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Navigating Bankruptcy we break down the new proposed UAE financial restructuring and bankruptcy law
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Issue 79 JUNE 2012 WWW.SMEADVISOR.COM
presents
June 2012
SME ADVISOR Middle East
Publisher Dominic De Sousa Group COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126
A change is as good as a rest
M
y closing remark in last month’s Editorial made mention of the magazine’s redesign. This month we present those changes – nothing too severe, but we thought it time to introduce minor amendments in order to keep the look and feel fresh, relevant and in sync with our reader’s inputs. Indeed, not only did we redesign the magazine but also overhauled the SME Advisor Website to incorporate the magazine’s new look. You can check out the changes at www.smeadvisor.com.
EDITORIAL Senior Editor Mike Byrne mikeb@cpidubai.com +971 4 440 9105 Sub Editor Joumana Saad joumana@cpidubai.com +971 4 440 9115 Contributing Editor Aparna Shivpuri Arya aparna@cpidubai.com +971 4 440 9133 ADVERTISING Sales Director James Khoury jamesk@cpidubai.com +971 4 440 9144 PRODUCTION AND DESIGN Operations Director James Rawlins jamesr@cpidubai.com +971 4 440 9108 Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 Design Director Ruth Sheehy ruth@cpidubai.com Head of Design Fahed Sabbagh fahed@cpidubai.com +971 4 440 9107 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 Photographer Cris Mejorada cris@cpidubai.com +971 4 440 9108 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya online@cpidubai.com +971 4 440 9100 Published by
We will also be amending the style of our events for 2012. The brainstorming, planning and final decisions have finally been put in place. From September to December, SME Advisor will be conducting four SME Success Series days. What we are endeavouring to provide the SME community this year are more focussed events, held across various Emirates and specifically directed at key business and innovation hubs. The first event is scheduled for September so do keep an eye out on the Website and in our weekly newsletters for updates. The yearly SME Advisor Stars of Business Awards and Summit will take place on November 28th. All those SMEs wishing to enter their nomination for the Awards will be able to do so very soon as we are in the final preparatory stages and will launch the process in the coming weeks. Again we will be sure to communicate all details to the SME community so that no-one misses out. Contained within this month’s issue are some key issues for you to consider – the cover story discusses the newly proposed bankruptcy legislation for the UAE. It has been scheduled for the end of 2012 and should go a long way to bridging several gaps currently hindering the business community. There are also articles regarding business and green initiatives here in Dubai, work-life balance investigations and changing technology trends for SMEs. What we have tried to provide our readers this month is a sense of change and things to come – all around us we are witnessing change, innovation and even complete overhaul makeovers. If ever there is a time of the year for businesses to slow down, take a step back to analyse their business and to diversify, it is the notoriously quieter months of the hot summer season. Why not spend some of those quieter weeks in the lead up to, and during Ramadan, to sit with your team and evaluate the year thus far – can you tweak any elements of your operations that might help give you that edge for the final quarter of 2012. They say a change is as good as a rest. If by slowing down to reconsider some of your strategies serves only to make minor adjustments, at least you are encouraging your business to adapt, while also opening your doors to innovation. Until next month....
1013 Centre Road, New Castle County, Wilmington, Delaware, USA Branch Office PO Box 13700, Dubai, UAE
Mike Byrne, Senior Editor
Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Printwell Printing Press LLC © Copyright 2012 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.
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SME ADVISOR Middle East
June 2012
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Contents Issue 79 June 2012
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Trade
24 | Corporate coaching Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, discusses the benefits of business coaches.
BANKING FOR BUSINESS
28 | Office space
We take a look at recent trends in the UAE’s commercial real estate market, and financing options offered by ADCB.
Opportunities
30 | Green shop
Joumana Saad interviews Gundeep Singh, founder of The Change Initiative, which has recently opened the first sustainability store in the UAE.
Entrepreneurship
34 | Christos Mastoras
Yahoo Maktoob! Director of Business Development, MENA, speaks to Aparna Shivpuri Arya about business opportunities within the ICT domain.
A step in the right direction We investigate the newly proposed UAE Federal Financial Restructuring and Bankruptcy law aimed at increasing legal sustainability.
EDITORIAL BOARD We present the SME Advisor Editorial Board for 2012.
John Lincoln, Vice President, Enterprise Marketing, du, talks segregation strategies.
Shoptalk
44 | Outsourcing
A quick look at news and events that will impact SMEs in this region.
Dan Smith, Head of Integrated Marketing, MENA region at Xerox, discusses the benefits of outsourcing.
SME about town
A round-up of the key events being attended by SME leaders in the UAE.
CORPORATE LIFESTYLE
22 | Executive trends
A glimpse at some of the latest products on the market.
SME ADVISOR Middle East
MaRKETING
42 | Segregation
16 | Beat on the street
June 2012
IMD Professor Nuno Fernandes, talks to Joumana Saad about the key management lesson to be learned from the Eurozone crisis.
06 | Introduction
08 | Trends and Updates
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Management
38 | Crisis control
Legal
46 | Premises David Bowman from Al Tamimi & Co. lists the practical and legal considerations surrounding shared office space.
48 | Bankruptcy Mike Byrne gives analyses of the newly proposed UAE bankruptcy legislation and what it means for businesses.
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Industry watch
52 | Tech trends
A recent study by Cisco shows the majority of IT leaders are accepting the bring your own device (BYOD) trend as a reality in the enterprise.
54 | Work-life balance Global work-life balance has improved among employees, but the UAE is lagging behind, according to a new survey by Regus.
Technology for business 58 | Tech news
We highlight IT trends and tools that are reshaping business in the region.
Sign off
62 | What’s next? SME Advisor Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.
56 | CEO study A new IBM study reveals that CEOs are changing the nature of work by adding a powerful dose of openness, transparency and employee empowerment to their organisations.
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EDITORIAL BOARD 2012
SME ADVISOR EDITORIAL BOARD The SME Advisor Editorial Board is an honorary advisory panel of experts comprising organisations and individuals who want to help regional business. The idea is to evolve the magazine through such sharing of ideas with key regional influencers. Over the next few months, we will conduct various interactive sessions with our board members, often including our readers, where we can collaborate and share ideas. The aim is to help the business community benefit from our panel’s expertise.
John Lincoln Vice President, Enterprise Marketing, du
John Lincoln has over 20 years telecommunications experience in the USA, the UAE, Japan, Europe, India, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in telecommunications from the Golden Gate University in San Francisco, California, USA.
Dr. Ashraf Mahate
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Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department
Regional Director, ICAEW Middle East, FCA
Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. He is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.
Amanda Line was appointed as the ICAEW’s Middle East Regional Director in September 2009. She is responsible for building the ICAEW’s presence and profile in the region. She has spent the last 15 years living and working in Asia and the Middle East and has extensive experience in financial training. Amanda founded the largest provider of professional financial training in Singapore. Working together with UK and US-based training companies, she expanded the business across Asia. Since moving to the UAE, Amanda has provided consultancy for educational businesses in addition to setting up and running several companies.
July 2012 June 2012
SME SMEADVISOR ADVISORMiddle MiddleEast East
Amanda Line
Abdulmuttalib Al Hashimi
Ghada Audi
Founder and Managing Director, Next Level
Head Of Disputes Resolution, Fichte & Co
Abdulmuttalib Al Hashimi is a UAE national entrepreneur, Managing Director and Founder of Dubai-based Emiratisation consultancy, Next Level. He founded the company in 2006 and under his leadership Next Level has helped more than 30 companies in the UAE on their Emiratisation recruitment and human resources needs. The company has so far helped employ at least 100 UAE nationals and around 200 international employees in various positions. Abdulmuttalib continues to play an active role in society particularly in the fields of Emiratisation, development of national capabilities and Emirati entrepreneurship. He is a regular speaker in conferences, such as the GCC Nationalisation Conference, the UAE Career Fair in 2009 and the Abu Dhabi Business Round Table conference.
Alexander Blass
Ghada joined Fichte & Co in 2012 as Head of Disputes Resolution, from the DIFC Courts and Special Tribunal Related to Dubai World. Her practise areas include international commercial arbitration, mediation, as well as DIFC litigation, regulatory, compliance and insolvency. She has experience on three continents, having practised law in the USA, Germany and the UAE, enabling her to bridge business cultures and tailor legal solutions and strategies to multijurisdictional clients’ needs. She is a registered practitioner with the DIFC Courts in Dubai and is a member of the USA Bar in New York and Virginia. She is a member of the DIFC Courts’ Rules Sub-Committee, LCIA Arab Users’ Council, GCC Commercial Arbitration Centre, ICC UAE Taskforce on the Compilation of UAE Arbitration Case Law, as well as the American Business Council.
David Burns
President and CEO, Alexander Blass International
COO, British Business Group, and Director of Marketing and Corporate Communications, UHY
Alexander Blass is an American entrepreneur and innovator who has travelled to over 40 countries and appeared in hundreds of media outlets, including several cover stories. He is the grand prize winner of the Daily Record’s Top Innovator of the Year Award. He presently serves as CEO of Alexander Blass International, an executive training and consulting firm. Alexander keynotes some of the world’s most prestigious conferences on topics including innovation,creativity, leadership change, business development and entrepreneurship. Examples include the Abu Dhabi Innovation Forum, the SME Advisor Stars of Business Awards in Dubai and the European Conference on Creativity and Innovation.
David is the Director of Marketing and Corporate Communications for an independent office of UHY, an international firm of auditors and accountants. His current UHY activities include the PR and marketing of four offices in the UAE and the business development for the firm in general. David is also the COO of the British Business Group in Dubai and the Northern Emirates, and is responsible for the overall administration of the group’s activities and an office based in the grounds of the British Embassy in Dubai. He has been involved with SMEs in the region for 35 years.
SME SMEADVISOR ADVISORMiddle MiddleEast East
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shoptalk
Manufacturing tops Business Confidence Index
Caption goes here Vit eiuscim nulluptatem quatiorpos atur? Quibero omnistin nonsequia eariorempos
HH Sheikh Ahmad bin Saeed Al Maktoum receives the award from the strategic team in the presence of Dr. Al Zarooni
UAE
Dubai Airport Freezone wins strategic planning award
H
is Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airport Freezone, welcomed Dr. Mohammed Al Zarooni, Director General of Dubai Airport Freezone, and the strategic management team at the Free Zone. During the meeting, Dr. Zarooni and the team handed over the Richard Goodman Strategic Planning Award to HH Sheikh Ahmed. The award, given by the American Strategic Planning Association, recognises distinction in strategic planning by Dubai Airport Freezone and honours its competence, innovation and excellence. Dr. Zarooni said: “Winning the Richard Goodman Strategic Planning Award is a result of our concerted efforts to apply world-class processes and methodologies which encourage creativity and innovation in the implementation of the strategic planning, and reinforcing the need to improve on the tools and process from time to time.” “One of our priorities is to attract more investors and international companies from various fields and to help expand their business in the Middle East
through the Dubai Airport Freezone. We aware of their demands and we work on implementing and developing the same. Strategic planning is considered one of the most important elements that meet the demands of our customers and help them in expanding their business across the Gulf and Middle East,” Dr. Zarooni added. Yousuf Behzad, Executive Director of Human Resources and Strategy, DAFZ said: “The purpose of participating in the top global award was aimed at achieving outstanding standards in the implementation of strategic planning processes, emphasising the excellence of the free zone in enforcing the same and help achieving its objectives. The Strategic Department team at the Dubai Airport Freezone consistently works on achieving the objectives of the institution, which includes the ongoing development of the infrastructure, gaining customer satisfaction, and providing all necessary facilities to create tailored environment for foreign investors to expand their business in the Gulf and around the region.”
Businesses across Dubai remain upbeat on growth and revenues with expectations riding high, especially in the manufacturing sector, as reflected in the quarterly business survey conducted by the Department of Economic Development (DED) during the first three months of 2012. According to the survey the composite Business Confidence Index (BCI) for Dubai stood at 120.5 points in Q1 2012, indicating an optimistic outlook for the next quarter. BCI crossing 100 points is seen as indicative of a positive sentiment within the business community. A majority of businesses in Dubai foresee sales increasing, or remaining steady, and plan to retain their employee count through to the second quarter. The survey also reveals an even brighter outlook among export-related businesses. The survey showed manufacturing as the most optimistic sector, with positive outlook extending across all key parameters (sales volume, selling prices, profits and employees). The service sector is close behind, while trading has a comparatively lower overall outlook. In addition, exporters in Dubai were seen to have a more positive outlook on sales performance, new purchases and profits, compared to non-exporters. Even though expectations are similar on sales volumes among SMEs and their larger counterparts, large businesses are more optimistic about profits for the coming quarter. Large businesses are also relatively more positive on the employment outlook.
du to provide 127 Emirati employees with training du has announced a new partnership with Higher Colleges of Technology (HCT), during an agreement signing ceremony, held at du’s headquarters in Al Salam Tower, Dubai. The partnership will see 127 of du’s Emirati employees attend a full day of training once a week for a period of six months at HCT campuses, including Dubai Men’s College, with courses covering a
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range of essential skills. This is the third consecutive partnership of its kind between du and Higher Colleges of Technology. The training is designed to help entry-level Emiratis develop their skills. There is a training opportunity to suit every grade of employee and each stage of learning, with both internal (such as induction training) and external (such as a university degree) sessions. Subjects
including English language; the etiquette of e-Communication; international computer driving licence (ICDL); communication skills; time management; the principles of report writing; business development; an introduction to the telecommunications sector; business presentation skills; and also problem-solving and decision-making, will be offered.
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shoptalk
BRL executives meet with a Lebanese delegation under IFC.
UAE
DED steps up efforts to enhance UAE business
T
he Business Registration and Licensing (BRL) Division in the Department of Economic Development recently received a high level delegation from the business registration sector in Lebanon headed by the International Finance Corporation (IFC), a member of the World Bank Group. The delegation reviewed the business registration system in Dubai, the electronic memorandum of association initiative, as well as the DED’s initiatives intended to facilitate economic activity in Dubai. The delegation’s visit followed the DED’s determined efforts to enhance the UAE’s top rankings in the World Bank’s Doing Business Report for 2013 and promote the country as a globally competitive business hub. An internationally competitive and competent business registration system that offers added value along with convenient and flexible procedures is one of the criteria against which countries are ranked in the report.
Bayt.com successfully wraps up fourth Virtual Education Fair Bayt.com, in conjunction with Dubai International Academic City (DIAC), a member of TECOM Investments’ Education Cluster, held its Virtual Education Fair (VEF). Over 12,000 registered students and 11 different education institutes took part in the online event that took place between 6th to 12th May, 2012. The fair followed on the successes Bayt. com has enjoyed with its virtual fair series in markets across the region, by providing a unique, fully-interactive online platform, for academic and training institutions.
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“Our efforts have reflected positively on doing businesses in Dubai and attracted significant interest from other Arab and international organisations, including the World Bank and the International Finance Corporation under its umbrella. During our meeting with the Lebanese delegation we also reviewed the DED’s future strategies to speed up licensing procedures, fee collection and obtaining initial approvals to start an economic activity, through constructive co-operation with local and federal authorities in the UAE,” said Mohammed Shael Al Saadi. Al Saadi praised the interest shown by IFC in the DED’s initiatives and especially in promoting e-services to overcome the challenges that investors and businesses may face in some countries. He also discussed various key aspects, most notably the possibility of the DED hosting a number of delegations under the supervision and guidance of IFC during the third quarter of 2012.
