BMME 4

www.busmanagementme.com • Q4 2008

TOUGHTALK

LEADER OF THE PACK

SAUD AL DAWEESHSaudi Telecom’s President on

the battle to stay aheadPAGE 74

PAR FOR THECOURSE

Teeing off with Leisurecorp’sCEO for golf DAVID SPENCER

PAGE 116

KING OF THE SKIES Inside the world’s fastestgrowing airline with EtihadCEO JAMES HOGANPAGE 32

Arab billionaireMISHAL KANOOreveals hiscontroversialviews on theMiddle EasteconomyPAGE 26

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InforDPS.indd IFC3InforDPS.indd IFC3 9/10/08 09:32:589/10/08 09:32:58

3.00pm FridayLocation: On the road.Peter receives email with an attachment on his Blackberry device. Itʼs an urgent order request from a customerwho needs a part ordered and delivered by Monday morning to their overseas offi ce. Peter forwards the email to Sueback in the offi ce.

3.03pm FridayLocation: HQ.Sue reads the email. Realises the part is not in stock. She knows Andy the Logistics Manager can get another part, but he is currently visiting their overseas warehouse. Sue checks her desktop UC application which shows Andyʼs presence status as “available”. She clicks on his name and starts a webcam video conference.

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3.08pm FridayLocation: Overseas warehouseAndy receives the online conference request and answers the call from his laptop. An image of Sue pops up on screen and they discuss the issue. Andy uses the fi le sharing feature to send Sue a picture of the new replacement part. Sue sees the image on her screen instantly and gives the okay. Andy organises delivery to the customer for Monday morning.

9:00am MondayLocation: Customer HQ.Delivery truck pulls up in front of customerʼs offi ce with the replacement part. Problem solved quickly and effi ciently. Customer is happy!Results happen withUnifi ed Communications.

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FROM THE EDITORSurvival of the fittestHow Middle East businesses are weathering the global economic storm.7

“There is a major credit crunch in thispart of the world. Banks are becomingvery stringent”Mishal Kanoo, Deputy Chairman, Kanoo Group(page 26)

“As a relatively new airline we canmake decisions quickly without theburdens that the older airlines have”James Hogan, CEO, Etihad Airways (page 32)

“We are still experiencing double-digitgrowth figures. I am not as pessmisticas the Western world”Marco Nijhof, Jumeirah SVP for the Middle East,Africa and South Asia (page 126)

For a long time it has been rare to read any bad news about the GCC econo-

my, and Middle Eastern residents are far more likely to read the word boom

than bust when they open their morning newspapers. The Western press

has long been peppered with the language of economic decline – recession,

debt, redundancy, etc. – but the good times in the Gulf have continued to

roll with stories about soaring wealth dominating the headlines. In recent weeks there

has been only one story dominating the headlines in the Western press – the credit

crunch and its devastating impact on global financial markets. And while mega con-

struction projects and multibillion-dollar acquisitions continue to hog the front pages

in the Gulf, for the first time articles are emerging that cast a shadow over the rosy pic-

ture that has previously been painted of the region’s economic future.

As Business Management went to press, it was reported that Merrill Lynch has

released a report warning that economic growth in the Gulf is expected to slow this

year because of the global economic downturn. The bank announced that it had

lowered its growth forecasts for the UAE, Saudi Arabia, Qatar and Kuwait and

warned that GDP growth across the Middle East as a whole is expected to slow to

4.5 in 2009 from 6.2 percent this year. Meanwhile, the UAE government doubled its

emergency bank funding to US$32.67 million in line with moves by other Gulf Arab

states. These figures back up the claims by Mishal Kanoo, who we interviewed for

this issue’s cover story. He warned that the credit crunch has already hit the Middle

East and that as a result regional banks are tightening their belts.

It important, however, to view the impact of the credit crunch on the Middle

East within a global context, and to remember that in relative terms the Gulf coun-

tries remain in a far stronger position than their Western counterparts. Indeed, in

its recent report Merill Lynch stated that the GCC economies are in a good position

to deal with the global downturn.

You only need to read the interviews in this issue of Business Management to

see that business in the Middle East is still booming. Take James Hogan, CEO of

Etihad, for example. While Western carriers are announcing mass redundancies and

smaller airlines look set to collapse, he plans to double Etihad’s network of desti-

nations by 2020 and recently spent US$43billion on new planes.

We also feature an interview with David Spencer, CEO for golf at Leisurecorp, which

recently acquired Scotland’s historic Turnberry golf resort. The credit crunch does not

seem to have hindered Jumeirah’s growth either. As we hear from the hospitality giant’s

SVP for the Middle East, Africa and South Asia Marco Nijhof, the company plans to in-

crease its hotels to 23 by 2011 and to expand internationally.

The business leaders we interviewed admitted the global economic downturn was

a concern, but said that it would not hamper their expansion efforts – proving that while

in the West recession looms, the Middle East is still very much open for business.

Diana Milne

Editor

EDS NOTE:BMUS 13 16/10/08 09:31 Page 7

Marsh.indd 1Marsh.indd 1 7/10/08 14:55:007/10/08 14:55:00

King of the skies James Hogan, CEO of Etihad, reveals how

he created the fastest growing airline in

commercial aviation history

Leader of the pack Expansion into foreign markets, a multi-million

dollar football sponsorship deal with Manchester

United and a corporate re-branding. Business

Management puts Saudi Telecom under the spot-

light and speaks with President Saud Al Daweesh

74

26 Tough talkOutspoken Arab billionaire Mishal Kanoo talks

corruption, conservatism and why he thinks the

Middle East is in the throes of a credit crunch

46 On the coal faceMadhu Koneru, managing director of RAK Minerals

and Metals Investments (RMMI) lifts the lid on why

the company plans to invest US$1 billion in mines

across the world

Par for the courseDavid Spencer, CEO for golf at Leisurecorp, on why buyersare paying millions to live on his golf courses

116

32

9CONTENTSLEAD FEATURES

CONTENTS:aug08 16/10/08 08:34 Page 9

100

122

89

Fasten your seat belts

Saad Al Shuwaib’s field of dreams

Lessons in leadership

38 Laying down the lawStandardising Islamic finance laws worldwide

42 Winning combinationIslamic finance, profits and mergers, with

Emirates NBD CEO Rick Pudner

56 Staying off the hookNational Bank of Kuwait CISO Tamer Gamali

discusses the growing headache of phishing in

the Middle East

62 Global securityWorld Bank CISO Jim Nelms on the next gener-

ation of threats

64 Automated code testingBy Howard A Schmidt

66 R Shankar, Ramco Systems86 Paul Hammond, Infor 98 Adam Hughes, PA Consulting Group106 Fadi Abdul Khalek, UKS114 Saïd Aïdi, HR Access

EXECUTIVE INTERVIEWS

Paul Hammond, Infor86

54 Alexander Trekin, Vision Solutions 60 Mahesh Vaidya, ISIT

INDUSTRY INSIGHTS

10 CONTENTSBANKING, SECURITY & BUSINESS INTELLIGENCE


100 Lessons in leadership Frank Brown, Dean of INSEAD, on the top tips

he’ll be teaching business leaders at the

school’s Abu Dhabi campus

110 The talent war heats upTackling the oil and gas skills shortage head-on,

according to Bapco CEO Abdulkarim Al-Sayed

122 The sky’s the limitLuxury business travel with MEBAA CEO

Ammar Balkar

126 The business of luxuryJumeirah’s Marco Nijhof talks exceptional hos-

pitality and global expansion

68 New dangerBusiness continuity management and the cred-

it crunch

70 Making a real differenceHow to achieve strategic HR objectives

82 The promise of unifiedcommunications Demystifying UC challenges

84 Putting unified communications to work Advice on the best strategies for getting the

most out of the business tool

90 Field of dreamsKuwait Petroleum Corporation’s ambitious

efforts to ramp up production

96 Satisfied customersUsing CRM technology to your advantage

40 Haitham Abdou, InternationalTurnkey Systems 72 Mike MacDonald, 3D Networks 94 David Allinson, Opennet 108 Tadhg Carey, Thru-U

ASK THE EXPERTS

David Allinson, Opennet 94S I LV E R S P O N S O R

Mike MacDonald, 3D Networks72

Klaus Gheri, phion

HEAD TO HEADS

50 Clear and present danger, VASCO and phion78 Moving unified communications forward, Nortel and Green Packet

50 Nik Ismail, Green Packet78

14 The brief 15 Middle East business round-up 16 Insight 18 Frontline 23 Inmy view 24 Project focus 130 Leadership 132 Business doctor 134 On theshelf 136 City guide 138 The knowledge 140 Hot wheels 140 Objects of desire144 Final word

REGULARS

11CONTENTSCOMMUNICATION, HR & BUSINESS IMPROVEMENT

142 Hot wheels


MANAGEMENTChairman SPENCER GREEN,[email protected]

Chief Executive Officer JAMES CRAVEN,[email protected]

Editor-in-Chief ADAM BURNS,[email protected]

Finance Director JAMIE CANTILLON,[email protected]

Sales Director (International) OLIVER SMART,[email protected]

EDITORIALSenior Editor BEN THOMPSON,[email protected]

Managing Editor HARLAN DAVIS,[email protected]

Editor DIANA MILNE,[email protected]

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Staff NATALIE BRANDWEINER, MATTBUTTELL, FRANCES DAVIES, REBECCAGOOZEE, MARIE SHIELDS, HUW THOMAS,

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BMME (Q4 2008) is published three times a year by GDS Publishing. All rightsreserved. Reproduction in whole or in part without permission is prohibited. Theviews expressed within this publication are not necessarily those of the publisher.

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WEB SERVICESSenior Designer (Web) JAMES WEST,[email protected]

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INTERNATIONALGeneral Manager (North America)DAMIEN MUNRO,[email protected]

RECRUITMENTHR Manager (UK-Bristol) IAN CASSLEY,[email protected]

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Cover Photography© Francisco Fernandez 2008 www.photographer.ae

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BMME MAGAZINE

16-18 March 2009 The InterContinental,Abu Dhabi, UAE

Find Out MorePhone Ross Abbott on +44 (0) 292 066 3626Visit www.fstsummitmena.com

The Financial Services Technology Summit is a three-day criticalinformation gathering of C-level technology executives from thefinancial services industry.

A Controlled, Professional & Focused EnvironmentaFST ’09 is an opportunity to debate, benchmark and learn

from other leaders in your own finance market. aFST ’09 is a C-level event reserved for 75 participants.aFST ’09 includes expert workshops, facilitated roundtables,

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A Proven FormatThis inspired and professional format has been used by over100 CIOs and CTOs as a rewarding platform for discussion andlearning.

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MENA 2009

Thesooner youregister, the moreyou save!Seewww.fstsummitmena.comfor details

CREDITS:oct08 15/10/2008 16:35 Page 12

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14 www.busmanagementme.com

IF YOU WALK THROUGH the heart of Dubai’s financial district, you’ll en-

counter a very different atmosphere from that currently pervading the

business districts of Europe or the US.

Recent events have left Western financial institutions reeling – and

increasingly looking to the Middle East for salvation. Once regarded as a

remote outpost by international banks, the Gulf is now being eyed as a

potential gold mine by some of the banking world’s biggest players.

Dubai was recently named as the number one financial centre in the

world in a list of those most likely to become significant on the world

stage in the future in the Global Financial Centres Index. Surging oil

wealth and a flurry of high profile investments by sovereign wealth funds

means that financial services are in high in the Gulf – and as a result fi-

nancial institutions are heading there in droves.

In September both Deutsche Bank and Credit Suisse announced

plans to beef up their presence in the Middle East. Credit Suisse an-

nounced it had won a licence to open an office in Bahrain, adding to its

existing operations in Dubai, Abu Dhabi, Doha, Riyadh, Beirut and Cairo.

Meanwhile Henry Azzam, Deutsche Bank’s CEO for the Middle East

and North Africa, revealed it too planned to expand its Middle East pres-

ence following the news that it is to provide new custody services on the

Abu Dhabi Securities Exchange and the Dubai Financial Market.

Earlier this year, Lehman Brothers moved one of its more senior po-

sitions, Philip Lynch, the bank’s co-head of equities, to Dubai and

Barclays dispatched one of London’s highest paid bankers, to the emi-

rate as chairman of investment banking and investment management.

They were joined by Citigroup, which transferred its co-head of global in-

vestment banking from London to Dubai.

The Dubai International Financial Centre is expecting such an influx

of banking professionals to be employed there that it is building the

world’s largest car park, featuring 35,000 spaces, to cater to the de-

mand. And Bahrain’s 38,000 square foot Financial Harbour district was

built specifically to cater to the country’s growing financial services sec-

tor. The situation means that while jobs in the European banking sector

may be scarce, the huge growth in the Gulf financial services sector, par-

ticularly in the UAE, has created an acute shortage of skilled financial

services professionals.

In the past year alone over 20,000 US-based finance professionals

have lost their jobs. In the UK, earlier this year the Confederation of

British Industries announced that it expected at least 10,000 financial

sector job losses this year. Since then the Lehman Brothers collapse has

left around 5000 employees looking for work.

With further culls expected across Western financial markets, relo-

cation of financial professionals to the Middle East could well become a

stampede.

EASTERN PROMISEAs turmoil in Western financial markets hits crisis point increasing numbers of banks are lookingto the booming economies of the Middle East to recoup their losses. DIANA MILNE reports.

14 THE BRIEFANALYSIS

UPFRONT new:oct08 16/10/2008 08:10 Page 14

15www.busmanagementme.com

within the tower. Men will be

allowed to work there but

woman will be provided with

special facilities including their

own entrances, elevators and

car parks. The tower will be

completed in 2010 and will be

part of the Hydra Towers

Project that is made up of five

high rise towers. A Hydra

Properties spokesman said the

aim of Eve’s Tower was to en-

courage entrepreneurship

among women.

TECHNOLOGYSAUDI ARABIA’S KING

ABDULLAH University of Science

and Technology is joining forces

with IBM to build one of the

world’s most powerful super-

computers.

The Shaheen supercomput-

er will be the most powerful in

the Middle East and will rival

Europe’s fastest machines.

Development work on the

Shaheeen supercomputer is cur-

rently underway at IBM’s re-

search laboratories in the US.

Shaheen is expected to be

completed in September 2009.

INVESTMENTFOREIGN DIRECT INVESTMENT

(FDI) in the GCC rose by 19.6 per-

cent last year, according to a

study by the United Nations

Conference on Trade and

Development (UNCTAD).

The study found that invest-

ment into the wider region is ex-

pected to keep rising in 2008

despite a slump in global finan-

cial markets.

Within the region, Saudi

Arabia, the UAE and Turkey at-

tracted more than four fifths of

the total RDI, which rose 12 per-

cent to US$71 billion.

Energy and commodities

investment was responsible for

a majority of inward FDI in the

GCC.

Outward FDI concentrated

on financial and telecommunica-

tions services.

FDI is defined by the UN as

an acquisition of 10 per cent of

more of a company.

HOSPITALITYDUBAI-BASED HOTEL OPERA-

TOR the Jumeirah Group has an-

nounced plans to operate 60

hotels by 2012.

The group currently man-

ages 11 hotels for investors

and has another 11 under con-

struction.

As well as operating in the

Gulf region it is expanding to re-

sort islands in the US Virgin

Islands, the Maldives, Majorca

and Thailand.

The group’s expansion is fo-

cussed on the Middle East and

the Asia Pacific.

CONSTRUCTIONTHE GCC’S US$2.4 TRILLION

construction industry could be

threatened by acute labour

shortages, a report by the pro-

ject management firm ESI

International has warned.

According to the report, the

region is facing severe shortages

of construction professionals

such as skilled programme and

project managers.

Raed Haddad, senior vice

president of ESI said the scale

of construction activity in the

region is placing “severe strain

on the viability of projects”.

He warned that companies

must tackle the skills shortages

or risk facing delayed handovers

of projects or poor quality finish-

es on projects.

REAL ESTATETHE WORLD’S FIRST EVER fe-

male-only owned tower is to be

built in Dubai.

Eve’s Tower is being con-

structed by Hydra Properties

within Dubai’s Business Bay

development. Only women will

be allowed to own office space

ROYAL DUTCH SHELL has signed a multibillion-dollar deal with Iraq for a jointventure in the Basra province.

The deal between Shell and the Southern Gas Company will

include work to capture natural gas released as a by-product of crude

oil extraction. Under the terms of the deal Iraq will hold a 51 percent

stake in the venture, and Shell will hold a 49 percent stake.

Iraq has the world’s third largest proven oil reserves and has said

it wants to focus on developing in southern gas fields. If successful it

could become a major supplier to Europe.

ENERGY

UNITED AIRLINES has launched a new route directlybetween Dubai and Washington Dulles International Airport.

The move makes it only the second US carrier, after Delta Air

Lines to fly directly to the UAE and Dubai and will be the airline’s only

new destination this year. It will fly to Dubai seven times a week

using a Boeing 777-200 ER. Flights will depart from Dubai at

11.30pm and take 15 hours.

AVIATION

15MIDDLE EAST BUSINESS ROUNDUPNEWS


2386


200: Number of London taxi cabsbeing imported by the ArabianTaxi Company to work on the

streets of Bahrain.

US$1.7bnValue of the latest

project by Dubai realestate firm Limitless

in Indonesia.

327KM

Length of a highwaybeing built to link AbuDhabi with the Saudi

Arabian border.

Number of millionaires in India according toMerrill Lynch’s latest Asia Pacific Wealth report.

60.8%: Growth of the Qatari economy in the second quarter of 2008.

The country’s economy is now worth

US$26.41 billion.

123,000

US$4.2 billion: Cost of the

Dubai Metro project which

officials have announced will be

completed in September 2009.

NEWS INNUM8ERS

IMAGENATION was formed by the Abu Dhabi Media Company sothat it could enjoy a slice of the action in Hollywood by fundingfeature films.

At a time when producers are struggling to secure funding for their

projects from traditional sources, Imagenation is offering to invest over

US$1billion in films over the next five years.

Already it has formed a partnership with US-based Participant Media

with the two having pooled their resources to form a US$250 million fund

to finance feature films.

Mohamed Khalaf Al-Mazrouei, Chairman of Imagenation and the Abu

Dhabi Media Company said the firm would help make the emirate a “major

player in the media industry”.

Abu Dhabi Media Company, was formed in 2007 and employs 1800

people across its operating units, which include publishing, television,

radio, digital media, distribution and printing. The company is headquar-

tered in Abu Dhabi but has offices in Cairo, Dubai and Washington DC.

INSIGHT

COMPANY SPOTLIGHT

GULF ARAB BANKS’ CREDIT OUTLOOKGULF ARAB BANKS face slower growth and lower profitability, because

of the credit crisis, according to the latest research by Moody’s.

But while the outlook may

be darker for regional financial

institutions their situation will

remain stable, the report goes

on to say.

It does warn of concern

about the banks’ exposure to

the real estate sector and the

trend towards speculative pur-

chasing of properties, which

could distort the market.

Moody’s concludes that banks in the Gulf are cushioned from the

credit crunch by their countries’ huge cash reserves and the fact that

they rely not on the financial markets to obtain funding but on ample

customer reserves.

HOT TOPIC

16UPFRONT new:oct08 16/10/2008 08:10 Page 16


INSIGHT

Iranian President Mahmoud Ahmadinejad speaks during a press conference

in Tehran before heading to New York for the UN General Assembly.

Ahmadinejad said that Iran has no fear of threatened new international

sanctions over its controversial nuclear drive.

An investor holds his prayer beads as he follows the stock market activity at

the Dubai Financial Market as Western financial markets faced meltdown.

The large arched entrance of the Atlantis hotel at Dubai’s man-made Palm

Jumeirah island is seen after a fire broke out there in September. Dubai

police confirmed the fire started in the hotel’s lobby as labourers were

carrying out maintenance work prior to the opening of the hotel.

COMPANY INDUSTRY % INCREASE MARKET CAPMena Holding Group (Kuwait) Building Contractors 453.85 179.87 millionAref Energy Holding Company (Kuwait) Schools and Nursery 400.81 1.11 billionInternational Fish Farming Company (UAE) Fishing and Seafood 388.00 415.23 millionEzdan Real Estate Company (Qatar) Landlord and Developers 313.82 6.39 billionMethaq Islamic Insurance Company (UAE) Insurance Companies 229.51 328.37 millionJordan Phosphate Mines Company (Jordan) Nonmetallic Minerals 224.23 4.13 billionVending Network Company (Kuwait) Restaurants and Cafes 212.09 257.92 millionFirst Dubai Real Estate Development (Kuwait) Landlord and Developers 174.44 1.77 billionGulf Medical Projects Company (UAE) Hospitals and Clinics 174.01 165.00 millionGulf Rocks Company (Kuwait) Cement 125.00 177.59 millionM

OVER

S AN

D SH

AKER

S THE TOP FIVE BIGGEST SHARE MOVERS IN THE FIRST HALF OF 2008 (ALL PRICES ARE IN USD)

(Sou

rce:

Ara

bian

Busi

ness

.com

)

NEWS IN PICTURES



AMD HAS LAUNCHED a new corporate brand cam-

paign under a new tagline, ‘The Future is Fusion’. The

adoption of the ‘Fusion’ brand and the accompanying

global campaign, which is expected to run through

the end of the year, are among sev-

eral steps AMD is taking as part of a

broader transformation designed to

sharpen its focus around its core mi-

croprocessor and graphics technolo-

gy businesses.

“Fusion is AMD’s way to ex-

press how we blend our customers’

needs, dreams and desires with our

unique passion for enabling innova-

tion,” said Nigel Dessau, AMD Senior Vice President

and Chief Marketing Officer. “While this unique ap-

proach has always been our practice, ‘Fusion’ is the

most focused articulation yet of how AMD marries in-

novation with collaboration in ways that can yield

benefits to the marketplace greater than the sum of

its parts.”

At the heart of the campaign is the ‘Fusion’ brand

concept: a unique energy created by connecting AMD

people and technology with those of its partners.

Fusion is the AMD working philosophy that marries in-

novation with collaboration, and is the process by

which AMD and its partners can en-

able next-generation technologies

that change the way we live, work

and play.

Consumers, especially PC gam-

ing fans, can see and experience the

power of ‘Fusion’ on their PC desk-

top in a new and exciting way.

Available today for download, the

AMD Fusion for Gaming utility beta2

is designed to allow gamers to experience greater per-

formance on AMD processor-based PCs with a simple

click of a button. It works by temporarily reducing re-

source-consuming background services while boost-

ing compute performance with advanced acceleration

technologies.

For more details about the new advertising cam-

paign, visit http://fusion.amd.com

FRONTLINE

Middle East

Rest of world

World total, Avg.

17.4%

20.1%

20.0%

INTERNET PENETRATION IN MIDDLE EASTDecember 2007

Penetration (% Population)

Source: www.internetworldstats.com. © 2008 Miniwatts Marketing Group

0 5 10 15 20

A REPORT BY the market research firm RNCOS has revealed that the

number of internet users in the Middle East soared by 600 percent – in

the past decade, three times higher than the global average increase.

It attributes the increased number of users to reduced charges and

upgrades to the network infrastructure in the region.

The Middle East country with the top number of internet users is

Israel, followed by Saudi Arabia, Egypt and the UAE.

The report claims: “The Middle East broadband market is poised to

grow at rapid pace in the backdrop of positive economic outlook and in-

creased market liberalisation.”

The report also predicts that by 2010 there will be over four million

internet 3G subscribers in the Middle East.

For WILLIAM WELDON, CEO of US drug giant Johnson & Johnson, a suc-

cessful leader is the person with enough courage to make difficult deci-

sions and enough compassion to understand their impact, as the US

version of Business Management discovered during a recent interview

with the man himself. Staff too, are incredibly important for Weldon. “To

me, everything is based upon the strength of individuals in the compa-

ny, and you see it time and time again – if you have great people then

you have a great organisation.”

To read more, go to www.busmanagement.com and click on the lead interview.

A GL

OBAL

PER

SPEC

TIVE

CORPORATE BRAND INFUSED WITH THEPOWER OF ‘FUSION’

CYBER CATCH-UP

DON’T WORRY, BE HAPPYAccording to MaktoobResearch’s survey,Omanis and Saudis arethe happiest people inthe GCC.

Percentage ofpopulation that saidthey were happy:

Oman 61%

Saudi Arabia 57%

Qatar 56%

Bahrain 54 %

Kuwait 53%

UAE 52 %



GLOBAL TECH HOTSPOTS:THE LIST

1. Silicon Valley2. Bangalore3. London4. Tokyo5. Boston

6. Cambridge7. Shanghai8. Tel Aviv9. Seoul10. Beijing

11. Chennai12. Pune13. Singapore14. Helsinki15. Moscow

16. Hong Kong17. Hyderabad18. New York19. Sydney20. Shenzhen

IT PAYS TO KEEP TABS ONSTAFF SALARIES IN A COMPETITIVE EMPLOYMENT MARKET such as the Middle

East, the challenge facing companies in many industry sectors is

how to establish and maintain competitive levels of pay and bene-

fits. During the last three to five years, salary inflation has in-

creased year on year in most parts of the region. 2008 has been a

particularly challenging year but are companies managing salary

reviews in a structured manner or are they making random, knee-

jerk decisions in response to market forces?

John Macdonald, Managing Director of ORC Worldwide

(Middle East), a global HR consulting company that specialises in

compensation-related issues, believes that many companies in the

region are moving towards a pay philosophy that places more em-

phasis on maintaining alignment with the external market than

with internal equities. “A lot will depend upon the culture of the or-

ganisation and, clearly, you cannot simply ignore internal compar-

isons, but market realities will cause companies to sacrifice some

of their internal equity ideals in the interests of attracting and,

more importantly, retaining high calibre people.”

Inevitably, this will create tensions for many companies as

long-serving employees often see newcomers recruited at higher

rates of pay. Macdonald continues: “Any company’s first priority

should be to the high performing, high potential individuals who

will have the biggest impact on the long-term success of the busi-

ness and these people are not just in management positions. It is

essential that companies stay tuned to what the market is paying

these individuals and that they pay the going rate for up-to-date,

sought after skills and experience.”

Since ORC Worldwide opened its Dubai Office in 2007, they

have seen a lot of interest from clients seeking reliable data on mar-

ket rates of pay and benefits. “Companies are hungry for data to

help establish market-driven pay scales and it is encouraging to see

this becoming integral to their overall pay philosophy and strategy,”

MacDonald concludes.

For more information on ORC’s activities in the region, contact

John Macdonald at [email protected].

STRANGE BUT TRUETHE UAE is planning to design and

build the largest ever hot-air balloon

seen in the Middle East, Africa and

Asia. The huge balloon will be

designed and built under the

leadership of Italian balloon designer

Paulo Benano. The UAE will be the

only country in Asia and the third

worldwide after US and Canada to

have such a powerful balloon.

Expected to be 50 metres in length

and 25 metres wide, the balloon will

have two engines and is due to be

launched in December 2009 to mark

the country’s 37th national day.

FRONTLINE

THE SKY’S THE LIMIT FOR PLANNED TOWERJUST WHEN YOU THOUGHT you had seen it all in Dubai, along

come jaw-dropping plans for the next world’s tallest tower. The

multibillion dollar development, the centrepiece of a port and

harbour complex, will rise to an incredible 1000 metres – 200

metres higher than the yet-to-be-complete nearby Burj Dubai. In

fact, the tower is so tall that it is thought the temperature at the

top will be around 10 degrees cooler than at the bottom, while

high-speed lifts will whisk people to the top so fast that you will

be able to witness sunset twice.

Nakheel, the company behind the new project, say the

eponymous tower will boast more than 200 floors, 19,000

residential apartments, 3500 hotel rooms and a 100-room super

luxury hotel at the summit. Bosses say the whole development

will spread over 270 hectares and be home to 55,000 people

and a workplace for 45,000. “There is nothing like it in Dubai”,

His Excellency Sultan Ahmed bin Sulayem, the CEO of Dubai

World (Nakheel’s parent company), said at the launch.

NEWSMAKER

19

1000950900850800750700650600550500450400350300250200150100

Burj Dubai(Dubai)

Russia Tower(Moscow)

Chicago Spire(Chicago)

Taipei 101(Taipei)

Shanghai WorldFinance Centre

(Shanghai)

PetronasTowers

(Kuala Lumpur)

New Tower(Dubai)

Empire StateBuilding

(New York)



FRONTLINE

KUWAIT SETSMINIMUM WAGETHE KUWAIT GOVERNMENT has

agreed to a new minimum wage

after protests rocked the

country. Tough penalties

will be brought in for em-

ployers abusing foreign

workers and maids. Parliament's

human rights committee has in-

troduced a bill stipulating jail

terms of up to 15 years for of-

fences including forced labour,

abusing workers or sexually ex-

ploiting maids.

UAE BANKS HIT BYWAVE OF CARDFRAUDUAE BANKS HAVE BEEN hit by a

wave of ATM card fraud, with

criminal gangs using counterfeit

cards to access local accounts

from abroad. HSBC has refund-

ed the small number of its cus-

tomers have been affected and

warned others to change their

PIN numbers as a precaution.

“Together with other UAE-based

banks, we have been experienc-

ing an attack on our local ac-

counts from counterfeit ATM

card usage abroad” said

Jonathan Campbell-James, re-

gional head of security and fraud

risk at HSBC Middle East.

MIDDLE EASTREVENUE SET TODOUBLEROYAL BANK OF SCOTLAND ex-

pects its revenue from the Gulf

to double over the next two

years on the back of booming

economic growth in the region,

said Colin Macdonald, regional

head of the Middle East for RBS.

He continued that revenue had

doubled over the last two years

and he expected growth to re-

main at current levels.

NETDIMENSIONS, a global provider of performance,

knowledge and learning management systems recently re-

leased Enterprise Knowledge Platform (EKP) 5.5. A major

upgrade in EKP 5.5 is the hierarchical picture-based cata-

logue view. “Nesting catalogues under other catalogues is

now a standard feature,” said NetDimensions CIO Ray Ruff.

“A hierarchical catalogue view enables listing of a

course in more than one catalogue. This is useful in e-

commerce, document management applications and

multiple groups or business units where they need to

be precisely managed.” Version control of courses and

learning objects give managers the ability to keep track

of versions a user has taken, making it easier for com-

pliance and certification audits.

Visual enhancements also give users a more ap-

pealing and navigable interface. “The new Learning

Path feature presents a graphical layout of the courses

currently assigned to learners, making it easier to view

course assignments that need action, in process or

have been completed,” explained Ruff.

Enhancements tailored to the needs of managers

include tracking certificate IDs for easier management

of certifications, greater flexibility in planning multiple

training days, as well as setting up deadlines and avail-

ability dates for courses. This allows managers to set

up the same course over different days when training a

diverse group of learners. “Clients conducting classes

using WebEx Virtual Classroom can also use EKP to co-

ordinate classes and keep track of enrollments and

scores,” Ruff noted.

Learners can now specify a date range when print-

ing user transcripts, view the map of a training facility,

and have greater flexibility to change their status when

enrolled in a course. “We also made the e-commerce in-

terface more intuitive, walking the buyer through the

whole process.” added Ruff. “Our ultimate goal is to

give our clients a more convenient EKP experience so

they can focus on learning. EKP 5.5 takes us one step

closer to that goal.”

Find out more at www.NetDimensions.com

LATEST RELEASE OF THE ENTERPRISEKNOWLEDGE PLATFORM

GOOD NEWS/BAD NEWS ARE YOU BUSINESSCONFIDENT?

ACCORDING TO A NEW SUR-

VEY, business confidence is

falling across the GCC. The sur-

vey recorded the opinions of

over 500 business people

from across the GCC and

asked respondents if they ex-

pected overall economic con-

ditions in six months to be

better, the same or worse than

they were presently.

Most pessimisticcountries: Bahrain and the United ArabEmirates

Most optimistic coun-tries: Saudi Arabia andOman

Source: Arabian BusinessBusiness Confidence Survey

20GOOD NEWS: BAHRAIN COMMUTERSTRAFFIC CONGESTION in the Bahraini capital of Manama

is to be eased with the building of a monorail train

network.

The Bahraini government’s cabinet has unveiled the

ambitious plans to build the metro in a bid to tackle the

city’s traffic problems. It will be built in three phases to be

completed in 2030.

The plan is similar to the US$4.2billion Dubai Metro

project, which is scheduled to be completed in September

2009.

BAD NEWS: DUBAI HOUSE BUYERSDUBAI BASED SHUAA CAPITAL has warned that 70

percent of Dubai residents are being priced out of the

country’s property market.

The rapid rise in Dubai’s property prices and the

high demand means there are few homes for those in

the lower to middle income sector, the company has

warned.

Shuaa Capital predicts a year-long price correction

in the Dubai property market starting in 2009.

✓

✗



WHERE NEXT FOR OIL?IN THE PAST FEW MONTHS

crude prices have been on a

rollercoaster ride, leaving indus-

try experts scratching their

heads over where the price is

heading next. Crude hit US$147

a barrel in July before plummet-

ing to less than US$80 a barrel

three months later. Opinion sug-

gests that the price could remain

around the US$75 mark for the

rest of the year, while some ana-

lysts claim it could go as low as

US$50. The deepening financial

crisis and global economic

slowdown, as well as a general

fear amongst investors, is being

blamed for the fall. However,

the economic woes are expect-

ed to lead to a drop in steel

prices and other equipment

which will be good news for the

oil and gas industry.

IN SOME SECTORS business continuity management (BCM) is a mature

and widely accepted discipline, but the journey to get to that point was

one of gradual development. Marsh Risk Consulting (MRC) began deliv-

ering solutions in this area many years ago. The services developed out

of a growing need to protect companies’ balance sheets from loss. This

was traditionally through insurance cover by providing financial compen-

sation for loss of profits after an incident, often after many months, or

even years of wrangling with lawyers, accountants, underwriters and

loss adjusters. Indeed, one of our earliest marketing publications includ-

ed the statistic that 88 percent of small

and lower medium-sized organisations

never recovered from a severe fire.

MRC initially worked with clients to

construct emergency plans. This included the key actions required in the

first 24 hours after an incident such as evacuation, first aid and firefight-

ing procedures. Next we worked on producing crisis management plans

covering the days and weeks that followed. Actions in this area typically

look at command and control. During the 1990s organisations realised

that following the above actions there was a longer term need to manage

reputational damage with stakeholders such as customers, investors

and employees. We worked with our clients on business recovery plans

outlining actions such as restoring critical processes, media manage-

ment and redeveloping business strategies. The combination of these

three areas is demonstrated in fig1.

As our consulting practice grows throughout the Middle East,

Marsh recognises the differing cultural and geographical challenges in

the region. Through a combination of thought leadership and learning

from our clients the process and style of BCM is constantly evolving and

we recognise and support forums such as this in driving the maturity of

the discipline to contribute to a robust economy particularly at this time

of significant global economic change.

FRONTLINE

PLANNING FOR THE WORSE CASE SCENARIO

ECO-FRIENDLYRULES AIM TOTRANSFORM ABUDHABIAbu Dhabi is seeking to

transform itself into a green

city in line with the city’s

master plan, Plan Abu Dhabi

2030. An interim set of

community planning

guidelines to ensure

sustainable development in

Abu Dhabi have been unveiled

and the new regulations from

the emirate’s green initiative,

The guidelines, which will

eventually become mandatory,

will also boost the amount of

green space in the emirate.

For every 10,000 people, the

city will have a minimum of

two hectares of open space.

Emergencyresponse plan

Crisis management/communication plan

Activ

ity

Time objective

Businessrecovery plan

A successfuloutcome


FRONT LINE

Forecasting the future isn’t easy: When it

comes to predictions related to oil, the record is rather

chequered. In general, we have grossly

underestimated mankind’s abilities to find new

reserves of petrol, as well as our capacity to raise

recovery rates and tap fields once thought

inaccessible or impossible to produce.

Concerns over energy security are nothingnew: Back in 1972, an interdisciplinary research

group known as the Club of Rome issued The Limits to

Growth, a landmark study that predicted the rapid

depletion of natural resources leading to worldwide

socioeconomic chaos. Fortunately the dates predicted

for the exhaustion of these natural resources have

come and gone without the dire consequences of

societal collapse and economic misery envisioned in

the report.

Confidence is no excuse for complacency:I am confident that this growth trend will continue. But

I also believe we must take a hard look at the earth’s

total endowment of liquid fuels, and realistically assess

our ability to meet future demand for energy.

The joker in the pack among non-conventional liquid resources is biofuels:Their growth will be a function primarily of government

policies and incentives, rather than market

fundamentals. Frankly there are huge uncertainties

associated with biofuels, and I think it is therefore

difficult to predict with any certainty their ultimate

contribution to the global energy mix.

I do not believe the world has to worryabout ‘peak oil’ for a very long time: What

we do need to worry about is ignoring liquid fuels in

our energy policies and investment decisions, and

discouraging their development and growth on various

pretexts.

Petroleum is too important to the global economy

to be subjected to superficial analyses, doom and

gloom prophecies or simplistic assumptions. Rather,

oil deserves to be the topic of a rational and realistic

dialogue.

Abdallah S. Jum’ah isPresident and Chief ExecutiveOfficer of Saudi Aramco.

22IN MY VIEW



IT IS NOW THREE YEARS since Advent Software opened

its Dubai office and in that time the business in the re-

gion has grown considerably. The office in the presti-

gious Emirates Tower is the home for the team of 10 who

cover the full range of services – from sales, to consult-

ing and provide local support to the clients in the region.

Advent’s client base in the region has expanded

across all territories that include the UAE, Bahrain,

Qatar, Egypt, Lebanon and more recently Saudi

Arabia. With almost 30 clients spread across the re-

gion, Dubai is the home for almost one half. However,

the company is seeing a significant surge in demand

for more sophisticated portfolio management sys-

tems from Saudi Arabia, where the gradual opening of

the markets has highlighted a need for reliable and

proven technology.

Asset managers, family offices and wealth man-

agers in the region are now looking to build and grow

their businesses on a platform that will support their

growth without adding cost and also improve efficien-

cies and productivity. Clients are now much more de-

manding and need faster, more accurate information

via any channel and to deliver this level of service

firms need the right technology to support them.

