.svg)
Get in Touch
We would love to hear from you!
Recent posts
DIGITAL MARKETING FOR BETTER DEMAND GENERATION
Kreston Menon
Majority of marketing and sales team members will agree that internet has changed the buying behavior and pattern of businesses as well as end consumers.
Read More
Offshore Company Formation in Dubai
Kreston Menon
It’s no revelation when one hears many an industry leaders pronounce they will be putting their money in innovation. The real revelation probably could be why such investments are not delivering returns. Conventional ethos of most organizations has a nursery that not only provides a below par environment for customer-centric innovation, but also totally dampen innovative thinking. One thing we often come across at super markets, shopping malls, conferences and seminars is how customers are not concerned about the company but are more concerned about the product they wish to buy. Customers don’t go about their daily lives with labels on their minds, irrespective of how great the company is. Customers interact and engage with a particular brand only when it is suitable for them, based on capabilities the product allows them to do and the emotional satisfaction they get from engaging.
Read More
Employee Engagement as Vital Customer Centric Innovation
Kreston Menon
It’s no revelation when one hears many an industry leaders pronounce they will be putting their money in innovation. The real revelation probably could be why such investments are not delivering returns. Conventional ethos of most organizations has a nursery that not only provides a below par environment for customer-centric innovation, but also totally dampen innovative thinking. One thing we often come across at super markets, shopping malls, conferences and seminars is how customers are not concerned about the company but are more concerned about the product they wish to buy. Customers don’t go about their daily lives with labels on their minds, irrespective of how great the company is. Customers interact and engage with a particular brand only when it is suitable for them, based on capabilities the product allows them to do and the emotional satisfaction they get from engaging.
But countless companies confuse themselves over the idea of innovation with the product in spotlight. What could be the USP when all are selling identical products?
Amazon delivers same books that are available in our neighborhood bookstore. For Amazon their products are commodities, but they have innovated to create unforgettable impression on customer mind. Amazon with their innovation for delivering cheerful experiences has turned the market to its advantage and today the pure online portal with fiscal revenue of over $75 billion is all set to be among the top 10 global retailers. Amazon’s success stems from the way it caters to customers’ ever evolving needs and expectations.
Also Read: The Seven Essentials of Successful Business Innovation
The success of Amazon made the top boss of Wal-Mart instruct his top executives to examine minutely as to what is that makes Amazon the top online retailer and Wal-Mart’s online division the distant No.2 with just over $10 billion revenue. Wal-Mart market intelligence team came out with an eye opener report detailing the short comings. Innovations built around customers will not succeed if one department is not precisely briefed about what another department is doing to serve the customers. In fact, it could prove detrimental because staff working in brick and mortar store will feel threatened that success of online portal will hurt them as customers would avoid visiting physical stores and thereby affect their turnover based incentives. Encouraging transparency and open communication needs to be part of a customer-centric innovation strategy in order for it to be unbeatable. If everyone of the employee doesn’t feel engaged with the customer, that’s a problem in waiting.
Human beings tend to pull together with other humans who are most like them. Leaders of large diverse organizations tend to enfold themselves with like-minded people, that buttress conventional approaches but then the downside is that the sparks that ignite innovation simply will not detonate, rather it will become an albatross for the company that is striving for innovation.
We are aware that real life is always changing to suit current needs and adapt to the environment, so why must the customer experience be stagnant and comatose? The customer experience should be dynamic. We often see and read executives advice youngsters don’t try to be smart with untested ideas, even seniors got fired for espousing bad ideas. It is pearls of wisdom like these set the stage for an environment where no new ideas would ever be brought forward. Innovation gets killed swiftly at that very moment. The problem is when decision-makers are unwilling to take risks and have tolerance for a few mistakes in the process. Innovation at times can be messy and entail some risk. If everyone in the organization feels like their job may be on the line of fire for these types of errors, innovation will be sluggish.
Any avid observer of consumer centric news in social media routinely would have come across about someone’s grievance as a customer at a bank and most of the time, it would be due to a branch employee or group of employees. Inaccurate billing of POS transactions, confusing customer service number for ATM related issues, are among a few other things which are frequent causes for customer complaints.
