SME Advisor Issue 119

Presenting partner

strategic SME partner

ISSUE 119

mer st o c e C u s e r v i

Seco f u n dnind a r y g

B us in es s ex pa ns io n

D iv er si fi ca ti

on

Get up to 10 devices at zero upfront With Business Quick Start, choose from a range of free and high-end devices in easy instalments Run your business with an amazing bundle of Broadband Internet, voice and the latest devices. From as low as AED 900/month, Business Quick Start is the only solution that provides you:

T&C apply

s &REE OFlCE DEVICES AND HIGH END DEVICES IN EASY INSTALMENTS AT ZERO upfront including smart signage TVs, printers, projectors, laptops, tablets, smartphones, and more s &REE NATIONAL AND INTERNATIONAL MINUTES s /NE CONVENIENT BILL

800 5800 etisalat.ae/businessquickstart

I

Etisalat Business Your business grows with us

NBAD’s financial solutions and service has led to our success in the Middle East.

Takuya Hamasaki General Manager, Shinryo Corporation Middle East

In the last 40 years, Shinryo Corporation has established an outstanding worldwide reputation for projects in airconditioning ventilation, district heating and cooling, co-generation and clean room facilities, to name a few. :KHQ 6KLQU\R ORRNHG WR HVWDEOLVK LWV SUHVHQFH LQ WKH 0LGGOH (DVW WKH\ WXUQHG WR 1%$'ČƒV FXVWRPLVHG Ě°QDQFLDO solutions in Trade, Cash and Forex Management, for securing and successfully implementing projects.

At NBAD we believe that the true success of a business is partnership. With our regional expertise and global reach across the dynamic West-East trade corridor, you can count on us to partner you to the next level of success.

Global Commercial Banking Toll Free 800 2211

E-mail: CommBankingSales@nbad.com

Subject to bank approval. Terms & conditions apply.

www.nbad.com

Khalifa Fund for Enterprise Development is a government entity that spearheads the support and development of SMEs in the UAE. His role is integral to the strategic planning and management of the organisation in alignment with the Executive Council’s objectives.

EDITORIAL COMMITTEE

His Excellency Abdullah Saeed Al Darmaki CEO, Khalifa Fund for Enterprise Development

SME Advisor is delighted to announce that during 2015 we will be working with some of the leading QDPHV LQ WKH 60( VSDFH NH\ ͤJXUHV ZKR KDYH kindly agreed to take part in our prestigious Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever - analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Policy makers

Professor Val Lindsay MSc (Otago), MBA (Victoria), PhD (Warwick) As a Professor of Entrepreneurship and Management at the American University of Sharjah (AUS), she has a keen interest in teaching and research in the areas of international strategy, exporting, services internationalization, entrepreneurship, small and medium-sized enterprises, networks and clusters, and economic development.

Thought leaders At the helm of the BPG Group since 1991, he is responsible for consolidating the Group’s interests across advertising, public advocacy, public relations, design, activation, media asset management and digital verticals, in the Middle East and North Africa region.

Entrepreneurs Avi Bhojani CEO, BPG GROUP

6

www.smeadvisor.com

SME ADVISOR ISSUE 119

He is also the Director of the Dubai Chamber initiative, Tejar Dubai. He is a proven UAE leader and business entrepreneur, with the ability to rapidly mobilize teams to achieve organisational change and integration.

With his unique background as an educator, a business strategist, and a researcher, Dr. Abonamah has conducted many strategy and organisational transformation workshops for various SMEs in the Gulf region and has been invited to speak at many national and international conferences, and panel discussions. He has over fifty publications in international journals and conferences and a US patent in reliable computer systems.

Essa Al Zaabi Senior Vice President -­ Support Services, Dubai Chamber of Commerce & Industry

Abdullah Abonamah PROFESSOR OF MANAGEMENT SCIENCES AND CEO, UAE ACADEMY

He is a Board Member of the Advisory Board of Deutsche Auskunftei Service GmbH, Chairman of Business Advisory Council of EFMA, member of ECGI (European Corporate Governance Institute) and Member of the Advisory Board of BAA, the Alumni Association of Bocconi University and SDABocconi.

Roberto Mancone MD, GLOBAL HEAD BUSINESS PRODUCTS, LENDING, DEPOSIT AND PAYMENTS, DEUTSCHE BANK

Paul Kenny PARTNER, EMERGE VENTURES

Laura has been named one of the Best Keynote Speakers by Meetings and Conventions Magazine and is a member of the National Speakers Association. She serves on the boards of the American Heart Association, Clean the World Foundation, Common Threads and Event Solutions Magazine.

Laura Schwartz PROFESSIONAL SPEAKER, AUTHOR AND FORMERLY WHITE HOUSE DIRECTOR OF EVENTS

Paul is one of the most important figures in the Internet space in the MENA region and is an active investor, mentor and advisor to numerous companies around the world. He has made numerous investments into Internet and Technology companies worldwide and sits as an advisor and board member to several companies.

Yogesh Mehta Managing Director, Petrochem Middle East Mohan Valrani Senior Vice Chairman & Managing Director, Al Shirawi Group of Companies Apart, from his business-related ventures, he is also deeply involved in social activities. He is the founder - Chairman of the India Club and on the Board of Trustees of The Indian High School and has been as instrumental in contributing to the success of these institutions.

www.smeadvisor.com

Driven by passion and a need to succeed, he established Petrochem Middle East in 1995 with friend and business partner David Lubbock.

Petrochem Middle East has since grown from strength-to-strength to become one of the largest independent petrochemical distributors in the Middle East. A self-made billionaire, his greatest attributes are mentoring and leading by example.

Sultan Sobhi Batterjee owner and CEO, IHCC He is a member of several social and economic associations including the Young Arab Leaders Society in Dubai, the young entrepreneurs committee Jeddah Chamber of Commerce and he is also a Board Member of the (EO) Entrepreneurs’ Organisation in the USA.

7

FROM THE EDITOR MANAGEMENT Dominic De Sousa Chairman Nadeem Hood Group CEO Georgina O’Hara COO - Business and Consumer EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 ADVERTISING Business Development Executive Adam Barrie Lees adam.lees@cpimediagroup.com +971 4 440 9119 Business Development Executive Mohamed Kerrouchi mohamed.kerrouchi@cpimediagroup.com +971 4 440 9162 Account Executive Freshia Mistry freshia.mistry@cpimediagroup.com +971 4 440 9161 DESIGN Head of Design Glenn Roxas

A QUESTION OF CAPACITY In a recent conversation with Dubai SME’s Alexandar Williams, we debated what would be the key priorities for SMEs looking to build their business in 2016? It’s tempting to look at factors like the coping mechanisms required to deal with a potentially slower economic outlook, or to evaluate what overseas markets are set to be favourable trading partners in a region where civil strife has reduced the options considerably. Yet in reality both of these factors relate to a larger picture and a larger challenge. This is the need for ‘capacity building’ - expanding the skills and resources available within the business in order to allow it to perform better and take on additional responsibilities and opportunities.

There are some classic examples of how capacity building can make a powerful impact.

For example, the role of technology and IT. How many businesses actually properly avail VJGOUGNXGU QH VJG DGPGĆ‚VU QH C VJQTQWIJN[ OQFGTP +6 RNCVHQTO YKVJ HCEVQTU NKMG TGCN VKOG QPNKPG DCPMKPI EQOOWPKECVKQP VJTQWIJ CRR OGUUCIKPI WPKXGTUCN GORNQ[GG EQPPGEVKXKV[ CPF RTQĆ‚V KFGPVKĆ‚ECVKQP VJTQWIJ EWUVQOGT CPCN[VKEU! #PQVJGT HCEVQT KU TGETWKVKPI UGPKQT UVCHH YKVJ RTQXGP expertise, who accurately match your needs in terms of capability, character and experience.

Too expensive? Apart from observations such as ‘did you actually look for them?’, the reality KU VJCV 5/'U UWHHGT FTCOCVKECNN[ HTQO VJG UJGGT CXQKFCPEG QH VJG SWCNKĆ‚GF RGQRNG YJQ MPQY how to do the job at hand. There are very sophisticated search and recruitment platforms that QPN[ C VKP[ RGTEGPVCIG QH TGIKQPCN 5/'U MPQY CDQWV CPF WUG ;GV VJG[ CTG FGUKIPGF URGEKĆ‚ECNN[ to build your organisation’s capacity - taking its capabilities up a notch or two and making it RGTHQTO CV C JKIJGT NGXGN YKVJQWV UKIPKĆ‚ECPV UVTWEVWTCN EJCPIG QT NCTIG UECNG TGĆ‚PCPEKPI Another factor in capacity building is the value of acquiring new and better professional skills an imperative tackled by new forums like the SME Academy, for example, the one-stop training resource created by NBAD, ably supported by Etisalat and executed and delivered by SME Advisor. 5MKNNU DWKNFKPI KU C VGTTKĆ‚E NKHGNKPG HQT nWRRKPIo EQORCP[ RGTHQTOCPEG CU KV WUGU VJG OQUV critical resource you have - people - and empowers them to work smarter, better and more RTQĆ‚VCDN[ $[ IKXKPI VJG TKIJV VTCKPKPI QRRQTVWPKVKGU [QW CICKP GZRCPF VJG EQORCP[oU CDKNKV[ VQ perform and build internal capacity.

If capacity building isn’t as yet on your agenda for 2016, put it at the top of your executive DTKGƂPI 4KIJV PQY Enjoy this issue of SME Advisor!

Senior Graphic Designer Froilan Cosgafa IV Production Manager James Tharian

Paul Godfrey Senior Editor

Data Manager Rajeesh Melath Printed by Al Ghurair Printing & Publishing LLC

Rushika Bhatia Editor i>` "vwVi PO Box 13700, Dubai, UAE Tel: +971 (0) 4 440 9100 Fax: +971 (0) 4 447 2409

Talk to us: E-mail: paul.godfrey@cpimediagroup.com Facebook: www.facebook.com/SMEadvisor

PRESENTING PARTNER

Š Copyright 2015 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.

Twitter: @SMEadvisorME LinkedIn group: www.tinyurl.com/smeadvisorme

STRATEGIC SME PARTNER

OFFICIAL GOVERNMENT PARTNER

CONTENTS

“A massive 82 per cent of SMEs fail within the first three years of activity, for mainly two reasons: lack of finance and a shortage of skills.”

44

p28

“Educate your staff and business partners on why they need to think of ‘sustainability’; it’s a broader concept than just being ‘green’.” p38

06 EDITORIAL COMMITTEE SME personalities bringing industry-leading expertise across the publication and its raft of prestigious events.

09 EDITOR’S NOTE Is capacity building on your agenda for 2016?

12 DATA AND DECISION MAKING Editor Rushika Bhatia’s infographic section provides a snapshot of key trends shaping the SME marketplace.

Ground Level 14 NO TIME LIKE THE PRESENT We provide simple steps to help you create your 2016 business plan!

18 WHY YOUR CUSTOMERS DON’T ALWAYS EQUAL CASH How Customer Analytics can supercharge business performance…

22 MEMORABLE, MOTIVATING, UNIQUE? What does your brand say about you?

SME ADVISOR ISSUE 119

Christina Lee, Founder and Managing Director, Global Green Economic Consulting…

26

44 PROFILE OF A GLOBAL NO. 1 – AS LLOYD’S COMES TO DUBAI An excerpt from our exclusive meeting with Mark Cooper, General Representative Middle East…

38

Business Growth 48 THE FINANCE FUNCTION Here, Fazeela Gopalani, Head of Education – Middle East, ACCA, provides a template for growth.

70

Technology 52 LOOKING TO THE FUTURE Top technology predictions for 2016.

Strategy 58 PLANNING YOUR EXIT STRATEGY SME Advisor explains a selection of exit options.

Fast Four 26 WEARABLE TECHNOLOGY Four excerpts that summarise everything you need to know.

SME Academy 28 AN SME ACADEMY TO SUPPORT GULF ENTREPRENEURS NBAD Editor Nathalie Gillet’s summary of this empowering initiative…

Digitally Disruptive 34 THE RIGHT DEVICES AT THE RIGHT TIME SME Advisor’s powerful dialogue with Sharaf DG’s CEO Nilesh Khalkho.

Movers & Shakers 38 THE FUTURE OF BUSINESS – BUILDING A SUSTAINABLE ENTERPRISE We speak to global expert

ss Don’etr mstiory! our cov

Legal 62 PROTECTING YOUR BUSINESS Experts from Clyde and Co. highlight the key aspects.

HR 66 MASTERING THE ART OF TALENT MANAGEMENT IN 2016 Top HR policies to consider as we approach the New Year.

Finance 70 GET YOUR BUSINESS ON THE RIGHT PATH We asked Michael Armstrong FCA, ICAEW’s Regional Director – Middle East, Africa and South Asia (MEASA), to provide a detailed analysis…

Tech Trends 76 Top apps to boost business performance.

DATA AND DECISION MAKING

Unleashing the power of THE GLOBAL LANDSCAPE

THE GLOBAL BIG DATA MARKET IS PROJECTED REACH $122BN IN REVENUE BY 2025

GLOBAL DATA TRAFFIC WILL CROSS 100 ZETTABYTES ANNUALLY BY 2025

64% OF ORGANISATIONS HAVE EITHER INVESTED OR PLAN TO INVEST IN BIG DATA

TACKLING THE CHALLENGES

41% 37%

LACK APPROPRIATELY SKILLED RESOURCES DON’T HAVE THE RIGHT TALENT

Sources: Frost & Sullivan, Big Success with Big Data by Accenture, Gartner, IBM, Single Grain Digital Marketing.

12

www.smeadvisor.com

DATA AND DECISION MAKING

DATA AND BUSINESS PERFORMANCE

EMPLOYEE AWARENESS ACROSS BUSINESSES: 49% know that they can get more value from data, but do not know how 30% can act on information in real time 24% believe they are able to convert raw data into meaningful insights

89%

OF BUSINESS LEADERS BELIEVE THAT BIG DATA IS ALL SET TO REVOLUTIONISE BUSINESS OPERATIONS

85%

BELIEVE THAT BIG DATA WILL BRING IN A DRASTIC CHANGE THE WAY BUSINESS IS BEING DONE

79% 83%

AGREE THAT ‘COMPANIES THAT DON’T EMBRACE BIG DATA WILL LOSE THEIR COMPETITIVE POSITION AND MAY EVEN FACE EXTINCTION’ PURSUE BIG DATA WITHIN OPERATIONS VISION TO GAIN A COMPETITIVE EDGE

BIG DATA WILL MAKE AN IMPACT THE FOLLOWING OPERATIONAL AREAS: 37% Customer relationships 26% Redefining product development 15% Improving operational organisation

BIG DATA SPEND ACROSS INDUSTRIES (IN 2014):

$2.1 billion

Discrete manufacturing

$1.8 billion Banking

USES OF BIG DATA

48% 37% 23% 26%

CUSTOMER ANALYTICS RISK ANALYSIS

$1.5 billion

Process manufacturing

THE SECURITY DIMENSION

LOCATION BASED TARGETING CAMPAIGN OPTIMISATION

IT IS PREDICTED THAT BY 2018 50% OF BUSINESS ETHICS VIOLATIONS WILL OCCUR THROUGH IMPROPER USE OF BIG DATA ANALYTICS THERE IS A 22% CHANCE OF A DATA BREACH TAKING PLACE OVER THE NEXT 24 MONTHS

www.smeadvisor.com

13

GROUND LEVEL

NO TIME LIKE THE PRESENT

FINALISE YOUR 2016 BUSINESS PLAN BEFORE IT’S TOO LATE! Unless you set crystal-clear goals and then focus resources on meeting them, it’s unlikely that your 2016 will bring the success you want. Follow these simple steps to create a practical template that’s a workable roadmap for business growth…

14

www.smeadvisor.com

GROUND LEVEL

Everyone has seen daunting and complex business plans that seem like business initiatives in their own right.

So not surprisingly, the majority of EXVLQHVVHV SXW RII ¿QDOLVLQJ WKHLU QH[W year’s plan until it’s simply too late to be useful. The reality is that drafting the business plan is not supposed to be an exercise in micro-planning, but rather, an opportunity to take a step back and focus on the items and activities that will really make money.

Not just the small print, but the elements that are your real business essentials - what they are and how and when you’ll deliver them.

In this spirit of focusing on the activities that are your core business and which have the potential to deliver more growth - it’s useful to follow a simple four-step process before you start working on the plan itself.

STEP

1

REVIEW YOUR 2015 PLAN

Now we’re at the end of the year, you know exactly what worked and what didn’t. As well as tracking income, RTKQĆ‚VCDKNKV[ CPF ECUJĆƒQY [QW UJQWNF also have been tracking your marketing efforts and expenditures, so you can see where you are getting the best return on investment.

The reality is that you won’t have started everything afresh at the start of the year, but will have commenced a few new initiatives at different times throughout the year. So it may be early to say whether certain new schemes have worked or not. You may decide to set a budget limit and give a couple of your key plans another six months to try to reach fruition. At the same time, don’t be afraid to abandon an activity that clearly is not paying dividends. The Golden Rule is ‘don’t throw good money after bad’. Set an investment limit and stick to it.

Not every decision about whether activities have been successful will always be obvious. You may want to consult members of your team - especially those

www.smeadvisor.com

15

GROUND LEVEL

delivering the ‘front end’ service. Also, bear in mind that it’s vital to check on regional economic trends: something you may have rejected may now be coming into its own as the market suddenly becomes ready.

STEP

2

FOCUS MORE EFFECTIVELY

It’s very likely that your 2015 plan listed a number of objectives and actions as your priorities. One of the classic mistakes is to make this list too complicated. This year, try to focus on no more than three deliverables - and tackle these with 100 per cent effort. Don’t waste effort dividing your focus. As you decide to focus on achieving a few things, work out a clear timeline for each of them.

This means that you might be able to concentrate on one key objective for a whole quarter - giving you a far greater chance of success.

STEP

3

NO TIME LIKE THE PRESENT!

STEP

If you have a clear set of ideas to implement, there’s really no point in waiting until a hypothetical date in the future - start now! This is especially true if yours is a larger SME where new initiatives can take some time to ratify and need to be approved by a Board or a particular group of Directors – in which case, your plans for January could easily spill over into March.

It’s best to start in a low-key, informal way right now.

4

EVALUATE AND ADAPT

The majority of businesses build up a series of ‘myths’ about what they’re good at, where business comes from, and who their customers actually are.

Decide that you won’t fall into this trap: take time out to evaluate where

16

the business is going and whether this is what you want. You can – r 4WP C UKORNG OCTMGV TGUGCTEJ UWTXG[ about what your customers think of your products and services and discover if these are what the market needs. r .QQM CV VJG PWODGTU CXGTCIG UCNG price, number of closed transactions and duration, what percent of your business comes from referrals, HTMLs, the Internet, repeat business, etc. r #TOGF YKVJ VJKU FCVC EQPUKFGT YJGVJGT you want to break into other markets, or offer a different product range. Don’t be like the famous analogue camera manufacturers and let the tide of change wash you away‌ r 'XCNWCVG RTQITGUU SWCTVGTN[ QPEG C year is not enough. Decide that you will book quality ‘time out’ with key staff and brainstorm honestly and directly about what’s right and what’s not.

Putting  the  business  plan  together:  the  key  elements

Executive Summary Many people take the view that the business plan need not include an Executive Summary unless your company is a start-up and you are ORRNLQJ IRU ÂżQDQFH DQG LQYHVWRUV <HW the reality is that this â&#x20AC;&#x2DC;snapshotâ&#x20AC;&#x2122; of the company and its markets and intentions is a great way of focusing your own mind on what the business is essentially about. Also, you never know when you might want to bring additional investors RQ ERDUG RU ORRN IRU DGGLWLRQDO ÂżQDQFH - and it is useful to have the Executive Summary already in place.

The purpose of the Executive Summary is to capture the interest of the reader VR WKH\ ZLOO ZDQW WR ÂżQG RXW PRUH DERXW your company. It should emphasize key issues and be no longer than one page.

The Executive Summary will â&#x20AC;&#x201C; Â&#x2021; 3URYLGH D EULHI VXPPDU\ RI WKH EXVLQHVV plan and explain how it is organised Â&#x2021; *LYH D OXFLG DQG FRQFLVH &RPSDQ\ Description It can include â&#x20AC;&#x201C; 1 Legal name and Legal Form of business entity

Mission Statement and Objectives 3URGXFW 6HUYLFH GHVFULSWLRQ 4 Intellectual property description 5 Location and geographical information 6 &RPSDQ\ÂśV GHYHORSPHQW VWDJH 7 &XUUHQW ÂżQDQFLDO SRVLWLRQ 2

3

Description of the industry This is the next section and should include â&#x20AC;&#x201C; Â&#x2021; ,QGXVWU\ FXUUHQW VL]H RI ÂżUPV employment, aggregate sales) Â&#x2021; *URZWK SRWHQWLDO Â&#x2021; )DFWRUV LPSDFWLQJ WKH LQGXVWU\ including: 1 Seasonality 2 Technological and regulatory challenges 3 Supply and Distribution &KDUDFWHULVWLFV 4 Economic trends The Target market This section of the plan assesses who you are selling to, and how. It will detail the following: 1 Target market analysis 2 Target market size 3 Target market trends 4 Demographics 5 3XUFKDVLQJ SDWWHUQV &RPSHWLWLRQ This section of the business plan assesses who the current players are in the industry and how you will compete with them. It gives you the opportunity to plan how you will proceed in the market and differentiate yourself from the other major players. There are also risks or barriers to any market participation and this portion of the plan should explain how those risk and barriers are managed in your business.

