New Initiatives from Dubai Government to Promote Business
Lavin Nalinbabu, Business Consultancy
In a sign of continuing investor confidence in Dubai and new opportunities arising across diverse economic sectors, the Department Economic Development in the emirates issued 2934 new license for various professional, commercial, industrial and tourism activities in June 2019.
BRL also issued 250 instant licenses, which processed in a single step without the need for either the memorandum of association or an existing location for the first year while the number of DED trader licenses, which allows to conduct business activities on social media platform reached 219 in the same period. DED trader is an initiative aimed to license business activities on social networking sites.
NEW FORMS OF LICENSE:
An initiative aimed to license business activities on social networking sites. This is primarily to help business to promote their products.
Businesses can promote their products through social networking sites, events and exhibitions, display in consumer point of sale etc. This also helps to protect trade name.
Businesses are also allowed to have bank facilities, membership in Dubai Chamber facilitating import and export. This also allows temporary employment services.
The cost of setting up the DED trader is very minimal.
Issuing the trade license in one-step without the need for either the MOA or an existing location for the first year only. The MOA and location to be submitted upon renewal.
This can be a limited liability company, one person LLC, sole proprietorship or a civil company.
Some of the activities would need external approvals.
Helps business to keep the cost low for the first year of operation. Helps business to establish.
INITIATIVE FROM DED TO EASE OF DOING BUSINESS
Suspension of business activity under an expired license
This will help business to retain the license without penalty for non-renewal. The suspension of license will be for maximum of three years. The license free can be cancelled any time. No activity is allowed during the freeze period.
The business can renew the license anytime during the freeze period, however, the fees paid for freeze will not be returned.
It is the process of mortgaging the license and the business office related to it or the partners shares in order to apply for a loan from one of the banks in UAE or for any other purpose that requires a mortgage certificate.
There are two types of mortgage, the mortgage of business office which requires announcement, and the mortgage certificate shall be issued. The mortgage of shared doesn’t require announcement, and a mortgage certificate shall be issued in respect thereof.
CANCELLATION OF COMPANY’S LICENSE THAT HAS BEEN EXPIRED FOR MORE THAN TWO YEARS
Long term visa for investors without sponsors
The following categories are entitled to apply for a 10-year residence visa in the UAE.
Investors in public investments of at least AED 10 million
The investment may take many forms such as:
A deposit of at least AED 10 million in an investment fund inside the country
Establishing a company in the UAE with a capital of not less than AED 10 million
Partnering in an existing or a new company with a share value of not less than AED10 million
Having a total investment of not less than AED 10 million in all areas mentioned, on condition that the investment in sectors other than real estate is not less than 60 per cent of the total investment.
Persons with specialised talents.
This includes specialised talents and researchers in the fields of science and knowledge such as doctors, specialists, scientists, inventors, as well as creative individuals in the field of culture and art.
The visa advantage extends to the spouse and children. All categories are required to have a valid employment contract in a specialised field of a priority in the UAE.
Eligibility for a 5-year visa without a sponsor:
The following categories are entitled to apply for a 5-year residence visa in the UAE.
Investors in a property in the UAE
The investor must invest in a property of a gross value of not less than AED 5 million.
The amount invested in real estate must not be on loan basis.
The property must be retained for at least three years.
This category includes those having an existing project with a minimum capital of AED 500,000, or those who have the approval of an accredited business incubator in the country.
The entrepreneur is allowed a multi-entry visa for six months, renewable for another six months. The long-term visa includes the spouse and children, a partner and three executives.
Outstanding students with a minimum grade of 95 per cent in public and private secondary schools
University students within and outside the country having a distinction GPA of at least 3.75 upon graduation.
Long-term visa includes families of the outstanding students
Residence visa to investors in Property:
Investors buying property for more than 1 million is eligible to get residency visa including the family members. The investor should have the title deed in the personal name and should also obtain clearance from Dubai police.
