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SKY HIGH ambition
Kazakhstan rising
We speak to the winner of the 2012 ADCB Ambition Award
This emerging market is fast positioning itself as a trade hub for the Central Asia region
Emiratisation
An overview of how top players in the private sector are attracting and developing high-quality local talent
Employee loyalty Polls show compensation levels are not mirroring the allegiance of employees
INSURANCE PARTNER
Issue 85 december 2012 WWW.SMEADVISOR.COM
presents
come to
life
Technology contracts Insights into key issues which may come as a surprise to lawyers and clients
Winner of DU’s hit TV show The Entrepreneur shares her startup story and future plans
PUBLICATION LICENSED BY IMPZ
Publisher Dominic De Sousa
Final curtain
W
e’ve been giving you snapshots and snippets for the best part of four months, but the time is nearly upon us. The annual SME Advisor Stars of Business Awards & Summit will open its doors on December 5th at the Yas Viceroy, Abu Dhabi. Having traditionally held the event in Dubai, this year we decided to bring the event to the capital as part of our year-long objective to encourage participation across the seven emirates.
Group COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 EDITORIAL Senior Editor Mike Byrne mikeb@cpidubai.com +971 4 440 9105 Sub Editor Joumana Saad joumana@cpidubai.com +971 4 440 9115 Contributing Editor Aparna Shivpuri Arya aparna@cpidubai.com +971 4 440 9133 ADVERTISING Commercial Director Chris Stevenson chris@cpidubai.com +971 4 440 9138 Business Development Manager Pankaj Sharma pankaj@cpidubai.com +971 4 440 9120 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 Head of Design Fahed Sabbagh fahed@cpidubai.com +971 4 440 9107 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 Photographer Jay Colina jay@cpidubai.com +971 4 440 9141
The SME team have worked to provide some of the region’s top subject-matter experts and business gurus in an effort to bring even more value-driven discussion and debate. The day is packed with stimulating keynote speeches, presentations, a panel discussion, not to mention the afternoon breakout sessions and one-to-one consultations. There will be plenty of opportunity to mingle and network at the coffee and lunch breaks so do bring your business cards. The SME Advisor Stars of Business Awards continues to be a symbol of SME development in the region. We received over 3,500 voluntary nominations again this year, with the quality of entries and their respective nominations showing even more quality and depth. A big thanks must go out to our external auditors, Morison Menon, for taking the time to sift through all the entries and for short listing finalists and to the judges for scoring these finalists and selecting this year’s winners. In line with celebrating the year-long entrepreneurial and SME success, this month’s issue of the magazine features the winner of du’s tv hit show The Entrepreneur, as well as discussions with various ambitious entrepreneurs currently operating startups, while still working full time. We have also provided insights into growing opportunities for regional SMEs to conduct cross-border trade with Central Asia, as well as a breakdown of free trade agreements and the benefits a business, and indeed a regional economy, can gain from such alliances. In addition, there is particular focus this month with two factors that will determine the success of Emirati business in the coming years – an examination of the progress of Emiratisation and, of local family-owned business and their ability to implement structures to stay competitive and sustainable for future generations.
DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developer Abey Mascreen online@cpidubai.com +971 4 440 9100 Published by
Regular columnist John Lincoln has very kindly provided a chapter from this recently released book, Connect the Dots. The article gives invaluable tips on life lessons that every SME can associate with. All management, entrepreneurs and business owners will also receive a complimentary copy of John’s book at the day-time Summit on the 5th December. On a final note, we look forward to welcoming you all at the day-time Summit and evening Awards ceremony next week and to meeting you all in the New Year for what promises to be another 12 months full of challenges, growth, success stories and better business. Until next month...
Registered at IMPZ PO Box 13700, Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409
Mike Byrne Senior Editor
Printed by Printwell Printing Press LLC © Copyright 2012 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.
Talk to us: E-mail: mike@cpidubai.com
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December 2012
SME ADVISOR Middle East
LinkedIn group: www.tinyurl.com/smeadvisorme
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Contents Issue 85 December 2012
Trade
20 | Free Trade Agreements Dr. Ashraf Mahate of Dubai Exports explains how a global economic shift has led more countries to put a focus on exporting.
22 | Kazakhstan rising
36
Joumana Saad gives us a look at how this emerging market is positioning itself as a trade hub for the Central Asia region.
BANKING FOR BUSINESS
26 | Sky high ambition
We speak to Colette Griplas, winner of the 2012 ADCB Ambition Award.
MANAGEMENT
28 | Lessons in leadership du’s John Lincoln shares valuable personal lessons from his new book, Connect the Dots.
32 | Family business
Stepping into the spotlight The winner of du’s hit TV show The Entrepreneur shares her startup story and future plans
EDITORIAL BOARD We present the SME Advisor Editorial Board for 2012.
40 | Balancing act
Shoptalk
Joumana Saad speaks to a few part-time entrepreneurs about how they manage it all on top of a day job.
10 | Trends and Updates A quick look at news and events that will impact SMEs in this region.
SME about town
16 | Events
A round-up of the key events being attended by SME leaders in the UAE.
CORPORATE LIFESTYLE
18 | Executive trends
We give you a glimpse at some of the latest products on the market.
December 2012
SME ADVISOR Middle East
Entrepreneurship
36 | Meet The Entrepreneur Joumana Saad talks to Loulou Khazen Baz, Founder of Nabbesh.com, about her experience on the hit-TV show and her future plans.
08 | Introduction
6
Bill Humphries of Eureka Financial outlines steps business owners can take to keep their business going strong from one generation to the next.
legal
42 | Technology contracts David Yates of Al Tamimi & Co. highlights some key differences in the laws that govern contracts in this space.
HR
46 | Emiratisation We take a closer look at how top players in the private sector are attracting and developing high-quality local talent.
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INDUSTRY WATCH
TECHNOLOGY FOR BUSINESS
50 | IT knowledge gap
56 | Tech news
A recent survey finds that 51% of businesses in the GCC region cite a significant degree of misunderstanding of IT security issues.
We highlight IT trends and tools that are reshaping business in the region.
52 | Big spenders
64 | What’s next?
Qatari residents are the biggest spenders on luxury in the Middle East, while Dubai retains its title as the region’s preferred luxury shopping destination.
SME Advisor Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.
Sign off
54 | Employee loyalty Polls show compensation levels are not mirroring the allegiance of employees.
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December 2012
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EDITORIAL BOARD 2012
SME ADVISOR
Amna Sultan Al Owais Deputy Registrar & Small Claims Tribunal Registrar, DIFC Courts
EDITORIAL BOARD The SME Advisor Editorial Board is an honorary advisory panel of experts comprising organisations and individuals who want to help regional business. The idea is to evolve the magazine through such sharing of ideas with key regional influencers. Over the next few months, we will conduct various interactive sessions with our board members, often including our readers, where we can collaborate and share ideas. The aim is to help the business community benefit from our panel’s expertise.
Dr. Ashraf Mahate Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department
Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. He is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.
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July 2012 2012 SME ADVISOR Middle Middle East December SME ADVISOR East
Amna Sultan Al Owais joined the DIFC Courts in October 2006. In her role as Deputy Registrar, Amna undertakes judicial functions and other duties prescribed in Article 17 of the DIFC Courts Law No. 10 of 2004. Amna’s role supports the judicial bench and Registrar in the management and day- to-day administration of the DIFC Courts. In addition to her contribution to the Courts operations, planning and communications, she has a critical technical mandate, which includes case management and legal research responsibilities. Another aspect of Amna’s position at the DIFC Courts is focused on overseeing the Small Claims Tribunal, one of the busiest of the DIFC Courts. In this role, she coordinates all of the claims lodged and often undertakes consultation for some of the cases filed. Previous to her employment at the DIFC Courts, Amna was in practice as a lawyer for Hadef Al Dhahiri & Associates, in Dubai.
David Burns COO, British Business Group, and Director of Marketing and Corporate Communications, UHY
David is the Director of Marketing and Corporate Communications for an independent office of UHY, an international firm of auditors and accountants. His current UHY activities include the PR and marketing of four offices in the UAE and the business development for the firm in general. David is also the COO of the British Business Group in Dubai and the Northern Emirates, and is responsible for the overall administration of the group’s activities and an office based in the grounds of the British Embassy in Dubai. He has been involved with SMEs in the region for 35 years.
Alexander Blass
John Lincoln
President and CEO, Alexander Blass International
Vice President, Enterprise Marketing, du
Alexander Blass is an American entrepreneur and innovator who has travelled to over 40 countries and appeared in hundreds of media outlets, including several cover stories. He is the grand prize winner of the Daily Record’s Top Innovator of the Year Award. He presently serves as CEO of Alexander Blass International, an executive training and consulting firm. Alexander keynotes some of the world’s most prestigious conferences on topics including innovation, creativity, leadership change, business development and entrepreneurship. Examples include the Abu Dhabi Innovation Forum, the SME Advisor Stars of Business Awards in Dubai and the European Conference on Creativity and Innovation.
John Lincoln has over 20 years telecommunications experience in the USA, the UAE, Japan, Europe, India, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in telecommunications from the Golden Gate University in San Francisco, California, USA.
Ghada Audi
Abdulmuttalib Al Hashimi
Head Of Disputes Resolution, Fichte & Co
Founder and Managing Director, Next Level
Ghada joined Fichte & Co in 2012 as Head of Disputes Resolution, from the DIFC Courts and Special Tribunal Related to Dubai World. Her practise areas include international commercial arbitration, mediation, as well as DIFC litigation, regulatory, compliance and insolvency. She has experience on three continents, having practised law in the USA, Germany and the UAE, enabling her to bridge business cultures and tailor legal solutions and strategies to multi-jurisdictional clients’ needs. She is a registered practitioner with the DIFC Courts in Dubai and is a member of the USA Bar in New York and Virginia.
Abdulmuttalib Al Hashimi is a UAE national entrepreneur, Managing Director and Founder of Dubai-based Emiratisation consultancy, Next Level. He founded the company in 2006 and under his leadership Next Level has helped more than 30 companies in the UAE on their Emiratisation recruitment and human resources needs. The company has so far helped employ at least 100 UAE nationals and around 200 international employees in various positions. Abdulmuttalib is a regular speaker in conferences, such as the GCC Nationalisation Conference, the UAE Career Fair in 2009 and the Abu Dhabi Business Round Table conference.
SME ADVISOR East July SME ADVISOR Middle Middle East December
2012
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shoptalk UAE
Dubai Chamber launches SME finance guide
Panellists at the launch event included experts from the UAE banking industry as well as SME owners who shared their perspectives on the issue.
A
s part of efforts to assist SME growth in the UAE, Dubai Chamber of Commerce and Industry recently launched its Guidelines for Enhancing SME Finance during a seminar held at its head office. Held in cooperation with the Ministry of Economy, the guide sought to highlight efforts aimed at reducing the gap between
supply and demand of SME finance. It also provided SMEs with a unique opportunity to learn about essential requirements for applying for financing and how to maximise the effectiveness of an application. Speaking on behalf of Dubai Chamber, HE Abdul Rahman Saif Al Ghurair, Chairman, said that enhancing SMEs access to finance was an effective way of ensuring Dubai’s continued development as an international trading hub. “SMEs represent over 90% of Dubai businesses and they play an essential role in building a competitive private sector and contribute significantly to employment and economic activity in Dubai and the UAE,” HE Al Ghurair said. He added: “Despite their integral role in Dubai’s economy many of our SME members continue to face difficulties securing financing at sustainable rates. In fact, the UAE’s total bank lending to SME’s is around 3.85%, when its target is 24.3%, so addressing this issue has been a primary task for Dubai Chamber,” HE Al Ghurair added. Representatives from the SME community in the UAE welcomed the launch of the new guide, but at the same time voiced their concerns that more needed to be done by the public sector to ease lending restrictions for established businesses. He concluded: “Today’s seminar was a culmination of work over the past year and a half and served as an ideal platform for Dubai’s public and private sectors to discuss solutions to the current challenges SMEs face securing financing.
Strengthening business oversight The Department of Economic Development (DED) in Dubai and the Emirates Authority for Standardisation & Metrology (ESMA) have signed a Memorandum of Understanding (MoU) to promote commercial compliance among businesses. The MoU will also lead to shared awareness programmes between the two parties to improve the quality standards of different products available in Dubai and the UAE. The initiative aims to strengthen supervisory authority and ensure transparency in all proceedings to protect the rights of consumers, thus enhancing the economic and business environment in the UAE, particularly in Dubai. Ali Ibrahim, Deputy Director General for Planning and Development Affairs, DED, said: “The DED seeks to form strategic partnerships that will promote economic development in Dubai and the UAE. Our partnership with ESMA will contribute to improving commercial compliance and provide a suitable economic environment that ensures enterprises and their products meet the standards and specifications as laid down by the Cabinet.” “The DED will ensure that businesses fully comply with the approved standards before
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L - R: Ali Ibrahim, Deputy Director General for Planning and Development Affairs, DED; and Eng. Mohammed Saleh Badri, Acting Director General, ESMA, during the signing.
they obtain certificates of conformity, send a report to ESMA on the outcome of our inspection campaigns, as well as conduct educational programmes to educate traders on the importance of compliance,” added Ibrahim. Eng. Mohammed Saleh Badri, Acting Director General, ESMA, said: “The MoU will
contribute to promoting confidence in various economic sectors, and support the creation of ideal markets in terms of quality and absence of products that do not meet the mandatory standards in the UAE. The MoU also covers market surveys, and certificates of conformity for all products listed on ESMA website.”
Ras Al Khaimah eGovernment Authority and Dubai eGovernment officials during the meeting.
UAE
Ras Al Khaimah makes eTransformation a focus
D
ubai eGovernment Department (DeG) has hosted a delegation from Ras Al Khaimah eGovernment Authority who visited to become more familiar with Dubai eGovernment’s leading eTransformation experience. During the meeting, they discussed Dubai’s experience at national and regional levels and its integrated methodology for providing shared services to Dubai Government entities.
The delegation, which consisted of a number of directors and heads of sections, was received by a number of officials in the presence of Sumaia Bin Hammad, Director of Business Development and Communication Department, who welcomed the delegation, stressing the importance of streamlining the channels of communication with UAE government entities to exchange the best practices and knowledge that would
enhance the practical steps towards an integrated knowledge-based society. Commenting on the visit, HE Ahmad Bin Humaidan, Director General of Dubai eGovernment, said: “The visit of Ras Al Khaimah eGovernment Authority’s delegation is aimed at getting familiar with the most outstanding stations of the successful experience of Dubai eGovernment, which established robust foundations for digital transformation in Dubai. The visit is also aimed at discussing means of mutual co-operation for developing government work across the UAE, which shows Dubai eGovernment’s ongoing keenness on sharing its leading experience with the various entities concerned with eTransformation locally and regionally.” Beginning the presentation, Bin Hammad outlined Dubai eGovernment’s vision, mission and strategy, in addition to its way of implementing its leading applications in Dubai Government departments and entities over the past decade. She added that Dubai eGovernment.
