav Trivedi, Chief Executive Officer, Network International. “The ISO certification is a reflection of the quality culture within Network International, and is a significant milestone in the journey towards

Deloitte reveals regional CFO optimism The latest edition of Deloitte’s Global CFO Signals report revealed that the optimism amongst CFOs in the Middle East has weakened over the past year. The report further stated that a net 41 per cent of Middle East CFOs feel more optimistic about the prospects for their companies, in comparison to a net 54 per cent recorded a year ago. Gulf countries, however, ranked higher than surrounding North African and Levant countries, in terms of optimism. Optimism among

surveyed CFOs in Syria fell by 13 per cent, while finance chiefs in the UAE reported a net 75 per cent increase. Only a net two per cent of CFOs reported their companies are carrying

implementing it across the entire organisation. “With this certification, the journey of quality and excellence has commenced at Network International,” said Hisham Hammoud, EVP & Chief Operating Officer. “Moving forward, we hope to implement several quality initiatives aimed at improving service levels in the organisation, as we are committed to providing consistently good service and improved standards.” ISO 9001:2008 specifies requirements for a quality management system where an organisation needs to demonstrate its ability to consistently provide products that meet customer satisfaction and applicable statutory and regulatory requirements. Network International aims to enhance customer satisfaction through the effective application of the quality management system, including processes for steady improvement of the system and conformity to statutory and regulatory requirements.

higher cash balances compared with a year ago, when a net 23 per cent reported the same last year. While 75 per cent of CFOs were predominantly concerned with market risk last year, that number has declined to 39 per cent, with strategic, operational, and financial risks all becoming a prevalent concern, reflecting the general uncertainty in the environment. Moreover, when asked about their companies’ business-continuity plans, one in four CFOs in the Middle East said they still did not have a plan in place despite the increased instability in the region. Middle East CFOs were also found to favour expansion in their own region over other parts of the world.

New Programme: Invest On Board

urkish Airlines has launched an innovative initiative to extend its support to entrepreneurs and startups. Its new worldwide programme – Invest On Board – will give startups and entrepreneurs the opportunity to take their business concept to the next level by cleverly connecting them with potential investors. This is how the programme works – 11 startup ideas will be featured

using the in-flight entertainment system available on Turkish Airlines making it easy for investors to browse through these video pitches and find a perfect match for their funding. These ideas will be renewed on Turkish Airlines’ Planet system on a monthly basis. Away from their busy offices and regular workdays, Invest On Board is a great way for investors to encounter the next big business

in an easy, accessible format. On the other hand, startups can gain added exposure through this global platform. Further information on the project will be available online at InvestOnBoard.com and new startups can apply through this website to be periodically included in newer video pitch releases. The campaign aims to promote the entrepreneurial spirit of Turkey in a fresh and noticeable way with an unconventional, distinctive and modern message.

CIMA joins hands with CUD

L to R: Geetu Ahuja, Head of GCC, CIMA signs the MOU with Prof. Karim Chelli, President, The Canadian University of Dubai.

The Chartered Institute of Management Accountants (CIMA), the professional body for management accounting, joined hands with The Canadian University of Dubai (CUD). As part of the partnership, students will now have the opportunity to gain global accreditations.

This agreement also offers CUD students pursuing their BBA and MBA degrees to pursue CIMA’s global qualification simultaneously and be double qualified. Not only do CUD graduates receive a solid grounding in the fundamentals of business and accounting but it also

gives them an advantage to be professionally qualified and fast track their careers as soon as they graduate. Prof. Karim Chelli, President, The Canadian University of Dubai said, “Our agreement with CIMA is a step forward in helping our students succeed in the business world. The CUD degree combined with the knowledge gained from CIMA’s certification in finance and business will prepare them for leadership roles.” CIMA offers the most relevant globally recognised business and finance qualification. The qualification focuses on business performance, management and finance, giving students an advantage to be placed across any business. By

the time the students graduate, they are not only financially qualified but also professionally trained in business management, capable of advising on business strategy and risk management. Geetu Ahuja, Head of GCC, CIMA said, “We are seeing a growing interest from students in the UAE who are keen on building a career in business and finance. From an employer’s perspective, there is a strong emphasis on recruiting qualified professionals to fill a number of key management positions in the region. For them a qualification such as that from CIMA is the most relevant as it prepares students to lead and drive business forward on a strategic level.”

December 2013

FINANCE FOCUS

In spotlight: Islamic Finance

n a recent seminar, supported by the GCC branch of the International Fiscal Association (IFA), industry experts explored the key topic – ‘Taxation of Sharia’ah compliant financial products and transactions’. The seminar kicked-off with a presentation by Mohammed Desin, a partner at Ernst & Young, who highlighted the growth potential within Islamic Finance in the region, and emphasised the importance of Sharia’ah compliant products. He said: “Islamic finance is effectively the sharing of risk and reward and not ignoring the economics of the transaction. We say: ‘We are partners with you’. The intention of the parties doing the transaction is critical.”

Islamic finance consultant and keynote speaker at the event, Mohammed Amin, revealed the

London Business School experts throw light on unethical behaviour

In a surprising new research, Margaret Ormiston, an organisational behaviour expert from London Business School, revealed

that CEOs with a strong record in corporate social responsibility (CSR) are more likely to engage in less ethical practices in the long-term.

research he had conducted on crossborder taxation of Islamic finance in the MENA region. The primary focus of the research was to suggest tax policies for countries looking to implement a supportive tax regime for Islamic finance – with Malaysia and the UK as comparators. Amin said: “There’s very little legislation for Islamic finance. Countries are at very different stages of development. For example, of the countries which responded to our study enquiries, only Turkey and the Qatar Financial Centre have specific rules for Sukuk.” Mohsin Iqbal from Latham and Watkins also voiced his opinion on the issue; he gave a detailed description of some real transactions in the GCC region and identified pitfalls for the unwary investor. He said: “A comprehensive legal structure is essential in any jurisdiction to ensure that Sharia’ah finance is successful.”

The research, undertaken by Assistant Professor of Organisational Behaviour at London Business School, Dr. Ormiston, alongside her co-author Dr. Elaine Wong, University of California – Riverside, suggested that CEOs who typically take utmost care of their stakeholders have an increased likelihood to feel justified to associate themselves with unethical behaviour. The reason behind this, they explain, is a sense that they have accrued moral credits from their prior ethical behaviour. Dr. Ormiston explains: “CEOs with a strong track record in corporate social responsibility are more likely to think that they can behave in a socially undesirable way without fear of discrediting their image. This is much like someone who is a healthy

eater for 11 months out of 12 and indulges during the holiday season. A generally healthy diet gives them confidence that they will not be discredited as an unhealthy person.” Dr. Ormiston takes the infamous example of Enron: “Prior to the Enron scandal, former CEO Kenneth Lay endowed chaired positions at universities and donated vast amounts of money to charity. Such behaviour on the part of the leader builds his social responsibility credits, which may licence him to commit socially irresponsible behaviour in the future. In other words, top leaders may feel that when they have acquired moral credits through a CSR strategy that balances the needs of multiple stakeholders, they can then put forth a strategy that cuts corners or is potentially harmful to stakeholders.”

December 2013

SME ABOUT TOWN

During the seminar

Dubai Chamber – TRA seminar

ubai Chamber of Commerce and Industry in cooperation with the Telecommunication Regulatory Authority (TRA) held an informative ‘Domain Name Management’ seminar. The session highlighted the various aspects of domain name registration and protection, and suggested several practical tools for resolving domain name disputes. In addition, attendees at the workshop enjoyed expert guidance on the best applicable dispute resolution mechanism. Speaking to an audience of lawyers, business owners, managers, and consultants from the intellectual asset

management field, Jehad Kazim, Director – Legal Services, Dubai Chamber, stated that the seminar was a part of the Chamber’s efforts to educate the business community about the latest tools in the area of domain name management. Kazim accredited the success of the seminar to the profitable partnership with the Telecommunication Regulatory Authority as she stressed that the workshop achieved its objective of raising awareness on the importance of domain name while highlighting its various aspects of registration, protection and resolution of disputes. “Domain names are one of the most important business assets that contribute in supporting and globalising businesses. We believe it is important that local businesses understand the benefits and value

of registering domain names, the protection involved and the tools for making them even more efficient and effective,” said Mohammad Al Zarooni, Acting Executive Director Policies and Programme in the TRA. Tariq Ali, Business Development Officer, and Nadya Al Jasmi, Business Operations Officer, TRA, gave presentations on Domain Names’ Registration Process and Requirements, while Nassir Al Ali, ICT Specialist, TRA, spoke on The Role of .ae Domain Administration in Resolving Domain Name Dispute. Hoda Barakat, Founder, Hoda Barakat Legal Consultancy, gave an overview of WIPO’s Domain Name Dispute Resolution Mechanism, and Omar Shteiwi, Head of Legal Compliance & Corporate Governance, Nestlé Middle East FZE, spoke on How Companies Manage their Domain Names.

du’s workshop on MNP Prior to the launch of Mobile Number Portability (MNP) in the UAE, du held an informative Telecom Knowledge Session with Ahmed Mokhles, Executive Vice President, Consumer and Digital Business, du, and Carin Johansson, MNP Commercial Programme Manager, du. The session was held both in Arabic and English and was attended by

members of the UAE’s media, key bloggers and social media activists. Mokhles and Johansson offered detailed insights on the mechanics of MNP, what it is, what it means for customers, and why it matters for the UAE. They also highlighted key topics such as MNP worldwide best practices, success criteria and how it is being implemented in the UAE.

Mokhles said: “MNP is all about offering freedom of choice to telecom users. Under the guidance of the TRA, MNP presents a landmark initiative for the UAE’s telecom sector. The UAE is ready to launch this significant step, and we are confident that it will have several positive implications for not only the nation’s telecom sector, but for the country as a whole and the economy, too.”

Johansson added, “In launching MNP, the UAE will join a rich history of 75 countries and 15 territories in the world that offer this superior level of choice to telecom customers. Since it was introduced in Hong Kong in 1995, number portability has opened new doors for telecom operators across the world, and it will now provide UAE customers with a new level of choice.”

Mom Souq holds monthly session

he November edition of Mom Souq’s monthly Mompreneur Meet-Up was led by successful entrepreneur and business mentor – Mona Shibel. Speaking to an audience of over 40 ‘Mom Entrepreneurs’, Shibel said: “More and more women now are starting their own businesses, especially given the greater time flexibility they enjoy when they are mothers as well. Starting a business can be hugely overwhelming, and if not dealt with properly from the outset could result in burn-out or even the business closing down. The key is to apply a few useful techniques, systems and strategies to ensure you are working smart rather than hard.” During the session, attendees were able to gain excellent advice from

During the session

Mona Shibel on increasing business opportunities, attracting more clients and enjoying time spent within their business. Furthermore, Shibel also highlighted effective strategies, systems, support and motivational tools required to propel one’s business forward, remove obstacles, and accelerate success. Mona Tavassoli, Founder, Mom Souq, said: “Women entrepreneurs across the world are now, more than ever, using powerful techniques to create

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businesses and a life of their dreams. We are proud to support the community of women entrepreneurs in UAE and as part of providing this continued support; we decided to have a dedicated session with a speaker who has been a business mentor for the past 18 years. I think a lot of women today have gained important information and motivation that can help them create successful systems and strategies in order to be successful in their businesses.”

4:10 PM

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December 2013

SME ABOUT TOWN

The inaugural SME Congress and Expo

he inaugural SME Congress & Expo was held at the Abu Dhabi National Exhibition Centre. The three-day conference had an actionpacked agenda with over 50 worldclass experts, free-to-attend training workshops, informative sessions, exciting competitions and an extensive exhibition. Attracting entrepreneurs, SME owners, industry leaders, government officials and subject experts from all across the region, the event highlighted key topics including getting finance, market trends, opportunities for growth, current industry challenges, and so on. The dedicated exhibition also allowed entrepreneurs to meet new partners and suppliers to help them build a strong network for any future business expansion plans. One of the most exciting features of the SME Congress & Expo was its Pitch

More than 50 experts shared their knowledge and expertise on harnessing the potential of Middle East small and medium businesses at the three-day SME Congress & Expo

for Investment competition which saw 10 of the regionâ&#x20AC;&#x2122;s top SMEs and entrepreneurs compete. Shortlisted from over 200 entries from across the region, the ten finalists were split into two groups of five, delivering live presentations to a panel of judges, and the ultimate winner was announced on the final day of the event.

Idea Olympics workshop

As part of the Tejar Dubai Emirati entrepreneur development programme initiative, the Dubai Chamber of Commerce and Industry held its first Idea Olympics workshop on November 23, 2013. The workshop was conducted by industry

experts and featured brainstorming sessions and interactive group discussions where participants shared their innovative business ideas. These ideas focused on enhancing customer experience through accessibility, usability and speed in the mobile technology sector. The session was themed Smart Mobile Services and will be followed by forthcoming workshops on Tourism and Design. The workshops are to be held on three different days dedicated to a theme and the participants get the opportunity to showcase

Organised by Informa Exhibitions, the SME Congress & Expo was held in strategic partnership with the Abu Dhabi Department for Economic Development, the Abu Dhabi Chamber of Commerce and Industry, Khalifa Fund for Enterprise Development, and Dubai Internet City.

their ideas in front of a panel of judges who will select the best candidates for an extensive training under the Tejar Dubai programme. The participants of Idea Olympics also benefit through the opportunity to network with business leaders, get individual mentorship and acquire skills to shape and nurture creative business ideas and models. Till date, the Tejar Dubai programme committee has received 90 enquiries for participation. Additionally, 51 meetings were held with youngsters who submitted their business ideas. Following this 21 people qualified out of which six were selected to meet the

judging panel who then chose five candidates for the next phase of the programme which focuses on individual development training. Tejar Dubai, organised under the patronage and support of His Highness Sheikh Majid bin Mohammed bin Rashid Al Maktoum, Chairman of Dubai Culture and Arts Authority, is the first entrepreneursâ&#x20AC;&#x2122; development programme in the UAE which seeks to find and train creative and commerciallyminded youth. It also provides them with a platform to enter the world of business and helps them effectively establish their own small-to-medium-sized enterprises.

DAFZA’s networking event

ubai Aiport Free zone (DAFZA) plays a major role in attracting foreign investments, facilitating Dubai’s overall growth and enhancing the national economy. In line with this vision, DAFZA recently held a networking event for its current and potential tenants. The event, hosted by Mohammed Bin Suwailem, Senior Director of Leasing and Tenants’ Employees Affairs Division at DAFZA, gave businesses the

Mohammed Bin Suwailem, Senior Director of Leasing and Tenants’ Employees Affairs Division, DAFZA

opportunity to find out more about the Free zone’s new company structure and discuss future ventures with the DAFZA’s management team.

