Safaricom Limited

Technology Roadmap

Christine Ndwiga

June, 2015

Nairobi, Kenya

Table of Content Executive Summary ..............................................................................................................................4

Section 1: .......................................................................................................................................4

Section 2: .......................................................................................................................................4

Section 3: .......................................................................................................................................4

Section 4: .......................................................................................................................................4

Section 5: .......................................................................................................................................4

Introduction: About Safaricom Limited® ............................................................................................5

Organizational Structure .................................................................................................................5

Products and/or Services .................................................................................................................5

Section 1: Organisation and innovation: Identifying innovative use of IT technology in

operations, products and services ......................................................................................6

Innovation .............................................................................................................................................6

Strategy ..........................................................................................................................................6

Market ...........................................................................................................................................7

Company’s Competitive Position Regionally, Nationally and Globally ....................................8

Dynamics of the Telecoms Industry ............................................................................................8

Evaluation of Safaricom®’s Innovativeness .....................................................................................9

Section 2: Analysis of company’s innovative capacity in using, adopting and generating

innovation ......................................................................................................................... 10

Organizational or Individual Culture? ........................................................................................ 10

Factors that provide the foundation for an innovative culture. ............................................ 10

Employees’ Readiness to Enable Innovation ................................................................................ 11

Safaricom’s Cultural and Innovation Readiness ......................................................................... 12

Organizational Culture Strengths ............................................................................................ 12

Organizational Culture weaknesses ......................................................................................... 12

Analysis on the role and status of innovation at Safaricom® ..................................................... 13

Bring M-Pesa Home – Safaricom’s latest Innovation ................................................................. 14

Innovation brief ......................................................................................................................... 14

Innovation Implementation: My Approach................................................................................. 15

Framework ................................................................................................................................. 17

Process Management ................................................................................................................. 18

Challenges – Anticipated Issues................................................................................................ 19

Change Management – Effecting the adoption of Innovative Technologies ............................ 20

Section 3: Analysis of innovative technologies landscape ............................................................. 21

Proposal for Innovative Technologies .......................................................................................... 21

Quad Bundle: TV, Broadband, Phone and Banking ................................................................ 21

Re-introducing Simu ya Jamii as a free Street Mobile Charging unit using Solar............... 23

Section 4: Innovation strategy: Linking people, operations, product/services and IT with growth

and competitive edge ....................................................................................................... 25

Technology roadmap: Safaricom Limited .................................................................................... 25

Where we are today .................................................................................................................. 25

Goals ........................................................................................................................................... 26

How to Strengthen Safaricom’s capacity to Innovate ............................................................. 27

Section 5: Innovative scenarios: Creating future cases of IT innovation deployment ................. 28

The M2M Revolution – The Future Innovation .......................................................................... 28

How it works .............................................................................................................................. 28

How we pull it off ...................................................................................................................... 28

Benefits:....................................................................................................................................... 29

Risks ............................................................................................................................................ 29

References .......................................................................................................................................... 30

Annexure A: Research Questionnaire for Section 2: ...................................................................... 33

Part 1: Demographics ................................................................................................................ 34

Part 2: Insight on Organizational culture. .............................................................................. 35

Part 3: Insight on Organizational Change ............................................................................... 37

Part 4: Recommendations.......................................................................................................... 38

Annexure B: Questions on Future Innovation Expectations for Section 5 ................................... 39

Executive Summary According to Phaal et al (2004), “Roadmaps and the roadmapping process can provide a means for enhancing an organization’s ‘radar’, in terms of extending planning horizons, together with identifying and assessing possible threats and opportunities in the business environment”. With a solid roadmap, it is easier to identify how IT projects are going to be rolled out and match these to the organization’s strategic objectives.

Section 1: Organisation and innovation: Identifying innovative use of IT technology in operations, products and services To remain competitive in this evolving mobile technology market, Safaricom Limited® has used different strategies to remain in competition with the other mobile providers. Diversity strategy, cost management strategy, centered strategy, product excellence, market infiltration strategy and pricing strategy have left this mobile giant leading over the years since its inception in 1997.

Section 2: Analysis of company’s innovative capacity in using, adopting and generating innovation The corporate world is rapidly growing. New entrants come in with big ideas that may throw old players off-guard. There has to be something that keeps a company relevant and sustainable. Innovation plays a key role in achieving this. Any organization looking to remain at the top of the food chain must easily transition when there is need for change and work towards adapting in a new environment.

Section 3: Analysis of innovative technologies landscape As it is, Safaricom stands a leading mobile provider in Kenya with a myriad of innovations for the consumer market. Their biggest revenue generator is the mobile transfer service MPESA. However there are gaps in their other products. There is not much to report on their revenue generation. Seems the concentration is mainly on the mobile money transfer technology. In their strategy for continuous improvement, there is room for more. This section presents Safaricom with possible innovation ideas to pursue to increase untapped revenue channels

Section 4: Innovation strategy: Linking people, operations, product/services and IT with growth and competitive edge Every undertaking, whether personal or business oriented has to have a plan. You cannot just go into something blindly. Having a clear path gives more positive results, that the product at the end was actually what it was intended for.

Section 5: Innovative scenarios: Creating future cases of IT innovation deployment Gauging a company’s innovativeness or predisposition to innovate remains a tricky affair. The ability to innovate has three must-have P’s according to Carayannis & Provance (2008): “posture, propensity and performance”. Research is paramount.

