Business Management Middle East Issue 6

PLUS Drake & Scull CEO Khaldoun Tabari Nakheel Hotels CEO Joe Sita Al Islami CEO Saleh Abdullah Lootah

REBUILDING

IRAQAfter decades of wars, sanctions and tyrannous

rule, Iraq is crying out for foreign investment. But is the country really open for business?

PAGE 22

www.busmanagementme.com • Q3 2009

COVER.indd 1COVER.indd 1 18/6/09 10:15:5418/6/09 10:15:54

Airpartner.indd 2Airpartner.indd 2 17/6/09 15:28:0117/6/09 15:28:01

Airpartner.indd 3Airpartner.indd 3 17/6/09 15:28:0817/6/09 15:28:08

Kofax.indd 1Kofax.indd 1 17/6/09 15:33:0017/6/09 15:33:00

If you told your colleagues today that you

were travelling to Iraq for business they

would probably tell you to stay at home.

Most people associate the war-torn

country with only one thing – danger.

The name conjures up images of tanks,

debris and armed troops – a far cry from

the shopping malls and skyscrapers of the GCC.

But while it’s true that the security situation

there remains highly volatile, there’s another

side to Iraq that, ironically, makes it a far more

lucrative prospect for foreign investors than its

richer neighbours: oil.

Nobody knows the true extent of the coun-

try’s oil reserves because only 17 of the 80

known fields have actually been explored.

Current estimates are that Iraq has reserves of

way. The latter looks likely, with foreign com-

panies already clamouring to win lucrative oil

contracts. There is no guarantee however that

further instability won’t damage the country’s

fragile efforts at recovery. Let’s hope that Iraq

is given the time and space it so needs to re-

alise its true potential as a giant on the world

business stage. �

Diana Milne

Editor

115 billion barrels, but some say it could be as

much as 200 billion. This means that Iraq has be-

come a magnet for foreign investors eager to

stake their claim in the country’s black gold rush.

Before business can begin however, the re-

building of the country’s infrastructure and the

modernising of its banking, transport and tech-

nology system must be undertaken. In this

month’s cover story we report on the efforts

that are being made to rebuild Iraq’s shattered

economy and meet the people involved. Their

stories are inspiring and demonstrate true de-

termination and persistence in the face of huge

obstacles. The success of their plans depend

on two factors: peace and continued foreign in-

vestment – US$500 billion-worth by 2015 if the

Iraq National Investment Commission has its

The sleeping giantIraq’s efforts to rebuild its economy shouldserve as an inspiration to us all.

Editor’s note3

“Foreign companies have astrong and competitive wish toinvest in Iraq and the govern-ment has put forward facilities toencourage this” Mohamad El-Tai, CEO of Iraqisatellite television broadcaster AlFayhaa (Page 22)

“We are expecting to achieve 25percent growth this year and that’sgoing to come from acquisitions and from introducingourselves to new markets such asLibya and Jordan” Khaldoun Tabari, CEO of Drake &Scull International (Page 32)

“We wouldn’t say we are the silver bullet but if people are nottravelling to make businessdeals then deals don’t happen,which contributes to the eco-nomic slowdown” Andrew Cowen, CEO ofJazeera Airways (Page 42)

ED NOTE BMME:may09 18/6/09 10:51 Page 3

ITS2_content.indd 1ITS2_content.indd 1 17/6/09 15:31:5917/6/09 15:31:59

Contents5

Cheap thrillsJazeera Airways CEO AndrewCowen on why his low-cost carrieris conquering the Middle Eastbudget aviation sector

42

22

32

Rebuilding IraqWith green shoots of peace andstability sprouting, the Iraqigovernment is beckoningforeign companies andinvestors to resuscitate thenation and unlock its riches. Isnow the time to finally put Iraqon the business map?

94The luxury collectionWe enter the five-star world of JoeSita, CEO of Nakheel Hotels

First off the blocksHow impeccable timing hasturned Drake & ScullInternational into a multi-million dollar success story

www.busmanagementme.com

CONTENTS BMME6:june09 18/6/09 14:31 Page 5

38 A recipe for successWe report on Al Islami Foods’ success in the

global halal food market

48 Qatar Calling Qtel’s CIO reveals its aim to become one of

the world’s top 20 telecoms companies by

2020

56 Shifting the security landscapeWith Ovum’s Graham Titterington

61 New age disaster planningWill BCM strategies have to change in today’s

economic climate?

62 A human fit David Lacey explains the importance of

managing the human factor in information

security

66 Cerf’s upGoogle’s internet pioneer Vint Cerf on why in-

frastructure development is more important

than ever in a tight economy

72 Lessons in business Difficult times call for new approaches. For IT,

that means getting out of the back office and

talking business, says Gulf International Bank

CIO Seb Kacary

81 Risk/rewardDavid Samuels on managing risk in a global fi-

nancial meltdown

82 A family affairBM reports on a new study into the future of

family run firms in the GCC

88 Playing by the rulesWith Carole Stern Switzer, President of the

Open Compliance and Ethics Group

100 The future of CRMThe growing demand for CRM applications

EXECUTIVE INTERVIEW

124 Dr Russell C. GomersallDr Dirk Oevermann

S I L V E R S P O N S O R

80 Hazem Elmalla, Advent Software92 Darren Burrows, Create-Comply98 Thomas Senger, Kofax110 Rajesh Hari Parsad, SugarCRM124 Dr Dirk Oevermann and DrRussell C. Gomersall, IDS Scheer130 Nadeem Ahmad, ManagerForces

ASK THE EXPERT

64 Mohammad Mobasseri,Comguard FZ-LLC

Contents6

100 The future of CRM

124

92 Darren Burrows

72



Comsoft.indd 1Comsoft.indd 1 17/6/09 15:29:2017/6/09 15:29:20

INDUSTRY INSIGHT

60 Vim Vithaldas, Datapoint78 Haitham Abdou, ITS102 Roland Rott, Exact Software

81

38

118

12 The brief14 Business round-up20 In my view134 Leadership136 On the shelf138 City guide140 The knowledge142 Hot Wheels144 Objects of desire

IN THE BACK

HEAD TO HEAD

52 Information security

Moscow

Risk/reward

United we stand Saleh Abdullah Lootah

PROJECT FOCUS

70 Skip Williams, KingsBridgeDisaster Recovery86 Nate Pruitt, NetSimplicity

104 Brands with bottleBehind the scenes at Aujan Industries, the

makers of the Middle East’s most popular drink

108 The marketing guruUsing technology to win customers, even in a

downturn

112 On the right trackHow Italian supercar maker Lamborghini will

drive demand for fast cars in a downturn

118 United we standKhalid Al-Falih, Saudi Aramco’s new

President and CEO, gives an insight into the

future of energy and his company’s relation-

ship with the US

126 Getting better Kelli Kolsrud sheds some light on the state of

corporate wellness

132 The art of e-learningFind out how developing a strategy for e-learn-

ing is the only way to provide ROI

Contents8

138



Airbiz.indd 1Airbiz.indd 1 17/6/09 15:27:5017/6/09 15:27:50

Chairman/Publisher SPENCER GREEN

Director of Projects ADAM BURNS

Editorial Director HARLAN DAVIS

Worldwide Sales Director OLIVER SMART

Editor DIANA MILNEManaging Editor BEN THOMPSON

Associate Editor JULIAN ROGERS

Deputy Editors NATALIE BRANDWEINER, MATTHEW BUTTELL,

REBECCA GOOZEE, MARIE SHIELDS, HUW THOMAS

Creative Director ANDREW HOBSON

Design Directors ZÖE BRAZIL, SARAH WILMOTT

Associate Design Directors MICHAEL HALL, CRYSTAL MATHER,

CLIFF NEWMAN

Assistant Designer ÉLISE GILBERT

Online Director JAMES WEST

Online Editor JANA GRUNE

Managing Director MENA OLLIE STEBBINGS

Project Director GARETH JONES

Senior Sales Executive DANIELLE DOCHERTY

Sales Executives DAVID EDLER, EMMA BOHAN, ABI LABATTON, RICHARD

SHORTEN, LUKE STEVENS, REBECCA SCADDING

Finance Director JAMIE CANTILLON

Production Coordinators HANNAH DRIVER, HANNAH DUFFIE, JULIA FENTON

Director of Business Development RICHARD OWEN

Operations Director JASON GREEN

Operations Manager BEN KELLY

Subscription Enquiries +44 117 9214000. www.busmanagementme.com

General Enquiries [email protected]

(Please put the magazine name in the subject line)

Letters to the Editor [email protected]

Business Management 4th fl oor, 3 Callaghan square, Cardiff CF10 5BT, UK.

Tel: +44 (0)2920 729 300. Fax: +44 (0)2920 729 301. E-mail: [email protected]

Legal InformationThe advertising and articles appearing within this publication refl ect the opinions

and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or

photographs. All material within this magazine is ©2009 BM .

GDS InternationalGDS Publishing, Queen Square House, 18-21 QueenSquare, Bristol BS1 4NH.

+44 117 9214000. [email protected]

Find Out MoreContact NGO&G at +44 (0)117 915 4755

www.ngomenasummit.com

A Controlled, Professional & Focused EnvironmentThe NGO&G Summit is an opportunity to debate, benchmark and learn from other industry leaders. It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

A Proven FormatThis inspired and professional format has been used by over 100 CIOs and CTOs as a rewarding platform for discussion and learning.

“A good investment of time: It was scheduled to continue talks with several potential contractors. Excellent organization.”Mikhail Ivanov, CEO, Volga Gas Plc

“Many thanks for the excellent organization of the Summit. Everything was great! Once again, many thanks.”Sergey Ryzhov, Chief Geologist, Samara-NAFTA

The Next Generation MENA Oil & Gas Summit is a three-day critical information gathering of C-level technology executives from the oil and gas industry.

Next Generation MENA Oil & Gas Summit.

Sharq Village, Doha • Qatar6 – 8 April 2010

CREDITS BMME6.indd 10CREDITS BMME6.indd 10 18/6/09 08:17:0218/6/09 08:17:02

Advent.indd 1Advent.indd 1 17/6/09 15:27:2617/6/09 15:27:26

FrontlineTHE BRIEF12

GREATEXPECTATIONS

the economic downturn are very

much being felt in the region,

42 percent of those sur-

veyed claimed they

planned to in-

crease their

headcount in

2009 while the

majority – 60 per-

cent – said they

would increase their

headcount during 2010, some

by as much as 10 percent.

growth in 2009 compared to 2008.

And so confident are these compa-

nies, that 94 percent claim

they believe they will

meet their targets.

Mercer’s survey

concentrated on six

topics: business re-

sults, talent manage-

ment, incentives,

headcount levels, salaries

and training and development.

Despite the fact that the effects of

of those surveyedrevealed they had

set targets for higher, or similar

growth

73%

THE GCC MAY STILLbe reeling from

the shock of the economic down-

turn hitting its markets, but accord-

ing to a survey by the HR

consultancy Mercer, the future of

the region is bright.

More than anything, the sur-

vey of 67 companies reflects the

GCC business leaders’ belief that

economic recovery in the region is

imminent. Indeed, 73 percent of

those surveyed revealed they had

set targets for higher or similar

As oil prices inch backup towards 2008

levels the mood islifting across the GCC

UPFRONT BMME 6:nov08 18/6/09 09:31 Page 12

FrontlineTHE BRIEF 13

Employees too are looking on the

bright side, according to a survey

by the news website arabianbusi-

ness.com. Its most recent salary

survey found that more than a

third of GCC employees expect to

get a pay rise this year. Survey par-

ticipants from Oman were particu-

larly upbeat in their outlook with

55 percent indicating that they ex-

pected a big increase in their pay

packet. In Qatar, 47 percent said

they expected a pay rise while

20 percent of them expected an

increase of at least five percent.

Kuwait had the highest number

of people at 23 percent, who

said they expected to re-

ceive a pay hike of

between five and

nine percent.

The survey

shows a clear cor-

relation between

how badly countries

have been affected by the

downturn and how optimistic

their residents are. In the UAE,

where the effects of the downturn

have seen property prices crash

by 50 percent since peaking last

August, 35 percent of residents

said they did not expect to re-

ceive any pay rise at all, while an

equal number said they did not

expect to receive a rise.

GCC residents have good rea-

son to feel positive: oil prices have

hit the US$72 a barrel mark and

OPEC has predicted a reduction in

oil stocks by the end of the year.

Meanwhile June saw UAE fi-

nancial markets rally to a seven-

month high on the strengths of

these oil prices.

The light is shining bright at

the end of the tunnel for GCC resi-

dents, but with the strength of

the economy so dependent on

that of the West as demand de-

termines oil prices, the situation

will always be a volatile one.

seeing in pockets for a little while,

and it’s good to know that our sur-

vey results are backing that up.”

The survey also indicates a

positive and proactive approach

on the part of Middle East compa-

nies with regards to using the eco-

nomic downturn as an

opportunity to recruit talented

staff. One in 10 of those surveyed

said the crisis had given them an

opportunity to attract talent from

competitors when previously this

had not been a viable option. This,

claims Mercer, is also further evi-

dence that companies are plan-

ning ahead for when economic

conditions improve. Over

three quarters of the

companies said the

downturn had not

affected their view

that recruitment of

talented staff was a

high priority. Indeed,

81 percent said they

viewed talent management as

more important or as important as

before the crisis. Bob Schuetz, a

senior partner in Mercer’s GCC op-

eration, said: “We’ve spoken to a

number of leading companies

from around the Gulf who are

looking to adopt a more long-term

HR strategy to secure their com-

pany’s future, attract and retain

talent in key positions and ensure

an ongoing pipeline of talent for

core skills and leadership devel-

opment. All of these actions are

essential to keep ahead of the

competition as they move out of

these unprecedented times and

this survey supports the notion

that more companies than not see

the pivotal role HR plays in both

being competitive today and

planting the foundations for future

growth and success.”

But it’s not just employers that

are feeling positive about the future

of the GCC economy in 2009.

Bassam Gazal, Mercer’s

Survey Project Leader, said the re-

sults display a shared sense of

confidence amongst GCC-based

companies: “This is demonstrat-

ed not only by the strong busi-

ness targets, but also in retention

and recruitment plans. Our survey

tells us that there is a quiet and

determined confidence here in

the GCC now, about the rest of the

year and into next year and be-

yond. It’s something we’ve been

of those surveyedclaimed they

planned to increasetheir headcount

in 2009

42%

US PRESIDENT Barack Obama tours

the Sphinx and the Great Pyramids in

Giza Egypt after delivering a much an-

ticipated address on American Foreign

Policy at Cairo University.

A PROTESTER holds a slogan during

a rally in the Iranian capital Tehran

following the re-election of

Mahmoud Ahmadinejad.

NEWS IN PICTURES

FRENCH PRESIDENT Nicolas Sarkozy

inspects UAE and French Navy forces

during the opening of the new French

navy base in Abu Dhabi.


FrontlineBUSINESS ROUNDUP14

SAUDI ARABIA

SAUDI ARABIA has retained its

crown as the world’s top oil

producer in BP’s annual rank-

ings. The Statistical Review of

World Energy report estimated

the Kingdom’s untapped re-

serves at 264.1 million barrels

at the end of last year. It

claimed that Saudi Arabia

pumped 10.846 million barrels

per day last year, beating

Russia, which pumped 9.886

million barrels per day.

Meanwhile the UAE slipped

down a place in the rankings

and was overtaken by

Venezuela. The latter’s reserves

accounted for 7.9 percent of the

world’s total oil produced, while

the UAE accounted for 7.8 per-

cent of global reserves.

KUWAIT

THERE ARE SIGNS of economic

recovery in Kuwait where real

estate transactions rose by

eight percent in April, accord-

ing to the National Bank of

Kuwait. In its latest economic

brief it said the rise in sales

was led by the commercial sec-

tor, where transactions surged

by 51 percent. Overall real es-

tate transactions in the coun-

try are down by 54 percent

compared to the previous year,

with the biggest impact seen

in residential sales, which suf-

fered an eight percent drop.

UAE

PROPERTY PRICESin Dubai will

drop a further 15 to 20 percentand

won’t bottom out until the end of

the year, according to Deutsche

Bank. A research note issued by

the bank estimates that prices

have dropped by 50 percentsince

peaking last year, while the market

has come down 30 percent.“We

expect UAE property prices to de-

cline another 15 to 20 percent from

current levels and only bottom by

year end,” the team of analysts

wrote. They based their forecast

on an exodus of expatriate work-

ers and the amount of new supply

entering the market this year. The

findings contradict those of

HSBC, which claimed in May that

real estate prices were stabilising.

UAE-based conglomerate MAG

has revealed plans to buy tyre

company Continental’s Clairoix

plant in northern France. It sub-

mitted a letter of intent to

Continental and revealed plans to

produce three million tyres a year

with around half of the plant’s cur-

rent workforce. Continental’s deci-

sion to close the plant prompted a

series of protests from Clairoix

workers who were told the move

would eliminate 1,120 jobs.


FrontlineBUSINESS ROUNDUP 15

QATAR

A NEW POWER PLANT in Qatar

will almost double the country’s

electricity generation capacity.

The plant, which is being built by

energy giant Ras Girtas, will be

completed in 2012 and will also

increase desalinated water gen-

eration by 33 percent. Speaking

at a meeting of private sector

companies in Doha, Qatar’s

Deputy Prime Minister and

Minister for Energy and Industry,

Abdullah bin Hamad al-Attiyah,

said the new plant would be a

major development in the re-

gion’s utilities sector. At the

same meeting he said he ex-

pected the Qatari economy to

grow significantly despite the

global recession.

The first tenants of Qatar’s

US$2.6 billion Energy City devel-

opment will move there in 2010.

The company’s Chief Executive,

Hesham Al-Emadi told Reuters

that the infrastructure of the pro-

ject was 70 percent complete

and that 25 to 50 percent of con-

struction contracts would be

awarded by the end of the year.

OMAN

AN OMANI investment fund has

signed the largest real estate deal

of the year in the UK capital, ac-

cording to property consultants

Asteco. A spokesman for the

company said the Oman

Investment Fund had purchased

75 percent of Bishops Square, a

central London office develop-

ment, for US$703 million.

Foreign investment accounted for

40 percent of real estate transac-

tions in London in 2009 accord-

ing to Asteco – many of which

were by Middle East based in-

vestment funds. The second

largest was by the Abu Dhabi

Investment Council which bought

a 50 percent stake of the

Meadowhall Shopping Centre in

the north of England.

New employment opportunities

are to be created for Omani na-

tionals as part of the diversifica-

tion of the country’s economy,

according to a research note by

Standard Chartered Bank. The di-

versification plans announced by

the government include plans to

reduce the country’s dependence

on the oil sector from 41.5 per-

cent of GDP in 2007, to nine per-

cent of GDP in 2020. One of the

key drivers behind these changes

would be the doubling of income

from the industrial sector increas-

ing its contribution to GDP from

14.3 percent in 2007 to 29 per-

cent in 2008.

IRAQ

IRAQ’S SOUTH OIL COMPANY

has revealed plans to boost

output from its southern fields

by up to 500,000 barrels per

day by 2011. The new head of

the company, Fayad al-Neman,

told the Reuters news service

that the company was in talks

with foreign firms, including

Haliburton, Schlumberger,

Baker Hughes and Weatherford

International to help it meet its

target. Iraq has the world’s

third largest oil reserves and its

southern oil fields currently ac-

count for 80 percent of the

country’s production capacity.

At the end of June the govern-

ment is expected to announce

the names of companies that

have won bids to develop six of

the country’s largest oilfields.


FrontlinePROJECT FOCUS16

The layer of glass that covers

the building’s exterior reflects the

heat of the sun whilst allowing

for natural light. The north-south

orientation of the structure also

helps protect inhabitants from

the glare of the sun.

The personal rapid transit system,

consisting of 3000 electric cars op-

erating on a recyclable lithium-

cadmium battery, will transport

people around the car-free city.

Most of the roadways are housed

in underground tunnels.

THE MASDAR HEADQUARTERS,

currently under construction in

the sands outside Abu Dhabi,

will go beyond zero net energy:

it will be the world’s first mixed-

use, large-scale positive energy

building. And it will utilise pio-

neering technology to get there.

The design takes it cue

from centuries of indigenous

architecture, marrying

historically suc-

cessful building

strategies for

the climate

with the latest

technology and

innovative build-

ing systems – includ-

ing some developed especially

for the project. The design in-

cludes numerous systems that

will generate a surplus of the

building’s energy, eliminate car-

bon emissions and reduce liq-

uid and solid waste. The

complex will utilise sustainable

materials and feature integrat-

ed wind turbines, outdoor air

quality monitors and one of the

world’s largest building-inte-

grated solar energy arrays.

Compared with typical mixed-

use buildings of the same

size, Masdar HQ will consume

70 percent less water.

“The Masdar Headquarters

will set a new paradigm for the

way buildings are designed,

constructed and inhabited,”

says Gordon Gill, partner at ar-

chitecture firm AS+GG, the

company behind the de-

sign. “The project

represents the

perfect integra-

tion of architec-

ture and

engineering, re-

sulting in a dynam-

ic, inviting building that

outperforms any other struc-

ture of its type in the world.”

“As a positive energy com-

plex, the project will have a far-

reaching influence on the

buildings of tomorrow,” adds

AS+GG’s Adrian Smith.

Masdar City will be con-

structed over seven phases and

is due to be completed by 2016.

The headquarters building is

part of phase one and will be

completed by the end of 2010.

DESERT BLOOM

The project represents the

integration of architecture and

engineering

perfect


FrontlinePROJECT FOCUS 17

Narrow, canopied streets provide

shade and funnel cooling breezes,

reducing the temperature to a

manageable 20˚C. Meanwhile, the

network of subterranean tunnels

serve as passenger walkways to

the underground transit system.

At 75,000 square feet, the one-

piece roof – made up of a steel

trellis covered with photovoltaic

cells – represents one of the

largest solar arrays in the world

and will provide enough power

to build the rest of the building.

Wind towers – one of the build-

ing’s references to traditional

Islamic architecture – exhaust

warm air, help naturally venti-

late the building, and bring

cool air up through the subter-

ranean levels of the city below.

The building will use its own

wastewater to irrigate several

lush gardens situated through-

out the complex. In turn, the

plants and trees help provide

shade, keep the building cool

and absorb carbon dioxide.


UpfrontINSIGHT18

THE CUTTING EDGE

‘YOU CAN QUOTE ME ON THAT’

The month of May saw the launch of BM’s new sister magazineBusiness Management Europe, with one of the cover articles featuringan exclusive interview with Rio Tinto’s CEO for Energy, PRESTON CHIARO.Speaking at their London headquarters, an ebullient Chiaro revealed thatbeing at the sharp end of the company’s global operations is where hefeels most at home. “Visiting the mines is one of my favourite parts ofthe job. I like to see the equipment working and I like to see, literally, theshovel contacting the coalface – that’s the fun part of the job.”

To see more about Rio Tinto’s global ambitions, go to www.bme.eu.com

GLOBAL PERSPECTIVE

“No-one couldhave predicted thescale of the world-wide recessionwhich is nowimpacting everycountry on earth”

Sheikh Ahmed binSaeed Al-Maktoum, CEO and Chairman ofthe Emirates Group

CARDAX FT V5.21, the latest release from Gallagher Security Management

Systems (GSMS), supports two new high level interfaces with leading imag-

ing and elevator brands Pelco and Schindler. The new Pelco Endura

Platform High Level DVR Interface (scheduled release, November 2008) al-

lows Pelco DVR recorded video to be associated with alarms in Cardax FT

Command Centre. In addition, it supports:

Transfer of Pelco Endura alarms to Cardax FT, via a high level in-terface, for management from the Cardax FT Alarm Viewer

Sending a camera to a preset or initiating a camera tour, in re-sponse to Cardax FT event or alarms

Viewing of live video in Cardax FT from Pelco Endura platformcameras

The Cardax FT / Pelco HLI supports Pelco Endura Platform API

Specification v1.0.7.00 and has been tested on and is compatible with

Pelco Endura WS5000 running version 01.05.0036 and Pelco Endura

DVR running version 01.05.3035-EE-3037. The Schindler-Miconics

Elevator Interface supports the following:

Automated synchronisation of cardholders from Cardax FT tothe SchindlerID server database

Logging of all elevator events in the Cardax FT Event Log

Allows Cardax readers to be used at elevator terminals to identi-fy the cardholder to the Schindler system

This interface has been tested and is compatible with Cardax FT Command

Centre vEL5.20.xxx (or later version) and Microsoft Windows XP

Professional, Service Pack 3 and SchindlerID v1.1.296.1. Enhancements to

core Cardax FT system functionality delivered in v5.21 include:

Configurable pick-list Alarm Notes which can now be pre-configured

Mifare Smartcards – advanced security enhancement. MifareSmartcards store a cardholder’s relevant access control informa-tion securely in an encrypted sector of the card chip’s memory

Activity Report enhancements deliver the ability to report on ac-tivities over the last ‘x’ number of hours

Unlocked Doors Report - This gives the operator an instant viewof all potentially unsecure doors on a site

Sagem Fingerprint integration – user interface enhancements

For more information, please visit www.cardax.com

Latest release of Cardax FT, v5.21, underpins new Pelco andSchindler HLIs


UpfrontINSIGHT 19

For more information, contact Biswas Nair, Managing Director ProquestSolutions Pvt Ltd on +91 9766313300 or [email protected]

OPEN SOURCE: BIG FEATURES, SMALL PRICE

AGAINST THE BACKDROP of the current eco-

nomic climate, with increased costs in running a

business and real estate coming at a premium,

the region’s small and medium-sized business-

es (SMBs) need to operate more effi-

ciently than ever before. While

certain costs cannot be avoid-

ed, such as the need for a

minimal IT infrastructure,

business incorporation

costs, and so on, costs spent

on software applications and

especially operating systems, can

indeed be controlled.

If you are looking at operating costs, open

source offers the least expensive computing envi-

ronment for a small business. One might argue

that the quality of open source software varies

from excellent to pre-alpha – the same can indeed

be said of proprietary (and expensive) software.

Just take a look at some of the bargain bins at the

local technology superstore if you think all propri-

etary software is slick and polished. Care must be

taken when choosing any software solution.

Open source code is typically high quality.

It lets you avoid licensing fees and most impor-

tantly, you can lift the hood and fix any bits

that come loose. Red Hat is one of

the pioneers as far as the open

source movement is concerned.

With open source, you can do

pretty much anything you can

do with commercial products,

but with added advantages. In par-

ticular, today’s companies are looking

for operational efficiencies without compro-

mising the quality of solutions. In our discus-

sions with industry analysts, we see open

source solutions gaining adoption across small

businesses in the region. The results speak for

themselves, open source is viable, particularly

when an offering is integrated, optimised, certi-

fied and supported by proven industry leaders

such as Red Hat.

MARKETS EXPECTEDto see the greatestneed for new staffingtalent in the second-half of 2009

TALENT CRUNCH

China

India

North America

Western Europe

Southeast Asia

Eastern Europe

Central/South America

Russia

GCC/MENA

Other

26%

15%

14%

3%

9%9%

8%6%6%

4%

A few years ago, the only choice for small businesses wanting to digitise their operations,was to either run legitimate or pirated versions of proprietary software. Open source istoday in a position to challenge proprietary software in the small business arena.

Source: Association of Executive Search Consultants

THE DREADED ‘R’ word is all around and it is no differ-

ent in Middle East. The debate between analysts

seems to be on the severity and timeline. The knee-jerk

reaction in today’s financial climate is to make deep

cuts in operating expenses. CFOs and CEOs are chal-

lenged by an environment where you need unprece-

dented control over your company to project and

protect growth but optimise costs at the same time.

Long known for their entrepreneurial spirit and in-

novation, the business owners in the Middle East are

faced with a tough task in this uncertain economy re-

garding their business automation projects. They are

not keen to invest in large ERP installations, which re-

quire large capex expenditures. Neither are they

ready for six- to eight-month installation time periods.

Given this scenario, the one thing all experts

agree on is that the arrival of the concept of Software

as a Service (SaaS) and this is here to stay. SaaS or

the on-demand or pay-as-you-use model has been

around for more than 10 years now and offers a reli-

able solution to the present day challenges and is

one of the fastest growing trends in the IT industry.

Some of the areas to which SaaS is applicable

include:

Some of the areas wherein the leading CIOs and

the CEOs need to focus on when evaluating a SaaS

based solution are financial stability of the vendor,

completeness of the solution, SLA and flexibility of the

organisation to meet the budget requirements.

After being the leading SaaS player in India, Proquest

Solutions now wants to offer the Middle East market the

SaaS benefit and help the business owners beat the ‘R’

blues. There’s nothing like a recession to focus the mind

on practicality over ideology and we hope the Middle East

management is listening.

SOFTWARE AS A SERVICE

CRM/ERP

HR MANAGEMENT

PROJECT MANAGEMENT

BUSINESS INTELLIGENCE

IDEA/INNOVATION MANAGEMENT

Red Hat is one of the

as far as the opensource movement

is concerned

pioneers


FrontlineIN MY VIEW20

One effect of the global downturn on the real estate

sector is that property buyers and investors will be-

come more discerning in their choices. They will

search the market for properties that will give them

the best returns on their investment and ask for more

value for their hard earned money.

If you are a property developer and you do not chal-

lenge yourself to present a unique value proposition

to your customers then what good have you done? If

you do not innovate and exercise creativity and re-

sourcefulness, you will be just one of many. If you

want the market to know who you are and what you

can accomplish you have to show it exactly what you

are capable of.

If there is a time to act on saving the environment, it

is now. This is something that cannot be put on hold

because sooner or later the effects will come back to

us. A commitment to sustainable development is a

significant investment that Hydra Properties makes

with every project that it launches to ensure that we

and many generations after us will have a bright fu-

ture and a balanced eco-system.

Capital will always be attracted to areas where sta-

bility, security, and growth potential exists.

Businesses should be ready to exploit every possible

opportunity. That’s why we see investments by big

names in the Levant, North Africa, other GCC states,

the Indian sub-continent and elsewhere.

You need to diversify your portfolio so that it can

withstand any unforeseen circumstances. If a down-

turn hits one market, our developments in other

places will remain safe and unscathed. We launch

projects abroad because we acknowledge the fact

that apart from the UAE, there are other destinations

that can offer strong investment returns for us and

our clients.

Before I launched Hydra Properties I realised there

were five key people I needed to hire. Choosing

these five people would be my five most important

business decisions. For each of the five jobs I inter-

viewed 100 people. And it took forever – around 250

solid hours of interviewing people.

DR SULAIMAN AL FAHIM ofHydra Properties on the lessonshe has learnt in life and business


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

Advent Software 11, 80

Air Arabia 42

Air Partner IFC

Airbiz 9

Al Islami Foods 38

American Chamber of Commerce

in Iraq 22

Arab Air Carriers Association22

Archos 144

Aujan Industries 104

Austrian Airlines 22

Bahrain Air 42

BCI 61

Blue Coat 52, 53, IBC

bmi 22

Booz & Company 82

B-Plan Information Systems 22

Cadbury 104

Cardax 18, 58

Centre for Global Energy Studies 22

Chrysler 112

Coca-Cola 104

Commguard 64, 65

Commsoft 7, 21

Creat-Compy 46, 90, 92

Datapoint 60

Dow Chemical 118

Dubai TechiPark 38

DVB Bank 42

easyHotel 96

Exact Software 102, 103

Ferrari 112

flydubai 42

Frake & Skull International 32

Frost & Sullivan 79, 100

General Motors 22

Google 66

GTCC 32

Guinness 104

Gulf International Bank 72

Hinterland Travel 22

HIS Global Insight 22

Hydra Properties 20

IDS Scheer 68, 124, 125

International Monetary Fund 22

iPod 104

Iraq Stock Exchange 22

Iraqi Airways 22

ISIT 52, 55

ITS 4, 76, 78

Jaguar 122, OBC

Jazeera Airways 42

Kerzner International 96

KFC 38

Kier Construction 22

KingsBridge Disaster Recovery 70

Kofax 2, 98, 99

Lamborghini 112

Manager Forces 129, 130, 131

McDonald’s 38

Mercedes 30

Misys 22

Naizak 50, 133

Nakheel Hotels 96

National Bank of Kuwait 42

NetSimplicity 86, 87

Nokia 144

Ovum 56

Panasonic 144

Proquest Solutions 19, 37

QE2 Enterprises 96

Rafidain Bank 22

Redhat 19, 84

Rio Tinto 18

Rotana 22

Royal Dutch Shell 118

Saudi Aramco 118

SIT 116

Sony 144

Sugar CRM 110, 111

Tad Logistics 137

TAUSPACE 110

Trade Bank of Iraq 22

COMMSOFT RMS (relationship management solu-

tions) develops market leading management infor-

mation software to enable analysis of

telephone system usage, staff

productivity and communi-

cations costs in a busi-

ness. The CommsOffice

portfolio includes

CommsOffice telephony

reporting: users can run ex-

tension, trunk, department,

agent or direct dial in re-

ports and then they can filter by

cost of call, duration of call, time peri-

od and numerous other criteria to

get the required management in-

formation in the form of graphs,

charts and reports. Also added

in 2009, CommsOffice Pro

which delivers live tele-

phony statistics, agent

performance reports

and wallboard tiles

ideal for call and contact centres. The CommsOffice

Enterprise version offers all of the above plus addition-

al data traffic reports to show web sites visited, band-

width usage and PC activity.

CommSoft RMS has added an innovative new call

recording product to their portfolio for 2009:

CommsOffice Voice, a recording and reporting solution

with a low price tag and the same award winning inter-

face. To provide best value to customers, CommSoft

RMS voice recording solutions have an ‘all in’ price

which includes a high spec server PC, all required hard-

ware and unlimited client licences for search and play-

back at no extra cost. The entire range is modular:

purchase CommsOffice reporting and add the new

CommsOffice Operator Console or add CommsOffice

CTI Screen Pop and Dial as a module – all applications

in the range work from one database and use one in-

terface. CommSoft RMS is actively seeking resellers

and distributors in the Middle East region. For telepho-

ny or data resellers/distributors looking to earn great

margins, a partnership with CommSoft RMS repre-

sents an exciting opportunity. CommSoft RMS offers

technical accreditation, sales training, marketing mate-

rials and all of the tools required to add value to every

telephone system or data solution sale.

REBUILDING IRAQHow the economy inwar-torn Iraq is finallyon the road to recovery

HOT WHEELSTake a ride in the latestLotus model

THE LUXURYCOLLECTIONBM speaks exclusivelyto Joe Sita, CEO ofNakheel Hotels

DON’T MISS...

22

94

142

COMPANY INDEX Q3 2009

UpfrontCOMPANY INDEX 21

CALL TRACKING AT ITS BEST


22 www.busmanagementme.com

IRAQ FEATURE P22-29 Sec1:22IRAQ FEATURE P22-29 Sec1:22 18/6/09 09:10:2418/6/09 09:10:24

23www.busmanagementme.com

nancial centres like London or New York. Nevertheless, foreign inves-

tors (deterred by the old paper system) are now much more willing

to take a punt on Iraqi stocks, says Salam. “I have investors from the

US, Canada, Europe, as well as Arabs in the region and Iraqis living

abroad, who have told me directly that they are very interested in Iraqi

stocks now that we have this automation.”

Granted, the ISX going digital may seem a pretty insignifi cant

development when you assess the destruction and carnage that this

country has endured after decades of bloody wars, crippling sanctions

and tyrannous rule. However, Iraq looks to be fi nally turning the corner

as a new dawn beckons in this land of opportunity. This is a nation

that boasts a skilled and educated workforce, gargantuan oil and gas

reserves and land ripe for agriculture. It’s a young nation, too, with 40

percent of its 28 million people under 15 years of age. Indeed, Iraq has

the raw ingredients to resurrect itself into a prosperous and infl uential

country in the region. And there has been no shortage of companies

from all four corners of the globe eyeing up a slice of this juicy pie as

the country begins to stabilise. Americans, Chinese, Russian, French,

South Koreans, Brazilians, Australians and a whole heap more are

vying for, or have already landed, lucrative contracts to build and repair

the full gamut of sectors, such as healthcare, energy, transport, educa-

tion, construction and telecoms, as well as rejuvenate basic services

like waste management, electricity and water supplies.

