Business Insight _June by Business Insight

www.businessinsight.ae

Issue 6 - June 2013

Promise Beyond Darkness: The Rise of Africa

How to Increase your Sales How to Become a Better Manager Pirates of the 21st Century New Initiatives for Waste Management Secrets to Success Series with Dhananjay Datar, of Al Adil

Profile on UTurn Tax Refund Increase your PR without Spending Money

Editor’s Foreword I know, I know… your holiday is just around the corner, but is that any excuse for you to take your eye off the ball? Yes, we all want to wind down, but when we have businesses to run, sadly there is no such thing as wind down. Whilst being on holiday is great, the run up to it is pretty horrific. If you are anything like me, you have a million and one things that you need to do and with only 7 days in the week, you work around the clock to achieve them all. The problem is that it means you get stressed, which fundamentally impacts on your health… and that of your business. To avoid this, turn to page 42 and read “Are you fit for business”, for tips on how you can be in that last stressful month of preparation before you are able to hit the beach. But if you are going to far flung beaches, or even just travelling to a new territory for work, have you considered what you would do if you were to be kidnapped. Sounds ridiculous right?! I am sure that is what the English couple Paul and Rachel Chandler felt before their boat was intercepted by Somali pirates and kidnapped for the next 12 months, or the English couple, one of whom was murdered whilst the other was kidnapped from their luxury Kiwayu Safari Village. Did you know however, that if you sent someone away on business, you have a duty of care to your employees, or that under Ministry of Labour guideline’s, you could be held liable to pay costs? On page 32, we have the solution for you. On a positive note though, being on holiday will give you the time that you need to think things over, away from the work environment. Where are you taking your business? Should you develop other areas? What can you do to grow your business? As may well be the case, you may not have the sufficient funds to grow as you would like just yet. If this is so, have you considered franchising? Our article on page 11 gives you the full low down; what you should be aware of before remodeling your business, to what to do to make this a success. All this talk is getting us at Business Insight Magazine excited for our own holiday in July. We will therefore be back with our next issue in August. Happy Holidays!

Published by: DMCC Authority Contact: James Bernard Associate Publisher: Nuria Gonzalez Martin Editor: Tanya Selley Associate Editor Ritwika Chaudhuri Business Development Manager: Phil Starr Administration: Janice Porte Art Director: Mohsin Rawal Printing: UPP Printers Distribution: Blue Truck For information on advertising rates & positioning: Please contact Phil Starr – Tel. +971 4 375 4619 Email: sales@redcorp.ae

Tanya

Talk to me at editor@redcorp.ae and let me know what information you need to take your business forward – and I will try to help you in the next issue!

June 2013

For editorial schedule & article submission: Please contact Tanya Selley – Tel. +971 4 375 4121 Email: editor@redcorp.ae

CONTENTS OPERATIONS

PEOPLE

Page 11 - 12

Page 32 - 34

Protect Yourself and Your Employees Against Blackbeard

The Art of Franchising

SUCCESS

TECH

Page 15 - 16

Page 36 - 38

Product Pirates of the 21st Century

Success Series – Interview: Dhananjay Datar Managing Director of Al Adil

MONEY

WELLBEING

Page 23

Page 42 - 44

UAE: Major Player in Raising Funds in the GCC

Are you Fit to Run a Business?

COMMODITIES WELLBEING

THE HUB

Page 26

Page 47 - 48

Grains

Delegation – Empowering Employees

Operations 6 8

Promise Beyond Darkness: The Rise of Africa How to Increase your Sales

People How to Become a Better Manager

Tech Success 13 14

My Ex Wardrobe entourage marketing & events

RAK Bank Case Study; Loans and Success Mudarabah & Musharakah: The Pillars of Islamic Finance How to Recover Money

The Future for Retail Banking Customer Service Panasonic Review of the KX-MB1520 and KXMB1530 printers Getting your IT Correct Right from the Start

Money

21 24

Commodities 29

Bitcoin: An Alternative Investment or One to Avoid

35 39 40

The Hub How to Set Effective KPIs How to Increase your PR Without Spending Money New Initiatives for Waste Management Business Directory News Desk

June 2013

45 50 52 54 55

Promise Beyond Darkness:

The Rise of Africa F

or decades, the defining images of the so-called ‘Dark Continent’ (Africa) have been dictators, despair, disaster and death. It isn’t that Africa has changed overnight and the darkness has disappeared, but quite the contrary, in fact it is that in the midst of its continuing poverty and political turmoil Africa is becoming the land of opportunity; an emerging growth market, attracting investors from around the world. So why Africa? Africa is one of the fastest growing economies with an expected GDP growth rate of 6.8%. Compare this to 7.3% in Asia, 1.4% in advanced economies, 0.6% in UK, and you can understand why the International Monetary Fund has projected that over the next five years, ten of the twenty fastest-growing economies in the world will be from sub-Saharan Africa, and two will be from North Africa. None will be from developed Western countries. Other factors highlighting Africa as an emerging growth market include: • Human Resources: Improving mortality rates and an expanding middle class have created a larger pool of human resources. Morgan Stanley’s Sustainable and Responsible research team state, “Over the next 20 years the global population of 20 to 64-year-olds is expected to grow by about 900 million, but 30% of this growth will come from sub-Saharan Africa” • Low Debt: Apart from Africa’s expected GDP growth rate, which is above any other continent, Africa also has a low debt level. Africa’s median GDP debt ratio is 37%; 47% lower than G8 nations’ median of 84% • Improving Political and Economic Framework: The continent is marching forward in democracy/ governance/economic management and the rule of law, thus providing increased stability • Strong Stocks: Despite a drop of 30% in 2011

June 2013

“Africa is a completely different ball game to other investment regions and is only suitable, in my opinion, for sophisticated investors, not mainstream retail investors”

Philippa Gee, MD of Philippa Gee Wealth Management

African stocks have continued to outperformed broader frontier and emerging market indices, climbing 38% in 2012 and over 9% so far in 2013 • Land and natural resources: Africa is a continent with almost 20% of world’s land mass, and is abundant with mineral resources • Funds: According to Reuters, African Investment team funds have grown nearly five times in value over the past six years, attracting new forms of capital as well as increasing media exposure. According to Lipper data, equity funds that badge themselves as Africa or African held assets of just under $1billion in 2006, rising to over $3billion in 2011, and nearly $5 billion in 2012 Is this reason enough to consider Africa as your next investment destination, or to allocate a certain percentage of your portfolio to emerging Africa? If you need to know more here are more insights to help you decide. Where to invest? Set up in June 2010 UK investment firm Alquity manages Alquity Africa fund, and targets longterm growth. Based on a ‘virtuous circle’ model of growth Alquity promises attractive returns, sustainable investment whilst transforming lives. The fund invests in companies either listed on thirteen of Africa’s stock exchanges or derive most of their income or profit from within Africa. Alquity Africa fund is an open ended, daily price fund where people can buy and sell on a day-to-day basis. Available for pension fund savers and regular investors, the 2012 calendar year return for Alquity Africa fund was 15%. “And above all we donate a minimum of 25%, not from our investor’s return but from our net management fee revenue, to micro finance projects that support local economic activity in Africa. This also conforms to Islamic belief of returning to society a part of the earning,” said Simon Smith, Business Development Director of Alquity Investment Management.

OPERATIONS Alquity is one of the few noted funds that are targeting Africa. Other investable funds include J.P Morgan Africa Equity, DWS Invest Africa, Investec Africa Opportunities, Nile Pan Africa Fund, and Magna Umbrella Fund PLC, Africa fund. Launched in May 2012 Templeton Africa fund has produced a 14% return by the year-end where as J.P Morgan’s Africa Equity Fund produced a return of 60% since its launch in May 2008. Eaglestone Asset Management is developing and launching five private equity funds targeting investments in the following sectors in Sub-Saharan Africa: real estate, infrastructure, mining and natural resources, agribusiness and general industry & services. They have a target capital of US$ 100million and each of the funds will be regulated in Luxembourg. As far as the traditional African sectors are concerned the old investor’s view of oil and mining cannot be discounted totally. Mining continues to represent a substantial percentage of Africa’s growth, 14% according to Renaissance Capital data analysis of 20202009. Their data also showed that 53% of Africa’s growth derives from services such as banking and telecommunications. They feel that Africa’s growth story is consumer driven and subsequently why it might make sense to focus on fast-growing sectors like food, consumer goods, telecoms, especially mobile telephony and banking. Further favoured investments include banking stocks, particularly in Nigeria, with demand for financial services increasing due to the growth of the middle class. Pharmaceuticals and breweries are also in demand.

“I wouldn’t be surprised if it beat Asia in terms of economic growth over the next five years. But liquidity will always be an issue if you are 100pc invested there, and if you go for global emerging market funds instead, you won’t actually be invested enough there to benefit”

Mark Livingston, investment director for emerging markets at Fidelity

One of the most lucrative countries to invest in is Nigeria, where the average income per capita has quadrupled since 2000, and is becoming particularly popular with specialist fund managers after Ship with oil rig in the background in the Nigerian capitol Lagos

consistent annual growth rates of approximately 7%. Other countries with growth potential include Sierra Leone, Ghana and Kenya. Think before you leap: As with any potential high-return investment opportunity there are also a number of risks that you need to consider before taking the plunge. The main areas of concern are: • Political instability, social unrest, violence Corruption and unreliable power/water supplies, as you no doubt would expect • The high rates of economic growth are not being experienced across all African countries, and do not necessarily correlate with stock market returns either. Therefore, we would recommend that you conduct full due diligence prior to spending money. Slim Feriani, whose Advance Frontier Markets fund has 40% of its assets in Africa, says the preponderance of consumer-facing businesses listed on African markets means there is a good correlation between economic growth, corporate earnings growth, and shares in African companies which offer outstanding yields • African funds tend to be rather small and relatively expensive when compared to other markets, and have limited performance histories as you would probably expect. Several are also denominated in US dollars which means there can be currency risks • Economists also warn against making too many optimistic assumptions about future growth potential in southern Africa, based on demography alone • Distribution of wealth in Africa is extremely unequal, hindering business David Mcilroy, Chief Investment Officer of Alquity says, “Failing to take account of those risks can destroy long-term shareholder value. So Africa investors also have to take a longer term view, and not be afraid to ride out short-term turbulence.” Emily Whiting, the client portfolio manager for the emerging markets equity team at JP Morgan Asset Management states, “Over a period of at least the next five years I would expect specialist African funds to outperform more general global and emerging market funds as we are seeing the same fundamental developments that we saw in the more developed emerging market economies in the Eighties and Nineties.” Companies in the UAE are increasing their Africa exposure. DP World runs the Port of Senegal and owns the ports in Mozambique, Algeria, and Dijbouti and Dubai Investment Group owns 35% of Tunisie Telecom, whilst Etisalat owns 82% of Sudans Canar Telecom, 51% of Tanzania’s Zanizbar Telecom (Zantel) and 50% of West Africa’s Atlanique Telecom which operates in Benin, Bukina Faso, Togo, Nigeria, Central African Republic, Gabon and the Ivory Coast. Clearly there is a huge potential market out there, but the question is, what do you think? Is it worth the risk?

June 2013

How To Increase Your Sales S

loyal to you they wouldn’t look at any other provider. The only way to achieve this is by building a great relationship with them, making your first meeting and impression vital. You must establish: • What makes them tick • What they are looking for • What have they got • Why they are passionate about their work • What they value about business, family, life and friendship • Who they are as “regular” people, as opposed to their executive titles • What their dreams and goals are

ales are key to the life of any business; without sales you have no business. There are proven clear theories for sales, and whilst many of us think we know all about it, evidence shows that refreshing sales skills is an extremely valuable exercise, that not only eliminates bad habits, but also creates motivation, energy, and reinforces key steps that you may have forgotten about. Here we look at the sales process, specifically closing more sales. Failing to prepare is preparing to fail This cliché may sound obvious, but how many times have you run out of time ahead of a meeting and gone in cold, without understanding your client’s business? This happens to us all, but can easily be avoided if you just make time before your meeting to research your prospective client’s business to fully understand their industry, and what their competitors are doing. Also, do a little web research on the person you’re meeting, that way you can start a more personal conversation with them, which is a great way to start building rapport and very often impresses the person that you are sat in front of. Take to the meeting a printed document with their company logo on it and your research attached. This will not only remind you of why you are there, but is also a great talking point with your prospect that illustrates how serious you are about the meeting. Have a simple, yet effective USP If you are bringing a new product/service to the market you must have a unique angle to it. Or, if your product/service has been on the market for a while, then review this against your competitors and identify the key advantages. Either way you’ll need to train your staff in these USPs. If not, this may be why your sales are failing. Reveal a genuine interest in your prospect The best sales are those where your customer is so

June 2013

“Show class, have pride, and display character. If you do, winning takes care of itself”

Paul Bryant

If you appear genuinely interested in your prospects, they will automatically align their opinion with you. Think about it, you prefer working with people who are genuinely concerned about you and your family, don’t you? You feel engaged and connected with these people; this is what you want your prospects to think about you. Do not confuse this as being manipulative; it’s a legitimate interest in others that could eventually lead to real friendship anyway. But the question is, just how can you refresh your sales technique when in front of a prospect?! Sales tie-downs Harvey Mackay, author of The Mackay MBA of Selling in the Real World, suggests ending all questions with wouldn’t you? doesn’t it? and, shouldn’t you? You may have noticed, I used this above. It works well, doesn’t it? What we mean by this is; • If you know two little words that could improve your sales, you’d use them, wouldn’t you? • When you see your customer has some reservations, it makes sense to get the issues out in the open, doesn’t it? • And after the ink is dry on the deal you should make every effort to make sure your customer is satisfied, shouldn’t you?

OPERATIONS Tonality The tone of your voice is also vital. You must ensure that the questions do not sound threatening and argumentative, so use them in role-playing exercises. Develop a flow that ensures you ask enough, but not too many questions, therefore not appearing ‘odd’ to the prospect.

So what is it with all the questions? These illustrate a technique called sales tie-downs. What this technique achieves is you get your customers to agree with you in small, but very important steps, so they dont even notice. The psychology of this is that this creates positive reinforcement, confirming that everything that the salesperson says is believable and right, making it second nature for the prospect to agree at the end of the meeting/call to the sale. When I used this method, I actually had my prospect tell me that she didn’t realise she had a need to consider alternative options until after she’d spoken to me. Until that point she would have guaranteed that she’d been getting the best service from her current provider. So surely this is worth a try, isn’t it? Mackay states, “Sales tie-downs are short questions you add to statements throughout your presentation to get your prospective customer to start saying yes long before you go for the close. You want to engage your customer and get them used to saying yes.” Don’t be afraid of soliciting just yes or no answers initially. These questions can be: • Aren’t they? • Can’t you? • Isn’t it? • Shouldn’t it? • Won’t they? As I admitted before this process feels rather uncomfortable so practice to make it perfect. This is important as your questions must sound natural before you are able to use them to secure business. You wouldn’t take advice from someone who doesn’t sound convincing, would you? Another benefit of tie-downs are that they keep you in control. You can ensure that customers fully understand what you are saying, and you know when it is OK for you to continue.

The push, pull technique This is very effective, especially when submitting a pitch in writing. The best way to describe this is by thinking of a fly-fisherman; a man casting his fishingrod, getting a hook and pulling it in, and allowing it to slack a little, and repeating this process a couple of times until you pull it in.

“If you are not taking care of your customer, your competitor will”

Bob Hooey

Basically, this technique would involve you asking the relevant questions to determine the facts surrounding your product/service and their current product/ service; 1. Push: Big fat claim: Tell the prospect about your services/product and what it could do for them. For instance, “Our service is……. and we can provide customer feedback from customers to confirm this.” 2. Pull: Make a statement and finish with a tiedown: take it back a little by saying something along the lines of, “I’m sure you have the best service/product already, but surely you want to confirm that you have the best already don’t you?” 3. Repeat this process three times: But with slightly different points and questions. 4. Close the sale. Closing Believe it or not, yes closing is vital but you don’t need a big close. Avoid saving all of the big influencers to the end, as this won’t enable your prospect to trust or engage with you, especially as if in a previous life, the person you are talking to was a sales person. As the old addage goes “you can’t sell to a sales person”. They will know the tricks of the trade and will be likely to get increasingly frustrated with you, therfore loosing you the sale. By keeping the customer actively engaged throughout the process you’ll garner their trust and build a solid relationship; which is ultimately what you want from the process as relationships are more difficult to break than just the sales. Provide excellent after-sales service It is equally important that you provide support to your customers, as repeat customers are highly profitable and provide quality referrals; but you know this, don’t you? Now let me ask you again, if you knew that two little words, a little preparation, and excellent service could improve your sales, you’d use them, wouldn’t you…? In the next issue, we will let you in on the secrets of how you can be paid on time, and faster than you have before, which will increase your cash flow and the health of your company.