Shadi Diab, Acting Director of Government Resources Planning Systems (GRPS) Department, demonstrated the role of these systems used by Dubai government entities to run their human and financial resources as well as the GRPS ability to manage 40 government entities employing more than 62,000 employees, including financial management systems, human resources, systems, payroll system, purchasing, inventory, enterprise project management and asset life management system, in addition to eJob and eSupply. Hessa Al Balooshi, eServices Section Manager, presented the core & channel enabling services of ePay, mPay, mDubai, eSurvey, Ask Dubai, unified eComplain and eSuggest, eHost and GeSS. Matar Al Humairi, Director of Infrastructure Management Department, focused on the infrastructure-related shared services, explaining their added value for saving the total cost, improving the quality of services and ensuring co-operation among all the electronic systems in Dubai Government.
The future of government The World Economic Forum’s Global Agenda Council (GAC) on the Future of Government has identified a matrix for government transformation. In a new report entitled The Future of GovernmentFast and Curious, a group of academics, politicians and business leaders outline a framework for governments to follow to become flatter, agile, streamlined and tech-enabled or (FAST) organisations. In addition, the report argues that FAST government cannot happen without significant changes in mindset among all stakeholder groups. For example, the Council calls on public and private decision-makers to highlight the most immediate priorities and most promising opportunities to transform governments and enhance their ability to deliver value to citizens at all levels. In particular, the report demands that governments design citizen-oriented strategies to encourage greater engagement and accountability. Pursuing an open and candid dialogue among all entities, organisations and groups affected by the transformation of governments will remain a central priority of the Council. Offering innovative and pragmatic approaches to what governments can achieve, and with, their citizens is the Council’s ultimate goal. Remaining fast and curious is a priority to share with governments
The World Economic Forum Summit on the Global Agenda in Dubai examined the role of governments in strengthening their economies.
that seek to transform themselves for the better, and for all those who want to contribute to this ambition. The Co-Chairs of the Summit on the Global Agenda 2012 are Sultan Bin Saeed Al Mansoori, Minister of Economy of the United Arab Emirates and Sami Dhaen Al Qamzi, Director-General, Department of Economic Development of the Government of Dubai.
SME ADVISOR Middle East
December 2012
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shoptalk
The Euromoney Conference to be held in Qatar is aimed at strengthening the overall understanding of regional financial challenges.
QATAR
A post-crisis perspective
W
ith the global financial market changing and world economies continuing to face new pressures, a major conference in Qatar this December aims to understand how the growth of alarming credit levels is being controlled, and the role that GCC institutions will play in the future. Held under the patronage of HE Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, Prime Minister and Minister of Foreign Affairs, the Euromoney Conference will examine how credit has been used as a primary driver for
public spending, lending and private consumption in recent years, and look at the efforts to manage the spiralling phenomenon. The event entitled Global Finance: Re-Designed is being supported by a number of leading banks in Qatar. Keynote speakers at the event will include HE Yousef Hussain Kamal, Minister of Economy & Finance, State of Qatar; HE Sheikh Abdullah Saoud Al-Thani, Governor, Central Bank of Qatar; HE Zeti Akhtar Aziz, Governor, Bank Negara Malaysia; HE Chedly
Ayari, Governor, Central Bank of Tunisia; HE Marek Belka, President, National Bank of Poland; and Murat Cetinkaya, Deputy Governor, Central Bank of the Republic of Turkey. Richard Banks, Regional Director for Euromoney, organiser of the event, said: “Governments have reacted to the credit crisis by increasing regulation on banks, upping capital requirements and restricting banks ability to take on risk. Banks and markets have reacted to the government debt crisis and the regulatory changes by reducing lending across the board and by viewing sovereign debt as a credit product.” “However, if governments and banks are bound by restrictive credit, what financial mechanism will provide the oil, which lubricates the global economy and returns it to growth? This will be the subject of the first Euromoney conference in Doha on 11th to 12th December,” he adds. One of the key areas for discussion at the conference is that the world of finance is becoming more, not less, complex as a result of the crisis. The pace of financial innovation, in both products
and technology, is increasing. The number and type of companies involved in the business of finance will also increase. New credit players such as hedge funds, asset managers and specialist non-bank institutions will grow. At the heart of this lies a fascinating debate on behavioural financial models versus “the market”, and the emerging discipline of “neuro-economics”, which combines evolutionary biology, neurology and financial market behaviour. Banks concludes: “Finance is meant to be an enabler, a means to an end and not an end in itself. If the result of the current changes is a financial system, which has a better series of results for savings and investments as its output, then the changes will be worth it. These outputs are measured primarily in the private sector, better return on our investments and more capital available to business.” Major international and Qatari institutions are taking part in the event, and there will be a strong showing of international delegates. Further details are available at www.euromoneyconferences.com/qatar.
Young entrepreneurs pitch to win Students from around the region recently convened in Doha for the Sixth Annual INJAZ Al-Arab Young Entrepreneurs Competition held under the patronage of the Qatar Foundation. ALGreenIA and Creative Generation from Algeria and Yemen respectively, walked away with the top accolade for the Best Company of the Year award. The award was delivered by Fadi Michael Bay, Vice President of ExxonMobil Qatar to both companies for their environmentally-friendly products. Commenting on the company’s win, Karim Hamaïli, Director of Projects & Development for ALGreenIA stated: “The competition has been a fantastic learning experience for us all and I would like to thank INJAZ Al-Arab, the Qatar Foundation, and ExxonMobil for the opportunity to participate. I hope this competition inspires individual contestants to continue using their entrepreneurial skills and become active participants in their local economies in the future.”
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Executives on the judging panel for the awards included Fadi Ghandour, Founder and CEO of Aramex, Sheikha Hanadi Al Thani, Founder and Chairperson of Amwal, Slim Othmani, Vice President of Afia Algeria, and Fadi Michael Bay, Vice President of ExxonMobil Qatar. Student companies were assessed on their ability to demonstrate sound business insight, financial knowledge, marketing support and feasibility studies. In addition, competing students were required to spend one day showcasing their products, presenting them to the public, and holding a private question and answer session with the judging panel in order to present their business in its entirety. Other awards of the night included the FedEx Access Award, which went to RecycloBekia from Egypt, a company which specialises in electronic waste collection that offers green recycling and data destruction; the NBK Award for the Company with
the Best Social Impact which was given to VISIO from Lebanon, a company which aims to educate communities to take care of the environment; and Barwa Bank’s Award for the Best Marketing Plan, received by H2O Meter from Palestine, an environmentally-friendly product which aims to preserve water with high efficiency and low costs. Commenting on this year’s competition, Soraya Salti, Regional Director of INJAZ Al-Arab, said: “Every individual who took part should be proud of their achievement. Each year we are wowed by the unbelievable talent displayed by Arab youth and this year was no different. This event was created to prove to students that entrepreneurship is a viable avenue for achieving economic success, especially given the challenges they face in today’s competitive job market. This competition is about broadening students’ minds, showing them that entrepreneurship is an exciting challenge and a fulfilling career choice.”
shoptalk SYRIA
Investing in Future Syria
KSA
Saudi Build ramps up global participation
T
he 24th International Construction Technology and Building Materials Exhibition, concluded recently with SAR millions worth of trade agreements and projects signed during its four-day run from 11th to 14th November at the Riyadh International Convention and Exhibition Centre. More than 22,650 visitors from all over the world as well as over 800 companies from 35 countries attended the largest business-to-business construction fair in KSA, which was inaugurated by HRH Prince Dr. Mansour Bin Meteb Bin Abdulaziz, the Minister of Municipal & Rural Affairs. Saudi Build 2012 generated strong interest and remarkable international participation as reflected by numerous national and country pavilions from Austria, Belgium, China, Egypt, France, Germany, Italy, Jordan, Korea, Kuwait, Portugal, Spain, Taiwan, Turkey, UAE and the UK. Saudi Build 2012 was concurrently held with Saudi StoneTech – The 14th International Stone and Stone Technology Show, and Saudi Build – The PMV Series 2012, the Third International Exhibition for Construction Equipment, Plant, Machinery and Vehicles. Saudi Stone-Tech was organised by REC in collaboration with Verona Fiere and Confindustria Marmomacchine (Assomarmomacchine). Commenting on the successful participation of German companies at Saudi Build 2012, Sebastian Sons, Official Representative of the German Pavilion representing the German Ministry of Economy &
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Technology, said: “This is our 14th year of participation at Saudi Build, which is one of region’s biggest and most effective specialised events. KSA’s growing interest in German products, its positive market results and population growth combined with several other factors have boosted trade figures between both countries to surpass EUR six billion by 2011, and position Germany as the fourth biggest trade partner of the Kingdom.” “Business cooperation between both countries mainly constitutes German machinery and material exports in the fields of construction, healthcare, automotive, engineering, education and exchange programmes among others,” he added. Saudi Build is the only construction trade show in Saudi Arabia accredited by UFI, the Global Association of the Exhibition Industry. UFI grants certification to top-notch professional events managed by experienced organisers with proven track records in international exhibitions. Providing an exclusive opportunity for local and international construction suppliers to identify new business opportunities in Saudi Arabia’s construction industry, Saudi Build 2012 showcased the latest in building materials and equipment; architectural finishing products; stone, marble and granite products; construction tools and technology; engineering services; infrastructure materials; security and safety systems, among others.
Dubai Chamber of Commerce and Industry recently organised a conference titled Partnership to Invest in Future Syria on 21st November 2012, in Dubai. This one-day conference attracted around 500 regional and international business people, entrepreneurs, policymakers and sectoral experts. The conference marks the second meeting of the Working Group on Economic Recovery and Development, which is co-chaired by the UAE and Germany. One of the four key work streams identified by the Working Group to achieve the vision of a dynamic, free-market Syrian economy is Private Sector Engagement, a stream that was chaired by the UAE. The conference featured participation by leading Syrian and Emirati business leaders and entrepreneurs. A range of international experts on economic and social development also took part in the forum. These experts provided in-depth presentations, and held discussions on the Syrian economy and strategies for supporting the country’s future development and growth. HE Hamad Buamim, Director General, Dubai Chamber, said that the Emirate’s strategic position as a regional business hub makes it an ideal platform to energise private-sector engagement and promote Syria’s economic capacity building. He added that the discussions will helped identify potential partnership opportunities across all sectors of the Syrian economy, including agriculture, manufacturing, energy, construction, services, public administration, healthcare and telecommunications, among others. The conference featured four panel discussions, covering economic capacity building, the role of the private sector, core sector analysis, and the socioeconomic implications of infrastructure investment. The first session Economic Capacity Building: Challenges and Opportunities examined how Syrian economic capacity can be expanded, including by enhancing local skills through knowledge transfer in sectors such as finance, trade and infrastructure. This discussion was informed by a review of relevant best practices in the UAE and internationally. A parallel session, The Role of the Private Sector in Syrian Economic Recovery focused on how the private sector in Syria can be strengthened, drawing upon the experience of countries such as the UAE. During this session, participants discussed strategies to support public-private partnerships and increase foreign direct investment. The third session of the day Sectoral Analysis: Building the Core Sectors of the Economy included a gap analysis of the current situation and future requirements, and highlight opportunities to facilitate foreign investment through innovative models, such as the establishment of Special Economic Zones. In parallel, the fourth session Infrastructure Investment for Social Growth explored how infrastructure development projects can address social challenges, especially in areas such as housing, education and healthcare.
SME About Town
Dubai SME organises market for its members
D
ubai SME, the agency of the Department of Economic Development (DED) mandated to develop the SME sector, will organise a market for innovative products of its
members to mark the UAE’s 41st National Day, as directed by His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai. The market will be held in Wafi from 27th to 29th November, 2012. The initiative stems from the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to support national entrepreneurs and their innovative ideas. Dubai SME is also keen to provide an ideal growth environment for young Emirati business leaders to help them participate in developing the business sector in the UAE. A special committee of Dubai SME has started communicating with members in the UAE to ensure their participation in the Wafi market and to select projects that demonstrate a high degree of professionalism and innovation.
Abdul Baset Al Janahi, Chief Executive Officer, Dubai SME, said: “We thank His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum for his unwavering support to national entrepreneurs. Dubai SME is implementing strategies and initiatives that stimulate innovation and spread an enabling entrepreneurial culture to enhance business confidence and add value to SME development in the country.” Al Janahi added: “Organising a special market for SME products is also a way for Dubai SME and the society to contribute to the National Day celebrations.” The market will mainly include products inspired by the UAE and its 41 st National Day. The exhibits will include souvenirs, clothing bearing patriotic signs and phrases, stationery, car accessories paintings, kids wear with national motifs, as well as school supplies.
IT training centre inaugurated
HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Silicon Oasis Authority (DSOA), inaugurates the new SAP training institute located in Dubai Silicon Oasis (DSO).
In a ceremony held on 6th November, HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Silicon Oasis Authority (DSOA), officially inaugurated SAP’s Training and Development Institute at Dubai Silicon Oasis (DSO), the integrated free zone technology park. The ceremony was attended by Dr. Mohammed Al Zarooni, Vice-Chairman and Chief Executive Officer, DSOA; Shahla Abdul Razak, Deputy CEO of
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SME ADVISOR Middle East
DSOA; Dr. Werner Brandt, Chief Financial Officer and Executive Board Member, SAP; and Sam Alkharrat, Managing Director, SAP MENA. A collaboration between SAP MENA, a subsidiary of SAP AG and DSOA, the venture is designed to serve the entire MENA region through training and certifying SAP consultants, driving partner and customer co-innovation, and enhancing the localised SAP portfolio of solutions.
Set up within a short time since its announcement in March 2012, 20 developers, language experts and product managers have taken up residence at the Training and Development Institute, with notable results including the localisation of SAP‘s Human Capital Management (HCM), Financials (FIN) and Fund Management solutions for the Kingdom of Saudi Arabia’s public sector, as well as HCM and FIN solutions for Qatar’s private sector to further complete SAP’s broad local offerings. SAP is moving forward with plans to establish additional training institutes across the region. Following the inauguration ceremony, HH Al Maktoum witnessed a live Arabic demonstration of the SAP Customer Financial Fact Sheet, a mobile application that allows enterprises to stay up-to-date on the orders and financial status of their customers anywhere, anytime. HH Al Maktoum said: “The Training and Development
Institute serves as a vital investment to up-skill local talent and drive sustainable innovation and growth across the region. While today represents the official inauguration of the UAE’s first IT-specific education and development entity, we can notice the significant progress registered in building operational processes and concrete IT solutions that address country-specific needs. The importance of IT in shaping the MENA region’s future cannot be underestimated and we are proud to partner with SAP to harness its potential in such an effective way.” The Training and Development Institute aims to certify 2,000 new SAP consultants within the next four years, tripling the company’s existing consulting capabilities in the region, as well as accelerating and extending the localisation and Arabisation of SAP solutions to meet fast-growing regional industry needs.