An unassuming blue Arabic and English sign hangs from

the facade of a non-descript building in the now thriving

Karrada district of the Iraqi capital, Baghdad. Inside, cap-

tivated brokers and investors gaze up at one of the 46-inch

plasma TV screens fl ashing up ‘buy’ and ‘sell’ prices for

abbreviated stock codes. A couple of grey-haired gentlemen gesticu-

late at the screen while others babble into their mobile phones. The

stock exchange, a microcosm of capitalism and free enterprise the

world over, has entered a new era in Iraq with the introduction of an

electronic trading system – the fi rst of its kind in the country and an-

other milestone towards this nation’s gradual recovery.

Until recently, prices at the Iraq Stock Exchange (ISX) were adjust-

ed using primitive white boards and marker pens, and a traditional

open outcry system. With the new fangled technology, trades are ex-

ecuted in minutes instead of the two weeks and more it took for stock

certifi cates to be issued under the manual method. “My fi rst baby

was establishing this stock exchange in 2004 but my second baby has

been getting the electronic trading system,” the exchange’s CEO, Taha

Ahmed Abdul Salam, reveals proudly with a broad smile.

A total of 91 Iraqi companies are registered with the bourse, but

for the time being the shares of just three banks and two hotels can

be bought and sold using the new platform. Around US$270 million

was traded last year – a miniscule amount compared to colossal fi -

It’s a fractured and fragile country scarred by bloody wars, the shackles of

sanctions and a despotic regime. But with green shoots of peace and stability

sprouting, the Iraqi government is beckoning foreign companies and investors

to resuscitate the nation and unlock its riches. There’s no doubt this is the land

of opportunity – but is now the time to fi nally put Iraq on the business map?

BY JULIAN ROGERS

IRAQREBUILDING



to the current leasehold arrangement) in a bid to make investment in

the crumbling country a more attractive prospect.

Risk-reward ratio Despite its obvious opportunities for big business, Iraq isn’t with-

out its problems and any would-be investor is more than aware of this.

For starters, the regulatory and legal framework of the Investment Law

2006 appears fuzzy and vague in places to say the least, while govern-

ment agencies and ministries don’t always sing from the same hymn

sheet when enforcing the laws. Also, the security situation, although

vastly improved compared to the bloodbath witnessed just a few years

ago, spiked again in April and May with a spate of deadly suicide bomb-

ings. Bureaucratic red tape can prove a par-

ticularly vexing obstacle for foreign companies

unfamiliar with doing business in the Middle

East; and Iraq has sustained a signifi cant

‘brain drain’ with skilled professionals either

killed in the confl ict or choosing to fl ee abroad

to escape the bloodshed. Then there are prac-

tical problems like unreliable telecommunica-

tions and a sporadic electricity supply, which

are hardly conducive to a quick recovery.

“Essential services have not improved

much,” concedes Mohamad El-Tai, CEO of Iraqi satellite TV broadcaster

Al Fayhaa. “Electricity is still unstable and shut off several times a day,

which constitutes a signifi cant problem affecting many aspects of the

lives of Iraqis.” Indeed, estimates suggest Iraq will need an additional

20,000 megawatts of electricity to repair the country and provide power

for new homes and businesses. It currently produces 6750 megawatts

of intermittent supplies but a slump in oil revenues has left a US$2 bil-

lion shortfall in the budget assigned to develop power supplies.

Hussein al-Uzri, Chairman and President of Trade Bank of Iraq (set

up in 2003 to facilitate reconstruction and international trade), says

now is the time for investors to come to the country. “Iraq is open for

business because most of the country is now quite safe and the time is

right – we are also seeing Iraqi investors bringing their money back to

the country. Iraq hasn’t had investment in infrastructure and industry

for the past 20 years because of the sanctions so we need hundred of

billions of dollars.”

UK-based Kier Construction assisted in building a port in the

south of the country back in the 1980s. Managing Director Phil Cave

travelled to Iraq in April to assess opportunities and now feels the

time is right for his fi rm to return. “There is defi nitely a change in the

air and, notwithstanding recent incidents, the

security situation has signifi cantly improved

over the last year. They are determined to

move the country forward and have the means

to underpin their priorities. It is evident that

the government is working to overcome actual

and perceived challenges.”

Iraq itself is shelling out US$15 billion this

year on modernising its civil infrastructure,

but the fl y the ointment is crude oil prices

– tumbling around US$100 from last sum-

mer’s record high. The sky-high price was seen as an oil bonanza

that would provide an additional boost to state budgets. The sub-

sequent nosedive forced overall 2009 spending plans to be slashed

from US$80 billion to less than US$60 billion, with some offi cials

panicking about the country’s future spending power. The downturn

is another reason why the Iraqi National Investment Commission is

looking to attract US$500 billion of foreign investment by 2015. It

could include overseas fi rms being allowed to own land (as opposed

Oil accounts for a mammoth 95 percent of Iraq’s revenues

The Iraq Stock Exchange is looking to attract foreign investment with its new automated system

40% of Iraq’s population is under 15 years of age. Its median age is just 20.4



contracts, do the Ameri-

cans feel any resentment?

“There is a window open

for all international com-

panies,” Mills responds

diplomatically. “When

you go to Iraq and speak

to offi cials they might say they want an American company to carry out

a US$50-100 million project to rebuild a refi nery or electric power sta-

tion. But if a US company won’t come and do it they will just fi nd another

fi rm from France, Russia, China or wherever, that will. The need to fi nd

companies to do these Iraqi government projects always persists.”

As well as government projects, Mills notes that many US compa-

nies who came over in the initial reconstruction phase have branched

out into the private sector. He says car giant General Motors (GM)

originally set up a maintenance facility in Iraq to service the tens of

thousands of vehicles fl ooding in for the reconstruction effort but has

since looked elsewhere for private contracts. It’s a similar situation

with construction equipment manufacturer Caterpillar. But whether

you are rebuilding an oil refi nery or installing software for a telecoms

contract, Mills stresses the need for businesses to do their homework

Putting the troubles to one

side, El-Tai believes investment

opportunities for overseas fi rms,

particularly those involved in oil

and gas, outstrip those of Iraq’s

neighbours in the region. “Iraq is

a promising market with numerous

investment opportunities,” he as-

serts enthusiastically. “The foreign

companies have a strong and com-

petitive wish to invest in Iraq and the government has put forward

facilities to encourage this.” He is also upbeat about the country’s

future when asked to gaze into his metaphorical crystal ball. “I am

optimistic, despite the diffi culties that Iraq and Iraqis are facing at

present. I believe the tremendous riches of Iraq – be it oil, gas or other

minerals, agriculture and water resources – will enable the rebuilding

of the country very quickly.”

As the spearhead in the invasion of Iraq in 2003, the United States

has benefi ted the most from lucrative contracts. Indeed, some US$2

billion of American contracts have been signed with over 5000 private

equity fi rms in the last three years alone. Timothy Mills, former Presi-

dent of the American Chamber of Commerce in Iraq and a practising

international lawyer, has seen with his own eyes compatriots working

to rebuild the country. Speaking to Business Management from Wash-

ington prior to his latest departure for Iraq (his 111th visit since July

2003), Mills says the country’s redevelopment is a bright light amid the

global economic gloom. “The attractiveness of business opportunities

has increased as other areas of the world have retracted, but whether

or not to work in Iraq comes down to a risk versus benefi t calculation for

many company bosses.” But with thousands of companies from coun-

tries that played no part in the 2003 invasion awarded reconstruction

Iraqi Airways is soaring again with new scheduled routes and destinations, including Europe

“There is a window open for all international companies”

TIMOTHY MILLS former President of the American Chamber of Commerce in Iraq and a practising international lawyer



allows citizens and companies to store, transfer and

invest their earnings.” Without reliable voice, postal or

internet communications it has been very hard for any

bank HQs to standardise – Rafi dain is essentially a

group of 155 individual banks all operating with unique

procedures and systems, and most banks are in a similar

situation. Being a government-controlled bank it is sit-

ting on a cash mountain of US$15 billion, which proves

extremely hard to manage and invest without electronic

clearing and a core banking system. “Every government

account is held with Rafi dain Bank so once Rafi dain

starts working, Iraq will start working,” Hargreaves

explains.

Dubai-based Roy Froud is Head of the MEA region

for Misys Banking, a global application and services

company involved in upgrading and centralising op-

erations at four Iraqi institutions. He believes Iraq’s

lenders could eventually “leapfrog” other banks in the

Middle East with modernisation. He’s also an advocate

of companies setting up in the region and building up

a reputation and trust with customers. “Clearly banks

here don’t want to deal with companies fl ying in from

the West, dropping software on them and then fl ying

home again. They want partners who are committed to

the region and committed to them as customers, and

companies with Arabic skills and the right people to

implement solutions.”

One of Misys’s clients includes al-Uzri’s Trade Bank

of Iraq. He describes Iraq as being seriously “underbanked” when

assessing the condition of the fi nancial sector. “Iraq has less than

600 branches countrywide, which is very low compared to regional

countries,” he remarks. “Iraqis would be encouraged to have bank ac-

counts if there were better services, better returns on their deposits

and good credit policies to allow the banks to lend.” Al-Uzri is also a

proponent of the banks playing a much more signifi cant role in the

economy and in terms of Iraq’s GDP.

fi rst or face failure. “If US companies

have not been working in Iraq, either

with the government or the private

sector, then there needs to be a seri-

ous adjustment of the business model

and they need to do due diligence. It

also means fi nding trusted Iraqi part-

ners to do business with and navigate

the local nuances.”

Money mattersAlthough most industries are

creaking, one sector lagging light

years behind its peers in the region

is banking. In Iraq cash is king, with

people forced to hoard wads of

dinars because the banking system

is so antiquated. Transactions are

carried out manually, branches can’t

communicate electronically with

one another and ATMs are virtually

non-existent. Paying for goods and

services with credit cards is a nascent

payment option, too. Shirko Abid, an

Iraqi Kurd and Chairman of B-Plan

Information Systems, is introducing

a much-needed electronic clearing

system across state-owned Rafi dain

Bank’s 155 branches (55 in Baghdad). With the new system Abid says

companies will be able to pay salaries directly into employees’ bank

accounts, money can be transferred between branches and even with-

drawn from Rafi dain’s seven outlets abroad.

Rafi dain, which holds 45 percent of the country’s fi nancial assets,

used to stand proud as the Middle East’s largest bank before falling

into a decrepit state. Laurence Hargreaves, B-Plan’s Project Co-ordi-

nator on the ground, is candid in his assessment of the archaic state of

the banking industry. “Rafi dain struggles to function with-

out a banking system to manage its 4.5 million accounts,”

he explains. “There is no communication system to enable

any of the branches to communicate to HQ, money can’t be

transferred between branches and no unifi ed products can

be offered. The legacy of Saddam Hussein’s regime and

the two wars have left gaping holes in the balance sheets

that need to be fi lled.” Trying to repair the situation was

taxing in the years following the fall of Saddam, suggests

Hargreaves. “Until recently, the security situation meant

that installations of such large new systems couldn’t be

achieved and banks have had to ‘make do’ with an incom-

patible range of legacy systems.”

For Hargreaves, a reliable and trustworthy banking

system is one of the most basic requirements for building

a secure and prosperous state. “Many people fi nd it hard

to comprehend that a country does not have a system that

“We are seeing Iraqi investors

bring their money back to

the country”

“Electricity is still unstable and shut off several times a day”

MOHAMAD EL-TAI CEO of Iraqi satellite TV broadcaster Al Fayhaa

HUSSEIN AL-UZRI Chairman and President of

Trade Bank of Iraq



Crude awakening Of course when it

comes to GDP, Iraq’s most

prized and coveted asset

is its enormous energy

reserves. The ramshack-

le oil sector brings in a

mammoth 95 percent

of the earnings for a country with perhaps the largest unexploited

energy resources in the world. Iraq’s offi cial reserves are around 115

billion barrels (the third largest in the world) but this is based on ar-

chaic 2D seismic surveying. Ambitious estimates by industry insid-

ers triple the outdated reserve fi gure, partly because only 17 of the

80 known fi elds have been signifi cantly tapped for oil. If the ambi-

tious estimates turn out to be true, Iraq would catapult to the top of

the production league table, ahead of neighbour Saudi Arabia. “The

reserves are not exaggerated – they are huge, and I am optimistic

that this fi gure will be higher than 115 billion barrels,” suggests Man-

ouchehr Takin, Senior Analyst at the Centre for Global Energy Stud-

ies. “Some think it could be 200 billion or higher but these amounts

are just estimates.” With rock-bottom extraction costs, thought

to be as low as US$2 per barrel, and more than a third of reserves

lying just 600 metres below the earth’s surface, you can just

imagine the dollar signs fl ashing in

the eyes of the bosses of

the foreign oil majors. It’s

a tantalising prospect, ac-

cording to Takin: “Why go

to harsh and inhospitable

places in the world like the

Arctic? It really is entering

the unknown and despite all

the costs that are incurred,

you are not guaranteed to

fi nd oil. In Iraq the costs

are low and the fi elds are

already there.”

Iraq currently pumps around 2.4 million barrels a day (bpd), of

which 1.8 million is exported. But although the industry overall is seri-

ously dilapidated, Oil Minister Hussein al-Shahristani is confi dent that

output can be ramped up to an ambitious six million bpd, although he

openly admits that US$50 billion will be needed to achieve this, along

with the help and technical know-how of the international oil com-

panies (IOCs). But there are still stumbling blocks: the long-awaited

Watchdog group Transparency International ranks

Iraq as the world’s third-most corrupt country

behind lawless Somalia and dictatorial Burma.

Since the 2003 invasion Iraq has been dogged by

accusations of dishonest business practices, including

allegations that government workers absconded with

billions of dollars planned for reconstruction, military

supplies and food. Two years ago,

the former head of the country’s anti-

corruption commission, Radhi al-Radhi,

suggested that some US$8 billion had

disappeared. Iraq’s anti-corruption

committee investigated 12,000 complaints

of government corruption and discovered

the worst departments are the ministries of

interior, fi nance, defence, education and

health. However, the committee admits

that the investigation barely scratches the

surface of what goes on. Iraq’s image

has also been tarnished by the recent

resignation of Trade Minister Abdel Falah al-Sudani amid

allegations of corruption and embezzlement linked to the

nation's food assistance programme. Meanwhile, Prime

Minister Nouri al-Maliki admits that his country cannot

prosper until widespread corruption is snuffed out – a

seemingly impossible task as it stands.

GREASY PALMS

hydrocarbon law, a bone of contention between political factions, has

been deadlocked for two years, the industry itself is in dire need of a

skilled workforce and technology to boost production, while many fa-

cilities and pipelines have been sabotaged or damaged. “I would say

the oil industry is on its feet at the moment but the question is what

needs to be done to get it to a brisk walk?” says Mills. “Iraq needs

to rehabilitate refi neries, explore new reservoirs and then extend the

pipeline and port capabilities in order to export, so the IOCs will be

key because this needs signifi cant investment.”

Meanwhile, the autonomous Kurdistan has signed contacts with

overseas oil companies to extract hydrocarbons, much to the anger

of Al-Shahristani who has branded these deals as “illegal”. Tensions

“The reserves are not exaggerated – they are huge, and I am optimistic that this fi gure will be higher than 115 billion barrels”

MANOUCHEHR TAKIN Senior Analyst at the Centre for Global Energy Studies



between Iraq’s leaders and the Kurdistan Regional Government (KRG)

are strained to say the least. For the time being, the IOCs are busy pre-

paring and submitting their fi nal bids to the Iraqi oil ministry for the

technical service contract (TSC) award ceremony at the end of June.

Those that land the highly sought-after contacts will be weighing up

the costs versus the risks of venturing into the unknown. “Business

in Iraq for oil and gas companies remains far from straightforward,”

explains IHS Global Insight’s Senior Analyst, Samuel Ciszuk. “Despite

the dramatic improvement in security over the past two years, Iraq

still remains one of the most unsafe business environments in the

It may not be the obvious destination for European and

North American sun-seekers, but a trickle of tourists

are tentatively venturing into Iraq to discover its unique

culture and stunning archaeological sites fi rsthand.

Bizarrely, for US$220 a night newlyweds can even spend

their honeymoon in the late Saddam Hussein’s bed at

his former palace south of Baghdad. Geoff Hann, owner

and Managing Director of Hinterland Travel, recently

returned from a 15-day tour of the country accompanying

eight American, Canadian and British

tourists. He says curiosity fuels visitors’

decisions to go: “Iraq has been in the

news so much over the past few years

so people want to come and see things

for themselves, as well as take in the

archaeological and Islamic history.”

This was Hann’s fi rst organised tour

since a self-imposed hiatus in 2003.

“We stopped going because of the

kidnappings and killings so this trip was a learning curve

for us.” For Hann and his group, fears over security and

getting bogged down in administrative matters were the

biggest headaches but he insists that these issues didn’t

spoil the trip. “The clients were prepared to put up with

anything,” he recalls, “And they needed to be because

the infrastructure is quite bad and the checkpoints can

be extreme at times, which leads to delays.” Hann says

the trip was an overall success and has a second tour

earmarked for October.

‘NOTHING TO DECLARE’

world.” Security costs for IOCs and contractors with a signifi cant

physical footprint run in the range of US$8000 to US$10,000 a day,

according to Ciszuk.

A large proportion of the recent bombings in Iraq have targeted

oil installations. With the IOCs on their way in, there are serious

concerns that a deadly bombing and kidnapping campaign could

surface. “You have to analyse it on a case-by-case basis; structure

your business plan accordingly with respect to your security precau-

tions and security costs,” is Mills’ advice to

foreign oil fi rms. “In vast reaches of Iraq the

environment is what the military would call

permissive. The military itself does not wear

military gear and has declared these areas

as safe, particularly such areas as Najaf, the

south, Kurdistan and areas of Baghdad.”

The sky’s the limitAny oilman entering the country will

invariably do so by air. And one of the most

vital aspects of the recovery effort will be the expansion of routes

and regional airports, together with improved security at Baghdad

International Airport (previously known as Saddam International Air-

port). This gateway to the country was an important travel hub in the

Middle East in its heyday before UN sanctions were imposed during

the 1991 Gulf War. The national carrier, Iraqi Airways, used to fl y to

destinations all over the world until the embargo forced the fl eet, with

their distinctive green and

white livery, to languish

on runways and in hang-

ers for 12 years, like relics

of a bygone era. Baghdad

and other Iraqi cities were

scrubbed from destina-

tion boards in most major

overseas airports, too.

Recently however, several

of Europe’s major airlines

have tentatively expressed an interest to resume fl ights. British

carrier bmi says it is “ready and willing” to begin services between

London Heathrow and Baghdad by summer 2010, which would be the

fi rst commercial fl ights between the two countries since the Gulf War.

The only direct link currently between Iraq and Europe is provided by

Austrian Airlines.

Iraqi Airways is soaring again too, with new planes on order and

new routes planned. It recently launched a scheduled fl ight to Stock-

holm, Sweden, and plans are in the pipeline for other European and

Middle East destinations. Improved technology and facilities are being

installed at the capital’s airport, too. Abdul Wahab Teffaha, Secretary

General of the Arab Air Carriers Organisation (AACO), is buoyant about

Iraqi Airways’ future. “I believe the foundation is there for a successful

and powerful airline that will make its mark on the air transport scene

in the Arab world. Iraq is a rich country that is also extremely rich in

culture and historical heritage, as well as having a large diaspora.”

Tourist Tina Townsend snaps away during a visit to the Cross-Sabers Monument in Baghdad’s Green Zone

The International Monetary Fund predicts

6.8%growth for Iraq in 2009



oping a hotel in the Kurdish area of Erbil but has announced its inten-

tions to open a fi ve-star development opposite the American Embassy

inside Baghdad’s Green Zone. The move left people in the industry

“astonished”, says President and CEO Selim El Zyr. “We always go to

places where nobody else goes and that is why we are pioneers in this

fi eld. We don’t mind taking risks, not at all.” . Rotana, which manages

a portfolio of 67 properties across Middle East, says its 250-room

Baghdad hotel, due to open in early 2012, will cater to diplomats and

visiting businessmen. As well as the British and Australian embas-

sies, the new US embassy is located inside the zone and is the largest

(the size of Vatican City) and most expensive in the world. Up to 5500

Americans and Iraqis work and live there, although more than half are

security professionals.

Apart from hotels and accommodation for foreign workers and visi-

tors, there is a chronic shortage of housing. It’s thought that Iraq needs

between two and three million new housing units. This could lead to a

whopping US$35 billion of foreign investment in real estate for 2009,

according to US-based Dunia Frontier Consultants. Likewise, Mills sug-

gests this shortage will fuel a sharp upswing in construction projects:

“You will eventually see a building boom because there is a need for

several million housing units and there is the development of a nascent

mortgage industry to support this.” He even foresees Dubai-esque

development. “Over the next fi ve to 15

years the capital will be redeveloped

and you will see a core of offi ce towers in

downtown Baghdad – similar to Sheikh

Zayed Road in Dubai.” Quite whether

Baghdad will ever be lined with shiny

skyscrapers piercing the clouds remains

uncertain. But there is no getting away

from the fact that 10 years from now the

capital and country could be unrecognis-

able. With coalition troops withdrawing

and investment pouring in, Iraq is coming

off its life support machine, but the crux

of Iraq’s recovery will depend on long-

term peace and the government being

able to squeeze every drop of profi t out

of its abundant natural resources. And,

of course, drumming up the right levels

of foreign investment. “Iraq has poten-

tial to become either the second or even

the most vibrant economy in the Middle

East,” suggest Mills. Watch this space.

Teffaha goes on to

say: “You cannot deny

that there are busi-

ness opportunities

and attractions so

there will be traffi c. It

will not be like the Big

Bang but gradually,

however long it takes, Iraqi Airways will get out of this situation.”

Apart from improving security, Teffaha is perturbed by the dearth

of trained aviation personnel in the country and says it could very well

bring the industry down to earth with a bump. “They need to plug the

gap after being isolated for 35 years because of wars, embargoes and

working in a very precarious situation,” he notes, “but before this

Iraqi Airways had an excellent engineering base and a modern fl eet.”

It’s the same for the airport, says Teffaha. “Baghdad International

Airport was a state-of-the-art airport when it was built and although

new equipment can be easily purchased it is more about the people

who will be needed.”

Those business chiefs brave enough to venture into Iraq through

Baghdad International Airport after the coalition forces toppled

Saddam were all too aware of the problems awaiting them. Even

before passengers touched down on Iraqi soil

the aircraft would land using a steep corkscrew

manoeuvre in a bid to avoid rocket attacks from

surface-to-air heat seeking missiles. Then once

through customs they had to negotiate the 12km

stretch of road into the city that gained the noto-

rious tag of the most dangerous stretch of high-

way in the world – a white-knuckle ride avoiding

roadside bombs, insurgents blowing themselves

up and the common-or-garden drive-by shoot-

ing. Many high-ranking offi cials and VIPs sought

the sanctuary of the heavily fortifi ed Green Zone

by means of helicopter. Others stumped up as

much as US$3000 for a ride in an armoured car

to their hotel.

Today, the situation is much safer but with

increasing numbers of executives, contractors

and government offi cials fl ooding in, the dilemma

of where to stay is proving rather a headache.

Iraq needs tens of thousands of additional hotel

rooms to cope with the infl ux but this will take

time. Luxury hotel group Rotana is already devel-

“You cannot deny that there are business opportunities and attractions [in Iraq] so there will be traffi c”

ABDUL WAHAB TEFFAHA Secretary General of the Arab Air Carriers Organisation (AACO)


Mercedes.indd 2Mercedes.indd 2 17/6/09 15:33:4217/6/09 15:33:42

Mercedes.indd 3Mercedes.indd 3 17/6/09 15:33:4817/6/09 15:33:48

CONSTRUCTION

FIRST OFF THE BLOCKS


KhaldounTabari ed:5oct 18/6/09 10:38 Page 32

When it comes to timing, Drake &

Scull International is bang on the

mark. The mechanical engineering

contractor was the first on the scene

in Dubai, arriving in 1973 just in time

for the start of the country’s dramatic

transformation from desert outpost

to global giant. Last July, 35 years on, it launched an IPO on the

Dubai Financial Market, which was 101 times oversubscribed and

raked in US$325 million for the company. Unbeknown at the time

to Drake & Scull, it narrowly missing coinciding the launch of its

IPO with the sudden downturn in the UAE economy, which would

have resulted in a very different outcome for the facilities man-

agement aficionado. “The IPO has been exciting because it was

so timely,” says Drake & Scull CEO Khaldoun Tabari. “Right now

the market is prohibitive in the sense that there is no money out

there,” he goes on to say, adding that the company has, as a re-

sult, shifted its focus away from Dubai to other parts of the GCC,

in particular Abu Dhabi and Saudi Arabia. “Two or three years

ago we had a boom in Dubai but now it has come down and it

has levelled off,” he says.

Dubai-based Drake & Scull is one of the biggest benefi-

ciaries of that boom – with an order book currently estimated

to be worth over US$1.4 billion. It is working on 35 projects

and in the first quarter of this year its first quarter profit rose


From the moment it touched down inDubai in the 1970s, Drake & ScullInternational has appeareduntouchable, raking in a series oflucrative contracts that saw itbecome the first specialist contractorto list on the Dubai Financial Marketlast year. Diana Milne meets CEOKhaldoun Tabari, and tries to find achink in his armour.

A sample of the GCC projects Drake &Scull International has worked on


“Libya is an emerging market. It has been in isola-

tion for some time because of the sanctions that were

put on it. These have now been lifted. There are a lot of

foreign and private investors already there. It is a little

bit risky but things are getting clearer and we believe the

potential there is humungous because of the lack of in-

frastructure of any kind there, whether it’s water, power, schools, hospitals.

So there is huge potential for contractors from anywhere there.” Saudi

Arabia will also be an important market for Drake & Scull International

going forward, says Tabari who describes how the country shares Libya’s

lack of infrastructure – a gap his company hopes to fill: “We are looking at

projects in Saudi Arabia related to colleges and healthcare. There’s a lot of

by a massive 162 percent compared to the previous year, to US$21.2 mil-

lion. To date it has worked primarily in the UAE on iconic projects that have

recently included Dubai Festival City, Jumeirah Beach Residence, Zayed

University and Rashid Hospital. And despite the downturn, the orders keep

flooding in; in May it was awarded the US$62 million mechanical electrical

and plumbing (MEP) contract for the Kingdom of Sheba

development on the Palm Jumeirah bringing the total

value of its projects there to over US$380 million. In the

same month its civil contracting subsidiary, Gulf Technical

Construction Company (GTCC), was awarded a US$27 mil-

lion MEP contract for the Mangrove Place project on Al

Reem Island in Abu Dhabi.

Exiting the comfort zoneWhile its luck hasn’t run out yet, timing-wise, Tabari

says he knows it’s time for the company to change its

strategy and seek opportunities outside its domestic mar-

ket. The GCC construction industry has been dealt a harsh

blow from the global economic downturn with some esti-

mating the total value of the industry has more than halved from US$1.5

trillion in July 2008. It is time for Drake & Scull to identify where the next big

opportunities will be and to ensure it beats the competition to get a place

there. One of those countries is Libya. It hopes to set up an office there by

the third quarter of this year, pending board approval, and Tabari describes

the potential in the country as “humungous”.


Drake & Scull International is an integrated end-to-end

service provider in the field of electrical and mechanical

engineering and has provided solutions to customers since

its inception in the UAE in 1966. Its expertise in mechanical,

electrical and plumbing (MEP) contracting spans from

providing complete solutions through design and

build to Engineering, Procurement and

Construction (EPC), and civil contracting

services across the UAE as well as

Infrastructure, Water & Power (IWP) solutions

and across the Middle East and North Africa.

ABOUT DRAKE & SCULL

“Libya is anemerging market.

It has been inisolation for some

time because of thesanctions that were

put on it. Thesehave now been

lifted”


Bayshore Ad.indd 61Bayshore Ad.indd 61 17/6/09 15:28:2117/6/09 15:28:21


work going on out there and for us it’s only a matter of time. We are putting

in a lot of effort then hopefully we will achieve success there. It’s a country

which is going to spend a lot of money on infrastructure such as hospitals,

schools, water and power, which is mainly our business.” The company also

has projects in the pipeline in Jordan and, further afield, in Thailand.

Tabari acknowledges however that regional and global expansion

won’t be easy particularly due to the logistical challenges of recruiting

enough manpower to work on the projects and shifting that manpow-

er across different sites: “It’s difficult to get countries’ permission to

move workers from one area to the next. In the UAE we take it for grant-

ed. We’ve got the people, we get a job, we man it and we do the work.

But when you go to work, for instance in Qatar, you have to start all

over again. You might be able to transport senior management, say ten

or 15 people. But contracting needs thousands of workers.” He goes

on to say that exiting its domestic market will mean the company won’t

enjoy the financial advantages of being a domestic company that it has

enjoyed on its home turf: “Anytime you

go to a new country and you ask for

credit it becomes difficult and it favours

the contractors locally if they are avail-

able. Fortunately [in the UAE] we as

Drake & Scull have special abilities

which makes life easier for us, Being for

instance in high rise buildings or having

built so many water treatment plants or

district cooling plants. We have the edge

over the local contractors who haven’t

done it.”

Infrastructure focusAs well as shifting country focus

Drake & Scull is also focussing on differ-

ent areas of work as the downturn re-

duces demand for what has traditionally

been its core business, MEP. As demand

for this relies on new building projects,

Tabari says he expects turnover from this

to reduce in 2009. However he says

there will be increased demand for

Infrastructure, Water and Power (IWP) from less developed countries

like Libya and Saudi Arabia which face increasing demand for facilities

to support their growing urban populations.

“I would say the IWP division, power, water treatment plants, and

district cooling plants, are the most significant parts of the business

going forward and will give us the turnover and growth that we need. In

terms of normal MEP work, I think in Dubai that is going south. In other

words there aren’t many buildings being built. You are not going to find

any buildings that are seven storeys tall coming up, at least not at the

rate that they used to. So the MEP division that we have will definitely

lose turnover but this will be more than compensated for by the growth

we are seeing in IWP.” He goes on to say that Drake & Scull’s acquisition

of civil contracting firm GTCC in 2007 – which led to the subsidiary’s

turnover increasing from US$13 million in 2005 to over US$108 million

in 2008 – has proved a considerable advantage in the IWP area: “For

water treatment plants and sewage treatment plants for instance, you

need a civil contractor to do the infrastructure around that. The two go

hand in hand and our acquisition of GTCC is right now complimenting our

delivery mechanism by actually doing the project management for us on

contracts for projects such as district cooling plants.”

Acquisition spreeDrake & Scull now hopes to emulate the success of the GTCC ac-

quisition by making further strategic purchases of GCC based compa-

nies. Tabari reveals that the company is currently in negotiations to

acquire four companies in Saudi Arabia, Qatar and Oman: “They are ba-

sically in our line of business. One is a civil construction company to help

us in our infrastructure projects. Strategically we feel that infrastructure

is one of the main areas for our expansion going forwards. That’s why we

are pushing hard on that front.” He goes on to say that the company

hopes to complete the transactions in the third quarter of the year: “We

are currently doing due diligence – financial and legal. We already have

board approval to go ahead, subject to finalising all these issues. Then we

will bring this to the board and hopefully by the third quarter we will have

these companies under our wing.” These acquisitions form part of Drake &

Scull’s strategy to achieve 25 percent growth in profits and revenue this

year. “I think I have stated before to many people that we are expecting to

achieve 25 percent growth this year and that’s going to come from acquisi-

tions and from introducing ourselves to new markets such as Libya and

Jordan,” says Tabari. “I think Drake & Scull has a fantastic future ahead of

it and that is just the beginning.” It’s a sharp departure from the company’s

40 to 60 percent growth last year, but still a highly ambitious target given

the economic conditions in the region. Let’s hope, that on this occasion

Drake & Scull’s timing isn’t wrong. �

Khaldoun Tabari, on how loyal

employees have contributed to the

Drake & Scull success story:

“We have great people on board here

and of course a long history of being in

Abu Dhabi since 1966 and Dubai since

1973. The average person has been

with us for over 20 years. That’s a lot for

the Middle East. And especially

considering that this whole boom is a

recent one. So we have plenty of

people that are committed to the vision

and the strategy that we have mapped

out for the company.”

PEOPLE POWER


proquest.indd 1proquest.indd 1 17/6/09 15:34:2817/6/09 15:34:28


FOOD PRODUCTION

“What we are trying todo here is change theperception of Islam inthe eyes of the world”

SALEH ABDULLAH:5oct 18/06/2009 08:51 Page 38

Halal food is no longer a niche market. With 1.8 billion Muslims living

worldwide it is a US$600 billion industry that is thought to account for

12 percent of the global trade in food products. Top of the halal game

in the Middle East is Al Islami, which since the 1970s has produced and

sold halal meat and dairy products across the region and now the

world. In 2007 it reported an increase in sales of 40 percent and this

year, despite tough economic conditions, it is opening a US$16 million state of the art

8000 square metre factory in Dubai’s Techno Park. This increased production capacity

will help the company to achieve its aim of a US$1 billion surge in sales by 2011.

Spreading the wordWhile these figures speak volumes about the company, CEO Saleh Abdullah

Lootah says he believes the real mark of Al Islami’s success is the impact it has had

on public perceptions of halal food. Outlining what for him is a labour of love, Lootah

says: “What we are trying to do here is change the perception of Islam in the eyes of

the world. It’s a big challenge we’ve set ourselves. But we have to do it because gov-

ernments, individuals and businesses all have a responsibility to change the percep-

tion of Islam, which it has not been perceived properly in the eyes of the world. When

you mention Islam or a Muslim product people tend to perceive it as either backward

or not up to the mark.” Part of the problem, says Lootah, is that the halal food that

has been available for worldwide consumers has not been of a high enough quality.

This is something Al Islami plans to change by selling its products across Europe, and

has already established a presence in the UK. Lootah hopes to now target the French

and German markets: “There is huge potential for halal food in Europe. But the con-

sumers have never been served properly in terms of products. We provide halal that


A recipe for successAl Islami Foods has ventured out of itsdomestic market and is hoping to tap

into the US$600 billion global halal foodindustry. Diana Milne asks CEO Saleh

Abdullah Lootah how it is faring on theinternational circuit.


ence then a trade convention to tell everyone

we’re here and we mean business.”

The expansion of Al Islami’s business across

different territories means that now is the time

for the company to ensure that it has standard-

ised systems and procedures in place across its

operations. Lootah says it is currently engaged

in setting up these processes, both on the tech-

nical and commercial sides of the business: “We

want to make sure that we have solid standards,

processes and procedures which can be followed

and implemented in all of the countries where we

operate. On the technical side this means logis-

tics, warehousing and distribution and on the

commercial side, it’s marketing, merchandising

and point of sale materials. It will make our lives

much easier if we don’t have to re-invent the

wheel everyday.”

is the best in terms of variety, standards, quality and taste.” He goes on to

say that Al Islami is in the “penetration phase” in Europe – and is currently

in the process of placing its products with supermarket chains and setting

up distribution networks.

