SME Advisor Middle East | March 2013 by SME Advisor Middle East

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Issue 88 MARCH 2013 EXCLUSIVE TELECOM PARTNER

INSURANCE PARTNER

PLUS

Where the grass is greener An inside look at what life is like working for some of the UAE’s top employers.

Rent-a-manager

SHAPING

a global network His Excellency Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry, talks about the Chamber’s expansion strategy and vision for Dubai’s future.

Fractional managers can provide real solutions to an SME’s growing pains.

Reinventing the serviced office We look at the appeal factor of serviced offices in the UAE.

A new threat landscape Kaspersky Lab takes on a vast and challenging corporate security market.

Taking off with online travel We look at a company on a mission to win over the region’s travellers.

PUBLICATION LICENSED BY IMPZ

Publisher Dominic De Sousa Group COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 EDITORIAL Senior Editor Paul Godfrey paul@cpidubai.com +971 4 440 9105 Sub Editor Rushika Bhatia rushika@cpidubai.com +971 4 440 9115 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 Abdul Kader Pattambi DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma

Time for change

t’s a well-known fact for every company director that there are key landmarks in the lifecycle of a business – milestones signposting its growth into new markets, the availability of fresh investment partners, or the means to bring better, more innovative products on-board. The same is true of magazines and with this issue of SME Advisor, we see a complete re-imagining of the brand, across the magazine, the website and the raft of social media. So you’ll find fresh page design, look and feel, along with a restructuring of the contents and a renewed commitment to positioning the brand as the ‘magnetic north’ when it comes to helping SMEs evolve and plot a profitable course for the future. I’m especially delighted to take over the reins as Editor of SME Advisor at such an auspicious time, and look forward to building on the immensely well-regarded work of my predecessor. I should say that I come to this role as a former SME owner, insurer and financial services practitioner. So at the very least, I have first-hand experience of many of the crucial issues impacting the day-to-day life of an SME. My mission now is to translate this into highly readable material that is not only relevant but which helps SMEs ‘raise’ the bar’ and wherever possible take a more proactive stance when negotiating the path to heightened scale and commercial success. If ever there was proof of the value of getting sound market information and strategic corporate guidance, it’s surely the fact that in a new report by the Oxford Business Group, ‘What makes businesses falter or succeed: a review of the key influencers’, the ready availability of a reliable hands-on business ‘toolkit’ was seen as more important than qualifications such as an MBA – especially in the early to mid stages of business development. It’s my intention to make SME Advisor exactly that kind of toolkit and I hope it provides a valuable source of help, data and (not least) encouragement and inspiration in the months ahead. Good reading!

Web Developer Abey Mascreen online@cpidubai.com +971 4 440 9100 Published by

Paul Godfrey Senior Editor

Registered at IMPZ PO Box 13700, Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409

Printed by Al Ghurair Printing & Publishing LLC © Copyright 2013 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.

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March 2013

Issue 88

March 2013

CONTENTS

SHAPING a global network

In an exclusive interview, HE Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry, talks about the Chamber’s expansion strategy and vision for Dubai’s future.

SHOPTALK 10 News and developments impacting SMEs in the region. FINANCE FOCUS 14

The latest offerings on the SME financing front.

SME ABOUT TOWN 18

Key events attended by the SME owners and managers.

BANKING FOR BUSINESS 22

Banking know-how is pivotal to success at Ethos Consultancy.

OPPORTUNITIES 24 We look at the appeal factor of serviced offices in the UAE. 28

Kasperky Lab unveils a new endpoint solution designed for SMEs.

BUSINESS PIN UP 30

TravelerVIP.com is on a mission to win over the region’s travellers.

30 March 2013

CONTENTS

54 MANAGEMENT 34

Fractional managers can help ease your business’ growing pains.

BUSINESS GURU 38

The man behind Dubai Chamber talks about expansion strategy.

HUMAN RESOURCES 46

Working life at Best Places to Work in the UAE.

MARKETING 54

Businesses are still hungry for guidance on social media marketing.

LEGAL 58 Bonus schemes as incentives to reward and retain valuable employees.

INDUSTRY WATCH 62 Leading companies are making cyber security a bigger focus. 63

What’s driving the rise in M&A deal values in the MENA region?

Key Abu Dhabi residential areas are defying trends of declining rent prices.

Avidly investing in eLearning content, tools and platforms.

Coverage of the first Trade & Export Middle East awards in Dubai.

TECHNOLOGY FOR BUSINESS 70 IT trends and tools that are reshaping business in the region. EVENT HOTSPOTS 78 A snapshot of the events not to be missed.

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SHOPTALK

UAE

Outlining public sector priorities

The Government Summit, the first of its kind in the region, attracted over 2,500 regional and international delegates who gathered to discuss and debate economic and social issues

he Government Summit, the first of its kind regional initiative in Dubai, called for a “sustainable and inclusive” development model for the Gulf countries, with international speakers commending the UAE for its success in fostering human resources development as a key priority. Addressing an audience of over 2,500 regional and international delegates,

His Excellency Gordon Brown, former Prime Minister of the United Kingdom, said that evaluating the performance of the region’s educational system against other competitive economies, and acting upon the needs of the younger generation will determine long-term economic success. Brown said that the key priorities in development must be centred on not only investing in education but also

Free zone companies rush to restructure The Links Group, a company formation specialist in the UAE, has recorded a marked increase in the restructuring of UAE company licences during January, 2013. The demand has largely come from free zone registered companies, as they move to ensure their onshore business activities comply with regulations set by Dubai’s Department of Economic Development (DED). The Links Group says its business enquiry level has more than doubled since the DED reiterated the onshore

and free zone trade licence rules last December. “It seems free zone companies have been oversold by their licensors about where they can trade. Several companies, largely consultancy businesses, have told us they were informed at the time of registration they could still conduct business in Dubai outside of their free zone. This is simply not the case,” said Stuart Curtis, Group Managing Director, The Links Group. While the DED has been actively educating UAE-based and foreign businesses about

measuring its output and performance, as well as a focus on innovation and technological expertise, and ensuring that the opportunities are widely spread. Underlining the need to further strengthen the educational sector, he said: “It is important to tap the potential of every child and this can be achieved only by providing the best basic general education to all.” Her Excellency Reem Al Hashemi, UAE Minister of State, said the UAE’s Vision 2021 serves as a roadmap in defining the priorities of the government to promote development with a focus on overall societal welfare. “At the heart of all our development endeavours are our people. We regularly review our performance to ensure that we consistently make progress.” Highlighting the success achieved in women empowerment and gender equality, Her Excellency Al Hashemi said that compared to less than five per cent of women representing the UAE workforce in 1975, today, that figure is over 40%, while the governmental sector workforce has a women representation of over 65%. “This is the result of the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President & Prime Minister and Ruler of Dubai, who has focused on the importance of women to be part of the decision-making process,” she said.

their options for establishing a company in Dubai, The Links Group says confusion reigns. “There are still many companies, particularly SMEs, that do not fully understand they cannot be trading onshore without some kind of branch office or DED-registered distribution partner,” Stuart added. According to The Links Group, some free zone companies admit to skirting their onshore licensing obligations in an effort to save time and money. “There are a lot of misconceptions about the cost and logistics involved in coming onshore. This can be as simple as opening a branch office in a matter of

days through a cost-effective option. Alternatively, free zone companies can establish an onshore presence via a 100% owned professional licence or through a local agent,” explained Stuart. In addition to regulatory compliance, long-term business development is another motivating factor prompting free zone companies to come onshore. The slowdown in European and US markets has elevated the importance of the UAE as a key international trade hub, while other companies attribute their onshore move to preparing their businesses for the anticipated introduction of audited reports and taxation.

UAE

Enhancing trade ties with Poland

HE Hamad Buamim, Director General, Dubai Chamber of Commerce and Industry, speaks during the Poland-UAE Investment Forum, which was recently held in Warsaw

he Dubai Chamber of Commerce and Industry signed a Memorandum of Understanding (MoU) with the Polish Information and Foreign Investment Agency (PAIiIZ) to enhance twoway trade and investment between Poland and Dubai. The agreement was signed on the sidelines of the PolandUAE Investment Forum, held in Warsaw recently. HE Hamad Buamim, Director-General, Dubai Chamber, signed the MoU along with Slawomir Majman, President, Polish Information and Foreign Investment Agency, in the presence of HE Sultan Al Mansouri, UAE Minister of Economy, and Janusz Piechocinski, Deputy Prime Minister and Minister of Economy of Poland. The agreement aims to strengthen and assist cooperation for enhancement of business and investment activities, joint ventures, as well as develop direct contacts between businesses in Poland and Dubai. It also

STATS

The volume of cargo handled by Dubai Airport rose to

3.9%

as it handled a total of 2.28 million tonnes of cargo

emphasises on the exchange of expertise and information on fairs and exhibitions and business meetings aimed at boosting economic development for the two countries. HE Buamim stated that the agreement opens doors to investment opportunities for both sides, particularly with the launch of the Emirate’s daily flights to the Polish capital allowing for a stronger two-way flow of trade, he said. The Director-General of Dubai Chamber stated that the strategic bilateral cooperation is the continuation of efforts that started with the visit of the country’s Prime Minister HE Donald Tusk for the UAE-

Poland-Business Forum at Dubai Chamber last April. This visit laid out the foundation of a long-term trade relationship. Now, the announcement of the opening of a Polish trade office in Dubai will aim to strengthen economic ties between both the sides, he said. In his welcome address during the Forum, Buamim said: “Exploring Eastern Europe is a priority for Dubai Chamber, which comes in line with the recommendations of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, as well as the expansion into promising markets of the world.” Buamim also explained how Dubai and Poland share many similarities as they represent global destinations and gateways to the regional market. Dubai currently trades with South East Asia and Africa, while Poland is a strategic link way to Russia and Europe and a corridor to East European countries. The Director General urged Polish businesses to benefit from the strategic position Dubai enjoyed as a base to reach out to their customers in the region and beyond, as well as its government’s unconditional support to all global investors. Buamim also highlighted Dubai’s lucrative investment potential, as well as its safe and stable business environment which makes the emirate one of the leading centres of global business in the Middle East. He added that trade, tourism, logistics and financial services were the real drivers of Dubai’s economic growth and held great potential for Polish investors. He took the opportunity to highlight the latest statistics of Dubai’s

economy by highlighting the passenger numbers at Dubai International Airport which registered a record growth of 13.2% in 2012, as 57 million passengers passed through the airport making it the third largest airport in the world, while the airport handled 344,245 flights with a 5.5% growth in comparison to the year 2011. Buamim informed that the volume of cargo handled by Dubai Airport rose to 3.9%, as it handled a total of 2.28 million tonnes of cargo, which clearly shows the rising profile of Dubai as a logistics hub in the region, he said. He further said that the number of tourists arriving in Dubai in the first nine months of 2012 was 7.2 million with a growth of nine percent while the number of guest nights was 27.2 million registering a growth rate of 15%. This shows the leading position enjoyed by Dubai which can be an ideal holiday destination for Polish travellers. Buamim also emphasised the excellent performance of Dubai Chamber members’ exports and re-exports which valued at AED 268 billion last year as he said the Chamber’s goal this year is to enhance the competitiveness of the emirate’s businesses in the overseas markets, while also introducing them to the promising markets of the world. The UAE delegation visit to Poland came during the inaugural flight of Emirates airline to Warsaw. The Polish capital was also host to the UAE Business Forum, as well as the first meeting of the Joint Commission on Economic Cooperation between the UAE and Poland and the announcement of the opening of the Polish trade office in Dubai.

March 2013

SHOPTALK

BAHRAIN

Robust growth for Bahrain’s economy

espite continuing global economic uncertainty, 2012 was a year of steady consolidation for the Bahraini economy with progress across the non-oil sector of the economy, according to the latest Economic Quarterly Report from the Bahrain Economic Development Board (EDB). The annual pace of economic growth in the first three quarters of 2012 was

4.4%, led by a strong rebound in the nonoil sector of the economy, with overall growth for the year estimated at 3.9% and all main sectors of the economy recording positive growth. The rebound in economic activity has been supported by a significant increase in lending by Bahraini retail banks. The country’s retail banks are in generally robust health and have been working to remobilise their liquidity after a period of elevated risk aversion. The strengthening of the short and longterm picture for the Bahraini economy has been reflected in the fact that Standard & Poor’s has recently revised its outlook on the Kingdom from negative to stable. Growth is also likely to pick up further in 2013 due to planned large-scale industrial investments and growth in infrastructure spending.

The Bahraini economy is fairly resilient to external shocks and it is currently estimated that real GDP growth could exceed six per cent this year. Commenting on the report, Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain Economic Development Board (EDB), said: “The latest Economic Quarterly report demonstrates that Bahrain’s economy continues to strengthen and after achieving solid growth in 2012, the economy is well-positioned to continue to achieve steady and sustainable expansion in 2013 and beyond.” “In particular, the Kingdom plays an important role as a gateway to the rapidly expanding GCC economies, and the opportunity this offers for investors is demonstrated by the strong performance of key non-oil and gas sectors,” he added.

A competitive cost environment A new report from KPMG concludes that Bahrain has one of the lowest costs of doing business in the GCC region, with a range of employment costs of hiring an employee in Bahrain, incorporating occupation costs, average wages, house rent allowances and other expatriate benefits, being significantly lower. The report’s findings reflect Bahrain’s competitive advantage as a location

for investment into the Gulf market. Strategically located at the heart of the Gulf, Bahrain has long been considered the gateway to the region, with easy access to the large economies of Saudi Arabia, Kuwait and Qatar. The Kingdom’s highly skilled bilingual local workforce and low cost of doing business mean that it is a natural home for firms looking to invest in the region.

Alongside a low cost of doing business, other recent reports have also highlighted Bahrain’s economic strengths. Bahrain was ranked first in the Middle East and 12 th worldwide in the 2013 Wall Street Journal/ Heritage Foundation Economic Freedom Index. In September 2012, the Fraser Institute’s annual Economic Freedom of the World Index ranked Bahrain as the

seventh freest economy in the world. KPMG said: “The Gulf economies have grown rapidly over the past decade and as the market expands, many local, regional and international businesses will look to continue to build their presence in the GCC. In doing so, they need to make sure they choose the right location that offers the best platform for sustainable growth, and this report illustrates that Bahrain has a competitive cost environment.”

KSA

Fuelling demand for imports

Gulfood 2013 welcomed a strong record number of F&B buyers and trade professionals from the Kingdom this year

ith the Kingdom of Saudi Arabia importing approximately 60% of the Middle East’s total food and beverage imports, the country is a key target market for regional and international food manufacturers and suppliers. Gulfood 2013, which took place in Dubai from 25th to 28th February, 2013, welcomed a strong record STATS Saudi Arabia’s hospitality market is expected to reach

USD 18.1

billion by 2016

number of F&B buyers and trade professionals from the Kingdom this year. Saudi Arabia’s rising population, together with dynamic growth in its travel, tourism and hospitality sectors, are key drivers in the Kingdom’s burgeoning food and beverage industry. According to a report by Business Monitor International (BMI), tourist

arrivals in KSA are forecast to increase by 7% to 17.3 million in 2013 and by an average of 8.5% each year until 2017. The Saudi hospitality market is growing in tandem with tourist arrivals. Valued at USD 13 billion in 2011 by Alpen Capital, KSA’s hospitality market is expected to reach USD 18.1 billion by 2016. Currently the fastest-growing in the GCC, the Saudi hospitality market is seeing an upward trend in luxury hotels having attracted investments from global players such as Marriott and IHG. While rising food imports are already indicating strong market potential for F&B, such robust growth in the tourism and hospitality sectors is expected to fuel the need for international food products, services and technology, even further. Analysts have observed a growing preference for foods from Europe, North America, Africa and the Middle East, with the organisers of Gulfood corroborating this trend. Trade visitors from the Kingdom are increasingly sourcing European and American products and technology, and attended the show to access more than 4,000 international food producers from around the world.

Saudi delegation visits Dubai Chamber Dubai Chamber of Commerce and Industry recently received a high-profile Saudi delegation headed by Adnan H. Mandourah, Secretary General, Jeddah Chamber of Commerce and Industry, at the Chamber premises. The visit came in line with both the prominent GCC chambers’ efforts to take their bilateral ties to a higher level as well as to exchange expertise and work jointly in mutual areas of interest. HE Hamad Buamim, Director General, Dubai Chamber, who received the delegation, discussed means of enhancing trade cooperation between the business communities of Dubai and Saudi Arabia. Buamim stated that the Saudi delegation visit led to exchange of expertise and sharing of vital information which will work in favour of both the sides to further cooperate for the smooth flow of trade between their two countries. He reaffirmed Dubai Chamber’s commitment to provide all the support to the Jeddah Chamber by passing on the expertise and information about his Chamber’s initiatives and services. This would help in raising the competitive edge of its members and stakeholders in the regional and global markets.

During the delegation’s visit, the two parties discussed means of enhancing trade cooperation between Dubai and the Kingdom

Atiq Juma Nasib, Senior Director, Commercial Services Sector, Dubai Chamber apprised the visitors with the Chamber’s various business stimulating initiatives and also updated them on last year’s trade figures, which showed Saudi Arabia to be the topmost trading partner for Dubai Chamber members in the GCC market. Emphasising trade growth between Dubai and Saudi Arabia. Nasib added that exports and reexports of Dubai Chamber members to Saudi Arabia grew by 27% and valued at AED 71.6 billion in 2012, compared to the year 2011, which are clear signs of a strong trade partnership between the two countries. The Commercial Services Sector’s Senior Director explained Dubai Chamber’s committment to extending all cooperation and working jointly with other GCC chambers for the enhancement of trade in the region.

March 2013

FINANCE FOCUS

Emirates NBD launches new mobile app

mirates NBD recently announced the launch of an app that runs on the all new BlackBerry 10. Speaking at the UAE launch of the new SmartPhone, Suvo Sarkar, General Manager, Retail Banking, Emirates NBD, said: “Emirates NBD is delighted to become the first bank in the region to launch an app that runs on the new BlackBerry 10. We have worked closely with the BlackBerry Middle East team to customise our existing mobile banking app for the BlackBerry 10 platform, to offer our customers the very best in flexibility, convenience and useful on-thego banking services.”