It will cover 1 &RPSHWLWLYH SRVLWLRQ 2 Market share and distribution 3 Barriers to fresh market entry 4 3RWHQWLDO IXWXUH FRPSHWLWLYH challenges 6WUDWHJLF 3RVLWLRQ 5LVN $VVHVVPHQW This will start with a comprehensive SWOT analysis - listing Strengths,

www.smeadvisor.com

GROUND LEVEL

MANY PEOPLE TAKE THE VIEW THAT THE BUSINESS PLAN NEED NOT INCLUDE AN EXECUTIVE SUMMARY UNLESS YOUR COMPANY IS A START-UP AND YOU ARE LOOKING FOR FINANCE AND INVESTORS.

Weaknesses, Opportunities, Threats. It will then detail successes and failures in delivering day-to-day business objectives and the timelines involved.

The idea is to build a comprehensive view of any positive or negative trends, so as to build proactive defences against threats and encourage and stimulate the right conditions for growth.

0DUNHWLQJ 3ODQ DQG 6DOHV 6WUDWHJ\ This is arguably the most important part of the entire plan. It explains how you will reach the target market with your message and when you will do so.

It details what marketing activities your company will put in place to generate VDOHV DQG LW FOHDUO\ LGHQWLÂżHV WKH FRVW associated with each activity. This section will focus on: 1 &RPSDQ\ PDUNHWLQJ VWUDWHJ\ 2 Marketing media and formats 3 6WUDWHJLF 3DUWQHUVKLSV 4 Marketing tactics 5 Sales force and structure Operations This section should provide an overview of the strategy for the day-to day implementation of the business model. The objective here is to demonstrate the working links between departments and the reporting lines that all core operations will involve.

Itâ&#x20AC;&#x2122;s also important to discuss the technology needed to help manage processes and to identify the previous FRVWV DQG EHQHÂżWV RI DQ\ WHFKQRORJ\ upgrades.

Above all, this section focusses on the raft of costs associated with LPSOHPHQWLQJ WKH ÂżQGLQJV DQG FODXVHV outlined in the business plan. Depending on the type of business, you should address the key areas listed below: 1 3ODQW DQG IDFLOLWLHV 2 0DQXIDFWXULQJ SURGXFWLRQ SODQ 3 Equipment and technology 4 Variable labour requirement 5 Inventory management 6 Supply and distribution 7 2UGHU IXOÂżOOPHQW DQG FXVWRPHU service 8 5HVHDUFK DQG GHYHORSPHQW 9 Quality control

www.smeadvisor.com

10

11

Safety, Health and Environmental &RQFHUQV Management Information Systems

'HYHORSPHQW DQG 3URMHFWHG 0LOHVWRQHV Where are you now and where are you going? This section assesses what steps have you completed and what steps need to occur for you to launch and grow your business. It will include â&#x20AC;&#x201C; 1 3DVW DQG IXWXUH PLOHVWRQHV 2 Long-Term company goals 3 *URZWK VWUDWHJLHV 4 &RPSUHKHQVLYH WLPHOLQHV The Financials 7KLV ZLOO LQFOXGH ÂżQDQFLDO SURMHFWLRQV which address procurement, allocation, return on investment, and cash PDQDJHPHQW 5HTXLUHG VWDWHPHQWV DUH 1 %XVLQHVV 3ODQ $VVXPSWLRQV 2 %DODQFH 6KHHW <HDU 6XPPDU\ 3 ,QFRPH 6WDWHPHQW <HDU 6XPPDU\ 4 6WDWHPHQW RI &DVK )ORZV <HDU Summary 5 ,QFRPH 6WDWHPHQW 0RQWKO\ <HDUV

4XDUWHUO\ <HDU 6WDWHPHQW RI &DVK )ORZV 0RQWKO\ <HDUV

4XDUWHUO\ <HDU

6 Break-Even Analysis 7 3URSRVHG 6RXUFHV 8VH RI )XQGV 5HPHPEHU DV ZHOO WKDW WKH ÂżQLVKHG %XVLQHVV 3ODQ VKRXOG KROG WRJHWKHU as a lucid and coherent document that Directors can read as a complete snapshot of where the business is going in 2016. In this sense, it needs to be more than â&#x20AC;&#x2DC;the sum of all its partsâ&#x20AC;&#x2122;, providing a complete narrative of where, when, how and why. Whatever it SUHGLFWV RU LGHQWLÂżHV LQ WKH FRPLQJ \HDU is up to you, but remember, ratings agencies like Dun and Bradstreet have LGHQWLÂżHG WKDW WKH FRVW RI OLYLQJ GRXEOHV every 10 years - so will you have the growth potential to stay ahead?

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;}Ă&#x20AC;Â&#x153;Ă&#x2022;Â&#x2DC;`Â&#x2021; Â?iĂ&#x203A;iÂ?Ă&#x2030;Ă&#x201C;ä£Ă&#x2C6;Â&#x2021;LĂ&#x2022;Ă&#x192;Â&#x2C6;Â&#x2DC;iĂ&#x192;Ă&#x192;Â&#x2021;ÂŤÂ?>Â&#x2DC;

17

GROUND LEVEL

WHY CUSTOMERS DONâ&#x20AC;&#x2122;T ALWAYS EQUAL CASH Itâ&#x20AC;&#x2122;s a truism that while businesses may pay lip service to the idea that â&#x20AC;&#x2DC;the customer is kingâ&#x20AC;&#x2122;, very few companies understand which customer transactions are actually SURĹľWDEOH RU NQRZ SUHFLVHO\ KRZ WR IRFXV RQ WKH elements that will ensure maximum value. This is the role of Customer Analytics - an essential tool for attracting repeat business and heightened margins. Senior Editor Paul Godfrey looks at this rapidly-growing science dedicated to adding customer valueâ&#x20AC;Ś

:KDW LV &XVWRPHU $QDO\WLFV" ,WÂśV the sum total of the processes and technologies that enable a business WR GHOLYHU RIIHUV WKDW DUH SURÂżWDEOH UHOHYDQW DQG WLPHO\ $V VXFK &XVWRPHU Analytics includes a number of disciplines such as predictive modelling, relationship management and customer segmentation. This may sound complicated, but itâ&#x20AC;&#x2122;s vital for SMEs to get up to speed on this critical agenda as quickly as possible, because customers are more choosy, empowered and more connected than ever. &RQVLGHU WKLV ZLWK PRELOH GHYLFHV customers can access information anywhere, any time - where to shop, what to buy, and how much to pay.

That makes it increasingly important to manage customer interaction with your organisation, so you can respond accordingly. The good news is that these processes empower you to understand the value of each

18

WUDQVDFWLRQ DQG LWV SURÂżWDELOLW\ DQG to know who is buying what and how frequently. ,Q VKRUW &XVWRPHU $QDO\WLFV OHWV \RX drill deep into customer behaviour, clarifying precisely which of your products are desirable, and which are in effect losing you money each day you keep them on the inventory.

Then, it lets you batch customers together into like-minded groups so you can have highly effective, targeted marketing. There are three other NH\ EHQHÂżWV WRR &XVWRPHU $QDO\WLFV means you can Â&#x2021; 6XSHUFKDUJH UHVSRQVH UDWHV FXVWRPHU OR\DOW\ DQG 52, E\ approaching the right customers at the right time, and with highly relevant offers and messages. Â&#x2021; 5HGXFH FDPSDLJQ FRVWV E\ WDUJHWLQJ those customers most likely to UHVSRQG DQG DYRLGLQJ WKH UHVW

Â&#x2021; 'HFUHDVH DWWULWLRQ E\ DFFXUDWHO\

predicting customers most likely to fall prey to competitors and then create the right proactive campaigns to retain them.

Ignoring  the  obvious?

One of the fascinating things about business in 2015 is that so many organisations of every size continue to ignore the most valuable of all

www.smeadvisor.com

GROUND LEVEL

SMEs CAN USE THE SCIENCE OF DATA ANALYTICS IN MORE SIMPLE, COMMONSENSE WAYS, AND STILL GET GREAT RESULTS AND STRONG VALUE FOR MONEY.

massive e-tailer, youâ&#x20AC;&#x2122;re probably already working with a dedicated consultancy to crunch the numbers DQG VKRZ ZKHUH \RXU SURÂżWDELOLW\ really lies. But SMEs can use the science of Data Analytics in more simple, commonsense ways, and still get great results and strong value IRU PRQH\ ,Q 86 SHULRGLFDO Marketing Day worked with global FRQVXOWDQF\ .30* WR FUHDWH WKH following executive checklist.

GDWD VRXUFHV WKHLU FXVWRPHUV 8QWLO recently, it was estimated that about 90 per cent of all customer business was untrackable and hence, impossible to foster and build by campaigns based on customer preferences. The advent of high-percentage card transactions, loyalty programmes, customer tracking, social media, mobile offers and digital shopping have started to

www.smeadvisor.com

FKDQJH DOO WKLV &ROOHFWLYHO\ WKH\ JLYH the data that is allowing us to create rich veins of customer opportunity.

The way we analyse this data is called &XVWRPHU $QDO\WLFV DQG LWÂśV D VFLHQFH born out of a dire need for more information. &XVWRPHU $QDO\WLFV FDQ EH DV simple or as complex as we need it to be. If you are a retail group or a

Listening  to  the  customer  service  team/account  directors Just as we all too easily forget to listen to customers, so we often overlook the views of the people closest to them â&#x20AC;&#x201C; the customer VHUYLFH WHDP LQ D PHGLD DJHQF\ RU professional services environment, this will be your account managers DQG GLUHFWRUV 8QIRUWXQDWHO\ WKH\ are most often consulted when things go wrong, rather than seen as a proactive source of guidance. Instead, we should be doing our hardest to see what they see. What are customers asking for? What are they unhappy with? What are the favourite repurchase signals? How price sensitive is your market? Is there a problem with distribution or follow-up? With the website, is your offer or language confusing? Does the site structure

19

GROUND LEVEL

make sense? Itâ&#x20AC;&#x2122;s imperative to set up a bi-monthly meeting with the customer VHUYLFH WHDP DFFRXQW GLUHFWRUV $VN them to prepare weekly summaries in advance, which can be used as the key verticals for productive discussion.

The  role  of  Customer  Advisory  Boards  (CABs) $ &$% FXVWRPHU DGYLVRU\ ERDUG

is a group of current customers that you can poll, question, and receive detailed feedback from. This is a vital way to gain critical insights into how to position the business, its offer, its prices, its relevance and its campaigns.

So for example, if you are thinking of launching a new product, breaking a new market, or simply charging more, DVN WKH &$% WKLV VKRXOG DOZD\V EH \RXU ÂżUVW SRUW RI FDOO 5HPHPEHU WKHVH people know your brand intimately, and are predisposed to help you.

They can give you a sharply-focused, objective view that you are simply too close to the business to have. The best consultation frequency is monthly, but there is no harm in contacting lead customers whenever you have a major query. &UHDWLQJ &XVWRPHU 3URÂżOHV &ROOHFWLQJ GDWD RQ LWV FXVWRPHUV gives any business a huge advantage over those that rely primarily on DQRQ\PRXV EX\HUV <HW KDYLQJ collected the data, it is vital to leverage it for relationship building, customer SURÂżOLQJ DQG PDUNHWLQJ LQLWLDWLYHV This is an opportunity to gather a wealth of subjective data. It is not the basic information we need to run the business - that is the objective data JDWKHUHG E\ $QDO\WLFV VRIWZDUH VHH below). This time, ask: Â&#x2021; *HQHUDO ELR LQIRUPDWLRQ DJH ethnicity, choice of residence, size of family, etc.) Â&#x2021; :KDW GR WKH\ UHDG" Â&#x2021; :KDW GR WKH\ ZDQW WR OHDUQ DERXW" Â&#x2021; :KDW LV WKHLU IDYRXULWH SURGXFW" Â&#x2021; +RZ WKH\ UDWH RXU SURGXFWV DQG services? Â&#x2021; :KR GR WKH\ SHUFHLYH DV RXU competitors?

20

Â&#x2021; :KDW DUH WKHLU OLIHVW\OH DQG FDUHHU goals? Â&#x2021; 'R WKH\ SUHIHU GHOLYHU\ RU VHOI SLFN up? Â&#x2021; :KDW WLPHV GR WKH\ EURZVH WKH ZHE" Â&#x2021; 'R WKH\ EURZVH XVLQJ D PRELOH device? Â&#x2021; +RZ FDQ ZH WDLORU RXU RIIHU ZHE content and services toward them?

7KHVH FXVWRPHU SURÂżOHV VKRXOGQÂśW EH just a batch of sterile information used only for some extra hard selling. Itâ&#x20AC;&#x2122;s vital to insert questions that help us serve the customer better. In this way, every campaign can be personalised to D FXVWRPHU VHJPHQW EDVHG RQ SURÂżOH information, making the campaign more valuable both to your business and to the customer, simultaneously. &UHDWH DQ HĚ&#x2020;HFWLYH 3URGXFW Feedback  Tab &KDQFHV DUH WKDW LI \RX PDUNHW online, you have a tab on your site for feedback. However, that feedback will often be routed to a product alias designed to collect feature requests DQG SURGXFW FRPSODLQWV <HW WKLV same channel also collects a wealth of marketing data. There will, for example, be suggestions on product names, on feature descriptions, on pricing, customisation and delivery.

So it is vital to be able to access these IHHGEDFN IRUXPV LH DVN IRU WKH ORJ LQ password) and use them to build the core of your promotional campaigns.

A pulse on customer feedback and product requests can lead to powerful ways to meet the customersâ&#x20AC;&#x2122; needs ZKLOH HQKDQFLQJ SURÂżWDELOLW\ DQG reducing wastage costs.

Increase  commitment  to  Customer  Surveys The truism with surveys is that generally, we only ask our customers what they want to see when we realise ZH GRQœW NQRZ :H VKRXOG DFWXDOO\ run customer surveys on a regular basis. Feedback shows clearly that while many marketers are worried about over-surveying, in reality, we are nowhere near the saturation point. If

you segment your responding audience correctly, and make the questions relevant to their needs, they are often more than not willing to collaborate in extremely helpful and communicative ways..

Analytics  software  exists  for   a  reason Itâ&#x20AC;&#x2122;s extremely worthwhile to invest in a basic Analytics software package, This will give you the objective data that twins so well with the subjective dialogue described above. It sits FRPIRUWDEO\ ZLWK \RXU ÂżQDQFH DQG accounting software packages and will WHOO \RX DW DQ DEVROXWH PLQLPXP Âą Â&#x2021; 7KH IUHTXHQF\ RI HDFK FXVWRPHUÂśV purchasing Â&#x2021; 7KH YDOXH RI HDFK FXVWRPHUÂśV purchasing Â&#x2021; :KDW HDFK FXVWRPHU SXUFKDVHG Â&#x2021; 7KH PDUJLQ RQ WKH VDOH Â&#x2021; 7KH PHWKRG RI SXUFKDVH Â&#x2021; (DFK FXVWRPHUÂśV FXUUHQW SURÂżWDELOLW\ to the business Â&#x2021; :KHWKHU LW ZDV D UHSHDW SXUFKDVH Â&#x2021; :KHWKHU LW OLQNHG WR DQ\ SURPRWLRQ Â&#x2021; :KHWKHU WKHUH ZDV D FRQWUDFWXDO relationship underlying the purchase How many of these questions could you currently answer about your customers and their transaction histories? Taking the guesswork out of FRUH EXVLQHVV SURÂżWDELOLW\ LV WKH UHDO YDOXH RI &XVWRPHU $QDO\WLFV

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;}Ă&#x20AC;Â&#x153;Ă&#x2022;Â&#x2DC;`Â&#x2021;Â?iĂ&#x203A;iÂ?Ă&#x2030; VĂ&#x2022;Ă&#x192;Ă&#x152;Â&#x153;Â&#x201C;iĂ&#x20AC;Â&#x2021;>Â&#x2DC;>Â?Ă&#x17E;Ă&#x152;Â&#x2C6;VĂ&#x192;

www.smeadvisor.com

GROUND LEVEL

MEMORABLE, MOTIVATING, UNIQUE?

The impact of your brand involves much more than simply having good quality, good value products and services.

Itâ&#x20AC;&#x2122;s about the way you position your brand in the market â&#x20AC;&#x201C; and how that position creates resonance and appeal for the target customer.

Product positioning can make the difference between failure and success; itâ&#x20AC;&#x2122;s the â&#x20AC;&#x2DC;Factor Xâ&#x20AC;&#x2122; that differentiates Coke from a 1,000 other beverages and makes BMW a noted sedan of choice across almost every world market. Paul Godfrey explains how positioning power can work for you.

22

3URGXFW SRVLWLRQLQJ EDVLFDOO\ involves two related activities â&#x20AC;&#x201C; Â&#x2021; )LUVWO\ DOLJQLQJ \RXU EUDQG ZLWK the lifestyle or business activities that are meaningful to your target audience Â&#x2021; 7KHQ HQVXULQJ WKDW WKLV SODFHPHQW is unique and differentiates your brand from any other 3XW VLPSO\ EUDQG SRVLWLRQLQJ LV WKH process of effectively and profitably positioning your brand in the mind of your customers. The idea is to â&#x20AC;&#x2DC;ownâ&#x20AC;&#x2122; an industry niche for your brand, product or service, drawing on factors such as competitive advantage, favourable connotations,

distribution, pricing, quality and market reach. The whole idea of product positioning emerged in D ERRN FDOOHG Âł3RVLWLRQLQJ 7KH %DWWOH IRU <RXU 0LQG´ ZULWWHQ E\ $O 5LHV DQG -DFN 7URXW LQ The idea is to create a unique impression in the customerâ&#x20AC;&#x2122;s mind so that the customer associates something specific and desirable with your brand - something that is utterly distinct from the rest of the marketplace.

5HLV DQG 7URXW GHILQHG SRVLWLRQLQJ as â&#x20AC;&#x153;an organised system for finding D ZLQGRZ LQ WKH PLQG´ 7KLV draws on the belief that effective communication can only take place

www.smeadvisor.com

GROUND LEVEL

your position in the marketplace: 1. Ask how your brand is currently SRVLWLRQLQJ LWVHOI LV LW WDQJLEO\ doing this at all, or is it simply relying on ‘happenstance’?

2. Identify your direct competitors 8QGHUVWDQG KRZ HDFK FRPSHWLWRU is positioning their brand &RPSDUH \RXU UHODWLYH positioning to that of your competitors to identify your XQLTXHQHVV DUH \RX UHDOO\ XQLTXH at all?

5. Brainstorm to create a defined and relevant positioning concept 6. Write a brand positioning VWDWHPHQW VHH EHORZ

Photo Credit: Luciano Mortula/Shutterstock.com

at the right time and under the right conditions, so the quest for any business is to identify those optimum circumstances and align their offer with them.

When executed effectively, brand positioning makes your life as an SME much easier and more costeffective. It ensures that all brand DFWLYLW\ KDV D FRPPRQ DLP LV guided, directed and delivered by WKH EUDQG¶V EHQHILWV UHDVRQV WR EX\ and it focusses all points of contact with the consumer. It also means seeing your business from the ‘other end of the telescope’ - because brand positioning always relates to the reasons that your target

www.smeadvisor.com

customers have to buy your brand in preference to any others.

The brand positioning strategy model It should already be clear that creating the right product positioning is perhaps more time consuming and necessary than defining the physical elements of the product or service itself. Where can an SME start the process? In order to create a position strategy, you first need to identify your brand’s uniqueness and determine what differentiates you from your competition. There are a number of key steps to enable you to define

The Brand Positioning Statement A positioning statement is a short, 150-word definition that properly communicates your brand’s unique value to your customers and differentiates its offer from your main competitors. The reality is that unless you can define your offer in such a crisp and simple way, it’s unlikely that you have a solid and unique positioning at all. It’s helpful to think of the brand positioning statement as comprising four different elements, namely 1. Your Target Customer: how can you describe demographically the target group of customers your brand wants to reach?

2. M arket Definition: What sector is your brand operating in and how is your brand designed to be used by your customers?

3. Brand Promise: What is the most powerful and solid benefit that your brand extends to your target audience, and what is its advantage over your competition?