Sign up for HLB HAMT insights newsletters
The Digital Future of HR
Binny Broono, Manager HR Consultancy
There has been widespread scepticism and fears that the integration of emerging new technologies like AI into an industry such as HR would inevitably lead to multiple job losses.
However, that prediction was vehemently rejected by Binny Broono, HR manager at HLB HAMT, who believes the integration of trans-formative technologies like AI, Block-chain, Big Data and Virtual Reality will empower the HR workforce – and ultimately free them of mundane administration responsibilities.
In a detailed and fascinating overview on the future of the HR ecosystem, Broono examines the role new technologies will play and attempts to project the impact the integration of AI will have on the industry.
Broono explained that automation is universal, and its frontiers are ever expanding. However, the HR is very less aware of the potential – It is predicted at least 20% of the workforce will be automated in the future.
Technology is transforming traditional HR functions such as hiring, training and benefits administration. And the execution of all this change demands a strong HR role.
The ability to grasp and gain knowledge in automation will prove to be the cutting edge and distinction between those who survive and evolve in HR and those laid redundant or automated out of their HR jobs. The fear of automation replacing the jobs, especially automating the repetitive transactions is existent. However, on the contrary, more HR staff will be performing analytical functions and getting more involved with other organisational activities.
Automation refers to the use of electric or mechanized processes to perform work without—or with intervention by humans. Most organisations believe that automating the HR activities is the role of IT however on the contrary the process owners will be the best person to implement the change.
75% of the HR jobs can be automated as indicated by research, in consolation to the rest, more complicated jobs that require complex social interaction will and cannot be automated in the future. Individual employee and candidate at an organisation will be different and cannot have their needs met by an automated HR department.
On the contrary computers cannot wholly replace human beings in the HR function but will eventually revolutionise the HR process. Like many aspects of cloud and business digitization, where tasks are taken away from us as humans, we are given more scope to direct our work in innovation and towards more creative endeavors powered by the new wave of technologies such as Automation, Digitization, ML and AI. The HR industry has developed efficient and data-driven operations solutions with predictable ROIs, an indication of the graduation of the role of the HR from an administrative and compliance department to key decision and impact maker.
So, what has been the evolution in the last few years, and how are we equipped to face the 21st century?
Technology has been the game changer, organisations continue to transition their core HR systems to the cloud and employ more AI-driven technologies to automate communication between HR and employees. The benefits of these tools—such as productivity gains, faster hiring or reduction of compliance risk. It is also told that the HR Function is the most vulnerable to be replaced by automation.
It’s clear HR is undergoing through unprecedented changes. Don’t be surprised to see an increased demand for skills like Digital HR, design thinking, strategic workplace planning, agile working, diversity and inclusion.
“AI will completely revolutionise HR”, says Broono
I need to share two concepts. The first concept is difficulty, and the insight is that in order to transform your business with Machine learning (ML), you should think about goals that are challenging but not impossible.
The second concept you need to use to assess ML use cases is specificity. Just like with difficulty, there’s a sweet spot between too open and too specific that allows teams to establish a heading but not get derailed by obstacles.
The varied implementation of machine learning is evident in – chat bots that can automate screening, questioning, scheduling interviews, whereby drastically reducing time and manpower.
Video screening powered by AI has the likelihood of identifying, analyzing body language and facial reactions.
AI based screening and interviewing will negate the unconscious bias, stereotyping resulting in varied culture, merit based and skill-oriented interview.
Virtual reality training with simulated training that are as close to real work, subtle situations, provide prospects in handling hazardous material training and critical situation simulation.
Block-chain is also inevitable in incorporation of recruitment due to its immutability and accessibility, also reducing reliance on job portals.
To conclude technology can help you to automate and streamline HR processes in the employee life cycle from hiring, on boarding, training, compensation and exit. As we take a leap towards the implementation of AI, careful strategy and a vision are perquisite for a successful implementation of board room plans. Implementing such technologies will have stiff resistance in face of layoffs, redundancy, fear, however on the upside, the long-term benefits are larger, and it is a worth exploring the avenue.