June 2013

OPERATIONS

The Art of Franchising D

o you want to grow your business, but don’t have the money or the drive to take it any further than you have already? Or have you have been offered a buy out for your business as you are heading back to your home country, but you are sad to be saying goodbye? If you have asked yourself any of these questions recently, then franchising is an option that you should definitely consider. During 2005-2006 in the US, there were approximately 1500 brands franchised with more than 767,483 outlets and a turnover of over US$62,460 billion. McDonalds, Burger King and Elevation Burger are just three big names whose business model is based on franchising; a strategy deployed by companies to capture market share. Ultimately, it is a method of product and service distribution via a network of interdependent business relationships, which enable sharing of: • A brand • A successful method of doing business • A proven marketing and distribution system In order to consider if franchising is right for you, you must already have a successful business model. The franchisor (your company) and the franchisee (the person who ‘buys into it’) enter into a contract so the franchisee is able to use the model and/or brand (a.k.a goodwill), for a return of capital. Generally the franchisee makes two payments. The first is a one-time franchise fee, and the second a recurring expense called a royalty fee, for the useage of the business model, advertising, marketing and training costs. Royalty varies between 3-10% of gross income. The truth When you hear about franchising you immediately think of people “buying a franchise” which is

“I think it’s great to be part of a franchise that is successful. Any franchise is successful because it’s a continuation and people have seen it”

Jeremy Renner, Actor, Mission Impossible

incorrect as people are buying into a system that utilises the brand name, operating and all support systems associated with that name, enabling the buyer full rights to use that name. They jointly commit to obtaining/retaining customers, and using the services of the franchisor. So what are the reasons for franchising your company? 1. Rapid Growth and increased market share: If you are experiencing finance, talent and/or property restraints then franchising may be an option, as franchisees will fund the expansion of the premises, staff and anything else that you require in order for your business to grow. The franchisee will immediately look to turn a profit as they will implement an already successful business model as opposed to starting from scratch, using the franchisors intellectual property rights and internal processes to add competitive value to the business. It really is a win-win. Franchising will also automatically increase market share and increase brand awareness in line with expansion. How big and how fast you grow will ultimately be down to you. 2. Self–funded expansion: As the franchisee pays you for your services you will not need further capital to pay for creating and providing the franchise (things like training, support and the launch of the franchise), as these should be included within their payment. Also, the opening costs including fixtures, fittings etc. should be met by the franchisee so you do not have to factor these in either. The ongoing service costs, marketing, regional management etc. will be met with their royalty payments… All you have to do is ensure that the service that they receive from you warrants the payments they are making! To franchise by units or regions? By this we mean that you don’t have to sell units of your business; for example a café in Al Barsha

June 2013

and another café in the Marina unless you want to. Regional franchises provide the franchisee the authority to operate within a given territory, and subsequently a more personal touch. For example, Elevation Burger brought their franchise for the whole of the Middle East Region. This empowers the franchisee to think of the business as a more personal business, as they are able to sell products/services under specific terms and conditions. In the UK, MacDonalds and Burger King do not have delivery services but the franchises here in the UAE can offer this service. The franchisee, who is on the ground with the business, will be able to see these openings and should be allowed to make these decisions to prove that they are for the good of the company as a whole.

Also, consider conducting mystery shopping activities, but ensure to act on these. Do not be afraid to ask for customer feedback. Remember, any complaint is actually an opportunity to increase your customer service and strengthen your business model.

“Be in business for yourself, not by yourself”

Ray Kroc, Founder, McDonalds

Success in franchising In order to obtain success in franchising, you have to understand the legal and business ramifications of your relationship. Your focus must be on working with the franchisees and company managers to successfully market the brand, with processes in place to ensure that the franchises are fully supported operationally, as well as ensuring their stock is fluid and issued timely. The franchisor should also ensure timely communication with the franshisee, as you have to remember, it is your brand and your business reputation that is at risk should the franchisee act inappropriately. Management is also key. The franchisee, if managed correctly, should ensure the success of the franchise as they will have invested such considerable time and energy in order to get the business up and running, that they will continue to ensure its success; it is not unusual to see franchises out perform the inhouse management unit. The quality of a franchisee - their abilities, qualifications, skills and experience, will ultimately reflect on the success of the franchise, so taking the time initially to implement an efficient selection process is paramount. You also have to work with franchisees to ensure that they understand that other company franchisees are not their competition as such. Yes, a little healthy competitive streak is good for business, but you do not want this to spoil your brand and therefore you have to be weary of this. Training will assist with this. Think of getting them to work together. For example, if they run out of stock of an item, have them refer to the other office/shop. Make them understand that the financial risk that you have all undertaken is to be shared and the best way to compete and dominate the market is to have the units work as one, with the company overseeing this structure. Service levels are vital regardless of how you build your business. As the custodian of the brand you have to be seen to enforce this. Your franchise agreement should be clear and include an operations manual thus avoiding any misconceptions, with penalties imposed if necessary, should the franchisee fails to act as required by you. Service levels should be regularly reviewed with the franchisee.

June 2013

“I thought initially that it would be a small-scale business. But after I brought in franchising we got to about 200 stores in the early 1980s. It was then that I wondered how well we could really do”

Beware the ownership mentality The main reasons franchises fail is due to the mentality of both franchisee and holding company. The “ownership mentality” destroys the relationship. The franchisee may believe that they “bought” the franchise and therefore “own” their business. Be straight with them from the start and ensure they understand that they are actually buying into the business itself and therefore there is clear guidance from you as to the parameters in which they operate. From their point of view, they may want to make changes. Encourage them to approach you on these (after all, they are paying you a royalty and you never know, you may learn of a better way of doing things), but ensure that you drive the relationship, which has been clearly documented at the outset. Franchising consultants If after reading this article you think franchising is for you, the next step is to contact franchising experts. Franchising is an art; you need to ensure that you have all the documentation and processes in place to attract franchisees; that the process runs quickly, smoothly and as cost effectively as possible. Franchising experts will not only help you to develop all this documentation, but also introduce you to potential franchisees. If this is of interest, undertake your own due diligence before engaging any expert. Ensure that you have synergy with the expert as if you don’t feel that the expert has connected with you, your business/vision then how will they be able to develop your franchise as you want? Above all, take references and where possible visit actual franchises, and meet other franchisor and franchisees. Top 10 Franchises According to Entrepreneur.com the top 10 franchises in 2012 were: • Hampton Hotels (hospitality, lodging)

Fred DeLuca, Founder/President, Subway Sandwich

• Subway (sandwiches, salad) • 7-Eleven, Inc. (convenience store) • Serpro (fast food) • Days Inn (hospitality, lodging) • McDonald’s (fast food) • Denny’s (family restaurant) • H & R Block (service, tax preparation) • Pizza Hut (pizza) • Dunkin’ Donuts (donuts)

SUCCESS Success Series Continuing with our Success Series, we speak with some of the leading brands that have come from the UAE. Read on to find out how they have become so successful and what advice they have for you.

Interview

Sian Rowlands Partner, My Ex Wardrobe

ll of us have clothes in the back of wardrobes that never see the light of day anymore, but what can we do with them? Sian Rowlands and her sisters Bekky Britton, Teagan Rowlands, came up with a business idea to satisfy this problem. My Ex Wardrobe is an online and pop-up-shop style event that enables both buyers and sellers to meet up to give your clothes a second chance of happiness. We talk to Sian Rowlands, Partner of My Ex Wardrobe to find out about their success. How did you start your business? My sisters and I spent a lot of time discussing the business workings; processes, focus, brand etc. and then we hosted a couple of events to ‘test the water’. The response was fantastic so we knew we had a feasible business idea. That’s when I started writing the business plan, which helped us to refine our business model, all the while developing and refining our processes. Have you made any mistakes along the way? Easy; our original selection of web developer! Early on to reduce expenditure we decided to save a significant amount of money and trust a freelancer rather than going with a professional established team. He came recommended, but sadly after a painful 10 month delay and 50% of the payment gone, there was no progress. We had to cut our losses and walk away. We found ourselves with a cash flow problem, and no working website to start generating revenue. The only way to recover from this is get your head down and keep going. We found a new team, and made sure there were clauses in the new contract that covered us on similar issues. Thankfully things went very well, and whilst there has been some unforeseen delays, we are very close to launching our new website! How did you achieve success? Hard work, and more hard work! For the first

Left to Right: Bekky Britton, Teagan Rowlands & Sian Rowlands

“My highlight was winning the 2011 Emirates Woman ADCB Ambition Award, which 2 weeks later was followed by winning the SMEAdvisor Stars of Business Award for Incredibly Innovative Approach Award”

18 months I held down a demanding and time consuming career, whilst starting up and developing the business, this meant late nights, and long weekends. 6 months ago, I left my job in order to focus on taking My Ex Wardrobe to the next level, which is very exciting! What are your plans for the future? Once the full website is launched, we are looking forward to implementing our growth strategy, by offering access to our fashion membership community to other cities in the UAE and the GCC. We have lots of other ideas to explore and research, but for now we are focusing on our online community. We’re going to be re-enforcing our physical presence in the market by taking part in a couple of large fashion and lifestyle exhibitions in Dubai and Abu Dhabi, which is exciting for us. What is the biggest threat to an SME operating in the UAE today? Capital. The government rules and regulations regarding start-ups and businesses, means it can be difficult to get started. Having lived in Dubai for 23 years, I understand these, but I think more needs to be done to understand the emerging need to bring new concepts to the region, especially after the economic global crisis and the lasting repercussions. There is still so much room for growth, so I think the changes on the horizon are very exciting. So what would your one piece of advice be? Go for it; it’s not an easy ride, but it’s a fun one!

June 2013

Interview

Mohammed Tayem M D. entourage marketing & events

egular readers of Business Insight Magazine will notice we talk about the value of your brand, your perception to the public, and how, if you want to be successful, you must keep these in your upmost thoughts. Therefore, who better to talk to than Mohammed Tayem, Managing Director of entourage marketing and events, one of the UAEs only live communications agency, that won 9 awards in 2012 alone, to find out his secrets on building a successful business.

We now can do the digital printing, branding and carpentry; so we can build a full set, production, exhibition stands, outdoor digital branding for business etc… I trusted the figures. Adding the production house means I can reduce 5% of my costs and add 90% to quality.

Why did you start your own business? The crisis happened. In 2008 each senior individual had two options; go home or spend the money you had saved whilst you waited for either another employer, or start own company, and make your future. I looked at the crisis as an opportunity. For example, if you were about to recruit a senior person before the crisis, you would have had to pay as a salary over AED50,000 per month. During the crisis you got a 50% discount. When something bad happens, become a glass-half-full person. You will spot opportunity everywhere! In 3 years we now have two branches in Saudi and Jordan. We also employ 30 people in Dubai, and today we are the exclusive activation agency for Google, with Coca Cola adding entourage to be an activation agency. To achieve this we ensure we live to our USP; that we are creative, cost efficient and do ensure a return on investment. What changes have you implemented for this? I made the decision early to invest more and add the production house to the business so my team now has full control.

June 2013

“To keep clients, you must deliver on your presentation, don’t be greedy and don’t over promise”

What mistakes have you made in business? One mistake is to work with the wrong supplier; this is why we invested in our own production house. They fool you to make the most profit when you think you are getting a good deal. By bringing in your own production house, we are now in control of all of this. You have impressive clients; what is your secret? You need to a strong proposal and an effective presentation to secure the client. To keep them, you must deliver on your presentation, don’t be greedy and don’t overpromise. Put yourself in your client’s shoes and work on that basis. Don’t get greedy and think this is your chance to make as much money as you can, and rip the client off in the same process. What have you learnt in business? I won’t turn a profit until my 5th year as I am building a corporate structure. I need the right procedures and people to be able to do this. I need hand books and finance systems; all these things you have to take into account. People don’t take this into account, so they won’t grow properly. What advice would you give an entrepreneur? Focus on what you know how to do.

SUCCESS

Interview

Dhananjay (Jay) Datar

Chairman and Managing Director, Al Adil Group of Companies

rom the son of a grocery shop owner 30 years back, Dhananjay Datar, the Chairman and Managing Director of Al Adil Group of Companies is today the 19th richest Indian in the Gulf, with a total net worth of $650 million (AED2.4 billion). It is an unbelievable true-life story of ‘rags to riches’ for the spice-king of Dubai. What brought you to Dubai, and when did you start your business? My father came here in 1976 after retiring from the air force. We saw that Indian nationals used to come to Dubai empty handed but would come back to India with so much more. We never had a cosy life, the air force salary was not good enough to pay for everything we needed, and we had to endure a lot of hardship during our childhood. I didn’t have shoes to go to school; or an umbrella to protect myself from the sun or rain, and had only one school uniform. I used to borrow ink and pens from friends to write. For a few years, I used to have only chapatti and dal (lentils) as my lunch, and only yogurt (without sugar)

“Once you start your business, either ‘do or die’, and do not expect any return in the first 3 years”

for my dinner. Knowing this; and seeing how Indians had become richer by moving Dubai my father made the same decision. In fact my father sold his gold chain to pay the agent to come here. After working for a British company building Jebel Ali Port, my father decided to set up a small grocery shop to mainly cater for the day-to-day needs of the Indians here. He saw that although there were Indians from all parts of country throughout Dubai there were hardly any spices to cater for their palates. In 1984 he started his business with a 150 square feet grocery in Meena Bazar, with a total investment of AED 4500. Tell us your journey since 1984… Soon after my father set up his shop I was summoned from Mumbai to help him. We had to sell some of my mother’s ornaments to raise more capital. We had two other employees apart from us, and we all used to stay in one room. I had to clean the shop, carry 50kg weight bags, and also deliver goods to clients. We worked almost 16/17 hours a day. During 1985 we won a contract from five 5 star hotels as their wholesale suppliers of grains and spices. Then in 1987 we bagged the contract from Dubai Duty Free; that was a turning point in our business and was swiftly followed by a contract from Emirates Flight’s Catering in 1989. Those days we concentrate more on wholesale business rather than retail. We set up our Al Quoz factory in 1995, our first branch in Abu Dhabi in 1997, and second one in Rolla, Sharjah in 1998. We also won 8th best supplier’s award

June 2013

No, I am the same old Dhananjay Datar that I was 30 years back when I came to Dubai. I owe so much to this city. Today I have all the material wealth, but that has not changed me. My wife and I still visit the small apartment in Bur Dubai where we spent 23 years. This place has given us everything. That being said, when I do something I love doing that in style. I celebrated my son’s thread ceremony up in the air with 150 guests. Recently to make the 30th anniversary celebrations really special, we came up with the concept of doing a press conference on bateaux, which is a French boat and the only one of its kind in Dubai. During the silver jubilee celebrations of the company, the press conference was held on a Royal Jet 737 Boeing Business Jet, which hovered 30,000 feet in the skies for three hours over UAE. What is the secret of your success? I believe in hard work and like to satisfying people’s need. My store started with the idea of supplying day-to-day food requirements, and now we have extended the scope with special items catering to Indian festivals. I value the support of my family, my employees, and suppliers in the business. “My office is my temple, our customers are ‘god’, employees are my asset, and my suppliers are partners.”

from Dubai Duty Free in 2003. To be successful you must keep looking after your business to make it healthy and sound. There is no short cut in life, and do not forget that a businessman learns everyday from different experiences. What is the present status of your business? We opened our Karama branch in 2006, and gradually I realised the need to change my style of work and importance of catering as per market demand. I realised that advertising and marketing are two important components for a successful business. Our visible growth came during last 7 years when we added 21 branches throughout UAE. At present we have 25 retail shops in UAE alone, two flour mill factories, and two spice factories in the Al Quoz area. I have 500 employees, a mix from all parts of India. I also have a company Masala King Exports back in Mumbai, which exports 8000 number products all over world. Five years back it used to export Rs50 core worth of products, today the value has increased 500%. My wife looks after the finance side of the company as Finance Director and my elder son looks after purchasing; and along with other things, I look after our HR needs. We have found out not to get disheartened by difficulties as that is common place, and in most cases you can only solve 5% of it, for the remaining 95% you will have to learn to compromise. What’s next? Do you have any targets? No I have not set any targets. I just want to grow more; I love to run after success. For me, once I have started there is no stopping. “An arrow, once discharged from the bow does not stop still it reaches a destination, I do not know the destination but I want to continue.” I have plans to step foot outside of the UAE, and in July planning my first branch in Oman. This will be followed by Kuwait and Qatar. I have also plans to set up three more branches in Abu Dhabi before the end of the year. You have been ranked as 19th richest Indian in the Gulf! Has success changed your perspective?

June 2013

“Respect your customers, as they are the one who are giving you business”

My employees are like my family, and they have direct access to me. We observe employee birthdays, and we have two parties per year with our employees. Don’t get me wrong, treating employees fairly does not mean that if they make mistakes/do something grossly wrong, that they will be spared! However, to be successful in business you need not have to have a business background, anybody can do business. Just remember to treat your business the same way as you do to a new born baby, it needs constant attention, and nurturing. What advice would you give to aspiring entrepreneurs? Once you start your business, either ‘do or die’, and do not expect any return in the first 3 years. Above all respect your customers, as they are the one who are giving you business.

SUCCESS

June 2013

Are You An SME and Need a Business Bank Loan..? T

ime and time again, we at Business Insight Magazine have told you that cash flow is king: the more cash you have, the better prepared you are for a rainy day. However, we also know just how difficult those startup years are, when you are running to full capacity, with limited finances, and potentially missing opportunities to grow your business because these lack of funds means that you can’t seize that fleeting moment. Obviously, you could look to external investors who would be able to help you finance your new avenues; but do you really want to give up a chunk of your business in order to do this? If not, then perhaps a loan is an area you should look into. Going back 24 months, the market was a far different place then it is now. Then, getting a loan for an SME business was tough for the simple fact that there were only a couple of banks in the market. Now however, with investor confidence returning, and banks once again launching their loan products to the market, we thought it best to highlight exactly what a loan can do for you. So who is out there I hear you ask? Well, Standard Chartered Bank, Emirates NBD, and RAKBANK are the established players in the market place. However, at the time of going to print, DOHA Bank was also set to launch their products the following day, with Emirates NBD launching their new products also. Rodney K. Saldanha, Managing Director of RIOT realised early on that to make his business a success not only did he need courage and passion, but he also needed money to get his photography printing business up and running. “However good your idea is, unless you have access to funds it is increasingly difficult to turn your idea into a practical business proposition and subsequent success”. Luckily for Saldanha, RAKBANK was able to assist him.