Emirates NBD’s new BB10 app is available for download on Blackberry App World. The new App builds on the recent launch of the bank’s mobile banking apps across all platforms, including Apple

iOS, BlackBerry and Android, where the mobile banking app recorded more than 60,000 downloads across these platforms. An essential addition to the bank’s e-Portfolio system, the mobile banking app enables customers to manage all banking operations including accounts, transfers and utility payments. Other services include currency converter, an ATM and branch locator and news about promotions. Emirates NBD’s mobile banking app has also been linked to its Internet Banking service, enabling customers to access a host of Internet banking services through their SmartPhones. These include viewing financial summary, scheduled transactions, checking loan details, and transferring funds to Emirates NBD, Emirates Islamic Bank, or other banks in the UAE. The innovative and user-friendly interface also provides easy access to Emirates NBD’s 28 payment partners for utility payments.

Serving Saudi Arabia’s SMEs

STATS

SHUAA Capital has announced the establishment of Gulf Installments Company, a new Saudi-based installment company focused on providing installment and lease financing to businesses across a variety of sectors. The assets will be operated by Gulf Finance under a management contract with SHUAA. Following the success of Shuaa’s subsidiary Gulf Finance Corporation in the UAE, Gulf Installments Company, His Highness Sheikh Maktoum Hasher Al Maktoum, Executive Chairman of SHUAA Capital and Chairman of Gulf Finance said: “This is an important

SMEs are estimated to account for

90%

strategic milestone for our credit business that we announced in October 2012, and represents an enormous opportunity for SHUAA to build out a successful business in the largest regional economy. Our investment in Gulf Installments is an investment in the success story of Saudi Arabia, and underscores our confidence in the growing private sector in the Kingdom.” Saudi Arabia is the largest economy in the GCC, with a nominal GDP of USD 435 billion, and is expected to grow by 4.5 per cent in 2013. Even though Saudi SMEs account for 90% of Saudi

of Saudi businesses and

24.7%

of total employment

businesses and 24.7% of total employment, they represent only two per cent of the Saudi banks’ lending market. With over 220,000 SMEs in the Kingdom, many of which are underserved, credit demand outpaces supply. Dr. Sabah al-Binali, Chairman of Gulf Installments, and Vice Chairman of its operator Gulf Finance said: “Our move into Saudi Arabia is a perfect opportunity to extend SHUAA’s reach into a new and dynamic market place. We have exceptional expertise within the SME space and through Gulf Installments, we are now able to offer the Saudi business community a wide range of credit solutions. These solutions are in demand by a large number of clients, which paves the way for building significant market share.” David Hunt is appointed as the Chief Executive Officer of Gulf Installments in Saudi

Arabia. David will lead the company’s operation as it expands into the Kingdom. He will lead a team of seasoned bankers, financial veterans and credit professionals. Gulf Installments offers lease financing for a wide range of fixed assets. Lease periods are available from one to four years and can be tailored to suit the needs of each individual client based on the term, down payment and rental plan. Strategic alliances have already been negotiated with two of the top five heavy equipment vendors in the Kingdom, which will underpin the business and ensure immediate traction. This in turn will capitalise on the significant growth within Saudi Arabia’s construction industry which awarded SAR 270 billion of contracts in 2011 up 155% on 2010. Gulf Installments is based in Jeddah and will be expanding across the Kingdom over the course of the next few years.

Regional insights on SME lending

white paper on the SME sector in MENA, commissioned by Citi Foundation and Shell Foundation, has concluded that growing businesses in the region lack sufficient access to the blend of finance and skills that they need to succeed. For instance, in spite of the fact that SMEs have large contributions to GDP, ranging from 30% in Saudi Arabia to 70% in Egypt, and that the region has a big banking system and the banks are well capitalised, lending to SMEs is the lowest in the world (averaging about two percent in the GCC countries, 13% in non-GCC countries) and only 20% of SMEs have a loan or line of credit. Conducted by Heart+Mind Strategies, an independent consultancy, the new research is based on in-depth interviews with over 200 public and private leaders and SMEs in Saudi Arabia, Jordan, UAE and Egypt.

STATS

The reports estimates that only

20% of SMEs in MENA have a loan of line of credit

Authors Dr. Khalid Al-Yahya and Jennifer Airey investigate SME growth potential in MENA, examine current financing strategies - and identify four key areas of support that entrepreneurs need to achieve sustainable growth. The study examined the Missing Middle segment of SMEs, that are both significant and underserved in MENA, to better understand their capital deficiencies, why these exist, and how to best overcome obstacles and barriers to open the way for a better approach. This segment comprises of formally registered firms that have passed the initial start up stage, yet they have relatively modest revenues (USD 100,000 to USD five million), employ an average of six-150 employees, and require flexible growth finance and business

development assistance, in order to sustain their operations. More specifically, the findings suggest that these SMEs have four critical interrelated needs for sustainable success: • Flexible patient capital structured to fit the needs of each SME (USD 50,000 to USD two million). • Sustainable and customised business development assistance targeted to each SME’s needs and applicable for the long haul. • Market linkages to supply chains to ensure SMEs have adequate access to market opportunities.

RAKBANK launches new mobile services RAKBANK, a retail and small business bank in the UAE, announced the launch of new services on its Mobile Banking platform that allow customers to conduct a wider range of banking transactions on- the-go via their handset. By introducing added services on its Mobile Banking Application and Service, customers can now use their mobile phones to order new cheque books, transfer balances, apply for supplementary cards and even report a lost or stolen credit card. RAKBANK Mobile Banking saves time when seeking investment details and when applying for an advance against salary. “We are always working to add new services on our digital channels that simplify the customer’s banking experience,”said Homi Gandhi, Head of RAKBANK Direct. “The launch of a collection of new services on Mobile Banking is part of this continuous effort, which ensures that customers can conduct their banking activities anywhere, and anytime.” Using their handsets, RAKBANK customers can today request to

• Enabling business environment that addresses the barriers to their development and growth. Obstacles, including loan denial rates, are particularly high for Saudi and Jordanian SMEs, where many note they would prefer to take on debt as opposed to giving up equity, though many have no other choice. “Addressing these needs will better enable SMEs, particularly those in the Missing Middle, to operate in a business and regulatory environment that supports their development, and to receive much needed growth financing and strategic business development assistance,” said Jennifer.

place fixed deposits, postpone a loan installment, and register for e-statements. In addition to opening aF@stS@veraccount online, RAKBANK customers can now use their mobile to open a Term Deposit Account plus a RAKBANK AMALJood Account, a unique Mudaraba-based savings account that grows customer savings while giving them chances to win AED 500,000 in a quarterly draw. “RAKBANK recognises the growing trend among its customers to access their accounts on their mobile phones and has made Mobile Banking available to holders of various devices ranging from Android, iPhone, and Blackberry SmartPhones. The bank even offers non-SmartPhone users a unique USSD-based banking service which can be accessed on any mobile device on the Etisalat network,” added Gandhi. Going one step further, RAKBANK provides customers with an online application process for customised insurance products, offered by various leading insurance service providers, through RAKBANKDirect on www.rakbank.ae. It also gives customers the added advantage of connecting with the bank’s social media accounts on Facebook and Twitter.

March 2013

FINANCE FOCUS

Enhancing the e-Payments process

L - R: Issam Galadari, Chief Executive Officer, Dawahi & Emaar Dubai Operations; and Dr. Adnan Chilwan, Deputy Chief Executive Officer, DIB

ubai Islamic Bank (DIB) has announced that it has signed an agreement with Emaar Properties PJSC, the global property developer, to facilitate quick and easy

e-Payments for customers of the two companies. Through the agreement, DIB customers can pay Emaar’s community service charges via the bank’s online and mobile banking services, and through

its Express Banking Terminals located across the UAE. Dr. Adnan Chilwan, Deputy Chief Executive Officer, DIB, said: “DIB has invested heavily in alternative banking channels, enabling us to deliver a truly world class online banking facility for customers. We continuously look for new ways to enhance our offering and are delighted to work with Emaar to make this new payment service available to our joint customers.” Issam Galadari, Chief Executive Officer, Dawahi & Emaar Dubai Operations, said: “Our partnership with Dubai Islamic Bank complements Emaar’s commitment to consistently enhance our customer experience. The

implementation of innovative, efficient, and user-friendly systems and services will further add to their convenience in making all required payments. We will continue to explore opportunities for further enhancing the convenience of our community residents.” Over the last 12 months, DIB has introduced a range of new and improved electronic banking services to meet the evolving needs of its customers. In 2012, the bank launched the Arabic interface of its internet-based banking service, Al Islami Online Banking, allowing customers to conduct over 70 banking transactions in both Arabic and English. This was quickly followed with the launch of Al Islami Business Online, a portal enabling companies to access over 75 services at the click of a button.

Exploring prospects for an SME stock market Nasdaq Dubai has established an advisory group of experts to prepare for a proposed new market for SMEs, including high-growth companies, to offer shares to the public. At its inaugural meeting, the group discussed ideas about regulatory models and the ideal practical framework to attract issuers from the Middle East and around the world to carry out initial public offerings (IPOs) and other listings on Nasdaq Dubai. As well as the exchange, the group brings together Dubai SME, the agency of the Department of Economic Development mandated to develop the SME sector, and leading investment bankers, lawyers, accountants and investor relations experts. Hamed Ali, Acting Chief Executive Officer, Nasdaq Dubai, said: “High-quality SMEs are vital to the expansion of the UAE’s economy, but many are starved of

the capital they need to grow. An IPO on Nasdaq Dubai will enable them to raise the funds they need.” “The group is exploring a range of possibilities, including which regulatory and trading framework will be most effective for a market for SME and highgrowth companies, as well as what types of advisory support they will need,” he said. Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, said: “Our participation in the advisory group underlines our commitment to help high quality SMEs, including high-growth companies, find the financial backing that they deserve. “The creation of an active

equity market will act as a powerful driver for the continued growth of the SME sector, whose development adds critical strength to Dubai’s economy and generates high quality employment opportunities for its people. Internationally, Dubai will also be better positioned as a hub to attract more entrepreneurial high growth SMEs to be based here, adding greater value to the economy in the longer term”, added Al Janahi. In June 2012 the Dubai Financial Services Authority (DFSA), Nasdaq Dubai’s regulator, reduced the minimum market capitalisation for an IPO from USD 50 million to USD ten million dollars.

SME ABOUT TOWN

Realising the benefits of CSR

L - R: Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME; and Murad Abida, Partner and Head of the Corporate Group at DLA Piper Middle East, during the signing ceremony

Addressing key legal issues

ubai SME and the global law firm DLA Piper have teamed up to offer guidance to SMEs on a range of corporate and commercial issues. The two sides have signed a memorandum of understanding and accordingly, DLA Piper Middle East hosted a half day seminar for SMEs recently in Dubai. Experts from DLA Piper covered a range of topics including company structuring, corporate governance, current commercial practices, corporate financing issues, real estate and property leasing, employment and labour law issues and IP/IT issues as well as litigation, arbitration and regulatory issues at the seminar. The seminar was part of the capability development and knowledge initiatives being progressively rolled out by Dubai SME for firms listed in its Dubai SME 100 ranking. Launched under the patronage of His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, Dubai SME 100 ranks the top-performing SMEs in Dubai to help groom them into bigger, better and more sustainable enterprises, and support them through their growth into larger, internationallyfocused companies. The topics covered in the seminar were of particular interest to businesses seeking to expand into new markets and also helped

participants understand key legal issues relevant to their businesses. “Dubai SME is delighted to partner with DLA Piper to offer added-value services to our current batch of SME100 companies in the area of due diligence, which is often overlooked. Dubai SME sees this as a key area of growth for SMEs, especially if they are seeking new markets and need more complex legal support and understanding of their liabilities. We believe that the SME100 companies will find the knowledge and experience imparted by DLA Piper extremely useful as they strive to move to the next level of growth and development,” commented Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME. “The raft of current legislation relevant to small and medium sized enterprises can appear complex to navigate at first, and through the seminar we aimed to shed some light on ways in which businesses can seek to understand the framework as a means of developing and growing their respective organisations and enhancing their competitive advantage,” said Murad Abida, Partner and Head of the Corporate Group at DLA Piper Middle East. “The SME sector is a key part of Dubai’s economy and its continued growth and we are delighted to partner with Dubai SME on such a valuable event,” Abida concluded.

To help SMEs understand and adopt better corporate social responsibility practices, Dubai Chamber of Commerce and Industry’s Centre for Responsible Business recently organised a complimentary session at The Change Initiative premise. The session, entitled Corporate Social Responsibility for Small and Medium Enterprises, focused on providing SMEs with practical knowledge and guidance to align responsible business practices with their company. Vineetha Mathew, Senior Executive CSR Training, Centre for Responsible Business, spoke about how using CSR models and practices can help SMEs become more effective, productive and responsible businesses. She told attendees that regardless of a company’s size, or how limited its time or resources are, it can still adopt individual CSR programmes that will help it become a better business. As a major source of employment in the UAE, SMEs are the backbone of the economy, said Mathew. More so than large enterprises, SMEs have a greater advantage when it comes to implementing CSR, as having fewer employees makes it easier to develop a corporate culture within the company that supports responsible practices, she said. In addition, SMEs tend to have more flexible operations and can respond to new ideas more easily and quickly. Today’s session aimed to provide SMEs with practical knowledge and guidance to align responsible business practices into their company, she said. Syed Atif, Corporate Responsibility Reporting & Compliance Manager, SEMEA of TNT Express, gave an introduction to the Dubai Chamber Sustainability Network’s Integrating CSR task group, which worked with SamTech to help it formalise its CSR practices and processes. This was followed by SamTech’s Founder and CEO Samir. Adbul Hadi, who spoke about his perspectives as an entrepreneur, as well as his company’s CSR journey and the benefits they have seen following the work with the Dubai Chamber Sustainability Network task group. Gundeep Singh, CEO of The Change Initiative, then gave a presentation about their business model and its strategy to add social value. This was followed by a question and answer session and a tour of the store in Barsha 1, which sells eco friendly solutions and products.

Business gurus share insights

he Entrepreneur’s Organisation [EO] UAE Chapter, comprising of business owners from across the UAE, recently organised an event at the Jashanmal Headquarters in Dubai. Entitled In the Boardroom with the Jashanmals, the event was hosted by Tony and Mohan Jashanmal of the Jashanmal Group. The initiative was launched by the local EO UAE Chapter in 2008 to bring together leaders in both the public and private sector to inspire entrepreneurs

with insight into their personal accomplishments, their industries and their organisations. Commenting on In the Boardroom with the Jashanmals, Hassan AlHazeem, President of the EO UAE Chapter, said: “The Entrepreneur’s Organisation was honoured to have business pioneers such as the Jashanmal brothers contribute to our monthly event. This has been particularly inspiring as the Jashanmal family has been in the Gulf since 1919, and has contributed to the evolution of the UAE’s dynamic retail sector.” The EO is a global community of young energetic entrepreneurs from all walks of life and nationalities who

Tony and Mohan Jashanmal pose with EO members during the roundtable event in Dubai

run companies of every type and size imaginable. They all share a common bond of the desire to grow their businesses, learn from others and share experiences. The local EO UAE chapter is made up of over 50 entrepreneurs from over 30 diversified industries The Entrepreneurs’ Organisation (EO), for entrepreneurs only, is a dynamic, global network of

more than 8,500 business owners in 40 countries. Founded in 1987 by a group of young entrepreneurs, The EO is a catalyst that enables entrepreneurs to learn and grow from each other, leading to greater business success and an enriched personal life. The EO has over 120 members worldwide. For more information, please visit their website: www.eonetwork.org

Dubai Chamber recognises SME exporters November; and to Alacrity, as a recent startup company, for the highest export value in the month of December respectively. Dr. Belaid Rettab, Senior Director, Economic Centre: HE Abdul Rahman Saif Al Ghurair, Chairman, Dubai Research and Chamber poses with the four winners at the exclusive ceremony Sustainable Business Development Sector, Dubai Chamber, HE Abdul Rahman Saif Al Ghurair, stated that the SME Exporter of the Chairman, Dubai Chamber, Month is an important Dubai Chamber congratulated the winners and initiative in supporting the development presented the Certificates of of business and creating a favourable Recognition and the SME Exporter of business environment. the Month trophies to Mercury General “The trading sector, which Trading Co. for achieving the highest export value in the month of September; includes exports and re-exports, is a leading driver of Dubai’s economic Marina Gulf Trading Co. for the highest growth and this honour goes on to number of markets exported to during encourage companies to enhance their the month of October; Gerab National performance, while helping drive the Enterprises for obtaining the highest economy and to promote Dubai as a number of Certificates of Origin in

major international business hub,” he said. Dr. Rettab also emphasised that the SMEs play an essential role in the growth and development of the economy of Dubai. Top officials of the honouree companies expressed their gratitude to Dubai Chamber for the support provided to them. They said the recognition encourages positive and healthy competition which yields numerous benefits to the company’s performance and helps benefit the overall competitiveness of Dubai businesses. In the last ceremony, companies that were recognised for their excellent performance were Swift Telecom FZCO, Khushi Trading Co., Hawraa Alwadi General Trading and Taj Al Mulook General Trading. Dubai Chamber launched SME Exporter of the Month in 2009, under the name SME Exporter of the Quarter, in order to recognise, support and encourage strong trade performance. The name was changed later to make it a monthly event due to its popularity and success.

March 2013

SME ABOUT TOWN

A call for economic cooperation

The forum featured a roster of prominent international panellists who spoke on a wide variety of topics, including infrastructure, energy, education and healthcare

is Highness Sheikh Dr. Sultan Bin Mohammed Al Qassimi, Supreme council Member and Ruler of Sharjah, and President of American University of Sharjah (AUS), has called for increased cultural and economic interaction and cooperation between the East and the West, and for the emirate of Sharjah and UAE to play their due role in this multi-faceted exchange. His remarks came during the inaugural speech made at the opening of the MENA Economic Forum 2013, held under the theme Sharing Vision and Prosperity, at AUS. “We hope this forum will increase cooperation and cultural interaction, gathering East and West in one human culture, based on tolerance, love and knowledge, to all human beings without discrimination,” said the Sharjah’s Ruler. “We are also looking for the emirate of Sharjah to reflect a bright image for this shared human culture,” he added. His Highness Sheikh Dr. Sultan said that the

objectives of the forum are strengthening cooperation and the exchange of expertise between the city of Sharjah and the rest of the cities of the Western world. “Sharjah has already succeeded in strengthening its relationship and cooperation in the fields of culture, business and tourism with several Western cities,” he said. Sharjah’s Ruler pointed out that it was with such an objective in mind that AUS was established “to become a centre of cultural interaction and exchange of science and knowledge between East and West. We established AUS with the mandate of becoming organically linked to the economic, cultural, scientific and industrial sectors of society in productive collaboration. We built the university to ensure that science and education regain their rightful place for the betterment and advancement of society. It is through organising such conferences and forums that these mandates can be met,” he stressed.