4. Reason to Believe: What is the most compelling evidence that your brand delivers on its brand promise?

Once you have answered this questions successfully, you then have the essence of what the brand positioning statement needs to

23

GROUND LEVEL

REMEMBER THAT A SUCCESSFUL BRAND POSITIONING STATEMENT WILL EMPOWER THE COMPANYâ&#x20AC;&#x2122;S GROWTH, FOCUS YOUR MARKETING STRATEGIES AND AVOID WASTAGE OF TIME AND MONEY.

24

include. Try to express the sum of these values and characteristics in no more than 150 words. This statement should then become a core part of all your company collaterals, since it is even more fundamental than your mission statement, given that it underpins the very secret of your commercial success.

Donâ&#x20AC;&#x2122;t  overlook  the  obvious  -­  ask  the  market  what  it  thinks Many companies who have most successfully positioned and differentiated their brand were able to do so because they brought together a number of customer focus groups and brainstormed with them to understand the inherent values their products communicated and embodied. Were the values good RU EDG" 5HDVRQV WR EX\ RU WR SDVV over? Widely known or generally QRW NQRZQ" 5HVSHFWHG RU LJQRUHG" *DWKHULQJ WKLV GDWD PHDQV \RX DUH no longer acting on intuition or â&#x20AC;&#x2DC;feelâ&#x20AC;&#x2122;, but armed with valuable, hard criteria that you can then adjust and build on.

5HPHPEHU WKDW D VXFFHVVIXO EUDQG positioning statement will empower the companyâ&#x20AC;&#x2122;s growth, focus your marketing strategies and avoid wastage of time and money, and be the main reason that you can beat your competitors. It will also need to Â&#x2021; 0DWFK FXVWRPHU SHUFHSWLRQV RI your brand Â&#x2021; ,GHQWLI\ \RXU EUDQGÂśV XQLTXH YDOXH to your customers Â&#x2021; ,PPHGLDWHO\ FRPPXQLFDWH something very different from your competitors Â&#x2021; %H FRQFHQWUDWHG RQ WKH YDOXHV RI your most desirable and profitable customers Â&#x2021; :RUN LQ WKH PHGLXP DQG ORQJ WHUP Â&#x2021; %H HDV\ WR XQGHUVWDQG Â&#x2021; %H EHOLHYDEOH DQG UHDOLVWLF VHWWLQJ an achievable goal Â&#x2021; :RUN DFURVV DOO \RXU SURGXFW UDQJH - donâ&#x20AC;&#x2122;t let poorer elements of your product portfolio drag it down because you havenâ&#x20AC;&#x2122;t considered their perception too

Â&#x2021; +DYH D UHVRQDQFH WKDW LV motivating and easy to remember, both for staff and customers The  classic  positioning  mistakes 8QOHVV WKH VWUXFWXUHG DSSURDFKHV described above are followed fairly meticulously, some painfiul and expensive errors can easily occur in your product positioning. These include Â&#x2021; 8QGHU SRVLWLRQLQJ - your customers have an unclear idea of the brand Â&#x2021; Over positioning - youâ&#x20AC;&#x2122;ve narrowed it down too much, overthought it, and customers now have too limited a awareness of the brand. Â&#x2021; &RQIXVHG SRVLWLRQLQJ - customers simply donâ&#x20AC;&#x2122;t know what to think about the brand Â&#x2021; False positioning - customers donâ&#x20AC;&#x2122;t believe the claims of your brand If you still doubt the value and role of getting your brand positioning right, consider this. Among Fortune 500 businesses, up to 60 per cent of company capitalisation can be tied up in perceived brand value.

Thatâ&#x20AC;&#x2122;s a direct result of getting the positioning exactly right. While the same approach might not make your company an Apple or Tesla, it can certainly help you sharpen market share and leverage a critical advantage that key compettiors simply canâ&#x20AC;&#x2122;t respond to.

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;}Ă&#x20AC;Â&#x153;Ă&#x2022;Â&#x2DC;`Â&#x2021;Â?iĂ&#x203A;iÂ?Ă&#x2030; LĂ&#x20AC;>Â&#x2DC;`Â&#x2021;ÂŤÂ&#x153;Ă&#x192;Â&#x2C6;Ă&#x152;Â&#x2C6;Â&#x153;Â&#x2DC;Â&#x2C6;Â&#x2DC;}

www.smeadvisor.com

ACQUIRE BETTER BUSINESS SKILLS THE KEY SUCCESS INGREDIENT FOR SME S

The SME Academy is created to help small and medium enterprises to develop the vital business skills they need for growth and success.

Itâ&#x20AC;&#x2122;s a powerful resource of skills building workshops, training material and information, designed to give you and your key staff practical, relevant knowledge.

The SME Academy is brought to you by NBAD (National Bank of Abu Dhabi) and CPI Media Group - two names committed to the SME agenda through market-leading brands like SME Advisor magazine, the NBAD Stars of Business Awards and SME Beyond Borders Summit.

WHAT DOES IT OFFER? A comprehensive skills development platform delivering: Skills-Building Workshops from world-class names, building focused expertise for SMEs Exclusive research reports from PwC, highlighting current business trends and opportunities Online visual content from leading-edge events, putting you in the front row with the change-masters Opportunities to network with peers and experts

FIND OUT MORE

Ron Kaufman

www.smeacademy.com

FAST FOUR

Employers are seen encouraging the use of wearables at the workplace as it can be used to improve employee productivity DQG HI¿FLHQF\ $Q DUWLFOH RQ readwrite.com RSLQHV ³&RPSDQLHV WKDW DUH LPSOHPHQWLQJ pilot programmes for wearables are seeing early successes. By getting ahead of the latest technologies, early adopters are able to provide input and help shape the future of wearable technologies, making them smarter, faster, more functional and more tightly integrated with daily business RSHUDWLRQV ´

WEARABLES IN THE WORKPLACE

We present to you a compelling new section that explores four different, practical views on one topical SME issue. This month SME Advisor scoured through multiple sources of information and found four excerpts that summarise everything you need to know about wearable technologyâ&#x20AC;Ś

$ UHSRUW E\ 3Z& RQ ZHDUDEOHV KLJKOLJKWHG WKH IROORZLQJ EHQH¿WV RI XVLQJ ZHDUDEOHV 1.  Improved  safety: 90 per cent of consumers expressed that the ability for parents to keep children safe via wearable technology is important.

2.  Healthier  living: 0RUH WKDQ per cent of consumers listed eating healthier, exercising smarter and accessing more convenient medical FDUH DV LPSRUWDQW EHQH¿WV RI ZHDUDEOH technology.

3.  Simplicity  &  ease  of  use: 5HVSRQGHQWV FLWHG VLPSOL¿FDWLRQ DQG improved ease of technology as a key EHQH¿W RI ZHDUDEOH WHFKQRORJ\ Source: PwC

26

ONE TOPIC

THE ADVANTAGES OF WEARABLE TECHNOLOGY

www.smeadvisor.com

FAST FOUR

THE FUTURE OF WEARABLE TECHNOLOGY

FOUR EXPERT OPINIONS THE CHALLENGES OF WEARABLE TECHNOLOGY

www.smeadvisor.com

While wearable technology has already PDGH VLJQL多FDQW LQURDGV LQWR VHFWRUV VXFK as healthcare and tourism, its future looks ripe within the retail sector. Businesses are increasingly looking to exploit wearables to enhance the overall customer service experience. This will help them gain a better understanding of consumer behaviour and push the right content to the right audience.

One of the biggest challenges, however, remains to be the privacy and security of consumers and will need to be addressed.

Hot topic this month: Wearable technology

Some of the primary concerns include: a) Lack of privacy and security E 3RRU XVHU H[SHULHQFH 7KHUH LV D QHHG to improve user experience in order to create a long-term emotional connection with the user.

F &RVW DQG LPSOHPHQWDWLRQ 7KLV LV D major concern for businesses as the hardware in itself can be expensive and would additionally require the support of specialised IT staff.

G &RPSOLDQFH ,Q WKH DEVHQFH RI D SURSHU regulatory framework, it is often challenging for businesses to ensure that they are working within the legal boundaries.

27

SME ACADEMY

AN â&#x20AC;&#x2DC;SME ACADEMYâ&#x20AC;&#x2122; TO SUPPORT GULF ENTREPRENEURS ,I \RXĹ&#x2018;UH WU\LQJ WR JHW QHZ ĹľQDQFH UH IRFXV \RXU EXVLQHVV or implement a growth strategy, do you have the right core skills? The SME Academy is all about tackling the skills gap head-on and focusing on the practical aspects that really make a difference. NBAD Editor Nathalie Gillet attended a cross-section of the Academyâ&#x20AC;&#x2122;s Skills Building Workshops - and here is her summary of that classroom experience, its objectives, appeal and feedbackâ&#x20AC;Ś

28

www.smeadvisor.com

SME ACADEMY

â&#x20AC;&#x153;There was a time when one could start with a good idea at the right place DW WKH ULJKW WLPH 7KRVH GD\V DUH JRQH ´ VDLG 0RKDPHG 0DKDUL D &RUSRUDWH &UHGLW WUDLQHU DW 0RRG\ÂśV $QDO\WLFV He likes to start his training sessions with a strong statement like this one, which he used in front of about 35 SMEs on September 13 in Abu Dhabi.

After catching the business ownersâ&#x20AC;&#x2122; attention, the charismatic speaker ZHQW RQ Âł7KH W\SLFDO 8$( VWRU\ RI rags to riches, where someone had a vision and a determination to work hard â&#x20AC;&#x201C; and went on to build a business empire â&#x20AC;&#x201C; no longer works. Anybody starting a business today is competing with the best and with the rest of the world, in an environment that has EHFRPH PXFK PRUH VRSKLVWLFDWHG ´ Indeed, it has never been more critical for businesses to equip themselves with the right skills. A PDVVLYH SHU FHQW RI 60(V IDLO ZLWKLQ WKH ÂżUVW WKUHH \HDUV RI DFWLYLW\ IRU PDLQO\ WZR UHDVRQV ODFN RI ÂżQDQFH and a shortage of skills.

Still, companies of this size are the backbone of the countryâ&#x20AC;&#x2122;s economy, as ÂżJXUHV SXEOLVKHG E\ WKH .KDOLID )XQG for Enterprise Development clearly show: there are about 300,000 SMEs across the country, which account for 94 per cent of all businesses and employ nearly 90 per cent of the private sectorâ&#x20AC;&#x2122;s workforce. The sector KDV WKH SRWHQWLDO WR DGG 86 ELOOLRQ WR WKH *'3 DV ZHOO DV JHQHUDWH XS WR WZR PLOOLRQ MREV LQ WKH *&& in the coming years, according to estimates from AT Kearney.

Indeed, the sector already contributes more than 60 per cent to QRQ RLO *'3 DFFRUGLQJ WR WKH 8$( Ministry of the Economy, which is why the Abu Dhabi Economic Vision has placed them on its priority list. *RYHUQPHQW LQLWLDWLYHV VXFK DV WKH Khalifa Fund and Dubai SME aim to bridge the gap by providing funds along with private initiatives.

Money  is  not  everything However, money is not everything, as the 35 SME owners listening to Mahari

www.smeadvisor.com

29

SME ACADEMY

A MASSIVE 82 PER CENT OF SMEs FAIL WITHIN THE FIRST THREE YEARS OF ACTIVITY, FOR MAINLY TWO REASONS: LACK OF FINANCE AND A SHORTAGE OF SKILLS.

have learned. They had come to Abu Dhabi on a Sunday morning to attend WKH ¿UVW PRGXOH RI WKH QHZO\ ODXQFKHG ³60( $FDGHP\´ D WUDLQLQJ SURJUDPPH created by the National Bank of Abu 'KDEL 1%$' SRZHUIXOO\ VXSSRUWHG

by Etisalat, and executed and delivered E\ &3, 0HGLD *URXS Although like other banks, NBAD looks for an audited accounts trail and a level of market maturity before DGYDQFLQJ ÂżQDQFH LW LV VWLOO SURYLGLQJ ÂżQDQFH WR VPDOOHU EXVLQHVVHV LQ various forms, including trade and working capital facilities, invoice discounting and guarantees. <HW WKH FRXQWU\ÂśV ODUJHVW EDQN E\ assets also wanted to go the extra mile in the area of skills. This is how the idea of an academy was born, with a view to addressing the general skills gap. The programme, which is still in the pilot phase, currently consists of a series of five skill-building workshops focusing on practical topics designed to help SME owners make betterinformed decisions for a successful business. â&#x20AC;&#x153;Last year, we made a commitment to support the growth and development of the countryâ&#x20AC;&#x2122;s SME sector as part of RXU &RUSRUDWH &LWL]HQVKLS VWUDWHJLF LQLWLDWLYH ´ VDLG $OH[ 7KXUVE\ 1%$'ÂśV *URXS &(2 Âł,Q RXU ÂżUVW \HDU ZH have successfully built and launched the SME Academy, a unique platform which provides practical and relevant content to help SMEs to realise their ambitions. Our goal is to nurture the entrepreneurial spirit of the region and ultimately to help to build a strong 60( VHFWRU LQ WKH 8$( WKURXJK WKH 60( $FDGHP\ ´ NBAD expects that the strategy to help smaller businesses reach the next level and qualify for larger funding facilities will be both a philanthropic venture and an economic win for the bank in the longer run, as the size of the programme grows.

Overcoming  common  challenges Business owners involved in the programme have shared common challenges. â&#x20AC;&#x153;I have never used

30

finance facilities from a bank. But now that I have two branches - in Abu Dhabi and in Musaffa - I am thinking of taking out a loan to RSHQ D WKLUG RQH ´ VDLG 9DGLYX Muthuraman, the Academic Director of Best Kids Brain Skill Development &HQWUH ,W WRRN KHU D \HDU WR RSHQ KHU business due to changing regulations in her field. She now employs 12 people who teach maths and abacus to improve childrenâ&#x20AC;&#x2122;s concentration and memory power.

Now that the enterprise is up and running, sheâ&#x20AC;&#x2122;s looking to expand but the main thing holding her back is capital, in addition to a lack of understanding regarding banking processes. â&#x20AC;&#x153;I am a technical engineer and I donâ&#x20AC;&#x2122;t know much about banking processes and accounting. I found this kind of programme excellent for 60(V 3HUVRQDOO\ , DP QRW DZDUH RI DQ\ RWKHU EDQN GRLQJ WKLV ´ A  free  training  programme  open  to  all  qualifying  SMEs Each of the Academyâ&#x20AC;&#x2122;s workshops is delivered free of charge by expert institutions, including Moodyâ&#x20AC;&#x2122;s $QDO\WLFV $VVRFLDWLRQ RI &KDUWHUHG &HUWLÂżHG $FFRXQWDQWV $&&$ 3Z& Hawkamah and best-seller author and FRQVXOWDQW 5RQ .DXIPDQ â&#x20AC;&#x153;The two Moodyâ&#x20AC;&#x2122;s speakers were YHU\ HQJDJLQJ ´ %HYHUO\ 5DYLVDQNDU WKH &(2 RI 7HFK :RUOG &RQVXOWDQF\ said. â&#x20AC;&#x153;There were about eight round tables and in one of the group H[HUFLVHV HDFK WDEOH KDG WR UHĂ&#x20AC;HFW RQ the challenges that SMEs faced with

Beverly Ravisankar, CEO, Tech World Consultancy

www.smeadvisor.com

SME ACADEMY

A snapshot...

Zak Abideen from Moodyâ&#x20AC;&#x2122;s Analytics

banks and then write them down on D ZKLWH ERDUG ´ /LNH DOO WKH DWWHQGHHV 0UV 5DYLVDQNDU GLVFRYHUHG WKDW PRVW RI WKH 60(V IDFHG WKH VDPH WRS ÂżYH problems, though in differing orders: documentation, high interest rates, 100 per cent cash deposit requirement for a guarantee fund, and lack of clarity in terms of risks. â&#x20AC;&#x153;It was nice to see that everyone had the same kind of problems, which then made it easier WR WKLQN DERXW WKH VROXWLRQV ´ Kingson Jebaraj, the founder of IWET, a company focused on commercialising advanced water and energy solutions, also attended the ÂżUVW PRGXOH Âł,W ZDV YHU\ KHOSIXO LQ terms of understanding how banks ORRN DW D FOLHQW ´ KH VDLG Âł$IWHU ZRUNLQJ IRU \HDUV DW &RRO7HFK D division of district cooling company Tabreed, I started my own business.

The main problem we face today is working capital, owing to our quick growth. Thatâ&#x20AC;&#x2122;s where I need a bankâ&#x20AC;&#x2122;s VXSSRUW PRVW ´ Even though the SME Academy is open to businesses that donâ&#x20AC;&#x2122;t bank with NBAD, not every SME is eligible.

To enrol, an interested SME must have been trading for a minimum of two years and have a minimum turnover of AED 5 million a year. As a result, only 24,000 companies out of the countryâ&#x20AC;&#x2122;s 300,000 qualify. â&#x20AC;&#x153;At this point, focus is on content that supports businesses

Fazeela Gopalani, Head of Education Middle East, ACCA

www.smeadvisor.com

31

SME ACADEMY

THE PROGRAMME, WHICH IS STILL IN THE PILOT PHASE, CURRENTLY CONSISTS OF A SERIES OF FIVE SKILLS-BUILDING WORKSHOPS FOCUSING ON PRACTICAL TOPICS DESIGNED TO HELP SME OWNERS MAKE BETTER-INFORMED DECISIONS FOR A SUCCESSFUL BUSINESS.

Upcoming session!

Attaining leadership in Customer Service

32

LQ HDUO\ JURZWK SKDVH ´ 1LODQMDQ 5D\ 0DQDJLQJ 'LUHFWRU RI *OREDO commercial banking at NBAD explains. â&#x20AC;&#x153;We intend to support start-ups at a later stage during the HYROXWLRQ RI WKH 60( $FDGHP\ ´ SME  owners  face  common  pitfalls As the head of a nine-year-old business with 25 employees based LQ 'XEDL 0UV 5DYLVDQNDU TXDOLÂżHG Her consultancy provides e-learning solutions for large corporates in DYLDWLRQ RLO JDV GHIHQFH DQG manufacturing, but also supports other SMEs in their business. When VKH UHFHLYHG DQ LQYLWDWLRQ IURP &3, 0HGLD *URXS WR EHQHÂżW IURP 60( Academy she did not hesitate to make the trip to Abu Dhabi and Dubai. â&#x20AC;&#x153;I also attended the second ZRUNVKRS 8QGHUVWDQGLQJ DQG ,PSOHPHQWLQJ 3ULQFLSOHV RI Accountancy. The speaker was the 0LGGOH (DVW WUDLQLQJ KHDG RI $&&$ She didnâ&#x20AC;&#x2122;t teach us how to build a EDODQFH VKHHW RU FDVK Ă&#x20AC;RZ EXW LQVWHDG explained what is way more important to SMEs: why accounting is a crucial part of our business and what it is SMEs should be looking at in our ÂżQDQFLDO GRFXPHQWV ´ 0UV 5DYLVDQNDU said. â&#x20AC;&#x153;The crowd was very engaged.

To be honest, most entrepreneurs donâ&#x20AC;&#x2122;t really know what to look at when WKH\ VHH WKHLU ÂżQDQFLDO VWDWHPHQWV So we learned what questions to ask our accountants in order to get the answers to understand how weâ&#x20AC;&#x2122;re GRLQJ DP , PDNLQJ D SURÂżW" $QG LI \HV ZKDW NLQG RI SURÂżW"´ The most useful thing she took away was the list of the typical pitfalls faced by smaller businesses: failing to adapt to changes of the environment LQWHUQDO DQG H[WHUQDO DQ LQDELOLW\ WR understand the strategic drifts of the market, coping with growth, managing working capital and budget forecasting as well as an overall inability to manage accounts.

8SRQ FRPSOHWLRQ RI WKH FRXUVHV 60(V DUH SURYLGHG ZLWK D &HUWLÂżFDWH RI &RPSOHWLRQ ZKLFK FDQ VHUYH

as reference collateral for formal discussions with banks, accountancies and public sector entities, as well as EHQHÂżWLQJ FRPSDQLHV ZKHQ DSSO\LQJ for competitive tenders or working in public-private partnerships.

Feedback from attendees so far has been widely positive, according to RUJDQLVHUV IURP ERWK 1%$' DQG &3, 0HGLD *URXS 6RPH RI WKH DWWHQGHHV made a few suggestions for the year 2016-17, such as Julia Stolyarova, the Director of Vinci Solution, a consulting agency specialised in software implementation: â&#x20AC;&#x153;I came all the way from Dubai to Abu Dhabi to attend the VHVVLRQ RQ Âł+RZ WR EH EDQNDEOH´ 7KH main thing I noticed is that the content has not changed. I have been running my own company for seven years now in this region. Whatever was said, quite rightly, about SMEsâ&#x20AC;&#x2122; challenges with banks and the government has QRW FKDQJHG VLQFH &KDOOHQJHV UHPDLQ the same. I personally would love next time to see a session on how to get the DFWXDO ÂżQDQFLDO VXSSRUW ,Q DGGLWLRQ are the banks doing their work of talking to the government to get easier SURFHGXUHV IRU XV" , KRSH WKH\ DUH ´ All the feedback collected as the Academyâ&#x20AC;&#x2122;s curriculum unfolds throughout its pilot year will serve as a base to develop next yearâ&#x20AC;&#x2122;s offering of the SME Academy.