June 2013

RAKBANK is one of the key banks providing loans and assistance to small and medium enterprises (SMEs). They have carved out a niche in this field, offering easy access to innovative products with a proactive approach to helping small businesses.

“However good your idea is, unless you have access to funds it is increasingly difficult to turn your idea into a practical business proposition and subsequent success”

In Saldanha’s experience, a bank can work very well for you not just in terms of lending money. For instance, RAKBANK offered him advice as to how an effective business plan can turn a dream into a reality. An efficient business plan is necessary for banks to better understand their clients’ needs, and offer customised financial solutions accordingly. Saldhana explains below: What is your business? And when and why did you decide to go for a business loan? I have a bespoke photography studio where we process tailor made albums, photo canvasses, business cards, greetings cards, and frames. In addition to this service I also have an online platform where we offer free software to download and create people’s own photo books, which they can send us after compilation, and we will then get it printed and delivered to them. We provide a 75 year guarantee in terms of durability and photo quality, reviving the tradition of printing and avoiding the dependency on storing pictures online only. I launched Riot in DMCC, Jumeirah Lake Towers (JLT) year end 2009/early 2010. Before 2009 I had an advertising agency based in Dubai Media City, and also used to own another LLC photo shop company based in Dubai with local sponsors called Riot Art. I was the owner of both the companies however I had to close down the advertising firm during 2009 due to big outstanding receivables; which are now paid up. I still had my passion for photography and I knew the market, so I shifted Riot to DMCC JLT to take advantage of its free zone facilities. At that point Riot

MONEY Has the loan helped grow your business? Certainly it has helped. We have grown steadily in the last three years. I have been able to buy necessary equipment and machines. Staff numbers have also increased from 5 to 11, and soon it is going to be 12. I now have a 30,000 strong online client base, with a vision of 100,000 by the end of this year.

JLT had hardly any money and it was then I thought of approaching a bank for business loan. Why did you decide to bank with RAKBANK? At this time I was banking with another global bank and found that there was hardly anybody to listen to me, my ideas or my needs. It was taking me a long time to even put forward my proposal to the right people. A friend of mine, worth probably AED10 million, was already an existing business client with RAKBANK and suggested that I approach them, describing them as friendly. Following his counsel I was introduced to his relationship manager… What were the steps that you needed to confirm to be eligible for the business loan? I have been banking with RAKBANK for 10 years on a personal basis so I was familiar with their system. I was still under the impression though that applying for a business loan is a lengthy procedure given the requirements for many official documents including trade licenses, financial statements, and others. However, the process of applying for my business loan with RAKBANK in general turned out to be simple. How was your experience with RAKBANK? Despite the application process being simple, it took me personally a little longer to get a loan the first time around because when I initially applied for a business loan the Bank didn’t have the internal policy to support my requirement. Lucky for me, they implemented the policy a few months down the line and called me soon after to extend the loan to me. Not only did I get the loan but every so often I get calls to ensure everything is okay and to check whether I need any further assistance or a top-up. Despite having to wait for my loan until the policy was implemented, the Bank proved its ability to listen to feedback and act upon it when possible. Also staff is always extremely friendly and approachable. This is a change from my previous bank!

“[Having a loan] certainly has helped. We have grown steadily in the last three years. I have been able to buy the necessary equipment and machines”

To reach this goal I now need another business loan, but this time I need a larger loan amount to be really secure and be able to invest on more sophisticated machines. As a small business owner, it is important to nurture and grow a healthy client base especially if market entry and penetration stakes are high. Cash flow for small businesses is the main obstacle to competing with bigger and more established competitors because you lack the same economies of scale, supplier discounts, or credit arrangements like larger competitors. My main challenge is maintaining a healthy business bank account for my banking relationship while growing my business and paying my supplier bills and staff salaries every month. Even though it is overwhelming at times, I still manage to pay my dues every month and after I do, I relax and enjoy the perks of having my own business. Given your experience would you recommend RAK Bank to any other SME who is looking for a business loan? Yes, definitely. I advise all my friends to try RAKBANK mostly because they are an approachable bank, staff are friendly and helpful, and yes, much more considerate in terms of SME loan approvals and procedures than the other banks. Also, they are easy to contact 24/7; I have a Relationship Manager, as well as telephone and internet banking. RAKBANK is truly a ‘people’s bank’. Special thanks to Rodney K. Saldanha, Managing Director, Riot JLT

June 2013

MONEY

Mudarabah & Musharakah:

The Pillars of Islamic Finance T

Musharakah Musharakah is a type of Shirkat-ul-Amwal, which literally means sharing contract. In the context of business it refers to a joint enterprise or partnership structure based on of profit and loss sharing instead of interest bearing loans. Instead of charging interest as a creditor, the financier will achieve a return in the form of a portion of the actual profits earned as pre-agreed. However, unlike a traditional creditor the financier will also share the losses.

he increasing popularity and widespread acceptance of Islamic finance is encouraging investors to go deeper into the basic premises of Sharia principle. In our last few issues we spoke about what Islamic finance is all about, different concepts associated with it and how it has developed and grown in the past decade. We also gave an insight into the two widely used Islamic financial instruments, Sukuk and Takaful. In this issue we explain the two most important pillars of Sharia principle, Mudarabah and Musharaka. Mudarabah Mudarabah is a partnership where one partner gives money to another to invest for them in a commercial enterprise. The first partner from whom the investment comes from is called “Rab-ul-Mal”. However, the management and work is the exclusive responsibility of the other partner; the “Mudarib”. There are two types of Mudarabah investment: 1. Al Mudarabah Al Muqayyadah (a.k.a Restricted Mudarabah): Here the Rab-ul-Mal may specify a particular business/place/market for the Mudarib, who then invests the money where requested. Since the investment is restricted by the choice of the Rabul-Mal, this is called restricted Mudarabah. 2. Al Mudarabah Al Mutlaqah (a.k.a Unrestricted Mudarabah): Here the Rab-ul-Mal gives full freedom to the Mudarib to invest where he deems fit. In this scenario the Mudarib is authorised to carry out any work normally undertaken during the course of business, but he is not allowed to undertake any extraordinary work, or lend money to anyone else without the consent of the Rab-ul-Mal. The Mudarib is also not authorised to keep another Mudarib or partner, or mix his own investment in that particular Mudarabah contract without the consent of Rab-ul Mal. The profit will be distributed to an agreed ratio, however any loss is borne by Rab-ul-Mal.

Mudarabah is a partnership where one partner gives money to another to invest for them in a commercial enterprise

Like Mudarabah, Musharakh is also based on certain principles. In general it is agreed that a proportion of profit be distributed among the partners (the splits on which are agreed at the outset), but exactly what the split should be varies significantly among experts; some say that it is necessary that each partner’s share in the profit is exactly equal to the proportion of initial investment, others say that the ratio of profit distribution may vary without restriction from the ratio of investment, while another says that it may vary only for silent partners (non-active partners who only contribute capital) but that it cannot be higher than the ratio of investment. It is unanimous that each partner’s share in loss must be exactly equal to the ratio of initial investment otherwise the contract invalid. The above is complicated further when the type of actual capital for investment differs. To some protagonists capital is not a restriction in Musharakah and subsequently, in-kind contributions (non-cash) by partners is acceptable, as the market value of the commodity is considered and agreed at the time of contract. However, others insist on only cash contribution as non-cash contributions may create an issue if liquidation or redistribution is required. The differences • In Musharakah the partners share the loss in proportion to their investment whilst in Mudarabah

June 2013

• •

•

the loss, if any, is suffered by the Rab-ul-Mal alone as the Mudarib does not invest anything. However, this principle is subject to a condition that the Mudarib has worked with due diligence. If the Mudarib has worked with negligence or has committed dishonesty he is liable for the loss caused by this The investment in Musharakah comes from all the partners, whilst in Mudarabah investment is the sole responsibility of Rab-ul-Mal In Musharakah all the partners can actively participate in the management of the business, whilst in Mudarabah all of the work is carried out by the Mudarib only The liability of the partners in Musharakah is normally unlimited. Therefore, if the liabilities of the business exceed its assets and the business goes in liquidation, all the exceeding liabilities will be borne pro-rata by the partners. However, if all the partners have agreed that no one shall incur any debt during the contract, then the exceeding liabilities shall be borne by that partner alone who has incurred a debt on the business in violation of the condition previously mentioned. Contrary to this in the case of Mudarabah, the liability of Rab-ul-Mal is limited to his investment, unless he has permitted the Mudarib to incur all the debts on his behalf In Musharakah as soon as the partners put capital in a joint pool, the Musharakah become jointly owned by all of them according to the proportion of their respective investment. Therefore, each can benefit from the appreciation in the value of the assets, even if profit has not accrued through sales. The case of Mudarabah is different as the goods purchased by the Mudarib are solely owned by the Rab-ul-Mal, and the Mudarib can earn his share in the profit only if the goods sell for more than purchased

Whilst the principles of these contracts differ from conventional loan and investment criteria, they have many widespread uses in nearly all sorts of financing, asset or liability. For asset side financing it is used for short, medium, and long-term financing, project financing, large as well as SME financing, trade/bridge financing, working capital financing, and for letter of credit with margin (Mudarabah) and without margin (Musharakah). For liability financing it is used for current, saving, investment accounts (deposit giving profit based on Musharkah/Mudarabah, with predetermined ratio), inter-bank lending, borrowing, term finance certificates and certificate of investment, T-Bill and federal investment bonds, debenture, securitisation for large projects (based on Musharkah) etc. It can also fund Islamic Musharakah bonds (based on projects requiring large amounts of funding where profits are based on the return from the project). Knowing now the way Mudarabah and Musharakah work would you, as an investor, consider investment following either of these two principles?

June 2013

Doha Bank to invest US$1.5 billion (AED 5.5 billion) in UAE business

oha Bank, one of the leading GCC-based banks, announced its intentions to support Small and Medium Enterprises (SMEs) and corporate clients in the UAE through the Bank’s fully licensed branches in Abu Dhabi and Dubai, including support for companies in the infrastructure development and construction sectors. Doha Bank Group CEO, Dr. R. Seetharaman, during a conference held in Dubai said that the Bank is seeking to participate in the resurgence of the UAE which is building its commercial economic platforms at a steady pace after the property market bubble which impacted the UAE. Dr. R. Seetharaman also added that Doha Bank is earmarking US$12 billion (AED 44 billion) for lending to high-potential clients in the GCC between Qatar, The UAE and Kuwait, where the Bank operates full branches. They aim to commit about US$1.5 billion (AED 5.5 billion) in the UAE focusing on corporate and SME clients. Dr. Seetharaman said: “Our outlook is based on the UAE now firmly being on a recovery trend, post the financial crisis, and particularly after the consolidation of the property market. Indicators clearly show that general market confidence is slowly returning. Consumer confidence is showing positive trends and UAE indicators on tourism, services, industry, projects and city infrastructure are returning to significant levels. People and institutions are benefiting from increased financial stability. Expatriates and investors are starting to look at the UAE again as a key destination. All these factors combine to stimulate the core SME platform”. “SMEs have only recently transitioned as a primary focus area for banks in the region and this has been mainly due to government stimulus and incentives for financial institutions to support this high-riskhigh-rewards segment in many parts of the GCC. In the UAE, Doha Bank sees significant organic opportunities, without external stimulus involved in the SME market, which plays a pivotal role in the non-oil economy. And due to the strategic location of both Abu Dhabi and Dubai at the heart of this vibrant economic region, we envision growth across a number of sectors including industrial and semiindustrial or manufacturing businesses, infrastructure and construction businesses, consulting sectors and key commercial trade areas,” added Dr. Seetharaman.

MONEY

UAE: Major Player in

Raising Funds in the GCC

ulf Co-operation Council (GCC) countries have for quite some time become major revenue drivers of global mutual funds, hedge funds, and private equity players. Comprehensive figures on size of fund sales or assets under management in the region are hard to qualify but it is estimated that they run into billions of dollars.

two main drivers of capital inflow into UAE is the stability of UAE, versus the instability of neighbouring countries, and secondly a favourable local investment authority • The emergence and growth of the state pension fund industry driven by local demographics and the Arab Spring • A preference for light-touch single-family offices with increasing autonomy from the family business

Saudi Arabia is emerging as the regional leader, the UAE is the favourite destination for foreign capital, according to FTSE MENA survey. In general, the fund related activity in this region focuses on international funds selling to wealthy investors like sovereign wealth funds (SWF), individuals and family firms.

Despite being a traditional hub for foreign funds, and as signs of the financial crisis ebbs away, managing assets, and raising capital in the region has always been challenging. The asset management industry continues to face challenging markets, the implementation of regulatory reform initiatives, competition for clients and talent and new expectations from investors, regulators, industry partners and other stakeholders.

So far asset management in the Middle East and GCC is concerned the following distinct trends have been identified, from a FTSE MENA survey, and fourth Invesco Middle East Asset Management Study: • Short-term opportunity to invest in interest rate differentials is influencing retail investors, however target returns have declined • There is increasing appetite to invest GCC SWFs in local markets • Second tier institutional GCC investors are adopting a slightly sophisticated approach defined as ‘separate pots’ with different risk profiles and target returns • Major sovereign governments and SWFs in the Middle East, accounting for 35% of global SWF flows and represent $ 1.8 trillion, are increasingly considering new private equity models for investment. There are also new differential trends in the investment pattern of ‘Development and Investment’ SWFs • UAE is the key beneficiary of private capital flow into the GCC region, while overall capital in remaining GCC markets appears to exist in home markets. It is estimated that 43% of capital coming to UAE derives from emerging markets, most notably from India, Russia and China. The

A PWC study on ‘top issues facing asset managers’ have identified nine key challenges that the asset management industry faces in this region, though situations vary from country to country: • Governance • Navigating risk complexity • Navigating regulatory complexity • Delivering cost-effective technology and operations • Foreign Account Tax Collection Act (FACTA) and global information reporting • Building trust and transparency • Maximising value from mergers & acquisitions • Pursuing growth • Growing and leveraging human capital Adding a new rule regarding promotion and sale of foreign funds, and the requirements for offering and launching new local funds recently introduced lately in the UAE market, will affect UAE’s role as fund hub. Some experts predict that new regulation will resemble that of Saudi Arabia which is a difficult market for international fund managers to navigate. However, the presence of various challenges, complexity and governance has not dampened the optimism about capital movement to this region and is expected to continue with expectations focusing on an improved regulatory environment, ease of doing business, quality of local staff, more market liquidity, improved risk management services and lower political risk, FTSE survey points out.

June 2013

How To Recover Money T

he guys in the Business Insight office stumbled across some literature asking the simple question, “Did you know Value Added Tax (VAT) paid on a wide variety of foreign business expenses is reclaimable from all of the EU Countries, Switzerland, Norway, Japan, South Korea, Lebanon, Argentina, Canada & Australia?” We certainly didn’t. We met with Julie Hernon, Marketing and Communications Manager from U Turn Tax Refund LLC to find out more. “Companies are entitled to reclaim the VAT incurred on international expenses in some countries. Every year however, billions go unclaimed as people either don’t know about this or are worried about the paperwork which is exhaustive and can differ for each country to which they travel. Also, it has to be completed in the language of the country in which it is being claimed.” said Julie.

The items that can be reclaimed are: • Hotel bills • Car Rentals • Taxi and train receipts • Telephone and mobile phone charges (Roaming) • Apartment rental • Restaurant slips • Sports events attendance • Leisure expense receipts • Conference fee • Events attendance fees • Training

Processing VAT reclaim through

She explains, “People don’t appreciate just how much this can add up to though. On average, VAT can be 27% in some countries; that is a lot to recover”.

local tax offices

In total U Turn Tax Refund offer turnkey solutions for foreign VAT recovery from 45 countries around the world, and with 51% of their staff coming from the big 4 audit firms, 42% are fully qualified accountants, and 35% fully qualified legal advisors; operating in 30 offices globally, assisting clients from 60 different countries… you can see the market potential and possibility of huge returns to businesses.

months depending

In order to claim back tax you can do the legwork yourself. However, if you are happy to enlist a company to work on your behalf, all you have to do is provide them with your foreign invoices and the required documents, “Ideally we would rather our auditors obtain full access to the files to ensure that everything that could possibly be claimed back is found and submitted. Failing this, we can issue full guidelines on what to provide to us”, explains Julie.

June 2013

can take 6-10

on the country,

In respect of the foreign payments, you can reclaim: • Import VAT and customs duties • Professional services fees • Marketing and advertising expenses • Exhibitor and trade show costs • Information office expenses • Tooling and warranty • Aviation VAT • Movie Production VAT And more.. “The most important thing to remember about claiming back VAT from other countries is that you have an 18 month window in which to do so for most of the countries,” Julie advises, “If you fail to claim the VAT back within this time frame, the local government gets to keep it all. If you think about the difference that a return of 2027% of your international expenses can make on your cash-flow, it is definitely worth looking into further? With special thanks for Julie Hernon, Marketing and Communication Manager, U Turn Tax Refund LLC. UTurn offer a range of services. The VAT U Turn Tax Refund scheme is offered on a no refund, no fee basis.

MONEY

t +971 4 437 0402 f +971 4 437 0401

e info@entourageintl.com w www.entourageintl.com 25 June 2013

Grains A

s a food source, we have all encountered grains at some stage and no doubt eat them on an almost daily basis, but how much do we know about them as a commodity? Grains are the largest agricultural and food commodities in the world in terms of quantity, due to their use as an ingredient/raw material in many food and beverages (a loaf of bread for example, or even beer). Almost all primary and secondary foodprocessing companies depend on grains for their production. Consumer demand for grains and grainbased products can significantly impact the price and availability of grains. As an agricultural crop, the supply of grains can be affected by a number of factors including supply and demand, weather conditions, natural disasters or gradual changes in climate.

increase in population and demand for food over the coming decades will place more pressure on the natural resources such as land and water. These factors all influence the prices of grains. The agriculture sector withdraws 70% of fresh water from global supplies and it is no secret that each day over 1 billion people go to bed hungry. This means that grains as a food commodity, assumes a very important role considering that each day more than 35,000 people die from hunger; nearly 85% are children in Asia and Africa.”