Today, it is not just about acquiring new clients –

the focus is just as strong on retaining existing clients

and you can only achieve this by providing world-class

service and support to deliver the products that meet

clients’ requirements fast and without fuss. To be suc-

cessful at these key areas there needs to be a strong

front and middle office platform to support the invest-

ment manager.

For more information see www.advent.com or

email [email protected].

3D NetworksAbu Dhabi Royal JetAccentureAdvent SoftwareAirbusAircelAlgeria TelecomAlsalam Aircraft CompanyAMDAnti-Phishing Working GroupAppleBahrain Petroleum CompanyBeximco PharmaceuticalsBoeingBombadier SkyjetBoxSentryBPBusiness Continuity Institute ChevronCommercial Bank InternationalCyveillanceDatamonitorEfmaEmirates AlluminiumEmirates NBDEtihadEtislatExxonMobil

2,7212231

23,4532747466

18, 9356

1401103832

12356906890

66,70569696664232

74, 13790

FerrariFinancial TimesForbesFour SeasonsGPD Industries Green PacketGuinnessGulf HelicoptersHotmailHR Access SolutionsIBMIDCInforInnovative HR SolutionsINSEADInsigniaInternational Institute for ResearchInternational Turnkey SystemsIron Mountain DigitalIslamic Financial Services BoardIsland Global YachtingJBOSSJumeirahJumeirah Golf EstatesKanoo GroupKanoo Shipping AgenciesKoenigseggKPMG

321374

1261166,78

746656

1149482

IFC, 86105

100,1308474

40,1356038

11694

1261162626

14256

Kuwait Petroleum CorporationLeisurecorpLexisNexisLiberty AllianceManchester United Football ClubMarsh McKinsey & CompanyMEBAAMeet The BossMoody’s Investor ServiceMoroc TelecomMotorolaNational Bank of KuwaitNet DimensionsNortelOger TelecomOpennet MEAOracle ORC WorldwidePA ConsultingPayPalPearl Valley Golf EstatesphionPricewaterhouseCoopersRAK BankRAK Minerals and Metals InvestmentsRamco SystemsRas Al Khaimah Investment Authority

90116385074

8,2142

1221257474

14056

20,59,10378749486

19,11398,121

5611650

1006646

66,7046

COMPANY INDEX Q4 2008Companies in this issue are indexed to the first page of the article in which each is mentioned.

FRONT LINE

SOCIAL CLIMBERSUAE INTERNET USERS have the

second highest rate of membership

of social networking sites in the

world, according to Synovate.

Around 13,000 people aged

between 18 and 65-years-old were

surveyed by Synovate and 46

percent of those that took part

from the UAE said they were

members of sites like Facebook.

The highest number, at 49

percent, came from the

Netherlands.

As well as being the second

most likely to sign up to a social

networking site, UAE users were

shown to be the most prolific with

37 percent of users saying they

had more friends online than in the

real world.

Ritz CarltonSAPSaudi AramcoSaudi Telecom Company SecuricorShamil BankShangri-LaSharjah Teaching HospitalShibbolethSiemens Snowmass ColoradoStandard & poor'sThe Peninsula Thru-UTrend MicroTrimex InternationalTroon GolfTurnberryUK Financial Services AuthorityUKSUN Relief and Works AgencyVASCOVertuVision SolutionsVolvoWorld BankYahoo!Zain

1268623746638

1386650

37,8411674

138108, OBC

5646

11611638

4,106,IBC66

50,7314054

142625674

SOFTWARE COMPANY CONTINUESMIDDLE EAST GROWTH



Abu Dhabi will win a coveted place on the F1 racing calender once the Yas Marina Circuit is complete. Business Management takes a look at how far the circuit is from the fi nishing line in this issue’s project focus.

On November 15 2009 fi ve glowing red lights suspended

across the starting line of Abu Dhabi’s Yas Marina Circuit

and a cacophony of roaring engines will signal the start

of the emirate’s inaugural F1 Championship race. At fi rst

glance a birds’ eye view of the development on Yas Island

looks like nothing more than a dusty, sprawling construction site.

But look closely and you will see that the track and state-of-the-art

facilities are fi nally beginning to take shape. Recently released artist

impressions give you some idea of just how impressive the track will

eventually be.

Next year’s race will be the fi nale for a 19-race season that would

have seen the world’s best drivers battle wheel to wheel across four

continents. The fact that the race could be the championship decider

will add extra spice to the event. Designed by respected F1 track ar-

chitect Herman Tilke, the 5.6km circuit will boast a non-permanent

section that will replicate a street circuit, as well as extensive stadia

and a marina. Up to 150 yachts will be able to allowed to berth

alongside the track, which is being built by the UAE’s

Aldar Property Development Company.

But the Etihad Airways Abu

Dhabi Grand Prix (to give it its

offi cial title) is not just about

the racing. Yas Island, a natu-

PROJECT FOCUS

“GENTLEMEN START YOUR ENGINES”

ral 2550-hectare island located off the coast of Abu Dhabi and will

also house a Ferrari theme park, a water park, signature hotels, golf

courses, a 300,000 square metre retail area, apartments and villas,

and much more. These facilites will help put Yas Island up there with

the best circuits on the F1 calendar.

However, there have been whispers that the ambitious circuit

won’t be fi nished on time, something that Phillipe Gurdjian, Chief

Executive of Abu Dhabi Motor Sport, has rubbished. He told reporters

that he is a “perfectionist” and that he is solely focused on the devel-

opment being ready for the earmarked date. His Excellency Khaldoon

Al Mubarak, Chairman of the Executive Affairs Authority, Abu Dhabi

has also been keen to stress that work is progressing well, with some

parts actually ahead of schedule, including the piling work for the pit

building and the excavation of the marina.

Gurdjian, who was drafted in to rescue the

Grand Prix events in Spain, Malaysia and

ABU DHABI GP.indd Sec1:24ABU DHABI GP.indd Sec1:24 16/10/08 08:21:0716/10/08 08:21:07


VITAL STATISTICS

No. of laps: 56 (estimated)

Length: 5.6km

No. of corners: 20

Top Speed: 320 km/h (estimated)

Lap time: 1min 38sec (estimated)

or not Abu Dhabi can overtake its neighbour will remain to be seen but

it has certainly gained a motor racing upper hand and a highly-coveted

spot on the F1 calender.

All that is needed now is for the site’s 15,000 workers to fi nish the

circuit on time and to the high standards that have been set. . Al Muba-

rak told the media in the summer that Yas Island Circuit will create an

“unparalleled” experience. “By starting with a blank canvas we have

had the luxury of learning from existing Grands Prix as well as other

major sporting events to ensure everything we do is best-practice and

that the experience we will deliver spectators is unparalleled.”

Bahrain believes that the race will showcase Abu Dhabi and the UAE’s

offerings to a global audience. Sport is such a good revenue channel

that both businesses and governments are vying to cash in on its

worldwide appeal, especially Formula One.

Just look at Bahrain, for instance. This Middle Eastern neighbour

hosted its inaugural F1 Grand Prix in 2004 – the fi rst ever race to be

held in the region – at its US$150 million circuit in Shakir. The fi nan-

cial gains are clear: last year’s race weekend alone generated almost

US$400 million in direct income to the businesses and traders of the

Kingdom. In fact, it is thought that the F1 Grands Prix events create

more revenue per event than any other sport in the world. The multi-

million dollar sponsorship deals with the world’s largest companies

and the internationally recognised luxury brands echo this sentiment.

On top of this are the millions of viewers seeing what Abu Dhabi has to

offer through their TV sets.

The emirate believes the Yas Island project is another step toward

competing with neighbouring UAE emirate Dubai, which already plays

host to world-class golf, tennis and horseracing events, as well as its

US$8 billion Dubai Sports City – due to be complete in 2010. Whether

“F1 Supremo” Bernie Ecclestone seals the deal with HE Khaldoon Al Mubarak

ABU DHABI GP.indd Sec1:25ABU DHABI GP.indd Sec1:25 15/10/08 16:03:2715/10/08 16:03:27

COVER STORY

Mishal Kanoo:5oct 16/10/08 08:05 Page 26

There are few Arab business leaders that are

more publicly outspoken than Mishal Kanoo.

And when it comes to his views on the future

of the Middle East economy, he pulls no

punches. To date Kanoo, Deputy Chairman of

the Kanoo Group with an estimated person-

al fortune of US$1.7 billion, has written articles predicting

a stock market crash in the Gulf, the collapse of the re-

gion’s property market, and the destruction of the econo-

my by family-run firms. So it’s no surprise that when I ask

Kanoo whether he thinks the tremors of the credit crunch

will be felt in the Middle East – his answer is an unequivo-

cal yes. “When you have these kind of events happening

in Europe and the US, it would be reprehensible, and un-

acceptable for anyone to say these things are happening

in isolation and it has nothing to do with us,” he says.

“There is a major credit crunch in this part of the world.

Banks are becoming very stringent. They are fearful of

what’s going to happen and rightly so.


He’s a member of the 11thrichest family in the Gulf andoversees a multibillion-dollarbusiness empire. But, as DianaMilne finds out when shemeets Mishal Kanoo, he hascontroversial views on the stateof the Gulf economy.

TOUGHTALK


“They are looking at the future and thinking, ‘I’m going

to be straddled with a lot of debt and a lot of people who are

not going to be able to pay up’”. This, claims Kanoo, will re-

sult in a situation where the ambitious projects under con-

struction across the region could be delayed and global

players could be deterred from establishing headquarters

in the Gulf: “You’re not going to see the free flowing money

that there was in the past. It’s going to slow expansion

plans, it’s going to slow a lot of additional businesses com-

ing into this part of the world.”

Kanoo’s pessimism on the state of the Arab economy is

ironic given the success his own firm has enjoyed. The Kanoo

Group is one of the largest family-owned firms in the Gulf

and spans industries ranging from travel, machinery, oil and

gas, industrial chemicals and shipping. Kanoo Shipping

Agencies is the largest regional shipping agency in the

Middle East supporting over 5000 vessels a year across the

Arabian Peninsular and the success of the business has

made the Kanoo family the 11th richest in the Arab world.

And while Kanoo himself may have a reputation for holding

radical views on the future of the Gulf economy, he admits

his family business has conservative aims.

While the Kanoo Group continues to expand, it does so

mostly within the boundaries of its existing markets and its

established business divisions: “To be honest we haven’t

changed,” Kanoo reveals. “What we’ve done is we’ve added

onto our existing businesses. We have not added any new di-

visions. I sincerely doubt we will go into anything outside our

area of expertise. But within our areas of expertise there’s a

lot of new businesses to get into.” Kanoo says that the main

focus of the group will continue to be its activities in the in-

dustrial sector: “The reason why is because it is one of the

hardest types of businesses to get up and running but when

you have it up and running with the right partner, it is very re-

warding – not only financially but also socially.” He goes on

to say that the company has recently acquired a majority

stake in a UAE-based landscaping company with an industri-

al focus – an area the Kanoo Group is keen to branch into:

“We’ve established a majority share in a well established

landscaping company here. That is the type of business which

we think is going to blossom, pardon the pun,” he jokes. “The

governments of Dubai and Abu Dhabi are concerned with

beautifying the cities so this makes sense to us.”

“There is a major credit crunch in this part ofthe world. Banks are becoming very stringent”

Kanoo Shipping Agencies is the largestregional shipping agency in the Middle East.


International expansion is part of the Kanoo Group’s business strate-

gy, at least within the travel industry, having last year acquired full own-

ership of 12 American Express Foreign Exchange services, 10 in the UK

and two in France as well as 18 American Express consumer travel outlets

in the UK. “What we’ve managed to do so far in travel is to piggy back on

our expertise. We’ve expanded into businesses that

are part and parcel of our core business. So for exam-

ple we now have a travel agency in the UK and Egypt,”

he explains.

Any additional expansion by the company into in-

ternational markets should be within emerging economies,

he goes on to say. “If you have a successful model, yes, you

can replicate it. Trying to replicate the idea in more

stable economic countries does not give you

the same fantastic return as you would get

from emerging ones. But it does give you

security. The only problem is because

these markets are stable you have a lot

of competition there versus if you set

up in certain parts of Latin America,

Asia and Africa for example.”

While he acknowledges the need

for the Kanoo Group to expand its pres-

ence in the international markets, Kanoo

says the company’s main focus will remain on

existing Middle East markets. “I would still stick to

my regional areas. You play to your strengths,” he says.

“That’s my strength. I wouldn’t limit this to the GCC. I

would say the region now.”

However despite being keen for the company to con-

tinue to expand on its home turf, Kanoo is highly critical of

the business environment in the Gulf compared to in more

developed markets and claims that weaknesses in the

economies’ regulatory frameworks could deter foreign in-

vestors. “Any investor (in the Middle East) has to ask him

or herself a few questions regarding the rules and regula-

tions, i.e. the law, and whether it is stable or flexible. If you

are the type of person who wants the laws to be flexible then

this environment would suit you. But if you are coming from

a European background where people live or die by the law

then this would not work for you. It all depends on the type of

business environment you are looking for.”

He adds that while legislation is in place to support the

practice of corporate governance by Middle East businesses,

the enforcement of this is patchy – leading to corrupt prac-

tices “We do have best of the breed legislation. But the prob-

lem comes with implementing those rules and regulations.

“That’s not something I can say, hand on heart, is being

done perfectly by the book. If you talked purely about pub-

licly traded companies, there are issues of governance, of

transparency, insider trading and you have them happen-

ing all the time. It’s like an illness we don’t want to address.

That said, are the authorities trying to combat it? Yes. Are

they putting enough resources into it? I don’t know. Only time will tell.”

The best efforts at enforcing corporate governance are being made

by the Dubai authorities, according to Kanoo, who argues that efforts

have not been as successful so far in Saudi Arabia. He says that it is

more important, now than ever before, for Middle East-based compa-


S A U D I A R A B I A

Y E M E N

S U LTA N AT E

O F OM A N

U A E

SANA

ABHA

MECCA

JEDDAH

RIYADH

YANBU

RABIGH MUSCAT

JUBAILDAMMAM

AL AINABU DHABI

DOAH

BAHRAINMANAMA

SHARJAHDUBAI

ABU DHABI

FAMILY FORTUNES: THE KANOO GROUP

The Kanoo Group is one of the largest independent, family-owned,group of companies in the Gulf region. Established in Bahrain in 1890

by Haji Yusuf Bin Ahmed Kanoo, it grew from its early trading andshipping business to become one of the most diversified

and highly regarded business houses in the Gulf regionand beyond.

Today the Kanoo Group is a diversifiedbusiness conglomerate with business activitiesacross the world’s most dynamic industries fromshipping, travel, holidays, machinery, oil and gas,power and industrial chemicals to exhibitionservices, courier services, logistics and business

centres and other retail and commercial activities.In addition, the Kanoo Group has formed joint

ventures with international companies serving theservice and industrial sectors such as Norwich Union

Insurance, Mearsk, BASF, Johnson Arabia, Akzo Noble,Freightworks and others.

Kanoo Group’s office network


nies to meet world standards in corporate governance,

given that many are now joining their international

counterparts on the global stage. “Corporate gover-

nance and transparency are things that will take a

while for people to absorb and get done. The question

is at what pace? In this region it’s not a question of is it

ready. It’s a question of we have to be ready. Because

when you have to attract international buyers, you no

longer have a choice.”

The Kanoo Group has recently made steps to im-

prove the quality of its own organisation having ap-

plied to be assessed using the Dubai Quality Mark

standards in partnership with Dubai Industrial City.

Earlier this year the company also announced plans to

“re-engineer” its business with a focus on its leisure di-

vision and how to run this and its corporate operations

more efficiently, admitting it had not fully reached its

goals in these areas.

Given the rapid growth of the company and the many

divisions it now comprises of, an overall assessment of

the way it is run makes sense. The family-run company

also appointed an outsider, Julian Knott, as divisional man-

ager of business development and re-engineering, to con-

duct an overview of the way the business is run. Describing

the move, Kanoo says: “Any organisation eventually be-

comes, to a certain degree, content with itself. If you look

inwards, you will only see what you have seen in the past.

But if you have brought eyes in from the outside, in this

case Julian, you will see different aspects and from a dif-

ferent angle. This will benefit our customers. And at the

end of the day, we live and die by our customers.”

Kanoo is prone too to reassessing his own life and

where he wants to go next. And while clearly devoted to

the family firm he admits he harbours ambitions to pursue

personal goals. “There are only two things I wanted to do,”

he reveals. “The first is that I wanted to go back to teaching.

And the second thing is that I’d like to write a book. I don’t

know what on yet but I’m hoping to tend towards something

more philosophical – to bore the cr** out of people.” Kanoo’s

controversial views and outspokenness however mean that

he is very unlikely ever to bore anyone. �


“Any organisation eventually becomes,to a certain degree, content with itself. Ifyou look inwards, you will only see whatyou have seen in the past”

Mishal Kanoo, was born in 1969 and he received his higher education

at the American University of Sharjah and the University of St. Thomas

in Houston, Texas, where he obtained an MBA in finance.

He joined the family firm in 1991, left to work as an auditor for

Arthur Anderson in Dubai, then rejoined the firm in his current position

in 1991. In his spare time he teaches business part time at the

American University of Sharjah where he specialises in the subject of

family businesses. Kanoo is also a regular contributor of columns to

Middle East-based magazines and newspapers.

MISHAL KANOO’S BIOGRAPHY


Accenture.indd 1Accenture.indd 1 9/10/08 09:54:179/10/08 09:54:17

James Hogan is not a man who believes in doing things by

halves. Five years ago Etihad Airways didn’t even exist.Today

the Abu Dhabi-based airline is a household name that has

flown four million passengers to 50 destinations worldwide and

has invested billions of dollars in new aircraft this year alone. And

under Hogan’s leadership it shows no sign of slowing down. In

September he revealed to the American media that he planned to double the

number of cities Etihad services to 100 and to fly 25million passengers by 2020.

These goals will be supported by Etihad’s US$43 billion shopping spree at the

UK’s Farnborough Air Show in July at which it purchased 55 Airbus aircraft and

45 aircraft from Boeing.

Etihad, like so many Middle Eastern companies, has experienced ac-

celerated growth thanks to the region’s abundant oil wealth – putting it on

a par with more established Western airlines, despite only being three

years old. And according to Hogan it is precisely Etihad’s relative youth that

allows it to set such ambitious targets.“One of the key advantages Etihad

has is that it’s not a legacy carrier,” says Hogan “As a relatively new airline

and evolving brand, we can make decisions quickly without the burden that the

older, more traditional airlines have.”

But while youth may give Etihad the edge over its more established rivals,

it shares with them the threat posed by volatile oil prices.

Hogan is bullish on Etihad’s prospects of surviving the storm, but admits

the airline will have to make cut backs to meet the rising costs. “The high cost

of fuel is a challenge and it’s not one that is going is to disappear overnight,” he

says. “Thankfully we’ve hedged aggressively and we have a strong focus on

keeping costs that are within our influence under control. There are no plans

for Etihad to compromise its customer service in order to cut the weight of our

aircraft. However, the airline is currently pursuing a number of fuel saving ini-

tiatives, which are already realising significant savings on Etihad’s aviation bill.”

But while he may be looking to cut the costs of Etihad’s fuel bills, Hogan

has invested heavily in the continuing expansion of the airline – both by pur-

chasing aircraft and by expanding its network of routes. Among the new des-

tinations added to Etihad’s network this year alone are Lagos, Melbourne,

Chennai, Belarus, Kazakhstan and Moscow. And while that may sound im-

pressive, Hogan says the list is just the tip of the iceberg for Etihad.

With plans to double its destinations and fly 25million passengers by 2020 Etihad Airways isflying high. But as the airline’s CEO JamesHogan tells Diana Milne, like every internationalcarrier, it faces tough challenges ahead.

AVIATION

ETHIAD_ed:5oct 16/10/08 08:45 Page 32



THE ETIHAD STORY

Etihad Airways was set up as the national airline of the United Arab

Emirates in July 2003 by a royal decree issued by Sheikh Khalifa bin

Zayed Al Nahyan, then the Crown Prince of Abu Dhabi and Deputy

Supreme Commander of the UAE Armed Services. Soon after, Dr Sheikh

Ahmed bin Saif Al Nahyan was appointed Chairman of the airline.

Based in Abu Dhabi, the capital of the UAE, it started, with the

twin objectives of creating an airline that would bear the UAE flag and

extend Arabian hospitality to its guests. ‘Etihad’ is Arabic for ‘united’,

and hence a symbol of the bonding among the seven emirates that

constitute the UAE.

Services were officially launched with a short, ceremonial flight to

the oasis city of Al Ain in the emirate of Abu Dhabi on November 5, 2003.

A week later, on November 12, 2003, commercial operations started with

the launch of services to Beirut.

In the months that followed, Etihad added almost one new route a

month. In June 2006, it achieved another milestone: 30 destinations in 30

months. By 2010, it plans to touch 70 international destinations.

Other significant achievements in the airline’s three-year history

include:

• An unprecedented US$8-billion order for new aircraft in 2004 (five

Boeing 777-300ERs and 24 Airbus aircraft, including four A380s).

• The first-ever direct flight from the UAE to Geneva (June 2004),

Brussels and Toronto (October 2005).

• The first-ever non-stop flight from Abu Dhabi to Johannesburg.

• The World’s Leading New Airline of the Year Award (2004, 2005 and

2006, World Travel Awards).

• The World’s Leading Flatbed Seat Award (13th World Travel Awards, 2006).

“To give you some idea of our intentions, we don’t yet fly to places like

Japan, Korea, or anywhere in South America. Currently we only serve New

York in the USA and that situation will change,” he says.

At Farnborough Etihad purchased a total of 205 planes – at a time

when most airlines around the world are making cut backs. The growth of

the airline is in many ways, concurrent with the growth of the Abu Dhabi as

an international tourism and business destination and Hogan says he fore-

casts strong future demand from visitors to the emirate. This, he says, is

why he spent US$43 billion at Farnborough: “The growth of Etihad Airways

and Abu Dhabi are inextricably linked. We would not have made an order

of this size and magnitude unless we had absolute confidence in the future

success of the emirate, both from a tourist and business point of view. Our

order reflects our belief in Abu Dhabi’s future plans.”

Hogan has every reason to be confident. Approximately US$200 billion is

to be invested the UAE capital in the next 10 years. Among the attractions

set to put Abu Dhabi on the global map are Saadiyat Island which will fea-

ture a Ferrari theme park, racetrack, hotels and leisure facilities and Yas

Island which will feature the Middle East’s very own Guggenheim Museum

and Louvre art gallery. Travel to the region is also set to continue to grow

at a rate that far oustrips the global average. According to IATA, the Middle

East witnessed growth of 18.1 percent in passenger traffic in 2007, com-

pared to 7.4 percent growth in global traffic. It predicts growth in the re-

gion between now and 2015 to be around 7.1 percent – the highest of any

region in the world compared to a global average of 5.3 percent. As well

as capitalising on these growing numbers Hogan says he plans to contin-

ue to target niche travellers to the region. “We tap into many different mar-



kets – religious traffic, business, tourists, and people using the Middle

East to connect to their final destination.

“Coupled with a rapidly strengthening business and tourism market,

the Middle East is a recipe for success and Etihad is proud to play an inte-

gral part in it,” says Hogan.

But Etihad faces hot competition in the aviation market and in order to

increase passenger numbers it must invest not just in new aircraft and des-

tinations, but also in strengthening recognition of the Etihad brand globally.

Like neighbouring Emirates Airline, sports sponsorship has been a cornerstone

of this strategy. Its most high profile sponsorship agreement to date is a three-

year sponsorship deal with the Ferrari F1 team, which will see Etihad’s logo dis-

played prominently on the Ferrari cars and on the drivers’ uniforms. Etihad is

also the official airline of Chelsea Football Club and closer to home it is the title

sponsor of the Formula One Abu Dhabi Grand Prix, the official airline of the Abu

Dhabi Golf Championship and sponsors the Abu Dhabi Harlequins Rugby

Union Football Club.

Investment must also be directed towards ensuring the airline’s image is

an ethical one – particularly at a time when the spotlight has been turned on

airlines in the bid to cut carbon emissions. Hogan is keen to emphasise that

the airline is doing all it can to stay green. “We take our commitment to the en-

vironment seriously. Etihad operates one of the youngest and most environ-

Below: A class of Emirati cadet pilots on their first day of training Bottom: Etihad Cabin crew with an Etihad sponsored Ferrari F1 car


mentally-efficient fleets in the world. The average age of the fleet is

three years meaning lower levels of emissions than older fleets. A key

selection criterion in the Farnborough deal was the environmental per-

formance of the aicraft. The new generation aircraft we have ordered

from both Boeing and Airbus are amongst the most fuel efficient

and will help maintain Etihad’s fleet as one of the youngest and

greenest in the sky.” He goes on to say that the airline is currently

developing policies to minimise its impact on the environment in

line with Etihad’s commitment to sustainability.

In the area of social responsibility, Hogan says the airline is also

keen to create and promote employment for Emirati nationals. Indeed,

he says the participation by Emiratis in the airline’s success story is one

of his proudest achievements to date: “A particular issue which continues to

please me is the increasing role that Emiratis are playing in the continued de-

velopment of our airline. Etihad continues to build its Emiratisation scheme,

which, by the end of 2008 will boast more than 100 participants across the

cadet pilot, management trainee and technical engineering programmes. With

Etihad’s incredible growth set to continue, it is crucial that we develop our

multi-talented, multi-cultural workforce with strong Emirati representation.”

The expanding of Etihad’s workforce and the favourable market

conditions it enjoys in the Middle East are in sharp contrast to those in

the West where crumbing financial markets and a looming recession are

set to hit airlines’ profit margins hard and will lead to mass redundan-

cies. Earlier this year British Airways CEO Willie Walsh announced re-

dundancies of 1800 and warned that he predicts 30 airlines will go

bankrupt before Christmas. “We are in the worst trading environment

the industry has ever seen,” he said at the time, adding “We have seen

30 or so airlines go bust this year and it would be fair to expect a simi-

lar number of casualties worldwide over the next three to four months.”

The situation has prompted some to predict wealthy Middle East air-

lines such as Etihad could acquire struggling European airlines. Indeed

there was media speculation this year that it was in “firm talks” over a

possible US$1 billion merger with UK carrier BMI British Midland.

According to the reports, Etihad had approached Lufthansa, which

holds a stake in BMI, and is believed to want to sell its stake for US$357

million. Such a stake would give Etihad the second strongest position at

BA’s home airport Heathrow. In a statement Etihad admitted it was consid-

ering such a move but said it had no definite plans to strike a deal at pre-

sent, stating it had held “a number of discussions with a variety of carriers

around the world”, however it had “no firm talks planned with any airline

or any proposals in the pipeline with any possible new carrier”.

Hogan admits that Etihad is not immune to harm from the economic strife

affecting the European and US aviation industries and that his airline must en-

sure it remains competitive in order to remain in business. “The aviation mar-

ket remains incredibly competitive. The deteriorating economic situation in

Europe and North America is amongst the headwinds that we face going for-

ward. By continuing to focus on the customer experience and by providing the

best service both in the air and on the ground, we will continue to achieve the

challenging targets we set ourselves.”

Deteriorating global economic conditions may lead some to describe

Hogan’s ambitious target-driven approach as unrealistic. But so far the airline

has hit every one of its targets, making it the fastest growing commercial air-

line in history. And judging by this track record, there’s nothing to say Etihad

won’t keep flying high. �


James Hogan was born in 1956 in Melbourne, Australia. After a distinguished

career with Hertz International spanning 13 years, he joined BMI British

Midland in 1997 as Service Director.

In 1998 he was appointed to the board of Forte Hotels Limited as

Worldwide Sales Director. In 1999 he re-joined BMI British Midland as Chief

Operating Officer.

He was based in Melbourne, Australia as Chief Executive of Tesna, a

consortium engaged to restructure Ansett Airlines before moving to the

Bahrain as President and Chief Executive of Gulf Air from May 2002 to

September 2006. He was appointed as Chief Executive of Etihad Airways in

October 2006.

JAMES HOGAN’S BIOGRAPHY

His Highness Dr Sheikh Ahmed bin Saif Al Nahyan, Etihad Airways’ Chairman, CEOJames Hogan, Airbus CEO Tom Enders and Airbus COO, Commercial, John Leahy.


Siemens.indd 1Siemens.indd 1 9/10/08 09:54:459/10/08 09:54:45

New areas of law come about only

rarely. The core principles of contract

law, tort law and criminal law have

long outlived their earliest practitio-

ners. Some areas of law, including, for example,

fi nancial regulation, have expanded greatly from

a small seed of minor legal issues to a great hulk-

ing oak of law; others, such as the law of resti-

tution, came into being from isolated legal

issues coalescing into a single, coherent

body of law. The process by which new

areas of law are created is rarely, however,

straightforward.

The same is true of Islamic fi nance law.

Shari’a law, in and of itself, is certainly not

new. As Potter LJ observed in his signifi cant

speech on the decision of the Court of Appeal

in Shamil Bank of Bahrain v Beximco Pharma-

ceuticals Ltd, “most of the classical Islamic law

on fi nancial transactions is not contained as

‘rules’ or ‘law’ in the Qur’an and Sunnah but

is based on the often divergent views held by

established schools of law formed in a period

roughly between 700 and 850 CE.” What is new,

however, is the growth of Islamic fi nancial busi-

ness into a signifi cant part of the fi nancial mar-

Laying down

the law

ISLAMIC FINANCE

There is a growing need to address the challenges of

regulating Islamic fi nancial institutions in global markets.

Legal expert Antony Hainsworth describes the diffi culties involved

in standardising legislation.


Antony Hainsworth.indd Sec1:38Antony Hainsworth.indd Sec1:38 15/10/08 15:46:1315/10/08 15:46:13


kets. This has led to the court systems of essentially secular countries

having to grasp the signifi cance of Shari’a principles. This process

requires the courts to reach decisions on how what are, in essence,

religious principles, are to interact with black letter law. As with many

conventional areas of law, there is often no easy answer.

Signifi cant steps were taken by the decision of the Court of

Appeal in the Shamil Bank case. Although

the court chose not to recognise the Shari’a

as an independent body of law capable of

governing the relationships between parties,

signifi cant concessions were made. It was

recognised that Shari’a principles may be rel-

evant to the intentions of parties when enter-

ing into a contract. It was recognised that the

courts may have regard to expert evidence

from Shari’a scholars in determining such in-

tentions. From such simple beginnings larger

things often grow.

RegulatorsThe courts are not alone in having to meet

the challenge that Islamic fi nance poses. Fi-

nancial services regulators are fi nding that

there are signifi cant differences in the way

that Islamic fi nancial institutions operate,

which they must take into account in regulat-

ing such institutions. At the same time, regulators are fi nding conven-

tional fi nancial institutions, which they regulate wishing to expand

into the Islamic sector. Islamic fi nancial institutions may pose dif-

ferent prudential and systemic risks from conventional institutions;

this becomes all the more signifi cant when Islamic fi nancial institu-

tions and conventional fi nancial institutions are inextricably linked

in a single, interconnected fi nancial market. These are just some of

the reasons why the UK Financial Services Authority chose to pub-

lish a signifi cant policy paper in November last year entitled Islamic

Finance in the UK: Regulation and Challenges. Financial services

regulators in a number of other jurisdictions have already introduced

regulatory rules on the operation of Islamic fi nancial businesses. The

FSA’s paper is an early indication that similar legislative measures

should be expected in the UK in the near future.

With the UK positioning itself for the anticipated worldwide

growth in Islamic fi nance, it is increasingly important to understand

how secular English laws and regulations will be applied to Shari’a

compliant products and services. Whilst there are a number of publi-

cations in the market, which seek to explain Shari’a principles, there

are few, if any, that seek to address the accompanying black letter law

issues that come with them. It is this

interaction between English laws and

regulations and unfamiliar religious

principles that will be of particular in-

terest to practitioners. Even a passing

knowledge of Shari’a principles will

give some indication of the practical

challenges that must be met. Should

Shari’a compliant products and ser-

vices be originated and marketed in a

different way to conventional products

and services? Do conventional fi nan-

cial institutions wishing to offer Shari’a

compliant products and services need

to engage the services of Islamic

scholars? Are fatwas issued by Islamic

scholars binding on an institution that

commissioned them? Are default fees

permissible under the Shari’a? If a

default fee is impermissible under the

Shari’a, is it enforceable before the English courts? These are just

some of the questions that need sensible, practical answers.

PrinciplesIt has been over a year now since I was fi rst approached by Lex-

isNexis to write a new chapter for the Encyclopaedia of Banking Law

on Islamic Financial Institutions and Islamic Finance. This was no small

undertaking. English jurisprudence on Islamic fi nance is in its infancy. A

number of international bodies, including in particular the Accounting

and Auditing Organisation for Islamic Financial Institutions (‘AAOIFI’)

and the Islamic Financial Services Board (IFSB), have taken steps to

introduce standardised principles on the governance and operation of

Islamic fi nancial institutions, but are fi nding that there is a lack of con-

sensus amongst Islamic scholars on the practical application of Shari’a

principles. Institutions as signifi cant as ISDA have commissioned proj-

ects to create Shari’a compliant versions of their standard documenta-

tion. Trying to capture and commentate on all these developments is, in

many ways, like trying to paint a picture of a moving subject.

However, it is for precisely this reason that a publication such

as the Encyclopedia of Banking Law lends itself to the subject. As a

loose-leaf work with monthly updates, it is very well positioned to

take account of new developments in the area. In many ways, this is

an editor’s dream. New decisions can be commented on promptly.

New regulations can be taken into account. The publication can be

responsive to new developments both at home and abroad. The

chapter is likely to change and develop over the coming years as law

and practice develops. I couldn’t be happier to be involved.

Antony Hainsworth is a LexisNexis Section Editor

and a leading lawyer on Islamic fi nance. He is also a

fi nancial services and fi nancial regulation specialist

at Clifford Chance LLP. He advises both local and

international institutions on all aspects of regulated

fi nancial activity and fi nancial business. He is the

editor of the new Division on Islamic Financial

Institutions and Islamic Finance in the LexisNexis

Encyclopedia of Banking Law.

“Financial services regulators are

fi nding that there are signifi cant differences in the way that Islamic fi nancial institutions operate, which they

must take into account in regulating such

institutions”

Antony Hainsworth.indd Sec1:39Antony Hainsworth.indd Sec1:39 15/10/08 15:46:1315/10/08 15:46:13


banks to employ Islamic fi nancial techniques

in their banking, giving a profi t/sharing

framework as an alternative to an interest

rate mechanism. Over 70 banks and fi nancial

institutions operating worldwide utilise ITS’

banking solutions.

Currently, the ITS Islamic banking solution

processes an average of 750,000 transactions

daily, although the solution’s transaction

processing capabilities are unlimited. Islamic

banking solutions for newly launched Islamic

banks and fi nancial institutions can be imple-

mented in less than two months. In less than

six months, ITS can provide solutions for

banks that are converting from a conventional

framework to an Islamic framework. Further-

more, ITS offers Islamic banking solutions

for conventional banks that provide Islamic

banking products. Lastly, ITS Islamic banking

solutions can also be implemented in Islamic

fi nancing companies. ITS also provides value

added services that include facilities manage-

ment. Through this product, ITS handles the

management and operation of a corporation’s

existing IT facilities for a predefi ned period

of time. This ensures the high availabil-

ity, effi ciency, and robustness of the facilities

throughout that period.

For more information visit www.Its.ws

Haitham Abdou, Group Director

of Marketing at International

Turnkey Systems, has over 13

years of experience in the banking

and fi nance industry. His areas of

expertise include IT strategies for

fi nancial institutions, SOA for Islamic

fi nance banks, automation projects,

core replacement, AML, electronic

banking and payment systems.

Having been virtually unheard of two

decades ago, the concept of Islamic

banking has since become a power-

ful force in mainstream banking and

is now an industry worth an estimated US$300

billion with an annual growth rate of between

15-25 percent. This makes the Islamic bank-

ing and fi nance industry a very lucrative op-

portunity for conventional and Islamic banks

alike. Although most of the Islamic banks and

fi nancial institutions in the world reside in the

Middle East, they are rapidly mushrooming in

Asia, Europe, and the US. Demand for Shariah

compliant banking products and services is

now so great that conventional banks are

rushing to offer such products, referred to as

Islamic windows, to cater to the demands of

their customers. Increasingly, non-Muslim

customers are being attracted due to the

principles of Islamic banking that dictate risk-

sharing and no interest policies.

Despite the immense potential of Islamic

banking and fi nancial products there are nu-

merous challenges that the industry faces. As

a result of accelerated globalisation and fi erce

competition between Islamic and conventional

banks, Shariah compliant products need to pro-

vide competitive products that are customised

to suit local needs. At the same time, these

products must meet international standards.

Specialist support is therefore strategically

essential to implement information technology

solutions that are specifi c to the different mod-

ules used in Islamic banking products.

It is also essential that providers have

the capability to integrate with other banking

systems and comply with Central Bank rules

and regulations. For over two decades Interna-

tional Turnkey Systems (ITS) has been the lead-

ing ICT solutions provider for Islamic banks and

Islamic fi nance organisations. The ITS solution

is specifi cally designed to fulfi l the needs of the

Islamic banking and fi nancing sector. To that

end, the ITS products take into account the

great importance of the Islamic Shariah in the

community’s fi nancial dealings while remain-

ing easy to use, with simple interfaces.

ITS has a keen understanding of what its

customers really need from an ICT partner.

In short, to enable technology utilisation in

order to allow your business to grow. ITS rea-

lises the importance of the Islamic banking

fi eld and how dynamic the industry is. Based

on subsequent changes in Central Bank rules,

the ITS Islamic Banking Solution has been

developed to comply with multiple Islamic

rules. ITS appreciates the unique structure

of Islamic banking as well as the differences

between Islamic banking and conventional

loan or debt markets.