His Highness said that the number of distinguished officials in government, academia and business from various parts of the world gathering together is proof that the distances between East and West are becoming shorter and that this was also an indication of the wish to broaden minds and to exchange ideas and thoughts. The inaugural session, entitled Transitions: How Can the West and the GCC Cooperate and Meet Future Challenges?, was comprised of two panels, one of which was addressed by senior government officials from the region and beyond and included HE Dr. Anwar Gargash, Minister of State for Foreign Affairs, UAE; HE Cherif Rahmani, Minister of Industry, Algeria; HE Philippe Douste-Blazy, Under-Secretary-General, United Nations and Former Minister of Foreign Affairs, France; HE Jack Lang, President of the Arab World Institute, and Former Minister of Culture, France; HE Homaid Al Shemmari, Executive Director, Mubadala Aerospace, UAE;

and HE Bariza Khiari, Vice President, French Senate, France. Speaking on the topic, Dr. Gargash said that the UAE had lessons to offer the region in creating a business friendly environment for economic growth. He said that the oil exporting countries in the region should help their struggling Arab neighbours as a business friendly region is good for all. However, he also noted that the region has challenges that need to be addressed. “Economic integration in the region has lagged behind other economies around the world, such as the EU,” he observed. The second day of the forum hosted panel discussions which focused on the topic of Challenges and Opportunities in the Aftermath of the Arab Spring. The panellists included Pr. Gilles Kepel, Professor of Middle East Studies at Sciences Po, along with HE Fahad Al Raqbani, Director General, Abu Dhabi Council for Economic Development, UAE; Badr Jafar, President, Crescent Petroleum, UAE; Faizal Kottikollon, Founder and Chairman, KEF Holdings, UAE; Pr. Jean-Louis Reiffers, President, FEMISE, France; Jay Footlik, Founding President and CEO, Global Policy Initiatives, USA; Khaldoun Tabari, Vice Chairman and CEO, Drake & Scull International (DPI) PJSC; Jose A. Lopez-Monis Plaza, CEO and Managing Director, Habtoor Leighton Group; Sultan Abu Sultan, CEO, Barclays Bank, UAE; Varouj Nerguizian, CEO, Bank of Sharjah; and Fahad Al Othman, Business Development Executive, Zone Group, UAE.

Trade opportunities with Thailand

he Thailand Trade Office in Dubai recently hosted an event entitled Thai-UAE SMEs: Growing up together, which was attended by His Excellency Thosaporn Moonlasartsathorn, ConsulGeneral of Thailand to Dubai and Northern Emirates. During his speech the Consul General highlighted the importance of SMEs, not only for the domestic economy of Thailand, but as well as on how it has become a centrifugal force in promoting Thailand trade and business across the globe and particularly in the UAE. He noted that since 1982, Thailand’s government has placed a great importance on supporting and promoting SMEs on a domestic and international level. This was achieved as the government carefully underlined and

The event, hosted by the Thailand Trade Office in Dubai, aimed to encourage cooperation between the UAE and Thailand’s SME segments

implemented polices that would foster its growth. He mentioned that SMEs account for about 78% of the country’s employment, 43% of non-agriculture GDP, and 30% of exports. He mentioned that by implementing these policies there are approximately 2.6 million SMEs (2011), or about 99.8% of the country’s total enterprises. SMEs employ approximately 9.7 million

Mapping out a management strategy

Roberto Wyszkowski, Partner at ShiftIN Partners, poses with DBWC members and attendees after the Network Majlis session

Dubai Business Women Council (DBWC) recently concluded the second session of the Network Majlis for 2013 with Roberto Wyszkowski, Partner at ShiftIN Partners. Roberto conducted a special presentation about the fundamentals of strategy execution and the balanced scorecard. Organised under the

people, wherein they represent 80% of the country’s working population. He also mentioned that the office of SMEs Promotion has drafted the third SMEs Promotion Plan for 2012-2016, which supports and puts emphasis on Thai SMEs for international economics integration. HE Thosaporn Moonlasartsathorn mentioned that the import market of

SMEs sources of Thailand in 2011, the UAE accounted for the import ratios of 6.46% of the total import values, an increase of 243.11% from 2010. In terms of export ratio of Thai SMEs to UAE, the number increased 24.74%, which placed the UAE within Thailand’s top 20 destinations of SMEs trade partner. Both Thailand and UAE can use the opportunity and the privilege of liberal market system to find business allies for SMEs, which is an effective way to expand their businesses. This might involve joint ventures with other SMEs in the partner countries. As a result, the Thai government has placed great importance on promotion and trade policies in the Middle East market. What the government is trying to push forward is to establish a stronger network and linkage among SMEs with various manufacturers to create diversified product and expand their business opportunity.

theme Building the Strategy Execution Capabilities, the DBWC Network Majlis discussed the rationale behind strategy maps and the importance of a measurement system in evaluating a company’s performance. The key points discussed the relevance of sound objectives to provide clear direction for any organisation and the core of a Performance Management Framework. Participants also learned about the relevance of having robust KPIs (Key Performance Indicators) to provide clear direction for the organisation, and the magnitude of good strategy governance to effectively manage the execution journey. A veteran consultant and trainer specialising in strategy planning and execution, change management, and corporate performance management, Roberto recently led the initial stages of implementation of the performance management framework for a municipal utility system in the UAE, helping set national goals and targets and identify the priorities and supporting resources needed to achieve them. During the past several years, Wyszkowski has also managed major projects in public administration, engineering, telecommunications, utilities, financial services, and manufacturing throughout a wide range of management cultures in the UK, Germany, Luxemburg, Switzerland, Sweden, Venezuela, USA, Spain, and the Middle East.

March 2013

Banking for business

Trail blazers

We take a closer look at the company that has gone from strength-to-strength with revolutionising the region’s customer service industry.

hen looking at the history of Ethos Consultancy since its inception into the region in 2004, it’s tough for anyone to imagine this company as ever being a struggling startup. And yet, according to the man behind this success story, Robert Keay, mistakes were made, focus was misplaced and, the company faced a real uphill struggle. “I sold my UK business in 2002, moved to the UAE in 2003 and setup Ethos Consultancy in February 2004; by October 2005, all I had left was AED 600. I made the wrong decisions and didn’t research or understand the market properly. I spent too much money setting up the business

and getting my family settled and I didn’t think like a Middle East business man should; I lost focus and misunderstood the requirements,” says Robert, Founder and Managing Director. So what changed? How did this now very successful SME dust itself off and plot its rise? Robert notes that it was a mixture of muchneeded investment from an Emirati friend to help guarantee some financial obligations, as well as some acute business re-direction. And so, after an initial drawback, there followed a string of successes. After developing and executing a number of successful customer service reports and initiatives, the pivotal turning point came. Robert was called to meet with a UAE government ministry, where a very senior

ranking executive quickly took notice to the importance of the company’s reports and Ethos was subsequently selected to develop and launch a Government Service Excellence Measurement Programme. To date, Robert estimates that close to AED 40 million has been spent by UAE government institutions with his company on a number of initiatives and solutions. Indeed, these achievements and successes have been on SME Advisor’s radar over the past two to three years. Since winning the Business Star of the Year at the SME Advisor Stars of Business Awards in 2010, Ethos has year-on-year achieved success with these prestigious awards; in 2011 and 2012 they picked up the award for best Consultants.

Most recently, Robert spoke at the SME Advisor Stars of Business Power lunch in January, where he shared his insights and successes to over 120 business owners, market leaders, innovators and captains of industry. The audience participation with Robert was certainly more interactive than is commonly seen at such events; he was taken through his paces on issues ranging from dealing with late payments to initial startup costs. “There is generally the misconception in this region that banks are not doing enough to help SMEs, but it simply isn’t their sole responsibility to lend me money to start my business. My initial finance came from my personal funds and from a friend who invested in my vision. Ethos banks with ADCB and they have very professionally extended us every facility to help foster and nurture my business, ranging from credit to overdrafts. If you look at most of the other banks here, the concept of an overdraft is completely absent.” When we spoke to ADCB about Robert and Ethos Consultancy they noted that both he and his business are prime examples of what hard work and determination can achieve. “We have watched as Ethos Consultancy has gone from strength-to-strength during the course of the past seven years and the bank has been happy to extend every feasible facility and service to help facilitate that growth,” says Nilanjan Ray, Head - Business Banking Division, ADCB. If one is to study the elements that have contributed to Ethos’ upward trajectory, it becomes clear exactly why this SME is now considered one of the region’s leading customer service consultancy firms. In 2009 Keay introduced the International Customer Satisfaction Benchmarking, which eventually expanded to other parts of the Gulf region. In 2010 Ethos launched the inaugural UAE Customer Service Week, which has since witnessed year-on-year growth. Add to this Robert’s role as the Chairman and Co-Founder of the International Customer Service Institute (TICSI), which is the global forerunner in promoting best practices in customer service and service quality, and it’s not hard to fathom why this SME hasn’t looked back. When it comes to defining a business idea and plan, Robert tells us of the importance of creating a service that is scalable and

Get clients to pay on time or upfront; don’t work with clients who are well-known in the market for not paying on time; communicate with the bank as much as possible and, as often as possible, and invest in staff development. adaptable to new market needs. “We started out with the mystery shopping online reporting solution in the UAE and gradually developed into an institute with a global footprint, having carefully cemented partnerships across multiple regions,” he says. “When you’re running a business, today is not as important as tomorrow. You need to have a plan in place and you need to know what you are selling and how valuable it is; that is something

Flashpoints »» Introduction of International Customer Satisfaction Benchmarking »» Launches the inaugural UAE Customer Service Week »» Winner of the SME Advisor Stars of Business Business Star of the Year award »» Winner of the SME Advisor Stars of Business Consultants award »» Ranked 25th at the Dubai SME 100 rankings (1st in Human Capital development) »» Develops Arabic and English E-learning solutions for the public & private sectors »» Wins Business Services Sector award at the Middle East Business Leaders Summit & Awards (MEBLSA) »» Winner of SME Advisor Stars of Business Consultants award

I didn’t do right for the first 18 months of business and which have since made sure to amend.” 2012 has perhaps been one of the most successful and fruitful years for Robert and Ethos Consultancy. In February of last year, the first official ranking for SMEs in the Middle East was announced. Launched by the Mohammed Bin Rashid Establishment for SME development (Dubai SME) the Dubai SME 100 ranking seeks to identify the best of the best across a number of areas, including human capital and corporate governance. Indeed this government ranking goes beyond merely revealing a list. Those awarded a spot among the top 100 are subsequently given full access to the programme’s partners, some of which include ADCB, Dun & Bradstreet and Deloitte & Touche. Special benefits, expertise and knowledge are shared with these companies in order to facilitate further growth. Ethos was ranked 25th and awarded first place for their initiatives with human capital development. Indeed, the company has grown to over 40 employees, consisting of over a dozen different nationalities, with offices in Dubai and Abu Dhabi. Robert has always maintained that looking after the welfare of his greatest asset, his staff, is what drivers the company forward. “Reward and recognise your staff continuously; be creative in engaging them and get them all to think as a team. Make work a fun place to be; involve your team in your own success and show them you go the extra mile and they will follow,” he says. Robert noted at the SME Advisor Stars of Business Power lunch that Ethos Consultancy has instituted creative awards to appreciate employee’s top performance, such as Employee of the month, Thank you Award, Personal Achievement, Bob’s 5K Award and a parody award to add some humour and camaraderie among the staff. In terms of one business development tip from this SME trail blazer; “Get clients to pay on time or upfront; don’t work with clients who are wellknown in the market for not paying on time; communicate with the bank as much as possible and, as often as possible, and invest in staff development,” he concludes.

March 2013

OPPORTUNITIES

Reinventing the serviced office MyOffice Business Centre aims to fill a market need for tailor-made solutions for SMEs and startups looking for more flexible and convenient options.

ooking at the various serviced office players in the region, it’s quite difficult to find a middle ground. On one hand, you have small scale providers that are limited in the services they are able to provide startups and SMEs. Then, there are the big name players who tend to offer standard solutions across a global network of offices. This market gap, is the main reason why a group of Dubai-based investors decided to take a bet last year, by starting up a new high-end serviced office, designed to offer tailored solutions and services to businesses of all sizes.

Location, location and location With background experience in the serviced office front, the investors had to make a

number of important decisions before the launch. Choosing the right location would be key to attracting clients looking for a convenient address that will work to their benefit in forming new relationships. The business partners chose to set up shop in Emaar Boulevard Plaza Towers, located in Downtown Dubai. Initially, they were attracted by the bustling environment in the heart of the city. Taking a tour of MyOffice’s flagship facility, one can begin to understand why a business owner would be keen to set up an office there. Surrounded by skyline and sea views on one side and stunning views of the Burj Khalifa and Dubai Mall on the other, you can’t help but be impressed by the ultra-modern and open atmosphere.

“On the interior design side, we didn’t compromise on the fit-out. We wanted it to represent our vision of a high-end serviced office. I think when people arrive, there’s that initial wow factor, yet that’s something that we have to live up to by making sure that they are not disappointed after they join us,” says Melissa O’Neal, General Manager, MyOffice. Location was one of the biggest selling factors for the COVA Group, a startup design agency. The business claims that its presence at the centre has opened up a number of new doors in terms of clients, partners and mentors. “We have looked at many different locations around Dubai and have realised it is important to be in a busy surrounding environment.

This creates productivity and now many of our clients are our neighbours,” says the company’s CEO, Tom Ashenford. “Having so many different businesses in one location means you learn an incredible amount. This has allowed us to break out

On the interior design side, we didn’t compromise on the fit-out. We wanted it to represent our vision of a high-end serviced office. I think when people arrive there’s that initial wow factor, yet that’s something that we have to live up to by making sure that they are not disappointed after they join us. into business sectors that we would never have considered before,” he added. Value proposition The list of services provided by MyOffice includes: company formation and licensing, dedicated office space, shared access to lounge areas and a stocked kitchen, concierge and receptionist

support, as well as other mail delivery, water and electricity services, among others. Typically, a new business would not spend too much time thinking about all of these issues, when looking to lease an office, but they are equally important to a business’ day-to-day operations and need to be handled by the business owner. By taking care of all of these various issues, Melissa says the serviced office can save clients a lot of valuable time that can be spent focusing on their business. “The standard practice when people are looking for office space is to go to a real estate agent and it can be a long struggle to find the right place. You don’t end up getting anything ready. You have to consider fit-out, electricity, Internet, furniture, water, receptionist, maintenance and other added costs. That’s not their business, so we take that on as our business and take care of these things. It takes a huge load of stress off of them and that’s the real value,” she says. That is precisely why Chesterton, a real estate consultancy firm, chose to maintain a presence at MyOffice. Paramount for a growing company like Chesterton. Due to several regulations in the UAE it takes a while to establish an office environment. This means our staff is not able to generate income until all the necessary tasks are complete. This equates to substantial loss of business to the company if the process is not handled effectively,” says Robin Teh, Country Manager UAE and Director of Valuations & Advisory, MENA, Chesterston. Expedited expansion Within the first six months of operation, MyOffice reached overcapacity, and had no choice but to expedite its expansion plans. The company nearly doubled the number of office units by acquiring a new set of offices adjacent on their floor. Melissa tells me that although the new offices have only been open for a few weeks, they are already 60% sold. Referrals proved to be the most effective way to bring in new clients for MyOffice, as testimonials and wordof-mouth can be a lot more effective than traditional marketing channels in this line of work. Experiencing such rapid success for any SME presents a whole set of challenges, but Melissa sees these developments as good problems to have. “The speed at which things are going now is just picking up day-by-day. It’s been 18 hour days for a while now, but it really hasn’t felt like work,

March 2013

OPPORTUNITIES

because it’s really just a pleasure. We get to work with great people who are motivated to be here. Our receptionists are very welltrained and this place is a success because of them and their hard work in making everything easier for me and everyone else. The payoff is incredible; we see first hand how we are helping businesses so it’s very rewarding,” she says. This year, MyOffice is focusing on strengthening its presence and operations in Dubai, and also contemplating the idea of opening an office in Abu Dhabi. Looking ahead, the company is eyeing near-term expansion throughout the GCC region, with Qatar as a focal point. “Talks have been open and we’ve found that we are in the position to run with this. It’s an incredibly exciting time for us right now but it’s also pretty manic as well. A number of GCC countries would be a part of regional network. This would build on the flexibility factor and would be a natural progression for us,” adds Melissa.

Melissa O’Neal, General Manager, MyOffice

with communicating on behalf of bigger brands. For Sam, compromising on a suitable location was not an option, while at the same time, her business was still in the setup process and could

On the fast track to growth Return on investments reached

Renewal rate of

in its first year of operations.

has been reached through in house office clients, through agreements and referrals.