KYO_BusinessEntry_SmeAdvisor_17.5wx11hcm_revised.pdf

Bin Suwailem highlighted the Free zone’s efforts in facilitating business solutions for organisations, “At Dubai Airport Free zone, we are consistently 11/24/13

working to improve our services to meet the needs of our tenants, across a multitude of sectors. We recently announced various set-up options in the Free zone to help a wider variety of businesses begin operations swiftly and smoothly.” Strategically located next to Dubai International Airport, and with all necessary processes and procedures available on site, DAFZA has firmly cemented its reputation as an unrivalled business hub for companies looking to access free zone opportunities in the region. Several world-class brands including Airbus, Johnson & Johnson and Rolls Royce have established a working base in the Free zone.

1:28 PM

December 2013

Banking for business

20/20 vision

Dubai’s triumphant victory in EXPO 2020 opens the door to a host of fresh opportunities - but along with every opportunity comes fresh competitive challenges, new markets and the requirement for every SME to raise its game to ever-higher standards. We spoke to four industry champions about the likely impacts of 20/20 and what it means to business owners and directors across Dubai. Then we asked Howard Gaunt, Executive Vice President, Head of Corporate and Business Banking Group, Abu Dhabi Commercial Bank (ADCB) to comment on the answers and explain how a key financial entity can work with SMEs to supercharge their development path… The SME Champions

Mark Fisher, Vice President - Corporate Communications, NASDAQ Dubai Kay Braganza, Founder & Managing Partner, The Public Relations Company Alexandar Williams, Director – Strategy and Policy Division, Dubai SME Mona Tavassoli, Founder, Mom Souq Howard Gaunt, Executive Vice President, Head of Corporate and Business Banking Group, Abu Dhabi Commercial Bank (ADCB)

Should SMEs be worried about an influx of new startups and entrepreneurs in the region following the EXPO 2020 announcement? As the competition in the market intensifies, what should an SME owner implement in his/her company strategy for 2014? Mark: “Many new companies will

undoubtedly set up. But few will do so overnight, so existing ones can benefit from being in place already to seize the opportunities that the EXPO 2020 win will bring.”

Kay: “As Dubai now gears up to make the EXPO 2020 a success, and to bring to fruition its proposed plan of hosting EXPO 2020, generally speaking small and medium enterprises should not be afraid of the influx of new startups. This is primarily due to the fact that they already have a presence in Dubai, are established, and have had a head start when compared to new players; now it’s a matter of taking advantage of the moment and capitalising on the situation. At the

same time, based on the industry an SME operates in, there could be an increased amount of pressure to perform due to competitive advantages, depending on the product/service the SME provides. Overall, I think SMEs are likely to benefit from the great opportunity, provided their foundation has been well laid. “As competition intensifies with the influx of startups, an SME would need to focus on strengthening and building existing relationships with clients/ customers, and on developing their competitive advantages. They would need to put an emphasis on business development with the increasing available opportunities, be as efficient as possible and overall be price competitive and brand competitive.” Alexandar: “On the contrary startups

and entrepreneurs should be pleased that competition will enable them to upgrade and improve their business models, services and products to buyers and contractors for the EXPO 2020. The business and investment opportunities will be immense and there should be something for SMEs if they make the grade and are determined to improve to secure deals. Also, the value chain of opportunities will be enormous, and SMEs in diverse industries and activities such as contracting, hospitality, travel, wholesale, retail, logistics & transport, F&B and related services will be able to get a slice of the EXPO 2020 economic pie. “To ensure a fair chance of securing EXPO 2020 business opportunities, SMEs should be clear on what specific opportunities they want to capitalise capitalise and aim for, have the strengths and focus to bid for them, be flexible in pricing, yet offer value for money supplies and services, focus on quality and upgrading constantly, to meet the EXPO 2020 demands on quality and sustainability. Hence, in terms of strategies, SMEs should ensure that a robust quality system is in place, a customer management and risk management system is in place to ensure business continuity.” Mona: “An influx of new startups is healthy for the economy. Yes it might feel scary to think that there will be a

lot more competition, but this actually gives businesses a chance to focus their resources on areas that are their core competencies so they make sure they excel. “Another factor is that, in the same way that the number of players will increase, the market itself, the value, and the number of projects each of these new startups will be vying for will also increase. “SME owners should ensure that their strategy accounts for the growth of the market. They should be aware that they may need more resources to satisfy market demand and build future plans accordingly.” Howard: “In a time of potentially increased competition, the first thing a business needs to do is ensure it fully understands its financial status and current profitability. While it’s tempting to think in terms of expansion and heightened marketing budgets, and so on, the reality is that only the most solidlygrounded - and profitable - businesses can navigate through a more challenging climate. As ever, the businesses with the most innovative solutions, customer offer and commitment to Best Practice will emerge from the pack - and it’s these that can afford to think in terms of taking on additional risk or investor finance to support growth and expansion initiatives.” Is EXPO 2020 a gateway to global growth and international expansion for SMEs in the region? Mark: “EXPO 2020 will bring people from

all over the world to Dubai and they will be seeking local know-how, services and products. SMEs can build on these relationships to expand overseas.” Kay: “Yes it most definitely is. There are two perspectives here: 1) Dubai is a global business hub in itself – given its central location companies and individuals from across the world choose Dubai as a place to run business from/in, allowing SMEs to form strategic alliances and partnerships with companies across the globe. 2) Taking into consideration Dubai’s v i b ra nt a n d s e c u re b u s i n e s s environment, it also brings global consumers to one strategic location,

allowing SMEs to expand their consumer base from just one location but to an international base.” Alexandar: “For sure, the EXPO will

provide a global window of opportunity for SMEs participating in the exhibitions and supplying the exhibitors. Being a supplier will expose the SME to global customers, and if noticed, will create a business reputation for future businesses.” Mona: “The EXPO inherently means international exposure. It ensures an influx of work and clients into this market. If SMEs are able to place themselves correctly and take advantage of the EXPO, then global growth is a real possibility.” Howard: “EXPO 2020 will allow a business to play more to its strengths – showcasing its skillsets to a broader audience. Remember, however, that this can be a significant challenge for businesses who are not familiar with the concept of ‘thinking global’. “Now would be an ideal time for SMEs to start developing their brand, and their presence, not just locally but also internationally. Having a recognised brand with a reliable product portfolio can empower the business and guarantee customer attention. “We also anticipate that there will be three major impacts in terms of bringing a broader canvas for development. • Firstly, there is the business opportunity impact where we see ready and competitive SMEs being able to benefit from the contracts and engagements on hand. • Then, there is the SME firm expansion impact where it will enable SMEs to grow and develop to bigger and better enterprises if they made a conscious decision to upgrade continuously. • The third impact is the multiplier impact, where SMEs all along the value chains of various industries and sub industries across the economic sectors, that is, “the suppliers of suppliers of suppliers” will stand to gain. SME suppliers of nuts and bolts could be the biggest winners in the EXPO 2020 if they played their game right – ensuring that the suppliers are environmentally manufactured, packed, shipped and distributed.

December 2013

Banking for business

Do you think businesses – particularly SMEs – will need to make a conscious shift to sustainable practices in order to support Dubai’s vision of EXPO 2020 being the first Carbon Neutral exhibition in the world? Mark: “SMEs will certainly improve their

image by demonstrating ‘green’ practices. This is an area with a lot of hot air however and claims should be backed up with evidence.” Kay: “I think it would greatly benefit SMEs, whilst also serving as a good example. SMEs should try to make an effort to shift to sustainable practices as they would be acting in support of the Dubai EXPO 2020 vision. As with any kind of growth comes change - preserving the UAE’s gains and earning more achievements adds value, recognition and credibility for the SME.”

In addition, this will serve them well when approaching potential investors. In short, working towards sustainability is not just fashionable but it is essential.” SMEs currently account for 95 per cent of Dubai’s businesses but contribute only 62 per cent to the GDP. Will we see this equation change as the EXPO 2020 nears? Kay: “According to recent statistics from

the UAE Ministry of Economy, close to 300,000 companies in the country can be classified as part of the SME sector – this number is only set to grow with the recent news of Dubai’s win for EXPO 2020 providing a significant boost to the UAE’s economy. So the overall net effect, yes, this increase will account for slightly more of the country’s business while contributing to an increase in GDP.”

Alexandar: “The key sub theme of Dubai

EXPO 2020 is on sustainable business practices that can measure their energy efficiency, environmental impact on a fair cost basis. SMEs that wish to be part of the EXPO 2020 ecosystem must play the game well and ensure they have the systems and processes in place to support the aim of Dubai EXPO being the first carbon neutral exhibition in the world. SMEs will certainly gain from this requirement to be carbon neutral in their business model and operations, and will be ahead of the competition.” Mona: “All responsible human beings

feel the need to make the shift towards more sustainable practices. Add to this desire the vision that Dubai has set for the EXPO - Sustainability is one of the 3 sub-themes that Dubai has chosen for EXPO2020, in addition to Mobility and Opportunity, which are key drivers of global development. I believe businesses will adopt this shift. It might not be as easy as it sounds, but when everyone works together towards a common vision, it eases the burden.” Howard: “Being Carbon neutral or being aware of sustainability is something that will serve all SMEs well. These practices are not just fashionable but serve to save significant controllable costs and encourage SMEs to explore non-traditional methods to reduce costs.

Dubai SME aims to see that the value-add growth rate of the SME sector is at least in tandem or outpaces the Dubai GDP growth rate. Alexandar: “If our SMEs take full advantage

of the EXPO and generate business spending and GDP several times the cost of the EXPO, and sustain their growth post-EXPO 2020, our SMEs could see their contribution increase to more than the present 62 per cent contribution to GDP. Dubai SME aims to see that the value-add growth rate of the SME sector is at least in tandem or outpaces the Dubai GDP growth rate.” Mona: “I believe there will be a slight shift to these figures as the numbers of new startups increase, and they begin to compete with their larger counterparts in some industries. However, there are some mammoth industries in the region, which may not be significantly impacted by an increase in the number of SMEs.” Howard: “It’s important to remember that this imbalance in contribution to GDP largely results from the greater scales

of economy and efficiency that a larger business can leverage. It also reflects the ability of larger firms to attract top strategic and operational talent. It would be good to see the build-up to the EXPO impact not simply the number of SMEs, but enrich the talent pool at their disposal. It is this, not simply a numbers game, which will close the productivity gap in GDP percentages. “Another factor here is the ability to leverage sector growth through creating strategic alliances, which complement each party’s relative strengths and create a very powerful core proposition. There are a lot of examples of how large organisations play to their strengths but combine resources to gain access to a wider market or deepen their reach. This is something that SMEs are beginning to do but a lot of distance has to be covered yet.” How will the EXPO 2020 win impact SME finance? In other words, can SMEs expect easy access to finance as the country gears up for fast-paced growth over the next few years? Mark: “The positive economic climate is

opening doors for SMEs seeking funding, whether it is from private shareholders, private equity firms or an IPO. Bank loans should get easier to obtain too as companies can demonstrate sounder finances and faster growth. Companies that write an innovative EXPO segment into their business plans will be at the head of the pack.” Alexandar: “Dubai SME expects that with

SMEs wining contracts and engagements in the EXPO, bank financing will follow to support the business deals. Credit supplies will increase as the EXPO opportunities grow. The banks are always waiting for good opportunities and if quality SMEs win contracts, they will be encouraged to finance the SME. The UAE banking sector is competitive, so SMEs will continue to have a diversity of bank financing.” Mona: “I am not overly optimistic that SMEs will be able to access finance easily. Dubai has been slowly but surely increasing the amount of support that it offers SMEs. Finance, however, may still be a point of discussion between SME owners a few years down the line.”

Howard: “Access to finance will be determined as much by SMEs themselves, as it is defined by banks. By this we mean that for good stable SMEs, finance has not been a significant issue even prior to the EXPO, with the winning of the EXPO what we expect is some SMEs will now be on their way to significant growth and many others will benefit from the fallout. “In order to be able to access finance in such a climate, SMEs need to ensure that they get their basics right and have a clear vision of what, why, how, when and how much is required; this will enable banks to come in at the right point with the required level of support.” One element that was strongly emphasised in Dubai’s plans for EXPO 2020 was ‘technology’. In fact, the theme – Connecting Minds, Creating the Future – is based on the keyword ‘connectivity’. In your opinion, how do you rate SMEs in the region in terms of technological advancement? Have they succeeded in staying on the top of latest tech trends? How crucial is this kind of innovation for them to sustain themselves? K a y : “In ter ms of technological

advancement, I think SMEs lag behind slightly - but not by a whole lot. This kind of innovation is very crucial, if not necessary for survival in today’s competitive world. With EXPO 2020 opening the doors for international competition to showcase their talents and products, it is essential that local SMEs use this time and acquire resources to get up to speed with international standards so that they stay ahead of the game and are part of the bigger picture.” Alexandar: “There is a great deal of

opportunity for SMEs to adopt more innovation and technology in their business model to serve customers and improve internal processes. In a recent SME survey by Dubai SME, it was found that many SMEs in the Emirate were moderate to low adopters of technology be they ICT or other productive technologies that would improve productivity. In terms of innovation too, our SMEs seem to be low to moderate in their innovation capacity. Overall investment in technology innovation is low. The EXPO could change

that by giving SMEs the opportunity to showcase their innovative products and creative designs.” Mona: “Although our region may not be renowned for research and development, one thing we do very well is adopt new technology. The very young age of infrastructure in the UAE, availability, and financial capability, makes it’s very easy for us to adopt new technology and stay current with technology trends. This will definitely play in our favour when developing the best EXPO the world has ever seen.” Howard: “There is no doubt that, for the first time, there are an increasing numbers of ‘Techno-SMEs’ starting-up in the region - the kind of businesses we are more used to seeing in Singapore, Hong Kong and the USA. In the recent ADCB Stars of Business Awards, for example, there was a higher percentage of entrants from this category than ever before. This trend is being fuelled partly by the rise of specialist free zones that cater to technology specific businesses and as the EXPO fuels stronger investment in the region, the TechnoSMEs are likely to be among the first to benefit. Globally, these businesses are typically capable of fast growth and so are potentially attractive to risk and investment partners alike.” As opportunities within the region increase, several regulatory measures are also likely to be put in place to ensure that Dubai is on par with international standards. Does this mean Corporate Governance will be key to the survival of an SME in this competitive environment? Kay: “Corporate governance will be key

to an SME’s survival. Although most SMEs may not have this in place, they will have to meet corporate governance requirements in order to be able to bid and fulfil various orders and services. It is best they work towards this now, so it makes things a lot easier for them in the long-run with a full-fledged approved structure and corporate policies in place.”

on business transparency will be a key priority. All SMEs that wish to participate is expected to be financially sound, derisked and with a high level of financial governance. Dubai SME will ensure that SMEs that need assistance in corporate governance will be able to access advisory and resources to meet the international standards. Dubai SME will be organising an ‘EXPO SME 2020 Opportunities Forum’ once we have more information on the business opportunities and contracts at hand. The process of bidding and meeting requirements of the contracts will be highlighted to the SMEs.” Mona: “Corporate governance may not be the first thing that a startup or SME owner takes into consideration. We may not realise the importance of implementing corporate governance from beginning; however, it is very important to the survival of a business. “It makes all the difference between a small, one-man-show, and a world class business capable of competing internationally. Any measures that Dubai puts in place will ultimately be for the betterment of the industry, and although in the short term it might be painful, the benefits will soon become apparent.” Howard: “Corporate Governance is already becoming a crucial issue in the SME space; while the new Companies Act, for example, only makes internal audit a compulsory requirement for larger businesses, it also specifies a large cluster of operational duties that every size of company is beholden to carry out effectively. This, however, is only half the story: the real appeal of Best Practice initiatives is that they enhance performance, supercharge the business’ capabilities and drive a culture of aspiration and ’can do’ values. Who wouldn’t prefer to partner with an SME that behaves in this way? Certainly, as competition intensifies, customers will have more and more choice about who they do business with - and it will be the companies which excel against benchmarked values which do best in that equation.”

