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Pillars of practice We investigate the emerging foundations for corporate governance compliance

Other stories: CORPORATE CULTURE

SME CLUB MIDDLE EAST

DATA PROTECTION

Issue 78 MAY 2012 WWW.SMEADVISOR.COM

presents

EDITORIAL Publisher Dominic De Sousa Group COO Nadeem Hood

Safety in numbers

Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126

This month CPI has proudly introduced the SME Club Middle East. Some of you might ask – well what makes this different, or what separates this from the other dozen or so business groups and clubs scattered across the region? In response the engineers of this club will tell you that it is quite simply the first exclusive membership of its kind dedicated specifically to supporting SMEs in the Middle East. But there is much more.

EDITORIAL Editor Mike Byrne mikeb@cpidubai.com +971 4 440 9105 Sub Editor Joumana Saad joumana@cpidubai.com +971 4 440 9115 Contributing Editor Aparna Shivpuri Arya aparna@cpidubai.com +971 4 440 9133 ADVERTISING Commercial Director Chris Stevenson chris@cpidubai.com +971 4 440 9138 PRODUCTION AND DESIGN Operations Director James Rawlins jamesr@cpidubai.com +971 4 440 9108 Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 Design Director Ruth Sheehy ruth@cpidubai.com 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 Cris Mejorada cris@cpidubai.com +971 4 440 9108 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya online@cpidubai.com +971 4 440 9100

The platform is designed not only to add value and save money on an unlimited variety of products and services, but can also help extend client networks and generate new business opportunities through the use of online initiatives and networking events. I won’t go into all the details here but you can gain a better all-round understanding of it all on pages 36 and 38, with the club’s Director, James Khoury, talking to SME Advisor about the ins and outs. What the club does signal to the SME community in the region is that we are all safer, more profitable and better able to grow when operating in sync and in numbers. Imagine a database of regional businesses, all on a streamlined system, where services are offered for reduced rates, where SMEs with similar interests can make the relevant ties and where networking opportunities are regularly created for meet and greets. The possibilities are indeed endless. Also contained within this month’s issue are some inspiring stories from both a global entrepreneur and a newly formed regional business – what we endeavoured to give you this issue is a varied perspective – life for an entrepreneur after years of experience, and the outlook of someone who has just recently dipped his toes into the entrepreneurial whirlpool. Lastly, at a time when IT is continuing to accelerate with its options for businesses, we take time to pause and offer some legal advice about how best to protect your data, about laws surrounding privacy and some food for thought regarding consumer protection. With all the recent talk around cloud computing and the struggle between whether to implement it or not, SMEs should first try to navigate through the legal minefield that surrounds the digital world. We’ve decided to give the magazine a bit of a make-over starting with the June issue – nothing drastic, but do keep an eye out for it and let us know what you think. Until next month...

Published by

Mike Byrne, Editor

1013 Centre Road, New Castle County, Wilmington, Delaware, USA

Branch Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Printwell Printing Press LLC © Copyright 2012 CPI All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

Talk to us: E-mail: mikeb@cpidubai.com Twitter: @SMEadvisorME Facebook: www.facebook.com/SMEAdvisor LinkedIn group: www.tinyurl.com/smeadvisorme

CONTENTS Issue 78 May 2012

Sales

28 EXISTING CUSTOMERS Sales teams too often look to new business and miss out on opportunities within their customer base, says Peter Heredia, Managing Director, Max Sales Solutions.

Business guru 30 MAKING THE JUMP Hari Kesavan, an American entrepreneur and Founder of UniPropitia talks to Joumana Saad about the transition of going from employee to entrepreneur.

Opportunities 34 du CEO FORUM

Pillars of practice We investigate the emerging foundations for corporate governance compliance

Editorial Board 06 INTRODUCTION This month we introduce the new SME Advisor Editorial Board for 2012.

Shoptalk 08 TRENDS AND UPDATES A quick look at news and events that will impact SMEs in this region.

16 SHELF LIFE New toys for you and your business. Like you need an excuse!

Trade 18 OUTSOURCING SMEs should examine ways to shift their non-core activities abroad, in order to boost profits, says Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economics Policy Committee, Dubai Economic Department.

SME ADVISOR MIDDLE EAST MAY 2012

22 BANKING FOR BUSINESS We spoke to ADCB about their range of banking products to determine how they are servicing the segment.

Finance 24 LIFE ASSURANCE In part two of this article, Richard Taylor and Rupert Connor, Chartered Financial Advisors, Acuma Wealth Management, look at the case for life assurance in business, and explain exactly how to protect employees and shareholders.

Management 26 CORPORATE CULTURE A high-performing organisation starts with a strong leadership team. Elias Mazzawi, Managing Director, EMS MENA, outlines steps to effectively manage your employees.

du, our Exclusive Telecom Partner, presents its Leadership Series session for business leaders with special guest and keynote speaker Chris Anderson, online pioneer and editor-in-chief of Wired magazine.

36 SME CLUB MIDDLE EAST

Mike Byrne talks to James Khoury, Account Director of SME Club ME, about the launch of this new CPI initiative, and the benefits to club members.

Entrepreneurship 40 A FRESH STARTUP Salim Akil, talks to Joumana Saad about founding SearchInMENA.com, a business search engine, which he hopes to one day become the Alibaba for the MENA region.

Legal 46 FINANCE With the strong focus on trading in the UAE, businesses often require short-term financing, and this is where trust receipts can help, says Hufriz Wadia, Senior Associate, Banking and Finance, Al Tamimi & Co.

48 CORPORATE GOVERNANCE We take a look at the nine pillars of the Corporate Governance Code, and talk to two Dubai SME 100 companies who have already incorporated such practices into their businesses.

Industry watch 52 ECONOMIC OUTLOOK The IMF has released its Regional Economic Outlook Update for the Middle East North Africa, Afghanistan, and Pakistan region.

54 QATAR FOCUS MarketView’s report on Qatar’s economy in the first quarter of 2012, shows positive growth over the medium term.

SME about town 56 BUSINESS EXCELLENCE Dubai Chamber of Commerce and Industry honours top businesses during the sixth cycle of the Mohammed Bin Rashid Al Maktoum Business Award.

58 YEC COMPETITION Dubai SME awarded the top 100 projects of the Young Entrepreneur Competition 2012 (YEC). The annual competition aims to promote entrepreneurial values among younger generations.

Technology for business

60 DATA PROTECTION Nick O’Connell, Senior Associate, Technology, Media & Telecommunications, Al Tamimi & Co., examines key issues related to privacy in the information age.

64 SMARTPHONE SECURITY A majority of people polled in the UAE are worried by the threat of malicious activity on their mobile phones, according to research conducted by YouGov on behalf of BlackBerry.

Sign off 66 WHAT’S NEXT? SME Advisor’s new Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.

MAY 2012 SME ADVISOR MIDDLE EAST

Editorial Board 2012

SME ADVISOR EDITORIAL BOARD

The SME Advisor Editorial Board is an honorary advisory panel of experts comprising organisations and individuals who want to help regional business. The idea is to evolve the magazine through such sharing of ideas with key regional influencers. Over the next few months, we will conduct various interactive sessions with our board members, often including our readers, where we can collaborate and share ideas. The aim is to help the business community benefit from our panel’s expertise.

John Lincoln Vice President, Enterprise Marketing, du John Lincoln has over 20 years telecommunications experience in the USA, the UAE, Japan, Europe, India, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in telecommunications from the Golden Gate University in San Francisco, California, USA.

Dr. Ashraf Mahate Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. He is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.

SME ADVISOR MIDDLE EAST MAY 2012

Amanda Line Regional Director, ICAEW Middle East, FCA Amanda Line was appointed as the ICAEW’s Middle East Regional Director in September 2009. She is responsible for building the ICAEW’s presence and profile in the region. Amanda has broad international business experience. She has spent the last 15 years living and working in Asia and the Middle East and has extensive experience in financial training. As a passionate believer in the value of professional accountancy qualifications, Amanda founded the largest provider of professional financial training in Singapore. Working together with UK and US-based training companies, she expanded the business across Asia. Since moving to the UAE, Amanda has provided consultancy for educational businesses in addition to setting up and running several companies.

Editorial Board 2012

Abdulmuttalib Al Hashimi

Ghada Audi

Founder and Managing Director, Next Level

Head Of Disputes Resolution, Fichte & Co

Abdulmuttalib Al Hashimi is a UAE national entrepreneur, Managing Director and Founder of Dubai-based Emiratisation consultancy, Next Level. He founded the company in 2006 and under his leadership Next Level has helped more than 30 companies in the UAE on their Emiratisation recruitment and human resources needs. The company has so far helped employ at least 100 UAE nationals and around 200 international employees in various positions. Abdulmuttalib continues to play an active role in society particularly in the fields of Emiratisation, development of national capabilities and Emirati entrepreneurship. He is a regular speaker in conferences, such as the GCC Nationalisation Conference, the UAE Career Fair in 2009 and the Abu Dhabi Business Round Table conference.

Alexander Blass President and CEO, Alexander Blass International

Alexander Blass is an American entrepreneur and innovator who has travelled to over 40 countries and appeared in hundreds of media outlets, including several cover stories. He is the grand prize winner of the Daily Record’s Top Innovator of the Year Award. The publication credited him with “revolutionising charitable giving” in 2007 for inventing the person-to-person giving technology available on the Internet. He presently serves as CEO of Alexander Blass International, an executive training and consulting firm. Alexander keynotes some of the world’s most prestigious conferences on topics including innovation,creativity, leadership change, business development and entrepreneurship. Examples include the Abu Dhabi Innovation Forum, the SME Advisor Stars of Business Awards in Dubai and the European Conference on Creativity and Innovation.

Ghada joined Fichte & Co in 2012 as Head of Disputes Resolution, from the DIFC Courts and Special Tribunal Related to Dubai World. Her practise areas include international commercial arbitration, mediation, as well as DIFC litigation, regulatory, compliance and insolvency. She has experience on three continents, having practised law in the USA, Germany and the UAE, enabling her to bridge business cultures and tailor legal solutions and strategies to multi-jurisdictional clients’ needs. She is a registered practitioner with the DIFC Courts in Dubai and is a member of the USA Bar in New York and Virginia. She is a member of the DIFC Courts’ Rules Sub-Committee, LCIA Arab Users’ Council, GCC Commercial Arbitration Centre, ICC UAE Taskforce on the Compilation of UAE Arbitration Case Law, as well as the American Business Council, German-Emirati Joint Council for Industry & Commerce (AHK) and Jordanian Business Council.

David Burns COO, British Business Group, and Director of Marketing and Corporate Communications, UHY

David is the Director of Marketing and Corporate Communications for an independent office of UHY, an international firm of auditors and accountants. His current UHY activities include the PR and marketing of four offices in the UAE and the business development for the firm in general. David is also the COO of the British Business Group in Dubai and the Northern Emirates, and is responsible for the overall administration of the group’s activities and an office based in the grounds of the British Embassy in Dubai. He has been involved with SMEs in the region for 35 years.

MAY 2012 SME ADVISOR MIDDLE EAST

shoptalk

trends & updates

Dubai Chamber releases data on members’ Q1 exports and re-exports The first quarter data recently released by Dubai Chamber of Commerce and Industry has confirmed that Dubai’s economy is firmly back in the saddle and ready to make strides. The first quarterly report highlights the 7.8% rise in the value of exports and re-exports by members, in comparison to the first quarter of 2011, confirms the status of the trade sector including exports and re-exports as one of the frontrunners of Dubai’s economic growth. The first quarterly report of 2012 reveals that the value of Dubai Chamber members’ exports and re-exports was AED 63.5 billion, compared to AED 58.9 billion during the same period in 2011; while the monthly March exports and re-exports was AED 23 billion and February was lowest with a value of AED 17.6 billion. During the same period, Dubai Chamber issued a total of 177,502 Certificates of Origin, which is an increase of 5.3%, compared to the 168,558 Certificates of Origin issued during the first three months of 2012. January was the month with the highest number of certificates issued, numbering 60,558, while February was the month with the least totalling 57,330.

Between January and March, a total of 3,449 new members joined Dubai Chamber which increased the total number of Dubai Chamber members to over 131,900. The quarterly data also shows that during the first three months Dubai Chamber received 35 international delegations comprising of 358 delegates. These groups came from Saudi Arabia, Japan, Germany, Sudan, Chile, Jordan, Egypt, Hungary, Turkey, Hong Kong, US, Tajikistan, Tunisia, China, Latvia, Portugal, Lebanon, UK, Australia, Ghana, Russia, Lithuania, Uruguay, Malaysia, Uganda, Norway, Iran and France. Dubai Chamber participated in 16 events around the world, particularly in countries like Canada, US, Libya, Ethiopia, France, Tanzania, UK, Belgium and Oman, to promote Dubai, while also took an outbound delegation to the Consumer Electronics Show 2012 in Las Vegas. HE Hamad Buamim, Director General, Dubai Chamber, said the first quarter results are quite encouraging and points at the continued strength of Dubai’s economy while enhancing the Emirate’s position as a thriving investment destination. Elevated by the outcome of the first quarter, Buamim

SME ADVISOR MIDDLE EAST MAY 2012

lauded the role of the trade sector, which he said is responsible for the overall health of Dubai’s economy, which is supported by its strategic location, advanced infrastructural and financial facilities, unconditional government support and a competitive and safe business environment. Buamim stressed the organisation’s efforts in exploring new and emerging markets for its members, with the Chamber set to send out trade missions to the world’s promising markets. Buamim also stressed on Dubai Chamber’s mission of representing, supporting and protecting the interests of the business community by highlighting the value-added services and facilities offered by the Chamber, which he said directly help in enhancing the business environment as well as the confidence of foreign investors. In the first quarter of the year, Dubai Chamber received two high-profile delegations. The first was headed by HE Abdulla Gul, the Turkish President at the head of the UAE-Turkish Business Forum. The second delegation was headed by HE Valdis Dombrovskis, Prime Minister of Latvia, during the first UAE-Latvia Business Forum organised by Dubai Chamber. With the joining of the Somali Business Council, the

number of business councils reached 41 while taking the total of business councils and business groups operating under the umbrella of Dubai Chamber to 66. Dubai Chamber maintained its lead in the excellence programme by offering innovative services to its customers, thus winning the Best Result in Customer Satisfaction Award for the third year in a row at the prestigious Dubai Government Excellence Programme. Dubai Chamber also organised quarterly meetings for its business councils and business groups to discuss issues facing the business community and to recommend the same to the concerned government authorities, while it also held a Talk Business at Breakfast networking event which brought together representatives of the private sector and HE Dr. Mohammed Al Zarooni, Director General of Dubai Airport Free Zone. Also, as part of its initiative of the Diplomatic Circle Dinner launched last year to interact, exchange notes and discuss new business opportunities for the diplomatic corps, Dubai Chamber hosted the first dinner of the year, which was attended by HE Reem Al Hashimy, UAE Minister of State and Managing Director of Dubai Expo 2020 Executive Bid Committee.