MyOffice reached their target by month six and are currently resting at

25% 80% 120% Scalable solutions Although the centre experienced a small level of turnover, Melissa says the overall retention of clients has remained strong since inception. She sees this directly related to the centre’s range of solutions that are able to grow with the business. Businesses who have established themselves at MyOffice have the option of moving to a traditional commercial office tower. Yet, they are choosing to swap their small offices with larger ones within the centre, as they begin to hire more staff. The extra room for flexibility was one of the biggest value adds for Sam Malik, Founder of the PR Professionals, a PR agency operating in Dubai and London. Image and prestige are incredibly important for a firm tasked

occupancy

not afford to be locked into a longer term lease. “Most of the offices in Dubai are handed over as a shell and core so, there is the additional cost and the responsibility of arranging contractors to do the fit outs, approvals and bringing in designers to do the décor and furnishing. This process alone takes months and effects business productivity. Time is money. Lastly, landlords expect 12 month cheques upfront, which is not suitable for most SME’s from a cash flow prospective,” she says. A cross-business culture Melissa also spoke about the shared vision of creating a new culture that

encompasses a transparent and collaborative environment for businesses. “I can’t think of one client who hasn’t done some amount of business within the centre, even if it’s through a referral. We hold informal networking events, but more often than not, we’ve created an open door policy where people can knock on each other’s doors, or ask the receptionists, who are aware of the different businesses, ” she says. Part of that strategy is developing a high level of trust between the centre and its clients early on. In a place like the UAE, it is quite common for businesses to over-promise and underdeliver. This is a major reason why MyOffice went to great lengths to build up its reputation as a trusted partner, instead of just a facility provider. When dealing with prospective clients, Melissa says her team spend a lot of time finding out exactly what they are looking for, before bringing them in. The packaged services are pretty inclusive, and clearly state what’s on offer and what would be considered as added extras, such as online marketing, graphic design and accounting services. “There’s nothing worse from a clients perspective than coming in needing something and being sold something completely different. That’s just not how we work. There are different levels of what we can offer, and although we market a full package, we are flexible and can break it down to specific services, such as licensing, office space, or other services,” says Melissa. “Our business model and flexibility lends itself perfectly to the unique requirements of businesses of all types and sizes. As long as the availability on our end is there, we try to offer it to interested clients.” With the recent push on registration and licensing from the Department of Economic Development in Dubai, Melissa says the centre is seeing more inquiries from businesses who want to make sure they have their operations and paperwork in order. Management holds advisory meetings intended to keep clients abreast of all the latest developments and requirements. She added that such moves from the government are useful in providing more clarity for businesses like MyOffice.

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OPPORTUNITIES

Assessing a new threat landscape With the launch of its new endpoint solution, Kaspersky Lab is planning to take on a vast and challenging corporate security market.

ver the past decade, malware has taken on many new forms and has evolved to become a force to be reckoned with. However, when looking at the overall trends, it is astonishing to see the rate at which new malicious programs are being created. According to Kaspersky Lab figures, there are an estimated 200,000 new threats surfacing every day, over 35,000 malicious programs specifically targeting mobile devices and over 100 million malware files in Kaspersky Lab’s collection. Just two years ago, the number of collected files stood at 50 million. This exponential growth was one of the key issues being addressed by Kaspersky Lab during a recent media event in Dubai. The event was organised with the intention of bringing the business community up to speed on the company’s insights, activities and also educate them about its newly launched corporate security solution.

During his presentation, David Emm, Senior Regional Researcher, UK and Global Analysis Team, Kaspersky Lab, spoke about general awareness levels about malware and the consequences of not adopting adequate security. “We are seeing that perceptions among businesses are lagging behind what the threat really is,” he says. “SMEs are in denial. Many of them believe that they are too small to be targeted, since they are not holding onto any government secrets.” David also added a bit of historical perspective, comparing the current threat landscape to decades past. “When I started out in this business, there were only 96 viruses out there; now there are thousands of variants of malware that have become extremely complicated and sophisticated, and they are being produced like a factory product. As more businesses find themselves entering the cloud and BYOD era, the potential for vulnerability increases substantially. Kaspersky Lab has become a company synonymous with the discovery of new

malware surfacing around the globe. The company played a major role in thwarting some of the biggest attacks to date, including Red October, Flame and Gauss, just to name a few. It also has made education a major focus of its business, as its website becomes a resource with the latest information on newly discovered threats, as well as predictions as to what may be lurking around the corner. 2012 was an unmatched year with regards to the number of targeted attacks, as well as the number of malicious programs unleashed by cyber criminals. Some of the biggest players in the online and technology space, such as Google, Dropbox, LinkedIn and Adobe were hit with attacks sophisticatedly designed to steal user information and sensitive data. By examining the root causes of such attacks, you can begin to understand how dangerous these threats are to businesses. According to Kaspersky, unpatched applications and software vulnerabilities are the number one cyber security risk

to businesses. A recent report by the company revealed how users of older editions of Oracle Java, Adobe Flash Player and Adobe Reader, are highly reluctant to switch to newer and safer versions, thus opening up their businesses to new threats. Looking at the latest statistics issued by Kaspersky Lab, it’s no surprise why the company chose to take on corporate IT. Despite the fact that businesses are becoming a major focus of cybercriminals, the awareness level of this evolving threat landscape remains incredibly low for businesses in general. During the Dubai event, the company recently announced the global launch of its new flagship corporate security platform, Kaspersky Endpoint Security for Business. The unified platform offers a dynamic combination of deep protection, efficiency, and streamlined manageability. With the intention of simplifying the IT management process, the solution comes equipped with a number of new and improved features that allow IT managers to see, control and protect their network. Among the biggest selling factors of the platform is the fact that the tools are all designed to be managed from a single console, says Vasily Dyagilev, Managing Director of Emerging Markets, Kaspersky Lab. He explained how it’s common practice for a large enterprise to purchase more than one solution and then bear the burden of managing them separately. “This is the primary reason why we wanted to design something that can be managed this way. It provides real value to business by bringing down both risk and cost. Why should a business pay extra for incomplete solutions that end up leaving holes along the way?” With the endpoint solution, administrators gain a greater level of visibility and control with regards to monitoring the whole infrastructure. For example, if a company SmartPhone becomes lost, tools on the platform can be used to wipe out sensitive data, as well as access points. Among other useful tools is the data encryption feature which is linked to other security solutions. Addressing related BYOD issues and a growing need for mobile security tools, the solution also enables businesses to containerise or, separate corporate and personal data on devices used by employees. The Middle East is currently one of the fastest growing regions for IT growth

Kaspersky Lab Executives in the press conference launching Kaspersky endpoint Security for business

Now, there are thousands of variants of malware that have become extremely complicated and sophisticated. They are being produced like a factory product, and are often given new life. spending, while it is seen as the number one player in the area for anti-malware sales. Breaking it down further, Vasily says the company is experiencing a growth rate of 20% in the corporate market, compared to eight per cent in the consumer space. The company estimates that it secures 17.5% of market share in the UAE, putting it head-to-head with its competitor Symantec. The new endpoint solution represents a conscious move to grow Kaspersky’s customer base across the board, including large enterprises, SMEs and home office clients. Vasily explained how emerging markets are showing many of the same behaviours when it comes to reacting to new technology trends. “Across emerging markets, we are seeing that people are very early adopters, value new technology and really see the benefits of it. It’s pretty much even or, even higher in Middle East, in terms of awareness.

Africa is more calm, while in the Middle East, there’s always something boiling. People are a lot more aware here than in other regions. This will help us in delivering our message,” he says. Taking that message home, however, requires businesses to first understand the value proposition of the platform. This cannot be established until they are convinced that these type of solutions are really necessary. In the meantime, Kaspersky will be doing its share of outreach with the intention of educating current and prospective clients about the solution and the direct role it plays in detecting and responding to new threats. The consensus reached by the Kaspersky team during the event was that this plan would take a lot of time to execute, as it requires changing people’s perception. Vasily is of the opinion that SMEs represent a real sweet spot for the company, as their size would work to their benefit in the implementation and management process. “When you look at SMEs, it’s more likely to find a company with 100 employees with all IT systems working and streamlined, than in larger enterprises where people are not on the same page. It would mean fewer people to educate and a higher acceptance level,” he says. On the other hand, he explained how large enterprises require very in-depth projects on infrastructure levels and a lot more than just the installation of software. “Education is one of the cornerstones in big companies, it takes more time, and depends on willingness of the customer to change things.”

March 2013

BUSINESS PIN UP

Taking off with online travel Tapping into the region’s high-end hospitality market, Blagoja Hamamdziev and his team are on a mission to make TravelerVIP.com a household name.

t’s been one year since Blagoja Hamamdziev and two of his friends came up with a winning business idea that led them to create a brainchild of a website by the name of TravelerVIP.com, a luxury hotel collection. The idea, which was originally born out of a casual chat around the kitchen table, was worked at on a parttime basis, until the team felt that they had all of the necessary pieces in place to take it to the next level. In tune with the region’s fast-changing and growing e-commerce landscape, Blagoja knew that time was of the essence in getting the business off the ground. “If you want to run an e-commerce business efficiently you have to be 100% involved and dedicated and that is the approach we took. Early on, we had to prove that model worked, in order to go full-time with it and present it for investment,” he says. Value proposition Essentially, the website is tasked with handpicking only the best four and five star hotels in the Middle East, while at the same time providing members with exclusive discounts and added perks. The website’s business model is built around three key value adds that it delivers to its members— the ability to save time and money, gain an insider’s view on the information and reviews available on the listed hotels. When logging on to TravelerVIP.com, a member can quickly sort through shortlisted hotels by destination and area, and read detailed and editorialised descriptions on what makes each hotel unique.

Providing the right information is a key focus area for the website, as it has an editorial team in place which does extensive research on the hotels and edits the descriptions to provide the details that members are looking for. The website does a good job in keeping the listings and information limited and tailored towards the user’s needs and requests. Blagoja says the extra time and effort being put in the back end goes a long way in saving the user’s time, which is usually spent researching and getting the necessary advice to make an informed purchase. The other component to the business is the exclusive special offers it provides to its members. The company offers discounts as high as 50% on luxury hotels

In order to raise money, you need to show that the business model works and that you are able to implement it and capture that opportunity. What we’ve been really successful with is the implementation part and delivering on our plans.

that are available for a limited amount of time. Compared to the most popular hotel booking websites, such rates are significantly lower, while the listings are designed to focus on quality instead of quantity. The website also offers members the option to book at the best available online rate, with the addition of added perks, such as vouchers, which are negotiated by the website. Making a business case Although such offerings are competitive, the ability to secure such deals was one of the biggest challenges that Blagoja and his team faced as they were starting up. “We refer to it as the chicken and egg problem. In order to get great offers, you need to show that you can bring in sales. Yet, in order to have sales, you need to have the great offers. So, do you get

offers first or members willing to buy?” he says. “As we built more relationships with hotels and started selling more, we have overcome that issue. In a very competitive market like travel, it’s never an easy process, but it has become much easier to get the special offers.” The business recently experienced a milestone moment, as it announced that it had secured funding of over USD one million, from an investment round led by venture capital firm BECO Capital, and a number of local angel investors. Previously, the co-founders were reliant on personal funds to keep the business going. When asked about the company’s strategy in attracting investors, Blagoja explains the process in very layman’s terms. “In order to raise money, you need to show that the business model works and that you are able to implement it and capture

that opportunity. What we’ve been really successful with is the implementation part and delivering on our plans,” he says. Comparatively speaking, Blagoja says he and his team have been incredibly lucky with regards to the investors they have partnered with. More often than not, entrepreneurs are put in a tight spot, as they attempt to balance the demands of venture capitalists, with the needs of their business. “The investors have been very helpful for the development of this business. It’s not just about the money, but the help that they have provided in opening new doors for us in connecting us with partners, that I don’t think other firms would be willing to do. ” Travel market trends That opportunity is estimated to be growing rapidly, as online travel bookings in the region are to reach USD 15.8 billion and

make up 22% of all travel bookings within the next two years, according to a recent report by global travel market research firm PhoCusWright. The report, entitled Assessing the Online Travel Opportunity: The Middle East, travel, also identified the UAE as the most mature market in the region, owning 47% of the region’s total travel and tourism market, and 60% of the online market. Couple such figures with explosive estimates for the region’s e-commerce markets, and you’ve got a strong business case to present to investors. “People in this region have high disposable income and are very protravel. For the UAE especially, people are more prone to explore, that’s why most of us are here to begin with. Also compared to the US and other markets, people here have the luxury of a lot more vacation days,” adds Blagoja. Although, the UAE

March 2013

BUSINESS PIN UP IT is another area that needs considerable time and money for an e-commerce business. “We have brought one of the best IT professionals in the online travel scene, he’s worked for other online travel startups, and has helped build those businesses and get them off the ground. That was an area where we didn’t compromise on spending, because IT is crucial in understanding your customers,” he adds.

Blagoja Hamamdziev, Co-founder and CEO at TravelerVIP.com

Online travel bookings in the region are to reach USD 15.8 billion and make up 22% of all travel bookings within the next two years, according to a recent report by global travel market research firm PhoCusWright. is currently the website’s main focus, he says he’s seeing very strong interest and engagement levels from Saudi Arabia. Although data on that market is not readily available, he seems convinced that the financial opportunity is much larger there. Blagoja says his team spends a great deal of time tracking their customer’s behaviours on the website and has identified a number of travel trends arising from the users in the region. According to the website’s data and numbers, the UAE is currently the most popular destination

for users outside and inside the UAE. UAE-based members, who book on the site, often make reservations for weekend trips, selecting hotels in different Emirates. The second biggest destination for travellers in lies within Middle East region itself, with countries like Lebanon and Turkey, remaining a popular choice. During the summertime, the UK and Europe are the most popular destinations, with travellers in the region booking to London, Paris, Geneva and Munich. Thailand, Malaysia and Indonesia are among the most sought after Asian destinations, while a new trend that has surfaced is the growing number of searches for hotels in Australia. Blagoja sees this trend arising from a desire from well-travelled users to try something new. A few words of advice Looking back on his year-long journey, Blagoja shared a few tips for entrepreneurs new to the world of e-commerce. “I would tell them not to wait until they have a perfect website before launching. Put it up online as soon as possible and then let people come and tell you what they think about your website and your business. Let people vote with their money and interest on your site and ask about what they think needs to be tweaked.”

Setting new goals After securing this sizable sum, TravelerVIP.com has now positioned itself on the fast track to growth and Blagoja and his team have big plans ahead of them for the year. “Now that we have raised our round of financing, we will use this money to significantly grow the business, and it will be invested into online advertising and marketing campaigns, PR, radio advertisements and magazines,” he says. “The goal is for TravelerVIP.com to be the leader in online travel in the Middle East, we want to focus on this region until we conquer it, after that we can think about different geographies.” He added that the business would aim for 20,000 bookings by the end of the year to make it the largest online travel website in the region. Within the next few months, TravelerVIP.com will unveil a mobile app that will be part of its marketing and distribution strategy. Blagoja also revealed that the company is in discussions with some big name partners and websites that he hopes will become platforms where the business can distribute its products. Currently, the website has an agreement with the National Bank of Abu Dhabi, which features its offers to the bank’s credit card customers. For the time being, he explains how the business will open up its website to advertising, as he sees this as diluting the valued offering presented to its members. The plan will be to continue its focus on luxury hotel offerings, as the market continues to grow and fluctuate. Blagoja noted how it’s common for hotels to drop in quality over time, thus requiring his team to stay on top of the offerings, to ensure that its listings live up to its promise. He emphasises that only by talking to your customers can a business get a realistic picture of how it is performing. “In the end, your opinion doesn’t really matter. Knowing your members and customers and getting their feedback on the website is the only way you can move forward and succeed.”

MANAGEMENT

Rent-a-manager Fractional managers can provide real solutions to an SMEâ&#x20AC;&#x2122;s growing pains, by offering a wealth of experience, for a much smaller cost, writes Dr. Ashraf Mahate of Dubai Exports.

n todayâ&#x20AC;&#x2122;s competitive business environment, it is very important for firms to effectively manage their operations. However, this implies that firms will need to recruit and retain the best talent. This is a simpler process for larger companies who can, in the first instance afford to recruit such staff, and in the second instance, have sufficient work to keep them fully occupied. It is a completely different reality for SMEs who have limited budgets and a workload for highlevel full-time management staff. One can argue that SMEs are in greater need of experienced staff than perhaps larger firms. The common approach by SMEs has been to use consultants who tend to be experts on a particular topic or area. However, the problem with consultants

is that they tend to be project or assignment based. Even if the consultants can be hired on a longer term basis, the fact that they are external employees can be an issue as they may not share the same corporate culture and values. In areas where confidential information is concerned, some firms may not wish to share it with outside staff who may also supply services to their competitors. In some cases, companies have sought to bring in non-executive directors, but they tend to be at the senior level and are more inclined to provide strategic direction. This means that SMEs have little assistance on a day-to-day level for non-routine aspects. Of course, an SME coach can be helpful, but they also tend to play an advisory role and are not usually hands on. In order to deal with these

Role of fractional manager So, how does fractional management work in reality? The usual manner is for a fractional manager to work for one, or possibly two, days a week with the company. The fact that a proportion of the time is spent with the company implies that it receives strategic hands-on help, especially where troubleshooting is required. As such, the fractional manager is not bogged down with routine administrative tasks, which can be given to a junior staff. In doing so the company is able to obtain experienced staff at a fraction of the cost to carry out tasks required. This means that smaller firms who do not have sufficient work can still benefit from expertise. At the same time, other staff (and maybe the owner) are educated

The fact that a proportion of the time is spent with the company implies that it receives strategic hands-on help, especially where troubleshooting is required. As such, the fractional manager is not bogged down with routine administrative tasks, which can be given to a junior staff.

shortcomings, the growing trend has been for SMEs to go with a fractional management approach. What are fractional managers? At the outset, it should be pointed out that fractional managers are employees of the firm. As such, they are definitely not consultants or normal part-time employees. Fractional managers are senior level individuals with a wealth of knowledge of running profitable operations. Their key asset, in many respects, is the proven experience that they have in managing companies with successful outcomes. As employees of

the company, they become part of the corporate culture and values, and hence, differ from consultants. Fractional managers, unlike consultants, are concerned about the longer term survival of the firm. Like most employees, fractional managers can be relied on while out of the office. In fact, in many cases fractional managers have the company email system and can be contacted outside their regular office hours if required, without incurring additional costs, as is the case with consultants. At the same time, their remuneration package can be linked to the performance of the company, which is not always the case with consultants.

through the regular contact with the fractional manager. Therefore, not only is the firm able to solve problems with hands-on approach, but also benefit from knowledge transfer. Timing is everything? The obvious question that arises is, at what point an SME should bring in fractional managers? The real answer is that there is no golden rule. Some SMEs tend to bring in an experienced fractional management team right from day one, but on a limited engagement of a day every fortnight, for example. However, when the firmâ&#x20AC;&#x2122;s turnover exceeds

March 2013

MANAGEMENT

AED one million, then the business model needs to move away from a small operation to one with a formal and mature organisational structure, which allows for scalability. There is no upper limit as far as bringing in fractional managers is concerned. Some large firms continue to employ fractional managers to benefit from their experience and perhaps contact base. The real benefit of fractional managers is that they allow the firm to benefit from retaining the same expertise and capability of a full-time experienced manager, without the additional cost of another top-level executive. More importantly, it gives considerable flexibility to the firm to ramp-up the usage when required or, even reduce it if business slows down, either seasonally, or cyclically. Moreover, there are the financial benefits that can be derived from the experience and know-how that is brought into the firm through cost savings. Meanwhile, experienced staff are able to utilise their contact base, in order to assist the firm with business development, especially in foreign markets. The process of exporting is a difficult one, but the rewards can be well worth it. Considering this fact, exporting activity among SMEs remains on the low end. Export inertia is certainly a major cause, but so is the lack of knowledge and experience of dealing with foreign clients. Fractional managers can handhold SMEs to enter and become successful in global markets. Anecdotal evidence also shows that banks are more comfortable to lend to SMEs that have managers on their payroll who have a proven track record and are known in the industry. Outside the region, fractional management has proven to be an extremely successful strategy in boosting the capabilities and knowledge base of SMEs. In the UAE, the concept has been successfully introduced by the Burki Group (burkigroup.com), which brings together a large group of senior executives across a diverse range of business areas from IT, to financial strategy and business planning. The key advantage of using a company such as Burki Group is

Dr. Ashraf Mahate of Dubai Exports

that the SME is able to have a single contract with a supplier of experience and knowledge, but with differing demands. In other words, SMEs by their very nature have problems or issues that require a different set of skills. For instance, at the beginning, they may wish to develop

The real benefit of fractional managers is that they allow the firm to benefit from retaining the same expertise and capability of a fulltime experienced manager, without the additional cost of another top-level executive. an IT strategy. This could be followed with business process optimisation, and then an application for bank financing. Through using a single source supplier, SMEs can utilise a diverse range of skills through employing different managers for periods of as little as one morning every fortnight to three days a week. Bringing in specialist experience certainly has huge benefits for firms.