Alexandar: “Indeed, as the EXPO 2020

is a global event with international economies participating, the demands

For an online version, please visit: www.smeadvisor.com/2013/12/2020-vision/

December 2013

MOVERS AND SHAKERS

The chemistry of

success In 1849, a young chemist borrowed US$ 2500 from his father, joined forces with his cousin and set out to live his entrepreneurial dream. Working out of a mundane red-brick building – which served as his office, laboratory, warehouse and manufacturing facility – this ordinary boy went on to set the foundations of the world’s largest pharmaceutical company – Pfizer. The question then, to ask yourself is, if US$ 2500 and a modest facility in a suburb of New York can result in such exponential success, what happens when a young scientist has access to a facility equipped with state-of-the-art infrastructure, advanced security mechanisms, and cutting-edge technology? The answer, as you will surely agree, is simply mind boggling. A key figure pioneering the development of such an exclusive facility in Dubai and empowering significant progress in the field of Science is Marwan Abdulaziz, Executive Director of Dubai Biotechnology and Research Park (DuBiotech). Here, in a candid chat with SME Advisor, he explains how this relatively new free zone has become a powerful ‘catalyst’ to accelerate the growth of the region’s Life Sciences industry… What do you personally regard as the ‘X-factor’ that makes Dubai’s free zones such an attractive proposition?

product – it’s truly satisfying to contribute towards something that enhances the life of a person in any large or small way.”

“Something that appeals to me personally is the kind of interaction we have with companies every day. As part of our jobs, working in a free zone, we get to meet with a Tell us a little bit about DuBiotech. lot of businesses with different backgrounds; these range “DuBiotech, encompassing over 22 million square feet, is from pure scientists looking to set up their own company a TECOM cluster primarily dedicated to the Life Sciences to larger Fortune 500 companies. So, we are continually industry which offers world-class infrastructure to a having different conversations which, in my opinion, is growing community of pharmaceutical, biotechnology, a wonderful learning process. and medical equipment companies, in addition to “Another factor that is quite inspiring is being able to see laboratories and testing laboratories. We specifically companies go ‘from concept to execution’, and being part cater to firms involved in the research and development, of their success stories. We’ve very often seen businesses manufacturing or distribution of products and services start as one-man entrepreneurial ventures and go on to within the Life Sciences industry.” become successful larger companies. “Businesses can choose from a variety of services “Finally, the kind of work that we do at DuBiotech, in we offer – Warehousing facilities fully equipped with particular, touches the lives of people, whether it is a new cutting-edge technology, The Nucleotide Complex drug by a pharmaceutical company or a new medical which offers laboratory space as well as commercial

Marwan Abdulaziz, Executive Director of DuBiotech

office space, Business Centre facilities ideal for commercial offices and Land open for lease or sale.”

How do you envision the new Al Maktoum International Airport facilitating the growth of DuBiotech?

own small businesses, there are larger companies looking to establish a smaller base here, and there are service-based businesses looking to run laboratories and testing labs. I would say that 40 per cent of the businesses in DuBiotech are SMEs.”

“Of course it’s going to be a great facilitator. One of the good things about Dubai is its great connectivity with other places in the world. Many people have decided to set up “It was a strategic decision in line with here is because they can, within hours, be What is the current occupancy rate at Dubai’s vision to develop the south part in new markets. So, I definitely see the new DuBiotech? of the city. DuBiotech also conveniently airport impacting overall business growth.” “Our warehousing facility is at 90 per cent lies between two major highways – the occupancy and our laboratory building is at Emirates road and Al Khail road. We are What kind of companies does DuBiotech 50 per cent occupancy, but overall you can also within close proximity of the new Al attract? What percentage of businesses say that we are at 50 per cent occupancy.” Maktoum International Airport. All these within DuBiotech are SMEs? factors enhance our connectivity – which “There are several different types of What are some pre-requisites an SME is an essential element within any free companies that set up in DuBiotech; needs to meet in order to be located in zone.” there are individuals looking to start their DuBiotech? What major elements were considered at the time of deciding the strategic location of DuBiotech?

December 2013

MOVERS AND SHAKERS

“We have a very comprehensive review process in place. There are two different sets of rules. In case of a larger well-established company seeking space to set up a base in DuBiotech, we do a background check on the company and look at the products they are trying to bring into this market. We make sure that these products comply with the UAE’s rules and regulations. Our regulatory framework is largely based on the guidelines provided by Ministry of Health, Ministry of Environment and Dubai Municipality. “In the case of an individual looking to form his/her company, we look at the firm’s business plan, growth strategy, vision for the future, product or service portfolio, and so on.” Considering the nature of activity within this cluster, are your business partners subjected to a strict regulatory framework to ensure their operations are on par with global standards?

DuBiotech, encompassing over 22 million square feet, is a TECOM cluster primarily dedicated to the Life Sciences industry. is this important? This is crucial for labs that don’t want any cross contamination to happen, so all the gases and chemicals get filtered out before they mix into the environment. “Another special feature is the drainage facility. If there are any chemicals being used, for example, there is a superior system which we’ve installed in the basement which cleans out any chemicals. If there is any hazardous material produced, this is transferred into a specialised chamber and disposed through the appropriate channels following the international standards and procedures.”

focus. How important is R&D at the SME level?

“The way we encourage R&D – and the approach I personally believe would work in our part of the world – is by incorporating it within the industry. The model that would work here is industry collaboration. In terms of SME participation, the question to ponder upon is – ‘how will a scientist with a great idea or concept get the funding to move forward?’ and again the answer to this question is by collaborating with larger well-established industry experts.” On a global scale, where do you position Dubai as an innovator in the Life Sciences industry?

“I think we are still at the very beginning. Now that we have a strong industry foundation – particularly at DuBiotech – I think it is important to have an ongoing dialogue with universities, I think this is what will drive innovation in the future, especially in the Life Sciences area. “Also, many companies are looking at disease management in a unique way. Rather than just treating an illness, they are looking at trends, genetic factors, lifestyle and diet habits, and going to the root of the problem. There’s innovation in the way of approaching things as well – not just product innovation.”

“At DuBiotech, what we have done is, instead of creating our own regulations, adopt the federal regulations. For instance, if it’s an activity relating to medicine or a medical device, the Ministry of Health (MOH) regulations – which of course are on par with international standards – What are some safety features apply and we ensure that these are strictly implemented within the cluster to protect followed. We work very closely with the your business partners? For instance, what MOH and have an ongoing dialogue with happens in case of a power failure in one In terms of future growth, what are some them; the goal of this partnership is to raise of your chemical labs? developments that your business partners awareness of the regulatory framework “Our laboratory building, for instance, can look forward to in the years to come? within the industry. has a lot of special features such as the “I think if we can contribute to reducing “In fact, we are also very open to feedback entrance door is fireproof and the lab the prevailing illnesses in the city such and engage in a healthy knowledge- fit outs are conducive to the nature of as Diabetes or cardiovascular diseases, it exchange with companies working with chemical activities taking place in them. will be a great achievement that we will us at DuBiotech. We encourage them to In terms of the chemicals themselves, we be extremely proud of. Many companies share their experiences from working in obtain necessary permits from different within DuBiotech are currently working different countries – if there is a rule or agencies before we allow companies to with government agencies and major regulation that we think can and should work with them. We make sure that all hospitals to achieve this goal. be implemented here, we try to take the precautions are taken care of. In fact, “The dialogue between the industry and these suggestions to the government we have a department dedicated to this university is another crucial aspect in our function. long-term strategy. We are in discussions agencies. Again, it’s a very collaborative relationship.” “Additionally, we have a disaster with our sister entity, Dubai International management manual that we intensively Academic City, and are trying to create a As a Life Sciences cluster, what are some follow. Of course, we have a power backup symbiotic exchange between education features and special benefits that you offer system to avoid any mishaps in the labs, and innovation. We will also continue to to your business partners? every small detail is taken care of including encourage the hiring of fresh talent within “We have several such features, many of the installation of shower areas within labs our free zone and ensure that the industry which are quite technical in nature. Let in the case of burns or other serious fire- is continually fuelled with new ideas.” related injuries.” me explain with an example. One unique feature that our laboratory building For an online version, please visit: provides is fresh air facility – in comparison DuBiotech is perfect for research and www.smeadvisor.com/2013/12/thechemistry-of-success/ to the usual air circulation model. Why development – an area that is your primary

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Getting finance

Ready, Set,

There’s no doubt that equity finance is an important part of the SME finance equation. IPOs are a great way to fuel your SME’s long-awaited expansion plans and can have a liberating impact on your company’s cashflow. What’s more, going public sets in place a strong exit strategy for SME owners – often giving them access to higher sell out amounts than they would normally anticipate. Hypothetically, an IPO sounds like the perfect choice, but is it all it seems? We asked Professor Florin Vasvari of London Business School to analyse the profits and pitfalls…

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December 2013

Getting finance

mall and medium sized enterpr ises (SMEs) are particularly in need of capital due to their limited access to alternative sources of funding. Although lending to the private sector has been rising significantly in GCC states, it has mainly benefitted big family owned companies, leaving SMEs struggling to obtain bank financing. Banks are reserved about funding SMEs because of their small size, limited potential and high risks. SMEs tend to be more vulnerable to the economic cycle and are more likely to fail when compared to their larger peers. So what funding options are available? Raising capital in public equity markets via an ‘Initial Public Offering’ (IPO) is a potential solution. In a typical IPO, an SME sells newly issued shares to public investors on a stock exchange. As a result, the company’s current shareholders benefit not only from an infusion of fresh capital, but also from gaining a higher liquidity for their shares. In addition, the stock exchange listing provides investors with an opportunity to exit their investment at a potentially higher valuation than they would otherwise get. Many experts are predicting that the IPOs in the GCC markets will bounce back from the near stagnant trend of the past few quarters. For instance, a recent study by Deloitte (Deloitte, October 2013), indicates that the respondents are highly optimistic about the increase in the volume of IPOs that will be issued in the GCC over the next 12 months. A potential explanation offered by the authors of the study is that there is a pent-up supply of private equity and family-owned businesses looking to

The IPO process is fraught with numerous hurdles that GCC investors should be aware of. 32

Professor Florin Vasvari, London Business School

enter the IPO market to access the relatively cheaper public equity capital. All sounds great on the surface, but the IPO process is fraught with numerous hurdles that GCC investors should be aware of. One concern is the liquidity of these markets given the lack of a large number of institutional investors. The GCC public equity markets have had limited liquidity and high volatility in the past. The Saudi’s Tadawul market which was relatively

more liquid, has now introduced a new facility that allows the cross-listing for overseas companies. Further, Morgan Stanley Capital International announced earlier this year that it will upgrade the UAE and Qatar exchanges to emerging market status, effective in May 2014. These recent developments will have a positive impact both on volumes traded and valuation levels. Therefore, GCC stock exchanges are expected to attract more capital to the region.

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December 2013

Getting finance

A second concern is that an IPO on GCC exchanges remains a complicated and time-consuming process. Many companies are likely to significantly underestimate the requirements of the IPO process. The transition from a private to a public company involves a significant change in the culture for senior managers who need to spend more time communicating with new public shareholders and regulators. Thus, a fully developed investor relations department is needed. The regulator y hurdle can be significant. The length of time required to go through the review process of the capital market regulators in GCC is significantly lengthening the listing process. The problem is compounded by a lack of readiness to deal with the regulatory pressures of a listing process which involve the preparation of required documentation. In addition, the compliance with regular financial reporting obligations can be a major challenge for the newly listed company. Investors and regulators are likely to scrutinize closely the timeliness and the accuracy of the financial reports. Improper reporting together with weak governance mechanisms often leads to lower investor confidence and limited interest from stock analysts to provide research reports to market participants. A third concern is the uncertainty about how public equity investors will perceive

The compliance with regular financial reporting obligations can be a major challenge for the newly listed company. the company. In the IPO market there is no guarantee that the exit will be as timely or profitable as the firm’s investors would hope or require. Often investors in the public market fail to understand the business model, which results in a low level of capital subscriptions. Fortunately firms can mitigate this risk by strategically preparing for the IPO exit. This is critical not only for executing the public market sale efficiently, but also for maximising the value of the company. Sellers can learn from experienced private equity firms by following a few important steps prior to engaging in the listing process. Such steps mainly involve taking an in-depth look at the company in advance to prevent unwanted surprises by proactively addressing any risk areas of the deal. Few examples involve evaluating thoroughly the financial health of the company, identifying the key business

drivers that affect revenues and operating margins, appraising the value of the assets owned by the firm, appraising the investments needed in productive assets, identifying internal management and operational weaknesses, as well as any potential transitional issues, and bringing the corporate governance mechanisms up to best practice standards. It is also critical that financial books are in perfect order. Discrepancies between what is reported in the financial statements and the reality are likely to be unveiled during the IPO process or immediately after. The valuation consequences can be dire. Combined with an efficient communication strategy, steps proactively addressing risk can often mitigate a mismatch between the valuation expectation of the public market investors and the expectations of the firm’s current shareholders. Significant disagreements between these two sets of stakeholders with respect to valuation often leads to an aborted IPO process and may negatively affect the shareholders’ willingness to list the firm in the long term. Hiring an experienced and realistic underwriter also helps mitigate against this problem. Last but not least, finding the appropriate listing venue for an SME has been historically challenging. Governments could do more to encourage and support the setup of dedicated SME stock exchanges. SME platforms on the main exchanges should aim to attract SMEs with high growth potential. New, early stage ventures and small, quality companies should be able to raise much needed growth capital on these platforms as they grow, mature and transit to the Exchanges’ main boards. A complementary approach is to create new market subcategory and regulatory regimes for SME growth markets. And of course, if all else fails in the IPO listing process, there is always another option: sell the company to a strategic corporate buyer or to a private equity fund. Given that the local IPO market is yet to see any significant resurgence, private equity may remain a key funding option for companies looking for access to new capital. For an online version, please visit:

www.smeadvisor.com/2013/12/readyset-ipo/

December 2013

Getting finance

Calling in the

pros

Businesses of all sizes can benefit from using chartered accountants, and it needn’t cost as much as you may think, says Peter Beynon, Regional Director, ICAEW Middle East…

mall and medium sized companies make up the backbone of many countries’ economies, and this is certainly true for the UAE. It is estimated that the SME sector for Dubai, for example, comprises 95 per cent of all businesses. It is also responsible for around 40 per cent of both the workforce and value added to the economy. But this is not all; SMEs are playing a key role in helping achieve two of the UAE’s key economic aims – diversification away from hydrocarbons and building a large private sector. As such it is important that the sector is supported and able to grow and develop as quickly as is sustainably possible. One of the fundamental aspects underpinning any business is sound finances. So it is worrying that research by Dubai SME reported that 45 per cent of mature SMEs in Dubai ‘do not do proper accounting’. Proper accounting practices are how businesses keep a firm grasp on the most critical aspect of any business – the bottom line. This is especially important for SMEs, for whom small discrepancies or adjustments can have big consequences. Larger companies might be able to weather the storm created by internal errors, or at least be in a position to carry on whilst the problem is rectified, but for many small companies this is simply not possible. This is why many small companies across the world choose to outsource their accounting and finance. As a demanding specialist skill it is not always costeffective for small companies to employ a full time

finance professional in the organisation. However, in the UAE, there is more of a tradition of using internal book-keepers and doing accountancy from within the business. In the past, the financial information has largely been produced for internal use; this is partly cultural, with a greater emphasis placed on privacy, and partly thanks to the legislative and tax regimes in the country. Unlike countries like the United Kingdom, which have a fiendishly complex tax system, UAE companies are not subject to corporate tax, reducing the need for information. Pre-crisis, business confidence was often simply gauged by looking at cash flows, whilst bank lending was often done on the basis of personal relationships. But this is starting to change. A firm grasp of the figures

Firstly, the recent economic downturn forced some companies to look long and hard at their finances; how and where they were both making and spending their money. Smaller companies found they were no longer able to carry loss-making products, and equally wanted a better understanding of costs. Only by ‘trimming sails’ were many companies able to ride out the tougher times, and the first step was a firm grasp of the figures. Now that growth is returning, there are other reasons. One of the biggest challenges for SMEs in the UAE has always been access to finance. High quality, clear, transparent financial reporting is

High quality, clear, transparent financial reporting is often essential for raising finance.