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shoptalk

trends & updates

Dubai School of Government session examines Malaysia’s growth prospects

(L-R) Dr. Bassem Younes, Director of Academic Affairs and Executive Education Dubai School of Government, and Hamidin Abd Hamid, Chief Executive Officer, Razak School of Government in Malaysia

Dubai School of Government (DSG), a research and teaching institution focusing on public policymaking, hosted a discussion to identify a prospective road map for effecting socioeconomic transformation in Malaysia. Hosted on 10 th April, the session titled Courage, Innovation, Change: Malaysia at a Crossroads, closely examined the past, present and future of Malaysia’s financial system. Hamidin Abd Hamid, Chief Executive Officer, Razak School of Government in Malaysia (RSOG), delivered the key note address and discussed crucial issues such

as identifying a solution for the middle income trap to help Malaysia achieve the status of a developed nation. Abd Hamid said: Malaysia is at a crossroads, and not because it is undecided on its path. The country’s momentous growth dictates the need to put in place a system that propels the country to the next stage of sustainable development. Malaysia’s continued progress remains a fundamental vision of opportunities and challenges- one where all public and private initiatives are in synergy.” He added: “Yet, in order to achieve Malaysia’s Vision 2020, which necessitates a

SME ADVISOR MIDDLE EAST MAY 2012

professional public sector and a competitive private sector, the nation must address issues it faces head on. It is sessions such as this, hosted by DSG, that help initiate discussions and eventually lead to solutions that can change a nation.” Abd Hamid highlighted that Malaysians need to take on the role of market makers, economic drivers and innovators at the global level to achieve the status of a developed nation. Pointing out that it is important to train and acquire quality, talent and social infrastructure, he called for active participation from non-government and media institutions. He said other key

influencers of productivity included transparency and accountability of both the public and private sectors, in addition to integrating a merit-based culture that inculcates competitiveness. His Excellency Tariq Hilal Lootah, Executive President, DSG, said: “The experience of Malaysia stands as an interesting case study for the UAE to take pointers from the circumstances and obstacles that other nations face in achieving growth. DSG hosts such seminars in order to ensure that the communication channels remain open and that there are abundant learning opportunities for local government bodies. The Malaysian experience reveals the significant impact of detailed planning and foresight of knowledgeable leaders on the nation’s growth trajectory.” The Razak School of Government (RSOG), founded in 2012 by the Government of Malaysia, spearheads the intellectual, leadership and professional development of Malaysia’s public sector leaders. RSOG’s is mandated to identify and inculcate the missing link – a unique leadership that capably addresses the challenges of the future.

shoptalk

trends & updates

Dubai SME opens registration for ‘Mohammed Bin Rashid Award for Young Business Leaders’ Under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE vice President, Prime Minister and Ruler of Dubai, Dubai SME, the agency of the Department of Economic Development mandated to develop the SME sector, has announced that the registration for the seventh cycle of the Mohammed Bin Rashid Award for Young Business Leaders (YBL) is open till 12th July 2012. The YBL Award aims to create a competitive environment amongst the young entrepreneurs in the UAE and the Arab countries. It also recognises those individuals and organisations who have aided in the development of entrepreneurs in the UAE. The Awards will be presented in the following categories: Entrepreneurial Awards in the UAE and the Arab countries; Entrepreneurial Personality of The Year in the UAE and the Arab countries (by nomination); Supporting Organisation Awards (which include Best Supporting Entity to the Government Procurement Programme in the UAE government), semi-government and private sectors; Best Supporting Bank in the UAE; and Best Initiative to Support Entrepreneurship in the UAE and the Arab countries (by nomination).

Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, said: “The YBL Award reflects the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum to provide an ideal growth environment to attract young business leaders, help them to participate in developing the business sector in the UAE and the Arab world, and enable them to lead international projects.” “Since its launch in 2003, the YBL Award has received His Highness Sheik Mohammed’s continuous support in its mission to encourage the SME sector. Dubai SME is committed to further elevate the scope of

this award by through stronger efforts and adopting best practises to make it a model for the whole world,” said Ibtihal Al Naji, General Coordinator of the Award. To be eligible for the YBL Awards, a business should be legally registered and be based and/or operating in the UAE or the Arab country of origin, in addition to being fully owned by nationals. The age of the business should be as follows: home-based business (Intelaq) in Dubai (up to three years), startup business (six months to two years), and established business (two to seven years).

The applicants should forward the application form along with the supporting documents to Dubai SME office in the Business Village. The evaluation of the applications progresses through different stages such as application stage, preliminary short listing, site visits, second stage short listing, and panel interview, before the final results are announced. After each stage the applicants will be informed whether their applications have been qualified for the next stage or not. For more information about the Awards please visit: www.smeawards.ae.

Arab-Brazilian Chamber of Commerce registers increase in commercial relations Brazilian accumulated exports to the Arab countries totaled USD 3.2 billion in the period from January to March 2012, representing an increase of 3.33% when compared to the corresponding period in 2011. Imports from the Arab countries have also registered a significant increase, reaching USD two billion in the period, accounting for an increase of 18% in relation to the previous year. According to the Arab-Brazilian Chamber of Commerce, the instability observed last year in some Arab countries has not affected the results. “The commercial relations between Brazil and the Arab countries proved to be vibrant in 2011 and continues so in this

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year of 2012,” said Michel Alaby, DirectorGeneral of the Arab Chamber. Of the exports to Arab countries, Saudi Arabia heads the list as the main destination, reaching USD 701 million. Next is the United Arab Emirates (USD 611 million) and Egypt (USD 485 million). Among the exported products, the highlights were sugar, beef and poultry, mineral ores, cereals and vegetable oils. As per Brazilian imports from the Arab countries, in turn, Algeria leads with USD 807 million, followed by Saudi Arabia (USD 387 million) and Kuwait (USD 265 million). Among the imported products, there was an increase in oil and oil products, fertilisers and plastics.

shoptalk

trends & updates

Dubai Business Women Council receives women delegation from Saudi Federation of Chambers of Commerce

Top officials of Dubai Business Women Council (DBWC), a Dubai Chamber of Commerce and Industry initiative, received a women delegation from the women’s department of the various Saudi Arabia chambers working under the Saudi Federation of Chambers of Commerce. HE Raja Al Gurg, President, Dubai Business Women Council, welcomed the Saudi women’s delegation headed by Khloud S. Al Tamimi, Acting General Manager, Ladies Department, Saudi Federation of Chambers of Commerce in Riyadh. Her accompanying delegation comprised of heads of ladies departments from different Saudi chambers. The meeting was also attended by a number of Dubai business women and representative of the Hamburg Office in Dubai.

In her welcome speech, HE Al Gurg paid tributes to the contribution of GCC women to the vibrant business and investment environment of the region, as she said that the Emirati business women have achieved a lot under the wise leadership of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai. “This visit reflects a mutual desire to build bridges and establish a strategic partnership between the two sides, share experiences and information while strengthening cooperation ties and to work jointly in common areas of interest,” said HE Al Gurg. Highlighting the role of the Dubai Business Women Council, HE Al Gurg informed the delegation that the Council’s objective is to empower the role of UAE businesswomen in

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developing their economic, social and cultural status in life. It works to foster equal opportunity in the world of commerce, through designing programmes and policies to give businesswomen the right opportunities so that they develop their own business enterprises, she said. HE Al Gurg further stated that since its establishment in 2002 under the umbrella of Dubai Chamber, the Council has been working to improve the work environment for businesswomen across the Emirate while leveraging their competitiveness through series of initiatives, policies and programmes designed to support them throughout the process of initiating their businesses in the public or private sector enterprises. She invited the delegation to attend the MENA Businesswomen’s Network

(BWN), on 12th and 13th of April in Dubai under the theme Unleashing the Economic Potential of Women in the MENA Region. HE Al Gurg further stressed that the Council is a founding member of the forum and is hosting its inaugural event. Regional and global delegates will be attending the inaugural BWN Forum which provides an excellent networking opportunity for businesswomen in the region to share experiences and hands-on skills to promote their businesses, she said. In her presentation, she emphasised on the instrumental role played by UAE businesswomen, as there are currently 3,760 businesswomen in Dubai; 66% work in the public sector, 30% hold decisionmaking positions in the public sector, 22.5% are in the Federal National Council, while women investments in various sectors amount to AED 12.4 billion, she revealed. On her part, Khloud S. Al Tamimi stressed on the importance of the visit, which she said provided an opportunity to build stronger ties and expand the areas of cooperation between the two sides in the long-run. Other members of the delegation from Riyadh, Yanbu, Madinah and Sharqiya shared their experiences with the attendees regarding successful business ventures and efforts to achieve positive results in recent years. Meanwhile, members of the Dubai Business Women Council also apprised the delegates with their experiences and investment facilities available in Dubai, as the two sides agreed to coordinate efforts for the exchange of information on investment opportunities in both countries.

SHELF LIFE

Eco-friendly entertainment Speed and style Sony has announced the new VAIO E14 Series, a 14-inch notebook with stylish new wrap design and long battery life, is set to be rolled out across the region in May 2012. Ideal for stress-free everyday computing, the laptop is equipped with third generation Intel Core i5 and i7 CPU with AMD Radeon HD 7670M discrete GPU. The light-weight VAIO E14’s design is accented by complementary colour flourishes around the notebook’s edge, touchpad and keyboard. The device also comes with a personalisation kit comprising of a matching mouse and keyboard skin. The battery life of up to 5.5 hours is enhanced by the discreet GPUs that automatically switch off to boost battery life when less graphic-intensive tasks are being performed. Featuring the new Rapid Wake + Eco energysaving mode, VAIO goes into an ultra-low power deep sleep, keeping all your data safe for up to ten days. Once the PC’s lid is opened, the laptop is up and running in seconds, with the files exactly as they were left.

SME ADVISOR MIDDLE EAST MAY 2012

Panasonic Marketing Middle East and Africa (PMMAF) has used its annual media convention to announce the launch of a complete new range of eco-friendly products. The company is rolling out a new range of VIERA televisions, which incorporate design, enhanced picture quality and a series of energy efficiency features. All future VIERA televisions will serve as smart interactive communication devices, providing users with an infinitely configurable and immersive new TVviewing experience, as well as easy access to the internet. Panasonic also has plans to launch larger 44 and 55 inch LED TVs.

Panasonic also debuted its LUMIX GF5 camera, that boasts a new 12.1 megapixel High Picture Quality Live Mos sensor with built-in flash. The compact and lightweight GF5 offers Full High Definition Video recording capabilities. Users can shoot amazing pictures even in low light conditions, thanks to an extended ISO range of up to ISO 12800. Customers have the option to either buy the GF5 with a power zoom lens or with a double lens package which includes a 14mm-42mm Zoom lens and a wide angle and bright pancake lens.

Fashion forward Acer will soon be releasing its Liquid Glow SmartPhone. Based on the Android 4.0 Ice Cream Sandwich operating system, this SmartPhone is designed to balance style, performance and affordability — targeting today’s fun-seeking, social-networking youth. The Liquid Glow sports a 3.7-inch screen and portrays Acer’s signature look with curves, chrome details and a soft-touch casin, and is available in a number of trendy colours. The Liquid Glow brings together the power and the convenience of Ice Cream Sandwich, providing a user-friendly interface along with widgets to easily stay connected, entertained and updated. It also works with the latest voice-input engine from Google, which guarantees a continuous “open microphone” experience and streaming voice recognition. The Acer Liquid Glow will be available in early summer 2012.

SHELF LIFE

Smart printing Canon Middle East has launched two new smart laser printers – the i-SENSYS LBP6680x and i-SENSYS LBP6670dn. The new black and white, single function printers (SFPs) can be easily integrated within an organisation’s print fleet and as part a balanced deployment of print and imaging technology. The printers provide many of the same high-level imaging features normally associated with the imageRunner Advance range, such as support for Adobe PostScript. The products’ compatibility with uniFLOW, allows organisations to effectively manage their print processes. Print costs can be controlled and managed through cost management features, which include print accounting.

Teaching tools

Organisations will also benefit from reduced print downtime. Device management, through eMaintenance, enables the remote servicing of devices, and the close monitoring of consumables ensures that toner and paper supplies never run low.

Epson has launched its secondgeneration of interactive ultra-short throw projectors for the education industry in the region. Based on industry feedback, Epson has developed new features, such as more responsive interactive pens and PC-free connectivity, to help bring engaging learning to more classrooms.

Office apps Nokia has announced the local availability of Office Mobile apps from Microsoft - including Word Mobile, PowerPoint Mobile and Excel Mobile. These apps are available to users via a software update for the new Nokia Belle, range consisting of the Nokia 701, Nokia 700 and Nokia 603. The update is also available for Nokia E7, Nokia X7, Nokia C7, Nokia Oro, and Nokia C6-01. Office Mobile completes the suite of Microsoft productivity applications for Symbian SmartPhones with Nokia Belle, including OneNote mobile, Document Connection, Lync 2010 Mobile and PowerPoint Broadcast. Business users using SmartPhones with Nokia Belle range, can also enjoy the latest Nokia applications like Nokia Drive and Nokia Maps that feature free turnby-turn voice guided walk and drive navigation in more than 100 countries.

The interactive EB-485Wi and EB-475Wi projectors feature two interactive pens. They allow teachers and students to write on the screen at the same time, making collaborative work easier. These lightweight pens are very responsive and easy to use, thanks to the new hover function that accurately detects when they are not in contact with the projection surface. The projectors also come with an instant annotation tool that allows teachers to annotate moving images and photos when linked up to a DVD player.

MAY 2012 SME ADVISOR MIDDLE EAST

Trade

Outsourcing

Focusing on the core In the modern business environment, companies are under increasing pressure to reduce costs to maintain their competitiveness. Therefore, it is important for SMEs to examine their range of operations to identify areas that are perhaps non-core, and can be carried out better and cheaper by a specialised, or outsourced firm, says Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economics Policy Committee, Dubai Economic Department.

utsourcing is more often embraced by companies that are exporting their products or services to foreign markets and competing with low-cost producers. Generally when one refers to outsourcing of activities, it usually implies back office, or call centre related tasks. However, in recent years,

SME ADVISOR MIDDLE EAST MAY 2012

the trend to outsource activities with the corresponding cost savings has led firms to re-evaluate the services that can be provided by a third party company. Various studies have shown that costsavings tend to be pretty clear, especially where labour is concerned, because no longer is the SME concerned with the individualâ&#x20AC;&#x2122;s

salary and overhead costs, such as office space, gratuity, medical insurance and so on. Generally speaking, the average cost savings tend to be about a third of the companyâ&#x20AC;&#x2122;s previous costs. Today, the communication media in outsourcing is well established and largely assisted by the development of technology.

Trade

Outsourcing

Only a few years ago, outsourcing relied on the telephone and courier services. Today, both the outsourcing and client companies have very sophisticated video conference equipment, which is quite cheap and easy to set up. The common range of communication media are:

For a firm to really consider outsourcing any activity it has to offer substantial cost savings in the region of 20% or more. Any cost savings below this level do not necessarily make it worthwhile for SMEs to outsource.

E-mail based This is by far the most common and allows the outsourcing and client company to scan documents as well as files. This is very convenient but suffers from security issues and most client companies require that e-mails are encrypted.

Quality of work In theory, a company specialising in one aspect or activity, should have a very high quality of output. However, the reality is not always the same as the theory. Client companies tend to fear that any error or low-quality output, will impact their reputation. The usual approach is to create an internal quality control system along with regular staff training to ensure that the output meets the requirements of the client company.

Secure server based This is a more secure method, whereby the client company uploads the files in an encrypted format onto the pre-agreed server. Once the documents are on the server the outsourcing company can gain access and can deliver the finished work onto the same server. Remote access based In some cases, the client company may give access to the client companyâ&#x20AC;&#x2122;s servers. This is very convenient as the outsourcing

Dr. Ashraf Mahate

An export management company (EMC) provides a range of services from negotiating export contracts to providing aftersales services. Usually, the EMCâ&#x20AC;&#x2122;s operate on a commission basis, but some take title to the products they sell and make a profit on the mark-up.

company simply becomes an extension of the client company. More importantly, the client company has complete control of the documents in terms of recording, access, printability and so on. Video-conferencing Various options exist from the fixed-line variety to Internet-based forms, such as Skype. This allows the outsourcing and client company to have regular dialogue and for the former to understand the requirements of each assignment. Issues in outsourcing Although, outsourcing may bring about benefits, the client company may actually have

some concerns, the most common of which are as follows: Security of information By definition, all information is sensitive by nature and needs to be stored and transmitted in a secure manner. This is by far the most important concern that client companies tend to have, especially as any breach may lead to misuse. Associated with this is the aspect of confidentiality. Any UAE company seeking to outsource any part of its activities needs to have appropriate controls in place to ensure that client confidentiality is maintained along with security.