Introduction: About Safaricom Limited® “Safaricom Limited was incorporated on 3 April 1997 under the Companies Act as a private limited liability company. It was converted into a public company with limited liability on 16 May 2002. By virtue of the 60% shareholding held by the Government of Kenya (GoK), Safaricom was a state corporation within the meaning of the State Corporations Act (Chapter 446) Laws of Kenya, which defines a state corporation to include a company incorporated under the Companies Act which is owned or controlled by the Government or a state corporation. Until 20 December 2007, the GoK shares were held by Telkom Kenya Limited (TKL), which was a state corporation under the Act. Following the offer and sale of 25% of the issued shares in Safaricom held by the GoK to the public in March 2008, the GoK ceased to have a controlling interest in Safaricom under the State Corporations Act and therefore the provisions of the State Corporations Act no longer apply to it.” (Web Source: www.safaricom.co.ke)

Innovation is the core of Safaricom. The mobile phone market in Kenya rapidly growing and saturation is evident. The company’s capacity to innovate is the key differentiator between them and other mobile network providers. (KPMG Report on Sustainability Strategy 2012)

Organizational Structure

Safaricom®’s approach to accelerate its growth involves a lean team with a customer focus. It has successfully implemented the Strategic business units (SBUs) in its organizational structure to align the company’s strategy with the corporate support services in Finance, Enterprise Business and Consumer Business. Figure 1: Safaricom Organogram (Web source: Safaricom.com)

Products and/or Services

1. Mobile Money Transfer (M-PESA) 2. Data 3. Voice 4. Corporate Connectivity Solutions 5. IT Consultancy 6. IT Services (Cloud Computing, Data Centre ) 7. Managed Wi-Fi

Section 1: Organisation and innovation: Identifying innovative use of IT technology in operations, products and services

You cannot argue that industries have equivalent potential. They are very diverse, principally in their definitive revenue probability.

High returns are common in technology-based companies such as Safaricom; A leading Mobile technology company in Kenya

Innovation The main question is; Has innovation been effective in meeting Safaricom®’s organizational goals?

Innovation has indeed been used in Safaricom to develop strategy mentioned in the previous section.

A study conducted by a local university found that the strategies touched on the

Organizational structure/or Restructuring Financial management (How do we use our money differently), Technological advancement, Customer relations Product injection Manpower (Getting the right people) Competitive strategies (cost, differentiation and market focus)

In the year 1998. All one could do with a mobile handset was make a call and receive one. Short message text was integrated later in the year. A handset cost a fortune and was a reserve of the rich and famous. The internet was a dream. We are singing a different song now.

The biggest innovation brain child of Safaricom is the M-PESA® Service. This is where a subscriber can transact via mobile phone to pay their bills, plan a savings scheme and execute it, send money and receive from anybody with access to a mobile phone across all networks via appointed agents, Send and receive money to and from their bank accounts. It is basically an awesome convenience to pay for services. Call it a mobi-wallet.

Strategy

Gupta (1987) classifies Strategic Business Units (SBU’s) strategic contexts into two dimensions: strategic mission (shape and yield strategic missions) and competitive strategy (diversity and low cost)

The key to a sustainable strategy and positioning is an integrated marketing system (Oloko Et.al 2014)

Remaining competitive means that Safaricom® has to foster innovation, develop their products regularly and work with the trends in the international and local market by providing an exploration platform for innovation. The company enjoys a wide customer base with subscription at 21.6 Million as at 2014.

These are the core strategic Pillars in Safaricom (annual report 2014: Strategy)

1. Keeping the customer happy (Customer base strategy) 2. Popularizing data service 3. To provide the best network in Kenya 4. Extend financial presence by enhancing mobile money, e-wallets and bill payments 5. To be the ultimate partner of choice for businesses 6. Pull the youth in 7. Stay ahead of trends 8. Have a social impact through foundations to serve the community

Sawhney Et. Al (2006) defines business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system. Innovation is relevant only if it creates value for customers.

From a Risk assessment performed by KPMG in 2012, a “heat map” was plotted, highlighting the areas in which the company’s sustainability footprint would be relevant. These would include

a) Dynamic regulatory environment b) Energy security c) Network stability d) Innovation e) Supplier integrity and performance f) Ethics and values g) Employee atmosphere h) Eco-friendly performance

Market Safaricom is undoubtedly the market leader in the mobile operator turf with over 21.6 million subscribers in 2014.

Figure 2: Kenya Mobile Operator Market Share 4Q 2014 - 1Q 2015 (Source: CA 2015)

Company’s Competitive Position Regionally, Nationally and Globally

Survival for the fittest they say. It has not been all smooth sailing for the country’s largest mobile phone operator Safaricom. State monopoly on telecom licensing has limited the company’s ability to innovate as they should, or should I say as they wish to. Tough regulations keep this player in check so to speak.

Despite this, Safaricom has been the largest corporate tax payer in the Kenya. It has been Safaricom strategy to maintain a competitive edge to keep this revenue up as it is vital to the overall contribution of the country’s development vision 2030.

Commercial banks have been at a standoff with the company due to its recent launch of banking services (Digital Wallet) where subscribers can save money in their virtual mobile account and access credit services that depend on their deposits.

In East Africa, the company plays a vital role in the telecom industry by waiving roaming charges in the member countries. You can call Kenya from Uganda under the same tariff as if in Kenya. Safaricom continues to negotiate better rates for customers across Africa.

