SME Advisor Middle East - May 2014

ISSUE 101

strategic SME partner

THEENABLERLaudy Lahdo and Servcorp’s SME mission

Presenting partner

Fair trade

TeknoPark’s golden

opportunity

Making plans

What your business plan

has to say

www.nbad.com

The true success ofa business is partnership

NBAD Commercial Banking

SME Advisor is delighted to announce that during 2014 we will be working with some of the leading names in the SME space - key figures who have kindly agreed to take part in our new Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever - analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Alexandar Mathew

Williams

Alexandar Mathew Williams is presently the Director of Strategy and Policy at Dubai SME, a government

agency of the Department of Economic Development (DED) tasked with the development of Entrepreneurship and Small & Medium Enterprises (SMEs) in Dubai. He has logged more than 20 years’ experience in public policy and strategic programme development focusing on micro-economic, business and SME development.

Anas Halabi

Anas is Managing Partner at Prediam Partners, an independent investment

real estate, hospitality and related ventures that he co-founded. Prediam has successfully assisted in setting up,

and international projects and startups, including an innovative application for Muslim travelers, an aggregator website for tourists in the UAE, an income producing hospitality portfolio in Dubai and a boutique hotel development in Beirut.

Mona Tavassoli

With over a decade of work experience, Mona Tavassoli is the Founder of Mom Souq (www.momsouq.com), an online community

and bazaar for mothers residing in the UAE, through which mothers can network with each other, share advice and their experiences. As an extension, with the aim of continually providing support to working mothers in this region, Mona launched a new platform - Mompreneurs Middle East (www.mompreneurs.me).

Laudy Lahdo

Laudy Lahdo is currently the General Manager of Servcorp, an Australian-based global provider of

the Middle East region. She joined the company in 2003, after her move from Australia to the United Arab Emirates and as General Manager, has helped grow the

Emirates Towers to 11 branches spread across the UAE, Bahrain, Qatar, Kuwait, Lebanon and Turkey. Servcorp provides both small and medium sized enterprises (SMEs), as well as multinationals, with the best locations, facilities, and technology and business support services in over 140 locations worldwide.

Simon Hodges

Simon has more than 30 years of experience working for international companies at Board level. He has spent

over 10 years in the UAE and was previously Corporate Director of Administration of The

of Dubai Holding Insurance Services LLC and Head of Governance for ADNEC. He also completed a two-year assignment as head of the health funding project for the Government of Dubai. Since 2011 he has been mentoring business owners from Dubai to enable them to create and then manage effective organisations that support business growth.

Hazel Jackson Hazel has built an impressive reputation and successful multi-million dollar business – biz-group FZ LLC- during the past 19

years based in Dubai. Nearly two decades ago, and with just US$700 in her pocket, Hazel founded biz-group, which she has developed from a small training company into an organisation of 42 professionals servicing the Middle East’s corporate training, team building and business strategy needs. Passionate about impacting performance, biz-group’s success is a testament to Hazel’s entrepreneurial spirit.

Kay Braganza

A seasoned public relations professional and successful

years of experience in the industry and

an extremely commendable portfolio, Kay Braganza decided to pursue her love PR and start up her own agency four years ago. Here, she aims to cater to the demand of

which strives to make a lasting difference to companies of all sizes. A recognized and respected expert in the PR world, her

after working in it for nine years and having dealt with reputed clients such as Sony Gulf, Nokia, Mom Souq, and Clarion Events amongst many others.

Nadine Halabi

Nadine Halabi has been the Coordinator of the Dubai Business Women Council since August 2011. Since then, she has been

managing the overall operations of the exclusive Council, coordinating the high

members in line with the values, visions and missions as set out by its President, Mrs. Raja Al Gurg. Prior to her joining the DBWC, she worked at an events management and PR

senior role as Deputy General Manager.

EDITORIAL COMMITTEE

SME ADVISOR ISSUE 101

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ARE YOU PART OF THE PROBLEM - OR THE SOLUTION?

Just as ‘no man is an island’, so too, the SMEs of any one region are not detached or immune from the impact of larger macroeconomic and global trends. It is inevitable that the developed economies best able to drive innovation and change (and for that matter dominate the key

the old adage that the Middle East is typically a buyer of innovation, not a primary home of innovation itself. This tendency is not being helped by the fact that the global economic picture has never been so full of uncertainty and geopolitical strife. The leading economic superpowers increasingly press for higher standards (sustainability, governance, transparency of pricing, etc.) - but is this leading to a ‘two-tier’ SME world, where the elite nations are leaving the majority of SMEs behind?

There’s more food for thought, too: while it can be argued that the online revolution has opened up global opportunities for all - and that you can market across the world for the same price as supplying the corner shop - the one thing that this new culture hasn’t done is create a level

Williams made a very powerful point that is often overlooked: the online community raises the bar very high for SMEs not only in terms of their pricing and core offer, but also in terms of the power of their brand. Being part of the international market means that in order not to appear provincial and second-rate, every SME needs to have convincing, compelling branding. Does yours?

The same principle of the bar being raised very high is also true when it comes to the social media explosion. Worldwide, SMEs cannot afford not to take part in the social media phenomenon - but the reality is this: you need to ask if you have the resources and skills to establish the right kind of enriching, rewarding social media dialogues - because if you don’t, your messages and market position will be swept away.

These are factors resulting from the increasing proximity of global competitors and the fact that that the old parochial world order has gone forever. Yet the question is, will your SME be one of the businesses at the forefront of change, helping raise the standards and performance of the overall SME sector in the GCC? The alternative doesn’t bear thinking about…

Enjoy this issue of SME Advisor!

FROM THE EDITOR

Paul GodfreySenior Editor

Talk to us:E-mail: [email protected] Twitter: @SMEadvisorME

Facebook: www.facebook.com/SMEadvisor LinkedIn group: www.tinyurl.com/smeadvisorme

PRESENTING PARTNER KNOWLEDGE PARTNERINSURANCE PARTNERSTRATEGIC SME PARTNER

© Copyright 2014 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.

CONTENTS

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

05 EDITOR’S NOTE

08 DATA AND DECISION MAKING Our new info graphic section showcases key trends shaping the SME marketplace.

Ground level10 STARTING ON THE RIGHT FOOT Social media success from Day One. We present a practical, relevant and hands-on guide.

12 TEN STEPS TO SUCCESS Using database marketing to supercharge business performance. Put them into practice and reap the rewards!

16 DON’T JUST DO IT - PLAN! Paul Godfrey looks at the basics of putting an effective business plan together.

Telecom providers are making SMEs a key priority and this

is leading to massive innovation

p24

An entrepreneurship course is an effective

way to meet like-minded people, share ideas and find potential business partners

p50

In the UAE, the Labour Law sets out certain minimum

standards, covering issues such as annual leave, sick leave, and end of service gratuity, which cannot be

contracted out of46

A COMPANY COULD DEVISE A FEW MEASURES

TO INTEGRATE A RANGE OF QUALITATIVE MEASURES TO IMPROVE

THE POTENTIAL AND COMPETENCY OF FINANCE

p38

34

Business Banking 20 FOUR PILLARS OF COMPANY GROWTHNational Bank of Abu Dhabi (NBAD) highlights the

Business Innovation24

28

Education30

Movers & Shakers34

Workspace38

42

Legal46

The next level50 OR BUILT?

Trade and Export ME53

Industry watch84

85 DBWC’s insightful session86

87

88

business parks89

90

Tech Trends92

42

46

50

SME ADVISOR ISSUE 100

WHAT DOES THIS MEAN FOR YOUR SME?Innovation has been a long-standing debate within the SME

that is here to stay. Every SME needs to create an innovative

in. Using such technology as a catalyst, SME owners need to

late than never!

WHAT ARE THE INDUSTRY EXPERTS SAYING?In a recent interview with SME Advisor

INNOVATIONTRENDS SHAPING

THE MARKETPLACE

DATA AND DECISION MAKING

of UAE businesses regard

innovation as a strategic priority to

help drive business growth

expect decision-makers to encourage a stronger

entrepreneurial culture in the education system

through better linkages between students and

business-savvy individuals

54%

81% 89% believe innovating or improving

products and services will drive

business performance

say that innovation has

performance

62% expect to step up

their innovation

investment

80%

believe attracting and retaining

innovative people is another key driver

for innovation

62%

say their company directly involves

customers in the innovation process

by asking for their feedback

79% say their organisation constantly

keeps itself up-to-date by

adopting best practices

69% anticipate ‘breakthrough’ or

‘radical’ changes that include

technical and business model

innovation

57%

of respondents (globally)

believe the CEO is responsible

for spearheading their

company’s innovations.

29%

www.smeadvisor.com8

SOURCE:- The third annual GE Global Innovation Barometer survey- PwC’s Middle East Innovation Survey- KPMG Technology Innovation Survey 2012 and KPMG International 2012- The Bayt.com ‘Innovation in the MENA’ poll

Visit www.toyota.ae to register. 195641 503564

TOYOTA

GROUND LEVEL

STARTING ON THE RIGHT FOOT SOCIAL MEDIA SUCCESS FROM DAY ONE

With the digital revolution now behind

of building and maintaining a

responsibility – something that is

Where do I start?

is – where to begin? With at least 50

business owners are left feeling lost

that you have to start somewhere, and

For start-ups and small businesses, every extra resource added to the mix can make a huge difference. Social media is one such tool – which is not only cost-effective but also has the power to give small businesses an edge over their larger counterparts.

new ‘Ground level’ section, Rushika Bhatia presents a practical, relevant and hands-on guide with useful social media tips that you can apply into your business – and get results – straight away!

www.smeadvisorme.com10

PURPOSE

AUDIENCE

RETURN ON INVESTMENT(ROI)

event? Do you want to drive sales for

to maintain your brand image in the

will help you build a strategy for

registrations by end of Week Two, 500

is a very important – perhaps the most important – step when looking

GROUND LEVEL

www.smeadvisorme.com 11

CONTENT

TEAM

INVESTMENT

EVALUATE

CONTROL

Just like the customer is king in your business, content is king when it comes to social media. The right content can make or break your social media account. If you have the budget, hiring a content manager is recommended – this would be someone who would help you select the right platform, manage daily content, monitor results and keep the brand messaging consistent. Alternatively, if you or one of your business partners is looking to manage the account, creating a social media planner or calendar can be extremely useful. Write down the different themes you want to highlight, the number of posts every week, sources of good content, special offers you want to mention, industry-focused events, etc. This will help you get a better understanding of the time you need to set aside for social media activity every day. It’s also a good way to ensure that the content you are sharing is interesting, varied, and credible; and gives you a fair view of what kind of content works and what doesn’t.

At the time of opening a social media account, ensure that your complete team is on board, and they are fully aware of its objectives, ROI, timeline,

can then evaluate where your target audience is present online. A good example – if your business is B2B focused, a platform such as LinkedIn is more suitable for connecting with business owners, high-level executives, partners, etc. However, if you run a consumer-based business, Facebook is an ideal option with over a billion estimated users.

costs and so on. This isn’t just limited to the social media or marketing team, every individual that is a part of the business should have a brief understanding of the company’s social media plan. An effective way of doing so is to create a social media strategy document (doesn’t have to be very long!) which can be distributed amongst all employees; this will guarantee full awareness and cooperation, and reduce the possibility of any bandit messaging! Speaking of which, be sure to appoint a social media ‘brand custodian’, who regularly checks and monitors posts and ensures that the staff aren’t overtly siding with

disputes. (See ‘Control’ below)

After all, as a business owner, your

company – and this needs to be kept in mind when starting a social media account. Ask yourself these questions: what are the costs associated with using this platform; how much and how often am I ready to invest into social media activities; and what are the different online advertising options available? With a lot of new advertising avenues easily accessible and affordable, understanding the kind of investment you want to make is crucial. Will you like to use a major portion of your marketing budget towards Facebook ads or divide it equally between Facebook and Google ads? Discuss this with your business partners and again – put it into writing.

Once you have an idea of the purpose, your target audience and the approximate investment amount, it’s time to make a decision about which kind of social media platform that is most suitable for your business. Your decision can be based primarily on these three factors in addition to the kind of business you operate. For instance, if you are a bakery or a restaurant, Instagram is a great option as you can post images of your delicacies – a visual representation is more powerful versus a text-based message. On the other hand,

one good option as you can use it to connect with businesses looking for service providers (like yourself).

At the end of the day, remember that social media is an open, public domain. Anything that goes on your social media account is permanent. So if there is any bandit messaging, it could have a

major – possibly irreversible – impact on the overall image of the business. Putting control measures into place right from Day One can make a huge difference, and can protect you from any PR disasters. In addition to having a social media manager, ensure that all your employees fully understand the ‘do’s and don’ts’, and have agreed to (in writing) the guidelines presented in the social media strategy document. Also consider conducting regular employee training workshops and seminars that demonstrate basic social media rules and regulations.

Practice makes perfectAs soon as you have implemented these steps, you are ready to start with your new social media account. Even

hope. The secret behind social media success is a focused, consistent and long-term approach. Remember, practice makes perfect!

For an online version, please visit:www.smeadvisor.com/2014/05/social-media-success-from-day-one/

GROUND LEVEL

When getting started, one of the foremost aspects on your mind is the customer.

identify and reach out to the customer? Database marketing can provide an easy, effective


Imagine the following scenario: You’re on a business trip and are visiting a foreign country you’ve never travelled to before. As you check into your hotel, the hostess informs you that she has pre-arranged a chauffeur service for your next meeting. When you arrive back to your room after your day’s meetings,

based on your previous preferences in different hotels. Finally, as you get ready

out immigration forms for your next destination along with your passport!

This scenario is a simple, yet effective, illustration of the power of database marketing. Database marketing is the

TEN STEPS TO SUCCESSUSING DATABASE MARKETING TO SUPERCHARGE BUSINESS PERFORMANCE

ability to use customer data to make an impact on the overall customer experience – leading to a better bottom line for your company. The term comes under the umbrella of ‘customer relationship management (CRM)’ and very often largely involves ‘e-mail marketing’ – sending out mass e-mails to your database. It also branches out to include direct mail and cold-calling. While on the surface level database marketing is an easy way to reach out to your customer and drive sales, it is also a great tool to understand your customers’ needs.

Here we present a key point guide with top ten tips to keep in mind about database marketing:

GROUND LEVEL

DATABASE MARKETING IS THE ABILITY TO USE CUSTOMER DATA TO MAKE AN IMPACT ON THE OVERALL CUSTOMER EXPERIENCE – LEADING TO A BETTER BOTTOM LINE FOR YOUR COMPANY.


CLEAN YOUR DATABASE

SPLIT TESTING

ACCESSIBILITY

CUSTOMER SEGMENTATION STRATEGIES

STEP

STEP

STEP

STEP

1 PERSONALISATIONSTEP3

4

5

2

GROUND LEVEL


MEASURE THE OUTCOMES

OPERATIONAL MANUAL

LINK ALL YOUR MESSAGING

TELL, DON’T SELL!

LEGAL IMPLICATIONS

STEP

STEP

STEP

STEP

STEP

6

9

10

78

This is when you can assess the kind of impact your campaign has managed to create. What do the customer

You can take this up a notch and use

when making management decisions.

Like any other marketing activity, ensure that you have a comprehensive

areas to target, the kind of campaigns

the budgets for each of them, which

If you are running other campaigns via

brand image of the company. More

sent to your customers by sending them

appear desperate and customers might

situation wherein a coffee shop sends

prepared to cater to a huge crowd. As

the basics.

Database marketing for your SMERemember, database marketing has

marketing strategies. One downside of database marketing,

to set up the sophisticated software mechanisms required to run it.

For an online version, please visit:www.smeadvisor.com/2014/05/ten-steps-to-success/

Ways to increase effectiveness of your e-mail marketing campaigns

you create a strong brand image. For instance, if you are a restaurant, instead

Source: B2B Marketing’s Email Benchmarking Report (b2bmarketing.net)

40%SUBJECT LINE

32%PERSONALISATION

55%SUBJECT MATTER

38%DATABASEACCURACY

39%DATABASE

RELEVANCE

C

M

Y

CM

MY

CY

CMY

K

SME 200mm x268 mm.pdf 1 4/24/14 11:37 AM

GROUND LEVEL

A business plan isn’t just the document you produce to attract investors and banks. Life for any entrepreneur can be a roller-coaster of changing risks, sudden challenges and unexpected cash shortfalls - and that’s why it’s so vital to have a good, solid business plan as the blueprint of where your business is going, how it’s going to get there, and why. Paul Godfrey looks at the basics of putting an effective business plan together - and says don’t go another day without one’!


Would you start a journey without knowing the best route to get to your destination? Imagine if that journey involved spending lots of money along the way, making investments and keeping thousands of people happy - of course, you’d want a very good and accurate map indeed. So it is with your business: you need a roadmap that can highlight the dangers and risks, show you where to turn (and where not to!) and highlight the best landmarks along the way. It’s especially important for a business, because in order to be successful, you’ll need to set goals, focus your efforts and often set aside

who are going to buy in to your ideas and aspirations.

In its simplest form, a business plan is quite literally a roadmap for your business. One that outlines goals and details how you plan to achieve those goals. Your business plan may also describe your team and why they

DON’T JUST DO IT - PLAN!

are the right people to achieve your business goals.

Making a startThe great entrepreneur Steve Jobs was famous for jotting down business ideas on the back of napkins in cafes. If you’ve done the same, you’re already familiar with the essentials of creating business plan. At its heart, a business plan is just a plan for how your business is going to work, and how you’re going to make it succeed. It can be as long or as short as you feel it needs to be in order to capture the essentials of where you’re taking the business.