Firmly rootedThe ITS Islamic banking solution enables

providers to offer a competitive range of al-

ternative fi nancing vehicles, different to those

offered by commercial banks, while, staying

fi rmly rooted in Islamic principles. The Islamic

banking solution also allows conventional

ISLAMIC BANKING REACHING NEW HEIGHTSWhile the world’s fi nancial institutions are taking a battering, Shariah compliant banking is witnessing unprecedented growth says Haitham Abdou.

ASK THE EXPERT

ITS.indd 40ITS.indd 40 15/10/08 15:50:4915/10/08 15:50:49

ITS.indd 1ITS.indd 1 7/10/08 14:54:477/10/08 14:54:47

BM. What has the merger done for the new group’s stat-

ure in the region?

RP. The deal made Emirates NBD the biggest bank in the

Middle East by assets and it’s this scale and the heritage

of the two legacy banks that positions us as a national

champion bank. The size of our balance sheet also makes

the bank a natural leader in big ticket project lending, an

important growth catalyst in the GCC banking sector. Emirates

NBD boasts over 20 percent of the domestic, corporate loan

market. The deal also meant pooling two talented staff teams

in the region. This team remained dedicated throughout the

deal, enabling us to grow further still since.

BM. Has it been diffi cult bringing together two banking

giants?

RP. Generally, the banks’ stakeholders were pleased with how

the deal went. The banks partnered with best-in-class advisors

early on and thus the merger progressed very smoothly. Evident

of how smooth the process was is the fact that business ran as

usual and even managed to grow throughout the deal.

Our staff, the regulators, our customers, public sector bodies and our

shareholders were all very supportive throughout the deal. The case

for merging was compelling and the bank was transparent throughout

the transaction with all of its stakeholders.

An important challenge is the integration of our staff. With

new offi ces and merged teams in place, settling the bank’s people

and creating a positive new culture has been a priority over the past

year. To this end, we have hosted ‘Culture Workshops’ for all employ-

ees. These sessions focused on team building and communicating

the new vision, mission and values of Emirates NBD to all. Technical

integration is of course a challenge, front-end and back-end. We are

on-track with all areas of integration and are on-line for our 2009

deadline. It has been said that the Emirates NBD merger is a blue-

print for future large regional mergers.

BM. Do you forecast further consolidation in the UAE banking sector?

RP. Consolidation in the UAE banking sector is overdue. The market

is overbanked, with 49 banks servicing a population of 4.6 million

people, according to the 2006 census. This is true throughout the

GCC. I believe we can expect to see some other big banks in the region

look to join forces within the year.

BANKING FOCUS

UAE-based Emirates NBD is a banking heavyweight in the Middle East following the merger of Emirates Bank and National Bank of Dubai last year. CEO Rick Pudner talks to Business Management about the group’s strength in the region and how Islamic banking is providing a signifi cant boost to earnings.

WINNING COMBINATION


Emirates Bank.indd Sec1:42Emirates Bank.indd Sec1:42 15/10/08 15:47:5715/10/08 15:47:57


BM. Do you feel threatened by the arrival of international banks in the

UAE or do you see the competition as being healthy?

RP. Competition is always healthy and inevitably drives progress. As the

market stands, cluttered as it is, the authorities are hesitant to issue

new licenses to international competitors. After further consolidation

I’m sure this will ease up but we are the biggest in the region with the

largest distribution network in the country. We will always work hard to

secure this position.

BM. Emirates NBD posted a surge of 45 percent in second quarter

profi ts. How has the group achieved such a rise in growth and how

pleasing were these results for you personally?

RP. As I mentioned before, the new scale has positioned Emirates NBD

well for big-ticket lending, an area of considerable growth for Emir-

ates NBD. Retail banking and wealth management are also expanding

successfully. Islamic banking has been another area of exponential

growth for the bank. Such growth is of course very pleasing for us

all at the bank and for those who have supported it throughout the

merger. This is a refl ection of a fertile banking landscape, but mostly,

and I speak for bank’s shareholders when I attribute this in large to the

hard work and dedication of Emirates NBD’s workforce.

BM. Your CFO Sanjay Uppal announced that much of this gain could

be attributed to a major upswing in Islamic fi nance. What’s driving

this upswing and how are you placed to cope with future demand for

Islamic banking?

RP. Emirates NBD’s award winning and market leading Islamic fi nancial

services arm, Emirates Islamic Bank, increased its profi ts and assets sig-

nifi cantly in the fi rst half of 2008, compared to the same period in 2007.

Analysts forecast Islamic assets increasing from 13 percent of UAE

system assets in 2007 to 18 percent by 2012. Continuing to expand our

Islamic banking services amongst such opportunity is an important

focus in Emirates NBD’s long-term growth.

Globally, Sharia-compliant assets have grown by 20-30 percent a

year over the last decade to reach US$400-500 billion. Consensus is

unanimous that Islamic or Sharia fi nancial services is a market geared

for continued exponential growth over the next decade. Islamic bonds

– Sukuks – are one of the fastest growing fi nancial instruments globally.

They are expected to be the largest contributors to sustained double-

digit growth in Islamic fi nance.

McKinsey & Company has suggested that the broader region’s

sector assets – excluding Iran – could hit US$750 billion, and will

exceed US$1 trillion by 2010. We are building the Islamic business in

line with these forecasts and the rapid growth witnessed internally.

Emirates NBD has a reputation for innovation and this is important

to the Islamic bank too. By continuously designing new products and

services we aim to stay at the head of the curve.

BM. How big is the mortgage market and how much demand are you

seeing for your products?

RP. The UAE’s mortgage market is set to double from US$8.7 billion in

2007 to US$17.4 billion in 2011. The real estate sector’s strong perfor-

mance, buoyed by overall economic performance, steady population

growth, negative real interest rates, and higher tourism receipts are

driving the country’s thriving home fi nance sector.

Domestic mortgage lending represented only 3.5 percent of the

gross domestic product in 2006 and 4.7 per cent in 2007 whereas the

average for emerging markets mortgage is 15 to 30 per cent of GDP.

In developed countries, mortgage lending accounts for more than 50

per cent of the GDP. So we can expect an increase in this business.

Emirates NBD is an active player in this market and we are seeing

positive growth in the demand for home fi nancing in the fi rst half of

2008 which is refl ecting on our market share in this market.

BM. There are suggestions that customer service levels in the Middle

East are not up to the same standard offered by US or European lend-

ers. What is your response to this statement?

RP. The Middle East is a rapidly developing region which is, of course,

behind the US and Europe in a number of areas. The GCC is perhaps

developing faster than the rest of the region in some sectors, banking

is one of them.

“We have not made asecret of our hopes to

make one or two strategic acquisitions in the

medium term”


Customer service is not dependent on in-

frastructure and so the region should not be a

determining factor. Customers anywhere in the

world are more demanding and generally more

savvy when it comes to their fi nancial services

providers. We have strong customer retention and

strong customer satisfaction levels. But as with

everything else, we are always keen to learn what

we can do better and often look to banks in the

US and Europe markets for inspiration and often

best-practice benchmarks.

BM. What is Emirates NBD doing to improve cus-

tomer service and use it to leverage a competitive

advantage?

RP. The bank reviews its customer services con-

tinuously and we worked tirelessly to ensure that

it didn’t suffer amidst last year’s transaction and

that it will not for the duration of integration.

Recent research has suggested that there has

been no considerable effect to customer services

over all throughout the merger.

Any organisation can always service its cus-

tomers better and we dedicate a lot of time and

resources to learning how. Ongoing training is one

of the tools we use to ensure our employees are

well equipped to provide an excellent service to

our customers. Ongoing training across Emirates

NBD is utilising best practice from both banks and

is proving to be particularly useful.

The new Emirates NBD brand, which is still

to be unveiled, will focus on the whole customer

experience. At whatever scale the bank is at,

Emirates NBD will never become complacent. Our

customers have supported us throughout a busy

year and we will always strive to thank them with

great service.

BM. Finally, what goals or targets do you have for

Emirates NBD in the next 12-18 months? Is over-

seas expansion on the cards?

RP. The bank aims to continue growing at a steady

rate. Growth will be both organic and inorganic.

Organically, we see the Islamic fi nance division

continuing to develop as with our lending. We are

also seeking to strengthen existing international

positions over the next year.

Inorganically, we have not made a secret of

our hopes to make one or two strategic acquisi-

tions in the medium term. Outside of the UAE,

building upon our position in Saudi Arabia is a pri-

ority. Other markets on our radar include Turkey

and some of the CIS nations.


Emirates NBD headquaters


Advent.indd 1Advent.indd 1 7/10/08 15:06:127/10/08 15:06:12

Volatile oil prices and a surge in demand for coal has creat-

ed lucrative investment opportunities for RAK Minerals

and Metals Investments (RMMI). The company, set up by

the Ras Al Khaimah Investment Authority (RAKIA) in

2005 and co-owned by the industrial minerals giant,

Trimex Group, may not be the best known name on the

UAE business scene. But when it comes to its achieve-

ments to date – the numbers speak for themselves. This year alone it will

invest US$1billion dollars in acquiring mines across the world. This will

lead to a global asset base worth US$4 billion.

But, says the company’s Managing Director Madhu Koneru, who is also

executive director of Trimex International, the group is not focussed solely

on its profit margin. Ensuring the welfare of the workers at the mines it ac-

quires is a key part of its strategy – not just in terms of corporate social

responsibility but also to maintain a stable workforce. Indeed, Koneru

says he believes that implementing this strategy is one of the biggest

challenges that mining companies currently face. “One of the big chal-


INDUSTRY

RAK Minerals and Metals Investmentshas embarked on a multi-billion dollarglobal shopping spree buying upmines across the world. And asManaging Director Madhu Konerureveals, the strategy is paying off.Diana Milne reports.

RMMI:5oct 15/10/08 15:52 Page 46

lenges that companies like RMMI face is that the

mines they run are in very remote and underdevel-

oped places. How you deal with the people in these

areas is very important.

“Out of the money that you make from the

mine, a percentage of this has to go into corporate

social responsibility. And if you don’t do that you can

face all sorts of issues such as workers striking.

Koneru goes so far as to say that he believes im-

plementing corporate social responsibility strategies

is in fact more challenging than the mining process

itself. “Handling a mine is very easy. There’s no rock-

et science in that. You drill it, remove the raw materi-

als, process them and sell them. But dealing with the

people at the mine head is very sensitive. They want

you to make them understand how building a railway

track or doing mining in their area will help them and

their children in the future.”

But overcoming such challenges is one of the

reasons why RMMI has become so successful in

such a short space of time. The company does not

shy away from acquiring mines in challenging areas

including Armenia, where earlier this year it invested

US$200 million in the acquisition of the TSCC

Armenia. This covers three mining complexes spread

across north and south Armenia and under the terms of the deal RMMI

will also establish a concentrate plant in the country. Koneru says he be-

lieves Armenia holds a great deal of untapped potential for RMMI –

largely due to the fact that few of its rivals to date have been willing to in-

vest in the country .

“Because of the political relationships they have with its neighbouring

countries, European and American companies are not keen to invest in

Armenia. It is also a country that has not been developed for a number of years

because it is landlocked,” explains Koneru.

To overcome the logistical challenges of transporting materials and

equipment to and from Armenia, the Ras al

Khaimah government acquired 50 percent of the

nearest port – Poti in Georgia. It will be utilising

the port to do most of its exports when it starts

production in Armenia.

RMMI has faced similar infrastructural chal-

lenges in Australia where it has invested in mines

in remote areas on the country’s east and south

east coasts. To overcome these challenges,

Koneru says the company plans to build a railway

or port facilities. “We will do a similar thing to what we are doing in Indonesia

right now which is to put up a railway track or a new port facility. Ras Al Khaimah

has always been an industrialised city in this part of the world. It handles close

to 80 million tonnes of bulk raw materials for the cement factories so the com-

pany has the expertise to build something over there.”

As part of its strategy to invest in mines on each continent, RMMI has ac-

quired a mine in Indonesia and earlier this year announced it was investing

US$ 250 million in a Congo-based copper mine. “We have invested US$50 mil-

lion in acquiring the mine and we are investing another US$200 million in

building the smelter,” says Koneru. “We have been doing a lot of exploration

there and it’s going fantastically,” he enthuses.

The next region it hopes to target is South America, and Koneru says

the company is currently seeking out possible investment opportunities

there. “The next place that we’re looking to go to in the next couple of years

is South America,” he says. “It’s rich in iron ore and coal so we’ll be fo-

cussing on those areas. We are trying to look at some opportunities in

Colombia and Brazil. We’re just shopping right now.”

But this is no ordinary shopping trip. Once it has chosen the right spot,

RMMI will invest millions of dollars in a mine there – a project that will be

years in the making. The company has every reason, however, to be confi-

dent of high returns on its investments. Globally, energy needs are set to

increase by 55 percent by 2030 with the usage of fossil fuels, dominated

by coal, estimated to grow by 84 percent.

JPMorgan recently revised its 2008 global coal price forecast to US$90

per metric ton – an increase of almost 62 percent from its 2007 prices.

Meanwhile, the analysts suggest that demand for metals such as copper,

nickel, zinc and iron, could double or even triple over the next 25 years. The


“The next place that we’re looking to go to in the nextcouple of years is South America, it’s rich in iron ore andcoal so we’ll be focussing on those areas”

Madhu Koneru obtained a bachelor degree in

commerce from the Delhi University and started his

career with the Trimex Group in 1992 as a trainee. Three

years later he was appointed General Manager and

became the company’s Executive Director in 1996.

During this time he has also been a member of the

boards of directors of Al Ghanem Industrial Company,

Kuwait, and TJ Shipping and Logistics.

In his role as Managing Director of RMMI on behalf

of Trimex, Koneru is focused on building RMMI into a

world-leading mining solutions provider in the metals

and minerals industry.

Koneru is a YEO, India member, a charter member

of the Indus Entrepreneurs in Dubai and a member of

the Indian Business and Professional Council in Dubai.

In 2007 he won the Asian Business Award Middle East

for ‘Young Asian Achiever of the Year’. He has also been

instrumental in facilitating bilateral initiatives between the

governments of Dubai and Ras Al Khaimah and India.

MADHU KONERU’S BIOGRAPHY

RMMI:5oct 15/10/08 15:52 Page 47

situation is helped by the surge in oil prices earlier this year and a drop in

the productivity of oil fields which has prompted many developing countries

to turn to coal for fuel. This has led to particularly strong increases in demand

from China and India, which Koneru says has boosted the building of power

plants within both countries, as well as in the Middle East. There will be a lot

of demand for coal coming up from power plants that are being built in India

and in the Middle East,” he says.

Koneru also believes that his company is insulated from the effects of the

credit crunch on demand for metal as a component in consumer goods, by the

fact that it focuses primarily on copper.

“Whether the economy is up or down, copper is always going to be

used,” says Koneru. “Unlike other metals such as lead or zinc which are di-

rectly related to consumer products, copper is related to infrastructure. So

the resources which we have acquired are a very long term investment.”

Part of the profits gleaned from these projects will be invested back into

developing the infrastructure of the emirate of Ras al Khaimah. The RAK

government, through the Ras al Khaimah Investment Authority

(RAKIA) has embarked on an ambitious plan to develop the emi-

rate into the focal point for industrial activity in the UAE.


Founded in 1985 by Koneru Rajendra Prasad, a

mainstay of the minerals business since 1973, Trimex

Group was launched to fill the demand supply gap for

quality industrial minerals to the oil drilling industry. It

has since grown into a leading minerals and metals

conglomerate with interests in all areas of the minerals

supply chain, from mining and logistics to processing

and research and development.

Located in UAE and India, the group has grown from

strength to strength, doubling its market capitalisation

several times over within the past decade. Trimex’s

success is the result of strategic diversification through

forward and backward integration, which looks at all

aspects of the mineral value chain.

Trimex Group today is one of the region’s largest

mineral and metal conglomerates that prospects,

mines, sources, processes and delivers industrial raw

minerals, heavy minerals and metals to the world’s

leading oil-well drilling, ceramic, glass, construction,

energy and fertiliser industries.

TRIMEX

RMMI:5oct 15/10/08 15:52 Page 48


RMMI was established in 2005 as a joint venturewith the Ras Al Khaimah Investment Authority(RAKIA) and the Trimex Group. Its mandate is toextend Ras Al Khaimah’s long-term investmentstrategy in minerals and metals.

RMMI’s mission is to become a leading miningsolutions provider in the metals and minerals industrythrough strategic, long-term investments across theentire mining value chain – from geological exploration,mining and processing to trading and logistics.

RAKIA’s mandate is to underpin the investmentattractiveness of Ras Al Khaimah, which has a longhistory in mining and has produced about 100 milliontonnes per year of limestone and aggregate in thelast 30 years. With 25 years of experience in the

business, Trimex specialises in mining, researchand development, processing, shipping, logisticsand marketing.

Trimex benefits from its extensive regionalexperience and global reach – shipping close to fourmillion tonnes of various cargoes all over the world.

Although still a relatively young company, RMMIhas emerged as a highly successful investment armof RAKIA and is now a fully-fledged Middle Eastmining company, currently managing 23 licences inIndonesia, Congo and Armenia and recentlyinvesting in Australia.

RMMI will invest approximately US$1 billionduring 2008 towards building an asset baseexceeding US$4 billion.

ABOUT RMMI

To date it has established a thriving limestone and aggregates mining

industry. Describing the relationship between the establishment of

RMMI and the RAK government’s vision to develop the emirate, Koneru

says: “RAK was very particular about developing the emirate and it

needed to invest a lot of money in building infrastructure there. The raw

materials needed for that are very expensive and copper and coal are

not available locally so the government decided to go out and invest in

it. That can be directly or indirectly hedged to the emirate,” he goes on

to say. “If we invest in a coal mine in Indonesia and

we are selling coal to China, whereas the RAK gov-

ernment is buying it from South Africa at a higher

price, they are at least making money from the

Indonesia and China deal. That is how the cost of

infrastructure will be indirectly hedged.”

RMMI hopes to enter into partnerships with

other Middle Eastern companies which also want to

develop mining industries. “We are being approached

by various other companies within the region to do part-

nerships because the whole Middle East region now

wants to invest in natural resources,” he notes. “They

have traditionally invested in oil and gas but now they

want to invest in mining also. Everyone has seen the value of natural resources

because of the cost of infrastructure and what they are paying. We are nego-

tiating, we are talking to some people, we are trying to do some co-invest-

ments but nothing has come to the finalisation stage.”

Judging by RMMI’s achievements to date, however, there is little

doubt that these agreements will be finalised. And while Koneru is keen

to remain cautious about the future of the company, increased demand

for coal and a surge in demand for copper means that RMMI could be

sitting on a gold mine. �

“Everyone has seen the valueof natural resources becauseof the cost of infrastructureand what they are paying”

RMMI:5oct 15/10/08 15:52 Page 49


BM. Protecting information and confi dential

data is paramount today. What challenges

are organisations facing when it comes to

security and are there any differences in the

Middle East?

KG. As the digital world does not know any

borders other than those barriers organisa-

tions put up as safeguards for themselves, one

would strongly suspect that the ‘threatscape’

in the Middle East is the same as everywhere

else. The vast and rapid economic growth that

many areas in the Middle East have seen over

the past years also means that the abundance

of prosperous businesses there make inter-

esting targets for criminals.

RV. An important security challenge for many

enterprises is caused by ‘de-perimeterisa-

tion’, which refers to the blurring of the com-

pany network’s boundary. The boundaries of

networks disappear more and more through

the use of smart phones, laptops, wireless

network connections, USB-devices and the

use of web services for business partners.

‘De-perimeterisation’ implies that security

mechanisms must not only be implemented

at the network boundary (e.g. using a fi rewall)

but that there is a need for distributed security

including authentication, encryption, etc.

A second challenge is referred to as iden-

tity and access management. Employees of a

company need to use multiple applications,

and therefore different usernames and authen-

tication mechanisms. These applications re-

quire authentication mechanisms with varying

strength. Identity and access management is

required to allow employees effi cient but also

secure access to confi dential resources.

Finally, the growing importance of elec-

tronic information has caused governments

around the world to enact legislation with

respect to its retention, use and destruction.

This legislation, ranging from Sarbanes-Oxley

(US) to the Bundes-Datenschutz-Gesetz (Ger-

Security threats are coming from all angles and organisations need to be on their guard in the battle against cyber criminals. Two industry experts, Roger Vandeplas of VASCO and Klaus Gheri of phion discuss the issue with Business Management.

many), requires companies to increase efforts

regarding legal compliance. These challenges

are visible at a global level, including also the

Middle East.

BM. How has technology evolved in the past

few years to ensure information and systems

security and keep the criminals at bay?

KG. Those who believe that protecting against

spam mails and defending against virus and

phishing attacks is enough, are wrong. Con-

tent such as SSL-encrypted data traffi c, XML

web services or RSS feeds pose real threats

that are extremely diffi cult to monitor at all

with conventional security solutions. There

are also other security-relevant areas that

have to be addressed with the same caution in

order to stop the transfer of damaging content

from the outset. These include cross-location

networks using VPN or wireless LANs. One

single remote access from an unprotected PC

or laptop is often all that it takes to open the

famous backdoor into a company’s network.

Another important complication is posed by

access control and identity management sys-

tems. The question has to be answered here as

to who is permitted to access which data in the

company network and how to ensure that only

this person has access?

RV. In the area of ‘de-perimeterisation’, end-

point security technology has emerged. This

technology allows for the performing of a

health-check on end-points (e.g. desktops,

laptops, smart phones) to verify whether their

security status is in line with corporate security

policies. Trustworthy computing, the idea of

which is to allow proving that the hardware and

software of a certain computer have not been

tampered with, can be seen as a type of end-

point security technology.

CLEAR AND PRESENT DANGER

HEAD TO HEAD

“The growing importance of electronic information has

caused governments around the world to enact legislation with

respect to its retention, use and destruction”

Roger Vandeplas

IT Security H2H.indd Sec1:50IT Security H2H.indd Sec1:50 16/10/08 08:17:3416/10/08 08:17:34

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In the area of identity and access man-

agement, key technology providers take

efforts to standardise identity management

systems (e.g. Liberty Alliance, Shibboleth). At

the same time, other companies specialise in

providing strong authentication mechanisms

in different form factors including dedicated

hardware devices, smart card readers and

mobile phones. In the area of legal compli-

ance, vendors come up with software that

can be used as a ‘control layer’, allowing for

monitoring compliance of the company’s in-

frastructure with legal requirements.

BM. As workforces become more mobile and

devices get smaller and more sophisticated

how can companies best protect defences?

KG. With the advent of novel technologies work

habits have changed dramatically through-

out the past years. The portable laptop, vast

amounts of data easily portable on a small USB

stick, intelligent phones, ubiquitous wireless

network access, personal area networking all

have attributed to the fact that endpoints in

corporate networks have become an increas-

ingly hard to control hazard.

Effective endpoint security today extends

far beyond historical personal fi rewall and

antivirus concepts. It still entails protection of

an endpoint against network threats using a

host fi rewall and malware detection software,

but extends the protection concept by adding

the new dimension of policy governed network

access control.

RV. In order to prevent unauthorised access

to company assets, companies need to follow

a ‘defence-in-depth’ approach, consisting

of multiple protection mechanisms. Firstly,

companies should install strong authentica-

tion technology for establishing the identity

of end-users requesting access to company

resources. Additionally, companies can imple-

ment end-point security technology as well as

authorisation and audit mechanisms.

BM. What advice would you offer for a quick

recovery after a security breach?

KG. Attacks on web applications such as

online banking services and e-commerce busi-

nesses are not coincidental, but targeted and

on the increase. The systematic protection

of web applications and services is therefore

unavoidable. Only a mature solution that com-

bines different security measures can identify

even hitherto unknown attack methods early

and prevent them, this guaranteeing sustain-

able protection.

Similar to physical security measures at an

airport, where tickets, passport, luggage and

passengers are checked before they can board

an airplane, it is crucial for web applications

security to answer these questions in advance

– that is, who someone is and secondly, what

they are doing?

RV. Because prevention is still the best cure, an

ongoing security awareness and training pro-

gram needs to be part of any company’s overall

security strategy.

When a security incident does occur, it

is of utmost importance that the incident is

managed adequately in order to ensure that

lessons are learnt. This means that responsi-

bilities regarding security have to be estab-

lished clearly within the company. The people

that are responsible should be empowered

appropriately to allow them to take measures

to prevent future security incidents as much

as possible. Responding to security incidents

starts with having a proper organisation and

procedures in place.

BM. How are your products and services help-

ing your clients today?

KG. Enterprises are confronted with an increas-

ing need for effi cient, highly integrated secu-

rity and connectivity solutions. By using phion

products, multinational corporations and large

to medium size companies are provided with

an integrated protection platform covering

all needs for comprehensive and compliant

network security, secure web access, access

control, WAN protection and optimisation, web

application security and central management.

RV. VASCO Data Security develops and sells

hardware and software solutions for strong

user authentication.

Worldwide, millions of e-banking end

users and more than 7000 companies, includ-

ing over 1000 fi nancial institutions, already

use the VASCO solutions to secure access

to their networks (local and remote) and/or

applications (including SaaS environments).

Virtually all these customers rely on the

DIGIPASS by VASCO strong user authentica-

tion solution offering. Deploying a DIGIPASS

by VASCO brings our customers and their

user: convenience, ease of use, fl exibility and

higher security levels.

Klaus Gheri is the CTO and co-founder of phion

THE PANEL

Roger Vandeplas is the Vice President of Sales and Marketing at VASCO Data Security

“Those who believe that protecting against spam

mails and defending against virus and

phishing attacks is enough, are wrong”

Klaus Gheri

IT Security H2H.indd Sec1:52IT Security H2H.indd Sec1:52 15/10/08 15:50:2215/10/08 15:50:22

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Automation ensures confi denceHigh availability (HA) solutions vary

signifi cantly in the level of sophisticated

automation and autonomics they incorpo-

rate – as well as the ability of the automa-

tion and autonomics to remain effi cient

and invisible to the operator over the long

term. As a general rule: the more automa-

tion and autonomics, the less operator time

involved and the healthier your overall HA

environment.

Of particular importance in maintaining

confi dence in the active HA infrastructure is

how well the availability software validates

the data is always in sync. Auditing technol-

ogy is critical to the success of the active HA

infrastructure. For example, when some-

thing changes in the IT environment, most

solutions will not automatically notice the

change. This may become a serious issue in

the future.

Turning downtime into new productivity

Many businesses now view their high

availability solutions as a way to add new

value on a daily basis. No longer viewed just

as an insurance policy against a potential

disaster, companies are using HA to gener-

ate quantifi able and documented return

on investment. Maintaining a switch-ready

HA environment over time, and in spite of

changes within your infrastructure, requires

a combination of IBM’s advanced autonom-

ics technology with innovations that provide

a self-managing, self-healing, self-auditing

– even adaptively self-learning solution.

These essential ingredients ensure high

availability solutions remain switch-ready

today and every day.

Today’s real-time reality for busi-

nesses is that if a system goes

down, their operations stop. The

unavailability – or downtime –

of applications and databases

cannot be ignored. Downtime now affects

business profi tability as well as productivity.

• Globalisation and eBusiness mean 24/7

operations. There is no ‘end of the day’.

• Outages are not localised. Today’s just-

in-time delivery means that one system

outage can impact the entire enterprise.

• Transactions are increasingly electronic,

with less paper documentation and human

involvement.

• Database growth means maintenance, data

backups and batch processing can no longer

be accommodated in off-hour windows.

There’s a new reality, however. With an

advanced, easy to install and manage soft-

ware from Vision Solutions, IT staff have an

information availability solution that enables

continuous, optimum availability and switch-

ability. Vision Solutions’ high availability and

disaster recovery tools reduce the risk and

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and can easily confi gure to fi t a wide range

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to the next level of effi ciency with more ca-

pabilities to optimise processing resources

without additional management time.

To solve the realities of business, Vision

Solutions technologies can make an ideal

option to:

• Deliver maximum uptime and zero data

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• Switch systems on demand to completely

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• Respond within seconds to unexpected

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failover to the backup server.

Organisations cannot afford to ignore the importance of disaster recovery and should the worse happen information availability is critical, says Alexander Trekin.

Alexander Trekin is Vision Solutions’ Sales Director for Russia, CIS and MENA. For more information, call +44-207-5152169 or +44-7920-026185. You may also e-mail [email protected]

ABOUT VISION SOLUTIONS

Vision Solutions, Inc. is the world’s leading global provider of high availability, disaster recovery

and data management solutions for IBM Power Systems. Vision keeps critical business

information continuously protected and available. The company’s products ensure business

continuity, increase productivity, reduce operating costs and satisfy compliance requirements.

ALEXANDER TREKIN

INDUSTRY INSIGHT

The new realities of business

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On the morning of Sunday, June 22 2008, alarm bells began

to ring at NBK. A phishing scam was targeting customers

in a bid to steal customer information and passwords. A

bogus email, purporting to be from NBK, claimed that the

bank had lost the details of two million bank customers and

that re-registration was required. The fraudsters tried to direct custom-

ers to a fake NBK log in page where details would be stolen and accounts

raided. Fortunately, NBK’s anti-phishing controls quickly detected the

con and the site was taken down within hours. No losses were suffered

by NBK or its customers.

“It wasn’t the standard ‘update you banking details by clicking

here’,” reveals the bank’s CISO Tamer Gamali. “They added a story

about the bank losing details in an effort to try and mislead the cus-

tomer.” But there was one glaring error, as Gamali explains. “The email

was done by someone with not a great deal of knowledge because it

mentioned two million customers. The population of Kuwait is 2.7 mil-

lion and there are at least eight banks operating here. No single bank

has two million customers.”

Despite the infl ated online customer numbers (the correct fi gure is

just over 100,000), the email would have appeared genuine to an un-

suspecting NBK client checking their email accounts. They could have

re-registered only to later discover that their account had been emptied.

And don’t forget, just a tiny strike rate is good enough for the gangs

behind these scams. “They will send 500,000 emails and if they can get

one or two to respond then they have made their money,” says Gamali.

The incident in June was just the latest in a long list of phishing at-

tacks on banks in the Middle East as the criminals increasingly divert

their efforts away from the European and US banking giants. Indeed,

Gamali says he discovered 10 fake NBK websites two years ago but in

2008 this fi gure has leapt to 50. On top of this, a survey conducted by

Readiminds revealed that more than 20 percent of banks in the Middle

East have been targeting by phishing or pharming (a hacker’s attempt to

redirect a website’s traffi c to another, bogus website). Institutions in the

region are having to ramp up security and controls, as well as educate

customers, in order to stay ahead of the fraudsters; not an easy task in

these times of 24/7 online banking.

“Three years ago the phishers were going for the mainstream banks;

they weren’t targeting the Middle Eastern ones,” Gamali remarks, “How-

The Middle East has been hit by a spate of bank security breaches and phishing frauds in recent months as scammers go on the prowl for new victims. Business Management catches up with the man on the front line at National Bank of Kuwait (NBK) – Chief Information Security Offi cer (CISO) Tamer Gamali – to discover more

about battling the on-going phishing threat.

Staying off the hook

3.6 million people lost money last year to

phishing scams worldwide.

40% of phishing sites are hosted in Asia.

90% of business emails received in the Middle

East are Spam.

Sources: Trend Micro and BoxSentry

PHISHING STATISTICS

SECURITY REPORT

NBK.indd Sec1:56NBK.indd Sec1:56 16/10/08 08:30:3316/10/08 08:30:33


ever, three years down the line they are moving to other banks, so now is the time that the

banks here should have all the measures in place. They have been lucky to get away with

being affected for a while now but no longer because they are easy pickings – especially

those that have a lack of controls in place.” Gamali also notes how important it is for these

controls to be different. For instance, if you are a bank that has a single password for

logging in and a single password for a transaction, then a phisher, if he can get the cus-

tomer to respond, has all the details that he needs. The fi rst time the customer discovers

the fraud he or she will probably be seriously out of pocket. In terms of re-imbursement,

some banks do offer to refund customers and others won’t; it’s a grey area with no clear

law or policy.

Attack, not defenceOver three years ago NBK identifi ed the need to tackle the security threat (not just

phishing) head-on. Gamali, previously head of security services for KPMG Kuwait, started

the information security unit from scratch when he arrived at NBK. At fi rst Gamali and his

team dealt with phishing scams themselves, but they soon realised this was not practical.

“We used to contact the ISPs directly and work on getting the [phoney] sites taken down,”

he explains. “However, the volume of work started to increase to a point where we began

facing the challenge of how to speak Korean to an ISP in Korea or Dutch to an ISP in the

Netherlands. All of a sudden we needed to speak 25 languages.”

NBK also had to work with the international ISPs to get bogus sites removed. June’s

fake NBK website was taken down in just over two hours. But success depends on where

the ISP is based, with Eastern Europe, the Far East and south America often taking longer.

“There is no hard or fast rule on how long it takes – it depends on which country and ISP

you are dealing with,” Gamali confi rms.

To help with the legwork of detecting contacting fraudulent websites and contacting

the ISPs, NBK opted for the services of Cyveillance. The US-based company monitors the

main mail boxes, such as Yahoo! and Hotmail, to spot the bogus emails and locate where

the fake websites are being hosted. Kuwait’s biggest lender is then able to carry out quick

analysis to identify compromised cards before a fraudulent transaction has occurred. The

bank can also send a SMS text to a customer’s phone the minute a transaction takes

place. If it is indeed an unauthorised movement of money the customer can contact the

bank to block it.

This pro-active approach to phishing, and security in general, fended off the attack

on NBK in June but Gamali is all too aware that won’t be last incident he and his team

have to deal with. Indeed, according to research more than 60 million phishing emails

are sent each day, with about one in six eventually opened. The Anti-Phishing Working

Group (APWG) reported between 30,000 and 50,000 new phishing sites per month in

2007. “Phishing and related website spoofi ng has grown to an epidemic worldwide,” ac-

knowledges APWG Chairman Dave Jevans. “Most people would be shocked to learn that

billions, yes billions, of spam and phishing emails are sent every day by scammers.”

“You are trying to fi nd solutions that provide the highest levels of controls but the greatest amount of fl exibility

for the customer”



the problem is surmountable. Education,

technology and industry partnership will

be the answer to the phishing problem.”

Gamali agrees but is keen to stress

that the banks walk a fi ne line beteeen

security and fl exibility. Controls need

to be tight but not too rigorous and

time consuming that consumers can’t

be bothered to bank online. “You are

trying to fi nd solutions that provide

the highest levels of controls but the

greatest amount of fl exibility for the

customer. You don’t want them to be

heavily impeded by using online

banking because it is a channel

that the banks encourage custom-

ers to use. We want to continue to

provide that service but we also

want to provide the assurances that

it is secure.”

However, with all the media cov-

erage about the proliferation of phish-

ing scams and the security steps that

banks have had to implement, there is

a danger that customers will log off

for good. After all, without the as-

surance there that online banking

is safe there is an uphill struggle

to attract new customers. So

is banking on the web slowing

down or even declining over se-

curity fears? NBK’s CISO says

evidence suggests this is the

case. “I recently saw some

statistics that there was a

decline in online banking

last year by somewhere

between 10 and 15 percent

because customer confi dence

had dropped due to people perceiving online banking

to not be secure.”

So what would Jevans like to see done to restore customer confi -

dence and deter criminals? “We, as an industry, must implement email

authentication technologies to allow ISPs to automatically reject fake

emails, and ensure that important business emails are reliably deliv-

ered.” He adds: “It is crucial that banks and brokerages start to authen-

ticate the email that they send, in order to allow receiving computers

to verify the authenticity of emails, and automatically reject phishing

and other spoof messages.” Gamali describes the banking sector as a

“moving target” and emphasises the need for institutions to stay active.

He concludes: “You can’t stop people sending emails but the priorities

are to shut down sites, educate customers and put in place internal con-

trols to detect fraudulent activity.”

And Gamali suggests that do-it-yourself phishing kits on the

internet are only exacerbating the problem. “These online kits take

you step-by-step through how to fi nd websites that you can hack and

upload your pages to, and it gives you a mailing list of who to send it

to,” he notes. “So if you have the kit and a reasonable IT knowledge

you can have a go at phishing.”

After the criminals have reeled in a victim then comes the problem

of how to get the money out of the account. With international transfers

there is a ‘window’ that allows transfers to be stopped if spotted by the

bank or the customer. Not to be outsmarted, the phishers are exploring

ever-more devious methods – including utilising mobile phones. “This is

a new trend here but one that has been going on in the US for a while,”

Gamali reveals. “If they can obtain card details through phishing they

can then go and buy credits from a telecoms company and charge up

the phone with thousands of dollars of credit and then transfer smaller

amounts of credits to people enticed into money making business op-

portunities advertised through the internet, who would then go on and

sell credits to end users on the street. If any alarm bell rings then the

local credit dealers, who have no link back to the original culprits, would

be arrested. This is using the telecoms companies to launder money.”

Education In an ideal world customers would just delete phishing emails when

they land in their inboxes. It’s customer gullibility that the con artists

prey on along with the fact that online banking is an important revenue

stream for the banks. The institutions have been educating customers

on what to look out for and to be extremely suspicious of emails purport-

ing to be from their lender. Unfortunately, this education won’t prevent

everyone from falling victim. Jevans is philosophical about the problem.

“Even if we could afford the expense of educating tens of millions of con-

sumers, the phishers and crimeware authors are continually improving

their techniques in order to make it virtually impossible for people to

discern fake emails from the real thing.”

One security expert who knows a thing or two about the global

problem of phishing is PayPal CISO Michael Barrett. For him, a positive

attitude goes a long way. “People have a tendency to say, ‘Woe is me,

phishing is insolvable’. We think that’s way too defeatist and that actually

og off

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NetDimensions.indd 1NetDimensions.indd 1 7/10/08 14:55:247/10/08 14:55:24

John Crane, founded in 1917, has built its global reputation

by designing and manufacturing seals and associated

products mainly for the oil & gas, chemical, pharmaceuti-

cal, pulp and paper and mining sectors. The John Crane

business has an impressive turnover of US$744 million

and boasts 20 manufacturing sites and more than 6000 employees,

located in 50 countries. John Crane MENA alone covers 10 countries

and employs over 130 personnel.