Raising the bar in corporate accountability
The event gathered professionals from the public and private sectors to learn more about best practices in corporate accountability.
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he Dubai Chamber of Commerce and Industry’s Centre for Responsible Business recently organised a seminar on integrated reporting in partnership with the Pearl Initiative, the non-profit organisation aimed at promoting best practices for corporate accountability and transparency. The event was attended by CSR, sustainability, finance and strategy professionals from listed companies, public sector, private companies, state-owned enterprises and family firms, with experience
and interest in financial and non-financial reporting. The seminar looked at what integrated reporting is and how it can help businesses take more sustainable decisions and also enable investors and other stakeholders to understand how an organisation is really performing. A number of companies also shared their best practices in this area with the participants. Speakers at the event included Andrew Robinson, Partner, KPMG and Frank Clary, CSR Director, Agility, among others.
Dr. Belaid Rettab, Senior Director, Economic Research and Sustainable Business Development Sector, Dubai Chamber, stated that the aim of integrated reporting is to clearly and concisely tell the organisation’s stakeholders about the company and its strategy and risks, linking its financial and sustainability performance in a way that gives stakeholders a holistic view of the organisation and its future prospects. Stressing the importance of promoting awareness about these reports, Dr. Rettab said that integrated reporting should connect to the risks and opportunities in line with the company’s drive towards more sustainable development, which ultimately leads to better management of reputational risks, and a stronger confidence in its stakeholders. Said Imelda Dunlop, Executive Director, Pearl Initiative, said: “It is important for us to share good practice experiences between GCC-based companies, so that we can spread locally-relevant practical experience and lessons learned.” He added: “Working with organisations such as the Dubai Chamber allows interaction with a wide business community who are committed to improving their integrated reporting practices right across the region.”
Leveraging trust in business On 7th November, leadership expert, Stephen MR Covey conducted a half-day Live Event at the Ritz Carlton DIFC, entitled Leading at the Speed of Trust. The session was attended by over 150 delegates, including senior executives and CEOs from organisations in the region. At the session, Covey challenged the age-old assumption that trust is merely a soft, social virtue, and instead demonstrated that trust is a hard-edged, economic driver. Covey revealed to the audience how trust could become their most leverage-able tool, giving them a distinct strategic advantage. The session was based on his bestselling book The Speed of Trust, in which he discusses how trust measurably affects both speed and cost of doing business, and is an essential competency in organisations across all industries today. According to Covey, trust is defined as a function of character and competence, which can be created and destroyed. He discussed with the audience how trust is a learnable and measurable skill that makes organisations more profitable, people more promotable, and relationships more energising. Covey highlighted the costs of becoming a low-trust organisation, saying that “Everything slows down in a company with low trust. Organisations are becoming painfully aware of how expensive this is, and they are taking steps to become trusted players from the inside out.” He also revealed the 13 Behaviours of High Trust, which help individuals keep their trustworthiness high on a regular basis.
The event gathered over 250 delegates from the UAE and region who came to hear author Stephen MR Covey speak on the importance of trust in leadership.
e quoted several examples of research studies that showed the importance of high trust organisations. One such study by Watson Wyatt shows that total return to shareholders in high trust organisations is almost three times higher than the return in low trust organisations – a difference of nearly 300%. An education study by Stanford Professor Tony Bryk also reports that schools with high trust have more than a three times higher chance of improving test scores than schools with low trust. Covey asserted that: “The ability to grow, extend, and restore trust with all stakeholders – customers, business partners, investors and co-workers, is the key leadership competency of our new, global economy.”
SME ADVISOR Middle East
December 2012
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CORPORATE LIFESTYLE
Keeping it organised
The Porsche Design P´2150 Roadster 2.2 Lean BriefBag is truly striking, especially for its intelligent detailed solutions. Doing away with superfluous or pointless compartments, the bag is an ideal piece of luggage to accompany managers to the office or on business trips. The lean briefcase is available in Porsche Design Stores and selected specialist retailers around the world. The concept of the brand new briefcase stems from a precise analysis of traditional business luggage and its actual uses. The typical disadvantages were identified: overfilling with unnecessary tools, such as oversized notepads, too long and heavy computer cables, too big inner pockets, too many small compartments for unspecified items. In short, ordinary briefcases often contain too much in general, but too little that is actually necessary.
Executive trends We bring you a sample of the newest products being snapped up by the executive shopper.
Festive fashion Classic Ferrari style
The F1 Leather Holdall Ferrari Niki Lauda No.12. is beautifully handcrafted using Italian leather by Caracalla Bagaglio. Why the number 12? This was the number on the Ferrari 312T, the first single-seater car from the prancing horse manufacturer to be fitted with a transversal gearbox. The medium-sized celebratory bag is great for weekends and allows for a wide opening. The holdall comes with detachable shoulder strap is fully lined, has an internal pocket and fitted with metal studs/feet for protection.
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SME ADVISOR Middle East
This red velvet blazer from Neil Barrett’s Fall and Winter 2012 collection is a great choice for someone who’s looking for a bold outfit for a holiday party or other special occasion. The menswear collection embraces sophistication and a variety of textures and colours. In recent years, the designer’s signature hand aged coats and suits have been worn by a number of A-list celebrities who have made the brand a household name in the world of high-end men’s fashion.
More than a watch
Keep up-to-date with your social network, colleagues, family and friends, whether your phone is in your bag, pocket or anywhere within ten feet. Like a mini version of your SmartPhone, SmartWatch from Sony reflects what is happening in your world and lets you know. Download apps and control your music player direct from your wrist, with wrist straps available in several colours and a choice of digital or analog interface. SmartWatch is compatible with most Android phones.
Personalised and prestigious
Visually impactful and light-as-air, this intrecciato VN version of the iconic messenger has been exclusively designed for Bottega Veneta’s collection of personally monogrammed bags. With its un-lined interior and minimal metal hardware, the bag is perfect on-thego elegance. The front flap is completely woven with breathtaking intrecciato detail all around it. The shoulder strap is adjustable and attached with discreet metal studs. All bags in the collection can be personalised with the owner’s initials.
Digital golf glove Wiimote
The Wii U GamePad controller removes the traditional barriers between you, your games, and your TV by creating a second window into the video game world. It incorporates a 6.2-inch, 16:9 aspect ratio LCD touch screen, as well as traditional button controls and two analog sticks. The GamePad also includes motion control, a front-facing camera, a microphone, stereo speakers, rumble features, a sensor bar, a stylus, and support for Near Field Communication (NFC). It is powered by a rechargeable lithium-ion battery and weighs approximately 1.1 pounds.
The newly advanced SensoGlove now offers a longer battery life for extended use and Automatic Sensitivity Selection for an automatic, more accurate pressure read to ensure a consistently smooth and powerful golf swing for greater distances and lower scores. Made of the highest quality cabretta leather, SensoGlove helps you learn and improve your game. The glove works as a personal golf trainer, helping avoid bad habits and injury. With SensoGlove, all golfers can quickly learn how to hold the club, improving every part of the game, from backswing, downswing, impact, followthrough, to driving, putting and chipping.
SME ADVISOR Middle East
December 2012
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Trade
The quest for
Free Trade Agreements A dramatic shift in global economics has led once inward looking economies to place a great importance on exporting, writes Dr. Ashraf Mahate, Head of Market Intelligence at Dubai Exports.
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Dr. Ashraf Mahate Dubai Exports
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he move towards signing free trade agreements (FTA) has taken on a new surge in recent years. According to the World Trade Organization (WTO), there are currently around 500 FTAs in force with approximately 60 others in various stages of negotiation. One reason for the eagerness to sign FTAs is that there has been a dramatic shift in global economics. The end of colonial rule and the move towards globalisation has changed the relationship between the developed and developing nations. The once inward looking and proimport substitution based economies have changed their stance and place a greater importance on export oriented policies that seek to attract foreign investment. As such, the companies in these countries need to be competitive and hence governments have sought to reduce the cost of doing
SME ADVISOR Middle East
business, including the regulatory and trade related aspects. In the absence of such initiatives, companies who tend to be rather fickle will simply move to another location, taking with them the economic benefits of their presence. An FTA is essentially an agreement between countries to reduce, if not eliminate the tariffs, on the trade of goods and services between them. The principle aim is to move to an environment that allows the firms in each country to grow through exports to the country of the counterparty, with little, if any trade restrictions. Of course, some FTAs tend to be more comprehensive than others in their coverage and objectives. Nevertheless, trade of goods and services forms a key component of all FTAs. With such potential benefits, it is no surprise that almost every single member of the WTO is part of an FTA. The European Union has signed the highest
Trade About Dr. Ashraf Mahate is the Head of Expor t Market Intelligence at Dubai Expor ts (formerly known as the Dubai Expor t Development Corporation), which is an agency of the Dubai Economic Depar tment. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Depar tment. He has written a number of journal ar ticles, chapters in books and edited books in the areas of economics, finance and banking. He has also presented papers at major international conferences.
Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund. Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read Economics at University
TRADE IN GOODS - BILLIONS EUROS (2007)
Source: OECD
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An FTA provides an element of insurance to firms that no new protectionist measures will be implemented against exports from the country. This can lead to further investment as investors seek to profit from the FTA by locating their new or, even existing, ventures in the country.
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number of FTA’s while developing countries constitute the greatest number of FTAs. The reason for this is that the General Agreement on Tariffs and Trade (GATT) system has allowed developing countries access to markets in developed countries, without any reciprocal arrangement. However, the game has now changed and developed countries impose various trade restrictions on the imports from developing countries. Developing countries have understood the importance of global markets for the growth of their firms and to increase foreign investment. Therefore, international trade agreements are simply a mechanism by which firms in these countries can increase their global market share. Of course, these agreements also support the developmental goals of the country.
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College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Char tered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Cer tified Anti-Money Laundering Specialists (ACAMS).
Although FTAs may allow access into foreign markets, the real question is what benefits do they actually bring to a country? First, an FTA has the ability to spur competition in the domestic economy, while at the same time increase foreign investment. Both of these have the added advantage of technology transfer and increased productivity. Second, an FTA provides an element of insurance to firms that no new protectionist measures will be implemented against exports from the country. This can lead to further investment as investors seek to profit from the FTA by locating their new or even existing ventures in the country. However, one needs to bear in mind that although these benefits are possible within an FTA, the country needs to initiate policies which allow firms to capitalise on them. The potential benefits of FTAs are rather persuasive, so much so that the UAE is currently in negotiations on twelve FTAs with 47 countries as a part of the GCC. This is in addition to signing the GCC customs union, the Greater Arab Free Trade Agreement, which covers 17 regional countries; the European Free Trade group, which includes Iceland, Liechtenstein, Norway, Switzerland and most recently with Singapore. There is somewhat of a debate as to whether FTAs actually increase the level of a country’s trade. Some commentators argue that FTAs are simply a method of achieving global free trade through an ever increasing circle of signatories, who with time, overlap and cross over the benefits to other countries. Therefore, FTAs are argued to be a necessary pre-requisite to the increase of a country’s exports, as well as overall global trade. The counter argument is that FTAs simply divert trade away from other countries to those who are part of the agreement. Under this view, FTAs are viewed as not necessarily increasing the volume of trade, but merely diverting it to a different set of countries. In reality, the answer is far more complicated and depends on the relative efficiencies and productivities of the firms in the country. Also, the trade privileges that are accorded under the FTA differ and impact the benefits. Similarly, the rules relating to the certificate of origin can differ greatly from one FTA to another. Taking all of this into account, empirical evidence lends support to the argument that FTAs tend to increase the level of trade between the countries by as much as four times the preFTA level. This implies that there are very good reasons for countries to pursue the goal of signing FTAs. If nothing else, an FTA can at least increase the alliance between trading partners.
Trade
Kazakhstan and the new Silk Road We look at how this emerging market is positioning itself as a trade hub for the Central Asia region.
A Joumana Saad CPI Business
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former republic of the Soviet Union, Kazakhstan has battled with its global image and reputation for decades. However, looking at the state of its economy and its emerging role in global trade today, it’s safe to say that it that has come a long way from a rural country to become one of the most important strategic trade hubs in the Central Asia region, also known as the Commonwealth of Independent States (CIS). Kazakhstan currently ranks 49th on the World Bank’s 2013 Doing Business report, and scores even higher in areas such as the ease of starting a business (25th), investor protection (tenth) and paying taxes (17th). The country also boasts one of the lowest debt ratios in the world and a wealth of natural resources. It is currently the world’s leading uranium producer and the second largest oil producer in the CIS region, not to mention it has a big hand in the production of chemicals and pharmaceuticals. Above all, Kazakhstan’s most important attribute may very well be its strategic and geographic location, which is positioned beautifully on the map, bordering countries like China and Russia, while several other major areas of economic activity are within about four hours distance by plane. The more you delve into the country’s economic profile, you begin to realise how much it has in common
SME ADVISOR Middle East
with a hub like the UAE. Despite its oil and wealth of resources, it has been working hard over the years to diversify its economy, by investing in construction, infrastructure, healthcare and tourism, to name a few industries. So, it’s no surprise why Kazakhstan has been seeking to strengthen its trade ties with the UAE, through several initiatives this year. In September 2012, the country welcomed executives from 30 Dubai-based companies on a trade mission led by Dubai Exports, where a number of them exhibited under at KazBuild 2012, the main construction trade fair held in the country. During the trade mission, the Dubai companies (most of them SMEs representing various industries) were able to meet with potential partners and explore trade opportunities in the market. Days later, Dubai Chamber of Commerce and Industry welcomed a delegation from Kazakhstan for a country briefing session in Dubai. During the session, representatives from the Kazakhstan Chamber of Commerce and Industrym, as well as KazInvest, an investment promotion arm of the government, presented the various advantages and incentives for doing business and exporting in Kazakhstan. “We feel that this was one of the most successful missions of 2012, aligning our strategy to penetrating
The Dubai Exports trade mission to Kazakhstan included 30 UAE-based companies from a variety of industries.
