Sms As Business Communication Tool For SMEs, by Eng. Amani Nakembetwa

Cluster Initiatives - ICT 129th Oct. 2009

6th Regional ConferenceInnovation Systems & Innovative Clusters in Africa

Kunduchi Beach Hotel & Resort,Dar es Salaam – Tanzania

October 28 – 30, 2009

Using SMS as a Business Communication Tool for

SMEs - Tanzania

Cluster: ICTDate: 29th Oct. 2009Place: Dar es Salaam

Topic: Using SMS as a Business Communication Tool for SMEs - Tanzania

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Introduction Purpose of Presentation / Discussion

To bring the facts into the public attention Policy makers Private sector associations Development partners Entrepreneurs (SMEs)

To encourage seminar participants Act as change agents to spread the information in

their areas of influence.



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Introduction

The Presenter: Amani NakembetwaICT Cluster Member (T)

From:PinkPrime Solutions Ltd

e - Business Development Service Provider (e-BDS)

e –Business Process Outsourcing (e-BPO)&

ICT - Enabled Solutions



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Topics of Discussion1. Introduction.2. Characteristics of SMEs in Tanzania in regard to use of

e-Commerce facilities.3. Why SMS is a Proper Channel to Implement e-

Commerce for SMEs.4. Why Does SMS Make Sense for SMEs.5. Examples Where SMS has been Used as Business

Communication Tool.6. Challenges for SMEs when Developing and Operating

Mobile SMS Services.7. A Friendly Framework for SMEs to Implement SMS

Based Communication Tool.8. Real example of SMS Based Service Provider in

Tanzania9. Conclusion.



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1. Introduction The National Vision 2025

“Tanzania should have created a strong, diversified, resilient and competitive economy, which can effectively cope with the challenges of development and, which can also easily and confidently adapt to the changing market and technological conditions in the regional and global economy”.

SME Policy 2003 – 2013

Why SMEs don’t grow and become completive ?

“Lack of Information and appropriate use of ICT facilities (e-commerce) to enhance their efficiency and effectiveness in productivity”

E-CommerceE-commerce is in short, conducting commercial and business transactions by the use of computer mediated networks (internet).



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2. Characteristics of SMEs in Tanzania in Regard to Use of e-Commerce Facilities

Young, small and often die before maturity.

Often less structured and less formal, with fewer fixed procedures, because there has not been time to develop them

Less opportunity to automate and introduce IT or to have its own IT department with resident expertise.

They live in environments where there are no or limited infrastructures for implementing ICT enabled business solutions.



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They have the advantage of flat hierarchies and thus being very flexible esp. in decision making.

They have little or no knowledge on use of computer facilities & ICT enabled solutions to enhance their effectiveness in business.

They have limited resources, cannot afford to by notebooks, PCs, get internet connection or even to employ highly specialized ICT support staff.



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Majority of SME living in the areas where there is mobile network coverage, do own or use mobile phone services (for calling and SMS texting).

[1] Source: Research by Henley Management College and Teleconomy

“When questioned if they agree with the statement – ‘I cannot imagine life without my mobile phone’, almost 70%of people in the age of 16-34 said that they either agree or strongly agree with this statement” [1]



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3. Why SMS is a Proper Channel to Implement e-Commerce for SME

Internet penetration in Tanzania < 2% while mobile phone penetration >30%. and increasing at a rate of 10% [2]

Nowadays, mobile phone has a dominating presence in all of our lives. Unusually, mobile phone ownership is very evenly spread across the different group categorizations of age, gender and social grade.

People are using their mobile phones all the time, in and outside of work, mainly for calling and texting people.

Mobile phones are cheaper compared to notebooks or tablet PCs

SMS service is available on every mobile phone gadget regardlesshow simple or cheap it is.

[2]-Source: Tanzania Mobile Fact Book 2009 - by Blycroft Publishing.



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SMS service is well known and friendly to users so there is no need for training on how to use. The service has been tested and implemented for long time by the GSM operator and there is no risk in implementing this technology in new innovative ways.

Mobile phone has the ability to reach mass audiences in a way that no other technology has had the potential to do before now. Indeed, in many parts of the world mass communication is leaping straight to mobile phones and bypassing both the internet and landlines.

100% of GSM mobile phones support SMS services. [3]

[3]-Source: http://www.clickatell.com, SMS Marketing - Promote your business via mobile marketing.

“It is predicted that there is set to be a continued rise in the number of text messages sent and growth in the way that text messages are used, while the popularity of phone calling remains popular, but constant.” [3]



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Reach more customers - More people can be reached via SMS than internet, email or fax. Using a reliable SMS gateway with global reach, allows access to recipients at any time, anyplace on the globe and at the cost of a local message.