Globally, the money transfer service M-PESA® has hit UK, Australia, U.S and other overseas countries. Sending money to your loved one has been made much easier and they can receive the money directly to their mobile phone.

Clearly, innovation for this giant is far from completion.

Dynamics of the Telecoms Industry

Until recently, the evolution of telecoms in Kenya has been pretty slow, largely owing to firm government regulations.

In 2004, substantial strides were seen in the telecom industry when the main operator Telkom Kenya lost its monopoly in the fixed-line and internationals bandwidth sectors. Licenses were allotted to other new entrants thus marking a major transformation in the competitive landscape for telecom services in Kenya.

In 2009, the Government accepted these radical developments in technology and introduced the Communications Commission of Kenya (Now the Communications Authority of Kenya: CA) to oversee the ICT sector and e-Commerce.

Table 1: Kenya - Telecom Industry Snapshot 2010 (Source: Blycroft 2011, CA)

Segment Subscriber (millions) Penetration (%) Fixed-line (3Q 2010) 0.362 0.96 Internet (3Q 2010) 8.7 22.1 Mobile (4Q 2010) 69.3 61.0

Evaluation of Safaricom®’s Innovativeness

Majority of organizational change initiatives are not assessed the impact and degree of success of such initiatives before organizations progress to the next (Doyle Et al., 2000). There has to be a gap analysis performed and the connection established for the intended return on investment to be seen.

Safaricom set up an innovation board in 2010 to look into viable proposals by various techies across the country. It opened its doors to creative and innovative ICT engineers who would have better methods to improve its services.

However this did not go well with the community due to its terms and conditions and I quote “That the submissions and its contents will automatically become the property of Safaricom, without any compensation whatsoever to you”. The company also held all rights to the material once submitted.

This pushed them to go back to the drawing board on how to pull the talent from the country. This is where the manpower revamp came in. Engineers were hired to bring their knowledgebase to the table and in return own shares in the company.

What exactly is Safaricom®’s journey in innovation?

1. Mobile payment revolution via M-PESA® where one can send and receive money across the country. In fact the product is even available in EEU via Western union, straight to your mobile phone. It also had evolved to ATM cash withdrawals without your card, just use your mobile phone.

2. Subscribers can now pull their resources and save with a payment plan called M-Shwari®

.This product also dispenses loans based on your saved deposits. 3. Linking the healthcare gap with Mobile technology by starting a low-cost healthcare

product called Linda Jamii® where people from all walks of life can access quality medical care by contributing a premium affordable to all.

4. Local Artists benefit from a service called Safaricom Skiza® Tune; Much like Apples iTunes where you can download and listen to local music.

5. Safaricom Appstore® in competition with playstore, Apple etc and others to avail free and low premium apps for mobile

6. Safaricom Business product Biashara®Smart that allows small scale business individuals to have a web presence with a website, and a personalized domain for email communication

7. Internet Data plans for high and low bandwidth users 8. Subscription services e.g Job Alerts, Daily bible scriptures, offline Search engines

Section 2: Analysis of company’s innovative capacity in using, adopting and generating innovation Creativity and Innovation have been words used interchangeably to achieve relevance in the market. While it may mean the same, these two words have a slight difference though they work hand in hand. Amabile et al. (1996) suggest that “creative ideas are the conceptual frameworks for innovation and when an organization is running innovation it means that this is the successful implementation of the creative ideas”. Summarily, you cannot innovate without the creative process. You need to identify the issues, and map out opportunities, collect information, explore this information to generate new ideas and validating those ideas to see if they are viable

Organizational or Individual Culture?

Poskiene (2006) defines organizational culture as a “complex set of ideologies, traditions, commitments, and values that are shared throughout the organization and that influence how the organization conducts its whole performance becoming a potential source of innovation, advance and advantage”

Further, Williams & Yang, (1999) emphasize that “The major focus in creativity research has been on the individual creator and his or her personality, traits, abilities, experiences, and thought processes”

Culture has different traits, four of which a core according to Denison & Mishra (1995)

Contribution Stability Adaptableness/ Flexibility Knowledge of Task ahead

Factors that provide the foundation for an innovative culture.

Several strategic pillars have to be put into consideration to build a solid foundation for an innovative organizational culture. According to Martin & Terblanche (2003) “Organizational culture affects the extent to which creative solutions are encouraged, supported and implemented”.

From various research material, I have found that these factors contribute to a vibrant innovative culture:

1. The Social Culture: Regular Interaction brings ideas together. Support Mechanisms that encourage interaction such as continuous learning in the work place.

2. Transformational Leadership: Management involves all staff in its exploration of ideas and natures individual contribution to the overall achievement of departmental goals. Employees need to be empowered.

3. External Environment – Competitiveness ; new market entrants can push an existing organization to review its products

4. A Solid organizational strategy that will drive teams to innovation. Is the Vision Understood? Mission?

5. Reward and recognition has been known to push people in the right direction 6. Open Communication – Open Door Policy

Figure 3: Martin’s Model of Organizational culture ( 1987)

Employees’ Readiness to Enable Innovation

I conducted a brief research to collect information from Safaricom Staff on what they think is the right direction for the company’s Innovation strategy.

Overall, most of the staff is happy with the work environment. The responses were positive, and spoke of a culture that encouraged every individual to bring something to the table.

Of the factors highlighted above, some of the interviewees highlighted on the lack of support from the leadership. There are situations where your line manager can sit on your proposal for it to never see the light of day. There were cases where leadership had passed innovative ideas as their own.