Sign up for HLB HAMT insights newsletters
Expo 2020 and Its Impact on UAE Industries
Jay Krishnan ,Partner
Expo 2020 is the current buzzword that has been stealing limelight for quite a while. Ever since Dubai was selected as the venue to host the event, the people and media of UAE have been celebrating every minute progress regarding the event. It’s an excellent opportunity for the city to showcase who they are, what they can offer to the world and why they are the best.
Expo 2020 will undoubtedly have a significant impact on the economy of the country, with massive shift expected across almost every business sector in UAE. Right from tourism and hospitality to real estate and construction, the impact of Expo 2020 will be huge and impressive. Let’s have a look at some of the sectors that will witness a massive transformation with Expo 2020 around the corner-
Tourism forms a major part of UAE’s economy and with Expo 2020 a major upgrade to the industry is expected. Approximately 25 million visitors will make it to the expo, with more than 70 percent coming from outside the country.
Along with tourism, hospitality sector will also witness a significant change in its business. Accommodating the large number of visitors is indeed a challenge and to tackle this, up to 45,000 additional hotel rooms will be added to the existing 82,000 room supply.
Numerous hotels are under construction and a total investment of US$7.2 billion is required in hotel capacity by 2020.
Food and beverage
Providing accommodation for visitors is important; equally important is pleasing their palette. It is indeed a unique, one-time opportunity for food businesses in Dubai, to provide service to a large sector of population.
Expo 2020 opens plethora of opportunities for food businesses looking to establish and expand their base in the country, even if it is a small hotel or a food truck. More than 200 Food and Beverage outlets covering an area of 30,000 sqm will be featured at the site and 85,000 meals are expected to be served every hour.
Another industry that is expected to undergo huge transformation during Expo 2020 is cleaning industry. Hotels, exhibition centres, commercial complex, residential and commercial projects will require the facilities of cleaning companies.
Currently, the cleaning and hygiene industry stands at AED 80 billion and this is likely to reach AED 300 billion by the end of 2020.
Again, this is the best time to pitch in if you wish to start or expand your cleaning business in the country. A cleaning license is mandatory if you wish to carry out cleaning business in the country.
UAE’s real estate market has not been all that great in the last couple of years. But, Expo 2020 has led to an increase in the number of businesses in diverse sectors, which has helped boost the real estate sector of the country.
One can expect a thriving and successful UAE real estate market post expo 2020. Investors shouldn’t miss out on this excellent opportunity to set up their real estate business in the city.The construction sector is expected to contribute AED 25.7 Billion, before expo starts.
Up to $17.7 billion revenue will be generated, if the expo turns out to be a success, and it sure will be!
Sign up for HLB HAMT insights newsletters
Cyber Security Strategies in UAE
Vimal Ramachandran, Director
UAE, a highly advanced digital economy, has been at the forefront of embracing technologies, be it block-chain, artificial intelligence or cloud. With the advancement in technologies, the question of security arises. To provide a shield to prevent attacks, a national cyber-security strategy is a must.
The UAE National Cyber-security Strategy was launched recently by The Telecommunications Regulatory Authority (TRA), that aims towards a safe cyber infrastructure. According to H.E. Hamad Obaid Al Mansoori, TRA Director General, “The cyber-security strategy is based on a well-known reality, that cyberspace provides vast horizons and endless opportunities for well-being, happiness and sustainable development. However, it also provides a gateway for hackers and phishers. It is obvious that the battle between the two sides is a battle of knowledge and technology, a battle of intelligence, perseverance and patience. Yet, in essence, it is a manifestation of the eternal conflict between good and evil.”
The increase in the number of cyber-attacks across the globe, that results in losing data, money and reputation, has compelled the government to develop the strategy. The strategy is based on 5 pillars and 60 initiatives, that intends to mobilize the whole cyber-security ecosystem in the UAE.