Home baseAl Islami’s efforts to penetrate the European market go hand-in-hand

with its continuing march across its primary market, the GCC, which it

hopes will be the main driver behind its $1 billion increase in sales. Lootah

says it is particularly keen to penetrate the Saudi market where it is cur-

rently also in the preliminary stages of selling its products through local

supermarkets. He does not foresee, however, that the country will be an

easy one in which to establish a business, despite the huge demand there

for halal products: “There is huge potential in Saudi Arabia. It is one of the

biggest markets, I see, in the GCC. The

problem is that it’s not an easy market –

it is a tough one to operate in. The com-

petition is very tough and it is not like

Dubai where you can come and do your

business easily. There is a lot of paper-

work and logistics involved in setting up

there. But whoever manages it will take

a major market share.” At present, how-

ever, he admits Al Islami has not yet

cracked the market – or properly an-

nounced its presence there: “We are

not excellent in Saudi. We have not

seen the growth we want to see be-

cause we have not invested enough in

terms of marketing. We need to make

sure the product is in all the supermar-

kets and make sure the distribution is

happening. Then we will do our big bang

activities which start with a press confer-


The sweet taste of success: a selectionof Al Islami’s products


Branching outAnother reason why Al Islami must standardise its processes is that

it is also diversifying its product range and setting up stand-alone outlets

rather than relying on supermarket sales. In the GCC it is concentrating

on a chain of fast food outlets it acquired two years ago called Al Arooj

Fresh, which it hopes, says Lootah, will rival multi-national chains across

the region. There are 16 currently in the UAE, two in Lebanon and Oman

and Al Islami plans another 10 branches this year. “We want to bring some-

thing that can compete with the multi-national companies. I’m talking

about companies like KFC and McDonald’s. I think that we provide some-

thing unique and different to what other people offer. We are working very

hard on a facelift of the brand, changing the management and setting up

standardised systems. We will open branches wherever the company’s

products are sold today.” In a separate project, Al Islami is also setting up

hot dog stands across the UAE at schools, airports, and shopping centres.

As well as tackling the fast food market Al Islami’s next big area for ex-

pansion is stand-alone butcher shops. It is currently setting up shops with-

in supermarkets, leasing the space there and exclusively selling its own

products. “At the moment the concept is a shop within a shop,” says

Lootah. “We’re hoping in the future to have standalone butcher shops.”

The strategy now, says Lootah is to bring all its business into each mar-

ket it enters: “Wherever we grow we’ll be growing with all the different

businesses we have. The decision will not be if we should bring that busi-

ness to the market, it will be when.”

Ironically, given Al Islami’s push into the fast food market, it is very in-

volved in campaigns to reduce obesity in the GCC as part of its corporate

responsibility strategy. Last year it launched the Good Food for Better Life

marketing campaign, which included the setting up of an anti-obesity forum

and advertising campaigns around nutrition and healthy eating and the pro-

motion of Al Islami’s halal production methods. “Obesity has been in-

creasing in the GCC and everybody has a responsibility to tackle the

problem – producers, government regulators and stakeholders. We need

to discuss the issue openly and come up with recommendations on how

we can avoid these problems. We want to make sure we have given some-

thing back to society,” says Lootah.

This philosophy goes back to Al Islami’s aim not just to change peo-

ple’s eating habits but to change hearts and minds. But as demand for

halal food grows worldwide there’s not getting away from the fact that

Al Islami is on the cusp of becoming a key player in a multi-billion dollar

industry. n


“Obesity has been increasing in theGCC and everybody has a

responsibility to tackle the problem –producers, government regulators

and stakeholders”

The launch of the Al Islami Meat Shop chain


Low-cost, low-frills air travel is a somewhat nascent market

that is gradually filling a void in the Gulf’s aviation indus-

try. For years, legacy carriers ruled the skies until a wealthy

investor and successful businessman stumped up the cash

to get a budget airline off the ground in Kuwait. Founded in

2004 by Chairman Marwan

Boodai, Jazeera Airways was

the first privately-owned airline in the Middle

East, ending a 50-year dominance in Kuwait

held by national carrier Kuwait Airways. The

results have been impressive too: Kuwait

Stock Exchange-listed (KSE) Jazeera has flown

3.6 million passengers since it first took off in

2005, while profits soared last year by 94 per-

cent to US$15.3 million compared to 2007. It

boasts a fleet of eight leather-seated Airbus

A320s flying to 29 destinations in 16 countries

from hubs in Kuwait and Dubai, but will take

delivery of another 32 aircraft between now

and 2014. With this aggressive growth strate-

gy it is little wonder that Jazeera is perceived

as being a catalyst for popularising budget air

travel in the region.

“This is an airline that is maturing and ex-

panding,” CEO Andrew Cowen states confi-

dently during an interview at his office in

Kuwait. Cowen arrived six months ago to take

up the newly created position after Boodai decided to relinquish the duel

Chairman/CEO role. “I previously built an airline [Sama] up from scratch in


Accounting for just five percent of all air transport in the Middle East, the budget sector has

the potential to reach new heights. Andrew Cowen, CEO of rising star Jazeera Airways, is

confident his business can capture a greater market share in these turbulent economic times

as passengers give legacy carriers the cold shoulder in favour of budget alternatives.

BY JULIAN ROGERS

Saudi Arabia and took it as far as I could,” says Cowen, “So

Marwan wanted me to take over the day-to-day management of

Jazeera and take the company through the next stage of its devel-

opment.” Cowen, who describes Boodai as a “serial entrepreneur”, says

the Chairman’s investments [under the Boodai Group umbrella] are about

identifying gaps in markets. “The low cost busi-

ness model was spreading across the world so he

though ‘why not the Middle East’?” According to

Cowen, his Chairman quickly cottoned on to the

fact that the aviation industry in Kuwait was ripe

for liberalisation and it seems investors were

falling over themselves for a piece of the action,

too. Boodai raised US$34 million through an ini-

tial public offering (IPO) that was oversubscribed

12 times. At the time, one in 25 Kuwaiti citizens

owned a slice of the company.

Reaching for the starsEven after Jazeera’s rapid ascent and last

year’s impressive results, Cowen still aims to be

flying 60 percent more passengers this summer

compared the same period in 2008. “Although

that might seem very aggressive growth, we are

playing to consumer concerns that they need to

watch their money a bit more,” he remarks.

“Given these more uncertain times, we think the

business model is particularly attractive and re-

silient and we hope to gain from this through significant growth and mar-

ket share.” Indeed, with a global downturn exerting a vice-like grip on

Cheapthrills

AVIATION

Cowen ED:4oct 18/6/09 10:24 Page 42


business budgets the corporate bean counters are looking to save dinars

and dirhams where they can. Jazeera, which aims to crowbar passengers

away from the more expensive legacy rivals, has secured a number of cor-

porate contracts for air travel, including National Bank of Kuwait. “We are

seeing an awful lot of companies who have cut back on travel, but with their

essential travel they are looking to book with Jazeera. With business travel

bans and consumers looking to make their travel budgets go further, they

perhaps find lower fares that much more attractive.” He goes on to say:

“We wouldn’t say that we are the silver bullet but, if people are not travel-

ling to make business deals then deals don’t happen, which contributes to

the economic slowdown.”

Jazeera recently launched ‘Happy Hour’ on its website, allowing cus-

tomers to take advantage of different selected reduced fares and specific

routes between 1pm and 2pm, seven days a week until summer 2010. It’s

about drumming up business on the less popular flights and meeting those

“The management team was able toride the economic buffeting that wesaw last year with fuel prices, whichled to the profits we announced”


going is fuel and this past year has seen crude

prices spike at US$147 a barrel before plummet-

ing more than US$100 in the space of a few

months. Cowen says abolishing the surcharge

was more sensible than slashing fares and con-

fusing customers. The price of oil currently hov-

ers around the US$60 mark but Cowen admits

that a prolonged rise above US$65 could see the

surcharge reintroduced.

However, to protect itself from

a repeat of last summer’s crude

price surge Jazeera has a 25 percent

hedging requirement for the second

quarter. “We want to protect our-

selves against another oil spike so

we have cautiously gone back into

the hedging market.” Cowen ex-

plains. “I say cautiously because

we are trying to avoid any specu-

lative aspect as this is about lim-

iting the business risk.” He

describes hedging as a “double-

edged sword” when discussing how a number of

airlines paid the price for wrongly hedging at the

top of the spike. “They lost sight of the down-

side and took quite a financial hit. We think we

have quite a robust hedging strategy and we try

to take as much human guesswork out of it as

possible and look at the momentum of prices

and so on.” For the time being opinion remains

divided on where crude prices will head next.

“Clearly there is a bit going on between world-

wide economic conditions and productions cuts,

particularly among the OPEC members, but

quite where it will end up, we don’t know, nor

are we going to use guesswork.”

Another particularly astute manoeuvre by

Jazeera’s management was to take financial pres-

sure off the business and lease the jets from

Sahaab Leasing, established by Jazeera Airways,

DVB Bank and National Bank of Kuwait Capital.

This separates aircraft ownership from the day-to-

day management of the business. Cowen likens this system to how some

global hotel chains operate. “Intercontinental Hotels sold off all their

properties to specialist asset or property management companies but

still maintained the management contracts on those properties. There is

recognition here that different skills are required to operate an airline ver-

sus operating and financing an asset.” The leasing decision was a shrewd

move because it took costly aircraft off Jazeera’s balance sheet. The tim-

ing was excellent, according to Cowen: “When all these things came to-

gether it meant that the management team was able to ride the economic

buffeting that we saw last year with fuel prices, which led to the profits

we announced.”

ambitious passenger targets. “The reality for most airlines is that you have

to work very hard to get good passenger loads and sometimes you get 24

or 48 hours before a flight and for one reason or another it is just not sell-

ing,” explains Cowen. “We only cancel flights as a last resort because it is

very damaging for customer service so ‘Happy Hour’ is a way of saying that

there is going to be cheap fares on a flight and passengers with time flexi-

bility can take advantage of it, while for us it creates incremental revenue

that wasn’t there before. Happy Hour has taken off very well because it

suits students or someone wishing to visit a relative in Dubai, for example.”

The airline has also removed its fuel surcharge – another welcome

move for customers looking to score a bargain. Any airline’s biggest out-


LAST YEAR JAZEERA’SPROFITS

SOARED BY

94%



Air wars While Jazeera’s profits for 2008 were impressive, Boodai and Cowen

are all too aware that competition is going to intensify in the region. To re-

inforce this point, flydubai – a low-cost

airline formed by the government of

Dubai – is set to launch this summer.

The fleet will consist of just two aircraft

but flydubai has made a US$4 billion

firm order for 50 Boeing planes. It will

join Jazeera and the likes of Sama, Air

Arabia and Bahrain Air in flying to key

destinations in the Middle East and

North Africa. Whether or not we see

more airlines, especially those pri-

vately-owned, turning up on runways

depends on the GCC governments,

suggests Cowen. “For more airlines to

appear there has got to be aviation

deregulation, says Cowen, “And

places like Kuwait were very forward

thinking with this by allowing

Jazeera to come into being. However,

it is unlikely that the current number of budget airlines

will stay at the current level – there is almost certainly

going to be more but how many exactly is hard to tell.”

But could the legacy carriers be about to launch a

counter strike in a bid to stop their budget rivals from

cornering the market? In the previous issue of BM,

Qatar Airways CEO Akbar Al Baker said he was against

the concept of low-cost airlines but would be forced to

launch a budget business if Qatar Airways’ market

share became significantly eroded. Time will tell if the

turbulent economic conditions hasten this decision.

However, with two thirds of the people currently re-

siding in Gulf states registered as expatriates and for-

Marwan Boodai, founder and Chairman ofJazeera Airways does more than just oversee aburgeoning airline business. His family-ownedBoodai Corporation is a Kuwait-based group ofdiverse companies involved in engineering,transport, construction, logistics, energy, shippingand more. The group was established in the mid-1950s to supply equipment to the oil explorationindustry but quickly diversified into one of Kuwait’smost dynamic corporations. With a 3500-strongworkforce, the group has a strong presence in theMiddle East and has offices in Europe and Japan.

eigners, air travel can only blossom – especially low-cost travel. Cowen is

relishing the opportunities that lie ahead. “There is still a huge amount of

opportunity for this airline because low-cost penetration is only around five

percent of the market in the Middle East,” he ex-

plains. “In Europe this figure is 25-30 percent so

there is no reason in my mind why we can’t see

the same level of growth for the low-cost model

– not least in the current economic conditions. It

comes back to businessmen and women, or Joe

Public, looking to reduce their costs. Budget air-

lines facilitate this and so help keep the econo-

my moving,” he concludes.�

THE SERIAL ENTREPRENEUR


FundAxis.indd 2FundAxis.indd 2 17/6/09 15:29:5917/6/09 15:29:59



How is IT helping Qtel to meet its business objectives?

Salman Al Mannai. There is no doubt that the major acquisitions, we

have made over the past few years have enriched our IT experience.

This is evident in the way IT is directed today versus the way IT was

used to do business four years ago. There is a paradigm shift in IT

operations and IT approach towards addressing the various needs

of both internal customers and external customers. Because the

telecoms market in the region is opening up Qtel IT has gained new

insights and experience through its interaction with other Qtel subsid-

iaries operating in these markets. At the same time, IT is contributing

to the advancement of IT operations in other Qtel subsidiaries through

the many Centres of Excellence (CoEs) established within the group.

Qtel (Qatar Telecom) provides coverage to over 560 million people in 17 countries and has 57.5 million subscribers. BM hears from Head of IT Salman Al Mannai to fi nd out how technology will help it to reach its aim of becoming one of the world’s top 20 technology companies by 2020.

How high a priority is IT given by the management of the organisation?

SAM. IT is right at the heart of Qtel’s main operations, hence it is

always given a high priority at all times. From an organisational

structure point of view IT maintains a strong relationship with the

core business units at all levels. When I fi rst joined the organisation

in 1989 the IT structure was very simple and there were just four of

us working in the department. At that time it was described as Data

Processing and was actually part of the fi nance department. Today

we are very much linked to the business. Previously, if we went to

the management and said we needed to spend some money on an IT

project they asked a thousand questions. At that time people didn’t

understand the business value of spending money on IT. Nowadays

QAT

AR

CA

LLIN

GTELECOMS

Salam Al Mannai.indd Sec1:48Salam Al Mannai.indd Sec1:48 18/6/09 10:23:1118/6/09 10:23:11


that our online services will be the most successful. We are trying to

come up with different ideas. We don’t want to copy what everybody

else is doing, we want to be more innovative and capture the custom-

ers from the heart. My anticipation is that going online will be our

most successful project. We have also set up an Oracle CRM system.

We had some basic CRM systems in the past but today, in view of

the competition, we fi nd its more challenging to maintain customers

with the systems that we have today. We are trying to develop a

complete framework when it comes to CRM.

What new technology is Qtel planning to deploy to improve the ef-

fi ciency of the organisation?

SAM. We are currently working on server consolidation and virtuali-

sation. The more services you add on the business side, the more the

complexity of the IT side increases. Because of this we have had to

think about getting our house in order otherwise IT becomes messier,

more complex to deal with and causes services to deteriorate.

it’s the other way around. They come to us with the money and tell

us to spend it. Our aim is to become more of an innovation centre,

which suggests ways that IT can be used to improve the way we do

business, and not just to develop modules for projects.

What new technologies is Qtel now planning to introduce to its cus-

tomers and which do you foresee will be the most successful?

SAM. At the moment the biggest project we are working on is put-

ting our services for our customers online and developing the self-

service concept. This would mean customers would no longer have

to visit out stores to receive these services– they could just access

them easily online. My anticipation is that this will be our most suc-

cessful project yet. As well as improving services for our customers

,another reason why we are doing this is to prepare ourselves for

more competition in the market. This will come not just from Voda-

fone operations in Qatar but from Zain, Orascom and Etisalat. Their

target is the same – to capture customers online. My anticipation is

Salman Al Mannai


• SAP™ Authorized Training and Certifi cation (SAP Education Partner) • UK Accredited Management & Leadership • UK Accredited English Language Training • Health, Safety & Environmental (UK Accredited) • Purchasing, Supply Chain & Logistics (UK Accredited) • Professional Development Programmes • Risk Management • Oil and Gas Exploration & Production • Human Resource Managers Training

Naizak is acknowledged as a leader in instructor-led, customized, on site certifi cation training

and consulting for corporate and individuals. Since its founding in 2004, Naizak Education

Services has specialized in providing professionals the knowledge & tools to drive their

business. Naizak has also been chosen as an SAP Education Partner since it is recognized

as a quality provider of SAP Technical and Applications training in the Middle East. Now it

partners with APT to provide best of British management, leadership, and technical training

in the Gulf region.

KEY TRAINING AREAS

NAIZAKLEADER IN CLASSROOM BASED TRAINING

Naizak Saudi Arabia8th Floor, Khashoggi Building

Dhahran Street, Al Khobar

P.O. Box 4

Zip code: 31411

Tel: +966 3 8892085

Fax: +966 3 8892086

Email: [email protected] / [email protected] www.naizak.com/training_education.html

Naizak UAESuite 306, Building 1,

Dubai Internet City,

P.O. Box 502315,

Dubai, U.A.E.

Tel: +971 4 391 1165

Fax: +971 4 390 9540

Naizak.indd 1Naizak.indd 1 17/6/09 15:34:0417/6/09 15:34:04


SAM. Just like any other telecoms operator, the magnitude of infor-

mation we are required to process and maintain is very large, hence

we have applied the proper technologies that can assist us in achiev-

ing our goals for maintaining the information. The challenge does not

stop here however, as the business is growing exponentially. Despite

the economical recession, we always fi nd ourselves demanding more.

We deployed SAN (Storage Area Network) fi ve years ago along with

the right quantity of processing power required. We are currently

moving towards consolidation and virtualisation of the servers to

minimise the systems management effort.

Shoveling such a large amount of data requires the right network

architecture which is why we adopted the SONA (Service Oriented

Network Architecture) whereby, the IT infrastructure is segmented in

such way that the right service is deployed within the right domain to

the right user segment at the right bandwidth. We are still pursuing

new technologies in that regard in order to maintain an edge over

the competition, which is an ongoing challenge. In terms of storage

we started with megabytes then gigabytes and today we’re talking

about terabytes. I’m not sure what comes next. Another challenge is

that things change very rapidly. Coping with these changes is becom-

ing more challenging than adding storage.

How big an issue is IT security for Qtel and how is it combating this?

SAM. Confi dentiality of information is not just an IT matter, it is en-

graved in Qtel’s policies. Gaining customers’ confi dence implies that

all information pertaining to customers must be maintained with a

great deal of confi dentiality. We also worry about how solid our sys-

tems are when it comes to performing against any malicious hacking

attempts, and hence a reasonable degree of protection has been

applied, that we review regularly. We have also recently awarded

the ISO27001 certifi cation that we are

planning to maintain and enhance for a

long time.

What business continuity challenges

does the company face?

SAM. The main challenge we face is

that the business is so dynamic. Things

change so quickly and this always puts

pressure on the IT resource to meet

these ever changing demands. Often as

the business changes, projects are no

longer available and new projects come

on board in their place. These projects

span multiple systems and some of

those systems are not part of our disas-

ter recovery plan (DRP). This is going to

be our weakest link so we ensure that

we regularly revisit our DRP and make the necessary changes to it to

include those new projects and systems. We also have to ensure that

the people working in other parts of the organisation are aware of the

importance of the DRP and this has to be addressed as new projects

come on board.

In order to do this we are trying to improve on our processes so

that things won’t be delayed and to unify our IT systems so that they

are common to all business operations. We are

trying to come up with some standardised ap-

plications for standardised IT services across

the group. But I don’t think we are going

to see something tangible in the next two

years. When you talk about consolidating IT

systems, there is a cultural side to it. People

do things differently in some markets where

people operate. One of the most successful

technology deployments we have had was the

deployment of a Service Orientated Network

architecture from Cisco.

How much is being invested to improve Qtel’s

IT systems?

SAM. On the technical side IT makes up 20 per-

cent of Qtel’s total domestic capital expendi-

ture budget. This is substantial compared to

20 years ago when we used to spend peanuts. Today we spend almost

2000 percent what we used to spend in the past.

What systems does Qtel have in place to successfully and securely

store the large quantities of customer data it holds?

“In terms of storage we started with megabytes then

gigabytes and today we’re talking about

terabytes. I’m not sure what comes next”



IT security is a key aspect of most organisations today. Could more be

done by businesses in the Middle East to protect themselves and their

networks?

Mahesh Vaidya. None of us would want our company making headlines

for the wrong reasons, especially regarding a breach of extremely sensi-

tive information. These breaches can be extremely expensive and even

embarrassing. There have been very well publicised incidents of these

breaches in the Middle East in recent times.

The Middle East might be slightly behind the Western world in imple-

menting sophisticated information storage and security solutions.

It is still seen as a technological issue in several companies and

processes and people related aspects within the IT function are not

given due importance. However, the situation is changing and the

banking industry is ahead in terms of having a better understanding

of information, storage and security. In

the absence of any regulations this issue

is likely to continue as an afterthought for

most organisations.

Nigel Hawthorn. Initial security threats

were aimed broadly worldwide and they

were often targeted at US internet users.

Now we are seeing threats that are ever

more specifi c and addressed to individuals or specifi c organisations

and countries, including in the Middle East. We can’t assume ‘it’s not

happening here’ and turn our heads away from the problem. Middle

Eastern organisations need to look at phishing and spyware as well

as hackers. Many threats are based on fi nancial gain and as the world

economy stumbles, more people may be drawn to internet-based fraud,

and so the threats increase.

What would you say are the main challenges organisations face today

when keeping networks secure and warding off dangers?

NH. There’s been a lot of talk about hackers getting into organisations

and outsiders are certainly a problem. However as we know, most

fraud is conducted with the knowledge of someone inside the organi-

sation. We need to ensure that we don’t allow disgruntled employees

to cause damage to the organisation or

external attackers to use lax security or

social attacks to hit at our weakest point.

It’s amazing how successful a phone call

saying ‘this is the head offi ce IT group, we

have heard of problems with your network

access, can you tell me your password

please?’, can be. So organisations need

to train staff to recognise the potential

Blue Coat’s Nigel Hawthorn and ISIT AE’s Mahesh Vaidya give their verdict on

what Middle East companies can do to protect themselves against cyber threats.

The

security safety net

HEAD TO HEAD DISCUSSION

“The banking industry is

ahead in terms of having

a better understanding of

information, storage and

security” Mahesh Vaidya

HeadtoHead.indd 52HeadtoHead.indd 52 18/6/09 08:31:0418/6/09 08:31:04

Bluecoat.indd 1Bluecoat.indd 1 17/6/09 15:28:3417/6/09 15:28:34


can be implemented. But before that, the organisation needs to

defi ne policies about who can access what types of data and (as

before) train staff to recognise the dangers lurking on the web.

Do you have a recent example of where your services were im-

plemented successfully for an organisation in the Middle East

and what the outcome was for the client?

NH. One interesting example is Woods Bagot, the architects

who designed Dubai Waterfront properties, who used Blue

Coat’s WAN optimisation solutions to allow employees to share

content globally. They reduced WAN bandwidth by 60 percent

while speeding up delivery of Microsoft Sharepoint 300 times

and CAD fi les 50 times. A further unplanned benefi t was man-

agement meetings, which can be conducted via videoconfer-

ence, saving US$120,000 in travel costs (and a lot of wasted

travel time) each time senior management meet.

MV. Yes, we have recently completed an Information Security Manage-

ment System (ISMS) audit for a large enterprise in Abu Dhabi. This

helped in uncovering gaps in both technical and non-technical aspects

affecting the security of the company and developing a roadmap to-

wards implementation of a secure information infrastructure. Tools

like the risk radar charts and heat maps helped to depict their security

landscape in an easy to understand but comprehensive manner. We also

implemented the fi rst electronic tape vaulting solution for a major bank

in the UAE. The backup data is electronically moved between sites using

sophisticated inline deduplication technology. This eliminated the risk

of physically moving tapes between sites. We have also implemented a

‘storage as a service’ solution for another fi nancial institution whereby

they are backing up remotely to our partner data centre. This helped

them eliminate the exorbitant costs of disaster recovery by having their

data in an extremely secure location with the highest SLA’s but in a very

cost effective manner with a pay as you go subscription based model.

threats as well as introducing policies and technology that can look

for inappropriate use of data or accessing applications or websites

that may harbour threats.

MV. IT governance, risk and compliance, confi dential data leakages, un-

authorised intrusions, viruses and worms still continue to be a problem.

Incorrect/incomplete processes and limited end user awareness is also

a problem in several companies. ISIT is adept in the use of information

security standards, such as ISO 27001 and having a thorough under-

standing of these guidelines helps us to position ourselves as a trusted

advisor to our customers and to help them overcome these challenges.

How can companies protect themselves in today’s climate where stor-

age devices are becoming smaller and the risk of staff walking

off with confi dential data is growing?

MV. We have a set of data loss prevention (DLP) solutions, which

are creating quite a vibe in the market, especially in a business

climate where lay-offs are commonplace. DLP technology, for

example, can monitor and sometimes block employees as they

try to send, modify or copy potentially sensitive data. We also

have a range of solutions for remotely backing up data even

over low bandwidth links using technologies like deduplication

and encryption. Data on laptops can also be confi gured to self-

destruct in the case of theft of the device, hence minimising the

risk of data loss.

NH. Remote workers can use similar technologies to those inside

the organisation (such as web fi ltering against phishing sites and

downloading spyware), in addition technologies that lock down

PCs and restrict the use of RAM sticks and even remote printing

Blue Coat’s Nigel

Hawthorn has over 25 years

experience of computers,

security and networking.

He has a strong technical

background, has presented

at security, e-commerce

and networking forums

in over 50 countries and

contributed to a number

of computing books on

protocols and security.

Mahesh Vaidya, CEO of

ISIT AE has two decades of

experience in the industry

and has been a pioneer in

bringing innovative solutions

to the Middle East to help

customers store and secure

their digital assets. He is

also the Chairman on the

SNIA Europe ME committee.

“Most fraud is conducted with the

knowledge of someone inside the

organisation” Nigel Hawthorn

HeadtoHead.indd Sec1:54HeadtoHead.indd Sec1:54 18/6/09 08:31:0818/6/09 08:31:08

ISIT.indd 1ISIT.indd 1 17/6/09 15:31:3317/6/09 15:31:33

Graham Titterington, Principal Analyst at Ovum, dissects

the latest trends in IT security.

THE SHIFTINGSECURITYLANDSCAPE

IT security remains a hot topic for businesses and IT profession-

als alike. It has consistently been close to the top of the league

table of IT managers’ concerns and it is evolving at a rapid rate.

The IT security industry is developing new types of products

and services in response to new business requirements and the

deteriorating threat scenario, while changing how it delivers them.

We will look at these factors in turn.

Business requirementsThe loudest call from business to the industry has been for

help in meeting the myriad range of legal, regulatory and compli-

ance demands it faces. These require a business to secure its infor-

mation, and to be able to show that its information is secure. The

Payment Card Industry (PCI) standard has had a particularly large

impact because it affects every organisation that handles payment

cards (that is virtually every organisation) whereas other regula-

tions have been more limited in their scope. The walls around a

business are coming down. More business is being done over the

internet, as opposed to simply using it to communicate and supply

information. Internet-facing processes are performing automated

transactions without human involvement. Employees are spending

more time working outside company premises. Telephone calls

often go over the internet and mingle with data traffic. Web 2.0

technologies are making it possible for outsiders to work with cor-

porate data systems in a more interactive way, and to push data

into these systems. The challenges of Web 2.0 are still not fully

understood. Businesses are also becoming more concerned about

the damage that can be done to their commercial operations and

reputations through data leakage, or indeed by any visible security

failure. These risks are increased by the poor economic climate in

which cutbacks can disrupt operations and lead to demoralised or

disaffected staff.


ANALYST VIEWPOINT

Ovum.indd 56Ovum.indd 56 18/6/09 08:31:2218/6/09 08:31:22


A hostile worldThe world, which is here represented by the internet, is a hostile

place. Hacking has been transformed from a kind of sporting contest into

a mainstream criminal activity driven by fi nancial gain. The cyber criminal

world is large and highly organised. There is really no such thing as cyber

crime, but rather the criminals have found new ways to perpetrate lots of

old world crimes on a larger scale. Law enforcement is

hampered by the technical complexity of detection, the

speed at which the criminals can change their strategy,

and the international nature of much of the activity.

Attacks are growing exponentially in both volume and

sophistication.

The defenceIt is not surprising that the need to satisfy external

regulators, to adopt new technology without incurring

undue risk, and to stand up to more ferocious attacks is driving the secu-

rity industry to offer new types of products. The days when security could

be equated to a fi rewall and an anti-virus product are sadly long gone.

The ‘hot’ areas where interest is growing most rapidly are:

• Data leakage protection: Technology that detects, blocks or con-

trols sensitive information that is moving around or leaving corporate

networks. While most data leakage incidents are caused by mistakes

rather than malicious intent, the consequences are often similar.

• Application protection: The opening up of IT systems to external use

is causing the focus of protection to shift from the network to applica-

tions, data and servers. Application protection is being enhanced both

by placing greater attention on developing applications that are inher-

ently secure, and by using an ‘application fi rewall’ to fi lter communica-

tions going in and out of the application. SQL Injection attacks through

database applications to steal corporate data are still one of the hackers’

favourite weapons. Applications can be made more secure by improved

development processes such as those that have been published by lead-

ing ISVs, by using code analysis tools to check for bad coding practices,

and by adding security testing to the pre-delivery QA procedures.

• Protecting mobile devices that have been lost, including laptops:

Two complementary approaches are enhanced access control and

encrypting data that is stored locally on the device – and indeed on

removable media.

• Security audit services: ‘Penetration testing’ services in which the ser-

vice provider tests its client’s defences by simulated attacks, are required

by the PCI standard and are therefore a growing area of activity.

• Activity audit and log analysis: You cannot eliminate all secu-

rity breaches, but you can detect them when they occur. Computer

systems produce log fi les containing millions of events each day.

Automated tools can sift and correlate these and show what has

happened at a meaningful level, as well as raising alerts in real-time.

These tools are enjoying increased use, both as a specifi c require-

ment of some compliance regimes and as the ultimate check on

information security.

Delivering information securityThe evolution of the supply side of the industry is as rapid as its

products. Maturity is bringing commoditisation to the more estab-

lished product areas such as network protection and anti-malware.

An extreme example of this is Microsoft’s intention to make some of

its anti-malware products free. The vendors are consolidating and

we expect to see acceleration in this

process in response to the economic

downturn. Security is moving out of

its silo and over the last few years we

have seen the big IT vendors buying

companies to increase their range

of security offerings. This is largely

the result of realising that secu-

rity depends on good management

practices in the wider sense and it

is therefore sensible to integrate se-

curity planning into IT management.

This view is consistent with leading management frameworks such

as ITIL and COBIT. Finally we are seeing a trend to deliver security

as a service rather than by selling software products or hardware

appliances. Remotely managed services are provided by the security

vendors, but will increasingly be delivered by ISPs and telcos. They

provide pools of expertise and economies of scale, although at the

lower end of the scale this comes at the expense of fl exibility.

The futureEconomic crises always increase the rate of change as we shall

see in the security sector. However in a hostile world the demand for

security can only increase and we will continue to see rapid innova-

tion from a shrinking supplier base.

“It is not surprising that the need to satisfy external regulators, to adopt new technology

without incurring undue risk, and to stand up to more ferocious attacks is driving the security

industry to offer new types of products”

Graham Titterington is a Principal Analyst at Ovum,

specialising in business continuity, IT security, and

information storage. With 30 years of experience in the IT

industry, Titterington has contributed to a wide range of

Ovum research including taking leading roles in producing

reports on identity management, web services security,

business continuity, networked storage and e-business

security.

Ovum.indd 57Ovum.indd 57 18/6/09 08:31:2318/6/09 08:31:23

Cardax.indd 2Cardax.indd 2 17/6/09 15:28:4717/6/09 15:28:47

Cardax.indd 3Cardax.indd 3 17/6/09 15:28:5217/6/09 15:28:52


of audio within 24 hours. It will allow law

enforcement agencies, state security, telcos

and call centres to analyse all voice calls in

seconds – thus, searching for key words and

phrases – taking the operator/agent directly

to the point in the conversation where the

word/phrase was mentioned. Examples of

where this could be used include: to review

staff and detect business trends in an en-

terprise call centre; in a bank to detect why

customers are closing accounts; for the pur-

poses of state security where the police

have a subject under surveil-

lance, telephone calls can

be monitored, indexed

and searched for pat-

terns of speech.

Summary Voice bio-

metrics can be

adopted by

organisations

wishing for higher

levels of security

and built around exist-

ing applications. Target

markets would be banking,

telco/mobile operators and web-based

payment platforms – working with enter-

prises, oil and gas and also government.

Voice analytics is applicable to any organ-

isation wishing to search quickly on key words

or phrases in real time that could and would

compromise an organisation – both internally

and externally. Target markets would be gov-

ernment, telco/mobile operators, fi nance,

airlines, oil and gas, legal or any organisation

with high call volumes that rely on contact

centres for customer engagement.

Voice biometrics and voice analytics – the road ahead

The latest authentication technologies bring major security and business benefi ts says Vim Vithaldas of Datapoint.

Datapoint’s expertise lies in using voice

biometrics and analytics to enable se-

curity strategies designed to eliminate

fraudulent commercial activities such as iden-

tity theft, credit card fraud and money laun-

dering. Security services such as the police,

Ministry of Defence and border controls also

benefi t from these technologies by using them

for security clearance and tracking the voice

component of phone calls and video footage

for content analysis and identity verifi cation.

Voice biometrics is unique within the

broader family of biometrics technologies in

that the person being authenticated does not

need to be present for the purpose of identifi -

cation and verifi cation. This makes it a perfect

solution for any organisation that needs to

allow employees, partners and customers

convenient but secure access to confi dential

data. For those with the need to develop the

highest level of security such as banks, voice

biometrics is a key component in striking

the right balance between risk and customer

convenience. Speech analytics is another

powerful voice- based solution that has

transformational potential for any organisa-

tion that needs to identify and respond to the

embedded intelligence usually locked within

call recordings that are typically collected in

customer service or security environments.

Phonetics-based speech analytics has the

ability to process recordings at extraordinary

speed and therefore opens up the opportu-

nity for extensive mining of archival material

to pinpoint any combination of keywords that

are contained in the voice records.

Voice biometrics and the fi nance sector

Customers wishing to enquire and obtain

information from telephone banking today,

have to navigate through multiple passwords

and pin numbers. With voice biometrics, not

only can we save call centres time and money,

we can also ensure customers get access to

their accounts effi ciently and securely by using

their ‘voice’ as a method of security. However,

one of the most compelling value

propositions in this example

is the ability to wipe out

identity theft and fraud.

Your voice is unique to

you and there is no

way you can bypass

the voice biometric

footprint. An annual

subscription to such

a system costs any-

thing from US$1-$10

per year, which enables

the system to pay for itself

within months.

Voice biometrics and state securityGovernment and security business drivers

could be:

• Border control & E-Gate

• Stop and search

• Attempts to illegally enter a country

• Entry into Hajj or Umra

The benefi ts of voice analyticsOur leading voice analytics solution

has the ability to index over 38,000 hours

Vim Vithaldas is the Chief Executive of Datapoint. He joined the board of Datapoint in 2003 as CFO and became the CEO in 2005. Since then, Vithaldas has grown Datapoint organically and by acquisition whereby it now is one of the largest telephony systems integrators in Europe. Vithaldas has a background in law and chartered accountancy. Prior to joining Datapoint, he was responsible for raising fi nance in the housing industry.

INDUSTRY INSIGHT

Data Point.indd 60Data Point.indd 60 18/6/09 10:22:2018/6/09 10:22:20


Asenior BCM executive for one of the UK’s leading retailers has a

comment he often uses when people like me try to make the sub-

ject too complex or too academic. He says BCM really should

stand for “Basic Commonsense Management”. I have been re-

minded of this comment, made by Steve Mellish, Business

Continuity Manager of Sainsbury’s, many times during the past few months

as horror after horror has unfolded in the world’s leading fi-

nancial institutions.