The MENA region makes up only 5% of the world’s

This issue is of even greater importance to Middle East and North Africa, “The MENA region makes up only 5% of the world’s population, yet it consumes more than 20% of the world’s grain exports. With water scarce, arable land limited, and production stagnating, grain imports are likely to continue rising.”

“Grains are critical for survival of life. They have limited shelf life and are grown seasonally but consumed annually, so storage and logistics issues are as important as production,” explains Tomar.

The recent history “Grains production in 2012 was slightly down but strong growth is expected in 2013… So the good news is that prices will not go crazy like what we have seen in last 5 years. As per the FAO (Food and Agriculture Organisation) of United Nations, world cereal production in 2012 was reduced by nearly 4 million tons, however FAO’s current forecast of global wheat production in 2013 stands at 695 million tons; 5.4% up from last year’s harvest. Much of the increase will come from EU, the breakaway Russian States A.K.A. CIS and also Asian countries, driven by increased plantings in response to attractive prices,” explained Tomar.

He continues, “Grains are also a “socio-geopolitical” commodity as they are essentially a global food security. This therefore means that ethical investing in agriculture is essential for reducing hunger and promoting sustainable agricultural production. An

The affect of animal feed and the food and beverage (FF&B) market on price Prices on grains fluctuate substantially due to the number of factors that account for them. For example, there is a direct correlation and price

Also, new uses for grains can put a strain on existing supply and demand balances. One such example is the rising demand for sugarcane or corn-based ethanol, a potentially viable biofuel, which is putting pressure on the prices of both corn and other grains. What does this mean to the market though? We talk to Sudhakar Tomar, the Managing Director of Hakan Agro DMCC, the UAE’s largest agro-commodities supply chain organisation to find out.

June 2013

population, yet it consumes more than 20% of the world’s grain exports

COMMODITIES interdependence between Grains and FF&B segments because Grains are used not only as an ingredient but also as raw materials for FF&B.

hungry, “If the objectives of changing governance are met, this should lead to all round prosperity in the region leading to increased consumption of food. In the long run, we will eventually move up the food value chain in favour of processed food industries. Also, if these economies open up to foreign investment, logistics, storage and a intensive and sustainable structured farming policy, the end result will be an increased food supply and distribution network adding to the global supply pot. Agriculture growth in the region will come both from consumption as well as production.”

Almost all primary and secondary food processing companies depend on grains for their production. Consumer demand for grains and grain-based products can significantly impact the price and availability of grains. Other than this direct correlation there are scores of often unnoticed but critically important factors such as supply and demand imbalances, underinvestment in agriculture and logistics infrastructure especially in the MENA region, stagnant global food production, population growth, and limited resources such as land and water. Tomar explains, “To make matters worse growing urbanisation too plays a negative role in food production as it puts pressure on the arable land. Rising income levels in emerging markets lead to change in dietary patterns, thereby raising the demand for more grains as raw material for fat, oils and meat. Also the gap in per capita consumption of food among different countries is already narrowing. Cumulatively these factors coupled with erratic weather patters and climate change are a recipe for a long term structural imbalance in food supply chain.” What are the opportunities in grain trade in the Middle East? There are many challenges that we face on a global scale, which can lead to an increase in opportunity within the Grain trade. In 2050, as per FAO estimates, we will need to raise overall food production by 70%. Consequently production in developing countries needs to increase substantially or they will have to import 100% more than they do now. We also need to grow additional 3 billion tons of cereals by 2050, up from today’s nearly 2.1 billion tons. “We need to make immediate investments in agriculture infrastructure in MENA, Asia and Africa, reducing wastage at production and post production handling and logistics, employing cutting edge technology to increase crop production yields in the developing world where we lose over 50% crops to such wastage. Also, stressing increased reliance on vegetable protein rich crops such as Beans, Pulses and Legumes would help create increased supply of economical and quality protein, whilst also reducing water footprints,” says Tomar. He continues, “Moreover from a trade and business prospective, this unique situation will throw open the challenges and unprecedented opportunities to growers, exporters, importers, processors and all the components of middle east food supply chain.” In fact, Tomar has already been proven correct. Two of the major causes of Arab Spring were lack of employment and high food prices. The MENA region has 50% of it’s population under 25 years of age and you can not keep hundreds of millions of youth

In 2050, as per FAO estimates, we would require raising overall food production by 70%. Production in the developing countries would need to go up or they will have to import 100% more than now

The challenges “From a general perspective I feel that key challenges in Grains sector are to bridge the gap between the demand and supply of food as opposed to the affordability of transportation and storage. If you look at specific issues, the concerns are liquidity of futures markets, stability of oil prices, trade flows and barriers, erratic weather patterns, domestic food production and distribution policy of major producers to rise above political rhetoric and align to an internationally accepted commodities ‘sharing’ model, the adoption of farming methods to improve yields, as well as the availability of cheap and diverse crop insurance policies, enhanced flow of supply side information, the list could continue...” states Tomar. That is not all. In the MENA region alone, imports of Grains have increased from 30 million tons in 1990 to nearly 70 million tons in 2011. Today imported grain accounts for nearly 60% of regional grain consumption. Grain imports have filled the widening gap between production and consumption but population growth alone will raise grain demand in the Middle East to 200 million tons by 2050, equal to 66% of current world grain exports. Increased meat consumption would take demand up even higher which will ensuring grain supplies will become progressively more challenging as countries look to import more grain from abroad. The future In Europe people are concerned with the real environmental impact on producing biofuels from food crops, with a possible change on earlier targets to meet 10% of the transport sector’s needs from renewable biodiesel by 2020 by proposing to limit what comes from food crop-based biofuels, such as wheat and rapeseed. It is expected to be less than 5% of the total energy consumed in the transport sector in 2020. The growth in biofuel production further tightens the linkages between energy and agricultural markets. At a basic level, petrol prices are likely to largely determine biofuel prices and biofuel prices are likely to largely determine prices for grains. Since producers will choose which crops to plant based on relative profitability, this suggests that long–run prices for soybeans, wheat and other commodities also will be largely determined by petrol prices also.

June 2013

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COMMODITIES

Bitcoin:

An Alternative Investment or One to Avoid?

ith the increasing concern in the global economic outlook people have been looking at new areas of investment, and nothing appears to be more interesting or newer than the new currency exchange that has risen up out of nowhere called Bitcoin. To be fair to you all scratching you head in bewilderment at this, you are not alone. Bitcoin is a digital currency that enables people who are on-line gamers to complete transactions. For example, on the game Island Forge you can create an island with shops for people to explore, charge, and accept transactions in Bitcoins, which can then be transfered into your own currency. The weird thing is that Bitcoin appears to have become a haven for investors, with financial journalists reporting a currency spike during the Cypriot financial crisis by users in Spain worried that their banks may have the same tough 40% bank deposit levies imposed on them. This level of interest has sought banking institutions to monitor the movement of Bitcoin, with Reuters reporting that banks, including Morgan Stanley and Goldman Sachs, visiting Bitcoin exchanges as often as thirty times a day, and some bankers investing their own money in Bitcoin too. Such is the level of interest that Forbes has even created a Bitcoin rich list; the only downside of this list is that you are unable to ascertain the person/entity to which the money belongs. With the level of attention Bitcoin is receiving it came as no surprise that Exante, a hedge fund that exclusively invests in Bitcoin, was launched in October 2012. The rise of Bitcoin can only be described as astronomic. In just one year Bitcoin rose ten fold, starting with a price just above zero to, at the time of writing this article, a weighted average of $112.88 on one exchange. This is a marked increased from it’s 1st January 2013 price of $13 to it’s high of $266 on April 10th,when it dropped to $105 before returning to $160 within six hours. It is currently estimated that US$1billion is invested in Bitcoin.

“We believe that Bitcoin represents something fundamental and powerful, an open and distributed Internet peer to peer protocol for transferring purchasing power”

Fred Wilson Mt.

The negatives Not only is Bitcoin causing a stir in the financial industry but it is causing the US Government issues due to numerous claims that the currency is being used to purchase illegal transaction, including drugs via a peer-peer process. The paperless/bank-less method means that there is no paper trail for the authorities to follow, so it is easy to see how these claims have originated. The theory behind the software, which is based on what the techies call an “open source cryptographic protocol”, is not regulated by any central authority which creates further concern regarding the safety of data, its use, where/how the money is stored, and risk. In fact, despite exhaustive research the only authority actively associated with Bitcoin is the Maltese Financial Services Authority, who authorise and regulate the Exante platform. Furthermore, whilst the New Yorker and Fast Company have investigated the identity of Satoshi Nakamoto who is the creator of Bitcoin (the name is believed to be a pseudonym), but both were unable to trace concrete evidence to link him to one person. With this in mind how secure is this new investment platform?

Gox (USD/Liberty Reserve)

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How can you Become a Better Manager S “Practice Golden Rule number 1 of Management in everything you do. Manage others as you would like to be managed”

Brian Tracy

o we all know how difficult it is to get your business up and running; and that sadly difficult can often mean stressful. So, how can you ensure you don’t pass this stress onto your employees and become an ineffective manager, who is disliked by their employees?

2. Understand your employees: In order to understand your team you must get to know them as individuals. You need to identify what makes them tick and what their motivators are. By understanding their motives you can enhance, adjust, and align them with your goals.

Ultimately, we all know that business succeeds through the efforts of employees. Therefore, just because you’re in charge doesn’t mean you have to take the credit for your team’s hard work. In reality your team is responsible for the majority of work undertaken, with you and other managers, leading employees in the right direction, ensuring that work undertaken is compliant, and customers are satisfied. The easiest action that you can take to become a better manager is to acknowledge this, and thank your team when they have done a good job. But what are the other actions can you take to increase staff happiness, engagement, and therefore your bottom line? Below are our 13 top tips to help you become a better manager: 1. Delegate and trust: Think back to when you worked for someone else, I bet you didn’t like it when you were micromanaged?! If you really think about it you probably felt that this was disrespectful as you were doing your job well, and meeting your KPIs, so why should your team feel any different? Perhaps they think you are being disrespectful to them too…

Also, identify who performs to minimum expectations and standards, and who goes above and beyond. Knowing this will enable you reward accordingly, and potentially motivate other employee’s to do more if they can see a positive outcome for their increased efforts.

Once someone is fully trained and proven their capability, stand back and allow them to complete their role, without interference. So what if they have a different approach then you? Their approach may be more efficient. Before making any changes give an honest evaluation to their work-process, and if you find it works just as well, even if it’s different from yours, let it be. Business is about learning; so don’t be afraid to admit when you’re wrong. Remember, constantly correcting your employees undermines their confidence and frustrates them.

June 2013

3. Rely on your staff: Most managers who garner negative feedback do so because they believe that they’re the only person able to perform a certain role/function. Give your staff the space to prove themselves little by little so that you’re able to then increase their responsibilities; enabling you to better manage from above, and add more value to the business. 4. Empower your staff to make decisions: When you empower your employees to make decisions on the spot, not only do decisions get made quicker, but you also improve productivity, customer satisfaction, and free your time to undertake more executive duties. This, in turn, leads to a more positive work environment, and increased revenue. If an employee asks a question, turn this question back to them, and ask what they believe they should do. If you agree, great! If not, explain why you would take a different course of action and encourage a debate. You never know, you may learn something from their approach! 5. Allow staff to work out their own issues: People spend so much time together at work that occasionally conflict arises between staff members.

PEOPLE If someone comes to you to complain, listen; identify whether there is grievance or discipline issue, and if so manage accordingly in line with company policy. Remember to always encourage staff members to talk about the issues with each other before taking any other steps. If the issue is clearly a personality clash let both parties know that they’re not required to be friends, but are required not to cause divisions in the workplace that affects morale and productivity. Reassure them that you know how hard they work, and how you believe that they can work together. Don’t interfere again unless the issue causes further business disruption; for instance, bickering in front of clients, or the negativity causes morale to drop amongst other team members. If you see anything like this, put a stop to it immediately, in line with Ministry of Labour and company guidelines. Where workflow or output is an issue investigate informally to confirm whether the issue needs to be addressed. If it does, refer back to your company’s discipline policy to identify what steps to take next. 6. Communication is key: Communication may be the single most important skill of a manager. After all, your team depends on it, and you need to be able to effectively communicate your vision and expectations. You can’t be a leader if you can’t communicate your vision and expectations and your employees must understand this. 7. Motivate: As a manager your job is to drive business forward towards the common goal. You can’t do this unless your team are behind you. People work better when they’re undertaking tasks that they like and want to do; not tasks that they dislike or have to do. To motivate your team establish what makes them tick (see tip 1) so that you can effectively give people what they want, and you can get what you want. 8. Don’t be an ostrich: If problems arise, deal with them immediately and effectively. You don’t need all the details; just an accurate summary for you to review and then take action from. Be careful how you talk to your staff however, as in this instance they are likely to be anxious about coming forward.

motivation towards the common goal. Think of Bill Gates, Steve Jobs and Richard Branson. You wouldn’t call them managers would you? 10. Flattery gets you everywhere: Tell your employees, as a group and individually, how much you appreciate them. Telling them in front of clients is the ultimate pat on the back. Wherever possible compliment your team, and make them feel valued and appreciated. 11. Give back: If your staff are going the extra mile for you, reward them. This can be as simple as a box of chocolates to say “Thanks”, or allowing them to leave work early. Everyone likes surprises and this just shows you appreciate your staff. 12. Listen: If your staff are seeking you out to discuss their concerns, then they have a right to be listened to. Don’t interrupt. Allow them to finish and try not to form objections to what they are saying before you have fully heard them out. Acknowledge what they’re saying and show that you understand (using their own language is always a good approach here), but if you do disagree with them, explain why. Alternatively, if you would rather have time to consider what they have said and/or ignore it all together, simply say “I appreciate you telling me this…”, so it appears that they have been listened to, and action will be taken. 13. Don’t forget your manners: Say “Thanks”. Even where employees are undertaking tasks that are in their job description say thanks. This will show them that they are integral to the business, and more than just a cog in the wheel. Everyone likes to be appreciated, don’t we? Finally, and most importantly; take a break. You’re less effective as a manager if you’re over-stressed as you will be less tolerant and will snap at staff more. You need a chance to relax and recharge your batteries. This will increase productivity upon your return so you will definitely make up the lost time.

“I think that the best training a top manager can be engaged in is management by example”

Carlos Ghosn

“Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them”

Paul Hawken

The best managers are not managers who apportion blame, but they are those who are focused on identifying and implementing a positive solution should problems occur. However, don’t allow the same mistake to be made twice as staff should learn from mistakes the first time. Once you have dealt with the issue you can then ensure actions are taken so it doesn’t happen again by increasing training, changing processes, reviewing technology, and/or disciplinary action if deserved. 9. Be a ‘Leader’, not a manager: You have a team you believe in and you are constantly motivating them, but something still isn’t right… It’s direction. If you don’t provide direction can’t turn employee’s

June 2013

Protect Yourself and Your

Employee’s Against Blackbeard! W

hen you hear about kidnap and ransom, you probably think of swash-buckling pirates in the Caribbean, sailing on huge sale boat ships and fighting with cannons and swords. Obviously you are not wrong, but more recently pirates are becoming a menace of global proportions. According to CNBC Indonesia saw 43 pirate attacks, Somalia 31 attacks, Nigeria 22, Gulf of Aden 10, India, Bangladesh and the Red Sea 7, the Ivory Coast 6, whilst Peru and the Singapore Straits saw 4.

“Ransom demands for foreign nationals in the Middle East and North Africa have risen as high as $10 million per hostage”

Frances Nobes, Global Risk Analyst, red24

Aside from pirates operating in the high seas, kidnapping is just as rife on land as it is off. Although South America continues to witness the highest number of kidnappings, the Middle East and North Africa have witnessed an increase in kidnappings over the past few years, accounting for approximately 25% of all kidnapping incidents in 2012, compared to only 10% in 2003. In Yemen alone, between January and October 2012, red24 recorded more than 13 kidnapping incidents involving at least 26 foreign nationals. The actual number of kidnappings is likely to be considerably higher when including the abduction of local nationals, and the likely number of unreported incidents. So what does this mean for businesses? With the Arab Spring still very much in people’s mind, the ongoing tensions in Egypt, the unrest in Bahrain, and the civil war which is raging in Syria, have you got a plan in motion that would protect your staff, you and your family, not just financially but also physically? If not, don’t you think it is about time you considered something? Frances Nobes, Global Risk Analyst, red24 explains, “Kidnappings in this region are commonly motivated by both financial and ideological or political factors. Groups, such as Al Qaeda in the Islamic Maghreb (AQIM), the Arabian Peninsula (AQAP),

June 2013

and national political or social organisations such as Tuareg rebel groups, conduct kidnappings in order to raise their profile both nationally and internationally, as well as to obtain funds for their organisations. Gaining visibility and publicity for their cause, be it a political, religious or social issue, allows groups to pursue concessions from the government (e.g. prisoner release, local investment or cultural acknowledgement or rights). Nobes said, “A number of kidnappings which took place in Eastern Libya in the post-Arab Spring environment demonstrate this motive as the abduction of foreign and local nationals were performed in part to raise the demand for an autonomous region in Eastern Libya in order to best harness the benefits of the vast resource wealth in that region for the local population. Furthermore, the recent incident at the In Amenas oil and gas facility in Algeria also demonstrated the growing capabilities and tactics of criminal and militant organisations in order to make political demands and attract global media interest. The ongoing crisis in Syria has also resulted in a significant increase in kidnappings for both political and financial purposes by both the government forces and rebel groups.” A large proportion of kidnappings are financially motivated. Both local and foreign nationals are targeted, although foreign nationals demand a significantly higher ransom demand than local nationals. Nobes reports that, “Ransom demands for foreign nationals in the Middle East and North Africa have risen as high as $10 million per hostage, although the average is considerably less. However, globally, local nationals are more frequently targeted, as only approximately 10% of kidnapping victims are foreign nationals. In addition, the duration of kidnappings in the Middle East and North Africa varies, with many abductions lasting relatively short periods of time; for example, in Egypt a number of

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tourists were detained for a few hours by Bedouin tribesmen, while in other countries such as Yemen, there have been incidents of foreign nationals being held hostage for a year or more, and demanding ransoms of approximately $1 million for their release.” The above clearly shows that the very real risk of kidnappings. Employers have a duty to protect their employee’s from harm, not only in terms of health and safety, but also in the implied terms of employment and labour law. This means that not only will the Company have to pay the ransom for the kidnappers but can also face further civil action from the employee and/or their family.