A recent survey by the Burki Group shows that bringing in specialist expertise in the area of IT can reduce a firmâ&#x20AC;&#x2122;s spending in the area by as much as 40% because they have the experienced staff that is able to plan and manage the systems more efficiently. There are of course disadvantages that come with using fractional managers, the most important one being that the SME may not really know what it wants from these professionals. The firm has to be clear from the beginning as to what will be required. For instance, it could be the implementation of an IT project or, it could be regular troubleshooting. Whatever the goal may be, it should be documented on a contract and should include realistic expectations and targets that are agreed by both parties. Another potential problem area for SMEs is that they may overestimate the capabilities of the fractional manager, based on the perception that they come with wealth of experience and knowledge. Unfortunately, not even the best of managers can perform miracles in little time. Business is about understanding the problem or situation, planning the best strategies and then executing the plan effectively. These steps take time, as they may involve various sub-steps, such as developing particular innovative tools or, forming partnerships. SMEs need to be realistic with regards to timeframes. Thirdly, SMEs need to provide sufficient resources for the fractional manager so that assignments can be completed efficiently and correctly. This usually involves discussing each major project and the resources that will be required ahead of time. Fractional management is a great concept that SMEs can utilise to make their businesses grow and become global. Fractional managers can be used in any aspect of a business where there is a regular need to address major non-routine issues as a member of the management team on a less-than fulltime basis. Of the countless companies that have used fractional managers, there exists a common perception that they represent an excellent cure to a companyâ&#x20AC;&#x2122;s growing pains.

Less actual (more virtual)

wire Less

More points

Sophos UTM 100

Gives small businesses access to enterprise-grade security at a fraction of the cost. Includes many of the capabilities typically reserved for enterprise solutions, such as: 

Web Application Control features



Network Firewall & IPS



Remote Access and VPN



Wireless Protection



Web antivirus and URL filter



Email antivirus and anti-spam capabilities

Unified

Web

Endpoint

Mobile

Network

Data

BUSINESS GURU

Shaping a global network In an exclusive interview, HE Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry, talks about the Chamber’s expansion strategy and vision for Dubai’s future.

azing at a bird’s eye view from the thirteenth floor of Dubai Chamber’s headquarters, DirectorGeneral HE Hamad Buamim is observant as he monitors the traffic coming in and out of Dubai. “There was a time when businesses in Dubai had to travel to find new opportunities. Now, considering the large number of events happening here, everything and everyone is coming to us,” says Buamim. That’s just one of several indicators pointing toward the positive for the Emirate’s economy. During our candid interview, he takes a trip down memory lane and recalls just how much the Chamber has evolved and expanded since he first joined in 2006. Having wrapped up a very successful 2012, he can’t help but feel a sense of accomplishment and enthusiasm for what this year may bring. Over the last six years, the Chamber has nearly doubled its membership and tripled its bottom line. The one area where it has cut back was its staff, as Hamad explained how its restructuring and has led it to become more productive and focused. “We have gained a solid reputation in the business community and I believe we are now more relevant

than ever to businesses. Engagement is something that has given the Chamber a real advantage over other entities; the relationships we have are the real value add for our members,” says Hamad. “The government is quite clustered and limited, and businesses need to work in a more structured way. This is done efficiently through business groups under the umbrella of the Chamber, as we are the link to the government.” Exceeding trade expectations 2012 was quite a year for Dubai Chamber as its members experienced record growth in several areas. The value of total member exports and reexports rose nine per cent, compared to the previous year, while member exports to GCC countries grew by 51%, according to the Chamber’s 2012 Annual Report. Other bright spots uncovered by the report were Saudi Arabia, which was identified as the top export market for members, while Iraq replaced Iran as the largest non-GCC export market. “There is a very linear relationship between the export growth of our members and overall trade levels in Dubai. The growth story is more diversified than ever, yet the GCC and

Middle East regions still depend greatly on Dubai and its position as a regional trade hub,” says Hamad. In an effort to globalise its members and promote Dubai on the international trade scene, the Chamber has upped the number of visiting and outbound delegations. Last year, the Chamber organised trade missions to India, the US, Libya, Ethiopia and Azerbaijan, its biggest delegation to date. These countries represent the current target markets for the Chamber. “Keeping people connected and networking can really help boost optimism. Creating these new opportunities and providing access for businesses are some of the highlights of our activities. Internally, we will continue to do what we have done traditionally for years, such as documentation, services, certificates of origin, resources, educational outreach, settling commercial disputes and CSR activities through our Centre for Responsible Business,” he says. Target markets Embarking on a new mission, the Chamber last year opened up its first overseas office in Baku, Azerbaijan. Hamad revealed plans to launch two new offices in Addis Ababa, Ethiopia

HE Hamad Buamim, Director-General, Dubai Chamber of Commerce and Industry

March 2013

BUSINESS GURU and Eribil, Iraq, by the end of the first quarter of 2013. “We’ve been paying a lot of attention to Ethiopia, as it’s one of the highest growth markets for our members. We are witnessing more and more announcements from Dubai-based companies who are doing business there. With a physical presence, we will be able to do a lot more there,” he says. Such expansion plans are just phase one of the Chamber’s larger strategy to enhance trade opportunities and provide valuable resources for its members. “Our offices will be an essential resource for our members in the future as they will provide local market intelligence and advice and information on opportunities in those markets. A lot of big players are going to consulting firms. What we are trying to do with our new initiatives is to provide highly valuable information to our members,” he adds. New expansion strategies The next phase would be to establish a presence in key markets of interest within the next two years, including Saudi Arabia, India, China and Brazil. Within five years, Hamad says he is aiming for expansion into 20 other locations, mostly along neighbouring markets including Africa, Turkey and the CIS region. Aside from delegations, one of the Chamber’s most successful initiatives has been its Country Focus Briefing sessions. The sessions are organised in association with embassies, consulates, business councils, trade centres and representative offices of target countries. The main objective of the briefing is to introduce business opportunities in one chosen market to Dubai’s business community, so as to empower them to explore emerging export destinations, develop relationships with relevant trade bodies as well as enhance their competitiveness in the global business arena. So far, the initiative has brought into focus new markets like Chile, Switzerland, Japan, Turkey Brazil, Ethiopia, Australia, the Netherlands, Kurdistan, Kazakhstan and Qatar. In addition, the Chamber is planning this year to open membership to international delegates. These “serious” businesses, located across various regions, will become part of a global network that will be able to benefit from the Chamber’s information on Dubai. Hamad explains that the move will aim

HE Hamad Buamim, Director-General, Dubai Chamber and HE Marwan Bin Beyat, General Manger of the private office of His Highness Sheikh Majid bin Mohammed bin Rashid Al Maktoum, during the launch of Tejar Dubai

There is a very linear relationship between the export growth of our members and overall trade levels in Dubai. The growth story is more diversified than ever, yet the GCC and Middle East regions still depend greatly on Dubai and its position as a regional trade hub.

to speed up the networking process and help businesses find new opportunities in an efficient manner. “Every year we receive around 200 incoming delegations from other companies. We try to provide the best relevant information and matchmaking opportunities for them. Usually this is limited by time and availability. So, we are trying to expand their access on information and trade opportunities that they can access any time. We hope this will improve matchmaking potential, by learning more about business landscape and take it forward,” he says.

The voice of business As Hamad sees it, one of the most crucial responsibilities of the Chamber is its role as a facilitator between the business community and the government. The challenging times that the 2009 crisis brought to Dubai were a major obstacle in the Chamber’s efforts. Yet, instead of playing it safe on the sidelines, it has vowed to work hard to keep business booming. “Since that time, our focus has turned to ways we can keep things moving. We found that the best way to do this was to keep arranging meetings and discussions with government officials.” In 2010, the Chamber has launched a number of programmes aimed at engaging the business community on a variety of issues. Talk Business at Breakfast was one well-received initiative which brings together leadership from different entities, such as the UAE Central Bank and relevant business community with the purpose of hosting an honest discussion that addresses various concerns and issues. These have been very successful selling out well in advance. When people pay money to come and meet these people, you can see the level of engagement and interest from the business community,” he adds. Central to this responsibility is its advisory role on regulatory issues. The Chamber is in a unique position to gather the views and feedback on newly proposed laws and report back any

Trade

GOING GLOBAL Highlights from 2012 Annual Report Value of Dubai Chamber member exports and re-exports achieved a record growth of nine percent in 2012 1

Saudi Arabia identified as top export market for Dubai Chamber members 2012 2

Iraq named top non-GCC export market 3

Dubai Chamber attended 62 events in 41 cities in 28 countries (2012) 4

Membership 2012

140

2011

128

2010

118

2009

108

2008

103

2007

13%

Source: Dubai Chambers

y-o-y change

(000)

Visiting delegation attendees

Year

Visiting delegations

Delegations

170

201

220

2007

2008

2009

1572

1575

200

Turkey China Iraq Azerbaijan Libya

India Ethiopia Nigeria

Brazil

Egypt

Tanzania

Target markets for 2013: Ethiopia

Iraq

Azerbaijan

Markets of interest:

208

187

2010

2011

Saudi Arabia

192

Two-year plan

2012

Five-year plan 870

1093

1061

Saudi Arabia

Brazil

China

India

Turkey

Egypt

Libya

Nigeria

Tanzania

March 2013

BUSINESS GURU

A panel of experts debate on the topic of Enhancing SME financing, as part of a launch event for Dubai Chamber’s SME financing guide

concerns and issues. Hamad explains how the Chamber has developed the reputation of a trusted neutral partner which is tasked with balancing the interests of business with the rationale and requirements of surfacing legislation. “When we agree with their views, we really go out of our way to defend them. This is one of most important of our roles, which is to voice the concerns and issues of the businesses to the government. We are focusing more and more on being the voice of business,” he says. Creating new opportunities SMEs currently make up a majority of the Chamber’s members, and are encouraged to participate in seminars, workshops and trade missions in which they can benefit from. Hamad says, now the Chamber will soon focus on supporting high-potential startups and entrepreneurs. Inspired to try something different, the Chamber officially launched Tejar Dubai at the end of 2012, a mentorship and accelerator programme focused on equipping Emirati entrepreneurs with the resources and expert advice. The term Tejar, which means merchants in Arabic, is all about getting back to the concept of Dubai’s original business community, which was made up of merchants. “We have so many established and successful businesses who want to help entrepreneurs and small businesses by sharing their experiences. That expert know-how is the secret that we hope we will be

able to identify and utilise a panel of experienced business people who want to pay back to society through support and mentorship. They will mentor entrepreneurs and provide them with information and advice that classrooms cannot,” he says. He also revealed how a number of banks and high-profile Dubai grown businesses will be involved as partners for the programme. In the next few months, the application process will be officially opened and the entries will be screened and assigned to an expert panel tasked with selecting the best of the bunch. “The programme will have a lot of sides to it, and will be practical so that it can graduate people at the end of the day into the workforce. We hope to see real businesses established by the end of the year, and hopefully, on the right track to success and growth,” says Hamad. He added that more details will be forthcoming in the first half of this year, and that there is the possibility of expanding it to include expatriates as well, depending on the success of the first round. Engaging businesses There have been a number of proposed laws in the headlines over the last year. However, action on passing them has been delayed, due to various reasons. Last year, the Chamber had the task of reviewing at least 20 laws at the federal and local level. Receiving the most attention were the UAE Companies Law, Bankruptcy law and SME finance law. Hamad sees the Companies Law as

the most important law that will need to be passed before others. He’s optimistic to see it come into effect this year, as businesses become more mature and prepared to meet such requirements. During a recent event organised by the Chamber, Dubai-based businesses were invited to share their perspective and views on newly proposed laws in the food and beverage sector. The businesses voiced their concerns about the level of strictness of some of laws being placed on Dubai-based business, and compared them with more lax regulation in neighbouring countries. The point of the meeting was to introduce higher standards and convince businesses of the longterm benefits of investing in customer service and quality. “We want Dubai businesses to be ahead in standards and we should be able to play with international standards in order to expand. The government is trying to emphasise importance of businesses taking responsibility in the rights of consumers, and businesses want less restrictions in that area,” says Hamad. “We believe that customers should have the same level of rights here in Dubai as they do in other countries; we believe that this market is not there yet, but we can accomplish this with the least level of damage to businesses. “ With the intention of addressing the SME financing question, the Chamber launched an SME finance guide late last year. A panel of finance experts and established SMEs were commissioned to provide their input to be used in creating the guide. As part of the guide’s launch, a total of nine banks committed to financing SMEs that stick to those guidelines. In Hamad’s view, the biggest obstacle for SMEs seeking funding is their own know-how in presenting themselves to the banks. “Realising this gap in communication, we came up with a guideline that aims to provide more clarity and structure for SMEs when putting their case together for banks,” he says. “Most banks are currently only lending 2% of their portfolio. Many of them have expressed their intention to expand that figure to 15% or 20%, so, we are talking about five times more lending than in years past. Banks have the will and money to do it; SMEs have the great ideas but have to work on packaging them in the right way.”

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March 2013

Where the grass is greener An inside look at what life is like working for some of the UAE’s top employers.

he UAE has undergone a number of challenging trends with regards to human resources in recent years. For one, HR budgets have been downsized, while a number of pressing issues like retention, training, women employment and Emiratisation, still remain at the top of the agenda. While HR professionals set their benchmarks for the year, many tend to forget about the issues that matter to employees the most. One programme that has put such issues in the spotlight is the annual Top Companies to Work in the UAE list, which is conducted by Great Places to Work Institute UAE (GPTW). The list recognises the top employers in the country and is compiled by evaluating confidential employee surveys, as well as audits on management and HR practices. It also represents a benchmark showcasing best practices utilised across various industries. The institute is part of a global research, training and consultancy firm that recognises the best workplaces in over 45 countries worldwide. Raising the bar This year, the institute decided to expand the ranking to include a total of 15 companies. Many experts are seeing this as an indication that more UAE-based companies are putting a real emphasis on valuing their human capital. “We have seen a significant increase in the number of companies participating in our programme and following the completion of the evaluation procedures. In the latest round we found more than ten companies that deserved to be recognised as top companies to work for. Our study is about recognising the top companies to work for and we hope to recognise more companies next year,” says David Robert, CEO of Great Place To Work Gulf. This is the third year that the ranking has been applied to the UAE, and within that timeframe, David has noticed how the issue of trust has become more prevalent among

leading companies. “Employers in the UAE are increasingly recognising the benefits of understanding what makes a great workplace. The notion of becoming a great place to work is recognised by leaders in a variety of industries,” he says. “Most importantly, the UAE government has continued to embark on various initiatives that ultimately seek to enhance the performance of our human resources, especially young talents, by identifying creativity and channelling it appropriately,” he added. Leader of the pack Topping the list this year is Microsoft, which also took top honours in 2011. The company has put significant effort behind many of its workplace programmes, such as its WorkLife Balance Charter, which, according to the Institute, helped the company to achieve the highest score in its proprietary trust measurement tool, The Trust Index. Such tools set the principles that the team uses in raising awareness of some of the key issues impacting employee work-life balance. Samer Abu Ltaif, Regional General Manager, Microsoft Gulf, explains how the company keeps its HR strategies on point, as part of an ongoing process. “Making the company a great place to work is extremely important to me personally, as I believe that most, if not all, staff think of the office as their second home,” he says. “Being able to provide a safe environment where my staff can be productive, share ideas, contribute to the business and innovate is a major priority for me, so our HR team is always looking into new and innovative ways to engage our employees and ensure that they are satisfied,” he adds. As the inaugural winner, Samer explains how the ranking has helped Microsoft Gulf improve on its own programmes and policies. In addition to classical KPIs, employee motivation, perception and dedication are all taken into account when it comes to company strategy and business planning. Excelling across all of these categories, Samer

March 2013

Great Places To Work winners

says is directly linked to a comfortable and unique workplace environment, where employees are happy, comfortable and much more prone to posses a sense of loyalty and ownership. “I strongly believe that you need to be the best to attract the best; we are after all, as a company, only as good as the talent we retain. It’s extremely important to be able to attract the right people in the market place, and in order to do this our HR team goes to extreme lengths to ensure that we are not only perceived as a favourable employer, but that we have the programmes in place to back these perceptions,” Samer adds. Creating a superstar team Bayt.com, the only SME on this year’s list, prides itself on its employee-centric culture. Its HR team is dedicated to not only bringing in the right people, but also developing their skills, by putting a big emphasis on training. Bayt’s employees, internally referred to as “Baytheads”, undergo daily training sessions where content is prepared by employees and is shared across the offices each day. The sessions are part of the company-wide STARS programme, which stands for systems, technique, activities, role-plays and stories. Throughout the process, employees are trained on internal and external software systems, and advised on systematic procedures to accomplish tasks. They are also able to measure the amount of work related to inputs and outputs, and share lessons learned in client interaction, with the wider group.

