The current economic situation in the UAE indicates that some companies are vulnerable, and an increasing number of enterprises have sought mergers as a result. Mergers bring new opportunities and can increase revenue, and as such has become an attractive option for a lot of companies.

When you try to combine systems, there are a lot of advantages and challenges that come. The advantages include combined reports, bringing operations together, and that board members get easy MIS reports.

A lot of trading companies and banks in particular have taken the merger route to increase their stability, but this results in numerous challenges for IT systems. It brings both technical and digital challenges and can cause difficulties in combining technology operations into one. Companies “A” and “B” will almost always have different operations and that’s difficult to handle.

History of records won’t match for a data integrity report. Dimensions of reporting will be different for the two companies. There’s also an innovation challenge. When they merge, there needs to be a business reason for the merger. They need to innovate new things with their current systems.

Blockchain can help to avoid challenges. It can easily integrate systems and data sources can be validated and used to trust reports; it will give easier data analysis and trust of data for merging companies. Blockchain can be difficult to implement, but it promises to bring huge benefits. Banks will have to assess how to handle customers during a merger. Merging causes technology gaps and that’s not easy to manage. There will be issues around training and distribution, and how to handle shipments. Issues can occur without proper planning.

Organizations should always see challenges as advantages. They should look to bring new technology and IT systems and invest in security to avoid challenges. It’s an undoubted challenge for companies to implement new technology, but it must be done. IT systems must be farsighted when merging. Organizations need to evaluate the cost benefits and technology benefits, and then decide which technology to progress with. They shouldn’t just think about the present, but also the future.

Cloud is going to be a challenge with mergers. One company may be reliant on the cloud, but the other could be reliant on on-premise. The future will be in the cloud, so we need to keep an eye on the future. They also need quick wins to mitigate any problems occurring.

“Organisations need to adopt best practices to take strategic decisions.”

Organizations need to adopt best practices like COBIT 5 or COBIT 2019 to take strategic decisions. They need to do a proper analysis of what needs to be achieved and use a GAP analysis. Then they can plan projects to avoid future risks and proceed without any loss of business.

Proper project management is key. You need to build a project management office with the right stakeholders to plan properly for the merger. If you’re focused too much on project management, you can’t always focus on your own business, and sometimes that aspect can be outsourced.

When it comes to solving conflicts between two parties, meanwhile, the board must decide on some issues. There aren’t always clear answers. Boards have to take tough decisions. It’s important to be flexible enough to decide things based on logic.

The Business Registration and Licensing Sector’s auto renewal service has proved to be a huge success in Dubai. The increase in the number of licenses renewed via the service proves the fact. There has been an increase of 47 percent and the number stood at a whopping 73,404, during the first half of 2019.

Among these licenses renewed, 73.2 percent were commercial, 24 percent professional, 2.2 percent industrial and 0.6 percent were related to tourism.

Licenses can be renewed for a period of up to four years and for this the lease must be valid. If the license is being renewed for more than a year, the number of years should be specified in the text message. Also, there shouldn’t be any change in the location of the company; it should be same as that of the previous year.

The auto-renewal service sees to it that a text message is sent to the license holders to inform them about the date of renewal. This will be sent a week before the license gets expired and the message will also carry details on the service channels and steps to complete the renewal process. The service covers more than 2,200 commercial activities.

External approvals are not required to carry out the renewal process. But, for transportation by public taxi, transportation by limousine, rent-a-car, and non-emergency transportation services, the Roads and Transport Authority’s permission is obligatory. This is in addition to inbound and outbound tours, related to the Department of Tourism and Commerce Marketing.

Some of the major activities for which the licenses were auto-renewed in the first half of the year include general trade, ready made clothing, perfumes and cosmetics, watches and spare parts, gifts, dyes and paints, textiles, plumbing and sanitary installations, and carpentry and flooring.

Business licences can be auto renewed in two simple steps and in less than two minutes and that is the reason why people are embracing it whole-heartedly.

Expo 2020 is one of the most anticipated events in the Middle East, which is expected to leave a huge mark on the economy of the country. Ever since UAE was declared as the venue to host the event, endless debates and discussions on the changes it is going to bring to the economy of the nation has been doing the rounds. The event will undoubtedly be a game-changer for Dubai and the country and will help in elevating the country’s position on the global level.

Expo 2020 is not an everyday event, it is one of its kind the Middle East has ever witnessed, and it will leave a substantial, sustained impact on the economy. This will be via construction, visitor and commercial activity, which will happen in the pre-expo phase, during-expo phase and legacy phase respectively.

The event will be held for 173 days and will host 192 country pavilions; a perfect platform to learn about innovative technologies from around the world that is going to shape the future.

Expo 2020 is expected to contribute around Dh123 billion to the UAE economy in the decade after the it ends. 50, 000 jobs will be created as part of the expo, which is expected to rise to 94,000, during the exhibition months. The acquisition and purchase of goods and services related to expo 2020, will result in a revenue of Dh100 billion and almost Dh38 billion will be added to the local economy till October 2020.  During the time of the expo, an additional amount of Dh22.7 billion is expected to be added to the economy.