Peter Beynon, Regional Director, ICAEW Middle East

December 2013

Getting finance

often essential for raising finance; it in the same way as permanent staff, and demonstrates to potential investors not growing companies may wish to retain just that the company is in a healthy ‘institutional knowledge’. However, it is state, but also that the managers have a critical that even when outsourced, the clear commitment to managing the nuts people undertaking crucial business roles, and bolts of their business and keeping especially ones as fundamental as finance, are qualified professionals in whom you their house in order. Companies looking to trade or expand can have trust. overseas – which is not always restricted to large multinationals in regions like the Cost or investment? Gulf – will also benefit from being able The challenge is, of course, that qualified to demonstrate sound, healthy finances. professionals do not come cheaply. This And finally, there has been far more should not necessarily be a surprise; interest of late in ethics and corporate chartered accountants, like solicitors, governance, even in smaller companies. Not being transparent is no longer as acceptable, either to the public at large – meaning the customer base – or to other The main reason for businesses. This is another facet of the using a skilled finance need for clear and consistent information, professional is to save so that companies can demonstrate that they are as ethically sound as they are a business money in the long run. financially. Cutting your coat to suit your cloth

Of course firms need to match their needs to what they can afford. When small, companies need to focus their resources on meeting customer demand. This usually means that smaller companies will outsource specialist services, especially technical ones. Accountancy, much like IT, will usually be contracted out. At this level there is a clear benefit to having services like payroll and accounts preparation done by a specialist. As companies grow, they may decide that they want more direct access to this kind of expertise. This may mean hiring a part time Finance Director, for example. In time, they may feel that they want this role filled full time; contractors fill a business need but they are not part of the company

are highly trained specialists, and have undertaken years of study to hold their qualification. But the overall cost need not be too prohibitive. Firstly, the main reason for using a skilled finance professional is to save a business money in the long run. And when you think of how much of your business and livelihood you are entrusting to them, you may think twice about employing the cheapest possible option. It is true that the first time a small company looks into retaining a chartered accountant it may seem expensive, but in the long term the returns to the business should certainly exceed the costs. Employing a finance professional should be an investment –

Peter Beynon FCA is Middle East Regional Director for ICAEW, a world leader in the accountancy and finance profession. Heading up the Dubai regional office, Peter is responsible for supporting the accountancy profession across the Middle East and ICAEW members on the ground, while raising awareness of accountancy as a career choice. After graduating from Bristol University, Peter joined PwC’s London office and qualified as an ICAEW Chartered Accountant. He spent over 20 years with Jardine Matheson working in a number of senior finance and management roles in Asia and the Middle East, including significant periods in Hong Kong, the Philippines, Saudi Arabia and Singapore. He has also worked as the Finance Director of several listed companies. Peter then embarked on a career in consultancy, leveraging his diverse chartered accountancy skills in international environments. He became the first non-family MD of the esteemed Al Fahim Group based in Abu Dhabi, before joining HBG, a Private Equity firm in Dubai.

as well as helping you get to grips with basic finances, they are also able to offer business and strategic advice which will save you money. Another way in which chartered accountants can be of great strategic use to companies is when they take on the role of a Non-Executive Director (NED). Having an experienced finance professional in this role not only allows them to provide good financial advice, it also means they are able to represent the views of the finance function at Board level and if necessary query directions taken if they do not raise strategic questions. Moreover, to the outside observer, having a chartered accountant at Board level demonstrates that a firm is serious about managing its finances. Finally, it is not always necessary to use a chartered accountant for every single financial job. Modern accountancy software means that it is possible to retain a chartered accountant to do complex work and to set a company on the straight and narrow, and perhaps use a book-keeper for day to day legwork. At regular intervals, such as at year end, the accountant can provide a check that everything is working properly and running smoothly. The client and the accountant can then review the accounting arrangements and discuss if improvements are required. This is one way that SMEs can ensure that they are using their resources smartly. Smarter business

The more complex businesses become the more that they will want to draw on the expertise of a trained finance professional, but finance professionals have a role to play helping firms of all sizes. For the smallest companies, this will be because they lack the specific technical expertise themselves – or indeed the time – and it is smarter to to outsource. As companies become larger and more sophisticated, they will find they require more services, and it may be a good business decision to employ someone full time. What is certain is that sound finances are the bedrock on which any business rests, and the bottom line will always be the bottom line. For an online version, please visit:

www.smeadvisor.com/2013/12/callingin-the-pros/

PRESENTS

SUMMIT AND AWARDS 2013 IN ASSOCIATION WITH

he ADCB Stars of Business Summit and Awards - held on November 28 - are together the single largest business event in the Middle East. The Awards this year attracted 4,947 entries across 26 business categories. They were presented at a glittering gala dinner attracting no fewer than 660 guests. The two events, organised by SME Advisor magazine, are designed to provide a ‘milestone’ in the yearly calendar of an SME - honouring top performers and providing world-class food for thought via a keynote, daytime Summit conference.

With the hallmark of the occasion being its sheer scale and level of avid participation, it’s also a terrific barometer for determining current trends and developments in the SME sector. This year, we saw – • The beginnings of the ‘Techno-SME’ - the category that dominates in Singapore and the USA but has hitherto been rare in the Middle East. • A bigger and better commitment to corporate governance and Best Practice. • A higher percentage of businesses with a commercial template designed to facilitate rapid expansion. Read on to see how the Summit put together a working template for The Power to Achieve - and which businesses scooped up the key honours of the year…

December 2013

SME ADVISOR STARS OF BUSINESS SUMMIT 2013

The ADCB Stars of Business Summit:

‘The Power to Achieve’ S

ince the theme of the day is all about celebrating the SMEs who demonstrate the determination, competitiveness, invention and lateral-thinking to succeed in a highly competitive market, the Summit took the theme of ‘The Power to Achieve’. A wide range of speakers examined the nature of success in an extremely practical series of presentations, explaining how best to leverage factors such as innovation, risk and equity finance and the right operational skills. The afternoon session then took the shape of a workshop led by Alexander Williams, Director, Strategy and Policy Division, Dubai SME, dedicated to ‘Strategies for SME success - finance, growth and innovation’. The Summit identified two particular aspects as being central to ‘The Power to Achieve’. These were • A commitment to innovation - the importance of having a business idea that is genuinely strong and provides a comprehensive, easily understood solution to a particular need. • A realistic approach to getting finance. This will often mean being prepared to put your own money into an idea as a token of commitment and good faith before going to the bank or investor, and not counting on the lender to come up with one

sum that will solve all your problems. Leveraging cash flow via factoring, for example, or getting a small-scale loan to help with a specific area of product R&D are both good routes to building better scale and credibility in the early days. Building the dialogue of Achievement

Moderated throughout the day by Senior Editor, SME Advisor, Paul Godfrey, the Summit opened with a presentation from Sudarshan Seshadri, Vice President, Head Sales & Business Development Business Banking Division, Abu Dhabi Commercial Bank, evaluating the changing financial needs of the SME sector and how businesses at different stages of evolution could best leverage their loan and finance opportunities. One of the main characteristics of the Summit over the last several years has been its power to attract highly influential Emiratis at the helm of legislative change. This year saw the Summit honored to receive a keynote address from HE Raja Al Gurg, President, Dubai Business Women Council. She looked at the changing role of women in the SME workspace, addressing factors such as – • Promoting the employment of women in the private sector, not simply encouraging their role as entrepreneurs.

• The value of the Business Women Council in providing onthe-job training skillsets and motivation. • The incentives and opportunities being provided by the UAE government for women’s participation in the SME community. Practical steps

Among the speakers addressing the practical initiatives for securing The Power to Achieve, Steve Smith, Chief Operating Officer, Arabian Radio Network, looked at the value of using creative radio time as a key tool for boosting business. Importantly, one of the aspects discussed was the relationship between broadcast media and online formats, showing how maximum value can be squeezed from a campaign with the extraordinary reach of web-based technology. Another key factor with broadcast media is the very precise targeting of prospects and their demographic profiles - introducing the all-important theme of careful strategic planning, an aspect that would be further developed in a powerful paper presented by Shabnam Ansari, Head of Strategic Planning and Special Projects, Nexus Insurance Brokers. In a presentation titled ‘Unleash the power of planning to achieve corporate excellence’, Shabnam addressed factors such as – • The importance of continual innovation in the face of market trends (‘Red flag’ cases in point here include the likes of General Motors and Blackberry). • Ensuring the presence of skills commensurate with the business’ aspirations. • The need to pursue goals with all-out dedication and perseverance.

Yet this requires a precise knowledge of what your services actually cost to provide and the margins that they are generating in practice. Understanding these factors - and ensuring that a business is playing to its strengths - is one of the key concerns of the science of Analytics, and the Summit heard a classic summary of this all-important topic from K.S. Vasudevan, Managing Director, Navo Informatica. Some of the critical factors covered here included the techniques for tracking receivables - and understanding how much delayed payments are actually costing the business. Another factor common to all businesses is risk. How much risk is a business prepared to take on board? Too much, and the over-exposed business can be eliminated completely. Too little and the business will simply stagnate and miss opportunity after opportunity. The Power to Achieve Summit tackled these complex issues by means of an expert panel discussion, featuring Mona Tavassoli, Founder & CEO, MomSouq; Anas Halabi, Founder CEO, Momentum; Laudy Lahdo, General Manager, Servcorp Middle East; and Dhiraj Kunwar, Regional Head, SME Business, ADCB, Dubai & Sharjah/NE. The session was ably moderated by Richard Schofield, SVP Communications, AIG. Perhaps surprisingly, a key conclusion was that an SME had to be prepared to take on board a fair share of risk if was to leverage The Power to Achieve, and that risk was indeed intrinsic to the SME model. Each of the entrepreneurs on the panel took the view that they understood the risks when they started their business, and that as the going gets rougher (typically at the nine-month stage) you simply have to buckle up and do your best to survive the ride. Another factor was the understanding that it’s in the business owner’s best interests to mitigate risks by avoiding overborrowing, and by working with an accountant at the earliest stages to properly understand the financial workings of the business.

These factors are especially crucial for SMEs, where the ‘hard-edge’ skills in areas such as Finance and IT may be very difficult to bring on-board and their absence can easily result in a more ad-hoc approach to proper business planning and strategy. It’s also the case Yet of course, there’s another element in business life which that, with technology continually accelerating the rate of change, is every bit as fundamental, but which is so often overlooked SMEs are in danger of being left behind by key developments such - the style of office the business is based in. Laudy Lahdo - who as digitization and the growing mobility of the business model. played a key role in the panel discussion, above - explained how a serviced office can be a powerful catalyst for business This was the factor assessed by Vikram Chadha, Vice President, success, since it works on extremely flexible leasing terms, SME Marketing, du, who showed the critical importance of SMEs and - because it can be upgraded as your business grows having to adapt to the new digital template - which enables allows your business to have an office fully commensurate better customer engagement by virtue of data replicability across with your needs and the business’ status. Other key factors the full range of mobile devices. This means that sales staff, include the ability to be based in a prestigious city centre for example, never have to break away from the customer and location and the availability of highly trained support staff. revert to base, but can instead access all relevant information Yet, how many business fail to leverage these benefits and and create a customised proposal ‘on the spot’. Moreover, the instead get into a wasteful spiral of rising costs and over-long extreme level of flexibility that the digital model now provides lease commitments? can lead to a transformation in the way that SMEs structure their staffing and teams. It makes ‘telecommuting’ a reality, The Power to Achieve Summit provided a deeply informative and whereby staff can work from home with no impact whatsoever highly engaging forum for SME owners and directors to discover, on data availability, work schedules or deliverables. share and evaluate many of the key concerns influencing their sector. See you in 2014? Making the most of what you’ve got

One of the classic hallmarks of successful SMEs is that they know how to maximize profit across the spectrum of customer relationships.

For an online version, please visit:

ww.smeadvisor.com/2013/12/the-power-to-achieve/

December 2013

Night of Shining Stars Honouring top SME achievers at the ADCB Stars of Business Awards 2013 - the nation’s No.1 business awards gala

he evening of November 28 saw one of the UAE’s most glittering and prestigious business occasions - the ADCB Stars of Business Awards 2013. In the dazzling setting of the Jumeirah Beach Hotel’s seafront arena, the stunning gala hosted 660 guests, all ready to honour the star performers in the SME universe.

The ADCB Stars of Business awards - organised and hosted by SME Advisor magazine - is the largest professional awards event in the GCC, attracting no fewer than 4,947 entries and recognising top achievers across 26 specialist business categories. This year’s event recorded the largest-ever pool of nominations and saw entries from as far afield as Jordan, Kuwait and Saudi Arabia. Top SME performers such as Just Falafel, German Imaging Technologies and Healthcare MENA scooped some of the key honours, with hotly-contested shortlists across all 26 awards categories. But there was no doubt about the shining star of the evening – Healthcare MENA with a stunning three awards. Narrowly beating double winner, Cobone.com.