I am not so naive as to believe better BCM would have

prevented the financial meltdown in itself, but I wonder why

basic BCM principles were not adopted by organisations as

part of their risk management philosophy. The reason, of

course, must be that banks use risk management purely as a

means of hedging financial risks whilst largely ignoring the

context of those risks. After all, it takes very little financial ex-

pertise to understand that if money is loaned to people who

have no means of paying it back and secure it against assets

that have very little chance of realising the amount loaned on

them, there will be a problem somewhere down the line.

It also takes no great insight to understand that if you

let highly intelligent but totally inexperienced mathematics graduates design

a theoretical risk model that pertains to show that if you parcel up bad risk and

move it around the world quickly enough it becomes safe, you might have a

problem. Have top bankers, government regula-

tors, central banks or even their political mas-

ters never played ‘pass the parcel’ or had to

gently discourage their newly grown-up

children when they suggest they

should re-mortgage the house and

gamble the proceeds on a spread

betting website? Apparently

not, because that is exactly

what they have done in their

professional lives.

Business continu-

ity might not be as in-

tellectually challenging as risk management or as boringly grandiose as

much of the box ticking that claims to be corporate governance.

However, if we believe Mr Mellish, it is doubtful if the application of basic

commonsense (aka business continuity) would not have spotted these

systemic problems and addressed them well before the dire financial con-

sequences crystallised.

BCM is not a tangible commodity, so it can be dif-

ficult to understand the full benefits of the concept.

To see these benefits you only need to look at exam-

ples of poor planning. In the 1993 World Trade Center

bombing, out of the 350 enterprises affected 150 en-

terprises went out of business. Years later, after 9/11

is some large businesses had learned lessons – Morgan Stanley,

Cantor Fitzgerald and American Express were able to resume business

quickly whilst other failed. However, what is generally forgotten about

9/11 that of all the companies affected the vast majority were small

businesses relying upon the big name companies’ employees for their

trade. It has been reported that of these small businesses, over 70 per-

cent never opened again.

The same anonymous BCM global manager quoted earlier summed up

an earlier attitude: “My current company is pretty enlightened in BCM

terms but in one of my previous jobs at a large global investment bank,

the Head of Treasury once told me not to waste his time on business con-

tinuity he said. ‘Every deal we make is worth hundreds of millions. We

could make or break but we know how to manage the risks. So please

do not talk to me about business continuity. I know business continuity

– when the building falls over, I’ll roll my dice and make a call then!’” In

a booming economy it is easy to think that sufficient resources are avail-

able to deal with anything that might happen. I don’t think many people

assume that they can buy themselves out of trouble any more. When

money is tight, you must not create situations in which unplanned large

costs might suddenly occur. The best way to insure against that is to in-

troduce proper business continuity, not pseudo-science risk models or

the endless paper trails of corporate governance. �

New age disaster planning In the face of global economic meltdown, Business Continuity Institute (BCI) TechnicalDirector Lyndon Bird, asks whether Business Continuity Management (BCM)strategies will have to change?

“BCM has everything to dowith understanding yourbusiness properly”

LYNDON BIRD

BUSINESS CONTINUITY

Lyndon Bird:5oct 18/6/09 10:44 Page 61

In David Lacey’s latest book, Managing the

Human Factor in Information Security, he inves-

tigates the growth in social networking and the

vital need for all enterprises to ensure that com-

puter users adhere to corporate policies.

“Technology security is a big issue,” he explains, “and

certainly we don’t place enough emphasis on it. In

fact, over time, the balance between whether you

need more emphasis on technology, people, or

processes does tend to shift a lot.”

As Lacey details, there have been times in the

past where the financial services sector has needed

a ‘technology fix’, but at the moment he believes that

the real problem lies on the people side. “You can’t

get a perfect solution with people,” he notes, “you

need technology as well. People make mistakes –

they’re only human. And there will always be inci-

dents arising from that.”

People can be easily fooled, for example, and

Lacey stresses that there needs to be a lot of empha-

sis on people simply because they are behind every-

thing: “People design systems: they supervise them

and they operate them. They also attack the systems,

and it’s actually people who then identify the risks,

spot the incidents and then turn them around.”

Another important factor for Lacey is the issue of

major incidences that can also be an opportunity for

organisations. “There is a lot of publicity that comes

with a major crisis,” he explains. “There is a lot of op-

portunity to transform the organisation – and it is pos-

sible that you can come out on top.”

In fact, according to research by Oxford Analytics,

shareholder values for companies that manage a cri-

sis well can actually go up quite significantly, by as

much as 10 or 20 percent. It can also go down by 10 or

20 percent if the incident is managed badly.

“The key thing with people is that we’ve been

going about the whole process the wrong way. We

haven’t learned from areas like safety, for example,

where there is a distinct no-blame culture. You do a

root cause analysis of every major incident to find out

all the different things that contributed to that, and

A human fix


The financial services sector often places much emphasis on the technology side ofthe business, but ultimately, all technology is only ever as good as the people behindit. BM speaks exclusively with David Lacey about the importance of managing thehuman element in information security.

IT SECURITY

DAVID LACEY Q7:apr09 18/6/09 10:28 Page 62

you fix them. The safety field also realises that behind every major incident,

there are, on average, 29 minor incidents, 300 near misses and thousands

of bad practices.”

This is something that currently isn’t being done in the security field.

Here, professionals wait for a great big incident and then carry out a knee-

jerk reaction where a lot of money is spent to try and stabilise the crisis. “If

you’re instilling the kind of blame-culture where everybody knows if they do

something wrong, they’re going to be immediately disciplined and punished

severely, then that’s the wrong kind of culture to promote. Behind every inci-

dent, there are many causes. It’s never just down to a single person and that

becomes a big distraction in tackling the root causes of such crises.”

Lacey identifies that incidents are often the fault of varying layers of re-

sponsibility, and he stresses that organisations need to understand that

people are going to make mistakes. He even notes that it is often the best

staff who will make these mistakes because they are working harder, for

longer hours and are under more pressure – particularly during this reces-

sionary climate where layoffs and cutbacks result in harder work schedules

for those left behind.

“If staff are working too hard,” Lacey explains, “they are more liable to

make mistakes. If they’re not supervised properly then that’s another fac-

tor, and if they’re not trained properly or aware of the risks then that poses

another problem too.” He also adds that badly designed systems, that are

neither user friendly or ergonomic enough also play a role as a root cause

of an incident happening.

Bolster your defenceInsider threat is another major issue, and people processes are be-

coming more and more important because of networking and its use in the

workplace. “Networks connect people, and with the growth in social net-

working, you’ve now got a collective power of

people to do things which they never could do

before and therefore make mistakes on huge

scales that they could never do before either. All

of the centralisation of power and the powerful

access an individual can have encourages insid-

er threats and encourages external attempts to

manipulate people inside. Because of this, there

are some really severe things going on.

“The problem with insider threat is that it’s

very hard to actually differentiate a potential

crook from a high-flying, effective manager. They

both show the same characteristics of being de-

termined, competitive, ruthless, aggressive and focused, and therefore it’s

often the case that fraudsters do well within an organisation.

“Having said that, there are things you can do to bolster your de-

fences,” Lacey continues, “and these include more rigorous background

checking when recruiting people.” He also notices that organisations don’t

do enough in terms of disciplining and encouraging people not to commit

crimes, because everyone who commits a fraud tends to justify it to them-

selves. “Fraudsters have to rationalise why they did it, and they often be-

lieve that they did the right thing. Evidence shows that even serial

murderers think they did the right thing for society. That’s how they live with

their actions.”

Lacey believes that if organisations allow people to get away with the

small things – like someone browsing inappropriate material and nobody

doing anything about it – it creates a climate that is encouraging people to take

that one step further and commit a fraud. “People will only do something

wrong if they can justify it to themselves in some way and if they believe they’re

going to get away with it. What we tend to find is, ‘acceptable use policies’ are

absolutely worthless within an organisation

and, oftentimes, people just don’t know

about them, they’re badly written or are in-

comprehensible.” What’s more, they’re not

communicated properly through training,

nor are they enforced consistently. “So every

now and then, when somebody does en-

force one of these policies, it’s always a

shock to the organisation, and it shouldn’t

be that way; people should know what the

rules are, they should know exactly how far

they can go, and they should know that they

will be enforced consistently.” �


MANAGING RISK

David Lacey discusses the relationship betweentechnology and the human risk element

The starting point is to realise that the people who

work in security and technology don’t have any

training background on the essential sciences

that are related to how we communicate in messages. I

believe that communications need to be developed by

communications professionals, not technology

professionals, it’s much cheaper to hire a journalist than

a security consultant. The question is, why are we using

security managers and consultants to develop

educational awareness material? What we need is a lot

more emphasis on getting professionals in to support

security people.

But it’s not just the psychology of communications

that we need to understand, it’s also taking on better

practices that prove to have longevity, like those within

the safety field. And we, as security professionals, could

learn so much. There’s almost a whole culture of

reeducation that’s required in the area.

David Lacey is a leading authority on

Information Security management with

more than 25 years professional

experience, gained in senior leadership

roles at Royal Dutch/Shell Group, Royal

Mail Group and the British Foreign &

Commonwealth Office. Lacey is now a

freelance director, researcher, writer and

a consultant to organisations, venture

capitalists and technology companies.

“Behind every major incident,there are, on average, 29 minorincidents, 300 near misses and

thousands of bad practices”

DAVID LACEY Q7:apr09 18/6/09 10:28 Page 63


Development in information commu-

nication technologies has brought

about an accelerated information

explosion and huge change in how

information is being produced, processed,

stored and communicated. Information is

now being made available in digital format

accessed via electronic networks such as the

internet, and being stored or preserved in

digital archives. In addition, digital informa-

tion can be manipulated and disseminated

very easily. Such forms of development

have resulted in major concerns about the

protection of digital information sources.

We will examine some key trends we are

witnessing today and challenges organisa-

tions are facing to protect information from

being stolen, disseminated inappropriately

or misused. We will explore how technology

can help secure information, and how indus-

try has been benefi ting from the security

tools, standardised policies and practices.

The utility of security toolsWe will examine the utility of several cut-

ting edge technology tools like Data Auditing

& Protection (DAP), Data Leakage Prevention

(DLP) and End Point security implementation

and understand how they can help protect

or prevent data theft. DLP is a cutting edge

technology that monitors and prevents

known content from leaving the edge of the

enterprise via emails, web, or IM-type ap-

plications. Newer versions of DLP have also

started monitoring desktops and laptops to

understand the type of data stored and track

its movement to the edge. In contrast, DAP is

a data centre technology that monitors how

data stored in databases and fi leservers is

being accessed, to track and alert on data

breaches. Data auditing is helpful for moni-

toring and detecting when data breaches

result in a loss or theft – mostly from critical

databases that house customer or fi nancial

data. Data leak prevention monitors confi -

dential data leaving enterprises, typically via

email. For most enterprises, both technolo-

gies are needed, but it is worth examining

the relative value of the technologies.

DAP can understand when a user ac-

cesses and retrieves sensitive content from

the source such as a database. DLP can moni-

tor when the content leaves the enterprise,

for example when the user emails the content

from his/her PC. In most of the recent data

theft incidents, data theft did not happen via

email leakage but by users who hacked into

the database or had credentials to access

the database. Such users could then carry

out the data via disks, tapes, or PCs. DLP

cannot solve this problem effectively since

it may not have visibility into how data was

accessed. DAP is intended to address this

visibility hole. Additionally, fi nancial or credit

card compliance regulations require visibility

and auditing at the stored data level – a capa-

bility provided naturally by data auditing.

Future trendsSuccess in business will also be defi ned

by the ability to protect business information

despite volatile situations posed either by

internal or external threats. Our consultancy

teams often report that non-adherence to

compliance standards is a niggling issue. In

most instances, there is little we can do, as

compliance standards are not yet mandatory

in some organisations that we consult with.

We are making an effort to create aware-

ness. I am sure that internationally accepted

standards will soon be making their way into

several work spaces across the Middle East

region.

Information lockdown

Mohammad Mobasseri is the Senior

Manager at Comguard FZ-LLC. He has

more than 15 years experience of high-

technology in IT Security for consumer

and enterprise experience, holding key

positions at several start-ups in the ME as

Business Unit Director.

MOHAMMAD MOBASSERI

Protecting your data from internal or external threats will dictate whether or not your business succeeds.

ASK THE EXPERT

“Digital information can be manipulated

and disseminated very easily”

Commguard.indd 64Commguard.indd 64 18/6/09 10:16:1518/6/09 10:16:15

Comguard.indd 1Comguard.indd 1 17/6/09 15:29:0817/6/09 15:29:08

When Vint Cerf speaks about the web, people

sit up and listen. Widely thought of as the

founding father of the internet, Cerf, along

with research partner Robert Kahn, designed

the TCP/IP protocols that govern data transfer

across the net along with its basic architecture.

In 2005, the pair re-

ceived the highest civilian honour bestowed

in the US, the Presidential Medal of Freedom

– recognising the fact that their work on the

software code put them “at the forefront of

a digital revolution that has transformed

global commerce, communication and enter-

tainment”. For many, Cerf is as close as you

can get to internet royalty.

However, it’s a title he’s reluctant to

accept. “The internet has many fathers;

there are lots of people who’ve contributed,”

he says. “This is very much a collaborative

effort, and over the history of the internet

you’ll fi nd that tens of thousands – maybe by

this time, hundreds of thousands – of people

have contributed over the years. This is one of those wonderful ideas

where everyone has an opportunity to contribute – and they do! And

that’s the real magic and power of the internet. It’s an open environment

that everyone has an opportunity to share in and to contribute to, and

that’s exactly what’s happening.”

Indeed, the idea of openness and collaboration – and of sustaining

the internet as an open network for consumer choice and innovation – is

a subject close to Cerf’s heart. “Google believes in a very open internet

environment,” he explains. “One where everyone has the opportunity

to try out new products and services without discrimination. We also

believe that you have a right to know exactly what you are getting. Sup-

pliers of internet service need to be clear about

expected performance and what you are paying

them for.”

In Cerf’s view, the internet should be an egali-

tarian entity used by anyone and everyone, one

where suppliers of the service are unable to dis-

criminate against a user merely because of who

or where that user is. “We are arguing that the

internet should be nondiscriminatory in terms of

its access, although we accept the argument that

for larger capacity you may have to pay more,” he

says. “What we are after is an open environment

where both consumers and suppliers of applica-

tions are treated fairly.”

InvestmentNaturally, in order to attain the open environment that Cerf is so

keen to see happen, the infrastructure itself needs investment. But in

a tight economy, are companies in the mood to invest in internet infra-

structure? “We have a situation where the incentives for companies

providing internet access are distorted by a natural desire to maximise

INNOVATION

Cerf’s upIn an exclusive interview, Vint Cerf,

internet pioneer and current Vice President and Chief Internet Evangelist for Google, explains why infrastructure

development is more important than ever in a tight economy.

“The internet should be

nondiscriminatory in terms of its access”


VintCerf.indd Sec1:66VintCerf.indd Sec1:66 19/6/09 09:39:5319/6/09 09:39:53


their investment to the detriment of innovation,” concedes Cerf. “I think

we need to provide adequate incentives for all parties, those providing

underlying facilities and those providing value-added services, to have

fair and nondiscriminatory access to the underlying bit-carrying capac-

ity of the internet. Monopolising provision of service does not produce

innovation; in fact, it sometimes inhibits it. People want to know why

they should invent a new, less expensive solution when they are able

to charge more money for their service by sticking with the old way of

doing it.”

However, Cerf sees innovation as critical to long-term prospects,

and as a result insists there must be some kind of incentive for investors

to create the appropriate infrastructure. He believes that there will cer-

tainly be opportunities to fi nd ways to invest in infrastructure, particu-

larly in light of the current fi nancial crisis. “Perhaps there are subsidies

that could be provided? Maybe there are other tax benefi ts that could

be provided? What we need to do is be creative about providing incen-

tives for building infrastructure, and at the same time ensure that it is

as openly accessible as possible to all parties who want to innovate on

top of it,” he explains.

He likens the shared asset to a road system – everyone drives on it

and the roads are used simultaneously by lots of different users – which

is exactly how packet switching works. “Packet switching may be a way,

like the road system, to allow people to share common infrastructure,”

says Cerf. “From my point of view, in order to create broadband access

there needs to be a fi nancial or other business incentive, whether that’s

R&D tax credits or credits related to revenue gained on new investment

– if there are ways of providing incentives to business for creating openly

sharable infrastructure, then that’s a hint of the direction in which one

might go in this current climate where at least the present legislation

is intending to provide a substantial amount of government support for

investment in infrastructure of all kinds. Creating incentives for industry

and the private sector to both build the underlying infrastructure and

then participate in inventing new ways to use it is the direction that we

want to be heading in,” says Cerf.

21st century infrastructureBut away from the development of the internet infrastructure

itself, Cerf sees great potential for expansion of internet services and

applications. For example, during the Great Depression, President

Roosevelt deliberately created a massive investment in physical facili-

ties and infrastructure in the US, and Cerf believes that there is now a

reasonable need and opportunity to do something similar in the current

climate. However, he maintains that it is of vital importance to invent

21st century versions of those infrastructures. “I want to build the 2010

version of infrastructure,” he says. “So we need to ask ourselves tech-

nologically, what kinds of infrastructure could we build? What kind of

infrastructure would create more opportunities for businesses to invent

new products and services? In Roosevelt’s case he focused on this in

the midst of horrible turmoil and joblessness; he saw an opportunity.

They say opportunity lies on the edge of chaos – maybe that’s going to

be true today too.”

Ideas for the 2010 infrastructure include ensuring that every new

mile of highway or bridge that is built has conduits built-in so that it

Vint Cerf offers his thoughts:

“Frequent speculation is that somehow as the internet gets larger

and larger and more computers with more software and more

memory fl ow into it that someday it will simply wake up and become

self-aware. I am somewhat sceptical of this, although I will say that

as we provide the internet with more and more information – and in

particular the ability to experience the world the way we do through

video cameras, microphones and sensors – the internet could

potentially have a kind of sensory system like human beings do.

“The question is, ‘How does the internet experience that

information?’ In a human being, the information is sensed through

our neural system and then goes into a neural network in our heads.

The neural networks are extremely complex, and they are quite

malleable. In fact, the imposition of sensory data into the brain

physically affects the way in which the brain evolves. The internet

could conceivably affect a similar kind of evolution, but it might

require human beings to change the software because we don’t have

self-programming systems at this stage of the game.

“I think, though – in my science-fi ction speculative moments –

that if the internet could interact with the environment in ways like

human beings interact then we might someday actually fi nd that the

internet or its successor could become self-aware. For me that’s

still science fi ction. But you can certainly see on another axis here

that – independent of self-awareness – the network and the sensory

systems associated with it can handle much more information than

any individual human being could handle and could process that

information with all the huge computing power that’s available, and

so that’s a different kind of intelligence than what you and I have.”

THE FUTURE OF THE INTERNET?

could carry fi bre. This way the road wouldn’t have to be dug up later in

order to pull fi bre along that particular length of road. Other examples

include the use of so-called Smart Grids. “For the fi rst time in history,

we may have the opportunity to not only adapt our supply of electrical

power to demand, but have control over some of the energy-consuming

devices in businesses and residences. We can communicate when to run

the hot water heater or the air conditioning in order to moderate peak-

load demand, and if we manage the demand as well as the supply, then

we may be able to avoid investing huge amounts of money in peak load

capacity that we only use two or three percent of the time. Similarly, if

we’re investing in new electrical grid distribution media, maybe that

same framework will allow us to also invest in new high-bandwidth tel-

ecommunications facilities, fi bre being an obvious example.”

It’s about exploring the possibilities, and at the end of the day Cerf

sees huge potential in terms of the opportunities the internet opens up

for the businesses of tomorrow. “I think what companies need to do is

to examine the products and services that they offer and the means by

which they make those things known to others and ask themselves how


IDSsheer1.indd 1IDSsheer1.indd 1 17/6/09 15:30:1417/6/09 15:30:14

as cloud computing that is making the difference. “Companies that are

trying to help people analyse, evaluate and accumulate their informa-

tion can take advantage of the internet – and in some cases, of what

Google offers – to help people organise their information and evaluate

and analyse it.”

The value of collaborationIt is this quality that most inspires Cerf about working for Google

– the company’s commitment to organising the world’s information

and making it accessible and useful. “That’s an honest motivation,” he

says. “It’s true. The company really believes that this is what it wants to

do, and that’s what people who work for Google want to make happen.

I’m one of them, but just one of 20,000. It’s a wonderful feeling to have

a company whose leadership believes that motto and wants to make

it happen.”

He believes one of the keys to the organisation’s success is its abil-

ity to deal with scale – particularly given

the rate at which information fl ows into

the internet, the rate at which it changes

and the rate at which Google has to keep

track of that. The ability to manage all

of that change and all of that increase

quickly and responsively is really stun-

ning,” he enthuses. “When you walk into

one of the Google data centres, which

most people are not gonna be allowed

to do, it’s awe-inspiring. The physical

scale of the facilities, and the number

of machines that are made to work

together – both the hardware and the

software – is frankly mind-blowing.”

Cerf also cites the fi rm’s internal

structure – the quality of people it hires

and their ability to work together and

share information – as important. “The

willingness to share internal information

with a fairly signifi cant part of the entire company really helps improve

its likelihood of success,” he says. “One thing I’ve learned about com-

panies that are successful is that virtually every employee, whether

they are cleaning the fl oors or the CEO and everything in between, has

a pretty good idea of how the company makes money. And if people

understand how the company works, then they can reasonably ask the

question – and I hope they do – of whether what they are doing today is

helping the company do what it’s trying to do.”

Ultimately, however, it is technology that really excites him. “For

the fi rst time in human history, computers are allowing us to magnify

and leverage our brain power, whereas in all the previous history what

we’ve done is magnify and leverage our muscle power,” concludes

Cerf. “This is a big change in our human civilisation where we’ve

mechanised something that never has been mechanised before.” And

it is this – Google’s ability to leverage the power of the human brain to

make it more capable than it ever has been in the past – that truly sets

it apart.

the internet can enhance their ability to draw attention to their products

and services – or even to deliver their products and services,” he says.

“Google is an example of this. Our business is the selling of advertising,

but the advertising is incidental to the use that most people make of

our products and services – they’re looking for information, and we try

to help them fi nd it. Take Google Maps or Google Earth, for example.

We didn’t get any direct revenue from the Google Earth or Google Maps

system, although we have advertising related to it, and if people are

there taking advantage of information that others have provided and

also can see related information coming from our advertising, people

click on the ads, and that generates revenue for us and sometimes also

for the other people who provided the information.”

Business opportunitiesAlmost invariably, improvements in technology lead to opportu-

nities in the business world – whether by making it less expensive to

provide a product or service, or by creating

entirely new businesses or industries that

nobody had ever thought of before. Cerf cites

a couple of examples.

“Look at education. Here, the product is

learning; but technology opens up new op-

portunities with regards to how you deliver

it. For many years, the way you delivered it

was by having a professor up on the podium

and students sitting in chairs taking notes.

But we now recognise that not everyone can

afford to go on a four-year course at a college

and devote themselves exclusively to that.

Nonetheless, they still have to learn new

skills and knowledge in order to maintain

the edge that they need for the jobs they’re

doing. So the university, which is providing

education as a product, needs to package

not only the four-year degree and the two-

year degree, but also the two-week special

course or the part-time MBA program. In this instance, repackaging the

product of education and delivering it through the network could be a

very powerful revenue enhancer, to say nothing of growing a market that

doesn’t exist compared to residential colleges.”

The second example is that of information sharing. “People increas-

ingly rely on information in order to keep their lives organised, whether

it’s calendars, keeping track of their stocks, or keeping track of medical

records,” he explains. “Most people probably visit more than one doctor

and have medical records scattered around on physical paper in differ-

ent offi ces. This means when someone new asks you for your medical

records, you don’t have an easy way of gathering the data. So if we had a

common ability to record our personal medical records, we could supply

that information more easily and accurately – making this information

more easily discoverable and analysable is a powerful tool.”

Google has a number of applications that help people manage this

information, such as Google Docs and Spreadsheets, and Cerf insists

that it is the increased level of collaboration provided by advances such

“Creating incentives for industry and the

private sector to both build the underlying

infrastructure and then participate in inventing

new ways to use it is the direction that we want

to be heading in”



In May, Google suffered a service outage that

led to worldwide internet slowdowns and

left millions with limited or no access to crit-

ical business functions like email. The real

story, though, is not the outage, but why a com-

pany controlling almost two-thirds of the world's

internet search traffic didn’t have a better disas-

ter plan in place, and how you can learn from its

mistakes. We live in interesting times right now.

Everyone expects complete 100 percent ‘up-

time’, but nobody has the budget to support

those kinds of expectations. In business conti-

nuity and disaster recovery, there should be con-

tingency plans put in place, but with today’s

market it is tough to find the financing to have

the redundant systems in place.

The job of a good business continuity and

disaster recovery specialist is to build a plan

(both recovery and project) that allows the com-

pany to maximise its effectiveness when there is

money and sustain it when there isn’t. Keep

reading and we’ll examine how each of these

questions are the foundation for your project

and can lead you in the right direction.

Finding the right consultantIt isn’t uncommon to be sceptical of a con-

sultant, which is why we have seen their title

change from ‘Consultant’ to ‘Managed Service’

over the years. Most people feel that a consul-

tant is simply there to punch the clock and not

exactly geared towards results, even though

they are being paid a lot of money. How do you

find a good one? Read on to learn more about

what each project should entail to ensure a good

result from your consultant.

Know your businessAs you work in, manage or own a successful

business, you already know what solutions work

best for you. Are you an ‘online’ office? Is your

entire office paperless? Is your office full of paper

and do you “need it” to operate? Or is the bulk of

your workforce mobile? The answer to each of

these questions requires very different strategies

and very different solutions to ensure the best

chance for recovery. Your disaster recovery or

business continuity plan should reflect the man-

ner in which your regular business operates.

Keep your options openAll projects are impacted by advancements

in technology and slowdowns in the economy;

business continuity and disaster recovery are no

different. Thus building a flexible recovery solu-

tion for your business is key. As with all con-

tracts, avoiding being locked into one long-term

contract with only one technology is essential. If

you are looking for a solution that is going to

grow (or shrink) with your business, make sure

your contract allows for flexibility. Any good ser-

vice provider (software or managed services)

should be able to determine a solution that

works for you. If you feel they are pushing ser-

vice on you, consider changing to a vendor neu-

tral provider.

To recap the above paragraphs, let’s outline

the major points:

• We need to do due diligence on our proposed

consultants

• Also, it is critical to have set deliverables for a

set price

• Find a solution that works for you. It can be

very simple or very complex, but make sure it

works for you

• Whatever you choose to do is better than

nothing, but it must work for you (and your

company)

As budgets are at the forefront of every-

one’s mind right now, when researching a so-

lution provider, make sure they can offer a

solution that works for your budget. There are

a lot of providers that will sell you on overkill,

but there are also a lot of providers that will

give you an excellent solution for less than you

are expecting. Find a solution that works for

you and make sure they have a good history,

they offer a flexible solution and you like them

because you might be working with them for a

long time! n

Crisis averted


How to avoid the mistakes made by Google indisaster planning and business continuity

PROJECT FOCUS

Skip Williams is the CEO of

KingsBridge Disaster Recovery.

KingsBridge’s sole focus is

building disaster recovery and

business continuity plans for your

business with its Microsoft Office

integrated Phoenix software or its

managed services.

SKIPWILLIAMS

KINGSBRIDGE:5oct 18/06/2009 09:19 Page 70

Kingsbridge.indd 1Kingsbridge.indd 1 17/6/09 15:32:4717/6/09 15:32:47

In a recent survey conducted by the Economist Intelligence Unit, 59

percent of 360 Middle East executives surveyed said they had been

prompted by the financial market turmoil to scrutinise their risk

management practices in greater detail. This demonstrates the

need for having the organisation as a whole understand the im-

portance of risk within the banking arena. Certainly within Gulf

International Bank (GIB), we’ve taken great steps to highlight

and improve the risk appreciation across the board, so we can see

the importance of getting more thorough processes in place and

more targeted technology to support those processes.

To foster a culture of risk management, education is funda-

mental from the outset. We’ve been fortunate enough that be-

cause of the crisis, people understand the need to have the

group in the corner covering risk management. But now they

understand full well the importance of that group and how it

can support both the trading function and the operational func-

tion of the bank.

A perfect fitThe IT function of managing the business need for speed and

the innate slowness of risk is done by getting the right technology

in place, right now. It’s about understanding technology that’s fit for

purpose. Too often, organisations, banks in particular, over-engineer

solutions and over-engineer the process to support those solutions, and

you need to have something far more slick and targeted to understand how

the business performs and how it wants the information available to it.

Finding the technology that’s fit for that purpose is about getting the

right people in place who understand the processes, how to measure the

risk and understand the scope of our business and what we need to sup-

port that. It’s about getting the right people educated in order to get those

tools in place. Too often, you have a salesman selling you a tool or a chief

executive reading about a technology, which becomes implemented and


LESSONS INBUSINESS

BANKING

Difficult times call for new approaches. For IT, that means getting out of the backoffice and talking business, says Gulf International Bank CIO Seb Kacary.

Seb Kacary:5oct 18/6/09 10:46 Page 72


requirements as highly as they would like you to be, yet you’re spending an

awful lot of money on upgrades and software patches, and unless you com-

municate the importance of those, they don’t adequately see why you’re

doing that. Building effective communication channels is key.

IT also needs to adapt to the corporate culture in which they live. As a

department, they are quite often working as an island to themselves and

have a view that they should be able to operate in isolation. Business does-

n’t understand what IT are doing, and think we should just be left to work

the way we should be working. But we need to look at how business oper-

ates. Are they a centralised organisation? Is it process driven? Is the com-

pany seen as a measurement company? Do they measure much more

beyond financial records? Are they risk tolerant? And so when you under-

stand that corporate culture, IT and business tend to work far more effec-

tively together.

It’s important, not only for IT but the entire banking sector, to look out-

side of itself. I try to encourage my whole team to look at best practice

then you find that it’s not fit for purpose. So you need to get the intelli-

gence in the organisation, or draft it in, in order to properly set out what’s

required and what you need to build.

From a technology point of view, one of the most important things

that we need to do is have all the requirements thoroughly mapped out and

approved, and then make sure we have a full support structure around that.

That is far more important than what may be the new technology to sup-

port the business. It’s fundamental to get the right technology in place and

have that completely supported, without having pockets of technology that

evolve from the business.

Communication Building effective communication channels is vitally important.

Without those, if you don’t communicate with the business and you don’t

let them know what you’re doing, the natural assumption is that you’re not

doing a great deal. What they typically see is that you’re not prioritising their


Reliable resourcesStreamlining functions and becoming resourceful is one way of cutting

costs within the department. It’s a similar thing that you’ll see across a lot

of organisations, that the strands we’re looking at are predominantly sim-

plification of the environment. So a lot of organisations evolved organical-

ly and found themselves supporting multiple applications and multiple

streams with similar core functions.

They turned to Reuters as having a common platform, and it’s a simi-

lar process I’ve looked to instil within GIB to drive an initiative that was

already ongoing, and pushing back a very complex network of applica-

tions that were meshed together into something that’s far better suited

to the organisation we are now, and far more direct-

ly supports what business functions we have. Also

important is looking at technologies such as virtual-

isation both from a server point of view – storage and

desktop – and having the flexibility that affords us as

a bank.

Difficult times such as these can often lead to both

customers and providers neglecting innovation. In

order to reduce impact from the financial crisis,

we’re deploying a tactic of moving away from some

of the over-engineered solutions that we had and

moving to end solutions that are inherently reliable

and robust because you build in resilience as part of

it, rather than buying very large units that are fully

resilient.

It’s more the provision of the technology rather than the technology it-

self that will flourish in these times. This will happen more if less organisa-

tions invest heavily in the bespoke applications for their sites, and far more

organisations that are our size will look to buy software as a service or an

ASP model to support their business and then look at how technology can

support the integration of those services.

StrategistThe role of today’s CIO is still in flux from technologist to strategist. I

think something that’s helped is that lot of organisations promote, pure

technologists. They no longer hit a glass ceiling at a senior developer

stage, and they can progress within the organisation. That helped stop

the Peter Principle proliferating through IT, where 10 years ago it was

very common.

across the board. A good example of this is Reuters. Since I began and held

a position there, they have evolved quite remarkably as a company – how-

ever they’ve sought to allow technical staff to progress within a technical

sphere and have that promotional capability, without them having to move

into a management role that potentially is not suited for them.

It’s important for all of IT to look at best practice outside of the IT arena.

Some of the areas I’ve looked to introduce within IT are having a proper ser-

vice management governance structure to bring in an ITO framework with-

in the bank, which has been very successful. So we’ve implemented the

processes, and now it’s implementing the tools to support those, which

we’re having the fun part of doing now.

We’ve introduced a newsletter within IT as a means

of fostering communication within the IT community. It’s

a way of IT having something that’s purely for us. We can

poke fun at some of the banana skin moments we have

within IT; we can applaud good work. But we can also

foster that communication across the organisation.

SecurityFortunately, the issues we have faced in convincing

management to follow us with our ideas have not nec-

essarily been true for us in terms of security. There’s

been enough press and media attention related around

issues of our IT security function and the lapses in se-

curity, and the effects have been positive – it’s almost

done the job for us to a certain extent. It’s certainly not

easy to get the funding for these initiatives, but there’s enough profile with-

in the business now, and I’d imagine it’s similar in other organisations, that

as long as we can justify and show the benefits it’s bringing to security, then

we often have the approval to proceed.

From a security point of view itself, we no longer have issues – they’ve

pretty much recovered from the early initiation of software as a service,

where that was an obvious flaw. That box has been ticked now. However,

software as a service doesn’t provide what we’re looking for, in terms of cus-

tomising the applications. You need to integrate the customisation of the

application, and that’s where we would struggle and any provider would

struggle to support us as a bank. You almost need a larger bank providing

services to smaller banks like us, or us engineering our solution and being

a profit centre rather than a cost centre, being a software as a service

provider to other banks.


“The problem is that people only really hearof the IT projects that fail, first off. If youwent to most organisations, the vastmajority of IT projects succeed, and typicallythey are within budget and within the agreedtime scales”

Seb Kacary

“The role of today’s

CIO is still influx from

technologist tostrategist”


I strongly feel that the path that CIOs are

following more and more now, is one where

they’re becoming much more strategists than

they are pure technologists. Along that path

they need to pick up far more business knowl-

edge, business education and look to stretch

themselves a bit more. They are no longer look-

ing at technology with their head down and

only concerning themselves with providing a

good technology solution, but are looking more

at how the business is supported by that tech-

nology. And that’s what I think is becoming far

more important.

Whether technologists have that experience

comes down to whether each company wants

their CIOs to focus purely on technology, which

isn’t a bad thing – in the right situation and with

the right people, they’re serving their best skills.

However, what we need to do is to move the IT

function to work better with the business. You

need to have more of a strategic overview, and I

think it does come down, to a certain extent, to

education, having more business education

amongst IT.

Something I’ve introduced within GIB is hav-

ing business talk directly to IT, which has gone

down very well. It’s about having the opportuni-

ty for IT to listen to the people that are conduct-

ing the business and are on the trade floor

talking about future plans, talking about how

well the business is doing, talking about issues

that they have, both with technology and outside

of the technology remit. It helps IT appreciate far

more exactly what business is all about and think

of new ways in which we could offer solutions or

offer products that we could market within the

organisation.