Typically, a business plan is longer than a list on a napkin - although it is possible (and sometimes ideal) to write the entire business plan on one page. Remember, it is not something that is ‘once and done’ and carved in stone. It’s a working blueprint that can evolve as the scale and complexity of the business evolves. Unfortunately, many people

“Starting a business is like going on a journey; you better make sure you have a good roadmap to get you to your destination.”- Peter Drucker

GROUND LEVEL


think of business plans only for starting a new business or applying for business loans. But business plans are also vital for running a business, whether or not it needs new loans or new investments. Existing businesses should have business plans that they maintain and update as market conditions change and as new opportunities arise.

Every business has long-term and short-term goals, sales targets, and expense budgets - a business plan encompasses all of those things, and is as useful to a startup trying to raise funds as it is to a 10-year-old business that’s looking to grow.

Who needs a business plan?If you’re starting a business that will be the source of your income, then the answer is ‘you do’. The business plan can tell you when you’ll have the money to pay yourself a salary (and pay your staff too!); when you’ll face your biggest cash shortfalls and when you’ll need to

As the old saying says, if you’re serious about business, you need to take planning seriously.

Starting a businessThis is the most classic use of a business plan - and that’s because it helps you deal with uncertainty. It also helps your potential investors deal with uncertainty, too, showing them that you’ve thought through the challenges and have real, comprehensive answers. So the business plan will include aspects such as the sales projection, the expense budget, key milestones and the most challenging tasks.

Remember, the bottom line with a start-up is that you don’t actually know precisely how much money you’ll need - and the business plan lets you build in a comfort margin. So you’ll need to set out projected sales, costs, expenses, and timing of payments. The business plan will also need to focus on explaining

what the new company is going to do, how it is going to accomplish its goals, and - most importantly - why the founder (you!) is the right person to do the job. A start-up business plan also details the amount of money needed to get the business off the ground, and through the initial growth phases that

Mature businessesExisting businesses use business plans to – Manage and steer the business Address changes in their markets Take advantage of new opportunities. Reinforce strategy Establish metrics Manage responsibilities and goals, track

results, and manage and plan resources Understand, predict and identify

For existing businesses, a business plan means competitive advantage, with better, faster growth and more opportunity for innovation. It can be a

GROUND LEVEL


What’s the right kind of plan for you?

One-page business plan

The core business plan

External business plan

For an online version, please visit:www.smeadvisor.com/2014/05/dont-just-do-it-plan/


GROUND LEVEL

how potential funds are going to be used. Investors and risk partners will want to understand how their funds will be used and what the expected return on their investment is.

Finally, external plans put a strong emphasis on the team that is building the company. Investors invest in people rather than ideas, so it’s critical to include biographies of key team members and how their background and experience is going to help grow the company.

What to include in your business planA formal business plan will need to include:

Executive Summary

Just like the old adage that you never

impression, the executive summary is your business’s calling card. It needs to be succinct and hit the key highlights of the plan. Many potential investors will never make it beyond the executive summary, so it needs to be compelling and intriguing.

The executive summary should provide a quick overview of the problem your business solves, your solution to the problem, the business’s target market, key

who does what on the management team.

you might want to convey in the executive summary, keeping it short is critical. If you hook your reader, they’ll

as they continue reading. You could even consider using your one-page business plan as your executive summary.

Company Overview

For external plans, the company overview is a brief summary of the company’s legal structure, ownership, history, and location. It’s common to include a mission statement in the company overview, but that’s certainly not a critical component of all business plans.

The company overview is often omitted from internal plans.

Products and Services

The products and services chapter of your business plan delves into the core

of what you are trying to achieve. In this section, you will detail the problem you are solving, how you are solving it, the competitive landscape, and your business’s competitive edge.

Depending on the type of company you are starting, this section may also detail the technologies you are using, intellectual property that you own, and other key factors about the products that you are building now and plan on building in the future.

Target Market

As critical as it is that your company is solving a real-world problem that people or other businesses have, it’s equally important to detail who you are selling to. Understanding your target market is key to building marketing campaigns and sales processes that work. And, beyond

how your company grows.

Marketing and Sales Plan

The marketing and sales plan details the strategies that you will use to reach your target market. This portion of your business plan provides an overview of how you will position your company in the market, how you will price your products and services, how you will promote your offerings, and any sales processes you need to have in place.

Milestones and Metrics

A business plan is nothing without solid implementation. The milestones and metrics chapter of your business plan lays out concrete tasks that you plan to accomplish, complete with due dates and the names of the people to be held responsible.

This chapter should also detail the key metrics that you plan to use to track the growth of your business. This could include the number of sales leads generated, the number of page views to your web site, or any other critical metric that helps determine the health of your business.

Financial Plan

component of nearly all business plans.

Running a successful business means paying close attention to how much money you are bringing in, and how much money you are spending. A good

determine when to hire new employees or buy a new piece of equipment.

If you are a start-up and/or are seeking

you determine how much capital your business needs to get started or to grow, so you know how much money to ask for from the bank or from investors.

Sales Forecast Personnel Plan

Cash Flow Statement Balance Sheet

One last point: remember to use your business plan and not to let it go to waste. Review your ‘real-time’ progress against the plan’s goals at least once every week. Any business plan is only as good as the way it is used - use it well and it can be the key springboard to the success and results you want.

WHILE THERE ARE COMMON COMPONENTS THAT ARE FOUND IN ALMOST EVERY BUSINESS PLAN, SUCH AS SALES FORECASTS AND MARKETING STRATEGY, BUSINESS PLAN FORMATS CAN BE VERY DIFFERENT DEPENDING ON THE AUDIENCE AND THE TYPE OF BUSINESS.

BUSINESS BANKING

www.smeadvisor.com20

FOUR PILLARS OF COMPANY GROWTH

IT’S A COMMERCIAL REALITY THAT THE MAJORITY OF BUSINESSES WILL BENEFIT FROM AN INJECTION OF CAPITAL AT SOME TIME IN THEIR LIFE CYCLE – WHETHER TO SEIZE FRESH

OPPORTUNITIES, DEVELOP NEW CAPABILITIES OR REACH FRESH, REWARDING MARKETS. PLUS, A COMPANY WILL FIND IT EASIER TO ‘WAIT OUT’ A CHALLENGING CLIMATE, OR BOOST

CASHFLOW, IF IT CAN DIP INTO FRESH RESOURCES AND CONSOLIDATE ITS MARKET POSITION. YET THERE ARE MANY

DIFFERENT TYPES OF FINANCING AVAILABLE, AND HERE, PAUL GODFREY EXPLAINS THE OPTIONS AND SPEAKS TO NATIONAL

BANK OF ABU DHABI (NBAD) ABOUT THE STRUCTURE AND RELEVANCE OF THE VARIOUS KEY APPROACHES…

BUSINESS BANKING

www.smeadvisor.com 21

Perhaps the most common roadblock to a business’ development is the need for a particular piece of equipment or facility, which can make all the difference between stagnation and vibrant growth. Classic examples include a dry cleaning business needing

sprayshop needing a high-end spraying booth, or a cash-in-transit operation looking for a more secure counting and storage depot.

The danger is that if, in each case, the business waits until it has the resources to afford these facilities organically, without outside help, it takes the risk of standing still and, indeed, of losing market share. In this situation, the proven solution is to apply for a business loan - an unsecured cash loan that won’t require collateral and where the repayment plan is easily affordable within the existing revenue streams (note: not within the projected revenue streams, which of course may never be achieved). In this scenario, the company doing the lending is a classic ‘risk partner’ - ie, it takes on board the risk that the company may not be able to repay, and at the same time it hasn’t taken a stake in the business or its tangible or assets, so it won’t be able to

likely to be the case that the borrower hasn’t reached full maturity and doesn’t have a range of assets against which it

is probably not a retailer handling large amounts of cleared funds, which again, might be very attractive as an incentive

The simplicity of the unsecured business loan is very compelling: your business meets a pre-agreed set of repayments at a pre-agreed interest rate. When the entire sum has been repaid, the two parties simply walk away. The lender (usually a bank) has no investment holding in the business whatsoever and no ongoing interest in performance or growth. Yet of course, your business has to demonstrate its ability to repay the loan, and the best way to do this is to present a set of

A MORE MATURE BUSINESS WILL IN ALL LIKELIHOOD HAVE OWNERSHIP OF VARIOUS ASSETS THAT CAN EFFECTIVELY BE ‘RE-MORTGAGED’ - RELEASING THE SUMS THAT ARE OTHERWISE DORMANT AND TIED-UP, AND SUPERCHARGING THE BUSINESS WITH A NEW STREAM OF FUNDING.

22 www.smeadvisor.com

BUSINESS BANKING

audited accounts to the lender. Ideally, these will have been prepared by a

will have membership of one of the key professional bodies (for example,

attached to one of the bigger-name audit

is fundamentally how your business demonstrates its credibility and gives peace of mind to the lender, who is basically working on trust.

Of course, because you are not giving any guarantees against the loan in the form of collateral, the lender will look to recoup sums at a relatively high interest

need to be built in to your ‘affordability’ projections. On the other hand, an unsecured business loan can be a handy and quick way to refresh and rejuvenate a business that might stall without the new purchases it makes possible.

Making the most of the resources at your disposal

likelihood have ownership of various assets that can effectively be ‘re-mortgaged’ - releasing the sums that are otherwise dormant and tied-up, and supercharging the business with

this way include commercial vehicles, construction equipment, heavy printing equipment and medical equipment

use of the asset in question - the only difference is that it now serves a double purpose. Moreover, asset-

to obtain, since it’s secured against tangible assets with a demonstrable re-sale value and there will be less need

and complex assessments of your ability to repay.

in mind, however, when assessing if

Firstly, you will pay back more than the original value of the asset; and secondly, personal guarantees will often be required from the business

consideration that some businesses also

FACTFILE: A FOCUS ON NBAD COMMERCIAL BANKING SOLUTIONSBUSINESS LOAN

Unsecured cash loan (no collateral)

Maximum limit - AED 3,000,000 (conditions apply)

and machinery. It’s often the case that

items will need to carry a serial number

authenticates their manufacture, but establishes their age and whether the technology they represent is still current and worthwhile.

you release equity against an item’s current value – and generally, you can do this whether you currently own the item outright or if it still subject to an

the item outright, the asset-backed

the asset to the lender for its current value and then you can lease it back over a stated period of time, paying a monthly instalment. In order for the arrangement to be scrupulously fair, the item will normally be valued by an

for how much cash is freed-up, this will typically range from around 65 per cent to 100 per cent of the asset value.

If the asset is covered by an existing

repayments or spread them over a longer time period. You might also be

completely (depending on how much

remainder in the usual way, on key areas of business development.

It’s also worth bearing in mind, that in both cases you retain continued

ASSET-BACKED FINANCE

Financing commercial vehicles; construction equipment; medical equipment; printing machines

Maximum loan amount - AED 30,000,000

23www.smeadvisor.com

For an online version, please visit:www.smeadvisor.com/2014/05/four-pillars-of-company-growth/

* Terms and Conditions apply

BUSINESS BANKING

feel hesitant to surrender ownership of items they have worked hard to purchase - but here, the reality is that having assets lying idle is burdensome and wasteful to the business, which can otherwise utilise them fully to release valuable development capital. Also on the plus

work with a relatively low interest rate - perhaps less than half of the rate you’ll see with an unsecured loan.

The constant receipt of cleared funds is the ‘holy grail’ of every business, but few companies are in a position to have cleared funds as their basic commercial model. One exception is in the retail sector, where, apart from cash, a high volume of transactions are conducted via Point-of-Sale (POS) card payment systems. These then give a fully-receipted history of transactions, all of which represent sums due to the store from the various card providers (less handler commission). This chain of cleared funds can be used as a highly effective platform for obtaining an unsecured cash loan. The lender will generally look at the last six months’ history of POS receipts and then advance a sum equivalent to a multiple

aggregate value. This is an unsecured loan and doesn’t require asset-backed mortgaging or personal guarantees from owners or directors.

One advantage with this model

is that it is automatically geared according to income - so the lender will not typically need to spend a long

credentials from company accounting records. However, keep in mind that this is still in principle an unsecured

that added risk on the part of the lender.The Point-of-Sale loan is a relatively

for businesses with a high percentage of cleared POS funds to obtain

One of the challenges affecting business owners - especially in the ‘mid-term’ development of a business, when it may be moving to larger

equipment - is that there’s often no immediate way to afford large capital outlay. This is where a company credit card can be immensely practical and useful tool, not only by giving you a relatively high credit limit (sums of around AED500k are not uncommon) but enabling you to spread the payments of equipment over a comfortable repayment schedule. This also has the advantage that you physically own the goods in question (so they are tangible assets), since you

Another advantage is that while

hard to monitor and control company spending by senior staff, a company credit card - with an agreed staff distribution - can become a powerful management tool, clearly documenting expenditure while facilitating necessary payments for travel, business

is that while a corporate Visa card, for example, can offer a business exceptional spending power, its repayment policies and rates of interest are very much in line with what most consumers are already familiar with from their personal card accounts.

above all offer businesses considerable ‘competitive edge’ in terms of their ability to make strong progress and

roadblocks that might otherwise stall development. This can be a major advantage in a hotly-contested sector where critical price or quality advantage can be offered to customers due to better equipment or facilities.

with the best and most comprehensive strategy for deploying a prudent selection of the above techniques that

crucial market opportunity.

POINT-OF-SALE (POS) LOAN

Maximum limit - AED 1,000,000

BUSINESS VISA CREDIT CARD

Maximum limit – AED 500,000

Interest rate - 2.25 per cent per month

Cash advance interest rate - 3 per cent per month

THE STRATEGIES FOR START-UP AND SUCCESS

BUSINESS INNOVATION

First things first. If you’re setting up an SME, you’re going to need - as a matter of extreme priority - to be able to connect with your prospects, your customers, your suppliers and your contractors. In other words, ‘connectivity is king’. More than this, your business needs to put in place a complete 360 degree solution via a telecom partner who is willing to listen, collaborate and deliver. In other words, a provider that you consider to be the ‘SME Partner of Choice’.

Govind Jaganath Rao, VP Small and Micro Business Sales, Etisalat, explains: “The first thing to realise is that the days are long gone when a telecoms provider took a ‘take it or leave it attitude’. Today, the quest is on to provide you with a unique solution that’s entirely right for you, not to coerce you to have an off-the-peg answer. For instance, our relationship with SMEs is made as personal and bespoke as possible, via ‘channel partners’ who interact with customers and can implement highly tailored solutions. So it’s no longer just about getting the basic connections in place - it’s best to think of the relationship in terms of offering a kind of ‘drop down menu’, where you create bespoke options around your needs and your budgets. We take the view that you come to us as a customer not because you have to, but because you want to. The emphasis is on making all the options crystal clear and on delivering exceptional

CONNECTIVITYLeading research suggests that eight out of 10 business start-ups fail

of their existence. The question then is – what can you do differently to ensure that your business is on the path to success? Or, what key resources are available today that can

easier? In an exclusive interview with key industry expert Govind Jaganath

Business Sales, Etisalat, we learn the practical, relevant solutions – and discover that the answer

think!


service - and this service mentality is shared by the channel partner, who receives extensive training in the company’s service values.”

Govind’s comments reflect the fact that in 2014 - following the massive impact of the ‘digital revolution’ - even the most basic set-up needs to factor in aspects such as:

the data access I need?

data across every device?

to account information and history on their mobile devices, while face-to-face with the prospect?

management to enable market segmentation and target the right clients for the right products at the right price?

platform and reap the mobility benefits?

enable me to create a global reach?

The importance of these criteria is underlined by a definitive

School conducted in 2011, asking SME owners about the priorities influencing their business start-up. The 10 key points they raised were:1. Do you know who will buy your

goods - and how to reach them?

goods you plan to sell?3. What expert advice are you drawing

on to identify your USP?

WE TAKE THE VIEW THAT YOU COME TO US AS A CUSTOMER NOT BECAUSE YOU HAVE TO, BUT BECAUSE YOU WANT TO.

BUSINESS INNOVATION


Govind Jaganath Rao, VP Small and Micro Business Sales, Etisalat

WE HAVE ALSO DEDICATED OURSELVES TO CONTINUAL RESEARCH WITHIN THE SME MARKET TO UNDERSTAND WHAT BUSINESSES NEED, SO THAT WE CAN PROVIDE THEM WITH SOLUTIONS THAT THEY WILL TRULY BENEFIT FROM.

BUSINESS INNOVATION

4. What innovations distinguish your business from any other?

5. How will you finance the business and pay yourself and your employees a salary?

6. At what point does your Business Plan show you will turn a profit?

7. How large a team will you need at start-up and for the first three months?

8. How are you going to source suppliers and what are their payment terms?

9. Where will your business be located and do you need any special facilities if what you’re involved in complex manufacture?

10. Will you use a legal consultant to help with local licensing laws?

So many of these observations - particularly the first three - depend on the power of effective business communication and the ability to leverage the right connectivity mix.

Getting started So, is there an ‘all-in-one’ telecom solution available that serves as an easy, effective and quick starting point? How can you ensure that the packages provided to you are in line with your business’ needs?