This year’s occasion was made all the more special thanks to the engaging and impressive presence of an ‘A’-list celebrity M/C, who was no other than the superbly talented Egyptian movie and media star, Shereen Mitwalli. The Keynote message

The evening’s proceedings began with a keynote address from Howard Gaunt, Executive Vice President, Head of Corporate Business Banking Group, ADCB. He looked at how the Awards played an extremely important role in motivating the SME community, placing a valued emphasis on factors such as Best Practice, innovation and strategic planning. The tone, nature and volume of the entries also showed how the skillsets of the sector are changing, with SMEs becoming increasing sophisticated and smart players in the business community. Ensuring we pick the best

The Awards derive their popularity and appeal from the fact that in order to be shortlisted, each nomination is assessed, audited and ranked by leading ratings agency Dun & Bradstreet. The audit process uses -

• Expert financial comparisons. • An evaluation matrix turning qualitative data and comments into statistical rankings. • A panel of nine expert Judges evaluating the final shortlist of three businesses per category.

it is: and herein lies the extreme credibility and value of the Stars of Business Awards. The shortlists are then handed to a Judging panel, who then choose first, second and third places in each awards category. Top performers honoured by the Judges this year included -

The Judging panel comprises key names from the SME community, leading-light SME suppliers and subject experts from business schools and the financial community. This year’s Chair of the Judging panel was Howard Gaunt, who admirably achieved strong consensus across even the most hotly-contested categories!

• Excellence in Construction and Real Estate - Al Ain Oilfield Services Company LLC • Best Professional Services - The Statistics Centre • Arab Entrepreneur of the Year - Fadi Malas, CEO, Just Falafel • People’s Choice - TUV SUD Middle east • Star of Business - Healthcare MENA

To begin with, we opened nominations on August 18; applicants can apply for any one (or more) of 26 categories configuring a truly comprehensive cross-section of the SME community. Applicants complete a detailed form which assesses factors such as –

There is also an Editor’s Choice section, whereby Senior Editor Paul Godfrey awards three certificates honouring companies who have made a significant contribution not only to the sector as a whole, but specifically to the work of SME Advisor magazine, whether by helping to supercharge its content or powerfully assisting its extremely popular events portfolio.

• • • •

Approaches to Best Practice, internal audit and personnel policies Whether or not there is a record of innovation Turnover and growth - and their ratio against staff numbers Special initiatives in R&D, expansion into overseas markets, new product launches, etc. • Management strategies and effective planning The application form can be completed online or in liaison with one of the Dun & Bradstreet team over the telephone. Dun & Bradstreet then converted the total number of entries into a shortlist of 30 top contenders in each category. This is done using a financial matrix which not only compares quantitative data, but converts qualitative comments into a score sheet. If this sounds like a long and complex process, that’s because

The evening’s sparkling itinerary was a powerful catalyst for building the further success of the UAE’s SME community which represents 95 per cent of all businesses in the nation. CPI Media Group and SME Advisor magazine honour all the occasion’s valued sponsors, including Platinum Sponsor Abu Dhabi Commercial Bank (ADCB), Telecoms Partner du, Insurance Partner AIG, Associate Partner Dun & Bradstreet, Business Sponsor Servcorp, and Technology Partner SAP. For an online version, please visit:

www.smeadvisor.com/2013/12/night-of-shining-stars/

SME ADVISOR STARS OF BUSINESS AWARDS 2013

PRESENTS

IN ASSOCIATION WITH

Arab Entrepreneur of the Year Fadi Malas, CEO, Just Falafel

PRESENTS

IN ASSOCIATION WITH

ICT Support and Services Laudy Lahdo, General Manager, Servcorp Middle East, presents the Award to Ruckus Wireless Communications

PRESENTS

IN ASSOCIATION WITH

Change-master of the Year Pieter Sleeboom, Co-Founder and COO of Cobone.com

SME ADVISOR STARS OF BUSINESS AWARDS 2013

PRESENTS

IN ASSOCIATION WITH

Star of Business 2013 Shailesh Dash, CEO and Member of the Board, Al Masah Capital Management Limited and Ravi Dhir, CEO, Healthcare MENA Limited, with the coveted Star of Business 2013 Award

PRESENTS

IN ASSOCIATION WITH

Judging Panel Awards Senior Editor of SME Advisor Magazine, Paul Godfrey, presents a token of appreciation to Chairman of the Panel of Judges, Howard Gaunt, Executive Vice President, Head of Corporate and Business Banking Group, ADCB

PRESENTS

IN ASSOCIATION WITH

Editor’s Choice Awards - Best Telecom Products and Services for SMEs Vikram Chadha, Vice President – SME Marketing, du

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Managing Risk

Better safe than sorry With so much emphasis currently on cyber crime, there’s a risk of neglecting the more conventional dangers. For example, it’s often overlooked that many SMEs carry substantial amounts of cash either overnight or on a daily basis - potentially putting staff and vital resources at peril. Here, Senior Editor Paul Godfrey reviews some of the classic safeguards that can drastically reduce the risks without adding significantly to already hard-squeezed budgets…

s with any review of the risks facing a business, the best place to start is by trying to remove the risk in the first place. So, unless you are in the retail sector, or have to pay salaries in cash early the next day, why would you be keeping large amounts of cash on the premises overnight? It’s important to ensure that any sum larger than AED5,000 is automatically banked after the day’s business. Staff need to be trained to build the ‘bank visit’ into their daily agendas until it becomes a simple part of the daily routine. Take the sums off the premises and you immediately take away a major element of the risks facing you at night - which is after all the peak danger time, when the business premises are deserted and thieves have unlimited time to break in. Another basic strategy is to ensure that the cash office (or any areas where sums of cash are held) is not easily accessible to casual visitors and opportunistic thieves. This means ensuring that the cash office is at the heart of the premises, not adjacent to reception - or for that matter, not immediately next to fire exits and points of easy access. Bear in mind, too, that the cash office itself shouldn’t have features such as large sliding glass doors and open-

It is imperative that cash-handling areas are kept safe and sound behind a closed door at all times. plan access to communal or public areas such as common rooms or corridors leading to wash rooms, etc. Nor should there be any signage telling visitors where the cash office is located - this is a plain invitation to opportunistic thieves. Protecting valuables and staff

It is imperative that cash-handling areas are kept safe and sound behind a closed door at all times. If it is necessary for the door to have any glazed areas, this should only involve safety glass wired with a high quality steel mesh and conforming to safety standard DIN EN 356. Similarly, if there is a ‘hatch’ where cash sums are issued to staff and customers, this should be protected with a same-specification glass panel. Any transactions will take place through a five centimeter aperture at the bottom of the panel, with money and documents passed via a recessed metal tray.

The cash office door should be selfclosing and self-locking. Staff will require a key or swipecard to return through the door after exiting. This ensures that there are no vulnerable moments and no unwelcome temptations when cash sums are publicly on display. The door itself should be of steel construction, confirming to safety standard DIN EN 1627F. The added bonus with steel construction is that it is intrinsically fireproof, typically withstanding even major fires for a duration of at least one hour. If there is no cash office facility - or sums typically do not exceed AED10,000 - you may feel there is no need for a dedicated cash office, and can opt instead for a reinforced steel desk or cabinet with fitted cash trays. Desks and cashboxes must conform to DIN ISO 12914 1999, which will give them good break-in security against all but the bestequipped professional thieves. Note, though, that if you are using a cashbox, it’s a good idea to chain it to a strong immoveable object, so that the frustrated thief can’t simply pick it up and carry it away. Another non-negotiable practical step is to ensure that keys to the cash office, desk or cashbox are not kept in plain sight in a keybox hanging on the wall. Rather, these should be held by named staff members with an impeccable record of trust - and copied only on written authorisation of the CO or CFO.

December 2013

Managing Risk

The ‘zoning’ solution

With a larger building, a highly effective strategy can involve creating ‘zoned’ areas - identifying where the greatest risks are and prioritizing resources around protecting these crucial areas. For example, in the case of CCTV, cameras can be most costeffectively allocated to the building’s perimeter and the areas surrounding the cash office - the other areas probably don’t require more than a manual inspection. If you have a security guarding team in place, they will also be best deployed in these two ‘hotspot’ areas. Similarly, areas where staff keep belongings - for example, a cloakroom or locker room - can be zoned so as to receive a ‘medium’ security designation, and can therefore merit being watched without tying up excessive resources or involving the cost of more strict security. If you are using a CCTV system, there is one important point to note. Although the cost of systems has declined dramatically in recent years, there is only a benefit in having CCTV if there is someone there to watch it - and watch it 24/7. Unless it is watched by an external agency - which will involve additional cost - this means tying up staff time, which in many establishments will be better spent elsewhere. Back to the source

Surprisingly few businesses spend any time at all selecting good quality doorlocks. Yet these are a completely non-negotiable ‘must-have’, especially in front and back doors and when the cash office is unavoidably left without staff. The lock used should be a five-lever mortice deadlock, with a high carbon steel protection plate over the locking mechanism. It must conform to safety standard BS 3621 2004. (There is no point, however, on spending excessively on locks of higher specification, simply because while a five-lever lock will deter casual thieves, the more professional intruder can simply drill through a higher-quality lock in a matter of minutes). All windows at ground floor level should be protected with wire mesh safety glass, or - preferably - with steel bars across the window. Window frames should be lockable, using a simple Allen-key mechanism. While every premises left unprotected overnight should be fitted with an alarm,

Another nonnegotiable practical step is to ensure that keys to the cash office, desk or cashbox are not kept in plain sight in a keybox hanging on the wall. remember that this will not necessarily prevent the thief from making off with your goods if they are not properly secured in the first place. The alarm system is better thought of as a means to alerting the police if you have a larger premises where there is danger of losing high value capital goods. Walking the walk

A good way to identify where your security risks lay is by simply taking a walk through your premises with a tablet or notepad, recording potential security ‘hotspots’. For example, a classic area of risk will often be the positioning of the reception desk in the visitors’ area, which - if wrongly placed – can allow unwanted visitors to stroll into your offices without authorisation. You will almost certainly notice features such as loose doors on fire exits - allowing ‘bandit’

access to the building 24/7 - open windows, unattended offices and sums of money or valuables left on display and relatively unprotected. This ‘walk’ can also be done in association with a qualified risk manager, to ensure total authenticity. The insurance imperative

Even the most basic Commercial Property insurance policy can protect a business against the loss of cash sums on the premises. Or can it? The reality is that in the absence of all - or in some cases, any - of the features above, it’s extremely unlikely that you will receive the full value of the goods insured (and in extreme circumstances, you may not receive any pay-out at all). The converse, however, is also true. If you put these elements in place in liaison with an insurer, as part of a structured risk management audit, your insurance premium may be reduced by as much as 30 per cent - a substantial saving which means that your security initiatives are likely to pay for themselves in the first two years. The reality is that wherever your business is in terms of scale, turnover and size of premises, good security measures are a fundamental route to keeping the things that matter to you as safe as possible. Or would you rather be sorry? For an online version, please visit:

www.smeadvisor.com/2013/12/bettersafe-than-sorry/

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Workspace

A recipe for growth Some of the key elements in an SMEâ&#x20AC;&#x2122;s expansion plans will involve opening new branch offices, accessing different markets and facilitating access to fresh commercial hubs. One of the key challenges, though, is that this expansion will so often necessitate taking on board an expensive raft of fixed costs - not to mention facing a daily round of infrastructure and set-up challenges. SME Advisor spoke to Servcorp, the world leader in serviced office provision, about expansion strategies that can supercharge business growth and provide a crystal clear template for forward planning and cost controlâ&#x20AC;Ś

An up-and-coming business will often require an equally up-and-coming address, and for a prestige office in a citycentre location, the minimum leasing term may well be five years.

ne look at the current Dubai SME 100 reveals an interesting characteristic about the region’s top-performing small and medium businesses. It’s this: about 55 per cent of them have growth and expansion plans which will necessitate finding fresh office accommodation, and indeed, will require a clear strategy for acquiring more than one premises in the foreseeable future. What’s more, in about 20 per cent of cases these new premises will be in a foreign country. It has to be said, though, that taking on these new commitments isn’t always an easy task. For example, an up-and-coming business will often require an equally up-and-coming address, and for a prestige office in a city-centre location, the minimum leasing term may well be five years - it certainly won’t be less than three. Then, there are the set-up and support costs, and in the case of overseas expansion, factors such as recruiting support staff with fluency in the right local languages. All of which means that the ‘first step’ towards expansion can be a costly and risky business, especially given the

fact that the new markets can be far from proven in the early stages. Test the Waters

One solution is to leverage the company’s expansion via a serviced office - or serviced office network. In the case of Servcorp, for example, there is a specialised package designed to facilitate entry into new markets without automatically invoking the full range of costs. This is the ‘Test the Waters’ package - and it means that if you are an existing Servcorp customer, you can have a free virtual office for two months, providing an ideal base for your team to explore the new market and find the first raft of potential customers. (Note that in the UAE, this style of working arrangement is called a ‘Business Package’). With the Test the Waters package, you can call the office through the Servcorp network, and can even start with more than one office - in fact, setting up as many as you feel your expansion plans will merit. (Although a smaller style of company probably won’t have the staff resources on hand to look at more than one option).

December 2013

Workspace

to a commercial relationship. Here again, the Test the Waters package is ideal, because you will have the availability of fully-equipped meeting rooms, as well as access to an office for three days per month in any country that’s not your home base. If your ‘testing the waters’ idea works well, you can then upgrade to a real office at only 24 hours’ notice. This new office will then come with all the usual benefits, and you’ll have expert IT solutions, highly skilled support staff and the most professional office environment from Day One of your presence in the new market. You may decide, for example, to make the Test the Waters package a core element of your expansion strategy: so you could set a target of market penetration within three months of arrival (using the Business Package during that time) and use this as the water-shed period by which you either commit to the new market - and then upgrade to a full office solution or scale back to the existing premises. You can follow this principle either in the home market, or overseas, wherever Servcorp have a presence. It’s a question of timing

As a solution, this has the advantage of not only being extremely simple, but also tremendously well-suited to providing the full range of professional services you may need - in fact, Servcorp describe the Business Package as giving you ‘everything but the office’! You have a dedicated telephone number, fax number and a dedicated receptionist who can transfer calls to wherever you are. With all the advantages that come from dealing with a real person, not a call centre! So you can easily and quickly give instructions on how you want your calls answered, and update these instructions in less than a minute by accessing the Servcorp app. SMEs also have an address to receive mail - and you can even put this address on your business cards (although there is of course the caveat that in the countries of the Middle East and GCC, you can’t actually register your business via a virtual address). Then, when your mail is received, it’s sorted and delivered directly to you.

Interacting with your clients

Remember that the fixed office solution gives you a single monthly bill, so in terms of your office arrangements you know exactly where you stand financially and can maximize cash flow and budget planning. This is especially helpful if you are in sectors with an extended working capital cycle, or your receivables are typically locked into a 90-day payment term. You also have the benefit of not needing to tie up valuable staff time in leasing negotiations and IT set-up, which can potentially equate to several weeks of lost prospecting time. This means that you can time market entry more precisely, or align your move clearly with a new product launch or a new piece of market legislation. For an SME, timing and opportunity is everything, and the service office solution provides the means to play to your strengths, rather than join a game that risks becoming a costly and time-consuming ‘red flag’.