Control Some companies may fear that they do not have control over the outsourced employees. Of course, the real concern is that internal staff may work weekends or holidays to meet deadlines, but the same level of commitment may not exist for overseas staff. Additional costs In some cases, there may be additional costs involved, such as field trips that might add to the overall cost. Flexibility Accounting work, like most sectors, is both seasonal to some extent and definitely cyclical, implying that the client company would need considerable flexibility. Success factors in outsourcing If SMEs wish to outsource one or more of their non-core activities, they need to bear the following points:

Significant cost savings For a firm to really consider outsourcing any activity, it has to offer substantial cost savings in the region of 20% or more. Any cost savings below this level do not necessarily make it worthwhile for SMEs to outsource. SMEs need to weigh the cost savings with the need to

MAY 2012 SME ADVISOR MIDDLE EAST

Trade

Outsourcing

deal with outsourced staff. Therefore, the cost savings need to be worthwhile for SMEs to make the change.

Flexibility/scalability SMEs looking to outsource one or more of their non-core activities need to ensure they have the flexibility to upscale or downscale their commitment depending on their needs. This implies that the outsourcing company needs to have additional resources which can be called upon at short notice.

Focus on core activities A number of outsourcing companies have adopted the strategy of specialising in certain services rather than being multi-focused. In

24/7 operations The key to a successful outsourcing is for the outsource company to provide 24-hoursa-day and seven days a week service.

Control SMEs could still keep complete control on the data and their customer accounts. They can get the data uploaded to their own server, or get the data scanned and sent by secure e-file share systems. Outsourcing the export department SMEs seeking to export their products or services into foreign markets have a number of different ways of outsourcing their export departments which include the following:

Export merchants will purchase and then re-package products for export, assuming all risks and selling the product to their own customers. This export intermediary option should be considered carefully; as your business runs the risk of losing control over your product’s pricing and marketing in foreign markets.

this respect, the SME can be assured of the level of experience and competence. The SME needs to ensure that the outsource company has the appropriate expertise with the experience.

Technology The real success of any outsourcing company is its technology, as it needs to provide a seamless and quality service. More importantly, the SME may wish to have web-conferencing facilities, encrypted web enabled software, disaster recovery systems and so on. Although they are readily available, the real problem is that they get outdated at a fast pace and require regular investment. Also, high-end technology requires qualified individuals who can maintain the system. The SME needs to carry out appropriate technology based on due diligence to ensure that the outsource company is able to deliver in this regard.

SME ADVISOR MIDDLE EAST MAY 2012

Commissioned agents: They act as brokers, who link an exporter’s product with a foreign buyer. Usually, the agent does not fulfill the orders, but passes them to the exporter for acceptance. These agents can sometimes assist with export logistics such as packing, shipping and export documentation. Export management companies (EMCs): EMCs act as an exporter’s off-site export department, representing the exporter’s product to potential foreign buyers. The EMC searches for business on behalf of the export firm and takes care of all aspects of the export transaction. Hiring an EMC is often a viable option for smaller exporters who lack the time and expertise to break into foreign markets on their own. An EMC provides a range of services from negotiating export contracts to providing after-sales services. Usually, the EMCs operate on a commission basis, but some

take title to the products they sell and make a profit on the mark-up. Export trading companies (ETCs): ETCs perform many of the functions of EMCs. However, they tend to be demand-driven and transaction-oriented, acting as an agent between the buyer and seller. Most ETCs will take title to your goods for export and will pay your company directly. This arrangement practically eliminates the risks associated with exporting. However, the exporter needs to make sure that appropriate checks are made regarding the ETC. More often than not, an ETC can be a good source of export opportunity. Export merchants: Export merchants will purchase and then re-package products for export, assuming all risks and selling the product to their own customers. This export intermediary option should be considered carefully, as your business runs the risk of losing control over your product’s pricing and marketing in foreign markets.

About Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. He has also presented papers at major international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund. Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified AntiMoney Laundering Specialists (ACAMS).

Team members in three time zones. One document in the cloud. A single place for all information. It all works together.

Introducing Microsoft Office 365. Collaborate in the cloud with Office, Exchange, SharePoint, and Lync videoconferencing. Register for the Office 365 trial at: www.office365.ae (UAE) www.office365.com.qa (Qatar) www.office365.com.kw (Kuwait)

Banking for business FINANCE

Getting that business edge Banking options can often seem complex to SMEs when trying to determine the best possible deal for their business. We spoke to Abu Dhabi Commercial Bank (ADCB) about their range of banking products to determine how they are servicing the segment.

ot all business-banking products are tailor-made for SMEs. However, there are efforts by the banking industry to address as many of a business owner’s needs as possible. ADCB is one such bank making headway in the drive to engage with this segment. Their specifically designed SME product suite, BusinessEdge, offers a comprehensive range of products and is targeted to incorporate the requirements across the SME spectrum within the UAE. So what are

SME ADVISOR MIDDLE EAST MAY 2012

the banking elements contained within this Business Edge package? These products range from current accounts, call accounts, term deposits, working capital solutions, enterprise credit, to unsecured business loans, pre-approved business loans and commercial real estate funding. It also offers the option of specific end-use defined products, in terms of asset-backed finance, for purchase of commercial vehicles, construction equipment, medical equipment, professional printing equipment, compressors, generators and so on.

ADCB have also ensured that all these products fall within Shariah-compliant variants through the bank’s Islamic Banking Department. To further reinforce the reach to the SME community and its commercial segment of customers, 17 SME sales and service desks have been established across key branches. So are there any conditions, in terms of average balances, that SMEs need to fulfil in order to qualify for this option? The Business Edge current account offers five packages – Premium, Preferred, Platinum,

Banking for business FINANCE

Priority and Elite, with minimum average balances ranging from AED 50,000 to AED one million, so that the smallest business to the largest mid size enterprise can avail of these offerings. In addition, accounts are available in Dirhams, as well as other leading currencies such as Euros, US Dollars and the British Pound Sterling. And for those business owners who travel extensively and are on-the-go, ADCB also offers a fast and efficient Internet banking platform that enables real time access to customers. Credit facilities SMEs require day-to-day working capital. As the business grows, owners need to keep pace with increasing financial demands. ADCB’s Enterprise Credit is a flexible business banking product created to take care of the working capital and short-term funding needs.

For those SMEs dealing with trade and export, there is the option of specific customised products, which include pre-shipment finance for exporters, invoice discounting for suppliers and contractors of government institutions and back-to-back LC.

trade transactions from anywhere at any time. The new system offers clients quicker turnaround time and increased productivity by providing the opportunity to initiate transactions, as well as receiving notifications, from ADCB 24 hours a day, seven days a week. It also allows clients to completely manage online all their import and export letters of credit, bank guarantees and other

Every business encounters unforeseen financial requirements. BusinessEdge InstaLoan enables businesses to arrange urgent unsecured finance quickly and easily, giving SMEs more time to focus on their business.

The facilities are available to companies with an annual sales turnover of up to AED 100 million, with the credit facility accommodating up to AED 25 million. The collateral requirements are relatively flexible, with residential or commercial properties, SBLC, cash or cash equivalent accepted as collateral. For those SMEs dealing with trade and export, there is the option of specific customised products, which include preshipment finance for exporters, invoice discounting for suppliers and contractors of government institutions and back-toback LC. ADCB also offers ProTrade, an online platform to clients for trade finance, allowing customers to manage their

trade finance services, receive information on status of transactions in real time or, via email, and ensure complete security of access through ProTrade using secure 128 bit encryption. Fast financing Every business encounters unforeseen financial requirements. BusinessEdge InstaLoan enables businesses to arrange urgent unsecured finance quickly and easily, giving SMEs more time to focus on their business. The loan amounts can range from AED 1.5 million for UAE nationals and AED 1 million for expat owned busiesses, with no fixed deposit or cash margin required. With competitive interest rates and flexible repayment plans by way of

instalments, this kind of financing can be accessed by SMEs with a fast turnaround time and minimum documentation. Alternatively, SMEs with at least a six months current account with ADCB can set-up a pre-approved loan facility that enables them to arrange unsecured finance when they need it most. The BusinessEdge Advantage Loan also does not require a fixed deposit, or any other cash collateral, and the principal loan amount outstanding after 12 months can be converted into an overdraft facility along with a top-up. In this instance the loan amount can range from AED 100,000 to AED 250,000 and will be assessed based on current account transaction history. Equipment and vehicle finance For commercial vehicle loans, construction equipment loans, medical equipment loans and professional equipment (loans for printing equipment) ADCB have introduced the BusinessEdge Asset-Backed Finance option. The facility offers funding of up to 90% of the equipment or vehicle cost at competitive rates, with simple documentation and a quick turnaround time. This offer is not only for new equipment but also pre-owned.

Quick facts • ADCB possesses a network of over 50 branches and 290 ATMs across the UAE and India • 17 dedicated SME centres across the UAE and a team of relationship managers to service its customers

MAY 2012 SME ADVISOR MIDDLE EAST

Finance

Life Assurance: Part II

preparING for the inevitable Following the part one article regarding life assurance, Richard Taylor and Rupert Connor, Chartered Financial Advisors, Acuma Wealth Management, bring you part two of the series, giving the case for life assurance in business and protecting your main assets.

ife assurance continues to be massively under-bought and under-sold, often with disastrous consequences. If you are in business, failure to protect your company, partnership and key staff could have devastating implications in the event that one of you dies prematurely, or becomes ill and unable to work. Detailed below are some different scenarios that you should consider:

Shareholding directors of a private limited company The death or permanent disablement of a shareholding director could have a serious impact, both on the future of

SME ADVISOR MIDDLE EAST MAY 2012

your business and on your family. So what are the main points you need to consider? Majority shareholders Majority shareholders may have important voting rights that directly affect the

dependants. This could affect the company in two ways:

The dependants now have the right to a say in the running of the company. But, do they have the necessary experience? And will they share the objectives that the surviving shareholders have for the business?

They might prefer to receive the value of the shares in cash. But who will buy them? Unless the other shareholders have sufficient liquid capital reserves, they may be sold to a possible hostile third party, perhaps even a direct competitor.

Majority shareholders may have important voting rights that directly affect the running of the company. In the event of a majority shareholder’s death, these rights would normally pass to the deceased’s dependants.

running of the company. In the event of a majority shareholder’s death, these rights would normally pass to the deceased’s

Minority shareholders Generally, it is the voting rights attached to a shareholding in a private limited

Finance

Life Assurance: Part II

A legal agreement is signed by all of the shareholders, who agree to sell their shares in the event of their premature death, and an insurance contract(s) provides money for the surviving shareholders to purchase the deceased shareholders equity.

company that gives them their market value. Minority shareholdings may not have significant rights, and so the shareholder’s dependants may inherit shares that are virtually worthless. The only likely buyers of such a holding would be the surviving shareholders, but they may be under no obligation to buy. The simple answer to both of these scenarios is shareholder protection. A legal agreement is signed by all of the shareholders, who agree to sell their shares in the event of their premature death, and an insurance contract(s) provide money for the surviving shareholders to purchase the deceased shareholders equity.

Rupert Connor

Don’t forget key staff As your business is ultimately your people, its continued success may also depend on the special contributions made by a small number of key men and women. Your fellow directors or partners should also be regarded as key people. The death or disability of any of them could threaten your company’s profitability. Indeed, the very survival of the company could be at stake. Key people insurance The premature death of a key employee is likely to cause an immediate requirement for cash, so life assurance should be a top priority. However, it is not just the death of a key employee that can create serious financial burdens for your company. Today, many serious illnesses, such as a heart attack, stroke and cancer, no longer result in death, but require lengthy periods of convalescence. A key person insurance contract can be written on the lives of key staff that would provide money for this eventuality.

Following the disaster, shares in Carter & Carter, a national provider of apprenticeship games, plunged and the company issued three profit warnings before its shares were suspended. It then began talks with its banks over GBP 130 million of debts. By March 2008, it was heading for administration with the loss of 2,000 jobs. Fidelity International, the firm’s biggest investor, reportedly lost its GBP 63 million stake, while the Corus pension fund took a GBP 15 million hit from the collapse. This example shows what an important man Phillip Carter was to the company, and how the collapse of his business may have been avoided had sufficient key man insurance been in place. At the very least it would have provided the businesses interim leaders some breathing space, while deciding how best to proceed. Conclusion Once again, not an especially pleasant topic to consider, but of vital importance to anyone serious about their business. These things do happen, as highlighted in devastating detail by the Phillip Carter example. If it can happen in a listed company that counted Fidelity as a major shareholder, then it can almost certainly happen in your business. The smaller your business, the more vital your key employees are likely to be to the profitability and longevity of your company.

About Richard Taylor

In case you remain unconvinced, perhaps a real life example in the form of the tragic death of training tycoon Phillip Carter in a helicopter crash on 1st May 2007, and the devastating impact Carter’s death had on his business, may help change your mind. Carter, his teenage son, best friend and the pilot were all killed when his helicopter crashed in the UK, a few hundred yards from his home.

Rupert Connor and Richard Taylor are independent financial advisors with Acuma Wealth Management. As qualified advisors in the region they help expats to get their finances in order, and maximise the financial opportunities available offshore and plan for future events. Acuma Wealth Management offers three core services; wealth creation, wealth management and wealth preservation, which include retirement planning, pension transfers (SIPPS & QROPS), death tax and inheritance planning, life assurance and critical illness cover, group pensions and corporate benefit solutions, key man insurance and shareholder protection, and medical insurance.

MAY 2012 SME ADVISOR MIDDLE EAST

Management

Corporate culture

Perfecting your style We all know that SMEs are the engine for growth and are an important part of the economy. However, while setting up shop is one thing, it is another to manage it. Elias Mazzawi, Managing Director, EMS MENA, shares some of his management tips.

t’s what you do and the way that you do it - that’s what gets results. A slight variation on the lyrics of the 1939 tune, but that is forgivable. The song was not composed with business management in mind, but is nonetheless a pithy reminder of a very real truth; how we manage our businesses is perhaps the single biggest determinant of how successful our businesses are. Nowhere is this more true, than in the entrepreneurial SME. Ask fellow entrepreneurs, and they will tell you. Their biggest challenge is to find the keys to translating the skills, energy and dedication of the core leadership team, into a high-performing organisation and to do so pragmatically. The correlation between the extent to which this is achieved and the level of success of the business is direct. In other words, it is crucial. There are three lessons of note for every SME:

SME ADVISOR MIDDLE EAST MAY 2012

Make the transition from directly controlling and managing everything, to empowering the wider team. It is the first step in building a virtuous spiral. Understand and actively invest in the associated skill-building, so that your organisation can accept the empowerment you are offering. Build simple, workable management and reporting processes, and use them. Allow everyone to understand activity and results, cause and effect, which will in turn allow you to co-ordinate activity.

2 3

Command and control doesn’t help In many entrepreneurial SMEs, the core team is very actively involved in all the small details of the business. It is making all the decisions, being intrinsically involved in all resource allocation, fully taken up with strategy and day-to-day operations.