“Again, the emphasis is on choice - you can have something completely bespoke or you can have a neat, one-stop option. For example, we currently have a number of products specifically targeting the SME sector, and in the near future we will be launching more services geared to support and help SMEs. These will include key aspects such as landline and mobile device connectivity options, data packages, hardware, internet, handsets, etc.,” says Govind.

“We have also dedicated ourselves to continual research within the SME market to understand what businesses need, so that we can provide them with solutions that they will truly benefit from. For instance, some of the packages we offer now operate on an ‘OPEX or pay-per-user


model’ instead of the traditional ‘CAPEX model’. This conscious shift is because we realise that start-ups need affordable, flexible and viable solutions.”

Staying ahead of the curveThe headlong rush towards digitisation has led to the creation of so many new technologies, making it very difficult for a start-up or SME to survive without the help of a market leader. Is this something an SME can look for in its telecom provider?

“As a telecom partner, it is very much our responsibility to lead the way when it comes to new trends. Let me explain with an example. The ‘Bring Your Own Device’ culture is now very big business for the mobile providers, and the leading names aim to be key business partners in terms of offering security of usage, with iron-clad access firewalls for personal use, and so on. This is a great way to save money - especially at start-up or during Year One - since you don’t have to invest in new handsets for the whole team.

“In line with this emerging trend, Etisalat have just launched

TELECOM PROVIDERS ARE MAKING SMEs A KEY PRIORITY AND THIS IS LEADING TO MASSIVE INNOVATION.

For an online version, please visit:www.smeadvisor.com/2014/06/connectivity

BUSINESS INNOVATION


Business DataShare. Using this you can spread data access between personnel, and do so cost-effectively. You buy one amount of data capacity and then share it between staff for very low costs each month. This also gives you real management control - you can see who’s using what, and then decide who needs more or less access. What’s more, you can opt for four levels of package, depending on the number of users you want to include in the loop.”

Building an international appealWith landmark events such as the Expo 2020 on the horizon, every entrepreneur wants a business start-up that is ‘born global’. We might often feel that there’s a kind

of ‘urban myth’ that there might be a technology gap between the Middle East and, for example, Europe or the US. But the reality is that providers here - Etisalat is an example - offer top packages with incredible speed and reliability, and indeed, are already talking about the advent of 5G technology. In fact, the offer here in the region is in many ways superior to that provided in parts of Europe. That’s because it has to be - smart device penetration levels here are the highest in the world, at 197 per cent.

Govind adds, “Yes – services available in this region are directly comparable to those available in the Europe or US, particularly in the SME sector. Telecom providers are making SMEs a key priority and this is leading to massive innovation. For example, Etisalat recently re-structured and set up a highly specialised SMB division. This was done in order to ensure that the packages on offer are as adaptable and comprehensive as possible - so you can now get the entire working infrastructure provided to you as a service. This in effect gives a smaller organisation all the benefits of a larger company, enabling it to have a global reach.”

BUSINESS INNOVATION

Recipe: take one of the best-performing and aspirational SME sectors in the GCC; add a product range second-to-none from the region’s leading telecoms provider; then mix with an incentive

prizes and achievable goals. Result? A 260 per cent increase in revenue and a x30 return on the incentive investment.

This was the exceptional story that unfolded at the Westin Hotel, Dubai, on the evening of May 12, during the course of a keynote event designed to honour the top achievers in Etisalat’s incentives programme for its channel partners. The channel partners are incredibly important entities in terms of how the leading telecoms provider reaches the SME community: they provide a fully customised and tailored service, with the basic philosophy that ‘the customer is king’. They can offer both a comprehensive, one-stop package and augment existing set-ups using the most economic and customer-centric platforms.

Addressing a packed room, John Lincoln, Senior Vice President, Small and Medium Businesses, Etisalat, said, “It is going to be a win-win partnership where we are going to ensure that we work together with our partners and work towards taking away the complexities that SMBs face. We ensure our partners our complete support.” He added that the senior management

REWARDING PARTNERSHIPOn Monday May 12, Etisalat honoured its key channel partners with a major event that saw stellar performances rewarded with a range of luxury gifts - with the top award of a pristine Audi Q7. As well as playing a major, formative role in servicing the needs of the SME sector, the channel partners are themselves SMEs, and here,

programme that played such a powerful role in motivating their success…


will be spending more time with their partners at customer meetings and ensuring the company continues to offer end-to-end support.

During the course of the evening, Etisalat awarded the most successful sales teams from their partners with

- dramatically, all leading up to the major award of a luxury sedan. There was also a special mention of Etisalat’s Channel Partner Managers, who were commended for their dedication.

The occasion recognised the considerable success of a pioneering incentive initiative, and Govind Jaganath Rao, VP Small and Micro Business Sales, Etisalat, perfectly captured the spirit of the evening when he said: “The awards tonight are a perfect example of what can happen when we all pull together around the common goal of providing our valued customers with an exemplary service offer. Absolutely no-one could have worked harder towards this objective than the exceptional teams we honour here this evening.”

A commitment to inspiring excellenceThe top prize - an Audi Q7 - was awarded to Emerging Technologies for being the best performing partner in phase 1 of the channel programme. Emerging Technologies is a business following the classic channel partner

The Etisalat team with the lucky winner

BUSINESS INNOVATION


model, providing its services in marketing, promoting and selling Etisalat’s products to SMEs not managed directly by the company.

Hazem Ghoneim, Senior Manager SMB Channel Management, Etisalat, highlighted the great contribution that was done by all the Channel Partners within the last three months. “It is very obvious that we were successful in our selection process of the Channel Partners, today we all share the success, while tomorrow we must compete for growing this success. We are proud to have you as the main sales arm that covers the SME segment in UAE, you must congratulate yourself for this achievement!” Then Hazem launched the second phase of the incentive programme for the Channel Partners which will run from May 1st to July 31st. He discussed the incentives for the next phase, which also includes another Audi Q7 for the best performing Channel Partner and travel vouchers for the top three sales executives.

Extraordinary resultsWael Beatar, Sr. Manager/ SMB Channel Partners, Etisalat, commented that: “SME Channel Partners are one of the main sales arms for Etisalat since they cover the full region, with more than 250 Sales staff to serve the Medium and Micro Segment. The initial idea of Channel partners was to Improve customer service and experience a competitive advantage by enhancing customer interaction and improving response time. Now Channel Partners

acquisition and have a huge contribution to Etisalat sales.

“The idea of the incentive programme was initiated by the management to create a competitive environment among all channel partners to encourage them to invest more on this programme by increasing their sales force. The result of this programme was amazing since

and we are expecting an increase by more than 400 per cent by the end of the programme in August”

Towards the end of the evening, Thomas Rizikallah, Head of B2B, ME, Nokia, Microsoft concluded by giving a presentation about Microsoft’s offerings, focusing on products such as the Windows phone. He said, “Microsoft has been a key player in the enterprise and SME segment. We offer a complete strategy on devices - so partners will have a uniform experience across all platforms.”

This was part of the ongoing product training and support offered to channel partners in order to ensure maximum product awareness and the optimum offer to SME clients. A new incentive and rewards programme is now already underway, again

coveted Audi Q7 luxury sedan and an exceptional raft of privilege vacation and getaway breaks.

SME Advisor spoke to Sassine Mazraani, CEO of Emerging Technologies, the channel partner delivering a truly phenomenal

Etisalat’s incentive programme - and be proud recipients of the top prize, a luxury Audi Q7.

A VERY HUMAN FACE TO BUSINESS

For an online version, please visit:www.smeadvisor.com/2014/05/rewarding-partnership/


EDUCATION

MOULDING TOMORROW’S ENTREPRENEUR

into play such as: Is this the type of knowledge that can actually be taught? Will an MBA for example help or strifle individual entrepreneurship? If so, how is it that there are well-known entrepreneurs who have successfully set-up and run their businesses despite not finishing a degree?

While, there is no definitive answer to these questions, it nevertheless takes more than just ideas to run a business. There are several areas that you should consider looking into when starting up your business such as financial accounting, statistics, economics, strategy, management, marketing, finance, and technology. A strong understanding of these concepts will help make your business more competitive.

The Middle East region is known for its unwavering commitment to entrepreneurship. In the UAE

ADELLE GERONIMO SETS THE SCENE FOR A NEW SERIES OF FEATURES IN SME ADVISOR, FOCUSING ON THE ROLE OF ACADEMIC AND VOCATIONAL COURSES DEDICATED TO TEACHING ENTREPRENEURSHIP.

entrepreneurship proves to be a major driver of economic growth as it contributes about 40 per cent to the UAE’s GDP. In Dubai alone 95 per cent of the establishments are SMEs and entrepreneurship is said to be within the DNA of the city.

The development of innovative SMEs is part of Dubai’s national vision. The government encourages young entrepreneurs to enhance their skills and capabilities to play a vital role in national development.

Entrepreneurs are often characterised by their dedication, confidence, creativity, and drive. Essentially they are the people who have the ideas, the passion, and the vision to create a new business. However, becoming an entrepreneur is more than just having ideas, and having the financial capabilities and confidence to develop those ideas.

Education’s role in entrepreneurshipStarting a business requires skill and knowledge. This being said, several questions come

“Education is learning what you didn’t even know you didn’t know.”– Daniel Boorstin


EDUCATION

WE SEE A STRONG COMMITMENT ON THE PART OF THE UAE TOWARDS A GROWING NUMBER OF ENTREPRENEURSHIP AND LEADERSHIP COURSES – WHETHER AT SECONDARY OR TERTIARY LEVEL, OR AS PART OF A VOCATIONAL OR ACADEMIC PROGRAMME.

The new section within SME Advisor aims to equip young entrepreneurs with business related knowledge that will strengthen their confidence, innovation, and deepen their understanding of the business world. We aim to empower entrepreneurs towards excellence and globalisation.

In the succeeding months we will introduce a new section that will highlight the different trends in business education. We believe that

education is an essential element of entrepreneurship and is an important foundation for would-be entrepreneurs. This new section of SME Advisor will highlight various entrepreneurial programmes and initiatives on offer in the UAE. Moreover, it will focus on the academic and vocational courses offered by the various academic institutions in the Emirates.

SME Advisor will become the mouthpiece of academic institutions in putting the spotlight on the educational initiatives on offer for aspiring entrepreneurs in the UAE. In the succeeding months we will bring forth feature stories, researches, and case studies from prestigious universities here in the UAE that are offering programmes to develop young and budding entrepreneurs.

Paul Godfrey, CPI’s Group Director of Editorial, comments: “Increasingly, we see a strong commitment on the part of the UAE towards a growing number of entrepreneurship and leadership courses – whether at secondary or tertiary level, or as part of a vocational or academic programme. I wanted SME Advisor magazine to reflect these powerful initiatives – on the hand, analysing the courses and telling readers more

Championing the educational scene – the role of SME AdvisorSME Advisor Middle East shares the same vision. Entrepreneurs are recognised as pioneers for innovation and leaders in economic and social progress. In this current generation where there are a lot of promising young businessmen and women, we aim to help them gain a competitive edge as they develop ideas and products that will lead SMEs towards excellence.

32

For an online version, please visit:www.smeadvisor.com/2014/06/moulding-tomorrows-entrepreneur/

www.smeadvisorme.com

about them, and on the other, celebrating the top-achieving students. Also, as organisers of the highly successful Stars of Business Awards, I wanted CPI Media Group to create a powerful new forum to honour educational achievement in the business field, and we decided to launch the ‘Tomorrow’s Entrepreneur’ competition. A highly inclusive event that really ‘tests the water’ and showcases what young business-minded students are truly capable of.”

Education in the general sense is a form of learning in which knowledge and skills are transferred from one generation to another. According to the Organisation of Economic Cooperation and Development (OECD), education’s role in developing entrepreneurs is divided into two – creating the right attitude for individuals and developing knowledge and skills relevant to entrepreneurs. Through the new section of SME Advisor we will aim to shed light on how academic institutions here in the UAE go about fulfilling education’s role in molding tomorrow’s entrepreneurs.

There are numerous good reasons for a would-be entrepreneur to pursue higher education. For one thing, the value of networking during school comes to play. Graduates who have gone on to be successful entrepreneurs often credit their time in college with helping them make incredible connections. Some found business partners, while others made friends with people who were able to help them with their entrepreneurial ventures in other ways. While it presents a very good advantage, as far as a formal education goes, there are no specific requirements that must be adhered to before starting as an entrepreneur, but there are ways to enhance your skills and knowledge and increase your chances of success. However, entrepreneurship definitely is not a one-size-fits-all kind of world when it comes to education.

As for existing entrepreneurs this new section of SME Advisor will present fresh perspectives on the current trends in the business world. Vocational courses, seminars and workshop pioneered by academic institutions that can help broaden your skills and knowledge will also be part of the focus of this new section.

Many of you may have heard of the following names – Bill Gates, Steve Jobs, Richard Branson, and Michael Dell – what do they all have in common? They are all entrepreneurs who have successfully set-up and run their businesses despite not having a degree. Gates dropped out of Harvard University. Jobs only completed one semester at Reed College in Portland, Oregon. Dell left the University of Texas at 19. Branson, never made it out of high school.

But, what they also have in common is that they never stopped learning. For instance, Steve Jobs after leaving college – spent 18 months attending creative classes, including a course in calligraphy. Proving that after leaving school he still made a conscious effort to enhance the skills that he possessed.

At the end of the day, whether you are an aspiring entrepreneur trying to decide if you’re going to college to pursue a degree or an existing entrepreneur who is doing well in your business venture, the important thing is that you never stop learning. Bill Gates once said that learning is an essential ingredient to success. For entrepreneurs it is crucial to engage in a process of continual learning and have the ability to be open to change and always try to improve oneself and one’s business.

ACCORDING TO THE ORGANISATION OF ECONOMIC COOPERATION AND DEVELOPMENT (OECD), EDUCATION’S ROLE IN DEVELOPING ENTREPRENEURS IS DIVIDED INTO TWO – CREATING THE RIGHT ATTITUDE FOR INDIVIDUALS AND DEVELOPING KNOWLEDGE AND SKILLS RELEVANT TO ENTREPRENEURS.

EDUCATION

With Etisalat you can connect

Etisalat offers the ideal connectivity solutions to business customers that have a wide network of offices in the UAE. With LocalConnect, your network of showrooms, offices and warehouses, in different emirates, can all become one entity and communicate seamlessly.

800 5800etisalat.ae/localconnect

Etisalat Business


LEADERSHIPIT’S NO ACCIDENT THAT THE SME SECTOR IS INCREASINGLY THE FOCUS OF GOVERNMENT INITIATIVES AND ENTREPRENEURSHIP COACHING - IT’S SIMPLY THE FASTEST-MOVING PART OF THE

REGIONAL ECONOMY. THIS IS TRUE NOT ONLY IN TERMS OF THE FEROCIOUS COMPETITION BETWEEN BUSINESSES,

BUT IN TERMS OF WHAT AN SME ACTUALLY DOES. AS BUSINESSES BECOME MORE SOPHISTICATED, SO DO THEIR NEEDS – AND THAT INCLUDES FACILITIES, RESOURCES AND

ACCOMMODATION. HERE, SME ADVISOR ASSESSES THE CHANGING LANDSCAPE, AND ASKS LAUDY LAHDO, GENERAL MANAGER, SERVCORP - MIDDLE EAST, FOR HER VIEW ON THE

STYLE OF OFFICE ACCOMMODATION THAT SPELLS COMPETITIVE EDGE IN AN ERA WHEN ADDED-VALUE IS EVERYTHING.

MOVERS & SHAKERS

IN A CULTURE OF COMPETITION


MOVERS & SHAKERS

The region’s SME space is a powerhouse of potential - not least because studies from Dubai SME show that the sector

where growth - albeit healthily ahead

in single digits for more than half of the

SMEs experiencing this dramatic

challenges: the need for second and third generation funding, bigger and better

also the most basic need of all - suitably

The SME picture isn’t just about

key trends that we’re seeing emerge in the region’s SME space is the need for SMEs to get closer to the cutting-edge of technology - and that’s often because

The old days of the region being a buyer

Technology-focused business parks such as Dubiotech are experiencing their

businesses look set to further slant the growth statistics, because their

SME sector, there’s another factor to


The truth is that great aspirations

The statistics suggest that the

Practical assistance when it’s needed most

MOVERS & SHAKERS


network of the highest calibre - and it all happens seamlessly. From Day One, you become part of what we call the Servcorp Global Network. This gives

every location and instant control over the way the myriad of support services project your identity to your clients. Simply access Servcorp online and you can change the way that receptionists answer your calls, customise your voice data messages and redirect calls to your landline, to a mobile, tablet or any of your devices. You can also

and book meetings facilities instantly and in real time. Or, you can do this by using the Servcorp app on your mobile. What’s more, you’ll be able to make international calls all at local rates!”

“All of this is possible because we’ve invested more than US$ 50 million in our IT infrastructure, and have a state-of-the-art proprietary platform that is amongst the most advanced in the world. I’m delighted to say that this long-term investment is unparalleled and recognised as such in the market. It’s one of the key reasons, for example, why we are so widely recommended by companies who specialise in one-stop start-up services and instruct

accommodation. Statistics speak for themselves: in terms of connectivity, our clients experience 99.99 per cent uptime

speeds in the industry.”

What the research tells us…The focus on telephony and digital

recent research by Etisalat. As Govind Jaganath Rao, VP Small and Micro Business Sales, Etisalat, comments:

an SME is its connectivity. The need for telephone and e-mail contact is on a par with having a bank account - you simply can’t start without it. Customers in the region are leading the way in terms of wanting full portability of data across all the company’s devices. A younger demographic of entrepreneur is at the root of this change and we are putting more and more emphasis on having both call and digital connectivity as early as possible in the business’ lifespan.”