Moreover, the reward scheme, although existent, was/is unfairly distributed. There are situations where there was an individual innovative idea was developed and adopted but all employees got the same reward yet it was expressed that the source of the idea should have been rewarded more.

Safaricom’s Cultural and Innovation Readiness

Safaricom is a Mobile telecom giant in Kenya. It thrives on innovation. Every other day they are calling for young bright minds to join them and share their ideas.

An Organization’s culture can be

a) Power Culture- where there is a central source of management. Nothing can be actioned if it doesn’t go past the head;

b) Person Culture –In one word democratic. The individuals are allowed to think and decide for themselves. Innovative ideas are encouraged. Everyone feels important towards contributing to the growth of the organization as they are allowed to freely express themselves

c) Role Culture – Where you will hear of Standard Operating procedures, Specialties, and a senior management to co-ordinate these special roles to achieve the ultimate result as per policy.

d) The Task Culture – which is mainly project oriented with the individuals having complete control of their work

Safaricom works on a combination of Task and Person Culture.

This is very relevant to its strategy to innovate and grow to remain as the top Mobile phone provider.

Organizational Culture Strengths

1. Safaricom has a substantive workforce that executes its mandate. There is no one time that the task will be incomplete because someone went on leave

2. The Leadership is quite the transformational type. Employees are natured to their full potential. When a staff leaves Safaricom, every company in Kenya wants to employ them.

3. The Person Culture generates a higher participatory workforce. This way Ideas are passed around and more is achieved.

Organizational Culture weaknesses

1. There were concerns from the staff on the speed of innovation. Too many products and services coming up too soon. There was the fear of losing concentration on some products over others. For instance the M-PESA product is the leading income generator in

Safaricom. The Strategy is centered on this product while other services like Data continue to deteriorate causing data subscribers to move over to other providers with great deals.

Analysis on the role and status of innovation at Safaricom®

You have to spend to innovate; to spend you need a great management strategy. Technology does not come cheap. Beddowes (1994) puts together innovativeness (that requires Management development) and return on investment. You have to evaluate your ROI to map out a plan on which path of innovation you are going to take, otherwise it will be a total sham.

Reidenbach and Moak (1986) came up with a conceptual framework to comprehend and communicate the map in a situation, in this case, innovation.

Figure 4: Conceptual Framework (Reidenbach and Moak :1986)

Independent Variable Dependent Variable

Product innovation strategies

New product

Product portfolio

Technological innovation strategies

New technology innovation

Process innovation

Marketing innovation strategies

Mix of target market

Market orientation

Process innovation strategies

Productivity

Organizational structures

Global competition

Profitability New products Diversification

Bring M-Pesa Home – Safaricom’s latest Innovation

I agree with Klein and Knight (2005) when they say that technological innovations are generally undependable and defectively planned. The execution of such poorly crafted innovations could have a worse impact, in the opposite curve of what they were intended for. We, in the technology world compare innovation to kids with new toys. We see something new and we want to try it. But in reality it’s not always such a simple buy and use or carry and go kind of implementation. For instance, the new Galaxy S6 is what everyone wants. But it has its bugs and technical glitches with its new innovation such as a problem with its wireless charging, Auto-rotate delays and so on. Every new toy has its hiccups. So is every new innovation.

The plan is to have an innovation that majority can adopt and use; User acceptance is the principle measure of a good innovation implementation plan.

Innovation brief

Safaricom’s M-pesa service for years has been hosted outside the country. In fact, in Europe. Recently, there was a change of guard in the Technology unit. The new director obviously had fresh ideas he would easily impose on his unit’s pan for innovation.

One of the biggest projects that Safaricom embarked on this past April was to terminate its contract with its European links. The big plan was to move the servers back to Kenya hence the ‘Bring MPESA home’ campaign. The servers which were homed in Germany would finally be run from Kenya’s Capital of Nairobi.

How was Bring MPESA home executed? The actual migration involved disruption of services to the Safaricom Subscribers for about 36 hours. There was sensitization via print and broadcasting media on the disruption of service for about a week prior to the migration. Sources from Safaricom say that this was a plan in motion since January of 2013. Numerous training simulations were conducted prior to the actual implementation. Suffice to say, this confirms many scholars’ argument that innovation implementation needs a lot of meticulous planning prior to execution.

There was mitigation in place to counter risks involved with moving such huge and sensitive amounts of data across the web cloud. A whole team of network monitoring engineers was on standby to check for any intrusion from hackers. Backups had already been performed and shipped physically to Kenya before the go button was on. System upgrades were done to provide a better response rate once a payment had been made. The improvement cycle was intended for 3 seconds in response up from the 10 second window.

The switch back to service was a challenge. The uncertainty of whether the new servers will work or not was an obvious risk. But the commitment of the team and the leadership saw this execution succeed. Not to say that there were no hiccups. In fact, there are still there.

The outcome has been positive, save for unscheduled downtime as they tine tune the new system.

Who was involved? As the project manager, you need to have the right people for an innovation implementation to work. Collaboration from various parties, technology and non-technology personnel must be involved.

Figure 5: Determinants and Consequences of Implementation Effectiveness (Adapted from Klein and Sorra: 1996)

The project manager in Safaricom put together and trained a strong team consisting of

IT Engineers Network monitoring engineers Audit and Risk professionals Business Development professionals

There had to be a strong presence of these individuals with rich skills to make sure that the integrity of the data was not compromised.