The event has been garnering worldwide attention from the last many months and millions of people are expected to make it to the event, to experience the taste of innovative technologies that will be showcased here. This will benefit both public and private sectors and will help in boosting business, hospitality, real estate, recreation, and many other tourism sectors.

According to Najeed Mohammed Al-Ali, Executive Director of the Dubai Expo 2020 Bureau “Expo 2020 is a critical long-term investment in the future of the UAE. Not only will the event encourage millions around the world to visit the UAE in 2020, but it will also stimulate travel and tourism and support economic diversification for years after the Expo, leaving a sustainable economic legacy that will help ensure the UAE remains a leading destination for business, leisure and investment.”

Visitors attending expo 2020 will spend on tickets, merchandise, food and beverage, hotels, flights and local transport, which will in turn drive economic activity. There will be a surge in VAT revenues as well, as a result of increasing spending during this time. The VAT revenue is expected to cross $8 billion (AED30bn) in 2019.

The six-month long exhibition, that commences on 20th October 2020 and lasts up to 10 April 2021, will bring together the best of trade, innovation and products from across the globe. It explores the theme ‘Connecting Minds, Creating the Future’.

Tickets for Expo 2020 will be available to the public starting April 2020. Mark the date in your calendar; do not miss the opportunity!

We are living in a VUCA world that is gaining REFLEX. But what does this mean? The rapid growth and development in technology have given us some of the best products ever seen, from smartphones to driverless cars. This improved connectivity has made our world more volatile, uncertain, complex and ambiguous (VUCA), with the result being an explosion of data. However, the growth in data is rising faster than technology can keep up with, thereby Rapidly Enhancing Complexity (REFLEX) in developing better tools to handle data. While the growth of data and development of analytics tools and techniques is one part of the equation, to keep up with this constant transformation, the other part is the need to embed analytics in operations to drive better outcomes, like increasing top-line growth, improving customer and employee engagement, cost reduction, streamlining procurement and mitigating risks. At HLB HAMT Chartered Accountants, we are working on a roadmap to embed analytics into our internal audit function in the coming years to ensure we remain relevant to our clients, employees, and wider stakeholders. Such a transition will help us deliver internal audit engagements that are:

• Faster
• Cheaper
• Impactful
• Innovative

Like any initiative, embedding analytics into the internal audit function starts with setting the vision, defining objectives, designing KPI’s and then asking relevant questions along the way:

• What are our current analytics capabilities?
• What are our desired analytics capabilities or the future state?
• How and where to implement those capabilities and solutions?
• How to reposition our resources to drive these efforts?
• How can we use analytics to be more strategic not just for our clients but also with competitors?

Once the vision and the strategic direction are set, the next step is to design the data analytics competency model. I believe a deeper understanding of the competencies needed to succeed in this journey will help organizations of all sizes to bridge the gap between people, processes, technology, and data. According to a survey conducted by PwC in 2018, 52% of organizations in the Middle East see the lack of in-house data analytics skills as a challenge compared to 53% globally. In fact, embedding analytics in internal audit is 7-step approach analytics in auditing is a game-changer. What I described so far is just the first step. A leading stationery manufacturer required rationalizing their portfolio of 720 SKU’s (stock-keeping units/ products) to turn around the widening losses over the years and to remain competitive. The task was to rationalize its portfolio based on two criteria:

• What products to discontinue manufacturing and why?
• What products to continue manufacturing and why?

Traditionally, they relied on profit and loss accounts by department or sometimes by category, not by SKU, to find answers to such questions. Such an approach was not effective given the lack of visibility and granularity at the SKU level. As part of the team, I drew up upon multiple internal and external sources of data to shed light on the status of the portfolio. A closer look at the analysis revealed that around 300 SKUs were responsible for less than 7% of the total revenue and almost 20% of total expenses. Using analytics, the client was able to make confident decisions on each SKU and to revise their portfolio to 386 SKUs, improving profitability and their market positioning.

In another case, one organization in the hospitality industry had problems with the high procurement cost of raw materials, despite strategic partnerships with vendors. Traditionally the approach is to validate the reliability of the procurement cycle by checking purchase orders, invoice and GRN (goods received note) to ensure the effectiveness of internal controls.

However, in this instance by taking an insights-driven approach enabled by analytics to be helped to understand all purchase orders over a period of three years. The analysis revealed contrary to expectations, the business was making purchases outside strategic vendors. Furthermore, for some raw materials, they were overpaying by as much as 30%. The analysis was drilled further down into the data to shed more light on the nature and extent of the purchases.

To do this, the organization had to answer specific questions like what made the procurement manager to approve purchases away from strategic vendors? Why there was a significant variance in procurement and whether procurement expenses were reported on time? If quality and on-time delivery are key, then why initiatives were not made to establish new strategic partnerships? Overall, analytics helped to go beyond a checklist approach and make recommendations on rationalizing their procurement processes for improved savings.