Many of the markets in the GCC place a high premium on personal contact as a way if building the ongoing, warm dialogue which is a necessary precursor

www.smeadvisor.com/2013/12/a-recipefor-growth/

Servcorp describe the Business Package as giving you ‘everything but the office’!

It’s also worth bearing in mind that every location has a multilingual support team, giving your business perfect credibility in its new market. For example, the support teams in Lebanon are all fluent in Arabic, English and French, and you can designate exactly which language you want the ‘lingua franca’ of your day-to-day business support to be.

For an online version, please visit:

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December 2013

Workspace

On Cloud No.9 The digitization revolution has meant that every SME can have replicable data across many screens - whether PC, tablet, laptop or smart phone. All of which means that the dream of fully flexible data-on-the-move is closer than ever. But until recently, there was still one piece missing from the equation - the ability to access all your data at anytime, anywhere. This is where Cloud technology comes in: it’s the last and most important piece of the mosaic and it’s the key to giving your business complete flexibility. Yet it’s still often misunderstood and many SMEs have been slow adopters. Vikram Chadha, du‘s Vice President, SME Marketing, enlists the benefits of this technology for the benefit of SME Advisor readers...

he best way to describe the Cloud platform is by seeing it as the new era of evolution of the Internet. It offers a complete infrastructure and embraces all your ambitions about the mobility of your operation. It enables you to have a fully mobile environment, with complete data replicability, and without being close to your desk. Put simply, you can work anytime, anywhere. There’s no doubt, though, that at the moment, many SMEs are missing out on the benefits because they haven’t decided who their Cloud services provider should be. Given the fact that SMEs typically adopt most strongly as a result of word of mouth, it will take a little while for the Cloud revolution to settle down and become the new working norm for the SME community. The question is, will you be part of that new era of mobile working, or clinging to the die-hard old ways - and doing so to the detriment of your operating efficiency, your sales, your margins and your clients? Three things you need to know

First things first. The necessary infrastructure is very good here in the UAE; there’s very high speed Internet bandwidth available that means you can

access your data and systems very quickly indeed. This solid platform for the Cloud means you can reap two really substantial benefits, which completely set this new technology apart from other working platforms • Firstly, the Cloud is simply fantastic for collaborative work, because it enables you to open documents simultaneously, view the changes together or keep earlier versions open. • Then, it provides SMEs with a highly effective Disaster Recovery mechanism, because you always have back-up available in the Cloud - you don’t waste time trying to reconstruct your data path, because it’s still there. This means there need be no excuses to customers saying that normal service will be resumed ASAP, because those downtime glitches never happen in the first place. It also makes sense to get your Cloud service from a telecoms provider, because this ensures a highly secure and extensive infrastructure. What’s more, while your SME has traditionally had to buy a software licence (and ensure that it’s continually renewed), when you take the service from a telecoms provider, you subscribe on a monthly, pay-as-you-

The Cloud provides SMEs with a highly effective Disaster Recovery mechanism, because you always have back-up available.

December 2013

Workspace

go basis - because the licence has already been paid for by the service provider.

The rewards of mobility

Let’s talk about the bottom line

The Cloud also has very tangible cost benefits, across two important dimensions of the business. Firstly, it has advantages in terms of a significantly lower infrastructure cost; typically, servers have a lifetime and your SME has to keep re-investing in replacement and service. But this isn’t the case with the Cloud, where your business is set free from these physical constraints. Then, the Cloud incurs a much lower manpower and staffing cost. This is especially the case if you have a branch network, where the Cloud means you can replace highly complex protocols with one very simple, straightforward way of working. The Cloud also has three additional and very powerful - advantages for SMEs. These are • Great choice over the sheer level of computer power you will need. You can choose from a ‘Private’ Cloud, a ‘Hybrid’ Cloud, or a ‘Public’ Cloud. • You have great development potential at very cost-effective rates. For example, if you are building a branch network, an efficient cloud platform gives you timely and precise resources. • Strong scalability - it’s easy to decide if you want to increase requirements as a result of your business rapidly growing; in this way, Cloud technology contrasts strongly with the labour-intensiveness of traditional server upgrades.

Vikram Chadha, du’s Vice President, SME Marketing

It’s easy to decide if you want to increase requirements as a result of your business rapidly growing. Cloud technology contrasts strongly with the labour-intensiveness of traditional server upgrades.

The classic advantage of the Cloud is that you can access all the applications you need from anywhere in the world. All you have to do is enter your user access code. Another factor to accompany this extreme mobility is that you’ll get enterprise grade solutions on a monthly model which you can quickly upgrade or amend purely according to needs or budgets. You can also get far-improved storage options: you have the means to powerfully increase your storage options as and when you require - it’s as simple as that. No need to worry about all those oldfashioned issues of server capacity! Remember too that SMEs have one supreme advantage over larger businesses - they’re not tied down by ‘legacy’ systems and can rapidly adapt to change. The flexibility of the Cloud leverages these benefits and turns them into real commercial assets. So it’s a way of working that’s fully aligned with the way an SME best functions. There’s one more advantage, too: the Cloud lets you avoid all the tiresome problems of manual software upgrades, because a simple notification will tell you exactly what you need to do and when. So you can conveniently plan project work accordingly. The reality is that Cloud adoption is a supremely sensible and logical step for SMEs. So will you soon discover that every cloud has a silver lining - or will your technology platform remain firmly under a cloud? For an online version, please visit:

www.smeadvisor.com/2013/12/on-cloudno-9/

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December 2013

Top tips – HR

P for People, P for Progress What’s the biggest asset within your SME? If your first reaction was plant, machinery or land, think again. Although these assets come attached with a significant monetary value, something that’s incredibly important in most businesses, and especially in SMEs, is the people who work in them. That’s why implementing sound strategies to protect and nurture your ‘People assets’ can mean long-term growth and progress for your business…

December 2013

Top tips – HR Workspace

t may very well be the case that you’ve already spent all your cash in hand on building and sustaining your business. So, any other provision that requires attention is completely neglected. This is a common mistake that most SMEs make at their own peril. Here, we highlight a few basic steps that can have an enormous impact on your business and leave you with satisfied (read: productive) employees!

of an employee who has been constantly sick due to lack of appropriate medical attention. He logs in several sick days over the month leaving a huge pile of pending work. Eventually, the job has to be either passed on to one of his peers – who might not be able to handle the added workload – or has to be completed by the manager himself. Moral of the story is that healthy employees are happy employees that enhance the overall productivity of the business.

1. Communication is key

4. Set goals

Continuous and meaningful interaction with employees is absolutely necessary; it ensures that both parties know what to expect from one another. And, the truth is that such conversations don’t have to be painful. A simple yet effective way to communicate internally is through videos. For instance, if one of the employees within your company is constantly late to work, the HR department can make a light-hearted video depicting a scenario wherein a staff member that comes in late constantly is letting down the team and can eventually be fired. This enables the message to be sent across in a subtle way while still positively engaging your employees.

As an SME, you may have a great idea and a well-defined business plan, but these may be of no use if they aren’t broken down into short-term realistic goals. Without knowing what is expected out of them, employees can easily lose sight of their role in the company. And, this can be extremely dangerous for an SME with limited people resources – what happens if two out of three people in the business aren’t performing? Taking your long-term vision and simplifying it into smaller targets can help your employees stay on track in addition to making it easier to measure their performance over short periods of time. Another crucial aspect to bear in mind is Key Performance Indicators (KPIs). Identifying the right KPIs and linking them with incentives can work wonders for your business. These incentives could range from monetary benefits, profit sharing, awards for excellence, enrolment into a recognition programme, to additional training initiatives. By implementing such a system, you are now able to tie performance directly to employee incentives.

2. Key Man insurance

SME owners or directors, more often than not, form the backbone of their business. So, what happens when they fall critically ill? Or, if they are in a position where they can no longer continue normal business responsibilities? The answer is Key Man insurance. It provides the business with ‘buffer’ funds to operate through this difficult phase until it finds a suitable replacement. It’s also important to note here that Key Man insurance can provide cover to any person that is crucial to the working of an SME and cannot be easily replaced – someone that handles majority of the clients, has detailed knowledge of the business financial standing and investment portfolio or manages sophisticated technical operations. On the surface, such an option might look like it’s just about an individual but remember that it not only makes a tremendous difference to the crucial needs of your business but also helps your SME meet its responsibilities towards staff, investors, and most importantly, customers! 3. Medical cover

A common mistake made by most businesses is that they consider Medical cover as an added benefit to their employees. Compulsory by law in Abu Dhabi – and slated to be compulsory in Dubai by spring 2014 – Medical cover is a necessity. There is nothing more counter-productive than having staff worried about medical bills rather than being able to focus on the job at hand. In fact, making basic health services available to employees will work in the favour of your SME. Let’s take the example

5. Implement a Change Management Plan

Change is a part and parcel of SME life and there’s no denying that when this organisational change actually comes about, it directly affects all departments from the entry level employee to top level management. A great example of such change is the recent ammendment in the law governing ‘End of service benefits’, which will surely impact the way your business rewards employees when they leave your company. The implementation of a Change Management Plan – which highlights action steps in the case of such situations – can empower your business and prepare your employees to tackle any internal and external changes smoothly. This Plan should be available online for all staff and should be as detailed as possible. This step, which is often overlooked by HR professionals, provides your business a predictive ‘buffer’ against external change and ensures that it can be absorbed progressively without a catastrophic fall-out. For an online version, please visit:

www.smeadvisor.com/2013/12/p-for-people-p-for-progress/

December 2013

LEGAL

Dubai’s New Hotel Classification Scheme:

a review of implementation and scope Make no mistake – the hospitality industry has played a leading role in the way Dubai has so rapidly become a global hub destination. The fact is, its hotels and resorts have been among the most powerful catalysts in establishing the iconic repertoires of images and experiences by which Dubai is best-known the world over. Now, a new hotel classification scheme will allow for more specific designations and rankings, and bring even budget-style hostels onto the quality-control radar. Alexis Waller, Partner, Clyde & Co. and Sarah Khalifa, Associate, Clyde & Co., explain the changes.

n an effort to better serve Dubai’s 10 million and growing visitors, on 8 May 2013 HH Sheikh Mohammed bin Rashid Al Maktoum UAE Vice President, Prime Minister and Ruler of Dubai issued Decree No. (17) introducing a new hotel classification scheme aimed at enhancing transparency and modernising the existing classification framework in line with international standards. The Decree covers a larger scope of accommodation facilities than previous classifications and creates new categories and classifications based on quality grades, ratings, locale and activity designations. The scope of the Decree extends to Dubai’s various free zones, including Dubai International Financial Centre. What are “Hotel Establishments”?

The new Decree applies to “Hotel Establishments”, which are defined as hotels, hotel apartments, guest houses,

university dormitories, youth hostels, budget hotels, and floating hotels. Previously, Dubai’s classification scheme covered hotels, serviced apartments and guest houses. The new additions are intended to better provide for ‘budget’ accommodations and educational facilities. Licensing procedures

In order to operate, a Hotel Establishment must obtain from the Dubai Tourism Commerce and Marketing Department (DTCM) approval for construction of the Hotel Establishment (as applicable), preliminary approvals to operate, a tourism licence, classification in the appropriate category, and a no objection certificate in order to be allowed to receive guests. Licences, once issued, are for a term of one year, to be renewed annually at least 30 days prior to the date of expiry. In certain circumstances, and upon

agreement with DTCM, the license term may be for a period of up to four years. The Decree states that the Director General will issue resolutions for applying for new licences and renewals thereof, and for the documents which must be submitted. Until new resolutions are instituted by the Director General, the application process will remain in line with existing rules and practice. What are the categories and classifications?

The Decree provides for a total of six categories of Hotel Establishments as set out below. We understand that categories of self catering and timeshare are likely to be introduced in the future.

Hotel Establishments with more than one classification, i.e. in addition to mandatory quality grades or star rating classifications, a Hotel Establishment may also qualify for one or more optional designator classifications such as a Resort holding a five star classification as well as “Island” and “Beachside” Designators. Recognition to acknowledge merit for exceptional levels of luxury guest accommodation is anticipated to be introduced in the form of what are likely to be known as “Accolades” of ‘Gold’ and ‘Platinum’. “Grace Period” adjustment of status

The Decree came into effect on 8 August 2013 (Effective Date) and gives Hotel Establishments licensed before the

CATEGORY

CLASSIFICATION

Hotels

5 star, 4 star, 3 star, 2 star, 1 star

Resorts

5 star, 4 star, 3 star

Hotel apartments

deluxe, superior, standard

Guest houses

deluxe, standard

Youth hostel

___

University dormitory

___

Within each categor y of Hotel Establishment, classifications also apply. Mandatory classifications refer to the quality grades or star rating as indicated in the table above. These classifications, largely in place since 1998, have been enhanced to include a “superior” grade within the category for “Hotel Apartments”, in order to account for facilities in between “standard” and “deluxe” grades. The Decree allows for optional classifications describing location and facilities or “style” to be added by the Director General of DTCM. We understand from draft DTCM proposals that 19 additional classifications (Designators) are likely to be added, including designations such as “Airport”, “Heritage”, “Island”, “Shopping”, “Boutique”, “Convention”, “Golf”, “Desert”, “Spa”, “Business”, and “Sport”. In the future we are therefore likely to see

The new Decree applies to “Hotel Establishments”, which are defined as hotels, hotel apartments, guest houses, university dormitories, youth hostels, budget hotels, and floating hotels. Effective Date a grace period of one year before needing to be classified according to the new standards. Hotel Establishments which have obtained a construction permit before the Effective

Date but whose construction is completed after the Effective Date will need to adjust their status within one year from the date of completion of construction. Ramifications of non-compliance

Penalties for non-compliance now range from AED 100,000 to AED 500,000. Measures such as downgrading of a Hotel Establishment, six month temporary closing, permanent closing and cancellation of the licence remain as options for penalties for non-compliance. The Decree provides for the Director General of DTCM to issue resolutions necessary for the implementation of the new classification scheme and we anticipate that such resolutions will be rolled out over the coming year, outlining the new tiers of classification i.e. Designators, and the procedures and criteria for licensing. The promulgation of this Decree demonstrates DTCM’s commitment t o i m p rov e a n d g ro w D u b a i ’s accommodation portfolio, by seeking to achieve uniformity and set high - and internationally recognised - standards. Benefits include transparency in line with international practices and improved standards, allowing the consumer to conduct specific searches and make informed choices. With record numbers of visitors (and a goal of 20 million in the year 2020), the Decree provides a longterm framework to expand on Dubai’s success as a leading global destination. Further information

If you would like further information on any issue raised in this update please contact: Alexis Waller, Partner E: alexis.waller@clydeco.com Sarah Khalifa, Associate E: sarah.khalifa@clydeco.com Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 For an online version, please visit:

www.smeadvisor.com/2013/12/dubaisnew-hotel-classification-scheme/

December 2013

INDUSTRY WATCH

ICT trends in 2014 Citrix revealed its technology predictions for 2014 – highlighting crucial trends that can drive business growth in the regional ICT market. optimized for any device without leaving a trace of data behind only becomes more critical to enterprise mobility strategy.

s businesses make the shift to digital platforms, the need to implement latest technological strategies is crucial. Citrix reported key trends for 2014 that can help your business stay ahead of the technological curve. Here they are: 1. 2 014 will not be the year of VDI: Over recent years, many industry experts have declared 2014 to be the year of Virtualized Desktop Infrastructure (VDI). While VDI will continue to gain mainstream traction across all industries, the big conversation for 2014 will be about delivering apps, not desktops. Two trends dominating 2014 will be the maturity of enterprise mobility strategies and cloud-hosted desktops. While VDI can and will play a role in cloud-hosted desktops, the conversation is likely to move away from where the desktops are running and instead focus on the lifecycle management of those desktops. 2. All about apps, not the desktop: In the mobile enterprise, consumer technology has taught us to care about apps, and making those apps – and the data behind the apps - available anywhere. For the thousands of Windows applications in corporate circulation today, the ability to host and deliver apps

3. Mobile traffic will eclipse wired traffic: According to the Citrix Mobility in Business report, globally, Android is by far the most popular platform, with 72 per cent of global respondents saying they support or are planning to support Android this year, and another 65 per cent seeing an increased use of Android in their organisation. Apple iOS remains popular, with 54 per cent supporting or planning to support the platform, and 48 per cent seeing an increase in its use from last year. 4. B ring your own… everything: As laptops change and even become more like tablets with Windows 8.x, more companies will create plans for BYO for laptops and desktops as well as mobile devices. Further, the "corporate-owned, personally enabled" (COPE) model will gain momentum, meaning businesses will increasingly replace expensive PCs/ laptops in 2014 with lower cost corporate mobile devices like tablets. This will likely be the case for mobile devices that are used for worker-dedicated purposes or have a purpose-built application on them. 5. 2014 will be the year of mobile app proliferation and confusion. IT will be faced with fundamental decisions such as: • Determining whether to wait until native mobile or cloud versions of commercial-off-the-shelf apps are available. • Deciding what platforms (iOS, Android, Windows Phone) internally developed apps should support and in what order. • Creating the appropriate organisational structure and processes to support the development and management of a heterogeneous application environment.

new vc firm eyes mena A new venture capital firm recognises the potential of the technology sector and aims to give international and regional investors access to the budding tech startup market in the Middle East.