REGISTER TODAY:

Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>V>`iÂ&#x201C;Ă&#x17E;°VÂ&#x153;Â&#x201C;

www.smeadvisor.com

Salesforce CRM for small to medium sized businesses. www.tenacre.ae

Tenacre helps businesses like yours to customise and implement Salesforce.com, the world's OHDGLQJ &50 V\VWHP IRU VPDOO FRPSDQLHV 7KHQ ZH WUDLQ \RXU VWDÎ? DQG SURYLGH VXSSRUW WR \RXU WHDP DV \RX JHW XS DQG UXQQLQJ DOO IURP RXU RÉ?FH LQ 'XEDL

Sell better. Market better. Provide better customer service.

9LVLW RXU ZHEVLWH WR VHH RXU Č´[HG FRVW LPSOHPHQWDWLRQ SDFNDJHV

04 313 2064 www.tenacre.ae

//DIGITALLY DISRUPTIVE

The right devices at the right time THAT’S THE PROMISE OF BUSINESS QUICK START, THE LATEST INITIATIVE FROM ETISALAT, BRINGING UP TO 15 OF THE KEY DEVICES SMB S NEED WITHOUT UPFRONT COSTS. TO ENSURE TOP-QUALITY SERVICE DELIVERY, ETISALAT HAS TEAMED WITH THE ICONIC RETAIL BRAND SHARAF DG - AND HERE, WE ASKED THE COMPANY’S CEO, NILESH KHALKHO, FOR HIS COMMENTS ON THE PROGRAMME’S EFFECTIVENESS AND THE REALITIES OF PARTNERING WITH ETISALAT. 34

www.smeadvisor.com

//DIGITALLY DISRUPTIVE

Nilesh Khalkho, CEO, Sharaf DG

electronics retail. On a similar note, Sharaf DG continues on an aggressive growth path in other GCC markets like Bahrain, Oman and Qatar as well.

What is your view about the SMB market?

Two developments: firstly, we expect strong growth in the SMB segment as the Expo 2020 in UAE throws up opportunities for many.

Also we see a trend in the current SMB space wherein more SMBs are using technology to keep themselves competitive and efficient in these changing times.

No-one understands the trends impacting the SMB sector better than Sharaf DG, the region’s leading electronics retailer. The company’s vision for the sector is based around a real commitment to ensuring that SMBs are be best-placed to respond to the opportunities offered by the upcoming Expo 2020. Their expert teams also believe that technology is absolutely key in sustaining market advantage in an increasingly competitive climate.

That’s why Sharaf DG is the official partner of Etisalat in rolling out the Business Quick Start initiative, since the new offer covers the spectrum of key essentials that SMBs need to run their business: the hard-core practical items like mobile devices - phones, tablets and laptops - and printers, desktops and routers. Moreover, all

www.smeadvisor.com

these items are delivered with the premium service back-up that the retailer has become famous for.

The view ‘behind the scenes’ In true journalistic fashion, SME Advisor decided to take a look behind the scenes and talk to Sharaf DG about their views on the effectiveness of Etisalat’s Quick Start programme and its relevance to the issues currently facing SMBs. We are delighted to present the following interview with the company’s CEO, Nilesh Khalkho.

Nilesh, tell us about Sharaf DG? Established in 2004, Sharaf DG today has a retail presence of 26 stores in UAE, and is the undoubted market leader in organised

Tell us a little about your partnership with Etisalat and what it involves?

What is the role of Sharaf DG? Sharaf DG acts as the fulfilment partner Etisalat’s Business Quick Start for proposition designed for just SMBs, taking full ownership of the customer experience over the device lifecycle.

What is your view on how helpful the Business Quick Start offer is for SMBs? Is Business Quick Start – with zero upfront, instalments and free devices - meeting the needs of the SMBs? The Business Quick Start offer addresses two key needs of the SMB. It offers a range of devices which is generally

35

//DIGITALLY DISRUPTIVE

As a customer, you need to indicate the device type and address at the time of availing the Business Quick Start package, and we deliver it to you at your premises.

required by most SMB setups, small or big.

Second and most importantly, with an easy payment plan of up to three years, it frees up capital for the SMB. Instead of capital expenditure on ICT hardware, the SMB can now have it on an Opex model and use the capital on a more productive note.

Does the package include high-end equipment, or just the entry-level necessities?

The package continues to evolve with the core strategy of improving the value proposition to the customer and offering what is generally needed. It started as 3 essential devices in 2014, but now we have more than 15 options of various office equipment categories to choose from and are still looking to add more. All of the products selected keep in mind the typical needs of an SMB customer.

Does the package include world-class brands?

The products have been chosen keeping in mind the brand salience and customer acceptance in their respective segments.

The list includes: HP, Lenovo, Microsoft, Samsung, Seagate, Ricoh, etc.

Does the list of 10 items cover all the essentials for my office (mobile device, tablet, PC, printer, fax, etc.)?

36

You will find mobiles, laptops, desktops, multi-function printers, smart TV signage, tablets, storage, switches, access points, etc.

What’s the Service Level Agreement that you have in place for delivering the products? Also, what’s the turnaround time of delivery?

Delivery is done within three working days of receiving the notification from Etisalat, and this is generally inclusive of installation. These logistics are also supported by a dedicated call centre team which is available to address any queries from SMB customers regarding deliveries, installations and also aftersales service support.

What do I have to do in order to pick my items and arrange delivery? Do I physically have to visit a branch, or is it all done online?

As a customer, you need to indicate the device type and address at the time of availing the Business Quick Start package, and we deliver it to you at your premises. We have had instances wherein customers have indicated wanting to pick up from our stores, and we’ve always obliged.

Do you help the business customer with set-up and installation?

Depending on the device type, like switches, storages, smart TV signage, printers, etc., we send trained qualified technicians to facilitate the delivery with set-up and installation. Further on, we have a dedicated call centre to support any queries that might arise.

What other extra services do you extend to the customer? Extended warranty?

Post-sales support?

Customers can choose to opt for an extended warranty through us. Should you need any service support, you can either call/visit the manufacturerauthorised service centres, or walk into any of the Sharaf DG stores, and our Customer Care representatives will manage the entire service experience for you.

Moving forward, do you envisage working with Etisalat to provide more leading offers of this kind?

We are always in continuous dialogue with Etisalat, not only to enhance the current Business Quick Start value proposition, but also to explore other market opportunities wherein we bring our combined strengths to address the SMBs’ needs.

In your view what will be the future devices that could enhance the portfolio or other enhance solutions targeting the needs of the SMB market?

We feel cloud centric solutions will play a big role, going forward.

Why choose Etisalat?

This is a win-win situation for both partners. Sharaf DG today is a trusted name, and a market leader in consumer electronics, and we aspire to be the same for the SMB segment as well. Partnering with Etisalat gives us inherent advantages – their understanding and relationships in the SMB space coupled with the value proposition of converting CAPEX on hardware to the OPEX model. This will also go a long way in helping the SMB customer in their objective of sustained profitable growth, which is something we all want, in the greater interests of our respective organisations. On a strategic note, it’s also a key objective for the larger UAE/SMB market as such.

Business Quick Start is now celebrating its 1 year anniversary since it was first offered in Dec 2014. Business Quick Start Customers who have been with the programme for 12 months can get a new FREE device(s) and continue to enjoy another year of subscription with the same benefits!

For more info, please visit http://etisalat. ae/businessquickstart

For an online version, please visit: ÌÌ«\ÉÉÜÜÜ°Ã i>`Û Ã À°V ÉÌiV ÉÌ i À } Ì `iÛ ViÃ

www.smeadvisor.com

Be connected on every business trip in the GCC with unlimited data for only AED 35/day All you have to do is subscribe to the GCC Daily Unlimited Data Pack once and it will self-renew each day you access roaming data and for only AED 35/day.

Hurry! This offer is for a limited time only.

800 5800 etisalat.ae/gccroamingpack

T&C Apply

To subscribe, SMS ”GCC” to 1010.

MOVERS & SHAKERS

THE FUTURE OF BUSINESS

BUILDING A SUSTAINABLE ENTERPRISE 6JG KPƃWGPEG QH UWUVCKPCDKNKV[ JCU ITQYP VQ GZVGPF KPVQ GXGT[ CURGEV QH EQORCP[ QRGTCVKQPU YKVJ DWUKPGUUGU PQY GORNQ[KPI ITGGP VGEJPQNQIKGU CPF UQNWVKQPU HQT UWEEGUU 5/' #FXKUQT JCF VJG JQPQWT QH OGGVKPI QPG QH VJG OQUV F[PCOKE CPF ETGCVKXG HQTEGU YKVJKP 5KPICRQTGoU UWUVCKPCDKNKV[ CIGPFC s %JTKUVKPC .GG (QWPFGT CPF /CPCIKPI &KTGEVQT )NQDCN )TGGP 'EQPQOKE %QPUWNVKPI ))'% e

38

www.smeadvisor.com

MOVERS & SHAKERS

www.smeadvisor.com

39

MOVERS & SHAKERS

EDUCATION! EDUCATE YOUR STAFF AND BUSINESS PARTNERS ON WHY THEY NEED TO THINK OF â&#x20AC;&#x2DC;SUSTAINABILITYâ&#x20AC;&#x2122;; ITâ&#x20AC;&#x2122;S A BROADER CONCEPT THAN JUST BEING â&#x20AC;&#x2DC;GREENâ&#x20AC;&#x2122;.

Why is it so important to focus on a â&#x20AC;&#x153;Green Economyâ&#x20AC;? today?

Thereâ&#x20AC;&#x2122;s no other way, and itâ&#x20AC;&#x2122;s the 21/< ZD\ WR KDYH D VXVWDLQDEOH future.

What kind of best practices can businesses adopt to become more sustainable in their day-to-day operations?

(GXFDWLRQ (GXFDWH \RXU VWDII DQG business partners on why they need to WKLQN RI ÂľVXVWDLQDELOLW\Âś LWÂśV D EURDGHU concept than just being â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122;.

And, how can they do so without significantly impacting costs?

With considering the environmental impacts in business costs more is just a myth in my opinion. In our business, we hear so many examples from companies who are telling us how they can save cost and thrive in their businesses â&#x20AC;&#x201C; in comparison to their competitors who neglect the integration of such â&#x20AC;&#x2DC;greenâ&#x20AC;&#x2122; components.

How can working in a sustainable business ecosystem positively impact an organisation and help it stay ahead of its competitors?

Letâ&#x20AC;&#x2122;s put money aside, a sustainable business ecosystem helps companies to attract and retain talents, especially the Millennials. This 40

is integral to capacity building, particularly within SMEs.

At what stage in a companyâ&#x20AC;&#x2122;s evolution is it viable to integrate a sustainability strategy?

5LJKW DW WKH EHJLQQLQJ L H DW WKH start-up stage, when your business is still small and agile. It sets a strong foundation and puts your business in the right direction for growth in the long run.

While it is easy to change a companyâ&#x20AC;&#x2122;s policy, it is often challenging to change employee mind set. How can a business ensure that sustainability is embedded within its corporate culture?

As I mentioned earlier, education is so important. It is fundamental to changing employee mind sets and LQĂ&#x20AC;XHQFLQJ HPSOR\HH EHKDYLRXU &RQGXFW WUDLQLQJ VHVVLRQV DQG encourage knowledge exchange.

In your extensive experience of having worked with businesses across the globe, what are some of the major challenges that businesses encounter when implementing a sustainability strategy?

3HRSOH DUH DOZD\V WKH SUREOHP LWÂśV hard to change peopleâ&#x20AC;&#x2122;s mind sets and the way they approach such concepts.

7KDWÂśV ZK\ RXU DQQXDO **() *OREDO *UHHQ (FRQRPLF )RUXP EULQJV

www.smeadvisor.com

MOVERS & SHAKERS

PEOPLE ARE ALWAYS THE PROBLEM; IT’S HARD TO CHANGE PEOPLE’S MIND SETS AND THE WAY THEY APPROACH SUCH CONCEPTS.

together world renowned speakers to inspire these business decision makers.

We believe people will only get inspired by good news. We are hopeful our efforts will get paid off soon.

As a leading expert on the subject, what are key trends or emerging concepts that you foresee taking shape in 2016?

Excuse me, I’m far from being a leading expert. I am only passionate about the topic of ‘sustainability’ and trying my best to do my part. I foresee this topic of ‘green economy’ becoming the ‘new normal’ from 2016 and beyond.

It is often remarked that Singapore is the cleanest and www.smeadvisor.com

greenest in Asia. What kind of planning and government initiatives have been undertaken to achieve this status? What are lessons that businesses can take away from the Singapore model?

Well, I have been living in Singapore for close to a decade, but I am from Hong Kong. We must give credits to the Singapore government for doing such a great job to build a sustainable ‘green city’. First of all, Singapore has urban planning which isn’t common in Asia and the remarkable thing is that the government has taken ‘green’ into their urban planning years ago. I think businesses nowadays are looking for short-term returns and neglecting the ORQJ WHUP EHQH¿WV 3HUKDSV EXVLQHVVHV can learn from Singapore on its foresight, determination and stamina to pull through their long-term goals and vision.

41

MOVERS & SHAKERS

Manufacturing is one of the most prolific sectors today – particularly for SMEs. How can businesses operating within this sector take advantage of green technologies and solutions to become more effective?

Let’s take solar energy as an H[DPSOH WKHUH DUH VRODU OHDVLQJ companies out there offering very attractive energy saving plans which manufacturing companies could take advantage of. Essentially, these schemes help manufacturing companies to save costs while reduce &2 HPLVVLRQ :K\ QRW

learning something new every day, it’s a tough but rewarding journey.

Meet the author...

What advice would you like to give to our readership?

Don’t just let yourself go through WKH PRWLRQV HYHU\GD\ ,¶P QRW suggesting anyone to quit their job), but find a purpose in what you do, whether you’re SME RZQHUV RU VHQLRU GLUHFWRUV <RX will soon find your job satisfaction DQG UHZDUGV EHLQJ µSULFHOHVV¶

On a personal front, what motivated you to start Global Green Economic Consulting?

Christina Lee is the Founder & Managing Director of Global Green Economic Consulting (GGEC). In 2012, she launched GGEC alongside with a social enterprise, Global Green Economic Forum (GGEF) in Singapore. GGEF is an annual business conference that gathers global thought leaders from around the world to share insights and inspire actionable solutions that empower a ‘green economy’ for a sustainable future.

, DOZD\V ORYH WR GR WKH ULJKW WKLQJV LW doesn’t mean I don’t make mistakes), and I wanted to do something that could make a difference to my career OLIH DV ZHOO DV WKH ZLGHU VRFLHW\ *OREDO *UHHQ (FRQRPLF &RQVXOWLQJ JDYH PH the right platform for doing that.

What are some of the primary highlights of your entrepreneurial journey?

Being an entrepreneur was a bit of an accident to me when I look back, but that’s a long story. I took a very steep learning curve to be an entrepreneur.

For me, being perseverant, humble to learn and agile to change are the highlights for my entrepreneurial journey so far. I’m still constantly 42

For an online version, please visit: ÌÌ«\ÉÉÜÜÜ°Ã i>`Û Ã À°V É ÛiÀÃ Ã > iÀÃÉÌ i vÕÌÕÀi v LÕÃ iÃÃ

www.smeadvisor.com

MOVERS & SHAKERS

PROFILE OF A GLOBAL NO. 1 AS LLOYDâ&#x20AC;&#x2122;S COMES TO DUBAI

9KVJ KVU [GCT JKUVQT[ .NQ[FoU KU VJG QNFGUV NCTIGUV CPF OQUV RTGUVKIKQWU KPUWTCPEG OCTMGV KP VJG YQTNF KPUWTKPI TKUMU NCTIG CPF UOCNN UVTCKIJVHQTYCTF CPF EQORNGZ .NQ[FoU JCU PQY GUVCDNKUJGF C MG[ TGIKQPCN JWD KP &WDCK CPF VQ Æ&#x201A;PF QWV CDQWV KVU JWIGN[ KORQTVCPV TQNG KP VJG /'0# KPUWTCPEG OKZ 2CWN )QFHTG[ URQMG VQ /CTM %QQRGT )GPGTCN 4GRTGUGPVCVKXG /KFFNG 'CUV 9KVJ C UGPKQT VTCEM TGEQTF CV KEQPKE GPVKVKGU UWEJ CU <WTKEJ +PUWTCPEG CPF &+(% /CTM KU YGNN RNCEGF VQ CUUGUU VJG CEVKXKVKGU CPF EQPVTKDWVKQPU QH VJG YQTNFoU NGCFKPI KPUWTCPEG OCTMGV

44

www.smeadvisor.com

MOVERS & SHAKERS

Mark Cooper www.smeadvisor.com

45

MOVERS & SHAKERS

LLOYDâ&#x20AC;&#x2122;S VIEWS SYNDICATION OF RISK AS A CLEAR STRENGTH AS IT ALLOWS MULTIPLE MARKETS TO CONTRIBUTE ON RISKS, SHARE KNOWLEDGE AND EXPERIENCE AND ALLOWS ANY FUTURE LOSSES TO BE SPREAD.

Does Lloydâ&#x20AC;&#x2122;s seek to replicate the â&#x20AC;&#x2DC;syndicateâ&#x20AC;&#x2122; model - so famous in the London HQ - with regional companies from the UAE? 8QOLNH PDQ\ RWKHU LQVXUDQFH EUDQGV /OR\GÂśV LV QRW D FRPSDQ\ LWÂśV a market where our members join together as syndicates to insure risk.

Much of Lloydâ&#x20AC;&#x2122;s business works by subscription, where more than one syndicate takes a share of the same risk. Business is conducted face-to-face between brokers and XQGHUZULWHUV LQ WKH 8QGHUZULWLQJ 5RRP In Dubai, the principles of how the Lloydâ&#x20AC;&#x2122;s market operates in terms of market participants sharing risk - will remain the same as indeed it is with our other overseas hubs.

Lloydâ&#x20AC;&#x2122;s views syndication of risk as a clear strength as it allows multiple markets to contribute on risks, share knowledge and experience and allows any future losses to be spread.

Does Lloydâ&#x20AC;&#x2122;s currently play any regulatory role within the insurance activities of the DFSA?

We are currently working very closely with the DFSA in terms of securing an appropriate status for Lloydâ&#x20AC;&#x2122;s Limited which is the entity that has been created ZLWKLQ WKH ',)& 'LVFXVVLRQV KDYH been very positive and engaging and we are hopeful that we can secure the appropriate status for Lloydâ&#x20AC;&#x2122;s Limited in 2016.

How would you describe the role of the Dubai Lloydâ&#x20AC;&#x2122;s office?

46

Lloydâ&#x20AC;&#x2122;s Dubai is a co-location platform that currently supports eight Lloydâ&#x20AC;&#x2122;s businesses. A ninth will be joining soon and we have capacity for 10 within the Lloydâ&#x20AC;&#x2122;s office. The role of the office is to provide the infrastructure and administrative support to all of the /OR\GÂśV ',)& PDUNHW SDUWLFLSDQWV as well as developing the Lloydâ&#x20AC;&#x2122;s brand and capabilities within the region - whether that be through &RYHUKROGHUV %URNHUV RU 6HUYLFH &RPSDQLHV ,Q DGGLWLRQ WKH Lloydâ&#x20AC;&#x2122;s office will be looking at implementing a range of future shared services that will further enhance and improve the efficiency of the Lloydâ&#x20AC;&#x2122;s market over time.

In what regional commercial sector are Lloydâ&#x20AC;&#x2122;s entities most active?

Lloydâ&#x20AC;&#x2122;s is a specialist reinsurer and therefore is therefore very active across a number of commercial sectors that require Lloydâ&#x20AC;&#x2122;s expertise.

As a reinsurer, we are not active in WKH UHWDLO LQVXUDQFH PDUNHWV ZKLFK LV something that we are not allowed to GR IURP WKH ',)&

Can local brokers (many of whom are in effect SMEs) affiliate to Lloydâ&#x20AC;&#x2122;s?

Lloydâ&#x20AC;&#x2122;s works with brokers and other producers. Brokers are very important to the Lloydâ&#x20AC;&#x2122;s market and we will continue to work with them to help them with the risks that they are looking to place with the security and the expertise that the Lloydâ&#x20AC;&#x2122;s market can offer.

www.smeadvisor.com

MOVERS & SHAKERS

is a new hub for Lloydâ&#x20AC;&#x2122;s and we are FRQÂżGHQW RYHU WLPH WKDW WKLV ZLOO EHFRPH D VLJQLÂżFDQW KXE IRU /OR\GÂśV LQ the months and years to come.