Entrepreneurs are passionate about what they are building and managing and it’s this passion that is often one of main driving forces; the hands-on micro approach is in part the very reason for initial success. But it needs to be used to just the right extent, at just the right time, in just the right way and on just the right things. Otherwise, at some point this heavy micro involvement can begin to limit the potential for success. The challenge is to recognise when the time is right to make the transition and to have in place the tools and techniques to make it. Take the example below. Extreme perhaps, but this is something I saw recently and it certainly illustrates the point: Management set a rule that cars should be washed at a specific time on a specific day and this followed to the letter. In the middle of a sandstorm, a car was being washed as per the schedule. Consider the implications: It’s a waste of effort. The car will be just as dirty again in just a few minutes. It’s de-motivating. Consider the employee’s perspective – washing a car in a sandstorm is unlikely to deliver job satisfaction. It could destroy value. There is a high chance that the paintwork on the car would be scratched as sand gets into the cleaning cloth. It discourages initiative from the workforce. No-one considered the changed circumstances. No-one considered the value added. No-one considered the opportunity missed. No-one considered the potential value destroyed (paint scratched). At the simplest level, the car washer could have been doing something more productive – perhaps something that there isn’t time for in the normal day-to-day routine. But there was clearly no mechanism to encourage, or allow this. Looking at the less extreme but more complicated day-to-day and strategic business situations – how much initiative and talent is being ignored, and what value could it deliver for the business? This common management approach very soon sets a low ceiling for quality, initiative, growth and improvement at a level at that already time-challenged and stretched core team can be involved actively in the dayto-day decisions. A major challenge for any manager is attaining and maintaining

Management

Corporate culture

the ability to empower employees and to encourage initiative and independent decision-making, within the permitted remit of responsibility. Train, develop, motivate It’s all very well to say “I will empower the team.” However, the team needs to be in a position to accept that empowerment. That requires two things: Relevant and appropriate skills and capabilities A heightened sense of responsibility and duty to the company and to its customers Training is critical in technical skills, in decision making, in understanding the range of possible actions, and consequences must first be established. The region has quite acutely recognised that this approach is key to enhancing future success and if businesses are investing noticeable and substantial budgets for training and development. That training must be supported by a corporate culture that fosters learning, allows questioning, rewards success and learns from failure; management processes, practices and systems must all contribute to fostering this trend. Cause and effect approach It’s all very well to say “I will take the right steps to empower the business and I will take the right steps to enhance skills, capabilities and attitude,” but there needs to be a glue

A major challenge for any manager is attaining and maintaining the ability to empower employees, and to encourage initiative and independent decision-making, within the permitted remit of responsibility.

Linking those metrics to departmental objectives and cascading those to personal objectives focuses the team’s attention on taking those actions. It doesn’t need to be heavy-duty – a simple spreadsheet based on a shared cause and effect map can make a very big difference. Using this approach to plan and manage on a daily, weekly, monthly and annual basis is proven to work, provided it is implemented pragmatically and not over-analytically. Add in an element of celebrating and rewarding success, and it becomes a very powerful way to manage the business. Elias Mazzawi

However, far more important in this environment, is the underlying principle of cause and effect underpinning the scorecard. Defining the desired outcomes across the four dimensions is a hugely valuable exercise. Drawing the cause and effect map to achieve those outcomes is a massive benefit.

Training must be supported by a corporate culture that fosters learning, allows questioning, rewards success and learns from failure. Management processes, practices and systems must all contribute to fostering this trend. to hold all of this together and to make activity flow in the same direction. A balanced scorecard approach, pragmatically designed and implemented, fits the bill. The approach is not new – it has been around since the 1990s. Most recognise it as a scorecard covering a range of perspectives, typically financial, customer, internal processes, learning and innovation (these vary from company to company).

Explicitly stating the steps and actions (causes) that influence results (effect), and creating a shared understanding of these priorities and actions across the organisation. Defining the metrics that show progress towards the goals. This focuses attention. Ensuring that the metrics are things that the team’s actions can influence provides an understanding of the actions that make a difference.

The approach of tomorrow As a small business leader, don’t keep all the pressure, responsibility and accountability to yourself – share it with the team. The business will benefit, provided you set up the environment for success. Take advantage of the training and development opportunities available. Put in place a simple, pragmatic, actionable cause and effect management and reporting approach and use it. There is no magic switch to flick to make this success happen overnight, but placing some trust in the tried and tested techniques outlined within this article, should see benefits follow.

1 2 3

About Elias Mazzawi is Managing Director of EMS-MENA. EMS (itself an SME) works exclusively with midsized enterprises in the Middle East, driving higher performance in operations, sales and strategy. The EMS approach is focused on quick wins, delivered through short, intense and highly focused project bursts of just a couple of weeks. This is supported by light-touch several days a month over a longer period to ensure that the change lays foundations and becomes more permanent. For more information about EMS, visit www.ems-mena.com.

MAY 2012 SME ADVISOR MIDDLE EAST

Sales

Customer service

Working with what you have

Opportunities within your existing customer base are a vital source of additional revenue, but are often overlooked by salespeople. Peter Heredia, Managing Director, Max Sales Solutions, gives us his top tips on how to utilise this group of individuals to boost sales.

e have seen many organisations where there is such a focus on winning new business, that existing customers are taken for granted. This leads to significant easy revenue falling by the wayside.

This is a mistake. There is no reason why opportunities within existing customers aren’t given priority, as generally, you have a much better chance of winning this business and improving your closing ratio. Sales people often assume that their customers are fully aware of all the products and services that the company offers. Likewise, customers will expect an efficient sales person to understand their business and to proactively provide information about where there is a product or service that they may need. Obviously, it is the salesperson’s responsibility to make sure that both of these situations are addressed. If not, then the customer will only discuss areas that they feel are in a suppliers field of expertise and real opportunities for additional sales will be missed. The key to making sure that customers are buying everything you have to sell is to keep in touch and continually remind even your oldest customers, about all of the products and services that you have to offer. Clearly, you can only sell existing customers what they need, but by viewing

SME ADVISOR MIDDLE EAST MAY 2012

The key to making sure that customers are buying everything you have to sell, is to keep in touch and continually remind even your oldest customers, about all of the products and services that you have to offer. By viewing the lifetime value of a customer, rather than their individual transactions, this should lead to long-term higher sales.

the lifetime value of a customer, rather than by their individual transactions, this should lead to long-term higher sales. Let’s start by looking at why your closing ratio will be higher from existing customer opportunities.

You already have a relationship with the organisation. With a relationship, you can sometimes cut corners. It’s easier to get an accurate profile. You can ask more direct questions and get accurate answers and you are able

Sales

Customer service

to leverage your current business dealings. If your current contact is the decision maker for the additional business, you will be in a very strong position.

Effective sales teams should know about all of their existing customers’ requirements and any opportunities that exist across the whole organisation, but very often this is not the case.

You will have assistance in meeting the decision maker if it is not your current contact. If you need to meet someone else in the organisation, it is much easier for a colleague of the decision maker to assist in arranging the appointment. Are you using all of your current allies in every business to full advantage? There really is no reason not to.

Cross-selling: The practice of selling additional products or service to an existing customer. The objectives of cross-selling can be either to increase the income derived from the customer, or to protect the relationship with the them

You are aware of their industry and business, so you can offer more valuable solutions. To really understand a customers business takes time. Often the only way to gain more information is from a relationship built over time. The knowledge gained is crucial in helping profile more business and in offering more solutions. Your brand is already elevated within their organisation. Ensuring that the decision maker has confidence in your brand is time consuming, requiring skill and effort. With existing customers you already have it, or it should be a very simple process to evaluate it. You are able to provide the best references that any prospective customer could wish for. A recommendation from a colleague is unbeatable. Most referrals come from people or companies that the decision maker will not be personally familiar with. If somebody within their own organisation recommends your company to a prospect, then this should be a huge step towards closing the business. So why are additional opportunities from existing customers not always identified? It seems obvious that if you have been working with a company for some time, you should know all about their business and all of the opportunities that exist to sell to them. Effective sales teams should know about all of their existing customers’ requirements and any opportunities that exist across the whole organisation, but very often this is not the case. Here are some of the reasons why:

Up-selling: A sales strategy where the seller provides opportunities to purchase related products or services, often for the sole purpose of making a larger sale

Peter Heredia

Lack of industry understanding If you don’t understand every aspect of the customer’s business, then you will not be able to match your products or services to their requirements. Customer may not be willing to offer up certain information Whatever the reason, professional sales people will take the time and effort to understand their business. Your contact may not be aware of opportunities in other parts of their own business The simple way to overcome these issues starts with talking to the customer in their own language, avoiding your industry language. Then it is crucial to build a broader profile of your customers business. If you ask questions like “what other business do you have for us?” then you will be restricting yourself to any information they may have or wish to provide you. However, if you spend time understanding their business, linking your products or services to their needs, you will gain an accurate profile and overcome the above limitations.

What is the impact of increased sales to existing customers? Using the table below and our example, simply input your own numbers to see the impact that selling more to existing customers will have: EXAMPLE

How many customers do you have?

200

How many customers do you estimate have other opportunities?

How many opportunities are in your pipeline?

Number of additional opportunities identified

What is the average value per opportunity

10,000

What is your closing ratio?

30%

Extra Revenue (in Example 40 x 10,000 x 30% = 120,000)

120,000

ACTUAL

About Peter Heredia is the Managing Director of Max Sales Solutions. He has worked with sales teams around the globe for more than two decades and has worked in the Middle East for the last ten years. If you would like to talk to Peter about your sales team, please contact him on peter@maxsalesolutions.com.

MAY 2012 SME ADVISOR MIDDLE EAST

BusinesS Guru Hari Kesavan

MAKING THE JUMP With so many entrepreneurs looking to get a head start in countries like the UAE, some of the most important criteria for creating a sound business plan can get overlooked. Hari Kesavan, an American entrepreneur and founder of UniPropitia, gives his insights on entrepreneurship and shares his story with Joumana Saad â&#x20AC;&#x201C; one full of struggle, failure and success.

n an effort to inspire the next generation of entrepreneurs, most speakers will usually start by telling their audiences about the liberating aspects of entrepreneurship. Hari Kesavan, takes a quite different approach. One of the first things he warns aspiring entrepreneurs of, is the responsibility that comes with your business. Just like a breadwinner is responsible for his family, an entrepreneur must handle his employees and customers the same way. Hari draws life lessons and examples from his own career, and divulges the

SME ADVISOR MIDDLE EAST MAY 2012

good, the bad and the ugly, in an effort to introduce these individuals to the reality of entrepreneurship. Hari has founded and sold two successful companies in the US. The first was a small company, Intercontinental Software Solutions, launched during the software boom. He built the company to a certain level and sold it when he realised it was just offering services without building anything tangible. Out of that experience he learned of certain market gaps, which inspired him to find Percipia in 2000, by far his most successful venture. The company was one of the first of its kind to produce unique IP telephony technology software solutions for

the hospitality, higher education and health care industries in the US. The company went public through a reverse merger in 2004, later merged with a Singaporean company in 2007 and finally was acquired by a multi-billion Dollar Japenese congolmerate in 2008. Hari also founded a company in India that did not succeed and he says the experience has taught him a lot in terms of choosing the right people to work with. Failure, he says, is a word that is not as buzz worthy as success in the entrepreneurial community, yet is as equally important in terms of experience and personal development.

BusinesS Guru Hari Kesavan

“The lesson learned for me was you can fail, but don’t lose your confidence in the process. You can lose money, and certainly some relationships, but you can’t afford to lose your morale. In the end, you actually need to gain some wisdom. If I have to do this all over again what would I do right? If you can’t extract that life lesson, which no MBA will teach, then it’s not worth the failure.” Another key lesson Hari emphasises to entrepreneurs is to always have a long-term plan that involves selling your business, even during the early stages of developing your business idea and plan. “What I learned from my experience is that you make more money by selling companies than building companies. It is very natural for us to think that way in the US. In places like Silicon Valley, when a budding entrepreneur comes out with something new, immediately people ask who will buy this?” he says. Yes you have a passion for taking the market by storm, but at some point that has to stop and your objective has to be what I am getting, what is my family getting, what are my other shareholders and employees getting and how do I exit and move on to the next thing? For Hari, making the transition from employee to entrepreneur came when his

You can fail but don’t lose your confidence in the process. You can lose money, and certainly some relationships; you can’t afford to lose your morale. In the end, you actually need to gain some wisdom. If I had to do this all over again, what would I do right? If you can’t extract that life lesson, which no MBA will teach, then it’s not worth the failure.

Audience members listen during the launch of UniPropitia’s Entrepreneur Development Programme.

Yes, you have a passion for taking the market by storm, but as some point that has to stop and your objective has to be; what I am getting, what is my family getting, what are my other shareholders and employees getting and how do I exit and move on to the next thing?

manager at the time identified his technocommercial skills in spite of him being a hard core scientist. He told Hari he did not belong there, and suggested he aspire to become an entrepreneur. That bold statement put everything into perspective, as Hari began to think about things in a new way.

Finding that winning business idea, is something that can take years. Working at it, Hari says, should be done on a parttime basis after work and on weekends. “It’s just as important as doing an MBA; you need to sit at home, connect to the net, read the books, talk to people and network. If you take this idea into

a fruition stage, at the end of the day will people be willing buy it?” Once that paper concept has been perfected, Hari stresses the need to turn it into something tangible that people can touch and feel. “Just because you reach a prototype stage, doesn’t mean you’re ready to start. You still need to look for a customer. The moment you find your first customer that will be the safest time to quit your job and start,” he says. Although Hari initially chose to relocate to Dubai for personal reasons, he tells me he doesn’t look back. The move led him to finally create a socially responsible venture that would allow him to use his experience and knowledge to give back. After first working as a COO for a small technology

MAY 2012 SME ADVISOR MIDDLE EAST

BusinesS Guru Hari Kesavan

UniPropitia offers the following services to entrepreneurs and SMEs:

At the pre-start stage: Provides training, guidance and counseling required for the entrepreneurs to understand the entrepreneurial process, identifying the opportunity, understanding the myths and realities of entrepreneurship, introspecting the founder’s competence inventory and more. In a nutshell, it educates to demystify the entrepreneurship for college students and corporate employees with an entrepreneurial itch.

For existing entrepreneurial setups: Helps with funding, corporate advisory services, business re-engineering services, strategies to scale and globalise the companies and more. Besides providing strategic consulting, UniPropitia provides resource capital at subsidised cost to accelerate growth.

For established, matured organisations: Helps stakeholders step back and understand the valuation of the company if they choose to sell that company during that year. If the valuation is not up to the expectation of the stakeholders then the firm helps implement the turnaround strategies required to achieve better valuation one or two years down the road, either organically or by acquisitions. In the process, UniPropitia deploys resources to promote intrapreneurship and provide the necessary technology and business consulting required to promote the innovative and out-of-the-box thinking. Additionally, UniPropitia helps the company with due diligence from a variety of perspectives.

company, he decided to start UniPropitia, an advisory firm that specialises in guiding companies, entrepreneurs and aspiring entrepreneurs, from the pre-start to launch, and from the growth to exit stages. The firm holds educational sessions on demystifying entrepreneurship for college students and corporate employees with an entrepreneurial itch. UniPropitia also helps entrepreneurs with funding, and specialises in advising companies on merger and acquisitions. As SMEs become more informed about the importance and value of corporate governance, more and more are turning to experts who can guide them on basic

SME ADVISOR MIDDLE EAST MAY 2012

principles such as accounting, advisory boards, transactions and documentation and so on. This is especially important for companies that are looking to be sold, and equally important for startups who are seeking for funding. Besides funding, Hari sees lack of focus as one of the main challenges facing SMEs and entrepreneurs in this region. “A lot of people have not thought about why they are doing what they are doing. Out of all the companies we meet, 50% are in that boat. There is no measurement to assess how their company is doing.” On the upside, he says a key benefit of operating in this region is the ability

Hari Kesavan

of being recognised. Compared to more competitive markets like the US, entrepreneurs who stand out from the crowd here have a good chance of going far. The key is finding ways to launch and develop new markets in new economies like the UAE. “Entrepreneurs should be looking around the world seeing what’s unique that’s hiding in a closet and think about how they can bring it here and create a new market that will change the landscape in five years. Those things are becoming possible today; they weren’t possible ten years back.”