An SME that starts working with

has a powerful short-cut to the raft of telephony and digital services that will be its lifeblood in the quest for customers, inventory and marketing reach.

Getting things right from Day OneStatistics from Abu Dhabi’s prestigious Khalifa Fund show that all too many SMEs take off an expansion path without getting the basics right. A misunderstanding of factors such as

and visa allocation, the requirements and limitations of life in a Freezone, or

licence, can all come back to haunt a growing business - and amending these errors later on can be both prohibitive and costly. In fact, the need to ‘do things properly’ across many areas of the business is now enshrined in the wording of the new 2013 Companies Act, which details

Corporate Governance. Again, working

environment can positively ensure the right fundamentals are in place.

For an online version, please visit:www.smeadvisor.com/2014/05/leadership-in-a-culture-of-competition/

MOVERS & SHAKERS

As Laudy Lahdo comments: “We pride ourselves on being an international company that does business locally. We are dedicated to building strong relationships with local authorities which has enabled us to provide comprehensive solutions for our clients - ones that can be implemented smoothly because they’re totally aligned with every aspect of the legislative framework.

“We provide services that are very much bespoke to the markets we work in - and there’s no better example than the fact that, in every country we

languages. Here in the Middle East, our team are multi-lingual and have local experience. Catering to the local market is a Servcorp priority. In my own case as a frequent business traveller across the Gulf, I communicate in Arabic where relevant, re-enforcing the fact that we are an organic part of the local businesses’ aspirations and in tune with the kind of opportunities and challenges they face. This allows us

exceed their expectations.“In the eleven years I have been in

Dubai, I have seen many companies that started from a Servcorp serviced

large enterprises. This is testament to the fact that Servcorp is a nursery for SMEs. In fact, we’re very much geared to help businesses grow: we even offer a ‘test the water’ package that enables a company to test the market on an international basis and build a branch network without having to commit large sums up-front. My view is that this kind of approach will become even more relevant and helpful given the rise of the new generation of young entrepreneurs. We are very well-placed to work in line with their vision and ambitions and help them realise their goals. If you’re going to compete in the ever-changing SME space, rule No.1 is that it pays to be part of a winning team with all the right strategies in place!”


WORKSPACE

professional is changing, with more and more responsibility for company direction - and the job of CFO often seen as an ideal training ground for the potential CEO. What’s more, increasingly challenging legislation requires stringent

practitioners are likely to deliver. Yet how to attract,

create the assessment matrices that ensure the

Zenifer Khaleel assesses the climate of change in

ON THE FINANCIAL FAST TRACK FROM CFO TO CEO


WORKSPACE

The primary aim of any organisation, irrespective of its operational capacity, is to say it big with numbers in the profit sheet. Since the economic downturn gripped the world in 2008, finance professionals are under added pressure to create and sustain long-term value for the organisations they work in. But ultimately, this goal is dependent on the way that the organisation taps into the hidden talent of the personnel within their finance department.

Any organisation which hopes to capitalise on its financial manpower should create an integrated talent management framework targeted at development opportunities for both the organisation and the employee at a personal level. It should link recruitment and development structures with competency frameworks, performance appraisals and reward systems; thereby creating clear standards and reference points so that a culture of high performance can be developed.

Pressure is a comprehensive and versatile element in the functioning of the finance department and there is no escaping it. There is the need to minimise operational costs, to

ANY ORGANISATION WHICH HOPES TO CAPITALISE ON ITS FINANCIAL MANPOWER SHOULD CREATE AN INTEGRATED TALENT MANAGEMENT FRAMEWORK TARGETED AT DEVELOPMENT OPPORTUNITIES FOR BOTH THE ORGANISATION AND THE EMPLOYEE AT A PERSONAL LEVEL.

Alwyn Crasta, CFO,

Al Dahra Agricutural

Company

Shaveta Duggal,

Lecturer for Business

& Finance, Abu Dhabi

Vocational Education

and Training Institute

40

WORKSPACE


generate maximum value in a period of slow economic growth, to take opportunities that arise as conditions improve, to respond to new regulatory and tax pressures around the world and many more.

The talent scenario in finance is being increasingly affected by broader changes across the workforce, changing demographics, the globalisation of business operations and the development of more complex entity structures. In lieu with increasing performance expectations, finance leadership must rethink its talent aggressively; while comprehensively re-examining its models, capabilities and business relationship in order to help the organisation create value and growth.

Maximising on people powerHow does a CFO or finance manager constantly adapt to these changing equations of pressure and improve finance effectiveness?

“The finance function gained more focus due to various scandals in renowned companies like Enron and WorldCom. Since then the operational strategy has been reformatted to control accounting and correct reporting. Cash flow management is another important element as any mismanagement in cash flow has a direct impact on business,” says Alwyn Crasta, CFO of Al Dahra Agricutural Company based in Abu Dhabi.

“People power emphasizes that the workforce is empowered to manage the future of business. Companies should ensure that their workforce believes in its operational values and are motivated to create new ideas and values,” he adds

In order to empower the finance personnel, a few factors should be taken onto consideration:

particular objective or target, the finance manager should be given sufficient authority to plan, delegate, improvise and even

change operational strategies. If he has no authority to take necessary steps to complete the job, he will not feel confident enough to lead to the task to success.

very unstable entity, it is normal that some decisions will go right while others turn wrong. Finance personnel should be judged according to their aptitude and given the freedom to take calculative risk.

to reduce complexity in order to manage potential risks and implications. They should have deeper business knowledge and recognise potential weaknesses.

structures should encourage finance teams to plan ahead. Compensation packages should be geared to process improvement and the sustainable delivery of goals.

should be processed into a valuable source of information and insight.

Structured training and career development not only help ensure finance teams have the right capabilities, but also enhance recruitment and retention.

should continually upgrade their systems with the best technology and features to deliver solutions that will transform the business.

The ultimate financial ‘whiz kid’Like any other field, finance personnel should have occupational, industry and technology skills to be

Finance at the Abu Dhabi Vocational Education and training institute, gives a brief description of the ideal characteristics of the finance employee, “A methodical approach to your work, involving logical thinking

FINANCE TEAMS NEED TO REDUCE COMPLEXITY IN ORDER TO MANAGE POTENTIAL RISKS AND IMPLICATIONS.

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For an online version, please visit:www.smeadvisor.com/2014/05/on-the-


WORKSPACE

A COMPANY COULD DEVISE A FEW MEASURES TO INTEGRATE A RANGE OF QUALITATIVE MEASURES TO IMPROVE THE POTENTIAL AND COMPETENCY OF FINANCE.

and attention to detail is expected all the time. In addition to that, you have to be a number cruncher. The ability to understand, manipulate and make use of numerical and statistical data is very crucial. An insight into business procedures, the nature and functioning of organisations, and the commercial world at large is very essential. Being surrounded by numerical information, (finance employees) should have sharp analytical abilities and the acumen to critically examine information before accepting it.

“Additional traits should be social and interpersonal skills, communication skills, responsibility, leadership, teamwork, time management etc. Aptitude for accounting/finance management can be summarised thus: they should have a good head for numbers, a driving interest in business and a keen eye for detail not undermining the importance of workplace literacy and numeracy, information technologies, self-management, problem-solving and decision-making, oral and visual communication, relationship management and life skills at the same time.”

To attain a perfect finance system, companies should incorporate a preferred model which has the following elements:

together specialists in disciplines such as tax or risk,

efficiency

to reduce costs

partners (FBPs) to provide analysis and support to the organisation.

The qualitative approach

yet tasking aspect of any business. However, it is difficult to take a quantitative approach to manage employee relationship and talent

when the results you seek are purely qualitative.

A company could devise a few measures to integrate a range of qualitative measures to improve the potential and competency of

stakeholder satisfaction in relation to the quality of FBP support provided.

provide insights of how people feel about the learning and development, the clarity of their career paths and general level of engagement in company activities.

Regular training in the various aspects of the company is also important as the finance manager can decide on the true capability of the employee and which rung of the finance ladder he is most suited to. As businesses are becoming increasingly globalised, there is the need to capitalise on the potential of the local talent pool and convert it into international standards and output. Finance managers should be on constant vigil to source the right person from the local talent scene and make them adapt to the company’s international policy. This provides a beneficial situation for both the employee and the company. The company does not have to hire people on an international payroll, thus reducing

know the culture of the country and do not need to adapt; moreover they get the opportunity to work in a multinational company thereby boosting their morale and technical know how.

As we cater to a very complex and demanding corporate world, the real competency edge and profit boost for any company lies in having the right service delivered from the right location by the right skill set.


WORKSPACE

What if there was a platform that enhanced client relationships, improved overall customer experience, boosted customer retention and loyalty, and offered a competitive advantage like no other? The unique platform – UrbanBuz, provides all these services and much more. In an exclusive interview with SME Advisor, Mustafa Sadek, CEO of UrbanBuz, explains the company’s attractive SME proposition…

RESOUNDING SUCCESS

UrbanBuz is a customer loyalty and retention platform, facilitating

delivering a competitive advantage for its business partners across

platform is to provide customised and evolving solutions for businesses to

UrbanBuz enables its partners to

platform is fully digital and integrated

It can be used in-store, online, leveraging social media and mobile

Tell us a little about UrbanBuz.

How did the idea come about? What was your inspiration behind the idea?

THE INNOVATIVE CONCEPT OF URBANBUZ

Mustafa Sadek, CEO, UrbanBuz


WORKSPACE

What kind of packages and solutions do you have available for SMEs?

What is your USP and how do you use it to enhance the SME o!ering?

Do you provide bespoke solutions tailored to an individual SME’s needs?

What are key trends you’ve identified in the region in terms of customer service, customer satisfaction and customer loyalty?

Is your programme applicable to companies across all industry sectors?

What are some benefits of your programme?

It is important to note that we offer our clients an evolving solution and not a rigid product. Our solution is bespoke. We help our clients easily set up their own loyalty programme that they can run themselves, to help them attract and retain customers. Its attractiveness is that it is simple and easy to manage, and it is affordable. Our SME partners will grow by increasing and deepening their relationships with consumers. Our job is to make that happen. Because we

Our USP is simplicity. SMEs now have the capability to set up their own, advanced digital customer loyalty programme. This was something previously available only to big businesses with big budgets. Our partners can make the programme as sophisticated as they want it to be – it is entirely customisable. They don’t have the time, resources or budgets of big businesses, so we have designed the platform to be set up and managed very easily, at an affordable price. It takes no time to learn how to use it.

The platform itself is bespoke. It is tailored to each of our partners’ needs. The features themselves are customisable, so can be adapted according to the unique requirements of any of our partner businesses. If they are looking for additional features, we’ll always take that into consideration.

understand a business and its needs, and then go back to the platform and make it work as effectively as possible for them.

The region is very new to these things, so there aren’t many statistics available. If you talk to consumers, the consensus is that customer service is poor. That’s because the service oriented SME segment is still emerging in the region. But competition is growing and businesses with growth strategies are realising that they need to shape up or

Any business with repeat customers can make use of our platform. At present, it is used by businesses in the retail,

health & beauty sectors. We are adding new sectors regularly.

UrbanBuz makes it quick and easy for businesses to capture and retain customers. It is fully digital, which other programmes are not. That is to say it involves no cards and no forms, which can be barriers to customer participation. We provide simple customer data acquisition, fully customisable loyalty features, tiered rewarding, social media integration, targeted automated communications, and useful data and analytics for SMEs to exploit.

it came to customer engagement and loyalty. So we started researching regional and global market trends and UrbanBuz was born.

are a young company we have packaged

pricing – one for SMEs and another for enterprises. Next year we will be introducing more packages.

THE FIRST STEP IN THE PROCESS IS TO FULLY UNDERSTAND A BUSINESS AND ITS NEEDS, AND THEN GO BACK TO THE PLATFORM AND MAKE IT WORK AS EFFECTIVELY AS POSSIBLE FOR THEM.

44

We are becoming with time the trusted advisors of our business partners and are now looking at forging partnerships with other marketing related service providers as well as other technology providers. Our aim is to keep adding value for our business partners.

The role of every loyalty programme is to increase profitability by driving sales and foot-fall. Statistically, members of a loyalty programme outspend other customers by five per cent (per visit) and visit about 20 per cent more. So the first factor we look at is participation in the programme – if customers are not interested in the programme then there is something wrong with it. We assess the reaction of customers to the programme, and provide information on that. We then track sales and visits month-by-month to assess how far the programme is helping to generate more traffic and how customers are responding to special offers. We also track

What additional a!nity partners do you plan to bring into the programme?

What are some mechanics that you can use to measure the e"ectiveness and ROI of the programme?

WORKSPACE


nor software are required for our partners. We handle all the running of the platform, and it is accessible to businesses anywhere, anytime. They have constant, secure access to their data. It’s as simple as managing a Facebook page. The model is seamless,

Do SMEs need to have a dedicated in-house IT team to work with the programme or is this part of the package?

How e!cient is the programme to manage in terms of back-o!ce resources and software?

When people say ‘mobility’ it’s easy to assume they are referring to mobile phones. That’s true when it comes to consumers. For our businesses partners, mobility refers to tablets at their end, and the ability to reach consumers’ mobile devices at

centre of our platform. Tablets give

customers and make transactions anywhere, anytime. Through our mobile app, businesses can reach their consumers anywhere and push location based offers and promotions. Consumers get constant access to their accounts, their transaction history and their balance with each participating business.

What kind of after-sales support do you provide as part of the package?

After-sales support is at the centre of our offering. We emphasise the ongoing relationship we have with our partners. We constantly monitor the performance of our partners, and provide reports to them on how their business is doing. From those reports we are able to recommend how to make better use of the loyalty programme, and where potential opportunities for growing business lie. We are always watching the market and evaluating trends, then feeding this information back to our partners. We invite our partners to events and workshops to keep them up to date with what is happening in the market.

that, focusing on the programme and on customer engagement so our partners can focus on their business. We handle all the IT in the background, while our partners’ staff on the shop-

This model is the core to any SaaS business model (Software as a Service), which is the new trend globally.

the question: how are we going to gauge customer satisfaction? We have designed our surveys and our analytics to answer those questions, helping businesses to improve customer service and thereby customer satisfaction. To listen and engage with customers is the surest way of assuring their loyalty. The idea of customer service and customer satisfaction, from which loyalty derives, are a new trend in this region, and one which businesses have only recently begun to recognise as important.

Is your programme more viable for consumer-based companies versus B2B companies?

Given the headlong rush towards mobility, how do you help SMEs use mobile technology to attract and retain customers?

Yes. At present our platform

We do encourage and assist cross-collaboration between our partners,

we have in mind for the future.

STATISTICALLY, MEMBERS OF A LOYALTY PROGRAMME OUTSPEND OTHER CUSTOMERS BY FIVE PER CENT (PER VISIT) AND VISIT ABOUT 20 PER CENT MORE.

45

For an online version, please visit:www.smeadvisor.com/2014/05/resounding-success/

Firstly we consider their potential for growth. We are all about growth, and put all our energy and resources into it. If the business is not fully dedicated to that growth, then we probably won’t choose to work with them. It’s important that the business is not just interested in

as an important part of the growth process. If they don’t recognise it as essential it won’t work. Once they are on board, we are concerned with how engaged with the loyalty process our partners are. We aim to work with them and help them, and if they don’t have the time to engage with that process then the relationship probably won’t work. All this comes down to how serious the business is about the platform and how important they consider us to be as part of the growth process. One problem we encounter is businesses who want a loyalty programme because others have it, but don’t consider it to be instrumental to growth – as far as we are concerned it is an essential ingredient.

Digital has two major advantages: it gives you access to information in real time, and it is convenient. You can use a digital platform on a small device – it is quick, easy and mobile. But I would also caution SMEs: the ‘digital world’ is a big one. The word itself can be interpreted in different ways – for example as mobile phones, as tablets, as social media or as a website. As a business it is very important to identify what problem you want to resolve, and then identify the appropriate solution. Just ‘having’ a digital solution doesn’t mean it will solve the problem that you face. It has to be specific to the problem, which is why we always aim to understand a business intimately before recommending what solution will work for them.

something regional businesses actually needed. Initially we made many revisions to the platform. We offered our pilot for free to receive the feedback we needed. Our first success was acquiring our first paying partner. The next big challenge was to create a structured ‘company’ with passionate and talented employees. For that we needed to raise capital. Raising funds and pitching to investors takes time. In the UAE, technology start-ups are treated with caution. We engaged well with investors and raised US$735,000 in seed-funding in a short period of time, which is a huge achievement in this market. Investors liked our founding team, saw potential, and wanted to be part of the story. Since then we have been growing rapidly, adding business partners to our platform and improving the features as we go. We have more than 70 locations on our platform with 37,000+ engaged customers.

As an SME, what are the key factors you take into consideration when dealing with clientele?

Finally, what advice would you give to SMEs in terms of adopting digital solutions?

How would you describe your journey as an SME owner? What were the major challenges?

How have the latest digital trends impacted the way you do business?


WORKSPACE

Five years ago we would not have been able to do what we are doing now. I refer specifically to digital and mobile technology. These developments have enabled us to be able to capture information in a quick and convenient way. We can capture information anywhere – it is no longer restricted by location – whether on a mobile device, online or via social media. We have different channels through which to engage with customers that were not available until fairly recently. The mobile and social media explosions that have taken place in the past few years are what have given us the opportunity to build this platform, and give it the capabilities it possesses.