Innovation Implementation: My Approach

Booz Allen Hamilton, a management and technology consultancy firm’s Research and Development found that innovation implementation has demanding course and must entail a disciplined, stage wise authorization process with regular quantity and quality analysis for each critical element that may involve time and money to conclude that an implementation is successful.

Climate for Implementation

Skills

Incentives

Obstacle Free process

Implementation Effectiveness

Innovation Effectiveness

Innovative Values Fit Commitment Strategic

Accuracy of Innovation Adoption

So, we have generated the idea, collaborated with the relevant teams, imposed senior management power nudges here and there and converted the ideas into practical solutions. Question is, have we made all parties aware of what exactly we are planning? How we are going to make these practical solutions work for the organization is what matters. If there is poor architecture of the execution, then most likely innovation goes back to step one, or in most cases, you will find that a company will roll back to a previous system to maintain status quo. We need to consider a number of factors before deciding on which path to take to execute an innovation rollout.

Is the innovation going to impact on

1. Business processes 2. Team satisfaction (Commitment to see it through) 3. User Satisfaction (Intended Target market) 4. Revenue generation 5. Quality of technology

Figure 6: Business value model (Du Preez & Louw:2008)

Framework

Klein & Sorra (1996) shared a model that integrates the ‘determinants and consequences of implementation’ and how effective it can be. That effectiveness is the underlying benefit that the organization gets post innovation implementation. Theirs was to depict that both the individual and organizational values with regard to innovation are equally important in analyzing the effectiveness of an implementation plan. Du Preez & Louw (2008) echo this by saying that a ‘Successful innovation requires an integrated design process, i.e. integration in the design of the enterprise, the design of the product, as well as the design and implementation of new technologies.’

There are two types of models used in innovation implementation process

1. The Source-Based Stage Models - (Amabile 1988) where the path from the creation of a new product, how it is disseminated into the market as a final product is mapped. This may include the market research, production, testing and distribution.

2. The User-Based Stage Models – from the user’s understanding of the innovation in question. IS he well aware of the need to advance, and what kind of choices will he make, and how this change will be adopted to his routine. (Nord & Tucker 1987)

Figure 7: Innovation Life Cycle (Adapted from Du Preez & Louw: 2008)

Here, we are mainly considering the Deploy phase and how it relates to the other steps, up or down the tier.

Process Management

As mentioned earlier, the success of an implementation primarily depends on the team involved. If the employees are not committed to see it to the end, then the implementation will be a sham, and deemed unsuccessful.

I would adopt the framework proposed by Meyers et. Al (2012) – Figure 8

PHASE DESCRIPTION PROCESS MANAGEMENT Phase One:

Initial Deliberations

Run a requirements and resources valuation Pilot a fit assessment( What best works for my organization) Do a capacity/readiness valuation

Adaptation What Possibilities do we have Capacity-building approaches

Attaining explicit support from all parties involved to buy into the idea fostering a collaborative climate Structure general dimensions (eg Funding) Staffing and retention Effective pre-innovation training

Phase Two Building a structure for execution

Build Implementation teams

Develop the roll-out plan Considering risks and unforeseen interruptions

Phase Three

Improvement structures once execution begins and Support Plans

Technical assistance/coaching/supervision

Process appraisal

Feedback apparatus

Phase Four

Refining future undertakings

Learn from experience

Challenges – Anticipated Issues

The bottom line in any technological advancement is the business value it impacts on the organization.

PHASE CHALLENGE (s) MITIGATION Phase One: Initial Plans Few details on the plans. A

poorly documented will be inadequate.

Prepare a comprehensive project plan. Employ project planning tools like Requirements Traceability matrix Invest on R&D

Phase Two: Building a structure for execution

There may be too much time taken to run the implementation. Time is money. All Projects run on the Time-Cost-Quality Triangle (Atkinson 1999) principles highlighted by the Project Management Body of Knowledge (PMBOK)

The Work breakdown structure would work here as you are dealing with teams and roles.

Phase Three: Improvement structures once execution begins and Support Plans

Some team members may have little knowledge of the innovation Senior management may not sign off on project progress in good time

Pre-train your teams before execution. Involve Senior management from the start so that they know exactly what they are dealing with. This way, unnecessary approval delays will be minimal.

Phase Four: Refining future undertakings

There is a first time for everything. Perhaps the innovation is not tried and tested.

Invest in research and development. Alternatively go for an innovative product that has been in the market longer. For instance Galaxy s5 instead of Galaxy s6.

Time

Quality Cost

Change Management – Effecting the adoption of Innovative Technologies

Nadler and Tushman’s (1989) suggest that change includes the procedures, the individuals, the Formal and informal structures and harmonization mechanisms that will bring these aspects together.

For a successful implementation of change, it does matter

1. How the change has been presented, communicated and initialized 2. Who it involves, who participates and a clear statement of expectation on input from

each individual called in 3. How is the rollout for this change going to be executed whether pilot, Sudden Change

over or phased 4. If this change a long lasting solution to solving the issues that may have been raised

Change at Safaricom has become inevitable. Ranging from Product to recourse to services. There was a recent sudden reshuffle and replacement of some senior management staff. Of course this had an impact on the teams as some had become accustomed to one’s style of leadership. It will take a little time for staff to adjust to the new leaders. It remains to be seen whether they will adopt the culture of “this is the way we do things here” or they will come in with their own style.

The growth of the banking industry is keeping Safaricom on their toes. Various banks have come up with autonomous payment mobile services that are not restrictive of the carrier one is using. This competitive streak has forced the organization to keep on innovating, finding better solutions for its subscribers.