Dr. Ayoub Kazim, Managing Director, TECOM Investments’ Education Cluster, said: “Bayt.com’s Virtual Education Fair is an innovative platform in academia, enabling both educational institutions and potential students to communicate with each other to understand and cover each others’ needs. Thousands of students this year learned more about admissions, financial aid, institutions and academic programmes from the VEF. The initiative has not only benefited the students but also our academic partners at a fraction of the cost of traditional education fairs.” The VEF is a unique concept, allowing academic institutions and potential students the opportunity to interact through the flexible online platform. Visitors are given access to traditional fair facilities that enable them to chat with the institutions, download their brochures, and exchange information,
but with the added convenience of being able to attend from anywhere within the world. This year’s VEF was a dynamic forum which provided students with the wide variety of information required to make the academic decisions that will define their future lives and careers. “Bayt.com’s VEFs are a part of our mission to empower people with the tools and knowledge to build their lifestyles of choice, even from the comfort of their own homes,” said Suhail Masri, VP Sales, Bayt.com. He added: “At Bayt.com, we are committed to assisting all professionals who are interested in bettering their careers, whether it is by helping them find jobs or further education opportunities. This is our fourth VEF in the region, not to mention our very successful Virtual Job Fair series as well, and we look forward to many more to come.”
shoptalk
Dubai Exports returns from Project Qatar with deals worth AED 221 million
José Carlos García de Quevedo, Director General of Trade and Investment of the Spanish Ministry of Economy and Competitiveness, addresses the audience during the lecture
QATAR
Lecture on Qatar-Spain economic relations reassures business
T
he Spanish Business Council in Qatar and IBQ organised a lecture in April at the W Doha, hosted by José Carlos García de Quevedo, Director General of Trade and Investment of the Spanish Ministry of Economy and Competitiveness, and Bhupendra Jain, Head of Corporate Banking at IBQ. The lecture focused on Qatar-Spain economic relations in the light of recent positive economic developments. Over 40 delegates from Qatar and Spain attended, and were welcomed by the Ambassador of Spain to Qatar, HE Carmen de la Peña Corcuera. In his address, Garcia de Quevedo covered bilateral trade and investment relations between the two countries, which have increased over recent years but have still, in his opinion, could go
much further. He praised the business communities of both countries for their staunch cooperation. He also stressed how much support had been given by the two governments, as institutional contacts and visits had intensified, resulting in a number of economic bilateral agreements. In this respect, he highlighted the importance of the visit of HH the Emir of Qatar to Spain, in April, last year. From IBQ, Bhupendra Jain, Head of Corporate Banking, emphasised the remarkable growth in the Qatari economy and the country’s increase in overseas investment, saying: “The Qatari economy is expected to show significant and sustained growth and as one of Qatar’s oldest banks, IBQ is very well positioned to play a meaningful financing role in this growth.”
Local companies that participated in the UAE pavilion at the recently concluded Project Qatar 2012 exhibition were able to clinch 17 deals, together worth AED 221 million, with Qatari and international companies. The 3,000 square metre UAE pavilion, led by Dubai Exports, the export promotion agency of the Department of Economic Development, brought together more than 140 local companies specialised in the construction, contracting and building materials sectors. “The UAE companies were able to demonstrate their strength at Project Qatar 2012 as evident from the remarkable turnout at the UAE pavilion. The survey, conducted by Dubai Exports in coordination with the participating companies, also showed a bright outlook on future deals. The local companies expect to close 1715 deals worth AED 3.9 billion this year as a result of their participation in the exhibition,” said Engineer Saed Al Awadi, CEO, Dubai Exports. Al Awadi hailed the significant presence of leading Qatari and international traders, investors, and professionals from diverse sectors including facilities, services and infrastructure, equipment and machinery, and green buildings at the event. The UAE pavilion received over 20,000 visitors, many of them from the Arabian Gulf, Middle East, North Africa and Europe. Al Awadi stressed that Dubai Exports aims to increase the number of local exhibitors by 10% and expand the UAE pavilion by 15% for the next cycle of Project Qatar.
Links Group hosts trade delegations in Qatar The Links Group, a company that specialises in company formation in the UAE and Qatar, recently met with construction companies from Malaysia and the UK to discuss establishing a commercial presence in Qatar. Held on the sidelines of Project Qatar 2012, the separate seminars were hosted by the Malaysian External Trade Development Corporation (MATRADE) and the Construction Products Association, a representative body for the UK’s
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manufacturers and suppliers of construction products, components and fittings. The Links Group was invited to share local market insights with the international business delegations. The seminars were attended by 120 representatives from over 70 companies actively looking to set up shop in the Gulf state. Project Qatar 2012, which took place at the Doha Exhibition Centre, represents the booming construction growth the Gulf state is currently witnessing. Wayne Merrick, General
Manager of The Links Group Qatar, said: “While local and foreign construction companies are competing to win a slice of the USD 250 billion worth of projects being launched in Qatar, USD 125 billion alone is planned for the next six years. With many of these projects still in the developmental phase, Project Qatar is an important platform through which to tap these immense new business opportunities. We are confident the exhibition will reap dividends for the visiting delegations.”
shoptalk KSA
GITEX Saudi Arabia 2012 inagurated
H
E Dr. Mohammed Ibrahim AlSuwaiyel, President of King Abdulaziz City for Science & Technology inaugurated GITEX Saudi Arabia 2012, a premier business-to-business networking event and leading consumer ICT showcase. The event was held 21st to 24th May 2012, at the Riyadh International Convention and Exhibition Centre and attracted the participation of over 250 exhibitors from 16 countries, showcasing latest developments and emerging trends within the buoyant Saudi ICT sector. GITEX Saudi Arabia 2012 has generated remarkable interest from the local public sector. In addition to the support from the Ministry of Communications & IT, the event is seeing the participation of the Ministry of Interior-NIC, the Ministry of Justice, e-Government programme Yesser, Riyadh Municipality, Technical & Vocational Training Corp., Commission for Communications & Information Technology (CITC), and BADIRICT. It was also attended by companies from
HE Dr. Mohammed Ibrahim Al-Suwaiyel, President of King Abdulaziz City for Science & Technology inaugurates GITEX Saudi Arabia 2012
China, India, Pakistan, Taiwan, Japan, UAE, Qatar, Jordan, Lebanon, Czech Republic, England, Turkey, UK, Germany and the Kingdom of Saudi Arabia. GITEX Saudi Arabia 2012 taps into latest ISP solutions, card technologies and smart chips, consultancy and training, customer relationship management (CRM), digital imaging and graphics, e-Business, money
management, information management, networks and business communications, office automation, online information systems, security solutions and wireless computing among others. The event ran concurrently with Saudi Communications 2012 – The 14th International Telecommunications Exhibition, which serves as the business-to-business portion of GITEX.
BAHRAIN
Bahrain’s economy sees continued growth
The Economic Development Board (EDB) recently issued its Bahrain Economic Quarterly report, which looks into the key economic indicators of Bahrain for the fourth quarter of 2011 and first quarter of 2012. The report estimates that Bahrain’s annual real output continued to grow during 2011, expanding by 2.2%. This exceeded the previous estimate of 1.5% growth as the economy boosted was by a faster than expected recovery in the second half of the year. The report draws on statistics from the Central Informatics Organisation and indicates that after a sharp fall in the output in Q1 2011 due to unrest, output returned to its previous level in third
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quarter and grew by 3.2% in the fourth quarter, compared to the same period a year earlier. The fastest growing sector in 2011 was transport and communication at 11% growth for the year, particularly significant as it is a large contributor to the economy, accounting for almost 10% of Gross Domestic Product (GDP). Other large sectors experienced significant growth, including government services at 5.6%, downstream manufacturing at 3.9%, finance services at 2.6% and mining and quarrying (mostly crude oil output) at 3.2%. The hotels and restaurants sector was hardest hit in 2011, although it showed significant recovery throughout the second half of 2011, following a difficult first half to the year. The Consumer Price Index fell by 2.1% in March 2011 compared to the same quarter a year earlier. Overall prices remained subdued beyond March, returning to pre-unrest levels in October 2011. GDP growth is expected to continue to rebound towards historic levels during 2012 as increases in crude oil production, manufacturing and government spending are all driving expected economic growth of 4% to 5%. While a fall in private sector demand and oversupply of commercial properties has slowed construction, government spending is projected to compensate and fuel construction for infrastructure, social housing and other social spending projects such as schools and hospitals.
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SME About Town
DIFC event focuses on commercial disputes
Luis Murguia, SVP Ecosystem and Channels, SAP Europe, Middle East and Africa (centre), addresses the media during the round-table event.
SAP holds round table on SME solutions
I
nformation technology is a key pillar for SMEs to become a prime engine of economic growth in the UAE. This was the key message addressed by SAP executives during a recent media round-table. “The advances in business-oriented solutions for mobility, analytics and cloud, are driving the competitiveness of SMEs by empowering business leaders and entrepreneurs with the best in class technology innovations to gain clear insights,” said Luis Murguia, SVP Ecosystem and Channels, SAP Europe, Middle East and Africa. The power of small is particularly pronounced in the UAE, with the government recently calling for the creation of 20,000 jobs over the next decade.“The UAE needs to stimulate the development of existing SMEs, beget new companies through better financial solutions,
provide greater access to markets, and facilitate targeted mentoring of youth and entrepreneurs,” said Dhiraj Daryani, Research Manager, IDC MEA. Nearly 80% (98,500) of SAP’s customers are SMEs. Seventy-nine per cent of all SAP SME customers originate from over 3,000 value-added reseller (VAR) channel partners (the goal is to increase that to 100% in the coming years). Moving forward, there are big profits to be had. According to Gartner, the global SME market is projected to grow more than USD one trillion by 2014, with a five-year compound annual growth rate (CAGR) of 5.7%. This means big opportunities for those offering the latest IT solutions, with Forrester noting that the SME ERP market alone is expected to grow to USD 31.3 billion by 2014 (CAGR 6.1%).
IMD Business Forum outlines a new regional business agenda Key themes addressed by IMD experts during the forum were the global economic uncertainty and fast-moving social trends, and the need for businesses to adapt. “Companies can still do well in the current environment, and there are great opportunities to make good deals and investments. But businesses can’t have a single model worldwide – they need regional and local models,” said
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Dr. Nuno Fernandes, Professor of Finance at IMD. Dr. Fernandes and Dr. Hischam El Agamy, Executive Director of IMD, said senior executives in the Middle East are challenging some of their previous assumptions about how they lead their businesses and their employees. They noted that good people management is more important than ever,
because business leaders need to build confidence in their teams at a time of high uncertainty. Dr. El Agamy highlighted a number of challenges facing the region’s senior executives including demographic pressure and the need to adapt to technology and innovate. He added: “The business landscape in the Middle East is changing fast, and the shift of global economic power is creating some volatility. But in the years to come, I think this era will be seen as one of great business opportunities.”
In its second Knowledge Series event for 2012, the Dubai International Financial Centre (DIFC) discussed the different specialist world-class resolution platforms available in Dubai for commercial disputes. As a leading business hub, Dubai offers a range of commercial dispute options through its Arabic-language, civil law courts; the English-language, common law system at the DIFC Courts, and the DIFC - LCIA Arbitration Centre. The session, moderated by Mark Beer, Registrar, DIFC Courts, introduced each of the DIFC’s commercial dispute resolution options and discussed why and how firms might access each. Beer said: “Operating from the DIFC alone are two highly-regarded forums and the business community can be empowered by understanding what each offers and how each works. We know that in the case of the DIFC Courts, people know who we are; they are aware of our track record for speedy, effective dispute settlement, but they are less sure on how they can use us.” The panel discussion included Wayne Jones, Partner, Clyde & Co; Fiona Campbell, Senior Arbitration & Dispute Resolution Practitioner, Al Tamimi & Company; H.E. Justice Ali Al Madhani, DIFC Courts; and Nizar Fadhlaoui, Registrar, DIFC-LCIA Arbitration Centre. In their discussions, the panellists stressed the importance of having dispute settlement options that are sophisticated and nimble as the business they serve, and highlighted the terms needed to be included in the contracts to guarantee that disputes can be heard in these judicial forums. The Knowledge Series is an initiative by the DIFC intended to create dialogue between industry experts and DIFC members comparing interesting topics in the world of finance. Ten sessions have been held to date covering topics including captives, family offices, Islamic finance, funds regime, bonds and sukuk, private equity and capital markets.
SME About Town
Business seminar led by leadership guru Jim Collins UAE business leaders recently gathered to hear Jim Collins share his lessons on leadership and recipe for long-term success. Over 200 people attended the seminar in Dubai, despite the presentation being broadcast via satellite feed. In a business world characterised by change, uncertainty and even chaos, Collins says the surest way to steer a company to lasting success is through disciplined leadership. Collins referred to his latest research which explores why some companies thrive in uncertainty, even chaos, and others do not. During the three-hour seminar Collins told delegates there are three vital practices a company should adopt to help it succeed during challenging times: discipline, rationality and productive paranoia. “Remain hyper vigilant and highly attuned to threats and changes in your environment. Then prepare for the worst possible scenarios with contingency plans. It’s really
important to do this when things are going well,” said Collins. “Contrary to popular belief, the signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency,” he added. The event was organised by bizability, as part of its annual World Thought Leader Seminars for clients and senior business people. Hazel Jackson, CEO of bizgroup, the holding company of biz-ability, said, “The biz-group has been working with Jim Collins’ principles for more than seven years, incorporating his management techniques into many of our business strategy and leadership training programmes. This is the first time Jim has allowed international audiences to participate in his seminars via satellite feed, which is testament to the strength of our partnership. We are delightedto facilitate for our clients and the wider UAE business community such exclusive access to this high calibre of world thought leaders.”
UAE-based business leaders listen to Jim Collins’ presentation during the seminar.
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HH Sheikh Dr. Sultan Bin Mohammad Al Qassimi, Supreme Council Member, Ruler of Sharjah and President of American University of Sharjah (AUS), inaugurates the AIWF conference.