The journey has been rocky but interesting and rewarding. The first challenge was to validate the platform as something businesses wanted, and were willing to subscribe to. We had to understand our customers and ensure we were creating

DIGITAL HAS TWO MAJOR ADVANTAGES: IT GIVES YOU ACCESS TO INFORMATION IN REAL TIME, AND IT IS CONVENIENT.

the customers’ referral activity and sharing on social media and suggest changes to the programme to drive more activity on that front.

Managing an internationally mobile workforce can be challenging, particularly as home country and host country laws can be vastly different. Whilst a multinational employer may wish to centralise its employment policies and administration as far as possible, nevertheless, legal compliance with local laws in the host country may mean that it is not possible to impose global policies on the workforce. Taking the UAE as an example of a host country, the following is a useful checklist of the issues which HR and legal departments have to consider.

What contractual documents do you need?

LEGAL

46

A surprising proportion of SMEs are in fact

larger international businesses, running

centres and in day-to-

The question is, how can they cope effectively with bringing staff across

identity and expectations while enscribing personnel fully into the raft of UAE regulations?

www.smeadvisor.com

Many organisations prefer to maintain home country contracts for their mobile staff, in order to provide some comfort to the employees that their accrued service will continue

to an employee will be maintained, and rights and obligations will be familiar to the employee. Ideally, internationally mobile staff will not be inundated with paperwork

international status of the employee is preferred.

However, it is not always possible to approach the contractual documentation with a light touch and the immigration requirements of the host country can often drive

WHEN IN ROME:GETTING EXPAT STAFF IN LINE WITH UAE REGULATIONS

LEGAL

47

the host country entity and the home country entity in the event of a dispute. It is important, then, that the home and host entities are aligned in their management of employee relations and in particular, who is the disciplining and dismissing party. Whilst the host company would usually deal with the day to day management of the employee (including disciplinary matters), nevertheless the home company will want to maintain some control over this, or at the very least, be consulted with prior to any disciplinary or dismissal action. This can be dealt with by way of an agreement between the two employing entities.

TaxationWhen moving employees from one jurisdiction to another, the multinational employer must consider both the tax implications for the employee (for example, in what circumstances is income tax payable in the home or host country, or both), as well as the tax implications for the employer – for example, is a permanent establishment created when one or more employees are sent to a particular location?

In the UAE, for example, there is no income or corporation tax, however, certain employees (for example, American nationals), may still be obliged to account for tax in their home jurisdiction.

Medical requirementsImmigration requirements can pose

companies seeking to transition

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EXPATRIATES WORKING IN THE UAE, FOR EXAMPLE, MUST HAVE A RESIDENCE VISA AND WORK PERMIT WHICH ENABLES THEM TO LIVE AND WORK IN THE COUNTRY.

the employment documentation process. Expatriates working in the UAE, for example, must have a residence visa and work permit which enables them to live and work in the country. As part of the application process, an employee will be required to enter into a standard form local contract (supplied by the Ministry of Labour or relevant free zone authority).

What law applies to the international assignment?Where there is a requirement for a local contract, such as in the UAE, the local laws will apply to the employment – in the UAE, in most cases, this will be Federal Law No. 8 of

1980, as amended (the Labour Law).This means that a company must

consider how the host country laws will dovetail with the home country, in cases where a home country contract is maintained.

For example, in the UAE, the Labour Law sets out certain minimum standards, covering issues such as annual leave, sick leave, and end of service gratuity, which cannot be contracted out of. This means that a company will have to look at its usual policies and consider whether these need to be enhanced in order to ensure host country law compliance. Equally, a company will want to ensure that an employee does not receive two sets of entitlements and that any leave, for example, runs concurrently in both jurisdictions. In addition, local statutory rights may increase the value

the host country. In order to ensure parity with employees across the globe, it may be necessary to offset statutory

country. For example, in the UAE, an employee who achieves one year’s service is entitled to an end of service gratuity payment on termination of employment (unless they are dismissed for gross misconduct, or are instead in receipt of a pension provided in lieu of gratuity). A multinational employer may therefore wish to agree that any statutory end of service gratuity paid to the employee in the UAE is offset against a contractual redundancy payment offered in the home country.

Who is the employer?As noted above, in many cases, the immigration requirements of the host country mean that an employee is obliged to enter into an employment contract with a local entity in the host country. The host country employer may therefore be a branch or other group company of the home country entity, however, it could be a joint venture partner or local sponsor.

An employee may therefore acquire an ability to bring a claim both against

parts of it amended – for example, a whistleblowing policy cannot promise protection for the whistleblower where there is no statutory whistleblowing policy and where the publishing of certain allegations may in fact lead to a criminal complaint of defamation against the whistleblower.

Policies should therefore be looked at from a host jurisdiction perspective, in order to ensure local law compliance.

Health & Safety and company beliefsIn a large multinational where employees are disbursed across the

consistent standards. For example, different nationalities may have different views as to what is and is not appropriate behaviour in a workplace. Equally, certain policies may be so important to a company - for example, health & safety policies - that these must be consistently applied and observed across the globe. This may require the multinational employer to provide training and education to its workforce, both to introduce the required behaviours and to maintain an awareness of them during the course of employment.

Nationalisation requirementsMultinational companies need to be cognisant of local nationalisation laws in the host jurisdiction; for example, is there a limit to the number of expatriates who may be employed by the company in the host location? Alternatively, are the constituent nationalities which make up the workforce regulated (for example, in the UAE, additional fees are charged by the Ministry of Labour to companies who do not adequately employ UAE nationals or whose

UnionsWhilst it may be appropriate to work with trade unions in certain jurisdictions (and even to have an international framework agreement

should bear in mind that it may not

48

IN THE UAE, THE LABOUR LAW SETS OUT CERTAIN MINIMUM STANDARDS, COVERING ISSUES SUCH AS ANNUAL LEAVE, SICK LEAVE, AND END OF SERVICE GRATUITY, WHICH CANNOT BE CONTRACTED OUT OF.

www.smeadvisor.com

employees smoothly to the host jurisdiction. For example, in some jurisdictions, it is illegal to require an employee to take an HIV test. However, in others, such as the UAE, the immigration process includes a medical test which checks for communicable diseases, such as HIV.

The employer will need to explain to the employee that the medical examination is imposed by the authorities and obtain the employee’s cooperation. The employer may also want to consider how it will deal with the employee if things go wrong – for example, what happens if the employee fails the medical test, either at the outset or during the course of employment when the employee’s visa is renewed? Will the company continue to employ the individual in the home jurisdiction? Will the company supply counselling (particularly if the failure of the medical examination comes as a

In most cases, although a multinational can maintain similar employment policies globally, it is unlikely that they will all be the same. For example, a policy providing accommodation

couple would not be appropriate in jurisdictions such as the UAE, where to live together would be illegal; a drug rehabilitation policy would equally be inappropriate in the UAE.

In other cases, a policy may be able to be maintained but some

be able to promise the recognition and activity of a union in certain jurisdictions. For example, in the UAE, there is no right to freedom of association and collective action such as striking is expressly prohibited by the criminal code.

Public relationsMultinational companies are usually concerned to maintain best practice employment standards, not least because a failure to do so can attract criticism in the world’s press. Even where a jurisdiction does not require compliance with certain standards - for example, there are no anti-discrimination provisions in the UAE Labour Law - nevertheless, from the viewpoint of an international workforce, the integrity of a company and its policies should be consistent throughout the globe.

ConclusionAs companies and their employees become more globally mobile, in part as a response to economic challenges in

above will need to be considered on a more regular basis. The most appropriate time to consider the issues is at the outset, before an employee embarks on a role in a host location, in order that the correct legal and immigration policies and structures can be put in place in order to best serve the company and its employees.

For an online version, please visit:www.smeadvisor.com/2014/05/getting-expat-staff-in-line-with-uae-regulations

LEGAL

Further informationIf you would like further information on any issue raised in this update please contact: Clyde & Co LLPPO Box 7001Level 15, Rolex TowerSheikh Zayed RoadDubai, United Arab EmiratesT: +971 4 384 4000F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary.

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THE NEXT LEVEL

TODAY’S ENTREPRENEUR – BORN OR BUILT? With mega projects such as the Expo 2020 and Qatar World Cup on the horizon, there has been a recent surge of new small businesses entering the market, in order to meet the increasing demand for products and services. This means that young aspiring entrepreneurs now have the added pressure of ‘raising the bar’ if they want to survive in this competitive landscape. As a result, entrepreneurship education is gaining fast popularity for its ability to give current and future business owners a viable edge. In an exclusive interview with Professor of Entrepreneurship Vangelis Souitaris of Cass Business School, part of City University London, we assess the latest trends …

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What attracted you to the field of entrepreneurship education?

Tell us something about your research on entrepreneurship education. Did you identify any correlation between taking part in an entrepreneurship programme and starting a business?

What kind of entrepreneurship education trends have you observed in the region?

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THE NEXT LEVEL

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What are some major benefits of enrolling into an entrepreneurship programme?

Is there a right time to pursue an entrepreneurship programme?

But, is it the case that entrepreneurship is perhaps a case of nature vs. nurture? For instance, the like of Steve Jobs and Richard Branson are – surely – born entrepreneurs.

AN ENTREPRENEURSHIP COURSE IS AN EFFECTIVE WAY TO MEET LIKE-MINDED PEOPLE, SHARE IDEAS AND FIND POTENTIAL BUSINESS PARTNERS.

What are key metrics to evaluate the e!ectiveness of an entrepreneurship programme?

Professor Vangelis Souitaris

52

THE NEXT LEVEL

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For an online version, please visit: www.smeadvisor.com/2014/05/todays-entrepreneur-born-or-built/

My advice is that you should look for a programme that you think is aligned with your value-set, but more importantly look the following three factors: Quality of the course provider (ranking), location of the school, and the kind of entrepreneurship ecosystem surrounding the business school. The last point is immensely

to check if the school has any ‘added’

students. These usually include – a special entrepreneurship fund, an alumni network, incubation opportunities, value-added partnerships with industry experts, and so on.

Apart from an entrepreneurship programme, what are some supporting factors that contribute to the success of an entrepreneur?

Failure often has a negative connotation in this region. Is this something that you address within entrepreneurship programmes at the Cass Business School?

The stamina to face challenges and the determination to not give up in the face of adversity. Also, persistence is key – the ability to continue working under tremendous pressure.

This is a great question, and I completely agree. Failure does have a negative feel to it, not just in this region but globally. We do train our students on how to react to and accept failure. I think it’s crucial for every entrepreneur to embrace failure and look at it as a valuable learning experience.

How e!ective do you consider entrepreneurship programmes to be in terms of teaching day-to-day management skills?

What’s your advice to entrepreneurs and business owners looking to enrol into an entrepreneurship programme? What are key factors they should look for?

Within an entrepreneurship programme, like the one at Cass Business School for example, there are various modules that enhance different areas of management. For

accounting modules which allow the student to gain a 360 view of a business. We often also have a dedicated management training programme wherein students can gain practical experience of running a business. So, entrepreneurship programmes are

polishing management skills.

about owning a business? Are they now more likely to start a business? Do they fully understand and like the concept of entrepreneurship? These are questions that will help assess the success of an entrepreneurship programme.

An easy method is to conduct a student survey at the end of the programme and calculate the number of people that are considering entrepreneurship as their future career path. You can also carry out the same survey at the beginning of the course and compare the results.”

ENTREPRENEURSHIP PROGRAMMES ARE INDEED BENEFICIAL WHEN IT COMES TO POLISHING MANAGEMENT SKILLS Professor Vangelis

Souitaris teaches the EMBA programme in Dubai Innovation and Entrepreneurship Elective.

BUSINESS INTELLIGENCE FOR INTERNATIONAL TRADE

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presents

CONT

ENTS

56 ADVISORY BOARD Key personalities sharing their expertise to ensure that we bring you the latest trends and

Global meets local 58 A HYDROCARBON RENAISSANCE FOR IRAN?

Connolly assesses the latest p62

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With the digital economy developing

rapidly worldwide, new technological trends, such as mobile and

social solutions, cloud computing and data

analytics are beginning to offer a new range of opportunities for

business services in the knowledge economy.

Country focus: Qatar 62 THE VIRTUAL REALITY – HOW QATAR-BASED DOTCOMS ARE A FORCE TO BE RECKONED WITHWe evaluate the role that Qatar’s ICT sector plays in bringing connectivity and innovation in the Gulf state’s business and social networks.

Strategy66 CAN THE WORLD CUP HELP YOUR COMPANY? Dr. Ashraf Mahate, Head, Market Intelligence, Dubai Exports, shoots for goal – with his ideas on how exporters

as the World Cup.

VIP interview70 “WE BELIEVE IN DOING THINGS BETTER, QUICKER AND SMARTER.”Steven Speter, Managing Director, 36 Strategies speaks to Trade and Export ME

p74

Finance74 MONEY MATTERS The Western Union Business

polished update on currency

Event spotlight78 MEET YOUR TECHNOLOGY PARTNER TeknoPark - Yildiz Technical University, Istanbul, and Trade

networking evening. We bring you the highlights of the event.

Insurance and risk management80 FRESH OPPORTUNITY – TRADE CREDIT INSURANCEIn an exclusive interview with Roberto Cassaro, CFO of Euler

landscape and its increasingly strong take-up of TCI.

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TRADE AND EXPORT MIDDLE EAST

STERLING REMAINS A MARKET FAVOURITE

AS STEADY EVIDENCE OF A STRENGTHENING BRITISH ECONOMY HAS

MANY BETTING ON A SOMEWHAT EARLY RATE HIKE BY THE BANK OF

ENGLAND.

56 www.tradeandexportme.com

Trade and Export Middle East presents a dynamic group of industry experts and leaders as part of its Advisory Board. The following key personalities will help add value to our analysis and ensure that we bring you the latest trends and issues in the field of trade.

ADVISORY BOARD

TRADE AND EXPORT MIDDLE EAST

H.E Saed Al Awadi

CEO, Dubai Exports, Department of Economic

Development, Dubai

Lakshmanan Sankaran

Chairman, Regional Banking Commission (MENA)- ICC Paris

Khalil Saqer Bin Gharib

Corporate Communications Director, Dubai Customs

Moin Anwar

Trade & Investment Commissioner (Middle East), New South Wales

Government, Australia

Director, Foreign Trade & Export Support International Economic Relations Sector, Department of

Economic Development, Abu Dhabi

Peter Fort

CEO, Ras Al Khaimah Free Trade Zone

For more information, please visit www.tradeandexportme.com

P.O. Box 61450, Dubai, United Arab Emirates. Tel: +971 4 881 8288, Fax: +971 4 881 9157 e-mail: [email protected]

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GLOBAL MEETS LOCAL

A HYDROCARBON RENAISSANCE FOR IRAN?

WITH SOME OF THE LARGEST FOSSIL FUEL RESOURCES IN THE WORLD, AND THE LIKELIHOOD OF A THAW IN

INTERNATIONAL RELATIONS, CAN THE SLEEPING GIANT NOW BEGIN TO EXERT A POWERFUL INFLUENCE ON

GLOBAL MARKETS? WHAT WOULD BE THE IMPACT OF THIS NEW ORDER ON LOCAL ECONOMIES AND TRADE? VICKI CONNOLLY ASSESSES THE LATEST DEVELOPMENTS…


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GLOBAL MEETS LOCAL


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THIS RETURN MIGHT BE A GOOD DEAL EASIER THAN MANY IMAGINE: TRADITIONALLY, THE FINANCIAL AND BANKING INSTITUTIONS OF THE GULF HAVE HAD A LONG HISTORY OF TRADE WITH IRAN.

Of any of the industries that can truly be said to be foundation stones of the global economy, the oil and gas sector is perhaps the one with the largest influence on market values and international trade. With the warming-up of relations and the (albeit currently marginal) lifting of the harsher aspects of the CISADA sanctions, it’s likely that we will soon see Iran return to its former role as a primary shaper of that global sector.

This return might be a good deal easier than many imagine: traditionally, the financial and banking institutions of the Gulf have had a long history of trade with Iran, with Gulf-based finance being used to fill the gaps created by the exit of European lenders.

Designed to dissuade Iran from continuing with its nuclear programme, it was originally thought that the sanctions imposed would only impact the Iranian administration. Yet what resulted was a rapid depreciation of the Rial, unsustainable pressure on the banking system and concern

All have had debilitating effects not only on the administrative bodies they were designed to impact but also on the general standard of living for the Iranian population.

In the first quarter of 2014 following the historic agreement between Iran and world powers in Geneva, Iran began to scale back its most sensitive nuclear development work. The agreement, the first of its nature for over a decade, resulted in the modest relief of trade sanctions and gave Iran access to some of its frozen currency accounts overseas. The lifting of the financial restrictions on Iran has been received with varying degrees of warmth by their neighbours in the Gulf. His Highness Mohammed bin Rashid Al Maktoum, Prime Minister and Vice President of the United Arab Emirates and ruler of Dubai, the emirate with the strongest trade links to Iran, has welcomed the move and believes that the lifting of the embargo will be beneficial

to all involved. However, several of the other Gulf States have said they would prefer to proceed with caution, as they see the embargo as a powerful way to control the expansion of their potentially powerful neighbour.

According to the hydrocarbon powerhouse BP “Iran clearly has huge resources despite the fact that its production has been curtailed in recent years. It clearly has a lot of potential, however it is likely to be a very complicated political process.”