Paul Kenny and Arya Bolurfrushan, Emerge Ventures

aul Kenny, founder and CEO of Cobone, and Arya Bolurfrushan, CEO of Bolurfrushan International Group, an angel investor and CFO of RAK Petroleum, have launched a new venture capital firm – Emerge Ventures. The company will focus on high-impact early stage investments in Middle Eastern technology companies – with a slight preference to infrastructural e-commerce. The duo launched their first MENA Fund I in August this year and succeeded in closing the fund with capital from elite global venture capital funds, family offices and high net-worth individuals. MENA Fund I successfully

We see massive growth potential in the MENA technology infrastructure space, with the UAE in particular investing heavily to develop innovation and technological readiness.

closed in Q4 of 2013 and Emerge Ventures is not seeking any further investments until it launches MENA Fund II. Emerge Ventures has already made its first three investments. The first companies within the fund are all UAE-based and include The Impact Hub, a collaborative incubator and co-working space in Souk al Bahar Dubai; Lumba, a silicon valley based mobile gaming company focused on the Arabic-speaking world; and Elevision, a new digital media network that broadcasts news, information and advertisements from screens inside the lifts of premier towers in the UAE. Speaking from the Entrepreneurship Conference at Harvard Business School earlier this week, Kenny said, “Our focus is to find the best entrepreneurs and back them with smart capital – financial as well as intellectual - becoming true partners with the entrepreneurs to help them innovate, succeed and ultimately grow their business. We have been there and done it ourselves and our experience can help any company scale fast.” Bolurfrushan added, “We see massive growth potential in the MENA technology infrastructure space, with the UAE in particular investing heavily to develop innovation and technological readiness. As economies in our part of the world mature and move higher up the value chain towards the highest calling of man innovation - we are honoured to be a vehicle bringing the smartest global capital to serve as a catalyst in this transformation. We are pleased that such illustrious investors have entrusted us with their capital. We in turn will strive to add genuine value to the entrepreneurs we back and provide stellar returns for our investors.” The fund’s advisors include Harvard Business School Professors; the global CEO of Rocket Internet and a number of other veteran investors, entrepreneurs and advisors.

December 2013

INDUSTRY WATCH

Developing Dubai’s Islamic Economy At the Global Islamic Economy Summit, His Excellency Hisham Al Shirawi, Second Vice Chairman, Dubai Chamber of Commerce and Industry, highlighted three excellent strategic moves to boost the Islamic economy.

uring the Summit, His Excellency Hisham Al Shirawi, Second Vice Chairman, Dubai Chamber of Commerce and Industry, emphasised the need for the development of a regulatory framework to govern all aspects of the Islamic economy, and expressed that a new generation of consumers were demanding more sophisticated and varied Halal products and services. He also added that companies need to identify this changing trend and cater to this new customer base. He said: “Over the past two days we have debated and discussed the elements and challenges of the global Islamic economy. However, for us to make any progress in this new economic landscape we must achieve three major recommendations. “Firstly, the need for a proper regulatory framework governing all aspects of the Islamic economy is vital. Without this the Halal industries will lack the proper guidance and governance. Proper standardisation is key to developing Dubai’s Islamic vision.” He continued, “Secondly, unification of the term Halal. This is because what is thought of as Halal here is different to that in other parts of the Muslim world. Again and again at this conference, we have heard how we need to engage with indifferent Muslims and non-Muslims to take Halal industries to the next level. This is impossible without some sort of unification, especially when we are talking about nonMuslim markets or regional cooperation. “And thirdly, innovation. This is both across the spectrum of the Islamic economy and more specifically in the Halal

products and services available to consumers. We live in a world where 60 per cent of the Muslim population is under the age of 25. The language they speak and how they communicate is drastically different to that of previous generations.

Dubai is seeking to bring the Muslim world together under the concept of one global Islamic economy. “To meet changing demographics, we need innovation to promote the concept of the Islamic economy. And we need the private sector to seek innovation in the way they engage with Muslim and non-Muslim consumers. His Excellency further added: “The Islamic economy should be inclusive not exclusive, and we must aim for more than compliance by setting our sights on being the best standard internationally. Standardisation and certification are therefore crucial to the future development of the global Islamic economy. This is not only across cities, but across countries and continents, as the Muslim world is varied both culturally and economically. Dubai is seeking to bring the Muslim world together under the concept of one global Islamic economy.”

INDUSTRY WATCH

Encouraging energy conservation Informa Energy Group launched a new competition focusing on energy conservation open to undergraduate engineering students in the UAE.

The organisers of Middle East Electricity have introduced Future Generation, a new energy conservation competition for all UAE undergraduate engineering students.

he innovative competition called Future Generation will challenge students to design and develop a unique energy conservation or alternative energy solution. The participants have to showcase their ideas to visitors attending the Middle East Electricity Conference, to be held from February 11 to 13, 2013 at the Dubai International Convention and Exhibition Centre. Held under the patronage of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Middle East Electricity focuses on the power, lighting, renewable and nuclear sectors. During the exhibition, visitors have the chance to enjoy the designs on display – as part of the Future Generation competition – and vote for their favourite concept. The winner, decided by the number of votes, will then be awarded by Chair of the Education Committee for the Energy Institute Middle East. Anita Mathews, Director of Informa Energy Group, said: “As the organisers of one the world’s leading energy events, we are committed to investing in the future of the energy industry and are proud to introduce the Future Generation competition. The demand for energy is on the rise in the UAE and across the Middle East, and in order to be efficient, we should have the ability to store this valuable resource when we have enough of it and to use it when we actually need it. “The Future Generation competition will not only help create public awareness regarding the issue of energy conservation in the region but it will also help students

to think out of the box and derive innovative solutions to further address this issue.” Ahmed Warsame, Senior Mechanical Engineering student from RIT Dubai University, said: “Due to high temperatures and humidity in the region, cooling consumes a major portion of the total energy produced, of which over half is consumed by commercial and industrial use. Using more energy efficient cooling systems would not only reduce power consumption and the cooling expenditure, but also reduce the carbon footprint.” The three-day event is supported by Abu Dhabi Water and Electricity Authority (ADWEA), Dubai Municipality, Emirates Green Building Council, Society of Engineers – UAE, Environmental Centre for Arab Towns, Clean Energy Business Council and Energy Institute Middle East.

The Future Generation competition will not only help create public awareness regarding the issue of energy conservation in the region but it will also help students to think out of the box and derive innovative solutions to further address this issue.

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INDUSTRY WATCH

shift to ‘Smart City’ infrastructure At the second Middle East Smart Cities Summit 2013 held in Doha, Huawei highlighted prime factors that will drive the adoption of Smart City infrastructure over the next three to five years.

he global ICT solutions provider, Huawei, was the ICT Platinum Partner of this year’s event and emphasized the need to focus on Smart City infrastructure. During the event, senior executives and engineers showcased a wide variety of global case studies demonstrating how applications of cutting-edge ICT platforms are already supporting sustainable socio-economic growth in major metropolitan environments. Huawei experts at the event also shed light on a set of best practices from global deployments and case studies which demonstrated how smart city initiatives can be implemented through today’s ICT solutions and organisational collaborations. “Access to a safe and efficient economy for businesses, citizens, and local governments is the ultimate goal of any Smart City initiative. Countries in the region today need to provide services that span the digital divide, meeting citizens' expectations for interacting with and accessing government services at the touch

of a button—from healthcare to education, smart transportation, and even tourism services. Technology advancements such as ubiquitous broadband connections, advanced analytics software, and more advanced security protocol will all be required to meet this future, and thus it is particularly important to have public and private organisations in cultivating a healthy ecosystem for the development of future information highways,” says Pan En, Vice President of Huawei Middle East. As economies get further digitized and cities urbanized, information and communication technologies are becoming deeply embedded in the very fabric of urban infrastructure, presenting an immense opportunity for the development of intelligent cities in the form of new transport management systems, smart grids, water monitoring systems, and energy efficient buildings among others. Huawei has worked with governments across the region and around the world to deploy a vast range of Smart City solutions for the public sector in particular, from broadband infrastructure and communications to niche industry applications and data centre technologies. Up to date, Huawei has been involved in network infrastructure development in more than 100 Smart City projects globally, with 12 national broadband projects and over 10 e-Government and data centre development projects.

Access to a safe and efficient economy for businesses, citizens, and local governments is the ultimate goal of any Smart City initiative. Countries in the region today need to provide services that span the digital divide, meeting citizens' expectations for interacting with and accessing government services at the touch of a button—from healthcare to education, smart transportation, and even tourism services.

Handling trademark disputes The Dubai Chamber of Commerce and Industry participated in the International Trademark Association (INTA) conference and highlighted the crucial role mediation plays in the settlement of trademark disputes.

Jehad Kazim, Director – Legal Services Department, Dubai Chamber, at the conference

s part of the two-day conference – Hot Trademark Topics in the Middle East, Africa and South Asia – key issues such as ‘the increased need for trademark protection’ and ‘strategies to guard against infringement and the counterfeiting of goods’ were discussed. Furthermore, the conference also featured a panel discussion, comprising world-class experts, on the topic of Dispute Resolution: Is there really an alternative in the Trademark world? During this discussion, Jehad Kazim, Director – Legal Services Department, Dubai Chamber, highlighted the growing role of mediation or Alternative Dispute Resolution (ADR) methods in the settlement of trademark disputes and protection of Intellectual Property (IP) rights. She further stressed that in today’s fast-paced global trading environment, the settlement of trade disputes amicably is the most preferred method as the conflicting parties want to maintain long-term trade relations while protecting their IP rights. She advised that thinking out of the box and increased awareness on the benefits of adopting alternative means of settling trade disputes are two crucial factors to consider while tackling such issues. She added that mediation focused on the interests of both parties and is a much less aggressive process than other means like arbitration and litigation. That’s not all. It also offers a win-win situation for all parties involved.

The Legal Services Director of Dubai Chamber also touched upon the numerous benefits of mediation such as control over the outcome, significant cost and time savings, confidentiality and the potential to improve relationships. These reasons are compelling enough to consider mediation before other dispute resolution mechanisms for the settlement of trademark and IP disputes.

The settlement of trade disputes amicably is the most preferred method as the conflicting parties want to maintain longterm trade relations while protecting their IP rights. Kazim further stated that as a representative of the private sector, Dubai Chamber strongly supports mediation for the settlement of trade disputes as she informed that the Chamber received 553 mediation cases in 2012, and has settled 242 cases which are about 44 per cent of the cases received by the Chamber as 510 cases involved local conflicting parties.

December 2013

TECHNOLOGY FOR BUSINESS

New marketing solution for SMEs An innovative concept, ADXPRS.com, provides bespoke marketing solutions to entrepreneurs and SMEs via a unique Web-based design platform.

MEs can use this new portal to access creative and cost-effective design and marketing solutions including high-resolution images, personalised and targeted colour design and copy, thousands of templates covering over 30 industries, and much more. SMEs can also take advantage of the website’s key feature – the XPRS Editor. This tool imitates yet simplifies leading

software editing tools and allows the website’s customers to customise their chosen design instantly without the need for expensive and complicated software or hiring expensive talent. Through the technology and tools provided by the portal, companies can save not only a lot of outsourcing money and eliminate the hassle of finding the right talent but also save a lot of time required otherwise

Managing IT security SMEs can now safeguard their IT processes with the help of a new solution – FireEye’s Oculus platform.

in managing the creative process. Kinan Ismael, Founder and Managing Director, ADXPRS.com, said: “Keeping the end-user in mind, ADXPRS.com was founded with a vision of providing a comprehensive solution to businesses and individuals who are looking to access high quality, professional and affordable logos and marketing templates that not only look great, but can be fully customised quickly and easily. I believe that one of the major benefits of the website, apart from the user-friendly interface, is the fact that ADXPRS.com is also the only portal catering to the Middle East market by supporting the Arabic

advanced security needs of this large and critical business segment. “For years, FireEye has provided unprecedented protection to the enterprise, but there’s no question that small and medium-sized businesses (SMBs) have as much need for effective information security technology as large companies,” explained Charles Kolodgy, Research Vice President of Security Products at International Data Corporation (IDC). “Cybercriminals target small organisations who, consequently, require an effective solution to protect their businesses.” Here’s what this solution offers:

Tailored to suit SMEs, FireEye’s Oculus platform is the perfect combination of technology, services and threat expertise. The solution includes stateof-the-art continuous monitoring to help address the comprehensive

Web threat protection: With the FireEye® NX series platform, SMBs can stop Web-based attacks that traditional and next-generation firewalls (NGFW), IPS, AV, and Web gateways miss. The NX series protects against zero-day Web exploits and multi-protocol callbacks to keep sensitive data and systems safe. E-mail threat protection: SMBs can leverage cloud-based or the on premise

language.” He added: “Many entrepreneurs in the Middle East have goods and services to offer that are exceptional in terms of the idea, but their challenge is getting their message to the marketplace in a cost-effective yet highly professional manner. This is where we come in. ADXPRS.com enables smaller local companies to compete with bigger competitors. In the past three months, we have had a tremendous response in terms of registrations. Eventually our aim is to empower business owners throughout the world to take control of the image of their business and produce high-end design and print.”