Pillars and goals of the strategy
- Implement a framework that will include all types of cyber crimes
- Protect the current and developing technologies
- Secure SMEs against most common cyber threats
- Enabling a vibrant cyber security ecosystem by:
- Tapping into the opportunity of AED 1.8 billion cyber-security market in the UAE and the AED 18 billion cyber-security market in MENA
- Enhancing the talents of more than 40,000 cyber-security professionals, motivating professionals and students to opt for a career in cyber-security, developing cyber-security abilities and nurturing a vibrant ecosystem of cyber-ecurity training providers
- Providing awareness to citizens on cyber-security and help them realize the risks related to the cyberspace. Even institutions should see to it that proper training on cyber-security is imparted.
- Organizing national awards programme to acknowledge excellence in cyber-security and encourage entities to drive cyber-security programmes.
- Setup a robust ‘National Cyber Incident Response Plan’ that will aid in instant, coordinated response to cyber incidents in the country by:
- Streamlining the identification and reporting of cyber security incidents
- Setting up standardized severity assessment matrix to mobilize the required support.
- Establishing advanced capabilities that can respond to all types of cyber incidents.
- Protecting critical assets of the country that belong to the following sectors:
- Electricity and water
- Finance and insurance
- Emergency services
- Health services
- Food and agriculture.
- Mobilizing the whole ecosystem through local and global partnerships to jointly attain cybersecurity goals and ambitions. This would include:
- The public sector
- The private sector
- International consortia.
The national cyber security strategy is not the sole initiative by the government to enhance security and reduce risk. A strategy specifically intended towards strengthening Dubai’s position as a world leader in innovation, safety and security, has also been on the agenda of UAE government. This resulted in the launch of Dubai cyber security strategy.
Protection against the dangers of cyberspace, support for innovation in cyberspace and the growth of the emirate and its economic prosperity, are the motives of Dubai cyber security strategy.
Adopting latest technologies is a must when it comes to surviving in this competitive world; so is ensuring the security of your data.
Sign up for HLB HAMT insights newsletters
New Accounting Requirements bring Leasing into the 21st century
Nithin N. K , Director
IFRS 16 is an International Financial Report Standard (IFRS) promulgated by the International Accounting Standards Board (IASB) providing guidance on accounting for leases.
It is expected to give many enterprises a significant headache during its initial implementation phase – as teething problems are a common occurrence when it comes to new robust financial regulations.
However, on-hand to help businesses navigate their way around all these tricky implementation issues, is Nithin NK, Director, Audit at HLB HAMT.
NK explained: “IFRS 16 can initially cause trouble to the entities as there are huge changes in the lessee’s books of accounts. It was issued in January 2016 and will be applicable for financial periods starting January 1st, 2019 or later.”
IFRS 16 in a snapshot:
|What do you need to know?||Potential Impact?|
For lessees, most leases will come on balance sheet
Operating leases capitalised with corresponding recognition of the liability & Right-of-use asset
Lease operating expenses will be replaced with Depreciation and Interest costs
Companies using EBITDA as KPI will see positive impact post 01st Jan 2019
Impact on the presentation of the financial statements and changes to financial ratios will need careful communication
Shareholders/investors will need to be educated on the financial impact at transition
According to NK, these are the five implementation issues enterprises can face:
1.Identification of lease
Whether there is an identifiable asset – Supplier has no right to substitute the asset.
Whether there is a right to control the use of asset.
IFRS 16 contains a slightly revised definition of a lease but in practice this is likely to only cause differences at the margins. Where previously there were difficult judgments as to whether a contract contained a lease, those past conclusions may need to be revisited.
However, while the definition might lead to very similar conclusions, it could still cause problems in practice.
For example, whether a contract was an operating lease or a contract for services did not make a big difference under IAS 17; the expense was generally recognized straight line over the term of the contract.
Under IFRS 16 however, if it is a lease, it will affect the balance sheet. One area this could have a practical effect on would be some IT contracts.