Organizations need to receive feedback in a constructive way to make course correction so as to enhance better offerings to the customer. Not receiving honest feedback from line staff can put company at the mercy of a bunch of sycophants who only tell their bosses what they believe will please the boss not the real feedback that will benefit company or customers. Employees at times lack in confidence about reaction of the top management maintain silence and therefore, disengaged. When organizations provide anonymous ways for employees to offer suggestions and ask questions it is seen to receive frank and constructive feedback. Organizations need to keep the employees informed about the goals and achievements shared. This has to be done frequently and repeatedly. Attributing an individual employee’s tiny role even to the smallest improvement, will give employees more and more confidence about the course the company is heading for. Employee engagement will play a crucial role in creating customer experience.
Finally, connect with customers. Engaging with customers will help employees truly understand what is desired in market. Costco, Kroger, Home Depot, Target and Wal-Mart all have similar offerings, but Wal-Mart continues to innovate in both what they have to offer and how they serve it to their customers. Customers notice the difference. Today customers make their choices based on what suits their needs and lifestyles.
Time and time again, companies suddenly decide to start focusing on innovation when they realize they have fallen behind, and by then it’s often way too late. It’s time to look at the world around you objectively and with confidence. Be your own Customer Experience Investigator and face the facts. Everyone has too much on their plates these days. Nobody loves your brand enough to stay with you when someone else is offering an experience that makes more sense.
Have you destroyed your most vital customer-centric innovation before it even had a chance to be considered? Make it your mission to think about ways to keep employees engaged. Employee retention is directly related to customer retention and everyone wins! With plethora of alternatives available to the customer, innovation becomes an all-important arsenal for company in facing competition. Employee engagement could be the vital customer centric innovation.
Read More
Summary of M&A in Healthcare and Pharma Sector(1st January, 2016 to 30th June, 2016)
Kreston Menon
Reported Deal Count and Value
The total number of reported deals across all regions was 180 covering nine sectors. The total reported deal value as on 30-Jun-2016 was approximately US$ 142 billion.
M&A report
Sector Split of Deals
Number of M&A Deals
M & A Report
Deal Values Across Sectors
DEal Value M&A
Note:
The summary report on M&A in the Healthcare and Pharma Sector including service providers to the sector has been collated from published information from sources such as company press release, quarterly reports and Reuters. All effort has been taken to ensure that the data is as accurate as provided by the original source document. I’m so embarrassed about my skin condition that I try to minimize any contact with the surrounding world. Someone says it’s stupid, but at least I can avoid people staring at me. Now, I go through the therapy of cystic acne with Accutane.
Read More
Capitalizing from Internal Audits
Kreston Menon
Large and mid-size corporates consider internal audit as an adjuvant enzyme for improving an organization’s risk management, control and governance processes. Internal audits cater certain values to the governing bodies of an organization as an even-handed source of advices and suggestions. Majority of them have a system in particular to ensure that periodical audits are conducted as per company schedules.However, a keen observation is mandatory to conclude how many of them are capable of capitalizing from internal audits.
Scrutinizing through our prior experience in accomplishing internal and statutory audits across various organizations, we came across certain common attributes at the organization as well as auditor levels, which have assisted successful organizations in aiding maximum benefits from their internal audit process.
Let’s figure out those common traits that have endowed few organizations with legions of benefits from their audit process.
Perfect internal audits are born when it has applicable support from the top management and a robust commitment from auditor in protracting entire conscience from the audits. It’s also mandatory for the auditor and auditee to stick to proper deadlines. Besides, it’s inevitable for the performing internal auditor to follow certain traits in order for an organization to maximize its benefits from an audit.
What are those traits to be followed by the performing internal auditor?
Let’s have an inquest on this query.
