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

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This is a presentation made by Eng. Amani Nakembetwa at the 6th Regional Conference on Innovation Systems & Innovative Clusters in Africa at Kunduchi Beach Hotel & Resort, Dar es Salaam, Tanzania, October 28 - 30, 2009

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

  1. 1. 6th Regional Conference Innovation 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 29th Oct. 2009 Cluster Initiatives - ICT 1
  2. 2. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 2 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  3. 3. Introduction  The Presenter: Amani Nakembetwa ICT Cluster Member (T) From: Pink Prime Solutions Ltd e - Business Development Service Provider (e-BDS) e –Business Process Outsourcing (e-BPO) & ICT - Enabled Solutions Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 3 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  4. 4. Topics of Discussion 1. 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 Tanzania 9. Conclusion. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 4 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  5. 5. 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-Commerce E-commerce is in short, conducting commercial and business transactions by the use of computer mediated networks (internet). Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 5 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  6. 6. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 6 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  7. 7. 2. Characteristics of SMEs in Tanzania in Regard to Use of e-Commerce Facilities  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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 7 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  8. 8. 2. Characteristics of SMEs in Tanzania in Regard to Use of e-Commerce Facilities  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). “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] [1] Source: Research by Henley Management College and Teleconomy Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 8 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  9. 9. 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 regardless how simple or cheap it is. [2]-Source: Tanzania Mobile Fact Book 2009 - by Blycroft Publishing. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 9 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  10. 10. 3. Why SMS is a Proper Channel to Implement e-Commerce for SME  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. “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]  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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 10 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  11. 11. 3. Why SMS is a Proper Channel to Implement e-Commerce for SME  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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 11 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  12. 12. 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). Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 12 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  13. 13. 4. Why Does SMS Make Business Sense for SME 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 13 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  14. 14. 4. Why Does SMS Make Business Sense for SME 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 Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 14 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  15. 15. 4. Why Does SMS Make Business Sense for SME 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 15 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  16. 16. 4. Why Does SMS Make Business Sense for SME 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 16 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  17. 17. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 17 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  18. 18. 5. Examples Where SMS has been used as a Communication 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). Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 18 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  19. 19. 5. Examples Where SMS has been used as a Communication v). Mobile Loyalty (Customer Services) Programs  Reminders and updates be sent to customers, i.e. confirmation of appointments, overdue video rentals. SMS provides a simple, and low cost way of keeping in touch with customers. Effectively can be 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 faced by 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 19 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  20. 20. 5. Examples Where SMS has been used as a Communication 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 20 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  21. 21. 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 the one 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). Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 21 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  22. 22. 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 Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 22 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  23. 23. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 23 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  24. 24. 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 Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 24 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  25. 25. 7. A Friendly Framework for SMEs to Implement SMS Based Communication Tool The Concept Of Business Process Outsourcings (BPO) Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 25 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  26. 26. 7. A Friendly Framework for SMEs to Implement SMS Based Communication Tool  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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 26 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  27. 27. 7. A Friendly Framework for SMEs to Implement SMS Based Communication Tool  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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 27 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  28. 28. 7. A Friendly Framework for SMEs to Implement SMS Based Communication Tool  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 Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 28 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  29. 29. 8. Real Example of SMS Based Service Provision in Tanzania Pink Prime Solutions Ltd e - Business Development Service Provider (e-BDS) e – Business Process Outsourcing (e-BPO) & ICT - Enabled Solutions Dar es Salaam Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 29 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  30. 30. 8. Real Example of SMS Based Service Provision in Tanzania Pink  Who is Prime Solutions Ltd  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 Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 30 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  31. 31. 8. Real Example of SMS Based Service Provider in Tanzania Pink Prime Solutions Ltd 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 31 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  32. 32. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 32 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  33. 33. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 33 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  34. 34. 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. Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 34 Place: Dar es Salaam Communication Tool for SMEs - Tanzania
  35. 35. 9. Conclusion IT CAN BE DONE IF EVERYONE PLAYS HIS PART THANK YOU FOR LISTENING Amani Nakembetwa nakembetwa@gmail.com Cluster: ICT Date: 29th Oct. 2009 Topic: Using SMS as a Business 35 Place: Dar es Salaam Communication Tool for SMEs - Tanzania

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