The growing success of John Crane’s business resulted in a con-

siderable increase in the number of offi ce staff administering and

monitoring its interests. The daily processing of electronic data had

thereby become the lifeline of all core activities. For John Crane’s IT

Network Manager, Samad Khokhar, it was the key to address backup

risks, to improve data protection, eliminate recovery problems

and prudently manage costs – by means of a scalable, easy-to-use

backup solution.

Backup risksImpressed with the launch presentation ofthe storage company

ISIT, a fast growing storage company, in February, Khokhar ap-

proached the ISIT CEO Mahesh Vaidya with the following situation:

Despite the crucial importance of the electronic data residing on the

employees’ laptops, there was no clearly assigned responsibility in

case of data loss. There was no local automatic backup process in

place, and it was basically left to the employees to backup their local

business data manually on fi le servers.

The limitation of mailboxes and the introduction of employee

.pst-fi les produced a further issue for the manual backups to

home shares as this resulted in an ineffi cient storage of increasing

amounts of data. In addition, a growing number of identical local

fi les – for example, corporate PowerPoint presentations – became

redundantly stored on John Crane’s PCs and fi le servers. As if this

were not enough, Khokhar realised that the number of mobile work-

ers had been constantly increasing, which perpetuated the risk of

losing company information when laptops got stolen or break.

Looking for a solution In early 2008, John Crane started a selection process, evaluating

several backup solutions that could solve its fundamental problems.

Within the fi rst pre-qualifi cation phase, several vendors were evalu-

ated in terms of offered product functionality, scalability, usability

and price. Eventually, ISIT’s solution of Connected Backup for PC by

Iron Mountain Digital remained amongst the top two choices.

At this juncture three main criteria were looked into before John

Crane chose Connected Backup as its favourite backup solution

with its ability to reduce the .pst fi le volume by up to 80 percent

by means of the integrated EMAILOPTIMIZER, which uses SendOnce

(de-duplication) and Delta Block technologies. Secondly, the prod-

uct’s ability to check the network speeds before starting its backup

process through bandwidth throttling. And fi nally, the option to

manage the backups easily in one central console, while still being

able to specify backup parameters individually for each user. Today,

it is Iron Mountain Digital’s leading market position

and Connected’s ability to restore PCs and laptops

to their previous working condition after a HW fail-

ure that has turned the tide towards Iron Mountain.

“Connected Backup for PC convinced us because of

the balanced combination of technical fl exibility and

business value” says Khokhar.

Enrolment John Crane ultimately started the rollout process

together with Iron Mountain Digital and its partner

ISIT. Impressed with the process and procedure

Khokhar states: “We received excellent cooperation,

support and service from ISIT with their simple and ef-

fective solution from Iron Mountain which ultimately

proved very valuable for us. ISIT’s unique approach

to storage in partnership with Iron Mountain’s com-

prehensive solution makes for a winning combination

from which customers have greatly benefi ted.”

How the solution ‘Connected Backup for PC’ addresses backup and recovery issues for a client’s Middle East operations.

Preparation is key

INDUSTRY INSIGHT

Samad Khokhar (left) and Mahesh Vaidya


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tain research shows that 42% of those that do archive say their backup is their archive.“Many organizations are keeping everything for as long as possible, and that’s not always the best thing to do,” says Mahesh Vaidya, CEO of ISIT and local partner of Iron Mountain Digital. “They are looking at cost and human bandwidth effi ciencies. But the big question is what makes that data benefi cial to the or-ganization, and over what period of time?”

‘Storage-as-a-Service’ model enables IT managers to focus on risks and costs A rich set of services applied to outsourcing data capture, protection and management

can lower costs and risks for IT Managers, while enabling them to focus on aligning IT

with business goals.

Senior IT executives today are working to concentrate their efforts on the bottom line

instead of just “keeping the lights on. “ In fact, their priorities have been shifting steadily

toward business outcomes and away from technology-centric initiatives. Senior IT execu-

tives focus more and more on enabling business innovation, creating competitive advan-

tage and growing existing revenue streams.

In light of refocusing IT managers’ attention on the business and the pressures result-

ing from signifi cant trends in data management, Storage-as-a-Service is emerging as a

model for capturing, storing and protecting data, and putting that critical business data

into action. According to IDC Storage-as-a-Service is becoming a viable alternative for

enterprises, small and medium-sized businesses, and individual customers who need to

store digital data and would prefer to procure storage services and storage capacity as a

hosted service rather than as an onsite product or set of products. Using a storage service

can provide assurance that they are meeting requirements and will have enough capacity

to account for future growth.

Challenges in Data Management

When it comes to data protection, rising stor-age costs, the threat of litigation and regula-tory compliance demands make secure and effi cient data protection and storage today diffi cult at best. Key challenges like out of control IT costs, data loss concerns, data growth explosion as well as unmanageable data on the edge of the network constitute real diffi culties in managing information and ensuring the relevant data is accessible whenever needed. On top of that, companies may be spending too much money backing up too much data that is stored for too much time. Iron Moun-

The Case for Outsourcing

In today’s fast-changing environment, IT man-agers cannot afford to overlook the expertise, speed-to-market and cost benefi ts that out-sourcing can deliver. Outsourcing not only helps them create business value better, faster and cheaper, it also provides valuable new insights into their own data management, protection and storage policies—or lack thereof. Recent IDG research indicates the most appealing potential benefi ts of the Storage-as-a-Service model are more simplifi ed legal discovery (46 percent), long-term protection (45 percent), enhanced compliance (41 percent) and improved utiliza-tion of current infrastructure (41 percent).“It is all about helping IT Senior Executives manage the data the way they need to manage it,” Abdeslam Afras, Iron Mountain Digital’s Sales Manager Middle East, says. “With this service-based approach to storage that includes the value of making the stored information ac-tionable, Iron Mountain can help organizations understand their data requirements, and defi ne and implement policies in the context of the overall hierarchy of their information needs. In essence, he says, it forces organizations to get smart about storage.”Iron Mountain Digital’s Storage-as-a-Service model delivers online data protection and recovery, digital records management and information destruction. Most important, Iron Mountain helps you know what information you have, know it’s secure, know you can get it when you need it.With Storage-as-a-Service, organizations can get quick, „rich“ access to their information for legal discovery, business continuity, disaster re-covery, compliance, audits and other demands. And organizations can reduce two prime con-cerns for IT managers: risks and costs. Storage-as-a-Service tamps down the risks associated with online data storage and protection, and carries with it a real opportunity to save costs.At the heart of any information storage plan is security, and with the storage-as-a-Service model „We can put more effort into securing in-formation than the customer can,“ says Stephan Haux, Senior Product Manager EMEA of Iron Mountain Digital.

Data In,

Value Out

ADVERTISING FEATURE

BMME.indd 1BMME.indd 1 7/10/08 14:54:367/10/08 14:54:36

SECURITY FOCUS


Alignment The fear of systems hackers harvesting information obviously poses

some serious issues for the banking sector, and as Nelms highlights, World

Bank has taken a different approach to externally facing websites, choos-

ing to go to a registration and accreditation process before significantly re-

ducing the external points used using a common framework. “The

techniques we're using is to separate three components that make up an

externally facing website: the coding itself, the database behind it, and then

the web server. What we have done is move them into much more discreet

segments, so the network behind the bank has become much more gran-

ular.” Subsequently, in the event of a breach, even after it is certified with

regular scanning procedures, the extent of the anomaly would be much

smaller than it would normally be.

World Bank has of course been aligning its entire IT infrastructure over

the last few years. “We are aligning the IT services and security with the

business sides themselves, focusing both from a business continuity and

a security perspective. We do this through a layered approach, strength-

ening the areas of the business and organising them in a much more gran-

ular fashion; the internet may be the most popular choice in which to do

business, but it has also become an increasingly unsafe way to do busi-

ness. We’re utilising different technologies such as encrypted MPLS and

point-to-point frame lead-ins for very critical services, and then using a

much more granular approach at the externally facing systems.”

As Nelms points out, the internet plays a huge role in today’s market.

Because of this, he is certain that there are specific challenges raised in

terms of operations. Nonetheless, he also thinks the cure to these prob-

securityWorld Bank CISO Jim Nelms tellsBusiness Management how theorganisation is battling the nextgeneration of IT threats.

GLOBAL

Today’s market has seen security risks advancing and becoming

more and more complicated. There is no doubt about it; banks

simply have to deliver new products and services to beat these

threats. At World Bank, combating key security risks has proven

to be an integral part of the organisation’s DNA, as Nelms ex-

plains: “The primary security risk that we’re facing at World Bank is user-re-

lated, and it has to do with phishing or spear phishing of user credentials.”

As phishing has become more widespread, the techniques and sophistica-

tion of these attacks has become more focused as well, with locating entry

points to the World Bank networks becoming a prime target for e-criminals.

“To combat this at the bank, we have gone to a full two-factor authentica-

tion model using a token-based authentication process, and in the very

near future we’ll be linking that to a persistent credential using a certificate

with key pairs both for signing and for encryption.”

This is not the only way that the bank is tackling these problems. “We

have also found a huge increase in the number of attacks through weak-

nesses in the web interfaces,” adds Nelms. “This particular adversary looks

to create entry points into the network on externally facing websites, and

then one of two things happens. They either use those entry points to re-

sell, or to place you on the underground for access to the system, or they

use it for exfiltrating corporate information. Whereas five years ago some-

body who exploited a website might have defaced it or taken a system

down, the adversary today seems to want to keep the system up,” says

Nelms. “They’re quiet, they don’t disrupt things, but they do collect and

harvest information, encapsulate it, and then try to exfiltrate it outside of

the institution.”

BMME_4_JimNelms:5oct 15/10/08 16:07 Page 62


lems is much the same. Many of the projects, World Bank carries out for

monies or resources, and financial instruments that it either manages or

holds on behalf of other countries or other businesses, have a huge risk

potential if they were to be compromised from an external source. “With

the continued rise in weaknesses in web interfaces, we have established

a part of the office of information security where we have increased the

technical capabilities and the focus of one segment of that team to do

nothing but stay in front of the curve in terms of website security,” says

Nelms. “Because it is a primary point of business, and because in many

of the countries in which we do business internet access is the most reli-

able form, we have focused on a very segmented type of services that we

offer and focusing on those areas requires the highest degree of moni-

toring and security.

Ahead of the curveThough it operates in a very particular way, there is certainly a thing

or two other financial institutions could learn from World Bank’s ap-

proach to information security. The granular approach that Nelms talks

about is surely offering some key ideas to the market. “What I would rec-

ommend for the financial institutions who are looking to do this is to

take a very close look at the technical underpinning of how they provide

web services,” says Nelms. “Most institutions have a central point where

data is accessed, where websites are accessed, and I we’re finding that

that’s going to create much larger exposure than if you use a smaller, dis-

creet approach.” As Nelms highlights, if you have three business lines,

you should not put these in the same interface. Even though it may ap-

pear that is a good way of handling it from an information technology

standpoint, from a security and reliability standpoint it’s not. “You may

compromise more than one of your business lines at the same time,” says

Nelms “I’d recommend independent business lines to the outside world.”

With this, however, Nelms predicts that the total cost of ownership

will go up correspondingly. “You lose some of the economies of scale by

not being able to use huge web servers or huge databases or collective

information on the internet, and unfortunately, that is once again not a

choice we get to make,” he explains. And while information security may

be reducing the risk to a tolerable level, it is not eliminating it. “What

we’re finding with a more sophisticated and persistent adversary is the

probability of compromise has gone up significantly in just the last two

years alone. Now the only choice an institution has to make is whether

it will spend its time and money in remediation, or it will spend it in a pre-

ventative measure to reduce the impact of when a

breach occurs,” says Nelms. “Over the last couple of

years, looking at a number of companies that have had

breaches, they may not even be in a position to detect

these breaches for weeks or months after they have oc-

curred, so I think from a financial perspective, we have

to respond to that business environment very quickly

and realise that that has become an intolerable risk for

financial institutions.”

Security threats certainly aren’t going to go away

either. And preventing future attacks is clearly some-

thing that is crucial to the work Nelms does at World

Bank. “The biggest security threat, the most visible, is

probably going to be identity theft. That’s going to con-

tinue to rise. The most detrimental to businesses is

going to be the compromise of websites through tech-

nological weaknesses, through SQL injection or

through cross-side scripting or other weaknesses in the

software that we’re using to develop applications and

the exfiltration of information will be the most devas-

tating to a company.

“The practice of information security, and the con-

vergence of that, is becoming much greyer in these areas

because of the number of ways, and the complexities of

the systems that are required to do something as simple

as price a derivative, or follow a yield curve. Ultimately,

firms will have to look at the technology that underpins

their businesses with the same views as they do their

standard operational risk measures.” �

“The biggest security threat,the most visible, is probablygoing to be identity theft”

GONE PHISHING

Source: Gartner and Iconix

The facts about one of the biggest security threats ofour time

An estimated 59 million phishing emails are sent each day.

About 1 in 6 are opened.

About 20,000 phishing campaigns are identified everymonth.

Between July 2005 and July 2006 the number of distinctbrands attacked increased by 135 percent, from 83 to 195.

The average loss per victim in 2006 was €845, comparedwith €167 in 2004.

Victims recovered an average of 54 percent of their lossesin 2006, compared with 80 percent in 2004.

BMME_4_JimNelms:5oct 15/10/08 16:07 Page 63


The golden age of hackers and cybercriminals driven by a

desire to embarrass website owners or cause mindless e-

vandalism is a fading memory.

Today, e-crime is the domain

of organised gangs, often

from countries that are diffi cult to get

help from, with a sole motive – to steal

money and goods. Cybercrimes, and the

cybercriminals that perpetrate them,

have evolved. To protect the organisa-

tion from today’s attack, methods and

attitudes must evolve too. According to

Gartner, 75 percent of security breaches

are due to fl aws in software.

One of the major security problems

faced by organisations today is that the

business applications needed to run

the business are also the very applica-

tions making it insecure. Cybercriminals

have identifi ed this and are now focus-

ing all their attentions on application-

layer vulnerabilities. It’s a problem that

simply can’t be ignored.

The main target of cybercrime

today is e-commerce web sites and the

customer databases behind them. Da-

tabases that hold credit card numbers,

expiry dates, PINs, addresses, and ev-

erything else that’s needed to empty a

victim’s bank account. Their operations

are so slick that stolen data is exploited

within seconds of it being submitted by

unwitting victims. A total of 143,757,645

database records are reported to have

been exposed since 2005, yet many in-

cidents go unreported and unnoticed.

The big growth in e-commerce

right now is in the use of web-based

applications to replace traditional over-

the-counter or telephone-based trans-

actions. Primarily those applications have been put together as quickly

as possible with the main aim to get a working system up and running,

often without suffi cient thought given to the security implications.

Since six years ago, when Microsoft and other vendors made

security a priority, operating system and network-layer vulnerabili-

ties have become harder to fi nd. Of course

weaknesses still exist, but they're more

frequent in the application layer, predomi-

nantly in Web 2.0 applications. That said,

exploitable errors can appear in any type

of code; however, Web 2.0 apps, which

companies are increasingly reliant upon,

tend to be particularly vulnerable when

not coded with security in mind.

Many web applications make use of

JavaScript, for example, which was pri-

marily designed for portability. A recent

report, ‘Why Application Security Is Cru-

cial’, released by UK-based research fi rm

Quocirca, reveals that: “One of the key

security problems with using JavaScript

is that it can be manipulated by attackers

in order to gain access to the information

being transported”.

Another problem, confirmed by the

Quocirca report, is that Web 2.0, or Ajax,

applications tend to rely on a large number

of modules and higher-level interaction

than traditional programming languages,

adding complexity and increasing the

possibility of programming errors. The

report states: “The large number of small

modules also makes Ajax more vulner-

able to attack as it increases the overall

attack surface, with each request for

information and response representing a

potential attack vector”.

The research fi rm conducted its study

in December of 250 senior IT executives

in Germany, the United Kingdom and the

United States. It found that among respon-

dents developing Web 2.0 applications, “a

signifi cant number are reporting that they

are encountering vulnerabilities that are specifi c to new programming

languages and this can actually increase the overall number of vulner-

abilities to which the organisation is exposed”.

A compelling argument for automated code testingBy Professor Howard A Schmidt.

75%of security breachesare due to fl aws in

software

More effort is needed to design secure

applications and to use proper procedures to

test them

A total of

143,757,645 database records

have been exposed since 2005, yet many

incidents go unreported and unnoticed

EXPERT OPINION

BMME_4_HowardSchmidt.indd 64BMME_4_HowardSchmidt.indd 64 15/10/08 15:56:3515/10/08 15:56:35


UK-based company websites harboured at least one weakness that

could allow hackers to gain unauthorised access. The same research

also found that a third of those websites exhibited vulnerabilities

that are known to, and used by, cybercriminals across the web. No

doubt the hacker community has been busy discovering how to ex-

ploit the other two thirds.

Using automated se-

curity tools when devel-

oping software lowers the

overall cost of IT security.

The US government has

listened to this argument,

and has concurred, with

many federal agencies

now starting to demand

code analysis and I wouldn’t be surprised to see a move to indepen-

dent labs in the future validating code.

Referring back to Quocirca’s study, commissioned by Fortify, it

revealed that “over 10 percent of UK respondents spend more than

15 percent of their IT budget on security, but are the least likely to

use automated tools for application security. Conversely, 96 per-

cent of German organisations spend less than 10 percent of their IT

budgets on security and make the most use of automated tools for

building security into applications during the early stages of the

software development life cycle”.

The internet is here to stay, and so is internet crime. As the relent-

less move online by all sorts of business and government agencies

continues, e-crime will carry on evolving. With more coffee shops and

libraries offering free, anonymous Wi-Fi access, tracking down cyber-

criminals will get harder. So as hackers evolve, so must our efforts

to defeat them. Automated security tools are the best way to reduce

application-layer vulnerabilities.

We know now what to do and how to do it, we just have to get

it done.

Professor Howard Schmidt is Director of Fortify Software. For more please visit www.fortify.com

Howard Schmidt has held some of the most prominent

positions in the security fi eld. He has been Chief Information

Security Offi cer and Chief Security Strategist of eBay,

where he helped establish the online commerce giant as

the leader in securing online transactions for businesses

and consumers. He is the former Cyber Security Advisor for

the White House, where he was appointed Vice-Chairman

of the President's Critical Infrastructure Protection Board

by President Bush. He was formerly Chief Security Offi cer

for software giant Microsoft and helped establish the

Trustworthy Computing Program. He continues to lead many

efforts that bring public and private sectors together to

share critical cybersecurity information internationally and is

currently director of Fortify Software.

CYBERCRIMINALSAs cybercriminals continually up their game, the securities and

futures industry in the US recorded, in 2007, a 150 percent annual

increase in the amount of suspicious activity detected on its systems.

During the same period, research carried out at the University of

Maryland found that a computer system connected to the internet

was typically subjected to an attempted hack every 39 seconds.

A f irewall will happily let someone access an insecure web

application if they meet all the criteria for being allowed in. Surely

this can’t be allowed to continue. We need to focus our efforts

into building secure applications in the f irst place, which can't

be compromised. Perhaps the decision on whether someone

should be allowed to use an application should

be based on whether that application is secure,

not on the user’s IP address or the port they’re

trying to connect to.

As the move to online applications expands

beyond online shopping, the need for secure appli-

cations will become even more important. If an e-

voting application allows someone to vote twice if

they enter a couple of thousand random characters

as their surname, a fi rewall isn’t going to help.

So how can we make our web-based applications more secure?

Historically, software developers have always been so immersed

in trying to make the software bug proof and resilient they have

not focused on the security side. It is now time to change this ap-

proach. To illustrate the point, I can buy a jacket with a tag that

identifies inspector number 16 has checked the item for imperfec-

tions – I can’t get a similar certification for code.

More effort is needed to design secure applications, and to

use proper procedures (as well as automatic software solutions) to

test them. A 2007 report from NTA Monitor found that 90 percent of

“Cybercriminals are now focusing all their attentions

on application-layer vulnerabilities”

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BM: Can you provide some background on

Ramco in the Middle East?

RS. Ramco formally commenced its Middle

East operations in 2005 with an offi ce in

Dubai. We invested our initial efforts into

understanding the market, customer needs,

creating a solid, referenceable customer

base and building partnerships in the region.

Having achieved excellent traction in all

these areas, we will now be accelerating our

growth. Currently, our solutions are deployed

across 13 countries in the MENA region, and

accessed by over 1200 users in UAE, Oman,

Saudi Arabia, Qatar, Bahrain, Jordan and

Kuwait. Ramco’s HRMS and Payroll solution

generates the monthly payslips for over

48,000 employees of our customers in the

Middle East.

We have established a strong presence

in vertical segments such as manufacturing

(process and discrete) and Aviation MRO,

as well as horizontal offerings like HRMS

across industries. Some of our key custom-

ers include United Nations Relief and Works

Agency (UNRWA), Schlumberger, RAK Bank,

Commercial Bank International, Alsalam

Aircraft Company, Gulf Helicopters, Ducab,

Group 4 Securicor, National Life and General,

Citibank and Emirates Aluminium (EMAL).

Very recently, we have entered into a

signifi cant partnership with Sharjah Teaching

Hospital (STH) where Ramco’s enterprise so-

lution will be made available to students in the

health and management programs of Universi-

ty of Sharjah. This will assist Emirati students

in understanding the benefi ts of enterprise

solutions as a part of their curriculum.

STH is one of our most important gov-

ernment customers in the region. They will

be implementing a full-suite Ramco solution

centred around Financials, HRMS and Analyt-

ics for running their day-to-day operations.

Our outstanding customer references in the

region, with opinion leaders voicing their sat-

isfaction with Ramco’s offerings & services

helped us clinch this deal.

BM. Despite being a newer entrant into the

market, you have done well. What has been

the secret?

RS. As an emerging player in the Middle East

region, we offer signifi cantly more value to

customers than our competitors, both with

respect to quality products, and our ap-

proach to professional services, implementa-

tion and support.

We believe in leading the way with our in-

novative approach to create enduring value

for our customers. Our unwavering focus is

to deliver best-in-class solutions with end-to-

end functionality on time and within budget.

Two important facets are the fl exibility of our

system and its readiness to quickly and pain-

lessly adapt to change at all times.

We dive deep into every engagement

and ensure that all our customers derive

true value from our implementations. We

bring in dedicated professionals who dem-

onstrate sincerity, commitment and honesty

of purpose during customer engagements.

Our ecosystem of partners and 24/7 support

mechanisms enables our customers to reach

us whenever they need to.

BM. What is your view on the potential of IT

applications space in MENA?

RS. Across the region, there is substantial

growth in the economies and businesses of

R. Shankar, Vice President for Middle East and Africa Operations at Ramco Systems, provides insights on how his company is taking the Middle East by storm through the power of IT.

The complete solution

EXECUTIVE INTERVIEW

Ramco’s solutions are deployed in

13 countries in the MENA region,

and accesed by 12,000 users

ramco.indd Sec1:66ramco.indd Sec1:66 15/10/08 15:53:0715/10/08 15:53:07


various countries. New levels of investment

are visible across various sectors. Busi-

nesses are clearly experiencing the need

for a new class of IT solutions on the latest

technologies that do not carry the baggage

of older, legacy-type systems.

More than at any other time in the past,

CXOs are aware that their IT solutions have

to really keep pace with changes in the busi-

ness. To achieve this, they need to work

with a different genre of solution providers

offering their products on exciting founda-

tions like SOA and web services. Customers

should also demand that solution providers

and their partners need to be transparent,

dedicated and committed towards rendering

a value-adding experience.

Moving forward, we believe that the

small and medium segment of the market

will be best served through an ‘on demand’

model, where customers can access hosted

ERP solutions from data centres located in

their respective countries.

BM. What is your business strategy and

how does Ramco differentiate itself from its

competitors?

RS. Customers have pain points that impact

their entire business. Through its well-inte-

grated solutions, Ramco addresses these

pain points very uniquely and emphatically.

This is achieved through a combination of

deep functionality, a distinct implementa-

tion methodology with quality consulting,

and fl exible solutions. We nurture an eco-

system that delivers very high customer

satisfaction through superior products and

services. This level of customer satisfac-

tion pays off handsomely in the long term,

particularly since enterprise solutions is a

reference-driven business.

We invest in people, processes, partner-

ships and products that ensure sustained

and profi table growth. While we bring in

global best practices, we believe in partner-

ing with local fi rms that enable us to deliver

localized global solutions.

From a technology perspective, our strat-

egy is to remain evergreen by continuously

investing in R&D and partnering with leading

technology vendors. This helps us stay ahead

of the curve, and enables our customers to

derive a distinct competitive advantage.

Ramco VirtualWorks, our solution deliv-

ery platform, forms the foundation on which

all our enterprise solutions, products and

services are built and delivered. Our solu-

tions can be implemented with unparalleled

speed and fl exibility to provide a glove-fi t for

enterprise needs. Based on open standards

and SOA principles, our solutions support

our customers’ ongoing business needs, en-

abling high agility.

BM. How much does Ramco invest in the Middle

East and Africa and what is the importance of

this region to your global operations?

RS. ME and Africa form an integral and im-

portant part of Ramco’s global operations,

contributing almost 30 percent of global rev-

enues. Although we entered this region later

than other providers, we are growing well.

We are strengthening our presence in MEA

and plan to add more resources in the coming

quarters. The region has also witnessed sev-

eral breakthrough deals for Ramco.

BM. What are Ramco’s growth plans for the

Middle East and Africa?

RS. Our efforts in the region are yielding

positive results. We will be enhancing our

fi eld sales teams, rolling out an integrated

marketing program and also forging new

partnerships to accelerate our growth. We

aim to double our revenues in the region

in the next three years. Our focus verticals

are aviation, manufacturing, insurance and

human capital management (HCM). We will

also pursue select opportunities in the gov-

ernment sector.

We strongly believe that business part-

nerships/strategic tie-ups are the best way

forward to leverage emerging markets in

the region. We already have some strategic

partners across the region, such as Emitac,

CERT, Intercol, Lindenberg, CEM Business

Solutions, MAJAL, Eurosoft, Mabas and Al

Kalima. Ramco will invest into strengthening

these relationships.

BM. Is there a success story in the Middle

East that you wish to talk about?

RS. Every one of our engagements in the

region has been a success story, and each

of them is unique! What is signifi cant is the

fact that our customers have been realising

tremendous value from Ramco’s solutions. In

all cases, the return on investment for them

has been very high.

With all our engagements in the region,

we have been able to render the unique cus-

tomer experience that forms the theme of the

book recently released by Professor CK Pra-

halad, ‘The New Age of Innovation’. Ramco’s

solutions provide a great foundation for busi-

nesses to transform themselves.

Ramco is a global provider of business

consulting, enterprise solutions and

outsourcing services that enhance

business value through better business

processes and agile, global-class

applications. The company’s solutions

run at over 1000 customer sites

across more than 40 countries,

serving a customer base that includes

Fortune 500 companies, SMBs,

large enterprises and government

organisations.

R. Shankar, a post-graduate mechanical

engineer from the prestigious Indian

Institute of Technology, Kharagpur, is a

senior management professional with

over 24 years in the industry. Currently,

he has P&L responsibility for the Africa

and Middle East operations of Ramco

Systems.

A widely-traveled professional

with an international outlook, Shankar

has strong leadership skills and is a

respected speaker.

ramco.indd Sec2:67ramco.indd Sec2:67 15/10/08 15:53:0715/10/08 15:53:07


taking business risks is a good thing. Although excessive

exposures need to be hedged and closely monitored by

middle office procedures, the whole point of them is to

make profits. Although events at France’s Société

Générale last year suggest that controls could be better

at times, no one suggests you can run a successful in-

vestment bank without taking managed risks.

On the other hand, operational risk is about avoid-

ing problems and is always seen as a cost. Either you

spend money to reduce the risk or you have much

greater costs if the risk is realised and you haven’t. In

other words it is a sort of insurance, a drain on the bot-

tom line, not a potential profit generator.

I am firmly on the side of those who claim BCM does not cover normal

commercial problems. It is certainly nothing to do with BCM if your prod-

ucts are uncompetitive or your management is uninspiring. However it is

everything to do with BCM if an ‘out of the ordinary’ event triggers a situa-

tion in which an organisation cannot meet its primary business mission. If

I am a mortgage broker, surely lack of available mortgages in the market is

a bigger threat to my business than loss of a computer system or head of-

fice building?

An example from the UK serves to illustrate my point. Northern Rock,

a reasonable sized domestic bank specialising in providing private

mortgages, finds that its lending policies are unsustainable as sources

of credit dry up. News of this triggers a run on the bank, during which

the UK government has to make guarantees to deposit holders and ul-

timately nationalise the bank to save it from administration. If this were

a BCM area of concern, many things would have been in place. Single

points of failure would have been identified (limited sources of funding),

In the second half of 2007, the world woke up to a

whole new set of rules. The “easy” decade was over

and the credit crunch became the word on every-

one’s lips. Terms hitherto the exclusive property of

the financial world were suddenly in common cur-

rency. Following the crash in the US sub-prime mortgage

sector, we began realising that things we had never heard

about were impacting our lives, business and personal fi-

nances. We were all soon familiar with such esoteric con-

cepts as LIBOR rates, lenders of last resort, securitisation,

K adequacy and systemic risk. We quickly learned that the

interplay of these factors resulted in a shortfall of cash

availability globally. Commercial banks were sitting on

their funds and governments, while regulators and central banks were al-

most powerless to influence them. Without liquidity in capital markets,

many businesses big and small suffered badly, and not all survived.

Whilst thinking about this, I pondered how many financial executives

would consider such things to be a business continuity issue. I would guess

very few. So why is this type of crisis not yet seen as a concern of Business

Continuity Management (BCM), whereas losses resulting from computer

failures, pandemics or terrorist attacks are?

I can only conclude that this is due to the traditional distinction be-

tween legitimate business risk and operational risk. To most executives,

NEW DANGERThe recent troubles in the financial markets offer a freshperspective on business continuity management, says Lyndon Bird Technical Director of The Business Continuity Institute.

LYNDON BIRD

EXPERT OPINION

BMME_4_LyndonBird:5oct 16/10/08 08:18 Page 68


operational resilience would have been implemented (more diverse and

less risky trading activities) and a clear recovery strategy developed and

staff trained should the threat be realised. This would not have changed

the global financial reality in which this happened, but it would have

given the bank, its employees and its shareholders a much better

chance of surviving reasonably intact.

Many organisations either do not have a full-time BCM function in

place or, if they do, it is hidden in some specialist area like IT or risk

management. Surely no one would disagree that the decisions covered

by these questions are the most critical, far-reaching and business

threatening if they go wrong? In other words they put your business

continuity at risk much more than loss of an office block, a data centre

or even critical personnel. They can ruin your reputation, market share

and credibility overnight. So the conclusion is that most companies use

business continuity to protect against operational problems, but not to

provide input to strategic decisions. Many board members might

choose to ignore the views of the BCM professional, assuming they will

be risk averse and non commercial in their thinking. It is easy to see why

this might happen. BCM traditionally looks to eliminate single points of

failure, to spread activities around so as to improve resilience and have

adequate resources to deal with unexpected contingencies. This is not

a message likely to be popular with many managers, increasingly eager

to embrace business partnerships and single sourcing, larger and larg-

er fully automated distribution centres and ‘just in time’ delivery. This

perception only occurs because business continuity managers are

generally not operating at the correct level. If they are part of the senior

management team with clear strategic responsibilities for inputting

to and ultimately implementing board policy then their vision has to

be wider. Your current BCM Manager might not be viewed as of the

right calibre to make this step up, but that is only because you proba-

bly have not defined the job correctly and, therefore, not resourced

it appropriately.

Even at a more basic level there is much that BCM can do to help

reduce the risk of failure when we make strategic changes. For example,

the risks involved with ‘single points of failure’ are almost entirely pre-

ventable and only occur because of lack of a good business impact

analysis. Knowing your critical products, services and dependencies is

vital. It is then often possible to design out the risk by changing the design

or the specification. Don’t be surprised when things go wrong but make

sure that your process can manage the unexpected. BCM is not really

about clever technical solutions or documented procedures. It is about

process reliability and continuous improvement – topics close to the heart

of any serious manager.

I am often asked about the role of BCM in managing the impact of

climate change on business. BCM is traditionally about dealing with seri-

ous but unexpected incidents at very short notice with limited available re-

sources and confused sources of information. Climate change is anything

but unexpected or unpredictable, it will take many decades for its worst

consequences to happen and it has potentially the entire resources of the

world to solve it. Better still, if scientists are to be believed we could take

actions now that would solve the problem, or at least mitigate the

impact and prevent the worst consequences happening. However, if we

accept the cliché that every problem is an opportunity, companies that

provide imaginative solutions will become the successful companies

of the future. Technology might have caused much of the problem, but

it is only technology that can solve it. When you are talking business

change on this massive scale you are also talking serious business

continuity management. �

4 KEY BCM QUESTIONS

3 VITAL QUESTIONS FOR TOP MANAGERS

� Should all types of risk be managed consistently in an en-

terprise wide framework?

� If BCM provides a solution for IT and many other opera-

tional risks, why can’t the same principles work for busi-

ness, strategic or reputational risk?

� When something unexpected happens, do you not need

to have anticipated something similar and planned what

you might do?

� Why do financial firms invest hugely in training staff and

exercising procedures to deal with physical disasters but

ignore other crisis situations?

� When you are considering a major strategic change to your

business (e.g. outsourcing, off-shoring, rationalisation of lo-

cations) whom do you involve in the decision process?

� When you are considering a major strategic change to

your products and services what is the basis for your de-

cisions and how are the risks evaluated?

� If you have a business continuity manager, where does he

or she fit in the organisational structure?

BMME_4_LyndonBird:5oct 16/10/08 08:18 Page 69


BM. With the recent corporate identity transi-

tion, can you brief us about the road ahead for

Commercial Bank International (CBI)?

AJ. CBI is making a concerted effort to be iden-

tifi ed as an organisation that understands

what people need and be a bank with all the

answers. In keeping with our new motto ‘Ex-

ceeding Your Expectations’, we have made

every possible effort to offer a range of prod-

ucts and services to sustain our remarkable

progress in the competitive banking sector

as well as strengthen our clientele. We are

expanding in a major way in the country and

this includes setting up branches in strategic

locations with ATM/ CDM machines, Internet

banking support, phone banking and invest-

ments. To achieve this, CBI is very keen on

nurturing and retaining the best people who

have the talent and the necessary competen-

cies – so that we are well equipped to meet our

business objectives.

BM. What steps have you taken to support

this?

AJ. We quickly realised that apart from auto-

mating core functions of the bank, one major

area we needed to focus on and streamline

was Human Capital Management. We wanted

to completely re-engineer our employee

programmes to improve the quality of our

employees. To achieve this, we introduced

cutting-edge IT to streamline talent manage-

ment, leverage internal talent pools, mod-

ernise company structures and improve HR

productivity.

BM. Can you share some more details with us?

AJ. Given the number of employees (over 620),

the HR division of our bank had the challenge

of managing a rapidly growing workforce.

Functions like manpower, planning and re-

cruitment, training, compensation and bene-

fi ts play a very critical role in good governance

and enhancing employee satisfaction. Manual

HR processes and an outdated payroll system

were hampering our growth plans and we rec-

ognised the need for an integrated IT solution

to streamline our complex and dispersed HR

processes and payroll.

After a thorough selection process, we

confi dently chose Ramco Systems, a leading

HRMS and Payroll solution provider in the

region. With 10 years of experience in the

international human capital management

space, Ramco comprehensively addressed

our requirements – whether it was the size of

our operations, complexity of our HR process-

es, diversity in our organisation structures

or meeting unique and exceptional require-

ments. Ramco HRMS & Payroll provided us a

defi nite edge.

BM. How does Ramco help you align your

workforce with your strategic objectives?

AJ. Ramco’s solution helps us determine what

talent to acquire, develop and retain to meet

our business objectives and demands. This

critical information, provided by Ramco HRMS,

pinpoints exactly where the gaps are and provi-

sions for analytical information. This drives the

success of real time workforce management

and long-term talent management strategy.

Ramco HRMS comprehensively stream-

lines and automates our end-to-end HR

processes including recruitment, training,

manpower, career plans, succession plans,

employee induction, payroll, leave, reim-

bursement Items, loans, employee relations,

employee assets, organisation structure, per-

formance appraisal and self service.

In tune with CBI’s requirements, Ramco

HRMS comes with additional interfaces to our

core-banking system for fi nancial postings and

amortisation feature-specifi cally for banks,

handles Emiratization and equal distribution

of nationalities, and automates email pay slips

with password protection. The payroll is error-

free and the processes run accurately.

The best part is that the solution easily

complies with the Middle East statutory re-

quirements, and also seamlessly integrates

with our existing systems. The entire rollout,

including system setup and installation plus

implementation was completed as per our

timelines and as per our budget guidelines.

BM. Has Ramco’s solution been able to strike

positive changes in your HR initiative?

AJ. Defi nitely. The solution is enabling us to

reduce HR costs through greater effi ciency

and increased productivity, improve HR ser-

vice standards and free up our HR staff to

focus on strategic tasks. Moreover, our HR

and payroll department has strengthened its

visibility within CBI and especially with our

top management. This is due to the diligent

execution of the project and implementing/

improving our internal services regularly.

As head of Human Resources &

Administration at CBI for three years,

Abdulla Amer Jasem drives all the

human capital initiatives of the bank.

Abdulla has two decades of his HR

experience from the oil & gas industry,

and now fi ve years of experience in the

banking and fi nance industry, which

qualifi es him to be amongst a handful of

UAE Nationals with 25 years’ exposure

in HR.

Making a real differenceCommercial Bank International’s Abdulla Amer Jasem discusses how Ramco Systems is allowing the UAE-based institution to achieve strategic HR objectives.