A performing internal auditor should be trustworthy, possessing enduring confidence about bringing up considerable progress in the organization. He/ She should be able to mould optimistic expectations from the audits, emboldening auditee to come out with suggestions and criticisms that can improve various aspects of the organization and establishing a caring demeanour towards auditee. Most of the successful internal audit professionals have invested gobs of hours building trust throughout the organization. Additionally, the auditor should not be unduly flustered, in cases when audits were to end without a proper cessation. Usually, underperforming or non-performing internal auditors are of calumniator types, who will be imperious, criticizing processes, and rely on exhibiting a superior behaviour during the audit. Such auditors will lead to estrange the tenacity of the auditee.
Extensive ambits of internal audits entreat the need for spotting out the finest way to strategize and organize audits. Most auditors bestow majority of the available audit time in rushing through enumerable reports to pinpoint the arenas of compliance or non-compliance rather than riveting their concentration on to the main audit concerns. An expert internal auditor can assure in the improvement of 80% issues that arises from proper observations and probing while 20% concerns from inspection of documents and records. Excellent internal audit reports can be derived by keeping their priorities up to date.
An efficient internal audit procedure will include communicating with employees of different levels from the primary strategic level to top levels (starting from process operators, technicians, middle managers and finally ending up with top management). Generally, it’s seen that the employees at the very first level or ground level shares why they are not pursuing a process in particular. Auditing the lower level employees in an organization is the best way to raise the self-esteem of such people by making them feel involved in the entire organizational setup, encouraging them to bring enhancements in the organization from their end.
[Tweet “Capitalizing from Internal #Audits”]
Skilled internal auditors can also applaud their auditee to improve the working environment by revamping their behaviours and spotting out their issues to the management. In most of the cases, internal audits assist employees to diagnose various concerns that prevail amidst them, before they are audited.
These also assist companies to remit felicitous corrective measures on time. Management has an important role in ensuring that the root cause of the issues is determined and proper improvement actions are scheduled in a timely manner. If this is not done, then audits are not worth carrying out.
Performing an internal audit for acquainting an improved working environment requires prerequisite commitment from the auditor. It’s an act of revelation and motivation. However, strategizing audits for detecting areas of con-compliance is like carrying on a game from a position of weakness.
Most management and Internal auditors might have moved through a quandary of whether to perform audits in all area spending huge span of time or to persuade audits in small area of activities yielding a higher quality audit. This is quite similar of asking a child whether he would prefer his father playing with him every week for two hours of scheduled cricket but not interacting with him during rest of the week or he would prefer his father to spend more time with him without any commitment on playing time, but knowing well that a quality time is spent!! But actually, the fact resides as median; auditor need to spend more time with the auditee resulting in improved quality audits offering more choices of benefits to the management undoubtedly. Cutting corners by reducing time and staff on audit is a sure recipe for disaster and is not a good practice for management to out vie.
Process objectives and metrics clasp of greater importance in internal audits. Auditors should fathom the individual process objectives, verifying if the same have been achieved using the metrics and output to make sure that their audits are worthwhile. Using metrics to validate process objective can lead to cogent audits, sending the fact of beacons that audit is not about reporting non-compliance but to judge whether the planned results are being achieved efficiently.
Internal audits should succor as a value addition tool to bring persistent improvement in the organizational working. It is also relevant that the results of audits are disclosed in timely manner without undue delay and proper correcting remedies are instantly undertaken. To cinch applicable suitability of the system, periodical internal audits are mandatory.
Finally, let’s culminate that, to continuously benefit from internal audit, organization needs to showcase the success achieved through internal audit which would spur both auditors and auditee in perceiving audits seriously and acquainting the maximum benefits in subsequent audits.
Read More
DEMYSTIFYING VAT Series 1 – VAT Basics
Kreston Menon
By now most of you must be aware that the government will be implementing VAT in UAE (value added tax) from Jan-2018. The rate of VAT would be about 5%. Amongst the GCC member countries, UAE is not alone to go ahead with implementation of VAT.Other GCC members have also agreed to implement the VAT around the same time as UAE. I plan to share with our readers through our quarterly newsletter about various aspects of VAT rollout in the UAE as it unfolds.
In this Series, I begin with basic outline of VAT and in subsequent issues will be covering the regulatory and procedural aspects of VAT, similarities and differences between the VAT that is implemented in EU versus what is being unfolded in the GCC and the UAE, impact of VAT on certain categories of business, notably the gold business in the UAE and lastly a VAT primer which will help our clients to transition to VAT regime with ease.