Section 3: Analysis of innovative technologies landscape Innovations in the mobile operator’s market have gone conventional and are no longer a unique aspect in the industry. Handsets have become hubs for trade and commerce. There are mobile applications now that are tailored to work as well as the desktop web versions. Social networks are causing a major ripple in consumer markets shaking up traditional business systems. We are gradually accepting that we are moving towards an ultra-transparent digital culture.

Proposal for Innovative Technologies

As it, Safaricom provided broadband for both home and corporate use. They have gone further and introduced business packages to budding entrepreneurs to have access to a start kit which has a website hosting package bundled with the broadband at excellent speeds, I might say, better than most service providers.

But how about venturing into TV?

Recently, the Kenyan market migrated its signals from Analogue to Digital. Everyone had to change their TV or purchase a set box to access free transmitted channels. There are already existing companies that provide cable TV, but, not everyone can afford it.

Quad Bundle: TV, Broadband, Phone and Banking

Two of these, are existing innovations already rolled out by the company; Broadband and Banking via MPESA.

The inclusion of digital TV and phone services - mobile at home - could be a major way in boosting the income at Safaricom. The Kenyan market thrives on bundles. If they could access all under one roof kind of service, it will not be a problem spending on it.

Already, Safaricom holds the largest market share for mobile subscription. Imagine the numbers if most if not all of these subscribers could have access to the entertainment of choice and make unlimited calls from a landline that is actually on a mobile tariff.

On its 3G network, Safaricom can easily offer dedicated broadband speeds as low as 50mbps.

Innovative Features of the Quad Bundle

Watch TV in HD – Clear picture Download or stream movies with superfast broadband speeds Wi-fi on Get a variety of entertainment channels A mobile-at-home phone bundled for unlimited texts and talk minutes Do unlimited mobile to bank transfers to pay bills at no additional costs from your home

phone Finally have a landline that can verify your physical residence with just a phone call from

your utility provider.

TV interaction that is menu based. Select what you wish for.

Business Impact of the Quad Bundle Marketing this product will be easy since it is riding on an existing infrastructure. The challenge I think will be to match industry prices for other digital TV providers. However, a consumer will be willing to fork out the extra coin for the additional benefits as no one in the Kenyan market has bundled their entertainment this way.

As it stands, Safaricom holds the largest market share in mobile subscriptions. It will be a no-brainer to disseminate the news of this new product to the market. It is a guarantee that the target will be reached at least 90%.

There is bound to be a rise in revenue for Safaricom in this product, with minimal operational costs. The cost of marketing will also be minimal, as they already have most of not all Kenyans using the mobile network’s infrastructure.

Potential benefits of the Quad Bundle To the Company

Increased subscription base due to the competitive pricing in the bundle. Revenue up from sales of equipment and contracts Creation of jobs for the new product as part of the talent pull strategy in Resource

Division One of a kind provider for such a product. Unique Numerous savings on implementation as its running on existing infrastructure

To the Consumer

This is definitely a money saver. The fact that as a consumer you can access all these services at a bundled price is just a deal not to miss.

You pay a fixed rate for staying online the whole day (and night) Manage your life – Control your banking, shopping etc from the comfort of your home.

It eases life for many working professionals that have little time to look at their mobile phones in their busy day.

Adoption experiences of other companies on the Quad Bundle Virgin Media and Sky both in the UK are great examples of companies that have run this kind of bundle successfully. Theirs is a tight race for market domination. Safaricom would be one of a kind to provide such a product.

It has not been smooth Sailing for these companies. People have cancelled subscription majorly as a result of poor customer support.

Quad Bundle Implementation Providing all four facilities to the public generates an extra possibility for technical difficulties to be encountered, necessitating more support from technical maintenance.

I propose the use of existing Customer intelligence systems that are currently used by the company to determine consumer usage and what the market demands off such a telecom giant.

These reports in the project phase will lead the teams to designing appropriate products for the target market.

The existing Operations Support System/Business Support System (OSS/BSS) will be used to ease the process of tailoring the product. This will also reduce significantly the time-to-market taken to roll out the product. In effect, the operational performance will be also gauged and disruptions reduced to a minimum.

The fact that these are already existing infrastructures places this product as a potentially sustainable innovation. We are not re-inventing the wheel.

Re-introducing Simu ya Jamii as a free Street Mobile Charging unit using Solar

Simu ya Jamii was an innovation by Safaricom back in the late 2000’s that didn’t quite take off. It was a mobile phone kiosk operated by small entrepreneurs where anyone could make a call to a mobile number for a fee charged per minute of connection. It is not clear why this innovation was pulled off the market, but this plan is one way to keep the consumer glued to data and voice use while on the go.

This innovation is borrowed from a leading telecom company in the UK in its quest to go Green. The use of Solar is in line with Safaricom’s strategic plan to minimize environmental damage while distributing its technology to the consumer market and what a better way to do this than via an energy source that is readily available; Solar. Running out of charge is a common issue across smartphone users so this product will definitely be utilized.

Innovative Features for Simu ya Jamii- Charge as you Go

Easily accessible and convenient Use of existing public telephone booths and simu ya jamii vendor points At least 20% battery life for 10 minutes of plug-in Use of Solar – Going Green

Business Impact of the Simu ya Jamii- Charge as you Go This product will be rolled out as part of Safaricom’s Corporate social responsibility. It may not necessarily have a direct impact on the company’s operation or revenue generation since the service is free, but it will place the company at a better popularity position on the grid.