Kazakhstan: At a glance
Second largest oil producer in CIS region
Overall FDI to Kazakhstan exceeded $150 bn
World’s leading uranium producer – 19,450 tU in 2011
USD 26 billion to be invested in transport sector by 2015
Total volume of Kazakhstan’s external trade in 2011 exceeded USD 126 billion
Source: Chamber of Commerce and Industry of Kazakhstan and KazInvest
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new markets,” says Mohammed Al Kamali, Director of Export Market Development at Dubai Exports in an exclusive interview with SME Advisor. “The way that I’ve seen the level of interaction between those companies and their prior commitment to our mission compared to previous missions, it gives us a good indication that the mission was successful. We have worked closely with the Chamber of Commerce in Kazakhstan who has said there is huge potential and a big pipeline companies that want to visit the UAE market,” he added. One of the main reasons behind Dubai’s interest in the country is long-term opportunity it represents in reaching other surrounding markets such as Turkmenistan, Azerbaijan, Belarus and Russia. Kazakhstan today is in a real transitory place, as it moves forward with its mission to build itself up to become a regional hub, very much like Dubai and the UAE has done over the past few decades. “It’s these similarities between the UAE and Kazakhstan, Mohammed says, that make it an important trading and economic partner. “If we work together in terms of creating this corridor between us, it may actually benefit the SME sector. The big players are operating in a much bigger arena and they already know about these kinds of things. We think it’s important for SMEs to look through this market and beyond this market,” says Mohammed. SME owners who took part in Dubai Chamber session were also briefed on the country’s nearly-finished railway dubbed the “New Silk Railroad” that travels through southern Kazakhstan and links with China. The ZhetygenKorgas railway has garnered a lot of international interest since it was first announced. The railway is expected to begin operations at the end of the year. During the session, Kairat Karmanov, Deputy Chairman of the Board, provided businesses with a closer look at the country’s key ports and free zones. He also spoke of negotiations between Kazakhstan
The way that I’ve seen the level of interaction between those companies and their prior commitment to our mission compared to previous missions, it gives us a good indication that the mission was successful.
and DP World and hinted at the possibility of formal agreements and partnerships on the horizon with regards to the management and operation of facilities. Among the most important areas of focus is the new economic zone of Khorgos, which was established last year, and has become a key free zone for exporters in the food production, chemical and building materials industry. “Khorgos on Chinese border is going to be one of the biggest free zone that feeds Kazakhstan through China, and the Chinese are using it to expand to Eastern Europe. This is giving us an indication of the potential growth in this market. It will give a good boost to the economy,” adds Mohammed. As a result of the trade mission in Kazakhstan and high-level meetings with officials, he sees the eagerness on the part of the government in working with the Arab World, and adopting the successful models implemented by the UAE. “The market is trying to change its own culture. As it emerged out of Soviet Union, people had the impression that it was a tough market, but I think this is something that they are trying to change and they are working hard to attract investment.”
Mohammed Al Kamali
SME ADVISOR Middle East
December 2012
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BANKING FOR BUSINESS
Sky high ambition The 2012 ADCB Ambition Award attracted a number of innovative business ideas aimed at addressing market demands and consumer trends.
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Joumana Saad CPI Business
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n a very short amount of time, Colette Griplas has been able to cross off a number of achievements on her checklist. With the intention of setting up her business, she moved to Dubai in January of this year. After developing her website and getting all the moving parts in place for her business Specs Addict, she found out about the Emirates Woman of the Year Awards and entertained the idea of entering a nomination. “I saw the awards advertised and thought it might not be right for me as we are such a new business. Then I saw the ADCB Ambition Award, which is more in line with entrepreneurship, and thought it was a perfect opportunity. We ran an aggressive campaign for public voting, so it’s been quite a process,” she says. Colette, an Australian native, says it was Dubai’s flourishing ecosystem for entrepreneurs that initially attracted her to the Emirate, as similar support mechanisms were very hard to come by in her home
SME ADVISOR Middle East
country. She explains how she was able to come up to speed very quickly in a unique and enabling business environment, and learn a lot of important lessons along the way. “Handling all of the process myself, I’ve seen the whole spectrum of Dubai and have learned from my experiences attending events learning about the logistics side of my business and also visiting the factory where the products are made,” says Colette. Much like previous winners of the prestigious award, Colette prides herself on her dynamic background and her ability to blend tradition with fashion and new consumer demands. To describe her business in a nutshell, she labels it as a flexible fashion product everyone can use. “We’ve taken a very old idea, embraced consumer purchasing and e-commerce, and on top of that we’ve incorporated new technology with a virtual mirror on our website where users can try on different styles by using a webcam and then
share it through social media. There are no geographical boundaries, and glasses are a universal product that appeal to all consumer groups,” she adds. Winners of the annual ADCB Ambition Award receive USD 10,000 in cash, in addition to advisory services from the bank aimed at helping these entrepreneurs make wise decisions on how to spend the prize money. In recent years, there has been a rise in the number of awards and programmes in the UAE dedicated to SMEs and entrepreneurs. However, only a handful of them offer rewards sizable enough to really take their business to the next level. “It provides a huge amount of value. Being recognised as an ambitious woman is really the highest compliment I could be paid. Standing out amongst other competent businesswomen, and the fact that the judges believe in the
vision of my business, it’s a truly humbling experience,” Colette adds. She plans to use the prize money to open up a showroom in the UAE, where her clients and target customers can familiarise themselves with the products in a physical environment. This is the fourth year Abu Dhabi Commercial Bank (ADCB) has sponsored the Emirates Woman of the Year Awards and the Ambition Award, in partnership with INSEAD Business School. From the ambitious woman looking to start her own business, to the women who have excelled in their fields, the Emirates Woman of the Year awards are an annual reminder of the contribution women make to the development of their communities and their active contribution to the economy. The awards have also attracted a growing number of Emirati women entrepreneurs, who have gained exposure through the initiative and become examples in their own communities. “We’ve been involved in this award to prove our commitment to the entrepreneurs who have ambitions to fulfill. These values apply to our products and services offered to the community. This is one of our endeavours to celebrate the ambitions that we present to the market. In addition to these kinds of activities, we also support SMEs through financing and advisory services to help them make their dreams a reality,” says Dr. Majdi El Muhdi, Head of Corporate Communications, ADCB. Among the finalists for the ADCB Ambition Award this year were Deborah Henning, Founder of Shoreditch Muse, a platform for designers to develop
Colette Griplas wins the 2012 ADCB Ambition Award for her business, Specs Addict, an online retailer of sunglasses and glasses that allows users to virtually try on different styles and purchase them online.
and sell their collections; Kate McGill, Founder of pokkadotstripes.com, an online marketplace for families who are looking to buy or sell pre-loved baby items; and Mahyra Roy, Co-Founder of Catalyst Concepts, a provider of professional and life coaching services. What sets the Ambition Award apart from the other awards, Majdi says, is the added value and confidence that it gives a young business still trying to find its way. “It’s about
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It provides a huge amount of value. Being recognised as an ambitious woman is really the highest compliment I could be paid. Standing out amongst other competent businesswomen, and the fact that the judges believe in the vision of my business, it’s a truly humbling experience.
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The finalists for the 2012 Ambition Award presented innovative business ideas tapping into a variety of consumer and business needs.
the journey these women go through from the moment they come up with their business idea to the moment when they are being recognised and crowned on stage. The winners are then faced with the task of investing the money to enrich and support their businesses,” he says. He added that the bank keeps in touch with all of the award winners year after year, and encourages them to share their success stories with a wider audience.
SME ADVISOR Middle East
December 2012
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MANAGEMENT
Seeing the big picture John Lincoln, author of Connect The Dots, shares a chapter from his new book, wherein he draws personal lessons he’s learned throughout his career.
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SME ADVISOR Middle East
I John Lincoln du
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t was a typical San Francisco Bay morning, cool, bright and sunny, that day in the spring of 1999. I was on a yacht at the Half Moon Bay yacht club with my business partner John Thiele. With us was Dinesh Khurana, my other co-founder and business partner. As fellow founders of my e-learning start up, we were discussing our equity structure, preferred shareholder rights, stock option plan, our employees and the potential management team we could get on board. We were also discussing at length the implications of the proposed commercial model, and were gleefully contemplating an IPO exit strategy. As I look back, I am stupendously flabbergasted by the audacity of my idea. I had just resigned from my well-paying expatriate job in Tokyo, Japan. With my resignation went my very generous salary, bonuses and stock options. My wife Carol had to adjust back to life in the Bay area. On top of that, she was expecting our third child who was conceived in Tokyo. I had to buy
Instead of spending all our funds developing those lessons, I should have hired two or three competent sales account managers to target the human resources function in large companies. Had I done that, I would, in all probability, have sustained and grown the business.
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a house and two cars at the same time – one for my family’s use and the other for mine. We also had to settle our kids back to school in the US. Yes, on top of all this, I was crazy enough to invest over USD 600,000 in cash and kind into a business to be launched in Osaka, Japan. As I think about this last chapter, I can’t but help remember the dots that I then spectacularly failed to connect. Yes indeed, my partners and I had a purposeful exit strategy. But come to think of it now, it was a piein-the sky dream. The dots that I did not connect!
Flat rate and high speed Internet access was nascent in Japan at that time. This was a pre-requisite to ensuring that my customers could enjoy unfettered online access. On top of that, we had developed 150 lessons for the Japanese market. Hindsight is certainly 20/20. I should have just developed about five or ten lessons and gone after the B2B market versus trying to build a consumer brand with the paltry start-up capital that I had.
in Now o res t s k o bo
Connect The Dots, by John Lincoln, is a playbook for the modern day entrepreneur and SME, which provides valuable advice and business survival tips. Whether you are young or old, female or male, or about to start your own business or merely thinking about starting your own venture, this book will help you plan accordingly.
Instead of spending all our funds developing those lessons, I should have hired two or three competent sales account managers to target the human resources function in large companies. Had I done that, I would, in all probability, have sustained and grown the business. I again failed to connect the dots as I should not have hired that many teachers to handle the calls from students in my call centre. I had miserably failed in my forecasting and planning – and therefore, in my cash management. I certainly should not have hired one useless Chief Technology Officer who personally contributed to about eight months of delay to my launch plan. This particular person was competent in his function. He absolutely had no idea on how to manage a team. The infighting and back stabbing in his team was unbelievable. I should have hired his replacement, Kristina Sterling, much sooner. Further, I should not have hired all the artists and Flash programmers, but rather brought them on as contractors on a variable scheme. I should have fired at least two of my top management team who were just sucking up my bandwidth with their incompetency. I should have stayed focused on the core basis of the business model, developing the e-learning content, rather than trying to create a world-famous learning portal with games, exam preparation classes and auction and others. In hindsight, I should probably have not gone and entered into contracts with incompetent and unscrupulous vendors and offshore partners who kept changing my cost model. Last but not least, I personally should have stayed away from the business once the funding and management team was in place. As the single largest investor, I let my ego and emotions overcome the better of me! The dots that I connected well
However, I did connect some dots well. I had a business plan and was able to raise more than USD three million in funding from individual investors. My partners and the majority of the top management team that I hired were dedicated and superbly competent individuals. We had proper administration, accounting and legal contracts. This is not a trivial issue, as when we decided to shut the company, we paid off all the preferred shareholders USD 0.13 on the dollar for their investments. We renegotiated with all our creditors and probably paid about USD 0.20 to the dollar on moneys owed to them. As common stock holders, my two partners, John and Dinesh, and I did not get a single cent back. On top of that, John and I had forgone our entire salaries for stock options that were worthless. But in the end, we were able to walk out of it cleanly. We filed all the necessary papers and kept our records for ten years (although California law only required us to keep records for seven years). We retrenched our employees in Osaka, Japan and in Foster City California. This was all done legally. You see, when I had this great idea for the business, nothing could have stopped me from jumping into this bubbling frying pan. Despite my international experience of being a successful commercial manager and marketer, someone who had even been a protagonist
SME ADVISOR Middle East
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MANAGEMENT About With more than 30 years of senior level management experience in start-ups, telecom giants and technology companies across the globe, John Lincoln has experienced success and failures from boom to bust. Currently, he is the Vice President – Enterprise Marketing for du in the UAE and has representative responsibility to deliver the B2B (enterprise, large corporate and SMEs) revenue and profitability for this telecommunications company that has changed the face of public telecommunications in one of the world’s fastest growing regions. John has witnessed the early days of telecommunications when a few kb/sec was deemed as high speed access. John foresaw the huge potential of the telecommunications industry as early as the 1990s, and therefore
decided to pursue a Master of Science degree in Telecommunications from Golden Gate University, San Francisco, after completing his MBA from the same institution. A transplanted American who has worked in countries such as Japan, India, the UK, Malaysia, Thailand and Brazil, apart from the US, John has a truly global perspective. He has held senior management positions in global companies such as Vodafone, Japan Telecom, Bharti Airtel and AT & T and has had the privilege of hiring and managing large multicultural teams and working in different and very challenging market conditions. Through it all, John has grown and learnt from his – and other people’s – successes and failures. He started and ran small businesses, risking a lot of his capital and working round-the-clock. But the businesses failed, because he “didn’t know what
he knows now”.That led to him embarking on a corporate career, which he now cherishes. A keen and widely read blogger (http://www.johnlincoln.biz), John turns his work and life experiences into easy-to-read and easy-to-adapt essays and guidelines. He is also a regular contributor to the SME Advisor, Middle East, Kippreport and the Intelligent SME, three publications read widely by the multicultural business community in the region. John lives between beautiful San Francisco (where his family resides) and never-sleeping Dubai and travels across the world. He once used to fly single engine planes for fun, but now settles for voracious reading of business books, attempting to bridge the culture gap at a personal level and getting up to date with the latest technology and business ideas.
in a major business school case study, I made colossal mistakes. I certainly hadn’t connected all the dots. In hindsight, I wish I had. This entrepreneurial experience taught me many valuable lessons on human frailties, market, completion, branding, commercial models, equity structuring and others.
The ultimate guide
There are many dots that you will have to connect to sustain and grow. Some dots just cannot be disconnected! Here are the 30 dots that MUST BE CONNECTED!
1. What are your exit strategies? Are you positioning yourself to be acquired? To be sold? Do you have plans for an IPO? 2. Do you have a multi-scenario business plan? 3. Do you have adequate funding? What are your sources of funding? 4. Have you considered alternate methods of funding? 5. Do you know who will be your primary source of funding at every stage of your business? 6. How is your cash flow managed? Do you have a daily view on your cash situation? Do you have enough money to pay your employees, rent, critical suppliers and bank obligations? Have you stress-tested your cash flow situation? Can you survive in the worst case scenario? If not, do you have contingency plans? 7. Are you over dependent on a single or a few customers? Is this over dependency acceptable risk for your business? 8. Are your key employees emotionally intelligent to deal with the “white water” environment of your small business? 9. Do you know your market and industry structure? 10. What is your incremental value proposition and differentiation relative to your competition? 11. Do you have a purposeful pricing strategy and tactic? 12. Have you designed the end-to- end intentional experience across all touch points that your customers will interact? 13. Do you have branding strategy that all stakeholders of your company can relate to? 14. Do you know how you will engage in a price war if there is one in your industry or market? 15. Are your sales and marketing folks competent to meet your business growth plans?
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So how do you reach nirvana on sustaining and growing your business? Is the profit bliss achievable? What are the dots that an entrepreneur or a SME owner or investor must connect before venturing into the perilous world of entrepreneurship? How do you reach that beatific “seventh heaven”?