To be imprinted in the minds of the jobseeker as an employer of choice, you need to connect with them at an emotional level. Regardless of company size, it’s important for employers to take a holistic approach to branding throughout all activities related to the hiring process. “We value transparency. Managers are encouraged to have an open and frequent dialogue with their team. Baytheads are also involved in much of the decisionmaking process at Bayt.com, whether it is for a new product or on improved policies. This works from both ends – the decisionmaking process benefits from the different points of views and this improves group cohesiveness among our team members,” says Suha Mardelli, HR Director at Bayt. com. The Speaker Program, taps into the insights of leading executives, who visit the company’s office on a monthly basis to talk about out-of-the-box topics that can expand perspectives, such as

innovation through movie making and the psychology of change. In an effort to recognise its wellperforming employees, the company organises monthly “fiestas” aimed at providing regular feedback and bringing the various teams together to celebrate. During the most recent fiesta, employees held the event simultaneously across its 11 offices in the MENA region, and this experience was virtually beamed and shared with all offices on Google Hangouts. People policies FedEx Express earned the third spot on the list by creating its own employeecentric philosophy that guides its various efforts. It took top honours last year for its P-S-P or “people-service-profit” designed to thank employees who exemplify it on a daily basis. It uses the Purple Promise Award (PPA), which recognises staff who go beyond the typical expectations of their jobs to cater to the needs of the customers. “As part of our corporate culture and philosophy of putting people first, we ensure that managers remain available, open and transparent. This fosters an environment of two-way communication between managers and team members,” says David Ross, Vice President for FedEx Express Middle East, Indian Subcontinent and Africa Operations. Among the policies that have garnered the most interest among FedEx’s employees are its career progression and focus on promoting from within the organisation. These policies ensure that

March 2013

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Monde Interna

Marriott

Microsoft

Corporate so

A culture of appreciation

Work-life balance The company has managed to create a culture that is both business and employee focused. It also has introduced across multiple teams and businesses within Gulf the idea of having a visible Work-Life Balance Charter that the whole team prepares and signs together.

Every year in the firs International globall year, employees pa distributed to camp CSR efforts of pack at-risk youth about disaster relief efforts disabled and low-in its plants in KSA an

As an example, a Certificate of Excellence comes in the name of the associate from the Corporate Headquarters in Washington DC, and signed by the Company Co-Founder J. Willard Marriott, if an associate receives a thank you note from a customer on excellent service.

FedEx Express Fed Ex’s P-S-P or “people-service-profit”

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TO COM

This philosophy guides all of their efforts. To thank employees who exemplify PSP, it uses the Purple Promise Award (PPA) which recognises a team member who goes beyond the typical expectations for his or her job to ensure the customer’s needs are met.

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THE One Community involvement Employees are invited to participate in the organisation’s community involvement efforts. The company set up THE Onederworld - a Sustainable Village Community programme with balanced quality Education at its heart.

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Ericsson

Humanitarian work Ericsson Response is a non-profit employee volunteer initiative that works in partnership with aid agencies to facilitate ICT solutions for humanitarian relief work in disasters and enablers of economic growth and quality of life. This non-profit activity engages Ericsson employees in volunteer work with no commercial objective and is a key component of Ericsson's corporate responsibility activities. Not only is it inspiring those who participate but is a source of motivation, empowerment and value creation for all Ericsson employees.

DHL

Employee value proposition

The global logistic firm’s human capital work has centred on this to include growth, impact and pride – all of which are evident from their onboarding programme to the customised learning and development plans each employee receives.

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Omnicom Media Group

Engagement and empowerment

The company’s HR forums are championed by the senior management and HR Leaders and provide a confidential team environment for all employees to have a voice about their working lives. This incorporates all facets associated with discussing company initiatives, policies, idea generation, learn and development and enhances the collaboration between management and employees to create empowerment across the entire organisation.

General Electric

elez ational

Focus on health and wellness

ocial responsibility

st week of October, Mondelēz ly participates in CSR work. This acked 5000 + meal boxes to be ps in Somalia and Pakistan. Similar king food for the hungry, educating health and nutrition, supporting s, and providing aid to the elderly, ncome families were replicated in nd Bahrain.

HealthAhead is a GE company-wide initiative for employees that promote a culture of health through support, programmes and resources to promote healthy living at work and at home. In addition, healthymagination is a GE corporate initiative that focuses on employee and public health. It’s about becoming healthier, through the sharing of imaginative ideas and proven solutions.

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Merck Serono UAE Communication and representation

Merck UAE developed an Employee Council where every 15 employees elect one member to be their voice to senior managers. The employee council meets directly with the Managing Director of the organisation, the HR Director and the VP of the region. In this meeting, all issues are discussed openly and there are no barriers to topics.

Dulsco

Feedback and assessment The company’s open office model facilitates two way communication, especially down-up, and it also has suggestion boxes across every location and department to encourage suggestions through awards and recognition. The GPTW employee satisfaction survey is conducted each year to understand the areas of strengths and weaknesses and to understand how it fares against other companies.

OP 15 MPANIES

work n the UAE

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PepsiCo

EMC2

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Mentorship and coaching

Employee-centric culture EMC works hard to provide a caring culture, going beyond what is required. For example, it grants paternity leave, marriage leave, compassionate leave, even though it is not required to do so by labour law. And it grants public holidays in excess of government announcements.

Employees benefit during welcoming from an assigned “functional onboarding coach” and a “culture coach.” These two mentors help the new employee adjust to the company and its culture.

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Securities and Commodities Authority

Bayt

Motivation and support SCA earned a spot on the top UAE companies list in part because of its creative approach to thanking and motivating its employees. SCA offers a continuous variety of awards, recognition programmes, and incentives that drive employees to grow and drive toward both personal and professional goals. SCA also offers generous benefits, such as enhanced maternity and paternity leave and interest free loans to employees for cars and homes.

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Training and development The company works hard at creating an employee-centric culture. In developing employees, for example, it conducts a daily training. These 30 to 40 minute training sessions are called STARS training and the content is prepared by a baythead and the same content is shared across the offices each day.

ning

March 2013

HR policies also don’t cost an employer, so an SME with a limited budget can easily implement them,” he says. For SMEs that want to do more to invest in human capital, David Robert of GPTW, suggests that they focus on a few essential areas of the business, such as corporate culture, recruiting and training, employee value proposition and community work. To start, SMEs should find out how welldefined their workplace culture actually is, and how appealing it is to existing and prospective employees. The next step would to be take a closer look at the management’s strategy in selecting and cultivating the right talent. Thirdly, it must ensure that the value proposition presented on its website is clearly defined and accessible. Lastly, the organisation

Bayt staff

existing staff are the first considered for any job openings and growth opportunities. David also revealed how a number of senior executives in the company actually started out as couriers and through hard work, were able to climb the corporate ladder. Leading one of the UAE’s largest companies, it takes a great deal amount of hard work and effort to help instill such values across its various divisions. David also explained how the rankings has become a strong evaluation and recruiting tool. “Not only is being recognised as a great place to work proof of the effectiveness of our P-S-P philosophy, more importantly, it shows the confidence that our team members have in FedEx. It also helps us to continue to attract the best talent, which in turn further enriches our work environment,” he says. “During the last two years we have received more qualified job applications for open positions, while experiencing a lower turnover rate. In 24 months, the FedEx Express UAE team members have increased markedly,” he added.

David Robert also revealed that GPTW will plan to launch a 2013 Top Small & Medium Companies in the UAE list, later this year. This benchmarking study will help SME companies to understand the level of trust within the workplace and if their HR practices and programmes are effective and sustainable.

Re-thinking your HR strategy With the exception of Bayt.com, an overwhelming majority of the listed companies fall under the category of large enterprises. Although it may be a common perception that a company can only raise such standards through a sizable budget, many experts see this as a myth. “SMEs with limited hiring resources can still attract the very best and most talented professionals by creatively and competitively managing their HR activities and employer brand,” says Suha. “To be imprinted in the minds of the jobseeker as an employer of choice, you need to connect with them at an emotional level. Regardless of company

size, it’s important for employers to take a holistic approach to branding throughout all activities related to the hiring process,” she adds. Microsoft’s Samer also shares this opinion and recommends a few low-cost ways that SMEs can make some progress in this area. “There are simple changes that can be made to boost employee satisfaction that can even cut a company’s spending costs. An excellent example of this is flexible work hours and allowing employees to work remotely. These are both policies that we have at Microsoft that greatly increase productivity, while keeping the employees happy. These

Bayt.com awards night

should ensure that it’s doing enough good in its surrounding community to help form a strong connection between employees and their work. David Robert also revealed that GPTW will plan to launch a 2013 Top Small & Medium Companies in the UAE list, later this year. This benchmarking study will help SME companies to understand the level of trust within the workplace and if their HR practices and programmes are effective and sustainable. The institute also has plans to launch a new development Journey Training programme that will be designed to help managers implement tactics proven to drive trust in the workplace. He concluded: “Any company can be a great place to work. Creating a strong, high-trust workplace culture is a journey that requires time, resources, and above all, commitment from everyone in the organisation, from the top down.”

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MARKETING

All aboard the social media express Research suggests that SMEs and large businesses alike are failing to see the big picture with regards to strategising and analysing their activities.

ver the past few years, the MENA region has seen Internet and mobile penetration skyrocket, with social media websites seeing unprecedented growth in new users. We can recall seeing this firsthand; platforms were key communication channels used during the uprisings of the Arab Spring. More recently, the region has entered a new phase, putting its focus on the business benefits of using social media in marketing. Mixed attitudes among businesses On the business end, itâ&#x20AC;&#x2122;s a much different picture, as research shows that social media adoption levels remain on the low end. Husam Jandal, Digital Marketing Consultant & Trainer, WSI Academy, says there are a number of factors keeping businesses at bay when it comes to implementing effective marketing strategies on social platforms. He recently led a workshop in Dubai

aimed at educating SMEs specifically about the value of social media today, as well as best practices. â&#x20AC;&#x153;Some of the professionals who attended were comfortable using social media for personal use, but many were unaware of how to use them safely for business. Others were worried about the possibility of things going wrong, and were unsure of how to manage situations, such as handling user feedback and managing conversations,â&#x20AC;? says Husam. Coming into the workshop, he admitted how a portion of the participants were at first skeptical about the value add of social media to their businesses. Such attitudes are being echoed globally by SMEs who are either too cautious about communicating or, have already tested and tried an approach and were ultimately disappointed with the results. A recent report by Econsultancy provided some insight on this topic by evaluating the perceptions of SMEs in the UK on their use of Facebook pages and tools. According to the survey, a quarter of SMEs use Facebook to market

their organisations, yet more than a third of them (37%) say they don’t think it has helped their business in any way. It was also found that only 21% of respondents believe they are doing a good job of using the platform to market their business. The leading face of social media The Facebook For Business in MENA guide, written by Husam and published by Econsultancy, aimed to monitor business activity on the platform and identify best practices. The report uncovered a number of trends suggesting that a majority of businesses, including SMEs and large companies, are still not effectively engaging with their target audiences. He pinpointed the example of a UAE-based airline that is among the biggest spenders in the region in the area of digital marketing. Although the company’s page is one of the most Liked, a large portion of its fans are acquired through giveaways and special promotions, thus engaging users who are only interested in such offers. One of the most common mistakes businesses in the region are making, Husam says, is ignoring the importance of localisation. He points to the fact that many big name brands in the region only have one page that covers all of its markets in the GCC region. A few small steps a business can make is to create a specific dedicated page for each country of operation. Toyota is one company that has used this approach effectively, creating a page for each country and division of its business, he says. Addressing misconceptions Husam says these results indicate that the level of understanding among businesses still remains surprisingly low even in Western markets. He says this trend really boils down to inaction on the measurement part of the equation. All too often, businesses come down with something that he calls the “social media excitement syndrome” where their initial instinct is to jump headfirst into multiple platforms, without doing any proper research, planning, and more importantly, measuring activity and engagement through the use of analytics. “I often get approached by businesses who say we want to be on Facebook. I follow up by asking well why Facebook? There’s a common misconception

that whatever social media channel that has the most exposure is the best option. On Facebook, you can use the pages and tools to advertise, but many businesses think they can be on there purely to sell,” says Husam. “It’s a communication channel where you are expected to engage and share content and information with your target audience. Before choosing a social media channel, a business should first determine its objectives and look at where their target audience is spending most of their time.” For SMEs that are serious about adopting social media marketing, Husam

There’s a common misconception that whatever social media channel that has the most exposure is the best option. On Facebook, you can use the pages and tools to advertise, but many businesses think they can be on there purely to sell.

Ali Matar, Head of Talent Solutions, LinkedIn MENA

advises a holistic approach that begins with hands-on learning until a comfort level is reached. During the first phase, focus should also be diverted to planning online activities, content sharing and connecting contacts. Next, SMEs should consciously build up their profiles and dedicated pages to portray the right message to their target audience. This should be followed by the implementation

Husam Jandal, Digital Marketing Consultant and Trainer, WSI Academy

phase which requires businesses to follow through on planned tasks and engage target users on a constant basis, handling feedback and sometimes dealing with negative comments. Lastly, Husam stresses the need for businesses to use analytics to look at overall engagement levels and determine what is working and what is not. These must-have tools are the only way to measure the outcome and return on investment. Providing a missing link Another interesting trend that has surfaced recently is the preference of social media users to separate their professional and personal information being communicated across such platforms. This demand can be seen looking at the exponential growth in the number of users joining LinkedIn. Late last year, LinkedIn announced that it had reached 187 million users globally, over five million in the MENA region and 1.1 million users in the UAE alone. The UAE statistic is very impressive and a clear indication that the platform’s business model is resonating with a strong majority of businesses and professionals in the country. Recognising growing interest and potential among businesses, LinkedIn made a bold move in the fourth quarter of last year to open a regional office out of Dubai. “This is a market with exciting challenges that can change into opportunities. The way we are looking at it, one of the primary reasons we opened up here is to get closer to our members and get their feedback and communicate that to our headquarters,” says Ali Matar, Head of LinkedIn MENA, Talent Solutions.

March 2013

MARKETING

“We have different corporate solutions, marketing solutions and talent solutions which help companies grow faster by acquiring the right talent in a cost-effective way. Equally important, is branding yourself as an employer of choice, recruiter campaigns and in defining certain targeted messages in banners and impressions to specific audiences they want to attract.” Ali advises SMEs to focus on a number of key areas when building up a presence on the platform. First, the creation of a professional member identity and a company presence are equally important as these profiles work in a unique way together. Secondly, the ability to engage across specific LinkedIn groups, is a very effective way for SMEs to better target users, as these groups are specialised to

begin with. Businesses and members should have a detailed profile, and choose carefully the people in which they connect with. LinkedIn advises its members to connect with people they know, people that they think can add value to and people they can get value from. “Corporate presence on LinkedIn is still a new thing; social media, in general, is trying to stay on top of the latest technologies. For customers seeking to become more engaged, it’s just really about time and organising themselves internally. We are seeing more and more companies here launching their own social media departments, which shows that they are taking it very seriously,” Ali adds. Twitter’s business-friendly approach Following Facebook and LinkedIn’s regional launches last year, news came

Facebook

45 million total number of users in the Arab world

70%

of Facebook users in the region fall under the youth category

Social media penetration

50%

increase in users 2011. The report states that the 12% average user penetration rate

dominate in terms of users and tweeting

Source: Econsultancy, Facebook in MENA Report

users in the MENA region

is second largest market with 9.7% share of the market

1.3 million GCC countries and Egypt

5 million

Qatar

Twitter users in the MENA region

0.81 estimated number of daily tweets per active user in the Arab region (2011)

1.1

million users in UAE, making it the top market

that Twitter would be increasing its presence in the region by partnering with Connect Ads. The digital marketing agency’s role will be to expand the availability of Twitter’s Promoted Products suite of advertising products to marketers in the region, and manage all sales in Egypt, UAE, KSA and Kuwait. Connect Ads will further Twitter’s product strategy through a series of education and training programmes for agencies and large advertisers. During the launch event, Shailesh Rao, Twitter’s Vice President, International Revenue, was optimistic about the platform’s growth potential in the regional B2B and B2C market. “MENA is one of Twitter’s fastestgrowing regions, and we are seeing significant interest from marketers there who want to use our Promoted Products to build their businesses and connect with consumers,” he said. “Working with Connect Ads gives Twitter a strong partner with a footprint throughout the region and proven digital capabilities enabling us to scale and educate the markets as we introduce Twitter’s Promoted Products. This is the next step in expanding Twitter’s international presence, building on top of our recent launch in Latin America earlier this year,” he added. Peer pressure As the Facebook report proves, this region is in a stage of rapid growth with regards to the use of social media, with the largest chunk of that community currently using Facebook. It also found that there are more people reading content posted on Facebook, as opposed to traditional media channels. This has created tremendous pressure for businesses that are now more aware of the importance of a social media presence. The road to progress, however, will require a lot more due diligence and pre-planning on the part of businesses, in order to successfully link social media activity to their bottom line. Husam adds: “It’s an incredible opportunity for SMEs to have access to a more level playing field. In the end, the winner is the company that takes the time to plan properly, as opposed to those who jump into it and say they will find their way.”

March 2013

LEGAL

Employers often use bonus schemes as incentives to reward and retain valuable employees and this is usually the time of year when employers are reviewing performance and determining whether bonuses will be issued, writes Samir Kantaria and Natalie Jones of Al Tamimi & Co.

he criteria on which performance is measured, and against which bonuses are ultimately quantified, vary across companies and market sectors and, although bonus schemes are common, there are no statutory restrictions or guidelines dealing with the payment of bonuses in the UAE. Management of bonuses Employment relationships in the United Arab Emirates (“UAE”) are generally regulated by the UAE Federal Law No. 8 of 1980 (as amended) (the “Labour Law”) together with regulations promulgated under that law. The Labour Law applies to all employees working in the UAE, with a small number of exceptions.