Potential benefits of the Simu ya Jamii- Charge as you Go To the Company

Achievement of CSR goals Use the booths to generate income from advertisement posters on new products

To the Consumer

Remain in Communication even when on the go. Safe way to charge phone. Environmental friendly

Adoption experiences of other companies on the Simu ya Jamii- Charge as you Go Two entrepreneurs, Harold Craston and Kirsty Kenny, students in the London School of Economics (LSE) discovered a new way to use the wasting-away telephone booths; Convert them into solar charging locations.

This is the same situation in Kenya. The phone booths are run down and no longer work. In Its Corporate social responsibility, Safaricom could as well adopt this innovation for a good cause, and not necessarily for revenue generation.

Simu ya Jamii- Charge and you Go Implementation The biggest problem in Kenya is security. Physical security of the charging sockets is a concern. One of the ways to secure these is to install grills that are just large enough for a plug to pass though. The alternative is to install the sockets with plugs in the grill such that only the charging end is left dangling. The money generated from the advertisement in the booths contributes to the company’s revenue and maintenance of these charging booths.

Section 4: Innovation strategy: Linking people, operations, product/services and IT with growth and competitive edge Ideally, short and long-term goals should be projected in the innovation plan. You will find that most companies map plans with 3-5 year paths. But this may not be necessarily true for IT innovation. IT is constantly changing. It is for this reason that IT roadmaps are reviewed more frequently than other categories of plans.

A good IT innovation roadmap must show 1. Why we need the plan 2. What are the priorities 3. What are the goals/targets for the plan

Technology roadmap: Safaricom Limited Where we are today

Safaricom has an array of products alighed with its innovation strategy and organizational goals. Some of the primary products that continue to keep Safaricom relevant are

1. MPESA – Mobile money transfer 2. Safaricom Business- a starter pack for young entrepreneurs that includes a website a

bank account and loan facilities 3. Corporate IT products revolving around cloud technology and data warehousing 4. Voice and data for end users 5. Broadband for home and office

Applications and Infrastructure To support the product idea, the infrastructure has to have the ability to support it bundled together with the necessary applications.

Some applications may be redundant making it easier to deliver service for different products over one platform; hence the cost reduction in the innovation process. It could also be possible that the new product does not need any new purchase of equipment. The existing infrastructure could be adequate.

Policy and Governance Organizational and Division strategies must be aligned while planning for the product/Service.

The manpower required has to be well equipped to develop the product. Without the right people, you will not be able to deliver the product desired.

Delivery and Improvement Constant checks have to be performed during this process from the moment the product is introduced. This is a continuous cycle. It runs back and forth until the desired outcome is achieved.

360◦ Customer view Feedback is one of the measures used to achieve continuous improvement. It is also the method through which the innovation team can measure their goal achievement. Is the customer happy? Did the product fit the market needs? The findings are then used in the improvement process for current and future innovations.

Goals

How to Strengthen Safaricom’s capacity to Innovate

Section 5: Innovative scenarios: Creating future cases of IT innovation deployment Mobile will remain to be a key force of technology advancement for years to come. It has the most sold influence on consumer markets. However Cyber-security and privacy are major impediments in this progression. Quicker and better improvements surpass inexpensive innovations as a top advantage of adopting new technologies, an indication that the evolution of mobile technologies is motivating incremental significance as these technologies advance.

It is therefore paramount to come up with a “wow” factor repeatedly to remain a leading provider lest you risk becoming irrelevant quickly.

Top-Tier World telecoms and mobile giants are playing the big leagues game; most will start proposing large-scale deployments. Producing a copy-cat innovation will not work. It is time for Safaricom to run along these high-end leagues.

The M2M Revolution – The Future Innovation

Machine-to-Machine links machines; simply that.

Machines connect wirelessly to the internet, converting them into intelligent resources present possibilities for how to run day-to-day activities in your customer’s life or businesses.

How it works

A Sensor is placed in to an appliance or device to capture an occurrence that is conveyed over a network distributing data to applications. You can capture things like changes in temperature, lock in a location, record food consumption, health related matters like stress level, speed and so on then translated by the application. E.g Stress levels are too high, you need to relax.

This technology already exists on some mobile handsets via downloadable applications but are dependent on SIM use. It is time to capitalize on a SIM-free deployment.

Forget the handsets. Most of the business contracts that Safaricom has include broadband packages. These customers have a router or a dongle that doesn’t have to work with a SIM installed. Safaricom can install these sensors in these devices as a value-added service to attract more customers for this fun little addition.

The idea here is to capitalize on a competitive edge. No other mobile provider in Kenya has this innovation. It will be in the best interest for Safaricom to explore this in the near future.

How we pull it off

Gassmann and Enkel (2004), highlight open innovation’s main practices that can be adopted:

1. “Outside-in process (outside to inside)”: Source for knowledge externally to enrich the internal abilities. ( crowdsourcing)

2. “Inside out process (inside to outside)”, internal ideas are exploited externally

3. “Bi-directional process”, partnerships are formed to consult and choose the best solution with the largest gain for all parties involved.

Benefits:

1. Quick and efficient 2. A wider pool of ideas 3. More skilled personnel can be acquired/retained when they bring winning ideas to the

table

Risks

1. Ventures not well researched could be a dead end thus a waste of resources 2. Crowdsourcing can be tricky to control as it works on the external environment principle 3. Loyalties may be assumed, yet they may not exist. An innovator might just go the the

highest bidder.