You can always work to improve the gap

between IT and sales – it’s mainly down to com-

munication across the teams. It has suffered and

still does suffer from the fact that you typically

don’t have a seat on the board, as this is typical-

ly allocated through a finance, marketing or sales function, not IT. However,

that view is changing more and more, and IT is getting more representation

at a senior level because fundamentally it’s core to a lot of what business-

es do now. From a sales function, it’s important in that there are channels

of sales, be it effective internet for example, that IT could use to help the

sales function deliver the message far more cleanly and efficiently.

The problem is that people only really hear of the IT projects that fail,

first off. If you went to most organisations, the vast majority of IT projects

succeed, and typically they are within budget and within the agreed time

scales. But you can’t get away from the fact that certain high-profile pro-

jects do suffer and are widely reported.

My view of project work is that the time spent upfront is the most im-

portant time in any project, and that helps the project be a success. Too

often with project planning and initiation, people try to cut corners, and

they try to rapidly produce a business case or forget about the business

case. So it’s getting back to the basics, back to what we need to imple-

ment, and to know what you’re implementing or the success criterias of

what you’re implementing, a robust project team and project governance

must be in place.

Most importantly in any project is communication. If those channels

aren’t built and you don’t have a proper communications plan, you’re ulti-

mately going to fail. �


IT and operations are often one of the

first areas that the organisation will look

at to cut costs. When you work in IT, you

always see yourself as being one of the

areas that will be approached first when

there is a financial downturn. Sometimes

that helps lead to an element of distrust

between business and IT. That’s part of

my role – to try to build those bridges

and eradicate the distrust that’s created

by that. But from the heyday we had a

decade ago, IT has been trying to rein

back the costs and the over-engineering

that has been put in place across a large

number of organisations. From a

structural point of view, we’ve completed

an exercise to help contain the costs

from a resource point of view, and now

it’s really looking at further instilling a

strategy across our technology that not

only makes us more agile, but also can

contain costs.

Historically, business and IT have

elements of distrust. IT didn’t do

themselves any favours from Y2K and

the fiasco that was, and a lot of

business representatives haven’t

forgiven IT for that yet. What’s

important in building that trust and

building those bridges is really laying

out to business representatives exactly

what services we are providing for

them. A key part of that is to build

SLAs into what you deliver to the

customer without being too regimented

into how you dictate those. However, if

you’re leaving yourself open to the

service you provide, you’re really

leaving yourself open to failure as far

as business is concerned.

FEELING THE PINCH


ITS1.indd 1ITS1.indd 1 17/6/09 15:31:4817/6/09 15:31:48

ITS2_content.indd 1ITS2_content.indd 1 17/6/09 15:31:5917/6/09 15:31:59

slowing down. We’ve seen some of the Tier One

banks such as HSBC, Citibank and ABN Amro, all

establishing Islamic windows in their opera-

tions.” The ITS development centre is in Cairo.

We have about 1400 software engineers there.

We’re the only CMM level five software organi-

sation in this part of the world. What we’ve done

is put several products together whether they’re

ours or third-party, and re-packaged them as

one solution, which we call Ethix Financial

Solutions. The focus is on ethical banking, which

is the new term, really that is starting to be used

for Islamic banking. This way it can cross the bor-

ders of the Western community.

Unique Sharia complianceThe nature of Islamic banking means that

every bank interprets what rules there ought

to be. The problem that causes is that it

makes building a rigid IT platform to adminis-

ter all the different versions very difficult.

However, ITS welcomes diversity: “We don’t

believe there will ever be a standard, and I be-

lieve that if there was one it would defy the

whole point of an Islamic bank. I don’t think

you could come up with a standard, for exam-

ple, of how Murabaha [a type of sale compli-

ant with Sharia, involving a declaration of the

seller’s fixed costs, to be added to the price] is

defined,” says Abdou.

What ITS has done, is create an Islamic

platform which represents the underlying

principles of Sharia. This then allows the

client bank to define its own products from

the ground up, from an accounting point of

view, a product point of view, a line of busi-

ness point of view, how the particular bank’s

Sharia board wants to see it done and define

the workflow completely from scratch.

ITS is preparing to market the product glob-

ally, and has now had its name registered

around the world as a trademark. “Even con-

ventional banks need to be more ethical,” says

Abdou. “There are many components that fall

under the Ethix brand, such as Ethix – finance,

Ethix – Branch, Ethix – invest, Ethix – Ledger:

overall there might be 25 different products

under that banner. The good thing is, you don’t

have to purchase all of that, they’re all compo-

nents in the suite.” �

With the Western banking model look-

ing pretty rough after a year of col-

lapses and crises, even Pope Benedict

XVI recently urged financiers to look at the

Islamic system, where bankers are automatical-

ly more risk averse because they share the risks

with the customer. This shows that Islamic

banking is now ready to be re-branded as ethi-

cal banking, a system that could find new cus-

tomers in the Western world and elsewhere, as

well as its traditional home in the Islamic world.

The new focus on Islamic banking in the

West comes just as ITS prepares for a global

roll-out of its latest suite of banking solutions,

called Ethix.

Going globalToday ITS supplies more than 85 banks in

the Middle East. In the past couple of years it

has grown into Africa, and into the Far East

from Malaysia to the Philippines. Its core ex-

pertise is in Islamic banking, but it also sup-

plies into the conventional banking industry.

ITS has a lot of the Tier One banks as cus-

tomers; it supplies conventional banks in

Africa, Nigeria and South Africa.

“Conventional Western banks are looking to

open up Islamic ‘windows’, especially with the

global banking crisis,” says Haitham Abdou,

Group Director of Marketing at ITS. “Islamic

banking saw a boom starting a couple of years

ago and we feel it’s been growing at about 15 to

20 percent here and globally. We don’t see that

BANKING, THE ETHICAL WAY


Islamic banking has been widely established as an ethical alternative to the conventionalbanking system. Software firm ITS hopes to help drive its adoption worldwide.

INDUSTRY INSIGHT

Haitham Abdou is Group Director of Marketing at

ITS. He has over 15 years of IT experience in the

banking and finance industry and expertise in IT

strategies for financial institutions based on the

latest service orientated architectures. His areas of

expertise include: bank automation projects; branch

delivery; core replacements; Islamic financing; AML;

electronic banking; payment systems.

ITS Industry Insight:4oct 18/6/09 10:36 Page 78

FrostSullivan.indd 1FrostSullivan.indd 1 17/6/09 15:29:4217/6/09 15:29:42

In a previous issue of BM you said that financial

houses in the Middle East rely too much on

legacy systems, often based on Excel spread-

sheets. Do you still feel this to be the case?

Hazem Elmalla. We still feel that there are many

major financial houses that rely on legacy sys-

tems and Excel for bookkeeping of their invest-

ments and some basic financial reporting. These

organisations need to start by analysing their in-

ternal operations and identifying the key risk that

threatens their business due to lack of proper sys-

tems and enterprise strength infrastructure. These

risks can vary from lost data, erroneous data entry

and inaccurate reporting calculations to the dam-

aging compliance and regulation violations. Then

they will need to look at their internal workflow be-

tween departments and work on introducing the

proper systems to help with increasing efficiency

and scalability to their operations.

What key trends are you witnessing in the Gulf,

and what are the common mistakes being made

by investment management organisations?

HE. We noticed that there are more and more in-

vestment management firms who are looking to

diversify their portfolios by introducing hedging

strategies and unconventional investment vehi-

cles such as Derivatives and Swaps, as they realise

that relying only on the conventional Equity and

Fixed Income investments can expose them to

major market risks and limit their ability to protect

their clients and investors from events such as the

current market downturn. The need for electronic

trading capabilities is increasing. Exchanges in all

countries are looking into offering these capabili-

ties, if they don’t already. Firms need to have a rel-

evant front office system in place in order to take

advantage of this opportunity. This allows them to

reduce manual work and cut down on errors, i.e.

reduce cost and operational risk.

How are your products and services benefiting

your clients in the region? Do you have specific

examples?

HE. Advent offers the most tightly integrated sin-

gle vendor solutions available. These have been

developed and delivered by professional experts

with a broad and deep market understanding of

the business requirements in the region. A solu-

tion like Advent Portfolio Exchange has enabled

many of our regional clients to leverage the inte-

grated client relationship management compo-

nent to provide highly personalised client service

that has helped them distinguish themselves from

competition and attract new business. Moxy,

which is the industry-leading order management

system and part of Advent’s offerings to the in-

vestment management community, has helped

many of our clients achieve true straight-through

processing by automating key functionalities like

portfolio modelling, rebalancing and trade order

management processes. Also Moxy has the abili-

ty to route orders electronically utilising the in-

dustry standard protocol FIX which reduces

manual duplications and errors by minimising

manual intervention in the trading process.

What’s your vision for the market in the near fu-

ture and how will Advent Software play its part

in the Middle East?

HE. We see a challenging period ahead for our

clients as the uncertainty in the markets continues,

and they are being extra cautious with their budgets

and watching their costs very carefully. At the same

time these companies understand the importance

of enhancing their capabilities to manage their in-

vestment operation efficiently and provide superi-

or services to their clients while acquiring new

businesses. Advent, as a technology partner, will

make sure that we help our clients and prospects

manage through this cycle to achieve their goals of

controlling costs and at the same time growing their

business. Our vision is that we continually demon-

strate our commitment to the region with an ex-

pansion of our team in the Dubai office, which is

now almost five years old, and also the opening of

an office in Riyadh later this year. �

Perfect portfolio management


EXECUTIVE INTERVIEW

Hazem Elmalla joined Advent Software in 2000 as an

Application Developer and Systems Integration Specialist.

He now works as a Senior Implementation and Business

Consultant. He was involved in the implementation, support

and solution delivery for some of the largest firms in the asset

management industry, and graduated from City University of

New York with a Bachelor’s degree in Computer Science.

Hazem Elmalla of Advent Software outlines why MiddleEast companies now need to deploy portfolio managementsoftware more than ever before.

Advent Software:5oct 18/6/09 10:22 Page 80

What impact is the ongoing market volatility having on the business of

managing risk?

David Samuels. As you can imagine, the current state of the markets and

their ongoing volatility is having quite a dramatic impact on our clients.

They recognise the need for greater transparency in their risk management

processes, as well as the need for implementing overall risk management

frameworks within their organisations.

We are seeing a widening interest on the part of senior executives for

improved internal risk management capabilities. Clearly, these executives

recognise that they need to have a greater understanding about the risks

affecting their businesses. Not only are they placing increased emphasis

on having the right systems for assessing risk, but also on the right process-

es and the right people to evaluate risk across their entire business.

Do you think that the failings and the failures related to the financial cri-

sis will change, how we approach risk in the future?

DS. I believe that many organisations are already mobilising to implement

what we refer to as best practice risk management. Such organisations

recognise that they need to have the right systems, processes and people

in place to analyse and manage a wide range of risk in a proactive fashion.

For Europe, some of the incentive for better risk management is asso-

ciated with the demands of Basel II, but it’s not the only driver. Not all best

practices can be derived from a regulatory framework; some are derived

from just looking at what other institutions have done and profited from.

This is why we’re seeing a significant increase among financial institutions

and investors starting to implement comprehensive workflow-based solu-

tions such as our Credit Risk Evaluator product. Credit Risk Evaluator en-

sures a complete and accurate picture of an organisation’s risk profile

across the organisation.

In the wake of the financial meltdown, many have suggested that it was

impossible to see it coming. Do you believe this to be true, or were there

signs of what was to come?

DS. Our feeling is that no one system or process can predict everything.

However, with the right risk management systems, organisations are in a

far better position to identify, mitigate and manage risk. Proper risk man-

agement systems can help organisations not only quantify the risk, but turn

risk into competitive and financial benefits. It comes back to our overall mis-

sion within the business and being focused on our clients. Not simply to

understand what the risks are, but how to turn those risks into an advan-

tage for the business. There is a fundamental shift going on in the industry

right now.

Do you see any significant trends in risk over the coming year? How do you

predict the financial industry will respond to ongoing difficulties?

DS. We see several significant trends that are driving our clients and indeed

the direction of our business.

The first trend is actually a continuation of one I have already mentioned.

We believe that senior management will continue to expand its role in risk as-

sessment and risk management and require their organisations to broaden,

improve and integrate this capability across the entire organisation.

Another trend will be the increased focus on risk management as a

step in business improvement, not just control. History suggests that you

have to take risks in order to grow your market. From this we can deduce

that organisations that have effective risk management programmes

should be in the best position to turn controlled risk into competitive ad-

vantage. We are already seeing many organisations come to us for help in

putting in place industry best practices to avoid any number of the pitfalls

that others are running into. n


Fixed Income Risk Management Services (FIRMS) is a unit within Standard & Poor’sfocused on providing financial professionals with a wide range of analytic insight, dataand risk management solutions. BM meets David Samuels, the global head of RiskSolutions at FIRMS and asks how the financial downturn has affected organisations’risk management practices?

/REWARD

RISK MANAGEMENT

DAVID SAMUELS 1 page:jun09 18/06/2009 08:46 Page 81


A family affair

As competition for business hots up in the GCC, family-run fi rms can no longer afford to take their futures for granted, according to a new study by Booz & Company. BM investigates.

ANALYSIS

GCC Family Firms.indd 82GCC Family Firms.indd 82 18/6/09 10:25:3118/6/09 10:25:31


Family-run businesses are still going strong in the GCC –

dominating most market segments. But as international

players encroach on domestic markets and economic

conditions worsen, these companies must modernise if

they are to survive long enough for the fourth generation

to take over. This is the verdict of a new study by Booz &

Company, which identifi es the challenges facing the family-run fi rms

in the GCC, including the “restless entrepreneur syndrome” and the

need to develop longer-term business strategies. The fi rst step for any

family fi rms undergoing this process is to re-evaluate their existing

business portfolio and to, if necessary, shed parts of the business that

no longer fi t into the company’s long-term strategy. “The same disci-

pline is required for the evaluation of new investments and may call

for individual family member investments to be separated from the

family fi rm’s activities,” says Joe Saadi, Chairman of Booz & Company.

One of the most important steps these companies must take, he says,

is to recruit outside management to oversee this process of change

as well as “change agents” whose interests are closely aligned with

those of the business.

Managing changeSome of the world’s most successful companies are family-run

with governance structures under the control of the original founding

family. So far this strategy has proven effective, allowing companies

to survive economic downturn, war and family feuds. Indeed, an index

compiled by Credit Suisse found that between January 2005 and Janu-

ary 2008 family fi rms outperformed non-family fi rms in shareholder

creation by 15 percent. “Our analysis of more than 100 family busi-

nesses reveals the most critical factor to their success is the fami-

lies’ coordinated and sustained long-term strategy for growing and

controlling their businesses,” explains Ahmed Youssef, an analyst at

Booz & Company. He goes on to say that the corporate governance

strategies of family run fi rms usually involve the exercise of patience

in investing capital, the retention of companies through bull and bear

markets, a focus on core businesses, and an emphasis on long-term

performance over quarterly gains.

However, Booz & Company’s study points out that this method of

operating will not necessarily continue to sustain family-run fi rms in

the long term or overcome some of the challenges they face. Among

these are the fi rms’ attachments to the long term businesses that

defi ne the legacy of the family but that may not necessarily still be

generating profi t. In this situation, the study claims, many families will

retain the business just for the sake of preserving tradition. They also

risk losing objectivity and failing to distinguish between family and

business issues, resulting in confl ict and badly judged commercial

decisions: “The line between family and business activities is often

blurred, thus making it diffi cult to calculate the real profi tability of

the business and increasing the potential for areas of confl ict among

family members,” says Youssef.

GCC Family Firms.indd 83GCC Family Firms.indd 83 18/6/09 10:25:3818/6/09 10:25:38

Redhat.indd 1Redhat.indd 1 17/6/09 15:34:3917/6/09 15:34:39


the family members’ own business ventures. One the biggest “family

issues” facing these fi rms is the fact that many are going through a tran-

sition period of passing on the business to the third generation. This,

warns Booz & Company, creates greater diffi culty in maintaining control

over the business as a company formerly controlled by siblings is now

controlled by cousins, leading to weaker family ties and obligations. It

also creates pressure to increase the size of the business to support

more family members. According to Booz & Company’s research team,

family fi rms need to grow by on average 18 percent each year, just to

maintain the same level of wealth across generations. Creating a formal

governance structure for the company will help to ensure effective del-

egation and separation of activities but will also prepare the fi rm for

successful transistions. A change agent may also be appointed who can

oversee this transition period.

This is a critical time for family firms, with studies showing that

80 percent on average fail to make it through the third generation.

Given the vital role that family firms play in the GCC economy, it

is crucial that they survive this transition and the challenges that

the economic situation throws at them. Family ties have enabled

these firms to become highly successful businesses. But unless

companies adapt to the changing conditions around them, these

ties could ultimately strangle any potential they have left.

The restless entrepreneur Another problem is the “restless entrepreneur syndrome”

that can afflict members of family-run firms – the main symptom

of which is a constant focus on new business opportunities rather

than the insitutionalisation of the businesses once they have been

created or hired. A survey by Booz & Company of 25 family-owned

firms found that 48 percent of respondents were involved in five

or more sectors. Another 40 percent were involved in three or four

sectors and 12 percent in two sectors or fewer. According to Booz &

Company, the “restless entrepreneur syndrome” was particularly

applicable to companies that operate in strong economic condi-

tions with limited competition and abundant capital to spend on

new ventures. Economic conditions in the region have destabilised

however and family firms also face additional challenges from the

democratisation of the Middle East business world, which has seen

international players enter the market bringing increased competi-

tion. This means that the time has come for them to address the

profitability of existing businesses, stop investing in new opportu-

nities and take an overview of their existing operations and what

their long-term strategy should be. Booz & Company has identified

four steps family owned firms should take in this regard:

Revaluate existing portfolio of businesses to create sharper focus:

When capital costs increase and management time is stretched thin,

family businesses must focus on the best use of both by divesting or

lowering the priority of some traditional businesses.

Let go of emotional attachments to traditional businesses:

Family businesses must have the discipline to focus on the most

advantageous use of capital and target fewer businesses to drive

superior performance. Between 2003 and 2007, family fi rms that fo-

cused on one coherent sector outperformed those that didn’t by 5.5

percent per year.

Apply rigorous discipline to evaluation of new investments: Family

conglomerates must create clear guidelines for new investments,

focusing on scalability and relative return on capital and management

time. Other businesses important to the family can be fi nanced by

funds that are independent of the business.

Build management capabilities and relinquish control when neces-

sary: An essential element for an “immortal” family business is a

talented management team that is able to grow the business indepen-

dently of the shareholding. Family businesses must delegate control

to the management team when required, eliminate the glass ceiling

and create the right incentive structures.

In terms of family issues – and preventing these from affecting

business decisions – Booz & Company advises fi rms to ensure there is

separation between family and business activities, by creating a “family

offi ce” to handle such issues. It also urges these companies to separate

the philanthropic activities of individual members from the business

itself and to create a separate fi nancial arm to specifi cally support

Ahmed Youssef

GCC Family Firms.indd Sec1:85GCC Family Firms.indd Sec1:85 18/6/09 10:25:3918/6/09 10:25:39


Right on scheduleNetSimplicity’s Nate Pruitt explains how streamlining scheduling resulted in better communications for Staples Canada.

As Canada’s largest supplier of offi ce supplies and a

subsidiary of the world’s largest offi ce products retail-

er with consumer and business clients in 19 countries

throughout North America, Europe and Asia, Staples

Canada, Inc. is committed to making sure that buying

offi ce products is easy for clients around the world.

So when the company needed a room and resource scheduling solu-

tion, it’s not surprising that its top priority was that it had to be easy

to deploy, easy to use and effective – just like the products it sells to

small businesses and Fortune 500 clients around the world.

A company with a unique understanding of

business processes and business solutions, Staples

Canada needed a scheduling solution that not only

met stringent requirements of ease and sophistica-

tion, but also reduced the costs associated with

booking and scheduling.

“We maintain approximately 40 conference rooms

within our building,” says Leigh Pearson, Facilities

Service Manager for Staples Canada, headquartered

in Ontario. “We were looking for a centralised applica-

tion that would streamline the process.”

Cost control for successAs Canada’s largest supplier of offi ce sup-

plies and business equipment, maintaining lower

operational costs has been key to the company’s

success. That dedication has resulted in more than

296 stores across Canada and jobs for more than

13,500 employees.

Simplifi ed scheduling for 40-plus conference

rooms and resources within the company’s main

location would help Staples Canada continue its

growth trajectory and focus on its future success.

The company wanted software that gave it

simple, intuitive functionality; a friendly, fl exible

interface; easy deployment; universal access at all levels of the or-

ganisation; complete tracking of expenses; and fl exible reporting. It

also had to be sophisticated and scalable to accommodate the grow-

ing company’s changing needs.

Scheduling made easyAfter researching several room and resource scheduling software

applications, Staples Canada chose Meeting Room Manager. The com-

pany wanted centralised booking, allowing each person the freedom

to view schedules and request bookings – something they couldn’t

do in the past. And with Meeting Room Manager, Staples Canada can

do just that.

“The software allows for easy and consistent bookings to facili-

tate communication among everyone at the offi ce, whether members

are travelling to and from the various stores, or at home in the main

offi ce in Ontario,” says Stella Grgar, Meeting Room Manager Adminis-

trator for Staples Canada.

Staff members simply forward their requests

to Grgar, who can instantly confi rm availability and

secure the necessary resources. Meeting Room

Manager automatically sends confi rmation notices

to requesters, letting them know that the details

for their meeting are complete. The reservation

is then visible to everyone who can view Meeting

Room Manager.

Streamlined, controlled operationsAs a company which serves business needs

around the world, Staples Canada knew that

streamlining its internal room and resource

scheduling process was key to effi ciency – and to

containing costs.

Now bookings and scheduling are centrally

controlled, yet company employees can request

reservations and instantly obtain status with com-

plete visibility in a transparent, open process that

facilitates better communication.

Staples Canada has centralised, consistent

scheduling practices throughout its offi ce; a

streamlined, easily accessible room scheduling

process; and a much more effi cient use of rooms

and resources.

And, because there’s no wasted time when it comes to book-

ing and scheduling, like double-booked rooms or waiting to confi rm

whether a room or resource is available, the company can focus

solely on retaining and solidifying its lead in the offi ce and business

products industry.

“Meeting Room Manager has helped us by eliminating double

bookings and making the scheduling process easier,” says Pearson.

Meeting Room Manager is the easiest-to-use, most customisable,

room, resource and appointment scheduling software available.

Nate Pruitt is VP of Sales and Marketing for

NetSimplicity, a division of Asure Software. Pruitt was previously the Regional VP of Eloqua Corporation and is a former analyst at Giga

Information Group.

PROJECT FOCUS

Netsimplicity.indd 86Netsimplicity.indd 86 18/6/09 10:32:1718/6/09 10:32:17

NetSimplicity.indd 1NetSimplicity.indd 1 17/6/09 15:34:1717/6/09 15:34:17


Can you describe the work that the OCEG does?

Carole Stern Switzer. OCEG is a non-profit organisation and our mission is to

assist companies to achieve principled performance through the application

of improved approaches to governance, risk management, compliance, inter-

nal controls and the integration of these functions in the organisation. We de-

fine what is right for the organisation by identifying the mandated boundaries.

These include the boundaries that are set by law and regulation, and also the

voluntary boundaries that are set by the board and senior management of the

organisation, which reflect its values, its culture, its appetite for risk and its de-

sire for risk resiliency. We then identify what the organisa-

tion needs to do to ensure that it stays within those dual

sets of boundaries while still moving as rapidly as it can

towards the achievement of its business goals.

How do the current issues affecting the global economy

highlight the need for companies to adopt better gover-

nance, risk management and compliance practices?

CSS. I think what we can see in the financial crisis is a

lack of balance and the desire for short-term returns

and immediate financial gains versus a longer term

strategic view that would balance the well being of the

organisation. What happens in organisations that don’t

both establish their appetite for risk and their approach

to risk and drive the understanding of that throughout

the organisation, is that individuals at every level make

risky decisions every day. They define the organisation’s

appetite for risk. In this financial crisis, senior manage-

ment made overly risky decisions, but they did so be-

cause they were not taking a holistic integrated view of

what was best by balancing the well being of the organ-

isation and ultimately shareholder value against that

desire for quick high returns. When you’re engaged in a

process of governance, risk and compliance (GRC) that

is driving principle performance, you’re never going to

lose sight of that strategic view and you’re never going

to lose sight of the need to balance and understand the

risk appetite of the organisation.

How much of the crisis could have been prevented if

these organisations had better safeguards in place?

CSS. Well that’s hard to measure, but I sincerely believe

that we would not be in the global financial crisis situa-

tion we are in if these major organisations had engaged

in proper identification and management of risk. I don’t think we would be

anywhere near it. Does that also mean that we might not have seen the ex-

traordinary financial gains over the prior several years? Maybe we wouldn’t

have, but I think we would be better off.

Do you think that these situations are going to prompt more organisations

to put better GRC in place?

CSS. I’ve seen a lot of evidence that organisations are recognising that they

need to be much more risk aware, and risk resiliency is becoming a really

Playing by the rulesThere has never been more demand for the work carried out by the Open Compliance andEthics Group as pressure grows on companies to improve their corporate practices. BMasks OCEG President Carole Stern Switzer for her verdict on the adoption of governance,risk and compliance by companies worldwide.

CORPORATE GOVERNANCE

CAROL STERN:june09 18/06/2009 08:45 Page 88


think. Another big challenge is that people are comfortable with what

they’re doing in their limited role. People like their silos. People like their

spreadsheets. People like to hoard data because it gives them a certain

amount of indispensability to the organisation, and overcoming that resis-

tance to change is a very big challenge.

How easy is it to recruit skilled professionals who are able to implement

governance, risk and compliance measures within organisations?

CSS. In my opinion a good executive, anyone with strong executive skills

can head up a GRC improvement process. I don’t think that it has to be a

lawyer, accountant or auditor.

The organisations that have the most success with this are those

where there is good and consistent communication between the Chief

Compliance Officer, Head of Internal Audit and Chief Technology Officer.

These people have to function together as a team in order for the

process to work. What we do find is

that while these people need to

work closely together, they have

very different vocabularies. They

speak very different languages in

their professional lives, and so what

we want to do is get them more

comfortable with the language of

each other’s roles. I think it’s helpful

to have people who are well skilled

in understanding the basic models

like OCEG’s GRC capability model

and that’s why we are in the process

of creating an online course of

recorded lessons that we call GRC

fundamentals.

What is the OCEG doing currently to

encourage greater adoption of gover-

nance, risk and compliance strate-

gies among companies?

CSS. Well clearly the first thing,

which really drives our mission, is the GRC capability model, and the GRC

IT blueprint that goes with that model. We are also in the process now of

beta testing something we call the Burgundy Book, which is basically a

set of procedures that can allow a company to evaluate itself and to see

how well its programme of following the Red Book, the GRC capability

model, is going.

In the next month or two we are going to be adding a community fea-

ture to the OCEG website so that members of the OCEG will be able to join

communities together around specific interest areas and risk areas, do

polls or surveys and share sample policies. We have right now more than

20,000 people who are members of OCEG and they are in more than 40

countries around the world, and so we’re beginning local chapters. We’re

beginning translation of the Red Book into Spanish, Portuguese and

Japanese, all of these efforts are undertaken by our members in a volun-

tary way and so these community groups will grow as the members drive

them to grow. n

key factor. Right now you might think that companies would be tightening

the purse strings and not engaging in improvements to risk or compliance

processes or technologies because they are cutting funding everywhere

and to some degree that’s true. But I’m hearing that more and more com-

panies are still planning on moving forward and in some cases more rapidly

with improvements around risk management and around technologies that

support more transparency of information throughout the organisation be-

cause they are less able to withstand a failure now.

How much of a part does technology play in how companies can improve

their GRC processes?

CSS. I think technology plays a very large role today in the way that com-

panies operate in a global and very complex structure, but you can’t just

throw technology at the problem. You have to follow a process that takes

you through having appropriate oversight, having that strategic analysis in

place about what the organisation wants to achieve

and how it’s going to achieve it and what boundaries

it must adhere to and what boundaries it accepts for

itself. You then have to determine the processes and

policies and then you can determine what technolo-

gies you need.

We’ve recently released what we call our GRC IT

blueprint, and that identifies 72 different types of

technologies that support different aspects of GRC.

There is no one magic bullet. There are some very

good over-arching GRC management platforms that have come to market

in the last several years, but they don’t do everything. Also you cannot suc-

ceed if you don’t have clarity and the ability to move consistent information

across the organisation for different uses.

What are some of the biggest challenges that organisations currently face

when it comes to putting risk management and compliance practices in

place?

CSS. The biggest challenge is historic development. Virtually no one is going

to scrap everything they have and start from scratch, so you’re beginning with

the challenge of understanding how things have been done in what we call

silos of operation as they have grown over time, and a lot of things have

grown over time in ways that you would never put them together now.

Organisations that have merged or acquired other organisations often

have contradictory policies or procedures, duplicative technologies, or in-

formation that can’t be easily reconciled, so that’s the biggest challenge I

“I sincerely believe that wewould not be in the globalfinancial crisis situation we are in if these majororganisations had engaged inproper identification andmanagement of risk”

CAROL STERN:june09 18/06/2009 08:45 Page 89



How would you define GRC?

Darren Burrows. GRC technology is an architectural framework that enables

all control functions to define, maintain and monitor risks and policies ef-

fectively, across the entire organisation rather than in silos. This engages

with the businesses’ operational units, and enables the boards of directors

to see a consolidated view of risk and compliance across the organisation.

What does a comprehensive GRC framework look like?

DB. Our product offering is a pretty good benchmark. It includes: policy

management, risk and control, incident and losses capture and analysis,

audit and assessment management and comprehensive document man-

agement. We have industry-specific content, dashboard reporting, the abil-

ity to integrate with multiple business applications, and the system is also

available as a hosted solution.

You are providing content, not just the technology?

DB. We offer content for SAS70, SOX, MiFID, anti-money laundering, health

and safety regulation, data protection, IT security, and other client-specific

requirements. This offers clients reduced implementation time-frames as

they do not need to manually add all the policy content themselves.

What is the impact of globalisation on GRC?

DB. Boards of directors need to manage complex regulations

in multiple jurisdictions. GRC technology enables them to en-

sure that all the local regulations and policies are captured

and managed whilst also ensuring that group best practice is

adopted in each locality, with consistent processes and busi-

ness controls being observed. The ability to see consistent

and consolidated reporting across all entities is also key.

Would a GRC solution have prevented the impact for firms of

the current financial crisis?

DB. Business controls in place across the organisation to man-

age credit risk would have allowed attention to be focused

where most required and for Corrective Action Plans to be in-

stigated and effected. It’s a difficult economy in which to try

and sell a GRC Framework!

For many institutions the business case for GRC is clear-

er than ever. Companies are faced with a wave of regulatory

initiatives. Their boards and regulators are demanding more detailed and

more timely information. Turnover of staff introduces a risk that key knowl-

edge is lost to the organisation. There is a need to do more for less and to

be more efficient in the use of resources.

But do you agree that it is still a big commitment to invest in a GRC appli-

cation?

DB. It is, and now is not the time for “risky” projects. However, our appli-

cation is genuinely multi-modular, meaning that customers can select

which modules they want and which to prioritise, ensuring meaningful re-

sults in weeks, rather than a project which takes 12 months to implement.

Can organisations ever expect to achieve a Return on Investment (ROI) on

GRC software?

DB. One prospect has 500 different business checklists, which can all be

automated within the Audit & Assessment module. They spend 28 man

days per month generating M.I. for management, clients and regulators,

all of which can be automated using the embedded Crystal Reporting and

Dynamic Dashboards. Their SAS 70 review costs nearly US$0.5 million an-

nually, a figure which could be dramatically reduced by capturing all Control

Objectives, Controls and Control assessments in the Policy Management

module. Unfortunately, the ROI will not always be so obvious.

Finally, the Dynamic Dashboards look great!

DB. Thanks. These are on every C-Level executive’s wish list! They are fully

integrated with our GRC software but they can also integrate with all your

business applications ensuring consistent, highly engaging and intuitive

reporting. It is a great addition to our product. n

The benefits of good governance


Darren Burrows of Create-Comply outlines the benefits of governance, risk andcompliance (GRC) technology.

EXECUTIVE INTERVIEW

Before joining Create-Comply,

Darren Burrows, Managing

Director, held senior compliance

and risk positions at leading

financial institutions and provided

extensive consultancy and

implementation-support services

on governance, risk and

compliance issues to companies

in the EMEA region; including in

respect of SAS70, SOX,

Occupational Health and Safety,

Data Protection, Operational Risk

and Market Risk.

“Turnover of staff introduces a risk that keyknowledge is lost to the organisation. Thereis a need to do more for less and to be more

efficient in the use of resources”

EXEC INT FUNDS AXIS:5oct 18/06/2009 08:47 Page 92

200,000 Challenges 100,000 ExecutivesOne Community

Dedicated to business

Join now: www.meettheboss.com

If your network isn’t focused on your business, change it.

MeettheBoss.com membership reads like an industry who’s who. CEOs, CIOs and other senior executives from leading organizations are just two clicks away.

But there’s more. Weekly interviews with industry leaders are webcast on the site’s dedicated channels. These are combined with live, moderateddiscussion groups, video conferencing, IM and secure e-mail in one easy-to-use app that’s dedicated to business.

New York 8:50 a.m.John is upgrading some core business functions. He wants to know how to ensure a smooth transition, so he video calls…

London 1:50 p.m.Paul, who has seen the benefi ts of an upgrade and is now sharing project management tips with…

Dubai 4:50 p.m.Georgina, the turnaround expert who’s moving on to a new project in Japan, where…

Tokyo 9:50 p.m.Ringo has the local knowledge. But he’s also planning for tomorrow, and that’s all about core business...

MeettheBoss.com is simple, intuitive, unintrusive and secure. It’s also free to use. Membership restrictions apply.

MTB AD (Full page B2B Mag).indd 93MTB AD (Full page B2B Mag).indd 93 18/6/09 11:00:3918/6/09 11:00:39

The luxury collectionAfter conquering the Dubai property market Nakheel is takingon the world with its own portfolio of luxury hotels. BMmeets Nakheel Hotels’ CEO Joe Sita.

JOE SITA:5oct 18/06/2009 08:49 Page 94

Only in Dubai could a company acquire a hotel property

portfolio worth US$4 billion in the space of just four

years. But with the weight of its parent company’s brand

and budget behind it, failure wasn’t an option for Nakheel

Hotels. Today, the company’s portfolio includes 25 hotels

across 18 cities, including joint ventures with luxury hotel

giant Kerzner International’s Palm Atlantis hotel in Dubai and the

One&Only resort in Cape Town. Nakheel’s close business relationship

with Kerzner provided it with the leg-up it needed on the global hospital-

ity ladder – and access not only to expertise and investment but to a high-

ly lucrative brand name. Describing the importance of the partnership,

Nakheel Hotels’ CEO Joe Sita says: “Our strategy has always been to be

partnered in the luxury segment with the best of the best in terms of

brands. So we have always had a very good relationship with Kerzner.

We’re the largest single shareholder in Kerzner and one of the reasons

that we are invested in them is because of the strength of both the

One&Only brand and the Atlantis brand. We find that the value of the real

estate we invest in is significantly enhanced if you have a very high qual-

ity luxury brand like One&Only.” The latter already has a well established

and loyal following among luxury hotel clientele, he says: “It’s interest-

ing that such a small portfolio of hotels can garner such interest and such

a loyal following from its marketing. I put that down very simply to the

quality of the hotels in terms of the experience that’s offered in terms of

the physical product, because every one of the One&Only products is ab-

solutely stunning.” He goes on to say, however, that he has no wish to

establish Nakheel Hotels as a brand in itself – it is an investment, devel-

opment and asset management company that operates be-

hind the scenes and behind the face of the operators it

chooses to associate itself with. “Nakheel hotels is really a

hotel investment and development company. We’re not a

brand per se. Nakheel is a very well known brand obviously

but as Nakheel hotels we’re a fully integrated investment,

development and asset management company. We’re not

operators of hotels – we invest in hotel companies and real

estate, then we appoint operators such as Kerzner to brand and run the

hotels for us.”