One of those exceptions relates to employees working in the Dubai International Financial Centre who are subject to the DIFC Employment Law No. 4 of 2005 (the “Employment Law”). Neither the Labour Law, nor the Employment Law, contain provisions in respect to bonuses and it is therefore a discretionary matter for employers in the UAE and the DIFC as to whether employees receive bonus payments and, if so, how the underlying schemes are operated. In some sectors or industries, it is commonplace for employees to receive bonuses as a custom or practice. Where this is the case, it is likely that the contract of employment will make some reference to the payment of a bonus. Contractual reference does

a bonus will be omitted entirely from the contract of employment. Alternatively, the contract of employment may mention that a bonus scheme is from time-totime operated, but that payment of any bonus is entirely at the discretion of the employer’s management team and usually subject to certain performance criteria of the individual and the employer as well. Non-discretionary bonuses are those which essentially guarantee payment of a bonus to the employee. Whilst such schemes may utilise eligibility criteria, for example, requisite length of service or performance targets, they nonetheless guarantee payment to the employee (subject to meeting the prescribed criteria) and remove discretion from the employer.

This case highlights the importance of setting out the terms of any bonus scheme very carefully, and at the very least making it clear where the employer can exercise its discretion; be that over the status of the scheme, the calculation of any bonus payment, and/or the terms of entitlement to any bonus payment. not, contrary to popular belief, mean that a bonus is automatically guaranteed. Ultimately, entitlement to a bonus is a matter for whether the bonus is deemed to be discretionary or non-discretionary and this, in itself, can be a tricky matter. Discretionary vs. non-discretionary Discretionary bonuses (whether contractual or not) are those which give the employer the ability to determine whether a bonus should be paid and, if so, in what amount. Frequently, where a discretionary a bonus is operated, the mention of such

It is not unusual for employers to seek to retain an element of discretion, whilst in reality implementing non-discretionary bonus schemes. This might arise where the employer implements a bonus scheme which refers to the company meeting certain levels of turnover or profit and subsequently the employee meeting targets but then goes on to state that the employer has overall discretion as to payment of the bonus. In reality, such schemes are non-discretionary and can create difficulties where the employer believes that it has retained discretion when this is in actual fact not the case.

In order to avoid complaints, it is prudent for employers to proceed with some caution when exercising their discretion over the payment of bonuses. It is apparent that few employers consider exactly what is meant by the term “discretionary”, and to what exactly the discretion relates. A recent UK Employment Appeals Tribunal decision, which may be persuasive in cases in the UAE and particularly those before the DIFC Courts, indicated that “discretionary” in the context of bonus schemes may mean: 1. The provision of an overarching bonus scheme itself was discretionary; 2. A decision to operate the bonus scheme each year is discretionary; 3. The method of calculating the bonus is discretionary; or 4. The threshold or performance target which triggers a bonus payment is the subject of discretion. The distinctions could potentially have a significant impact on the respective rights and entitlements of the employer and employee over the bonus scheme and therefore it is imperative, where the contract of employment or the bonus scheme documents refer to discretion, that there is little doubt as to what this discretion refers to. This case highlights the importance of setting out the terms of any bonus scheme very carefully, and at the very least making it clear where the employer can exercise its discretion; be that over the status of the scheme, the calculation of any bonus payment, and/or the terms of entitlement to any bonus payment. The fact that a bonus scheme has been referred to as “discretionary” may not in fact give the employer the unfettered right to withhold, or refuse, to make a bonus payment to employees. End of service gratuity (EoSG) An employee is ordinarily entitled to an EoSG payment in the event of termination of employment, so long as he has the qualifying length of service (and is not being summarily dismissed). EoSG is calculated on the basis of 21 calendar days’ pay for each year of service for the first five years, and 30 calendar days’ pay for each year of service thereafter.

March 2013

LEGAL

Pay for the purposes of EoSG is generally accepted as being the employee’s “basic pay”, excluding allowances, provided that the contract of employment properly distinguishes between the basic pay and allowances. A recent Court of Cassation judgment has added some confusion to this area. Essentially, the Court of Cassation has deemed that EoSG calculations should be based upon basic salary and, in addition, commissions or bonuses where such amounts are essentially fixed or guaranteed. Accordingly, there is now a risk for employers paying bonuses on a fixed or guaranteed basis that such bonuses may lead to a much larger obligation on termination than originally intended. In order to seek to limit the potential liability for EoSG for employees who receive bonuses, it is advisable that performance indicators are utilised which, if not met, mean that the bonuses are not payable. Managing expectations Despite efforts to manage employees’ expectations, the award of (or failure to award) bonuses can have both a detrimental effect on employee morale, and may lead to allegations of breach of contract and/or discrimination. Where an employer is intending to introduce a bonus scheme, caution should be exercised to ensure that the rules of the scheme are sufficiently well drafted to cover most eventualities. When drafting discretionary bonus scheme rules, it is also important to consider in what circumstances payments may not be made to the employee. For example, it is useful practice to have a provision in the employee’s contract saying that any discretionary payment under the bonus scheme will only be made if the employee is in employment on the bonus payment date, and is not under notice (whether given or received). This is intended to enable an employer to exercise its discretion not to award an employee a discretionary bonus payment in circumstances where the employee has resigned to go to a competitor, or has been dismissed part way through the year. To avoid any dispute as to this matter upon termination of employment, it is sensible to include wording in the

contract of employment (where the bonus is contractual) which states that any bonus entitlement which has not been declared or paid out at the time of notice being given or received is forfeited. It is also worth considering what specific factors will be taken into account in exercising discretion. Many employers prefer not to express this and to leave their discretion as wide as possible. However, it may be helpful sometimes to express that both employer and employee (and perhaps team) performance can be taken into account in assessing the discretionary payment which may be

To avoid any dispute as to this matter upon termination of employment, it is sensible to include wording in the contract of employment (where the bonus is contractual) which states that any bonus entitlement which has not been declared or paid out at the time of notice being given or received is forfeited. made to an employee. Moreover, the mention of discretion without clarity as to the scope thereof, may lead to arguments as to what the discretion relates to (as discussed above). Potential disputes The relevant case law also indicates that where an employer has an absolute discretion, it must not exercise, or fail to exercise, that discretion irrationally, and it must act in good faith, particularly in the DIFC. Cases in other jurisdictions have suggested that the test may be even stricter than this, and that “it is presumed to be the reasonable expectation and therefore the common intention of the parties that there should be genuine

and rational, as opposed to an empty or irrational, exercise of discretion”. If discretion is exercised perversely or irrationally, or in breach of any express conditions detailed in the employee’s contract or bonus scheme rules, the employee could bring a claim for breach of contract. The damages sought would be the bonus monies the employee believes he should have been paid. In addition, as any breach would relate to the employee’s remuneration (which is considered a fundamental term of a contract of employment), it would be open for the employee to resign and claim constructive arbitrary (or unfair) dismissal. The employee would seek his notice monies, and arbitrary dismissal compensation constituting a basic award of up to three months’ remuneration (outside of the DIFC) and potentially damages (in the DIFC). Alternatively, the employee could remain in employment but protest at the level or lack of bonus and commence proceedings for an unlawful deduction from wages. When paying out a contractual bonus, employers should be careful to ensure that they are making the award in accordance with the rules of the scheme, otherwise a claim for breach of contract is likely to ensue. Where this type of claim has come before the UAE Courts previously, a prorated payment of the potential bonus entitlement has been favoured. Finally, the employee could claim that the discretion has been exercised in a discriminatory way. This is more likely to be a serious consideration for employers in the DIFC. When determining bonuses, employers should therefore be cautious not to forget about those who remain employees but are not currently working in the office, such as those who are on long term sickness absence or maternity leave. Care should be taken to ensure that those employees are treated fairly and in accordance with the rules of the bonus scheme (which must not be discriminatory). Given the complexities involved in drafting bonus schemes, it is often a good idea to seek advice at an early stage, before claims are brought as a result of employees not receiving what they had expected under the rules of the scheme.

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INDUSTRY WATCH

IMPROVING information security A Deloitte study reveals that top technology, media, and telecommunications firms are strengthening cyber resilience through strategic security initiatives. “Every organisation is vulnerable and 100% prevention does not exist. To help prevent attacks, detection and response are necessary. Ultimately, the public and private sector need to engage in a deeper collaboration in 2013 across all TMT sectors to develop a more robust response effort,” said Saguto. Other major threats identified by respondents include advanced persistent threats (64%) and hacktivism (63 %), new to this survey, which combines social or political activism with hacking. While more than half of those surveyed gather general intelligence information, only 39% gather information about targeted attacks specific to their organisation, industry, brand or customers.

xecutives at the world’s largest technology, media and telecommunications (TMT) companies have replaced compliance with implementing a 2013 security strategy and roadmap as the number one driver for improving information security, according to the Deloitte TMT Global Security Study just released. The study also reveals that companies are starting to recognise information security to be a fundamental business issue, with companies increasingly focused on cyber resilience, not just security. The Deloitte survey, which also identified a lack of employee awareness and third party risks as top security vulnerabilities, suggests that TMT organisations should also invest in information security training and awareness for their employees to help mitigate risks from new technologies. “The question is not if you will be attacked: the question is when and how you will respond,” said Santino Saguto, Partner in Charge for the TMT industry, Deloitte Middle East. “Effective management of information security risks requires a robust combination of prevention, early detection, and rapid response. Being cyber resilient is just as, or even more important, than being cyber secure alone.” Partnering for cyber resilience Additionally, results of the study suggest overconfidence in protection against external threats, with 88% of executives not viewing their company as vulnerable. However, when pressed further, more than half of the executives acknowledged experiencing a security threat in the last year (59%). Further, less than half of survey respondents reported having a response plan in place to address a security breach and only 30% believe third-parties are shouldering enough responsibility for cyber security.

People, technology and mobile devices According to the survey, innovations in technology and the people using these technologies also rank as one of the biggest threats, with 70% listing their employees’ lack of security awareness as an “average” or “high” vulnerability. Employees without sufficient awareness of security issues may put an organisation at risk by talking about work in public, responding to phishing emails, admitting unauthorised people into the organisation’s facilities. The increased usage of mobile devices is also perceived as a high threat to organisations, with 74% of those surveyed identifying it as a top vulnerability. Additionally, the study finds that new of telecommunications, media and technology technologies exacerbate organisations acknowledged the problem. While they experiencing an information can provide powerful security threat in the last year new capabilities that may benefit the business, they also introduce new security risks at a faster pace than many organisations can handle. of respondents say the increased usage of mobile Seventy-four percent of devices is also perceived the executives ranked the as a high threat to mobile and bring-yourorganisations own-device technology trend as a continued concern but only half of the organisations surveyed indicated describe their employees’ that they have specific lack of security awareness policies for mobile as an average or high devices in place.

59%

74%

70%

Regional M&A deals on the rise Announced deal values in the region rose from USD 31.6 billion in 2011 to USD 44.8 billion in 2012, recording an increase of 42%, according to Ernst & Young’s 2012 report. deals by value in MENA in 2012, four of the deals were acquired by Qatar and three of the deals were acquired by the UAE. The countries that saw the largest number of announced acquisitions in 2012 were the UAE (77 deals), Qatar (48 deals) and Saudi Arabia (33 deals). In the domestic space, Egypt and the UAE saw the highest activity in terms of target country focus of announced domestic deals, with 36 and 33 deals respectively in 2012. The countries with the highest deal values for target country focus of announced domestic deals in MENA were Kuwait at USD 4.9 billion and Egypt at USD 3.4 billon.

he fourth quarter saw significantly higher deal values, yet lower deal activity in 2012 compared to the same period in 2011. Deal volume on the other hand fell by four per cent, from 416 in 2011, to 398 in 2012 and announced deal values increased by 84% from USD 7.2 billion in Q4 2011 to USD 13.3 billion in Q4 2012. Deal volumes in Q4 2012 declined by 17%, to 107 deals from 129 deals, in Q4 2011. In comparison to the previous quarter, total announced deal values rose from USD 9.9 billion in Q3 2012 to USD 13.3 billion in Q4 2012, marking a jump of 35%. Phil Gandier, MENA Head of Transaction Advisory Services, Ernst & Young, said: “The 42% increase in announced deal values in 2012 suggests that there may be an improvement in the valuation gap amongst buyer and sellers in the market in comparison to last year where total deal values were considerably lower. Additionally, many businesses that restructured their capital back in 2011 left themselves well placed to finance and close deals in 2012. As 2013 unfolds, there is an anticipation that the improvement in deal activity in 2012 will further improve as we start to see market conditions continually improving, despite the unpredictable macroeconomic landscape.” Leading regional deal activity From an acquirer’s perspective, countries that ranked highest in terms of announced deal value were UAE at USD 13.5 billion, followed by Qatar at USD 11.2 billion and Kuwait with USD 3.9 billion. Of the top ten announced

Outbound vs. inbound deals In terms of value, outbound deals held the greatest value among total announced deals, comprising USD 19.4 billion, 43% of total announced deal value in 2012, compared to USD 15.6 billion for domestic deals and USD 9.9 billion for inbound deals. Domestic transactions outnumbered inbound and outbound deal activity, comprising 48% of total deals in 2012. Total inbound announced deal value saw the largest improvement compared to 2011, increasing by 77%

There is an anticipation that the improvement in deal activity in 2012 will further improve as we start to see market conditions continually improving, despite the unpredictable macroeconomic landscape. from USD 5.6 billion in 2011 to USD 9.9 billion in 2012. Announced domestic deal values also saw a significant rise of 60%, compared to 2011, despite the decline in announced domestic deal volumes from 224 in 2011 to 190 in 2012. Phil comments: “The increase that we’ve seen in deal values across all types of deals in 2012; particularly inbound deals when compared to 2011 highlights that the MENA markets still continue to remain attractive to global investors and institutions as they look to emerging markets as attractive regions for growth.

March 2013

INDUSTRY WATCH

Property prices rise in Abu Dhabi Clutton’s survey reveals key areas of Abu Dhabi are defying the overall trend of declining rent prices and performing at an encouraging level.

reas which have benefited from the recent development of good quality residential communities, such as Raha Beach, Raha Gardens, Al Reem Island, Saadiyat and Al Reef, have all demonstrated rental price increases over the last six months, which appear set to continue throughout 2013. The increases are linked to general market demand. This is being driven by an influx of people moving to Abu Dhabi from both Dubai and outside the region, as well as relocating within the city from older buildings, which lack equivalent facilities to the modern developments. The general standard of living and quality of build has improved in Abu Dhabi, which has also encouraged movement within the marketplace. The recent decree that all government employees, as well as those who work for government-affiliated companies, must live within Abu Dhabi has helped fuel residential property demand. The Dubai to Abu Dhabi migration is expected to continue throughout 2013 as existing leases in Dubai expire. Indications are that tenants working across various sectors including the airline, construction, energy and professional services industries, are moving to Abu Dhabi. Average rents in Abu Dhabi have also become more affordable, whilst Dubai rents have begun to rise, bringing the most sought-after areas of both cities closer together. For example, the average rent of a two bed apartment in Dubai Marina is AED 125,000 per annum, while the average two bed apartment rent in Al Reem, Raha Beach and Saadiyat range from AED 105,000 – AED 145,000, dependent on quality. This has helped to encourage people to relocate to the capital. Recent announcements on future developments, investment into infrastructure and real estate, and the

Sorouh/Aldar merger have also helped bring confidence to the marketplace. There are many positive signs that as long as Abu Dhabi continues to offer enough jobs and improved lifestyle, people will continue to move to the city. The average rent increases of two beds within the following areas over the last six months are as follows: • Al Reem – 10% increase on two bed apartments. Current average rent AED 105,000 per annum • Raha Beach – 22% increase on two bed apartments. Current average rent AED 135,000 per annum • Al Reef – 17% increase on two bed villas. Current average rent AED 95,000 per annum • Raha Gardens – 18% increase on two bed villas. Current average rent AED 160,000 per annum • Saadiyat – 25% increase on two bed apartments. Current average rent AED 145,000 per annum Whilst further stock is expected to be brought to the market throughout 2013, Cluttons believes that high quality developments with good facilities will continue to be in high demand and experience rental increases.

The Dubai to Abu Dhabi migration is expected to continue throughout 2013 as existing leases in Dubai expire. Indications are that tenants working across various sectors including the airline, construction, energy and professional services industries, are moving to Abu Dhabi. The average two bed rent in older buildings on the island is currently AED 95,000 per annum, a 10% decrease over the past 12 months. The increased supply of new apartments is expected to put downward pressure on rents across the island as people choose to relocate to newer buildings. Landlords in older buildings will be forced to further lower rents as vacancy increases, in order to secure a return on their investment. The redevelopment of older buildings will also be crucial to protect rents and reduce vacancy levels, if they are to compete with new stock entering the marketplace.

INDUSTRY WATCH

Salary stability in the UAE A recent survey by Aon Hewitt shows employer predictions on point in 2012.

ata from the winter update of Aon Hewitt’s annual Middle East Salary Increase Survey based on participation from almost 120 companies across the GCC and Egypt, has confirmed that the average salary increase across all sectors in the UAE in 2012 was consistent with levels predicted by participating organisations during 2011. On average, the organisations surveyed both predicted and subsequently reported an average increase of 5.2% in salaries at the close of 2012. The update also gives organisations an opportunity to re-forecast their salary increases for 2013, having last made their estimates in the middle of 2012. Overall, the 50 plus UAE companies surveyed revised their forecast of average salary increase during 2013 from 5.1% to 4.8%. The results indicate an underlining stability in the market with relatively consistent rates of increase and overall growth in salaries year-on-year. While most UAE organisations surveyed based salary increases on market competitiveness, others reported that salary increases were also influenced by other factors including business performance (18.6%) and by tracking inflation and consumer prices (9.3%). Martin McGuigan, Head of Reward Consulting at Aon Hewitt Middle East, commented on the latest results: “The Aon Hewitt Middle East Salary Increase Survey provides a valuable snapshot of overall trends in salary increases in the UAE and wider region and enables organisations to benchmark their forecasts with the market in order to remain competitive.” “We continue to see a growing trend towards performancebased pay. It is to be expected that merit-based pay will become more prevalent as the UAE employment market continues to mature, giving organisations a means of capping their pay budget in accordance with business performance. Indeed, Aon Hewitt has seen an increase in demand for such information from a number of core industry verticals,

We continue to see a growing trend towards performance-based pay. It is to be expected that meritbased pay will become more prevalent as the UAE employment market continues to mature, giving organisations a means of capping their pay budget in accordance with business performance. including public sector, healthcare and media, and as a result, we will soon be launching a series of new data surveys to give businesses better insight into salary levels within their specific sector.” The report also reveals that no participating UAE or, indeed GCC firms, were planning a hiring freeze in 2013; 97.2% of those UAE companies surveyed have ruled out making any redundancies in 2013; while a large percentage (41% ) are actually looking to increase recruitment this year compared to 2012. Aon Hewitt has been conducting its annual landmark salary survey across the globe for 36 years, launching it in the Middle East for the first time in 2009. The survey was conducted during 2012 in seven regional countries: Bahrain, Egypt, Kuwait, Oman, Qatar, the Kingdom of Saudi Arabia and the UAE. The survey is part of Aon Hewitt’s suite of evidence-based, research-led studies including Qudurat, Best Employers Middle East (BEME), Total Compensation Measurement (TCM) and People Risk Index (PRI).