American University of Sharjah hosts AIWF annual conference
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he Arab International Women’s Forum (AIWF) conference hosted sessions focused on women and youth as drivers of change in emerging economies. Also addressed was the potential for women entrepreneurs to become enablers for job creation in the region and other emerging economies around the world. Plenary sessions included Innovators and Entrepreneurs in Emerging Economies: Reaching a New Level of Entrepreneurial Excellence; Developing Youth: The Role of Governments and the Private Sector; Hidden Potential: New Perspectives on the Role of Women and Youth; and How Are Students and Young Entrepreneurs Leveraging Technology and Social Media to Promote a Sustainable Future? Executives from organisations such as the World Bank, Sharjah Business Women Council, Emirates Foundation and the OECD Investment Programme gave various presentations during the conference. Critical issues highlighted during the session were the need to revise labour laws throughout the MENA region to promote women entrepreneurship and recruitment, and as well as cultural factors that limit women’s participation in the economy. Haifa Fahoum Al Kaylani, Founder, AIWF, pointed to some startling statistics illustrating the pressing need for initiatives to promote employment opportunities, and utilise the entire labour pool, men and women alike. “According to the World Bank,” she notes, “the Arab world needs to create 75 to 100 million jobs by 2020 in order to see any significant reduction in unemployment and absorb the number of young graduates entering the workforce each year.” Enlarging on the vital importance of providing equality of opportunity to men and women in the workforce, Dr. Peter Heath, Chancellor, American University of Sharjah, said: “It is crucial that women and youth are given the essential tools, training and hands-on-experience that will ensure that they are workforce ready.” Critically, he observes, “Talent is universal, but opportunity is not.” The conference incorporated global expertise of diplomats, government officials, business leaders, economists and academics from the UAE, Saudi Arabia, Qatar, Egypt, Jordan, Palestine, India, South Africa, the US, UK, Germany, France, Italy and Sweden. Key speakers included Dr. Afnan Al-Shuaiby, Secretary-General and CEO, Arab-British Chamber of Commerce, UK; Nicola Ehlermann-Cache, Senior Administrator for MENA-OECD Investment Programme; and Dr. Nasser Saidi, Chief Economist at Dubai International Financial Centre (DIFC).
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SME ABOUT TOWN
Experts debate on the future of vocational education Dubai Knowledge Village recently invited industry experts to participate in a seminar focused on the role of vocational education in the region. The discussion included speakers Richard Barrett, Director, Consulting, Deloitte; Dr. Naji Al Mahdi, Executive Director, National Institute for Vocational Education; Dr. Howard Reed, Director, Dubai Women’s College; and Senior Director, Higher Colleges of Technology, and Dr. Abdullatif Al Shamsi, DirectorGeneral, Institute of Applied Technology. “Stakeholders in key industry segments are faced with the question about why Emiratis do not join the private sector when it is said to provide the majority of new jobs.
Furthermore, policy makers need to identify what would motivate Emiratis to take up occupation in the private sector in the professional, technical and service industries,” said Dr. Reed. Dr. Naji Al Mahdi said: “There has to be a future for vocational education in the region. Achievement in vocational training programmes leads to rewarding jobs and successful careers. The skills required for employability may vary from country to country. For instance, the UAE, Kuwait, and Qatar demand white-collar skills while blue-collar skills are needed in Bahrain, Oman and Saudi Arabia. However, whatever the skill level, vocational education will play an increasingly
Panellists included representatives from the Institute of Applied Technology, Dubai Women’s College and Higher Colleges of Technology, National Institute for Vocational Education, and Deloitte.
pivotal role in helping young nationals meet the challenges of the workplace.” Countries such as Singapore and the UK were described as key examples of how vocational programmes can have a positive impact on economic growth. The
panellists agreed that must more be done at the government and corporate level to develop a hiring process for these graduates, but the focus in the near term should be to understand the market and skills gaps that companies are looking to fill.
TECOM SME Builder focuses on new age business models Dubai Knowledge Village (DKV) recently hosted it’s TECOM SME Builder event which connected SMEs and prospective business owners to industry experts. Iyad Mourtada, Managing Director, OpenThinking, presented on the topic of business model generation. He stressed the need for CEOs and senior managers to identify ways to transform their businesses and processes to reinvent their business models. Held on 24th May at the Dubai Knowledge Village Conference Centre, the event was open to the public and provided cutting-edge solutions to crucial issues that SMEs face while working towards improving longterm profitability. The event gathered over 150 participants, including prospective business owners who gained considerable expertise through interaction with peers from various industry sectors. Mourtada added: “Business model generation is the first step to visualising business processes and strategies in a simple and
SME leaders and prospective business owners attended the event hosted by Dubai Knowledge Village.
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effective way. Following this, the strategies must be implemented in real time to test their efficiency and make the right adjustments. In other words, it is essential for businesses to build a unique model and keep refining that model in response to market dynamics.” The half-day event featured 30-minute speed tables. Led by experts from companies operating out of TECOM Business Parks, the discussions focused on SME-specific issues such as change management, digital marketing and communications, legal, strategy, networking and referrals, sales, marketing and banking and investment. Phil Bedford, Managing Director, The Referral Institute, underlined the importance of referrals for SMEs. He said: “Over 91% of companies gain between 40% to 100% of their new business through referrals or leads. However, these referrals come by chance. And, business cannot be left to chance.” Bedford additionally shared an easy, systematic and proven approach based on relationship-building for the purpose of generating higher sales in less time. Suhail Masri, Vice-President of Sales, Bayt.com, said: “The TECOM SME Builder has for years provided a space for owners of SMEs to grow their businesses, sharpen management skills, and network with professionals. At Bayt.com, we are excited about our collaboration with such a highly-strategic initiative to help businesses in the UAE develop and eventually contribute to the UAE economy as a whole.” TECOM Investments, a member of Dubai Holding, regularly hosts events that support and encourage the growth of businesses in the region. TECOM Business Parks (Dubai Internet City, Dubai Outsource Zone, Dubai Media City, Dubai Studio City, International Media Production Zone, Dubai International Academic City, Dubai Knowledge Village, DuBiotech, Dubai Industrial City and ENPARK) offer a favourable ecosystem for SMEs through shaping a business environment that fosters the sector’s long term growth. The event was supported by Bayt.com, SME Advisor ME and Zawya.
CORPORATE LIFESTYLE
New Coupé
The all-new BMW 6 Series Gran Coupé is the first fourdoor Coupé in BMW’s history. The car sports a flat roofline that smoothly flows into the rear end giving it a sporty shape. The interior of the car falls in line with typical BMW style. The driver-focused cockpit and front passenger area are bordered by elegantly sweeping surfaces with a harmonious connection between the front seats and the rear. The rear passengers section is generous on space and a high level of comfort in a very stylish and luxurious surrounding. The Coupé is a four-seater that offers travel comfort in the back with an additional third rear seat which can be used for shorter journeys.
Executive trends We bring you a sample of the newest products being snapped up by the executive shopper.
Couture collection For leather lovers
US-designer Kenten Sorenson’s collection host a wide variety of luxury leather goods. The Modern Man front pocket wallet (USD 98) is durable, yet slim enough to put in your front of back pocket. The luxury designer definitely kept Apple fans in mind when designing this collection, which includes an iPad portfolio (USD 190) that ties in front, as well as iPad and iPhone sleeves. The KS Messenger Bag (USD 750) is made of undyed oak tanned leather and nickel hardware, and contains a large convenient outside sleeve on back. All items are made in the USA and offered in the brand’s trademark tan colour.
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Tailoring brand Savile Row has announced its partnership with Dubai-based fashion designer Franklin Eugene to launch its first men’s couture line FRANKLIN EUGENE. The new 2012 men’s line features a collection of ten different styles of suits ranging from dressy casual, corporate and formal. Pieces in the new couture line are made with exceptional fabrics of high quality wools, silk, cashmere and customers have an option of upgrading their fabrics selection at the Savile Row. The collection has varied installations including the Sharmoud, homage to the brave and indomitable spirit of the Arabian male.
Pens with prestige Montblanc recently launched the Montblanc Donation Pen Johannes Brahms Special Edition, honouring the great music virtuoso Johannes Brahms. The overall design of this Special Edition reflects the style of the composer’s music: traditional yet pioneering and inventive. The cap and barrel of the handcrafted pens are made of black precious resin enhanced with platinumplated fittings. The clip shaped like a tuning fork and the five lines of a music staff decorating the cap bring to mind the excitement of his symphonies and orchestras tuning up before a performance. The iconic Montblanc emblem crowns the writing instrument, while the cap is elegantly engraved with Brahms’ signature. The pens are handcrafted with a rhodium-plated 14 K gold nib, and are decorated with a dove of peace: the sign of love and peace.
Transforming luggage
Dror For Tumi is a new luxury collection of travel bags that are able to transform, expand or slim down. From backpack to tote bag to carry on, this collection can adapt to all the needs of a modern business traveller.
Underwater luxury
Breitling has recently unveiled a new limited edition luxury watch, the Superocean Chronograph. The watch is ultra-technical, and water-resistant to 500m. Its stand-out features include its unidirectional rotating bezel, which appears clad in red rubber. Issued in a 2,000-piece limited numbered edition, this super-diver with its youthful and dynamic style houses a highperformance self-winding movement chronometer, certified by the COSC (Swiss Official Chronometer Testing Institute).The highly readable dial is fitted with oversized hands and hour-markets, underscored by a luminescent coating, as well as a thick sapphire crystal that is glareproofed on both sides. The Superocean Chronograph also comes with a choice of steel bracelet, a strap in rubber or Barenia leather, or the all-new Superocean leather strap with red edges to match its bezel.
Haute shoes
Armani has a big varierty of shoe styles from its Spring/Summer 2012 Collection. The collection includes shoes for every day of the week, for work and leisure. The laced-up front shiny black dress shoe (priced at USD 510) offers classic Armani style, made with 100% calf-skin leather and a varnished leather sole and narrow toeline. The leather sneaker (USD 420) is casual yet stylish and is availabe in Armani’s classic colours – black and grey, with the Armani logo displayed along the side. The sneaker is made of both calf-skin leather and polyster and is built with a rubber sole and round toeline for maximum comfort. The leather flip-flop sandal (USD 225) is also offered in black and grey with the Armani logo along the top strap. The shoes are made to last during the hot summer temperatures and are made with calf-skin leather and polystrene.
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Investing in experience A lack of experience can frequently be the deciding factor with a downfall. Dr. Ashraf Mahate, Head of Export Market Intelligence at Dubai Exports, explains how finding that veteran who can show you the ropes can often make all the difference.
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Dr. Ashraf Mahate Dubai Economic Department (DED)
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nternational evidence shows that taking a business from a startup stage to its corporate adolescence life is fraught with numerous dangers and pitfalls. Therefore, it is no surprise that a third of businesses never see their fifth birthday. By the time of their tenth anniversary, a little over a half of the businesses tend to fail and are wound up. The question that arises is why SMEs have such high rates of failure? The most obvious answers seems to be that they are undercapitalised, or don’t have enough money on-hand to keep going as a result of an inadequate
SME ADVISOR Middle East
or, even the absence of, a business plan. Beneath this veneer lies a much deeper cause, namely that a typical SME owner needs to be a jack of all trades; an expert in production, marketing, customer service, logistics and so on. Of course in reality, this is not possible and invariably SME owners make errors, either due to lack of knowledge or, experience. To make matters worse, SME owners often feel overwhelmed by the growing pains associated with managing their businesses and can become distracted from core management issues.
About Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking. He has also presented papers at major
Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Char tered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Cer tified Anti-Money Laundering Specialists (ACAMS).
insurance and so on. Then there are issues with technical standards, import requirements, contractual obligations, tariffs, dealing with agents and distributors, obtaining payment and so on. A business coach who has knowledge of these markets and has exported in the region can assist the SME and hand hold it through the process. A business coach can also provide a strategic input in terms of developing an export plan which is critical to the overseas success of a firm. In a world of global complexity it requires that the SME owner or manager be a fast learner. However, more often than not there are no real established avenues for SME owners to learn about the global market place. Business coaches can be instrumental and assisting the SME to adapt to global
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From a corporate governance perspective, a business coach can bring about professional external advice and thought to the SME. In doing so, the business coach allows the SME an opportunity to be proactive and carry out interventions that seek to enhance its performance.
changes and its impact on the workplace. Similarly, globalisation has made the world more competitive with the need to make fast decisions. In an ideal world the SME owner can research a particular issue and arrive at an informed decision. However, very rarely does the modern business climate allow for such a luxury and information needs to be processed rapidly. In such a situation a business coach is able to provide a quick answer and in time create a more team-based engagement. This obviously requires the SME owner to learn as well as restructure the organisation so that appropriate skills are developed and responsibilities delegated within the firm. A business coach can also make an important difference to the internal workings of an SME. For instance, in the world of exporting a firm needs to be ready in terms of not just meeting the foreign country requirements but also as far as internal resources are concerned. More often than not, SMEs are lured by the huge potential that exporting offers them and tend to forget that they need to ensure that they have the appropriate
SME ADVISOR Middle East
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Despite the passion that they may have for their product or service this is often overshadowed by the strain of managing a business and a job; four weeks holiday, sick leave, medical insurance, housing allowance and educational benefits can at times seem too attractive to ignore. Academic evidence suggests that the isolation and strain of managing in SME along with the failure rate can be drastically reduced when the owner has sufficient experience. However, very few owners of startups or young SMEs have the required experience of owning and managing a growing business. With that said, this need not be a barrier; an owner can utilise the experience of individuals who have been there and done that and reduce the probability of making mistakes that are avoidable. This is more so the case for exporting where each country, despite the commonality of language, religion, culture and so on, still requires specific on-the-ground knowledge and experience. A helping hand can be obtained from business contacts and associates but may not be assured in the medium or long term. Similarly, the SME owner may not wish to share confidential information with business associates. In such cases the SME owner can use the services of a business coach. More specifically, a business coach is a resource that the SME owner can utilise as and when required so that the business is able to achieve a mutually identified set of goals, as well as to enhance the professional performance. In doing so it is assumed that the business coach comes from a background of managing a diverse range of businesses. There have been various surveys that have shown not only the popularity of business coaches but also their importance for SMEs. For instance in the UK, the Chartered Institute of Personnel and Development study showed that 80% of firms in the sample used business coaching. Similar results were also found in Australia and the US. The success of business coaching stems from the realisation that managing an SME is a very complex affair and requires external assistance. Although it may be relatively easy to obtain an export order through an exhibition or the numerous online portals that exist, it is far more difficult to negotiate the sale and deliver as required. An SME entering the exporting arena needs to be aware of first how to price its product, bearing in mind that there are additional costs involved such as logistics,
international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund. Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance. He read
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for this is that the constant provision of advice leads to dependency, which defeats the objective of business coaching. In fact, a good business coach will ask penetrating questions which take the SME owner into an area of thought not previously considered. Second, for effective results the SME owner needs to set the agenda and become aware of the changes that need to be made. More
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Senior managers who tend to be isolated can have someone with whom they can share confidential thoughts and ideas without any internal political influence that are often associated with discussions that take place with colleagues.
importantly, the SME owner needs to set the pace at which the two work together and the level of support required. This is brought about through the realisation that the SME owner and business coach are equals and the role of the latter is to achieve increased effectiveness for the former. Business coaching is a practical and a very costeffective method for assisting SME owners to enhance their performance and that of their organisation. However, it has to be appreciated that its success depends on the level of commitment by the SME owner to bring about changes in leadership, organisation structure, communication, interpersonal, and cognitive skills. At the same time the business coach has to develop the SME owner and not create a state of dependency.
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capacity, processes and procedures in place to fulfil their obligations. As a result a business coach can develop a responsive approach to the organisational development in a tailored manner to overcome current deficiencies in performance. From a corporate governance perspective, a business coach can bring about professional external advice and thought to the SME. In doing so, the business coach allows the SME an opportunity to be proactive and carry out interventions that seek to enhance its performance. In a global world where SMEs are competing with firms from all around the world this seeks to give them a competitive advantage. At the same time senior managers who tend to be isolated can have someone with whom they can share confidential thoughts and ideas without any internal political influence often associated with discussions that take place with colleagues. Finally, business coaching forms an essential part of the SME owners’ lifelong learning experience. The convenience and tailor-made approach ensures that this lifelong learning can be carried out at different speeds, as well as styles. The UK study mentioned previously demonstrated that two thirds of the sample who used business coaching found it to be very effective in meeting the needs of senior management. However, for business coaching, especially in the area of exporting, guidelines need to be adopted. Firstly, the SME owner needs to be prepared to accept the advice provided and employ the appropriate resources to solve the problems. This does not mean that the SME owner cannot challenge the advice given. In fact, business coaching is very different from mentoring. Good business coaches give advice and recommendations sagaciously. The simple reason
BANKING FOR BUSINESS
The price is right
Businesses in the UAE are taking advantage of recent commercial real estate trends by upgrading to higher quality premises.