Freedom of choiceThis strategy means that from a business point of view Nakheel Hotels

is free to pursue any avenues it views as profitable without compromising

brand values. This flexibility means it focuses on five distinct lines of busi-

ness: luxury hotels, private clubs, equity investments, QE2 Enterprises and

branded budget hotels.

The latter is a sharp departure from Nakheel Hotels’ most high profile

properties, such as The Atlantis or the One&Only. Sita, however, says the

company sees strong potential in the branded budget hotels sector. It holds

the master franchise for easyHotel in the Middle East, North Africa and the

Levant and plans to open around 20 branded properties across the region

in the next five years. “We see great growth potential for branded budget

hotels in the Middle East hence we acquired the master franchise from

Stelios [Haji-Ioannou – founder of the easyGroup]. The Middle East is well

known for its luxury hotels but we do see a significant gap at the lower end

of the market in the branded hotel segment. There is certainly many two

and three-star unbranded hotels in the Middle East but there are very few

in the budget sector and we see great opportunities for products in that

market.”

In Asia Nakheel Hotels also sees strong potential for budget hotels and

has a 40 percent stake in a fund set up by Tune Hotels, a subsidiary of

AirAsia, which aims to develop between 20 and 30 hotels in the region in

the next three to five years. “Tony Fernandes, the founder of AirAsia, came

up with a concept for a branded budget hotel company which he formed

and called Tune, and everywhere that AirAsia flies to he’s planning to put a

Tune hotel,” explains Sita. “We think this concept is extremely valid and

lucrative, hence the reason why we’ve invested in this fund.”

Challenges aheadSita admits that the company has had to put the brakes on some of

its plans for Tune Hotels because of the economic downturn: “We current-

ly have two hotels under construction in Bali and a number of other sites

that have been acquired in Malaysia. Our plans for that are still the same

but with the current economic conditions we’ve slowed down a little bit on

that plan.”

It’s not the first time Sita has expressed concern about the effect of

economic conditions on Nakheel Hotels’ aggressive expansion plans.

Speaking at the Arabian Hotel Investment Conference in May this year, he

said the company would not be making new investments in 2009, adding:

“This year is all about survival. We are not out in the market [for new in-

vestments]. We are preserving cash.”

A month on, he says he believes that given the strength of the brands

Nakheel Hotels has associated itself with it is well placed to weather the

storm. However, he says the company is currently being hyper vigilant

over its spending and is in talks with lenders about restructuring the con-

siderable debts on its properties: “Nobody is immune to what’s going on

in the world and we’re no different. But by virtue of the quality of the as-

sets that we’ve invested in I’d like to think that we are reasonably well

placed. We’re having our issues like everybody else. We’re focussed on

very active asset management of our portfolio and we’re working with

our partners to mitigate the impact of cash flow in all of our investments.


“Nobody is immune to what’s going onin the world and we’re no different”

HOSPITALITY

JOE SITA:5oct 18/06/2009 08:49 Page 95

We’re constantly looking at our overheads at our ho-

tels. We’re talking to our lenders to find out how we

can restructure some of the debt that we have on our

properties.”

He reiterates also that the focus for Nakheel in

2009 is not on making new investments but on nurtur-

ing existing ones. “We’re continuing to look at how we

might take advantage of the environment in terms of

new opportunities that may arise. But certainly that’s

not the primary focus at the moment. It’s all about look-

ing after the assets we have and making sure we can

continue to trade them properly.”

Grand gesturesIt’s a new note of caution for the company whose

reputation is built on spectacular and often record-break-

ing real estate feats. The opening of the Palm Atlantis fea-

tured a mind-bogglingly lavish US$24 million launch

party – the most expensive in history with more than

2000 guests that feasted on lobster and champagne and

were entertained with a display of 10 million fireworks –

reportedly 10 times the scale of the display at the Beijing

Olympics opening ceremony. The resort itself features

1539 rooms and was completed at a cost of US$1 billion

in November – which given current economic conditions

– was very bad timing. Sita maintains however, that the

world still has an appetite for luxury and maintains, that

the hotel’s launch has been a success despite the shad-

ow that the downturn has cast over it: “It has been ex-

tremely successful. We are very happy with the way that

it’s been launched. We launched it officially in November

and despite the global economic conditions the hotel has

traded exceptionally well. We had a tremendous March

and a very strong April. So we’ve very pleased with how

the property is performing.”


Djibouti Palace Kempinski

From top: Fountainebleau Miami One & Only,Cape Town Fountainbleau, Miami Beachfront.

JOE SITA:5oct 18/06/2009 08:49 Page 96

He is hoping similar success will be enjoyed by South Africa’s first

One&Only resort, which it opened in April in a joint venture with Kerzner

International and which features two artificial islands and restaurants op-

erated by the celebrity chefs Gordon Ramsey and Nobu Matsuhisa. It’s one

of several properties owned by Nakheel Hotels in Africa, including Djibouti’s

first five star hotel, the Djibouti Palace Kempinski, which was launched in

conjunction with US$1.3 billion of investment in the country by Nakheel

Hotels’ parent company Dubai World, which has included the building of a

new port, free zone and roads. Speaking about the importance of invest-

ing in Africa, at the time of the opening of Cape Town’s One&Only resort,

Dubai World Chairman Sultan Ahmed Bin Sulayem, said: “We see a bright

future for this dynamic continent and continue to invest in Africa for the long

term. We are delighted to add the One&Only at Dubai World’s own Victoria

& Alfred Waterfront to our Africa portfolio. Our strategy is to work with the

best partners and invest in high-end assets in key destinations around the

world, which deliver real, measurable results. The One&Only Cape Town is

part of that highly successful business model.”

A confident outlookThe fact that Nakheel Hotels is still continuing to launch luxury prop-

erties is testimony to the success of its business formula, which Sita

says is based on never diverting from the path that the company has set

itself on – and continuing to leverage strong partnerships with more es-

tablished names in the industry.

“We have a very specific strategy in terms of the segments that we

operate, both the luxury and branded budget segment, and we stay fo-

cussed on those two segments. We actively look for high quality part-

ners such as Kerzner, Starwood, Tune Hotels and easyHotel. We don’t

get too distracted from that and therefore don’t dilute our efforts over

the whole spectrum of hotel products and that allows us to be very fo-

cussed and very successful in what we do.”

For now the company’s strategy is to focus on the new openings

that are in the pipeline, including the opening of several W hotel prop-

erties: “We have a few hotels that are still under development. We

have two in Thailand, both W hotels. One is the W Retreat and

Residences in Ko Samui. which opens towards the end of Q1 next year.

We also have a W hotel under construction in Bangkok which opens

probably Q3 2011. Apart from that we also have a W hotel under rede-

velopment in Washington DC, which opens in July. That’s fast ap-

proaching completion.”

Nakheel’s brash confidence as a company shines through in Sita’s

predictions of future growth despite the downturn. But with a portfolio

of super brands behind it – the company stands a pretty good chance

of continuing the firm’s success story. n


“We have a veryspecific strategy in

terms of thesegments that weoperate, both the

luxury and brandedbudget segment”

Joe Sita

JOE SITA:5oct 18/06/2009 08:49 Page 97

Why are capture and transformation tech-

nologies so important for organisations and

how can they boost productivity and compet-

itiveness?

Thomas Senger. According to a study by

PricewaterhouseCoopers, companies spend

US$20 in labour to file a document, US$120 in

labour to find a single misfiled document,

and a staggering US$220 to reproduce a lost

document. The same study records in detail,

that 7.5 percent of all documents get lost,

while three percent get misfiled and on aver-

age each document gets copied 19 times.

These activities and their associated costs in-

crease the cost of sales and cut directly into

company’s margins. Lowering these costs has

become a priority for businesses, retargeting

related cost savings to new revenue generat-

ing activities. Advanced capture technology

can solve this problem by eliminating tardy

manual processes. Digital information can be

easily shared with all subsystems and con-

stituents of the respective business process.

However, capture and transformation is

not only a question of pure cost reduction –

and it’s not ‘only’ applicable to digitise infor-

mation residing in paper. Solutions like Kofax

Intelligent Capture & Exchange enable organ-

isations to capture, enhance, intelligently ex-

tract and categorise relevant information from

documents – regardless of their format – and

then integrate the won information into a mul-

titude of business processes. Furthermore,

they enable automated notifications to the

senders of the documents or any other in-

volved instance. Resulting competitive ad-

vantages are not only related to reduced

costs, but also to the ability to share vital in-

formation and collaborate quickly with sup-

pliers and customers. Combined with the

ability to meet governmental requirements

around data accuracy, security, and auditing,

information capture and transformation be-

comes a must-have for all organisations deal-

ing with large numbers of documents.

What are the common pitfalls that businesses

encounter with their business process automa-

tion efforts and what should they do to over-

come these obstacles?

TS. The most important thing about the suc-

cessful implementation of a new solution is

definitely the right preparation, which will re-

sult in tremendous dividends down the line.

Industry experts agree upon the rule of ‘Ps’:

‘Proper Preparation Prevents Poor Performance’.

I couldn’t agree more that the right prepara-

tion is key to a successful automation project.

I would strongly recommend an in depth busi-

ness process analysis; ideally together with

an experienced vendor like Kofax or one of our

business partners. Our professional services

team is able to engage with clients through-

out an entire project, from discovery and de-

sign through customising, implementation

and support.

What key trends will we see in the capture and

transformation market in the next few years?

TS. One of the trends we clearly see is best de-

scribed as ‘from back office to front office’. In the

past, the promise of document image capture

has been to simply introduce a scanner to a

workflow, and to scan at the point of the largest

volume of paper (back office). While demon-

strating already a huge improvement, back of-

fice solutions don’t necessary deploy the full

potential of modern capture and transformation

technology. Modern, transactional capture sys-

tems, seamlessly connected to the business

process they serve, are able to provide a much

higher value.

Organisations are realising the benefits of

capturing information at the earliest point (front

office), while pushing for information being cap-

tured at multiple points.

In addition to centralised, high-volume op-

erations, capture systems will be present

throughout organisations including mobile

devices which is another trend we observe. By

integrating small workgroup scanners, multi-

function peripherals (MFPs) as well as hand-

held devices, capture systems will turn into

enterprise solutions. Kofax, the leading glob-

al provider of Intelligent Capture & Exchange

solutions, is one of the trailblazers in the de-

velopment of easy-to-install and easy-to-use

distributed capture applications. �

Information overload


With organisations often wasting considerable time and money through mismanagementof documents, Kofax’s Thomas Senger discusses how to best capture and manage yourall-important information effectively.

EXECUTIVE INTERVIEW

Thomas Senger is SVP ofApplications Software &Services EMEA for Kofax. Inthis role he has full P&Lresponsibility for the entireregion and manages a teamof 150 sales and serviceemployees. Senger reports toAlan Kerr, EVP of FieldOperations.

KOFAX EXEC INT:5oct 18/6/09 10:44 Page 98

Kofax.indd 1Kofax.indd 1 17/6/09 15:33:0017/6/09 15:33:00

The phrase ‘the customer is king’ has never been more apt than in

the current market scenario. Global slowdown has forced compa-

nies to revisit their strategy and devise ways to boost their rela-

tionships with their customers. Companies are focusing more on

retaining existing customers and increasing their loyalty to fight the eco-

nomic slowdown. Getting more out of existing customers by identifying

their individualised needs has become even more important. Concentrating

on key customers in order to enjoy their continued loyalty is the strategy

of companies across the globe. All this has brought Customer Relationship

Management (CRM) services to the limelight.

Global market landscapeThe CRM market has witnessed healthy growth rates in the past cou-

ple of years and the trend is expected to continue. In 2008, the market reg-

istered a growth rate of 12 to 15 percent and reached a value of US$9.6

billion despite economic meltdown. SAP has maintained its leadership in

CRM followed by Oracle. Both companies experienced higher growth in

their on-demand software compared to that in their on-premise software.

Riding on the increasing demand for Software as a Service (SaaS)-based

CRM software, Salesforce.com has strengthened its market position fur-

ther. There has been a significant increase in the demand for and accept-

ability of open source CRM software as well. North America and Western

Europe are the largest markets for CRM software. Regions like the Middle

East, Africa, and Eastern Europe have also registered high growth in the

CRM market. In the Asia Pacific region, both India and China are attracting

more CRM vendors due to long term growth prospects in these countries.

Recent trends Higher bargaining power and the demand for personalised products

by end customers, the advent of new technology like Web 2.0 and cloud

The future of CRM


Santosh Kumar Sinha of Frost & Sullivandescribes why there is growing demandfor CRM applications.

CRM FOCUS

FROST SULLIVAN CRM:june09 18/06/2009 08:47 Page 100

computing, strong focus on the ROI of CRM software, and untapped de-

mand for medium and small segment businesses have prompted CRM ven-

dors to look for new technology and innovative business models.

On-demand CRMUnder this model, companies generally purchase a license to use the

software and the service provider manages the logistics and

hosts the infrastructure at his premises. Companies can even

choose to rent a solution and then decide whether to purchase

the solution at a later date. With the software running at a cen-

tralised remote location, on-demand solutions provide lower

software implementation and customisation costs as well as

faster implementation.

Open source CRMOpen source CRM software has

gained strength in the last two to three

years. Ownership of code and the liberty

to tailor different aspects of the software

apart from a significantly lower price level

has attracted many small and medium

business houses to adopt such solutions.

The number of open source CRM projects

are on the rise with more than 350 pro-

jects being listed on SourceForge Inc.

Social CRMEarlier, CRM was more operational in

nature. Customer insights were used to

increase the employees’ effectiveness in

managing the relationship with cus-

tomers. Today, the customer is demand-

ing more personalised products and an

individualised relationship with the com-

pany they choose to do business with.

CRM products have undergone remark-

able transformation to meet this rising de-

mand. Social tools such as wikis, blogs

and enterprise mash-ups have been in-

corporated into CRM solutions.

CRM on mobileQuite a few vendors have tried to

make CRM applications available on mo-

bile. However, the complexity of providing such functionality on small

screen thumb operated mobile devices and slow networks has hindered

the success of such attempts. With new devices coming into the market and

greater adaptation of 3G as standard for mobile devices, vendors are ex-

pected to achieve a higher success rate in their efforts. The focus on plat-

form interoperability is also expected to increase the penetration of such

applications in future.

Future outlookThe future holds the promise of a high demand for CRM solutions.

However, clients’ increased focus on ROI and investment requirements for

such solutions is going to increase in the coming years. Customers are like-

ly to demand more clarity on pricing and a stringent case for the return on

their CRM software investment. Reduced funds are expected to increase

interest in on-demand or SaaS-based models. This is expected to prompt

more vendors to offer such services and experiment with unique pricing

models, such as connecting the ap-

plication’s cost with the customer’s

profitability to gain market share.

Vendors who are able to deliver high

value solutions at low cost using in-

novative models are most likely to

succeed in future. n


Santosh Kumar Sinha is Industry

Analyst for the Information &

Communication Technology

Practice, South Asia and Middle

East at Frost & Sullivan.

“Today, the customer isdemanding more personalisedproducts and an individualised

relationship with the company theychoose to do business with”

FROST SULLIVAN CRM:june09 18/06/2009 08:47 Page 101


In a normal economic climate, when striving

to optimise their business processes and

boost value, companies might automati-

cally be compelled to choose a 1st-tier

provider as their business software solu-

tion. Top market brands such as SAP or Oracle

are widely believed to be safe and trusted choic-

es, although they come at a significant price, re-

quire a lengthy implementation period, and may

not even be optimally suited for every business

because of their complexity.

Today, in these challenging economic times,

most companies are not in a position to simply

accept paying the premium amount for any in-

vestment, which also applies to business soft-

ware. As it has never been this important to have

a strong software backbone to help streamline

processes, increase transparency and gain control,

companies are searching for cost-efficient alter-

natives to the pricey market giants. And there is an

alternative – in the form of 2nd-tier ERP solutions.

They can save companies millions on investment,

implementation time and long-term cost of own-

ership, while delivering as much or more value,

benefits and satisfaction. No matter what type of

business software set-up companies are current-

ly using, 2nd-tier business software solutions like

Exact Software are well worth considering.

Study According to a study carried out by the

Panorama Consulting Group, companies can

save up to 75 percent with 2nd-tier solutions

within a much shorter implementation time.

They were also found to yield up to 10 percent

more employee satisfaction. In around three to

six months, a 2nd-tier provider can help a com-

pany gain control, optimise cash flow, increase

transparency, boost revenues, identify under-

performing areas and increase reaction time –

providing valuable agility in these challenging

times. Fully integrated and standardised, 2nd-

tier alternatives can either complement 1st-tier

solutions already in use at headquarters or they

can serve as comprehensive ERP systems, and

they are generally perceived as more user-

friendly by employees and IT.

If a company is considering which type of

ERP software to implement, 2nd-tier providers

present a cost-efficient and often more attractive

alternative to the top-tier brands. Additionally, in

cases when a leading brand has not optimally

served its customer’s needs or running costs like

maintenance are a material factor, it could still

be more cost-effective to switch to a 2nd-tier

ERP system in order to gain significant overall

savings and benefits. Exact Software is a cost-

efficient 2nd-tier provider whose solutions are

specifically designed to suit the needs of SMBs

or the SMB subsidiaries of larger companies.

Combining global presence with local support,

Exact provides companies with one standard

product globally and complete integration of all

business areas in one solution.

CustomersFounded 25 years ago, Exact currently op-

erates a network of subsidiaries in more than 40

countries worldwide, providing support to cus-

tomers, such as Siemens, Toyota and Lufthansa,

in over 125 countries. Exact’s solutions can be

implemented more quickly than 1st-tier com-

petitors and better suit a company’s needs with-

out weighing it down with unnecessary bulk.

Exact Synergy and Exact Globe – Exact’s full-

suite, front and back office business solutions –

integrate all business areas to provide real-time

enterprise resource planning, high information

quality and streamlined processes for all of a

company’s stakeholders, thereby increasing

transparency. By reducing the number of differ-

ent ERP solutions a business uses, Exact also

lowers long-term cost of ownership, resulting in

future economies of scale.

The decision to invest should never be taken

lightly, but it is particularly critical today. Studying

the available options and their real return on in-

vestment, companies may be surprised to find

that 2nd-tier solutions are the better choice in al-

most every scenario. After all, why pay substan-

tially more for less satisfaction? �

Making savings with ERP business softwareRoland Rott explains how 2nd-tier business software can cut companies’investment by up to 75 percent, whilst streamlining business processes, increasingtransparency and delivering high value.

INDUSTRY INSIGHT

Roland Rott is the Managing

Director for the EMEA region of

Exact Software, a leading provider

of business software solutions. Rott

is responsible for key global clients

and has played a leading role in the

development of the company’s

international strategy. Prior to

joining Exact Software in 1998, he

was a successful entrepreneur.

“If a company is consideringwhich type of ERP software toimplement, 2nd-tier providerspresent a cost-efficient andoften more attractive alternativeto the top-tier brands”

ExactSoftware ED:23 APR07 18/6/09 10:27 Page 102

Exact.indd 1Exact.indd 1 17/6/09 15:29:3017/6/09 15:29:30


BEVERAGE INDUSTRY

Aujan_Abdallah.indd 104Aujan_Abdallah.indd 104 18/6/09 09:02:4018/6/09 09:02:40


Advertising giant Saatchi & Saatchi coined the term ‘love-

marks’ to describe brands that are so loved by consum-

ers that they transcend the products themselves and

are known not for what they are but for the values they

represent. Among those listed in the advertising giant’s

top 200 are Coca Cola, Guinness, iPod, IKEA and Cadbury. One that

it forgot to put on the list is Vimto – a drink so popular in the Middle

East that it even features in the reconstruction of a typical Arab

home at the Dubai museum. “It’s got to the point where people

completely associate Vimto with Ramadan and it has become in-

grained in the local culture. People even tell jokes about it” says Dr

Kamel Abdallah, Executive Vice Chairman of Aujan Industries, the

company behind the brand in the Middle East since 1928. Vimto is

not the only ‘lovemark’ in Aujan’s brand portfolio. It is also behind

the hugely popular non-alcoholic beer Barbican and the juice drink

Rani, that is distributed to 56 countries worldwide. The strength of

these brands has seen the company achieve phenomenal success,

chalking up profits of US$500 million in just four years, one year

ahead of target.

Today Aujan is the largest

privately-owned, independent

soft drink and confectionary

manufacturer in the Middle

East, with 2200 employees. Like

most of the Middle East’s most

successful companies, Aujan

is family run, having been set

up as Abdulla Aujan & Brothers

in 1905. However, unlike many

of those companies, it is keen

to ensure that it is run like any

other private venture, with

those who carry out the running

of the firm chosen because of

their credentials and not their

family ties, and an emphasis

on good corporate governance.

Dr Abdallah says: “The success

of the company is all down to

good execution, leadership and

strategy. We have been blessed with a board and a Chairman that

have the vision to separate the ownership of the company from its

management. This means that the management can concentrate on

the execution of the Chairman’s vision. We are run like any other

private company with good corporate governance and clear objec-

tives it wants to achieve.”

Breaking the mouldThis modern approach has seen the company set new standards

in the region regarding the branding and marketing of its prod-

ucts, breaking the mould in terms of creativity and the use of new

media. Barbican, which is aimed squarely at the male Arab youth

market, has been the subject of several award-winning advertising

campaigns, including the Supe-up Up Your Ride campaign which

invited customers to send in a video of their car with the chance to

win a free makeover of the vehicle. There were 1800 entrants and

86,000 people viewed the Barbican micro-site for the campaign.

Describing this success, Dr Abdallah, says: “We wanted to build a

campaign where we didn’t talk down to the customer as much as

the customers talked to each other. The uploads to the websites

were unbelievable. We were getting 10 films a day that people had

made on their digital cameras. Consumers found it to be a way for

them to communicate with each other and that played a big part in

our success. The passion for Barbican among the youth generation

is unbelievable.” This success is a double-edged sword however,

as Dr Abdallah says the company now has to work harder than

ever to retain its market share as competitors are now seeking to

emulate the success of its marketing campaigns: “We very much

dominate the segment that we’re targeting which is the young Arab

consumer. But we now have to work extra hard to maintain our

leadership position because everybody is trying to copy us. They

are even trying to copy our marketing campaigns.” The economic

As the makers of the some of the

GCC’s best-loved drinks, Aujan

Industries is the Middle East’s answer

to Coca-Cola. Diana Milne meets

Executive Vice Chairman Dr Kamel Abdallah to fi nd out the secret to

building brand power.

“We now have to work

extra hard to maintain

our leadership position

because everybody

is trying to copy us.

They are even trying

to copy our marketing

campaigns”



downturn means that for now Aujan does not plan to copy its own

success by launching new brands – choosing instead to focus on

its three existing strongest products; Vimto, Barbican and Rani:

“We’ll always have innovations but probably not any new brands

this year,” says Dr Abdallah. “Brands have a life of their own and

starting them is not easy. You need to make sure you will be able to

support them afterwards in order to have the right product, capac-

ity and thinking.”

Having hit its US$500 million target a year ahead of schedule,

Aujan’s eye is now on regional expansion and it has now entered

the Iraq and Iran markets. Dr Abdallah claims Aujan is currently

the only international company to have build a factory in Iran – a

reflection of the bureaucratic and logistical challenges involved in

setting up a business there: “Iran required a higher tolerance for

risk and a long-term vision. There is the risk of sanctions there

at any time. The regulatory frameworks are very complicated. We

also faced other challenges such as the intellectual property rights

protection. There isn’t a good system there for protecting brands.

We had to work hard to protect our brand because we knew we

were fighting copy cats.” The effort was well worth it: Iran is now

Aujan’s biggest market in terms of dollar value after Saudi Arabia.

“We thought it was worth the challenge,” says Dr Abdallah. “Iran

has a population of 70 million and a good per capita income.”

Daring to venture into the Iraq market, where competitors

feared to tread, has also reaped rewards for Aujan. It is now the

company’s third largest market and it is planning to invest heavily

in marketing its products on Iraqi television channels. The chal-

lenges it faced in setting up there were primarily security related,

Barbican: Launched to great acclaim in the 1980s, Barbican is

aimed at the GCC’s growing youth market. A fl avoured malt beverage,

Barbican is aimed at the younger generation and keeps its leading

market position by embracing regional changes in trends, imagery

and consumption habits.Barbican is now available in a wide choice of

fl avours.

Rani: Originally launched in the region in 1982, Rani has been sold

across the Middle East for over a quarter of a century. It was launched

as a new concept in juices, with a recipe that combines smooth juice

and real fruit pieces.

Rani has experienced tremendous growth across the Middle East

and North Africa, and is now sold in over 56 countries worldwide.

Vimto: First introduced from the UK to

the Middle East in 1928, Vimto is one of

the most well-known brands in Aujan’s

portfolio. It is particularly popular during

Ramadan and has been consumed during

over 80 Ramadan Iftar celebrations within

the region,.

In addition to the original bottled cordial

recipe, Vimto is now available as a

carbonated, ready to drink can.

AUJAN’S BRANDS



as Dr Abdallah explains: “In Iraq security is paramount.

Getting a team on the ground is challenging, particularly

because of border controls. Some borders would close,

some would open. There were also issues with customers

and wholesalers in terms of payment terms and getting

money,” he goes on to say.

Thinking bigAujan’s success in Iran and Iraq has spurred it on to

further expand outside its domestic market, the GCC, and

to become ‘super-regional’. It now plans to target North

African markets, and further afield, South East Asian and

Eastern European markets. In North Africa it already has

market share in Egypt, Libya and Sudan – where Dr Abdal-

lah says it benefits from pan-Arab television advertising

and good word of mouth: “We advertise on a lot of Pan-

Arab television programmes. In addition, there are many

Sudanese, Egyptians and Libyans working in the GCC and

so they are familiar with our products.” Aujan now hopes

to target new North African markets including Morocco. In

Eastern Europe it sells products in Romania, Bulgaria and

Albania where it dominates the fruit juice sector. It hopes

to achieve similar success in Afghanistan where it has a

five-year expansion plan.

This confidence in the future of

the company’s international sales is

impressive given the worsening global

economic conditions. So far Aujan ap-

pears immune to the woes befalling

many of its fellow GCC companies,

having announced a 26 percent rise in

2008 third -quarter revenue and a 20

percent growth in sales. The company

recently opened a new US$54 million

factory in the Dubai Investment Park,

which will boost its production capacity

by 50 percent and announced plans to

launch an US$40 million factory in Iran

and to spend another US$50 million on

expanding its main factory in Dammam,

Saudi Arabia. That’s a lot of drinks. At

present Aujan produces one billion cans

or bottles of soft drinks a year. The fig-

ures, once the new factories on board,

are pretty mind-boggling. Despite

having hit its US$500million target a

year early. However Aujan is not resting

on its laurels. Dr Abdallah reveals it is

already planning its strategy for the

next phase of expansion and says we

can only expect big things.

Abdulla Aujan & Brothers was set up in the GCC in

1905 as a family operation trading in tobacco, rice

and beverages. In 1928 the company obtained the

exclusive rights to import and distribute Vimto in the Middle

East, following the drink’s success in the UK. Shortly

afterwards it became Aujan Industries and enjoyed two

decades of growth starting in the 1950s and by the 1970s

had established itself across Saudi Arabia and other parts of

the GCC.

In the 1980s it launched its fi rst home-grown brand,

Rani, and by 1999 sales of the drink had exceeded 10 million

cases. It also launched Barbican, a malt beverage, which it

aimed at the Arab youth market.It continues to market Vimto

and its two home-grown brands having established a strong

R&D department.

The Aujan Industries’ heritage

THE AUJAN INDUSTRIES DISTRIBUTION NETWORK

Head Offi ce

Direct Distribution

Regional Offi ce

Regional Offi ce Manufacturing Facilities

Indirect Distribution


What is the feeling among your members regarding the effects of the

downturn on the marketing industry?

Donovan Neale-May. We’ve just completed our latest Marketing Out-

look study and generally we’re not seeing direct predictions of immi-

nent failure. In fact we’re seeing a fairly positive outlook. I think what

you see and read in the newspapers is not necessarily refl ected within

marketing organisations themselves. However there is clearly a lot of

tightening up of marketing budgets within companies and there are a

huge number of marketing people that are

on the street because of job cuts.

Within marketing organisations I think

they are looking strongly at the types of

skills and profi ciencies they need to actu-

ally embrace new digital marketing pro-

grammes and strategies. They are paying

a lot more attention to the customer and

to understanding who they are doing

business with, who their most profi table

customers are and what the lifetime value

is of those customers. More traditional

PR functions have been impacted more

than the folks working in areas like search

engine marketing, demand generation,

lead acquisition and search advertising.

How many companies are cutting their marketing budgets?

DNM. Well actually we’ve seen around 30 percent of companies in-

creasing their marketing spend. Also it’s less about cutting budgets

than redirecting spend.

It’s going to be more expensive and diffi cult to acquire new

customers, so companies are focusing on the customers they have

and what to do with those customers relative to getting increased

value from them or using them as agents to help introduce other cus-

tomers. This situation is forcing companies to do something which

they’ve been very poor at which is to grab more customer data, get

deep inside it and fi gure out ways to get more tightly connected with

the customer.

The CMO Council has published a

report claiming that marketing de-

partments are not forming strong

enough relationships with other

parts of the business such as IT and

fi nance. What could they learn from

these departments?

DNM. The marketing departments

today have got to want to live, breath

and eat data. The trouble is that so

much data is being generated today

and it is not being effectively collect-

ed, mined or leveraged. There are so

many different third party data sourc-

es that you can gather insights from,

but companies don’t even necessarily

use that data. With a lot of marketing folk their modus operandi is

focused on spend, not around analytics or insight gathering. They

need to be able to not just acquire a contact but track and monitor

the return from that contact. Marketing departments need to look at

THE MARKETING GURUMarketing budgets may be shrinking but there’s no better time to get your company’s message across, according to Donovan Neale-May, Executive Director of the Chief Marketing Offi cer (CMO) Council. He tells BM the latest marketing tricks his members have up their sleeves.

Donovan Neale-May

MARKETING FOCUS


Donovan.indd Sec1:108Donovan.indd Sec1:108 18/6/09 10:23:4118/6/09 10:23:41

hiring people from different backgrounds such as people with PHDs

that can run algorithms.

How are marketing companies taking advantage of social networking

technology?

DNM. It depends on the product they are marketing. If you are in a

consumer business there are obviously some very creative ways to

get your brand, your experience or your product talked about using

social networks. On a consumer level there are opportunities to virally

communicate and to introduce conversations into communities that

centre around new offerings, new innovations and new experiences.

At the same time you can build a collectivised customer commu-

nity, particularly on the b2b side. It’s about creating a shared interest

group around themes, issues, needs and requirements, not necessar-

ily about your product. You’re creating an affi nity network of decision

makers who have an interest and want to interact peer-to-peer.

Trusted business networks are very powerful. They are the way

people, in many cases, infl uence and shape huge amounts of spend.

What do you think are the next big marketing trends? Can you predict

any groundbreaking new marketing methods that may be used in the

future?

DNM. Well I think the future is all about automating on a massive

scale and about interacting more with the marketplace and being far

more agile and adaptive and responsive to shifts and trends. One of

the trends will be cyber-eavesdropping – listening in to the conversa-

tions people are having on the web. For instance we’ve built a whole

global community of mobile computer users and we use a system

called Track the Yak which has been developed by an Indian market-

ing analytics company. This features an intelligent agent, which you

can programme to track certain topics that are being discussed in

certain environments such as forums, bulletin boards, news groups

and blogs. You can use it to track conversations around issues, So for

instance, a company like Shell could track conversations about envi-

ronmental concerns or lawsuits or things that their company might be

embroiled in from a programme reputation point of view. The future is

about getting much smarter and using the new interconnected world

that we live in.

What are the benefi ts to marketing offi cers of using cyber-eavesdrop-

ping techniques?

DNM. This technology allows marketers to track every nuance of dis-

cussion, to track discussions about fashion, electronics and all sorts

of consumer goods. This allows them to predict trends more effec-

tively and manage their demand and supply chains more adeptly. They

could also identify potential threats that could be incursions into their

market space. This technique should, if it is embraced properly and

systemised, put companies at a signifi cant competitive advantage.

This sort of technology will transform the way people acquire custom-

ers, keep customers and more importantly, operate their marketing

programmes globally on a much more effi cient level.

How will mobile technology change marketing techniques?

DNM. The future is very mobile. The new markets around the world

are being driven entirely by mobile communications and cellular

technology. Places like Africa, Latin America and Eastern Europe

don’t have structured markets, they have informal markets and the

future for marketers there is to look at new channels for interaction.

The mobile device is going to be the primary way to interact with the

market and deliver content and create relationships. When you look

at text messaging applications it’s not just about games and content,

it’s about delivering messages. So for instance a message could be

sent out to farmers saying the climate is great and now is the time to

spray their crops, or to senior citizens telling them when to re-order

their medication.

Donovan Neale-May is Executive Director and founder of the CMO

Council – a global network of 3500 senior marketing and branding

executives. He is president of GlobalFluency Inc. The company

specialises in intelligent market engagement and has 70 offi ces in

40 countries employing 450 employees.

Previously he held senior marketing positions in marketing,

promotions and public relations agencies in Silicon Valley, New

York, London and Los Angeles. For fi ve years he ran Ogilvy &

Mather’s west coast PR operations and managed communications

during the formative years of Dell Computer in the mid 1980s.

During his 30-year career Neale-May has consulted with

over 300 leading multi-national companies, including Del Monte,

Samsonite, Colgate, Lever, Polaroid and Kraft General Foods.


Donovan.indd Sec1:109Donovan.indd Sec1:109 18/6/09 10:23:4518/6/09 10:23:45


How can effective CRM initiatives allow

organisations to boost productivity, better

serve customers and lower response times

to customer enquiries?

Rajesh Hari Parsad. By ensuring that the CRM

initiative is driven by business issues and not

technological ones. CRM is a business problem

fi rst, a technological one second. It is critical to

understand how and where customers interact

with their company and how CRM technology

can provide assistance in automating and ex-

pediting those interactions to the benefi t of

both the customer and business.

Once the business issues are resolved,

selecting and implementing a CRM solution

that fi ts the processes and procedures that

support your CRM initiative is critical. In

short, the technology should support the

processes, not visa versa. By doing so, busi-

nesses are leveraging a CRM solution to meet

their customers’ needs across channels and

outlets that are unique to that business and/

or industry, and in a fashion that customers

expect and are more satisfi ed with.

What would you say are the common mistakes

that people make with their CRM strategies?

RHP. In addition to the mistakes mentioned

above, end-user adoption is one of the most

common reasons for CRM failure. Adopting

solutions with intuitive, simple-to-use user

interface, in addition to training, is critical for

success. Failure to achieve executive buy-in

is another common mistake companies

make. Having C-level support for a CRM ini-

tiative provides leadership and motivation,

provides support at the management level,

helps to solidify and achieve goals, and

drives high end-user buy-in.

We are currently witnessing a signifi cant

global economic downturn. How can CRM

help to attract and retain customers, as well

as gain a competitive advantage in these

tough times?

RHP. During economic downturns CRM ini-

tiatives need prioritisation. Deferring these

projects can lead to reduced customer sat-

isfaction or acquisitions. Reducing customer

churn is critical, since most research points

to the fact that customer acquisition costs

signifi cantly more than retention.