CUSTOMER INTERVIEW

“Given the number of employees (over 620), the

HR division of our bank had the challenge of managing a rapidly growing workforce”

ramco-customer pro.indd 70ramco-customer pro.indd 70 15/10/08 15:53:2915/10/08 15:53:29

Ramco.indd 1Ramco.indd 1 7/10/08 14:56:147/10/08 14:56:14

Unified technology is the consolidation of virtually any communi-

cation system, including federated instant messaging, email,

voice, social networking, video, web services and even file ex-

change to enable a collaborative sharing environment that provides more

effective communications, increased productivity and reduced opera-

tional and capital costs. Normally we think of communications as two or

more people exchanging information. However UC can be extended to

human-to-machine and machine-to-

machine communication as well. Where

previously collaboration was based on con-

ference calls and emails in non-real-time, it

now consists of voice and video conferenc-

ing with application sharing, interactive

messaging and the ability to launch com-

munications from within any application, all

in real-time. For example, a guest in a hotel

may use the in-room ‘infotainment’ system

to contact the hotel staff. The guest will

browse a list of click-to-call enabled con-

tacts on the television and one is present-

ed with a choice of initiating the call from

the em-

bedded soft client in the set-top box, the in-room phone, or a preferred

personal mobile device.

3D Networks strongly believes that UC will bring a new dimension to

the way businesses operate today by enabling employees, customers, sup-

pliers and executives to stay in contact whenever and wherever they need;

essentially improving workforce productivity. By further extending UC into

business processes, a customer driven organisation can provide more time-

ly responses, reduce costs and have a greater de-

gree of personalisation, which ultimately drives

satisfaction and hence revenue.

UC should always be approached, however, with

a view to enabling all aspects of the solution over time

(say a three- to five-year time scale), as just approach-

ing it from a presence, IM, or even video conferencing

solution, will cost more in the long run. We encourage

customers to explore mobility, customer interaction,

telepresence, application sharing and smart video col-

laboration as well as the more traditional elements

such as IP Telephony, IM, presence, web, audio and

video conferencing and application sharing.

Working together with 3D Networks and adopting

a long-term business process change approach, the

right solution can be determined to drive the appro-

priate return on investment. We have customers using

UC to provide extensive data to mobile workforces and

ensure teams in remote locations can collaborate with

organisations using RFID tagging to enable objects to

facilitate faster delivery of service. UC solutions en-

ables you to do business differently, to make it easier,

and to enrich the experience. Employees within an or-

ganisation inherently know where these process im-

provements lie. Our job as a solutions provider is to tap

into that thought process and provide the tools to en-

able the evolution.

3D Networks is uniquely positioned to offer ex-

pert consultation, implementation and support of UC

solutions from a variety of best of breed solution partners. The

consultation process involves a thorough understanding of the cus-

tomer’s needs typically addressed with a multiple question evaluation criteria

that explores the organisations size, employee, supplier and customer collab-

oration, the desire for business process change and its IT strategy.

By exploring these areas we can easily determine the most

appropriate path forward and establish a long term

relationship with the customer to drive the bot-

tom line of any organisation. �

The communications revolution


Reducing costs but keeping service levels high is the name of the game for businessestoday. Mike MacDonald, Director of Marketing and Technology for 3D Networks, explainshow unified communications (UC) is helping organisations to meet their targets.

ASK THE EXPERT

Mike MacDonald has been providing

consultancy expertise for over 10 years

in both the carrier and enterprise envi-

ronments for major customers through-

out North America, Europe and Asia. His

current focus is networking and applica-

tions with specific emphasis on web ser-

vices and communications enablement.

3D NETWORKS:5oct 15/10/08 15:41 Page 72

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Saud Al Daweesh

TELECOMS

There are challenging timesahead for Telecoms titan SaudiTelecom Company (STC) as itbattles to defend its positionas the industry leader inMiddle East and spreads itstentacles into lucrativeoverseas markets. STCPresident Saud Al Daweeshtells Julian Rogers he isconfident that his business isequipped to succeed andemerge victorious from thetelecoms war, that is heatingup in the region.

LEADER

Saudi Arabia may have been

slow to join the mobile com-

munications revolution, but

thanks to the effors of STC it

is catching up fast. “Over the

past decade, telecommuni-

cations has been – and still is

– one of the fastest growing industries world-

wide,” STC president Saud Al Daweesh an-

nounces proudly from his office in the heart of

the Saudi capital Riyadh. Indeed, STC itself

was formed 10 years ago and has strength-

ened its position as the number one player in

the Kingdom and the largest telecoms opera-

tor in the Arab world. The explosion in mobile

phone usage has been the catalyst for STC’s

rapid growth. The boss says catering to cus-

tomer needs has always been its forte. “Our

first requirement was to get up to speed and

then stay up to date with the newest techno-

logical developments, the latest marketing

trends and, above all else, the current needs of

our customers.”

STC, which boasts over 22 million domestic

customers, is experiencing strong growth for its

fixed lines at the moment. In fact, Al Daweesh

sees this arm of the business as having great po-

SaudiTelecom ed:5oct 15/10/08 15:53 Page 74

tential, especially for rural areas of the Kingdom.

“Mobiles are the future of communications and

they will continue to dominate the market com-

pared to handsets, but the great majority of

households still require a landline phone and we

will continue to increase our customer base by

network expansion and outreach to rural com-

munities,” he explains.

Top of the tree Within the Middle East mobile communica-

tions market STC is engaged in a heated battle

with Kuwait’s Zain and the UAE’s Emirates

Telecommunications (Etisalat/Mobily). Although

STC previously held a monopoly as the sole tele-

coms operator in its homeland, in 2003 the mar-

ket was liberalised. The same is true for the

fixed line sector when three consortia were

awarded licences in the Kingdom last year. Al

Daweesh puts a positive spin on the in-

creased competition. “Yes, the regional mar-

ket is becoming increasingly competitive but

at the same time it is big enough for all new-

comers. We welcome competition because it

means that we must continue to be innovative

in launching new products.”

Nevertheless, there are industry experts

who accuse Saudi Arabia of becoming a saturat-

ed market with the telecoms rivals jostling for

business. Although the sector still shows real

promises seeing as around one third of the

population is aged between 10 and 24, STC has

been looking abroad to re-enforce its position

with the telecoms leader shelling out in excess

of US$6 billion on domestic and foreign expan-

sion in the past 15 months alone. This included

US$3 billion for a 25 percent share in

Malaysia’s Maxis Communications, which gave

it an 18 percent share in India’s fourth largest

mobile operator – Aircel – as well as access to

the Indonesian market. A 35 percent stake was

also secured in Oger Telecom for US$2.6 billion


THE RIGHT NUMBER

US$6 BILLIONTotal investments made by

STC in 2007-08

72 MILLION Number of customers both

inside in and outside the Kingdom

18 MILLION Mobile phone (AlJawal)

customers in the Kingdom

35 New services launched in

2007 and 2008

21,000 Number of employees, of which

90 the percent are Saudi nationals

OF THE PACK


earlier this year. This gave STC a strong foothold in

the Turkish telecoms market. The firm also won

the third mobile licence in Kuwait last year in a deal

worth US$900 million, while untapped markets in

North Africa are on the company’s radar. This in-

cludes getting a share of the delayed privatisation

of Algeria Telecom. However, a bid to buy French

media group Vivendi’s stake in Morrocco’s Moroc

Telecom was recently rejected.

When quizzed on the expansion, an enthused

Al Daweesh is quick to point out the upsides. “The

benefits of partnerships with companies abroad

are many and varied, including sharing technolo-

gies and network resources. In terms of financial

gains, STC’s objective is to achieve 10 percent of its

total revenues from investments outside the

Kingdom by the end of 2008.”

He says the company’s financial muscle pays

dividends as it expands. “Diversification is sound

business policy and since STC is a cash-rich com-

pany we have the resources to both protect and

maintain our home market position while expand-

ing our interests to other markets that offer great

opportunities.” But with these telecoms firms

scrapping over the same business surely consoli-

dation is inevitable? “Simply, the answer is eco-

nomics. With the costs of labour and raw materials

continuously rising, a high degree of consolidation

is inevitable to minimise the impact and better

serve our customers,” says Daweesh.

Click online Al Daweesh is keen to discuss the subject of

his company’s online services. Broadband sub-

scriptions have increased three-fold year-on-

year and are expected to hit one million by the

end of the year, while business subscriptions

have risen by 12 percent on average every year.

It’s impressive growth but there has been criti-

cism in the Kingdom over the coverage, poor

speed and reliability, especially regarding broad-

band. Broadband in Saudi Arabia is also a great

deal costlier than that of neighbouring coun-

tries. Nevertheless, Al Daweesh is buoyant

about the market in the Kingdom. “Our vision for

the internet is to provide a world class service

and in this respect we have recently signed a

Memorandum of Understanding with several

leading international companies to construct a

high-speed submarine cable system.

“It also addresses regional bandwidth re-

quirements,” he notes, “and recently we acti-

vated the largest international internet

connection in the region with a speed of 10G per

second as an additional track for connecting STC’s

internet gate with the universal net that includes

the major internet services providers around the

world.” Al Daweesh says this will aid with busi-

ness continuity efforts. “This will help avoiding

visible and invisible risks, such as what happened

during the disconnection of the sub-marine inter-

net cable last February which the Kingdom was

not affected by due to STC’s investments in pro-


Coinciding with Business

Management’s meeting with Al

Daweesh, he was proudly

unveiling a new corporate identity

and logo for the business. The

new brand is designed around four

values: Transparent, Progressive,

Straightforward and Brilliant. Al

Daweesh says the idea was to

create a corporate feel that can be

leveraged internationally while

keeping reference to its Saudi

origins. It is also about

modernising and simplifying the

brand, as well as creating a sense

of unity to consolidate all the sub

brands under one umbrella.

NEW LOGO AND IDENTITY

“Since STC is a cash-rich company we havethe resources to bothprotect and maintain ourhome market position”

Saud Al Daweesh meetings Microsoft founder Bill Gates


viding alternative solutions that contributed to

the continuation of internet connectivity for its

customers.” The internet is still relatively nascent

in Saudi Arabia but sources suggest penetration

could hit 30 percent by 2012.

Image is everything Of course, any major company is constant-

ly striving to raise its international profile, and

STC is no different in that respect. However,

today brand-building is not just about bom-

barding potential customers with adverts of

the latest deals or products; exclusive deals

with superbrands are becoming all the rage in

the corporate world. This summer STC bosses

put pen to paper with European football giants

Manchester United on a deal that will allow the

club’s logo and imagery for STC’s marketing

purposes in its retail stores. The firm will offer

customers video clips of match highlights as

part of the mammoth US$18.6 million deal, one

of the largest non-shirt sponsorships in British

football. As a lead sponsor, STC will have a

presence inside MUFC’s 76,000 capacity Old

Trafford stadium and will be featured on the

club’s website, which is the most visited sports

website in the world. Furthermore, each year 70

Saudi students will be sent to train at the

Manchester United Academy, one of the world’s

most prestigious football training centres.

As you would expect, Al Daweesh is delight-

ed with the move and his face lights up when dis-

cussing the matter. So is he a fan of the team?

“Manchester United is a brilliantly successful glob-

al brand and was the obvious choice for STC be-

cause the club has a huge following of supporters


STC’s multi-million dollaragreement with ManchesterUnited is a record non-shirtsponsorship deal

In 2008, Saudi Telecom wasrecognised both locally and regionallyas the leading telecommunicationsprovider and one of the most sociallyresponsible organisations in the region.STC won the ‘King Abdulaziz QualityAward’ by the Saudi Arabian StandardsOrganisation, which is the mostprestigious award in the Kingdomand took ‘Best Organisation for Co-operative Training Award’. Thetelecoms giant also received the‘Saudi Joint Stock Company Awardfor Transparency’ presented by BMGFinancial Advisors for the company’s

STC SCOOPS PLAUDITS

continuous and transparentcommunications with regional andinternational financial analysts,financial research companies andinvestors, both inside and outside thegulf region. It doesn’t stop there,however, with the InternationalInstitute for Research awarding STCthe ‘Leadership Award’ for corporatesocial responsibility. In terms ofscale, Forbes recently named SaudiTelecom the largesttelecommunications company in theMiddle East and the fourth largestSaudi company.

will contribute to recouping our investment in this

prestigious partnership, not the least in terms of

goodwill among the many Manchester United

supporters in Saudi Arabia.” Sport, and especial-

ly football, is extremely popular in Saudi Arabia,

something that has not gone unnoticed by STC. In

fact, the company is in the Guinness Book of

World Records as the first and only company to

sponsor 12 clubs in the same league at the same

time. This record has never been broken.

With the exposure of the Manchester United

deal and the move into new markets, Saudi

Telecom is certainly on an international charge.

Indeed, second-quarter profits rose 24 percent as

income from foreign ventures starts rolling in. But

it’s not all good news; as Business Management

went to print reports surfaced that the company

could axe 14 percent of its home market work-

force in order to focus on expanding into North

Africa – a move that could affect 3000 employees.

Al Daweesh says his targets are clear in order to

strengthen the company’s position and stay

ahead of the pack. “Our goals over the next eigh-

teen months are to consolidate the gains made

in recent years, strengthen STC’s leading posi-

tion in the home market and maximise the ad-

vantages of our expansion into markets abroad.

We have every confidence in our ability to stay

ahead of the competition due to STC’s technical

expertise, innovative content, and marketing

know-how that is based on our understanding of

what our customers want and giving it to them

at the right price.” �

in Saudi Arabia, as evidenced by the attendance

figures at Manchester United’s match in Riyadh.”

I’ll take that as a yes. Back in January Manchester

United took the unusual step of making a 6000-

mile round-trip to Saudi Arabia to play in a testi-

monial match. The club was paid US$2 million and

it was here that the deal with STC was believed to

have been brokered.

Manchester United has a huge fan base in

country, as well as the Middle East as a whole.

STC believes that it can acquire new customers

through its affiliation with the current European

champions. Al Daweesh is reluctant to put a fig-

ure on projected revenues from the deal but it will

need to be more than a tidy sum to recoup its

hefty investment. “There are many factors that



Furthermore, UC promote communication effi ciency in the workplace,

which ultimately translates into improved productivity towards achiev-

ing business goals. UC converge various fragmented channels of com-

munications, devices and access networks to bring about cross-format,

cross-device, cross-network communication ability. UC allows employees

to have seamless access to data, voice, image,

instant messaging, and video on their fi xed line

phone, mobile devices, and laptop utilising any

of the available networks including WLAN, 3G,

WiFi, or even WiMAX.

BM. For some companies, issues about quality

are still obstacles to entering the UC market.

What is your response to this argument?

JB. It’s a good point and one we recognised three

years ago. This is the key reason that Nortel and

Microsoft formed the Innovative Communica-

tions Alliance. Our customers told us that unless

there was a joint development effort they would

hesitate to adopt UC. Our partnership brings

together the best of both worlds – the world’s leading desktop software

with the business-grade telephony from Nortel. Our joint R&D teams have

delivered together market recognised leading UC solutions. We have also

brought to market a portfolio of professional services to help customers

design, implement and operate their UC projects.

NI. When making a considerable investment in a UC product it is best to

choose a proven product, one that is developed by a company with ex-

perience and which can provide services and support. Green Packet has

global offi ces in the US, Malaysia, Singapore, Australia, China, Taiwan and

Bahrain, as well as distribution centres in Australia and Europe.

Green Packet has already enjoyed success in its home market of Ma-

laysia, in China, Taiwan and Bahrain securing contracts with major fi rms in

various industries, major telecommunication providers, internet service

providers, as well as VOIP service providers.

Moving unifi ed communications forwardBM. How can unifi ed communications help fi rms achieve their busi-

ness goals?

JB. It can boost employee productivity. Users now have one location to

access and manage the many ways they communicate. This means no

more wasted time checking various voice mail, email and instant messag-

ing (IM) systems. With presence information indicat-

ing when colleagues are available, you can eliminate

unproductive phone Lag.

It also allows you to stay in touch wherever you

are. You are no longer chained to desktop phones,

and mobile workers can answer voice calls on their

laptops wherever they have network connectivity,

such as in airports and hotels. Callers don’t have to

remember separate home and on-the road numbers.

Voice calls are delivered over cost-effective IP con-

nections and your existing telephony infrastructure.

And it dramatically reduces communication

costs. Nomadic workers can take full advantage of

broadband connections to make and receive calls

when away from the offi ce. There will be no more ex-

pensive calls from hotel rooms. No need to use a home phone for business

calls. No need to run up the wireless minutes. Yet you maintain consistent

voice quality and accurate presence status (on/off phone).

NI. All businesses aim to improve productivity and cut costs. However,

mobility is the key factor in many businesses today and with employees

spending much of their time outside the offi ce some costs are increasing

instead of decreasing. Travel and communication costs including equip-

ping employees with the various mobility tools they need to stay in touch

and mounting phone bills can quickly take their fi nancial toll on a fi rm.

As many enterprises are moving towards a fl exible and mobile envi-

ronment unifi ed communications help by providing a competitive edge via

seamless mobility and more effective communication tools in economical

and scalable solutions. This can drive communication costs down by 30

to 40 percent.

HEAD TO HEAD

“It is very important to analyse why the business needs UC and identify these

needs clearly in the project preparation”

While unifi ed communications (UC) has been around for some time, it seems that the time is now ripe to embrace it head on. Business Management gets the views of two industry experts, Jim Brindley of Nortel and Nik Ismail of Green Packet, on the UC solutions currently on offer.

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Green Packet’s strength is in our research and development and our

fi rst-to-market experience. Our research and development centres are

located in the USA, Malaysia and China. We know what employees need

and what employers require to keep in touch with their employees and

maintain productivity.

BM. How are companies managing risk when using UC?

JB. Here are the areas that I would advise require careful consideration.

Business drivers: It is very important to analyse why the business needs

UC and identify these needs clearly in the project preparation. It is not the

same as implementing another router or pbx, for example. These projects

will change the way people work. At Nortel we have consulting teams

working at the CIO/CEO level to help fi rms get the most business value out

of their UC investments.

Architectural design and vendor selection is vital. Selecting the best

design and the best products for the solution will ensure it is right fi rst

time. We often help customers integrate non-Nortel products as well.

Network Assessments: For those fi rms migrating to UC we fi rmly

recommend the assessment of your network infrastructure before adding

the potential stress of a UC service on top. The analogy here is that build-

ing the tower of Pisa on poor foundations will not stand the test of time

as well as the Pyramids in Egypt. We are able to do this for our customers

regardless of the infrastructure vendor.

NI. With employees communicating from all ends of the globe across

different media, data security is of the utmost importance to fi rms.

Green Packet’s solution for enterprises offers seamless mobility, se-

cured connectivity and UC. Our UC is securely connected via a Mobile

Private Network (VPN), a combination of two powerful technologies

– Mobile IP and IP Sec VPN.

It enables users to securely connect to their offi ce’s LAN even

while on the move, connecting to various access networks such as

WLAN, 3G, Wi-Fi, or even WiMAX without having to worry about the

integrity of the data that is being transmitted

or received.

BM. What do your solutions offer companies?

JB. Simply put. I offer my customers the best

possible UC experience. From the advisory

stage through to on-going support we have

made the strategic investments in R&D and

services. We also have a global footprint with

trained engineers and project teams all around

the world to support our customers. We have

a proven track record and have delivered well

over 600 projects.

If you are considering IP Telephony and Uni-

fi ed Communications then I would be delighted if

you consider Nortel.

NI. Green Packet’s UC solutions operate on a

‘one-click-access’ mode to provide utmost con-

venience and effi ciency to companies. Users

need only access a single client interface, apply a single login, and a single

authentication control to conduct their day-to-day communication needs.

Our UC solutions allow companies to be connected seamlessly at all

times and across all access networks including LAN, WLAN, Wi-Fi, 3G, and

WiMAX. The switch between networks is intelligent and is an auto hand-

off based on the best available and best pricing factors.

Our solutions offer improved productivity and cost savings by unify-

ing fragmented communication channels. Users do not have to attend to

different communication channels can be managed via one client. The

UC platform can be integrated with corporate telephony system (IP PBX)

to allow overseas-based employees to call their fellow colleagues without

incurring international roaming charges. Our UC solutions are modular

and scalable to suit the needs and size of any company. Green Packet’s UC

is represented by our product known as the ‘Interact’ series for consum-

ers, enterprise and operators. With Green Packet’s UC, employees can

communicate with their colleagues in real-time and with customers more

effi ciently when they are on the move.

“In 2007, unifi ed communications witnessed a growing demand,

with 50 percent of enterprises reporting that they are evaluating,

installing or running UC solutions,” says Henry Dewing at Forrester

Research. So what should we expect in 2008? “Mobility will

become an expected part of UC, video will come of age for multiple

purposes, communication-enabled business processes will start

providing ROI, and hosted and SaaS UC offerings and demand will

grow. Don’t expect federated presence to break out of the pack just

yet though; interoperability and user-confi guration tools remain

roadblocks to adoption in the near term.”

WHAT THE ANALYSTS SAY

Nik Ismail is the Director and Vice

President of Business Development for

Green Packet.

THE PANEL

Jim Brindley represents Nortel as Middle

East Innovative Communications Alliance

Prime.

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82 www.busmanagementme.com82 www.busmanagementme.com

ANALYST VIEWPOINT

The promise of unifi ed communications

Senior Research Analyst at IDC, Nora Freedman, demystifi es UC adoption challenges and discusses when and why companies should make the move to UC.

“In terms of trusted partners that people

can turn to, there are obviously heavy

vendor biases,” suggests Freedman. “So

don’t be afraid to seek out the system

integrators. Tier 1 system integrators like

IBM Global Services or HP Services have

well-established UC practices. These

systems integrators and some other tier

2/3 resellers have been on the frontlines

of making this stuff work. For those

customers who are particularly wary of

vendor hype and bias, trusted partners

can be crucial in helping serve as a key

solution advisor and/or the prime project

deployment lead.”

TRUSTED PARTNERS

BM. What do you think the promise of unifi ed communications (UC) is

for companies who are prepared to do it right?

NF. The essence of unifi ed communications is really about stream-

lining business processes that are already voice intensive, but not

making them separate exercises. You want to minimise navigation

between multiple applications. With UC, you’re trying to reduce time

to ‘X’ – whether it be for an approval, fi nding out about available sup-

plies, or locating a person or artifact.

If there was a way to do that within an ERP application or within a

CRM application, then you could automatically launch those searches

to make a phone call and get the right people. This

is particularly relevant in emergency and alert no-

tifi cation scenarios, where the onus of fi guring out

who is the right person and where he or she might

be located is embedded within the application, as

opposed to leaning on your own mental directory as

to who does what and where.

BM. There’s been some confusion around UC, in terms

of the number of vendor offerings, different implemen-

tations, etc. How should fi rms clarify the decision-

making process as to where to begin with UC?

NF. You have to understand that UC is more of an architecture, as op-

posed to a point solution. All of the major IT vendors are hoping to capi-

talise on the attention being paid to this market. But putting the term

‘unifi ed communications’ or UC in front of their product names, without

additional product engineering, doesn’t automatically make those prod-

ucts UC-enabled.

The future direction of a company’s unifi ed communications strat-

egy has a lot to do with its current infrastructure, because some of the

steps in the process can be leapfrogged. Certain enterprise environ-

ments – dependent on which vertical

market they are in – are just not relevant

in others. For example, some of the re-

quirements and regulations in fi nancial

services are very different than, say,

federal governments. So you have to un-

derstand what the security implications

are, who the essential personnel to be

notifi ed are, which regulations need to

be adhered to, and then what the gen-

eral business culture is, because a lot of

the work can be done in theory but not

achieved in reality.

People can often be the biggest

obstacle. Because UC is so new, there is

still a limited amount of people who are

trained and adept at training end-users,

as well as installing and maintaining the

system. There is still a lot of confusion

and there are limitations on that. En-

terprises will have to do their own due

diligence to determine if their internal staff is skilled and equipped. If

they are not, then the enterprise will have to identify which partners can

help fulfi ll those project gaps.

The development of unifi ed communications practices among con-

sultants and systems integrators is very much akin to 10-15 years ago

when we saw the emergence of internet and e-business practices. A lot

of companies were very focused on e-business enabling, developing

websites and providing web services. But now it is just a general busi-

ness expectation that you’re going to have at least a website and some

web services available. I think the same thing will apply here. Over the

next three to fi ve years, we’re going to see a lot of initiatives focused on

what organisations are doing in terms of unifi ed communications.

I think we’ll evolve to the point where if you can’t automatically

locate people within the key business applications you’re using or be

able to access certain applications through whatever device you choose,

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tion are rarely those who are forced to use it every day in order to

complete their job.

The best-use case scenarios emerge from conversations between

someone from IT, someone from the line of business and someone

from the executive level across the organisation.

These groups tend to welcome explorations into

what the real business issues are that need to be

addressed and how UC can solve them.

Consumer-based Web 2.0 applications

have also increased the expectations among

business users about what their organisations

should provide them. For example, most of us

became more adept at instant messaging from

AOL and MSN Messenger, as opposed to using

the Microsoft Exchange or Lotus Sametime.

Only after security breaches occurred did enter-

prises learn about the corporate vulnerabilities

exposed through the use of consumer apps

into the enterprise. And thus, enterprise grade

applications were deployed to displace those consumer applica-

tions. Now, many consumers are expecting the same level of usabil-

ity coming from their Apple iPhones as from their enterprise devices

and smartphones.

then it is going to be seen as unsatisfactory. Expectations of baseline

functionality are going to be much higher, and UC is not going to be a

strategy in isolation.

BM. How do organisations determine if their infrastructure is ready

for UC?

NF. Their internal IT department can do the pre-deployment assessment.

If they’re large enough, they can also go directly to the vendor or hire a re-

seller to do some of it. There are certain aspects about the infrastructure

that simplify the move to UC; for example, we usually use IP telephony as

a leading indicator about how prepared certain companies are. A lot of

times in the preparation for IP telephony, companies have completed the

network upgrades and some of the network management. They’ve done

some assessment of the kind of connectivity required and the service-

level agreements (SLAs) so that they will not have to worry about service

degradation when the bigger applications or more comprehensive busi-

ness processes are accessing multiple things, from multiple locations,

across multiple geographies.

BM. Can you discuss the heightened attention on security needed

as these disparate pieces of technology become part of a unified

solution?

NF. The security part has to do with the fact that there are just so many

more devices connecting to the network. Does your organisation have

device-specifi c authentication policies? Or can users authenticate

themselves across a variety of applications and devices? Are these

identities consolidated into one directory service or multiple ones?

Because there may be multiple directories within the organisation, it is

crucial that all user information is consistent. Otherwise, the promise of

UC may be compromised.

If we look at US, government regulations may also highlight new

business requirements, especially in fi nancial services and health-

care. Due to Sarbanes-Oxley and HIPAA, organisations must be

acutely aware of who is accessing customer and patient information

and must also be able to provide an audit trail. Be-

cause new UC solutions may introduce a new level

of auditing exposure, some organisations have

decided to disable certain features. For example,

some fi nancial organisations have disabled the

voicemail capabilities of their unifi ed messaging

solutions, since they don’t want these voice mes-

sages to become subject to SEC regulators and/or

they lack the appropriate mechanisms to capture,

archive and retrieve the voice messages to iden-

tify any policy violations.

BM. Can you talk about some of the best practices

for making sure that communications are inte-

grated with processes, workfl ow, applications

and so forth?

NF. Some of the best UC examples or UC success stories have come

from those companies that have built UC steering committees with

their organisations. Traditionally, those who purchase the IT solu-

Nora Freedman is a

Senior Research Analyst

with IDC’s Enterprise

Networking group. In this

role, Freedman provides

research, market analysis

and consulting services

about enterprise IP

telephony equipment,

unifi ed communications

and telepresence.

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94% Survey respondents

experiencing latency as a result of waiting for information

from unavailable colleagues

CHANGING THE WAY

WE INTERACT

While the term ‘unifi ed communications’ is now being used by

many CIOs, they often lack real understanding of the many

ways it can help their businesses and the key requirements

they should seek in a unifi ed communications (UC) solu-

tion. There are enormous pressures on businesses today to reduce costs,

deliver higher levels of service and be environmentally responsible. UC

can answer these issues, but before CIOs can determine the right solu-

tion for their business, they need to evaluate and understand how UC can

help achieve their goals.

Eliminating fragmented communications Despite the advances in communications technology – or ironi-

cally, possibly because of them – business users face a complex and

fragmented communications environment. While the variety of de-

vices and media provide fl exibility, they also

add to communication latency, friction and

overload. The ability to ‘connect’ in real-time

suffers, duplicate and redundant communica-

tion attempts proliferate, and key business

processes that rely on communications are

slowed (or even stopped altogether) because

of fragmented communications.

But how does this impact business? A

study done by Insignia Research set out to

measure the nature and impact of communi-

cation friction, latency and overload, based

on the real-world experiences of end-user

employees.

The study estimated the full fi nancial impacts of doing nothing

about fragmented communications by calculating the cost of lost pro-

ductivity and avoidable expenses incurred as a result of poor commu-

nications. The study identifi es these costs for varying sized companies

– ranging from several thousand to several millions of dollars.

Clearly, there’s a large opportunity for improvement and stream-

lining, which in turn has a positive fi nancial outcome. The communi-

cations status quo must be addressed for companies looking to stay

competitive and productive, eliminate redundancies, speed business

and improve their expenses and bottom line.

The answer, in large part, is unifi ed communications. UC enables

enterprises to automate and embed communications into business

processes resulting in faster, more effective decision-making. In a

typical business workfl ow process, each time human intervention and

decisions are required, the process slows or stops if the appropriate

person can’t be reached– adding minutes, hours or even days to the

process, detrimentally impacting the com-

pany’s bottom line and customer satisfac-

tion. Using UC, these workfl ows can be

automated to use rules-based routing to

reach the appropriate person on their de-

sired device, or forward to their designated

alternate, so decisions can be made quickly

and the workfl ow kept on track.

Another study by an independent re-

search organisation examined the total cost

of ownership (TCO) of communications solu-

tions including traditional PBX, IP PBX, Man-

aged IP PBX and Siemens OpenScape Voice

Application (formerly known as HiPath 8000). The scenario looked at a

Global 1000 enterprise with 25,000 total users with applications including

contact centres, messaging and conferencing.

COMMUNICATION FOCUS

Insigna.indd Sec1:84Insigna.indd Sec1:84 15/10/08 15:49:1915/10/08 15:49:19


The study found an IP PBX the most expensive solution, with Open-

Scape Voice Application offering the least expensive TCO over fi ve years.

Siemens designed OpenScape Voice with TCO in mind, with features

and functionality to improve operational effi ciency, reduce costs and

eliminate unnecessary business expenses. By consolidating nodes and

servers, network and operational costs are also reduced. Its modular

architecture provides nearly unlimited scalability and allows IP, TDM and

analog networks to co-exist, protecting legacy investments while intro-

ducing IP benefi ts to the enterprise.

Supporting green efforts As CIOs consider the economic impact of productivity and owner-

ship costs, they should also understand how UC can aid their efforts

to be more environmentally conscious. In traditional TDM technol-

ogy, the intelligence resided primarily in phone systems comprised of

proprietary hardware and discrete components. It provided most of

the computing power and consumed the lion’s share of energy. It also

required convection cooling, which has a big appetite for power. The

total electrical connected load of phone systems with 1000 extensions

ranged up to 5.4 kilowatts, and their cooling systems consumed at least

as much power. For networked phone systems, the overall power con-

sumption is signifi cantly higher when you consider that every site had

its own system.

Software-based VoIP solutions (such as Siemens OpenScape Voice

Application) that run centrally on standard servers in the data center

can signifi cantly reduce power consumption. Far fewer computers are

needed for a communications system centralised in a data center. Just

two servers are all it takes to provide phone service to as many as

100,000 subscribers.

IP systems spanning many sites can decrease overall power

consumption by up to 38 percent, depending on the confi guration.

Furthermore, these sophisticated systems can be installed, operated,

and maintained remotely. Service engineers need not travel to different

locations, further reducing CO2 emissions. Thus a centralised commu-

nications system residing at the data center reduces energy consump-

tion directly as well as indirectly.

Companies can further reduce their carbon footprint by leveraging

technologies such as HD video and telepresence that eliminate the need

for travel. Connected by multimedia-enabled internets, employees at

different sites can collaborate in virtual meetings. Modern videoconfer-

ence capabilities allow them to work together as if they were in the same

room, rendering many business trips superfl uous. And with the video

application using the same directory as voice and all other media, the

complexity of the video call of the past is replaced with the ease of a

click-to-dial videoconference, from the boardroom to the desktop.

Modern telecommunication solutions have also made the home

offi ce increasingly viable and reduced the need for daily commuting. With

innovative teleworking tools, companies can commit fewer resources to

on-site work places while maintaining productivity and effi ciency. Smart

desk-sharing schemes allow enterprises with a sales focus to operate

with up to 70 percent fewer workstations. With less offi ce space to lease,

maintain, heat and air-condition, companies save on capital expenditures

and energy costs.

Open communicationSo with unifi ed communications established as the way to go, what

kind of solution is best? That’s where open communications comes in.

Siemens believes that an open, software-based approach is key because

it allows customers to evaluate, design, integrate and support multi-

device, multi-media and multi-network solutions easily and effectively,

as opposed to bolt-on proprietary approaches.

Because Siemens solutions such as OpenScape Voice Application

and OpenScape UC Application use open interfaces and standards-

based technologies, they can converge seamlessly with your existing

infrastructure to make the most of legacy investments. This provides the

freedom to evolve your communications environment to meet current

and future needs.

Siemens has worked with a number of other business software

vendors to integrate with the OpenScape UC Application. By seamlessly

embedding real-time presence information into commonly used busi-

ness applications, enterprises can accelerate decision-making, reduce

process latency and improve collaboration.

Today’s businesses are rapidly changing and adapting in order to

maximise productivity at the lowest costs. Unifi ed communications and

Siemens can help them achieve a more streamlined, effi cient commu-

nications infrastructure that results in a more productive and effective

workforce and better customer satisfaction and bottom line.

A white paper that reviews the complete fi ndings of Insignia Research’s UC survey can be downloaded from www.siemens.com/us/open

SURVEY FINDINGS

The most common and costly pain point (experienced by 94

percent of respondents) was latency resulting from waiting for

information from unavailable colleagues. The average delay directly

attributable to the use of disjointed systems is 5.3 hours/week,

resulting in an average annual cost of over $9000/user. This delay

is indeed troubling, particularly in customer-facing roles.

Business travellers estimated spending 11 days in the past

year on avoidable business travel, equating to an annual waste

of at least US$3400/person in travel expenses. This happens

when collaboration through existing communications systems

is ineffective, forcing teams to synchronize through expensive

face-to-face meetings.

A majority of respondents reported spending at least 10 percent of

their time working remotely, reporting reduced productivity by an

average of 7.8 hours/month because they lack the communications

tools off-site that are available in their main offi ce.

75 percent incurred incremental communication costs on up

to four business trips within the previous six months, with an

average annual expense of $1488 per business traveler.

Insigna.indd Sec1:85Insigna.indd Sec1:85 15/10/08 15:49:2015/10/08 15:49:20


BM. Oracle and SAP are the market leaders.

How does Infor expect to make a mark?

PH. Infor has evolved over the last six years

and we are already established as the 10th

largest software company in the world.

Perhaps more importantly, Infor is already

recognised as a leader and innovator, with a

different strategy that really does offer the

market a viable, unique alternative.

Infor’s strategy is to make business

software better. We’ve made 35 astute, stra-

tegic, major acquisitions while annually we

invest millions of dollars in R&D to further

improve the software; to make our business

software better.

Fundamentally, Infor has already fi lled a

huge gap in the enterprise software market.

This gap has been left by the giants you

mention who typically provide stability and

a global presence but have generic, one-

size-fi ts-all solutions. The drawback is that

these type of solutions are expensive and

resource intensive to implement and require

substantial customisation, just to meet basic,

business specifi c needs.

Until now, the only other choice has been

to look at smaller niche vendors who provide

feature-rich, industry specifi c solutions. We

know this, as Infor has acquired some of the

best players in the market. However, on many

occasions these niche vendors lack fi nancial

stability and global reach – quite often they

simply disappear off the map – that’s not good

if you are building your business around their

technology. At Infor we have taken the very

best of both choices to successfully fi ll the

dilemma between the one-stop-generic-shop

giants or the risky niche vendor with great

functionality. Our strategy is proven. We have

grown to having 70,000 customers worldwide

and we’re continuing to gain brand new cus-

tomers organically in all regions – 2200 new

name customers last year.

BM. What about Infor’s successes in the

Middle East?

PH. EMEA accounts for 41 percent of Infor’s

revenues – nearly US$1billion and we have a

very successful and growing business here

in the Middle East, and I’m delighted to have

joined Infor as the General Manager to further

this success. The Infor brand name is actu-

ally relatively unknown in the region; however

some of our acquired brands are very well es-

tablished in the market, such as Baan (ERP),

DataStream (Enterprise Asset Management),

SunSystems (fi nancials) and Epiphany (CRM)

amongst others.

We have a very broad portfolio of business

specifi c solutions that are widely deployed

amongst our 800 plus customers across the

region, comprising Enterprise Resource Plan-

ning (ERP); Supply Chain Management (SCM);

Warehouse Management (WMS); Product Life

Cycle Management (PLM) Enterprise Asset

Management (EAM); Human Capital Manage-

ment (HCM), Performance Management (PM)

Financial Management (FM), Expense Manage-

ment (XM) and of course Customer Relation-

ship Management (CRM).

BM. In which areas has Infor been most suc-

cessful?

PH. Taking the hotel market, just as one ex-

ample, our Infor FMS SunSystems accounting

software is sold in partnership with MICROS-

Fidelio International a leading provider of

information technology solutions for the

hospitality and retail industries, to over 2000

of the world’s fi nest hotels. It is an integrated

solution that has been adopted by hundreds of

hotels here in the Middle East.

One of the most pioneering companies in

the region is a household brand hotel chain,

which has embarked on a project to deploy

part of our human capital management solu-

tion in order to improve customer service

through improved management of its staff.