What is technically Lloydâ&#x20AC;&#x2122;s jurisdiction and mandate here in Dubai?

LLOYDâ&#x20AC;&#x2122;S HAS A VERY STRONG REPUTATION GLOBALLY AND HAS BEEN IN EXISTENCE FOR 327 YEARS. HOWEVER, WE DO NOT ASPIRE TO BE A â&#x20AC;&#x2DC;WATCHDOGâ&#x20AC;&#x2122; AS SUCH.

/OR\GÂśV RSHUDWHV DV D ',)& company and the Lloydâ&#x20AC;&#x2122;s market WKDW RSHUDWHV IURP WKH ',)& ZULWHV international reinsurance business.

Our main focus is on the Middle (DVW EXW DV WKH ',)& FRQWLQXHV WR grow and bring in more business from a broader region then we will continue to serve that business.

Does Lloydâ&#x20AC;&#x2122;s aspire to a similar reputation and â&#x20AC;&#x2DC;watchdogâ&#x20AC;&#x2122; status here in the region as in London?

Lloydâ&#x20AC;&#x2122;s has a very strong reputation globally and has been in existence for 327 years. However, we do not aspire WR EH D ÂľZDWFKGRJÂś DV VXFK 5HJXODWLRQ is always best left to the regulators and this is a position that we respect and support. However, Lloydâ&#x20AC;&#x2122;s can and does work hard with its market and wider community to ensure the best standards, good governance and appropriate use of the Lloydâ&#x20AC;&#x2122;s brand are maintained.

How many international offices does Lloyds have?

Lloydâ&#x20AC;&#x2122;s operates across the globe in over 200+ countries and has a QXPEHU RI RIÂżFHV ,Q WHUPV RI KXEV Singapore remains the largest hub for Lloydâ&#x20AC;&#x2122;s outside of London. Dubai

www.smeadvisor.com

What is your ambition for developing the presence and role of the Dubai office?

Our ambitions are to continue to build out the wider Lloydâ&#x20AC;&#x2122;s marketâ&#x20AC;&#x201C; 6HUYLFH &RPSDQLHV %URNHUV DQG &RYHUKROGHUV Âą DQG WR HQVXUH WKDW we remain relevant to the market and continue to add value to the underwriting members. Lloydâ&#x20AC;&#x2122;s is committed to the region for the long-term and it is important that we continue to embrace the local and regional communities and support them as the risk landscape continues to change and evolve.

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;Â&#x201C;Â&#x153;Ă&#x203A;iĂ&#x20AC;Ă&#x192;Â&#x2021;Ă&#x192;Â&#x2026;>Â&#x17D;iĂ&#x20AC;Ă&#x192;Ă&#x2030; Â&#x201C;>Ă&#x20AC;Â&#x17D;Â&#x2021;VÂ&#x153;Â&#x153;ÂŤiĂ&#x20AC;

47

BUSINESS GROWTH

THE FINANCE FUNCTION

A CRITICAL PARTNER IN EFFECTIVE SME GROWTH For many SMEs, the term Ĺ?ĹľQDQFH IXQFWLRQĹ&#x2018; ZLOO UHIHU simply to a team of one or two people responsible for book keeping and client invoicing. Yet detailed studies by the ACCA show that developing WKH UROH RI WKH ĹľQDQFH department can transform company performance and help leverage VLJQLĹľFDQW JURZWK +HUH Fazeela Gopalani, Head of Education, Middle East, ACCA, looks at the latent resource on your doorstepâ&#x20AC;Ś

48

www.smeadvisor.com

BUSINESS GROWTH

First things first. This article was written with a two-fold function: Â&#x2021; 7R H[DPLQH VRPH UHDO OLIH examples of how the finance function in high-growth businesses has evolved, using the findings of eight case studies, and looking at the lessons they have for SMEs and larger companies Â&#x2021; 7R WUDQVODWH WKDW OHDUQLQJ LQWR useful points of guidance that high-potential businesses can implement to harness and develop the full role of their own finance function 1RWH WKDW IRU WKH $&&$ WKH WHUP â&#x20AC;&#x2DC;finance functionâ&#x20AC;&#x2122; refers to the broader application of the finance role in a business, shifting from being a book keeping and processing service to a role more akin to that of a business adviser and, indeed, a key partner to the business as a whole.

In our work with high growth companies, we found that how businesses understand the role of the finance function varies greatly as they go through different stages of their life cycles. In most cases, the finance function initially fulfilled its traditional accounting and book keeping role, but over time it evolved to a more strategic dimension as each business grew and diversified.

The style of this evolution varied between the companies, in some cases occurring organically as a reaction to high growth, and in others being planned and directed in anticipation of growth. All of which indicates that there is no one-sizefits-all way in which the finance function can be understood - this very much depends on the nature of the business, and the way in which the remit of the business itself evolves and diversifies over time.

The  role  of  the  CFO  is  key Our work with high growth businesses and the case studies we have carried underscores the vital UROH RI WKH &)2 DQG LQ SDUWLFXODU

www.smeadvisor.com

49

BUSINESS GROWTH

IN FACT, THE FINANCE FUNCTION AND BUSINESS GROWTH COULD SYMBIOTICALLY SUPPORT EACH OTHER, ACCELERATING GROWTH WHILE DEVELOPING THE ROLE OF THE FINANCE FUNCTION.

that this role can best be harnessed to its full potential if other teams across the company recognise its value, and are educated in integrating aspects of the finance function into their day-today work.

At some point in their lifecycle, all the businesses we studied demonstrated that there was an â&#x20AC;&#x2DC;innovative turnâ&#x20AC;&#x2122; involved in high growth, driven by strategic internal decisions to enter new markets, acquiring technical expertise that enabled the development of new products, or responding directly to external stimuli such as consumer demand for new technologies.

So in short, volatile growth came about through disruptive factors, not so much from organic growth or accrual of new business over long WLPHIUDPHV 7KH &)2 FDQ EH D NH\ factor in initiating and directing this dramatic process of development.

Managing  the  consequent  risks Often, this expansion entailed GLYHUVLI\LQJ LQWR QHZ SURGXFWV DQG RU services, which carried with it critical risks. These included â&#x20AC;&#x201C; Â&#x2021; ,QVXIILFLHQW VWDII FDSDFLW\ WR respond to new workloads Â&#x2021; ,QFUHDVHG SURFHVVHV DQG EXVLQHVV â&#x20AC;&#x2DC;trafficâ&#x20AC;&#x2122; such as simultaneous deals Â&#x2021; (QWHULQJ QHZ YHU\ FRPSHWLWLYH DQG RU SROLWLFDOO\ XQVWDEOH PDUNHWV Â&#x2021; %HLQJ YHU\ UHDFWLYH RSHUDWLRQDOO\ meaning that processes were not as smooth as previously.

Of course, by its nature, disruptive change and progress brings risks.

These will vary according to the risk appetite of the business. Key lessons for mitigating these risks and managing high growth included â&#x20AC;&#x201C; Â&#x2021; ,QYHVWLQJ LQ QHZ WDOHQW WR PHHW WKH challenges of the new markets and diversified business streams Â&#x2021; ,PSOHPHQWLQJ QHZ PHWKRGRORJLHV for managing change proactively Â&#x2021; &ORVHO\ PRQLWRULQJ JURZWK DQG developing robust systems of control to ensure that it didnâ&#x20AC;&#x2122;t spiral beyond the companyâ&#x20AC;&#x2122;s capacity

50

Â&#x2021; +DUQHVVLQJ WKH FDSDFLW\ RI WKH finance function not only to manage cash flows and create a safety net to boost the businessâ&#x20AC;&#x2122;s reserves, but also to analyse and plan future trends to maintain growth.

Our studies demonstrate a clear symbiosis between business growth and the evolution of the finance function. The remit of the latter was almost always found to extend beyond operational tasks and processes during - and especially after - periods of high growth, often becoming a strategic business partner in itself driving this growth. In fact, the finance function and business growth could symbiotically support each other, accelerating growth while developing the role of the finance function.

Having  the  right  people  is  key To enable the finance function to initiate, enable and manage high growth optimally, learning from the case studies suggests that having the right people and leadership in place is key, such as investing in FUHDWLQJ D &)2 UROH LI RQH ZDVQÂśW in place before the growth. If the growth threatens to be overwhelming, the finance function can be used to keep the supply chain alive by giving finance the authority to slow down new business where necessary, as determined by its knowledge of the cash flow and projections. The finance function is also vital for regularly collecting and analysing how the business is â&#x20AC;&#x2DC;trendingâ&#x20AC;&#x2122; in real time, presenting this data in an easily digestible format to management.

Aligning  departments  The alignment of the finance function leadership with that of other parts of the company also proved crucial, especially for filling key skills gaps that impeded keeping up with the companyâ&#x20AC;&#x2122;s growth, such as a lack of effective support to the â&#x20AC;&#x2DC;multichallengeâ&#x20AC;&#x2122; nature of high growth, and difficulty with communicating

www.smeadvisor.com

BUSINESS GROWTH

IN SUMMARY, THE HIGHGROWTH BUSINESSES WE LOOKED AT CLEARLY INDICATE THAT THE FINANCE FUNCTION SITS AT THE HEART OF A TRULY EVOLVING, DYNAMIC BUSINESS.

Top tip for SMEs!

www.smeadvisor.com

financial information in easily digestible ways. In response, the &)2V DQG ILQDQFLDO FRQWUROOHUV LQ WKH companies we studied often instigated coaching programmes for staff and management, both to boost vital skills and to adapt to new, more efficient ways of undertaking and managing finance tasks. This also involved careful attention to performance management and, where necessary, making a strong business case for the implementation of new systems.

As part of its evolution to a key business partner in most of the high-growth businesses studied, the finance function played a central role in the business planning of most of these companies. In most cases, &)2V IHG GLUHFWO\ LQWR EXVLQHVV plans, providing key information on current and future financial risks and opportunities, which ultimately determined the strategic decisions taken, such as whether or not to proceed with a particular acquisition or diversify into a new market.

In summary, the high-growth businesses we looked at clearly indicate that the finance function sits at the heart of a truly evolving, dynamic business. To enable this function to reach its full potential, itâ&#x20AC;&#x2122;s vital to implement strong financial management, with a comprehensive birdâ&#x20AC;&#x2122;s eye view over how the finance function interacts with operations and informs strategy. ,Q H[SORULQJ WKH UROH DQG VLJQLÂżFDQFH RI WKH ÂżQDQFH IXQFWLRQ LQ HLJKW KLJK growth businesses worldwide, and FROODWLQJ WKH H[SHULHQFH RI WKHLU &)2V DQG ÂżQDQFLDO PDQDJHUV WRJHWKHU ZLWK $&&$ÂśV HDUOLHU UHVHDUFK WKLV JXLGH KDV endeavoured to show that this function can extend beyond its traditionally perceived auxiliary role to one of a strategic business partner that drives growth as well as enabling it.

7KH PDMRULW\ RI &)2V DQG ILQDQFLDO managers interviewed as part of this research asserted that the finance function in their organisations has, indeed, been integral to enabling the business to achieve its growth.

Specifically, it has proved central to efforts to initiate, enter and establish QHZ PDUNHWV LW KDV DFWHG DV D SDUWQHU to the business development team and RWKHU GHSDUWPHQWV DQG LW KDV HQVXUHG financial health and discipline so that in each case the company could continue growing.

In exploring these key elements of the finance function, this guide has provided points of consideration for H[HFXWLYHV DQG &)2V RI KLJK SRWHQWLDO businesses, showing how they can fully understand and harness the potential of the finance function, and how this can be managed to facilitate and maintain high growth, describing the role of the finance function in business planning, and emphasising the importance of having the right skill sets and leadership in place to enable these benefits. &UXFLDOO\ WKLV JXLGH KDV demonstrated that the finance function needs to work in tandem with or, even more powerfully, become integrated across other key business development departments in order to prepare carefully for, and plan, new growth. Alongside this, in order to fully contribute to the business development as well as operational processes, the finance function has a key role to play in monitoring and controlling high growth as it unfolds, as well as forecasting future trends and possible new directions for the business, on the basis of present and historical financial data. By holding these key responsibilities, the finance function extends well beyond the traditional accountancy and processing role, becoming a central rather than auxiliary presence, and an essential element in the strategic decisionmaking of a high-growth business.

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;LĂ&#x2022;Ă&#x192;Â&#x2C6;Â&#x2DC;iĂ&#x192;Ă&#x192;Â&#x2021; }Ă&#x20AC;Â&#x153;Ă&#x153;Ă&#x152;Â&#x2026;Ă&#x2030;Ă&#x152;Â&#x2026;iÂ&#x2021;wÂ&#x2DC;>Â&#x2DC;ViÂ&#x2021;vĂ&#x2022;Â&#x2DC;VĂ&#x152;Â&#x2C6;Â&#x153;Â&#x2DC;

51

TECHNOLOGY

LOOKING TO THE FUTURE

TOP TECHNOLOGY PREDICTIONS FOR 2016 Changing technology always requires SMEs to stop and reconsider the way to move forward. Will they buy-in to the latest market advancements?

Or, simply continue to operate with existing working structures? Whatever the case may be, this is the right time of the year to assess the evolving landscape and plan for the future. SME Advisor presents the following snapshot of technology trends in the New Year to aid SMEs with their decision making processâ&#x20AC;Ś

52

www.smeadvisor.com

TECHNOLOGY

www.smeadvisor.com

53

TECHNOLOGY

1

CLOUD GETS BIGGER – AND BETTER

Looking to 2016, there seems to be a lot of buzz around the emergence of hybrid cloud as a popular choice – offering the best of both worlds i.e. private and public cloud. On one hand, it gives you the security that private cloud offers, while on the other hand providing the economies of scale of public cloud. A hybrid solution is said to be more flexible and adaptable, and this is the very reason why it will be adopted by a large number of SMEs in the coming year. The hybrid cloud is also an attractive solution because it is great for a company that is considering scaling up; allowing for cost savings and increased efficiency.

In terms of the MENA region, Gartner predicted that public cloud

54

services market will grow to total US$ 880 million in 2016 and the cloud management & security services market is projected to enjoy a growth rate of 29.3 per cent year-on-year in 2016.

Finally, on a legal front, there will be an increasing number of formal policies encouraging certain best practices with cloud computing and further tightening security and privacy of data.

2

ALGORITHMS DICTATE MUCH OF WHAT WE DO

Algorithms are increasingly being used to study behavioural patterns – data which is then used to design products, news, promotions and almost everything that we experience online. Moreover, algorithms

www.smeadvisor.com

TECHNOLOGY

A GREAT EXAMPLE OF THE POWER OF ALGORITHMS IS FACEBOOK, WHICH USES THEM TO CUSTOMISE THE CONTENT THAT APPEARS ON YOUR NEWSFEED; SO YOU ONLY SEE UPDATES AND POSTS THAT WILL ENGAGE YOU.

Did you know?

help organisations predict future trends, and this is something that is going to gain further traction in 2016. Businesses will get smarter in the way they approach consumers, and more importantly who they approach for their products and services. An excerpt on Gartner. com by Heather Levy explains: “Making sense of all the data about how customers behave, and what connected things tell an organisation, will require algorithms to define business processes and create a differentiated customer experience. Algorithms will evaluate suppliers, define how our cars operate, and even determine the right mix of drugs for a patient.

In the purely digital world, agents will act independently based on our algorithms, in the cloud. In the 2020s, we’ll move away from using apps to rely on virtual assistants – basically, algorithms in the cloud – to guide us through our daily tasks.”

A great example of the power of algorithms is Facebook, which uses them to customise the content that appears on your newsfeed; so you only see updates and posts that will engage you. It doesn’t there! It is said that many financial institutions will soon be using sophisticated algorithms to analyse and predict future transactions of their clients.

3

VIDEO CONTENT

A lot has been said about video content in 2015 but it appears that we are still only scratching the surface.

Cisco predicts that video will account for 69 per cent of all consumer internet VTCHƂE D[ While 2015 was a great year for video content as a whole, 2016 will see the rise of personalised and interactive videos, further driving video marketing.

Personalised videos will be created by cleverly integrating the user’s image, company logo and other basic information in the video – enhancing

www.smeadvisor.com

the overall user experience. Interactive videos, on the other hand, will be especially useful to convert leads to customers within the B2B industry.

These will make up a large proportion of advertising and marketing budgets, giving better return on investment than traditional videos.

But something that will be URGEKƂECNN[ DKI KP KU OQDKNG XKFGQ content. Marketers have noted the sharp rise in mobile video consumption and will look to capitalise this opportunity by creating customised video content for mobile.

4

WINNING BIG WITH BIG DATA

The next year will continue to see businesses exploiting the opportunities that big data presents. The industry will see advancement in terms of collaboration between companies, allowing them to take innovation to the next level. However, security and privacy will take centre stage, and there will new technologies evolving in order to protect sensitive data and manage individual privacy.

5

QUANTUM COMPUTING

6JKU KU C ƂGNF VJCV JCU DGGP CTQWPF for quite some time now, but was never considered as a real possibility in the near future. The use of quantum mechanics to process complex information is essentially what quantum computing is all about. Some of the world’s leading scientists as well as tech giants are currently working on creating quantum computers that could be the most powerful computers in the world. To put it into perspective, a quantum computer is capable of solving a problem 100 million times faster than a traditional computer.

While there are quantum computers in existence today, none of them are still fully ready to replace traditional

55

TECHNOLOGY

AN INCREASING NUMBER OF COUNTRIES ARE REASSESSING AND STRENGTHENING THEIR DATA SHARING AND PROTECTION LAWS. MOREOVER, SECURITY COMPANIES WILL ALSO BE SEEN RAISING THE BAR, AS HACKERS AND CYBERCRIMINALS GET SMARTER WITH THEIR ATTACKS.

computers. 2016 will see the further advancement – and possible commercialisation – of this technology.

An excerpt from uwaterloo.ca explains: “Although a fully functioning quantum computer is a longer-term goal, many fundamental and practical discoveries have been made in the name of quantum computing.

Quantum sensors and actuators will allow scientists to navigate the nanoscale world with remarkable precision and sensitivity. Such tools will be invaluable to the development of true quantum information processors. The quantum revolution is already under way, and the possibilities that lie ahead are limitless.”

6

SECURITY CONTINUES TO BE A TOP PRIORITY

An increasing number of countries are reassessing and strengthening their data sharing and protection laws.

Moreover, security companies will also be seen raising the bar, as hackers and cybercriminals get smarter with their attacks.

In 2016, organisations will need to come to terms with the fact that cybercrime is now easier and more professional than ever before, and it is imperative to undertake a proactive approach to security. Experts suggest that security in the cloud computing arena is extremely important, and this is reinforced by an online article on streetinsider.com that says, “Widespread transition to the cloud continues and new operating models are arising, but companies and the public sector remain responsible for keeping their business and customer data secure. It is therefore essential to integrate robust incident response structures into the cloud strategy. Part of the answer will be encryption, ensuring data is encrypted before it enters the cloud and, that the accountable-organisation, not the cloud provider, manages the encryption keys for themselves.

Solid IT governance practices will

56

be required to ensure that, during the transition, an organisation’s IT infrastructure continues to support and enable the achievement of its corporate strategies and objectives.”

7

MOBILE PAYMENTS WILL DOMINATE

Juniper Research predicts that there will be 450 million mobile payment consumers by 2017. An article on emarketer.com sets the scene, “The divide between digital and physical commerce will be further bridged in 2016, as mobile wallets become a standard feature on newer smartphones and more retailers accept proximity payments from systems like Apple Pay, Android Pay, Samsung Pay and others. But simply swapping cash and credit or debit cards with a tap or scan of a smartphone won’t be enough to convince the majority of consumers to change decades of ingrained payment behavior. Connecting more of the retail commerce experience to mobile wallets, especially when it comes to offers, coupons, rewards and loyalty, will be critical to getting more people to pay with their phones.”

To successfully create a mobile payment gateway, businesses will have to bear in mind that the key is the seamless integration of couponing and loyalty programmes with payments. Also, the primary reason why mobile payments is appealing to consumers is because it’s simple and instantaneous. So, ensure to keep your interface user friendly – with not more than two taps to checkout.

Are you ready to ride the wave of new technology?

Goodluck!