CRM can be leveraged to track and

maintain current relationships, identify cross-

sell and up-sell opportunities, and identify

disgruntled customers for further service. In

addition, analytics and reporting can give

managers insight into different customer

segments during a recession that can lead to

increased sales and marketing opportunities.

Choosing a CRM platform that supports

both your tactical and strategic requirements

is essential to ensure its longevity. Web 2.0’s

collaborative and viral nature should be ex-

ploited to extend the lifespan and effective-

ness of your campaigns, especially when

marketing budgets are dwindling.

Could you explain about a recent CRM solu-

tion that you implemented for a client that

you are particularly proud of?

RHP. Neotel is a converged telecommunica-

tions provider offering wireless and wire-line

services across South Africa. SugarCRM

Managing customer relationships

for business success

Rajesh Hari Parsad discusses how the latest CRM

technology is benefi ting businesses today.

Enterprise is used across the consumer and

SME verticals within the organisation for

sales force automation, customer support

and order entry. Tied into a middleware and

workfl ow engine, the solution provides a

comprehensive mechanism to automate key

areas of order entry, management and fulfi ll-

ment, which are often complex and disparate

in most telecommunications companies.

A unique trait of this solution is one that

many telecommunications companies strive

for. There is a single, profi le driven business

interface: SugarCRM. This simplifi es internal

training and the rollout into new sales chan-

nels. Every customer interaction is always

captured and tracked in one place, which is

unusual in a telecommunications company,

where unstructured customer information

is spread across many applications. Another

feature enables business users to quickly

build reports using a graphical interface to

measure KPIs or gather statistics.

Rajesh Hari Parsad is founder

and CEO at TAUSPACE, a

SugarCRM channel partner, and

has over 10 years of experience

with enterprise integration and

operational and business support

systems in telecommunications

carriers. He has previously fulfi lled

roles as chief architect and CTO

within telecommunications related

companies in Africa.

“Choosing a CRM platform

that supports both your

tactical and strategic

requirements is essential

to ensure its longevity”

EXECUTIVE INTERVIEW

SugarCRM.indd 110SugarCRM.indd 110 18/6/09 08:31:3718/6/09 08:31:37

SugarCRM.indd 1SugarCRM.indd 1 17/6/09 15:35:0917/6/09 15:35:09


LAMBORGHINI ED P112,113,114,115,117 Sec1:112LAMBORGHINI ED P112,113,114,115,117 Sec1:112 18/6/09 10:17:4418/6/09 10:17:44


It’s 46 years since Italian tractor maker Ferruccio Lamborghini hatched his

harebrained scheme to build a luxury supercar. But with the wheels falling off the

car industry amid the deepening recession, can this luxury brand navigate the

tricky conditions ahead? Julian Rogers investigates and hears from Director of

Brand and Design Manfred Fitzgerald.



in-house designers and engineers. Lamborghini has always had a cult

following among petrol heads. Ferrari is a bit, dare I say it, ubiquitous.

Lamborghini, on the other hand, is a more elusive breed that manages

to conjure up an intoxicating mix of elegance with muscle. I have crazy

visions of the designers using laboratory test tubes to mix the chromo-

somes of a testosterone-pumped heavyweight boxer with a svelte and

graceful matador. Exotic names (albeit slightly unpronounceable) for

the models, like Murciélago, all add to the alluring nature of the Lam-

borghini brand. Perhaps as a clue to the brute force contained within,

a snarling bull features in the badge stamped on the bonnet. Ferruccio

Lamborghini’s zodiac sign was Taurus, in case you were wondering.

It’s at the Sant’Agata Bolognese factory showroom that I fi nd

Manfred Fitzgerald, Director of Brand and Design. All around us sit

the fruits of his labour in shiny yellows, oranges and blues. Fitzgerald

fi rst arrived at Lamborghini in 1999 as the Marketing Manager and re-

calls how the business had lost its sense of direction. “Back then you

didn’t have a clear idea of what Lamborghini stood for,” he explains.

“If you went to a dealership you would fi nd that everyone interpreted

the brand in a different way, so I went out to create a corporate iden-

tity and corporate design.” A focused vision is vital, he says. “It is so

important for a luxury brand like ours to have a clear idea and vision

of where you want the brand to go. You have to be very consistent in

your approach.” Getting customers to believe in the brand is what it

is all about in the world of high-end motoring. When you slap down a

deposit you are buying into a select club, not just blowing your hard-

earned cash on a lightning-quick car that costs about the same to run

as a small African country.

Market forcesLike much of the car market where one carmaker seems to be

owned by another, Lamborghini is a division of Volkswagen’s Audi

brand. Despite this, Fitzgerald is keen to stress that Lamborghini is

a stand alone and autonomous company. “The whole of the R&D, as

well as the design, is done here in-house. If we want to, we can tap

A quick trawl through Lamborghini’s fl ashy looking

website brings you to a grainy black and white clip

of the late Ferruccio Lamborghini in a suit and dark

sunglasses being interviewed whilst steering a trac-

tor. A lit cigarette sits between his index and middle

fi nger. The journalist perched on the front of the

moving machine fl icks a microphone back and forth

between himself and Lamborghini’s chin. “What type of man are you?”

the young hack asks inquisitively. “A normal chap who likes creating

things,” Lamborghini responds nonchalantly. “A good worker in the

morning, and a man who likes enjoying himself in the afternoon.” The

interviewer suggests his subject is “very wise” in choosing to adopt

this outlook. Lamborghini then offers a snapshot into his uncompli-

cated working philosophy: “I’m not interested in ending up like my

colleagues, with heart problems.” A sagacious grin creeps across the

tractor-maker’s face.

The company’s serendipitous foray into luxury sports car pro-

duction came after Lamborghini complained to his friend Enzo Fer-

rari about the gearbox on his recently purchased Ferrari. The Ferrari

founder’s dismissive response was to tell him to stick to making trac-

tors because the problem was down to the driver, not the car. Cue

a defi ant Lamborghini, vowing to build a sports car to rival a thor-

oughbred motoring icon like Ferrari, contrary to the vehement advice

of those closest to him who said he would squander his wealth. He

was accused of being pazzo, or crazy, but Lamborghini would not be

deterred in his Herculean quest, and in 1963, aged 47, he created the

eponymous ‘Automobili Ferruccio Lamborghini’.

Heritage The Lamborghini factory resides in Sant’Agata Bolognese, about

25 kilometres from Bologna. It is here that some of the words’ quickest,

most expensive and most desirable supercars are handcrafted by the

With a top speed of 340 km/h, the Murciélago LP640 is the fastest street-legal model

Lamborghini went bankrupt in 1978 and was sold to Chrysler

The iconic Countach was created in 1974 and production ran for 15 years

THE NUMBERS THAT COUNT



“We still have quite a lot of white spots on the world map so we still

see potential to bring our products to the market without diluting our

brand image and exclusivity” he says.

Lamborghini is hard at work penetrating the Chinese market – the

most populous nation with a burgeoning, cash-rich elite. “A couple

of years ago, the Chinese did not know what Lamborghini was,” says

Fitzgerald. ‘Is it a coffee brand or perhaps something to wear? Is it

a car manufacturer?’ No, it’s a super sports car manufacturer and

luxury brand. We have to be something that the Chinese would like to

possess.” The tiger economies are far from impervious to the global

economic crisis but Fitzgerald still sees China as an uncut gem. “China

is still predicting growth this year of eight percent or more, which

would be a dream in Europe. Luckily, we still fi nd

markets out there that have enough money at

their disposal.” It’s also especially important that

the Lamborghini brand and message translates

across different countries and continents, says

Fitzgerald. “We don’t have products for a particu-

lar market – we have a global product that has to

work everywhere. We have to understand the

market and penetrate our brand values, and we

have to be understood as a luxury brand.”

One of Lamborghini’s unique selling points

is its option for customers to personalise their

new car in order to stand out from the crowd (as if pulling up at the

traffi c lights in a US$300,000 supercar isn’t conspicuous enough

already). The options are bewildering, right down to the colour of

the brake callipers.

Fitzgerald says this customisation and whole customer experi-

ence is vital. He wants to the company to have a greater focus on the

customer, although this would never extend to would-be owners infl u-

encing the design of the cars. And with Fitzgerald and his team already

producing stunning looking cars coveted by the motoring press they

probably don’t need any input from an over-zealous enthusiast.

into their research development facilities because it would be stupid

if we didn’t do that. But my team live at Lamborghini because we are

integrated into the company.”

When the bean counters at Volkswagen took charge they in-

troduced economies of scale. Profi ts soared and the factory was

operating at full capacity. However, in 2008 the car industry was

hit head-on by the credit crunch and subsequent meltdown. Global

car sales have fallen through the fl oor and factories have shed sig-

nifi cant staff numbers. Lamborghini, though, bucked the trend in

2008 with a pre-tax profi t of US$83 million – a 27.4 percent increase.

But it wasn’t all smooth running; sales were fl at and much of the

announced profi t came from cost-cutting measures. Unit sales rose

by just one percent to 2430, which was short of

the fi ve percent target. On top of this, the com-

pany’s largest dealer in the world – Lamborghini

Orange County in the US – closed last year amid

an accounting discrepancy whilst a third of the

Sant’Agata Bolognese workforce was sent home

during temporary shutdowns recently.

CEO Stephan Winkelmann says he expects

sales to decline and no growth in 2009 and 2010

but there are no plans to lay off staff permanently.

Fitzgerald echoes his boss’ pragmatic approach

to dealing with the economic climate. “We have

a clear strategy for the future and if we stick to that we will weather

the storm out there,” he reveals. “It’s about not being tempted to

do something erratic – there are some quick wins but that is not us.

Wealth is still out there and luckily people have enough money to buy

our products.”

Much of the wealth Fitzgerald identifi es is being unearthed in

the emerging countries and their inhabitants’ newfound fortunes.

Russia’s nouveau riche and well-heeled oligarchs think nothing of

splashing out a few million roubles on a supercar. Likewise, the ultra-

rich Arabs see a car like Lamborghini as a badge of wealth and status.

US$1.3 million is how much the Lamborghini Reventón model cost the lucky few that got their hands on one

The fi rst ever Lamborghini car was the 350GTV from 1963

Founder Ferruccio Lamborghini died in 1993 at the age of 76

US$83 millionLamborghini’s 2008

pre-tax profi t


We open your eyes to new opportunities

www.sitconsult.com

• CRM - Project Consultancy

• CRM - Solutions

• Mobile CRM - Solutions

• CRM Outsourcing

• Business Intelligence

• Business Process Management

SIM

PLI

CIT

Y •

INT

EG

RIT

Y •

TR

US

T

SirConsult.indd 1SirConsult.indd 1 17/6/09 15:34:5117/6/09 15:34:51


what you could call the ‘brand building’ phase and any step we take

out there has to be considered more than once. I discard around 95

percent of what lands on my desk in terms of product placement for

big Hollywood fi lms because they are just not a brand ‘fi t’.”

On the subject of movie placement, Lamborghini was featured

in the 2008 blockbuster movie The Dark Knight where Bruce Wayne

(Batman) is seen putting an equally masculine Murciélago through its

paces in the streets of Gotham City. A car’s appearance in a high-pro-

fi le fi lm can outstrip any advertising campaign and show the product

off to a global audience. Fitzgerald says Lamborghini went through

the script and felt that the fi lm would suit their brand. It was a similar

decision with Mission Impossible 3 when the producers pitched the

idea of a Lamborghini Gallardo making an on-screen appearance. So

how does Fitzgerald select that fi ve percent of offers that land a Lam-

borghini on the silver screen? One major factor is who will drive the

car. “I do not like to see our products being driven by villains because

that would not be the appropriate move for us. Mission Impossible 3

was a luxury setting but it’s important that our products are perceived

in a normal context. I’m trying to take us out of being a ‘niche of a

niche’.” Lamborghini’s presence in the US box offi ce has led to “huge

steps” being made in the US market – the fi rm’s largest.

With the interview wrapping up, Fitzgerald offers an insight into

what it takes to be head of brand and design: “You have to be consis-

tent in your approach and also a bit stubborn, but don’t get irritated

by what the people left and right of you are thinking. If you have a

clear vision of what you want to achieve, you have to go for it.” It

seems that having this maverick-like design attitude is translated

in Lamborghini’s corporate vision, too. “We like to be in the driver’s

seat, rather than the passenger seat,” he beams. Fitzgerald heads

back the drawing board, so to speak. Outside the factory a white

Gallardo (a colour that appears to be de rigueur at the moment) is

fi red up. A beastly cacophony emanates from the four chrome ex-

haust pipes protruding from the car’s rear. Seeing these cars in the

fl esh (or should that be carbon fi bre?) it is diffi cult to imagine that

the name Lamborghini was ever associated with a piece of farm ma-

chinery, but we have to thank Enzo Ferrari and the disputed dodgy

gearbox for that. Oh, and a laidback Italian’s headstrong attitude

and dogged determination. Bravo Ferruccio.

“Our obligation is to surprise people with the designs and let

them see how we realise the dreams they haven’t dreamt so far,” he

remarks whilst trying not to sound too much like a quote lifted from

a glossy Lamborghini brochure. Fitzgerald explains how his team are

able to design a car in 3D from the fi rst sketch onwards, which speeds

up the whole production process. For instance, the Murciélago Rev-

ingtón was designed in just four months. The team work hand-in-hand

with R&D, too. “We don’t work in sequences where one person gets

something and it then gets handed back for their approval. No, it’s an

integrated process.”

So where does he look for inspiration when designing a new su-

percar befi tting the Lamborghini range? “Everywhere.” He expands:

“We are so fortunate living in a country like Italy where you can get

so many inspirations. As a global company, we have our ears and

eyes open everywhere. We are heavily infl uenced by other industries

– just looking at the automotive industry won’t get you anywhere.

Our lives are moving and changing very fast; the way we commute

and the way we communicate

is changing so this inspires us

for future products.”

Image is everything Like many of the luxury

sports car producers, Lam-

borghini has done more than

churn out cars – its merchan-

dise is also a lucrative revenue

stream. Indeed, you can fi nd

the Lamborghini name as-

sociated with everything from

playing cards to coffee mugs. Fitzgerald suggests diversifi cation is a

necessity for a luxury supercar manufacturer. “A luxury brand is al-

lowed to play in other fi elds. Obviously this [car making] is our core

business, but the merchandising has taken enormous steps in the last

couple of years. As long as you stay authentic and credible in what you

are doing, any path out there is allowed.”

Ferrari is thought to rake in around US$150 million a year through

‘brand extension’ and Fitzgerald says they are ahead of his company.

“They [Ferrari] are in a different position to us,” he notes. “We are in

Manfred Fitzgerald“I discard around 95 percent of what lands on my desk in terms of product placement for big Hollywood fi lms because they are just not a brand ‘fi t’”



SAUDI ARAMCO v2:5oct 18/06/2009 10:19 Page 118

Today the financial and economic crises are on all our minds, and rightly so. The im-

pact of the global downturn, the restorative effects of various economic stimulus

packages, and the timing, strength and breadth of the eventual recovery are all is-

sues of the highest order. But to my mind, one of the most significant and enduring

lessons from this painful downturn is the reminder that ours is one, highly integrat-

ed and mutually dependent world. What impacts one country, business or industri-

al sector ultimately touches us all, and whether we realise it or not, we’re all

navigating the same rough seas in the same boat. Global interconnections are abundantly clear to

those of us in the petroleum industry, and we understand that in an interconnected, interdependent

global petroleum market, the strategies and actions of even a single major supplier or consumer have

implications for us all. That is why the decisions about energy that we make as companies, institu-

tions and nations have ramifications which know no borders, which touch the lives of everyone on

the planet, and which will be felt for many, many years to come. Today, much of the talk in the petro-

leum industry is about faltering demand and markedly lower prices for crude oil and refined prod-

ucts. There is plenty of oil in the market, and in some cases it appears to be storage capacity that is

in short supply rather than the petroleum that goes into those tanks. That’s quite a different picture


ENERGY

Khalid Al-Falih, Saudi Aramco’s newPresident and CEO, gives an exclusive insightinto the future of energy and his company’s

relationship with the US.

United

standwe


other words, you have to keep running just to stand still. Second, you need

to build new capacity as well as infrastructure to meet future growth. And

third, we also need to maintain a cushion of spare production capacity, the

very existence of which plays a vital role in tempering market volatility.

Shaping the energy futureGiven these dynamics, I believe we should commit ourselves to a more

pragmatic approach to shaping our energy future, especially considering

the central role that energy plays in our economies, our societies, and in-

deed our daily lives. In my view, the optimal strategy is to support contin-

ued enhancements in proven technologies and fossil fuels – most important

of which is oil – while concurrently supporting the development of a num-

ber of alternatives to a reasonable level of maturity, as opposed to favour-

ing one option to the exclusion of others. Then, let us expose the most

promising alternative sources to the rigors of market competition and con-

sumer preferences, and compete on a level playing field with other sources.

Thus we will increase the variety of options available for the long term with-

out premature commitments, and maximise the range of viable approach-

es to realising greater global energy security. But continuing to utilise

conventional energy sources doesn’t mean we must continue to operate as

we have, particularly when it comes to the environmental impacts that are

associated with the production and consumption of fossil fuels. While work-

ing to meet growing energy demand, we must address global and local en-

vironmental concerns, particularly carbon emissions. Ideally this would be

accomplished through R&D and technological solutions such as a combi-

nation of enhanced conservation measures and more fuel-efficient end-use

technologies, cleaner burning petroleum products, the development of car-

bon capture and sequestration technologies applied to both stationary and

mobile emission sources, and the use of alternative energy sources in ways

which complement coal, oil and gas. Of course, such utilisation of alterna-

tives should be based not on optimistic assessments of their future poten-

tial, but on realistic expectations consistent with actual progress made in

resolving the various issues restricting their greater use.

In terms of carbon management, much will depend on the policy envi-

ronment surrounding these issues. I believe that policymakers and regu-

lators must acknowledge the complexity of implementing alternative

mechanisms, as well as the ultimate costs for consumers and the far-rang-

ing impacts on our global, regional and national economies. A high degree

of uncertainty and inconsistency surrounding carbon management legis-

lation and policies is in the interest of neither producers nor consumers,

nor are risky policy initiatives and overly hasty legislation. As in so many

matters, a pragmatic and holistic approach that stabilises the energy mar-

ket and achieves the sought-after reductions is likely to be the best path

than the one we saw just a year ago, when the perception of supply short-

ages and the fear of interruptions opened the door for speculation which

played a significant role in driving oil prices to record highs.

But these snapshot indicators of a crude oil market awash in barrels

are just that: a snapshot taken at a particular point in the cycle, rather than

the shape of things to come. In the future, as before, I believe that crude

oil markets will be impacted by significant trends on both sides of the sup-

ply-demand ledger. Furthermore, given the need for wise and timely in-

vestments in all segments of the petroleum industry, I believe we must

collectively adopt a more pragmatic approach to energy and oil, particu-

larly when it comes to long-term prospects for global energy security and

environmental stewardship.

Rising demandsAlthough global petroleum consumption has exhibited considerable

volatility in the short term, it is rising worldwide oil demand that is the

surest feature in the future energy landscape. The combination of a grow-

ing global population and greater prosperity and affluence in developing

economies point the way toward a relentless increase in petroleum demand

over the next several decades. And given that six out of every seven units

of energy the world will consume over the next two decades will come from

fossil fuel sources, it is clear that the world will be looking to producers like

Saudi Aramco for significantly more petroleum than is the case today. Some

may argue that rising demand for oil in the developing world is a matter

for those economies to worry about, but given that petroleum is a fungible

commodity which is traded in highly integrated global markets, demand

growth in China, India and other countries has a direct impact on con-

sumers in industrialised nations as well, including the United States. We

are all in the same boat, and when it comes to petroleum, we are all sub-

ject to the same rising and falling tides. To meet this increased future de-

mand, the petroleum industry must be ready – and given the long lead

times associated with petroleum sector projects, that means investing now

in various segments of the value chain. It is true that the industry has just

come off a high in the investment cycle, and that for the next several years

supply is set to outpace demand. But the economic cost to the world will

be considerable if the industry is not well-prepared for future growth in con-

sumption: we all know that potential supply-demand imbalances have the

potential to trigger another cycle of steep price rises and debilitating mar-

ket volatility. That, in turn, would spell trouble for the green shoots of a

nascent economic recovery. At the moment, though, the low price, low de-

mand environment discourages substantive investment in petroleum de-

velopment and infrastructure projects – a situation which is compounded

by high development costs and tight credit markets. Furthermore, the talk

in some quarters about moving away from oil and toward energy self-suf-

ficiency and unproven alternatives which still face significant technical, eco-

nomic and environmental hurdles, are creating greater uncertainty about

the future prospects for fossil fuels in general and petroleum in particular.

Capital dislikes uncertainty, and indecision related to energy policies may

serve to exacerbate the trend of underinvestment – which is particularly

dire in an extractive industry like petroleum. The underinvestment risk is

especially worrying because large, timely oil investments are necessary to

meet not just one but three requirements. First, as you produce resources,

you have to continue to invest simply to maintain current capacity, or in


“Although global petroleum consumptionhas exhibited considerable volatility inthe short term, it is rising worldwide oildemand that is the surest feature in the

future energy landscape”


to achieve not just one-off, short-term gains, but meaningful, long-term,

and sustainable benefits.

The Aramco storyIt is within this broader industry context and with our sights firmly fixed

on the future that we at Saudi Aramco are striving to enhance energy se-

curity in an environmentally sensible manner, and partnering with other

companies and institutions which share these strategic objectives. That’s

why I would like to outline some of the many steps we are taking to bring

about a brighter energy future – one in which we are able to grow our

economies and enrich our societies while simultaneously protecting our

natural ecosystems. First and foremost, we are continuing to invest all

along the petroleum value chain, on a scale never before seen in the histo-

ry of our industry. In the area of exploration for crude oil and natural gas,

for example, we are continuing our efforts to locate additional resources

across Saudi Arabia, including new frontier areas both on land and offshore,

despite the large resource base we already possess. We believe there is

tremendous potential to locate substantial new hydrocarbon resources in

various regions of the Kingdom, and are bullish on these prospects.

In terms of production, Saudi Aramco is on the verge of attaining its goal

of a 12 million-barrel-per-day crude oil production capacity, once we complete

our Khurais oil field programme. This project is the largest single crude oil

increment ever commissioned, and will be capable of producing as much oil

as the entire State of Texas. But Khurais is only one aspect of

our overall crude oil development programme, and Saudi

Aramco alone will ultimately account for more than half of the

grassroots crude oil production capacity brought on-stream

worldwide this decade. We will also be expanding our natural

gas production capability, which is important given the role that

gas plays in the Saudi economy, supplying utilities and a wide

range of industries, fueling greater economic development and

diversification, and encouraging the development of value-

added enterprises based on gas and its associated feedstocks.

And while we’ve been known since the 1940s primarily as a

leader in the upstream segment of the business, we are also a

major player when it comes to refining. Today, we are con-

structing additional refining capacity both in the Kingdom and

abroad, including in the United States through our Motiva joint

venture with Royal Dutch Shell. Once the current expansion of

our Port Arthur, Texas refinery is complete, it will be the single

largest refinery in the country. In fact, Saudi Aramco will be be-

hind one out of every three barrels of firm commitments to new

refinery capacity to be built worldwide over the coming five

years. Even further downstream, we are moving forward with

integrated refining and petrochemical ventures in collaboration

with some of the world’s leading chemical companies, includ-

ing Dow Chemical, our partner in the landmark Ras Tanura

Integrated Project. These new facilities not only add value to the

Kingdom’s hydrocarbon production by converting refined prod-

uct streams into both base and specialty petrochemicals, but

also form the hubs of new industrial clusters which will house

conversion industries and manufacturing companies in pur-

pose-built business parks.

The bigger pictureMajor investments such as these, including the maintenance of sig-

nificant spare production capacity to respond to unforeseen circumstances

elsewhere in the global petroleum industry, allow us to play our part in

meeting the world’s demand for energy responsibly and reliably. But some

people question the wisdom of pressing ahead with these mammoth pro-

jects even in a challenging business environment and at a time when oil

consumption has fallen for the first time in 25 years. Certainly we have been

negatively impacted by the crisis along with the rest of the petroleum in-

dustry. But we continue to invest across the cycle, in good times and bad,

because we are maintaining our long-term focus rather than being swayed

by the volatility of short-term conditions. Given the combination of geolo-

gy, geography, history, and economics, Saudi Arabia and Saudi Aramco

have been fated to play a dominant role on the world’s energy stage. This

is a duty that we have embraced just as generations of Aramcons before

us did, and it is a responsibility we take very, very seriously indeed. So we

build with confidence today, knowing that tomorrow we will be able to meet

our commitments to all of our various stakeholders.

Ground breaking innovations Our world-scale infrastructure development projects and programmes

are coupled with investments in advanced technology and applied research.


Khalid Al-Falih


Jaguar.indd 1Jaguar.indd 1 17/6/09 15:32:3217/6/09 15:32:32

Saudi Aramco is particularly active in the area of cutting-edge upstream tech-

nologies relevant to our operations, including the first development of giga-

cell reservoir simulators which allow us to optimise our production strategies

to ensure outstanding reservoir sustainability over several decades using

a range of scenarios; we are also developing extreme reservoir contact well

technologies that enable us to produce our hydrocarbon resources more

effectively and more efficiently. We are also continuing to push forward and

further develop our Intelligent Field – or I-Field – vision, which serves to en-

hance the efficiency of our production operations, lower production costs,

and help further improve the recovery of precious in-place resources. And

this is not just talk, or something that might happen in the future; in fact,

all of our new field developments are I-Fields, and we are retrofitting our

older fields to become I-Fields as well. Within our EXPEC Advanced

Research Center focusing on upstream technologies, we are also develop-

ing futuristic technologies like “res-bots”: tiny, intelligent nano robots

which will be injected directly into the reservoir to provide a hitherto un-

dreamed of direct sensing of the subsurface, and a much greater under-

standing of the reservoir properties and

varying conditions over time. Innovation

is also helping us meet global energy

needs with less impact on the environ-

ment, and programmes designed to

lighten the environmental footprint of

hydrocarbon production and consump-

tion are central to the mission of our

Research & Development Center that fo-

cuses its efforts on downstream tech-

nologies and surface facilities. Our

commitment to environmental steward-

ship is nothing new—the company’s first environmental policy statement

was published more than 35 years ago – but today, advanced technology

and innovation are enabling us to do much more with much less impact.

At the moment, we are focusing our research on significant key initia-

tives with widespread applications affording Saudi Aramco a future global

leadership position in select areas, including carbon capture and storage

techniques, the pre-refining desulfurisation of whole crude oils, new refin-

ing technologies, novel fuel formulations to power next-generation engine

technologies, and production of hydrogen out of liquid fuels in a cost-ef-

fective manner. All of this will help to reduce the environmental ramifica-

tions of petroleum consumption while prudently and creatively building on

acquired human knowledge, existing infrastructure and expanding intel-

lectual capital. Energy and the environment are closely bound together, and

at Saudi Aramco we’re applying cutting-edge R&D and advanced technol-

ogy to both sides of this vital equation.

ConclusionI want to conclude with four brief points related directly to our inter-

actions with the US market. First, ‘energy security’ is a two-way street in-

volving not only security of supply for consumers, but also security of

demand for producers. Given the billions of dollars and millions of man-

hours required to bring petroleum projects and crude oil developments

onstream, unrealistic expectations and pronouncements could indeed un-

dermine energy security, instead of enhancing it, simply because they

cloud the demand picture and thus could possibly put into question our

investment decisions.

Saudi Aramco has contributed significantly to the past, present and

future energy security of the US. We have contributed through our sus-

tained investments in world-scale upstream projects, and our maintenance

of at least 1.5 to two million barrels of expensive spare production capaci-

ty – which has been brought onstream many times to make up shortfalls

in global supplies, including in the wake of Hurricanes Katrina and Rita

which shut in US Gulf of Mexico production. We have contributed through

significant and ongoing investments in US domestic refining capacity, and

in the construction of one of the world’s largest and most modern fleet of

double-hulled supertankers, devoted primarily to bringing our crude oil to

these shores, with the explicit aim of providing America and Americans with

the petroleum energy they need to maintain their prosperity.

Second, I think it would be very, very risky to bet the farm on one or

two unproven alternative sources of energy, because the stakes for this

economy and this society are extremely high, given the central role of en-

ergy in every aspect of modern life and contemporary

economies. The risks would be compounded if tried

and tested energy sources and technologies were

de-emphasised and big bets placed on unproven and

upcoming technologies. A more rational approach

would make the fossil fuels the base on which the

energy future is built, of course complemented by al-

ternatives whose contributions would gradually and

steadily grow, as their technical limitations are re-

solved.

Third, we need to work together more closely

and collaboratively on the development of sensible

environmental measures which protect and preserve natural ecosystems

while supporting the conditions necessary for economic growth and de-

velopment. Enhancing the environmental performance of fossil fuels, in-

cluding oil, through R&D and the development of groundbreaking

technologies, is perhaps the single most important step we can take in this

regard, given the overwhelming proportion that will continue to be met by

conventional fuel sources. Clearly, such enhancements are in everyone’s

interest, whichever side of the producer-consumer line we find ourselves,

because a cleaner environment and more effective and efficient energy use

benefits everyone.

My fourth, final and perhaps most important point is that Saudi

Aramco firmly believes that the United States will adopt a pragmatic, real-

istic and balanced approach to energy issues, and eventually arrive at a

basket of solutions that serve to simultaneously enhance energy security,

economic competitiveness, and environmental protection. Winston

Churchill once said, “The United States invariably does the right thing, after

having exhausted every other alternative.” Certainly in this case the com-

plexity of the issues in play, the number of stakeholders involved, and the

sometimes rough-and-tumble nature of the processes involved may make

for a difficult route, but I believe it is one which will ultimately lead to the

right place. For some seven decades, Saudi Aramco has been among the

foremost providers of energy to the world and to the United States, and we

look forward to continuing to meet a substantial portion of this nation’s

energy needs for another century – or more. n


12 millionSaudi Aramco’s target

daily production inbarrels



How would you describe the current profile of

Business Process Management in the Middle East?

How do companies currently relate to BPM and

where do you think they need to focus to improve?

Dr Russell C. Gomersall. The BPM market in the

Middle East is currently dominated by several

Business Process Redesign (BPR) initiatives. In the

current situation BPM and the element of BPR as

the method of choice take the strategy to an oper-

ational level. The overall goal is predominantly not

to optimise local processes but to derive from the

organisation’s strategy, clear design guidelines

which are the basis for setting up a holistic and in-

tegrated process framework in which all introduced

changes and requirements concerning for example

roles and responsibilities, KPI’s and IT require-

ments can be linked back to the overall strategic

objectives.

Another field of BPM activities within the more

industrial related markets is initiated by IT/ERP re-

implementations. The reason for re-implementing

is either driven by the necessity to consolidate the

heterogeneous IT landscape existing due to the

fast growth of companies and ever-growing IT re-

quirements but also due to failed implementations.

In both cases companies in the Middle East realise

that IT has to follow business and that processes

are the key element in aligning Business and IT.

Which solutions does IDS Scheer offer in order to

improve companies’ business performance?

Dr Dirk Oevermann. IDS Scheer covers the whole

spectrum of BPM consulting. Major areas of focus

besides the established Enterprise Business

Process Management are Process Intelligence,

Process-Driven SAP, Supply Chain Management,

Business-driven Service-Oriented Architecture, and Governance, Risk and

Compliance Management. With the integrated approach of ARIS Value

Engineering (AVE), IDS Scheer consultants view their customers’ enter-

prises holistically. AVE means building bridges between corporate strate-

gy, the processes derived from it, the IT solutions needed to support it and

also the controlling of running processes.

With its ARIS Platform for Process Excellence, the company offers an in-

tegrated and complete tool portfolio for strategy, design, implementation and

controlling of business processes. This means that IDS Scheer is the only

company in the international area that can offer con-

sulting and software for all aspects of business

process management from a single source.

Why would companies need the solutions of IDS

Scheer? What value do you add to them?

DO. IDS Scheer helps its customers to improve their

business performance by increasing efficiency, re-

ducing costs and enhancing flexibility through ex-

pert Business Process Management. Successful

companies know that the required changes need to

be monitored and implemented effectively to

achieve the needed results. Business Process

Management from IDS Scheer enables these com-

panies to improve their overall business perfor-

mance continuously. IDS Scheer supports

companies to make strategic decisions, driving cost-

effectiveness, efficiency and business success.

Innovative companies know that business

processes need continuous improvement. This

also includes redesign on the basis of up to date

information about the current process perfor-

mance. The IDS Scheer offering is the ARIS

Solution for Process Intelligence and Performance

Management. It enables the measurement of key

performance indicators (KPIs) in live business

processes. It offers executives and managers a

comprehensive, real-time view of their processes,

so they can make objective decisions and identify

and realise improvement potential.

What is IDS Scheer’s Middle East strategy and

why is this market unique?

RG. On the one hand the focus is on the industries

of the region such as public sector, petrochemical

industry and the regional industrial groups as

these are all IDS Scheer’s strategic fields. But several other factors make

the Middle East markets unique. The organisations and industries within

the region have grown incredibly during recent years and they are still in-

vesting heavily. I would like to stress the point that these investments are

not just merely concerning the ‘hardware’ aspects of the business. From

my perspective the region is unique concerning its determination to build

soft skills to ensure and sustain the investments in the long-term. I see our

relationship with our customers as a partnership with the vital element of

knowledge transfer in any of our engagements. n

The magic formulaDr Dirk Oevermann and Dr Russell C. Gomersall of IDS Scheer give their insightinto how Business Process Management can help Middle East companies to beatthe competition and improve their business performance.

EXECUTIVE INTERVIEW

Dr Russell Gomersall is responsible for the

MENA region at IDS Scheer Saudi Arabia LLC.

Dr Dirk Oevermann is a member of the

Executive Board with responsibility for the

DACH and EMEA regions of IDS Scheer.

IDS SCHEER:co proof 18/06/2009 09:20 Page 124

IDSsheer2.indd 1IDSsheer2.indd 1 17/6/09 15:31:0517/6/09 15:31:05

Getting

The IFEBP recently completed a major survey into wellness pro-

grammes, focusing on the design of wellness programmes and

what employers are offering, and if they offer them at all. We

looked at what types of initiatives were out there, whether or-

ganisations were getting adequate participation rates, whether

or not they’re offering incentives and if so, what kind of incentives? One of

the first questions we asked was what is their motivation for offering wellness?

Of thse surveyed 46 percent said they want to control healthcare costs.

Another primary reason is they just want to help employees have better over-

all health. That’s not really startling, but it confirmed what we expected.

better?Kelli Kolsrud of the InternationalFederation of Employee BenefitPlans sheds some light on the stateof corporate wellnes

HUMAN RESOURCES

IFEBP ED:feb08 18/6/09 10:40 Page 126


Then we asked about a lot of different initiatives.

Screening and health risk assessments and appraisals

are popular, near the top of the most commonly offered.

Weight loss and fitness are also popular, as well as some

informational initiatives where companies arrange health

fairs or give employees web links to useful resources.

Unfortunately a lot of the programmes they institute do

not have high participation rates and that’s a problem for

employers that leads them to offer incentives to try to in-

crease those participation rates.

We asked about specific initiatives and whether em-

ployers include incentives or not and also whether they

believe they derive certain benefits from wellness. That

brings up an issue that’s a challenge with wellness. A lot

of employers are not measuring the return on investment.

When we have an economic crisis like the current one, the

main challenge for wellness programmes is that employ-

ers don’t have a good sense of how much they save money

or add value. These programmes are then perhaps vulner-

able to reductions, budget cuts and problems like that.