16. Are your sales teams’ compensated to drive wins from your competition? 17. How will you reach the market? Is there an opportunity to create demand through channels other than your sales team? 18. Have you segmented your target customer base? Do you have differentiated propositions and communications for the different segments? 19. Do your marketing communications address the vulnerabilities of human beings? Is it a conscious decision or is it an afterthought? 20. Do you have purposeful strategy to target women? Is it differentiated from your other marketing efforts? 21. Have you considered the end-to-end operations of your business? 22. Do you have policies, procedures and processes that drive productivity in your business? 23. Do you have effective information and telecommunications systems? 24. Do you know where 80% of your cash flow and profits come from? 25. Do you have good, truthful and useful managers? 26. Are you conducting yourself as a leader or are you just a task master? 27. Do you know the set of activities that accentuate your business performance? 28. Do you know the set of activities that diminish your business performance? 29. Do you know how much your business is potentially worth today? Do you know the key variables that drive the value of your business? 30. Is this business really for you?
An ideas & innovation company
Driving Your Business Forward
JLT, Dubai - UAE www.GoMadideas.com
T +971 4 4471 200 info@GoMadideas.com
MANAGEMENT
Taking over the reins With younger generations starting to get active in family-owned businesses, we look at some of the best ways to ensure a smooth transition.
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Joumana Saad CPI Business
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amily-owned companies, whether they are large or small, make up a majority of businesses in the region. Many of them are relatively young and only beginning to experience issues as the founders and owners bring in younger generations. Some of the most common challenges they are facing revolve around succession planning, a growing number of family members and governance structure. There are also cultural and religious aspects that make this region unique in its way of handling matters in business and family, relevant to transfer of ownership and assets. RSM Dahman, an accounting and auditing firm based in the UAE and a part of RSM International, recently held workshops in Dubai and Abu Dhabi to educate business owners about best practices in managing a sustainable family-owned business. The Managing the Family Enterprise workshops, in partnership with Eureka Financial and Habib Al Mulla Group, were organised to treatise these challenges in the Arab business world. The workshops were attended by leading first and second
SME ADVISOR Middle East
generations of UAE-based family business owners, many of whom were SMEs. Speaking on the topic during a presentation, Bill Humphreys, Managing Consultant at Eureka Financial, outlined the various parts of a traditional family business, and the recommended practices and procedures involved in keeping the business under control and transparent. Bill points out that unlike other businesses, family members who work together have a better understanding of what to expect from each other, and thus could anticipate areas of conflict that may arise in advance. “Conflict is inevitable, and in fact, patterns of conflict are becoming more and more predictable. Governance systems, planning and transparent communication are essential tools for any family business looking to endure beyond the first generation,� Bill says. Formalising process and procedure
Many of the issues and concerns that were addressed by businesses at the workshop centred on the dynamics and procedures involved with succession planning as well
MANAGEMENT investing the time into developing that successor, as well as creating a realistic timetable of when that person will take over the business. Typically, this timeframe is about two to three years, which allows the successor to become educated and fully immersed in the day-to-day operations. Engagement and evolution
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L - R: Dahman Al Dahman, Founding Partner, RSM Dahman; Bill Humphreys, Trainer and Consultant, Eureka Financials; Rakesh Pardasani, Partner, RSM Dahman.
In more mature markets, where businesses are already in the fifth or sixth generation, there already exists a fragmentation in the family. Families in this region are still relatively young businesses that are still evolving. With regards to corporate governance, there is still a lot of catching up to do in terms of auditing and accounting practices.
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as the creation of proper structures to ensure a smooth passage from one generation to the next. In a fast-paced marketplace, businesses today need to constantly evolve their strategies and way of thinking, which requires all stakeholders (family members) to have a clear understanding of the business’ vision, strategy and goals. This is where interaction between family members is of utmost importance, and represents an area where many businesses run into issues. For young SMEs who are heavily involved in the dayto-day workings of their business, Bill advises them to start this formalisation process early by first adopting a family constitution which outlines the overall purpose of the family members being in business together. The next step would be for the members to dictate the role of the owner and family members, bloodline or spouses, dividend policy, the transfer of ownership, as well as the decision making process to be followed. Other aspects that will need to be addressed and agreed upon are company policies, the role, composition and selection of a Board of Directors, and the process of communication between the family and the board. Succession planning
As the workshop presentation suggested, a typical succession planning process can get quite complex. Some of the biggest obstacles in this category occur when family members are resistant to change and want to hold onto control of the business. There’s also the difficult decision of choosing the right successor (this often means choosing between two or more siblings),
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Bill is a believer that a family business in this region has a number of advantages on their side when it comes to management. In most cases, they are still very much a part of the core business and feel a sense of belonging to the brand. His advice to them is to line up their pieces as early as possible, before they reach a point where the business beings to lose its focus. “In more mature markets, where businesses are already in the fifth or sixth generation, there already exists a fragmentation in the family. Families in this region are still relatively young businesses that are still evolving. With regards to corporate governance, there still is a lot of catching up to do in terms of auditing and accounting practices,” he says. Families in this region are still relatively young businesses that are still evolving, but to with regards to corporate governance there is still a lot of catching up to do in terms of auditing and accounting practices,” says Bill. In the case of SMEs, it’s often the case that the owner is the manager. As time passes and a second generation gets involved, Bill says he tends to see people who own the business no longer manage it. With the introduction of third party managers, it’s extremely important that constitutions are in place to clarify individual management roles. Grooming the next generation
Managing Generation Y and younger professionals has proven challenging for companies of all types. Add the fact that an owner may have to manage a son, daughter or younger sibling, and things can get complicated. For one, younger professionals today are not motivated easily, and have a value proposition that differs greatly from their predecessors. They have developed a sense of entitlement at an early age, while their parents most likely have endured a certain degree of struggle at the same point in their lives. This generation also tends to lose focus quickly, and shift to whatever they find interesting at that moment in time. The best way to address these types of challenges, Bill says, is to make sure the company culture and vision is instilled into younger family members at an early age, so that the overall goals remained aligned as time goes on. After 20 years, Saeed Almalik, President of Middle East Fuji, is now reaching the stage where he wants his son to take on a more active role in the family business, which is a UAE provider of marine and oilfield services. Before that happens, he says he prefers that his son develops real-life experience outside of the company to find his out what his strengths are. “I’m a believer that you can’t just provide them with a sense of entitlement; younger generations need to get an education and experience before coming into management,” he says. “You are the best person to protect your business, so getting younger generations exposed and interested in the business at a young age is a good first step to develop a sense of accountability.”
Entrepreneurship
Stepping into the
spotlight After being named the winner of du’s hit TV show The Entrepreneur, Nabbesh.com Founder, Loulou Khazen Baz, is hoping to leverage the extra exposure to build up a profitable business.
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Joumana Saad CPI Business
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t a time when one would be taking in their moment of fame, Loulou Khazen Baz is working tirelessly on developing new features on her website Nabbesh.com. Since winning the televised competition, she has tried, tested, and evolved her business to become simpler and more user-friendly. It has been one year since she launched the first version of Nabbesh.com, a website aimed at creating job opportunities through skills listing. The original concept proved viable enough to be pitched to a panel of distinguished judges and more importantly, to an audience of millions. A Lebanese national who has lived in Dubai for ten years, Loulou has worked in a number of fields. During her most recent role working for a venture capital firm, she saw firsthand the hardships entrepreneurs faced in getting investor attention and funding. She knew deep down that she would never be able to start her own venture, unless she could devote all of her time to it. She left her job and began looking for freelance work online, and in the process discovered what she saw as a real market gap that could be filled.
The fact that the show was very new, we really didn’t know what to expect. I didn’t know that I had to pitch four times and that every pitch had to be different. I now see it as a good thing to go through that kind of pressure by the judges early on, because pressure is something that every entrepreneur faces eventually.
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“It’s a global need; the right to be employed and earn money where necessary. In this region, employment is a very big issue and women are still not very included in the workforce. So, this is a good platform for women who want to start families, and women who do not want to work from 9:00 am to 7:00 pm,” says Loulou. “The beauty about Nabbesh, is that I look at it every night and uncover what skills are out there. You never hear about these peoples and their unique skills.” What sets Nabbesh apart from other job sites is its practical and simple format. Registering your profile and listing your skills takes only a few minutes. Immediately categorised by your interests and skills, you can view updates on who is hiring and what exactly they’re looking for. Currently, Loulou says her team is working on formalising the process for the employer and the job seeker, by creating a system that protects the rights of both parties. The website will also begin to introduce ways for users to upload their credentials, portfolios and certifications to display the quality of their work. She checks the statistics on the site daily, to see how many jobs are being posted, and
what people are looking for. As more and more people begin to use the website, she hopes to one day expand throughout the MENA region and uncover new market demands and trends by analysing user data and attitudes. Over the last few years, the number of startup competitions and accelerator programmes has steadily climbed, creating more opportunities for new and innovative websites like Nabbesh. Loulou, however, opted out of entering into just any competition, and played her cards wisely by going for The Entrepreneur. “The competition had a lot of value to it, so even if you didn’t win, the exposure you get is valuable,” she says. “At the beginning stages of building up your business
The winning idea Nabbesh is a social network aimed at promoting work life-balance by giving people a platform to use their skills and practice their passions. Like-minded people can connect, communicate, work and collaborate based on their interests or their proximity to each other. Nabbesh aims to make a positive impact in the Middle East and North Africa by creating opportunities that enable dialogue, connections and collaboration between people, and converting those opportunities into income, outreach, education and experience.
you have to use your time very wisely. You can put a lot of effort into something smaller, or focus on things that will help you a lot more in the long run,” she says. “The fact that the show was very new, we really didn’t know what to expect. I didn’t know that I had to pitch four times and that every pitch had to be different. I now see it as a good thing to go through that kind of pressure by the judges early on, because pressure is something that every entrepreneur faces eventually.” One video, five pitches and three upgrades later, Nabbesh’s name is now out there for everyone to discover. Knowing beforehand that the show would air in quarter four, Loulou says was a real motivator for her and her team to better prepare themselves for the time when people would be actively searching for the
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Entrepreneurship
L - R: The judging panel included Abdul Basit Al Janahi, CEO, Dubai SME; Muna Al Gurg, Director of Retail, Easa Saleh Al Gurg Group; Yogesh Mehtta, Managing Director, Petrochem Middle East; and Nisreen Shocair, President, Virgin Megastore Middle East
website. “When you’re in startup mode, you’re sort of allowed to make a few mistakes. The show put us on a higher platform, where we knew we couldn’t make mistakes anymore. It also gave us a timeframe for us to achieve the goals we wanted to reach, and it made us very disciplined.” Preparing for her final pitch on the show, she remembers feeling exhausted and uncertain how she would be able to wow the judges once again. During the last episode, she learned something new about herself—that she performs her best while under pressure. Competing in the top three, she delivered what she calls her “best pitch yet” as she presented her action plan for Nabbesh, as well as how she will tap into the needs of her target user groups. Going into detail, she described how the platform would serve the needs of women and young users, who are looking for more flexible job opportunities, while SMEs could use the site to hire freelancers and save time and money in the process. Although confident throughout the competition, Loulou admits feeling pretty surprised when her name was called as the winner. “I really knew that I had something really good and knew I had a good chance, but I didn’t think I would win. So, when they said I won, it was an amazing feeling.” When it came down to the top three contestants, Loulou went up against Abdelghani Sinno, Founder of FLYconnect, a USB device with wireless capabilities, as
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for a business looking to build a strong foundation. At the same time, it also allows a considerable amount of freedom for an entrepreneur to build up their business as they see fit—a definite luxury, as many entrepreneurs today find themselves tied down to the demands of venture capitalists and investors.
Winner receives:
When you’re in startup mode, you’re sort of allowed to make a few mistakes. The show put us on a higher platform, where we knew we couldn’t make mistakes anymore. It also gave us a timeframe for us to achieve the goals we wanted to reach, and it made us very disciplined.”
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well as Mohammed Kazim and Faisal Lutfi, Co-Founders of Allinque, a personal assistance service that covers work and personal tasks. To this day, she keeps in touch with her fellow contestants and says she has formed so many great relationships as a result of the show. In addition to AED one million, Loulou received another AED one million in consulting services and office space from leading companies such as Ernst & Young, Leo Burnett, Dubai Silicon Oasis and Wamda. The value of such a prize is unique as it provides real financial support
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The future for Nabbesh is looking bright as Loulou begins to put an action plan together for the next few years. Being fortunate enough to witness such rapid success, the responsibility will now be on Loulou and her team to keep up the pace and take Nabbesh to the next level. “We’ve grown a lot since then and are now focusing on building a good team, acquiring talent and marketing a lot more, so you will hear a lot more about us soon,” Loulou says. “I don’t think we should keep calling ourselves a startup for a long time, and starting thinking about Nabbesh as a real company.”
Entrepreneurship
Balancing act We speak with three budding entrepreneurs about the challenges of building a business while still working full-time.
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Joumana Saad CPI Business
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hen it comes to starting your own venture, there are two schools of thought with regards to the amount of time that should be invested. Most people are of the belief that devoting all of your time into it is an absolute must in driving the growth of the business. Others believe it to be wiser to keep your day job, especially if it’s useful to the nature of your startup, and from there develop the business organically until you are ready to pitch it to investors. Shant Oknayan is a proponent of the latter approach, and has been working at just that over the past few years. Working full-time for a leading technology company in Dubai, he also is one of the founding partners of GlamBox, an online retailer of beauty and fragrance products. His inspiration came from his experience listening to startup pitches at an ArabNet conference in 2011. The four friends, who previously worked together at a management consultancy, came to the conclusion that they could use their combined experience to come up with a business idea that would fill a market gap existing in the MENA region. “We came across a product in the US that delivers beauty products to people’s homes and did some research here and saw that the beauty industry in the Middle East is huge. On average, women globally spend USD four on beauty products a month; in this region they spend USD 34 per month. Dubai is the second most saturated market after London in terms of makeup and fragrances, yet women are underserved with regards to the availability of online purchasing and content,” says Shant.