With European businesses eager to establish a presence back in Iranian markets, companies in France, Holland and Germany have already started to draw up plans for a return to Tehran.

Realistic ambition?Iran’s plans for its oil and gas future are ambitious and potentially contentious. The South Pars/North Dome natural gas field is the largest in the world, capable of producing an estimated 1,800 trillion cubic feet (51 trillion cubic metres) of in-situ natural gas and some 50 billion barrels (7.9 billion cubic metres) of natural gas condensates. Control of the field is shared between Iran and Qatar whose support, as the world’s largest exporter of LPG, is essential

GLOBAL MEETS LOCAL


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For an online version, please visit:www.smeadvisor.com/2014/05/a-hydrocarbon-renaissance-for-iran/

THE SOUTH PARS/NORTH DOME NATURAL GAS FIELD IS THE LARGEST IN THE WORLD.

if Iran is to realise its dream of world LPG domination.

While Iran has the potential to produce more natural gas than Qatar, it has over 78 million domestic users it must supply with heat, power food and fuel. This high level of domestic demand, together with oil and gas facilities that are in desperate need of modernisation, an antiquated business law system and the remaining financial sanctions being off-putting to European investors, without the support of their neighbours in the Gulf, Iran may struggle to realise its hydrocarbon dreams.

Such obstacles however daunting do not seem to be influencing the ambitious targets set by the Iranian government. In terms of oil production by 2018 Iran aims to double its daily output per day with a target figure of 5.7 m barrels of crude, current daily production figures hover at around 3 million bpd. There are also plans to go ahead with the development of the vast natural gas reserves Iran shares with Qatar with government plans to invest almost US$14 billion in the development of the oil and gas fields. In terms of attracting a market for such resources Iran’s foreign

minister Mohammad-Javad Zarif is confident that his country can deliver as promised and following the recent unrest in the Ukraine he goes as far as to offer Iran as a replacement for Russia as Europe’s main long term gas supplier.

“Gas exports is a priority of the government” states an official from the Ministry of Foreign Affairs.

The exporting of natural gas is capital intensive and with long payback periods. Re-entering the market is not to be taken lightly. Major European players such as France’s Total, Anglo Dutch Shell and Italy’s Eni - while showing signs of being keen to get back in business - are for now at least, cautious and adopting a wait and see approach until the remaining sanctions are lifted permanently.

Meanwhile, the technical problems and contractual issues that surround the country’s plans to re-enter and dominate the oil and gas market means that without the help of its closest Gulf neighbours, Iran’s plans for a hydrocarbon renaissance may remain the stuff of dreams.

GLOBAL MEETS LOCAL


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COUNTRY FOCUS

Everyone knows that Qatar is a fossil-fuel colossus, with export capabilities that are the envy of the world. Yet all too little attention is paid to the virtual sector, where dotcoms are riding on the back of almost unparalleled levels of connectivity and innovation. Associate Editor Vicki Connolly looks at the sparkling business opportunities that this powerhouse SME sector can offer and how it is at the forefront of the ‘new wave’ of commercial life in Qatar.

THE VIRTUAL REALITYHOW QATAR-BASED DOTCOMS ARE A FORCE TO BE RECKONED WITH


Did you know that on average, a household in Qatar owns three mobile phones, two computers, and one smartphone?

Residents of Qatar are more connected to the internet than almost any other country in the world. At 88.1 per cent, Qatar ranks first in the developing world in terms of percentage of individuals using the internet and second only to the Republic of Korea (97 per cent) for percentage of households with access to the World Wide Web. Qatar is also ranked 10th worldwide in terms of numbers of individuals using the internet, meaning that people in the state are not just connected at home, but also at work, and on their smartphones, laptops and iPads.

Qatar has created an exceptionally well-developed communications infrastructure under the guidance of the Supreme

Council for Communication and Information Technology (ictQATAR). Internet availability continues to grow exponentially, having increased from just 3.6 per cent of the population in 2000, 51.8 per cent in 2010 and up to an impressive 86 per cent in 2011. It would seem that the development of Qatar’s virtual infrastructure is well on its way to supporting the diversified, knowledge based economy that the government is ambitiously working towards as part of its QNV 2030 strategic plan. The state supports the application of knowledge as a key source of long-term economic growth by dedicating 2.5 per cent of national GDP to Research & Development projects , reflecting the increasingly important contribution of Qatari organisations who acquire, create, disseminate, and use knowledge more effectively for greater economic and social development.

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RESIDENTS OF QATAR ARE MORE CONNECTED TO THE INTERNET THAN ALMOST ANY OTHER COUNTRY IN THE WORLD.

COUNTRY FOCUS


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“Qatar continues to make great headway toward a truly digital future for all of its people,” said Dr. Hessa Al-Jabar, ictQATAR’s Secretary General. “Technology has the incredible capacity to inspire and propel change, innovation, and the progress necessary to ensure a competitive knowledge-based economy that will enrich the lives of all members of society.”

Compared to other countries, Qatar has very high internet penetration per head of population - a rate that is among the best in the Arab region and easily completes with ICT-advanced countries like South Korea and the UK. With plans already in place to increase fixed broadband penetration by the end of

2015 and the installation of high-speed fibre internet across the country, the population of Qatar are starting to connect en mass to an influential assortment of business and social networks.

New opportunitiesWith the digital economy developing rapidly worldwide, new technological trends, such as mobile and social solutions, cloud computing and data analytics are beginning to offer a new range of opportunities for business services in the knowledge economy. How well and how quickly Qatar-based SMEs adopt digital technologies will be a key determinant of growth in future years.

WITH THE DIGITAL ECONOMY DEVELOPING RAPIDLY WORLDWIDE, NEW TECHNOLOGICAL TRENDS, SUCH AS MOBILE AND SOCIAL SOLUTIONS, CLOUD COMPUTING AND DATA ANALYTICS ARE BEGINNING TO OFFER A NEW RANGE OF OPPORTUNITIES FOR BUSINESS SERVICES IN THE KNOWLEDGE ECONOMY.


COUNTRY FOCUS

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For an online version, please visit:www.smeadvisor.com/2014/06/the-virtual-reality/

Digital entrepreneurship embraces all new ventures and is also responsible for the transformation of existing businesses through the creation and employment of new digital technologies. Such enterprises are characterised by a high intensity of utilisation of technologies (particularly social, big data, mobile and cloud solutions) to improve business operations, invent new business models, sharpen business intelligence, and engage with customers and stakeholders. They create the jobs and growth opportunities of the future and are a fundamental part of the development of Qatar’s economy beyond oil and gas.

One Qatar based entrepreneur who has embraced the digital revolution and become a champion for technology-based entrepreneurship is Khalifa Saleh Al Haroon. A Law graduate turned investment banker turned online specialist, Khalifa is currently working with Vodafone Qatar as Head of Interactive and Innovation with his specialist subject being social media and networking. Well known for being the brains behind ILoveQatar.net (ILQ), a guide to everything Qatari for expats, locals, and tourists, Khalifa’s passion and commitment to making Qatar a better place has turned the network into a brand that people trust and regularly interact with. ILQ has evolved into a platform that gives people a voice as well as bridging the gap between the different cultures that coexist in the region. One of the things that makes ILQ unique is the fact that the company spends the majority of the profit generated by the network to support the community that has helped them to grow as well as other Qatar based charitable causes. Today, the ILQ network has seven different websites, each with its own focus bringing people together with one common goal, the sharing of ideas and

DIGITAL ENTREPRENEURSHIP EMBRACES ALL NEW VENTURES AND IS ALSO RESPONSIBLE FOR THE TRANSFORMATION OF EXISTING BUSINESSES THROUGH THE CREATION AND EMPLOYMENT OF NEW DIGITAL TECHNOLOGIES.

information to make Qatar a better place for all sectors of society.

Creating brandsKhalifa is passionate about supporting business start-ups and promoting the importance of effective partnerships between companies both domestically and internationally. As the founding member of the investment company H.U.G (The Haroon United Group) Khalifa and his partners are committed to creating brands that not only cater to the needs of the local population, but that also promote a positive image of Qatar. With an investment portfolio that includes both international brands such as King Koil and home grown businesses such as MiCasa and HUG properties, the HUG partnership is going from strength to strength with their main objective being the promotion of the positive aspects of life in Qatar.

Khalifa Al Haroon’s commitment to supporting digital based SMEs in the region is impressive. As a board member of the Entrepreneurs’ Organization of Qatar, The Internet Society (ISOC) and winner of Entrepreneur of the Year for 2011, Khalifa’s background is dynamic and progressive. His hard work and dedication to the cause have enabled both Khalifa and his partners to make a significant impact in the development of a locally based digital business environment. Removed from the constraints of geographical and cultural differences, Khalifa and young entrepreneurs like him look set to play a major role in the brave new digital world that Qatar is rapidly becoming.


COUNTRY FOCUS

www.tradeandexportme.com66

STRATEGY

THE FIFA WORLD CUP 2014 IN BRAZIL MAY BRING A LOT OF GOOD THINGS NOT JUST FOR FOOTBALL FANATICS BUT ALSO FOR BUSINESSES WHO WANT TO TAKE ADVANTAGE OF THIS MUCH AWAITED EVENT. DR. ASHRAF MAHATE, HEAD, MARKET INTELLIGENCE, DUBAI EXPORTS GIVES US AN IDEA ON HOW EXPORTERS CAN BENEFIT FROM EVENTS LIKE THESE.

CAN THE WORLD CUP HELP YOUR COMPANY?

The countdown has started for the most celebrated sports event this year namely the football World Cup in Brazil. It is expected that Brazil will see an increase in 3.7 million visitors this year due to the World Cup. In addition to this, hundreds of millions of football fans around the world will be glued to their screens supporting their favourite team. Therefore, it is no wonder that businesses have signed up to support the World Cup and get their brand globally recognised. The question is what the World Cup mean for small businesses that do not have the same

point is that one-off events such as the World Cup are an excellent opportunity for SMEs to start exporting and it’s never too late to start. Although, the World Cup may be just around the corner there’s still the 2016 Olympics that Brazil will also be hosting.

SMEs need to believe in themselves when looking to expand into foreign markets and not to think that it’s the preserve of large companies. The idea that SMEs consider the global market rather than their domestic one has

the years not only from academics but also from policy makers. There is considerable evidence to suggest that companies which think globally behave very differently from those that have only the domestic market

viewpoint. More importantly,

which target the global market place tend to have a much higher survival rate compared to those that are domestically focused.

Utilising the internetIn today’s technologically advanced world companies do not need to spend large sums of money for publicity or to capitalise on one-off events. The internet has changed the manner

opportunities that it offers to SMEs. In a short span of time, the internet has

THERE IS CONSIDERABLE EVIDENCE TO SUGGEST THAT COMPANIES WHICH THINK GLOBALLY BEHAVE VERY DIFFERENTLY FROM THOSE THAT HAVE ONLY THE DOMESTIC MARKET VIEWPOINT.

www.tradeandexportme.com 67

STRATEGY

that the usage and content of the internet has grown tremendously over the last 15 years.

Studies show that in 1994 there were only 4.8 million websites on the internet. Most of these sites were located in the USA and were of course in English. Today there are over 50 million websites in a whole host of languages and now even with non-English website names. With the advance of technology, the number of internet users has increased from 16 million or 0.5 per cent of the global population in 1995 to current level of 1,661 million or 25 per cent of world

population. Current forecasts indicate that the growth in internet usage is expected to continue to increase in the foreseeable future.

For SMEs these trends bring new opportunities especially as the business-to-business (B2B) trade in goods on the internet is expected to double annually. At the turn of this millennium, B2B sales on the internet were US$ 43 billion which only three years later were US$ 1.3 trillion and currently run into tens of trillions. Similarly, business-to-consumer (B2C) internet sales were just US$ 8 billion in 2000 and today in excess of US$ 1 trillion. B2B commerce represents an important avenue for SMEs to capitalise on overseas opportunities. At the same time, the internet allows SMEs to compensate for their inherent weaknesses in exporting such as market research and overseas promotion. The internet allows SMEs

capital to support export marketing activities in a number of ways.

Another solution for SMEs looking

entry into foreign markets is through strategic partnerships especially with

target market. Essentially strategic partnerships or alliances is a long-term arrangement between two or more companies to position either an existing or new product or service in a

it is intended that at least one party in the relationship is able to reduce its costs. Although, cost minimisation is

factor in a partnership, the long-term value growth is equally important.

together in order to capitalise on their relative strengths.

Be true to your brandOne-off events such as the World Cup present an ideal opportunity for SMEs to increase their sales, even carry out

also changed the manner in which we communicate. The internet has been a communication tool like no other and it has allowed the world to be truly international or global.

The internet is now an important source of information at schools, homes and especially in the world of business. The limited boundaries or restrictions

that it is accessible to everyone and as such, it is truly an example of mass media. With a relatively small investment, the internet is available to businesses regardless of the size or location. Therefore, it is no surprise

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STRATEGY

product development so as to enhance their existing portfolio or even test new products. Although the winners from one-off events tend to be the usual suspects such as the memorabilia, retailing and hospitality industries, it should not stop others from also cashing in on the occasion. One-off events allow SMEs to be innovative in their marketing/advertising material and messages without the liability of a huge expense bill. More importantly, it allows SMEs to consider entering foreign markets with the knowledge that their product range is targeted towards a particular event. As such this reduces the risks involved in foreign entry as well as lowering the costs of advertising and marketing because the event itself is a great attraction.

Events like these do offer opportunities for SMEs but they also have risks attached to them. For instance, the SME needs to contemplate on the possible impact of attaching itself to a particular one-off event on its brand image. As interesting or effective as using a one-off event may be in increasing sales, the SME owner needs to understand that they need to be true to their brand. The incentive of increasing a short revenue stream should not detract a company away from its core motivation and way of doing business. Companies need to be consistent in their activities and marketing messages and consider the sensibilities of the customers. If coming up with weird yet wonderful

promotions is something that the customers associate with the company then it is usually accepted by marketplace. However, if the customers feel that such tactics cheapen the product or service, then it may have long term implications for the company. Therefore, before cashing in on one-off events, a company needs to carefully think about how to properly execute this and consider how it is going to be received by the public.

One-off events also have the challenge that the company may not be able to accurately predict demand, hence it may pose issues with customer service and the likes. Predicting demand becomes a

businesses which are located close to the actual event.

One way of dealing with the level of uncertainty is to use proxy measures to estimate the likely demand. Typical proxy measures tend to be the impact of similar historical events on businesses in general and those in the same line of activity. The importance of being prepared for these one-off events cannot be understated, as any compromise on either the service or the actual product may hinder future business. This is more so the case if the

any business owner knows one happy customer is the best advert that it can possibly have while a disappointed

damage the business. Therefore, the golden rule behind

one-off events is to plan properly and to ensure that the company is consistent in its messages, services as well as its products.

Dr. Mahate received his doctorate from Cass City University Business School in London (UK). He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of

Laundering Specialists (ACAMS). He can be reached at [email protected].

COMPANIES NEED TO BE CONSISTENT IN THEIR ACTIVITIES AND MARKETING MESSAGES AND CONSIDER THE SENSIBILITIES OF THE CUSTOMERS.

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70

“WE BELIEVE IN DOING THINGS BETTER, QUICKER AND SMARTER.”

THIS IS THE POWERFUL AND PRACTICAL MANTRA OF STEVEN SPETER, MANAGING DIRECTOR OF PROCUREMENT SPECIALISTS 36 STRATEGIES. THE FACT IS THAT EFFECTIVE AND STREAMLINED

PROCUREMENT IS A POWERFUL TOOL FOR SUPERCHARGING BUSINESS PERFORMANCE - NOT TO MENTION SAVING MONEY AND TIME - AND IT’S A DISCIPLINE THAT CAN HELP YOU BUILD A FIRM FOUNDATION

FOR YOUR GOVERNANCE AND QUALITY CONTROLS. TRADE & EXPORT SPOKE TO THE EXPERTS ABOUT THE BENEFITS OF PUTTING THE RIGHT

PROCUREMENT STRUCTURE IN PLACE.


VIP INTERVIEW

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YOU HAVE TO REVIEW AND ADJUST YOUR PROCUREMENT POLICIES TO SUPPORT THE BUSINESS, NOT KEEP PROCEDURES IN PLACE JUST FOR THE SAKE OF THEM.

The reality is that, procurement is likely the second highest operating cost component for any business and using traditional procurement methods, it will cost about AED 275.00 to raise a single Purchase Order – this equates to AED 16,500 a day for the average SME in the Middle East! A classic example of time and money being wasted. Plus, the speed, cost and effectiveness of the procurement model you’re using will effect –

the business needs to execute its core tasks successfully.

running costs.

effectively service key project work.

a percentage of these challenges all too well. So what are the alternatives for securing a better-aligned and cost-efficient procurement model? Steven Speter comments that: “Our company - 36 Strategies - was founded with the specific intention of helping businesses optimise their procurement model and then capitalise on the financial rewards that it will bring. We work with companies in two (related) ways: either we can effectively become their procurement department, or we can provide a fresh, comprehensive model that makes the procurement path relevant and cost-effective.