About Hari is a seasoned serial entrepreneur and technology executive with over 20 years experience in the technology industry. Hari was the Senior Vice President of Emerging Business & Technology at NTT DoCoMo’s subsidiaries in the United States. Hari has founded two successful technology companies over the last 12 years. He was the Founder, CEO and CTO of Percipia, Inc in Columbus, Ohio and InterContinental Software Solutions in the United States and India. Percipia was a pioneer in launching the first IP Telephony solution from Cisco to the hospitality market globally. Hari grew Percipia from a small technology startup to a publicly traded company with market capitalisation of over USD 100 million. Prior to his entrepreneurial stint, Hari was a Senior Scientist in GEC Picker International (now Phillips Medical Systems) in Cleveland, Ohio. He was later promoted to lead the International Business Division in Asia Pacific region for Picker/Phillips.

Opportunities du CEO Forum

du proudly presents Chris Anderson at CEO Forum 2012 The UAE’s top business leaders are all set to converge May 9th at the Madinat Jumeirah Dubai, to attend CEO Forum 2012. Taking centre stage this year will be online pioneer, author and Editor-in-Chief of

Wired magazine, Chris Anderson.

n the build-up to the third CEO forum, which is being held under the aegis of the du Leadership Series, Osman Sultan, CEO, du, said: “We are proud to present our third CEO Forum, which will be yet another joining of the best business minds in the UAE – this time with the inspirational presence of Chris Anderson as our event’s presenter. His forward-thinking in terms of web innovation and proposing business models to make the most of current trends, represents the exact thinking that we hope to encourage at our CEO Forum events, expanding possibilities by combining industry expertise, innovation, and leadership tactics.” Farid Faraidooni, Chief Commercial Officer, du, said: “CEO Forum is one of the must attend sessions for business leaders in the UAE and beyond. We received a phenomenal response to the previous CEO Forums, and this year Chris Anderson will take centre stage as he shares his insights. Described as “one of the most knowledgeable, insightful and articulate voices at the centre of the new economy,” Chris Anderson is globally renowned for his thought leadership on new business models. He is the author of two New York Times bestsellers; The Long Tail: Why the Future of Business is Selling Less of More and Free, and the founder of DIYDrones and 3DRobotics. During his time as Editor-in-Chief of Wired, he has led the magazine to two dozen

SME ADVISOR MIDDLE EAST MAY 2012

The event, which had 150 of the region’s top business leaders in attendance, aimed to provide a forum for customers and colleagues to share views about the concept of business innovation and its role in driving growth in various economic conditions, with the opportunity of meeting key decision makers from the region. Building on the success of 2010, the audience at the second CEO Forum, held in 2011, was entertained by speakers Robin Sharma, widely acknowledged as one of the world’s most trusted leadership advisors, having achieved the prestigious Top Five Leadership Speaker Award, as well as the Top Five Leadership Guru Award, and author of bestselling books The Monk Who Sold His Ferrari and The Leader Who Had No Title, and, Pranav Mistry from the MIT Media Lab, hailed as one of the youngest and best inventors in the world today. As part of the Leadership Series, du aims to host a number of CEO forums and roundtable discussions each year, which will bring in some of the world’s foremost leaders to speak on a variety of subjects, including capital management, strategy, human capital and technology, among others.

About Chris Anderson

National Magazine Award nominations with three wins (2005, 2007 and 2009) in the prestigious general excellence category.

CEO Forum du’s CEO Forums are innovative, inspirational events that bring together the UAE’s top business leaders for a series of sessions with some of the world’s most thought-provoking thinkers. In the first CEO Forum, held in 2010, top business leaders were inspired by one of the world’s leading thinkers on innovation, Professor Clayton Christensen from Harvard Business School, who presented on How to create growth in a risk-minimising environment.

Before joining Wired in 2001, Chris Anderson worked at The Economist, where he launched the magazine’s coverage of the Internet. He has a degree in physics from George Washington University and did research at Los Alamos National Laboratory. He also has worked at the journals Nature and Science. The Long Tail: Why the Future of Business is Selling Less of More, which appeared on the New York Times Nonfiction Best Sellers list, argues that products in low demand or that have a low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough. His newest book, entitled Free: The Future of a Radical Price, which examines the rise of pricing models which give products and services to customers for free, was released on July 7th, 2009, by Hyperion. In 2007, Mr. Anderson founded GeekDad, a do-ityourself blog that became part of Wired.com. He acted as the editor until handing the title to Ken Denmead. Chris now serves as editor emeritus of GeekDad.

Opportunities

SME Club ME

Community of opportunity As part of the continued efforts to assist and advise SMEs, CPI has launched SME Club ME. It is the first exclusive membership of its kind in the region dedicated to specifically addressing the needs of this business demographic. Mike Byrne spoke to James Khoury, the club’s Director, to gather more specifics.

workforce and as such each will require differing levels of assistance. “We had the smaller businesses with limited sales staff in mind when we first thought of launching the club – they often struggle to attract high revenue companies, either to do business with or, to assist them at a competitive rate,” stresses James.

fter months of planning and structuring, the release of the club is finally here. It’s no secret that SMEs are often the victims of cost restraints, struggling to tap into the products and services essential for smoother operational abilities. With this in mind, CPI was determined to find a solution that provided a helping hand. The SME Club ME is a unique online platform designed not only to add value and save money, but can also extend client networks and generate new business opportunities through the use of online initiatives and networking events. “Having worked for a business startup, we knew that SMEs were an important and

SME ADVISOR MIDDLE EAST MAY 2012

integral part of the business dynamics in this region – we saw they needed some lookingafter and moved to try and fill this void,” says James. “What we proposed was that we go out and negotiate and sell reduced fees with either SMEs, or larger businesses supporting the SMEs, as not everyone has either the budget or the manpower to effectively do this themselves.” So, how exactly does the club work? James explains that it operates in a number of different ways, each designed to give different levels of value, according to the needs and requests of various businesses. SMEs can have staff numbers that range from a two man team to a bustling 150 dedicated

Membership benefits Annual Membership Card and PIN number Unlimited discounts and special offers Access to the Business Directory Listing in the Membership Directory Exclusive members only networking opportunities Receive regular SME Club ME newsletter Invited to CPI social events, forums and workshops Advertised in our end of year SME Club ME directory Classified Advert in SME Advisor Middle East Up to 30% off rate card for all CPI magazine titles James explains that club platform can give not only access to a potentially unlimited business resource, but can give the much needed exposure that smaller businesses often fail to acquire due to financial constraints. “It’s an opportunity to show-case your products and services and to either offer a deal or discount on behalf of your company or, alternatively, to avail of another company’s offer,” he says.

Opportunities

SME Club ME

(L-R) Gautum Gangliani, Right Selection Group; Carolyn Coe, Skyrocket Sessions; Ramez Helou, The Academy for Sales Excellence; Rukhsana Kausar, Liquid of Life; James Khoury, Director, SME Club ME; Carol Talbot, Matrix Training Sessions; Philip Bedford, Referral Institute and Bijay Rajnikantt Shah, BNI

The SME Club events will mirror SME Advisor’s ongoing networking and educative events, whereby members will have the chance to meet and share ideas with other members and also with the club’s partners. Indeed, SMEs more than often acquire the services of larger businesses to assist them in their day-to-day operations and with this in mind SME Club ME endeavoured to partner with such companies. “The events are designed to open-up access to SMEs with the larger companies who can assist them – whether it through pitching business to these bigger players or jsut seeking free consultation, either way it is a win-owin situation,” stresses James. Upon payment, each member will receive a Membership card. This card can be presented at a number of retail establishments, restaurants and hotels and can access you a certain events, forums and workshops. Every month the club will sign up new outlets and businesses so that members receive maximum benefit from this unique card. Each card has a unique PIN number which will identify each member. This PIN number will also gain you access to private pages on in the SME Club ME website exclusive only to members. Partnership benefits There are three different categories of partners. Again this is has been structured

SME ADVISOR MIDDLE EAST MAY 2012

A one-off payment for the yearly partnership will cost USD 25,000. Alternatively, monthly payments of USD 3,000 can be accommodated. Lastly, the SME Club ME is seeking Strategic Partners that can bring added value to the table to support the SME community. “We are always keeping an eye out for specific products and services and from companies that can best benefit the club. At the moment we are treating this on a case-by-case basis and would ask that anyone interested contact us directly,” explains James. Currently the Strategic Partners the SME Club have on board include BNI, The Referral Institute and SME Advisor, along with Privileged Partners ADCB, du, Axa and the Rotana Hotel Group. For further details about the club visit www.smeclubme.com. For more information about the companies joining the club and to view the Business Directory visit http://www. smeclubme.com/business-listings/ SME Club ME Director, James Khoury, can be contacted at jamesk@cpidubai.com, or by calling +971 55 872 0722.

to cater for the needs across the spectrum of SMEs. Once you’ve signed up as an SME Club ME member you will be eligible for apply for a Preferred Partner status. As a Preferred Partner you will be given the opportunity to showcase your company in the SME Club ME Business Director. “The difference between the Preferred Partner and the Privaleged Partner is that the latter will inevitably have to pay a larger fee for the extended exposure we will generate for their business, both online and across our events portfolio,” he says. Added benefits include: Company logo on every page of SME Club ME Website Company logo displayed in SME Club ME newsletter Company logo displayed on all SME Club ME advertising James gives attendees of the Under the Stars networking evening a demonstration of the SME Club ME platform Dedicated micro site designed and monitored HTML mail shot to the SME Advisor database Visibility at SME Club ME events, including marketing collateral and roll up banners Prominent position in the SME Club ME annual business directory.

Entrepreneurship Salim Akil

STANDING OUT IN THE SEARCH BUSINESS Up until now, there exists a wide informational gap in terms of the development of online marketing practices among the MENA region’s SMEs. Salim Akil, a young entrepreneur is hoping to fill that void with SearchInMENA.com. He recently spoke with Joumana Saad about the challenges of setting up shop and the potential for this startup’s future.

n today’s world of e-Marketing, search ability is one of the most important criteria for brand exposure and business growth. In the region, a lack of knowledge and experience in this area, is a limiting factor for growth among SMEs. This informational gap inspired Salim Akil to develop SearchInMENA.com, a startup online business search engine, specifically designed for SMEs operating in this region. Salim says companies in the region are not utilising the Internet enough to get noticed. “Today, companies’ presence on the internet in the form of a homepage or a website is not enough to achieve the expected results and a large number of viewers. Companies must be listed and linked to an international and credible database,” he says. Today, SearchInMENA.com’s database includes over 10,000 companies, with a majority of them registered in the UAE, Saudia Arabia, Egypt, Syria and Qatar. The website is designed around a basic business directory that also offers SMEs the option to reach their target customers and clients through its online advertising and online PR channels. There is no charge for companies who want to simply get listed on the online directory and include basic details

SME ADVISOR MIDDLE EAST MAY 2012

Salim Akil

about their business along with contact information. Companies looking for more online exposure can either purchase a basic subscription for USD 300 a year (AED 1,300), or an advanced subscription for USD 1,000 a year (AED 3,750). These options allow companies to reach more clients by appearing in Google searches due to the website’s AdWords type system. With a basic subscription a company can advertise its products in detail, and also

have unlimited access for publishing press releases, company news and events. Key benefits from the advanced subscription include unlimited products listing along with attached multimedia (product pictures and videos along with video interviews), and also ads that appear on the main website. This brainchild of a website began in Syria in 2007, with SearchInSyria.com. A student of communications technology engineering, he tells me he always kept

Entrepreneurship Salim Akil

tabs on e-Commerce trends and watched as search engines like Google and Alibaba reshaped the global landscape for online advertising. He noticed that the business community in Syria was behind in terms of knowledge of these types of online markets, while doing business online was not a big concern for most businesses. Part of the reason behind this, he says, stemmed from the political atmosphere. In the beginning stages, Salim aimed to create a database to connect companies in Syria. “There was fear of being visible, and a lot of people wanted to be low-profile. So I worked hard to teach my clients how exactly to do business online,” he says. Salim started SearchInSyria.com with a very small team and after three years, was able to get 3,500 subscriptions. After creating something unique that was non-existent in a place like Syria, his startup began receiving

Today, companies’ presence on the internet in the form of a homepage or a website is not enough to achieve the expected results and a large number of viewers. Companies must be listed and linked to an international and credible database.

more attention. Salim was approached by Kompass, a global business-to-business (B2B) database, with more than three million international and domestic companies listed. He worked with the company on plans to launch KompassSyria.com up until 2011. Then came an unforeseeable lifechanging event. “Everything stopped when the situation in Syria deteriorated. That’s when we decided

When you come to a place like Dubai, you need someone to guide you. Yes, it is an expensive place to operate, but it is a great environment for startups. Through events, we have made many new useful connections. Here,you have a lot of opportunities to meet and connect with these types.

Traffic sources overview

Search engines 11,152.00 (66.31%) Referring sites 2,837.00 (16.87%) Direct traffic 2,828.00 (16.82%) view report

SME ADVISOR MIDDLE EAST MAY 2012

to move. We first contemplated moving to Lebanon, as Beirut was a gateway for the Middle East that was also not too far away. When the bad situation continued, we had to re-think our strategy and business model entirely.” Although confronted with this harsh reality, Salim says the change in plans was actually a blessing it disguise. Without this series of events, there may have been no SearchInMENA. The change allowed him to re-think his business plan to create something ever bigger and more valuable, and it also put pressure on him to re-locate. Salim had long had his eye on Dubai, but always considered it too expensive. After moving to Dubai in September 2011, he has no regrets. “When you come to a place like Dubai, you need someone to

Yearly subscription SEARCH IN MENA – NORMAL SUBSCRIPTION

• Details of company (profile, history, branches and distributors, export/import areas) • Trade info (record number, legal name, year founded, number of employees, the volume of production, capital) • 25 products with their details (text and image only) • Unlimited press release • Unlimited career advertising • Unlimited events and activities • Map of the head office • Download (catalogues, brochures, marketing reports) • Unlimited interviews (text only) • Management team • Contact info (website, e-mails, phones, fax) • Only three listed sectors Cost AED 1,300 / USD 300 yearly IMPROVE TO ADVANCED SUBSCRIPTION #GOLDEN MEMBER#

• Listed as the first companies in the specific sectors • Unlimited products + video each one • Unlimited video interview • Unlimited listed sectors • Ad on homepage for one month (logo, name, and brief) • Ad catalogue for three months in three sectors (logo, name, and brief) Cost AED 3,750 / USD 1,000 yearly

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Ranked #1 on the Dubai SMEs 100 list. Recognized as the top performing SME by the Government of Dubai. Dubai has 72,000 SMEs.

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Entrepreneurship Salim Akil

guide you. Yes, it is an expensive place to operate, but it is a great environment for startups. Through events, we have made many new useful connections. Here, you have a lot of opportunities to meet and connect with these types,” he says. Some of the most beneficial opportunities Salim has had were the regional competitions that he has participated in. His startup was listed in the top 30 Best Mediterranean Startups category during MedVentures’ 2010 competition in Marseille, France. He has also competed in ArabNet in Beirut, and MENA 100 in Bahrain. Most recently, he participated in The Entrepreneur reality show presented by du, which is set to air later this year. The process for participating in the show has been challenging but rewarding, he says. Once applicants were confirmed, they then had to put their idea into a formal business

process of getting his idea picked up by an investor can sometimes take longer than you imagine. “To reach investors you need to be good at networking, it requires special

You must choose the people you work for very carefully, and watch your expenses. My team comes from Syria they have worked with me from the beginning. They know my vision and believe in our business. You can’t put a value on that.

further develop its tools that allow companies to promote themselves online, specifically in online PR, providing a more cost-effective and faster option for companies. In the near term, he is focused on branching out into social media, and using his database to build surveys and reports that would be of value to clients and the media. Looking back on the hardships he faced, he hopes to one day give back to entrepreneurs just like him who are looking to get their feet off the ground. For him, Dubai has been both a blessing and a challenge. “The advantage, is business growth is very fast here but the financing structuring is a problem,” he says. “Investors are only willing to pay for a short amount of time, so finding a good match is hard.” Half of the battle, however, he says is surrounding yourself with the right people. “You must choose the people you work for very carefully, and watch your expenses. My team comes from Syria they have worked with me from the beginning. They know my vision and believe in our business. You can’t put a value on that.”