Understanding the true value of wellness pro-

grammes is going to be key to their ongoing success.

Academics have gone into companies and tried to do

studies, but the trick with wellness is it’s a long-term in-

vestment. You don’t institute a programme and then six

months later have a huge drop in healthcare costs. It

takes years and it’s a difficult task to try to change be-

haviors and convince employees that it’s worth their

Kelli Kolsrud is Senior Information/Research

Specialist for the International Foundation of

Employee Benefit Plans. The IFEBP is a nonprofit

organisation, dedicated to being a leading objective

and independent global source of employee

benefits, compensation and financial literacy

education and information. The Foundation delivers

education, information and research, and networking

opportunities to benefits and compensation

professionals.

“Weight loss and fitness arepopular, as well as someinformational initiatives wherecompanies arrange health fairsor give employees web links touseful resources”

0 5 10 15 20 25 30 35 40

Non-cash incentives/raffles/prizesGift cards or gift certificates

Cash rewardsInsurance premium reductions

Gym/fitness center discountsContributions to health accounts

Reimbursement of costsWaivers/reductions for deductibles

Additional time offOther

No Incentives offered

• Types of incentives

39%32%

22%22%

21%11%

10%5%

4%4%

20%

Highlights of the IFEBP’s recent survey intocorporate wellness programmes

Healthy figures

• Increased productivity

Not sure61%

Not at all3%

To a littleextent10%

To someextent20%

To a greatextent

4%

To a verygreatextent1%

0 20 40 60 80 100

Flu shot program

Health risk assessment/appraisal

Health screening

Smoking cessation program

Stress management program

Complementary/alternative medicine

On-site massage therapy

On-site healthcare clinics

None of the above

• Screening and treatment initiatives

82%73%

69%

60%34%

23%

21%

12%3%

• Improved worker morale

Not sure41%

To someextent29%

Not at all5%

To a littleextent12%

To a greatextent11%

To a verygreatextent

2%

IFEBP ED:feb08 18/6/09 10:40 Page 127


We asked the participants in the survey whether they thought some of

the benefits derived included things like improved morale, worker health,

increased productivity and reduced absenteeism. The areas where they

saw the most benefit is in worker health

and morale and not as much in

controlling costs in general for

healthcare or of high risk

conditions. A lot of re-

spondents to the survey

just said they weren’t

sure whether they de-

rived benefits or not.

That’s telling in itself.

The concept of wellness

isn’t something that should only be

the concern of employers. News stories

today are heavily populated with items about childhood obesity and lack

of fitness in young people and children. Obviously, if you have that prob-

lem at a young age it’s only going to be worse as they age and enter the

workforce. It’s a social issue across industrialised nations. I think even

Japan is having problems. Fast food has taken over the world.

As for who is going to take the lead on this going forward, the jury is still

out. It certainly seems like the new administration is interested in healthcare

reform and many healthcare reform proposals include wellness initiatives,

improving quality of healthcare and reducing costs. A public health message

is certainly part of healthcare reform proposals that are being introduced, but

it remains to be seen whether or not they will come to pass. We just heard in

Obama’s budget that he has set aside a healthy chunk for healthcare reform,

but of course it has to get through Congress. There are a lot of people who

will be clamoring for that money as well. It’s not a done deal yet. �

while, both for themselves and for the organisation. All in all, it’s a pret-

ty complicated challenge.

I think sometimes employers institute plans and they look upon them

maybe as a perk. But for wellness programmes to succeed they have to be

an integral part of the health plan and the com-

pany culture. You need to have support

from upper management to realise

the full potential. You need a

commitment from the em-

ployer to budget for it, allow

time for employees to par-

ticipate and reward them if

necessary. Sometimes

getting them started in the

programme isn’t so hard,

getting them to continue is

the real challenge. People

don’t necessarily want employers

dictating what they consider their

personal lives and they are sometimes just

used to eating less healthy foods or not making the time to exercise. We’re

creatures of habit and a lot of people don’t feel they have the time to exert

effort in that regard. Plus, some of those unhealthy foods taste really good.

But if employers see the value of wellness plans and can realise that value

then they’ll want to continue to support and enhance these programmes.

I certainly think the interest and popularity is growing. We have seen that,

but their success may be closely tied to whether wellness plans are able to

show their value.

Wellness is not purely a financial issue. Another element of our sur-

vey addressed the impact it can have on other factors within a company.

IFEBP ED:feb08 18/6/09 10:40 Page 128

MenegaerForcesCrisis.indd 1MenegaerForcesCrisis.indd 1 17/6/09 15:33:1217/6/09 15:33:12

If an organisation is looking to appoint a CEO,

what are the benefits of choosing an interim CEO?

Nadeem Ahmad. The CEO holds the most impor-

tant position in an organisation. If a CEO is re-

placed due to unforeseen circumstances, the

company is faced with one of two decisions. Either

wait for a few months as they search for a perma-

nent CEO or bring in an interim CEO within 10 days.

Having an experienced and top-level interim CEO

managing the business immediately is a great

benefit to the company as it brings in a sense of

confidence to all stakeholders and ensures that

the business maintains a steady course.

How is the interim management market being

affected by the global recession and what’s the

situation in the Middle East?

NA. Traditionally in markets hit by recession we

find companies look to top-notch interim C-level

professionals to turn around businesses and

steer companies towards becoming lean and ef-

ficient organisations. In the Middle East, most

company owners and members of the board are

reluctant to admit that their companies are fac-

place them in positions of strength to get going

when the downturn ends. We now find that a few

progressive Middle Eastern businesses are real-

ising the advantage that interim managers pro-

vide in a recessionary environment and are

opting for the same.

Could you give a recent example of a successful

interim appointment in the GCC that Manager

Forces handled?

NA. A Leading defence equipment and security

systems company in the UAE recently engaged

an interim COO through us to optimise the vari-

ous operations processes in the organisation and

bring about efficiencies in managing their entire

value chain. The candidate we identified and

brought in for them has wide experience across

defence, aviation, security and construction in-

dustries and has proved himself successful far

beyond the expectations of the management.

How has the interim management market

evolved since you first set up in the region and

how do you see it changing over the next few

years?

NA. Interim management, being a new product in

the Middle East, was often being confused with

recruitment or executive search. Through

strategic business development activities we

have been able to educate the target audience

on the nuances of interim management and the

benefits that hiring an interim C-level profes-

sional brings to their company. We are certain

that over the year to come interim manage-

ment will be the route of choice for most

Middle East corporations when they look at re-

structuring, new projects, gap management or

business turn around. �

FILLING THE VOID


Nadeem Ahmad of Manager Forces explains whyappointing an interim manager can reap big benefits forMiddle East companies.

EXECUTIVE INTERVIEW

Nadeem Ahmad is the CEO

(Middle East) for Manager Forces.

He is a trained psychologist and

has substantial experience in the

study of human and organisational

behaviour. With a strong interest in

human resources and, in particular,

recruitment, he possesses an in-

depth understanding of

international talent acquisition.

ing serious problems. This denial mentality often

impedes them from moving in the direction of

bringing in top notch CEOs, CFOs and COOs to

turn around and transform their business and

Manager Forces Ed:5oct 18/6/09 10:45 Page 130

MenegaerForcesSolution.indd 1MenegaerForcesSolution.indd 1 17/6/09 15:33:2517/6/09 15:33:25


The current economic crisis has

prompted much debate around how

the HR function can contribute to the

effectiveness of an organisation in

a time of challenge and change. There is in-

creased pressure to cut costs, increase value

for money and enhance fl exibility, whilst at

the same time it’s vital to continue to drive

for more effective and relevant staff develop-

ment.

So how can businesses, with a recogn-

ised need for training staff, begin developing

their own e-learning strategy?

Firstly, remember that an e-learning

strategy is part of an overall staff develop-

ment strategy; you need to ensure overall

strategic aims are in place before you embark

on using e-learning. These aims need to iden-

tify the audience; understand the skills that

employees need to develop; the subject mat-

ters that are covered by the training require-

ments; who the subject matter experts are

within the organisation; what the ‘quick win’

areas are; where (in geographical terms) the

learners are based; which requirements can

be effectively addressed through e-learning,

and which will require a traditional class-

room-based or mixed approach; and how ROI

and cost benefi ts will be measured.

HR functions need to be fl exible to chang-

ing business requirements and must support

them proactively. Using modern e-learning

as a key part of an overall training strategy

is becoming much more important in increas-

ing reach and reducing costs. So how do you

develop e-learning strategy?

Decide on your curriculaWhich content will be delivered as e-

learning, and which will be issued as class-

room-based training? If you need help, then

talk to someone who has the relevant experi-

ence; e-learning providers can supply a full

range of support services to help clients get

the most from e-learning as part of an overall

strategy.

Decide how to develop your e-learning content

In the past the only real option in de-

veloping e-learning content has been to

subcontract to specialist e-learning de-

velopers. However, with prices per hour

of e-learning ranging from US$14,000 to

US$35,000 or more, and long development

cycles of typically three months or more,

it’s easy to see why e-learning adoption

has been patchy.

Now, with the latest enterprise rapid e-

learning development platforms, e-learn-

ing can be created and updated quickly,

without having to outsource to external

specialists. This is an approach that can

deliver a very high ROI, with payback in

just a few months. The key is to make sure

you select a system that requires minimal

author training that can be used to develop

high quality and engaging e-learning,

quickly and easily.

Decide how to deliver your e-learning content

You can deliver e-learning content in a

number of ways. Most e-learning develop-

ment platforms can be delivered through

CD-ROM or a website, but the advantages of

a learning management system (LMS) should

also be considered. Additionally, you might

benefi t from the ability of comprehensive

platforms that are on offer, to deliver e-

learning through a Microsoft SharePoint site

or even a mobile phone or PDA.

Monitor results and modify the strategy going forwards.

In tough economic times, it is important

to ensure you get the best return on any

investment. For e-learning, this means track-

ing learner progress and ensuring the effec-

tiveness of the training. A key contributor to

monitoring e-learning is a SCORM-compliant

learning management system that can auto-

matically track and report learner progress

and individual results.

The real benefi t of using the latest tech-

nologies within your e-learning strategy is

not only the cost reduction that is offered,

it is also the speed, relevance and effective-

ness that the latest e-learning platforms can

enable. Content development timescales

are reduced from months to weeks, or even

days, and consequently many more courses

can be developed for a wider range of uses.

This enables a much better use of staff time,

and most crucially, training can be better tar-

geted for increased effectiveness.

The art of e-learningTim Buff of CM Group explains why learning online

is the future when it comes to training executives.

Tim Buff is one of the founder

members of IT Consultancy CM

Group and a major shareholder in the

company. He is a strategic thinker

and an astute entrepreneur with solid

managerial skills, wide experience

and a strong business mind. Buff

is a graduate of the University of

West of England where he studied

Accounting and Finance. On leaving

university he joined international

accounting fi rm PriceWaterhouse

Coopers, where he qualifi ed as a

chartered accountant. He is currently

responsible for the development of

CM Group, its staff and its position in

the market.

TRAINING & DEVELOPMENT

Elearning.indd 132Elearning.indd 132 18/6/09 09:19:0518/6/09 09:19:05

• SAP™ Authorized Training and Certifi cation (SAP Education Partner) • UK Accredited Management & Leadership • UK Accredited English Language Training • Health, Safety & Environmental (UK Accredited) • Purchasing, Supply Chain & Logistics (UK Accredited) • Professional Development Programmes • Risk Management • Oil and Gas Exploration & Production • Human Resource Managers Training

Naizak is acknowledged as a leader in instructor-led, customized, on site certifi cation training

and consulting for corporate and individuals. Since its founding in 2004, Naizak Education

Services has specialized in providing professionals the knowledge & tools to drive their

business. Naizak has also been chosen as an SAP Education Partner since it is recognized

as a quality provider of SAP Technical and Applications training in the Middle East. Now it

partners with APT to provide best of British management, leadership, and technical training

in the Gulf region.

KEY TRAINING AREAS

NAIZAKLEADER IN CLASSROOM BASED TRAINING

Naizak Saudi Arabia8th Floor, Khashoggi Building

Dhahran Street, Al Khobar

P.O. Box 4

Zip code: 31411

Tel: +966 3 8892085

Fax: +966 3 8892086

Email: [email protected] / [email protected] www.naizak.com/training_education.html

Naizak UAESuite 306, Building 1,

Dubai Internet City,

P.O. Box 502315,

Dubai, U.A.E.

Tel: +971 4 391 1165

Fax: +971 4 390 9540

Naizak.indd 1Naizak.indd 1 17/6/09 15:34:0417/6/09 15:34:04

LEADERSHIP Showing the way John Baldoni, author of the best selling management guide Lead By Example, tells BM why leading from the frontline is key to business success.134


development, job rotations and cross-functioning roles.

These things don’t have to cost money either, which is of

course a huge concern given the current state of the economy.

Every manager should be doing these things anyway, but

there are other career development opportunities out there

that leaders need to explore. Some of these may involve going

back to school, and that does provide a fi nancial consideration,

but things like job rotations aren’t going to cost any money,

cost-functional training isn’t going to cost money, and pairing

people up in senior/junior-teams requires no extra funding.

Leadership is about having the assertiveness to make these

things happen.

The real cost of leadingRegardless of this though, sometimes the only way to save

on dollars is to cut back on labour costs, and that’s a really ter-

rible thing for a manager to have to face. No manager likes having

to do that, and if you do you’re probably shouldn’t be working

with people in the long-term, but sometimes you do have to make

these tough decisions. For me, a defi nition of leadership is, know-

ing to do what is good for the organisation – even if what you

really want to do is what’s good for the people. As a manager and

a leader, the other thing that you have to do is focus on who is left

behind after the layoffs. You need to really shore up the morale of

the people who are left behind, because they’ll be struggling with

the dual emotions of fearing that they’ll be next and the sense of

In my fi eld of leadership development you become aware of

certain skills and attributes that make leaders successful

and keep them in control, and given the current climate there

is an even greater amount of pressure being placed upon

business leaders. Subsequently, what leaders need to do is

assert themselves enough so that they become ‘true’ leaders.

But what does this mean? Well, it means that leaders need to

maintain their vision, maintain their mission and strive for align-

ment, while at the same time pushing for innovation and risk.

The other part that goes in hand with this is the human element,

where you have to work overtime to keep the team together. That

really calls into the issues around whether leaders are being

seen, being heard and being present in the workplace. Leader-

ship is about letting people see you out there, meeting and min-

gling with your people and listening to what they are saying; yes,

leaders need to stay on message for themselves, but they also

need to ensure that they are listening to their people.

Leaders have to be prepared to be available to do whatever

the organisation needs. So if you’re in a small enterprise or a small

publishing fi rm for example, this might mean helping pack boxes

to get the orders out. Leaders have to understand that they need

to be there for the organisation and do whatever it asks of them.

In truth, every executive probably knows this already, but

there is a another side to a recession that says that as things slow

down this is the optimum time to develop your people. Leaders

need to be thinking about things like coaching, mentoring, career

Leadership.indd 134Leadership.indd 134 18/6/09 10:30:3418/6/09 10:30:34


guilt over why it wasn’t them getting laid off in the fi rst place. All

that is then mixed with the sense of relief they feel when they

don’t also become victims of further layoffs and are still in a job.

Some organisations are currently looking to get rid of non-value

adding activities, such as preparing reports for senior management

or an excessive numbers of meetings, so that job roles can ultimately

run more effi ciently, but the push for leadership development is still

strong. In fact, it was recently reported in

the Wall Street Journal that while many

training programmes are being cut to

save on costs, leadership development is

not, and this is because companies now

realise how critical leadership develop-

ment is to the future of the enterprise.

Again, leadership development does not

always mean spending money. There is

often a misconception that leadership

development programmes have to be

formalised for them to matter, and I don’t

think that is necessarily true. For example, you can coalesce a team,

give them special projects which relate to furthering the enterprise

and then you come back and work on that. How are we doing?

What have we learned? Those aren’t cost intensive, but they still

add value and give people greater levels of responsibility, which in

turn prepares your people for greater roles of leadership as they

progress in the company.

The other thing that organisations need to understand is that

you can actually teach leadership. It is true that you can’t just

make someone a leader – it has to be earned,

but you can teach it. In other words, while you

can teach someone the principles of it, actu-

ally becoming a leader has to be a personal

decision. That said, most leaders in our world

never went to any sort of a leadership devel-

opment institution and never will, nor should

they need to. I like to defi ne personal leader-

ship as the sense of autonomy, initiative and

responsibility, that sense of willingness to

step forward and make positive things happen

– and that has to come from within us.

What’s more, with the economy we’re ex-

periencing right now, we could be seeing the

emergence of new leaders because people

often to have to step up and really show their

worth during diffi cult times. In fact, in many

ways, crisis is the crucible of leadership. It

generates something in people. If we look

back at history – George Washington, Abra-

ham Lincoln, Winston Churchill – these are all

people who step forward in moments of crisis

and society has always benefi ted from that. I

expect we’ll see that same mentality happen-

ing within our corporate environment as we

continue through this recession.

A shining lightOne person’s story that I really like is Anne Mulcahy at

Xerox. She was someone from within Human Resources who is

now running the company. When she was given the job, I re-

member all the fi nancial people saying, “You’ve got to break up

the company and bring about some drastic changes,” and there

was a remarkable amount of pressure.

Of course, the thing is, Mulcahy

is a Xerox-lifer – she had grown up

with the company, and she said, “I

know the values of our organisation,

I know what we are capable of doing,”

and while there was a signifi cant

amount of downsizing that Xerox went

through, Mulcahy really helped to

right the ship.

She’s a wonderful communica-

tor, she went out and listened and she

asked, “What can we do here? What

can’t we do?” and she focused on core competencies. It’s a won-

derful story of someone who worked – and I’m a great admirer of

her leadership ability.

Leadership development isn’t always easy. Sometimes

people need to have the door opened for them, or they need

permission to do those kinds of leadership things, especially

within a large corporate infrastructure. “Oh, you mean I can do

that?” That’s leadership. And we have to go and do it, we have

to make it happen.

PLAN

DELEGATE

COACH

MOTIVATE

VISION

Describing the steps the organisation needs to take to fulfi ll the vision

Defi ning individual roles and team reponsibilities

Advising, counselling and listening

Recognise the contributions of others

Visualising and verbalising the message

Leadership process Communication action

Leadership involves both communications and learning. We look at John Baldoni’s Leadership Communication Model – a key tool in his teachings.

Communicating leadership

John Baldoni is a recognised thought leader

in leadership and communications, as well

as a motivational speaker, author, executive

coach and communications consultant.

Baldoni’s work is designed to help managers

create, plan, manage, recognise, motivate and

lead more effectively.

Leadership.indd 135Leadership.indd 135 18/6/09 10:30:4118/6/09 10:30:41

136IN REVIEWOn the shelfAs climate change and sustainability become increasingly important, Business Management reviews the best of this quarter’s green book releases.

With Broecker as his guide, award-winning science writer Robert Kunzig looks back at Earth’s vola-

tile climate history and sheds light on the challenges ahead. Ice ages, planetary orbits, a giant ‘con-

veyor belt’ in the ocean – it’s a riveting story full of maverick thinkers, extraordinary discoveries and

an urgent blueprint for action. Fixing Climate explains why we need not just to reduce emissions,

but to start removing our carbon waste from the atmosphere. And in a thrilling last section of the

book, we learn how this could become a reality, using ‘artifi cial trees’ and underground storage.

BM says: A fascinating account of how we have arrived at a point where climate change is no

longer preventable. A compelling read for anyone wishing to understand the unique challenge of

climate change.

Fixing Climate The Story of Climate Science – And How to Stop Global Warming, by Robert Kunzig and Wallace Broecker


As awareness of our own carbon footprint continues to grow, we continue to seek ways to be as

eco-friendly as possible. In this guide, off-grid energy itself is explained in detail, and then seven

different chapters take on the various different options available (solar, wind, wood, bio, water,

geothermal and gaseous). This invaluable book is a must for anyone who wishes to control their

consumption of fossil fuels and learn about the different possible sources of energy that could be

adopted in ether the home or the workplace.

BM says: Generally concise and well-written information for the energy-conscious consumer.

The Off-Grid Energy Handbookby Alan and Gill Bridgewater

When the economy turns rough, many companies sideline their green business initiatives. That’s a

big mistake. In Green Recovery, Andrew Winston shows that no company can afford to wait for the

downturn to ease before going green. Green initiatives ratchet up your company’s resource effi cien-

cy, creativity and employee motivation. They save energy, waste and money, preserving precious

capital – and give precise focus to your innovation efforts and strategic priorities. Part manifesto

and part how-to guide, this concise and engaging book provides a road map for using green initia-

tives to deliver short-term gains and position your company for long-term strategic growth.

BM says: Green Recovery is a great guide to establishing green positioning in a downturn and ex-

plains how to emerge stronger when the economy is back on the up.

Green Recovery Get Lean, Get Smart and Emerge from the Downturn on Top, by Andrew Winston

BookReview.indd 136BookReview.indd 136 18/6/09 10:17:0918/6/09 10:17:09

www.ges-uae.com www.tadawulat.com.sa

Tad LogisticsP.O.Box: 111095

Jebel Ali Free ZoneDubai, U.A.E.

www.tad.aeTel: +971 04 8836553Fax: +971 04 8836557

Email: [email protected]

TAD Logistics is a UAE based company that provides a total logistical solution in the Middle East for Hazardous and Non Hazardous cargo. TAD offers years of specialized experience in the freight forwarding, logistics and commercial storage sectors.

• Hazardous/ Chemical WarehouseOur modern chemical warehouse, which is strategically located in Jebel Ali Free Zone is the only privately owned hazardous chemical handling facility, which is designed for safe, efficient storage and handling of cargo. This facility adheres to the strictest regulatory standards and guidelines to ensure a safe environment and meets our customers

demand for the highest quality of service.

•Sea Freight Forwarding • Land Freight Forwarding • Air Freight Forwarding •Warehousing and Integrated Logistics Solutions

Our portfolio of professional services includes international freight forwarding, warehousing, shipping, customs clearance, insurance, and packaging. Our experienced staff can arrange logistical movements of single to multiple shipments from most countries to the Middle East.

OUR SERVICES

OUR SUBSIDIARIES

TAD.indd 1TAD.indd 1 17/6/09 15:35:2517/6/09 15:35:25

138CITY GUIDE

MoscowFrom the capital of the old communist days to the nerve centre of New Russia. BM puts this ever-changing city to the test – be it for a weekend getaway or an important business trip.

AboutMoscow is a city soaked in history and

intrigue, like much of Russia and the

old Soviet Union itself. Indeed, Winston

Churchill famously described Russia as a

“riddle wrapped in a mystery of an enigma”.

Since the fall of communism, Moscow

has transformed itself into a modern city

although traces of the old soviet era are

clear to see. Moscow is one of the world’s

most expensive cities – perhaps even the

most expensive. All foreigners entering

Russia require visas.

Getting aroundThe Moscow Metro is an excellent way of

navigating the city and mixing with the locals.

Indeed, around seven million Moscovites travel

by the metro on any given weekday. A fi rst

glance at a map of city’s extensive underground

rail network (which stretches just under 300km

in total) can appear daunting. However, try

to make an effort to learn the Russian Cyrillic

alphabet to better negotiate the cross-crossing

lines and 170 stations. Travel on the under-

ground is cheap and effi cient – as well as osten-

tatious in parts; some stations have intricate

chandeliers and beautiful murals. Above

ground, taxis are abundant; just stand on

the street and stick your arm out. Offi cial

taxis have a chequer-board logo and/or

a small green light in the windscreen.

Drivers never use meters and often

claim that they don’t have change. Al-

ternatively, buses and trams go almost

everywhere the metro doesn’t.

From the airportMoscow boasts fi ve airports but you will

more than likely arrive at Sheremetevo-2 In-

ternational Airport, 30km north west of the

city. Some airlines use Domodedovo airport

– located 40km south of the city and con-

nected to the centre by a road and rail link. If

arriving at the former, once you collect your

luggage the ‘taxi mafi a’ swing into action.

Drivers will often quote absurdly infl ated

prices to go to the centre so haggle hard.

The journey should cost around $US45 but

many foreigners unwittingly wind up paying

at least double. There a few car rental

stands but to get the best deals it’s

probably best to book in advance.

If you are on a budget, buses to

the centre operate from 5.40am

until midnight. Be warned that

passport control at both air-

ports can be time-consuming so

factor this into your journey.

Not your usual station

Time: +3hrs GMT • Currency: Rouble • Average annual temp: 5.4°C • Population: 10 million

Red Square

ve at le

sta

pr

If


City Guide.indd 138City Guide.indd 138 18/6/09 10:18:0118/6/09 10:18:01

RelaxA visit to the world-famous Bolshoi Theatre is a must. The six-tier auditorium provides an

unforgettable experience, be it ballet or opera, although tickets for popular performances

can be hard to come by. For a more vibrant evening out, Moscow is packed with bars and

nightclubs, offering you a chance to sample Russia’s national drink – vodka. However, don’t

be surprised to see strippers, both male and female, plying their trade in bars. The city also

has an abundance of casinos and card rooms for you to gamble away your wads of roubles. Adventurous visitors should

sample a traditional bathhouse (banya) where you can enjoy being steamed, washed and pummeled. Russia has become

an emerging force in world football and Moscow is the home of fi ve teams in the country’s premier league (Viysshaya Liga).

Tickets for matches can be easily purchased, although the league shuts down for an extended break during Russia’s harsh winters.

SleepHotel Metropole Moscow

Location is everything in Moscow and the

Metropole doesn’t disappoint, with its

perfect spot near to Red Square. A tradi-

tional Russian-feeling hotel.

Rates: From US$400 a night.

Ritz Carlton Hotel

This eagerly-awaited hotel opened in 2007

with the stated aim to raise the standard

for luxury hotels in Moscow. Sumptuous

surroundings and décor make this possi-

bly the fi nest in the city.

Rates: From US$300 a night.

Eat1, Red Square

For authentic Russian fare head to this

conveniently-located restaurant in the

same building as the history museum.

Reservations are needed, even in the day-

time. Meals from US$50

Pushkin Café

Considered by many as the best eatery in

Russia with its early 20th century atmos-

phere. The food is exquisite. The fi rst fl oor

is open 24 hours a day.

Dinner costs around US$50

SeeNo visit to Moscow would be complete

without a trip to the historical Red

Square, which lies outside the Kremlin’s

north eastern wall. It was here that

communist rulers paraded their military

hardware, especially so during the Cold

War era. To the southern end of Red

Square sits the kaleidoscope of colour

and epitomy of Russia that is St Basil’s

Cathedral, created between 1555 and

1561 to celebrate Ivan the Terrible’s

capture of the Tatar stronghold Kazan.

Nearby, Lenin’s tomb proves a popular

tourist attraction. He died of a massive

stroke in 1924, aged 53, and has been

preserved in a granite tomb ever since.

St Basil’s Cathedral

• When venturing out at night Moscovites like to dress glamorously, especially when going for dinner, so make sure you pack smart evening wear.

• Learn to say ‘neyt’ to your host. Russians love their vodka and your glass will keep being refi lled if you drink it dry.

• Temperatures in winter can plummet to a teeth-chattering -10°C. Conversely, summer can get very hot.

• Keep your wits about you in touristy areas, where thieves tend to operate.

TOURIST TIPS

uld

ome

Liga).

harsh winters.

very hot.

boueasnd

e

a).

ut s,

Bolshoi Theatre


City Guide.indd 139City Guide.indd 139 18/6/09 10:18:3418/6/09 10:18:34

El Bulli, Girona, SpainEl Bulli has been voted the best restaurant in the world by virtually every culinary magazine

and association. This restaurant reinvents dinner as an art form, with its picturesque setting

in Girona on Spain’s Costa Brava. Owner Ferran Adriá spends months in his kitchen, or

“laboratory” as he refers to it, perfecting new techniques and tastes. The fl avours and textures

are the result of incredible amounts of work, and an unrivalled understanding of the gastronomic

make-up of each fresh ingredient. A highlight is the 27-course food festival that will awaken

taste buds you never knew you had. One downside for food lovers is that El Bulli is only open

from April through to September.

THE KNOWLEDGE

The wow factorLooking to broker a big deal over dinner? BM guides you through a handful of restaurants guaranteed to impress your clients.

Raffl es Grill, Raffl es Hotel SingaporeRaffl es is a colonial-style hotel that

dates back to 1887 and is named after

Singapore’s founder Sir Stamford

Raffl es. Today, it is managed by Raffl es

International and the Raffl es Grill is where

Singapore’s elite fl ock for that special

dining experience. The hotel’s opulent

surroundings and that traditional Raffl es

aura blended with a touch of French

decadence provide the perfect backdrop.

The quiet ambience and formal attire does

give you a feeling that you are attending

an offi cial dignitary dinner. The lobster

bisque comes highly recommended, while

the Raffl es Grill boasts an impressive and

extensive wine list.

140


The Knowledge.indd 140The Knowledge.indd 140 19/6/09 10:01:1219/6/09 10:01:12

Al Mahara, Burj Al-Arab hotel, DubaiThis underwater themed fi sh restaurant sits at the bottom of Dubai’s iconic Burj Al-Arab hotel. Al Mahara, which translates as ‘oyster’, begins with a

simulated submarine ride from the reception to the dining area. Once inside, you will fi nd the tables are placed around an enormous glass aquarium

packed with fi sh of all sizes and varieties. It certainly is a jaw-dropping view as you tuck into your meal. Being situated in the world’s only 7-star

hotel, it’s no surprise to learn that the service is exceptional. A special mention has to go to the whole bass for two people, while the sushi foie gras

is an unexpected and tasty combination. Al Mahara is open from 12.30pm-3pm and 7pm to midnight daily. A formal dress code is observed.


Masa, New York, USSituated in New York’s Time Warner Centre, Masa is a sushi restaurant

considered to be one of the best, albeit the priciest, in the world. Just don’t go

leaving your wallet at home – dinner will set you back around US$400 per person,

not including drinks, tax or tips. With just 26 seats, this dimly lit and intimate

restaurant serves unique cuisine prepared by chef Masa Takayama. Takayama

opened his eponymous restaurant, as well as Bar Sushi next door in 2004, and it

quickly gained a reputation in New York for its exotic ingredients. The owner fl ies

fresh fi sh in from his homeland of Japan and serves up Kobe beef. He can often

be seen serving the food himself and working behind the bar. Masa’s exclusivity

means that reservations need to be made several weeks in advance.

The Knowledge.indd 141The Knowledge.indd 141 18/6/09 10:34:2818/6/09 10:34:28

HOT WHEELS

Speed demonLotus has a sound heritage for producing fast two-seater sports cars. For this issue’s star car, we put the Evora model under the microscope. 142


With a top speed of 160mph, the mid-engine, six-speed Evora is the latest

lightning quick sports car from British manufacturer Lotus. Despite its unique

design, the Evora does retain the company’s tradition of beginning all model

names with the letter ‘E’. First impressions are that the car is larger than previ-

ous pocket rocket models like the Exige and the Elise. It exudes curvy lines that give off an

aesthetically pleasing and stylish appearance. Inside, the designers have blended leather

with metal to conjure up a minimalist and modern interior. You also have a choice of a two-

seater version or the more family-friendly 2+2 (back seats) confi guration, while the boot is

even large enough to accommodate two sets of golf clubs. Lotus plan to make 2000 Evoras,

with an automatic version scheduled for 2011. Expect to shell out around US$85,000 to get

your hands on one.

Hot wheels.indd 142Hot wheels.indd 142 18/6/09 10:29:5218/6/09 10:29:52

Business ManagementWhat business processes work? What are the proven, successful strategies fortaking advantage of domestic and international markets? Business Management isabout real, daily management challenges. It is a targeted blend of leadership andlearning for key decision makers in government and private enterprise.

gdsinternational www.gdsinternational.com

NextGen Power & EnergyA poll of 4000 utility executives posed the simplequestion: what keeps you up at night? The answers werecosts, new technologies, ageing infrastructure,congested transmission and distribution, viablerenewables and inadequate generation capacity.

NextGen P&E covers them all.

Available for: US

Find out more: www.nextgenpe.com

Oil & GasCollaboration between Government and multinationalsto ensure the energy supply is developing on two fronts.O&G is the definitive publication for stakeholders andservice companies to read about the regional projects,technologies and strategies affecting their group.

Available for: MENA, US, Russia

Find out more: www.ngoilgasmena.com

100Thousand Club100Thousand Club Magazine is a unique venture – anexclusive magazine and content-driven website for avery select group of readers. Where informed writing iscomplemented by passion, superb design, and the veryhighest quality execution.

Available for: Middle East, US, Russia

Find out more: www.100thousandclub.com

InfrastructureInfrastructure provides insight on how developers canachieve critical objectives by integrating leading-edgesolutions across their operations – helping them tomake informed decisions about technology andoperations solutions for all of their areas ofresponsibility.

Available for: Europe, US

Find out more: www.menainfra.com

Also available for:

Europe

US

US E

ditio

n

Euro

pe 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...

Find out more: www.busmanagementme.com

CATALOGUE PAGE BMME6:june09 18/06/2009 08:41 Page 143


144 OBJECTS OF DESIRE Technology for the mobile executive A glance at some of the gadgets designed to make your life easier.

<<< Archos 5 60GBRelatively unknown manufacturer Archos had a long history of producing media

players – long before the now ubiquitous iPod was just a twinkle in Steve Jobs’ eye. Its

latest model is the Archos 5 Media tablet with a great 4.8-inch touch-screen display

that fi lls the back of the unit. The basic model comes with a somewhat stingy 60GB,

although there is a more expensive 250GB version. The built-in Wi-Fi and software

means you can stream content from your home computer. Splash out on the additional

DVP station accessory and you will be able to record your favourite programmes straight

to the hard drive; perfect for catching up with re-runs of Dallas while on the road.

Desirability rating:

>>> Lumix DMC-FX48K Panasonic has been churning out some great digital cameras of late, and its latest Lumix

model – the DMC-FX48K – doesn’t disappoint. The 12.1-megapixel camera features a 25mm

ultra-wide-angle Leica DC lens and a powerful 5x optical zoom, yet its slim profi le makes

it convenient to slip into a pocket. A welcome added bonus is the ability to record High

Defi nition (1280 x 720p) motion images at 30 fps. And, using the DMW-HDC2 component

cable (optional accessory), the video can output directly to a television for easy playback.

Desirability rating

>>> Nokia E75The latest handset to roll off the Nokia production line is the stylish E75. First impressions

are that this is a solidly-built phone with a fairly slim design (14.4mm thick), which is all

the more impressive when you discover the slide-out, full QWERTY keyboard concealed

underneath. The 139-gram E75 offers the usual features like internet access and email on

the move, a 3.1MP camera, MP3 player, video calling, VoIP capabilities and Wi-Fi, whilst

the GPS receiver is a handy addition. The vibrant 2.4-inch screen displays 320x240 pixels.

Desirability rating

<<< Sony Reader Digital BookIf you are fed up with lugging dog-eared paperbacks around with you on holiday Sony could

have the answer. The Reader Digital Book holds about 160 eBooks or hundreds more with

optional removable memory cards. Its portable size makes it the perfect travel companion,

allowing you to read a variety of books whenever and wherever you want. With thousands

of eBook titles available at the eBook Store from Sony, you can choose to download new

releases, classics and popular titles. It’s available in silver, dark blue and red. Despite its ad-

vantages, some critics argue that it takes the romance out of physically reading a good book.

Desirability rating


Objects of desire.indd 144Objects of desire.indd 144 18/6/09 10:33:3318/6/09 10:33:33

Bluecoat.indd 1Bluecoat.indd 1 17/6/09 15:28:3417/6/09 15:28:34

Jaguar.indd 1Jaguar.indd 1 17/6/09 15:32:3217/6/09 15:32:32

Documents

Business Management Middle East Issue 6