For example, software service contracts might contain leases of equipment, such as a dedicated fiber optic connection. Finding and reviewing all these contracts and then applying the standard’s definition of a lease could be time consuming.
2.Completeness of lease information
Many companies with several subsidiaries would find it difficult to identify the leases where regular payment happens. Data analytics are required to identify such leases.
3.Gathering all the documentation
Gathering contracts from several departments like property, IT, legal team etc. Some of these documents can be very long, and occasionally poorly drafted. This can add considerable time to the analysis process.
The standard requires a very large number of estimates to be made, including the stand-alone selling prices of lease and non-lease components; the length of the lease term where the lessee has either an extension or termination option; the interest rate implicit in the lease; and amounts payable under residual value guarantees.
Stand-alone selling prices are to be used to allocate the payments under the contract to the lease and non-lease components pro-rats. For example, a lease contract might contain both the right to use a floor in a property, the lease component, and a payment for services such as cleaning and reception services, the non-lease component.
A practical expedient provides, by class of underlying asset, an election not to separate lease and non-lease components. Although if selected, this election requires all payments to be capitalized as though the entire contract was a lease.
Estimating the interest rate implicit in the lease could also be problematic. If the interest rate implicit in the lease cannot be determined readily, the standard does allow the incremental borrowing rate to be used but estimating this could also be challenging.
When the entity’s incremental borrowing rate is used, it is not simply the entity’s WACC or overall incremental borrowing rate. The incremental borrowing rate is supposed to be asset specific (i.e, what rate would be obtained to borrow the same amount as the right-of-use asset over a similar term and with the same security).
Modification in lease are accounted either as new lease or adding to the existing lease. Determining this requires obtaining information about whether the modification increases the scope of the lease by adding the right to use one or more underlying assets and whether the consideration for the lease modification represents the stand-alone sales price for the modification.
Sign up for HLB HAMT insights newsletters
Excise Tax in UAE – Scope Expansion
Jay Krishnan & Harish
In UAE, tobacco and tobacco products, Energy Drinks and Carbonated drinks are subject to Excise tax and the nation has now decided to levy excise tax on all e-cigarettes, e-liquids and sweetened drinks with effect from December 1, 2019. With this introduction a substantial change to businesses that import, manufacture or trade these products is expected. This article intends to explain the new scope of excise tax and what businesses should do.
Healthy lifestyle has always been a top priority for the UAE government and with this initiative, control over diseases arising from the consumption of harmful goods can be expected. According to the Cabinet General Secretariat “The decision comes to support the UAE government’s efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption.”
New Products that will be levied excise tax w.e.f. December 1, 2019
- Electronic smoking devices and tools and
- Sweetened drinks
ELECTRONIC SMOKING DEVICES AND TOOLS
Electronic smoking devices and tools shall include all electronic smoking devices and tools and the like, whether or not containing nicotine or tobacco. which would be classified on import under Customs HS codes:- 85437031, 85437032, 85437039
All liquid used in electronic smoking devices and tools used in such devices even if they contain nicotine or not will be levied tax under Customs HS codes:- 38249999.
Liquids used in electronic smoking devices and tools will be charged 100 percent tax.
Sweetened drinks that come under excise tax include any product to which a source of sugar or sweetener is added and is produced either as:
- A ready to drink beverage or
- Concentrates, powders, gel, extracts or any other similar product that can be made into a sweetened drink
Source of sugar includes white sugar, soft white sugar, powdered sugar, soft brown sugar and glucose syrup. Whereas sweeteners include saccharin and its salts, aspartame, sorbitol, and neotame.
Sweetened drinks that are excluded from Excise Tax
- Ready to drink beverages that contain at least 75% milk or its substitutes
- Baby formula, follow up formula or baby food
- Handling of Foods for Special Medical Purposes
- consumed for special dietary needs
- Beverages which include alcohol
What Business Needs to do
The Federal Decree-Law No. 7 of 2017 on Excise Tax stipulates that businesses/ persons that are engaged in any of the below activities must register for tax;
- Importing of excise goods;
- Production of excise goods;
- Releasing goods from an excise tax designated zone;
- Stockpilers of excise goods, in certain cases; and
- Warehouse keepers, in certain cases.