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he UAE, like most economies, has been impacted by the recession in recent years, with its real estate sector bearing brunt of the slowdown. Real estate has been at the forefront of development in UAE for last five years with Dubai leading the market until 2008, largely due to the increase of foreign ownership in that market. In Abu Dhabi, the property market for foreigners is operating on an off-plan basis. Apartments and villas are being offered on a leasehold basis without a corresponding title of land. The commercial real estate market in Abu Dhabi currently offers some notable opportunities for companies looking to upgrade their premises to new higher quality developments, such as which are due to be handed over imminently in investment zones. About 182,000 square metres of office
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gross leasable area (GLA) has been added to the Abu Dhabi metropolitan area during the first quarter of this year, according a recent report by Jones Lang LaSalle. This brings the total office stock to approximately 2.7 million square metres. In Al Ain, housing rental rates are also dropping as a result of new supply and tenants relocating back to Dubai or Abu Dhabi as rents have adjusted downwards. The Al Ain office market remains stable with healthy demand due to a number of new businesses setting up and a lack of adequate supply in the sector. The report also reveals that vacancy rates in Abu Dhabi have risen to about 30% in the first quarter of 2012, and are expected to increase further as new supply comes on stream. Several large scale office projects are scheduled
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The decrease in residential rental rates and the availability of better quality housing should have a positive impact on demand for office space in Abu Dhabi, making it a more attractive option for companies looking to relocate, or expand their offices in Abu Dhabi.
for delivery in 2012. The majority of office demand in Abu Dhabi continues to come from tenants looking to upgrade from existing premises, rather than business establishing new options or major expansions. Also, the decrease in residential rental rates and the availability of better quality housing should have a positive impact on demand for office space in Abu Dhabi, making it a more attractive option for companies looking to relocate, or expand their offices in Abu Dhabi. A recent report by Jones Lang LaSalle, reveals a number of trends shaping Dubai’s office market. First, there has been limited new office supply entering the market over the first half of the year. Asking rent prices for prime office space remained flat in the second quarter of this year, however, secondary rental prices have softened. Occupier consolidation remains a key focus, and in line with global trends, portfolio optimisation has been noticeable in Dubai during the first half of the year. Larger companies continue to show interest in upgrading premises with more flexibility in their leases. The report also shows a strong demand for retail outlets in the top-performing malls like Dubai Mall and Mall of the Emirates, however, the retail market is becoming
increasingly two-tier, and older, less popular malls are seeing weekend demand from consumers and retailers, with mall owners having to consider new marketing techniques and product proposition. The total amount of city-wide office space in Dubai stood at approximately 6.1 million square metres at the end of the second quarter this year. Only 58,000 square metres of space were delivered in the second quarter of 2012, according to the Dubai Real Estate Market Overview, released by Jones Lang LaSalle. Average asking rent prices for prime office buildings have remained unchanged over the past year. Prime rental prices in Dubai International Financial Centre (DIFC) stabilised at AED 2,370 per square metre, while prime rate elsewhere in the Central Business District remained flat at AED 1,615 per square metre. Secondary office buildings, on the other hand, are expected to see further declines in rental prices through the second half of this year. This is largely due to new supply and weak tenant demand that is further exacerbating the supply-demand imbalance and the two-tier nature of the Dubai office market. Abu Dhabi Commercial Bank’s (ADCB) Business Banking Division offers three types of commercial real estate products designed for a selected range of customers: 1. Commercial mortgage loan
A loan which is provided to companies either owned by a UAE national or, an expatriate. The loan can be used to purchase commercial properties like offices, shops, retail outlets, industrial properties or warehouse. The end use of these commercial properties should be towards the consumption of the company itself and cannot be used for investment purposes. The customer can obtain any of the mentioned commercial property either in Abu Dhabi or Dubai. 2. Rental discounting loan
This product is offered to UAE nationals who own a completed property, and receive rentals on yearly basis. ADCB offers a loan of up to five times the yearly rental against the rents of the building. The loan is provided after a proper checkup and evaluation is conducted. 3. Construction finance loan
Quick facts: n ADCB has a wide network of more than 50 Branches, 290 ATMs across the UAE and India n 17 dedicated SME Centres across the UAE, backed by a team of experienced, customerfocused relationship managers
This loan is designed to facilitate the needs of UAE nationals who want to construct commercial properties (offices, shops, residential villas or buildings) to be used for investment purposes in Abu Dhabi. Structured loans are provided to UAE nationals who have already obtained a loan from the government to finance their house or commercial properties in Abu Dhabi. The customer might have an additional financing need which is above the amount provided by the government. Therefore, the bank will provide the additional amount to the UAE national under specific terms and conditions.
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Opportunities
One-stop green shop We spoke to Gundeep Singh, Founder of The Change Initiative, an organisation that has recently opened a new sustainability marketplace in Dubai, aimed at easing the decision-making process for consumers.
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Joumana Saad CPI Business
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elling sustainability is no easy task, as businesses spend massive amounts of their budgets on green marketing initiatives. In the UAE, the terms sustainability and green are often thrown around by businesses without any serious action plans in place. It is understood that consumers value sustainability and are willing to pay extra to buy a product that will lower their carbon footprint. The main challenge, however, is getting people genuinely interested and educated enough on their options to make that final purchase. The Change Initiative is aiming to do just that with the launch of their new marketplace, a 55,000 square foot facility, located on Sheikh Zayed road in Dubai. The marketplace is a one-stop green shop for consumers looking to make more environmentally responsible purchases. Inside the store, customers can find everything from furniture made from recycled materials, high efficiency washing machines, organic grocery items, and energy-saving light bulbs for the home or office, along with countless other products. A Michelin-star restaurant and lounge area are also on site, and a certain ambiance fills the area with its trendy and colourful decor, as well as art wall hangings that agree with its theme. “The idea is to bring sustainability in the range of commercial value,” says Gundeep Singh, Founder of The Change Initiative. “Most of the sustainable topics worldwide range from climate change to global warming,
The Change Initiative Marketplace flagship store in Dubai
Success is not correlational to monetary gain. It’s a process where you create something of significant value to impact others. The Change Initiative is one such process in which we are trying to create a global supply chain of sustainable goods to replace unsustainable consumption with sustainable consumption.
are far removed from the people. If you want people to be sustainable you have to tell them how to do it; you have make it interesting enough for them to adopt it, and bring commercial value.” Singh is a well-established businessman who has held senior positions with companies in Dubai. So why leave the world of business, to create something non-profit? “Success is not correlational to monetary gain. It’s a process where you create something of significant value to impact others. The Change Initiative is one such process in which we are trying to create a global supply chain of sustainable goods to replace unsustainable consumption with sustainable consumption,” Singh says. He explained that the concept of the marketplace was four years in the making. His close friend and business partner, Robert Kennedy Junior, was involved in getting the marketplace off the ground as a board member of The Change Initiative. Kennedy is an environmental activist and the son of the late American presidential candidate Robert F. Kennedy. For Singh, this project was not born out if inspiration but rather came from a feeling of responsibility. He spoke of personally leading a very luxurious lifestyle in his past, but has now made a complete change in all areas of his life. “I used to have a yacht and Porsches; now I drive hybrids and my house is solar. Toys are very rare; we buy e-Books and conserve energy and water as much as we can. We don’t feel like we’re missing on anything, we’re still enjoying life and having fun, but it’s just a life change,” he says. Practicing what you preach is crucial to the reputation of any company who markets sustainability. Many companies today like to associate their brands with green values without practising the same values as an organisation. That’s why The Change Initiative did its research before deciding which companies to partner with. The marketplace offers integrated products and solutions from over 50 leading brands and multinational firms, operating in the sustainability space such as, Schneider, Vitra, Ecover, Siematic, Volkswagen and IBM. All of the products sold at store come with an product information card with details on its energy ratings and certifications, and include Forest Stewardship Council (FSC) wood and Energy Star rated appliances. Vitra is one of the partner companies, offering a number of products at the marketplace. The company is a provider of contemporary office and home furniture. Vitra focuses on selling styles that are timeless and always popular with its customers, and often uses recycled materials when designing its products. Sankar Vishwanath, Managing Director, The Swiss Corporation for Design and Technology, a distributor for Vitra, says the biggest challenge to selling sustainable
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Opportunities
Gundeep Singh, CEO and Founder of The Change Initiative, takes HH Sheikh Ahmed bin Saeed Al Maktoum on a tour of the new store.
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In the jungle of products available in the market, The Change Initiative store basically allows end customers to come to a place where the best solutions are available that will help them make up their mind about what is sustainable and what is not.
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products in this market specifically is the lack of laws and incentives for using these products. Vishwanath encourages SMEs to take advantage of the underlying benefits of having an environmentally friendly workplace for its employees, not to mention the importance of building a reputation. “Quality and sustainable products only enhance the performance of an SME and its work style. This, in time, will improve productivity and facilitate a quick return on investment,” he says. Roca is another partner company and provider of bath room products that are designed to minimise energy and water usage. Victor Schoone, Middle East Country Manager at Roca, says The Change Initative store is the ideal location to sell its products, with the store offering customers “an impartial view” on the latest and greatest green products available. “In the jungle of products available in the market, The Change Initiative store basically allows end customers to come to a place where the best solutions are available that will help them
make up their mind about what is sustainable and what is not.” Schoone says consumers and businesses in this part of the world are now “just waiting” for such innovative solutions to reach their market. Launching a project of this nature, in a place like Dubai, definitely comes with a number of marketing challenges. First, the metropolitan city is not synonymous to eco-conscious living; it is rather known as a place for a luxurious living where SUVs can be found everywhere on the road. The general knowledge on the topic of sustainability among businesses and consumers remains low compared to other markets and regions. However, at the same time, it is slowly becoming a hub for renewable energy in the region. Last year, Dubai announced its Integrated Energy Strategy, which seeks to reduce energy imports by 30% by 2030, and recently unveiled plans for a 1,000-megawatt solar power park. “Dubai was chosen as the location for our first showroom because, as a global commercial hub, it provides an ideal platform from which to launch The Change Initiative brand, and further build a portfolio of business, knowledge and innovation partners, many of whom base their Middle East operations in the Emirate,” says Singh. While it is still early to assess the response to The Change Initiative on the part of consumers, in the end, it will be up to the consumers to decide for themselves what types of changes they will incorporate into their businesses and homes. Singh says the traditional gloom and doom approach to pitching green to target customers, is more counterproductive than anything. He says people should not be constantly warned and forced into such purchase; they should simply be advised on the best solutions available to them. However, he is confident that in the long-run, people here will catch up and start paying more attention to the types of products they buy. “If you look at sustainability, when you compare the footprint of various nations, the residents of UAE have the highest footprint for the use of energy per capita water and waste. The only way to go is upwards, so to launch something like this is to bring to the forefront the need to make responsible decisions, to be sustainable and yet have fun.”
Tips for greening your office n Choose furniture that uses low VOC (Volatile Organic Compounds) and partly-recycled materials n Install carpeting tiles made from recycled carpets that are fixed without glue n Use LED lights which use 90% less electricity
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than incandescent bulbs; these do not heat up, and are managed by motion and daylight sensors n Computers can be set on Eco-Mode to automatically sleep when no presence is detected (Automatic switch off for network software on computers outside of office hours)
n Energy Star rated printers are efficient and use non-toxic ink n Stock up on paper made from either recycled or FSC (Forest Stewardship Council) certified paper n Seperate office waste for recycling
2011
Ranked #1 on the Dubai SMEs 100 list. Recognized as the top performing SME by the Government of Dubai. Dubai has 72,000 SMEs.
and public sectors establish high standard healthcare systems.
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Drug Databases & Medical Coding
Drug Databases, medical coding resources and training. Decision Support Systems
ENTREPRENEURSHIP
Fortune favours the bold
Christos Mastoras, Director, Business Development, MENA Yahoo! Maktoob, outlines his take on sweeping ICT transformations and how entrepreneurs can take advantage. What is your take on the ICT market in the region?
Aparna Shivpuri Arya CPI Business
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I really think this part of the world has lot of opportunities and gaps that startups and entrepreneurs can fill through innovation. For example, 5% of the online population speaks Arabic. However, less than 2% of the content online is Arabic. Yahoo! Maktoob definitely thinks that digital media and content is a very big area of opportunities for budding entrepreneurs. There are two things we need in the Middle East to make entrepreneurs successful; the first is to develop an ecosystem and the second is a cultural shift. The ecosystem has to develop on its own, but in the meanwhile they can partner with companies to help them monetise and gain the reach and scale, which they are unable to do themselves.
SME ADVISOR Middle East
From there on, at an individual basis, it’s about cultural shift. In the past, entrepreneurs were risk averse and failure wasn’t really accepted. So, I think it is the fundamental shift in culture and outlook which entrepreneurs and startups need to achieve in this region; they need not be afraid to take the risks and to accept failure is not a bad thing; failure is just a part of the experience. Like I have mentioned many times, entrepreneurship is like the Olympics, it’s not about winning, but about participating. If a startup wants to approach you, what do they need to do? What are you looking for?
We work very closely with startups and entrepreneurs to integrate them into our projects and to get their ideas and feedback. Therefore, we have partnered with both
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ENTREPRENEURSHIP About Christos Mastoras is the Director of Business Development at Yahoo! Maktoob, where he leads strategic partnerships, M&A and corporate ventures for the company, across the MENA region.
Christos Mastoras Yahoo! Maktoob
Prior to joining Yahoo!, Christos was an Engagement Manager in the Communications, Media & Technology practice of Booz & Company in Dubai. He is very passionate about entrepreneurship and innovation and active in developing the digital media
ecosystem in the region, as co-founder of Mobile Mondays Dubai. Christos holds an MBA from MIT Sloan School of Management and a BS in International Relations from the School of Foreign Service of Georgetown University.
individuals and companies with an aim to deliver key projects. So, the first thing startups can do is identify a major market need and for us at Yahoo! Maktoob we think digital content is a big one. We also work with startups and entrepreneurs to weave them into our projects actively. Yahoo! Maktoob is always looking to invest or, potentially, acquire very promising startups. So, we can pose as a viable exit strategy for such a company, which is always important for an entrepreneur. There are no specific criteria when we look for companies to partner with or acquire, but there are areas from which we would want companies to be; those companies in the forefront of innovation who can fill the gaps. Yahoo! Maktoob can look at very different areas, such as gaming and application, e-Commerce, mobile and tablet applications and so forth, in addition to their very unique and content propositions. But, at the same time, it’s also on a case-by-case basis. So, those approaching us would be startups from these areas or peripheral areas. On top of that, we also look at the quality of the technology and the strength of its team, regardless of geography. In any case, we operate at MENA-wide level. The startup has to be up-and-running. We cannot collaborate solely on an idea basis. When it comes to investment and acquiring, it has to be an operational startup, which means that they must have a team and a functional product. What would you advise a business which enters the region?