Another incredibly exciting area we see in

the region is in enterprise asset management

(EAM). One of our most fascinating projects is

supporting Nakheel where we have success-

A “leader and innovator” for the Middle EastPaul Hammond, General Manager and Regional Vice President for the Middle East at Infor, talks to Business Management about how his company provides innovative business software to the region.

Paul Hammond joined Infor in 2008

as GM and Regional VP for the Middle

East. Having 20 years of Global IT

experience, Hammond comes from

webMethods where he established the

company’s Middle East operation. Prior

to this, Hammond spent seven years

in international sales at Veritas (since

acquired by Symantec), his latter years

heading up the oil & gas sector.

EXECUTIVE INTERVIEW

Infor.indd Sec1:86Infor.indd Sec1:86 15/10/08 15:48:5315/10/08 15:48:53


fully deployed Infor EAM Enterprise Edition to

provide them with the tools to better manage

their assets – from bridges, cranes to pumps,

air conditioning systems and property mainte-

nance requests. These can all now be serviced

with an improved turnaround time to maximise

productivity whilst minimising costs.

We’re seeing incredible interest in these

EAM solutions right throughout the region

from Civil Aviation Affairs (CAA) Bahrain to

SWCC in Saudi Arabia; it’s a real sweet spot for

any asset intensive industry.

BM. What is your go-to-market strategy for

the Middle East, and is this likely to change?

PH. We sell both direct and through the

channel, and we are about to embark upon

a channel partner enhancement and recruit-

ment campaign to bolster our offering in the

region. Our approach to channel recruitment

is focused on quality over quantity. We are not

looking to take on dozens of partners and risk

dilution of our focused approach, but a smaller

number of partners that are well aligned with

our products and company ethos and can ar-

ticulate our unique ‘making business software

better’ value proposition to customers.

Infor has also developed a series of

‘business edition’ suites for many of its enter-

prise software solutions. These are in effect

template-based and designed for rapid imple-

mentation and setup – we are talking days and

weeks here–whilst providing rich functionality

and built-in best practices, making them ide-

ally suited to the SMB market, regional, divi-

sional or departmental level. They are equally

ideal for those cases where an enterprise

customer wants a rapid implementation to

fulfi l a pressing business requirement. At the

customers’ own pace they can then transition

to the enterprise version at a later date to add

advanced functionality to support their contin-

ued growth and evolving business objectives.

This rapid time to value implementation will

really resonate in the Gulf markets.

BM. What are the crucial areas for Middle

East companies to concentrate on in the

coming year?

PH. Focusing on becoming ‘green’ by being

more energy effi cient. Not just paying lip

service to this current topic or turning out the

occasional offi ce light switch.

Most companies we talk to are still in

the planning phase, trying to formulate their

energy conservation or ‘go-green’ plans. It is

staggering that so much still needs to be done.

According to a recent Plant Services survey,

80 percent of executives ranked energy as the

most impactful variable on operating costs,

yet many executives do not know where their

energy is being spent. Energy and utility re-

sources here in the Gulf cannot support the

growing demand, hence costs will continue

to rise and companies need to manage these

costs carefully. Nakheel is a great example of

this – implementing ‘green’ initiatives as a key

business differentiator.

Energy costs are all part of a necessary

effi ciency drive for every organisation. For

energy conservation, businesses need to

select technology that gathers information on

all facility assets that consume energy, such

as AC chillers, generators and lighting. They

then need to provide intelligence regarding

optimal maintenance and replacement based

upon energy consumption. By incorporating

energy management into asset management,

companies can now account for more than 90

cents of every dollar of operating cost.

BM. Where else should companies be looking

for effi ciency savings?

PH. Infor would also encourage Middle

Eastern companies to take a holistic review.

Replacing a machine may save hundreds

of dollars on an electricity bill; altering a

warehouse layout can save thousands; but

optimising the fl ow of goods from freezone to

delivery can save millions.

We feel one of the most signifi cant ‘green’

opportunities is in relation to the total supply

chain and here it is critical to work with sup-

pliers and customers to devise new ways of

effi ciently getting products into consumers’

hands. All across the supply chain there are

opportunities to reduce energy consumption

and emissions. Reduce, rework, re-cycle,

renew are becoming watchwords for the way

to re-think supply chain strategy.

More strategically, companies will re-as-

sess their sourcing strategies through newer,

green tinted glasses and perhaps reverse

some of the trends towards mass outsourcing

that have been experienced in recent years.

To contact Infor’s regional Middle East HQ telephone +97143914438 or email [email protected]. Alternatively, visit www.infor.com/middle_east

Infor’s solutions focus on a whole host of business-critical functions.

70,000 Infor’s

customers worldwide

Infor.indd Sec1:87Infor.indd Sec1:87 15/10/08 15:48:5415/10/08 15:48:54

InforSP.indd 1InforSP.indd 1 7/10/08 14:54:067/10/08 14:54:06


message about the KPC’s wealth, the recent rocketing price of black

gold has, of course, swelled the coffers further.

A founding OPEC member, Kuwait is the oil cartel’s second largest

exporter, and its reserves account for 10 percent of the world’s total.

According to offi cial data, the land here holds the fourth largest oil

reserves in the world. Its state-owned business, KPC, and its stable

of subsidiary companies currently produce around 2.6 million bpd.

However, the Kuwaiti government has ambitious plans to ramp up pro-

duction to three million bpd next year – 12 months ahead of schedule.

Looking further ahead, Al-Shuwaib, who was appointed CEO last year,

says production will hit 3.5 million bpd by 2015 and four million bpd

by 2020. These are bold targets but ones that will have to be achieved

if world supplies are to meet soaring demand. Indeed, OPEC predicts

that consumption could reach 118 million bpd by 2030.

“Expanding economic activities in the world and especially in

China and India are the main drivers for continuous rising demand for

Perched on the 19th fl oor of KPC’s

headquarters in Kuwait City, Saad

Al-Shuwaib’s plush offi ce stands as

a shining example of what petro-

dollars can buy these days in this en-

ergy-rich emirate. Panoramic views

over the stunning Arabian Gulf Coast can be seen

through its expansive fl oor-to-ceiling windows and

a beautifully crafted infi nity pool greets visitors

at its entrance overlooking Kuwait Bay. Offi cially

opened in February, the gleaming Kuwait Oil Sector

Complex, which is also home to the country’s oil

ministry, has two fan-shaped glass towers spouting

from the front and an opulent lobby which offers a

welcome respite from the searing heat outdoors.

While this state-of-the-art facility sends out a clear FIE

LD

OF D

RE

AM

S

Kuwait is ploughing tens of billions of dollars into an expansion plan that will see production eventually hit four million barrels of oil a day (bpd). But will it meet its targets? Julian Rogers meets Saad Al-Shuwaib, CEO of Kuwait Petroleum Corporation (KPC) to fi nd out.

OIL AND GAS

KPC Al-Shuib-4pg.indd Sec1:89KPC Al-Shuib-4pg.indd Sec1:89 17/10/08 11:14:4617/10/08 11:14:46


12 years time, the plan is to pump 750,000 barrels of heavy oil a day.

However, this cannot be achieved without the help of the international

oil companies (IOCs) who have been involved in the country’s operations

since the industry was nationalised in the 1970s through basic techni-

cal service agreements. But now, for the fi rst time ever, KPC is involved

in negotiations with foreign majors for performance-related contracts –

dubbed “enhanced technical service agreements”. These new deals allow

overseas companies a greater role in operations and key projects. “These

technical service agreements are still working, however, we are work-

ing to improve and strengthen such relations,” Al-Shuwaib comments.

US heavyweight ExxonMobil has signed a preliminary deal for the

north, while BP, which already holds service contacts, is in talks re-

garding oil fi elds in the West. Fellow global player,

Chevron, is negotiating an enhanced technical

service agreement for the oil-rich Burgan fi elds

to the southeast. More than two-thirds of the

country’s oil production comes from the greater

Burgan area – considered to be the second larg-

est oilfi eld in the world. Unfortunately for the

IOCs, the fl y in the ointment continues to be the

Kuwaiti parliament’s reluctance to allow foreign

companies any operational control over its prized

reserves. So for the time being the multi-billion

dollar Project Kuwait (originally drawn up in the

1990s to award IOCs 20-year “operating services

contracts”) appears to be no closer to being re-

solved. The political disputes and objections

to Project Kuwait, by some MPs, has stunted

progress, whilst the country was left without an

oil minister for six months until acting oil minister

Mohammad Al Olaim was appointed to the posi-

tion on a permanent basis earlier this year.

But when you consider that the oil sector ac-

counted for 60 percent of Kuwait’s gross domes-

tic product (GDP) in 2007, it’s not hard to fathom

why some hostility exists. Despite the opposition

to partnerships with foreign companies, for Al-

Shuwaib the advantages are abundantly clear:

“The desired benefi ts from foreign participation

includes extracting maximum value from the res-

ervoir assets, adding reserves, optimisation of

energy,” says Al-Shuwaib when quizzed on global supply and demand

fears. “We adopt the view that there is suffi cient petroleum resources,

conventional and non-conventional liquid fuels, to meet growing

demand for decades to come. However, key players in the market need

to make timely investments to expand oil and gas supplies.” This in-

cludes Kuwait. “We in Kuwait will pursue with our long term plans to

sustain enough supplies to the market according to strategies set for

KPC until 2020”, says Al-Shuwaib.

Strategies Leaning back in his leather chair, Al-Shuwaib explains how his vision

for the business will become a reality, in a country that is seeing home

energy demand rise 10 percent annually. First, he says KPC will spend

US$55 billion between now and 2013 to fi nance production, refi neries

and new tankers. At least half the investment will be needed for new

drilling and enhanced recovery technologies. Tapping into undeveloped

areas of the country will also be a priority. Earlier this year Al-Shuwaib

told reporters how KPC was exploring in “less than one-third” of the

country’s total area. KPC plans to exploit diffi cult fi elds in the north

and west of the country, holding vast reserves of heavy oil. Indeed, in

KUWAIT OIL FIELDS

Abdeli Field

Ratqa Field Sabriyah

Raudhatain

Bahrah

Kra’ Almru Field

Minagish

Dharif

Abduliyah

GreaterBurgan

Khashman

Medina

Failaka Island

BubiyanIsland

Umm Gudair

“Capital project management is becoming a big obstacle as projects are becoming more complex and at the same time exceeding their costs

and not meeting their deadlines”



Zour is up and running, KPC plans to close the

Shuaiba refi nery.

But it’s not only at home that KPC is ex-

panding; the company is fl exing its muscle on

the international stage too – Asia especially.

Al-Shuwaib earlier this year and a delega-

tion from KPC, travelled to Vietnam to sign

contracts on a deal between KPC’s subsidiary

Kuwait Petroleum International (KPI) and the

country’s national oil company Petrovietnam,

Japan’s Idemitsu Kosan Co. and Mitsui Chemi-

cals to build the socialist republic’s second

refi nery and petrochemical complex. The

planned facility, 200 miles south of the capi-

tal Hanoi, is expected to produce 10 million

tonnes per year.

Vietnam’s neighbour, China, is also a

country that KPC is involved with. Indeed, the

country’s fourth largest oil company, Sinochem

Corp, will be processing Kuwaiti crude at its

proposed refi nery in East China in around 18

months. This will be through a joint venture

with KPC and Royal Dutch Shell that will see

the refi nery process 240,000 bpd. As well as

this, KPC is progressing with plans to build a

huge refi nery-petrochemical complex in the

southern Guangdong Province, while KPC hopes to sign agreements

with India in the future. Al-Shuwaib stresses that these overseas deals

are all about securing long-term outlets for Kuwaiti crude.

Green credentials When the conversation broaches the issue of climate change, the

boss is quick to point out how Kuwait is not shirking its ‘green’ respon-

sibilities. Al-Shuwaib talks openly about how the business will invest

US$100 million in new energy technologies, including hydrogen fuel

cells, carbon capture and storage, and hydrogen generation from oil.

“KPC has been very conscious to the dilemma of climate change and

invests to improve energy effi ciency, reduce emissions and to continu-

ously monitor its carbon footprints. Furthermore, carbon capturing

and storing (CCS) is one of the industry’s main objectives at the time

being.” Naturally, technology is a required necessity.

“A stated objective of KPC is to promote the development of new

technologies which will maintain oil’s long-term competitive position

by making it a more effi cient and environmentally-friendly energy

source through an active investment policy,” Al-Shuwaib states.

He also enthusiastically explains how KPC adopted a zero fl aring

policy in 2002 for both onshore and offshore operations This is set

to be reached in 2011. KPC also supplies low sulphur gas oil for the

local market and low sulphur fuel oil for the Ministry of Electricity

and Water Power stations. “Our role is to be proactively managing

the environment, and health and safety aspects related to KPC’s

businesses and become a regional leader in HSE (health, safety and

environment) performance.”

capital expenditure, cost savings, the application of new technology,

acquisition of improved management systems and creation of job op-

portunities for Kuwaitis.”

Like a lot of the national oil companies (NOCs), KPC needs outside

help, particularly as easy-to-reach oil is dwindling – creating the need

for improved technologies to extract hydrocarbons. Indeed, fi eld ma-

turity is a problem with most in the country being more than 60 years

old. “Production is moving to increasingly diffi cult locations as easy oil

is diminishing and the high oil price makes previous exploration and

complex asset maximisation economically viable,” Al-Shuwaib explains.

“A very important challenge in this area is to improve technologies to

respond to these complexities and at the same time improving technol-

ogy application capabilities.”

Downstream, the organisation plans to drastically improve capac-

ity with new refi neries and petro-chemical plants. As much as US$30

billion is being allocated. In May it was announced that KPC had

awarded US$10 billion worth of contracts to construct the grassroots

615,000 bpd Al-Zour facility – the largest single-phase refi nery project

ever built. Situated near the border with Saudi Arabia, it is due to be

complete in 2012 at an estimated cost of US$15 billion. Al-Zour will also

produce 200,000 bpd of low sulphur fuel oil for electricity generation.

In the pipeline too is a large-scale upgrade of current refi neries in the

country “to enable us to produce cleaner products and meet environ-

mentally friendly fuel specifi cations”, Al-Shuwaib notes. Kuwait also

plans to upgrade two of its three existing refi neries, Mina Ahmadi and

Mina Abdullah. With Al-Zour on line, Kuwait’s total refi ning capacity

will swell to 1.4 million bpd. It currently stands at 930,000. After Al-

KPC FACT FILE

• Established in 1980

• Acts as the umbrella organisation to 10 oil and gas

subsidiary companies

• Operations spanning six continents

• Currently producing 2.6 million barrels of oil a day

• Has around 1600 producing oil wells



issues that need addressing are “magnifi ed” by the scale of capital

needed. “Capital project management is becoming a big obstacle for

the oil industry and KPC in particular as projects are becoming more

complex and at the same time exceeding their costs and not meeting

their deadline. This is a competency that needs to be nurtured and

developed to ensure the strategic objectives are met on the medium

and short-terms” he remarks. And it is only going to get worse for the

energy companies; according to the IEA, energy demand growth will

require US$800 billion of investment per year over the next 25 years.

As the lift whizzes back down to the lobby from Al-Shuwaib’s

offi ce, I can’t help but wonder what impact Kuwait’s energy targets

will have on the nation’s future prosperity. After all, this is a crucial

period for Kuwait if it wants to keep pace with the rampant economies

of fellow Arab countries. However, according to the Energy Information

Administration in the US, the nation’s reserves may only last another

50 years if production reaches four million bpd by 2020. Whether or

not this outlook is true, only the Kuwaitis know for sure. Then there is

the fear that the country may have already reached the dreaded Peak

Oil scenario. Question marks remain, but this is certainly one OPEC

producer to keep a close eye on in the next few years.

None of this can be achieved without a strong workforce, he as-

serts. Indeed, KPC faces a universal challenge affecting both the NOCs

and IOCs – the talent war. As projects get larger and more complex, the

need for experienced staff across the many facets of an oil and gas gi-

ant’s operations is only going to intensify. Indeed, the industry is having

to replace experienced and skilled workers approaching retirement age,

while more and more students are choosing to shy away from the oil and

gas industry.

“A skilled and motivated workforce is becoming increasingly

scarce,” he muses, “so the HR, learning and development depart-

ments are therefore becoming increasingly important.” And with

Kuwait’s expansion plans, HR is intensifi ed: “The need for such

talents is increasing as projects become more complex and manage-

ment becomes more diffi cult,” Al-Shuwaib points out. He says KPC

is developing and will continue to develop advantageous

remuneration and compensation packages in addition to

extensive training and development schemes for its cur-

rent and new employees.

OutlookFor KPC and its subsidiaries, the next few years will

be an interesting but challenging period in terms of oil

production; but what about that other highly-sought

after commodity – natural gas? Kuwait is going to

need more gas to fuel refi neries and other industries

– a signifi cant chunk of these hydrocarbons will

come from imports from Qatar, Iran and Iraq.

However, KPC is about to start production of

free gas (not a by-product of oil exploration). Two

years ago 35 trillion cubic feet of free natural gas

was discovered in the northern oilfi elds. Al-Oliam was quoted

in June as saying that the target was to produce a billion cubic feet of

free gas a day by 2015 but for the time being, KPC is set to produce 175

million cubic feet a day.

So gas production is looking good and imports have been secured,

oil production is being ramped up, alliances are being forged with the

IOCs and KPC is spreading its tentacles into emerging markets. As our

meeting comes to a close, Al-Shuwaib is keen to reiterate that KPC’s

tageous

ition to

ts cur-

will

oil

ht

to

s

was quoted

illion cubic feet of

Oil was fi rst discovered in Kuwait in 1938 by Kuwait Oil Company

(KOC), a London-based joint venture of the Anglo-Persian Oil

Company (now BP) and Gulf Oil (now Chevron Corporation), under

a concession granted by the then Amir of Kuwait, Sheikh Ahmad

Al-Jaber Al-Sabah. KOC had been formed in 1934 following more

than a decade of concession negotiations. However, development

of this bounteous natural resource was delayed by World War II

starting the transformation of Kuwait from a largely impoverished

desert sheikdom into the modern nation-state it is today.

Over the next three decades, extensive developments

occurred both in the upstream and downstream elements of

the industry. A key turning point came in 1974 when Kuwait

acquired 60 percent of KOC from BP and

Gulf Oil. In addition, the Supreme

Petroleum Council was formed to

oversee the country’s oil interests.

The following year, the Ministry of

Oil was established in its own right,

separate from the Ministry of Finance.

On January 27th, 1980, Kuwait Petroleum

Corporation was formed, which brought

together all elements of the industry under

one holding company, thus enabling greater

and more effective control. Throughout the

1980’s, expansion and integration occurred

continued. Today, the country is a major

oil exporter with an estimated 190 years of

reserves a current consumption levels.

A BRAND ABROAD

Outside Kuwait, the international arm of the KPC’s oil and gas

operations refi nes and markets fuel, lubricants and other petroleum

products under the distinctive “Q8 sails” logo. Founded in 1980,

Kuwait Petroleum International’s network of more than 4000 Q8

branded service stations extend across seven countries – Italy,

Germany, Sweden, Denmark, Holland, Belgium and Luxemburg.

KPI also holds signifi cant interests

in Asia, while Q8 Aviation

supplies jet fuel to many of

the world’s major airports.

HISTORY OF OIL IN KUWAIT

In 1946 His Highness Sheikh Ahmed

Al-Jaber Al-Sabah turned a wheel

to signal the fl ow of the fi rst Kuwaiti

oil exports


AMD.indd 1AMD.indd 1 7/10/08 14:51:407/10/08 14:51:40

to the implementation of middleware projects.

In the area of system integration it is particular-

ly useful to be able to view first hand how a ven-

dor has approached and implemented features

and standards with access to source code.

There is also the benefit of rapid product in-

novation with a global team of contributors work-

ing on the JBOSS product enhancement and

assisting each other in projects. On many occa-

sions the community will also provide its own

technical support and troubleshooting to resolve

issues encountered in a development project.

The open source subscription model also

offers a major incentive to the vendor to pro-

vide excellent support services since it is this

and not the software itself for which fees are

being received.

Finally, freedom from software license fees

reduces the cost of JBOSS middleware projects

considerably. For example, a portal implemen-

tation using JBOSS can be achieved for less

than half of the cost of the same project using

one of the proprietary competitive products.

So if you are faced with a decision on where

to go for your next enterprise middleware pro-

ject first look in-house and then contact us to

further your evaluation. �

JBOSS technologies could be deployed with

confidence by enterprise customers. This is

made available on a subscription basis where

the software continues to be free but the cus-

tomer pays for support testing and quality as-

surance.

Since the acquisition, Red Hat has come

across many customers whose software devel-

opers were working with JBOSS for proto-typing

but chose to go with one of the proprietary sup-

pliers when it came to production implementa-

tion. If CIOs from large enterprises checked with

their development team, they might be sur-

prised to see their exposure to JBOSS.

However, whether or not they already have

the in-house skills CIOs may derive many other

benefits from a move to JBOSS. The open

source model plays out particularly

well when it comes

JBOSS is the leading open source middle-

ware software supplier and competes in

a market traditionally dominated by

Websphere (IBM) and Web Logic (BEA/Oracle).

CIOs considering this critical area of the enter-

prise computing may think that JBOSS repre-

sents an unknown and unproven alternative to

their more traditional suppliers. However, we

have seen evidence that these organisations

are (quite often) sitting on JBOSS expertise that

they did not know about.

Earlier this year, at JBOSS World, it was an-

nounced that JBOSS had recorded 20 million

downloads of its products. Ten million of these

were recorded in the last five years and a fur-

ther 10 million after its acquisition by Red Hat

in 2006. As an open source company, JBOSS

has a very large development community and

continues to make a free version of its prod-

ucts available to this (open source) communi-

ty. However such a huge number of

downloads indicates that there are many

Java developers (and not just in the

open source community) using this

enterprise middleware solution

spread across the market.

Its acquisition by Red Hat

led to the creation of an

enterprise-ready version

of JBOSS, which was

fully documented

and fully tested

so that the

widely ac-

claimed

Tapping your hidden David Allinson gives Business Management the lowdown onopen source middleware software.

development resources

David Allinson is the General

Manager for Opennet MEA, the au-

thorised master distributor and certi-

fied training centre for Red Hat

products in the Middle East and

Africa. Allinson is responsible for the

running of its Middle East operations.

He brings over 25 years’ experience

in growing and developing business-

es and creating winning strategies to

strengthen their position in their indi-

vidual markets. For further informa-

tion email [email protected]


ASK THE EXPERT

OPEN NET ATE:5oct 15/10/08 15:49 Page 94

OpenNet.indd 1OpenNet.indd 1 7/10/08 15:09:087/10/08 15:09:08

Over half of the banks in the Middle East and Europe plan to in-

vest in CRM technology in a bid to keep customers happy, ac-

cording to a study by the European Financial Management and

Marketing Association (Efma).

Increased competition and the need to improve their brand images

were the two key drivers behind the decision to invest in CRM, a sur-

vey of 108 banks entitled Achieving Customer Centricity Throughout

the Enterprise found.

Efma collaborated with SAP and Datamonitor to conduct the on-

line survey, the results of which highlight the growing importance of

CRM to Middle East and European banks, particularly given the current

economic climate.

Commenting on the study Martha Bennett, Research Director for

Financial Technology at Datamonitor, said: “In the current economic

climate, it is more important than ever for banks to have as much in-

sight as possible into the financial needs and behaviours of their cus-

tomers and prospects.

“Providing a level of service that makes the client feel well looked

after and valued is as critical as the ability to offer the most optimal

product at the right time,” she goes on to say. Bennett added that in

order to provide the best service to their clients, banks should have

systems in place, which allow for an overall view over distribution

channels, to avoid organisational silos.

Four key findings were highlighted from the study. The first is that

while banks recognise the strategic importance of CRM, they face

many challenges in the implementation of this, including price com-

petition, pressure to lower operating costs, fragmentation of customer

segments and channel proliferation. The study also found that banks

are moving towards a more customer centric approach but that this is

a slow and gradual process.

According to those surveyed, CRM is implemented by individual de-

partments and as a front-end process rather than across the whole en-

terprise. And while they are increasingly realising the importance of

CRM technology to the success of their businesses, banks have limited

access to information to analyse the impact of the technology.

Overall, the banks were aware of CRM as a key strategic driver but

admitted that they had not been able to address fragmented customer

segments using the technology.

The reason why so many banks plan

to invest in new CRM technology, accord-

ing to the study, is because many of the ex-

isting packages they have are based on

outdated legacy systems which lack the flex-

ibility and the scalability required to allow the

banks to have a strong enough overview of the

whole organisation and connect customers

from different departments together. Deploying

technology with these capabilities will not only

improve customers’ experiences but will also in-

crease the productivity of the employees at the

bank and will increase return on investment. Patrick

Desmares, Secretary General of Efma, said: “The re-

sults from the survey show that a high percentage of

banks see the ability to differentiate their brand and

products as strategically important by offering superi-

or customer service. “But additionally these findings

emphasise the importance of well-chosen staff with the

right attitude through all distribution channels.”

Of those surveyed 50 percent of the banks said they

had invested or would be investing in CRM technology.

These investments, said Julian Johnson, SVP, Industry

Business Solutions, Global Field Operations, SAP, are evident in the

purchases of its technology by financial institutions across Europe

and the Middle East.

“In recent months, SAP has experienced the investment banks are

making standardised software for their core processes. As the survey

results support a bank’s customer facing activities are now an inte-

gral part of its business and included in its criteria for selecting stan-

dardised software. The value this brings to a bank is seamless

integration of its back-office functions, which will provide a true end-

to-end view of the customer.”

However, while banks are certainly adopting a more customer

centric approach, the survey found that their key focus remained on

operational issues rather than strategic ones. This, the study found,

was due to growing pressure on banks from the increasingly compet-

itive environment they are working in, particularly in less mature mar-


CRM technology has become a vital tool in the battle for banks towin and retain customers. Business Management reports on a studywhich reveals how many banks are deploying the software.

SATISFIED CUSTOMERS

CRM FOCUS

CRM:5oct 15/10/08 15:41 Page 96

Cultural issues, such as internal politics, were not however a bar-

rier to CRM, according to the survey. It concluded that banks recog-

nise the strategic role that CRM has to play but that they realise that

enterprise-wide adoption of the technology will not be easy. It states

that major progress must be made in order to achieve the internal

process changes necessary to gain the maximum effect from CRM im-

plementations.

But as global economic conditions continue to increase the pres-

sure on banks to improve their customer satisfaction levels, it has be-

come imperative for them to ensure that progress takes place. �

kets which are experiencing rapid growth. One major issue faced by

banks is the pressure to drive down operating costs – with 56 percent

of banks having listed that as their biggest challenge. Within this con-

text therefore it is no surprise that banks are adopting a customer

centric approach – in order to attract more customers.

However, the market pressures they face mean the banks’ prima-

ry focus is on tackling operational challenges, and in the execution of

goals rather than deciding on their vision for future goals. With re-

gards to how, specifically, CRM technology can help banks to adopt a

more customer-centric approach. The study highlighted the fact that

the credit crunch means it is more

important now than ever before for

banks to be discerning in their

product sales and to target specif-

ic customer segments. CRM tech-

nology allows them to do this more

effectively.

CRM technology also enables

banks to offer the right products to

their customers by providing staff

with instant access to real-time in-

formation about the different prod-

ucts on offer. According to the

study, the lack of integration of

CRM technology within some

banks’ limits their ability to assess

the lifetime value of their cus-

tomers and the return on invest-

ment (ROI) that they are receiving

from the technology.

In those situations, the survey

claims, the benefits of the CRM

technology will be undervalued.

But while emphasising the value to

banks of implementing CRM sys-

tems, the study also acknowledges

that the complexity involved in im-

plementing the technology remains

a major inhibitor to banks deploy-

ing it across their enterprises.

Other barriers to the technolo-

gy actually being deployed include

low take-up by the business and

the need for process engineering to

take place.

“Both of these issues have ad-

versely affected past efforts at

rolling out CRM, and are indicative

of banks’ unwillingness, or inabili-

ty, to address the business and

process issues fundamental to

CRM success,” the survey noted.

0% 10% 20% 30% 40% 50% 60% 70% 80%


Source: Datamonitor and Efma European & Middle Eastern banking study

In 3 years

Europe and Middle East

1.0 1.5 2.0 2.5 3.0 3.5 4.0

Now

Average (4-very important, 1-not important)

Percentage of respondents

2.66

3.23

Figure 1: How important would you say CRM is to your bank, and how important doyou expect it to be in three years’ time?

Figure 2: How does your bank measure CRM successs?

Customer satisfaction

Customer retention

Increased revenue

Customer acquisition

Increased profitability

Employee productivity

Customer lifetime value

Return on Investment

Faster processing times

Reduced costs

Increased win rates

CRM:5oct 15/10/08 15:42 Page 97


BM. How can companies achieve successful

return on investment through CRM Projects?

AH. The key objective for CEOs is to maximise

the ROI for shareholders in the business and to

achieve this objective, they must focus on maxi-

mising the profi tability of their customers.

In any business, fi nancial performance

from CRM projects ultimately depends on

whether the business ‘captures customer

value’ (CCV) as effi ciently as possible. For

many companies CRM is a powerful tool for

creating CCV.

PA’s research across 500 organisations,

and our own experience shows time and again

that the most successful companies are those

with the highest CCV. The analysis reaches

the conclusion that CRM is not a panacea, but

that in the right areas it has the potential to

create large amounts of value. Whilst busi-

nesses have undertaken CRM related initia-

tives, they are still not fully utilising customer

information to create business benefi ts.

Well implemented CRM systems should

lead to a virtuous circle of dialogue with the

customer, in which a good set of offerings

leads to a greater share of the market and

more and better customer information. This

allows additional tailoring and improvement

of the offerings - leaving competitors further

and further behind.

This is the route to maximising CCV, and

thereby ROI of CRM projects.

BM. How can effective CRM solutions provide

companies with a competitive advantage?

AH. The goal of CRM solutions is to identify,

win, retain and expand customer relation-

ships – in the most profi table way – across

the complete spectrum of points of contact

with the customer, from sales force to call

centre to the Internet. New technological de-

velopments are making it possible to deliver

CRM effectively across a company’s many

channels to market.

However, although the CRM technology

plays a vital role, it is only an enabler. The

smartest sales system is only as effective as

the quality of the salesperson and the set of

processes that govern how they operate. In-

tegration of all the company’s CRM elements,

along with other aspects of the manufactur-

ing and supply chain, is essential when seek-

ing competitive advantage. Attitudes and

procedures in dealing with customers must

also be consistent, particularly across chan-

nels. If it was up to the CRM systems alone to

deliver competitive advantage, it would fade

away when all the competitors had imple-

mented the systems.

BM. How do you think companies will change

the way they use CRM in the future?

AH. The businesses that have experienced

disappointing ROI on their implementations

need to ensure that their systems are best fi t to

purpose and that the processes are optimised.

After all, CRM is still about product excellence,

good communications, helpful staff, good ser-

vice and all those things that depend on com-

pany culture and the ethos of leadership.

BM. How do you think CRM technology will

evolve in the future?

AH. The internet has forever changed the way

customers want to be served. Customers want

service across a variety of channels and the

CRM technology that helps deliver this must

be as easy to use as Google.

In a discredited CRM market beset with

stories of costly failures, new approaches are

rising. Framework technology applications

(middleware integration products with tools

to develop workfl ows and screens from busi-

ness processes), combined with best of breed

applications, are emerging as a new wave of

innovative technology that, when combined

with the business imperatives of CRM, offers

the best hope yet for delivering CRM technol-

ogy that adds value.

BM. What factors should companies look for

when choosing a CRM package?

AH. The key to success is to break CRM proj-

ects into fl exible, manageable chunks and de-

velop a process-led approach. Use of fl exible

solutions, such as framework technologies,

is an emerging and highly successful alterna-

tive to implementing complex CRM packages.

PA Consulting Group is independent of the

major CRM software vendors. As such, our

client experience and research indicates that

a process-led approach to capturing customer

value, independent of software solutions and

with uncompromising attention to delivering

rapid results, provides the greatest benefi t to

companies and their customers.

Putting your customers fi rstBusiness Management speaks to Adam Hughes of PA Consulting Group to discover how organisations can implement CRM initiatives that will identify, win, retain and expand customer relationships.

Adam Hughes is a partner in PA’s

Solutions and Infrastructure practice and

heads up PA’s IT Gulf operation. He is one

of PA’s leading experts in IT development

and is a recognised CRM specialist. Hughes

focuses on the delivery of enterprise CRM

solutions across multiple sectors and

technologies. His experience ranges from

providing expert client side advice on the

selection and implementation of CRM

solutions to developing projects both within

the public and private sectors.

EXECUTIVE INTERVIEW

PAConsulting.indd 98PAConsulting.indd 98 15/10/08 15:52:3315/10/08 15:52:33

PAconsulting.indd 1PAconsulting.indd 1 7/10/08 14:55:487/10/08 14:55:48

EXECUTIVE TRAINING

Frank Brown:5oct 15/10/08 15:47 Page 100

Ayear has passed since the international busi-

ness school INSEAD opened its first Middle

East branch in Abu Dhabi and already it has

smashed its own targets by signing up over 500

students so far. INSEAD Dean Frank Brown, who

worked at PricewaterhouseCoopers for 26

years before taking on the role, is understandably excited about

training the business leaders of the future in one of the world’s

fastest growing economies. And he says, one of the main aims

the school hopes to achieve through the campus in Abu Dhabi

– its third globally – is to encourage an entrepreneurial spirit

among the local population. “I think that right now, a lot of the

business environment in the Middle East is driven by expatri-

ates. “I think that’s fine but I also think that locals need to play

more of a role going forward. So education for all levels of the

indigenous citizenry is really what’s important.

“I think entrepreneurship is one area that we need to

teach. But I also think marketing and finance and the inter-

personal side of business are critical needs as well.”

He goes on to say that given how fast

the economy in the region is growing, there

is also a need for a greater focus on planning

and strategy. “When you travel in the Middle

East and you look at the enormous property

development that is taking place, you realise

how the planning of organisations and in-

frastructure and that kind of thing is cru-

cially important.”

He acknowledges that achieving these

aims and encouraging the local business com-

munity to change won’t be easy, particularly

in a region with as rich a history as the Middle

East, where many businesses have been run

by the same families for generations: “In soci-

eties that have developed over generations

and generations, resistance to change is a big

issue,” says Brown. “Entrepreneurship is

about innovation but it’s also about being

open to change.”


Executives from across theMiddle East are going back tothe classroom to be putthrough their paces at INSEADbusiness school’s Middle Eastcampus. INSEAD Dean FrankBrown tells BusinessManagement about thelessons they are learning.


The credit crunch and ensuing turmoil in Western financial markets

means it is more important now than ever before to coach business people

in how to avoid making bad decisions or investments. Brown says that one

of the most important lessons that INSEAD teaches its students is the im-

portance of remaining sceptical and not adopting a herd instinct: “I have a

very simple view on this and maybe it’s because I used to be an auditor. But

my view is that what people need to do in business is to

make fact-based decisions. Don’t go with the crowd. You’ve

got to do your homework and rely on facts to make deci-

sions as opposed to relying on somebody’s sales pitch.” It

was a lack of adequate levels of scepticism that led to the

credit crunch, according to Brown. “If you look at the melt-

down in the dot.com area and you look at the meltdown of

today, there really is very much a crowd instinct of not think-

ing on one’s own or having the healthy scepticism to make

business decisions,” he says. “There is naivety across the

board. We’ve seen it in London. We’ve seen it on Wall Street

and I think that’s something we’ve got to make sure doesn’t

get repeated in the next generation of business.”

But while he is keen for students to learn the art of good decision mak-

ing, Brown says the school also encourages them to accept and learn from

mistakes along the way. “You’re never going to make 100 percent right de-

cisions, 100 percent of the time,” he explains. “I always tell people that if

three out of four decisions they make turn out to be winners and they recog-

nise their mistakes the other 25 percent of the time then they have the po-

tential to be great leaders.” As well as teaching future and existing business

leaders about the art of successful entrepreneurship, INSEAD academics

102

FRANK BROWN’S BIOGRAPHY

Frank Brown is the second American Dean since the founding of

INSEAD and for the first time in the school’s history, was appointed

on the basis of his professional experience rather than his

academic credentials. Before joining INSEAD he spent 26 years

working at PricewaterhouseCooper in various roles

including as leader of the firm’s US$3.5 billion

Advisory Services practice. His role also involved

developing leadership programmes within the

company. Brown is the author of The Global

Business Leader: Practical Advice for Success in

a Transcultural Marketplace. He is a member of

the American Institute of Certified Public

Accountants and the New York, New

Jersey and Connecticut State

Societies of Certified Public

Accountants. Brown is also a

member of the Bridgepoint

Capital Ltd Board, the European

Academy of Businesses and

the European Executive

Council (EEC).

www.busmanagementme.com

are undertaking a number of research projects in the region, looking into

the key issues affecting the economies of the Middle East. Among the top-

ics it will be researching will be alternative energy, sustainable supply

chains, health management and women in business. “I’m delighted to say

the research so far has been very well supported in Abu Dhabi,” says

Brown, adding that the school is also involved in ongoing research projects

aimed at strengthening the African economy. “We have

an initiative focussing on Africa and helping to not make

Africa still the forgotten continent. And I think there’s an

interest in that from the Middle East in terms of impacting

on healthcare and other similar issues in Africa as well.”

With regards to the research on women in business,

Brown says this is a particularly hot topic in the Middle East

given the significant gender gap within many regional or-

ganisations and the noticeable absence of women from

many of the GCC’s boardrooms. “First of all women in busi-

ness is an important area of research for us at INSEAD and

for the business world in general,” he says. “I talk to so

many business executives that say, they initially bring in a balanced team that

is split equally between men and women. But within five years that balance

starts to slip away. And by the time you get to management level the balance

goes from 50/50 to 80/20 or even 90/10. One of the things we’re focussed on

is why this happens and what you can do to change it. There’s something very

wrong with that and it goes back to resistance to change and using different

ways of rewarding and managing careers.”