“Without the correct policy in place, sufficiently covering the risks that are posed, then the company may as well not have a policy at all”

Kit Welsh, Senior Underwriter, Liberty Mutual Insurance Europe (Dubai)

Having a good KRE policy in place can negate this concern. Employee’s who actively work in high risk countries will inevitably look to employers who have good insurance cover that will protect them and look after their family’s future if the worse occurs. Furthermore this illustrates to employees that you care about them, and their security. Thus generating loyalty between both parties. So what exactly can we do about it from a company prospective? Kit Welsh, Senior Underwriter of Liberty Mutual Insurance Europe (Dubai) explains, “Any company seeking to do business in the MENA region needs to undertake a serious review of their enterprise risk profile, especially if capital and manpower are at stake. What many businesses often fail to consider when setting up operations in new regions, like MENA, are the risks employees might encounter, like random crime and the potential for extortion and kidnapping. The latter is a wellentrenched phenomenon in MENA. In fact, one party who doesn’t have any confidence in the local judiciary can take matters into their own hands. Rather than negotiate a settlement, one party might resort to violence, including wrongful detention and/or kidnapping. A Kidnap Ransom Extortion (KRE) policy can bring added resources; trained, experienced consultants, to help mitigate the risks, gain the safe release of employees and therefore protect employees and investments.” What should companies look for when buying KRE insurance? Welsh suggests, “Companies should not be guided solely by the price of the premium. And, neither should a company rely solely on the recommendation of their favourite broker who, after all, is working on a commission.

“When looking for the right KRE product it is imperative that a company assesses accurately the limits and coverage extensions that are needed. Without the correct policy in place, sufficiently covering the risks that are posed, then the company may as well not have a policy at all”, said Welsh. For the policyholder KRE insurance can provide valuable services and guidance in addition to the potential reimbursement for a paid ransom. Specifically, a policy may cover and/or provide: • A crisis response team which provides professional advice • Medical expenses, including psychiatric expenses and cosmetic/plastic surgery after release • Loss due to injury (mutilation, loss of fingers, total disability as a result of a kidnapping, extortion or detention) • Time away from work after release • Travel expenses • The cost of hiring and training new/temporary employees • A reward paid to informants leading to the arrest and conviction of responsible parties Welsh also suggests conducting due diligence on the response consultancies will ensure a company achieves exactly what they wish to from the policy, “For example, not all KRE response consultancies are the same. Some lack infrastructure, such as a 24/7 Crisis Response Centre, they may have inexperienced or untested response consultants and they may lack a global footprint or ability to handle multiple cases at one time. So, a potential buyer of KRE insurance should, meet or speak with the KRE response consultant and discuss all the issues mentioned in depth to avoid making a critical mistake; remember, lives are at risk.” So what exactly does KRE achieve? For this red24 suggested using a real life case study of a U.K.-based telecommunications company who entered into an agreement (contract) with an Iraqi company to reconstruct the telecommunications networks. The contract called for 14 network engineers to be deployed to Baghdad for 16 months to conduct field work and training. For the first three months, everything was routine, however one day a van carrying six company employees was fired upon as the van approached a bridge and underpass. The lead vehicle with an armed escort was destroyed by fire from the bridge. The van transporting the employees was blocked in the underpass by the attackers. All six of the employees survived but were taken as hostages (kidnapped) and the first ransom demand was received. The response consultancy deployed and assisted the company with the negotiations, forming a crisis management team and ransom delivery. The case lasted five weeks. All six were released after a ransom was paid. Ultimately, KRE Insurance will require an outlay; one that may not have budgeted for, but the question remains, can you afford not to have it?!

June 2013

TECH

The Future For Retail Banking

Customer Service? W

hat would you say if an interactive teller machine (ITM) could take care of all your banking needs, advise on mortgages and other loan issues, en-cash cheques, resolve disputes, or even help to open an account? If you’re thinking that this sounds like something of the future you’d be wrong! This is now possible in the UAE with the launch of NCR’s APTRA™ Interactive Teller machine. Following the successful American launch last year NCR Corporation, a global technology company specialising in connection, interaction and transaction, has recently partnered with Emirates NBD to launch their unique teller solution in the Middle East and Africa (MEA). The implementation is expected to go live in next few months. The new video based technology is designed as a retail branch banking solution which allows customers to conduct transactions and 95% of teller banking services via multi-function ATMs, driven by a centrally based teller, in a real-time video/audio interaction, beyond traditional branch hours, and across expanded locations. “The efficiency and security created through the centralisation of tellers enables banks to transform their branch locations into more effective service and sales environments, provide full teller services in areas not traditionally served by branches, giving them direct operational efficiency and productivity returns from day one.” said Habib Hanna, Managing Director, NCR, South Gulf & Pakistan region.

This looks like a win-win for both technology and services, and bank and customer’s alike. From the customer’s perspective it should make life simpler, this new innovation removes the requirement to physically make a special journey to the bank whilst still ensuring that all your needs are met through ITMs. From the

Bank’s viewpoint apart from gaining customer’s loyalty by providing them with convenience and flexibility of banking 24/7, it offers advantages that ultimately translate into more revenue and growth in business given the plethora of challenges banks face in today’s fiercely competitive environment. There are many reasons why banks will implement this instead of traditional ATMs including: • Gaining competitive edge over peers by adopting early, and take advantage of significant costs savings. ITM’s can reduce 41% in teller costs as one ITM replaces the need for three traditional tellers. Furthermore surveys in America have shown a reduction of 50% in transaction handling time when compared to a traditional teller, and teller attrition rates have fallen from 20% to 5% per annum • Delivering an ultimate experience, greater satisfaction, and convenience to customers • Reaching new customers, whilst retaining existing market share • Increasing revenue generation and customer profitability • Encouraging and facilitate migration of transaction away from tellers, enabling efficient staff deployment, and improvement in teller management • Saving the expenses of opening new branches • Reducing clutter in branches, improve branch productivity, and increased sales opportunities • Reaching remote places where branching and staffing is difficult • Allowing tasting of neighbouring markets before opening branch • Opening opportunity for cross selling with noncustomers, ensure sending targeted sales and service messages in a personal way

“Be everywhere, do everything, and never fail to astonish the customer”

Macy’s Motto

Ultimately it will be the consumers who will determine the success of this new innovation; you decide if this is the end of traditional ATMs and teller service…

June 2013

Product Pirates of The st 21 Century W

ould you buy an identical Louis Vuitton or Hermes bag at a very low price knowing that it’s a copy and not an original? Or a copy Rolex watch at one tenth of the cost perhaps? What about buying a copy of a film before it’s released…? Really, shouldn’t the questions start “Who hasn’t…”?

Counterfeiting is the infringement of proprietary rights on patents, designs, trademarks, or geographical indications with the intent of imitating the original product with copies resembling the design of the product. It causes billions in business loss, faith in brand names and values.

Consumer’s lack of consciousness or knowledge, eagerness to buy counterfeit products to save money, along with a vibrant and well-organised counterfeit market has led to high-end brand sales suffering globally. For example, in Mexico, Cartier fought through the courts the piracy of its own brand. Cartier is not alone. Benetton, Levi Strauss & Co and Lacoste have all been victims of counterfeiting where copies of products have been produced to a quality level significantly below their current standards.

The music industry claims that brand piracy causes a loss of US$4.6 Billion in market share alone, and an average US$12.5 billion in economic losses every year. It also states that 7 out of 10 CD’s sold around the world are pirated, and that an estimated 95% of music downloaded online is illegal. India estimates that it lost US$1.2 billion in 2011 in the cable and satellite business with Asia Pacific loosing US$2.1 billion.

Even in the UAE, where illegal activities are not taken kindly, piracy is an everyday menace. Tourists have easy access to the ‘genuine fake’ in parts of Dubai, where you can buy any number of counterfeit goods from all conceivable high end brands, from Swiss watches, to shoes, bags, smart phones, sporting goods. Despite the Department of Economic Development’s (DED) effort as one of the most active law enforcing agents, these markets are thriving. Dubai is not alone; the counterfeit goods market is rampant in almost every industry, and country. As consumers we are aware of the terms ‘product piracy, counterfeit or pirated products’, and barring few, most of us turn a deaf ear and blind eye to this blatant crime, but do we actually know what this means in the long term? Product/brand piracy Product piracy refers to when a new product is named very similar to a well-known brand so that consumers may mistake it for the well-known brand name, and purchase it in mistake. Alternatively,

June 2013

“True glory takes root, and even spreads; all false pretences, like flowers, fall to the ground; nor can any counterfeit last long”

Marcus Tullius Cicero

According to BSAs (Business Software Alliance) global software piracy report, software piracy cost the technology industry more than US$50 billion in 2010 with Asia accounting for the largest share of losses. Some of the figures used with regards to pirated products are alarming. Various reports suggest that more than 43% of software used in computers worldwide in 2009 was pirated. Despite various measures taken by companies, and worldwide governments on anti piracy and counterfeiting, piracy is taking place in virtually all economies and is growing in scope and magnitude. The Organisation of Economic Co-operation and Development (OECD) reported that pirated goods had been intercepted from close to 150 source economies, including 27 of the OECD’s 30 member countries. Covering the top 20 source economies, Asia emerges as the largest source for counterfeit and pirated products, with China as the single largest source economy, (see figure 1). Impacts and consequences The social, economic and financial losses due to

TECH

P.O. Box 487177, Dubai, UAE, Tel: +971 50 466 1368, Email: info@ih-c.com June 2013

counterfeiting and piracy are enormous. It causes: • Loss of billions of dollars of revenue for the original manufacturers from loss of sales • Higher expenses caused by combating counterfeiting/piracy • Damaged reputations of authentic products, brands and their manufacturers • Creates a barrier to the entry of trademark owners to those markets where brands are pirated • It closes off competition as competitors first get attracted by the high price margin being enjoyed by the original, and then have to wage a price war against low price counterfeiters • It encourages corruption, development of criminal networks, criminal financial gain, and effects safety • It can affect trade and foreign direct investment as people view the country/economy as risky • And harm economic growth via tax evasion Government action in UAE With the looming threat of enormous business loss and considerable social consequences, the UAE government is cracking down on counterfeiting. In June 2011 DED inspectors fined 113 stores at DragonMart over AED 100,000 for violations of anticounterfeiting laws. One raid against vendors in the shopping mall resulted in 2,500 fake items being seized. French Designer, Christian Louboutin has helped DED to unearth fake products of his famous brand ‘red sole shoes’, and thousands of pairs were seized from the market with the help of Al Tamini and Company, a prominent law firm in Dubai. In another raid, DED uncovered 26,000 duplicates of popular electronic brands including LG, Panasonic, Sony, Sharp and Hitachi at a warehouse in the Al Aweer district. The 120-tonne haul seized by authorities included 5,300 TV sets, 7,000 DVD players and other devices including stereo sets, vacuum cleaners and pressing irons. Very recently, Brother International (Gulf) FZE along with authorities from Dubai and Ajman seized from a warehouse in Ajman more than 6,200 counterfeit ‘Brother’ toner cartridges and other consumables. All of which can be lauded as a victory in the campaign against the proliferation of counterfeit products in the UAE. Initiatives by different concerned parties Apart from raid and seizures, numerous initiatives have been implemented around the world by both government and industry. Governments have been working with each other through trade agreements and multilateral organisations to strengthen Intellectual Property (IP) protection. Intergovernmental initiatives have included the establishment of a comprehensive multilateral legal framework within the World Trade Organisation (WTO), as well as co-operation in a number of specific fields. With regards to enforcement, the World Intellectual Property Organisation (WIPO), Interpol and the World Customs Organisation have all developed specific programmes to improve enforcement of IP. In the

June 2013

area of health, the World Health Organisation (WHO) is supporting specific initiatives to undermine the counterfeiting of medicines.

“Real happiness is cheap enough, yet how dearly we pay for its counterfeit?”

Hosea Ballou

“It’s clear that there are more instances of counterfeiting and consumers have to be cautious. The primary issue, of course, is safety”

Frank Monteleone

Industry efforts to combat counterfeiting and piracy include: • Supporting research and analysis of issues related to counterfeiting and piracy • Promoting awareness • Pursuing IP violators in courts • Supporting government efforts • Taking action to make it harder for pirates and counterfeiters to copy and market their products (i.e. through technology, etc.) Further efforts are also occurring at company and industry level. The Business Alliance to Stop Counterfeiting and Piracy, launched in early 2005 under the auspices of the International Chamber of Commerce, is one of the more recent and comprehensive global initiatives launched by industry. It seeks to bring firms together to pursue a more unified approach to combating counterfeiting and piracy. Despite efforts by all stakeholders there is no tangible solution to stop piracy and counterfeiting totally. That does not mean that we should stop trying. So, if you’re in business, take all precautions to protect your brand, and take an ethical stance to ensure you do not breach copyright. Think how you would feel if another company took all our ideas/products and simply copied them and sold them at half the price? And, if you are a consumer, why not be a little more conscious and sensible? Buying pirated or counterfeit goods could mean a sizeable difference to your future income.

TECH

Panasonic Printer Review

KX – MB1530 and KX – MB1520

e at Business Insight Magazine seem to be on a constant mission in our office… to replace ink cartridges in our printers or ordering parts. Having had numerous printers break down on us in some shape or form over the past year, we scoured the market to find the one that SMEs should be considering for their offices. One name kept coming up time and time again. Panasonic. So we called them up and asked if we could review their printers. The specification we gave them was that they have to be suitable predominantly for the SME market. The following morning Panasonic promptly delivered two very compact printers from their KX-MB1500 series; The MB1530 and the MB1520; and we went to play.

For many SMEs space is of a premium, and these printers undoubtedly take this into account. At 380mm (MB1520) and 391mm (MB1530) wide, they are a good size to be able to sit on the end of a desk or on a shelf. In fact the design is worth talking about in greater detail. At the back, the plug sits flush against the machine, meaning that this can be pushed right up against a wall without losing further space. Long gone is the need to physically turn the printer around for replacing ink cartridges and dislodging trapped paper. All access is gained from the front, so once these printers are in place, they stay in place. Also, the printed pages on the printer are held inside of the machine at the top. Again, a great space saving idea, as this means you can use the area directly in front of the printer also.

Firstly, the difference between the two is that the MB1520 doesn’t have a feeder and is not wireless. Apart from that, the two are virtually exactly the same.

Both of the machines scan and fax, although as we said before the MB1520 is a flatbed scanner, which can scan and fax four pages per second.