“The services we provide follow internationally-recognised quality standards and benchmarking: for example, we use the ‘Six Sigma’ methodology and provide solutions

How does it help to have a procurement process that follows a Six Sigma methodology? Because it allows you to understand and put a cost to every single part of the procurement process - simple as that. But how many businesses can say categorically that this is what they are leveraging at the moment? 36S practice what they preach working with their business partners on a ‘pay as you go’ model, so you don’t waste any money if something isn’t helping streamline your operations in the way you might wish. The overall goal of our service is to give you the benefit of a comprehensive overview and understanding of your business. That means you will have all the tools you need to make informed and effective business decisions.”

The reality:

in the procurement pipelineSteven Speter believes that one of the core issues with procurement is that very few managers are actually aware of how complex their own company’s procurement structures are - and how much time and effort they’re currently wasting. “One of the worst aspects of this over-complexity is that

it can easily lead to a lack of trust in the supply chain and the belief that, whatever you need, it probably won’t be delivered in time. This then results in people turning to petty cash and maverick spending which leaves

uncommon to find petty cash losses, incurred in this way, running to tens of thousands of dirhams, for example. All of which is a response to the fact that many internal processes include unnecessary tie-up of resources, which in themselves not only cost a good deal of money, but also increase lead time and the risk of out-of-stock situations.

“Moreover, the macro view here is that one of the key issues when it comes to procurement in the Middle East and GCC is the fact that it can be extremely challenging ensuring that all the operational procedures, guidelines and policies which exist in theory are actually executed. And if those policies do not support the real business needs you only amplify the problem.

procurement policies to support the business, not keep procedures in place just for the sake of them.

“Tackling that dilemma can make a huge difference to the efficiency - and above all, the effectiveness - with which a company works. For example, if we look at the whole procurement cycle - from when the purchase requisition is first made, right through to when the purchase


VIP INTERVIEW

Steven Speter, Managing Director, 36 Strategies

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BEING ABLE TO SET UP AN EFFICIENT PROCESS FROM THE GET-GO CAN BE A COMPETITIVE ADVANTAGE, NOT JUST IN TERMS OF COST, BUT ALSO VERY MUCH IN TERMS OF GETTING THE RIGHT PRODUCTS TO MARKET AT THE RIGHT SPEED.

of this is a process map which covers all stakeholders and processes and starts by identifying the need to purchase a product, following the cycle right through until the supplier gets paid. We’ll also use the available operational data to measure how efficient the existing P2P is - this allows us to understand the requirements unique to the company and helps us propose a bespoke, effective procurement solution.

“When we show the Optimization model to stakeholders, they are often amazed at how over-complex the whole process is: viewed graphically in this way, it’s much easier to see where work is being replicated and where unnecessary cost is being added.

“The P2P Health Check is in fact part of our procurement consulting work, and when we then go on to implement a working framework for you, it will use our advance eProcurement platform. This makes the purchase order process entirely paperless and mobile, significantly cutting down the lead time. It also gives visibility to procurement spending and efficiency, and removes margins for error. What’s more, you’ll have a powerful tool for tracking supplier performance - which in turn will enable you to have fact-based negotiations with suppliers, ensuring you only pay for the level of service you actually receive.

“I should also add that there’s nothing ‘technical’ about how this eProcurement platform looks - it’s extremely user-friendly, multi-lingual with clear pictures and specifications for everything that you will need to order. Whilst the system delivers the corporate governance of an ERP system, many customers have said it’s comparable to a consumer website - not what you might expect at all!”

Outsource sourcing and procurement for ultimate convenienceSteve continues: “We are the only procurement solutions provider in the Middle East - and as you will have

gathered, we want to take procurement in the region to the next level by setting up streamlined processes

as possible. For us, that means we utilise cutting-edge, Cloud-based technology to automate and digitize, boosting client capability wherever

usual procurement processes are slowed down dramatically, because they require local market intelligence - and that’s very labour-intensive to

process from the get-go can be a competitive advantage, not just in terms of cost, but also very much in terms of getting the right products to market at the right speed.

“This is where our Sourcing Consulting comes into play. We can effectively become your procurement department. We can help you find the right suppliers and products and establish your framework agreement - as well as managing the supplier to ensure on-time delivery. Taking over these tasks means we can make procurement as easy as possible for our business partners. We can work in a way that’s perfectly aligned with your own Governance criteria - and in fact, can help you leverage a higher quality specification if that is one of your goals. This in turn can be a compelling tool for building customer retention and preventing attrition or erosion of your base price list. While it’s true that time is money, so too is quality of performance: and it’s definitely worth maximising the contribution made by something as core as the procurement function.”

order is issued to the supplier - we have a track record of reducing cycle time by an average of 38 per cent. We also achieve an average saving of between 10 and 14 per cent on procurement cost - in many cases, much more. A classic example of this is the benefit that will accrue if we help you source an affordable, good quality supplier and set up a framework agreement with them. This means, for instance, that you won’t have to go through the procurement process again and again each time you’re sourcing the same item. It makes good sense for us to find your business a raft of similarly reliable suppliers and have strong framework agreements with each. As you can see, it pays if you get to know and properly understand your current procurement process.”

Business process optimization

edge technology“If we work with you”, says Steve, “to assess and re-model your overall procurement strategy, one of the first things we do is conduct a ‘Procure-to-Pay (P2P) Health Check’. This a business optimization model where we quite literally draw a diagram of the complete procurement cycle, what happens when, and why. The outcome


VIP INTERVIEW

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FINANCE

THE WESTERN UNION BUSINESS SOLUTIONS TEAM GIVES US AN UPDATE ON THE MOVEMENTS IN THE THREE CURRENCIES – USD, EUR AND GBP TO HELP YOU TRADE BETTER IN JUNE 2014.

MONEY MATTERS

The greenback has shown some poise recently and should find opportunity to advance further in June.

Let’s face it, though, the Dollar has disappointed many who had bet on a breakout year for the greenback. A meaningful Dollar rally has so far failed to take shape, as the economy has been slow to rebound from a harsh winter of frigid temperatures. The resulting slow thaw for the economy hasn’t put much pressure on the Federal Reserve (Fed) to boost borrowing rates, which has held back the Dollar’s potential.

Although a stronger Dollar narrative may be a story for the second half of this year, when the economy is expected to regain its footing, don’t dismiss the chance of solid gains over the month of June.

A potential driver of Dollar appreciation is seen in the European Central Bank’s (ECB’s) June 5 meeting. Markets are anticipating some sort of action by the 18-nation central bank to tackle low inflation. Bold, bazooka-caliber action could go some way in toppling the Euro from recent peaks near USD 1.40 against the greenback. For that to happen, though, the ECB would have to exceed already priced-in dovish expectations. A rate cut or even the introduction of negative deposit rates would weigh on the Euro to the benefit of the greenback. But to really dent the Euro, the ECB would likely have to resort to Fed-like quantitative easing

(QE) and add to its balance sheet. The bolder the action, the better chance the Euro would have at testing lows for the year around USD 1.3475.

On the home front, the Dollar will look for catalysts in the government’s monthly jobs report which comes due the day after the ECB’s June 5 meeting. Another month of 200,000-plus job growth would be constructive for the buck. But the quality of the jobs data will be key, too. In addition to job gains, markets want to see growth in wages that could set the economy up for more meaningful consumer spending in the months ahead. Keep a watchful eye on unemployment. The jobless rate fell to a September 2008 low of 6.3 per cent in April, but mainly because people left the workforce.

on June 17–18. The Fed is expected to keep scaling back stimulus. Moreover, this gathering will include fresh central bank economic forecasts and a press

For the Dollar to get a rise out of the Fed, bankers would have to hint at a possibility of raising interest rates before current forecasts of around the middle of 2015.

USD: United StatesJoe Manimbo, Senior Market Analyst, Washington, D.C.

3-month deposit rate (LIBOR): 0.23% (May 22)GDP annual growth rate: 2.30% (Q1)

Trade balance: -USD 4.04 billion (March)

Economic Indicators


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FINANCE

MARKETS WILL FIND ANOTHER DOLLAR-INFLUENCING EVENT IN THE FED’S MEETING ON JUNE 17–18.


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BOND YIELDS ON PERIPHERAL EUROZONE GOVERNMENT DEBT OFFER SOME OF THE BEST RETURNS IN THE WORLD, GIVEN INFLATION EXPECTATIONS.

EUR ECB policy announcement critical for June outlook

June 2: Markit Manufacturing PMI (May) June 3: Flash Harmonised Index of Consumer Prices (May); Unemployment rate (April)June 4: Markit Services PMI (May); Producer price index (April) June 5: Retail sales (April); ECB Monetary Policy Committee meeting June 12: Industrial production (April)

Upcoming critical events


FINANCE

FINANCE

77www.tradeandexportme.com

For an online version, please visit:www.smeadvisor.com/2014/05/money-matters/

STERLING REMAINS A MARKET FAVOURITE AS STEADY EVIDENCE OF A STRENGTHENING BRITISH ECONOMY HAS MANY BETTING ON A SOMEWHAT EARLY RATE HIKE BY THE BANK OF ENGLAND.

GBP

Pound may be the Pound itself. As some sectors of the economy continue

moved below the BOE’s 2 per cent comfort zone. Moreover, a strong

growth by depressing the cost of

undershoots, the less pressure the central bank would feel to raise borrowing rates, a less hawkish view that would leave the Pound vulnerable to a pullback as markets push out forecasts for a rate hike.

Over the course of June, Sterling will have to contend with the latest economic developments at home and abroad. And the catalysts from overseas could prove daunting with market eyes on the ECB’s June 5 meeting and the next day’s STERLING employment report. Should the ECB opt for ‘bazooka-caliber’ action, such as negative rates or Fed-like quantitative easing, downside risks for the Pound against the Euro should prove limited. But another month of robust STERLING job growth would open the door to greater downside risks for Sterling against the greenback. A healthier STERLING job market could see the BOE in a footrace against the Fed to boost interest rates.

The British Pound remained sound after all but touching USD 1.70 versus

year peaks on a trade-weighted basis. Sterling remains a market favourite

as steady evidence of a strengthening British economy has many betting on a somewhat early rate hike by the Bank of England. What really drives currencies is the perceived road ahead for central bank policy. That’s been a boon for the Pound as the BOE has forecast a rate rise some time during

other hand, has come under recent attack amid growing expectations for the European Central Bank to deploy bolder stimulus as early as June. With Britain leaning towards tighter stimulus and its Euro rival favoring looser policy, EURGBP weakened in May to 17-month lows.

Should one expect more runaway strength in the Pound this month? Maybe. The key will be the UK economy where unemployment is

cent and leading services and retail sectors have gained momentum.

But perhaps standing in the way of more meaningful strength for the

Upcoming critical events

Critical data

June 13: Trade balance (April)June 20: Flash consumer sentiment (June)June 23: Markit Flash PMI surveys(June)June 27: Ifo Business Climate Index (June)

June 4: GB CIPS Services PMI (May)June 5: GB BOE MPC MeetingJune 6: GB Trade Balance (April)June 11: GB Unemployment (April)June 17: GB CPI (May)

3-month deposit rate (Euribor): 0.319% (May 22)Gross domestic product annual growth rate: 0.90% (Q1)

Unemployment rate: 11.8% (March)Trade balance: EUR 17.1 billion (March)

3-month deposit: 0.55%GDP: 0.8% Q1 (q/q)

Unemployment: 6.8% (March)Trade balance: -USD 172.6 (February)

Economic Indicators

Economic Indicators

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EVENT SPOTLIGHT

MEET YOUR TECHNOLOGY PARTNERIn a landmark occasion for the UAE business community, TeknoPark - Yildiz Technical University, Istanbul, and Trade and Export joined

networking evening – Tekno Turkey Connect event.

world. That’s not all. Earlier this year, reports predicted that IT spending in the UAE will increase 8.3 per cent year-on-year to reach US$ 4.36 billion in 2014. Recognising this potential for growth, the event unveiled the strong business proposition of TeknoPark - Yildiz Technical University, which is one of the leading technology development regions in Istanbul.

On May 20, 2014, Tekno Turkey Connect – powered by TeknoPark - Yildiz Technical University, Istanbul, and Trade and Export Middle East magazine – provided the perfect platform for companies in the UAE to meet and network with potential technology partners from TeknoPark Istanbul. Held at the prestigious venue of Fairmont The Palm in Dubai, Tekno Turkey Connect introduced the frontrunners in the field of technology and presented a chance for the visiting companies to forge long-term business relationships in the UAE.

Technology has been a major driver of business performance in the UAE. Recently, the World Economic Forum ranked the UAE as one of the most tech-savvy nations in the


For an online version, please visit: www.smeadvisor.com/2014/05/meet-your-technology-partner/

Attendees enjoyed a fair overview of the free zone and its reputation for unrivalled innovation and excellence.

In his welcome address, Chris Stevenson, Commercial Director, Business Division, CPI Media Group, said: “TeknoPark has already raised the bar internationally in terms of its significant role in sectors such as aerospace, aviation, energy, health and defence - its client businesses are pre-eminent in their fields. It’s a place that prides itself on the ability to turn high-end break-throughs into practical and relevant products; that provides a truly world-class facility, with resources and networking opportunities second to none; and which is dedicated to sharing knowledge and resources with the very best international partners.”

The event was also successful in highlighting the fact that Turkey and the UAE are very much aligned in that they are both outstanding economic success stories. The countries show what’s absolutely best about this region and have governments committed to progress and the highest achievements in every sphere of life.

Dr. Mahmut Karaman, General Manager, TeknoPark, shared his plans of establishing a branch in Dubai with an aim to develop and promote ICT products and solutions of the companies from Istanbul within the region.

The champions of technological growthAmongst the companies from TeknoPark that were present during the networking evening were: Done Communication and Information Systems, a pioneer in developing high-tech mobile applications and services; Pordiva Information Technologies, a software agency developing innovative softwares in mobile and web technologies; Vendeka ITS, a developer of RFID system projects and solutions in Turkey; Ardela Technologies, a software company specialising in Mobile ‘Enterprise Applications’ for

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TEKNOPARK HAS ALREADY RAISED THE BAR INTERNATIONALLY IN TERMS OF ITS SIGNIFICANT ROLE IN SECTORS SUCH AS AEROSPACE, AVIATION, ENERGY, HEALTH AND DEFENCE - ITS CLIENT BUSINESSES ARE PRE-EMINENT IN THEIR FIELDS.

financial, pharmaceutical, automotive and retail sectors; SIGMADEL, a company founded with the purpose of building a telematic device to be used by insurance companies and commercial fleet; Getron, an industry leader in R&D software development; Senkron Yazilim, an organisation specialising in research and development and developing ERP solutions on specific sectors such as F&B and health & wellness.

Also present were companies such as IPera Technology Solutions, an R&D company which focuses on developing innovative, ergonomic and cost-effective solutions for the telecommunication sector; etugra, an Electronic Certification Services Provider and an expert on providing e-signature; Crypttech, specialises in the increasingly important field of information security; Minerva, a software company focused on producing ERP and business solutions; Karash, an expert on IT solutions and services on offer for banking and financial institutions; Rintek ARGE, a production-oriented software company which operates in SaaS (Software as a Service) model and a specialist on social media monitoring.

EVENT SPOTLIGHT


www.tradeandexportme.com80

INSURANCE AND RISK MANAGEMENT

Trade credit insurance is a critical subject for any import-export business and has been gaining traction in the past few years, particularly in this region. In an exclusive interview with Roberto Cassaro, CFO of Euler Hermes GCC, we examine the market landscape and its challenges and opportunities…

FRESH OPPORTUNITY

You were recently appointed as Chief Finance O!cer of Euler Hermes GCC. How would you describe the local environment for trade credit when you first came to the GCC?

TRADE CREDIT INSURANCE

You have served in other markets, including Madrid, Paris and Rome. In what ways would you say the GCC market is di"erent from the European market?

www.tradeandexportme.com 81


Here in the region, accounting and credit procedures are still evolving; credit decisions are made largely on the basis of relationships. How do GCC businesses, traders and banks benchmark against their peers in other regions in terms of managing credit and business/political risk?

There’s no doubt that in the GCC, few companies made use of trade credit insurance in the past, but this has significantly changed, particularly post the global financial crisis. What are your predictions on how the local market will evolve over the next five years?

The Middle East region is only 1.2 per cent of the global trade credit insurance market. Why do you think this is the case?

The 2008-2010 global financial crisis followed by the ‘Arab Spring’ a!ected businesses in the region, leading to financial defaults, insolvencies and bankruptcies. Did these events have any impact on risk appetite and insurance buying in the region?

Indeed, relationships among traders have been there for long and will remain. However, companies should evolve from relationships to the grading of a company in a more structured and sophisticated way as it has been a common practise internationally.

The credit insurance market achieved record premiums book value of US$73 million in 2013 in GCC, with a growth of 25 per cent versus 2012. Euler Hermes GCC is the market leader with a share of 49 per cent in the UAE and 60 per cent in KSA. I expect the same robust growth in the coming years. Corporate insolvencies confirmed the generally expected rise in 2013 (+ two per cent) due to the slowdown in the global economy.

This increase, following three consecutive years of decline, nevertheless masks two significant but opposite trends: on the one hand, the continued decline in insolvencies in North America (-11 per cent) and Asia (-four per cent); on the other hand, a rise in Latin American insolvencies (+10 per cent) – albeit from a low level –and particularly in Central and Eastern Europe (+ six per cent) and Western Europe (+ nine per cent), where the number of insolvencies continues to rise in manufacturing (+ three per cent) and construction (+ one per cent), with the exception of Germany and the UK.