Hence accordingly Importers, producers, stockpilers warehouse keepers, etc. of electronic smoking devices, liquids used in such devices and sweetened drinks need to register for excise tax system as soon as possible. Failure in registering within the specified time period can lead to fines and various other obstacles.
Stockpilers are that businesses that holds excise stock on which duty is not paid and it’s available for free circulation in UAE and intends to be sold in UAE and holds “Excess excise goods”. FTA has a prescribed method to calculate excess excise goods and their valuation. Most of the supermarkets and retailers may fall under this category.
A step-by-step guide for businesses concerned
- Classification of Goods – Identify the Excise Goods
- Identify the primary conditions for registration as an Excise Tax Taxable Person and if applicable, as a Tax Warehouse and Tax Warehouse Keeper
- Identify the tax trigger points and the tax liability for flow/transaction after going through the supply chain flows/transactions with regard to the Excise Goods
- If there is any additional excise tax during the transitional period, this must be calculated.
- Evaluate the pricing impact across the supply chain
- Valuation for Excise tax
- ERP and process readiness
Sign up for HLB HAMT insights newsletters
Leading Industries in the UAE
John Varghese, Managing Partner
The UAE has the most diversified economy in the GCC. The country was reliant on oil and gas for centuries; but of late the government has started giving equal prominence to all the sectors. The move has helped the government in increasing its revenue and has led to an impressive development in sectors that include tourism, retail, manufacturing etc. Some of the leading industries in the UAE, that has been contributing immensely to the economy of the country include;
The retail industry has been witnessing a massive growth in the UAE, specifically Dubai. With numerous global retail players having established their base in the country, the industry is expected to thrive in the coming years.
According to reports, the value of retail sales in Dubai alone is expected to reach $43.8bn by the year 2020 and a growth of 5.6 percent is expected in the time period 2018-2021.
Dubai hosts some of the biggest shopping festivals in the world, that helps in boosting the local sales of retailers.
Hospitality is another fast-growing sector in the UAE, that has experienced envious growth over the past decade. Dubai attracts visitors from across the globe and is one of the most visited cities, with 15.93 million international overnight visitors in 2018.
The UAE hospitality market is expected to reach $7.6 billion within a span of 3 years at a five-year CAGR of 8.5 per cent. International tourist visits will increase to 25.5 million at a five-year CAGR of 4.3 percent.
UAE is home to a highly-developed healthcare system, that aims to become one among the best in the world by 2021. The UAE government’s various initiatives to promote the sector coupled with latest technologies that are being embraced, has helped the healthcare sector evolve rapidly.
A growth of 60 percent is expected in the healthcare industry between the time period 2016- 2021, that will be worth over AED 103 billion.
The highly specialised doctors along with events such as Arab Health Exhibition, that brings together healthcare companies, technology, and products, has helped the industry gain global recognition.
Manufacturing is the second largest contributor to the economy of the country. It accounts for 80 percent of Dubai’s non-oil trade and 53 percent of the country’s total non-oil exports. Some of the primary sub-sectors of the industry are processed food and beverages, plastics and rubber, electrical machinery and equipment, chemicals and chemical products, minerals and mineral products, publishing and printing, pearls, precious stones and metals.
Organizations that plan to set up a manufacturing plant in Dubai are bestowed with a range of lucrative facilities.
Construction sector is an inevitable part of UAE economy, that has been flourishing leaps and bounds. The use of robots, unmanned aerial vehicles (UAV) and “intelligent” tools and equipment has helped in the automation of various tasks at construction sites and this has been a contributing factor to the thriving industry.
During the time period 2014-2018, residential construction accounted for the largest construction market in the UAE and it is expected to retain its position in the coming years. More than 15,000 projects worth $791 billion are at various stages across the UAE.