For an online version, please visit: ÌÌ«\ÉÉÜÜÜ°Ã i>`Û Ã À°V ÉÌiV ÉÓä£È Ì « ÌiV }Þ «Ài` VÌ Ã

www.smeadvisor.com

NOW AVAILABLE ON

STRATEGY

58

www.smeadvisor.com

STRATEGY

PLANNING YOUR EXIT STRATEGY Deciding what you want to get from the business in the future is the best way of focusing your strategies on the present. In fact, it pays to start considering your exit options early, because the sooner you start, the more rewarding your eventual exit is likely to be. SME Advisor explains a selection of exit optionsâ&#x20AC;Ś

The phrase â&#x20AC;&#x2DC;exit strategiesâ&#x20AC;&#x2122; basically covers two different scenarios: Â&#x2021; <RXU RZQ H[LW VWUDWHJ\ DV D IRXQGHU &(2 RU 'LUHFWRU :KDW GR \RX ZDQW to take from the business when you leave - a large cash sum that you FDQ UH LQYHVW RU OLYH RQ IRU OLIH

the peace of mind of leaving the company it to family or a successor, or the ongoing rewards of a successful sale? Â&#x2021; 7KH H[LW VWUDWHJ\ RI D SULYDWH investor or a venture capital business. The investor may want to sell the business to recoup the loan at what is perceived by their ÂżQDQFLDO DQDO\VWV WR EH DQ RSSRUWXQH PRPHQW SHUKDSV WKH\ ZLOO ZDQW WR IRUFH DQ ,32 WR Ă&#x20AC;XVK FDVK WKURXJK the business, or expand into an overseas market and then sell their interests to a large international player. Does this align with your own plans of where the business is going?

As you can see from the above scenarios, the most successful exits require careful planning. This is not to say that planning an exit strategy

www.smeadvisor.com

is rocket science. The reality is, you already may have started planning without even realising it. Many of the steps involved - including the XSJUDGLQJ RI ÂżQDQFLDO UHSRUWLQJ systems and controls, exploring growth through internal operations, DQG ÂżQH WXQLQJ \RXU FRPSDQ\ÂśV strategy - are the same ones that are in any case required to build a successful company.

The range of exit strategies includes Â&#x2021; 7DNLQJ WKH FRPSDQ\ SXEOLF WKURXJK DQ LQLWLDO SXEOLF RIIHULQJ ,32

Â&#x2021; 6HOOLQJ WKH FRPSDQ\ WR D VWUDWHJLF acquirer Â&#x2021; 5HFDSLWDOLVLQJ DQG VHOOLQJ WKH ÂżUP to the management team - also known as a management buyout None of these are right for everyone: thatâ&#x20AC;&#x2122;s why, even though you may desperately need investment capital, itâ&#x20AC;&#x2122;s so important not to have your hand forced by an investor who sees a particular strategy suiting their RZQ ÂżQDQFLDO HQGV *HQHUDOO\ WKH investorâ&#x20AC;&#x2122;s intended exit strategy will be declared â&#x20AC;&#x2DC;up frontâ&#x20AC;&#x2122; as part of the contractual investment offer being

made to you. A golden rule here is that if the exit strategy isnâ&#x20AC;&#x2122;t appealing to you, because it will contort and twist the business you have, donâ&#x20AC;&#x2122;t accept it. Instead, reduce the size of the sum being offered by offsetting it against another loan - this way, you will be able to negotiate milder exit terms.

Deciding  whatâ&#x20AC;&#x2122;s  best  for  you  â&#x20AC;&#x201C;  and  your  company The reality is that different people start companies for different reasons, and WKDW FDQ LQĂ&#x20AC;XHQFH WKHLU H[LW VWUDWHJ\ Not everyone has the end-game of a Steve Jobs in mind. While some people do indeed want to change the world when they start a company, others have the motivation that they never, ever want to work for anyone else, and theyâ&#x20AC;&#x2122;re happy to keep the business small for perpetuity.

If youâ&#x20AC;&#x2122;re looking to leverage growth through investment, remember that fundamentally, this buys other SHRSOH D ULJKW WR LQĂ&#x20AC;XHQFH \RXU business - now and in the future. If you take on investment over time from venture capitalists, angel investors, equity investors, or individuals,

59

STRATEGY

MANY BUSINESS OWNERS VIEW THEIR EXIT STRATEGY AS A CHANCE TO REAP THE BENEFITS OF THEIR HARD WORK AND TO INCREASE THEIR PERSONAL WEALTH.

60

you will usually give up a portion of the company, or shares, and those shareholders will have a say in any potential exit strategy.

Itâ&#x20AC;&#x2122;s vital to have a mental checklist of the following points in mind when choosing an exit strategy: Â&#x2021; &RQVLGHU \RXU IXWXUH UROH LQ WKH EXVLQHVV 3DUW RI \RXU GHFLVLRQ ZLOO depend on whether or not you want to continue to manage your business. ,Q DQ ,32 RU D PDQDJHPHQW EX\RXW you and your team will play much the same roles before and after the transaction. In a strategic acquisition, however, the buyer may replace you and your team with its own people.

A strategic acquisition can be an excellent solution for companies that are struggling with successionSODQQLQJ LVVXHV ZKLOH DQ ,32 RU D management buyout will work more effectively for teams that want to stay in charge. Â&#x2021; :KDW DUH \RXU OLTXLGLW\ QHHGV DQG how quickly do you want to get rich?

Making money from even the best of exits can be much trickier than you might imagine. Many business owners view their exit strategy as a FKDQFH WR UHDS WKH EHQHÂżWV RI WKHLU hard work and to increase their personal wealth. However, not all exit strategies work equally well in WKLV UHVSHFW ,Q DQ ,32 IRU LQVWDQFH your shares are likely to be subject to a share lock-up agreement, which means you will not be able to sell \RXU VKDUHV HYHQ DIWHU WKH ,32 for a period of time, typically six months. A strategic acquisition will often generate an immediate cash payment, thereby increasing owner liquidity. Sometimes, however, WKH ÂżQDO SULFH LV QRW GHWHUPLQHG until the end of an earn-out period, which can last several years. In a management buyout, the original owners also generally will receive liquidity over a period of time. There is another factor here as well: what DUH \RXU LQYHVWRUV OLTXLGLW\ QHHGV" If you accept outside investment, you essentially take on partners, and those partners at some point are

going to want liquidity. The reality is that you should look for good partners who donâ&#x20AC;&#x2122;t pressure you to sell or go public, but wait until the time is right and the company has matured. Â&#x2021; :KDW LV UHDOLVWLFDOO\ \RXU companyâ&#x20AC;&#x2122;s growth potential?

3HUKDSV \RX GRQÂśW UHTXLUH LPPHGLDWH liquidity, but can hold back and participate in your companyâ&#x20AC;&#x2122;s future growth potential. In this scenario, you will want to choose an exit strategy that allows you to retain an RZQHUVKLS LQWHUHVW $Q ,32 DOORZV you to keep a substantial interest in the company, as well as to time the ultimate allocation of your shares to meet your own personal needs.

A management buyout also will allow for continued participation in a companyâ&#x20AC;&#x2122;s growth. However, an acquisition will generally eliminate, or at least greatly reduce, your ownership interest in your company, DV ZHOO DV \RXU DELOLW\ WR LQĂ&#x20AC;XHQFH LWV future direction and performance. Â&#x2021; $VVHVV PDUNHW FRQGLWLRQV 'HPDQG for you companyâ&#x20AC;&#x2122;s products or VHUYLFHV WKH DSSHWLWH IRU ,32V DQG acquisitions among both investors and strategic buyers, and other market conditions also will have an impact on your exit strategy. Talk with your private equity partner, as well as with any commercial lenders, investment bankers, or other ÂżQDQFLDO SURIHVVLRQDOV DERXW WUHQGV in the marketplace. Â&#x2021; 'RQÂśW VHWWOH IRU DQ ÂľHLWKHU RUÂś predicament: consider a dual-track approach. When youâ&#x20AC;&#x2122;re planning to sell, how you present your company to investors requires a slightly different approach than if youâ&#x20AC;&#x2122;re presenting to potential strategic EX\HUV 3XEOLF PDUNHW LQYHVWRUV generally want to understand your company as a whole - what your main businesses are, what your prospects for growth are - while strategic buyers may be more interested in VSHFLÂżF SDUWV RI \RXU FRPSDQ\ WKDW are complementary to their own LQWHUHVWV <RX FDQ DFWXDOO\ SXUVXH

www.smeadvisor.com

STRATEGY

RECAPITALISING THE BUSINESS AND SELLING IT TO THE NEXT GENERATION OF MANAGERS IT IS KNOWN AS A MANAGEMENT BUYOUT.

both types of exits at the same time to capitalise on the most attractive opportunity.

5HPHPEHU DV ZHOO WKDW D JRRG PDQ\ RI the complexities in the choices above result from the fact that you brought in external investors who required equity DQG LQĂ&#x20AC;XHQFH LQ UHWXUQ 2QH VROXWLRQ here is only to take on board a â&#x20AC;&#x2DC;risk partnerâ&#x20AC;&#x2122; such as a bank, who will simply require that you meet your repayments and will not want any equity stake in return. The two potential hurdles here are that you will probably need to be a more mature business to receive VLJQLÂżFDQW EDQN IXQGLQJ DQG VHFRQGO\ that you will also forfeit the positive EHQHÂżWV RI KDYLQJ DQ H[SHULHQFHG mentor on your board, working closely with you to give strategic growth advice.

What  are  the  options?

Before you can choose your exit strategy, it is important to understand what the options are, and their basic characteristics. Â&#x2021; $Q ,32 ,Q DQ ,32 \RX VHOO D SRUWLRQ of your company in the public PDUNHWV <RX DQG \RXU PDQDJHPHQW team typically remain in place for a period of years. Meanwhile, your investors and managers may be able to sell some stock, and your company continues to operate much as it has in the past. However, your company will be subject to additional regulations, and media analysts and institutional investors will constantly scrutinise company performance. Will you want to deal with the rigours this imposes and the constant need to promote SRVLWLYH 35 PHVVDJHV ZKLFK PD\ EH a key catalyst in protecting the share price? Â&#x2021; $ VWUDWHJLF DFTXLVLWLRQ ,Q D VWUDWHJLF acquisition, another company purchases your business, either with cash or shares in the acquiring company or with some combination of shares and cash. The acquirer may or may not retain you and your management team, and may or may not make substantial changes in your companyâ&#x20AC;&#x2122;s operations, staff,

www.smeadvisor.com

DQG SURGXFW OLQHV 7KH EHQHÂżW LV W\SLFDOO\ OLTXLGLW\ EHFDXVH LI \RX sell the company to a strategic acquirer you might be able to sell most or all of your shares. Donâ&#x20AC;&#x2122;t forget, though, that the disadvantage of this exit strategy is that you are likely to lose operating control - and so is the tired and tested management team. That team may have enjoyed the freedom of controlling day-to-day operations, but with a sale, theyâ&#x20AC;&#x2122;ll probably have to give that up. Â&#x2021; 0DQDJHPHQW EX\RXW 5HFDSLWDOLVLQJ the business and selling it to the next generation of managers it is known as a management buyout. This type RI WUDQVDFWLRQ LV XVXDOO\ ÂżQDQFHG through some combination of debt DQG RU SULYDWH HTXLW\ LQYHVWPHQW with the debt collateralised by the assets of the company. It provides immediate cash to the owner and early shareholders, and allows the company to continue as a private HQWHUSULVH 7KH RWKHU EHQHÂżW LV that there is usually quite a smooth transition.

0DQ\ RZQHUV DQG &(2V DVN ZKHQ LV the best time to start selecting their options from the above list. The reality is that â&#x20AC;&#x2DC;Day Oneâ&#x20AC;&#x2122; is too soon, because QR RQH DW WKLV VWDJH FDQ DFWXDOO\ GHÂżQH the attractiveness of the business to LQYHVWRUV RU WR PDQDJHPHQW WHDPV

and no-one can foresee its likely JURZWK FXUYH 3UREDEO\ WKH EHVW WLPH to take a step back and evaluate your personal exit strategy is the moment you consider taking on board external ÂżQDQFH ,WÂśV EHVW WR HYDOXDWH WKH RSWLRQV in the light that their complexities might come back to haunt you at a time when they are least welcome - when you are tired of the business and want to move on.

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;Ă&#x192;Ă&#x152;Ă&#x20AC;>Ă&#x152;i}Ă&#x17E;Ă&#x2030; ÂŤÂ?>Â&#x2DC;Â&#x2DC;Â&#x2C6;Â&#x2DC;}Â&#x2021;Ă&#x17E;Â&#x153;Ă&#x2022;Ă&#x20AC;Â&#x2021;iĂ?Â&#x2C6;Ă&#x152;Â&#x2021;Ă&#x192;Ă&#x152;Ă&#x20AC;>Ă&#x152;i}Ă&#x17E;

61

LEGAL

PROTECTING YOUR BUSINESS Can you imagine a scenario wherein a senior personnel from your company has left to join your arch competitor? The danger of course is that he or she is DUPHG ZLWK \RXU FRQĹľGHQWLDO company information such as customer database, VXSSOLHU GLUHFWRU\ ĹľQDQFLDOV and so on. The reality is that this is a situation that arises more often than you might think, and it surely pays to be prepared. We asked a leading expert from Clyde & Co. to provide critical adviceâ&#x20AC;Ś

Responding  to  poaching  in  the  Middle  East Two of the most important assets of any EXVLQHVV DUH LWV FRQ¿GHQWLDO LQIRUPDWLRQ DQG LWV HPSOR\HHV &RPSDQLHV VWDQG to lose both when their employees defect to a competitor. In this feature, we highlight some of the key legal, commercial and practical measures DYDLODEOH WR 8$( HPSOR\HUV ZKHQ IDFHG with a competitor poaching one or more of their employees.

Legal  protection 8$( ODZ H[SUHVVO\ UHFRJQLVHV DQ employerâ&#x20AC;&#x2122;s need to protect its business interests in relation to business secrets and protection of clients. Non-compete restrictions are permissible provided they are reasonable in terms of scope, territory and duration and there are civil and criminal liabilities for employees

62

who unlawfully disclose their employerâ&#x20AC;&#x2122;s FRQÂżGHQWLDO LQIRUPDWLRQ 8$( ODZ DOVR SURKLELWV ÂłXQIDLU FRPSHWLWLRQ´ ZKLFK includes hiring an employee from a third party with a view to obtaining clients or FRQÂżGHQWLDO LQIRUPDWLRQ IURP WKDW third party.

However, notwithstanding these statutory protections the onus is very much on employers to identify what LQIRUPDWLRQ LV FRQÂżGHQWLDO WR LW WR set the parameters for its permitted XVH DQG WR GHÂżQH ZKDW DQ HPSOR\HH RU H[ HPSOR\HH LV SURKLELWHG IURP doing during their employment and after its termination. This requires employers to put in place employment documentation containing well-drafted contractual terms.

In addition to supporting a complaint DJDLQVW DQ HPSOR\HH RU H[ HPSOR\HH

IRU EUHDFKLQJ 8$( VWDWXWRU\ SURYLVLRQV

www.smeadvisor.com

LEGAL

 Rebecca  Ford,  Partner  at  Clyde  &  Co

there are any other employees involved L H LV WKH FRPSHWLWRU DWWHPSWLQJ to poach one employee or a team of employees?) and whether the HPSOR\HH V LQYROYHG KDYH EUHDFKHG or are likely to breach, their contractual REOLJDWLRQV 3RWHQWLDO VRXUFHV RI evidence will likely include: 1. colleagues who work closely with WKH HPSOR\HH V H J VHFUHWDULHV DQG SHUVRQDO DVVLVWDQWV

2. computers and other electronic FRPPXQLFDWLRQV V\VWHPV 3. mobile phones, sim cards and LWHPLVHG SKRQH ELOOV DQG 4. social networking sites such as Facebook, LinkedIn and Twitter.

a breach by an employee of their contractual terms will create potential causes of action for an employer. The terms could also have a deterrent effect, particularly if an employer has a reputation for pursuing its employees who breach their contracts.

Practical  protection To supplement the legal protections set out above, employers can take practical steps during the subsistence of the employment relationship to increase their protection from poaching.

First and foremost, employers must ensure that employees are properly remunerated by reviewing performance regularly and using bonus plans with deferred elements. However, remuneration only plays a part and employers should focus on cultivating an allegiance with employees so

www.smeadvisor.com

that they reward the company with loyalty. For example, providing proper career structures and recognising an employeeâ&#x20AC;&#x2122;s family commitments and need for leisure time can go a long way towards deterring an employee from joining a competitor.

From a commercial perspective, employers should avoid teams having exclusive coverage of clients. Where possible, clients should be serviced by a number of different senior employees to maximise the chances of retaining the FOLHQW VKRXOG D SDUWLFXODU HPSOR\HH RU team of employees) leave.

Reacting  to  a  discovery An employer who discovers the potential poaching of one of its employees should establish the facts, as far as possible, without delay. In particular, it is important to try and ascertain whether

Employers should be mindful that an individualâ&#x20AC;&#x2122;s right to privacy is SURWHFWHG E\ WKH 8$( FRQVWLWXWLRQ and various statutory provisions.

We therefore recommend obtaining legal advice before commencing any investigations.

Responding  to  poaching /(*$/ 237,216

Injunctive relief (PSOR\HHV SDUWLFXODUO\ VHQLRU employees) will often be subject to post-termination restrictions.

However, enforcing restrictive FRYHQDQWV RQVKRUH LQ WKH 8$( LV GLIÂżFXOW EHFDXVH 8$( &RXUWV ZLOO QRW JUDQW LQMXQFWLYH UHOLHI L H DQ RUGHU E\ WKH &RXUW SURKLELWLQJ DQ HPSOR\HH from taking certain actions, such as joining a competitor in breach of a non-compete provision).

However, injunctive relief is potentially available in the Dubai ,QWHUQDWLRQDO )LQDQFLDO &HQWUH ',)&

DQG WKH QHZ $EX 'KDEL *OREDO

63

LEGAL

0DUNHW $'*0 JLYHQ WKDW ERWK DUH common law jurisdictions. Although there have not yet been any cases on the enforcement of post-termination UHVWULFWLRQV LQ HLWKHU WKH ',)& RU $'*0 D ',)& RU $'*0 &RXUW ZRXOG likely assess the enforceability of restrictive covenants by reference to WKH VDPH SULQFLSOHV DV LQ WKH 8. L H do the restrictions go no further than is reasonably necessary to protect the legitimate business interests of the employer?)

7KUHDWHQ LQVWLWXWH OHJDO SURFHHGLQJV DJDLQVW WKH HPSOR\HH DQG RU WKH poaching employer In the absence of injunctive relief, an employerâ&#x20AC;&#x2122;s recourse against an employee for breach of a posttermination restriction is limited to a claim for damages. However, the poaching company will likely have far greater resources than the employee DOWKRXJK LW LV SRVVLEOH WKDW WKH defecting employee has secured an indemnity from the poaching company for legal costs and damages arising from litigation) and so may prove to be a more attractive defendant to any legal proceedings.

5HJDUGOHVV RI ZKHWKHU WKH employer actually commences legal proceedings, the threat of doing so will often deter the poaching FRPSDQ\ DQG RU WKH GHIHFWLQJ employee from proceeding with the move. In deciding whether or not to institute legal proceedings, the employer must weigh up a variety of factors including: 1 the potential impact of the employeeâ&#x20AC;&#x2122;s GHSDUWXUH 2 whether legal proceedings have any UHDO SURVSHFW RI VXFFHVV 3 the potential costs of legal SURFHHGLQJV 4 the likely reaction of the remaining ZRUNIRUFH H J LV LW QHFHVVDU\ WR VHQG a message to other employees or will they view legal proceedings as heavyKDQGHG EXOO\ ER\ WDFWLFV" DQG 5 the likely reaction of clients, competitors and the market.

64

Labour bans It may be possible for onshore HPSOR\HUV WR DVN WKH 8$( 0LQLVWU\ RI Labour to impose a ban on employees who have breached their terms and FRQGLWLRQV RI HPSOR\PHQW DQG RU KDYH GLVFORVHG WKH HPSOR\HUÂśV FRQÂżGHQWLDO information. However, such a ban would not prevent an employee from working for a competitor which is not UHJLVWHUHG ZLWK WKH 8$( 0LQLVWU\ RI /DERXU L H LI WKH FRPSHWLWRU LV ORFDWHG LQ WKH ',)& $'*0 RU DQ\ RWKHU IUHH zone).

agreeing a quick sale avoids potentially costly and time-consuming litigation DQG PD[LPLVHV WKH FKDQFHV RI VHFXULQJ the business which it may have set out WR SRDFK LQ WKH ÂżUVW SODFH ZKLFK VKRXOG enable the victim employer to secure a premium price from the poaching company.

3UDFWLFDO VWHSV :KDWHYHU OHJDO DQG RU FRPPHUFLDO approach an employer decides to adopt the following steps should always be at the forefront of an employerâ&#x20AC;&#x2122;s mind when dealing with a defecting employee:

&200(5&,$/ 237,216

5HWDLQ WKH HPSOR\HH V

The threat of dismissal can be used to retain defecting employees although employers should be careful to avoid acting in breach of contract as this FRXOG UHVXOW LQ WKH ORVV RI WKH EHQHÂżW RI any restrictive covenants. A preferable option may be to convince the HPSOR\HH V WR VWD\ E\ 1 improving the employeeâ&#x20AC;&#x2122;s UHPXQHUDWLRQ SURPRWLQJ WKH HPSOR\HH V DQG RU DJUHHLQJ QRW WR FRPPHQFH RU pursue) legal proceedings against the employee.