There are a few considerations. First of all, when you look at the region, you can see a very aggressive growth which makes business very promising. Secondly, the IT sector is not as developed as in the other parts of the world, but again this is developing at fast rate and continues to record fantastic growth. That creates a very good dynamic and an opportunity for companies like us through which we can partner with the right people. That’s why we have such a large presence in the Middle East. We are looking for other partners, across the region, which have the same plans and approach to this aggressive growth.
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There are no specific criteria when we look for companies to partner with or acquire, but there are areas from which we would want companies to be; those companies in the forefront of innovation who can fill the gaps.
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Does Yahoo! Maktoob have any exclusive services to the region?
Yahoo! Website portal is in English and Arabic and is customised to the region. In addition, our home page has key verticals, such as a woman’s portal, games, news and so on. Therefore, we have a dedicated offering for the Middle East in both languages. We also have a lot of products for the region in the pipeline; through a regional product engineering, editorial team and, by having that presence, we are able to cater to the regional needs. Are there any services that would benefit businesses?
Our advertisement solutions are quite helpful. If businesses start using that, they will have access to our 56 million users which will give them visibility. We have approximately 70 million people online and, out of that, 56 million per month visiting Yahoo! which provides good visibility and helps their presence in the region. We have to help the market to develop and to make the pie bigger. In line with that, we have a market development team which goes out and educates companies about the benefits of digital advertising. This is what we call share shift. That’s the key difference – there is potential, but we need to develop the market. Dos and don’ts
For companies that are looking for opportunities to scale across the region, especially if it’s an Internet-based company, this region has a lot of opportunities, in particular because of the common language and common needs. So, the trick is to go regional. It’s a case of calculated risk. They have to identify opportunities and go after something they are passionate about. It cannot be just about the money. For example, if they are based here, they can partner with key entrepreneurial centres in the country, work with incubation centres or, get into business-plan competitions. Reach out to the community, connect with the right people. I have been part of three startups and it’s good to talk about stuff you have lived through. I think, as an entrepreneur, that people are a bit hesitant about sharing their idea, while it should actually be the opposite. They should be out there, sharing their ideas and getting the word out there. Don’t be afraid to take the risk, don’t be afraid to fail – it’s almost like a badge of honour. I have learned much more from startups that have failed than from those that have succeeded.
MANAGEMENT
Lessons in crisis control As the Eurozone crisis continues to pose global challenges to business leaders, IMD experts share key lessons in crisis and change management.
W Joumana Saad CPI Business
ith the Middle East going through a period of rapid political, social and economic change, business leaders are constantly being faced with new realities. The ability to adapt to change will be crucial to any company’s business strategy. This was the key message being addressed by experts from IMD business school, which recently held its annual Business Forum in Dubai. The business forum attracted over 200 business leaders from a wide range of sectors across the GCC, Turkey, Egypt, India, Pakistan and Malaysia. During the event, Dr. Nuno Fernandes, Professor at IMD, presented on the topic of Globalisation and Crisis and shared his research findings to shed light on business trends and the best leadership strategies that can adapt to change and uncertain times. Hischam El Agamy, Executive Director, IMD , highlighted a number of challenges facing the region’s senior executives, one being demographic pressure, with UN figures indicating that more than half the region’s population is below the age of 25. El Agamy stressed the importance of incorporating “technology and innovation into business models in order to keep a competitive edge.” Fernandes says the biggest issues facing business leaders today are the volatility in the economic environment, and how to best prepare their companies for this “new normal” world, in which volatilities is here to stay. Despite such challenges he is optimistic on investment opportunities in the near-term. “Great opportunities to do good deals and investments do exist today. Cash in global corporate accounts is at a record high, but firms need more flexible financial and business models,” he says.
Lessons from the Eurozone
The Switzerland-based business school has done extensive research on the Eurozone crisis and its global impact. Fernandes’ presentation pinpointed lessons learned from crisis and what the implications may be for the GCC region. In terms of Europe, Fernandes advises business leaders in the Middle East to not repeat the same mistakes made in the West, in terms of capital structure. He says, “it is not possible to continue to base your growth model, either as a company or as a country, on leverage. Leverage has its limits. You also need to manage the perceptions from financial markets. The benefits of the Euro are large, but are not evenly distributed. This is
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MANAGEMENT valid when looking at borrowing costs, competitiveness and trade deficits.” Most recently, there has been widespread panic with regards to the possibility of Greece leaving the Euro. Such a move would have would have devastating effects throughout Europe, that would affect other regions to some degree, including the Middle East. The solution lies with integration, says Fernandes. “In order to run a monetary union such as the Eurozone, I believe we definitely need more integration. Having a single currency is unsustainable if economies are not more integrated than the current model. So, we need more Europe, not less.”
Dr. Nuno Fernandes
A fragmented global economy
The UAE, however, is riding a wave of strong economic growth. Last year, the UAE saw an annual growth rate of 4.9% according to IMD research. Trade, tourism and manufacturing were the major drivers of this upward tick. There are factors in place that act as obstacles to such growth including the country’s oversupply of real estate. On the surface it may not look like such a pressing issue, but Fernandes brings up the fact that the origins of the global financial crisis in the US and Europe came from the real estate sector. He also points to the large increase in public spending in the GCC region since 2009, as well as the risks associated with the large decline in oil prices. For SMEs, the current financial landscape in the region does pose challenges, but Fernandes says there are opportunities that still need to be explored. “SMEs must diversify their funding. Reliance on bank loans is not a solution. Indeed, we see that for many companies in the region, having substantial amounts of external debt is a risk
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We’ll see impressive growth in SMEs in Egypt and the rest of North Africa. It has a big population with talent being a channel for job creation. SMEs will move away from basic commodities and into value-added goods and services. These will require more investment, technology and talent.
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World at different speeds
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Developed
©2012 Nuno Fernandes. Not to be used or reproduced without permission.
Source: Nuno Fernandes, IMD
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Emerging
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The basic pillars of value creation
Invest well
Value Finance your investments well
Invest enough
©2012 Nuno Fernandes. Not to be used or reproduced without permission.
Source: Nuno Fernandes, IMD
factor,” he says. “It is key for SMEs to take this opportunity to restructure their capital structure. And focus more on the core principles of value creation, which imply that the strategy of the firm, and its finances, must go together.” The presentation also highlighted the fragmented nature of the global economy. Looking at the big picture, it can be seen that various markets are performing at different speeds. IMD research shows developed economies and a standstill, while emerging markets are continuing a steady pace of economic growth. The takeaway from this is Fernandes’ point that there is no single business model for success. He says in order to get ahead, businesses will need to diversify and incorporate regional and local models to benefit from economic trends. Another important lesson to be learned is the importance of “good people management” among business leaders in order to build confidence in their teams in times of uncertainty. Regional opportunities
In terms of the MENA region as a whole, it lags significantly behind emerging markets, but some markets within the region are poised to bring about growth through investment. “We will see a new economic landscape created in North Africa, with great new opportunities for investment. GCC enterprises already understand this and are investing heavily – or plan to do so – despite the political, economic and social transformation. Stability will come soon to create some very interesting opportunities,” says El-Agamy. El-Agamy says North Africa’s geographic location is key as it offers a link between Africa and Europe. He is optimistic on future growth prospects as he points to its large population and talent pool. “The biggest challenge is to create jobs, and SMEs can help to drive this,” he says. “We’ll see impressive growth in SMEs in Egypt and the rest of North Africa. It has a big population with talent being a channel for job creation. SMEs will move away from basic commodities and into value-added goods and services. These will require more investment, technology and talent.”
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Marketing
Divide and conquer
The element of segmentation is often misunderstood. John Lincoln takes us through what this marketing element means beyond the single customer aspect dimension model.
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John Lincoln du
t is essential that small business owners, managers and SME investors consider the cost to serve. Not all customers should be treated equally and the economics of customer experience dictate that the intended experience should be designed based on the value derived from a value based segment. Marketers and companies normally execute the application of their segmentation strategies too narrowly. Segmentation is often myopically thought of in a single dimension as clustering customers in homogenous groups for marketing purposes only. This is a fallacy as segmentation drives the very essence of how an organisation operates, serves and meets the needs of its customers. Most of us know it in generic terms but do not stop and think about what it really means. It is important for a business of any size to think through the essence of what a market is, before marketing their propositions to their customers. Defining market essence
First and foremost, a market has to have customers with unmet needs or wants. If there is not an unmet need, or if your value proposition does not offer anything incremental, or if you don’t differentiate your proposition, then there is no point in being in business. Secondly, consumers or businesses should have a willingness to buy; you don’t just build and have customers flocking to you. Thirdly, there has to be buying power. Consumers and businesses have to able to afford what you offer. Last but not least, whoever is buying has to have the authority to buy. In other words, how do you make your customers ready, willing and able? It is important that we keep this simple logic before we embark on an expensive proposition development or segmentation exercise. Segmentation is commonly known as a process in which customers are grouped or clustered into homogenous
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groups based on demographics, psychographics, needs, spending patterns, cultural background, education, language, mobility and other factors. As you will see later, segmentation is not just for marketing purposes only. A proper segmentation strategy will help you not only target and attract customers better but also helps set the tone and framework for how you serve them and how you organise to serve your customers better. The pillars of segmentation
For any segmentation exercise to succeed, it is important that these basic rules be met. I have often observed marketers using psychographics and other segmentation ways that are not relevant to their industry. The reason they do it is because they fail to clearly understand the MASA rules. Measurability (M)
Any segmentation of a market should be able to measure the size and purchasing power of the segments. Without this you will not able to know whether the market that you are after is attractive, viable or sustainable. Accessibility (A)
You should be able to effectively reach a segment. If you cannot economically, emotionally or logically reach a segment, it is not worth pursuing. Substantiality (S)
Size does matter here. There is no point going after a segment where the volume or the profit pool is minuscule. I know the naysayers might not agree. I am referring to the primary segmentation framework here. Yes, of course you can have secondary, tertiary and micro segments. You can even practice one-to-one marketing. What I am referring to here is only about the primary segmentation rules.
Action-ability (A)
Any segmentation framework has to be actionable. You need to clearly think if your marketing strategies and plans can attract the segments that you are defining. How do you segment the market? This is often done through a combination of primary and secondary research. There are many ways to approach the problem. A common way is to first do a set of qualitative studies (using limited focus groups). The outcome of these qualitative studies is then used to formulate a segmentation hypothesis, which is then validated through a detailed primary research, encompassing a much larger and statistically valid sample. Then, using advanced statics modelling, the segments or clusters are derived. If you are a small business, you probably cannot afford the cost and sometimes the incompetency of outside firms doing this. The point here is to make you think about the different possible segments as you craft your propositions for your customers. Good segmentation exercise outcome
A good segmentation exercise will not only be able to group and quantify the size and value of each segment but also enable you to develop portraits of each segment. The portrait of a segment could include their lifestyle and values, priorities, aspirations, needs, demographics, attitudes and preferences to your company’s and competitors’ products and services. Other valuable information could include triggers and barriers to adopting your products, durable and white goods ownership and how disposable income is spent as well as the Internet, television viewing habits and print readership benefits, among many others. The applications of segmentation
A good market segmentation framework will help you design and craft propositions that are relevant to a target segment, develop retention strategies that prevent certain segments of customers leaving you, as well as enable to you to spend your communications spend more effectively. The segmentation work that you have done will also enable your company to have optimal and differentiated pricing strategies for different segments. After all, when economists refer to a demand curve, they are actually referring to the aggregate average demand curve across all different segments in the market. Now you see the link between economics and marketing.
the fixed and mobile sectors. In addition, John has an impressive operational and management portfolio of established proven expertise in incremental business value creation and management of large multi-cultural teams in Vodafone Global in the UK, Japan Telecom in Tokyo, AirTouch and Pacific Bell (now AT&T) in San Francisco and Tokyo, Airtel in Delhi and other telecom and technology companies. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA
and MS in Telecommunications from the Golden Gate University in San Francisco, California, USA. You can find John’s personal blog at www.johnlincoln.biz. He can be contacted via: john.lincoln@gmail.com, and followed on Twitter: @lincolnjc. At present John is in the final stages of finishing a book which explores how businesses can grow and achieve sustainability and which is scheduled for publication in the near future. Watch this space for updates.
A good segmentation exercise will also enable your frontline sales and service staff to identify a customer upfront as to which segment he or she belongs to. Just imagine the opportunity costs lost in trying to close a deal with a wrong prospect. A two dimensional model
Market based segmentation alone is not enough. You will also need to know where you are getting your value from. If for example, 80% of your customers generate about 20% of your revenue, then resources have to be disproportionately allocated to the ones that matter.
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A good segmentation exercise will not only be able to group and quantify the size and value of each segment, but also enable you to develop portraits of each segment. The portrait of a segment could include their lifestyle and values, priorities, aspirations, needs, demographics, attitudes and preferences to your company’s and competitors’ products and services.
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About John Lincoln, is the Vice President, Enterprise Marketing, du. He has over 20 years telecommunications experience in the USA, Japan, Europe, India, Dubai, Malaysia, Latin America and various other countries. He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, P&L, product development and revenue management responsibilities in both consumer and enterprise segments for both
Value-based segmentation will help you to ensure that your customer services are prioritised at all customer touch points, albeit at the call centre or your channels. It will ensure that your credit and collections policies reflect the dependency of your profits on your high value customers. Therefore, it is imperative that you know that a single dimension market based segmentation alone is not enough, but that you also need to have an overlay of a value based segmentation to ensure that high value customers receive the royal treatment that they so fully deserve. Segmentation and organisation structures
Traditionally most organisations are grouped or segregated around their product lines. If the “customer is king”, then it behoves you to organise around your customers. World class marketing companies in the Fast Moving Consumable Goods (FMCG), telecoms, banks and other industries, organise around the customer segments that they serve. No matter how big or small, you need to segment and organise around your target segments within the market or markets that you are after. You can only ignore this if you are into commodities or if you are a monopoly.
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Marketing
Maximising your reach By teaming up with a digital marketing partner, organisations can outsource a lot of tasks, and in turn increase return on investment, says Dan Smith of Xerox.
Dan Smith Xerox
Customisation is king
Maximising the budget
New communications tools and technologies are opening the door to even more personalisation and customisation. For example, the explosion of social media impacts not only how we reach our customers, but also how we help them conduct business and communicate with their customers. Web 2.0 developments are creating many new ways to exchange ideas, share content and measure effectiveness. One way to get started is to think like a customer. Reflect on the amount of information you receive every day. Now, how does a company cut through that clutter and make a connection with the customer? By getting personal. Analysing client data from in-house systems, company websites, marketing and sales campaigns and strategic initiatives can be a daunting task. A partner with the right analytical skills and tools can offer a single source for data mining and determine the communications channels that are most appropriate for a target market. Even better, an experienced provider can help develop the most effective creative imagery, messaging and targets for marketing outreach. The tourism organisation for British Columbia created 5,000 vacation guides personalised to individual interests, budgets and starting locations. By eliminating information that was irrelevant to the recipients, the total number of pages for each brochure was reduced from 112 to 24. Recipients appreciated the courtesy of customisation, mailing costs dropped 145%, and ROI increased 25%.