About plan and a two-minute speech which they pitch to the judging panel. They also go through personality evaluations and other challenges that test their sales and problem-solving skills. Salim had the benefit of connecting with Danat, a company that serves as its incubator. Danat provides Salim office space and online advertising and web development support, as well as technology that allows customers to pay SearchInMENA online. Danat also houses four other entrepreneurs like Salim hoping to get their startups off the ground. Finding the right investor is no easy task, especially in a competitive environment like Dubai. Salim says there is an art to making connections that will help your business in its early stages. The

SME ADVISOR MIDDLE EAST MAY 2012

skills. After pitching my business plan to my first investor we spent two months working together to prepare an action plan. We then put our issues on the table, made an evaluation for the business idea and finally formed a contract, “ Salim says. Because online investment is different in this area than other types of companies, he says it was difficult to get someone to evaluate the business’ visibility and value, without the presence of equipment and offices. So, what does the future look like for SearchInMENA? After five years, Salim says he wants his startup to become the Alibaba.com for the MENA region, with a platform that covers the majority of SMEs. He plans to keep his website platform simple, but at the same time

Salim Akil, is an entrepreneur in the MENA region and has a degree in communications technology and engineering. He has long focused on the e-Commerce and online advertising landscape. This passion led him to create the startup SearchInMena.com, a search engine and database designed for SMEs to advertise their products to customers across the MENA region. The search engine aims to fill the void in the Arab e-Commerce market by creating new channels for businesses to build their own B2B networks. Salim is also a member of IEEE and JCI. He was a participant on du’s The Entrepreneur reality show, which will air in the fall of 2012. He has also participated in a number of regional entrepreneurial competitions including Arabnet, MENA 100, and MITEF. His startup project was also listed in the top 30 Best Mediterranean Startups during MedVentures’ 2010 competition in Marseille, France. Salim first founded SearchInSyria.com in 2007, and later expanded the business model to incorporate companies across the MENA region, and built another website (SearchInMENA.com). The startup is based in Dubai and also has staff operating in Saudia Arabia.

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Legal

Short-term financing

provided with the authority to deal with such goods (under a trust receipt), including use the goods for manufacturing and sell the goods or the finished product. While the customer is permitted to use the goods received from the supplier, the financier obtains and retains title to such goods, with the customer acting as agent, trustee or bailee on behalf of the financier in respect of such goods during the financing period. Any proceeds received from the sale of the finished goods, shall, to the extent these are related to the raw material supplied under the trust receipts, be held by the customer for and on behalf of the financier and for remittance to the financier.

What are trust receipts?

Building on trust With the strong focus on trading in the UAE, traders often require short-term financing and this is where banks and financial institutions step in. Hufriz Wadia, Senior Associate, Banking and Finance, Al Tamimi & Co., takes us through the legal in and outs of financing through trust receipts.

hile typically most banks and financial institutions restrict short term financing to letter of credit facilities, the financing of the retirement of the letters of credit is also in great demand. More and more banks choose to extend the existing L/C facility to a trust receipt facility to enable the customer to make payment towards the L/Cs and retire them by taking on a further short term loan.

This type of financing is popular, especially in the UAE, where the options for creation of several types of security (that are otherwise available in most commonwealth countries) are not available. Financing by way of trust receipts does not amount to secured financing. However, it does create certain rights and obligations that put

SME ADVISOR MIDDLE EAST MAY 2012

the lender in a better position than most other unsecured lenders. From the customerâ&#x20AC;&#x2122;s perspective, financing by way of trust receipts is particularly relevant for importers of raw or semi-finished goods who require such materials for their manufacturing process. Given that a customer who is an importance of raw material would receive funds only once he sells finished goods in the market, such customers often seek financing from banks or other financial institutions for payments due to their suppliers during the manufacturing stage. Typically under this structure, the financier pays the supplier of goods on behalf of the customer at the time the customer takes delivery of the goods (usually to retire the existing letters of credit). The ownership of the goods (being financed) is transferred to the financier and the customer is immediately

Trust receipts are not defined under UAE law. In practice trust receipts are receipts issued by the owner of the goods permitting another party to deal with the goods on behalf of the owner.

UAE law and trust receipts The UAE is a civil law jurisdiction and does not recognise common law trusts. However, trust receipts are commonly used in the UAE and would be recognised under UAE law provided the ownership of the goods clearly lies with the financier and the trust receipt issued by the bank clearly permits the customer to deal with the goods as agent of the financier. Trust receipt facilities are commonly used in the UAE as documentary credit financing. Banks and financial institutions issue letters of credit on behalf of their customers in order for the customers to avail their goods purchased (financed by such letters of credit) and enter into a trust receipt arrangement so that the goods may be released to the customer for sale in the local markets. The trust receipt ensures that the bank retains its title in the goods while releasing the right to deal in the goods to the customer. The UAE Commercial Code and the UAE Maritime Code recognise bills of lading as the title and transport documents for the transport and shipment of goods. In practice most trade finance (including documentary credit) is based on either bills of lading in the name of the importer (the customer) or bills of lading to the order of the financier. We find that financiers in the UAE often require bills of lading to be made to the order of the financier.

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Short-term financing

In the event the bills of lading are issued to the order of the financier then ownership and title in relation to such bills of lading would already vest with the financier. When bills of lading are issued in the name of the customer, it is essential (for the purpose of entering into a valid trust receipt structure) that the ownership to the bills of lading and the underlying goods be transferred to the financier. This may be achieved in the UAE by using the appropriate structure and documentation. The Commercial Code specifically permits banks to entrust their customers with taking delivery of goods on a trust or agency basis and selling them on behalf of the bank (and to the bankâ&#x20AC;&#x2122;s account) under terms and conditions agreed between the bank and the customer.

Hufriz Wadia

by returning the equivalent of the value of the goods to the bank. Also, if the goods under the trust receipt arrangement are sold by the customer to a bona fide third party then the bank may not be able to trace such goods in the custody of such bona fide purchaser. Further, on insolvency of the customer, if the proceeds of the goods have been co-mingled with other assets of the customer, the bank will need to claim in the insolvency, as an unsecured creditor. Any breach or consequence of such arrangement attributable to the customer may be seen as a breach of duties by the customer as the commission agent under the Commercial Code and a breach of trust under the Penal Code.

Conclusion

Financing by way of trust receipts does not amount to secured financing. However, it does create certain rights and obligations that put the lender in a better position than most other unsecured lenders. The customer will act as commission agent and the bank shall have all the rights of the principal on such goods or their value. To this end, the customer and the bank may enter into a trust receipt arrangement, whereby the bank entitles the customer to release the goods under the bills of lading as a commissioning agent on behalf of the bank. The term trust as referred to in the Commercial Code is different from the concept of trusts as understood in common law jurisdictions. The term trust is literally translated from the term amanah. The term trust or amanah is derived from the UAE Civil Code and relates to a custodianship or deposit arrangement created contractually where a party entrusts or deposits its property to another party for safeguard and preservation. The concept of amanah and/or a deposit contract would apply to the operation of trust receipts. Note that in a trust receipt structure it would be essential that the customer (as agent) should be required to abide by the compulsory and express instructions of the bank (as principal), and if the customer violates such instructions without an acceptable excuse, the bank may reject the

deal. The customer will also be responsible to the principal if the goods perish or there is any damage to the goods and other things that are in the customerâ&#x20AC;&#x2122;s possession unless the damage or perish results from a foreign cause beyond the control of the customer, or from an inherent defect in the goods. The UAE Civil Code also contains detailed provisions on deposit contracts under which a depositor authorises another person to take care of his property and to maintain the said property (or use it under instructions of the depositor) and make restitution thereof.

Enforcement process The trust receipt structure does not amount to a security, but does place the financier in a better position for recourse than other unsecured lenders, so long as the goods related to the relevant bills of lading or the proceeds thereof are adequately traced and identified. If the customer trades with the goods in its custody with the permission of the bank, the proceeds arising out of such trade shall then be transformed to a debt owed by the customer to the bank and will not be discharged, except

The trust receipt structure is a viable option for banks and financial institutions looking to fund short term requirements and for manufactures and traders in the UAE. However, while entering into the relevant documentation, care should be taken to ensure that the title documents clearly pass ownership to the bank and that subsequently, the parties execute the trust receipt agreement in respect of the specific title documents granting rights of use to the customer.

About Hufriz Wadia is a qualified solicitor in England and India and is registered as an advocate with the bar council in India and a solicitor of the Bombay Incorporated Law Society. Hufriz advises banks, financial institutions and corporates on bilateral, syndicated and structured financing transactions, both conventional and Islamic. She also advises on trade financing, restructuring and insolvency. She also assists with financial setups (including banks, financial advisors and intermediaries, portfolio and asset managers and funds) in the DIFC and advises on financial regulatory matters in the DIFC (including securities and product offerings in the jurisdiction). Al Tamimi & Co, originally established in 1989, is today one of the leading law firms in the Arabian Gulf region. It is one of the largest local, non-affiliated law firm in the United Arab Emirates, with offices in the Emirates of Dubai, Abu Dhabi and Sharjah, Riyadh (KSA) and associate offices in Doha, Baghdad and Riyadh. For more information, visit www.tamimi.com.

MAY 2012 SME ADVISOR MIDDLE EAST

Legal

Corporate Governance

PILLARS OF PRACTICE

To many SMEs, corporate governance has been somewhat presented as a “nice to have” rather than an essential element of doing good business. Overcoming unenthusiastic attitudes towards corporate governance has been a major challenge to its adoption. Joumana Saad recently spoke with industry experts and SMEs who have already begun their journey of implementing practices to bolster their credibility and strengthen their bottom line.

n the surface, many of the companies listed within the Dubai SME 100 rankings appear at the top of their game. Dig a little deeper and it becomes apparent that many are actually still finding their feet in terms of values, plan strategies and overall accountability. Dubai SME, the agency of the Department of Economic Development, has taken steps to groom these companies to exhibit responsible business practices and become an example for younger SMEs and entrepreneurs seeking to build a strong foundation. This message was echoed during a recent seminar organised by Taylor Wessing Middle East, in conjunction with Dubai SME, Deloitte Middle East and Hawkamah – the regional Institute for corporate governance. Comparatively speaking, corporate governance is still in its infancy stage in the UAE and the MENA region at large.

SME ADVISOR MIDDLE EAST MAY 2012

After introducing the first group of SME100 companies early last year, Dubai SME developed a corporate basic framework of corporate governance practices (Corporate Governance Code). At the end of 2011, the initial steps were made as the agency joined with IFC to host a series of workshops on the topic, mainly aiming to educate and incentivise. CEOs and SME owners were able to use the IFC’s diagnostic toolkit to assess the implementation of their own practices. As a result, Dubai SME found the response from SME100 companies who participated in the workshops to be overwhelmingly positive. The agency is now actively planning activities specifically around its corporate governance initiative, including an SME corporate governance success story compilation; an SME corporate governance conference; the publication of an SME corporate governance guidebook; a corporate governance

investors programme; and finally an SME Enterprise Risk Management programme to be rolled out in the next six to 14 months. An annual survey of the state of corporate governance among Dubai’s SME community will also be launched. Alexandar Williams, Director of Strategy and Policy Division, Dubai SME, says corporate governance is becoming more than just a buzz word in the SME community. After first launching the initiative last year, he says, Dubai SME received a high number of inquiries about the Code from companies, while many of them have already begun implementing basic principles (forming a board of directors, auditing and so on). “The Code has inspired a change in mindsets, has given many SME CEOs a reason to reflect how they want to grow properly and sustainably over the long term. When we launched this initiative, the approach was based on the premise that willing and able

Legal

Corporate Governance

SMEs that aspire to grow, need to have good governance in place, in order to compete globally.“ At this stage, implementing the best corporate governance practices outlined by the Code, is completely voluntary. Currently, there is no legal framework or body in the UAE that will regulate SMEs compliance with the Code. Some in the SME community see this bottom-up approach as necessary in the early stages, to allow time for SMEs to embrace such values on a wider level and reform their practices. Others see the equation to be quite the opposite and believe many companies need mandatory measures to be taken in order to kick start some businesses. “Our belief is that a Code is simply another document if it is not regulated and policed,” says John Martin St. Valery, CEO, The Links Group, a Dubai SME100 company that has been working at its own corporate governance, well before any code was issued. “There has to be an incentive for a business – particularly a startup – to adopt the right policies from the outset. Financial reporting is one obligation that should, in our view, be enforced. Currently, there is no official body where annual accounts can be filed. Implementing such a system would be the first step towards encouraging a culture of financial disclosure and creditworthiness.” For the Links Group, an SME specialising in company formation, this process has been both gradual and beneficial. Since the company was founded in 2002, it has implemented a number of practices: A Board of Directors that includes nonexecutive directors A company-wide corporate governance framework to include an ethics policy, remuneration and fiscal committee, and external audits (both legal and financial) to ensure that all stakeholders operate in a fully transparent manner Directors on The Links Group Board are required to take (or have taken) internal and external training to be certified as competent directors. The idea behind corporate governance may make a whole lot of sense, but what actual proof is there to support it? In the

(L-R) Ben Constance, Specialist Corporate Lawyer, Taylor Wessing Middle East; David Clements, Director, Deloitte Middle East; Nick Nadal, Head of Hawkamah; Alexandar Williams, Director of Strategy & Policy, Dubai SME; Jeremy Cama, Specialist Corporate Lawyer, Taylor Wessing Middle East

Nine pillars of the Corporate Governance Code 1.

2. 3. 4. 5.

6. 7. 8. 9.

Adopt a formal corporate governance framework outlining the roles of the key bodies such as partners, shareholders, board of directors and management Conduct a succession planning process Establish a timely, open and transparent flow of information with shareholders. Endeavour to set formal Board of Directors to accompany the growth of the company Develop clear mandate for its board of directors to oversee the operational performance of the business as well as evaluating and improving business strategies Maintain credible book of accounts, which are annually audited by an external auditor Set up an internal control framework in place and conduct a regular review of risk Recognise the needs of stakeholders Formulate a framework setting out the family’s relationship with the business.

case of the Links Group, St. Valery says each company should look to itself to see the results of its hard work.”Staff retention and the attraction of good quality new business have, in our view, been a direct result of us embracing corporate governance as part of our work culture. Staff need to know where they stand and that the company they work for is credible, has integrity and is not afraid to demonstrate this at all times,” he says. “From a client perspective, it has become apparent that traditionally our service sector has been steeped in secrecy and uncertainty. With a highly structured board acting as a nominee corporate partner, significant benefits in relation to security and protection of foreign assets

are achieved. This cannot be offered or maintained without a robust corporate governance structure.“ Time constraints is one challenge that limits SME owners and executives in their reforms. For e-Home Automation, a young Dubai SME100 company, this was certainly the case. The company has recently formed an employee code of conduct, full job descriptions and management structure (including promotional pathways), investor relations systems and international accounting policies into its business structure. Although the process was time consuming, Simon Roberts, Director at e-Home Automation, says in the end it

MAY 2012 SME ADVISOR MIDDLE EAST

Legal

Corporate Governance

Suggested integrity framework elements

Alexandar Williams, Director of Strategy & Policy, Dubai SME

Source: Deloitte Middle East

was well worth the wait. He says as a result of the reforms, “employees are more organised and have clear guidelines on all aspects of day-to-day operations.” He also said the newly implemented

“to be much easier, in terms of new employees, new branches overseas and in terms of future investment.” Besides showcasing the benefits of corporate governance, the Taylor Wessing

“The Corporate Governance Code has inspired a change in mindsets, has given many SME CEOs a reason to reflect how they want to grow properly and sustainably over the long term. When we launched this initiative, the approach was based on the premise that willing and able SMEs that aspire to grow need to have good governance in place, in order to compete globally. “ – Alexandar Williams, Director of Strategy and Policy Division, Dubai SME

measures have boosted the company’s overall internal efficiency. Moving forward, as the company expands, Roberts expects the path to growth

SME ADVISOR MIDDLE EAST MAY 2012

seminar also drew some bold statements in terms of its outlook and the need for companies in this region to keep up and compete in a global marketplace.