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Web source http://www.bbc.co.uk/news/technology-29455992

Web source: http://about.virginmedia.com/press-release/9428/virgin-media-goes-big-with-uks-first-true-quad-play-bundles

Web source: www.safaricom.co.ke

Websource http://www.solarboxlondon.org/

Annexure A: Research Questionnaire for Section 2: INTRODUCTION LETTER & QUESTIONNAIRE

Case Study: SAFARICOM LIMITED

Dear MD/CEO,

My name is Ms. Christine Ndwiga, a current graduate student at the University of Roehampton pursuing a Master’s Degree in Information Systems Management.

I am conducting a brief research on Safaricom’s journey into innovation for business sustainability and how this has impacted on the individuals working here and the organization as a whole.

I kindly invite you to participate in this study. Please be advised that

It will only take about 10 minutes of your time to complete the questionnaire Responses will be treated with confidence and will only be purposed for academic

submissions only. Participation is voluntary not obligatory Your contribution will in no way affect your current position at Safaricom.

Should you have further questions, you can reach me via email on wndwiga@gmail.com

Kind Regards,

Christine Ndwiga

Part 1: Demographics

(Please mark relevant Checkbox)

1.1 Gender

Male Female

1.2 Age

19 – 30

31 – 40

41 – 50

51 – 65

1.3 Highest education level?

O- Level

A-Level

Some Technical Training

Diploma

Bachelor’s Degree

Master’s degree

Doctorate

1.4 Employee Classification

Intern

Standard

Supervisor

Manager

Executive

1.5 Length of Service at Safaricom

0 – 3

3 – 5

5 – 10

10 – 15

Over 15

1.6 Business Unit

Resources

Risk Management

Corporate Affairs

Financial Services

Strategy and Innovation

Internal Audit

Consumer Business

Enterprise Business

Technical and IT

Part 2: Insight on Organizational culture.

This section assesses Safaricom’s organizational culture. For each item, please indicate with an (x) only once to which extent you agree or disagree with it, 5 being strongly agree and 1 being Strongly Disagree.

Strongly agree

Agree Neutral Disagree Strongly Disagree

5 4 3 2 1

2.1 Organizational characteristics Safaricom IS a a) Friendly work place

b) Formal type of workplace with plenty of rules and procedures

c) Dynamic and inspirational workplace

d) “get-the-job-done” kind of workplace

2.2 Leadership The Leaders a) Are Charismatic and Inspiring; They

definitely have followers

b) Encourage exchange of ideas and pilot Innovation.

c) Are not Versatile and Inflexible

d) Do not involve the staff in decision-making

2.3 Cohesion and Collaboration What keeps Safaricom together a) Threat of a new Market entrant with

better product

b) People’s Commitment to Organizational goals. Importance on the finish line.

c) Strict Adherence to Rules and Policies

d) Nurturing of Talent, Mutual Trust and Loyalty

2.4 Management Style a) Inclusive - teamwork, harmony, and

active participation

b) Individual input rather than a group effort for innovative ideas

c) Strict: Conformity to rules and regulations

d) Encourage competitiveness and winning

2.6. Reward structure Rewards are a) Equally distributed between all staff

categories

b) Biased on rank

c) Based on an Individual’s resourcefulness rather than group effort

d) Fairly distributed between all staff categories

Part 3: Insight on Organizational Change

This section assesses Safaricom’s Change Management. For each item, please indicate with an (x) only once to which extent you agree or disagree with it, 5 being strongly agree and 1 being Strongly Disagree.

Strongly agree

Agree Neutral Disagree Strongly Disagree

5 4 3 2 1

3.1 Understanding the Vision When the Change Process Initiates a) Its reasons are clearly communicated

b) Benefits of the Change are understood

c) There is little or no Communication

d) All relevant teams are involved from the initiation to the end

3.2 Leadership and Change The Leaders a) Invest time & commitment in Piloting and

supporting change

b) Ensures that the teams involve have adequate resources for change process

c) Do not involve anyone else other than top tier management to implement the change

d) Understand and educate the teams on the impact of change

e) Do not recognize individual effort and reward accordingly

f) Empowers all employees to initiate change and be involved in its process.

3.3 Employee Attitudes What is your perception of change? a) Innovation is necessary to remain

Relevant

b) We are doing too much too fast.

c) I am not threatened by Change

d) I look forward to Change initiatives in my work environment

e) I am involved in Change phases that affect my job

f) I initiate change

g) I would rather maintain Status Quo

h) I fear losing my power or position with Change

i) I do not like the way Change interferes with the way I do things.

j) I have had positive outcomes with previous change initiatives

k) I have had Negative outcome with previous change initiatives

Part 4: Recommendations

4.1 Do you think organizational culture has any influence on the Innovation drives initiated by employees in this company? Please Explain Briefly

4.2 In your opinion, what should Safaricom do different to achieve a smoother transition with Innovation initiatives?

Annexure B: Questions on Future Innovation Expectations for Section 5

1. What are the models for fixed and mobile broadband services over the next

3-5 years? 5-10?

2. Which type of equipment are you looking to adopt in that period?

3. How do you plan to increase revenue by learning from the external ecosystem?

Retail Commercial

4. Are you open to exploring ventures with small scale ISP’s or you would like to remain the sole internet provider to your users?

Thank you very much for your Time and Input