He goes on to say that the research the company has conducted so far

into women in business in the Middle East has been well received in the re-

gion. “It has been very much been welcomed in the Middle East. The Middle

East in general does not have a very great history in terms of women in the

workplace, Abu Dhabi in particular is

very focussed on this.”

Frank Brown at theinauguration of

INSEAD in Abu Dhabi

“You’ve got to doyour homework and

rely on facts tomake decisions asopposed to relying

on somebody’ssales pitch”


NetDimensions.indd 1NetDimensions.indd 1 7/10/08 14:55:247/10/08 14:55:24

Brown says students from a wide range of backgrounds have been

taking part in coaching at the school including executives from major

Middle Eastern organisations. “We’re getting very junior people from

companies like Mubadala and others. We’re working with businesses that

are indigenous to the region and global companies that have operations

there. If you look at some of the regional businesses we’re working with,

we’ve had the likes of Qatar Telecom, Aramco and Mubadala.” The school

likes to use a novel approach to teaching, including running boot camps for

executives to help them brush up on their core skills. Describing one such

camp, Brown says: “We do a boot camp for Mubadala’s analysts which has

been a lot of fun. We do a bit of finance, a bit of marketing. You run into peo-

ple on that programme that are as young as 21 who are very sharp, eager

and fun to be around.”

It’s no surprise that so many aspiring and current UAE business

leaders are keen to sign up to one of the world’s most prestigious busi-

ness schools. There is a huge demand for skilled business profession-

als in the country and for those with the right qualifications, the rewards

are lucrative. It is against the backdrop of these market conditions that

INSEAD has seen demand for its services higher than it ever expected.

Describing how the school has signed up over twice the number of stu-

dents it had aimed for since opening last year, Brown says: “It’s way

over our targets. I’m almost embarrassed to say it’s almost two and a

half times over what our targets were. And we’re not shy about the way

we estimate. �

• INSEAD was founded in 1957

• There are INSEAD campuses in Abu Dhabi, Singaporeand Fontainebleau in France

• INSEAD formed a strategic alliance with the US-basedWharton School in 2001

• Standing and affiliate INSEAD faculties total 138spread across 32 countries.

• There are 512 staff working across INSEAD’s threecampuses

• INSEAD MBA students currently total 887 – made upof 76 different nationalities

• Over 95,000 people from 100 countries and 2000different companies are taking part in INSEAD’sexecutive programmes

• The school has 54 PhD students from over 21nationalities

• There are over 36,000 INSEAD alumni from 160countries

INSEAD FACT BOX



Brown says students from a wide range of backgrounds have been

taking part in coaching at the school including executives from major

Middle Eastern organisations. “We’re getting very junior people from

companies like Mubadala and others. We’re working with businesses that

are indigenous to the region and global companies that have operations

there. If you look at some of the regional businesses we’re working with,

we’ve had the likes of Qatar Telecom, Aramco and Mubadala.” The school

likes to use a novel approach to teaching, including running boot camps for

executives to help them brush up on their core skills. Describing one such

camp, Brown says: “We do a boot camp for Mubadala’s analysts which has

been a lot of fun. We do a bit of finance, a bit of marketing. You run into peo-

ple on that programme that are as young as 21 who are very sharp, eager

and fun to be around.”

It’s no surprise that so many aspiring and current UAE business

leaders are keen to sign up to one of the world’s most prestigious busi-

ness schools. There is a huge demand for skilled business profession-

als in the country and for those with the right qualifications, the rewards

are lucrative. It is against the backdrop of these market conditions that

INSEAD has seen demand for its services higher than it ever expected.

Describing how the school has signed up over twice the number of stu-

dents it had aimed for since opening last year, Brown says: “It’s way

over our targets. I’m almost embarrassed to say it’s almost two and a

half times over what our targets were. And we’re not shy about the way

we estimate. �

• INSEAD was founded in 1957

• There are INSEAD campuses in Abu Dhabi, Singaporeand Fontainebleau in France

• INSEAD formed a strategic alliance with the US-basedWharton School in 2001

• Standing and affiliate INSEAD faculties total 138spread across 32 countries.

• There are 512 staff working across INSEAD’s threecampuses

• INSEAD MBA students currently total 887 – made upof 76 different nationalities

• Over 95,000 people from 100 countries and 2000different companies are taking part in INSEAD’sexecutive programmes

• The school has 54 PhD students from over 21nationalities

• There are over 36,000 INSEAD alumni from 160countries

INSEAD FACT BOX


Inspiring People. Shaping Success.

Successful businesses are shaped by their people.

Innovative HR Solutions has been supporting Middle East organisations identify and develop talented employees for the past decade.

We support our clients:

• Select the right people • Grow leaders • Transform teams • Retain talent • Build HR capability • Maximise potential

Contact us:Innovative HR Solutions+971 4390 [email protected]

InnovativeSOLUTION.indd 1InnovativeSOLUTION.indd 1 7/10/08 14:54:207/10/08 14:54:20

BM. How can encouraging the education of em-

ployees help companies achieve their own

goals?

FK. To achieve business success, an organisa-

tion must ensure that its workforce is produc-

tive, efficient, motivated and, above all, well

retained. This perspective towards the work-

place talent continues to lead organisations into

taking a more proactive, dynamic and effective

approach towards personnel management

with learning and development being a major

pillar of such approach. Continued education,

when adequately implemented, can ensure

that experienced talent is properly transferred

through peer to peer mentoring and coaching

educational programs and that new talent is

effectively motivated by drawing learning

paths that simultaneously meet business ob-

jectives and personal growth.

BM. How can online education institutions en-

sure that the right dynamic between students

and tutors is achieved?

FK. When we address learning requirements at

the workplace, we take a hybrid approach that

blends face-to-face classroom work with online,

personalised learning in order to achieve the

best of both worlds. With our partners, we make

sure we use the most optimal learning tech-

nologies to achieve that. Such technologies

combine both synchronous tools such as virtual

classrooms, chatting and video conferencing

and asynchronous tools such as discussions,

podcasts, wikis, emails and online simulations.

This provides an environment that not only

matches face-to-face interaction but, in many

cases, even supersedes it.

BM. Students can ‘attend’ a course at anytime,

from anywhere, and course material is often ac-

cessible 24-hours-a-day, seven days a week.

How important are these factors?

FK. In a typical classroom environment, it is es-

timated that the retention percentage of any

taught material among learners does not ex-

ceed, at best, 30 percent. One of the main rea-

sons for this is the relevance of the material for

the learner. This necessitates that we develop

learning solutions that are able to not only make

learning material available to the learner any

time, but that are also capable of tailoring the

right learning material to the right learner. With

online learning environments learners do not

only have unlimited accessibility to learning ma-

terial, but can also have personalised, engaging,

interactive and relevant material that they can

associate with while still maintaining the collab-

orative, social and mentored experience of face-

to-face learning.

BM. How is UKS aiding e-learning across the

Middle East?

FK. We have successfully managed to overcome

many of the misconceptions and inhibitions that

were prevailing with regards to the notion of e-

learning by implementing comprehensive, ef-

fective and all encompassing e-learning

initiatives. We have always taken a strategic

partnership approach with our clients. It is an

approach that is mainly vendor agnostic, focus-

ing on how best to achieve the specific learning

objectives of our partners rather than selling

them a long list of products and services. It is an

approach that focuses on the learning rather

than the ‘e’ using technology as a tool rather

than as an objective on its own.

In order to make sure that technologically en-

hanced education continues to achieve its desired

objectives, we continue to focus on building the

capacity of the tutors. We have developed, jointly

with well-recognised academic institutions, some

very solid and comprehensive teachers’ education

and capacity building programmes that would en-

sure the overall success of any education en-

hancement initiative on any level.

BM. What do you think the future for the online

learning space holds?

FK. Pure online learning has had its pitfalls in the

past and will continue to lack the necessary mo-

mentum both regionally and globally. Our ap-

proach has been more focused on hybrid

(blended) learning and this is where the majori-

ty of the effort will continue to be. It is not about

the new technologies developing as much as it is

about our ability to cope with such technological

developments. Our focus on capacity building,

teachers’ education and strategy development will

ensure just that. �

The power of education


How e-learning is enriching employee development and boosting business performance.

Fadi Abdul Khalek is the President and CEO of UKS, one of the leading e-

learning organisations in the Middle East with extended operations in Europe,

Asia and North America. Prior to joining UKS, Khalek had

more than 12 years’ experience in both academic and

corporate education and has been involved in a

variety of research, development and implementation

of various knowledge based technologies. More

recently, he has been spearheading UKS’ efforts in

the research and development of innovative and

advanced learning technologies that are

capable of transforming education into the

21st century and beyond.

To contact him please telephone +971 4 3910171 or [email protected]

EXECUTIVE INTERVIEW

UKS ED:5oct 15/10/08 15:35 Page 106

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viding a record of each learner’s performance.

Third, each course has an online interactive

simulator, like a computer game, where the

learner can practise their new skills. This

allows them practise and the opportunity to

make mistakes, learn from them and continue

to perfect their skills in the safe and cost ef-

fective environment of a simulator.

Certifi edVermont Technical College has certifi ed

all of our safety modules and so all courses

automatically carry US standards – a major

advantage for the petroleum and manufactur-

ing industries.

We are converting Vermont Technical Col-

lege’s electrical and plumbing apprenticeship

programmes into online courses using our au-

diovisual animations and interactive simula-

tors. This is only the beginning, in addition to

our safety, petroleum, electrical and mechani-

cal training, we will continue to add accredited

apprenticeships to our online portfolio.

This is real interactive safety, engineer-

ing and vocational training, available world-

wide online 24/7.

‘seeing, hearing and doing’. Trainee pilots are

fi rst taught the theory of aviation audiovisu-

ally by instructors. Then their knowledge of

the subject matter is checked using evalua-

tions. Finally, when they are deemed to have

suffi cient knowledge of the subject matter,

they are permitted to practice their fl ying

skills in a safe, cost effective environment

using interactive simulators.

In 1988 our associate company, Carey

international, started using interactive simu-

lators in instructor led ‘fast-track’ training for

engineers and technicians in the international

petroleum industry. At our clients’ request,

we further adopted the use of simulators for

fast-track training of electricians, mechanics

and instrument technicians.

Following on from 15 years of success in

training engineers, technicians and manag-

ers, our company thru-u.com applied the

same philosophy of seeing, hearing and

doing when converting our engineering,

safety and technical training programmes

into online modules.

We have patented our dynamic audiovi-

sual, interactive training technology and in

so doing, we have delivered the three phase

learning cycle online. How do we do this? First,

our course content is delivered audio visually

using an onscreen mentor and 3-D graphics

and animations. Second, the learner’s com-

petence is tested with online evaluations, pro-

V isualisation using dynamic 3-D anima-

tions and interactive simulators to prac-

tise skills is the secret to enhanced and

accelerated learning for engineers, techni-

cians and operators. Better training outcomes

will be achieved in less time and at a lower

cost by using interactive audio visual training

and this will result in a rice in profi ts due to in-

creased productivity, reduced quality failures

and reduced safety incidents.

To understand how this can be achieved

we must start by looking at how we learn.

Human beings acquire more new knowledge

and skills in the fi rst four years of their life

than they do during the rest of their lives.

This is before they learn to read. As children

our brains are programmed to adapt quickly

to our surroundings. How is this accom-

plished? From our earliest childhood we are

mentored by those closest to us to learn from

what we see and hear around us. Our men-

tors also quiz us to see if we understand what

we have just been shown. When our mentors

are satisfi ed that we fully understand what

we are being taught, we are encouraged to

practise the new skills safely under their

supervision.

CycleThis training method is quick and suc-

cessful because it encompasses the complete

learning cycle: First, knowledge acquisition:

The learner is given the information they

need to learn audio visually (by seeing and

hearing). Second, competence testing: The

learner undergoes evaluations to check that

they have suffi cient command of the subject

matter. Third, practice: The new skills are

practiced in a safe, controlled environment.

Pilots are an example of a profession to

avail of this prolifi c learning mechanism of

SEEING IS BELIEVINGHow to speed up learning using 3-D visual training techniques.

Tadhg Carey is CEO of

thru-u.com. He started Carey

International in 1987, using

simulators, for ‘fast-track’ training

of engineers and technicians for

global markets. Carey developed

and delivered the fi rst ever Western

Petroleum Engineering Training for

the former Soviet Union, scoring a

Triple ‘A’ rating in a report by the

EU. Thru-u.com holds patents on

its revolutionary technology.

“Vermont Technical College has certifi ed all of our safety modules and so

all courses automatically carry US standards”

Thru-u Ed P108.indd 108Thru-u Ed P108.indd 108 16/10/08 08:55:0316/10/08 08:55:03

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THE TALENT WARFIGHT

HUMAN RESOURCES

The oil industry in the Middle East is witnessing an unprece-

dented boom. Driven by a mix of rising international oil de-

mand and geopolitical uncertainties about supplies, crude

prices and refining margins have surged in the past four years, pro-

viding abundant liquidity to government and oil companies alike.

This liquidity and positive outlook on world oil demand has triggered

a wave of new investments aimed at boosting oil production and pro-

ducing higher value products that can also meet the more stringent

environmental specifications. The petrodollar was also aimed at new

projects to enhance the countries’ infrastructure that previously suf-

fered from the long recessions of the 1980s and the 1990s.

To draw a scale, the total value of active and planned projects

in the Gulf region was estimated at over US$1.8 trillion for the peri-

od 2006 to 2012. The value of projects at Saudi Aramco alone, the

world’s largest oil exporter and reserves holder, was estimated at

around US$500 billion. The value of projects at Saudi Aramco was

estimated at US$70 billion in 2007, requiring a workforce of about

23,000 engineers in 2007.

In an ideal world, the government agencies responsible for de-

velopment industries should be able to invest time and money in

training an army of local engineers and other professionals.

But this is far from an ideal world. Training engineers and pro-

fessionals for example takes time, and with the US$1.8 trillion-

Large-scale oil and gas projects requireskilled workforces but, sadly, a dearth ofexperienced engineers – both upstreamand downstream – is hampering theenergy companies’ efforts. BahrainPetroleum Company (Bapco) CEOAbdulkarim Al-Sayed says the MiddleEast needs to tackle the problem head-onor face falling behind the rest of the world.

SKILL FOCUS:5oct 15/10/08 15:54 Page 110

A global problem The present shortage of skilled manpower for the oil and gas sector is

felt equally by the IOCs (international oil companies) and NOCs (national

oil companies). They were all unprepared for the over US$100 per barrel

crude price which brought about this flurry of major investment projects re-

quiring professional manpower. In the West, for almost two decades now,

engineering colleges and universities have suffered from a lack of interest

on the part of indigenous school leavers in joining these institutions. Many

engineering departments faced closure due to this – they only survived by

throwing open their doors to foreign students (mainly

from the Asian sub-continent).

The present shortage of qualified manpower is not

the result of any normal supply-demand internal ad-

justment between various branches of science and en-

gineering. The cut in the supply side is far deeper and

is the result of no new candidates entering for a long

period of time. The demand, on the other hand, has in-

creased tremendously over the past two years. A major

US oil company has declared that all their current pro-

jects will build-in a manpower cost escalation of 20-30

percent per annum to cater for the higher wages that

will have to be given to engineers and technical staff in

the years to come. In some cases the situation is rather comical when the

client company, the EPC contractor, and the technology licensee all try to

lure away each other’s staff working on the same project.

The skilled manpower crunch in the oil and gas sector this time is not

a short-term phenomenon. The supply-side might be able to mount a con-

certed effort and we could see some improvement in the situation in about

five years time. The NOCs in the Middle East employ Western expatriates

and Eastern expatriates in their organisations.


worth of projects planned or under way in the Gulf region alone, time is the

one asset that the region’s clients and contractors do not have.

So, the only immediate solution is to look overseas, to Europe, the

US and Asia. But those regions are also facing an engineering and skilled

workforce capacity crunch. Coupled with the still common misperception

outside the region, that the Middle East is a dangerous place to work, it

is somewhat difficult to attract foreign professionals to the region. The in-

evitable result is that employers in the region are going to have to pay in-

flated prices to attract the necessary resources, driving up the cost of

projects and further restricting the development

of indigenous talent.

The cause To learn from the past, the present crisis goes

back to the oil price collapse in the early 1980s

through the 1990s when the oil process indus-

tries experienced a tidal wave of re-engineering

and down-sizing in an effort to mitigate the tide

of rising costs. Tens and possibly hundreds of

thousands of engineers were laid off worldwide.

Recruitment in the global oil industry slowed and

students, turned off by the bleak job outlook in

the sector, opted for other disciplines. Training and development pro-

grammes targeted at the indigenous workforce suffered. All of this caught

us unguarded against the current surge.

One of the most worrying aspects of the current skills shortage in the

region is the likelihood that the response to the problem will repeat the

mistakes of the past, which led to the crisis in the first place. With the

Asian regions, traditionally suppliers of the needed resources, also fac-

ing shortages, we need to give a more serious long term look at depend-

ing on our own indigenous talents.

At Bapco, we felt the pinch in many ways. We have lost over 30

Western employees through resignation since January 2006. From a sit-

uation where the Eastern employee turnover rate was traditionally very

low, Bapco has lost over 40 such employees through resignation since

January 2006, mostly engaged in critical jobs. It has become increas-

ingly difficult to attract and retain expatriate design engineers, geo-sci-

entists, production, drilling, and refinery process specialists. India,

which was Bapco’s most effective source of such recruits for profes-

sional jobs, is now in similar need of engineers and skilled manpower

to meet its ambitious industry development needs.

A “Quick Hit” committee consisting of all the senior management

members was immediately put in place to address short- and long-term

solutions. The committee introduced a number of measures to address

difficulties in attracting and retaining both Bahraini and expatriate –

workforces in the face of rising expectations. Bapco however, success-

fully completed a number of projects on its strategic investment pro-

gramme. The Low Sulphur Diesel Production (LSDP), at a cost of US$725

million, is one of the most complex projects undertaken in the history of

Bapco and it was successfully commissioned in 2007. The project used

many innovative ways to alleviate risks through sharing manpower

shortage problems with the E, P & C contractor by selecting a fitting con-

tracting strategy.

Demand in home countries has increased tremendously.

The IOCs have launched a recruitment blitz that hassucked up the supply pool.

Demand by the non-oil sector has mushroomed.

The perception about the security situation in NOC coun-tries has worsened.

Spouses have become more demanding; many of them areprofessionals in their own right and wish to pursue ca-reers. This facility is often not available in NOC countries.

Sayed Abdulkarim Al-Sayed says there are several reasons whyit is difficult to attract and retain qualified and experiencedWestern expatriates:

THE WESTERN DRAW

“A major US oil companyhas declared that all their

current projects will build-ina manpower cost escalationof 20-30 percent per annum

to cater for the higherwages that will have to be

given to engineers andtechnical staff”


other items such as fringe benefits, living conditions and other social ac-

tivities should also be stressed or considered.

The NOCs, especially those in the GCC countries, must launch serious

awareness campaigns aimed at the headhunters and the potential Western

expatriates to highlight the fact that many places in this part of the world, for

example Dubai and Bahrain, are fast becoming bet-

ter options to live from the standpoint of a Western

life style (climate, housing, standard of living,

amenities, entertainment, sports, schooling, do-

mestic help and servants, low crime rate…).

Construction of luxury villas and plush apartment

complexes is at its peak. These are aimed at not

only the currently working high-income profession-

als, but also to lure rich expatriate retirees to make

a home-away-from-home in this part of the world

Eastern expatriatesIndia is the primary country that currently has

a pool of English-speaking technical and manager-

ial professionals that is large enough to supply the

immediate need of the NOCs. It would take Poland

and the Czech Republic at least 10 years to intro-

duce English into their technical and engineering

colleges to the extent that they would have surplus

manpower in this category to meet the needs of

NOCs (currently the trend is migration to the UK).

But this pool of technical and engineering man-

power resources (like India) is also drying up rapid-

ly. The oil and gas sector in India is giving serious

consideration to the problem created for them by

the sudden, en masse flight of their experienced

personnel to pastures greener. In the recent past

the eastern expatriates started moving within Middle East due to considerable

difference in the pay packets offered. The NOCs need to implement some kind

of a ‘no poaching’ code of conduct to prevent the luring away of each other’s

expatriate staff. �

Western expatriatesFor most of the NOC’s in the Middle East, the English-language trained

pool of expatriates is the only one that presents workable options. Even in the

face of dwindling supplies, the Western expatriate can provide good value for

money. In addition to a tremendous rise in demand in their home countries,

the demand for Western expatriates has also

grown from some new and unexpected regions:

Russia, oil-rich former Russian states, China,

Africa, Pacific Rim, and even India. This factor,

along with some real and imaginary personal se-

curity concerns, has made it difficult for NOCs’ HR

departments to attract the requisite number of

Western expatriates (who have the technical/

managerial skills to deliver value for money).

As far as pay packages are concerned, there

have been many salary surveys conducted by pro-

fessional institutions and several other non-gov-

ernment organisations from time to time; a well

qualified (PhD level) geologist with good working

experience earns considerably more than what the

NOCs are currently prepared to pay.

The first factor to grab their attention is an

attractive salary. Like it or not, the whole Middle

East is seen as a dangerous place from the North

American perspective. If they do not see a sig-

nificant financial benefit to working in what they

perceive as a risky area, there will be little inter-

est. We can assume that a 10-15 year experi-

enced engineer in the oil industry in North

America will earn a yearly base salary of

US$80,000 – US$100,000. From this perspec-

tive, why would they leave the relative safety and

comfort of North America to move to the NOCs and earn less? On top of the

base salary that they can earn in North America they would probably be

looking at a premium of 30-40 percent to be an expatriate in this part of the

world. Once you have their attention with an attractive salary offer, then the


“An experienced engineer inNorth America will earn a

yearly base salary ofUS$80,000 – US$100,000. Whywould they leave the relativesafety and comfort of North

America to move to the NOCsand earn less?”


ORCworldwide.indd 1ORCworldwide.indd 1 7/10/08 14:55:367/10/08 14:55:36

BM. What are the benefits for organisations that choose to outsource this crit-

ical function of the business?

SA. Outsourcing HR may involve all domains: payroll, recruitment, training, com-

pensation and career development. Making the outsourcing decision is usually

guided by two goals – saving costs by outsourcing the majority of low-level tasks

and gaining expertise for some tasks that HR can’t

handle. The first choice is usually made in a global

company strategy: outsourcing database admin-

istration, printing payslips, distributing payslips,

managing payroll programmes and maintenance

(even legal), recording applicants’ resumes, print-

ing applicants’ letters and so on. The second choice

is made when HR wants to be able to really focus

on strategy and services delivered to its employ-

ees. Outsourcing becomes a way to deliver those

services. The efforts are focused on talent man-

agement, training path proposals, assessment of

specific profiles and so on.

BM. How are your services and tools helping or-

ganisations with their HR needs?

SA. HR Access is a complete HR solutions tool that

gives an HR team the ability to help deliver more

services and advice than just purely administrative

tasks. Our new release, HRa Suite 7, is a full web

solution delivering all services HR may expect from

a Human Resource Information System (HRIS):

guided processes based on HR best practices, document management system,

HR information space, key performance indicators, HR process tracking tools

and also personnel administration and payroll, recruitment, training, career man-

agement, compensation and benefits, time and attendance, expatriate assign-

ment management, risk management, HR warehouse and more. Thanks to its

architecture, HRa Suite 7 is able to communicate with every other information

system in the market. Our customers choose HR Access for its leadership in

HRIS, our HR services offering and our excellent customer references. The in-

vestment decision is usually driven by a reduction of low added-value tasks and

a strengthening in delivery of talent management advice such as individual train-

ing path, compensation and benefits programmes. We also deliver business con-

sulting advice on organisation, training, skills assessment plus specific advice

on how to manage change in HR services. HR Access Solutions also provides

outsourcing services and now owns a dedicated outsourcing platform: HR

Access ESP. In addition to HRa Suite 7, the platform delivers a range of tools and

‘best practice’ processes that enhance the value and efficiency of each cus-

tomer’s outsourcing solution. �

THAT HUMAN TOUCHOnce seen as a back-office function, HR has burst forth into a key business driver that candeliver real benefits. Saïd Aïdi believes investment in employees can make a real difference to a company’s performance.

For more information please visit www.hraccess.com.

BM.Why has HR become such an important function for organisations today?

SA. Organisations have noticed that investing in materials is not the only route to

competitive advantage in today’s business environment. The people who are in

charge of those materials need to be trained, have a competitive salary but and

have certain expectations of their company. Moreover, we are talking now of a job

market. That means that we also have an investment

in the employee. People are more flexible now in our

worldwide business market and have no hesitation in

seeking what they expect: career and evolution, salary

perspective and training to increase their skills.

Organisations now consider HR as a critical function,

thanks to the employees, and that people are more

added value they can offer to their customer.

BM.How can good HR practices deliver a competitive

advantage?

SA. In order to deliver good HR practices, the organi-

sation has to understand what its employees’ expec-

tations are. On the one hand, common language like

retention, motivation and giving visibility of the future

are normally used to implement HR practices. But it

also concerns the way a manager manages, the ser-

vices offered, and the benefits proposed that make

people stay in the organisations and be confident in

it. Evolution is also critical; an organisation can include

long-term career perspectives for their employees. For

example, internal mobility is another way to ‘keep’

people in the organisation and capitalise on their skills and knowledge. The com-

petitive advantage can be better quality products and/or better services. But

those goals can only be achieved if the employee is committed to them.

Saïd Aïdi is Managing Director for HR

Access Solutions Tunisia, tasked with

managing the company’s roll-out in the

Middle East and Africa and with building up

a large and strong added-value team in

Tunisia to support the global development

and the services activities of HR Access.

Aïdi joined the business in 2006 after his

own company, ATLASYS, was acquired by

HR Access Solutions.

EXECUTIVE INSIGHT

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LEISURE

Leisurecorp ED:5oct 15/10/08 15:49 Page 116

WITH demand for golf facilities soaring in the

Middle East and the likes of Greg Norman

and Sergio Garcia designing its courses,

Leisurecorp is on a winning streak. So much so

in fact that earlier this year the company

achieved the ultimate coup when it acquired

the historic Turnberry golf course and resort in

Scotland, one of the world’s leading golfing destinations and host to the

2009 Open Championship. That’s a pretty impressive achievement for a

company that was set up just two years ago.

Part of Dubai World, Leisurecorp is regarded as a serious player in

the world golf tourism market which is estimated to be worth US$17.5bil-

lion. As well as acquiring Turnberry it also owns South Africa’s prestigious

Pearl Valley Golf Estates and is months away from the completion of the

Jumeirah Golf Estates development, which includes luxury residential

properties and courses in four different neighbourhoods: Fire and Earth

designed by Greg Norman, Water by Vijay Singh and Wind by Sergio

Garcia, Pete Dye and Greg Norman.

Describing the demand for golf facilities in the Middle East,

Leisurecorp’s CEO for golf, David Spencer, says: “What we have in

Dubai is a situation where the demand for golf far outstrips the supply.

“We do not have enough golf courses to fulfil the current demand let

alone the future demand.” Furthermore, he says, demand for golf-re-

lated real estate is even greater, meaning that the luxury properties

on the Jumeirah Golf Estates have sold out before the development

has even been completed.


Golf and real estate have proved a

lucrative combination for

Leisurecorp, which is developing a

multi million dollar residential

golfing community in Dubai. Diana

Milne meets the company’s CEO

for golf, David Spencer to find out

why all homes on the Jumeirah

Golf Estates have sold out.


“The demand for golf property, particularly quality golf real estate,

is intense,” says Spencer. “If you took a one million dollar house in a

non golf development you could probably get 1.2 to 1.3 million dollars

for the same house in a gated residential golf community. In the Middle

East region though, I think the premiums are ranging from between

30% and 50%.”

But Spencer says that it is not just golf enthusiasts that are willing to

pay a premium to live alongside the fairway. Around 70% of those that

buy properties in gated residential golf communities do not in fact play

golf, according to Spencer. “Only 30% of the buyers play golf,” he says.

“But these sorts of developments provide a very nice lifestyle. Obviously

I’m biased when I speak about the development I’m involved in. But with


the green spaces, parks, indigenous flora and fauna and the birdlife, it’s a

very pleasant place to live in and these developments are very sustainable

from an environmental point of view.”

Spencer admits that building golf communities in the Dubai desert

poses unique challenges because of the region’s climatic conditions.

“Building golf courses in this region is actually quite expensive and that

is because of the amount of water required to keep those golf courses in

pristine condition,” explains Spencer. “It’s about having to get the right

amount of water in what we call a watering window. So we have to put

out, say, 7mm of water over 130 plus acres of green space in a four-hour

watering window.”

Leisurecorp has counterbalanced these costs and boosted the ROI of

the Jumeirah Golf Estates development by including prime real estate prop-

erties in themed neighbourhoods. Fire is built with a Tuscan Italian theme,

Earth in a European and North American parkland style, Water in the style

of the Pacific Islands, Florida with a waterfall centrepiece and Wind, which

Clockwise: An artist’s impression of the Jumeirah Golf Estates FireVillas; Pearl Valley Golf Estates; David Spencer with Leisurecorp’sGroup CEO, Alan Rogers.


follows the course of the Arabian Canal: “What’s

happened here is that we’ve used golf courses to

help us in assisting to drive real estate sales and

that has worked very well,” says Spencer.

While acknowledging the appeal of

Leisurecorp’s developments to the non-golfer,

Spencer is keen to emphasise how serious the

company is about the game, particularly when it

comes to holding international tournaments. On its

golfing calendar the company will be hosting the

Dubai World Championship at the Jumeirah

Golf Estates, the South African Open

Championship at the Pearl Valley Golf

Estates and now the 2009 Open

Championship at Turnberry.

Having its name associated

with such major events will make

Leisurecorp a major player in the glob-

al golfing world, according to Spencer: “I

think the fact that Leisurecorp was able to ac-

quire the Turnberry project was absolutely mind-

blowing. It’s one of the greatest venues in the world

and it helps us to create this unusual trilogy where

we have the world’s oldest golf tournament

being played at Turnberry in 2009, the sec-

ond oldest golf tournament in the world at

Pearl Valley Golf Estates and the newest,

Dubai World Championship, being played

at the Jumeirah Golf Estates.”

Spencer goes on to say that he be-

lieves further international golf events will

eventually take place in other parts of the

Middle East, where the sport is growing in pop-

ularity: “There are plenty of events for our com-

pany to handle. But I think the focus on golf in Europe, the Middle and Africa

is firmly on the Middle East. I wouldn’t be surprised if a tour event came to

Bahrain, Morocco or Oman because there is room for growth in the region.æ

The golfing champions Leisurecorp has enlisted to design courses

have added considerable kudos to the Jumeirah Golf Estates development

leading to increased interest from buyers.“The fact that you can buy a

house and have someone like Greg Norman landscape your backyard has

been very well accepted by the real estate buying public in this region,”

says Spencer. But he adds that the company must now work to attract the

world’s most up and coming players in order to appeal to a younger gen-

eration of potential buyers. “There are some fantastic new names in golf

such as young fellows like Justin Rose. That’s great because golf to a cer-

tain degree has been fuelled by baby boomers and the baby boomer gen-

eration when it comes to golf hasn’t really moved on and it’s become a bit

vanilla. To make our industry relevant to the next gen-

erations we need vibrancy, colour and we certainly

have that coming through.”

As well as signing partnerships with coming golf

stars of the future, Spencer says the company is eye-

Sergio Garcia who helpedto design the JumeirahGolf Estates

ing possible other acquisitions and that there are several potential new

purchases in the pipeline. “Part of our business plan is acquisitions. We

are absolutely looking at a lot of different properties. We’re not partic-

ularly close to announcing any. But we are 50% down the track of due

diligence with a lot of acquisitions.”

His words follow the announcement at the start of this year by

Leisurecorp’s Group Chief Executive Alan Rogers that the company plans to

broaden its portfolio over the next two years. Speaking at the time of the an-

nouncement in January, Rogers said: “Over the next two years, we will con-



solidate and develop existing investments – and look to broaden and deep-

en our portfolio into other leisure-related business sectors. You will see fur-

ther investments in golf, which is the powerhouse sector within the leisure

industry, but you will also see us reaching into other target sectors.”

But while Leisurecorp is continuing its expansion, Spencer says he is

well aware of the potential impact of the turmoil in Western financial mar-

kets on the leisure industry in particular. “I think anyone who is not aware

and somewhat concerned about what’s going on in the world at the mo-

ment would be a very cool customer. What one has to do at times like this

is go back to your business plan, always review your business plan and

make sure it has enough elasticity in it to go through strong times and

weaker times. We have a very strong business plan that we work to. We re-

view that business plan when things are going great. And we also review

that business plan when various things happen.”

As well as its golf estates, Leisurecorp has stakes in several major

businesses, including: Island Global Yachting, a manager and owner

of luxury marinas; Troon Golf, the world’s leading luxury brand golf

management company; GPS Industries, a provider of WiFi enabled GPS

systems for golf communities; and Snowmass Colorado, a 2.8million

square foot redevelopment of one of North America’s premier ski re-

sorts. But with the company’s CEO Alan Rogers having described golf

as the “powerhouse” sector of the leisure industry, Spencer is at the

forefront of driving the company’s most lucrative business forward and

ensuring that it both serves and fuels demand in the Middle East. �

ABOUT DAVID SPENCER

David Spencer joined Dubai World in September 2004

to spearhead its foray into the golf development

business through Istithmar Leisure, which has now

become Leisurecorp.

David has a wealth of experience in golf course

development and management, in Australia and the

Middle East.

His achievements in Australia include The Grand Golf

Club; Pelican Waters; The Glades, Brookwater; The

Vintage; and The Golf Club at Kennedy Bay – and all of

the Australian developments in which he was involved are

now rated in Golf Digest’s Top 50 courses in the country.

Spencer was also a Director of Troon Golf in Australia.

In Dubai, David was an integral part of the

development of The Montgomerie course at Emirates

Hills and The Desert Course at Arabian Ranches, before

joining Leisurecorp to set up Jumeirah Golf Estates.

David’s knowledge and influence in the world of golf

helped to secure the partnership between Leisurecorp

and The European Tour in November 2007. This deal

resulted in the Dubai World Championship, the world’s

richest golf tournament; the new European Tour

international headquarters to be built at Jumeirah Golf

Estates; and the re-naming of the European Tour Order

of Merit to The Race To Dubai.

David Spencer with Greg Norman


PAconsulting.indd 1PAconsulting.indd 1 7/10/08 14:55:487/10/08 14:55:48

BM. How did MEBAA come into existence and what is its mission?

AB. MEBAA was established in June 2006. During my time with Royal

Jet as VP of Sales and Marketing during 2005, we decided to check

the market and organise a conference to handle this industry in par-

ticular – not the major airlines or national carriers.

We wanted to see how feasible the project was so needed to get

some data from the market. However, it was very difficult to get some

data on the industry, the types of aircraft flying, operators, handling

agents, airports available and so on. Overall, it was very hard to get

information. It a very successful conference (held at the Dubai Air

Show) and afterwards we announced the formation of MEBAA. The

response was great and companies, operators and manufacturers

were very enthusiastic about setting up something that would han-

dle their issues, their concerns and promote this industry. And hence,

16 founding members – probably the biggest names in the industry –


Private jets are soaring in popularity in the Middle East as executives and the wealthy ditchcommercial carriers in favour of the ultimate in luxury air travel. Ammar Balkar, co-founderand CEO of the Middle East Business Aviation Association (MEBAA) believes the industry ison course to reach even greater heights.

established MEBAA. Today, this figure has grown to 95 members. The

whole purpose is to have one single platform that can communicate

the concerns and the needs of the operators to the authorities, to the

regulatory bodies and governments, as well as promote the industry

to the media.

BM. You spent your whole career working in aviation in the region.

How have you seen private aviation rise in prominence and what do

you think is driving this growth in the Middle East?

AB. The growth has been tremendous because the region was a virgin ter-

ritory for the industry. Between 1975 and 1999 there was only one opera-

tor covering the whole region. From 1999 onwards there has been 22 new

operators in the region so this gives you an indication of the growth.

Also, back in the 1970s there were probably one or two handling

agents. Today, there are more than 20. The reason why is because back

ARRIVINGin style

EXECUTIVE TRAVEL

MEBAA 2:5oct 15/10/08 15:48 Page 122

Visajet.indd 123Visajet.indd 123 9/10/08 09:44:129/10/08 09:44:12


in the 1970s there was no need for people to move around as quickly

as possible. Time wasn’t really an important issue because everyone

was in less of a hurry.

Privacy and confidentiality were not really of concern to the high

net worth individual or the businessmen either.

However, around the late 1990s we saw the economic develop-

ment of the region and multinational companies moving in and set-

ting up regional offices here. Suddenly business people realised they

needed to fly quickly to places like Bahrain or Qatar

and come back on the same day because they had

other meetings to attend. Of course, the petrodollars

have meant that governments can spend a great deal

on infrastructures and safety and security in the region.

I would say that it is a combination of factors that has

led to the growth of the industry.

BM. What effect did 9/11 have on business?

AB. The events of 9/11 actually increased the demand

on business jets worldwide by almost 40 percent due to

the safety issues. These are international figures, not

MEBAA’s own statistics.

BM. What obstacles has MEBAA had to overcome since its concep-

tion?

AB. We have not really had that many problems because the Dubai

government helped us in setting up a non-profit association. In the

past 18 months MEBAA has come along very quickly. We became mem-

bers of IBAC, the International Business Aviation Council, which holds

13 associations worldwide. All of the associa-

tions come together to discuss their needs,

concerns and challenges.

It’s also worth mentioning the advan-

tages of becoming a MEBAA member. It is

not only an umbrella organisation where all

these members come together to address

concerns and issues, but it also communi-

cates with the civil aviation authorities in

the region about our concerns, our needs

and about any issues with any of our mem-

bers. MEBAA also has purchasing power for

bulk fuel or insurance, which cuts tremen-

dously the costs for operators and service

providers. Also, MEBAA shows the authori-

ties the importance of a private jet cus-

tomer because they are more likely to invest

in a country.