“It is here to stay. It could be said of SMEs they should adapt or die. That may not be a very cheery message, but it is a realistic one. Corporate governance is more than just compliance with legal obligations or informal codes. It can, and should be a wealth creator, not a wealth reducer,” said Jeremy Cama, Specialist Corporate Lawyer, Taylor Wessing. Other points made during the panel, highlighted the dangers and risks to companies and the economy when corporate governance goes unpractised. Key examples included the downfall of Enron, the US financial crisis in 2008 and also Dubai’s debt crisis in 2009. In terms of outlook, the panellists all agreed that the adoption of corporate governance on a large level, is a long-term goal. In the short term, they suggested the possibility of basic principles such as accounting, to be included on a regulatory level, by being added to the UAE Companies Law. “Our knowledge is that the relevant Federal authorities are working on finalising the UAE Companies Law. Dubai SME and the Department of Economic Development (DED) have already given our inputs and we await its final announcement,” says Williams. Williams added: “Notwithstanding, the UAE Companies Law or other laws that may impinge on corporate governance and accounting practices, corporate governance, in and of itself, is positive for SMEs and the larger economy, as it makes enterprises more robust and resilient to the changing business environment.”

Industry watch

IMF Outlook Report

GROWTH AND CHALLENGES AHEAD The International Monetary Fund (IMF), hosted by the Dubai International Financial Centre (DIFC), has launched its Regional Economic Outlook Update for the Middle East North Africa, Afghanistan, and Pakistan region (MENAP). The report highlighted the continued growth of oil exporters in early 2012, as the GCC returned to more normal oil production levels.

he Outlook, titled Middle East and North Africa: Historic transitions under strain, takes into consideration the near-term risks to the macroeconomic stability of the Arab countries which have increased due to a combination of political transition, pressing social demands, and an adverse external environment. While these risks were contained to some extent during 2011, faltering growth, rising unemployment and continued fiscal and external pressures, IMF expects 2012 to be an equally challenging year. According to the report, MENAP oil exporters benefited from high oil prices which shielded them from the impact of the Eurozone crisis and its amplifications. The GDP growth of these countries decreased in 2011 to 4% but is projected to increase back up to 5% in 2012. In 2011, the MENAP oil exporters’ combined external current account surplus almost doubled approaching USD 400 billion. Continued government spending due to intensified social demands and higher oil prices, will support to the non-oil sector, which is projected to grow at 4.5% in 2012. As their oil production increased in 2011 to compensate for oil supply decreases, the

SME ADVISOR MIDDLE EAST MAY 2012

GCC countries’ GDP growth reached 8% last year. As stability returned to other oil producing countries, the GCC will return to normal oil production levels and its GDP growth will settle around 5.3%. Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, said: “Middle East oil exporters are benefitting from high oil prices, and we expect GDP growth to strengthen and

become more broad-based this year. Nonetheless, fiscal vulnerabilities to falling oil prices have increased, and structural challenges remain, such as the need to create jobs for growing working-age populations and to further diversify the economies.” “As the transitions taking place across the region continue, and with the depressed global environment, it is inevitable that economic growth will be

Industry watch

IMF Outlook Report

impacted, even though the GCC and other oil exporters are continuing to benefit from high oil prices,” said Dr Nasser Saidi, Chief Economist at DIFC. “Job creation is the clear economic and social policy priority and highlights the importance of having an inclusive agenda that supports and accelerates the growth of the private sector, notably SMEs and family businesses. It also highlights the need for the effective mobilisation of funds and the channelling of resources to meet the growing

“Middle East oil exporters are benefitting from high oil prices, and we expect GDP growth to strengthen and become more broad-based this year. Nonetheless, fiscal vulnerabilities to falling oil prices have increased, and structural challenges remain, such as the need to create jobs for growing workingage populations and to further diversify the economies.” – Masood Ahmed, Director of Middle East and Central Asia Department, IMF

(L-R) Masood Ahmed, Director of Middle East and Central Asia Department, IMF; and Dr. Nasser Saidi, Chief Economist, DIFC

“Job creation is the clear economic and social policy priority and highlights the importance of having an inclusive agenda that supports and accelerates the growth of the private sector, notably SMEs and family businesses.” – Dr Nasser Saidi, Chief Economist, DIFC

infrastructure and capital investment needs of the region,” he added. 2011 was a difficult year for MENAP oil importers. The social unrest and resulting decline in tourism and investment as well as higher energy prices and slower global growth, weakened economic activity and resulted in a decline in its growth to 2.2%.

With lingering concern over social instability and policy uncertainty, tourism – an important source of jobs and foreign exchange receipts – and private investment are likely to slowly recover this year. IMF expects the average real GDP growth for MENAP oil importers to increase slightly to 2.7% in 2012 with the main near-term

downside risk being a potential large increase in oil prices which would impact these countries’ external balances. The IMF report also highlights the gross external and fiscal financing needs of MENA oil importers, which are projected at about USD 90 billion and USD 100 billion in 2012 and 2013 respectively, and the consequent need of a timely official financing. Mr Ahmed added: “2012 is another challenging year for many oil-importing countries in the region, and in particular for those undergoing transition. Growth is faltering and unemployment is on the rise, and many countries are faced with diminished policy space, having eaten into their foreign exchange and fiscal buffers in 2011. A joint and sustained effort is needed to help these countries navigate through this challenging period and set out an economic vision that is fair and inclusive.”

Key figures: • GDP growth of regional oil exporters expected to pick up in 2012 to almost 5% after recording 4% in 2011. • GCC continues to be regional growth driver with GDP growth projected at 5.3% in 2012. • Average GDP growth of regional oil importers expected to recover to below 2.7% in 2012, from 2.2% in 2011. • The financial support of the international community is critical for regional oil importers. Source: IMF

MAY 2012 SME ADVISOR MIDDLE EAST

Industry watch

Economic snapshot

Qatar forecasted to see steady growth in 2012 MarketView has released a report on Qatar’s first-quarter economic growth for 2012. While the economic outlook looks positive over the medium term, regional social and political unrest remains a key challenge, as it disrupts the transportation of one of Qatar’s biggest exports, liquid national gas (LNG).

verview During 2011, Qatar achieved GDP growth of around 19%, although IMF forecasts for 2012 are far more modest at just 6%. The forecast slowdown comes against an anticipated reduction in LNG output with GDP likely to be driven by fiscal spending as the country shifts focus to the development of the mega-projects, including new transport systems and social infrastructure in the form of new healthcare and educational facilities.

SME ADVISOR MIDDLE EAST MAY 2012

The downside of increased government spending is likely to be rising inflation levels, although rates will still remain modest compared to 2006-2008 when double-digit inflation occurred. The diversification strategy of the economy continues to attract new talent into the country ranging from executives to unskilled labour, resulting in increased demand for housing units across all categories. Qatar’s economic outlook over the medium term remains positive amidst potential external

risks which include weaker demand for oil and gas products, and the disruption of the transportation of LNG due to social and political unrest within the region. Office sector Qatar’s office market is seeing a significant expansion of Grade A space amidst an ongoing construction boom in the New Doha area. Total office stock in Doha is now estimated around 3.5 million square metres, of which

Industry watch

Economic snapshot

47% is actually of Grade A specification, whilst the remainder comprises Grade B/C quality and residential units that have been converted into commercial uses, such as villas. This compares with the current stock level in Abu Dhabi estimated at circa 2.7 million square metres, of which around 36% is of Grade A quality. In Dubai, the

The diversification strategy of the economy continues to attract new talent into the country ranging from executives to unskilled labour, resulting in increased demand for housing units across all categories.

Qatar GDP & Growth

Note: * Estimates (2010 – 2011), Forecasts (2012 – 2016) Source: QSA/ World Bank/ IMF/ EIU/CBRE

Office Rents (QR/sqm/month)

total office stock is now over 6.59 million square metres, with a further 2.44 million square metres to be completed over the next three years. The rapid growth of office stock in Doha is resulting in a “flight to quality” as more quality office accommodations become ready for occupation.

Those buildings that satisfy Grade A specifications and are professionally managed are considered to be more resilient to the adverse impacts of the market downturn compared to buildings of lesser quality. In the long term, it is anticipated this differential will be a key determinant in upholding and maintaining the asset value of a property.

With rapidly rising office stock and a lacklustre increase in office space demand, the Doha office market will inevitably enter into a period of oversupply within the short to medium term. However, the Government, through its strategy of bulk leasing towers for its own agencies, has taken a pivotal role in minimising the negative impacts of this scenario and remains a dominant force in stabilising office market conditions in Qatar. Outlook Despite continued challenges globally, Qatar is well positioned to maintain its steady economic footing. Qatar’s solid financial position and highly developed financial sector are anticipated to help cushion the country against external shocks. The hydrocarbon sector will remain the most significant revenue generator, but future growth is likely to hinge more on the non-hydrocarbon sector. The country’s ability to diversify economic activities at the earliest opportunity is essential in expanding income generation potential for the next generation. The award of the 2022 World Cup has led to significant government investment in infrastructure and other facilities. This in turn is creating more job opportunities and thereby attracting an influx of foreign workers, driving population growth and increased demand for real estate products and other ancillary services. For a country as small as Qatar, the prospect of a post-2022 glut must be carefully considered. Determining long term plans (including scenarios post-2022) are seen as crucial to ensuring that strategies are in place to help mitigate and counteract the challenges and risks that will inevitably arise. To see the full MarketView report visit: www.cbre.com.au/research/Pages/ marketviews.aspx

MAY 2012 SME ADVISOR MIDDLE EAST

SME About Town

MRM Business Award

Business Awards honour excellence in institutional performance Organised under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, the Dubai Chamber of Commerce and Industry successfully concluded the sixth cycle of the Mohammed bin

Rashid Al Maktoum Business Award by honouring UAE-based companies vying for seven different categories. In the service category, A.C. Nielsen AMER Limited and Kanoo Travel LLC were the winners while Dubai Medical College for Girls won the Best Performance in this category. In manufacturing, Dubai Refreshments PJSC received the Best Performance honour. In the transport Mr. Ahmed Bin Eisa Bin Nasser Al Serkal, Managing Director, Dubai Refreshments PJSC receiving the Most Outstanding Performance Award in the sixth cycle of the Mohammed bin Rashid Al and logistics category, Maktoum Business Award (MRM). Vopak Horizon Fujairah Limited took the Best Performance award while in the he award ceremony was trade category, Paramount Computer Systems attended by HH Sheikh Hamdan FZ-LLC emerged the winner as Paris Gallery bin Mohammed bin Rashid Al LLC took the Best Performance honour in this Maktoum, Crown Prince of Dubai, and category. In the construction category, HH Sheikh Maktoum bin Mohammed Al Fara’a General Contracting Co LLC won the bin Rashid Al Maktoum, Deputy Ruler of award, while National Petroleum Construction Dubai, as well as HH Sheikh Mohammad Company won the Best Performance in this Bin Saud Al Qasimi; Crown Prince of category. Danube Building Materials FZCO Ras Al Khaimah, heads of Government won the Best Performance award for the Redepartments, dignitaries, Board members Export category. of Dubai Chamber, representatives of Encouraging overall business performance business councils, groups and trade excellence, Dubai Chamber awarded Dubai centers working under the umbrella of Refreshments PJSC with the Most Outstanding Dubai Chamber, and a large number of Performance. The company was honoured businessmen and members of the media. for demonstrating exceptional business Fourteen UAE-based companies received performance in addition to its valuable 15 awards including the Most Outstanding contribution to the economic development Performance award for their excellence in of the country. institutional performance.

SME ADVISOR MIDDLE EAST MAY 2012

Unlike the previous sessions, the sixth cycle of the award, which was open to all UAE based for-profit organisations, regardless of their type, size, or sectors, allowed the participants to strive in several diverse categories, thus enhancing their opportunity to emerge as winners. In order to boost competitiveness, the award selected winners and best performance in each category, while also choosing one overall winner for the Most Outstanding Performance in the current cycle. In his welcome address, HE Abdul Rahman Saif Al Ghurair, Chairman, Dubai Chamber, extended his appreciation to HH Sheikh Mohammed for his continuous support and help in providing a healthy environment to the private sector. The award has its inspiration in HH Sheikh Mohammed’s vision to promote a culture of excellence amongst the business community while enhancing their competitiveness, he said. The award also goes on to establish the competitiveness of Dubai’s business community in the region and the world over while also reinforcing Dubai’s reputation as a diversified economy, added Al Ghurair. On his part, HE Sultan bin Saeed Al Mansouri, UAE Minister of Economy and Chairman of the panel of judges of the award, stated that year after year, the award succeeded in instilling a culture of institutional excellence as it recognises outstanding business endeavours in the country. He said, “As success requires you to be alert and update yourself with the changing trends, the award has developed its model and is now open to all UAE based for-profit organisations, regardless of their type, size or sectors. It allows a wider section of companies and institutions to compete in the award and emerge winners.” The assessment criteria of the award this year focused on performance in key areas such as leadership, strategy, customer, workforce and talent management, operations and processes, financial and marketplace, innovation, governance and corporate social responsibility. To be a winner, an organisation must have a sustainable performance system that ensures progressive performance,” he added.

Technology SME about town for Business BUSINESS ANALYTICS for SMEs YEC Winners

REWARDING FUTURE PROMISE Dubai SME recently held a special ceremony honouring the winners of this year’s Young Entrepreneur Competition (YEC). The top ten and top 100 projects were recognised and given financial rewards.

Participants exhibit their projects during Young Entrepreneur Competition 2012 (YEC) held from 28th to 31st March at Wafi.

is Highness Sheikh Mansoor Bin Mohammed Bin Rashid Al Maktoum, honoured the top 100 projects and the best ten participating in the Young Entrepreneur Competition 2012 (YEC), organised by Dubai SME. HH Sheikh Majid Bin Mohammed Bin Rashid Al Maktoum, Chairman of Dubai Culture & Arts Authority, has announced AED 200 thousand in financial rewards to the best ten projects in the competition. These projects were selected based on a set of criteria ranging from their commitment to YEC rules and regulations, marketing, customer service, operations, and other factors such as innovations and sustainability. Earlier, HH Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of

SME ADVISOR MIDDLE EAST MAY 2012

Dubai, had announced AED two million in financial rewards to the top 100 projects in YEC 2012, wherein each project will receive AED 20 thousand. At a special ceremony held to mark the conclusion of YEC 2012, HH Sheikh Mansoor Bin Mohammed Bin Rashid Al Maktoum, HE Mr Sami Al Qamzi, Director General of DED, and Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, also honoured partner institutions, including du, WAFI Group, Potential, Dubai Roads & Transport Authority and Dubai Police among other organisations. Al Janahi said: “For the students, participating in YEC in itself is a valuable prize due to what they gain from the experience, especially the skills attained in project management, marketing, and dealing with different segments of visitors and customers,

as well as the financial gains from the sales in their projects. It allows them to have a clear idea of business, participate in the competition, and work in a competitive environment among their peers in a real world of small business”. “As an event held every year, YEC has become a real opportunity for our younger generation to contemplate about their future and lay the foundation to achieving their ambitions. Since its launch in 2005, the competition has seen continued growth and increasing demand with more than 2500 projects, and over 7,000 students, which reflect its success in preparing outstanding entrepreneurs,” said Nisrin Al Harmoudi, General Coordinator of YEC. Osman Sultan, CEO, du, said: “We would like to extend our sincere gratitude to Dubai SME for recognising our efforts towards supporting the Young Entrepreneur Competition for the third consecutive year. We believe entrepreneurship is a key driver of future economic growth and we are glad to share the vision of Dubai SME to identify, nurture and give direction to aspiring entrepreneurs and thereby ensure the growth of this important segment.” The YEC was launched by Dubai SME as part of its commitment to the vision of HH Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to sow the seeds of entrepreneurship among the younger generations at a very early age. Nurturing business skills among the youth also aligns with Dubai SME’s mandate to develop the SME sector. YEC aims to inspire and enable the younger generations to become entrepreneurs in the future by introducing them to the foundations of entrepreneurship and a real world of business to compete. The competition allows students to learn the basic principles of starting and operating a business and also apply them in an innovative market place.