(PSOR\HUV LQ WKH ',)& DQG $'*0 VKRXOG EH DOLYH WR WKH ULVNV RI ³WXUQLQJ´ a defecting employee who has already signed an employment contract with WKH SRDFKLQJ FRPSDQ\ &DVH ODZ in other common law jurisdictions has held that in these circumstances an employer can be held liable for inducing the employee to breach their contract with the poaching company.

Sell the business Where the defecting employees make up the entire workforce in a particular practice area, employers should consider whether they wish to sell that part of the business to the poaching FRPSDQ\ 6XFK ÂłVDOHV´ RIWHQ FRPSULVH deferred payments based on the income stream from the business taken by the defecting employees. From the poaching companyâ&#x20AC;&#x2122;s perspective,

3URWHFW FRQVROLGDWH WKH FRPSDQ\ÂśV SRVLWLRQ ZLWK FOLHQWV 2 Take steps to protect the companyâ&#x20AC;&#x2122;s FRQÂżGHQWLDO LQIRUPDWLRQ 5HDVVXUH DQG PRWLYDWH WKH UHPDLQLQJ ZRUNIRUFH DQG 4 Do not overreact - it should not always be assumed that an employee being poached by a competitor is a negative. Defecting employees may give a company an opportunity to refocus its business.

Further information v Ă&#x17E;Â&#x153;Ă&#x2022; Ă&#x153;Â&#x153;Ă&#x2022;Â?` Â?Â&#x2C6;Â&#x17D;i vĂ&#x2022;Ă&#x20AC;Ă&#x152;Â&#x2026;iĂ&#x20AC; Â&#x2C6;Â&#x2DC;vÂ&#x153;Ă&#x20AC;Â&#x201C;>Ă&#x152;Â&#x2C6;Â&#x153;Â&#x2DC; Â&#x153;Â&#x2DC; >Â&#x2DC;Ă&#x17E; Â&#x2C6;Ă&#x192;Ă&#x192;Ă&#x2022;i Ă&#x20AC;>Â&#x2C6;Ă&#x192;i` Â&#x2C6;Â&#x2DC; Ă&#x152;Â&#x2026;Â&#x2C6;Ă&#x192; Ă&#x2022;ÂŤ`>Ă&#x152;i ÂŤÂ?i>Ă&#x192;i VÂ&#x153;Â&#x2DC;Ă&#x152;>VĂ&#x152;\ ,iLiVV> Â&#x153;Ă&#x20AC;` Partner

Â?Ă&#x17E;`i E Â&#x153; * *" Â&#x153;Ă? Ă&#x2021;ää£ iĂ&#x203A;iÂ? ÂŁx] ,Â&#x153;Â?iĂ? /Â&#x153;Ă&#x153;iĂ&#x20AC; -Â&#x2026;iÂ&#x2C6;Â&#x17D;Â&#x2026; <>Ă&#x17E;i` ,Â&#x153;>`

Ă&#x2022;L>Â&#x2C6;] 1Â&#x2DC;Â&#x2C6;Ă&#x152;i` Ć&#x201A;Ă&#x20AC;>L Â&#x201C;Â&#x2C6;Ă&#x20AC;>Ă&#x152;iĂ&#x192; /\ ÂłÂ&#x2122;Ă&#x2021;ÂŁ { Ă&#x17D;n{ {äää \ ÂłÂ&#x2122;Ă&#x2021;ÂŁ { Ă&#x17D;n{ {ää{

Â?Ă&#x17E;`i E Â&#x153; >VViÂŤĂ&#x152;Ă&#x192; Â&#x2DC;Â&#x153; Ă&#x20AC;iĂ&#x192;ÂŤÂ&#x153;Â&#x2DC;Ă&#x192;Â&#x2C6;LÂ&#x2C6;Â?Â&#x2C6;Ă&#x152;Ă&#x17E; vÂ&#x153;Ă&#x20AC; Â?Â&#x153;Ă&#x192;Ă&#x192; Â&#x153;VV>Ă&#x192;Â&#x2C6;Â&#x153;Â&#x2DC;i` Ă&#x152;Â&#x153; >Â&#x2DC;Ă&#x17E; ÂŤiĂ&#x20AC;Ă&#x192;Â&#x153;Â&#x2DC; >VĂ&#x152;Â&#x2C6;Â&#x2DC;} Â&#x153;Ă&#x20AC; Ă&#x20AC;ivĂ&#x20AC;>Â&#x2C6;Â&#x2DC;Â&#x2C6;Â&#x2DC;} vĂ&#x20AC;Â&#x153;Â&#x201C; >VĂ&#x152;Â&#x2C6;Â&#x2DC;} >Ă&#x192; > Ă&#x20AC;iĂ&#x192;Ă&#x2022;Â?Ă&#x152; Â&#x153;v Â&#x201C;>Ă&#x152;iĂ&#x20AC;Â&#x2C6;>Â? VÂ&#x153;Â&#x2DC;Ă&#x152;>Â&#x2C6;Â&#x2DC;i` Â&#x2C6;Â&#x2DC; Ă&#x152;Â&#x2026;Â&#x2C6;Ă&#x192; Ă&#x192;Ă&#x2022;Â&#x201C;Â&#x201C;>Ă&#x20AC;Ă&#x17E;° Ă&#x153;Ă&#x153;Ă&#x153;°VÂ?Ă&#x17E;`iVÂ&#x153;°VÂ&#x153;Â&#x201C;

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;vi>Ă&#x152;Ă&#x2022;Ă&#x20AC;i`Ă&#x2030; ÂŤĂ&#x20AC;Â&#x153;Ă&#x152;iVĂ&#x152;Â&#x2C6;Â&#x2DC;}Â&#x2021;Ă&#x17E;Â&#x153;Ă&#x2022;Ă&#x20AC;Â&#x2021;LĂ&#x2022;Ă&#x192;Â&#x2C6;Â&#x2DC;iĂ&#x192;Ă&#x192;

www.smeadvisor.com

HR

MASTERING TALENT MANAGEMENT IN 2016 Happy employees are vital to a FRPSDQ\Ĺ&#x2018;V SURGXFWLYLW\ SURĹľWDELOLW\ and competitiveness. Thatâ&#x20AC;&#x2122;s why implementing sound strategies to protect and nurture your â&#x20AC;&#x2DC;People assetsâ&#x20AC;&#x2122; can mean long-term growth and progress for your business. In the following feature, we outline top policies to consider in the New Yearâ&#x20AC;Ś

66

www.smeadvisor.com

HR

It may very well be the case that you’ve already spent all your cash in hand on building and sustaining your business. So, any other provision that requires attention is completely neglected. This is a common mistake that most SMEs make at their own peril. Here, we highlight a few basic steps that can have an enormous impact on your business and leave you ZLWK VDWLVILHG UHDG SURGXFWLYH

HPSOR\HHV

1

REMEMBER COMMUNICATION IS KEY

Continuous and meaningful interaction with employees is absolutely necessary; it ensures that both parties know what to expect from one another. And, the truth is that such conversations don’t have to be painful. A simple yet effective way to communicate internally is through videos.

Videos help break down communication barriers and foster team work. For instance, if one of the employees within your company is constantly late to work, the HR department can make a lighthearted video depicting a scenario wherein a staff member that comes in late constantly is letting down the team CPF ECP GXGPVWCNN[ DG ƂTGF 6JKU GPCDNGU the message to be sent across in a subtle way while still positively engaging your employees. Training videos are also useful in the case of complex subjects such as an advanced software; employees have the option to refer back to these videos as and when required without having to re-visit the trainer.

2

RETHINK YOUR COMPANY’S CULTURE

This is an area that has been largely assessed in the recent past and will continue to be a priority for HR leaders.

Your organisational culture is key to how you engage your employees. It is critical that you develop corporate culture over a period of time and

www.smeadvisor.com

67

HR

ON THE SURFACE, SUCH AN OPTION MIGHT LOOK LIKE ITâ&#x20AC;&#x2122;S JUST ABOUT AN INDIVIDUAL BUT REMEMBER THAT IT NOT ONLY MAKES A TREMENDOUS DIFFERENCE TO THE CRUCIAL NEEDS OF YOUR BUSINESS BUT ALSO HELPS YOUR SME MEET ITS RESPONSIBILITIES TOWARDS STAFF, INVESTORS, AND MOST IMPORTANTLY, CUSTOMERS!

evolve it as you get employee and management feedback. It shouldnâ&#x20AC;&#x2122;t be something that is set in stone at the start of the year. Moreover, it needs to be unique to your company and its core values.

3

CONSIDER KEY MAN INSURANCE

SME owners or directors, more often than not, form the backbone of their business.

So, what happens when they fall critically ill? Or, if they are in a position where they can no longer continue normal business responsibilities? The answer is Key Man insurance. It provides the business with â&#x20AC;&#x2DC;bufferâ&#x20AC;&#x2122; funds to operate through this FKHĆ&#x201A;EWNV RJCUG WPVKN KV Ć&#x201A;PFU C UWKVCDNG replacement. Itâ&#x20AC;&#x2122;s also important to note here that Key Man insurance can provide cover to any person that is crucial to the working of an SME and cannot be easily replaced â&#x20AC;&#x201C; someone that handles majority of the clients, has detailed knowledge QH VJG DWUKPGUU Ć&#x201A;PCPEKCN UVCPFKPI and investment portfolio or manages sophisticated technical operations.

On the surface, such an option might look like itâ&#x20AC;&#x2122;s just about an individual but remember that it not only makes a tremendous difference to the crucial needs of your business but also helps your SME meet its responsibilities towards staff, investors, and most importantly, customers!

4

PROVIDE MEDICAL COVER

A common mistake made by most businesses is that they consider /GFKECN EQXGT CU CP CFFGF DGPGĆ&#x201A;V VQ their employees. Compulsory by law in Abu Dhabi and Dubai (rolled out in phases) â&#x20AC;&#x201C; Medical cover is a necessity.

There is nothing more counterproductive than having staff worried about medical bills rather than being able to focus on the job at hand.

In fact, making basic health services available to employees will work in the favour of your SME. Letâ&#x20AC;&#x2122;s take the

68

example of an employee who has been constantly sick due to lack of appropriate medical attention. He logs in several sick days over the month leaving a huge pile of pending work. Eventually, the job has to be either passed on to one of his peers â&#x20AC;&#x201C; who might not be able to handle the added workload â&#x20AC;&#x201C; or has to be completed by the manager himself. Moral of the story is that healthy employees are happy employees that enhance the overall productivity of the business.

5

SET REALISTIC GOALS

As an SME, you may have a great idea CPF C YGNN FGĆ&#x201A;PGF DWUKPGUU RNCP but these may be of no use if they arenâ&#x20AC;&#x2122;t broken down into short-term realistic goals. Without knowing what is expected out of them, employees can easily lose sight of their role in the company. And, this can be extremely dangerous for an SME with limited people resources â&#x20AC;&#x201C; what happens if two out of three people in the business arenâ&#x20AC;&#x2122;t performing? Taking your long-term vision and simplifying it into smaller targets can help your employees stay on track in addition to making it easier to measure their performance over short periods of time.

Another crucial aspect to bear in mind is Key Performance Indicators (KPIs).

Identifying the right KPIs and linking them with incentives can work wonders for your business. These incentives could range HTQO OQPGVCT[ DGPGĆ&#x201A;VU RTQĆ&#x201A;V UJCTKPI awards for excellence, enrolment into a recognition programme, to additional training initiatives. By implementing such a system, you are now able to tie performance directly to employee incentives.

6

IMPLEMENT A CHANGE MANAGEMENT PLAN

Change is a part and parcel of SME life and thereâ&#x20AC;&#x2122;s no denying that when this organisational change actually comes

www.smeadvisor.com

HR

ANOTHER CRUCIAL ASPECT TO BEAR IN MIND IS THE ROLE OF KEY PERFORMANCE INDICATORS (KPIs).

IDENTIFYING THE RIGHT KPIS AND LINKING THEM WITH INCENTIVES CAN WORK WONDERS FOR YOUR BUSINESS.

about, it directly affects all departments from the entry level employee to top level management. A great example of such change is the recent introduction of new additions to the law governing n'PF QH UGTXKEG DGPGĆ&#x201A;VUo YJKEJ YKNN surely impact the way your business rewards employees when they leave your company.

The implementation of a Change Management Plan â&#x20AC;&#x201C; which highlights action steps in the case of such situations â&#x20AC;&#x201C; can empower your business and prepare your employees to tackle any internal and external changes smoothly. This Plan should be available online for all staff and should be as detailed as possible.

This step, which is often overlooked

by HR professionals, provides your business a predictive â&#x20AC;&#x2DC;bufferâ&#x20AC;&#x2122; against external change and ensures that it can be absorbed progressively without a catastrophic fall-out.

7

MOBILISE YOUR WORKFORCE

Apart from connectivity â&#x20AC;&#x201C; and the ability to speed up business processes â&#x20AC;&#x201C; mobilising your workforce to be truly nQP VJG IQo ECP JCXG VGTTKĆ&#x201A;E DGPGĆ&#x201A;VU It enables your business to effectively lower its costs, sparks creativity within employees, improves operational GHĆ&#x201A;EKGPE[ GPJCPEGU EQNNCDQTCVKQP CPF puts you in a position of complete control.

8

9

INVEST IN TECHNOLOGY

Sophisticated project management software, productivity apps, cloud computing and several other data-sharing mechanisms have made employee engagement and collaboration much easier.

Incorporating these within the day-today operations of your business can be a huge advantage. It gives you, and [QWT VGCO Ć&#x192;GZKDKNKV[ CPF OQDKNKV[ /QTG importantly, HR analytics is an evolving concept that enables companies to use data-driven mechanisms to assess an employeeâ&#x20AC;&#x2122;s performance, decide compensation packages and understand behavioural patterns. In fact, a report by Deloitte found that 35 per cent of survey respondents said that HR analytics was â&#x20AC;&#x153;under active developmentâ&#x20AC;? within their organisations.

UNDERSTANDING THE NEEDS OF MILLENNIALS

PwC Research stated that millennials will account for nearly half the global workforce by 2020. This requires that organisations understand and cater to the needs of the new generation. Often regarded to be young, connected and tech-savvy, millennials prefer making a positive difference in the world over workplace recognition. They also strongly believe in innovation and the pivotal role it plays in business growth.

www.smeadvisor.com

Itâ&#x20AC;&#x2122;s also worth adding here that there KU C PGY IGPGTCVKQP UNQYN[ Ć&#x201A;NVGTKPI into the market called Generation Z â&#x20AC;&#x201C; born after 1994 and the younger counterparts of millennials. They are UCKF VQ DG OQTG GPVTGRTGPGWTKCN Ć&#x192;GZKDNG and ambitious!

For an online version, please visit: Â&#x2026;Ă&#x152;Ă&#x152;ÂŤ\Ă&#x2030;Ă&#x2030;Ă&#x153;Ă&#x153;Ă&#x153;°Ă&#x192;Â&#x201C;i>`Ă&#x203A;Â&#x2C6;Ă&#x192;Â&#x153;Ă&#x20AC;°VÂ&#x153;Â&#x201C;Ă&#x2030;vi>Ă&#x152;Ă&#x2022;Ă&#x20AC;i`Ă&#x2030; Ă&#x152;>Â?iÂ&#x2DC;Ă&#x152;Â&#x2021;Â&#x201C;>Â&#x2DC;>}iÂ&#x201C;iÂ&#x2DC;Ă&#x152;

69

FINANCE

70

www.smeadvisor.com

FINANCE

GET YOUR BUSINESS ON THE RIGHT PATH

SMEs play a critical role in developing and diversifying regional GDP, especially given the protracted decline in oil revenues. Yet only a minority are equipped to PDNH WKH FKDOOHQJLQJ ĹľQDQFLDO DQG UHVRXUFH GHFLVLRQV that growth can necessitate. SME Advisor asked Michael Armstrong FCA, ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA), to comment on the key dilemmas and highlight a number of practical solutions.

www.smeadvisor.com

71

FINANCE

WITH THE CHANGING ECONOMIC ENVIRONMENT, SKILLED FINANCE PROFESSIONALS ARE BECOMING INCREASINGLY IMPORTANT AS THEY ARE ABLE TO PROVIDE GUIDANCE AND ADVICE ON EMERGING ISSUES AFFECTING SMEs.

72

Small and medium-sized HQWHUSULVHV 60(V DUH DQ important part of private-sector development in emerging markets.

In the Middle East, especially WKH *XOI FRXQWULHV JRYHUQPHQWV recognise the importance of developing the SME sector in order to reduce economic reliance on the hydrocarbons sector and also to help in job creation for their fast growing populations.

7DNLQJ WKH 8$( DV DQ H[DPSOH small and medium sized companies make up 94 per cent of the total QXPEHU RI EXVLQHVVHV DQG per cent of the private sectorâ&#x20AC;&#x2122;s workforce. SMEs are also responsible for generating over half WKH *'3 RI WKH FRXQWU\ &RQWLQXHG support for the sector is, therefore, needed to offset the impact of low oil prices. So what are the biggest obstacles for SMEs in the region?

One of the fundamental aspects underpinning any business is still finances. The majority of SMEs in the region lack organised financial statements, transparency, and financial discipline, making it harder for them to access credit.

Financial institutions are generally reluctant to lend to SMEs, as they are classified as riskier. The result is that many entrepreneurs are forced to borrow from their families to launch their businesses.

With the changing economic environment, skilled finance professionals are becoming increasingly important as they are able to provide guidance and advice on emerging issues affecting SMEs. ,&$(: FKDUWHUHG DFFRXQWDQWV by virtue of the rigorous training they must undertake for a number of years in order to qualify, are well positioned to fulfil this role.

The combination of business and finance skills, technical knowledge and practical work experience provide them with a solid, holistic understanding of the industry and equip them with essential tools to be able to advise businesses.

The  changing  relationship  between  lenders  and  companies As smaller organisations rely relatively heavily on external funding, they have to ensure their financial position and reporting are VRXQG DQG VWDEOH ,&$(: FKDUWHUHG accountants can provide advice on how to access finance and prepare comprehensive financial statements which would give businesses the required financial credibility and, consequently, help secure funding.

As a reasonable, inherent part of their undertaking, they will also identify key threats with regards to corporate finance and advise on solutions to increase capital and make the most of available resources.

In some cases, international trading is a priority for SMEs that are trying to diversify their revenue and expand their operations. These organisations in particular will rely even more on external sources of finance, such as bank loans, to enable them to make the necessary investments. These might be related to infrastructure, inventory, or staff, to name just a few. Any SME knows that this is a huge step. ,&$(: FKDUWHUHG DFFRXQWDQWV KDYH a wealth of resources - from our various faculties and special interest JURXSV 6,*V WR RXU OLEUDU\ RI resources and access to 144,000 qualified peers across the world.

They can draw on this knowledge to support their already remarkable expertise as they advise SMEs on how to prepare for this exciting, and sometimes daunting, step, working with them to create robust international business plans and strategies. Not only does this give the SMEs peace of mind, it allows the directors and senior managers to focus their attention and energy on the other areas within their companies which need attention.

Establishing  stable  business  structures  and  the  importance  of  corporate  governance

www.smeadvisor.com

FINANCE

WHEN TALKING ABOUT REGULATION, IT IS IMPORTANT TO MENTION THAT THE GCC COUNTRIES ARE PLANNING TO CHANGE THEIR PREDOMINANTLY TAX-FREE ZONE STATUS AND IMPLEMENT CORPORATE TAX, VAT AND VEHICLE DUTY.

www.smeadvisor.com

In SMEs, it sometimes happens that the lines between different functions in the organisation are blurred as small teams tend to work across each otherâ&#x20AC;&#x2122;s functions in order to support each other. While it is commendable and sometimes necessary that SMEs function in this way, it can eventually negatively affect the overall performance and operations of many SMEs. As a result, productivity, transparency and even the organisationâ&#x20AC;&#x2122;s financial position are likely to be jeopardised.

Naturally, financial institutions tend not to be inclined to give loans to companies which they feel are lacking in these aspects. The role RI ,&$(: FKDUWHUHG DFFRXQWDQWV is of a vital importance as they are able to help set up transparent business structures and advise on best financial reporting practices.

8QGHUVWDQGLQJ FRPSDQ\ ODZ LV D complicated task that owners and managers of smaller entities might not necessarily have time to come to grips with. Therefore, seeking advice from a qualified professional could help address the problem reducing the risk of unstable corporate governance. A downside to such approach is the fact that offering employment to a finance expert can be quite expensive. However, as companies grow and access to loans and FDI becomes increasingly important, the price that the firm ZRXOG KDYH WR SD\ IRU KLULQJ ,&$(: chartered accountants would be offset by their contribution.