SME ADVISOR Middle East
Within a few months, the brainchild of a beauty retail website was launched. The idea was to create an online beauty hub where women can try samples and decide to purchase a full sized product via the online store. With a GlamBox subscription, users will automatically receive a box at their doorstep which contains travel-sized sample of the latest beauty products from luxury brands and private labels. Once plugged into GlamBox website, the users become part of a community where they can share their voice and also get editorial content and advice from beauty experts. Since GlamBox’s launch in January of this year, it has seen a steady level of growth and interest. Despite this being a positive thing, Shant says his team has been watching the business closely to be sure that it doesn’t overstretch its capabilities. In order for him and his team to go full-time in the business, they are looking to first secure funding from investors. Although it’s extremely difficult managing all of these moving parts on top of a demanding work schedule; Shant says it’s the shared passion for the business that makes it all possible. “There are a lot of sleepless nights, and a lot of weekends spent working. But we are so passionate about the business, because it’s such a vibrant exciting time to be a startup in the Middle East. So, it’s a pleasure for us to be doing this. We do have a full time team that handles the day-to-day operations, but when it comes to strategic decisions, the four of us are constantly meeting in our spare time to take the business forward,” says Shant. He is also believes that the myth of mixing friendship with business is simply not true, and says in his case, it’s the trust that keeps things on track. “There’s a
trust there that you wouldn’t have otherwise; I can trust them 100% that they will put the benefit of the business before themselves. I think we’ve been extremely mature in making sure we stay friends and close and at the same time being business partners. We can keep it separate,” he says. Mixing family with business is another issue altogether. Last year, Sian Rowlands and her two sisters launched My Ex Wardrobe, a provider of physical and online avenues for people to sell their second-hand clothes and accessories. Only months after launching, the startup was able to secure a number of awards and media attentions in the process. Although the extra attention was exciting, the three women were limited in their ability to move the brand forward, as all three founding partners all hold day jobs working in different industries. Sian says, their close relationship and mutual trust is what keeps the business up and running. “It’s quite beneficial that it is three of us who are all putting in the work together, and we rely on each other quite a lot. We work in different industries and have different time commitments, so we can always rely on someone having that spare time when the other is in work, it’s very difficult to juggle it, as you want to spend that extra time putting your ideas to work into the business, but at the same time, you have work commitments,” says Sian. The three sisters have thought about the day when they would all be in the business full time together, but have put that idea on hold for now. They are realistic about their goals and expectations and are not concerning about setting quick targets. “What we’re waiting for is the right balance between how much time we invest and hope much we actually get out of it in order to make it feasible opportunity for all of us. What we’ll probably do is have someone take the plunge and have the other two do the same with time. We agreed in the beginning that we wanted to grow organically and it’s really about what’s working best at the time and what opportunities come to surface,” she adds. Having tried many times to launch a startup of his own, Simon Hudson has shifted his focus into creating a platform that would help other entrepreneurs and also allow him a better chance to succeed with his own. Only a few months ago, he launched ThinkTank, which he dubs as a record label for ideas. Just as artists look to be picked up by a record label, he says an idea very similarly needs a mentor or angel investor to help guide them and open up new doors for their venture. “Having lived in both the USA and UK for a number of years I know the importance of having a tunnel into areas such as Silicon Valley. I approached Startup Grind and proposed setting up a Dubai chapter that would allow us here in the Middle East the opportunity to showcase
Sian Rowlands (right) and her two sisters co-founded My Ex Wardrobe while still working full-time.
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Shant Oknayan, Co-Founder, GlamBox, is waiting to secure investment before going full-time into the business.
our startup community. I believe Dubai is the next Silicon Valley and that we are only a short time away from witnessing the next major global startup success story,” says Simon. By day, Simon works for a popular online discounting website. In his spare time, he’s organising events bringing together successful entrepreneurs with aspiring ones looking to gain insights and advice. He’s also working on developing the online component of Think Tank, which is a network that facilitates interaction between entrepreneurs, mentors and investors. In Simon’s case, he says he’s fortunate to work for a company that’s very supportive of his venture. The first few events he has held were even sponsored by his
There are a lot of sleepless nights, and a lot of weekends spent working. But we are so passionate about the business, because it’s such a vibrant exciting time to be a startup in the Middle East. So, it’s a pleasure for us to be doing this.
company. In today’s demanding business world, not every employee gets the luxury to do such a thing. “I am lucky that I work for a company that fully supports entrepreneurship and is behind me 100%. As long as I complete my daily tasks at work they allow me the freedom to push the ThinkTank concept.”
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LEGAL
David Yates of Al Tamimi & Co. highlights some key issues in the context of technology contracts, which may come as a surprise to lawyers and clients more familiar with the laws of their home countries.
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David Yates Al Tamimi & Co.
rom time-to-time we act for foreign corporations who are seeking to supply technology solutions to customers in the UAE and who wish to do so using their standard technology supply contracts. Generally speaking, these standard contracts have been prepared in the UK, Europe or, the United States, having regard to local laws applicable to the foreign corporation in its home country. The Governing Law clause tends to be towards the back of the contract, and the parties may come to consider this towards the end of the negotiations. There may be a tendency on the part of the foreign corporation, in the interests of closing the deal, to agree with the request of the local customer that the contract be governed by UAE law (with the UAE courts having jurisdiction). That could be an entirely reasonable commercial approach for the foreign corporation to take. What can be of concern is when the foreign corporation takes the view that, if there is a dispute under the contract at a later time, this choice of UAE law and UAE courts
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If there is no agreement in the contract for the payment of interest, then the judicial practice in the Emirate of Dubai is that interest will be calculated at the rate of 9% per annum, with effect from the date the debt fell due for payment.
in the first place. In other words, liquidated damages are not, per se, a cause of action for a claim for damages. Rather, they can only be invoked for establishing the amount of damages claimed. Recent cases have shown that something referred to as a penalty, being a more strict imposition of an amount regardless of whether a loss has been incurred, may not be upheld by a court, whereas a liquidated damages clause intended to reasonably quantify the loss likely suffered is more likely to be upheld. Interest on claims
Vendors often include interest clauses for late payments in supply contracts (although sometimes the interest may be referred to as an administrative fee or something similar). If the amount claimed was quantified at the time the claim was filed, then the court will grant to the claimant, in the money judgment, interest as from the time of filing the claim (or the date of judgment, it varies) until final payment. If the debt is confirmed by a contract, the court may even grant interest on the debt from the time the claimed amount became due until final payment. Under the UAE Commercial Code, if the subject matter of the commercial obligation is a sum of money of ascertained amount at the time the obligation arises,
is unlikely to make much of a difference to the foreign corporation’s position. That, quite simply, is not the case. We do not have the space here to provide a detailed comparison of UAE law with the laws of other key technology-originating countries, such as the US or the UK (although we are asked to provide such advices on a case-by-case basis). Liquidated damages
Liquidated damages clauses are widely used in technology contracts. Article 390 of the UAE Civil Code (translated) states that: “(1) The contracting parties may fix the amount of compensation in advance by making a provision therefore in the contract or in a subsequent agreement, subject to the provisions of the law. (2) The judge may in all cases, upon the application of either of the parties, vary such agreement so as to make the compensation equal to the loss, and any agreement to the contrary shall be void.” This gives the Court the ultimate right (upon the application of one of the parties) to examine the level of pre-agreed, fixed compensation and increase or decrease the amount to reflect the actual loss suffered by a party. Liquidated damages are deemed to be ancillary contractual obligations, in the sense that they will not apply unless a primary obligation has been established
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LEGAL About David joined Al Tamimi & Company in January 2010. Prior to that he was a par tner with Australian law firm Allens Ar thur Robinson in Sydney. David’s specialties are Technology (including outsourcing), Intellectual Proper ty, Online Media and E‑commerce.
David is a member of the International Bar Association (and an officer of that Association’s Technology Committee) and a member of the International Trademark Association. Al Tamimi & Co, originally established in 1989, is today one of the leading law firms in the Arabian Gulf region. It is one of the
largest local, non-affiliated law firms in the United Arab Emirates, with offices in the Emirates of Dubai, Abu Dhabi and Sharjah, Riyadh (KSA) and associate offices in Doha, Baghdad and Riyadh. For more information, visit www.tamimi.com
and the debtor delays in paying it, he will then be obliged to pay the creditor interest at the rate agreed in the contract, provided that it does not exceed 12% per annum. If there is no agreement in the contract for the payment of interest, then the judicial practice in the Emirate of Dubai is that interest will be calculated at the rate of 9% per annum, with effect from the date the debt fell due for payment.
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It is our recommendation that if a technology vendor is considering adopting UAE law for a contract with a local customer, it should also consider building into the contract self-help means which they might not typically use in other countries, or for which they may not always negotiate as rigorously.
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Indemnities
There are no UAE law prohibitions on contracts containing indemnities in respect of any matters, either in respect of commercial matters generally or, specifically in respect of intellectual property issues (the latter common in technology supply contracts). The UAE courts will generally require solid evidence to support the sums claimed under an indemnity. There are certain articles in the UAE Commercial Transactions Law which limit the amount of any indemnity in certain specific situations, but these are not relevant for present purposes. Article 290 of the UAE Civil Code states that it shall be permissible for the judge to reduce the level of indemnity or, not to enforce an indemnity at all, if the person suffering harm participated by his own act in bringing about or, aggravating the harm. In all cases, the indemnity shall be assessed according to the amount of harm suffered by the victim, together with loss of profit, provided that that is a natural result of the harmful act. Article 293 of the UAE Civil Code states that the right to indemnity for harm shall include moral harm, and an infringement of the liberty, dignity, honour, reputation, social standing or, financial credit of another shall be regarded as being moral harm. The right to receive indemnification for moral harm may not be transferred to a third party unless the amount of it has been fixed by agreement or, by a final judicial order. Further, Article 294 allows that the indemnity be made payable by installments or, by way of a regular income.
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Limit of liability for breach
It is said that, in general, the UAE courts will uphold limitation of liability clauses, unless there has been fraud or gross negligence, pursuant to Article 383 of the UAE Civil Code. However, the concept of liability in this context must be appreciated. This is liability for failure to comply with a particular obligation, not financial liability (which is dealt with separately). The relevant article states (translated): “If that which is required of an obligor is the preservation of a thing, or the management thereof or the exercise of care in the performance of his obligation, he shall have discharged that obligation if, in the performance thereof, he exercises all such care as the ordinary man would exercise, notwithstanding that the intended object is not achieved, unless there is an agreement or provision of law to the contrary. In all cases, the obligor shall remain liable for any fraud or gross error on his part.” The article actually proposes a reasonable efforts level when assessing compliance, but leaves this subject to agreement between the parties. With respect to total exemptions of liability, Article 296 of the UAE Civil Code provides that: “Any condition purporting to provide exemption from responsibility for a harmful act shall be void.” This is intended to deal with a prior stipulation of non-liability in respect of an unlawful act done by one person causing harm to another. With regards financial liability, Article 390 of the UAE Civil Code provides (translated): “The contracting parties may fix the amount of compensation in advance by making a provision therefore in the contract or in a subsequent agreement, subject to the provisions of the law. The judge may in all cases, upon the application of either of the parties, vary such agreement so as to make the compensation equal to the harm, and any agreement to the contrary shall be void.” Self-help means are valuable
We generally recommend to clients that any time spent in a technology contract negotiation on means of self-help, which could avoid the need to litigate disputes at a later point, is time well-spent. It is preferable not to have key issues such as those before a Court. Thus it is our recommendation that if a technology vendor is considering adopting UAE law for a contract with a local customer, it should also consider building into the contract self-help means which they might not typically use in other countries, or for which they may not always negotiate as rigorously.
HR
Emiratisation:
An uncertain future?
We look at how some of the UAE’s top employers are using new strategies to attract and retain UAE nationals.
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Joumana Saad CPI Business
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n the case of the UAE, there exist a number of unique factors that have proved to create real challenge in the area of Emiratisation, or the integration of UAE nationals into business and the private sector. For one, this group makes up less than 20% of the total population, while the country’s economy and business environment relies heavily on expatriates. In addition, the countless benefits and safe nature of the public sector has not made it any easier for the private sector to compete for local talent. There have also been number of trends that are raising concern about the lack of future opportunities for a young generation who is set to enter the workforce. A recent study by Booz & Company highlights youth unemployment as a regional problem and estimates unemployment in the UAE at 22%, while Saudi Arabia’s unemployment rate reaches over the 40% mark. According to the management consultancy firm, the six GCC states have some of the highest unemployment rates in the world, with regards to their youth populations. The report also identified a number of factors that are contributing to these trends, including “a mismatch between the skills garnered through educational systems and providers and those actually required by the private sector.” Companies in the region are now becoming more aware of a widening skills gap that is hindering them in their recruitment process. Although there has been exceptional progress in the area of education of nationals in the UAE and throughout the region, there is still a widespread lack of skills that are required by employers today. Until now, overall progress in the area of Emiratisation remains low, considering the time, effort and resources being allocated to it’s implementation. Previously, government agencies have been addressing the issue by forming departments and institutions to work on developing and equipping nationals with the right skills. They have also mandated a quota for businesses who hire Emiratis, and in some cases even contributed to the cost of employing them. Such initiatives have yet to have a widespread impact on the actual hiring trends and the train of behaviour. Masdar, a renewable energy company, which is also a subsidiary of the Abu Dhabi Government-owned Mubadala Development Company, is one player that is
We are very conscious about making the right match. We are attracting people with strong expertise in the region, who are also in tune with business and think more globally; and when to you get that combination, it works very well.
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aiming to lead by example in its conquest to adequately attract and develop local talent, including the youth. The company has several programmes that expose Emiratis to various business environments, and provide them with tools needed to help them succeed in their roles. “We currently
have 40% of UAE nationals in production jobs at Masdar and have invested a lot of our resources to ensure they are set up for success. This includes mentoring and coaching from line managers. We have also found that knowledge transfer is of utmost importance in the post-recruitment process” says Maha Al Mansouri, Associate Director for HR, Masdar. She describes the Emiratisation situation today as much improved compared to years past and says the focus must be now on “aligning expectations between employers and nationals” to create an environment more conducive to this group. Maha shared her insights on the topic during a recent panel discussion at the 2012 Institute for International Research (IIR) HR Summit in Dubai, which gathered HR professionals from around the region to discuss nationalisation, among other pressuring issues. Also on the panel were HR directors and managers from government agencies, as well as Etihad Airways and Boeing International, who shared their ideas on the best way forward to address the Emiratisation issue. When asked how nationalisation can impact a business’ bottom line, Akif Tashkandi, HR Director at Boeing International said that “it is in their long-term interest to bring in local talent into their organisations.” He also pointed out the view that recruiting expatriates can be labelled as “a short-term strategy that is not always cost-effective,” as many companies end up investing in employees that do not stay in the organisation for the long run. Increasingly, there has been a lot more activity from the private sector, and specifically large companies in adopting new strategies to attract the right localised talent. GE is another company who is making Emiratisation a clear priority with specific programmes designed to train entry level candidates. Wayne Davies, GE’s HR Director for the Middle East, Africa and Turkey, describes the situation as “a real war for talent” and admitted that the company is still a beginning of its mission to attract the right people. Although the number of Emirati employees remains relatively small at GE, Wayne says the company is more focused on quality hires, as opposed to just hitting number targets. “It would be easy to just go and hire a bunch of people, but that wouldn’t work out in the long run,” says Wayne. “Because of our company’s culture, we are very conscious about making the right match. We are attracting people with strong expertise in the region, who are also in tune with business and think more globally; and when to you get that combination, it works very well.” Traditionally, GE has been a company synonymous with innovative ideas and a global perspective. Earlier this year, the company was recognised as one the Top Companies to Work For in the UAE, by the Great Places to Work Institute. The report acknowledged GE for implementing best practices in hiring, developing and retaining Emirati talent, and highlighted how the companies’ programmes provide a great example for the UAE business community on developing the local workforce.
SME ADVISOR Middle East
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GE has partnered with Mubadala on a number of training programmes for UAE nationals looking to enter the private sector.
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The company culture isn’t for everyone, it’s very performance driven and puts a big emphasis on accountability. So, we’ve really tried to build relationships with local universities and get the brand out there and get known. Having these men and women in prominent roles enables them to become role models and magnets for recruiting.