The print quality is reasonable. Certainly for printing in word, the quality is sufficient. Printing PDFs however, were very cumbersome as like all printers these struggled to receive the data, although it did seem to take longer than other makes. But most importantly the reason as to why we wanted to check out our options… The ink cartridge is simple to insert and replace (at the front of the machine) and vitally, it is guaranteed to print 2500 sheets and costs AED 279 to replace; making each print cost 8.9 fils for a print. The MB1520 should retail around AED 899 and the MB1530 around AED 1099. Out of these however, purely due to the requirement of USB, we do think that the MB1530 is more suitable to the needs of a SME as wireless connectivity means that the printer can be located anywhere and more than one person is able to print to the printer. As a whole however, we really didn’t want to give them back…

KX-MB1520 Size W: 380 x D: 360 x H: 203 mm Laser Print/Copy 19ppm/18cpm Super G3 Fax (33.6 kbps) Digital Duplex Speakerphone All-In-One Toner Cartridge Flatbed Scanner USB

KX-MB1530 Size W: 391 x D: 360 x H: 242 mm Laser Print/Copy 19ppm/18cpm Super G3 Fax (33.6 kbps) Digital Duplex Speakerphone All-In-One Toner Cartridge Automatic Document Feeder (15-sheet) Wireless

June 2013

Getting Your Information Technology

Correct, Right From The Start I

t doesn’t matter why you started your business or how good your idea is because if you don’t get the technology right, you’re simply not going to succeed. Realistically, most new businesses don’t have bottomless pockets, so it’s absolutely critical to get it right from the very beginning. So how do you start? You know you need IT but what type and service? How does this relate to your office set up? Do you want to buy and maintain your own servers? And how about a wireless network? You know you probably need one, but what are the challenges of setting one up for a whole company, where it actually might matter a great deal if your neighbours can piggyback on your bandwidth, or steal your intellectual property if you don’t get it right. The sheer volume of things that you need to know and problems you need to solve before you can even get started can be crippling... But it doesn’t need to be. The answers all depend on the type of business you’re running and your business goals. We spoke with Ralph and Alastair from IT-Serve, a complete IT service and support provider based in Dubai that offers everything from cabling infrastructure to a managed helpdesk, on how you can make the most of your IT from the start, design a system that will enable to you to grow in line with your business plan, and what their thoughts on why projects always overrun on time and costs and here is what they had to say. “In a typical office fit out in Dubai, the contract set up process is where we feel the flaw actually lies. A company typically engages a designer to design the aesthetic look of the office and then sometimes, they will have a Mechanical Electrical Programming (MEP) design company have the functional mechanics of that office designed. Quite often, these 2 activities will fall under an MEP contractor that has a design

June 2013

“Has ICT and Audio Visual (AV) detailed design been taken into consideration? In many cases, the client’s IT team has not even been engaged to find out what their requirements are (resulting in) projects overrunning on budget and time”

arm and they do a complete design and build proposal. Whichever route it follows, nowhere in this process has ICT and Audio Visual (AV) detailed design been taken into consideration? In many cases, the client’s IT team has not even been engaged to find out what their requirements are. This results in lots of unknown issues popping up, of which there are many examples, to many to mention here, however, they all have the same effect… they result in projects overrunning on budget and time, which is not good for anyone” said Ralph. So how does IT-Serve approach a turnkey ICT and AV project? Alastair suggests the following: Infrastructure 1. Structured Cabling: Will cabling be run overhead or in the floor? How many cables will be required per seat/location? Does some or all of the cabling need to be shielded to be protected from the environment e.g. electromagnetic fields or outdoor? Does the client require a particular brand, so often this does not get considered? These questions all have a direct bearing on costs, as if the premises has no raised floors, the floor will need to be cut and re-leveled once the cabling has been laid as well as determining what type of cables will be required. 2. Data Center/Server room: This is the nerve centre of your IT operation and requires full consideration. There are many factors to consider, but here are a couple of examples: • Will the data center/server room be on premises or in another specified location? Many buildings in Dubai now offer datacenters in their building, which will allow the client to minimise ICT floor space in the tenanted area and maximize that space for productive staff • What tier level will the data center adhere to? This has a bearing on the load that may be required for UPS and power distribution, which has a direct cost on MEP fit out

TECH • How much power will the ICT equipment require? • How much cooling will the ICT room require? 3. AV: The AV solutions that you find in an office have a very big impact on the aesthetic appeal of the finished premises. If AV has not been properly design, it can result in many issues, for example, illfitting TV’s, projectors hanging off the ceiling in your beautifully paneled boardroom… and let’s face it, they are not the prettiest things on the planet. Alistair recommends asking questions to try to mitigate these risks including: • Will TV’s or projectors be required in the boardrooms/meeting rooms? • Will TV’s be required anywhere else in the premises for any other purpose e.g advertising or monitoring? • Will independent speakers be required in the boardrooms/ meetings rooms or anywhere else on the premises? • Will there be a requirement in the boardrooms/ meeting rooms for a microphone system? • Will video conferencing be required? • Will control of lighting, blinds or peripherals be required in the boardrooms/meeting rooms or anywhere else on the premises? • Will any systems be used to control the use of boardrooms/meeting rooms as this has an impact on containment and the location of data cabling? 4. Access Control and Surveillance: Security requirements are mandatory in most of the buildings in Dubai today. A simple lock and key is not good enough, it needs to be connected to the building security systems. This area impacts on many aspects of your systems though. Some points to consider are: • Will there be a need for access control to any doors? This need may not be client specified, it may be a building requirement • Will access be controlled both inbound and outbound of the premises? (This may be required for applications like time and attendance and has an impact on structured cabling and containment) • Will there be a need for surveillance? • Should the surveillance system be IP based or digital? • Will the devices run on Power over Ethernet or will they require an external power source? • Will the access control and surveillance system be centralised or stand alone?

requirements of this equipment? • Which service providers can offer services in a given area?

“You must ensure that your MEP understands your (telephony) service. For example, are you using your own equipment or a service provider based system? And, will it therefore be digital or IP based?”

Telephony “Telephony is a sector that has changed quite a lot over the years. People have the choice of running IP based systems, digital systems or even renting them from the Service Provider. Regardless, it impacts significantly on cabling, switch and power requirements. You must ensure that your MEP understand your service and what you exactly you require from it. For example, Are you using your own equipment or a service provider based system? And, will it therefore be digital or IP based? Or, what is the thermal output (BTU) and power requirement of the PABX?” said Alistair. Central network components/ Server infrastructure Switches and routers glue the corporate network together and also have an impact on the office build. To identify what is required your MEP consultant has to fully understand what it is you have, you want to achieve and the full design of this. Ralph explains, “You need to furnish him with the components and the BTU and power requirement for the equiptment as well as the size of the device.” It is fairly clear to see that ICT and AV have a very big impact on how you design an office. We haven’t really delved into any of the detail here, like providing wireless infrastructure or printing requirements and the like, however, you should be able to get the gist of the message here….ICT and AV is what makes the modern office work today, it should be the first consideration when building an office, not an afterthought. If you need help with your IT, whether at fit out stage or development of an IT system call IT service on +971 4 373 7988 or email Alastair Seivewright on alastair@ it-serve.com. For more information, please refer to www.it-serve.com.

Service provider (ISPs) requirements Dubai has some unique quirks when it comes to the ISPs. They do not offer services all over Dubai and do not always present those services the same way in all locations. It also takes much longer than most international people expect to get services provisioned. This often results in delays and incorrectly budgeted costs for ISP services. Ralph says it is vital to find out: • Does the service provider require the employer to provide backbone cabling to the premises? • What equipment, if any, will be supplied, what are the thermal outputs (BTU), and power

June 2013

Are You Fit for Business? B

eing unfit, overweight or not taking an active role in your overall wellbeing can have a surprisingly detrimental impact on the success of running your business. Being unfit or overweight communicates countless overtones, not to mention the fact that your employees lead by your design. You need them to be fit and healthy to ensure that they are able to work at full pelt for your business. You may be wondering why this is so important. You probably are looking at yourself thinking, “I haven’t had a day off sick in years.” Well that is very admirable, but can you honestly say you feel fit and healthy 100% of the time? Can you walk up a flight of stairs without losing breath? Does your wife/husband nag you about your expanding waistband and the fact that you are spending all hours sat behind a desk, rather than being out and about mobile? If they do, it is because they are seeing a change in you; one that you may not wish to acknowledge yourself, but one that is a concern to your loved ones. Leading a sedentary lifestyle is not just the cause of a heart attack or diabetes, but it will also stop you from being as productive as you can be, which will eventually hit your bank balance. But let’s be honest, your time is precious, right? You have no idea when you can fit anything else to lead to your being healthier, right? Wrong… and we show you why. Bad influence on others This doesn’t just affect you. If you are following bad habits, you will probably be cultivating the same bad habits within your team and colleagues. It may sound silly, but by ensuring that employees take their entitled breaks, you will see an impact on your business. In the office environment it is all too easy to follow the example of your peers and work through your break, but if senior staff in the business are encouraging and taking regular breaks themselves, you are more likely to break this trend.

June 2013

BUPA found that 48% of employees felt that their production levels plummet in the afternoon

Where possible, identify staff who regularly work long hours without a break and discuss with them why they feel unable to take breaks. Suggest lunchtime walk areas or places of interest near the office when the weather is not too hot. Your team are your greatest asset so you should strive to get a positive return on your investment by investing in your, and in turn their, fitness and weight management. Positive and longlasting changes will result in: • Reduced absenteeism • Improved productivity and morale • Reduced employee turnover Also, don’t forget that unfit or overweight people generally display more stress, which in turn, discourages groups including you in their daily activities, be it closing that deal, or including you on an important office matter. Why is this problem so prevalent in Dubai? Although working in Dubai has its many advantages, being able to successfully marry work, fitness and wellbeing schedules is no easy task. People in Dubai work hard and play hard, making it difficult to find the time. Add the desert climate, which sees the temperature soaring for many months of the year, and time spent outdoors becomes a task in itself. The layout of the city does not help either as people have no choice but to rely on cars to get from A to B. Another major factor to consider is the role that eating out plays in the equation. Entertaining is not an optional extra. For many, a deal is made over decadent and calorie-laden buffets.

WELLBEING

Powered exclusively by

June 2013

business and for you, as it clears your mind, enabling you to focus on the route cause of the problem and deal with it quickly and efficiently. Yoga In our next issue, we explain that yoga this not only increases your heart rate to get you fit quickly, tones your body quickly, but that it also enables you to go into a meditative state which clears your head, and helps you to see things more clearly. We will look at this in more detail in our next issue. Get active! Whilst you may feel you don’t have time to fit in a training programme, help is at hand with a personal training package. For example, Ignite Fitness & Wellness can come to you any time that suits and help you every step of the way. They will give you a programme to follow when travelling on business, and can provide you with a pedometer to count your steps every day. You can then input your daily step count on your profile on our website to facilitate monitoring your progress.

What can you do about it? Help is at hand. Provided you have the willpower and determination to make the most of your company, and your own wellbeing, there are a number of ways you can improve your fitness, health and ultimately your personal wealth! Do you take a lunch break? I would be willing to be you don’t! The pressure of running your own business or being a senior manager often means that you work all the hours that are available to you, especially in the beginning, and taking a lunch breaks seem to be happen less and less but actually not taking an hour at lunch can mean people are far less productive in the afternoons. As your business gets more successful, your lunch breaks are long, expensive, and maybe even fine dining whilst entertaining clients. Health insurer BUPA found that just 30% of UK workers take their full lunch hour, with employees putting this down to increased work levels. Sadly however, the study found that 48% of those questioned felt that their productivity levels plummet in the afternoon. This is compounded, as those who eat their food at their desks tend to snack on high sugar items also to build up energy levels as a way of avoiding this dip, which will obviously go straight to the waste-band. The dip however appears to be unavoidable as it is estimated that on average, there is a loss of 40 minutes a day due to low productivity. Just imagine what you could achieve in this time. One face-toface meeting and possibly striking that next deal… Take a lunch break! Don’t sweat the small stuff: Meditate Manage your stress levels and try to take some time out each day to meditate. Being unfit or overweight costs a business so taking charge is a win-win situation; you owe it to yourself and the company you have worked so hard to build. To those who regularly read Business Insight Magazine, in issue 3 we explained why meditation is actually very good for

June 2013

There is a loss of 40 minutes a day due to low productivity. Just imagine what you could achieve in this time

Alternatively, you could sign up for an Ignite bootcamp or box-fit programme. If you would rather not train with a class, head down to your local park after work and have a brisk walk. It will do wonders for your mental and physical wellbeing and enable you to wind down after a busy day at the office. You are what you eat so take time to plan your meals and eat a well-rounded diet. Balance, variety and moderation are three key words to adhere to at all times. Choose foods that are high in fiber, low in fat and include plenty of fruits and vegetables. If you think you might prefer some one-to-one assistance Ignite are also able to offer nutritional advice. Ultimately though, it is down to you. In the next issue, we look at why investing in a bespoke corporate programme can pay dividends to your business.

THE HUB

How to Set Effective KPIs

By Helen Gaskell

n last month’s issue, we looked at why Key Performance Indicators (KPIs) are so important to business. We found that KPIs reveal how well employees perform in their jobs, and the saying “what gets measured, gets done” is certainly true. KPIs are more than this though. Implementing KPIs ensure that processes can be amended so you can get the best out of your business, and enable you to spot problem areas. So why don’t you have them? The main answer to this question tends to be that people just don’t know how to set them. There are two ways to look at KPIs. Firstly look at the attributes of the individual, and what motivates the individual to achieve the objectives set; or secondly look at the “journey”. If you want to make sales then you have to make calls; so the question is, how many and to whom? What is the customer base, how many people should you be calling? Who are the decision makers, the influencers, the gatekeepers? Once you know this information then you need to know how to get through the gatekeeper to then get through to the influencer, and then to finally get to the decision maker? The KPI has to be relevant to the journey. It could be as simple as finding ten gatekeepers and build a rapport with them rather than just getting through to the decision maker. KPIs also have to be relative to the employee and their work. Everyone works differently, so in order to get the most effective KPIs you need to ensure that the KPIs are SMART, and challenge the employee to succeed. For effective KPIs you have to review, and measure the tasks/achievements in relation to the expected outcome. For example, in recruitment a consultant may have a KPI of sourcing 10 jobs per month. In order to add value and motivate the recruiter you should not just measure the actual outcome, but also the process of achievement so that you can motivate the employee to achieve this KPI,

The KPIs need to provide a framework for both change management and performance management, and therefore overall development of the business

To get effective KPIs you have to look at everything relative to what the outcome wants to be and it has to be benchmarked against the outcome

identify any areas of improvement, and identify whether the KPI is realistic or not. In this instance if the recruiter has ten jobs to recruit for per month, with a 30% CV to interview success rate, and a 33% success ratio at interview stage, then the recruiter will need to forward thirty CVs to secure three interviews per job, and subsequently complete the task. But is this realistic? This means identifying 300 candidates. Depending on the actual vacancy and client, you may need to review the selection process and forward less CVs of a higher quality, and consequently improve the conversation rate. KPIs must be relevant to the outcome you want to achieve, measured daily, monthly or annually. They don’t have to be linked, but don’t bother measuring actions/tasks if you will not do anything with that information. KPIs are often linked to service levels, choose the service level you are trying to achieve and then set the KPI around it. It is important not to have standard KPIs because then these become standard and the norm and therefore not a performance indicator. Types of KPIs • Financial and non-financial measures • Short-term and long-term indicators • Performance drivers (future-oriented) and outcomes (past-oriented) • Quantitative and qualitative measures • ‘Lead’ and ‘lag’ indicators: Leading indicators measure activities that have a significant effect on future performance, whereas lagging indicators, such as most financial KPIs, measure the output of past activity Financial, quantitative and ‘lag’ measurements are the traditional, most widely used measurements. While indicating current and past performance, they are not necessarily good at predicting what

June 2013

will happen in the future, and on their own may lead to inappropriate, short-term behaviour being rewarded. They still have a role to play, and their ‘actual result’ status gives them credibility with many people, but on their own they will not provide an accurate overall picture. Leading indicators are powerful measures to include in a performance report but are sometimes difficult to define. They measure key drivers of business value, and are indications of future outcomes. To do this, leading indicators either measure activity in its current state (i.e., number of sales meetings today) or in a future state (i.e., number of sales meetings scheduled for the next two weeks), this one being more powerful because it gives individuals and their managers more time to influence the outcome. Professors Roberts S Kaplan and David P Norton, argue that the range of indicators should include examples from each of the following: • Financial measures: including profitability, return on investment, revenue growth and mix, cost control, productivity, asset use, investment strategy • Customer perceptions: these include market share, customer acquisition and retention, customer satisfaction • Internal business processes: by this we mean such as customer service, innovation, operational efficiency, quality, cycles, resource consumption • Innovation & learning: these are the measures that allow the organisation to develop, change, improve, respond to changing circumstances, and remain sustainable. The main categories this could apply to are the employee capabilities and skills, retention, productivity, information systems capability (equiptment procurement), knowledge management, employee empowerment, motivation and values alignment KPIs need to provide a framework for both change management and performance management, and therefore overall development of the business. Strategic KPIs differ from traditional KPIs in the following ways: • Customer-driven rather than financially driven • More future-oriented • Scope for flexibility • Linkages or ‘value chains’ can be demonstrated • Provision for feedback loops, to make the process ongoing • Several factors can be evaluated together instead of in isolation (such as cost, quantity, quality and delivery) The KPI has to clearly distinguish between effective performance and ineffective performance. Employees must clearly understand the KPIs, their value to the business and their role specifically, and how they will be measured. Therefore discussing KPIs direct with employees is more likely to add validity, and ensure the effectiveness of the KPI. KPIs should have an appropriate time frame for applicability and subsequent review, and there needs to be alignment between individual and organisational

June 2013

KPIs. The process should be continuous, with ongoing feedback and learning, and all areas of the business must be accountable. Developing and setting effective KPIs can be a lot of hard work to get it right. It requires longterm commitment and resources. Don’t treat it as another fad or quick fix. Characteristics of Effective KPIS Wayne Eckerson Founder and Principal Consultant for BI Leader Consulting)

Aligned KPIs are always aligned with corporate strategy and objectives Owned Every KPI is ‘owned’ by an individual or group on the business side who is accountable for its outcome. Predictive KPIs measure drivers of business value. Thus, they are leading indicators of performance desired by the organisation Actionable KPIs are populated with timely, actionable data so users can intervene to improve performance before it’s too late. Few in number KPIs should focus users on a few high-value tasks, not scatter their attention and energy on too many things. Easy to understand KPIs should be straightforward and easy to understand, not based on complex indexes that users do not know how to influence directly Balanced and Linked KPIs should balance and reinforce each other, not undermine each other and sub optimise processes Trigger Changes The act of measuring a KPI should trigger a chain reaction of positive changes in the organisation, especially when the CEO monitors it. Standardised KPIs are based on standard definitions, rules and calculations so they can be integrated across dashboards throughout the organisation Context Driven KPIs put performance in context by applying targets and thresholds to performance so users can gauge their progress over time. Reinforced with incentives Organisations can magnify the impact of KPIs by attaching compensation or incentives to them. However, they should do this cautiously, applying incentives only to well understood and stable KPIs. Relevant KPIs gradually lose their impact over time, so they must be periodically reviews and refreshed.