To reach an audience of 50 million users, it took: Radio - 38 yrs; TV – 13 yrs; Internet – 4 yrs; iPod – 2 yrs;

Facebook (100 million) in less than 9 month Mobile Phone (SMS ???) [4]

When used for marketing, promotion and advertisement, SMS Increase sales with higher response rates. SMS is an extremely personal means of communication, and invariably an SMS is viewed immediately and the whole message read. This high level of attention induces a higher call-to-action response rate than email or fax typically would. [5]

[4]-Source: www.newsplex.com – The Power of Internet & Television[5] http://www.clickatell.com,

SMS Marketing - Promote your business via mobile marketing.



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4. Why Does SMS Make Business Sense for SME

As compared to e-mail

i). SMS is Omnipresent.

Messages can be sent globally via a single SMS provider. All cell phones can receive SMS, and there is a high uptake of SMS by users as more people have cell phones than have access to email

Extensive reach: The number of people with a mobile device in their hand is growing at an exponential rate globally

A mobile phone is always within hand’s reach of the owner, it’s nearly always ON and the number of people, who own a phone, is continuously growing globally at a higher rate. SMS makes the most financial sense, especially in communicating with an audience on the move (e.g. Machinga & Masai).



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ii). The immediacy of SMS or Real Time Delivery.

An SMS is typically delivered within seconds and therefore valuable for Time critical information.

It is delivered directly to a user's phone irrespective of location (where there is network coverage). There is also a high likelihood of an SMS being read immediately when received, unlike email where messages might only be opened days later.



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iii). SMS ensures less spam to an end user.

Unsolicited messaging is significantly reduced as SMS are predominantly sent to users who have a current commercial relationship with the business

High response & effective rates: SMS enjoys a higher response rate than email as it is targeted and personal, and is less invasive & less costly than a telephone call



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iv). Cost Effective.

SMS makes the most financial sense, especially for SME wanting to communicate with an audience on the move / clients / vendors etc. Bulk SMS sending lowers the cost even more, i.e. the Extreme SMS service for Tigo and Vodacom

Time-saving: Less time spent on briefing business partners of an issue as compared to mail services.



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iv). Automation.

If integrated on website or on systems applications software, SMS sending can be automated. This is good for Bulk SMS sending for campaigns (product promotion or marketing).

Trackable ROI: reporting from automation systems allows determining exactly how effective the campaigns have been.

Total control: SME using these systems enjoys the flexibility of running their programmes according to their own timing and planning their schedule of communicating messages.



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5. Examples Where SMS has been used as a Communication

i). Mobile Financial Services.

Vodacom (T) Ltd with NMB partnership offering ATM recharge services for prepaid customers

NMB Mobile Banking – Balance inquiry, Mini-statement, Money transfer to any NMB account, payment of bills –electricity (LUKU), water (DAWASCO)

ii). Mobile Security Service.

A mobile phone with an integrated SIM card and private key signature using SIM tool kit client software becomes a mobile security tool for m-commerce payments example of this service is ZAP services for Zain and M-Pesa for Vodacom.



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iii). Mobile Information Provision.

Localized information such as updates on news headlines, weather, events, sports results, stock prices, business news, transport news, entertainment, yellow pages services, etc.

iv). For Social Networking.

An SMS is typically delivered within seconds and therefore valuable for time critical information such as death announcement to a group of members of society like church, mosque, sports clubs (simba & yanga).



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v). Mobile Loyalty (Customer Services) Programs

Reminders and updates be sent to customers, i.e. confirmation ofappointments, overdue video rentals. SMS provides a simple, and low cost way of keeping in touch with customers. Effectively canbe used by SACCOS to remind members of loan payment or meeting date.

School – Parent communication. It is perhaps the most viable and effective solution to the issue of communication gap often facedby the parents and school management in matters related to acquiring information about their children’s attendance, fees updates, education and academic activities

Greetings - Wishing customers a Happy New Year or sending a seasonal wish via SMS is a great way to remain in contact with customers with a personal touch. Festive and other bulk greetings are especially easy to send using bulk sms sending programs.



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vi). Market Campaign and Promotion of Products.

As a communications medium, SMS is the most cost-effective way of communicating to any business audience. When integrated with bulk sms sending programs, market information about a product can reach a targeted audience in a fraction of a minute

vii). Voting or Short Surveys.

An Creating an SMS voting poll or short survey is an excellent way of instantly getting to know customers thoughts or feelings (i.e. KIPIMAJOTO or Bongo Star Search programs)

viii). Trucking and Fleet Management Systems – Car Track, Trace Masters use sms enables platforms.



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6. Challenges for SMEs When Developing and Operating Mobile SMS Services

There are some challenges that SMEs would face in developing mobile services. In this paper two categories of challenges are discussed. These are technical and operational challenges on theone hand; and challenges arise due to the nature of mobile device/terminal on the other

Technical and Operational Challenges

Sending Bulk SMS

For the SMS services to make the most financial sense, especially for SMEs wanting to communicate with large group of audience, sending of bulk SMS at once lowers the cost even more.

To set-up a platform for this operation needs computers, a bit of computer knowledge with associated software - Application Programming Interface (API).