These two contrasting trends

The Arab Spring and international community sanctions on Syria and Iran have redistributed trade dynamics and GCC countries were the first beneficiaries of such events, capturing most of the trade activities thanks to their political stability and

The GCC is underpenetrated but shows a string growth rate. The reasons for this are largely cultural, as there is not much awareness of trade credit insurance and the most common practise is Letter of Credit – which will not be sustainable on the long run due its high cost and time consuming procedure.

Credit insurance supports the sustainable growth by helping companies make informed decisions about the level of credit they should offer their customers, identifying those businesses at risk and enabling them to manage their credit risk exposure accordingly, thereby avoiding the negative impact of unexpected bad debts or the need to make a claim.

are expected to moderate in 2014 when the slowdown in emerging economies should be offset by the better outlook in the more advanced countries. Countries experiencing a decline in insolvencies will become the majority in our sample but our Global Insolvencies Index will only show a slight decline (- one per cent) and nearly seven out of 10 countries show a higher level of insolvencies in 2014 than before the 2008 crisis.

The insolvency index in the UAE is growing as re-export from the country are further increasing. The GCC and especially the UAE have proven to be very cost-effective on logistics, labour, energy and other trade inputs. The countries optimal strategic location is another factor contributing to an accelerated growth in the volume and value of cross-border trade. This has led the region to become an ideal centre for re-exports. But this also exposes traders to additional risk when trading on open credit terms.

These increased levels of risk are boosting demand for trade credit insurance solutions which is precisely what Euler Hermes is able to provide from its offices in Dubai, DIFC, Riyadh and Jeddah. We will raise further awareness about TCI solutions for companies of all sizes in the GCC; UAE, KSA and also Qatar will be the leading countries for the trade credit insurance development.

openness to trade and export. Other factors that I believe are driving the trend for trade credit insurance in the Mena region include increased sensitivity to trade credit risk among CFOs; sustained economic diversification in the GCC countries; and the implementation of Basel III requirements impacting banks’ operations in financing receivables.

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The UAE, in particular, is no doubt an international trade hub and a gateway to the wider region and emerging economies such as Africa, Asia and Latin America. Dealing with international companies exposes local traders to potential defaults, insolvencies and bankruptcies of their trading partners. Is trade credit programme structured to help protect businesses, financial institutions and traders against the consequences of defaults, insolvencies and bankruptcies of their trading partners? What role does trade credit programme play in international trade?

Euler Hermes is the global leader in trade credit insurance solutions, facilitating trade and exports. Getting paid on time and access to required finance are two major problems traders are facing. Practical and reliable tools linked to the actual economy are needed to tackle these situations.

Trade credit insurance is one of these tools as it protects the company against payment defaults and provides companies with a powerful solution to assess new prospects. By assessing and constantly monitoring the risk, credit insurance is able to direct the business of insured companies towards reliable markets and clients that allow the company to achieve stable, long-term growth. The credit insurance policies also enable insured companies to obtain credit lines and related cost effective facilities from banks, which improve the company’s creditworthiness.

The major drivers are more information and education by Trade credit insurers; more interest from banks to support us in this business using Trade credit insurance as

Firstly, we provide a broad range of policy solutions, depending on the premium the customer is willing to pay for the risk. The cost is based on a risk assessment of the customer portfolio. It depends on the probability of default of the buyers which are the customers of the policy holder, the sector and the political risk associated with the country.

collateral; and the deteriorating global trade environment in the Eurozone, US and China pushing traders and exporters to increase the mitigation of such risks.

The GCC has benefited from all these situations. Regional GDP is expected to grow between four to five per cent in 2014 and the political stability and visionary leaders of the UAE, Saudi, Qatar and Kuwait are providing a very fertile environment. We see the GCC as very strategic. Dubai has low cost of labour, convenient energy cost, low taxes, excellent port facilities, infrastructure, logistics and relatively easy bureaucracy – all the elements to make this a worldwide trading hub. And in Mena, the political instability in some areas has heightened risk consciousness. All these factors make the GCC a marvellous opportunity for Trade credit insurance and Euler Hermes.

The cost of credit insurance depends on factors such as location of the business, the industry and the amount of credit given. What are the other pitfalls for trade insurance providers?

Roberto Cassaro is the Chief

Hermes GCC since May


To register, call +971 50 455 8738 or email [email protected] and guarantee your place.

www.maarefah-management.com

Join this unique, powerful, dynamic and easily applied courserenowned led by leadership and development trainers.

Leadership Development ProgramUnleash Your Full Leadership Potential

Interna

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Recogni

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Program

Media Partners:

Organised by: Strategic Partner:

Don Power, has extensive background in sales and marketing over 35 years. This experience includes senior sales management positions in the automotive industry before entering the top end of the commercial property market with the international property firm, Richard Ellis's Australian Office.

Julie is an Executive Coach, Corporate Trainer and a Master Practitioner in Neuro Semantics and NLP. She has been at the forefront of training and team development for many years having worked throughout Australia and more recently in Asia where her talent for executive development and innovative training style have made for a lively and entertaining executive development experience.

coaches and corporate trainers presenting

performance enhancement

executive evolution coach support

specific training needs

Coaching) upon demonstration of competence

200x268_Layout 1 2014/04/22 10:10 AM Page 1

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INDUSTRY WATCH

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CORPORATE GOVERNANCE IN BAHRAIN

The Pearl Initiative,

organisation working across the Gulf region to

corporate accountability

The event addressed the need for corporate governance and highlighted the importance of embedding high standards throughout all levels of an organisation. Expert panellists focused on challenging topics such as Bahrain’s current corporate governance and transparency situation.

Moderating the session, Fahad Alturki, CEO of ACTO Group and a Pearl Initiative Board member, said: “Getting corporate governance right is as important as the business model itself. If companies want to succeed in the long-term, build trust and reputation with stakeholders and spur sustainable and competitive economic growth, then best practice governance is the way forward. We are thankful to the Pearl Initiative for assisting us in driving this initiative forward.”

Mumtalakat’s vision is to grow the wealth of the country and create a

economy. Mumtalakat is fully owned by the Government of Bahrain and is recognised by the international community for its continued commitment to transparency and corporate governance.

Mahmood Al-Kooheji, CEO, Mumtalakat, said: “Transparency and good corporate governance are an integral part of Mumtalakat’s DNA, and we believe that we are uniquely positioned within Bahrain and the wider GCC to be able to encourage wide adoption of these essential principles. Adhering to good corporate governance and transparency practices has been shown to drive growth, and by partnering with like-minded organisations, we can ensure that a clear roadmap is drawn for others to follow, and that we create the necessary conditions for our economies and businesses to not only grow, but to thrive.”

Mumtalakat’s vision is to grow the wealth of the country and create a thriving diversified and sustainable economy.

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INDUSTRY WATCH

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DBWC’S INSIGHTFUL SESSION

Ro’Ya - a joint collaboration between the Dubai Business Women Council (DBWC) and Mastercard – held its latest workshop at the Nestle Middle East Head

World Central.

The session highlighted four key elements namely: ‘An introduction to customer value proposition’; ‘Knowing your customer’; ‘The focus on your

and ‘Fostering your competitive advantage’. The topics were further supported by real life Nestlé examples of global and local best practice campaigns and product launches.

“When we were in the planning phases of Ro’Ya, we agreed that this initiative should add value to the business women,” said Raja Al Gurg, President of DBWC. “We did this by including nine educational workshops which will provide further knowledge to every applicant – a concept which not only adds value to their decision to participate in Ro’Ya but one that supports them in achieving to the best of their abilities. Today’s workshop is fundamental to a new business or concept as they should consider the true value it brings to its customers. We hope that the ladies who attended the session today will go back to their business plans and really consider how to implement the tools shared as it will strengthen their plan and chance of

becoming the overall winner.”Attendees enjoyed key insights

segmentation techniques and understand the needs and drivers of core business targets. Nestlé and INNOVEST ME also discussed the right processes of analysing the market and its key players, whether competitors or substitutes, in order to develop and build a winning business value proposition, and at a later stage, build entry barriers to ensure sustainable growth of the business.

Rainer Mueller, Communication Director at Nestlé Middle East, said: “Delighting customers is the source of sustainable value creation. It means that our customer value proposition is superior and consistent across every contact point, often exceeding expectations. As a result, customers regularly repurchase our proposition or are loyal to it and actively/passionately recommend it to others. To delight customers we need to know them deeply, their needs, their motivations and their attitudes.”

The Ro’Ya workshops will carry through till October 2014.


INDUSTRY WATCH

Deloitte, in partnership with STR Global, released a new series of quarterly reports entitled Middle East Hotel Market Insight to highlight key trends and analysis on tourism, hospitality and leisure industry across the Middle East.

The report revealed that the demand for hotel accommodation in Dubai has

demand measured in rooms sold has

Dubai has established itself as one of

Dubai to continue to climb the global

KEY INSIGHTS ON HOSPITALITY SECTOR

tourism infrastructure and strong hotel

continued investor interest in hotel

planning or construction in Dubai which

Saudi Arabia drove the largest number of visits to Dubai in 2013 (1.4 million visits), followed by India (0.9 million visits) and the UK (0.75 million visits).


INDUSTRY WATCH

The two-day workshop addressed challenges that limit SME growth and

The session highlighted key topics

DUBAI SME AND IFC’S WORKSHOP

Dubai SME and the International Finance Corporation (IFC), a member of the World Bank Group, hosted a workshop to help Dubai SME100 companies understand the concept of corporate governance, and how to implement it in line with their stage of growth.

sector led growth and a regional priority

INDUSTRY WATCH


TECOM Business Parks announced new developments and the delivery of key projects – to be launched in 2014 and 2015 respectively, with a total investment of AED 1 billion.

TECOM Business Parks’ feature new project, The Butterfly, is two office buildings located in the heart of Dubai Media City and Dubai Internet City, offering 255,000 sq. ft. of world-class facilities and infrastructure, tailored office space as well as a spacious outdoor plaza. The development is expected to be completed by the end of 2015. TECOM Business Parks also announced the upcoming completion of the DuBiotech Headquarters Building, which comprises of commercial space and retail units, and is easily accessible from Al Khail Road, Sheikh Zayed Road as well as Mohammad bin Zayed Road. This iconic development has been designed to incorporate sustainability elements and covers a total area of over 500,000 sq. ft. It is expected to be completed by Q1 2015.

In International Media Production Zone’s growing community, The Publishing Pavilion - a nine storey development with a total area of 267,191 sq. ft. – is close to completion with handover expected in Q4 2014. In addition, Makateb

PROJECTS IN PIPELINE – TECOM BUSINESS PARKS

- a multi building development comprising two four storey towers and two seven storey towers, and a total area of 299,736 sq. ft. – is currently under construction with handover expected in Q1 2015. Both developments will cater to companies from across the media value chain.

Malek Al Malek, CEO, TECOM Business Parks, said: “Dubai is cementing its position as the region’s leading strategic business hub, and receiving significant interest from global and regional players across different industries to set up their businesses. TECOM is committed to remaining at the forefront of Dubai’s knowledge economy, ensuring we address business requirements by enhancing our services, optimising our assets and developing new projects to meet market demand.

“As TECOM Business Parks launches new developments and moves closer to handing over existing ones, we continue to demonstrate our commitment to driving Dubai’s economy and industries, and our readiness to respond to growth in market demand.”


INDUSTRY WATCH

Al-Futtaim Logistics was announced the winner of ‘3PL Service Provider of the Year’ and Acting Managing Director, Raman Kumar, the winner of ‘Logistics Manager of the Year’ at the industry leading Supply Chain and Transportation Awards 2014 (SCATA) held in Dubai.

These Awards recognise those regional and international companies that stand out from the Middle East logistics industry.

The ‘3PL Service Provider of the Year’ is awarded to organisations that demonstrate exceptional performance in storage, facilities, distribution services and value added solutions. Al-Futtaim Logistics won the 2014 Award for implementing innovative solutions and experiencing solid growth and expansion in the third party logistics industry.

‘Logistics Manager of the Year’ is awarded to an individual who has continued to make a strong and valued contribution to industry growth over the year, while raising the benchmark for excellence.

Adding to its list of recent accomplishments, Al-Futtaim Logistics has received Integrated

TOP HONOUR FOR AL-FUTTAIM LOGISTICS

Logistics Manager of the Year’ is awarded to an individual who has continued to make a strong and valued contribution to industry growth over the year, while raising the benchmark for excellence.

Management Systems (IMS)

international industry standards, ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007.

encompasses all services provided by Al-Futtaim Logistics, including freight forwarding, general transportation, contract logistics and automotive logistics, and covers all of its facilities,

Raman said: “A big thank you to the entire team at Al-Futtaim Logistics for another memorable achievement. The two prestigious Awards that we have received at SCATA 2014 are a tribute to the immense support and loyalty of our customers, and to the associates who deliver on our commitment to provide outstanding service quality to them every day.”

Al-Futtaim Logistics was announced the winner of ‘3PL Service Provider of the Year’ and Acting Managing Director, Raman Kumar, the winner of ‘Logistics Manager of the Year’

INDUSTRY WATCH


TURN8 announced the start of Round Three of its special programme aimed at promoting entrepreneurship and innovation culture.

The seed accelerator initiative, launched by global marine terminal operator DP World and powered by i360accelerator, is accepting technology business ideas for the third round of acceleration to begin in August 2014 in Dubai. The four-month scouting phase for Round Three began with an idea pitching event in Dubai on May 7, 2014. This is now being followed by pitching events in select cities around the world.

In addition to Dubai and Abu Dhabi, cities slated for TURN8 Round Three events include Cairo, Beirut, Mumbai, Jarkarta, Hanoi and Tricity. TURN8 will also hear pitches in Casablanca, Nairobi and Cape Town as part of the Seedstars World Global Startup Competition.

Start-ups selected for Round Three will be invited to Dubai for four months where they will receive mentoring to refine and launch their business idea, training in how to run a

TURN8 LAUNCHES ROUND THREE

successful business, and seed funding of US$30,000 per team, including valued services.

Mohamed Hamdy, TURN8 Managing Director, said: “TURN8 fills a gap in the marketplace by identifying and nurturing start-ups with early stage ideas, and supporting them in building a minimal viable product that attracts authentic demand in their addressable market. We achieve this through a 120-day programme that involves a hands-on approach and continued support post-graduation.”

A total of 20 start-ups were selected for TURN8 accelerator Rounds One and Two. Several Round One teams have been in discussions to receive follow-on investments after last January’s Demo Day event. Round Two teams are preparing for their own Demo Day where a number of unique technology ideas will be introduced.

Start-ups selected for Round Three will be invited to Dubai for four months where they will receive mentoring to refine and launch their business idea, training in how to run a successful business, and seed funding of US$30,000 per team, including valued services.

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TECH TRENDS

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MobibusA ‘Do-It-Yourself’ mobile app maker which offers a great solution to businesses looking to create an effective mobile application. The app’s user-friendly platform, with dual English and Arabic interface, allows companies to create a customised mobile app to suit their business or personal needs in just four easy steps – Registration, Design, Manage, and Preview & Publish.

Available for: iOS and Android Cost: Free

MULTIPLY YOUR BUSINESS

PRODUCTIVITY WITH THESE

TRENDY MOBILE APPLICATIONSRushika Bhatia's view

93

TECH TRENDS

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Evernote This is a fantastic app for business owners operating companies in any industry sector. Evernote is a one-stop-solution for all your business needs – it allows you to take notes, save images and record audio notes. More importantly, it makes all your data accessible across any device you use creating a seamless experience. It also enables sharing information with other users including partners, managers and employees. Additionally, for frequent travellers, it saves travel plans, maps and other documents. If your business requires you to be constantly on-the-go, Evernote is the perfect app to stay connected with your staff – and business – 24/7!

WallyTo begin with, the app lets you record all your expenses in a systematic way – enter the amount spent, location, time and the category of expense (food, clothes, transport, and so on). Another notable feature is that the user can scan and save images of receipts. The app can identify the amount, date, venue and category automatically, saving you valuable time! Wally supports multiple global currencies so that even if you are on a business trip or family vacation, you can keep track of your daily expenses. The application offers a weekly, monthly and yearly breakdown of the expenses – divided categorically – in the form of an easy pictorial representation that’s a lot easier to read and understand than a complicated Excel sheet or an unending pile of bank statements. An added plus is that using the app, you can access your expenses anywhere and at any time.

Available for: Mobile devices such as iPad, iPhone, iPod Touch, Android, Windows Phone and Blackberry

Cost: Free

Available for: iPhone Cost: Free


Plume for TwitterNo matter how busy you are, the reality is that the digital world is constantly ‘active’. This means that you need to continually manage your social media presence from any part of the world. This is especially true for those business owners that manage their company’s social media activities by themselves. Plume for Twitter is a fantastic app that lets you create a completely customisable Twitter experience. One feature that stands out is the app’s ability to support multiple Twitter accounts – this means you can easily switch back and forth between your business and personal account! Plume’s user-friendly and highly interactive interface makes it an absolute must-have!

Business in Dubai by Department of Economic Development (DED)This popular app – powered by the Department of Economic Development in Dubai – is suitable particularly for Dubai-based users. The app is a great

details, contact information, general services and so on. The app offers a range of business registration and licensing services for business owners and investors. Some of its notable features include trade name reservation, renewal of trade names, initial approval of licences, renewal of licences,

Available for: iOSCost: Free

Available for: Android Cost: Free

TECH TRENDS

www.nbad.com

NBAD Business Loan. Take your business to the next level.

NBAD Commercial Banking offers collateral-free business loans to meet your working capital and business expansion needs.

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