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Wayne says he was initially surprised by the acknowledgement as he admits that he still has a lot of work cut out for him. However, he explained his belief that the company’s value proposition lies in the overall experience, rather than purely on compensation. “We take pride in not buying our way into the market. We pay well, but not on the high end of the spectrum. Pay is one of the main reasons why a lot of Emiratis have gone into financial services.” He adds that the company has its eyes set on a different breed of local talent that is more concerned about broadening their skills and experience. “The company culture isn’t for everyone, it’s very performance driven and puts a big emphasis on accountability. So, we’ve really tried to build relationships with local universities and get the brand out there and get known. Having these men and women in prominent roles enables them to become role models and magnets for recruiting,” he says. There’s no question that in this war for talent, brand power, visibility and reputation is everything. Large companies with a healthy marketing budget have a much bigger advantage in this area than SMEs, but Wayne
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says there are other ways to get the word out to become an employer that people seek out. “It’s all about getting constant feedback, and staying current and connected to the workforce of tomorrow. This is harder for SMEs, as they don’t have same scale and ability to market themselves and build that reputation; however, they can use other powerful platforms such as social media to raise awareness and visibility.” In the end, it’s important to remember that the UAE is still a very young nation, with a national population that is still finding itself in a sea of change. The future of Emiratisation rests on a number of factors, and there is no one simple strategy or solution that can magically change the status quo. Change will be gradual, yet current trends are revealing that the newer generations are thinking much differently than their predecessors. Over the last few years, we’ve seen a lot more Emiratis venture into the world of entrepreneurship, as more are becoming interested in the opportunities available to them. Sara Al Madani, a young Emirati entrepreneur who co-founded a successful fashion line, Rouge Couture, is just one of many new role models that represent this new generation of business-savvy youth who are thinking out of the box. Sara has gone on to win a number of awards and gain international exposure. But most important to her, has been her work in educating and advising other Emirati women about her experience. “Each new entrepreneur that comes out gives the rest a lot of motivation to do the same. For those unsure of where to start, I want to tell them that there’s so much help out there for them; so take a chance, grab it and go with it,” she says. “It is a pleasure that I’m part of it and I just hope other locals will also take a chance instead of just letting them pass them by, or having it as just a thought.”
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Industry Watch
The GCC’s IT knowledge gap A recent survey finds that 51% of businesses in the GCC region cite a significant degree of misunderstanding of IT security issues, marking a significantly higher figure in comparison with the rest of the world.
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Corporate culture is rapidly changing, with employees becoming increasingly active in social networking and using web resources as a means of exchanging corporate information. This offers enhanced flexibility, but also makes networks more vulnerable to cybercrime.
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yber-threats are currently regarded as the second most dangerous risk by the majority of businesses. But companies need to invest more money to protect their business from IT threats. These findings emerged from a recent survey conducted by B2B International for Kaspersky Lab. Research shows that cyber-security threats are becoming more diverse and frequent, and pose greater dangers than ever for businesses worldwide. According to half of those surveyed, cybercrime in its various forms is the second biggest threat to business. Their companies most often face malware, spam and unauthorised attempts to penetrate the system. What’s more important, in future, business surveyed anticipate concern about these threats growing yet further in significance – over the next two years surpassing even the fear of economic problems. Alexander Erofeev, Chief Marketing Officer of Kaspersky Lab, said: “A typical modern business is based on an infrastructure of thousands of devices; including not just desktops, but also employees’ own gadgets, corporate SmartPhones and laptops. Corporate culture is rapidly changing, with employees becoming increasingly active in social networking and using web resources as a means of exchanging corporate information.
This offers enhanced flexibility, but also makes networks more vulnerable to cybercrime. We are concentrating on developing effective and easily managed security solutions that meet the requirements of this new age.” According to the survey results, IT professionals are well aware of the dangers of cybercrime. But only 52% of respondents in the GCC region in 2012 feel that they are more or less prepared for them. According to the survey, the main problem is money-related: 39% of respondents indicated budget constraints and 51% cited a significant degree of misunderstanding of IT security issues among those in charge of the purse strings. This is a significantly higher figure in comparison with the rest of the world. Thus, it turns out that that the main problem for IT professionals is their inability to make their management understand just how important corporate protection against cyber-threats is. The Global IT Security Risks survey, which was carried out in July 2012, explored the opinions of IT security professionals all over the world about what they considered the major issues in their sphere. As part of the survey, 3,300 senior IT professionals from 22 countries across the globe shared their views. All the respondents are actively involved in their companies’ decision-making processes, including IT security-related topics. Up-to-date information about the features and advantages of Kaspersky Lab’s corporate solutions is available on the company’s website at: www.kaspersky.com/beready/.
Industry Watch
The Middle East’s big spenders Qatari residents are the biggest spenders on luxury, while Dubai retains its title as the region’s preferred luxury shopping destination. Preference for luxury goods over experiences
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pending on premium goods and experiences by consumers in the Middle East is on the rise, according to the new American Express Middle East Luxury Spending Tracker. The Tracker revealed that in all markets except the UAE, consumers plan to increase spending on luxury goods and experiences through the end of 2012, as their personal circumstances improve and they develop greater awareness of brands and high quality products. The American Express Middle East Luxury Spending Tracker surveyed a random sample of 1,000 residents drawn from Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar and the UAE. It found that residents of Qatar are the biggest buyers of luxury goods across the Middle East, closely followed by consumers in Bahrain. As the biggest luxury buyers, Qataris spend up to USD 5,000 a month on luxury goods, while consumers in Oman and Jordan are the most conservative shoppers spending less than USD 250 per month. “Consumer attitudes towards spending have begun to improve significantly and there is a noticeable rise in spending on luxury goods and experiences across the region,” said Mazin Khoury, Chief Executive Officer, American Express Middle East. The survey also explored the most influential factors involved when consumers make luxury purchasing decisions and where they prefer to shop.
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Quality is by far the biggest driver of luxury purchases among consumers, though the brand name also remains a key deciding factor.
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Luxury products such as cars, high-end electronic goods and fashion accessories were identified by respondents as preferred purchases over experiential luxury, such as holidays and spa treatments this year. Fashion tops the list of preferred purchases in 2012, with 37% of respondents saying they enjoy shopping for fashion-related items. Cars are also a leading luxury purchase in 2012, with 31% of respondents planning to buy new vehicles this year. Automobile purchases are highest in the UAE with 42% looking to buy new cars in 2012, compared to only 24% of Bahraini respondents. Other favoured purchases included high-end electronic goods and personal accessories. In contrast to other countries in the region, consumer spend on food and dining out is remarkably high in the UAE, a likely reflection of the considerable array of international dining options in the country. Quality and brand name key deciding factors
The survey also found that quality and brand name are the leading factors which influence consumers’ luxury purchasing decisions. Commenting, Khoury added: “Quality is by far the biggest driver of luxury purchases among consumers, though the brand name also remains a key deciding factor. Those surveyed said that the brand name was key in determining spend, in addition to sales, price reductions and advertising. It is only in the UAE that a friend’s recommendation carried the greatest weight.” Dubai ranked first for shopping
When it comes to the ideal shopping destination, Dubai is almost universally seen as the prime location for purchasing branded luxury products, selected by 65% of respondents. The emirate was named the preferred shopping destination by 88% of respondents from the UAE, 81% from Oman, 78% from Bahrain and 67% from Qatar. Commenting on the trends, Khoury said “Consumers today have become more conscious of the cost of products and services and insist on getting maximum value and rewards for their investment. The inclination towards acquiring tangible luxury goods as opposed to participating in luxury experiences is in keeping with the new consumer sentiment that demands greater value for money. Tangible luxury offers greater perceived value as consumers can experience the rewards for their investment over a longer period.”
“We thought we’d need Dell’s help, but after the demonstration we saw how simple EqualLogic is to use and we set up our storage environment within days.” Mohamed Raafat Atia Technical Services Manager Digital Solutions Provider
Do more with Dell networking and storage Solutions See how Dell helped Saudi services and consulting company, DSP, build a highly-scalable, reduced server-footprint environment. Enabling support surveillance solutions for three of Saudi Arabia’s largest hotels using Dell PowerEdge servers and EqualLogic storage. Read the full case study at YourDellSolution.com/me/servers
©2012 Dell Products. Dell, the Dell logo, EqualLogic and PowerEdge are registered or unregistered trade marks of Dell Inc. in the United States and other countries. Intel, the Intel logo, Xeon, and Xeon Inside are trademarks or registered trademarks of Intel Corporation in the U.S. and/or other countries. Other trademarks or trade names may be used in this document to refer to third-party products (such as operating systems and software) included with the products offered by Dell and the entities claiming the marks and names of those products. Dell disclaims proprietary interest in the marks and names of others. Dell Corporation Ltd, Dell House, The Boulevard, Cain Road, Bracknell, Berkshire, RG12 1LF.
Industry Watch
Strong employee loyalty in MENA A recent poll by Bayt.com reveals that 90% of employees in the region claim to be loyal to their company, yet a strong majority do not feel that they are well compensated in their current job.
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There is a general level of satisfaction with their employment situation amongst the majority of people across the MENA region, though there are clearly areas in which employees wish their company would improve.
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he Work Satisfaction in the MENA region poll also finds that the majority (58%) of people in the MENA region are satisfied with their current employment, with 27% of these being very satisfied. Seven out of ten (71%) like the company that they work for, while eight out of 10 (80%) are proud of their employer’s brand and 94% say that their job is meaningful to them. When asked if they feel challenged in their current position, 83% stated yes, with a further three quarters claiming that their job stresses them either occasionally (39%) or most of the time (35%). Most feel that they are growing and learning in their job (although 35% would like to grow more). In terms of possibilities for promotion, a quarter (23%) say that there are plenty of opportunities in their company, while 38% state that there are none. A third (32%) of poll respondents claim that the thing they would most like to change about their job is their salary. Other respondents would like to change their role and responsibilities (23%), or their training and development path (20%). “There is a general level of satisfaction with their employment situation amongst the majority of people across the MENA region, though there are clearly areas in which employees wish their company would improve. These seem to be mostly incentivebased, which suggests companies looking to reduce churn should consider more training and motivation schemes for their staff,” said SuhailMasri, VP of Sales, Bayt.com.
Management style plays a significant role in employee levels of satisfaction, with the majority (45%) of poll respondents stating that they are supervised just right; that their management’s expectations of them are mostly realistic (according to 60%), and that the communication channels in their company are open (70% – though 36% of these state that they are not open enough).
Source: Bayt.com; Work Satisfaction in the MENA region poll
Only 28% of polled professionals believe that their management is unprofessional. A further 13% claim that their co-workers are unprofessional, though 95% state that they do in fact get along with their co-workers. Data for the Bayt.com Work Satisfaction in the MENA poll was collected online from September 13th to October 29th 2012, with 13,655 respondents covering more than 12 countries in the MENA region.
Technology for business
Introducing the Blackberry 10 The new SmartPhone model by Research In Motion offers an enhanced user experience along with an array of new innovative features designed around the enterprise.
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esearch In Motion (RIM) has announced that it will hold its BlackBerry 10 launch event on January 30th, 2013. The event will happen simultaneously in multiple countries around the world. This day will mark the official launch of its new platform BlackBerry 10, as well as the unveiling of the first two BlackBerry 10 SmartPhones. Details on the SmartPhones and their availability will be announced at the event. “In building BlackBerry 10, we set out to create a truly unique mobile computing experience that constantly adapts to your needs. Our
team has been working tirelessly to bring our customers innovative features combined with a best in class browser, a rich application ecosystem, and cutting-edge multimedia capabilities. All of this will be integrated into a user experience, the BlackBerry Flow, that is unlike any SmartPhone on the market today,” said Thorsten Heins, President and CEO of Research In Motion. “Thanks to our strong partnerships with global carriers and a growing ecosystem of developers, we believe our customers will have the best experience possible with BlackBerry 10. We are looking forward to getting BlackBerry 10 in the hands of our customers around the world.” BlackBerry 10 will offer a large catalogue of the leading applications from across the globe and across all categories, including games, productivity, social, lifestyle and leisure, multimedia and published content, as well as
Streamlined solutions Customers can now boost productivity on the cloud with SAP’s new comprehensive offerings. Since launching its cloud strategy at SAPPHIRE NOW earlier this year, SAP AG has infused the cloud DNA of SuccessFactors, an SAP company, into its cloud business to create a comprehensive portfolio of cloud solutions in the industry. SAP
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applications designed for business and enterprise use. The BlackBerry 10 platform has recently achieved FIPS 140-2 certification, which means that government agencies will be able to deploy BlackBerry 10 SmartPhones and BlackBerry Enterprise Service 10 as soon as it is available. This marks the first time BlackBerry products have been certified ahead of their launch. In addition, RIM recently announced that BlackBerry 10 SmartPhones have now entered more than 50 carrier labs with many more entries expected in the coming weeks. Some key features of the new BlackBerry 10 devices already unveiled recently include:
BlackBerry Flow and BlackBerry Hub BlackBerry Flow is a new user experience that allows seamless navigation across open applications and the BlackBerry Hub. All messages, notifications, feeds, and
offers 20 solutions and suites in the cloud, designed to optimise a company’s most critical assets, which are its people, finances, customers and suppliers. As an integral part of SAP’s cloud strategy, together with platform, social and the business network, today, SAP Cloud solutions are generating a USD one billion run rate, have a 14-fold revenue growth rate and boast 20 million users across more than 6,000 customers in the cloud. The announcement was made at SAPPHIRE NOW + SAP TechEd, which was held in Madrid from 13th to 16th November. “We are passionate about delivering beautiful, robust and reliable cloud applications that work the way our customers do,” said Lars Dalgaard,
calendar events come into the BlackBerry Hub and no matter what the user is doing with the device, with a simple gesture, they can peek into the Hub at any time.
BlackBerry Keyboard The BlackBerry Keyboard learns how you write and adapts to how you type so you can write faster and more accurately, giving you the kind of legendary typing experience that only BlackBerry can deliver.
BlackBerry Balance BlackBerry Balance offers the most elegant way to satisfy both customer and corporate needs without compromising on either. With BlackBerry Balance, personal apps and information are kept separate from work data, and the customer can switch from their personal to work profile with a simple gesture. The work profile is fully encrypted and secure, enabling organisations to protect their content and applications, while at the same time letting customers get the most out of their SmartPhone for their personal use. Details about BlackBerry 10 can be found at: www.blackberry.com/ blackberry10.
member of the SAP Executive Board. “I announced our cloud strategy acceleration six months ago and since then the response and traction we’ve seen in the market has been monumental. SuccessFactors grew by 92% year over year, SAP Business ByDesign at 300% year over year and companies are embracing SAP Jam as a productivity tool with more than eight million users. And we’re just getting started. There is so much more to come as we continue to innovate across our cloud portfolio, applying user and mobilefirst design principles, to meet our customers’ business needs, and most importantly, delight our customers’ end users.”