As the pressure from falling oil prices continues, smaller entities must be in a position to withstand the competition from larger organisations that will be better placed to diversify their revenue sources. Large companies can take out secured loans, or rely on their reserves to face the challenge of declining commodity prices. Smaller ones on the other hand will continue to depend on less secure sources of funding and so their business structures have to show to potential

investors and lenders, that they are a reliable and stable.

The  importance  of  regulation As mentioned above, there are currently no restrictions on how EDQNV LVVXH ORDQV WR EXVLQHVVHV financial institutions decide themselves to whom they want to lend money. However, the consequences of default on payment are severe. Instead of relying on criminal justice, many might argue that the region should transform how its financial systems operate and focus on regulation and prevention rather WKDQ WKUHDW ,&$(: FKDUWHUHG accountants could not only work with other professional bodies and governments to achieve this, but would also be in the best position to advise businesses on compliance issues.

When talking about regulation, it is important to mention that WKH *&& FRXQWULHV DUH SODQQLQJ WR change their predominantly taxfree zone status and implement corporate tax, VAT and vehicle duty. This would put additional administrative pressure on businesses that would have to come to grips with new laws.

Details of tax implementation are VWLOO EHLQJ GLVFXVVHG KRZHYHU WKH anticipated changes are likely to increase the demand for qualified finance professionals. Thinking DERXW WKH FRVW RI KLULQJ DQ ,&$(: chartered accountant, businesses should consider potential penalties for non-compliance and late SD\PHQWV ZKLFK LQ FRXQWULHV where corporate tax or vat are implemented) quite often amount to significant sums.

Hiring  an  ICAEW  chartered  accountant  is  a  long-­term  investment  rather  than  a  cost The majority of small and medium sized businesses rely on outsourcing of specialist services including accounting. However,

73

FINANCE

SMALLER ENTITIES DO NOT ALWAYS HAVE TIME OR RESOURCE TO TACKLE THESE ISSUES, SO INVESTING IN HIRING A QUALIFIED PROFESSIONAL COULD TAKE SOME PRESSURE OFF THEM.

as companies grow, they might consider taking on a permanent employee e.g. a financial director.

This might be an expensive step short-term, though the cost of hiring an accountant is proportional to the contribution they can make to the business. Therefore, a longWHUP DSSURDFK VKRXOG EH WDNHQ WKH potential effect of advice given by an unqualified individual could have an adverse impact on productivity and access to capital. Experienced accountants can not only help manage day-to-day financial operations, but also offer expert strategic advice and help companies deal with complicated compliance LVVXHV +LULQJ DQ ,&$(: FKDUWHUHG accountant should be viewed as an important investment and a step to expand the business.

Despite the fact that the SME sector makes up a significant part of the total number of businesses and employment market in the Middle East, the pressure on its further growth has increased. Oil prices are unlikely to rise significantly in the short term, which will increase the competition from larger entities that are continuously diversifying their sources of revenue. What is

74

more, banks are becoming more risk averse and less likely to issue unsecured loans, especially to companies that do not seem to be entirely transparent and reliable. Therefore the role of an ,&$(: FKDUWHUHG DFFRXQWDQW LV RI crucial importance. They are able to help companies come to grips with complex financial reporting standards and set up corporate governance structures that would limit unpredicted conflicts between the owners and managers.

Smaller entities do not always have time or resource to tackle these issues, so investing in hiring a qualified professional could take some pressure off them. Sound finances and keeping an eye on cash flows to maintain records are the basis of any organisation. Not being on top these discourages potential finance providers - which is why the ,&$(: FKDUWHUHG DFFRXQWDQWV¶ UROH is critical to business’ existence.

For an online version, please visit: ÌÌ«\ÉÉÜÜÜ°Ã i>`Û Ã À°V Éw > ViÉ }iÌ Þ ÕÀ LÕÃ iÃÃ

www.smeadvisor.com

LOOKING TO SET UP YOUR BUSINESS? COMPLETE BUSINESS PACKAGES STARTING FROM AED 420 PER MONTH RAK FTZ 15TH ANNIVERSARY OFFER Register today and enjoy a reduction of AED 2015 on all RAK FTZ Business Packages.

RAK FTZ RAFFLE DRAW Get a chance to win one of the exciting prizes every month upon your business registration.

Call: 800 7111 Visit: www.rakftz.com/promo Follow:

/ rakftz

TECH TRENDS

TOP APPS TO HELP YOU MANAGE YOUR DAY! , Rushika Bhatia s view...

Manage digital with Pocket Analytics * V iÌ Ƃ > ÞÌ Và à > LÀ > Ì >«« Ü V } ÛiÃ Þ Õ > V à `>Ìi` Û iÜ v > Þ ÕÀ > > ÞÌ Và `>Ì> Þ ÕÀ > ` i ` `iÛ Vi° / à `>Ì> à > VÕ >Ì v Õ LiÀà vÀ } i Ƃ > ÞÌ VÃ] 9 Õ/ÕLi Ƃ > ÞÌ VÃ] >ViL ] ÕÀÀÞ > ` > À>vÌ v Ì iÀ « >Ìv À ð >ÌÌiÀ Ü iÀi Þ Õ >Ài] Þ Õ V> ii« ÌÀ>V v Þ ÕÀ i >VÌ Û ÌÞ > ` Ì i ` v Àië Ãi Þ Õ >Ài }i iÀ>Ì }° / à à iëiV > Þ ÕÃivÕ v À 7iL L>Ãi` LÕà iÃÃiÃ Ì >Ì ii` Ì V Ì Õ> Þ Ì À «iÀv À > Vi° 7 >̽à Ài> Þ >ÌÌÀ>VÌ Ûi >L ÕÌ Ì Ã >«« Ã Ì >Ì Ì > ÜÃ Þ Õ Ì VÕÃÌ âi `>Ì> Ì i Ü>Þ Þ Õ Ü Õ ` i Ì Û iÜ Ì° 9 Õ V> VÀi>Ìi `>à L >À`à ÃÕ Ì>L i Ì Þ ÕÀ «ÀiviÀi ViÃ] Ü Ì Ì i «Ì Ì Ãi iVÌ v À >Ìà ÃÕV >à }À>« à > ` V >ÀÌÃ] >Ã Þ Õ `ii iViÃÃ>ÀÞ°

Available on: iOS Price: $8.99

76

www.smeadvisor.com

TECH TRENDS

Manage your finances with BillMinder `iÀ iÌÃ Þ Õ À}> Ãi > Þ ÕÀ L à i « >Vi° Ì vviÀà > > `Þ L Ài `iÀ > iÀÌ iÛiÀÞ Ì i > L à `Õi Ã Ì >Ì Þ Õ iÛiÀ Ãà > `i>` it 7 >̽à «>ÀÌ VÕ >À Þ ÌiÀiÃÌ } >L ÕÌ Ì Ã >«« Ã Ì >Ì Ì > ÜÃ Þ Õ Ì VÀi>Ìi Ài« ÀÌà v Þ ÕÀ iÝ«i ÃiÃ] Ì i v À à v V >ÀÌà > ` }À>« ð Ì > à vviÀÃ Ì «Ã Ü Ì VÕÌ ` Ü iÝ«i Ãià > ` VÀi>Ãi µÕ V Ã>Û }ð À LÕà iÃÃ Ü iÀÃ] Ì i >««½Ã Õ Ì ÕÃiÀ vi>ÌÕÀi à µÕ Ìi >ÌÌÀ>VÌ Ûi° / à i> Ã Ì >Ì > LÕà iÃà «>ÀÌ iÀà V> Li ÃÞ Vi` Ì Ì i >«« > ` }iÌ Ài}Õ >À Ì wV>Ì Ã LÕà iÃà Ài >Ìi` iÝ«i Ãið "Ì iÀ ÌiÜ ÀÌ Þ vi>ÌÕÀià v Ì i >«« V Õ`i\ ƂÕÌ *>Þ Ã] ƂÕÌ >Ì V >V Õ« > ` Ý« ÀÌ Ì * °

Available on: iOS and Android Cost: AED 10.98

IN A GROWING COMPANY, 360YOU WORK 9-­5 AND 5-­9.

Security – Antivirus Boost / Ã Õ Ì vÕ VÌ > >«« ` ià Ài Ì > ÕÃÌ «À ÌiVÌ Þ ÕÀ `iÛ Vi vÀ Û ÀÕà > ` /À > ° Ì > à > >}iÃ Þ ÕÀ IT’S TIME TO RUN SIMPLE L>V }À Õ ` >««Ã] vÀiià ի i ÀÞ Ã«>Vi] Ì ÀÃ Þ ÕÀ

Õ v `iÀ > ` «Ì Ãià L>ÌÌiÀÞ « ÜiÀ° / i >«« vviÀà i } Ìi i` «À Û>VÞ Ü Ì > V vi>ÌÕÀi Ì >Ì V> «À ÌiVÌ Þ ÕÀ iÃÃ>}iÃ] >}ià > ` Ì iÀ «iÀà > v À >Ì ° Building a successful company is hard work. Aīordable soluƟons for companies from ISS and SAP V>Ãi Þ Õ Ãi Þ ÕÀ « i] ÎÈä -iVÕÀ ÌÞ V> i « Þ Õ V>Ìi Ì > ` Ài Ìi Þ Ü «i Ì i `>Ì> vv° > Þ] > Ì iÀ are designed to make it easier. Easy to install and use, ISS and SAP SoluƟŽns help you to automate ÕÃivÕ vi>ÌÕÀi à Ìà - - > ` V> ÃV> } >L ÌÞ Ì >Ì L V à and integrate your business process to give real-­‐ƟŵĞ acƟŽnable insights, enabling you to take Õ Ü> Ìi` V> à > ` iÃÃ>}ið

decisions on the spot.

Find out how simple it can work for you. Contact : sales@issme.net ISS Middle East FZC. 707, Indigo Icon, Jumeirah Lake Towers , PO Box 213828 Dubai, UAE .

Tel: (+9714) 447 0565, Fax: (+9714) 447 0564, Web site : hƩp://www.issme.net

Available on: Android Cost: Free

www.smeadvisor.com

77

TECH TRENDS

Manage your time with aTimeLogger / à à > Õ µÕi] ÌiÀiÃÌ } >«« V>Ì Ì >Ì iÌÃ Þ Õ ÌÀ>V Þ ÕÀ >VÌ Û Ì iÃ Ü i Ì i } ° / i >«« >à «ÀiÃiÌ V>Ìi} À ià ÃÕV > i ÌiÀÌ> i Ì] iiÌ }] ÌÀ> ë ÀÌ > ` à ° Ƃ Þ Õ >Ûi Ì ` à Ì>« Ì i >««À «À >Ìi V>Ìi} ÀÞ > ` Ì i >«« ÃÌ>ÀÌà }} } Ì i Ì i Þ Õ >Ài ëi ` } Ì° 9 Õ V> > à VÀi>Ìi Ài« ÀÌà > ` > > ÞÃi Þ ÕÀ Ì i ëi Ì Ì Ü>À`à i>V >VÌ Û ÌÞ° / à à v> Ì>ÃÌ V v À ÃÕ«iÀ ivwV i Ì i ÌÀi«Ài iÕÀÃ Ü i Ì ii« ÌÀ>V v Ì i > ` VÀi>Ãi «À `ÕVÌ Û ÌÞ° 7 >̽à «>ÀÌ VÕ >À Þ >««i> } >L ÕÌ Ì Ã >«« Ã Ì >Ì Ì iÌÃ Þ Õ ÃiÌ } > à > ` «Õà iÃ Þ Õ Ì >V iÛi Ì i ] Ü V à `i> v À Ì i > >}i i Ì°

Available on: iOS and Android Cost: $2.99

Manage your travel with Concur

VÕÀ ÌÀ>V Ã] À}> ÃiÃ] > >}ià > ` Ài« ÀÌà > Þ ÕÀ ÌÀ>Ûi iÝ«i Ãià > ÃÞÃÌi >Ì V > ` À`iÀ Þ > iÀ° / à >«« Ì> ià >Ü>Þ Ì i >Ãà i v > ` } «>«iÀ ÀiVi «Ìà > ` ÃÌ Àià > Þ ÕÀ `>Ì> i « >Ìv À ° 1à } Ìà ¼V>«ÌÕÀi ÀiVi «Ì½ vi>ÌÕÀi] Þ Õ V> Õ« >` ÀiVi «Ìà LÞ V V } > « VÌÕÀi v Ì i ° À LÕà iÃÃ Ü iÀà > ` «À viÃà > Ã] VÕÀ à `i> Ì VÀi>Ìi > Ài« ÀÌ v Þ ÕÀ ÌÀ>Ûi iÝ«i ` ÌÕÀi > ` «ÀiÃi Ì > v À > Ãi` ÃÕ >ÀÞ Ì V i>}Õià À «>ÀÌ iÀð

Available on: iOS and Android Cost: Free

78

www.smeadvisor.com

TECH TRENDS

Manage your daily news and updates with LinkedIn Pulse / à « «Õ >À >«« Ü V « iÌi Þ V > }i Ì i Ü>Þ Þ Õ >VViÃÃ Þ ÕÀ `> Þ iÜð i` *Õ Ãi i >L iÃ Þ Õ Ì }iÌ > Þ ÕÀ ÃÌ À ià i iÜà vii` vviÀ } > ÌÀÕ Þ Ãi> iÃà iÝ«iÀ i Vi° ƂÃ Ì i > i ÃÕ}}iÃÌÃ] Ì i >«« à > «>ÀÌ v i` > ` ÕÃiÀà >Ûi Ì i «Ì Ì } Õà } Ì i À i` >VV Õ Ìð / i >«« V>Ì `i ÛiÀà iÜà ÃÌ À ià vÀ ÃÌ > À «ÕL V>Ì Ã > ` ÕÃiÀà V> VÕÃÌ Ãi Ì i À V Ìi Ì q Ã Ü >Ì Þ Õ Ài>` à «iÀà > Ãi` L>Ãi` Þ ÕÀ ÌiÀiÃÌð 7 >Ì Ã «>ÀÌ VÕ >À Þ >ÌÌÀ>VÌ Ûi >L ÕÌ i` *Õ Ãi à Ìà >L ÌÞ Ì ` Ü >` iÜà v À vy i Ài>` }] Ã Þ Õ ` ½Ì >Ûi Ì Ü ÀÀÞ >L ÕÌ ÌiÀ iÌ V iVÌ Û ÌÞ°

Available on: Android Cost: Free

Manage confidential data with Wickr 7 Ì À à } ÃiVÕÀ ÌÞ V ViÀ à >VÀ ÃÃ Ì i VÞLiÀ Ü À `] 7 V À ÌÀ `ÕVià > Ã Õ ` à ÕÌ ° / à iÃÃ>} } >«« > Üà ÕÃiÀÃ Ì i VÀÞ«Ì iÃÃ>}iÃ Ì >Ì Ì iÞ Ãi ` ÕÌ À`iÀ Ì «À ÌiVÌ V w`i Ì > v À >Ì ° " Þ Ì i Ìi `i` ÀiVi ÛiÀ à >L i Ì `iVÀÞ«Ì Ì iÃi iÃÃ>}ið 1ÃiÀà > à >Ûi Ì i «Ì v Ãi iVÌ } > ViÀÌ> Ì i «iÀ ` `ÕÀ } Ü V Ì i À iÃÃ>}i > ` i` > Ü Li >Û> >L i q v Ü } Ì Ã > iÃÃ>}iÃ Ü iÝ« Ài > ` Li `i iÌi`° Ƃ Ì iÀ >`Û> Vi` vi>ÌÕÀi vviÀi` LÞ 7 V À Ã Ì i ¼Ã Ài``iÀ½] Ü V i ÃÕÀiÃ Ì >Ì > Ì i w iÃ Þ Õ½Ûi `i iÌi` vÀ Þ ÕÀ `iÛ Vi >Ài V « iÌi Þ iÀ>Ãi`° / i >«« ÀiµÕ Àià ÌÌ i Ì «iÀà > v À >Ì >Ì Ì i Ì i v à } } Õ«] Ü V `iw Ìi Þ >``Ã Ì Ìà >««i> t

Available on: iOS and Android Cost: Free

80

www.smeadvisor.com

2 0 1 5

PUBLIC VOTING NOW OPEN

RED CARPET GALA DINNER DECEMBER 17, 2015 (+971) 4 377 2400 Proudly Supported by

mega@sport360.com Media Partners

In Association with

sport360.com/mega Organized by

TECH TRENDS

Manage your daily notes with Evernote ÛiÀ Ìi à > i ÃÌ « à ÕÌ v À > Þ ÕÀ LÕà iÃà ii`à q Ì > ÜÃ Þ Õ Ì Ì> i ÌiÃ] Ã>Ûi >}ià > ` ÀiV À` >Õ` Ìið Ài « ÀÌ> Ì Þ] Ì > ià > Þ ÕÀ `>Ì> >VViÃà L i >VÀ Ãà > Þ `iÛ Vi Þ Õ ÕÃi VÀi>Ì } > Ãi> iÃà iÝ«iÀ i Vi° Ì > à i >L ià à >À } v À >Ì Ü Ì Ì iÀ ÕÃiÀà V Õ` } «>ÀÌ iÀÃ] > >}iÀà > ` i « Þiið Ƃ`` Ì > Þ] v À vÀiµÕi Ì ÌÀ>Ûi iÀÃ] Ì Ã>Ûià ÌÀ>Ûi « > Ã] >«Ã > ` Ì iÀ ` VÕ i Ìð v Þ ÕÀ LÕà iÃà ÀiµÕ ÀiÃ Þ Õ Ì Li V ÃÌ> Ì Þ Ì i } ] ÛiÀ Ìi Ã Ì i «iÀviVÌ >«« Ì ÃÌ>Þ V iVÌi` Ü Ì Þ ÕÀ ÃÌ>vv q > ` LÕà iÃà q Ó{ÉÇt

Available on: Android and iOS Cost: Free

Manage your Twitter account with Plume for Twitter >ÌÌiÀ Ü LÕÃÞ Þ Õ >Ài] Ì i Ài> ÌÞ Ã Ì >Ì Ì i ` } Ì> Ü À ` à V ÃÌ> Ì Þ ¼>VÌ Ûi½° / à i> Ã Ì >Ì Þ Õ ii` Ì V Ì Õ> Þ > >}i Þ ÕÀ à V > i` > «ÀiÃi Vi vÀ > Þ «>ÀÌ v Ì i Ü À `° / à à iëiV > Þ ÌÀÕi v À Ì Ãi LÕà iÃÃ Ü iÀÃ Ì >Ì > >}i Ì i À V «> ޽à à V > i` > >VÌ Û Ì ià LÞ Ì i Ãi Ûið * Õ i v À /Ü ÌÌiÀ à > v> Ì>ÃÌ V >«« Ì >Ì iÌÃ Þ Õ VÀi>Ìi > V « iÌi Þ VÕÃÌ Ã>L i /Ü ÌÌiÀ iÝ«iÀ i Vi° " i vi>ÌÕÀi Ì >Ì ÃÌ> `à ÕÌ Ã Ì i >««½Ã >L ÌÞ Ì ÃÕ«« ÀÌ Õ Ì « i /Ü ÌÌiÀ >VV Õ Ìà q Ì Ã i> Ã Þ Õ V> i>Ã Þ ÃÜ ÌV L>V > ` v ÀÌ LiÌÜii Þ ÕÀ LÕà iÃà > ` «iÀà > >VV Õ Ìt * Õ i½Ã ÕÃiÀ vÀ i ` Þ > ` } Þ ÌiÀ>VÌ Ûi ÌiÀv>Vi > iÃ Ì > >Là ÕÌi ÕÃÌ >Ûit

Available on: Android Cost: Free

For an online version, please visit: ÌÌ«\ÉÉÜÜÜ°Ã i>`Û Ã À°V ÉÌiV É Ì « > >}i i Ì >««Ã

82

www.smeadvisor.com

TECH TRENDS

www.smeadvisor.com

83

Make your money work harder with an NBAD Commercial Call or Fixed Deposit account.

ZZZ QEDG FRP Make a smart business decision and get the most competitive USD interest rates on Commercial Call account and Fixed Deposits from NBAD. Č&#x160; 3URPRWLRQ LV DSSOLFDEOH IRU DOO &DOO DQG )L[HG 'HSRVLW DFFRXQWV LQ 86' FXUUHQF\ Č&#x160; 0LQLPXP DFFRXQW EDODQFH WR HDUQ LQWHUHVW IRU &DOO DFFRXQW LV 86' Č&#x160; 0LQLPXP DFFRXQW EDODQFH WR HDUQ LQWHUHVW RQ )L[HG 'HSRVLW DFFRXQW LV 86' Č&#x160; (DV\ DFFHVV WR IXQGV WKURXJK RQOLQH DQG EUDQFK EDQNLQJ FKDQQHOV

Global Commercial Banking 7R DSSO\ 606 Č&#x2026;%$Č&#x2020; WR FDOO RU HPDLO &RPP%DQNLQJVDOHV#QEDG FRP 6XEMHFW WR EDQN DSSURYDO 7HUPV DQG FRQGLWLRQV DSSO\