Outsourcing can help reduce operational costs without interrupting revenue generation or customer satisfaction. Marketing automation technologies can help make the most of budgets for the long term, while allowing the flexibility to make short-term tactical decisions. Time, money and materials comprise big investments in marketing campaigns. But, they all go to waste if the campaign is ineffective, and the campaign is ineffective if only a small percentage of the audience cared about the communication. Teaming with a marketing partner to evaluate the effectiveness and efficiency of everything you do – from your printed materials or digital communications, to your statements and invoices – reduces production and delivery costs and eliminates waste. An effective campaign generates measurable business improvements in cycle times, it heightens demand/response, lowers costs per lead and, most importantly, delivers a stronger marketing ROI. In addition to helping you design and implement an effective campaign, an outsourcing partner will measure how well a campaign is working and help determine where exactly it needs refinement along the way. Automated collection and delivery of data via reports, dashboards, and analytics enable marketers to easily and scientifically test concepts and monitor live campaign results. This also allows marketers to experiment with offers, messaging and creative concepts before launching to a larger targeted population, ensuring resonance with specific audiences. Throughout the campaign, performance can be analysed and adjustments can be made “on-the-fly” for successful results.
About Dan Smith is Head of Integrated Marketing for the Middle East and Africa region of Xerox’s Developing Markets Operations. He was appointed to this position in August 2008 and is based in the UK. He manages all facets of marketing – including channel communications, product marketing support, demand generation programs, electronic and e-marketing initiatives – for the Xerox lines of business
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in more than 70 countries comprising the Middle East and Africa region. Dan joined Xerox’s UK. operations straight from university in July 1997. His first role with the company was as a systems analyst for color solutions and pre-sales technical support. In August 2000 he joined a team tasked with establishing a channels business model for Xerox UK. At the start of 2003, he began working with partner development
in the UK and a Xerox sales team for enterprise-size organisations. In October 2004 Dan joined DMO to drive the Xerox Office strategy in the Middle East and Africa and in 2007 he became Head of Marketing for the Xerox DMO Office business, overseeing a drive to maximise channel communication and demand generation in emerging markets. Dan is a law graduate from Hertfordshire University in the UK.
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Legal
Shared space In the UAE businesses often need to share their premises. David Bowman from Al Tamimi & Co. lists the practical and legal considerations.
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David Bowman Al Tamimi & Co.
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f businesses do not consider these issues they could be in breach of the terms of their leases and in contravention of labour laws, unable to obtain or renew their commercial licences or secure visas for their employees. These sorts of arrangements usually need to incorporate a degree of flexibility so that they can be changed at short notice as commercial circumstances require. In many jurisdictions businesses are able to grant licences to occupy premises or concession agreements to enable third parties to share their premises, without the
SME ADVISOR Middle East
need to complete formal leases. Using these documents it is often possible to conclude arrangements more quickly and at lower cost than by completing formal leases. In many parts of the world, licences to occupy and concession agreements also allow businesses to retain flexibility when sharing premises as they can usually be varied or, terminated, with much more ease than leases. The concepts of granting licences to occupy premises or concession agreements is not recognised by UAE law so businesses in the UAE that need to share premises should consider putting in place alternative
About David Bowman is a member of Al Tamimi & Company’s Property Department and is a Solicitor admitted in England and Wales. He has more than ten years of general commercial and property experience in areas including property development, property financing, restructuring of developments,
Practical and legal difficulties
Difficulties businesses can expect in the UAE if they record the sharing of premises using licences to occupy or concession agreements, rather than a suitable alternative arrangement, include:
largest local, non-affiliated law firms in the United Arab Emirates, with offices in the Emirates of Dubai, Abu Dhabi and Sharjah, Riyadh (KSA) and associate offices in Doha, Baghdad and Riyadh. For more information, visit www.tamimi.com
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A business may therefore find that it has acted in breach of the terms of its lease by granting a sublease without the prior consent of its landlord. In this situation, a claim may be brought before the Rent Committee in Dubai or Abu Dhabi to terminate the unauthorised sublease and possibly also to terminate the head lease.
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arrangements. Failure to put in place these alternative arrangements could expose businesses to both practical and legal difficulties.
property investments, property management, project finance, acquisitions and disposals of commercial premises, property investment funds and commercial leasing. Al Tamimi & Co, originally established in 1989, is today one of the leading law firms in the Arabian Gulf region. It is one of the
Breach of lease terms
Article 787 of the UAE Civil Code provides that the prior consent of the landlord is required for any subletting. If a business is the tenant of premises and purports to grant a licence to occupy or, concession agreement of part of those premises to another company then, as the concept of these documents is not recognised under UAE law, such action is likely to be regarded as the grant of a sublease. A business may therefore find that it has acted in breach of the terms of its lease by granting a sublease without the prior consent of its landlord. In this situation, a claim may be brought before the Rent Committee in Dubai or Abu Dhabi to terminate the unauthorised sublease and possibly also to terminate the head lease. Labour law issues
UAE labour law requires that employees work at the registered premises of their employer. If an employer has entered into a licence to occupy or a concession agreement, rather than a formal lease, then the employer’s right to use the premises as a place of employment may not be recognised. It is likely that an employer that does not have a legally recognised right to use premises will encounter difficulties when applying for visas for its employees. Furthermore, if inspectors from the authorities carry out an inspection and find employers from the holder of a licence or concession agreement working at the premises, there could be serious repercussions for both the tenant and the holder of the licence or concession agreement. Licensing issues
All businesses must provide evidence to the authorities that they either own or have a valid lease of premises when applying for new commercial licences and on renewal of existing commercial licences. The business must show that it has ownership or a valid lease of its own defined and recognisable premises. A licence to occupy premises or a concession agreement is unlikely to be sufficient for this purpose.
Alternative arrangements
Although in the UAE it is not possible to have licences to occupy premises or concession agreements in the forms known in many other jurisdictions, we have advised many clients on suitable alternative arrangements. It is often possible to agree with landlords during the negotiations for the grant or renewal of a lease of business premises that these arrangements will take effect if the business needs to share use of its premises. Alternatively, if the terms of the lease have already been concluded then it is possible to introduce alternative structures to accommodate the needs of the business. These structures can either be temporary, to accommodate the requirements of a particular project or short term need, or they can deal with long term sharing of premises. There are also arrangements we can suggest that overcome the labour law and licensing difficulties businesses may experience when sharing premises. These arrangements ensure that the business does not breach the terms of its lease or contravene the law whilst at the same time maintaining the flexibility necessary to accommodate its commercial needs.
Why share premises? n Businesses may share the use of offices with others in order to work together on joint projects. n It may be necessary or beneficial for connected companies to
share premises for logistical or cost reasons. n Retailers routinely grant concession agreements to enable unrelated businesses to promote certain brands within their stores.
n Employers may contract with third parties for the delivery of services to their employees within their premises, perhaps for a staff cafeteria or an onsite crèche.
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Legal
A step in the right direction We investigate the newly proposed UAE Federal Financial Restructuring and Bankruptcy law aimed at increasing legal sustainability.
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Mike Byrne CPI Business
t’s been over two years since the first murmurings of potentially new bankruptcy legislation were circulated. Earlier this year it was reaffirmed by Dr. Hadef Bin Jouan Al Dhaheri, the UAE Minister for Justice, that the legislation would be finalised for the end of 2012, noting that provisions of the new draft law will apply more widely than the current rules and procedures governing bankruptcy in Book 5 of Federal Law No. 18 of 1993. At the Global Policy Conference in May of this year Hani Al Hamil, Secretary General, Dubai Economic Council (DEC), commented that the primary aim of the legislation was to increase legal sustainability and flexibility of the economy. “This step should enable the economy to maintain the existing businesses operating in various sectors and attract prospective foreign investments,” he said. As per its vision to be a strategic partner for the Government of Dubai in economic decision making, the DEC is involved in reviewing the legislation. Catering to this evaluation process, the two-day policy conference was organised to bring together both the decision makers and practitioners to draw lessons from the best international
This flexibility may assist some entrepreneurial SMEs that are weighing up possible growth against related risks. However, the rights of creditors must also be taken into account and balanced in the legislation and the implementation.
practices in financial and bankruptcy law and to refine the proposed legislation accordingly. Existing federal bankruptcy legislation remains untested in the UAE courts as distressed companies often prefer to settle creditor claims privately because the existing legislation is both obscure and complex, leaving a considerable amount of space for differing interpretations. It’s hoped that the new laws will ease debt restructurings with greater provision for out-of-court negotiations,
which in turn should logically lead to a boost in foreign investment in the Emirates. Al Hamil explained to attendees at the policy conference that the law draft covers various advanced concepts in the field of financial restructuring and bankruptcy, such as cross-border solutions. Therefore, while effectively acting as a hybrid law, it will be tailored to meet local circumstances, working in tandem with what is sufficiently suitable and beneficial from a pro-UAE viewpoint. “This law will make the UAE the first GCC country to handle the financial restructuring and bankruptcy law in an objective and scientific manner, as well as to combine the regulatory and legislative framework with experience and practice. The new law will separate from the existing company law; it will be interlinked to the company law because it will tackle the practice of the company and the governance,” he commented. What’s on offer?
So who exactly will fall under the remit of this new legislation? Richard Catling, Corporate Commercial, Al Tamimi & Co., noted in his recent review of the new legislation that not all businesses in the UAE will be able to avail of the laws. Companies incorporated under the Commercial Companies Law, establishments and individuals engaged in commercial activity can utilise the new provisions, but government authorities and entities in financial free zones cannot. “The Law sets up a new regulatory body, the Committee of Financial Restructuring and Bankruptcy, which must administer the law and its procedures. Outlined within are twin gates through which any debtor becomes subject to its processes – Payment suspension and Excessive indebtedness,” notes Catling. The former gate will apply where the debtor has stopped meeting or servicing debts; the latter instance is applicable where the debtor’s assets do not cover liabilities. In either instance the debtor can access the law’s procedures to protect the debtor from other legal attacks. The law also provides for active involvement by creditors, who can attend meetings, inform court appointed experts of their debt claims and vote on any proposed restructuring. Catling also makes mention of further plans for preventative composition procedures. “Similar to the Financial Re-Organisation Procedures, a debtor, a regulatory authority or, a creditor, may apply to the Court for (or it the court may instigate itself) a court sponsored plan for the restructuring of a debtor’s liabilities, which will be known as a Preventative Composition of Bankruptcy Plan,” he says. Judiciary participation
Global Policy Conference, held in May 2012
Indeed, the next stage can involve the court appointing an agent of the debtor one or more Supervisors of Composition (court registered bankruptcy experts and other specialists) to assist the debtor in the restructuring of the debtor’s liabilities and a judge may be appointed to oversee such proceedings where extra complexity arises. In his assessment, Catling notes the various avenues of action, each according to the circumstances of the debtor. He writes: “A Preventative Composition of Bankruptcy plan must be logged with the court. From the beginning
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Legal
Richard Catling
of this plan the debtor shall manage the ongoing conduct of his commercial or financial dealings under the direct supervision of the Supervisors of Composition (who have wide ranging powers to interfere in the conduct of the debtor’s business and affairs). “Creditors can apply for up to five observers to represent them in the Preventative Composition Procedures. The observer’s job is to ensure that the views and interests of the creditors as a whole are represented throughout the process,” he notes.
“Thus, one idea would be that a business which is unable to service its debt or pay its creditors could file to the court for protection. This would allow breathing space for restructuring of the business; for example, the ability to acquire financing by giving new lenders first priority. “This flexibility may assist some entrepreneurial SMEs that are weighing up possible growth against related risks. However, the rights of creditors must also be taken into account and balanced in the legislation and the implementation,” says Briggs.
Breakdown
Implementation
So, in the case where this plan will simply not deliver the results hoped, or where it becomes apparent that the debtor is in a hopeless position of excessive indebtedness, what are the viable options available for the debtor? “In this instance the court may, upon a request from the Supervisors of Composition or at its instigation, transfer Preventative Composition Procedures into bankruptcy. Whilst bankruptcy procedures in effect deprive the debtor of the power to manage the debtor’s business and affairs; as all such powers are assumed by the Court appointed bankruptcy supervisor. “After a meeting or creditors is convened, the bankruptcy supervisor will produce a plan to the Court which will recommend either a restructuring plan or the liquidation of the debtor’s assets. Once approved by creditors and the Court the key terms of the plan are published. The plan will set out time limits for returning the debtor to profit,
If the new legislation is introduced by the end of 2012, will the various institutions concerned be equipped to handle the changes effectively? Briggs explains that, pursuant to the UAE constitution, each of the seven Emirates is permitted to opt out of the Federal court system and operate its own courts. Those courts must follow and enforce applicable Federal laws. Each of Dubai, Ras Al Khaimah and most recently Abu Dhabi has elected to operate its own courts. The remaining four Emirates operate under the Federal court system. “Two of the jurisdictions that were assessed in formulating the draft financial restructuring and bankruptcy law are in essence civil jurisdictions (France and Germany). In tandem with promulgating a new financial restructuring and bankruptcy law, specialist bankruptcy judges must be trained in all relevant courts of the UAE. The local legal and accounting professions will also need to adapt efficiently to the new law,” he says. So what are the shortcomings of the new legislation? What is rather surprising is that the bankruptcy laws do not address the criminal sanctions under existing law for dishonoured cheques. “In practice, the culture of using cheques to support payment obligations and provide security still constitutes an important component of the UAE business community’s approach to risk. The interface between the new law and this issue will continue to unfold in the coming years,” explains Briggs. Gordon Stewart, President, International Association of Restructuring, Insolvency & Bankruptcy Professionals, (INSOL), echoed such sentiments while praising the new legislation at the Global Policy Conference this year. While emphasising that the real test would come from the ability of the courts to enforce the laws, he also noted that: “One has to look at the existing civil and criminal laws of the country and the ones governing the issuance of cheques. While our contributions might take certain situations for granted, this is a crucial aspect.”
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Therefore, it would seem that while the new proposed laws will represent considerable shifts to the approach of debtors in the UAE, and will afford more breathing space to some sinking SMEs, the element pivotal to its successful integration will be under close review.
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the provisions recommended by the bankruptcy supervisor for settling all liabilities and the preferential treatment of creditors if justified. The restructuring plan cannot exceed five years in duration,” Catling explains. According to a statement from Hadef & Partners, the new law will empower the supervisors to maintain a centralised register for disqualified persons and directors and a centralised register of bankruptcy restrictions and orders.
Breaking the mould Key makers
Hadef & Partners and Clifford Chance have both been instructed by the UAE Ministry of Finance to assist in formulating key policy proposals and to assist in drafting the new legislation. Ricahrd Briggs, Executive Partner at Hadef & Partners told SME Advisor that both legal firms have been requested to conduct comparative analysis’ of various jurisdictions, largely focussing on the UK, the US, Germany, France and Singapore. “The proposed draft law is intended to provide balance between the rights of creditors and the rights of debtors. The idea is to avoid obliging certain businesses that could potentially survive into liquidation.