VAT in simple terms is:
A tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services
A consumption tax because it is borne ultimately by the final consumer
Charged as a percentage of price (in UAE it will be 5%), which means that the actual tax burden is visible at each stage in the production and distribution chain
Collected fractionally, via a system of partial payments whereby taxable persons ( VAT-registered businesses) deduct from the VAT they have collected the amount of tax they have paid to other taxable persons on purchases for their business activities. This mechanism ensures that the tax is neutral regardless of how many transactions are involved
Paid to the revenue collection agency of the government by the seller of the goods, who is the “taxable person”, but it is actually paid by the buyer to the seller as part of the price. It is thus an indirect tax
As of now, the GCC countries such as Saudi Arabia, UAE, Qatar, Oman and Bahrain do not have VAT or sales tax as part of their indirect tax kitty. The indirect taxes currently levied by these countries include customs duty (GCC), excise duty (GCC) and in some cases tourist/ hotel tax and few other indirect taxes. In the UAE only customs duty is levied on CIF value of import of goods which varies based on the nature of goods imported and averages to about 5%. One of the key reason for the GCC countries to implement VAT is to converge with the international tax regime on indirect taxes and be in line with the suggestions of the IMF.
The other key motivations for the GCC countries to implement VAT is to help improve revenue side of the respective countries’ budget, provide cushion against volatile hydrocarbon pricing and as a consequence bring stability to non-oil revenue. For the UAE government the revenue from VAT is expected to about AED10 billion to AED12 billion in 2018, according to the Ministry of Finance. The introduction of VAT can also be expected to improve the ratio of non-oil to oil revenue from the present ratio of 1:2.
The history of VAT began in Europe in the 50’s. VAT was first adopted by France in 1954. By the 1990’s VAT had been adopted throughout the European Union and in many countries in Africa, Asia, and South America. At present, over 150 countries have included VAT as part of their indirect tax collection. About 70 countries in Africa and Asia have implemented VAT. However, one may note that two notable exceptions are the USA and Canada which have not implemented VAT. VAT as stated earlier is a consumption tax, as it is a tax on commodities purchased, ultimately for consumption, rather than on the income of an individual or corporate entity.
The idea behind the VAT is that each step in the production chain pays a tax on how much value it added to the product. It is a levy on the amount a business adds to the price of goods during the stages of production and distribution. The tax is levied on the value added to the product at each stage of its manufacturing cycle as well as the price paid by the final consumer. Commonly, the seller at each stage subtracts the sum of taxes paid on items purchased from the sum of taxes collected on items sold; the net tax liability due to VAT is the difference between tax collected and tax paid.
VAT is collected by the tax credit method; each firm applies the tax rate to its taxable sales, but is given a credit for VAT paid on its purchases of goods and services for business use, including the tax paid on purchases of capital equipment under a consumption-type VAT. As a result, the only tax for which no credit would be allowed would be that collected on sales made to you and me as individuals, rather than to business.
Let me illustrate the mechanism of VAT with a simplified transaction involving production, processing and sale of Dates to end consumer. I have chosen VAT rate of 10% (UAE VAT would be 5%)
Many economists believe that VAT is a regressive tax and impacts the lower income people harshly. Countries that have implemented VAT have learnt from their experience and have come up with improvements that lighten the burden on lower income people. As a consequence in many countries, necessities are often taxed at a lower rate than luxury items. Advocates of the VAT contend that it is an efficient method of raising revenue. In the UAE the proposed VAT rate of 5% from 2018 would exempt education, healthcare and about 94 common consumption food items.
I believe that the competitiveness of the UAE as preferred destination for global business entities would not be affected by the implementation of VAT. However, in the case of few businesses such as gold trade in the UAE, there may be a marginal impact on trade volumes though this may need further analysis. I shall be covering such select aspects subsequently in my series of writings on “Demystifying VAT.”
This article was originally published in Kreston Menon April- June 2016 Newsletter.
Read More