THE HUB

Delegation – Empowering Employees By Ceri McVittie, MCIPD

elegation is a powerful leadership tool… We all know this, but do we actually effectively delegate? There is an art to delegation as it isn’t just about ensuring that as a leader you are not bogged down in work, or alienating your team by micro-managing your staff. Studies have now shown that effective delegation of tasks and responsibilities can have long-term benefits for developing talent. Giving staff responsibility, accountability and the ability to make their own decisions and learn from their mistakes gives employees the opportunity to feel empowered and develop to their full potential. If you consider any work place environment, you can see that empowering your teams to make their own decisions is a powerful tool in driving your business forward. So, just what is it about delegation that gets your staff working harder and more efficiently, therefore increasing the bottom line of your company? The bullet points below explain all: • Provides opportunities for growth and development • Empowers staff by letting them feel and be responsible for the work, which increases morale and self-confidence • Gives yourself more time to concentrate on staff and other management issues • Enhances creativity and skills • Increases staff involvement and commitment to the job • Shows trust and confidence in their abilities and judgment • Encourages employees to develop varied skills and expand on the knowledge they already have • Provides broader experiences, which allow employees to look beyond their own jobs and responsibilities and see the big picture • Motivates employees by providing them with challenges and helping them achieve career goals

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out”

Ronald Regan

Benefits for you So clearly there are many benefits for your staff providing should you, as an employer, pass more work their way, but the problems arise when you believe that it will take you more time to explain and train a member of staff to complete a job, than it would for you to action it yourself. This is a very common misconception. Sadly, this may be the case, but over the longer-term only you can benefit. You will not only develop the skills and abilities of others, but you will also be able to save time, achieve more, increase your value, and develop your own potential: 1. Save time and money: As a leader, you must take time to think about goals, not just activities. It is unwise to spend your time doing tasks that your team members are capable of completing themselves. This will also save you money. The task in question may cost AED1,000 if you do it, but only AED30 if your employee does it. That is quite a saving! 2. Achieve more: By not delegating, you place a heavy burden on yourself. Delegating work will relieve some of your stress and enable you to focus properly; on driving the business forward. 3. Increase your value: Delegating can help enhance your credibility as a leader. By allowing your teammates new ways to show their responsibility, you get their respect and loyalty. 4. Effective delegation is key: Failure to delegate effectively can result in destroying an employee’s confidence and alienating them. The important thing to remember when delegating is that you can delegate responsibility but not accountability; this ultimately rests with you if you are the one who delegated the task. Not all tasks can or should be delegated and determining what tasks can be delegated and to whom requires thought and planning.

June 2013

will see that the job can be completed successfully, without you, and subsequently you will gain confidence and trust in the process and the capabilities of those that you are delegating to. Once you have this confidence you can focus on delegating more. You will soon reap the benefits as your employees develop the skills to perform tasks well and you can delegate more complex tasks; they may deliver even better results than you! Effective delegation also means avoiding a number of common pitfalls and mistakes. It is important to recognise what these are so you can ensure you take the time to mitigate against them: 1. Do they understand the task and it’s value? Clearly communicate the goals of the work, why they are doing it, what it achieves and it’s importance. Planning To get the best results, planning is essential. You should sit down with your delegate and plan out the delegation together. That way questions will be answered, clear expectations established and assumptions surfaced and explored. The planning stage should include: • Discussions around specific and detailed task description • Benefits expected by you • Training requirements for completing the task • Methods that will be used to track progress • Progress and reporting schedule • Authority and responsibility assigned • Trigger boundaries and how to get your reinvolvement if or when necessary Learn to let go Many leaders struggle with letting go and often have the view, “If I want something done right, I have to do it myself.” Letting go is one of the most important skills to develop when delegating. The hesitancy to delegate often comes at the beginning when you are still developing the trust amongst those whom you delegate to. To overcome this, you should remind yourself at the beginning that sometimes, “good enough is good enough.” Be patient, step back and avoid interfering in the process and progress of the delegation. It is important to show those that you have delegated to, that you value and trust them. As a leader one of your responsibilities is the development of others and delegation is a critical part of showing that you believe in both your employees current and potential capabilities. Not letting go means you deprive your employees of a learning opportunity, the chance to grow and build self-confidence. It sends the message that you feel they are not competent or that you do not trust them. Your employees may not do things exactly the way that you would, and your challenge is to let go and learn to be okay with that. It is important to focus on the end result and not be too concerned about how the job gets done, offer your support and guidance but give responsibility to the employee. Start by delegating a single, low priority task. You

June 2013

2. Be clear: Communicate what is expected/when. 3. Are you delegating to the right person? Don’t give the job to someone who you know is incapable.

“The best executive is the one who has sense enough to pick good men to do what he wants done, and selfrestraint enough to keep from meddling with them while they do it”

Theodore Roosevelt

4. Handover responsibility correctly: The individual should be accountable only for the things that are in their immediate control. A good management quote for this is “You can abdicate responsibility but not accountability when delegating.” 5. Don’t sweat the detail: If it all tallies, stop asking the questions! 6. Give them credit: Why take the credit yourself if you are not doing the work?! Hand over the praise. It is important to remember that successful delegation is one of the hallmarks of a good leader. Delegating tasks and responsibilities is something that you will be more effective at the more your practice. You will soon free yourself up to focus on other more important tasks and you will soon see your staff being more productive and enjoying the challenges of the extra responsibility. If you learn to be strong enough to let go and empower others to do things that you do not need to do on your own, avoid the pitfalls and common mistakes and learn to delegate correctly you will ensure success!

THE HUB

Aerohive

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June 2013

How To Increase Your

PR Without Spending any Money By Helen Gaskell

them you are available, you need to make yourself available and be able to drop everything when they call.

e all know just how important public relations (PR) is… after all, it is our perception in the eyes of the public that ensures that they return to us time and time again, driving our profit margins ever higher. For an SME however, with each fil accounted for, this often sounds like an expensive process, so how can you do this without spending money? In this article, we seek answer to these questions and more. It is not as difficult as you may think. Yes, hiring someone is the easy route, but if money is tight, you have no option but to invest the time and effort yourself. Initially though, you have to understand what PR is as it differs from sales and marketing. S.H. Simmons sums it up perfectly, “For a young man to tell his date how handsome, smart and successful he is; that’s advertising. For him to tell his date she’s intelligent, looks lovely, and is a great conversationalist, he’s saying the right things to the right person and that’s marketing. If someone else tells the young woman how handsome, smart and successful her date is; that’s PR.” So where do you start? Media To start with think about what local publications, trade magazines, anything that covers the market of your business or you could somehow relate to. Think about all local media outlets, radio stations, television news and make sure that you are watching, reading, listening to them. You need to listen out for anything that is relevant to you and then offer yourself for comment; to be the expert of the article. For this you need to be available for when a journalist is ready to speak to you. When you do, offer your services, say you have a comment and you’re an expert in whatever field. Yes, they may keep you holding and it may be inconvenient, but think of the free publicity you will receive. Once you have told

June 2013

You may feel you are jumping through hoops, but if you have a good relationship with the local media, you will find that they respond accordingly. Eventually, you could well be the first person that they come to. This means that you will be able to garner a lot of free advertising space that ordinarily you would have to pay for.

“PR is a mix of journalism, psychology, and lawyering; it’s an ever-changing and always interesting landscape”

Ronn Torossian

In order to do this, start by noting names and any email addresses that you can find in magazines, newspapers and online. Also, if there is someone specific that you wish to approach, tools such as Linkedin make people easy to find. You just need to introduce yourself, tell them what you do and what you could comment on, where you would be happy to offer your knowledge and expertise. Don’t be afraid, they will be glad of your offer to contribute; it saves them time trying to find you! Talk shows Calling in on a talk show is another way of getting yourself noticed if you have something interesting to say; it’s just about getting your name out there for knowing what you’re talking about. People do remember these things and, apart from the cost of a phone call, calling in is free. Keep an eye on the calendar By this we mean, identify important dates or events that could give journalists a news angle. It could be a date familiar to everyone or it could be something relevant to your business. If there is nothing already going on that you can comment on or relate to your business then you need to think of your own story. What sets you apart from your competitors? Is there anything personal that you could contribute to a story for how it relates to the business?

THE HUB a good chance of being published and sometimes you’ll get published with editorial comments from the Editor. The letter to the Editor is a great place to respond to editorial comments as well as to further state a position and many people read these. It is also another way to become friends with the Editor. If they see you enough, and match you with a newsworthy press release, then your chances of getting a press release in print increases. Other alternatives are: 1. Newsletters: If it’s in someone’s inbox, it may well be read. Make sure it’s content is valuable to your target market, your company and services. Advertising to current customers is proven to drive up business. Send newsletters via email to your email database, but enable subscribers to opt-out if they wish; otherwise the negativity could spread causing clients to go elsewhere. A holiday park that I worked at in the Lake District in the UK is famous it’s amazing display of daffodils in March, but a few years ago, thanks to climate change it meant that the daffodils had already flowered and wilted earlier than usual, and before the tourists arrived for their Easter holidays. This had been noticed by park staff and they released a press release saying that because of climate change they had had to plant plastic daffodils to keep the holiday makers happy….they hadn’t actually done this. But the television and radio news picked the story up and were so interested that staff at the parks had to rush out and buy fake daffodils and plant them before the cameras got there. It was the best free publicity they had ever had! Press Releases These can be good alternatives to active media work as people will get to see your company name. If this is repeated, and people recognise your company name, you are on your way to creating a brand. Time costs aside, the return on your investment is infinite, as the press release didn’t cost you anything to write and distribute. Writing them on a regular basis is key to keeping your name in front of the public’s eyes and being at the top of their mind when it comes to awareness. Write a press release for any of the following reasons, and any others you see fit: • Introducing a new product or service • Celebrating an anniversary • Winning an award • Reaching a milestone

“Public-relations specialists make flower arrangements of the facts, placing them so the wilted and less attractive petals are hidden by sturdy blooms”

Alan Harrington

2. Blogging: Everyone’s doing it and it doesn’t have to be long; just consistent. You can update it, or you can nominate other people in the business to write as well. People like reading blogs, and if you have an interesting one it can easily generate more traffic to your website, and business. 3. Public Speaking: Yes, it can be daunting and is not for everyone but speaking in front of an audience usually makes you an expert and do like to buy from experts. Also, people remember public speakers and therefore will come to you as an expert in that field. Offer yourself for event speaking when you’re out networking and put it on your Linkedin profile. Speaking is free, and it’s just like making a sales call to many people at one time. By tying in all of these practices, with your marketing plan, you will garner the best possible outcome to increase PR. Just remember to know who to contact, when and with what story. But most importantly of all is to be able to act quickly; when you want to get your story out, but also, for when people will want to talk to you. Remember, the only real costs are time costs.

Write an advertorial/article It doesn’t have to be long; but it must be informative. Share your experience and impart your expertise, knowledge and wisdom. Tell a story. Writing about how to do something is always something of value to readers. Writing articles gives you instant credibility, too. Always put your contact information the end of the article, otherwise it’s just a waste, however some Editor’s may charge to include these details. Follow up It is always best to follow up a press release/article with a letter to the Editor. Letters to the Editor have

June 2013

New Initiatives for Waste Management S

generated each year in the GCC, 33% is from plastic waste; of which less than 10% of 26 million tonnes (33%) of plastic waste is recycled.

adly, we cannot eliminate the creation of waste. We are a world that needs ‘fuel’ for survival, whether it is fuel in the form of oil, coal and gas, or as fuel for the production industries that clothe and feed us. Any process that begins with a raw material will end with a product that will eventually become waste. Since the industrial revolution the world’s waste levels have imploded, and only recently has the world become to realise what this actually means. Without taking action we will be overrun with environmental issues, including disease and unmanageable pollutions levels. Knowing this stark reality, governments around the world are now taking action before it becomes too late. The Middle East is no different with Governments trying their best to undertake measures to educate people about the lurking danger of mounting waste, and the very real threat of environmental disaster. According to a study document named ‘Waste Management in Gulf Cooperation Council countries’, which was distributed during Middle East Waste Summit2010, Gulf countries generated more than 22.2 million tonnes of household waste during 2009, of which 4.9 million tonnes, equivalent to 22%, derived from the UAE, whilst 58% from Saudi Arabia. A large portion of this waste consists of recyclable elements; plastic, glass, metal, paper and organic material that could be used as fertilizer. “One of the unintended impacts of the fast-paced growth in this region is an equally sharp increase in the volume of waste generated. Today, the GCC countries rank even higher than many of the developed countries in terms of per capita waste generation” a Frost and Sullivan report said. Mohamed Karam, Business Development Manager ME & Africa, InSinkErator, Emerson FZE, which manufactures food waste disposal units, also blames rapid population growth and urbanisation. A very bleak report by Gulf Petrochemicals and Chemicals Association (GPCA) reveals that from the 80 million tonnes of waste

June 2013

Gulf countries generated more than 22.2 million tonnes of household waste, with 22% derived from the UAE, whilst 58% from Saudi Arabia

UAE WASTE FIGURES Wissam Yassine, Senior Sustainability Engineer at Habtoor Leighton Group, stated in his case study that “The UAE unfortunately has one of the highest per capital waste generation rates in the world. To put it in numbers, an average UAE resident produces 3150kg of waste annually, as against 525kg by an average French resident, 726kg by an American, and an average 560kg per resident in a developed nation. Abu Dhabi annually generates over 10 million tonnes of waste; 33,000 tonnes a day which has already occupied about 1,800 hectares of landfills”. It is estimated that 90% of Dubai’s waste, approximately 8,000 tonnes a day as per 2011 figures, ends up in landfill. This means that 8,000 tonnes of waste a day misses the opportunity to be recycled. According to the Centre of Waste Management in Abu Dhabi this missed opportunity not only costs the UAE economy a whopping AED 1.5 billion a year, but that the sheer volume of waste means that landfill space is rapidly running out. We have to find a very real solution now to stop the potential hazards and risks that our current waste levels pose today, and to ensure for a better and a greener environment tomorrow. UAE initiative on waste management In 2008 recognising the above and in a bid to become world leader in sustainable and integrated solid waste management, Abu Dhabi has set out its commitment to improve the situation by establishing the Centre of Waste Management (CWM). CWM is the lead agency responsible for controlling and coordinating waste management activities throughout the Emirate. According to Saif Al Shamsi, Director of Excellence and Quality Department

THE HUB (HLG), which assesses the environmental impact associated with all products/process from cradle to grave suggesting that recycling programmes have significant environmental benefits across four impact categories; human health, climate change, resource use, and eco system quality.

at the centre, the goal of CWM is to divert 90% of waste from landfills to the recycling industry by 2018. Over the last two years the CWM has registered and licensed 2,000 companies, of which 760 are dedicated to waste collection and transportation, and 820 to cleaning services for streets, beaches and buildings. TAQA, the global energy company based in Abu Dhabi, and the CWM have extended their partnership by signing a collaboration agreement to study and develop a waste-to-energy demonstration facility at Abu Dhabi’s Dalma Island to produce 1 to 2 megawatt of alternative energy. This will be enough to supply power to more than 200 households as well as providing a more efficient waste management solution. Corporate responsibility concerns are gaining. The Westin Abu Dhabi Golf Resort and Spa now recycles food waste into natural compost that can be added to the soil. The hotel has installed a machine called the Waste Food Eater that can devour up to 600 kilograms of waste food in one go. Domestically, this can be replicated with home front Insinkerator’s food waste disposal system, which helps to reduce household food waste by 30% to 40%, and reduces our carbon footprint as the system eliminates the need to transport food waste in garbage bags as the disposer grinds it firmly, into a pack that can easily be flushed into the sewer system. Recent breakthroughs have also shown that grinded food waste can be utilised at equipped water treatment plants to generate Bio fertilizer or Biogas to generate electricity. Spinney’s have also ramped up their recycling efforts by installing recycling bins in front of its stores several years ago, allowing for the disposable of recyclables including paper, glass and plastic. Other supermarkets and malls have followed suit. Eng. Hussain Nassir Lootah, Director General of Dubai Municipality has affirmed that the Dubai Municipality is committed to sustainable development in collaboration with the private sector for the benefit of public in line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, by commissioning region’s largest landfill gas recovery system at its Al Qusais Landfill site.

90% of Dubai’s waste, approximately 8,000 tonnes a day as per 2011 figures, ends up in landfill

We have shown you the very real threat that waste poses to the UAE, and what the government is doing to protect us, and our future generations, but what are you doing as a business? Many businesses believe, wrongly, that implementing ‘green’ practices means more work and potentially higher costs. By taking steps to reduce waste a business can: • Save money on supplies • Conserve natural resources and energy • Reduce current waste disposal costs and hedge against increased disposal costs in the future • Give customers what they want: “green” products and environmentally conscious businesses • Avoid adding to the environmental burden caused by producing and disposing of unnecessary materials • Boost employee morale by giving staff members an opportunity to work together on an environmental project • Reduce the risk of future liability associated with the disposal of solid wastes • Help in reducing carbon footprints Think about what waste you produce, whether any of your waste can be recycled, and connect with waste management providers; it is surprising the number of UAE waste management companies there are that can help you for free. They can help you to identify how you can manage your waste, what you can recycle and there may even be a nice little reward for you! For example, Bee’ah, a Sharjahbased waste management company, is considering introducing a reward system where individual members of the public are awarded a monetary sum in exchange for any items they present for recycling, “This amount will be determined based on the market value of the object being given to us” Mohammad Al Hosani, Operations Manager at Bee’ah, added. Remember only three R’s- reduce, reuse and recycle waste to re-energise business and re-generate freshness around!

Also in March 2012, 3700 houses in Mohammed bin Rashid Al Maktoum Housing Establishment have been provided with different bins for different types of waste as part of the initial phase of the waste segregation campaign to support Dubai Municipality’s vision of Zero landfill by 2030 by recycling all waste generated in the Emirates.