BM. You mentioned about buying fuel in bulk. How did the rise in

crude oil prices this summer affect members?

AB. It has been very minimal actually. If you tell a businessman or a

customer that instead of paying US$40,000 a flight it has to be

US$41,000 or US$41,500 the impact is really minimal. He will not

cancel the flight because of an extra US$1000 when he’s already

paying US$40,000. It definitely affects those flying on a commercial

airline where previously you had to pay US$1000 and now it’s

US$1300. I cannot say that crude prices have affected the demand

for business jets.

BM. How seriously does MEBAA take the issue of security?

AB. Of course, it is one of our major issues. The members get together

in meetings and discuss safety issues. We also pass

our concerns to civil aviation authorities and vice

versa. It is one of, and probably the most important as-

pect, of the business as far as MEBAA is concerned.

BM. For those considering using a business jet, what

benefits would you say it offers customers compared

to flying with a commercial airline?

AB. When flying on a private jet you can arrive 10 min-

utes before departure. You don’t have to be at the air-

port 90 minutes or two hours beforehand. It’s just 10

or 15 minutes maximum and you are on board an air-

craft that gives you privacy and confidentiality. You can also conduct

several meetings in two or three countries all in the same day. You

can have your own guests on board and it’s your flight. You decide

when; you decide how long; you decide your destination; you decide

on the catering; you decide on the entertainment on board – the

videos, the DVDs, the magazines on board. And, as I said, time is very

important and that’s why 90 percent of our flights are for business

purposes. It is becoming a more affordable form of transport, rather

than a luxury.

BM. How big can the business jet industry get

in the next few years and how much will the

market be worth?

AB. The 2005 figures show US$500 million

worth of business sold. Our estimates state

that there will a 20 percent yearly increase so

by 2010 or 2012 we are targeting a US$1 billion

worth of private jet business being sold.

BM. And do you have any targets or goals for

MEBAA over the next 12 to 18 months?

AB. We need to promote MEBAA as much as

possible. We need to increase the number of

members because the more members you

have, the more power this gives you to push

for certain rules or regulations. MEBAA also

held its first show in 2007, which was very successful because it was

about promoting this industry. This year we have tripled the size of the

MEBAA 2008 show – an important event worldwide with 150 compa-

nies participating and almost 60 aircraft on static demo. This shows

the demand for this type of industry and I believe that we are on track

to hit our targets. �

of MEBAA passengers are

business travellers

90%

Ammar Balkar has spent his entire

working career in aviation through-

out the Middle East. Starting with

Royal Jordanian Airlines, he has a

wide range of experience in com-

mercial airlines, corporate jets and

helicopters. This experience in-

cludes assisting in the formation of

a number of business jet start up

companies, the most recent being

Abu Dhabi’s Royal Jet where he

was Vice President, Sales and

Marketing and sat on the executive

management board.

MEBAA 2:5oct 15/10/08 15:48 Page 124

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luxury The hospitality industry inthe Middle East is thriving –none more so than in Dubaiwhere Jumeirah is the home-grown king of luxury resorts.Bold and extravagantexpansion plans are in thepipeline for this precociousgroup as it matures into atruly global brand, as MarcoNijhof, SVP for the MiddleEast, Africa and South Asiatells Julian Rogers.

For a man charged with overseeing the

smooth running of some of the world’s

most extravagant hotels, Marco Nijhof is

in a jovial and relaxed mode when we meet in

the lobby of the Burj Al Arab hotel. His diary is

chocker block full of meetings and people to

see, but as we sit down for his first meeting of

the day, he’s still smiling. “It’s certainly given

me some more grey hairs,” he jokes. This is an

exciting period for the 48-year-old Dutchman as

the group’s wealthy backers forge ahead with

HOSPITALITY

JUMEIRAH ed:5oct 15/10/08 15:45 Page 126

their grand vision to increase

Jumeirah’s stable of luxury re-

sorts across the Middle East

to 23 by 2011 (60 in total

worldwide by 2012). Jumeirah

currently manages 11 hotels,

including eight in Dubai. “This

is a major goal when you con-

sider that we only had a hand-

ful of hotels a few years ago,”

Nijhof enthuses. In fact, he

says the group would like one

day to have a presence in all

countries throughout the

Middle East.

“The growth that we are

seeing in the Middle East is fantastic but the potential is enormous and

we are growing in Asia, Europe and the Americas. It’s a great situation

to be in.”

Although the hotel chain only opened its first hotel in 1997, the

group has since burst forth as one of the world’s most recognised Arab

brands. And with hotels in London and New York, as well as properties

earmarked for China, Bermuda and Europe, Jumeirah is muscling in on

the turf of global five-star players like the Ritz Carlton and the Four

Seasons chains.

Home champion However, it’s in Dubai – the birthplace of Jumeirah’s first hotel

(Dubai’s Jumeirah Beach Hotel) – that the business is most recognised

for its stylish and iconic hotels; none more so than the 321-metre high

all-suite Burj Al Arab.

This unique hotel is synonymous with sumptuous surroundings

and first class service and facilities, says Nijhof, who has worked at

some of the world’s finest hotels and resorts during his career. “When

you have a hotel of this nature and calibre, everything revolves

around the attention to detail and the focus on your

customers.” He says the sheer number of staff make a

crucial difference. “We have around eight staff per

suite in the Burj Al Arab, which is unheard of. In Europe

it might be 0.7 per room. So I would say that this hotel

is made very special because of the people who work

there. And, of course, we spend an extraordinary

amount of time and effort training our employees.”

The extravagant hotel is known the world over for

its distinctive sail-shaped design, opulent interior and

first-class restaurants. The Burj Al Arab also whisks you

to and from the airport in a chauffeur-driven Rolls

Royce. And as Nijhof remarks, not many hotels in the

world have a helipad on the roof for the ultimate in luxury transfers.

He says it sees no shortage of demand. “I was in the swimming pool

with my children the other day when we spotted one helicopter land-

ing and two in the air waiting to land but unfortunately I didn’t have

my camera. That was an unbelievable sight.”

A significant number of the customers arriving by helicopter, as

well by slightly less glamorous means, are on business or holiday from

Europe, Russia and Asia, while Americans are increasingly making the

long-haul trip to bask in the year-round sunshine. And,

of course, the Burj Al Arab attracts its fair share of

Middle Eastern guests. This is also the case for

Jumeirah’s other hotels. “We have a fantastic customer

base that comes from a truly international market.”

Nijhof comments. “What they expect is great service, a

great product and friendly people and this is what we

are able to provide our guests.”

Nijhof says rapidly growing airlines like Emirates

and Etihad Airways help to raise the profile of Dubai, as

well offering excellent service levels. New routes are

bringing increasing numbers of visitors to the emirate

to sample what it has to offer. The experience is what

brings guests back, says Nijhof passionately. “We have guests staying

at the Jumeirah Emirates Towers Hotel (located in the heart of Dubai’s

commercial district) who have come for the 48th time. It’s the same at

Jumeirah Beach Hotel. The repeat booking rate there is very high too –

we find that people come to stay for Christmas and immediately book


Marco Nijhof

of Jumeirah’sguests come fromEurope, the US and

the Middle East

75%


ferent products – not only from a tourist point of view but also in

terms of investment opportunities. “Whether it is Education City,

Media City, Healthcare City or Internet City, there are so many ini-

tiatives that are taking place in order to bring new customers. That

won’t stop; Dubai will keep developing different

things which are essential to the growth of the

emirate.” Nijhof describes the government’s sup-

port of new projects and initiatives as “exem-

plary” and says that it is keen to see new

businesses being set up and allowed to develop.

However, Dubai’s drive for greatness will create

competition for Jumeirah. Just look at the stunning

Atlantis resort and flagship development on The

Palm, Jumeirah: it is up there with the world’s very

best hotels but Nijhof is unperturbed about it af-

fecting business. “When the Atlantis opens what will it do? It will bring

more visitors to Dubai. It won’t take business away from us because

it is actually catering for a new market within Dubai.”

Another potential threat to bookings is the knock-on effect of

for Easter. You can only achieve this if you have good products and fan-

tastic service. This is where we can make a difference.”

Ambitious goals Jumeirah’s vision to turn the group into a recog-

nised global brand relects the Dubai government’s de-

termination to transform the emirate into a premier

tourist and business destination. The developments

that currently exist (as well as those on the drawing

board) are mind blowing. This creates a great oppor-

tunity for Jumeirah and Dubai as a whole. “We truly

believe that the vision that the government has put

forward is working,” Nijhof muses. “The Middle East

is where most aeroplanes are sold today. The Middle

East is where most hotels are being developed today.

In Dubai I believe there are 50,000 new residents arriving per month

– an unbelievable statistic. And Dubai as a destination keeps coming

up with new attractions and developments with its out of the box

thinking.” He adds that the vision is all about creating new and dif-


“In Dubai I believe there are50,000 new residents

arriving per month – anunbelievable statistic. And

Dubai as a destinationkeeps coming up with new

attractions anddevelopments with its out

of the box thinking”

Left to right – images from Jumeirah’s luxury hotel portfolio


the credit crunch and economic slowdown that is gripping the US

and Europe. On the face of it the hospitality industry in the Middle

East, appears unaffected but is Nijhof panicking? “There may be

an economic recession or downturn in Europe and the US but look

at the Middle East: nothing whatsoever is happening in terms of re-

cession.” So is Nijhof ignoring the economic worries elsewhere and

the potential impact? “No. I would be a silly businessman if I did.

We are keeping a very close track of it but we are still experiencing

double-digit growth figures over last year,” he acknowledges

proudly. “I am not as pessimistic as the Western world.”

Vision This optimism is reflected in the group’s impressive plans to fat-

ten its global portfolio over the next few years, For instance, it plans

to open its first resort and spa in Europe’s Port Soller while a third

London hotel on the banks of River Thames is on the cards. Plans are

also afoot for resorts in Thailand, the Maldives, Mexico, the US and

the Caribbean. Asia too is looking to be hot growth area (the group’s

first hotel in China will be opened soon) while future projects will in-

clude mixed residential developments under the Jumeirah Living

brand. It’s reported that staff numbers will mushroom from 11,000 to

around 55,000 to cope with the expansion effort. “We are very ambi-

tious with our goals because we are not purely a Middle Eastern com-

pany,” Nijhof remarks.

Nijhof says he believes Jumeirah is playing a major role in raising

Dubai’s profile as a global tourism destination: “It’s about keeping

Dubai up there with London, Paris, Singapore and so on. And it’s

working because we still see very good growth levels this year com-

pared to 12 months ago.” He adds: “The economic force of Dubai is

very important for the well being of the country.”

As our interview draws to close, I am keen to discover what gives

this hotel boss the most satisfaction from his role. After all, there are

worse hotel chains to be in charge of. A smile develops. “I love to

spend time with managers to see how they grow and take on greater

levels of responsibility,” he responds. “It’s great to see that you can

make a contribution to somebody’s life and their career. It’s extreme-

ly rewarding.” As is, no doubt, the opportunity to spend his working

days in some of the world’s most luxurious hotels. �



www.busmanagementme.com130

as is usually the case with activities that

merely cost money.

Strategic analysis is about under-

standing the relationship between differ-

ent forces that affect an organisation’s

ability to realise its goal(s). Given a corpo-

ration’s goal (often to increase its profit),

one needs to understand how the organi-

sation has internal resources and compe-

tencies to overcome obstacles and

capitalise on opportunities in its external

environment. Corporations are usually

well tuned towards the activities that

occur in the markets where they compete,

but many are less aware of the social and

130What is the current state of

Corporate Social Responsibility

(CSR) in the GCC and how does

it compare to CSR in the West? During the

past five years CSR has quickly become a

topic of great interest among business

leaders and government officials in the

region, but its current practices differ

starkly from Western practices.

CSR has been defined in many ways,

but most would agree that it means corpo-

rations should assume responsibilities to-

wards society beyond merely the

production of goods and services at a

profit. In other words, corporations should

act in a manner that not only takes into

consideration shareholder interests, but

also considers the interests of a broader

group of stakeholders. Usually these

other stakeholders are employees, cus-

tomers, suppliers and the general public.

The companies in the GCC that have

started to engage in CSR have primarily

done so through corporate philanthropy.

In other words, they have aimed to satis-

fy the interests of a broader group of

stakeholders through donations to local

charities and interest groups. This is an

“easy” form of CSR engagement in the

sense that it requires little managerial ef-

fort beyond the signing and posting of a

cheque. In the West where the notion of

CSR has been around much longer, many

corporations have moved past philan-

thropic donations and have instead start-

ed to integrate CSR into their corporate

strategies and managerial practices.

The reasons for this growing shift to-

wards strategic CSR in the West largely

centres around “the business case” for

corporate activities more generally, and in

particular, the belief that corporations

can better contribute to the public good

by focusing on their core competences. On

the one hand, it is easier to convince share-

holders to engage in CSR activities when they

are regarded as investments that aim to fur-

ther business goals, rather than engage in ac-

tivities that are simply regarded as costs. On

the other hand, corporations’ relative advan-

tage in society compared to other factors lies

in their core competences, and by harnessing

these in a socially strategic way, they can do

more good than by simply donating liquid as-

sets. Furthermore, by integrating CSR into the

business of the organisation, the activities

become sustainable in the long term because

they will not disappear in times of recession

LEADERSHIPCorporate Philanthropy vs. Strategic CSR in the GCCBy Dr. David Ronnegard, Post-Doctoral Fellow, INSEAD, The Abu Dhabi Centre

LEADERSHIP:feb08 16/10/08 08:31 Page 130

political circumstances in which their

business activities are embedded. To re-

gard CSR from a strategic perspective is

largely about paying greater attention to

political and social risks and opportuni-

ties. It is important to note that there is

no “one-size-fits-all” model for CSR strat-

egy; as with any strategy decision it will

depend on the particular circumstances

of the organisation.

From a political perspective, a new en-

vironmental regulation might pose a risk to

a business with a large carbon footprint, but

this could be turned into an opportunity if

the corporation adapts and positions itself

ahead of its competition- as we have seen

in the car industry. For example, Toyota has

led the way in fuel efficiency with its hybrid

technology and is now widely considered

the leader in an industry beset by emission

regulation. From a social perspective, a

corporation that not only understands

the technical product requirements of

its customers but also their social

values, might find that it matters

to them how the products are

produced which might present

an opportunity as well as a risk-

as we have seen in the clothing in-

dustry. For example, Nike did not suf-

ficiently take heed of the social

concerns of its customers, but has

now set up strict guidelines for working

conditions in the factories of its suppliers

following a public uproar against sweat-

shop conditions.

Much discussion about CSR con-

cerns the corporations’ affect on soci-

ety which sometimes leads to its

internal stakeholders being forgot-

ten. For example, a corporation’s em-

ployees are perhaps its most

important constituency in part because

of the pervasive influence that the corpo-

ration has over their lives, but also strate-

gically because they are the holders of

the organisation’s core competences. This

is particularly relevant to companies in

the GCC who during the current boom,

find it incredibly difficult to attract and re-

tain employees with the right skills.

A good example is SAS Institute which

is one of the world’s biggest software com-

panies. The company regularly wins

awards as “Best Employer” in many countries.

At the corporate headquarters in Cary, North

Carolina, the employees receive many bene-

fits, such as onsite healthcare, sports facilities,

and daycare for their children. SAS Institute

does not have the highest salaries in the in-

dustry, but is nevertheless a very sought after

employer and has an enviably low employee

turnover. The industry has an average employ-

ee turnover of about 20 percent, while at SAS

Institute the turnover is merely three percent

according to Jeffrey Pfeffer, professor at

Stanford University. He estimates that the cor-

poration easily

saves

US$60-80

million per year only from reduced recruitment

and training costs. Within the field of CSR, the

employees are seen as a very important stake-

holder group and SAS Institute shows how one

can be mindful of their interests in a manner

that also benefits the corporation.

The benefits of well executed CSR strate-

gies are clear, both from a corporate and a so-

cial perspective. It might therefore seem

natural that corporations in the GCC will

move in this direction as well. Although

this shift seems likely to occur over time,

there are also important local character-

istics that will influence the CSR activities

of corporations in the region.

Firstly, most managers in the GCC be-

lieve that their governments should be in-

volved in guiding corporations with

regard to CSR activities. Managers think

that the government should indicate what

areas corporations should focus on in

their CSR activities and provide incentives

to guide them in that direction. For exam-

ple, the government could sub-

sidise corporate practices that

it wishes to encourage and tax

other practices that it wishes to

discourage.

Secondly, religious values per-

meate the societies of GCC coun-

tries far more than in the West,

especially compared to Europe.

In the non-secularised societies

of the GCC region, religious val-

ues are seen in all facets of life in-

cluding business. The tradition of

giving is very prominent in Islamic

societies and this has a particular in-

fluence on the current and likely future

shape of CSR in the region.

Corporations in the GCC are mostly fam-

ily owned which characteristically allows

family values to influence the con-

duct of enterprises. These or-

ganisations may often take

stakeholder interests into con-

sideration when making busi-

ness decisions, but may not

think of calling it CSR.

Moreover, many regional

managers regard the concept

of CSR to be a corporate form

of Zakat (the charitable per-

centage of wealth that Muslims

of means are expected to give), which

helps explain the current focus on corpo-

rate philanthropy.

Although CSR in the GCC may move

towards becoming more strategic and or-

ganisationally embedded, in the near fu-

ture it is likely to maintain its focus on

corporate philanthropy due to its deep

cultural and religious underpinnings. �


LEADERSHIP:feb08 16/10/08 08:34 Page 131


other aspects of your business, such as in-

voices being paid on time, admin being effi-

cient, payroll being excellent.

Ask yourself also why morale is low.

Great leaders pay close attention to the en-

vironment they create and sustain within the

organisation. How are you creating an envi-

ronment where people are unhappy? How

can you create an environment were people

can be more motivated and feel loyal to your

business? Cash is only one way, developing

people’s skills for their (and your) long term

benefit is another excellent way.

There are also things you can do that

encourage people to feel part of a team, feel

they belong, that they matter. It is very moti-

vating for people to feel proud of their com-

pany, feel that it is a team/brand they

actively want to belong to – like a football

team. So if you spend some time with your

senior leadership team creating events and

opportunities for people to take part in

something together, to build their sense of

loyalty and belonging, that will be an excel-

lent investment.

Individuals spend much of their waking

life at work – they deserve and will seek an

experience that makes them feel part of

something really worthwhile. Speak to peo-

ple – listen – find out what would make a

real difference to them. Seek first to under-

stand them and they will feel important and

valued, they will want to take part in sustain-

ing a good working environment.

Dear Business Doctor,I am CEO of a Qatar based technology company, which, like so many other firmsin the region, is facing a skills shortage.

It has become very difficult to recruit staff from outside the country becauseof the rising cost of living, and the situation means that the work burdens of ex-isting staff have increased significantly.Morale within the company is low and I fear that unless something is done toprovide incentives for staff, they will leave to join rival companies.

Short of offering pay rises and promotions – what else can I do as CEO toshow my existing staff how much I appreciate their hard work and encouragethem to stay on board?

Regards,C Peters, Doha.

The lack of skills would be the obvi-

ous thing to tackle. By investing in

your people and developing them,

you show them that you value them

and that you are prepared to give them some-

thing of much more long term value than

cash. You also provide yourself at the same

time with a better workforce with greater

bench strength. Offer your key staff develop-

ment in management and communication

skills so that they are better able to motivate

and inspire their teams.

Performance management is vital, as

people like to know that they are doing well

and what they need to do better in order to be

more successful. Make sure you have a sim-

ple and robust performance management

process – so that all staff receive and under-

stand specific, individual objectives and get

regular, high quality feedback on how well

they are doing, with training or coaching pro-

vided in areas where they need some learning

or improvement. Have awards for particular

areas where you want to show what great per-

formance looks like, not necessarily just the

obvious sales targets being met but also in

“People like to knowthat they are doing welland what they need todo better in order to bemore successful”

132BUSINESS DOCTOREcecutive coach Natalie Gillam answersyour business dilemmas.

BUSINESS DOCTOR ED P132-133:feb08 16/10/08 08:54 Page 132


Dear Business Doctor,I have recently been promoted to the position of Senior Vice President of the company where I have worked for three years.

While I was delighted to have been selected for promotion it has meant that my relationship with some colleagueshas deteriorated as a result.

A long-term colleague had hoped to be made Senior VP himself and he is making his feelings about having beenpassed over very clear – as are his closest associates.

Their behaviour is making my job difficult and creates an awkward atmosphere in departmental meetings.I would very much appreciate it if you could advise me on how to tackle this situation.

Regards,Florence Biggs, Bahrain.

Clear objectives are one aspect of this,

which should be set by the business and

cascaded down in very specific terms for

each and every individual, including you.

One reason this is important is that it

means that everyone should be very clear

on what they are there to do, how they add

value and what they need to do in order to

be successful. Your relationship with oth-

ers at work, whilst it is great and enjoyable

if you can also be friends, should be based

on this clear sense of purpose.

Make sure you express very clearly in

departmental meetings what your purpose

is, how that relates to others and that you

are very positive about that. If your energy

is focused and positive on what you are all

there to do – make the business successful

– then you remove the personal ‘awkward-

ness’ from the meetings. As a leader, your

positive energy and focus will also be an in-

spiration for others to get on and do well, so

that they too might be promoted in future.

In other words, be a model of how

you want the relationship to be – posi-

tive and focused on what will bring suc-

cess. No need to feel bad or apologetic

for being successful. Nor is there any

need to gloat. Reward the organisation

for their trust in you by doing a great job

and the rest will follow.

It is always tough to be passed over

for promotion. Can you imagine or

perhaps remember how that feels?

Empathy is a great tool for helping us

to sustain good relationships. However, if

they had a good relationship with you be-

fore, they should be able to be happy for

you now and to celebrate your success.

The key thing here to recognise is that

your relationship is now different. You may

be in transition, but essentially you now

have different status – and you also have

new responsibilities in relation to them and

their performance. You have accepted a

leadership role within the organisation and

part of your new role must be to do what-

ever you can to ensure the highest levels of

performance from your teams. This means

that you must quickly establish with each

of them how you would like the relation-

ship to be in order to get the best possible

success for them, which will mean success

for you and for the business.

Natalie Gillam works for

NG Coaching, an executive

coaching company based in

Dubai and London. NG

Coaching provides

executive coaching and

leadership master classes in

the UAE.

To find out more about

how NG Coaching contact

Natalie Gillam by Email on

[email protected].

BUSINESS DOCTOR ED P132-133:feb08 16/10/08 08:54 Page 133


134ON THE SHELFThere is no shortage of executive self-help guides claiming to reveal the recipe for success in the workplace. Here is a quick look at what the latest management book releases have to offer.

The Game-ChangerHow Every Leader Can Drive Everyday Innovation, by A.G Lafl ey and Ram Charan

The Secrets of CEOs150 Global Chief Executives Lift the Lid on Business, Life and Leadership, by Steve Tappin and Andrew Cave

Why Women Don’t AskThe High Cost of Avoiding Negotiation – and Positive Strategies for Change, by Linda Babcock and Sara Laschever.

Co-author A.G Lafl ey is Chairman and CEO of Proctor & Gamble, a company that has tripled its profi ts in the

past seven years. In this 336-page book he and Ram Charan guide you through how the likes of P&G, Nokia

and Lego have become today’s game changers. This book claims to help you redefi ne your leadership style,

whether you are running a company or in your fi rst management job.

The book is packed with thoughtful insight and advice on how and why certain strategies employed by

multinationals have succeeded or failed.

BM says: The sections devoted to P&G’s organic revenue growth offer a fantastic insight into how the company

has outstripped its rivals. The book also demonstrates how an innovation curve should be an achievable goal,

not just wishful thinking. Recommended.

In this fascinating, authoritative book, 150 of the world’s top chief executives share their advice for getting

to the top, and, once there, how to be successful leaders and still have a happy life. The book reveals frank

discussions with some of the West’s most infl uential CEOs and incorporates radical and thought-provoking

comments from the heads of companies in India, China and Russia and well as the US corporate giants.

BM says: The Secrets of CEOs contains a wealth of strategies that individuals and organisations alike can use to

encourage a new standard of leadership. It could well be an essential guidebook for those wanting to know what

its really like to be a CEO – and the health warning that should come with the job.

According to this new book, by neglecting to negotiate the starting salary of her fi rst job, a woman may

sacrifi ce over $400,000 in earnings by the end of her career. From career promotions to help with child

care, studies show that time and time again women don’t ask. Babcock and Laschever draw on research in

psychology, sociology, economics and organisational behaviour to explore why women seldom ask for what

they need, want and deserve at work and at home.

BM says: This book will strike a chord with modern women and will encourage them to pluck up the courage to

ask for more.

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www.euinfrastructure.com136

CITY GUIDE

of a giant shell holding a larger than life

pearl. On your way down the corniche

stop in at the Rumeilah Park to escape the

sun under the shade of the palm trees

among picnicking local families.

Dine: For spectacular views over the

Doha skyline dine at the 23rd floor La Mer

restaurant in the Ritz Carlton which offers

superb French cuisine in opulent

surroundings. For a more down to earth,

authentic experience, join Doha’s local

populations at Al Khariss in the Souq

Waqif where you can enjoy a traditional

thyme pie and a mint tea. After dinner

smoke sheesha on the rooftop of

neighbouring coffee shop Eshairiq Coffee.

Party: Doha does not have a reputation

as a party hot spot and the variety of

venues available for night owls isn’t great.

However, the Admiral’s Club at the Ritz

Carlton offers guests a chance to hit the

dancefloor in stylish surroundings. The

club is designed with a nautical theme and

overlooks the marina. A resident DJ

provides the music and signature cocktails

are served.

Doha is Qatar’s capital city and it hous-

es around 80 percent of the country’s

population. Located on the Persian

Gulf, it was brought to the world’s attention

in 2006 when it hosted the Asian Games.

While far quieter than the nearby UAE,

work is underway to develop the city’s

tourist attractions and to construct major

new commercial and residential develop-

ments. The biggest of these will be the Pearl-

Qatar, a man-made island covering 400

hectares of reclaimed land which will feature

three five star hotels, luxury homes, marinas

and two million square metres worth of

leisure facilities.

Check in: For the ultimate in

comfort book a room at Doha’s most

prestigious hotel, the Four Seasons.

Located on the waterfront it offers

luxurious rooms overlooking the

Arabian Gulf and a top of the range spa.

Alternatively, for a stay with a

difference, book into the Sharq Village

and Spa, a low-rise seafront resort,

which has been designed in the style of

a traditional Qatari village where guests

stay in secluded courtyard homes.

Shop: No visit to Qatar is complete without a

visit to the Souq Waqif, one of the GCC’s most

traditional and atmospheric bazaars. Shopping

at the souq is a little like stepping back in time

with artisans using traditional methods to make

intricate ornaments and the smell of traditional

Arabian perfume drifting through the wide

covered lanes. To pick up some authentic Qatari

pearls shop at the Gold Souq.

Visit: Qatar National Museum was founded

in 1975 and includes displays with rare

photography showing the country’s past and

a model lagoon filled with models of Qatari

sailing and pearling vessels. The museum

also has a large aquarium.

Due to open in November this year, Doha’s

Museum of Islamic Arts will be the first of its kind

in the Gulf. It has been designed to reflect tradi-

tional Islamic architecture and will feature an ex-

tensive collection of Islamic art.

Walk: Take time out to join the locals for a

stroll along the palm tree lined corniche.

Enjoy the breeze from the Arabian Gulf and

see the working boats in the Dhow Harbour.

The corniche also features a tribute to the

country’s pearl fishing heritage – a sculpture

136 DohaYour essential guide to Qatar’s capital city, from shopping hot spots towhere to find the best coffee.

CITY GUIDE:feb08 15/10/08 15:33 Page 136

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THE KNOWLEDGE

Business hotelsThis issue we bring you the insider guide on where to stay when you are travellingon business.

LONDONLondon Hilton on Park Lane

Situated on one of London’s most

fashionable streets, the Hilton on Park

Lane offers rooms and suites with spec-

tacular city views and extensive business

facilities. There are 13 function rooms and

a grand ballroom with the capacity to

host up to 1250 guests. Wireless internet

access is available in all public areas

within the hotel and after hours, trav-

ellers can dine at the famous Galvin at

Windows restaurants, which has 360-de-

gree views over London.

138

NEW YORKThe Four Seasons

The Four Seasons is where New York’s

biggest movers and shakers broker deals and

take power lunches so it’s the ideal place to do

business and impress clients in the Big Apple.

Featuring 11 private boardrooms and conference

rooms, including two ten-person executive meet-

ing suites with dramatic city views, the hotel has

368 terraces including two with fully furnished

terraces. Dining options include the high-ceiled

American restaurant, 57 and L’atelier de Joel

Robochon, a fine dining French-Asian inspired

restaurant with an open plan kitchen.

CAPE TOWNCape Grace

When on business in Cape Town, experience

the ultimate in luxury at the five star Cape Grace

hotel. The hotel is situated on its own private quay

on Cape Town’s vibrant Victoria and Alfred

Waterfront and provides top notch facilities for

work or play. Its business facilities include a 24-

hour communications centre, board rooms and

private spaces for meetings of any size while staff

can arrange plasma presentation monitors for

PCs, broadband internet connections and courier

services. After work watch the African sunset from

the quay or enjoy a spa treatment that has been

specially designed for busy business travellers.

THE KNOWLEDGE:feb08 16/10/08 08:56 Page 138


DUBAIJumeirah Emirates Towers

There is no shortage of luxury hotels in

Dubai but when it comes to the best choice for

business travellers, the Jumeirah Emirates

Towers is number one. The unique design of the

hotel’s two towers, has made it an architectural

icon on the Dubai skyline. Situated in a prime

position on the city’s main highway, Sheikh

Zayed Road, it is a short distance away from the

Dubai International Financial Centre (DIFC). The

hotel’s business facilities are top notch and in-

clude 12 boardroom-style congress rooms, three

24-hour boardrooms and a high tech video con-

ferencing system, which delivers telepresence

quality. There is also a private dining room suit-

able for seating up to 70 people.

HONG KONGThe Peninsula

With a reputation as the grand dame of

the Hong Kong hotel scene, The Peninsula

has been serving business travellers visiting

the island since 1928. Its lobby is renowned

as the best place in the city to meet busi-

ness associates for afternoon tea, and its

impeccably styled meeting rooms show

clients that you really mean business. The

hotel’s concierge service can service busi-

ness travellers’ every need, from booking

helicopter flights across the city to reserving

tables at Hong Kong’s best restaurants.

SINAGPOREShangri-La hotel

Having been voted the world’s best busi-

ness hotel in the 2008 Business Traveller

Awards, there’s no better place to combine

work and play when in Singapore than the

Shangri-La hotel. Located just 30 minutes from

the international airport, it is just a 15 minute

drive away from the central business district

and features a 24-hour business centre

equipped with full secretarial services, three

private meeting rooms and an interview room.

And when work is over, the hotel offers plenty

of ways to unwind including a spa, three all-

weather tennis courts, an indoor rock climbing

wall and an outdoor free-form swimming pool.

SYDNEYPark Hyatt Sydney

For the ultimate room with a view – and broadband connection – check into the

Park Hyatt in Sydney. Most of the hotel’s rooms feature private balconies overlooking

the Sydney Opera House and all have a direct dial telephone with two lines and desks

with modem dial-ups. The hotel has its own private wharf with a water taxi, which is

the ideal way to beat the city traffic. It is situated close to Sydney’s business district

and is within the historic Rocks District. Its function rooms cater for up to 120 guests

and its harbour rooms have spectacular views over Sydney Harbour and cater for up

to 50 guests for a sit-down dinner.

THE KNOWLEDGE:feb08 16/10/08 08:58 Page 139


GADGETS

Gold rushImpress your colleagues with this selection of opulent mobile phones thatare guaranteed to give you the Midas touch.140

iPhone24 carat gold, unlocked3G iPhone customised byGoldstriker US$2000

Nokia E6518 carat gold and diamondencrusted Nokia designed byPeter Aloisson US$44,000

Vertu SignatureYellow gold handset with4.75 carat ruby bearingsUS$35,000

Motorola MOTORAZRLuxury EditionSnakeskin embossedultra slim phonefeaturing 18 caratgold plated accentsUS$700

GADGETS:feb08 16/10/08 09:36 Page 140

gdsinternational www.gdsinternational.com

US E

ditio

n

MEN

A Ed

ition

Your World. CoveredFrom the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Business ManagementWhat business processes work? Whatare the proven, successful strategies fortaking advantage of domestic andinternational markets?

Business Management is about real,daily management challenges. It is atargeted blend of leadership andlearning for key decision makers ingovernment and private enterprise.

Find out more: www.busmanagementme.com Also available for: US

CXOTechnology leadership is merging with strategic and financialleadership, and senior management is being called into apartnership for the future.

CXO brings together a range of voices with one sharedvision: to develop a strategy that considers business needsand technology’s role in moving your company forward.

Available for: US, Europe, Asia-Pacific

Find out more: www.cxoamerica.com

Next Generation PharmaceuticalApproximately 50% of new drug development fails in the latestages of phase 3 – while the cost of getting a drug to marketcontinues to rise.

NGP is written by pharmaceutical experts from the discovery,technology, business, outsourcing, and manufacturingsectors. It is committed to providing information for everystep of the pharmaceutical development path.

Available for: US, Europe, Asia-Pacific

Find out more: www.ngpharma.com

Financial Services TechnologyProviding for its customer’s needs and demands is the goalof financial institutions now more than ever. But it is a trickyremit to fulfill. Your customers want it all – security, cost-efficiency, speed, added functionality and, most of all,convenience.

Can it be done? Read FST to find out…

Available for: US, Europe

Find out more: www.us-fst.com

HRManagementHR needs three eyes: one on the past – don’t lose sight ofthe systems that generate value; one on the present –determine if current processes are efficient; and one on thefuture – be proactive in meeting new challenges.

HRManagement concentrates on the development of HRstrategies, directions and architectures.

Available for: US, Europe

Find out more: www.hrmreport.com

NextGen Power & EnergyA poll of 4000 utility executives posed the simple question:what keeps you up at night? The answers were costs, newtechnologies, ageing infrastructure, congested transmissionand distribution, viable renewables and inadequategeneration capacity.

NextGen P&E covers them all.

Available for: US

Find out more: www.nextgenpe.com

Oil & GasCollaboration between Government and multinationals toensure the energy supply is developing on two fronts. O&G isthe definitive publication for stakeholders and servicecompanies to read about the regional projects, technologiesand strategies affecting their group.

Available for: MENA, US, Russia

Find out more: www.ngoilgasmena.com

CATALOGUE PAGE:oct08 15/10/2008 16:29 Page 141


142HOT WHEELSSwedish sizzlerLooking for that special something to get your heart racing withlightning acceleration and an eye-popping price tag? Then take a look atthis issue’s star car, the Koenigsegg CCXR Edition.

Sweden – the land of Volvo, ABBA and

flat-pack furniture is, as strange as it

may sound, also home to a company

building ridiculously-fast supercars.

Koenigsegg (it doesn’t exactly roll off the

tongue like Ferrari or Lamborghini) has been

producing high-performance cars since

1993 from its base in Margretetorp. But

don’t be fooled by its lack of pedigree – the

eponymous carmaker Christian von

Koenigsegg sure knows how to give his cus-

tomers the thrills they crave from a supercar

brand that is heralded in racing circles. The

CCXR Edition (pictured) houses a twin-su-

percharged V8 engine under the bonnet that

kicks out over 800 bhp. But there’s more:

this supercar can also run on biofuel that

produces more than 1000 bph, making this

the most powerful production car in the

world. From a standing start you’ll hit

100km/h in a shade over three seconds,

while the car’s top speed is a nerve-jangling

400km/h. It’s unlikely that you will ever to

get to test this top speed claim but it is still

satisfying to know that all that power is at

the mercy of your right foot.

This Koenigsegg, which has stiffer chas-

sis settings and a lower ride height than pre-

vious models, has an adjustable wing stuck

on its back in order to stop the car from tak-

ing off. Inside, the cockpit is futuristic but

minimal, while the speedometer dial has to

be seen to be believed. It’s not exactly spa-

cious but then not many supercars are. This

is s rocket on four wheels that will excite

and terrify but is also kind on the environ-

ment. Shame it’s not so friendly on your wal-

let; prices start from around US$1,500,000.

Koenigsegg plans to produce just six exam-

ples of the CCXR Edition and 14 of the slight-

ly less powerful CCX Edition. Better get your

name down quick then.

CARS 2:feb08 15/10/08 15:33 Page 142

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LAST WORD

144“What Dubai obviously needs is that 25-year plan to seewhere the global economy is going, how the balance ofpower is shifting, what industries would have risen andfallen and how Dubai can exploit that in the best possible way” Former London mayor Ken Livingstone tells an audience at the Cityscape exhibition inOctober what he thinks Dubai should do next.

“The Arab world is the Hindi film industry’s strongestforeign market. Shah Rukh Khan Boulevard is my tributeto the love and affection shown by the people of the UAEto Indian cinema”Bollywood superstar Shah Rukh Khan on the luxury residential development that is beingbuilt in his name in the UAE emirate of Ras al Khaimah.

“Our customers tasted the fruit of years of planning,investment and commitment. While we were quiteconfident in the robust systems and facilities, today was a day of reckoning” Emirates Airline chairman Sheikh Ahmed bin Saeed al-Maktoum declares theopening of the new Terminal 3 at Dubai Airport a success.

“All I can say is that it will be more than 1km tall. It willbe ambitious, creative and innovative” Chris O’Donnell, CEO of Nakheel, describing the Nakheel Harbour & Towerdevelopment which aims to be the world’s tallest building at one kilometer high,beating the Burj Dubai which, it is thought, will be 900 metres tall.

LAST WORD:feb08 16/10/08 08:49 Page 144

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