Technology For Business Data protection

Keeping an eye on your information Nick O’Connell, Senior Associate, Technology, Media & Telecommunications, Al Tamimi & Co., gives us an overview of the key aspects from his presentation at the Telecommunications Law & Regulation in

the Middle East conference.

he topics that he covered were privacy, data protection, spam, consumer protection and cloud computing. The common thread between these topics is the need to balance the benefits of living in the information age with the expectation of privacy. The information age brings with it many benefits (including greater efficiency and

SME ADVISOR MIDDLE EAST MAY 2012

convenience with regard to gathering, storing and using data). On the other hand, expectations with regard to protection from arbitrary interference with privacy are generally considered a well-established social and legal norm, including in this region. Privacy Generally speaking, the position in most of the GCC countries is that the privacy of

an individual is protected under general provisions of laws not specifically focused on the issue of privacy. By way of example, the UAE Penal Code makes it an offence to publish, through any means, news, pictures or comments pertaining to the secrets of people’s private or familial lives. It also makes it an offence for anyone who is, by reason of profession, craft, circumstance or art, entrusted with a secret, to disclose the secret, or use it for his or her own benefit, or that of another, unless such disclosure or use is permitted by law or by the consent of the person to whom the secret pertains. The key point that I wish to illustrate by these examples is that these privacy related provisions have not been drafted with the information age in mind. To provide some context, we have recently relied on provisions such as this to advise on a corporate client’s proposed transfer of employee data to an offshore data storage facility and another client’s proposed use of customer data for purposes other than those for which it was originally gathered. Would a company’s use of personal information (such as employee information or customer information) for fairly mundane business purposes (such as off-shore data storage or targeted marketing campaigns) fall within

Technology For Business Data protection

Laws designed primarily to protect privacy do not typically exist as laws in their own right. Provisions relating to protection of privacy may be found in the context of other laws, including respective penal codes and laws relating to specific matters, such as regulation of conduct of medical practitioners, credit disclosure and unfair business practices.

prohibited uses of secret information under these penal provisions? Other laws restrict the use of personal data in certain circumstances. By way of example, the UAE Medical Liability Law (Federal Law No. 10 of 2008) prohibits a doctor from disclosing the secrets of the patient that the doctor becomes aware of in the course of practice, either if the patient trusted him with the secret or if the doctor became aware of the secret in the course of practice. We recently conducted a review of the situation in other GCC countries and essentially confirmed that privacy is protected in these other countries in much the same way as in the UAE. Laws designed primarily to protect privacy do not typically exist as laws in their own right. Provisions relating to protection of privacy may be found in the context of other laws, including respective penal codes and laws relating to specific matters, such as regulation of conduct of medical practitioners, credit disclosure and unfair business practices. Data protection Both the Dubai International Financial Centre and the Qatar Financial Centre have their own data protection specific laws or regulations. These legal provisions are generally consistent with data protection laws from other developed jurisdictions (specifically, the EU Data Protection Directive 95/46/EC and the UK Data Protection Act 1998). They apply to specific types of personal information that can relate to identifiable individuals, and set out obligations requiring that personal data be processed

Nick O’Connell

provisions relevant to data protection. Oman’s Electronic Transactions Law (Royal Decree 69/2008) and Qatar’s Electronic Commerce and Transactions Law (Law No. 16 of 2010) are both based largely on the UN Model Laws relating to e-commerce and electronic signatures – but the laws as enacted in both countries go beyond these to include specific provisions relating to data protection. Specific data protection regimes appear to be common in respect of telecommunications service providers. By way of example, Qatar’s Telecommunications Law (No. 34 of 2006) requires telecommunications service providers to operate their telecommunications networks and related systems with due regard for the privacy rights of their customers. It also requires telecommunications service providers to be responsible to protect any customer data in their custody and to refrain from collecting, using, retaining or publishing any customer information unless with the customer’s consent or as permitted by law. Additionally, service providers must ensure that all the information submitted is accurate, complete and valid for use (and correct or remove data upon the customer’s request).

Telecommunications service providers should be aware that special data protection regimes may apply to their activities, even if there may be no data protection laws of general application. fairly, lawfully, securely and for a specified and legitimate purpose. They also contain restrictions on data transfer from within the respective Financial Centres to places outside those Financial Centres. The most significant point to note about the respective data protection provisions of these Financial Centres is that they are applicable only to activities within those Financial Centres – or transfers from those Financial Centres to places outside the Financial Centres. In contrast, Oman and Qatar both have laws relating to e-Commerce, which contain

Similar provisions (although with varying degree of detail) apply to telecommunications service providers licensed by the telecommunications regulatory authorities in other GCC countries. The UAE’s Telecommunications Regulatory Authority has issued the Privacy of Consumer Information Policy. Oman’s Telecommunications Regulatory Authority has issued Resolution No. 113/2009 issuing Regulations on Protection of the Confidentiality and Privacy of Beneficiary Data. Thus, telecommunications service providers should be aware that

MAY 2012 SME ADVISOR MIDDLE EAST

Technology For Business Data protection

special data protection regimes may apply to their activities, even if there may be no data protection laws of general application. Consumer protection and spam The next topic ties in with the issue of privacy and data protection in the sense that personal contact details, such as mobile numbers and email addresses, may be disclosed by customers in the context of procuring goods and services, and then used subsequently for electronic marketing purposes. Many people find this type of marketing to be invasive of their privacy, and prefer to receive it only if they have opted-in.

regulator can take action against the licensee. The policy also prohibits licensees from being involved in address harvesting, and it requires them to implement opt-in consent processes for all electronic marketing provided to customers. Additionally, by way of an annex to the policy, the UAE TRA has provided similar restrictions specifically in respect of SMS spam sent via mobile phones. Cloud computing The term “cloud computing” describes a broad range of remote access computing services, generally involving situations in

If a licensee (for example a telecommunications provider) fails to take all practical steps to prevent spam with a UAE link (which includes spam originating both inside and outside the UAE) from being sent over the licensee’s network, then the regulator can take action against the licensee.

In some countries in the region there are general prohibitions on this type of activity. By way of example, the consumer protection provisions of Qatar’s Electronic Commerce Law restricts the ability of e-commerce service providers (not necessarily telecommunications providers) to be involved in providing unsolicited marketing communications, and requires consumers to be able to opt-out from the receipt of such communications. In July 2010, the UAE Telecommunications Regulatory issued a specific policy on unsolicited marketing communications. Under this policy, licensed telecommunications providers in the UAE are required to minimise spam and take all reasonable steps to ensure that spam is not being sent over their networks. If a licensee (for example a telecommunications provider) fails to take all practical steps to prevent spam with a UAE link (which includes spam originating both inside and outside the UAE) from being sent over the licensee’s network, then the

SME ADVISOR MIDDLE EAST MAY 2012

which users have access to applications and data storage services on demand and delivered over an external network. This basically involves the use of software and/or data storage space provided by someone else – allowing for savings on things such as licensing software or buying data storage hardware. Some of the key privacy and data protection considerations in a cloud computing environment are: Data security The cloud user will have its own data security and access management policies. The cloud provider’s policies should, at a minimum, be compliant with the cloud user’s policies. Data location It is necessary to consider the impact of the various laws governing privacy and data protection on the collection and transfer of data to the cloud provider, and the movement of that data across different

jurisdictions as part of the provision of the cloud service. Data retention obligations Different jurisdictions have different commercial record retention obligations. If data storage obligations are outsourced to a cloud provider in a different country, it will be necessary to ensure that, at a minimum, the cloud provider complies with document retention policies applicable to the user of cloud services. Corporate users of cloud services may place responsibility for direct control of critical data and applications in the hands of third parties. If there is an outage or a security breach, the user could be exposed to claims from its own customers (and potential reputation damage) even though the fault was on the part of the cloud provider. Similarly, failure on the part of the cloud provider (for example with regard to compliance in respect of data privacy) could lead to regulatory non-compliance on the part of the cloud user. Cloud users should conduct thorough due diligence of the provider they are considering and in particular focus on the privacy and security levels of the services to be offered.

About Nick O’Connell has worked for Al Tamimi & Company for almost five years, initially in intellectual property, and more recently in technology, media and telecommunications. Nick’s work focuses largely on software and IT services agreements, data privacy and data transfer, e-commerce, m-banking, m-commerce, as well as intellectual property and technology aspects of corporate and commercial matters. Nick’s clients have included companies operating in a range of industries, including financial services, automobile manufacturing, business machinery, digital content, e-commerce, engineering, exhibitions and events, food and beverage, pharmaceuticals, software, and real estate. Al Tamimi & Co, originally established in 1989, is today one of the leading law firms in the Arabian Gulf region. It is one of the largest local, non-affiliated law firm in the United Arab Emirates, with offices in the Emirates of Dubai, Abu Dhabi and Sharjah, Riyadh (KSA) and associate offices in Doha, Baghdad and Riyadh. For more information, visit www.tamimi.com.

Technology For Business Mobile trends

Securing Your SmartPhone With the rise of SmartPhone integration into our daily lives, along comes the risk of falling for malicious mobile activity, such as software viruses or data theft. According to a report conducted by research and consulting organisation, YouGov, on behalf of BlackBerry, 58% of the 762 people polled in the UAE are worried by the threat of malicious activity on their mobile phones, while 12% have been victims of malicious mobile activity.

ccording to the research, these figures represent one of the highest percentages for all of EMEA, largely due to the fact that the UAE has the highest number of app-downloaders, along with Poland, with 74% of users in the market downloading apps “at least sometimes.” “Increasing numbers of people are using their mobile phones for web browsing, shopping, banking, accessing government services and storing personal information, as they would their PCs,” said Nader Henein, Security Advisor, Middle East at Research In Motion. “This means our phones now contain valuable personal and financial information and, while people understand the need for security on their PCs, we’re not seeing that understanding transfer to mobiles. As a result, there is a significant number of SmartPhone users who have fallen victim to malicious mobile activity,” says Henein. Key findings from the research for the UAE were: A quarter (24%) do nothing to protect themselves against mobile threats. 76% don’t regularly change passwords. 57% don’t back up the personal information and content stored on their phones, such as contact details, photos and music. Close to 50% of app users that download new software to their phones almost never or don’t check the credentials of every publisher before downloading. Henein continued, “We were surprised to see, for example, that three quarters of mobile

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phone users don’t regularly change passwords. This one of the easiest and most effective ways for SmartPhone users to protect themselves against malicious activity.” The research also uncovered the following key findings: Men are more worried about being the threat of becoming a victim of malicious activity on their mobile phone, with 59% saying they are fairly worried or very worried about the threat compared to 54% of women. Women are more relaxed about their mobile data than men, with 32% saying they backup their mobile phone data, compared to 48% of men. More so, 36% of women do nothing to protect themselves against mobile threats, compared to just 19% of men. 43% of mobile handsets completely trust their handset manufacturers to protect their security, with 28% choosing their handset manufacturer or network operator based on their reputation for security and privacy. 34% completely trust their network provider to protect their security. 25% completely trust their software manufacturer to protect their security. Sandeep Saihgal, Managing Director at RIM Middle East, said: “SmartPhones are increasingly well-protected from security threats. Mobile e-mail is encrypted, phones are password-protected and mobile browsers can even tell you when a website might be fraudulent. The research tells us that the biggest challenge we face with securing the mobile Internet, is a lack of awareness of the

tools and techniques that can protect personal information and transactions. Alongside mobile operators, BlackBerry is working to bridge that gap with free security tools and best practice guides. For anyone unsure of how to protect their information while using their SmartPhone, Saihgal has the following tips: Always use a password or PIN to protect your mobile phone. Without doing so, you risk anyone being able to access the personal information stored on your device. Back up your personal information. Use BlackBerry Desktop Software regularly to backup the contents of your BlackBerry SmartPhone, including contacts, photos, videos and music. Never store personal information on your phone. Banking credentials, PINs, addresses and anything else you would not want to see in criminals’ hands should not be stored on your phone. Always check an app’s credentials before downloading. Download a malicious app and criminals can hurt you in a multitude of ways – don’t play into their hands. Be wary of phishing. If you wouldn’t click a link sent to your e-mail on your PC, apply the same reasoning to your mobile. Treat Wi-Fi with care. Use discretion over which Wi-Fi networks you connect to – connecting to an unsecured Wi-Fi network could leave your phone open to attacks via open Wi-Fi networks.

Sign off

Trends & Events

Embracing Change SME Advisor Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.

his past month has been a busy one for the SME community, full of seminars, networking events and a few surprises as well. Among the events we attended, Taylor Wessing Middle East’s seminar on corporate governance stood out as the most prominent. The event drew over 100 SME owners and senior managers. The panel consisted of executives from Taylor Wessing, Hawkamah, Dubai SME and Deloitte. The general consensus was that SMEs should embrace corporate governance early on to strengthen their bottom line and boost the local economy. While writing the feature article on this issue, I spoke to two SMEs who have already begun implementing some of practices included in the Corporate Governance Code outlined by Dubai SME (Please see page 48 to hear about their stories). The prospects for a greener Dubai, were showcased during the recent launch of The Change Initiative Marketplace, the

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UAE’s first facility dedicated to providing sustainable solutions and products to corporations and consumers alike. I took a tour of this massive two-story facility and was surprised by the overwhelming turnout and interest level generated by the event, as well as the variety of sustainable products offered. During the launch, I spoke to Gundeep Singh, CEO and Founder of The Change Initiative, who told me that in a place like Dubai, preaching about the benefits of going green will only do so much for the cause. That’s one of the reasons why his organisation decided to open the facility, to get people genuinely interested by providing something tangible they can touch and feel, along with supporting information to keep them better informed. Looking ahead, the next few months will be busy with events catering to the entrepreneurial community. Startup Weekend, a competition for technology entrepreneurs, will be held in Dubai on 10th to 12th May, in Abu Dhabi on 24th to 26th May, and in Doha, Qatar on 14th to 16th June. During the 54-hour event, participants pitch technology startup ideas and form teams to compete for awards and cash

prizes. I recently interviewed a budding entrepreneur who credits Startup Weekend Dubai for helping him get his business idea off the ground. (See the feature story on Salim Akil on page 40 to read more about his startup). In the article, he talks about the biggest challenges facing web entrepreneurs, and the most important lessons he has learned thus far. With the IT world going through a major transitional phase, SMEs are keen to learn about new technologies are out there. Fujitsu will bring its IT Future 2012 road show to Dubai on 21st May. The event will be under the theme, IT Reshaping Business and will be held at the Atlantis Hotel. The road show provides IT decision-makers, executives and experts with a comprehensive look at the innovations available to businesses – with live demonstrations, discussion sessions and presentations. For those SME owners and executives looking to do some remodelling, The Office Exhibition will be held 15th to 17th May, at the Dubai World Trade Centre. The event is the Middle East’s largest exhibition for the leading suppliers of office furniture, technology, consultancy, design and fit-out, featuring new technologies for the office industry.

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