Technology for business
Extending your boundaries Blue Coat Systems has introduced the Blue Coat Mobile Device Security (MDS) service, enabling businesses to extend the boundaries of the security perimeter to iOS devices in any location, on any network.
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he new security-as-a-service closes the security gap that leaves businesses without a control point over mobile browser (m.) applications and exposed to Web-based threats. “Our designers are constantly online, interacting with customers via social networking and staying abreast of the latest styles and trends, so creating a secure environment for them is job number one for me and my team,” said John Nevener, IT manager at Cantoni, LP, a leading design consultancy with modern furniture showrooms across the country. Businesses are increasingly invested in allowing mobile devices access to the network through corporate mobile initiatives that improve workforce productivity, bring your own device initiatives to give employees greater flexibility or guest device initiatives to enable a closer working relationship with partners, customers and other constituencies. As businesses move to fully embrace mobile devices in their extended corporate environment, they need to overcome three real risks: Exposure to Web-based threats, inadvertent data loss via native mobile and mobile browser applications, and employees circumventing corporate security policies. The Blue Coat MDS service operates at the network level, versus the device level, to extend the same protection and control that is available in corporate headquarters to mobile devices in any location.
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This approach allows businesses to embrace mobile devices in the corporate environment by delivering three key features: • Advanced defences: The Blue Coat MDS service is powered by WebPulse and the industry’s only Negative Day Defense to protect against device agnostic threats that indiscriminately target users on laptops, desktops, SmartPhones and tablets. • Granular application and operation controls: Unlike mobile device-level solutions that simply block entire mobile applications and offer no control over mobile browser applications, the MDS service provides granular application and operational controls across both types of applications – native mobile and mobile browser. These granular controls allow businesses to set flexible IT policies that prevent inadvertent data loss and ensure consistent enforcement across the extended environment, closing the application security gap. • Contextual policies: To balance the demand for network access from employees with the security needs of the business, the MDS service supports a robust policy framework that intelligently applies policies based on user, device, location and content. This flexibility allows businesses to create policies that can accommodate both personal
and business usage without compromising security. “The new enterprise exists beyond the office, in airports and coffee shops, wherever employees are, and successfully leveraging this new mobility requires enterprises to fully integrate mobile devices into their corporate environment by extending protection and policies to them, wherever they are,” said Christian Christiansen, Program Vice President, Security at IDC. “A network-based approach to this challenge removes IT from the business of managing hundreds or thousands of new end points while providing a more comprehensive and flexible security for those devices.” The Blue Coat MDS service is available through the Blue Coat Cloud Service, an enterprise-grade global infrastructure that delivers performance and scale with a 99.999% service level guarantee. The MDS service is newest component of the Blue Coat Unified Security solution that delivers Global Threat Protection, Universal Policies and Unified Reporting to all users on devices across the organisation. The Unified Security solution uses the same policy and protection infrastructure across deployment models, including Blue Coat Secure Web Gateway appliances and virtual appliances and the Blue Coat Cloud Service, giving businesses the flexibility to meet their unique security requirements on a locationby-location basis.
Technology for business
Windows 8: All about the apps Among the new operating system’s best enterprise-grade solutions are its immersive apps which have been developed to better reach employees and improve customers’ experiences.
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ess than a month after the global launch of Windows 8, Microsoft recently showcased the next-generation operating system to customers and partners at a launch event in Dubai. Microsoft’s top executives in the region discussed the opportunity Windows 8 brings to consumers, businesses and developers. “Windows 8 offers a no compromise platform, giving you the same experience on a touch device
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as through mouse and keyboard,” said Antoine Leblond, Corporate Vice President for Windows Web Services at Microsoft Corp. “Windows 8 builds on what is great about Windows 7. It works well side-by-side with existing Windows 7 infrastructure to deliver the experiences people love and the enterprise-grade solutions organisations need. Windows 8 also helps companies improve the way they do business through immersive apps developed to better reach employees and improve customers’ experiences,” he added. Now available on more than 1,000 certified PCs and tablets on a wide variety of screen sizes, configurations, and designs, Windows 8 is supported by thousands of apps available in the Windows Store. “The innovation Windows 8 is sparking in the region is impressive,” said Ali Faramawy, Corporate Vice President, Middle East & Africa, Microsoft. “Just a few weeks after its global launch, Windows 8 is already transforming the lives of consumers, businesses and economies through a set of amazing new devices and rich apps. UAE Smart Learning is a great example of how technology
is helping to make the region more competitive internationally by equipping students with access to the latest technology,” he said. Microsoft highlighted early deployment customers, including British Telecom, Emirates Airlines and UAE Smart Learning, that are already taking advantage of enterprise benefits – from enhanced fundamentals with security, performance and manageability to new features like Windows To Go that offer new possibilities in mobile productivity. Microsoft also announced new apps from DEWA, Time Out Dubai and Fedex Shop & Ship. These and other apps are available on the recently opened Windows Store. In addition to opportunity for companies to reach customers directly, the Windows Store represents a major opportunity for developers with the largest potential market of any platform as all new and upgraded Windows PCs can run Windows Store apps. Developers using the Windows Store for their apps have the most control over their business, the most favorable terms, and the most flexibility in their code.
PRESENTS
STARS OF BUSINESS
AWARDS & SUMMIT 2012
Free registration for SME Advisor Stars of Business Summit 2012 at:
www.smeadvisor.com/awards2012/register SUMMIT AGENDA
09:00 to 10:00 10:00 to 10:15 10:15 to 10:30 10:30 to 10:40 10:40 to 10:55 10:55 to 11:05 11:05 to 11:20 11:20 to 11:30 11:30 to 11:45 11:45 to 11:55 11:55 to 12:10 12:10 to 12:50 12:50 to 13:10 13:10 to 14:00 14:00 to 15:30
Registrations, breakfast and networking Welcome note Internationally-renowned keynote speaker Q&A Inspiring regional business case study Q&A Regional business guru Q&A Inspiring UAE business case study Q&A Coffee break Panel discussion Q&A Lunch Parallel breakout sessions/workshops with audience Q&A (audience members can select one breakout session out of two)
Finance 101 Building that banking relationship Getting your books in order Catching the attention of angels and VCs Business efficiency How to build a fearless brand Implementing the regulatory framework for corporate governance Streamlining SME security
EXCLUSIVE TELECOM PARTNER
15:30 to 15:45
Coffee break
15:45 to 16:30
One-on-one consultations with subject matter experts
INSURANCE PARTNER
STRATEGIC PARTNERS
KNOWLEDGE PARTNERS
OFFICIAL CAR PARTNER
BUSINESS COMMUNITY PARTNER
SUPPORTING MEDIA PARTNERS
PUBLISHER
Technology for business
Beefing-up cyber security Sourcefire enhances and expands its FirePOWER appliance family, providing users with the unmatched ability to protect against sophisticated malware, advanced persistent threats (APTs) and targeted attacks. One of the latest innovations is the introduction of advanced malware protection for FirePOWER, which provides visibility and control of modern threats on the network – from point of entry, through propagation, to post-infection remediation. “Network-based antimalware detection solutions provide defence in depth for organisations looking to reduce their exposure; however, if performed inline, it should have minimal impact on network performance,” said Neil MacDonald, Vice President and Gartner Fellow. “Enterprises want solutions that don’t require the purchase of an additional appliance, learn and adapt over time and provide historical visibility for retrospective analysis,” he addds. Sourcefire also introduced additions to the FirePOWER 7000 Series appliance lineup, and new 5.1.1 software featuring file type detection and control, as well
as security intelligence for IP reputation and blacklisting. With the new models, Sourcefire’s performance range now spans from 50 Mbps to 40+ Gbps. FirePOWER appliances provide industry-best threat protection with proven performance leadership, and comprise Sourcefire NextGeneration Intrusion Prevention Systems (NGIPS), with and without application control, and Next-Generation Firewall (NGFW) models on a universal platform.
Advanced malware protection FirePOWER’s advanced malware protection operates inline to provide continuous network protection and minimise propagation of advanced malware by creating forensic fingerprints of files to identify known malware, track file movement and identify attack targets for focused remediation. Using Sourcefire’s security big data analytics, this
advanced malware protection delivers continuous file analysis and retrospective alerting, so that users can be notified of malicious files, even if they were previously deemed safe. Advanced malware protection for FirePOWER integrates with the collective intelligence of Sourcefire’s FireAMP solution. This provides similar protection for devices, enabling visibility into malware trajectory and empowering rapid defense and cleanup to avoid reinfection.
• Security intelligence for IP Reputation blacklisting and alerting or blocking botnets, attackers, spam sources and other malicious IPs. • Context Explorer to visualise and explore contextual information about most-used applications, hosts and user identity. • Updated dashboards and event reporting to provide graphical summary views.
Enhanced awareness and threat protection
Expanded FirePOWER Appliance Range
Sourcefire’s 5.1.1 software, which is also being announced today, serves as the foundation for FirePOWERand virtual appliance-based solutions, and includes several new features that enhance network awareness and further strengthen threat prevention.
Sourcefire is also expanding the FirePOWER appliance line with the introduction of three new models, extending the FirePOWER performance range from 50 Mbps to 40+ Gbps. The new appliances include the FirePOWER 7010 (50 Mbps), the FirePOWER 7020 (100 Mbps) and the FirePOWER 7030 (250 Mbps).
• Detection and control of all file types, file protocols and file direction.
UNEXPECTED SAVINGS POTENTIAL WITH MANAGED DOCUMENT SERVICES AND TASKALFA DEVICES.
With KYOCERA Managed Document Services (MDS) you can reduce your output costs by up to 30%*. And you can make even more eff icient use of KYOCERA MDS when combining it with the very reliable and f lexible TASKalfa 2550ci. *source: Photizo Group
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KYOCERA. COUNT ON US. KYOCERA Document Solutions Middle East - www.kyoceradocumentsolutions.ae KYOCERA Document Solutions Inc. - www.kyoceradocumentsolutions.com
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SME ADVISOR Middle East
14-17 April 2013 Jeddah Centre for Forums & Events Kingdom of Saudi Arabia Co-located with
Saudi Building & Interiors Exhibition
The region’s largesT ConsTrUCTion
eqUipmenT eXhiBiTion Following a successful 2012 event, the Construction Machinery Show, the largest construction machinery exhibition in the Gulf region, returns to Jeddah between 14-17 April 2013. With the total value of awarded construction contracts reaching $72 billion in 2011 and with much more to come, the Construction Machinery Show is the ideal opportunity for buyers of construction machinery and heavy equipment to meet manufacturers, suppliers and distributors. A total of 450 billion Saudi Riyals ($120 billion) will be spent on construction projects between 2012-2016, and much of the development is focused on turning
Jeddah into a world class city, making it the perfect location for the Construction Machinery Show. The 2012 exhibition proved that Saudi Arabia is the most dynamic country in terms of construction in the region, drawing praise from exhibitors for the quality of his attendees and the number of deals signed on the show floor. With over 20,000 sqm of space at the Jeddah Exhibition Centre dedicated purely to construction equipment the Construction Machinery Show in 2013 will once again stand out as an event where visitors come to buy. We will be back in April 2013, Will you?
Find out more. Visit www.constructionmachineryshow.com Gold Sponsor The Construction Machinery Show and its entities are registered trademarks. The Construction Machinery Show is held alongside the Saudi Building and Interiors Exhibition under the patronage of the Saudi Ministry of Municipal and Rural Affairs. Š 2012 Corporate Publishing International. All rights reserved.
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Grooming a new generation SME Advisor Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.
O Joumana Saad CPI Business
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December 2012
ver the past few months, I’ve have had the pleasure of meeting a number of young entrepreneurs in the UAE who are pushing forward with their ideas. From a website focused on freelance hiring by skills, to innovative ideas that tap into trends in the beauty and fashion spaces, there is a strong indication that the face of entrepreneurship in this region is changing quickly. Startups and SMEs who are Web-based are now focusing more of their attention on analytics, SEO, e-commerce and social media interaction, in an effort to improve their overall product and experience. During a recent workshop held at Dubai Knowledge Village, the founders of online fashion retailer Namshi.com shared details about their year-long journey, from starting up to re-launching to becoming a funded enterprise. By sharing their personal experience with the audience, it was an insightful way for other SME owners to understand the logistics side of retail and e-commerce in this region. The founders noted that despite the numerous challenges they face as an e-commerce company, that they have succeeded in securing partnerships that have provided real value to their brand. They also highlighted biggest regional challenges to e-commerce today, which revolve around a lack of trust on the part of consumers to provide their financial information, in addition to an addressing system that is not always consistent or dependable.
SME ADVISOR Middle East
After winning du’s hit-TV show The Entrepreneur, Loulou Khazen Baz and her startup Nabbesh.com are now getting their moment in the spotlight. During our interview, Loulou was very enthusiastic about the potential of her website, and shared her ideas of how she planned to take the business forward. She also encouraged other aspiring entrepreneurs to try out for season two of the show, as being a contestant on the show provided with her with valuable coverage and visibility in the marketplace. To read more about her success story please see page 36. Another interesting trend I’ve noticed lately is the number of entrepreneurs who are moving to Dubai to specifically start up their businesses. Colette Griplas, winner of the 2012 ADCB Ambition Award is among this group. She moved from her native Australia in January of this year, and has already developed a strong foundation for her business Specs Addict. The company, an online retailer of sunglasses, aims to blend fashion with technology, with its virtual mirror that allows shoppers to try on different styles using a webcam. Fortunately for Colette, the prize money and benefits will give her a great boost in developing her future plans. To hear about her experience please see page 26. There also has been a renewed focus on the challenges of managing Generation Y, or younger professionals. Some of these challenges were highlighted at a recent seminar on
managing family businesses. With newer generations starting to become more active in their family businesses, owners and managers are finding it difficult to ensure that they are properly skilled, trained and motivated to do the job. Leading the discussion, Bill Humphries of Eureka Financial outlines ways family business can overcome such challenges to ensure a smooth transition from one generation to the next. For one, Bill advises family businesses to formalise a constitution that clearly outlines the roles of each family and board member. Another tactic is to get the younger generation involved at a very early stage to instil the company’s values into their thinking and strengthen overall understanding of the business. Emiratisation is also a topic that has received some attention lately, as many in the HR industry remain stuck on this issue. Although it remains an item near the top of most companies’ HR agendas, overall progress on the issue has been relatively low, considering the amount of time and effort being allocated to its implementation. Public sector initiatives have done little to make a real impact on hiring behaviours. Interestingly, some of the top players in the private sector are ramping up their focus in this area by implementing new strategies and programmes aimed at attracting quality hires rather than high numbers. To hear what industry experts and UAE nationals are saying about all of this, check out our feature story on page 46.
We are the new AIG
Bring on tomorrow www.aig.com AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. Products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Not all products and services are available in every jurisdiction, and insurance coverage is governed by actual policy language. Certain products and services may be provided by independent third parties. Insurance products may be distributed through affiliated or unaffiliated entities. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.
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