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INDUSTRY WATCH

Honouring excellence in trade The first Trade & Export Middle East Excellence Awards were held on the 25th of February at Habtoor Grand Hotel. The event was supported by du and AIG, in association with Dubai Exports. With close to 200 participants from all walks of the trading community, the inaugural event proved a big hit.

ith the motto of “Strive, Achieve and Inspire” the awards were an attempt to recognise and honour those who work towards making trade simpler and faster. It is about those organisations that strive to be the best, achieve it and inspire others through their work. There were 18 awards given in five major categories; finance, free zones, legal, business support services and warehouse and logistics. The event opened with a welcome speech by the Senior Editor of the magazine, Aparna Shivpuri Arya. Speaking about the magazine, she said, “There has been a lot of interest generated through our country focus events that we started last year and we are looking forward to a packed year ahead. It has given us the opportunity and the privilege to present these countries to potential and existing trading partners and businesses in the region.” The opening remarks were given by Nigel Rodrigues, CFO of CPI. He highlighted the

importance of trade in the region and the roadmap ahead for the magazine. His Excellency Saed Al Awadi gave the keynote address and spoke about the importance of trade in the region. The award ceremony started with the Business Support Services category and ended with the Free zones category. Two Editor’s choice awards were given to organisations which have played a major role in promoting trade and investment in the region – Dubai Trade and United Arab Bank. Speaking about the event, Dominic De Sousa, Founder of CPI, said, “We have been humbled by the response we received for this inaugural magazine awards and we hope to go from strength to strength in the coming years.” Nadeem Hood, COO, CPI, also echoed the same sentiments and remarked that they aim to become the leading publication on trade in the region and to give the trading community a platform to highlight the trade opportunities.

The winners Warehouse and material handling company of the year

Trade Finance Bank of the year

Best logistics practice of the year

Trade credit insurance firm of the year

Air cargo services provider of the year

Marine cargo insurance firm of the year

Best sea port of the year

Excellence in maritime law

Consulting service firm of the year

Excellence in IPRs

Al Futtaim Logistics DHL

Emirates SkyCargo DP World

The Links Group

Office set up company of the year

Abu Dhabi Commercial Bank Euler Hermes GCC Zurich

Fichte & Co Clyde & Co

The best international trade law firm

Regus

Al Tamimi & Co

Company formation services firm of the year

Free zone for attracting maximum investment

Online trade/market information portal

Free zone for ease of doing business

Foreign exchange house of the year

Editorâ&#x20AC;&#x2122;s Choice Award for promoting trade

Islamic Finance bank of the year

Editorâ&#x20AC;&#x2122;s Choice Award for contribution to trade finance

The Links Group Euromonitor

Western Union Noor Islamic

Jebel Ali Free Zone (JAFZA)

Ras Al Khaimah Free Zone (RAK FTZ) Dubai Trade

United Arab Bank

March 2013

TECHNOLOGY FOR BUSINESS

Evolving the cloud The new Ericsson Cloud System offers new features in terms of management and operation across the entire network, while supporting carrier-grade performance.

s mobility becomes part of the mainstream digital lifestyle, the next step is for the network to be the vehicle of cloud evolution.

With an increased focus on quality of experience among SmartPhone users, and with operators looking for new revenue, today’s networks and the cloud need to evolve in parallel. Cloud services need to be distributed and networks, including computing and storage capabilities, need to be elastic on an end-to-end basis. This combination will bring a new set of capabilities that doesn’t exist today. In response to this evolving need, Ericsson has introduced the Ericsson Cloud System. This cloud solution enables carriers and service providers to grasp market opportunities by enabling end-to-end elasticity using network assets. It enables distributed cloud capabilities such as, computing and storage capabilities in the network, resulting in a better experience when using cloud applications, and more efficient utilisation of network resources. The Ericsson Cloud System includes the Ericsson Cloud Execution Environment, which is based on OpenStack Cloud Management and KVM hypervisor. The solution is an addition to the existing OSS system, the Ericsson Cloud Manager. It offers

a smooth migration as it builds on the Ericsson Blade System and Ericsson SSR and it allows virtualised and non-virtualised applications to execute side-by-side with maintained carriergrade performance. The system provides an execution environment for applications irrespective of the source, whether it’s Ericsson, the operator, a partner, or other innovators. This makes it possible to introduce new services and consolidate existing ones onto the same virtualised platform. Magnus Furustam, Vice President and Head of Product Area Core and IMS at Ericsson, says: “We protect existing operator investments when introducing new technologies. We implement cloud-enabled networks by evolving what operators already have in the field. We do this by using established telecom platforms, such as EBS and SSR, and integrating them with new software in a way that ensures carrier-grade performance. This systematic implementation of end-to-end elasticity across network, computing and storage assets enables the delivery of new services and business models and is what we call Cloud Evolution.” The Ericsson Cloud System will be available on the market in the first quarter of 2014. During Mobile World Congress 2013 in Barcelona, Ericsson showcases its combined technology and services leadership for the Information and Communications Technology industry.

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TECHNOLOGY FOR BUSINESS

Tools for marketeers Facebook recently announced the availability of its suite of online educational tools under the Facebook Studio Edge brand.

he announcement came during the company’s first Studio Edge event in Dubai. The gathering brought together clients and marketers with the aim of improving their knowledge of Facebook’s advertising tools and showcasing examples of best practice. “Facebook Studio Edge was designed to assist agencies in keeping up-to-speed on product updates and best marketing practices on our social network’s platform,” explained Jonathan Labin, Head of Marketing Solutions at Facebook-MEA. “To create a better understanding of this remarkable interactive tool, we have invited key marketers and agencies to our Studio Edge event today in Dubai, where key Facebook speakers showcased its key features and discussed most effective means of supporting marketers in showcasing their work in the

Facebook Studio Edge directory, thus sharing their contributions in the Facebook Studio Gallery with their peers in the industry.” Available to all agencies and Preferred Marketing Developers (PMD), Facebook Studio Edge covers topics centred on new developments on Facebook pages, changes and opportunities in advertising on the social network’s platform, in addition to general updates in social technology. Each interactive topic, which ranges from ten to 15 minutes, can successfully bring participating agencies up-to-speed on latest news and developments related to Facebook’s tools and products. “The Middle East is an important and rapidly developing region for Facebook and our relationship with the various agencies and PMDs is built on offering the best tools and platform to reach, promote and engage their clients’ target audiences in the best possible manner,” said Labin. “I am confident the active enrollment of regional agencies in Facebook Studio Edge will contribute positively to their long term marketing strategies.”

Messaging made simple Nimbuzz for BlackBerry 10 debuts as first messaging app to integrate and combine the most popular social messaging platforms. Nimbuzz, has announced the release of its Nimbuzz messaging app for BlackBerry 10. The redesigned application is the only messaging platform to integrate GTalk, Yahoo and Facebook Messenger into a single BlackBerry application, enabling BlackBerry users to send unlimited chat messages and share pictures or videos files across any mobile device. Nimbuzz will provide Blackberry 10 device users, including PlayBook, free access to: • Group and Peer-to-Peer messaging integrated messaging and free chatrooms • Entertainment through the N-World an entertainment-focused international marketplace • Multimedia sharing, a cheaper way to share data • Social integration, post direct to Twitter and Facebook without leaving the app BlackBerry selected Nimbuzz as a prelaunch recipient of its new Software Development Kit, providing advanced tools and resources to maximise the impact of Nimbuzz across all BlackBerry 10 devices, including an expedited review process from BlackBerry World. “BlackBerry must continue to identify and promote the most successful and unique apps that already reach millions of users worldwide. This focus on advanced functionality and developer engagement will be a catalyst to the platform’s success,” said Vikas Saxena, Nimbuzz CEO. “

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TECHNOLOGY FOR BUSINESS

Faster action against security threats

Beefing up mobile security

HP has announced a new set of security services designed to help organisations respond to, remediate and mitigate the impact of security breaches as they occur.

Sophos recently unveiled Mobile Control 3.0, the latest version of its MDM (mobile device management) product for Android-based tablets and SmartPhones.

he cost implications of security breaches can be huge and often expose organisations to litigation. According to a recent study conducted by the Ponemon Institute, the average data breach event in the United States costs an organisation USD 8.9 million. The HP Security Breach Management Solution combines HP’s services expertise with security intelligence software to offer clients a comprehensive approach to protect what matters most to their organisations. It provides clients with the security intelligence to more quickly identify a breach and react to it, as well as minimise its impact and reduce ongoing exposure from vulnerabilities. Accelerate response times to protect what matters The new solution features the new HP Forensic Readiness Service, which helps clients get ahead of attacks before they occur. Leveraging the knowledge of experienced HP consultants, the service helps organisations proactively establish policies and procedures surrounding forensic investigations. HP Forensic Readiness This to assesses current policies and procedures for breach investigation to develop a plan detailing activities,

timelines and potential technologies that organisations should consider to improve their forensic readiness. It also establishes an appropriate forensic readiness policy to create a systematic, standardised and legal basis for the admissibility of digital evidence that may be required in the event of a formal legal dispute. Regain control during a breach The HP Security Breach Management Solution features services that span the entire security lifecycle, ranging from proactive planning and risk management strategies to immediate response measures. Together, these offerings provide a holistic approach to breach management and enable clients to reduce security-related costs, gain greater control of the situation and lower their exposure to risk. With HP Security Breach Management Solution, clients can: Contain attacks immediately with HP Breach Response Service, which provides 24/7 expert monitoring to detect and respond to intrusions. In the event of a breach, HP dispatches a team of security professionals to the client’s location to assess and investigate the breach and provide recommendations for reducing exposure to future vulnerabilities.

The new version includes support for SamsungSAFE (Samsung for enterprises) devices, as well as integration with the firm’s Mobile Security 2.0, an Android-based malware protection app, Sophos said. The firm said that the new product scans all Android apps and external media for malware, centrally reporting any findings and then automatically initiating any mitigating actions. Businesses need products such as this due to the fact that more of the Android owners are using their personal devices for work, and that Androids are vulnerable to, and targeted by, malware. “More organisations are struggling with how to implement a BYOD policy,” said John Shaw, Vice President of Product Management, Sophos. “As Android’s market share continues its ascent, and threats targeting Android continue to appear, it’s clear that anti-malware needs to be a part of that policy.” “The latest version of Sophos Mobile Control makes it even simpler for IT teams to implement mobile device management, including built-in anti-malware, making secure BYOD possible for organisations of all sizes.” Included in the new package comes Web security, which extends URL filtering capabilities to Android devices, Sophos said. The idea is that any URL a user attempts to access is first verified against SophosLabs’ hosted database for reputation and malware. When malicious content and phishing sites are discovered, the user will be warned and redirected to a safe site, the firm explained.

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TECHNOLOGY FOR BUSINESS

Tailored cloud solutions IBM has announced the global availability for its cloud service based on its industry-leading sourcing business to host SAP applications and other core operations.

any organisations are eager to leverage the economic advantages of cloud computing to run their critical applications on the cloud. These applications require deep technical expertise, around-the-clock customer service, tight security

and ongoing maintenance – features typically found in IT sourcing arrangements but not in the “one-size-fits-all” model of self-service clouds. To address this, IBM developed an Infrastructureas-a-Service cloud built on decades of hosting experience gained by being the world’s largest provider of IT sourcing services with more than 1,000 clients. Called IBM SmartCloud

Innovative Wi-Fi Ruckus introduces two new Smart Wi-Fi technologies, SmartWay and BeamFlex+, which simplify the administration and improve the performance of mobile devices and traffic over Smart Wi-Fi networks. Ruckus SmartWay is a new Smart Wi-Fi software technology that not only simplifies the administration and optimisation of service discovery traffic, such as Apple Bonjour and

Enterprise+ (SCE+), the service combines the best features of sourcing: high service level agreements, security and reliability, with the best features of cloud, elasticity and subscription-based pricing. This service offers the same level of assurance normally associated with a hosted service to make sure clients can always access their core applications for ERP, CRM, analytics, social business and mobile computing from the cloud. The new service goes beyond the infrastructure offered as a service with typical public clouds. With this cloud service, IBM also helps manage patch updates and identity management, improving security, which analysts often cite as an inhibitor to cloud adoption. IBM also announced today that IBM SmartCloud for SAP

UPnP protocols over Smart Wi-Fi networks, it also supports advanced facilities to restrict or “fence” these services to a given access point, group of access points or a particular geographic area. Ideally suited for K-12 and higher education environments, SmartWay helps enable users with Apple devices to exploit other resources on their networks. For example, SmartWay makes Apple Bonjour services such as AirPrint, AirPlay, and the Apple Filing Protocol (AFP), used in wireless printers and multimedia devices, usable and controllable across subnets.

Introducing BeamFlex+ Another Smart Wi-Fi innovation, Ruckus BeamFlex+ adds essential technology to Ruckus-patented BeamFlex adaptive antenna arrays. BeamFlex+ is “polarisation-agnostic” and automatically adjusts to deliver the best performance, regardless of the way in which client devices are sending WiFi signals. BeamFlex+ has the unique ability to control the shape of Wi-Fi signals to increase the probability that multiple data streams can be effectively combined within a given environment, improving Wi-Fi performance.

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Applications, an enterprise service unique to IBM, is available globally. As customers expand their use of SAP applications to more business processes, such as marketing campaigns based on Big Data, they often will benefit from more systems and greater management. Operating and managing IT environments running SAP solutions requires an advanced infrastructure and strong SAP operational skills. IBM SmartCloud for SAP Applications automates and standardises provisioning of IT environments, and can accelerate service delivery with expert certified staff. The SmartCloud services for SAP applications delivers 99.7 percent availability based on a global delivery model to support cloud-based systems around the clock.

3rd Annual

19 - 20 March 2013 JW Marriott Marquis, Dubai, UAE Co-located with

MEA2013 Hear from 60+ EXPERT SPEAKERS including:

Khalifa Al Shamsi Chief Digital Services Officer Etisalat

Ahmad M. Almulla Vice President, Information Technology Dubai Aluminium

Arun Tewary CIO Emirates Flight Catering

Paul Oâ&#x20AC;&#x2122;Kirwan IT Director Dubai Mercantile Exchange

Dr. Jassim Haji Director of Information Technology Gulf Air

Todd M Dick VP Corporate Business Unit Omantel

Akshay Lamba Chief Architect and Head of IT Strategy MTS India

George Makori Snr.Manager - Cloud & Managed Services SafariCom

Imad Hoballah Acting CEO TRA

Girard Moussa Head of Enterprise MENA Google

Muhammad Mudasser Head of Presales & Solutions Architecture, ICTE & Mega Projects Qtel

Anthony Kurban CIO Averda

EVENT HOTSPOTS

World Ports and Trade Summit Launched in association with ADPC, in 2011, the World Ports Trade Summit 2013 now enters its third year and is rapidly becoming a significant global summit for the commercial maritime industry.

16th Global Women Leaders Conference The conference offers an exciting opportunity for businesswomen, women leaders, professionals and entrepreneurs to learn, business network, share ideas and devise innovative strategies.

Date: 19th – 20th March Venue: St. Regis Saadiyat Island Resort, Abu Dhabi Time: 10:00 am – 5:00 pm

More information: http://www.worldportsandtrade.com/ index.php

Date: 6th – 7th March Venue: The Ritz Carlton, Dubai Time: 8:00 am – 2:00 pm

More information: http://www.woibex.com/

The CEO Dialogue The CEO Dialogue will provide the latest insights from senior industry experts who will discuss the current opportunities, trends and economic highlights within Dubai’s Tourism Industry.

Date: Monday, 11th March 2013 Venue: Dubai Chamber of Commerce & Industry – 13th Floor Time: 8:30 am – 10:30 am

More information at: http://www.dubaichamber.com/events/ upcoming-events/the-ceo-dialogue/agenda

Strathclyde 100 Dubai forum for entrepreneurs Entrepreneurs are invited to present their business opportunities to the audience, outlining areas where assistance is required. The type of help secured can range from informal advice, contacts and mentoring, to investment and more formal business relationships. Date: Saturday 16th March 2013 Venue: Crowne Plaza Hotel, Sheikh Zayed Road, Dubai Time: 5:30 pm – 10:00 pm

More information at: http://strathclydeuae.com/alumni/s100/

Cloud Computing World Forum Middle East & North Africa Combining the Cloud Computing World Forum MENA and the Cloud MENA Summit, this two day conference and exhibition covers every aspect of cloud, giving attending delegates all the information they need to begin or to expand on their cloud adoption needs.

Date: 19th – 20th March Venue: JW Marriott Marquis, Dubai Time: 8:00 am – 5:30 pm

More information: http://www.cloudworldseries.com/mena/

Country focus briefing the Republic of Belarus 2013 Belarus’s geographical location, favourable investment climate, highly skilled workforce, industrially developed economy and strong transport and communications infrastructure are just some of the factors which make the country attractive for international trade.

Date: Wednesday, 27th March 2013 Time: 9:00 am – 12:15 pm Venue: Dubai Chamber of Commerce & Industry – 13th floor

More information at: http://www.dubaichamber.com/events/ upcoming-events/country-focus-briefing-the-republic-ofbelarus-2013/agenda

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.

ADCB ENTERPRISE CREDIT As your business grows, you need to keep pace with the increasing financial demands involved in making it a success. ADCB Enterprise Credit is a flexible business banking product created to take care of your working capital and short-term funding needs. Key features: • Working capital facilities available to SMEs having annual sales turnover up to AED 150 million • Credit facility up to AED 30 million • Easy documentation and quick approval • Flexible collateral requirements, with residential/commercial properties, SBLC, cash/cash equivalent accepted as collateral • Shari’ah compliant products also available For more information on ADCB Enterprise Credit, please SMS ECREDIT to 2626 or call 800-SME-800

Terms and Conditions apply. Credit at sole discretion of the Bank.