FACTS ABOUT UAE WASTE

Competition comes from Sharjah and its vision of reaching a ‘green city’ status by 2015, where the Al Sajja Landfill, a state-of-the-art waste management centre, and advanced facilities are installed. They have a Life Cycle assessment (LCA) model initiated by Habtoor Leighton group

Amount of paper waste reaching Dubai landfills: 19%

Municipal waste generated in Dubai per day: 7,800 tonnes Waste generation in Abu Dhabi annually per day: 33,000 tonnes Average waste generation per person per day in UAE: 2.8kg Amount of plastic waste reaching Dubai landfills: 33% Amount of metal waste reaching Dubai landfills: 6% Amount of wood waste reaching Dubai landfills: 3% Amount of construction waste generation is: 60%

June 2013

THE NETWORK

Great business cards start with great design and influential copy. After that, the success of your business card as a marketing tool depends on distribution. By featuring your business card in our Business Card Directory we are able to link the needs of your company, with the right people, and enable you to reach over 46,000 decision-makers in DMCC, TECOM, DIFC, and surrounding business areas. You can feature your business card in our next issue for a small investment. Even if only 1% off our DMCC audience enquire and take up your services you would make your money back on this investment and a lot more!

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Business Consultancy Dr. Ann-Marie Carbery Antoun

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Director - Business Advisory

a. P.O. Box 643554 Swiss Tower, JLT, Dubai - UAE t. +971 (4) 3695520 f. +971 (4) 3695521 m. +971 50 6622951 e. annmarie.carbery@contaxpartners.com w. www.contaxpartners.com

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June 2013

Regional News UAE

Noor Islamic Bank Wins Best Corporate Account Award 2013 Corodex Industries wins

UAE MEED Quality Award

DUBAI: Noor Islamic Bank (Noor) today announced it has won the ‘Best Corporate Account’ award for its ‘Noor High Yielding Savings’ portfolio at the Banker Middle East Product Awards 2013. The award was presented to Hussain AlQemzi, Group CEO of Noor Investment Group and CEO of Noor Islamic Bank, by Adam Broom, CEO, CPI Financial, at a special ceremony held at the head office of Noor Islamic Bank. The award recognises Noor’s High Yielding Savings account for its flexibility in managing short term liquidity and enhancing the working capital yields for customers. Accepting the award, AlQemzi said, “This award validates our continuous efforts towards providing enhanced products and solutions to our corporate clients to meet their individual financial needs. The award complements the other key industry distinctions we have received and strengthens our resolve to be the financial provider of choice, offering Shari’a compliant products and services for clients in the UAE and abroad.”

An initiative of CPI Financial, the Banker Middle East Product Awards acknowledge excellence and innovation in financial products across the region. Organisations that play a leading role in the promotion of trade and investment in the Middle East and inspire industry peers through their work are recognised in various categories. Winners were selected through a month of online polling, which garnered a record number of votes this year. mIn total, Banker ME Awards saw 14,600 individuals cast more than 600,000 votes across four distinct categories: Retail, SME, Corporate and Investment Banking products. In March 2013, Noor Islamic Bank won the ‘Deal of the Year’ category at the Islamic Finance News Awards. In addition Noor Takaful, the Islamic insurance arm of Noor Investment Group, won the Takaful Insurer of the Year at the MENA Insurance Awards and Best Takaful Operator in the Middle East, CPI Islamic Business and Finance Awards in December 2012.

DUBAI: Corodex Industries Co. L.L.C., a part of Concorde-Corodex Group, is celebrating after winning the “Water and Water Reuse Project of the Year for UAE” for its Al Barari Development Phase 1 Infrastructure Works project from the prestigious MEED Quality Awards for Projects 2013. “We are very proud of this project because it embodies the sustainability plan of Al Barari and the vision of Dubai Municipality for environmental protection and continuous drive towards water re-use, as it greatly reduce the dependence on using costly desalinated

water”, says Mr. Mahmoud Awad, Managing Director for ConcordeCorodex Group. This well-thought out project aims to treat raw sewage water and TSE to be able to use it for unrestricted irrigation for landscaping and supply for waterways and canals in the projects. Corodex Industries together with its partner, ELFO International Ltd., a UK-based company in field of waste water treatment, water re-use and solid waste treatment, offered biological wastewater solutions namely EFLOSAF and EFLOSNAF to Al Barari to turn this vision into reality.

Luxembourg Minister of Finance heads to the Middle East DUBAI: On 6 and 7 May 2013 Luc Frieden, Minister of Finance and Chairman of Luxembourg for Finance (LFF) is leading a financial mission to Dubai and Riyadh. A delegation of over 60 senior representatives from the private and public financial sector with strong roots and clientele in the region is participating in this mission. Since 2010, these financial missions to Dubai have taken place on an annual basis. Luxembourg is known for its attractive financial and legal framework with political and social stability and a skillful and multilingual workforce. The financial mission is an opportunity for professionals and investors in the Middle East to learn more about the expertise

and services that the Luxembourg financial sector can provide. In the margins of the official programme, several bilateral meetings are organised between the Minister, the delegation and important local stakeholders. These meetings are aimed at further enhancing cooperation and building strong relationships between Luxembourg and the Middle East region. On May 7, the Minister and the official delegation will be present in Riyadh, where Minister Frieden participates at the prestigious Euromoney Conference. In the margins of the conference, a double tax treaty will be signed between Luxembourg and Riyadh.

City of Steam launched into MENA markets DUBAI: DAO Games, the leading Middle Eastern based MMO publisher, has announced the launch of the new free-to-play massively multiplayer online role playing game (MMORPG), City of Steam, the first ever browserbased Unity 3D game available in Arabic. City of Steam has been voted one of

the most anticipated MMO Games for 2013, by Massively.com, Forbes.com, MMOHUT.com and many other global media specialists. The arrival of City of Steam marks the beginning of latest high quality MMO games arriving in Arabic at the same time as their English versions are released in the US. City of Steam will be available in both Arabic

and English from DAO Games to satisfy the need of both local and expat communities. An action oriented game, City of Steam has its story set in the rich world of Nexus, a once great civilization, where mechanical steam-work is mixed with magic. Players can choose from hundreds of quests that lead them through ancient

ruins, defeating monsters, bounding and competing with fellow players, searching for archaic spoils while they find a place to settle in. With each quest telling part of a larger story, the game offers enough variety to satisfy casual MMO game players as well as hardcore role-playing game fans. City of Steam in Arabic is now available.

June 2013

Regional News UAE

Wouter Kingma; the first in the Middle East to sign up for 1% for the Planet

DUBAI: 1% for the Planet is a world-wide initiative that encourages the business community to contribute 1% of their sales to non-profit causes dedicated to the pursuit of preserving and restoring our natural environment. Annual 1% donations go directly to the environmental cause of the member business’s choosing. After signing up in 2012, Wouter Kingma says, “So much of my work takes place in or is inspired by nature so the opportunity to give back is important to me. We felt passionate about finding a local initiative to support and chose Wadi Wurayah National Park, a unique project on the east coast of the UAE, managed by Emirates Wildlife Society in association with WWF (EWSWWF). I sincerely hope many other businesses in the Middle East follow suit.” Since its inception in 2002, 1% for the Planet has become one of the world’s largest funders of environmental work and is dedicated to supporting the everincreasing sustainability challenges we

Saudi Arabia

face today. Membership consists of more than 1,400 businesses in 38 countries, together giving over $US15 million annually to over 2,000 environmental groups worldwide. Wadi Wurayah became the UAE’s first mountain protected area in 2009. The protected area extends over 129km2 in the northern part of Fujairah. Since then, great conservation efforts have been made to protect the area’s rich ecosystems. The wadi’s fragile and unique ecosystem is one of the few remaining catchments in the UAE and its protection has become essential for the survival of many of its rare species. A total of 1,350 species are known in the UAE, 30 of which have been found in Wadi Wurayah and through the course of the project there have been many exciting findings including confirmation of Gordon’s Wildcat, one the world’s most rare animals. A new vegetation study is also underway to gain a greater understanding of the plant species in the area.

Forex experts discuss the implications of a unified Gulf currency at Saudi Money Expo

DUBAI: As the 30-year wait for a single GCC currency continues, the growing similarities among Gulf countries’ monetary systems and economic policies have raised optimism that a mutually beneficial resolution is a step closer to reality. This is one of the views expressed at the 4th Saudi Money Expo and Conference, which brought together top experts, institutions and investors from the Gulf, Europe and the US. A single Gulf currency could play a similar role in the region to that played by RMB in the growing Asian economies. As questions continue to be raised about the long-term sustainability of the US Dollar peg in the GCC, the single currency is stirring renewed debate. Commenting after the event, Mr. Malek Kanawati, CEO of Mubasher Financial Services said, “This award is yet another demonstration of our strength in research, which is further evidenced

June 2013

by the launch of MubasherTrade’s new research product, ‘One Market For All’. We view our role as that of a catalyst in creating a unified Arab market. Therefore a single Gulf currency would advance GCC countries from merely cooperating to actually becoming members of one union. The single currency is by no means a foregone conclusion, so we are helping traders and investors to take advantage of the current opportunities in forex via our portal.” Among the proponents of a single Arab currency is Robert Mundell, the Nobel Prize laureate in Economics in 1999, who is widely regarded as the ‘Father of the Euro’. While a PanArab currency incorporating the MENA countries is a much more complex and distant prospect, a GCC currency is a more realistic goal; especially considering the Gulf’s progress in creating a Free Trade Area and the pursuit of a Unified Customs Union and Common Market.

Car rental demand projected to grow 25% in 2013 DUBAI: The demand for car rental services in Dubai is expected to drive in growth of more than 255 before the end of 2013. Recent industry reports have revealed that the emirate’s thriving tourism industry has played a major role in helping increase the rental of highquality, world class vehicles. According to senior executives of Najd Rent-a-car, Dubai’s position as a premier tourist destination has keyed in a large demand for car rentals, widely coming from tourists hailing from neighbouring GCC countries and other regions as well, particularly Russia. Seeing the industry’s continued growth,

the company has decided on investing in newer luxury vehicles to cater to the forecasted increase in car rentals in the next few months. “Over the years, Dubai has not only positioned itself as an investment haven with immense investment and real estate opportunities but has also become a global tourism destination; offering key attractions like the Burj Khalifa, Dubai Mall, JBR, Dubai Marina, etc. Complementing these sights are tourism related services like hotels, restaurants and more importantly, car rentals” said Omar Al Kasem, Partner and VIP Operations.

Qatar

Supporting the Syrian Rebellion DOHA: It has recently emerged that the gas-rich state of Qatar has spent nearly US$3bn over the past two years, supporting the rebellion in Syria. This amount is far exceeds any

other government globally, however, Saudi Arabia is now stepping up their donations, fast becoming the prime source of funding to rebels.

Mackeen and Vodafone partner up for SMEs

DOHA: Mackeen Technology, one of the fastest growing technology companies in Qatar, and Vodafone Qatar have formed a strategic partnership to deploy corporate business solutions targeting Qatar’s Small and Medium Enterprises (SMEs). Under the terms of the partnership, Vodafone will leverage Mackeen’s extensive ties with the local SME sector to roll out its new business solutions. The partnership reflects Vodafone’s commitment to support Qatar’s National Vision 2030 by introducing solutions that can significantly enhance commercial productivity of businesses. An estimated 98% of companies in Qatar are classified as SMEs, making the sector an important market for auxiliary industries such as telecommunications.

A survey of Small Office, Home Office (SOHO) and SME representatives shows that demand for video conferencing and mobile data in particular continues to grow. The run-up to the FIFA World Cup 2022 which Qatar will be hosting is expected to charge the business climate even further and present greater growth opportunities for SMEs. “Vodafone is committed to serving the SME sector in Qatar by offering solutions that can transform their businesses. Through its excellent reputation and strong ties among Qatar’s key industry movers, Mackeen Technology is an ideal partner for us to further broaden the reach of our latest corporate offering,” said Niraj Singh, Director of Vodafone Business Services.

World News China

China to overtake US on non-financial corporate debt

Standard & Poor’s is predicting that a stronger rate of economic growth propelling debt issuance could mean China’s non-financial corporations could owe $13.8 trillion by the end of 2014, eclipsing that of corporations in the United States.

Europe

Italy changes their VAT requirements

MILAN: Italy has loosened the documentary requirements for Italian Value Added Tax zero rating of intercommunity supplies (exports within the EU). Sales (dispatches) of goods from one EU country to another are ordinarily VAT exempt. However, certain conditions must be met, including: - The vendor and acquirer must be EU VAT registered - The goods must leave the country of the seller for the country of the acquirer

- There must be some documentary proof of the goods’ departure (e.g. proof of transport). The Italian tax office has recently said that it will accept the CMR (International Consignment Note/Letter de Voiture International) signed by the vendor as proof of the third requirement above. This includes providing the electronic CMR.

USA

Pressure for budget deal lessened as US deficit shrinks WASHINGTON: A sudden improvement in the outlook for the US government deficit over then next decade has alleviated some of the pressure on legislators to act, meaning the needs for a more radical approach to tax reform and the trimming of government spending, has reduced.

Saudi Princes deny laundering claim

which has been recently named MERS, for Middle Eastern respiratory syndrome coronavirus. Of those cases, 20 have been fatal. The bulk of the infections have occurred in Saudi Arabia, which is investigating a large and ongoing outbreak in the eastern part of the country, near the Persian Gulf. Other countries that have reported cases are Jordan, Qatar, the United Arab Emirates, Germany, Britain and France. But the infections in the European countries all had their origins in the countries on the Arabian Peninsula. Source: The Province

Source: Financial Times

Source: UTurn Tax Refund

WHO warns Coronavirus may spread affected countries for more transparency to date, it is likely that concerns about the virus and the opaque way investigations into it are being handled will be aired during the meeting. Saudi Arabia, draws roughly three million Muslims from around the world every year to the Hajj and a further million international tourists travel to Mecca during Ramadan. Experts watching the coronavirus situation are already worried about the potential for spread of the new virus, both within Saudi Arabia and internationally. To date, the WHO has been notified of 41 confirmed infections with the virus,

PARIS: The EU is set to impose a strict bonus cap on bankers, under their proposals to tighten the clampdown on pay in the financial sector. The banking regulator, has widened the definition of staff who will be affected by these measures, meaning that thousands more bankers would have their bonuses capped should they earn over €500,000.

LONDON: A brother and nephew of Saudi Arabia’s King Abdullah were involved in a scheme to launder millions of dollars, including to the Lebanese militant group Hizbollah, according to a London court claim filed by a former business partner. Prince Mishal bin Abdulaziz al Saud, a former Defence Minister and his son, Prince Abdulaziz, have rejected the allegations as “scandalous and outrageous”. Their lawyers have argued that they amount to a malicious attack on their reputations and “extortion”. The allegations stem from a business dispute in the UK courts, which can now be reported on only after a long court battle by the price’s lawyers to keep the case private. The Financial Times and the Guardian opposed the arguments for the case to be kept secret and won an application for the right to inspect and report on the case.

Europe

GENEVA: The World Health Organisation has issued a blunt assessment of the coronavirus outbreak in Saudi Arabia, acknowledging for the first time that there are concerns the virus may be spreading from person to person, at least in a limited way. The worrying appraisal of the situation was echoed in a revised risk assessment. The warnings come as health leaders from around the world are gathering in Geneva for the World Health Assembly, the annual general meeting of the WHO. Though other nations have not publicly pressed leaders of coronavirus-

Bankers Bonus’ Capped

The Congressional Budget Office projected that the deficit forecast would be 4% of the US economic output in 2013; less than half of the 2009 level. This would drop further by 2015. However, it is expected that this would start widening again in 2016 and would continue it’s momentum, increasing the risk of another financial crisis.

June 2013

The Truth About Fonts They say that the font you choose says a lot about you, but this brilliant series of posters makes us worry slightly. Entitled ‘Typocalypse’, this fantastic collection by Dutch-based graphic designer Lars Willem Veldkamp boldly states, in no uncertain terms, what subliminal messages fonts are actually trying to feed you.

Helvetica

Comin San

Arial

I am a conformist

I am the hand of God

I am the devil

Verdana

Brush Script

Stencil

I am a screen font

I am a rubbish poet

I am a Rambo 4

American Typewriter

Didot

Courier

I am drowning in nostalgia

I am wear a stripy top with onions

I am Kevin Spacey

Cooper

Trajan

Papyrus

I am playing the Jazz

I am missing my lowercasses

I am eating your brains

In the Next Issue Take a look below for a sneak peek into what is coming up in Issue 7 of Business Insight… Operations

Tech

Talking Chinese In issue 6 we brought you news as to how business people in the GCC are looking towards Africa for new business opportunities. But does this mean we should discount other avenues? No! With news that China is set to increase it’s trade with the GCC, we look at what this means for you.

Kickstart your business Did you know that there are websites which link up entrepreneurs to financial backers? No? Well you do now! We look at the two big players in the market to see if they are worth you considering when the times get hard.

Get Paid Promptly How many of you wait until the last minute to pay your bills? Conversely, how many of you get irritated when others do that to your business? In this article we review what steps you can take as a business to speed up this process so your Cashflow remains healthy and happy.

Money Energy market opportunities in the Gulf region With the low taxes and debt levels, and strong government investment, energy market opportunities are thought to be considered. Why? We tell you more in our next issue.

Wellbeing Get what you want from the power of your mind This all sounds a little hocus pocus, but in fact visualisation is a proven method in you obtaining success. We break this down for you so you can achieve all that your heart desires.

Hub What to do with negative feedback online We have all seen trip advisor, but one couple who were on Gordon Ramsey’s Kitchen Nightmare US took this to another level when they started to speak their minds back. We look at how you can turn this public negative into a huge positive.

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June 2013