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6. Challenges for SMEs When Developing and Operating Mobile SMS Services Operation Cost

Although it is cheaper, convenient and timely as compared to phone calls and internet accessibility, there is cost associated with sending every single sms or per every transactions using sms enabled services.

Decision Making Process in SMEs

While in big companies decisions about new technologies are made by special departments with experts, in SME it is often the owner of the firm who makes such decisions. Without proper information, it is even harder to assess the potentials embedded in this service.

Enforcement and Enactment SLA

Uncertainty to the formation and enforcement of contract enacted via SMS and more importantly to the protection of consumer interests



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6. Challenges for SMEs When Developing and Operating Mobile SMS Services Nature of Mobile Terminal (MT) Devices

Display quality:

MT have only a small display with low resolution and reduced color-depth, there is no real keyboard or “mouse” available for user input.

Limited Resources:

MT have limited resources like memory, CPU-power and battery capacity, the available bandwidth for wireless data communication will be not as good, cheap and reliable as for wired data communication.



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6. Challenges for SMEs When Developing and Operating Mobile SMS Services

Data protection concerns:

Wireless data communication is more vulnerable with regard to security threats (i.e. password securing of data). There is also the danger that a MT with sensible data on it is lost or stolen.

Existence of Different types of MT:

They all have different capabilities and support different formats for data exchange and therefore no unique way of handling information



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7. A Friendly Framework for SMEs to Implement SMS Based Communication Tool

The Concept

Of

Business Process Outsourcings

(BPO)



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Business Process Outsourcing (BPO)

BPO is the process of hiring or contracting another company (third-party service provider) to handle specific business activities or tasks that are considered “non-core” to the primary business strategy.

BPO can be of much help to SMEs because it's like “getting it done by the experts”.

It not only boosts efficiency, but also enables significant time savings and hence automatically results in significant cost savings.




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Operationalization of the Concept of BPO by SMEs

An SME hires/contracts a competent firm (Service Provider – SP, usually another SME) to host its SMS Communication Service and hence signs an SLA (Service Level Agreement).

At any time (24/7) an SME can instruct the SP (by phone call, by SMS text or by e-mail) to carry that assignment on its behalf according to the SLA.

The SP performs the task and is obliged to give the feedback to the SME (deliver report) – by call, SMS, e-mail, etc.



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Payments for the Service

Based on the nature of SMEs and experience working with them, in this paper we encourage the use of pre-payment modality

For instance with NMB SMS Bank Service, if both SP & SME have NMB accounts, payment can be done instantly by SMS cash transfer service regardless of where one is provided there is mobile phone network coverage.

Once both parties confirm transfer and receipt of payments, the service is offered as per SLA



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8. Real Example of SMS Based Service Provision in Tanzania

PinkPrime Solutions Ltd

e - Business Development Service Provider (e-BDS)

e – Business Process Outsourcing (e-BPO)&

ICT - Enabled Solutions

Dar es Salaam



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8. Real Example of SMS Based Service Provision in Tanzania

Who is

PPS Ltd is a Tanzanian entrepreneurial firm that has decided to embark its immense potential in e-Commerce & ICT enabled solutions to offer Business Development Services to SMEs that can be done electronically (e-BDS), scaled down to happen in mobile handsets using SMS - Based Services via Wireless GSM networks




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8. Real Example of SMS Based Service Provider in Tanzania

Offers:

e-BPO

Bulk SMS Sending Service for Marketing Campaign and Promotion of Products for SMEs

Provision of Information for Agricultural inputs and products

Performs survey and opinion solicit from customers Provision of School – Parent SMS based communication

platform. Provision of examination results using SMS.




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9. Conclusion

Summary:

What all these means

e-Commerce is the good for SMEs but not readily available. SMS stands to cover the last mile where internet can not

reach or is not affordable SMS service are best for SMEs as communication tool

based on their nature and implementability. SMS provides a convergent “Enterprise” communication

solutions using the lowest common denominator of technology to communicate with internal, external and extended customers or clients.



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9. Conclusion

Summary:

What all these means (cont…)

BPO – ‘getting it done by experts’

Boosts efficiency, enables significant time savings and hence automatically results in significant cost savings.

SMEs needs end-to-end mobility solutions where parts of the value chain are owned by other players (BDS) through BPO.



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9. Conclusion

THIS PRESENTATION THEREFORE ASKS THE AUDIENCE TO:

(being representatives from:-- Government,- Academic institutions,- Private sector Associations,- Development partners,- Entrepreneurs)

SPREAD THE INFORMATION and FACILITATE DEVELOPMENT OF BDS OFFERING BPO

SERVICES.



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9. Conclusion

IT CAN BE DONE IF EVERYONEPLAYS HIS PART

THANK YOU FOR LISTENING

Amani [email protected]

Technology

Sms As Business Communication Tool For SMEs, by Eng. Amani Nakembetwa