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Therefore, it would seem that while the new proposed laws will represent considerable shifts to the approach of debtors in the UAE, and will afford more breathing space to some sinking SMEs, the element pivotal to its successful integration will be under close review. As Catling notes in his review: “The law presents significant implications for the administration of the procedures set out in the law, not least given the lack of professionals and court officials with acute expertise in the handling of expertise.” Given that a smooth transition to adopting new procedures may not be as forthcoming as first thought, the new legislation nevertheless breaks the legal mould in the region and will very likley send ripples to neighbouring GCC states.
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Industry Watch
IT saying yes to BYOD Cisco has announced findings from the Cisco IBSG Horizons Study of 600 US IT and business leaders that shows IT is accepting, and in some cases embracing, bring your own device (BYOD) as a reality in the enterprise.
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76%
The number of IT leaders that consider consumerisation somewhat or extremely positive for their companies. Among respondents, the top two perceived benefits of BYOD were improved employee productivity (more opportunities to collaborate) and greater job satisfaction.
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he study shows some of the quantifiable benefits and complexities associated with allowing employees to use their own mobile devices on their employers’ networks. Coinciding with the publication of the study, Cisco also highlighted smart solutions for the enterprise and opportunities for service providers to help customers , and end users, make the most of mobility experiences in the office, at home or on-the-go. The study found most organisations are now enabling BYOD in the enterprise, with a staggering 95% of respondents saying their organisations permit employee-owned devices in some way, shape or form in the workplace. This study also concluded that the average number of connected devices per knowledge worker is expected to reach 3.3 by 2014, up from an average of 2.8 in 2012. IT managers are balancing security and support concerns with the very real potential to reap significant cost and productivity benefits from the BYOD trend. The survey also found that BYOD is just the gateway to greater business benefits. Over threefourths (76%) of IT leaders surveyed categorised BYOD as somewhat or extremely positive for their companies, while also seeing significant challenges for IT. These findings underscore that BYOD is
here to stay, and managers are now acknowledging the need for a more holistic approach, one that is scalable and addresses mobility, security, virtualisation and network policy management, in order to keep management costs in line. These research findings support Cisco’s assertion that mobility needs to extend well beyond BYOD to include the integration of service provider mobility, enterprise mobility, security, collaboration and desktop virtualisation solutions. Mobility and device use are on the rise. Currently, 78% of US white-collar employees use a mobile device for work purposes, and 65% of white-collar workers require mobile connectivity to do their jobs. On average, mobility initiatives will consume 20% of IT budgets in 2014, compared to 17% in 2012. Most IT leaders (76%) consider consumerisation somewhat or extremely positive for their companies. Among respondents, the top two perceived benefits of BYOD were improved employee productivity (more opportunities to collaborate) and greater job satisfaction. Employees want to work their way: Employees are turning to BYOD because they want more control of their work experience: 40% of respondents cited “device choice” as employees’ top BYOD priority (the ability to use their favourite device anywhere). Employees’ second BYOD priority is the desire to perform personal activities at work, and work activities during personal time. Employees also want to bring their own applications to work: 69% of respondents said that unapproved applications – especially social networks, cloud-based email, and instant messaging – are somewhat to much more prevalent today than two years ago. Employees are willing to invest to improve their work experience. According to Cisco IBSG, Cisco employees pay an average of USD 600 out-of-pocket for devices that will give them more control over their work experience. The benefits of BYOD vary based on an employee’s role and work requirements. Cisco IBSG estimates that the annual benefits from BYOD range from USD 300 to USD 1,300 per employee, depending on the employee’s job role. However, BYOD does bring complexity and challenges in the areas of security and IT support. Survey respondents cited security/privacy and IT support for multiple mobile platforms as the top challenges of BYOD. Device proliferation requires
Key survey findings: n More IT and business leaders saying yes to BYOD
new policy and approach to control cost. According to Cisco IBSG analysis, only 14% of BYOD costs are hardware-related, highlighting the importance of choosing the right governance and support models to control these costs. Desktop virtualisation on the rise
Companies recognise the value in desktop virtualisation: 98% of people surveyed were aware of desktop virtualisation. Sixty-eight per cent of respondents agreed that a majority of knowledge worker roles are suitable for desktop virtualisation and 50% noted that their organisation is in the process of implementing a desktop virtualisation strategy. The key benefits of virtualisation listed were business continuity, employee productivity, and IT costs. Enterprise
For the enterprise, Cisco is driving innovations around what’s called the Cisco Unified Workspace. The Unified Workspace is an integrated and strategic approach to the enterprise workspace that is squarely focused on helping employees access all of the people and resources they need to do their jobs effectively from wherever they are, on whatever device they choose and with an enhanced quality of experience. In short, with the Unified Workspace, everything that makes workers efficient and productive moves with them. For example, instead of an employee just having voice while on the road, why not also provide the worker with location and presence capabilities? As part of the Unified Workspace, employees will access some information on the device itself, like the platform-independent versions of collaboration applications such as Cisco WebEx and Cisco Jabber. Other applications or data may be accessed virtually through a virtual desktop centralised in the data center with full rich-media capabilities using the Cisco Virtualisation Experience Infrastructure (VXI). To bring this strategy to life, Cisco is offering a set of Smart Solutions that have been fully tested and validated and can help CIOs and IT leaders increase business efficiency and remove the cost and complexity associated with mobility. The solutions, built on a common technology framework and backed by services from Cisco and partners, help increase employee satisfaction and productivity by enabling personnel to work their
way, helping ensure the business is highly secure and intellectual property is protected. There are three Smart Solutions that can be offered to customers and partners:
n BYOD Smart Solution: The Cisco BYOD Smart Solution transforms the workspace, providing end-to-end BYOD lifecycle management. The solution helps secure data with unified policy, delivers uncompromised experiences with powerful collaboration tools, and simplifies operations with proactive management. n VXI Smart Solution: The Cisco VXI Smart Solution is a desktop virtualisation system that spans Cisco’s Data Centre, Borderless Networks and Collaboration architectures to deliver a collaboration and rich media user experience in a fully integrated, open and validated desktop virtualisation solution. n Remote Expert Smart Solution: Cisco Remote Expert is an integrated solution that will enable a virtual face-to-face consultation through immersive video and online form sharing at work or, in the home by identifying and accessing the most appropriate subject matter expert from any location.
n 95% of organisations allow employee-owned devices in some way, shape or form in the workplace n 84% of respondents not only allow employee-owned devices, but also provide some level of support n 36% of surveyed enterprises provide full support for employee-owned devices. In other words, they will provide support for any device (SmartPhone, tablet, laptop) the employee brings to the workplace
The enterprise solutions referenced above are key components of Cisco’s mobility offering which also includes an extensive technology and services portfolio for service providers. Cisco offers solutions that can enable high performance mobile networks, with seamless roaming between cellular and Wi-Fi networks, all while helping to ensure the experience is optimised for the service and devices being used. These technologies enable service providers to meet growing bandwidth demands effectively, while increasing their ability to monetise the customers both on and outside of their networks. For example, just as many coffee shops advertise hotspots today, additional mobility services offered by service providers could enable those same businesses to attract additional customers. According to the next Visual Networking Index Study, total devices and connections on the Internet will grow from 10.3 billion in 2011 to a whopping 18.9 billion in 2016 – nearly doubling in only five years. This provides service providers with clear opportunities to grow their business and offer value added services to customers.
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Industry Watch
Finding that work-life balance Business professionals in the UAE are likely to be spending more time away from home than their global peers, according to the newly launched Regus Work-Life Balance Index.
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Businesses have become increasingly results-oriented during the downturn and are everywhere seen to be opting for less traditional working practices and instead choosing to increase efficiency by giving workers more flexibility.
Key findings: n 57% of business people believe they spend more time away from their home life compared to the global average of 39% n 72% of workers report taking on additional duties during the downturn that were not subsequently taken up by a new member of staff n On a more positive note, 39% of respondents say that businesses have tried to shorten employee commute times acknowledging the strain a lengthy journey in and out of work can have
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he index calibrates job satisfaction indicators and respondents’ views on their overall work-life balance with data on real-life practice such as working hours and commuting from a global survey of over 16,000 professionals in more than 80 countries. While globally workers are enjoying work more and becoming more productive as a result of their improving work-life harmony, the UAE work-life balance Index rating is eight points below the global average of 124. Joanne Bushell, VP for Middle East and Africa, Regus, said: “A good work-life balance is essential for staff to live a healthy and happy life, but this index breaks new ground in showing that it is also closely linked to business growth. This survey shows that while some steps are being made towards providing a better, more flexible lifestyle, there is still an urgent need for businesses in the UAE to look at their own working practices.” Bushell said the launch of the new index brings encouraging news that workers globally are finding their work-life harmony improving. Findings from the index show that difficult economic conditions and the effects of the crisis have had a negative impact on UAE working life by forcing staff to take on additional duties.
“Businesses have become increasingly results-oriented during the downturn and are everywhere seen to be opting for less traditional working practices and instead choosing to increase efficiency by giving workers more flexibility,” said Bushell. One such measure that is becoming increasingly popular is helping workers to reduce tiring and unproductive commute time through the introduction of more flexible working practices. She added: “Whether these measures enable workers to travel out of peak time, to work from locations closer to home or, to spend more time with their families, there is no doubt that empowering workers to work their way is being acknowledged as an ever more important factor in promoting productivity and well-being.” The Regus Index has registered a 24% rise between 2010 and 2012. This is seen as a positive sign that more professionals believe conditions are improving in terms of managing work and personal time. However, it should be noted that there is a lot of room for improvement in this area in the coming years. A number of factors were measured for the index including working hours and additional duties, in addition to soft indicators like feelings of enjoyment and a personal sense of achievement.
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Industry Watch
Outperforming with social media A new global study by IBM of more than 1,700 CEOs reveals that executives are adding a powerful dose of openness, transparency and employee empowerment to their organisations.
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ccording to the study companies that outperform their peers are 30% more likely to identify openness (often characterised by a greater use of social media as a key enabler of collaboration and innovation) as a key influence on their organisation. Outperformers are embracing new models by tapping into the collective
More than half of CEOs (53%) are planning to use technology to facilitate greater partnering and collaboration with outside organisations, while 52% are shifting their attention to promoting greater internal collaboration.
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intelligence of an organisation and its networks to devise new ideas and solutions for increased profitability and growth. To forge closer connections with customers, partners and a new generation of employees in the future, CEOs will shift their focus from using e-mail and the phone as primary communication vehicles, to using social networks as a new path for direct engagement. Today, only 16% of CEOs are using social business platforms to connect with customers, but that number is poised to spike to 57% within the next three to five years. While social media is the least utilised of all customer interaction methods today, it stands to become the number two organisational engagement method within the next five years, a close second to face-to-face interactions. Coming after decades of top-down control, the shift has substantial ramifications, not just for the CEOs themselves, but for their organisations, managers, and employees, universities and business schools and IT suppliers. IBM’s research finds that technology is viewed as a powerful tool to recast organisational structures. More than half of CEOs (53%) are planning to use technology to facilitate greater partnering and collaboration with outside organisations, while 52% are shifting their attention to promoting greater internal collaboration. “One of the most compelling findings is how in tune CEOs are about the implications and impact of social media,” said Bridget van Kralingen, Senior Vice President, IBM Global Business Services. “Rather than repeating the familiar lament about de-personalising human relationships, this view leans heavily in favor of deepening them, and using dynamic social networks to harness collective intelligence to unlock new models of collaboration,” she added. Greater openness is not without risks. Openness increases vulnerability. The Internet, especially through social networks, can provide a worldwide stage to any employee interaction, positive or negative. For organisations to operate effectively in this environment, employees must internalise and embody their organisation’s values and mission. Thus, organisations must equip employees with a set of guiding principles that they can use to empower everyday decision making. Championing
Key survey findings
collaborative innovation is not something CEOs are delegating to their HR leaders. According to the study findings, the business executives are interested in leading by example. By the numbers
CEOs regard interpersonal skills of collaboration (75%), communication (67%), creativity (61%) and flexibility (61%) as key drivers of employee success to operate in a more complex, interconnected environment. To build its next-generation workforce, organisations have to actively recruit and hire employees who excel at working in open, team-based environments. At the same time, leaders must build and support practices to help employees thrive, such as encouraging the development of unconventional teams, promoting experiential learning techniques and empowering the use of high-value employee networks. The trend toward greater collaboration extends beyond the corporation to external partnering relationships. Partnering is now at an all-time high. In 2008, slightly more than half of the CEOs IBM interviewed planned to partner extensively. Now, more than two-thirds intend to do so. “Innovating together with your partners is a win-win for both,” says Peter Voser, CEO, Royal Dutch Shell. “At Shell, we not only deal with energy, we also need to focus on challenges such as water and food as they’re all interlinked. That’s why driving innovation together, also across industries, is extremely important.” Other findings
The IBM study found that a majority (71%) of global CEOs regard technology as the number one factor to impact an organisation’s future over the next three years – considered to be a bigger change agent than shifting economic and market conditions. Across all aspects of their organisations, CEOs are most focused on gaining deeper insights about their customers. Seven out of every ten CEOs are making significant investments in their organisations’ ability to draw meaningful customer insights from available data. Given the data explosion most organisations
Source: 2012 IBM CEO Study
are facing, CEOs recognise the need for more sophisticated business analytics to mine the data being tracked online, on mobile phones and social media sites. The traditional approach to understanding customers better has been to consolidate and analyse transactions and activities from across the entire organisation. However, to remain relevant, CEOs must piece together a more holistic view of the customer based on how he or she engages the rest of the world, not just their organisation. The ability to drive value from data is strongly correlated with performance. Outperforming organisations are twice as good as underperformers at accessing and drawing insights from data. Outperformers are also 84% better at translating those insights into real action.
71%
of global CEOs regard technology as the number one factor to impact an organisation’s future over the next three years.
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Technology for business
An office document alternative Corel WordPerfect Office X6 continues a long tradition of competing with Microsoft’s powerhouse Office Suite by giving particular groups of users some new features that they won’t find in Office, while maintaining compatibility with Microsoft’s ubiquitous formats.
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Customised solutions Info2cell.com is looking to reinforce its presence across the UAE’s mobile market with the release of new mobile apps that have been tailor-made to meet the demand of the country’s rapidly growing subscriber base.
This move follows a recent report from the UAE Telecommunications Regulatory Authority (TRA) showing that the country’s mobile subscriber penetration rate has reached 149.1%. Aiming to capitalise on the vibrancy of this market, Info2cell.com has started to invest in the development of more customised apps and solutions that can address the demands of
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UAE subscribers. One of the focus points that the company is looking into is the utilisation of new technologies to achieve a more satisfying viewer experience for users when streaming video content from their phones. One example of the new apps that Info2cell.com has rolled out into the regional market is the recently launched For Woman application, which caters to female iPhone users. The engaging new app is a health and lifestyle software designed with a calendar and a status bar. It features predictive tools for planning day-to-day activities and special events.
SME ADVISOR Middle East
utilities, most notably the WordPerfect Lightning note-taking app (a OneNote alternative), the Nuance PaperPort SE document manager, and (in the Pro and Legal editions) Corel PDF Fusion, a handy utility for managing and generating PDFs from multiple file types regardless of whether you have the applications used to create them. Corel has improved support for previewing documents in Windows Explorer (you can adjust the zoom level, perform searches, and even print from within the preview pane), and it gives you a lot of options for customising your workspace. But using those features isn’t always intuitive. Also, some of Corel’s most highly promoted features don’t always work as you’d expect them to. Corel WordPerfect Office X6 is, in short, a sprawling collection of productivity applications and utilities with scattershot functionality. You do get a lot of bang for the buck–but many people may not care about the additions, and unless you prize some of the specific new features, it’s difficult to make a case for jumping ship from Microsoft Office.