EX series platform to protect against today’s advanced e-mail attacks. Mobile threat protection: SMBs can leverage a cloud-based platform to address threats targeting mobile devices and help ensure that mobile apps are safe to use. Oculus for SMB also provides Oculus Continuous Monitoring to help ensure that constrained security resources do not hinder an organisation’s ability to counter targeted threats. Capabilities include: • Continuous Monitoring: FireEye threat intelligence augments customer IT teams to proactively recognise advanced persistent threat (APT) attacks. • Cybercon Reports: Verticalspecific threat information provides a more comprehensive view of the landscape so SMBs are better prepared to manage risk in their specific threat environment. • Health Check: Alerts notify customers when their deployments fail remote health checks to ensure uninterrupted protection against advanced threats.

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TECHNOLOGY FOR BUSINESS

Students develop new health app As part of the UAE Government’s Best m-Government Service Award, three students have pioneered a new health-focused mobile application.

he new application called ‘ActiveUAE’ works on the Android platform and combines a pedometer with a calorie counter allowing users to track their calories intake as well as the number of calories they burn each day. Another great feature of the app is its social media integration which enables users to interact with friends and family – through Facebook and Twitter – and share fitness experiences.

The app’s programmer Mohammed Baziyad said: “There are many things about this application that make it unique, but two elements really set it apart. The first is that there are very few, if any, applications that combine a way to monitor calorie intake and usage with an online community. The idea is that it will act as a support group for people who need encouragement and inspiration. It is also a way for people to see where around the Emirate they can go and get fit - users will be able to send messages about walking around Safa Park, for example.” “Secondly, and perhaps more importantly, the app is very simple to use. The idea was to make an app for the mass audience. Everyone has to be able to use it and we had to understand from the start how people use and understand mobile technology and how it differs from one person to the next.” In May 2013, the Government of the UAE announced the launch of Best m-Government service. According to its

website, it “aims to motivate government agencies to provide innovative solutions in the field of smartphone applications, mobile websites and SMS. The winners of the Best m-Government Service Award competition will be announced in February 2014. The AED1m prize is split 50:50 between the winning students and their university. The ‘ActiveUAE’ app, a creation of three students from the Canadian University of Dubai, has been submitted as an entry into this competition.

Is stress affecting productivity in the workplace? A latest survey undertaken by Regus reported that 66 per cent workers in the Middle East feel that they are seeing more stress related illnesses since the economic downturn.

The study further highlighted that 33 per cent of Middle Eastern workers were losing sleep over worrying about work, in comparison to last year’s research which cited 48 per cent of respondents felt

their stress levels had risen in the past year. It also found that as a result of the increasing stress levels, absenteeism was on the rise directly impacting business productivity as well as employee well-being.

The study put together the opinion of more than 20,000 senior executives and business owners across 95 countries. Key highlights of the survey included: • 25 per cent of respondents are worried about losing their job; • 43 per cent feel less confident about the sector they work in; • 51 per cent of respondents report that their family and friends have noticed they are stressed by work; • 57 per cent say that stress is damaging their co-worker’s personal relationships. Kory Thompson, UAE Country Manager at Regus, commented: “Difficult

economic times in the West and an unprecedented rate of growth in emerging economies have put a strain on businesses and their employees. Workers are expected to do more with less, and this has taken its toll to the point many are close to burn-out.” “It’s not surprising that work-related worries and the sleepless nights they cause, are taking their toll on employees’ personal lives. More importantly still, their health is at stake as stress is a known catalyst for a number of serious illnesses. Proactive businesses that address stress are likely to end up with a healthier workforce and reduced absenteeism,” added Thompson.

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NEXUS BUSINESS SERVICES was set up with the sole purpose of providing a ‘one stop shop’ for anyone wishing to establish their business or relocating in the United Arab Emirates. As a 100% UAE national owned company, our aim is simple: To allow new entrants to concentrate on their business plan, while we clear a path with streamlined processes to obtain licenses, visas and related services. By eliminating the time-wastage in company formation in UAE, Nexus allows you to take full control of your business from day one. Through professionalism, unique contacts and a partnership approach to our clients’ businesses, we have achieved clear leadership. Our loyalty to our clients and commitment has proven our dedication to fulfill all their needs.

Our PRO services include: • Providing a National Agent or Silent Nominee Shareholder to satisfy foreign ownership restrictions. • Ensuring you retain 100% management and shareholder control of your business. • A PRO (Public Relations Officer/Government Liaison Officer) to submit your application to incorporate a business with all necessary government authorities, including Freezones Authorities. • Obtaining residence visas and labor cards.

Relocating with your business or family can be a daunting experience. Nexus provides a firstclass relocation service that is tailor-made with the client in mind. We can help with as little or as much as you need. Many of our service partners offer a corporate discount to Nexus which is passed directly to you, thus helping you save money along the way.

We are happy to provide assistance with any of your relocation needs including those listed below: •

Arranging medicals etc. - We can arrange all the necessary formalities you need to cover in order to get your residence visa, work permit, etc. Residential and commercial property search

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We will view villas, apartments and business premises on your behalf and provide you with a fully comprehensive list of all suitable properties for your consideration including photographs, dimensions, rental costs, lease details and comments. We will then make arrangements for you to view any or all of your chosen properties on your arrival in UAE and accompany you to the viewings (or negotiate the lease with the employer in UAE so that it is ready for your arrival). We will liaise with landlords and real estate agents and negotiate tenancy contracts on your behalf.

TECHNOLOGY FOR BUSINESS

du partners with Fortinet du announced a new partnership with Fortinet, a global leader in high-performance network security, that will expand the telecom’s Managed Security Services offering, to include Cloudbased Unified Threat Management (Cloud UTM).

loud UTM, also known as Clean Internet Pipe, is du’s managed security services flagship. As a line of defence relevant for all businesses, from small or medium enterprises (SMEs) up to large enterprises, it offers a set of advanced security services, including new generation packet filtering or firewalling, intrusion detection and prevention, network antivirus, web content filtering, anti-spam, and application white-listing or control. Deploying Cloud UTM maximises security protection by covering almost 80 per cent of corporate security requirements, while substantially reducing the total cost. It eliminates

Protect your business data A survey powered by B2B International and Kaspersky Lab revealed alarming statistics on malware attacks and their disastrous impact on data.

all threats at the ISP (Internet Service Provider) level long before entering the business network, increasing both the performance of the network speed and the stability of infrastructure mail servers and corporate workstations. du’s Cloud UTM service will examine network traffic to determine whether there are indicators of a corporate security breach. Security policies that define what is considered authorised use of corporate resources and what is unauthorised access, are configured and monitored through the du security operation centre on 24/7 basis. An intuitive User Interface (UI) enables administrators to drill deep within security log data to provide the

The survey reported that only 40 per cent of users in the UAE were able to retrieve the data they lost in a malware attack, with 60 per cent citing that they lost some of their valuable information forever. Furthermore, the survey highlighted that 55 per cent of users in the UAE value their information more highly than the computer which stores it. In fact, users are willing to pay for data recovery, with one in 10 hiring outside experts to try to claw back the missing bytes. Effective solutions

So what happens when you are a victim to malware attacks and

granular level of reporting necessary to understand what is happening on the network. Historical or real-time views allow administrators to analyse log and content information, as well as network traffic. Bashar Bashaireh, Senior Regional Director at Fortinet Middle East, said: “We are proud to partner with du to bring our joint Cloud UTM solution to the UAE market. This highly cost-effective, flexible and reliable security solution leverages our high-performance security technology to provide businesses of all sizes with broad protection against a vast array of Internet threats, including advanced targeted attacks.” Fahad Al Hassawi, Chief Commercial Officer, du, said: “Our Cloud UTM service, powered by Fortinet, is the ideal addition to our suite of Managed Security Services, through which we provide the UAE’s businesses with fully comprehensive protection against cyber threats and more. We are pleased to have partnered with Fortinet, and look forward to further collaborations in the future.”

have lost a considerable chunk of your confidential business data? Kaspersky experts suggest two simple solutions: regular back-ups and a reliable protection solution. Kaspersky Lab develops security solutions to answer specific features of cyberthreats. This is the only way to create reliable protection technologies. For example, Windows is a desktop platform most often attacked by cybercriminals. They use various sophisticated techniques to achieve their goals – rootkit technologies, vulnerabilities in legitimate applications, etc. To combat

them, Kaspersky Internet Security features several proactive technologies which can repel the most dangerous threats: these include Automatic Exploit Prevention to protect software vulnerabilities, and effective Anti-rootkit systems. A similar approach is implemented in the development of Kaspersky Lab’s security solutions for other platforms. The company’s in-house technologies for data protection are featured in Kaspersky Internet Security for Mac and Kaspersky Internet Security for Android.

THE NEXT LEVEL

Change management: the role of strategy-making

For a successful SME, change isn’t simply ‘something that happens’ - it’s a fundamental requirement of the business as it grows and evolves, becoming more sophisticated in terms of both its offer and the raft of internal procedures. The secret is to make the business a ‘change master’, forging ahead with innovation and competitive edge, rather than being left behind by constantly-shifting market trends. SME Advisor explains the role of strategy making in underpinning a progressive, proactive approach to change.

“The wise man is led by change; the unwise is dragged by it.” – Seneca

ost founders and owners of SMEs are already specialists in change management - after all, didn’t the Business Plan for your venture describe your vision, its growth and the market trends that it would capture and take advantage of? Didn’t it plot a course of change and evolution and allow for factors such as the funding needed for new premises, new car fleets or machinery and plant, and the requirement for a top marketing director as you entered new sectors or thought about the growing impact of social media?

If indeed it did all of these things, did you also remember to show it to an insurance broker to get expert input on the ‘hotspots’ that would be likely to challenge your business and make sure that an effective raft of insurance ‘hedging’ was securely in place? Did you identify the risk factors that result both from changes in your business and from shifting market tastes and economics? In other words, did you cost-in the need to purchase insurance for situations such as: • Predicted growth in the size of your car fleet by Q4? • Key man insurance to cover your own involvement and that of your top sellers?

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CRAIG ADAMS CHIEF OPERATING OFFICER CHICAGO MAINTENANCE AND CONSTRUCTION CO. L.L.C.

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THE BACKGROUND Our client was using the 36 Strategies’ P2P Portal to replace the paper based P2P process in the organization and to task 36 Strategies with managing suppliers and deliveries. After merely 2 months, a 25% reduction in delivery time was achieved through inventory planning, order to approval time was cut in half by eliminating the paper based process and there was a 5% reduction in procurement spend.

THE OPPORTUNITY When the client saw the benefits from using the portal, they wanted to do more. With the increase in construction projects and the UAE winning Expo 2020, the client needed a proper channel to promote

and sell their products. All the client had was a showroom where they showcased their products and they would receive orders by email or phone.

THE SOLUTION 36 Strategies implemented the P2P Portal, an online tool for procurement requisitions and approvals, for the client’s customers, populated with the client’s products, in effect serving as an online store for the client. The client’s customers would order products and materials over the internet or using mobile technology through the cloud based stores anywhere in the world at any time. Once there was an approved order, the client would receive a notification and would proceed to make delivery arrangements with the customers.

THE RESULT In addition to the huge improvement in P2P lead times brought about by use of the Portal, the client was able to help their customers achieve process optimization, eliminating the paper based process and cutting their delivery time. The client now also has an online store which they can use to build a catalogue of products they think their customers may be interested in on top of ones they sell already. Future enhancements currently in discussion include putting the client’s products in front of 36 Strategies’ other clients who procure that product category, creating an interactive market place through the Portal.

THE NEXT LEVEL

• Third party protection for your investors if the loss of a director means the investment can’t be repaid? • Trade Credit Insurance to click in at Q3 to cover cashflow shortfall consequent on late or non-payers? • Life insurance and pensions plan incentives for staff on completion of three-months’ probation? If you didn’t, perhaps you need to consider the discipline of change management and what it might be able to achieve for your business and its effective contingency planning.

departments from the entry level employee to senior management. This means that the raft of insurances you plan for with your broker must reflect everyone’s interests, from those of the CEO to the livelihood of the most junior new recruit. A classic example of change management in this context is the imminent arrival of compulsory employee Medical insurance in Dubai, which all employers will have to provide. Have you already budgeted for the impact this will have on your bottom line? It may be too late to absorb the financial impact if you wait until the official implementation deadlines.

The science of change management

Change management is nothing more or less than the science of taking a structured approach to ensure that – 1) Within your business, changes are smoothly and successfully implemented to achieve lasting benefits. 2) You have a predictive ‘buffer’ against external change; it can be absorbed progressively without catastrophic fall-out. It’s a truism that in the external commercial world, organisations face rapid change like never before. Social media and mobile adaptability have revolutionised business and the effect of this is an ever increasing need for change - which of course means there’s a concomitant need for good change management, too. The growth in technology also means an increase in the availability of knowledge, which means your customers are likely to be more aware of their options (and therefore more fickle) than ever before. It goes without saying that the ability to manage and adapt to organisational change is an essential ability required amongst all SME owners today. It’s also the case that the speed with which you can adapt to change is everything. The faster the pace of change, the more the need for insurance because it’s more likely that your SME will be rendered temporarily dysfunctional (if only for a short while), getting caught out by a scenario that may have the capacity to derail your plans in a major way. Everyone’s affected!

Organisational change directly affects all

Did you identify the risk factors that result both from changes in your business and from shifting market tastes and economics?

wellbeing that come with change (whether internal or external change) and transferring the risk to an insurer via appropriate cover. For each major change initiative, commit your actions in writing in a Change Management Plan. This should be available online for all staff and be as specific as possible, eg, it should list the names of all the insurers you have involved and the relevant policy numbers, etc.

Moreover, because change impacts everyone, the strategies you have in place for dealing with it will often require everyone to buy-in and pull together. Telling customers and investors So while you might offer an attractive The fact that you are proactively preparing savings/pensions package to employee for change and have taken the necessary remuneration (or a raft of additional life risk transfer measures is good news. So insurance contributions), the deal is that you might want to communicate this with you won’t expect employees to get up and your customers, to assure them that you leave the moment they are approached are ‘ahead of the curve’ and that they will by a competitor. Dealing with change via - as a direct result - receive heightened insurance solutions therefore works as a levels of service and can feel secure in a two-way street. provider relationship that is underwritten by high-quality business protection (in Interpreting and tackling change other words, you show them ‘you are not There are six key stages in the change going anywhere’). management process. These are: It’s also vital to communicate your • Recognising what’s changing in the wider change management initiatives to funding business environment. partners and investors: knowing that • Customising a response to meet your your business is resilient to change and prepared for it can make a huge company’s particular needs. • Recognising what’s changing in your difference to the confidence factor with own business. which would-be investors will perceive • Putting adaptive training in place for and evaluate your offer. everyone affected. • Getting everyone on board and winning For an online version, please visit: support. www.smeadvisor.com/2013/12/change• Understanding the risks to the business’ management/