Dubai, a hub for public relations companies, advertising firms, print, production and broadcast facilities, was recently named as the Capital of Arab Media for 2020 by the Arab Information Ministers Council. According to His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, “Media outlets are not mere channels to cover events and disseminate information. Media is a partner in achieving development goals, setting their direction and driving their impact. It is a role that comes with great responsibility.”
The sector experienced an unprecedented rise in 2019, when compared to the previous year.
Setting up business in UAE for any of these sectors are relatively easy and all you must do is seek the help of a reputed business consultant.
Sign up for HLB HAMT insights newsletters
Implementing MIS Dashboards for Better Decision- Making
Melita Grace, IT
With all industries evolving at a faster pace than ever before, making the right decisions based on consistent and clear data is key for any company. Way too often, managers have to deal with several different monthly or yearly reports from each department, making data visualization and decision-making strenuous tasks, frequently resulting in poor financial and operational results. In order to facilitate the flow of information and avoid disastrous choices, companies should put in place a consistent and efficient reporting system, such as a dashboard.
A dashboard is a business intelligence tool used to display data visualizations in a way that is immediately understood, by summarizing information from different parts of the organisation to ensure that appropriate decision will be reached. Dashboards fall into three categories: operational, analytical and strategic. Whilst the first two will look respectively at real-time data to understand performance, and past trends that can influence future decision-making, a strategic dashboard tracks performance in relation to a company’s key performance indicators, to better align actions with strategy.
A management information system (MIS) dashboard can help identify the source of a problem in order to determine the future needs of the company. Moreover, it can predict future trends by using various market tools to analyse the current ones, while also helping assess monthly or yearly performance to increase efficiency.
Essentially, this system ensures data collated from different parts of your organisation are processed and then presented in a manner that will help make the right decisions. For example, different banks will have different reporting formats and tools, raising the question of whether integration can happen within the two and whether reported data is accurate.The needs for a strong and customisable visualization tool in terms of charts, graphs and data is fundamental.
By using MIS dashboard, banks can collect and understand consistent reports and financial statements of competitors using external sources, while also comparing assets, such as credit cards, applications or sales being audited across years. This helps identify their position in the market, loopholes, threats and action plans to fix any issue highlighted by the data.
Excel sheets have become a thing of the past, as a dashboard can show a greater and more in-depth amount of internal and external data in one report, avoiding discrepancies between departments. Thanks to this, spending per department can be compared and negative trends identified and corrected, resulting in more effective decision-making.
A business can have various MIS reports to benefit each division of the business, saving them time and gaining total visibility of all systems.
For example, financial MIS can provide financial managers with fixed and standard report formats containing major financial objectives, while also projecting financial needs. Similarly, accounting managers can benefit from aggregated information on accounts payable, accounts receivable and payroll.
Besides banking, other industries can greatly profit from an MIS dashboard. In IT, an MIS dashboard can report on infrastructure or operational issues, as well as calculate how many of these escalated to vendors, or ensuring the IT team is meeting SLAs. Each report can be customized depending on the company’s needs, tailoring frequency or data accordingly.
In retail, a MIS can be used for point-of-sale collection, logistics, inventory control and internal communication, all of which affect retail operations and marketing. The latest can also benefit from MIS dashboards by making sure its strategy is in line with KPIs such as sales effectiveness and sales revenue. The report can include charts, different dashboards, and comparisons between current and past years data and targets.
A similar approach can be applied by HR by analyzing recruitment data, as well as employee retention and month-on-month or year-on-year productivity. In conclusion, MIS reporting should be backbone of any organisation to ensure we achieve our goals and objectives by improving the performances and helping us look forward towards the growth and success of an organisation.
Sign up for HLB HAMT insights newsletters
Technological Challenges with Corporate Mergers
Vimal Ramachandran, Director
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.
Sign up for HLB HAMT insights newsletters
Expo 2020 and UAE Economy
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!