Speeding up performance Intel has launched its third generation Core processor family in the UAE. The processors make Ultrabook devices more responsive and secure to better protect personal information. Equipped with these new processors, the next wave of Ultrabook systems include enhanced security features, like Intel Anti-Theft technology, that lets people automatically disable the system if it is lost or stolen. Furthermore, all third generation Intel Core processor-based Ultrabook devices have Intel Identity Protection technology built in to help keep users’ identities safe.
Source: CNMEOnline.com
Source: IDG
or all the buzz about Web-based productivity alternatives, many people (and businesses) are still more comfortable with desktop software, and Corel clearly courts such users who are looking for a Microsoft Office alternative. WordPerfect Office X6 isn’t a major overhaul – the new features, including multiple-monitor support and the ability to create e-Books in the Amazon Kindle .mobi format within WordPerfect X6, are hardly jawdropping. But the suite has a slew of tweaks that certain users will welcome. WordPerfect Office X6 adds some new software, including WinZip and WinZip Courier (for automatically zipping large email attachments) in all editions, and bundling Corel VideoStudio Essentials X4 in the USD 250 Standard, USD 400 Professional, and USD 380 Legal editions. Existing users are eligible for USD 160 and USD 260 upgrade versions of, respectively, the Standard and Pro editions. Along with the core applications–WordPerfect for word processing, Quattro Pro for spreadsheets, and Presentations–Corel packs in an array of other programs and
The addition of Thunderbolt technology provides a high-speed connection that allows incredibly fast transfers. For example, a full-length HD movie can be transferred to an Ultrabook in less than 30 seconds. Intel engineers have also developed up to 22% faster performance on multithreaded applications compared to second generation Intel Core processors, and the new Ultrabooks also have up to twice the video processing and 3D graphics performance of the prior generation. The result is an up to 30 times improvement in video processing and up to 19 times improvement in 3D graphics over the Intel Core 2 Duo-based laptop. Conceived by Intel just over a year ago, the Ultrabook category was quickly embraced by the industry and more than 20 systems have been introduced since October 2011. There are now over 110 third generation Intel Core processor-based Ultrabook devices under development.
Back up made easy Symantec Corp. has announced its Backup Exec 2012 to help users perform backups in 100% virtualised environments and deliver instantaneous and cloud-based recovery through a single solution.
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s part of the new release, the transformed Backup Exec’s user interface and configurability to provide a significantly simpler customer experience. Symantec is also expanding its leading technology to SMEs with Backup Exec Small Business Edition and BackupExec.cloud, enabling growing organisations to back up their information in three simple steps in less than ten minutes.
Backup Exec Portfolio now includes: n Backup Exec V-Ray Edition: Gives virtualisation architects the option of having industry leading Backup Exec technology protect their 100% virtualised environment and the option to easily extend protection to physical environments, if needed, without having to buy a separate solution n Backup Exec Small Business Edition: Will install and configure backups so small businesses with
limited IT experience can protect their data with ease. Will also bundle Symantec’s data and system recovery technology into one affordable solution with a single licence that’s designed specifically for businesses with up to three servers n Backup Exec.cloud: Provides SMEs with simple offpremise data protection through a fully secure cloud-based service that is easy to setup, manage and configure. Cloud backup is ideal for a small office with no IT staff or remote or mobile offices that need a set-itand forget-it backup strategy.
Backup Exec 2012 will deliver the following benefits: n Eliminate backup complexity with a new administration console: Will provide users with fast, concise management, simplified experience, and monitoring capabilities.
n Unite virtual and physical: Enables visibility across both virtual and physical environments for fast and efficient backup and recovery while eliminating the need for specialised point products. n Integrated disaster recovery: With this system, SMEs can easily recover a failed system to aphysical server,or to a Hyper-Vor VMwareguest. Also enables granular restore of entire virtual machines, single files, active directory objects, exchange e-mails, or SharePoint documents fromany single-pass physical, VMware or Hyper-V backup. n Recovery in the Cloud: As part of the continued expansion into cloud technologies, Symantec will add Backup Exec Cloud DR Option powered by Doyenz to enable customers to leverage cloud Recovery as a Service (RaaS) for planned and unplanned system recovery in the cloud.
Flexible work boosts business A recent survey release by Polycom shows two thirds of respondents agreeing that flexible working has a larger financial impact on businesses than cutting operational costs. A flexible working strategy enables workers to have the ability to work at home or out of the office regularly or occasionally.In fact, companies with flexible working programs in place report that affected employees are an average of 39% more productive than others. Respondents say that, on average, more than half of a company’s ability to generate revenue depends on the positive productivity of its employees, so the extra productivity of flexibly working employees has a significant impact on the bottom line. These results emphasise the importance of flexible working for companies who are looking for new ways to succeed and thrive in achallenging financial environment. A second key finding of the survey is that video conferencing plays an important role in supporting flexible working strategies. Nearly 60% of companies surveyed are keeping on-site, remote, and mobile workers connected and collaborating face-to-face via high-definition interactive video, and 72% of respondents say that video collaboration is helping their companies become more productive and efficient. Video collaboration solutions for
employees working at home or on the go, such as video software for mobile devices and laptops, is helping to further drive the usage of video with remote and flexible working employees. However, in the UAE, 82% of workers regard flexible working conditions as important to them, though less than half of companies in the UAE offer some form of flexible working according to a survey by Al Aan TV. From amongst the UAE companies that do provide flexible working, 77% report that their productivity has increased as a result of flexible working practices, and 77% also link increasing revenues directly to flexi-working, according to a recent research from global workplace provider Regus. Employees are also benefitting from flexible working, according to the survey, with two-thirds of respondents (67%) reporting that they experience greater job satisfaction as a result. Furthermore, almost all respondents (97%) report that satisfied employees are harder-working and more productive. For all these reasons, remote working is now widespread across Europe,with 77% of companies surveyed offering their employees some flexibility in their working hours, and 68% regularly letting them work away from the office.
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Technology for business
Going virtual VMware has announced that the EMEA solution provider channel is seeing SMEs investing substantially in virtualisation, with this continuing to be an IT spend priority.
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ccording to new research, the acceleration of virtualisation adoption will see twice as many SMEs become more than 80% virtualised by 2014, as they look to drive efficiencies and embrace a move toward cloud computing. The research, conducted by Canalys among 350 channel partners serving SMEs across EMEA, found that of SMEs who have adopted virtualisation, 48% have virtualised the basic IT infrastructure of their businesses. Over the next two years, however, 75% of SMEs are expected to expand their virtualisation programs to include business-critical applications and more. The reasons behind this extend beyond pure cost savings: reducing costs is the more immediate driving factor (rated most important and second most important by 71% of respondents) to virtualise, but it’s closely followed by the desire to ensure business continuity and improve hardware utilisation. In terms of the over arching business priorities, beyond technology, cost reductions (rated as highly important or important by 83%), business continuity (79%) and business agility (75%) emerge as the top three, showing alignment between immediate virtualisation drivers and longer-term objectives. Furthermore, the majority (86%) agree that virtualisation and cloud computing are connected.
Smart PCs for SMEs Lenovo has announced a new series of ThinkCentreM and Edge Series desktops and all-in-ones (AIOs) designed keep up with the pace of business. ThinkCentre Edge 92z All-in-One The Edge 92z includes the essential features SMEs require, including choices of the Third Generation of Intel Core vPro processor family up to the Intel Core vPro i7 processor and the Lenovo Solution Centre powered by Intel Small Business Advantage, which provides a set of tools for remote management of energy settings and PC updates. Innovative features include an optional ten-point multi-touch display and Lenovo’s View Management Utility to easily manage multiple active displays. In addition, professionals in fields such as advertising, design or higher education will appreciate the ability to wirelessly connect the Edge 92z to an HDTV or business display using the integrated Intel Wireless Display (WiDi) technology.
ThinkCentre Edge 72 and 72z All-in-One For SMEs seeking an affordable yet elegant PC that covers the essentials, the sleek design of the
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ThinkCentre Edge 72 and ThinkCentre Edge 72z integrates easily in almost any office décor and environment. These desktops include choices of the Third Generation Intel Core vProprocessor family, with up to Intel vPro Core i7 processor. The Edge 72 also includes support for two independent displays with standard VGA and DVI ports so users can work separately on two monitors, while the 20-inch ThinkCentre Edge 72z All-in-One features an optional solid state drive that speeds boot time.
Built for Business: ThinkCentre M72z Designed for productivity in dynamic working environments such as education, health care and government organisations, the space-saving design of the ThinkCentre M72z All-in-One is ideal for organisations that need big performance in a small space. The clutter-free design with optional wireless keyboard and mouse results in a 65% smaller footprint compared to a traditional
desktop system with 20-inch display. The M72z also includes security features such as a TPM security chip, an optional self-encrypting hard disk drive and support for Lenovo PC Auto Lock technology, which uses the web camera to detect when the computer is unattended and then locks it securely.
Transforming your client app-roach HP has announced new Application Transformation solutions designed to help enterprises drive an enhanced user experience by integrating mobile-based enterprise applications into the traditional computing environment.
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he expanded solutions portfolio enables clients to design, build and manage applications that drive interaction between people and enterprises while optimising traditional application environments to deliver an improved user experience.
New software products The enhanced HP Application Lifecycle Intelligence (ALI) improves collaboration among delivery teams and reduces cycle times by offering real-time visibility and traceability of activities across the application life cycle. As part of HP’s IT Performance Suite, HP and Perfecto Mobile, a provider of cloudbased testing and automation solutions, have extended HP Unified Functional Testing to offer multifunctional applications by allowing developers to emulate and test the user experience of mobile applications across devices and networks. n HP Enterprise Collaboration enhances knowledge sharing and accelerates application development through a social collaboration environment that enables real-time, context-based conversations traced back to actions and work items.
New services for managing mobile apps n HP Enterprise Mobility Services for SAP Applications improves employee efficiency by allowing mobile users to obtain data from mission-critical SAP applications. By extending its mobile solutions to the SAP NetWeaver technology platform and the Sybase Unwired Platform, HP now offers an end-to-end enterprise mobile solution that enables clients to access key enterprise information. A fundamental component in the development of an application strategy, the HP Applications Transformation Experience workshop offers enhanced capabilities to exploit new enterprise mobile applications and cloud computing technologies.
Keeping your connections safe SonicWALL aims to capitalise on the bring your own device (BYOD) trend by launching firmware specifically designed to give SMEs control access of non-IT-managed Windows devices.
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he SonicWALL End Point Control for Secure Remote Access delivers a suite of enterprise-class device identification and interrogation features. EPC for SRA uniquely identifies Windows-based endpoints and ties them to authorised users. It enables global, group or user-level end-point assessment and enforcement by checking that essential security components such as antivirus, anti-spyware and personal firewall software are present and up-to-date on the device before allowing it to connect to the network. n SonicWALL’s Secure Virtual Meeting helps SMEs save time and money by instantly bringing meeting participants together in a secure and costeffective fashion, reducing travel expenses and boosting productivity. The product is an alternative to many web and cloud-based meeting solutions that lack security and charge monthly or yearly fees, even when services are not being used. n SonicWALL’s Web Application Firewall Service offers businesses an affordable, well-integrated compliance solution to protect web applications from SQL injection, cross-site scripting and cookie tampering attacks, in accordance with OWASP Top 10 and PCI DSS. It also prevents theft of credit card information and Social Security numbers. n The SonicWALL SSL VPN solutions provide organisations of all sizes, from SMEs to large enterprises, with secure, clientless remote access to business applications and resources. Utilising a standard Web browser, authorised users can securely access email, files, intranets, web-based and legacy applications, desktops and servers from any location.
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A glimpse of the future SME Advisor Sub Editor Joumana Saad takes the pulse on key business trends in the region and gives an update on upcoming events to add to your calendar.
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Joumana Saad CPI Business
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nformation technology is arguably one of the most fundamental tools in terms of growth for SMEs. Most recently, smart SMEs in the region have begun incorporating cloud technology and mobility solutions into their businesses. However, the majority of SME have not yet taken the leap in terms of utilising IT to create innovative solutions. Leading IT companies are looking to fill this void, by showcasing their latest products to businesses, and more specifically to SMEs. I recently attended Fujitsu’s IT Future 2012 road show which came to Dubai in mid May. Satoru Hayashi, Executive Vice Chairman at Fujitsu, highlighted the company’s recent and future iniatives focused on cloud computing, mobile communication, and sensory technologies that he envisioned to lead business and consumers into a “human centric era” in technology. These included some of the company’s recent projects in Japan that utilise sensory technologies to monitor and handle traffic congestion in real time, as well as the collection of data on the part of farmers to use analystics to improve the quality of their supply and output. Seeing such concrete examples of innovation was refreshing to many in an industry so focused on the virtual. I look forward to see this types of innovative technology adapted to our region in the near future.
SME ADVISOR Middle East
Western Digital is another company who is shifting its focus towards more mobile and flexible consumer-oriented solutions. Traditionally, a business built on the success of hard drive technology, the company now has released storage products that can be accessed via tablet, SmartPhone, laptop and web application. During Western Digital’s recent annual summit in Vienna, I spoke with the company’s COO Tim Leyden, who told me of the huge market potential among SMEs for the storage industry. Unlike their larger counterparts, the majority of SMEs do not have sufficient back up solutions in place. This can lead to serious data protection issues. (To read more about Western Digital’s small business and consumer initiatives, please see page 66). Looking ahead, there will be some slowdown on the events scene here in the UAE as we approach the (very) hot summer months. The ninth CSR Summit 2012 will be held 10th to 13th June at the Movenpick JBR in Dubai. This event will provide a unique platform for corporate social responsibility professionals in the region to learn and network alongside key stakeholders. Sumansa Exhibitions has announced the launch of the Ramadan Night Market this coming August. This consumer fair will be held during the last ten days of Ramadan and Eid (10th to 19th August). It is the first of
its kind in Dubai, and is expected to bring together over 300 retailers and 20,000 visitors. Exhibiting companies will be combination of large brand and SMEs. The event will be held alongside Dubai Sports World 2012 at the World Trade Centre. For more information, please visit www.ramadannightmarket.com. With social media being embraced by the Arab world and the UAE in particular, governments are fast realising its real value. The GCC Government Social Media Summit, to be held 17th to 19th September in Dubai, will bring together over 200 highpowered delegated representing the GCC and MENA regions. The summit will feature master classes, networking, public talks and other attractions to cultivate a free-flow of fresh ideas. There has been a lot of talk lately of successful digital marketing practices being channeled through social media. On 30th May, Facebook officially opened its MENA offices here in Dubai with the intention of helping local and regional businesses better utilise the website’s tools to better monetise online campaigns. Facebook has recently worked with Emirates Airline and Al Jazeera to launch fan pages and tools on the site that localise advertisements to reach a much more targeted audience. We’ll be interested to see the response from SMEs, as Facebook begins its business operations in the region.
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