HAWASSA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS SCHOOL OF MANAGEMENT AND ACCOUNTING Marketing Department M.B.A PROGRAM Course Title: Management Information Systems (MBAH-542)
Project Paper on Enterprise System of Ethio Telecom Group Members (Section I): Abdulahi Aliye
MKMW/023/05
Aychilum Alemayehu
MKMW/061/05
Dawit G/Mariam
MKMW/065/05
Ermyas Girma
MKMW/073/05
Kidane Mengesha
MKMW/062/05
Submitted to: Asfaw Wassie June 2013
Table of Contents 1.
2.
3.
Introduction ........................................................................................................................................... 1 1.1
Background ................................................................................................................................... 1
1.2
History of Ethio Telecom.............................................................................................................. 2
1.3
Organizational Structure of Ethio Telecom .................................................................................. 3
Literature Review.................................................................................................................................. 5 2.1
Enterprise Application .................................................................................................................. 5
2.2
Enterprise systems/Enterprise Resource Planning (ERP) ............................................................. 6
2.3
Benefits of Enterprise Systems ..................................................................................................... 7
2.4
Challenges of Enterprise Systems ................................................................................................. 8
Ethio Telecom Enterprise systems ........................................................................................................ 9 3.1
Sales and Marketing Systems ..................................................................................................... 10
3.2
National Network Operating Center System............................................................................... 11
3.3
Procurement and Facility System ............................................................................................... 13
3.4
Finance and Accounting Systems ............................................................................................... 13
3.5
Human Resources Management System (HRMS) ...................................................................... 14
3.6
Ethio-Mail system ....................................................................................................................... 15
3.7
Ethio Telecom Enterprise System’s Cross-function and Cross-level facility ............................. 15
4
Gaps identified/limitations of the Ethio Telecom Enterprise System ................................................. 17
5
Recommendations ............................................................................................................................... 17
Reference .................................................................................................................................................... 19
1. Introduction 1.1 Background We are in the midst of a rapidly moving river of technology and business innovations that is transforming the global business landscape. An entirely new Internet business culture is emerging with profound implications for the conduct of business. You can see this every day by observing how business people work using high-speed Internet connections for e-mail and information gathering, portable computers connected to wireless networks, cellular telephones connected to the Internet, and hybrid handheld devices delivering phone, Internet, and computing power to an increasingly mobile and global workforce.Information technologies and systems are revolutionizing the operation of firms, industries, and markets. A combination of information technology innovations and a changing domestic and global business environment makes the role of IT in business even more important for managers than just a few years ago. The Internet revolution is not something that happened and then burst, but instead has turned out to be an ongoing, powerful source of new technologies with significant business implications for much of this century. Traditional boundaries and business relationships are breaking down, even as new ones spring up. Traditional markets and distribution channels are weakening and new markets are being created.Today, networking and the Internet are nearly synonymous with doing business. Firms’ relationships with customers, employees, suppliers, and logistic partners are becoming digital relationships. As a consumer, you will increasinglyinteract with sellers in a digital environment. As an employer, you will be interacting more electronically with your employees and giving them new digital tools to accomplish their work. The Internet and related technologies make it possible to conduct business across firm boundaries almost as efficiently and effectively as it is to conduct business within the firm. This means that firms are no longer limited by traditional organizational boundaries or physical locations in how they design, develop, and produce goods and services. It is possible to maintain close relationships with suppliers and other business partners at great distances and outsource work that firms formerly did themselves to other companies. 1|Page
In addition to these changes, there has also been a transformation in the management of the enterprise. The traditional business firm was and still is a hierarchical, centralized, structured arrangement of specialists who typically relied on a fixed set of standard operating procedures to deliver a mass-produced product (or service). The new style of business firm is a flattened (less hierarchical), decentralized, flexible arrangement of generalists who rely on nearly instant information to deliver mass-customized products and services uniquely suited to specific markets or customers. Managers and business firms invest in information technology and systems because they provide real economic value to the business. The decision to build or maintain an information system assumes that the returns on this investment will be superior to other investments in buildings, machines, or other assets. These superior returns will be expressed as increases in productivity, as increases in revenues (which will increase the firm’s stock market value), or perhaps as superior long-term strategic positioning of the firm in certain markets (which produce superior revenues in the future). Ethio Telecom is currently launched the enterprise system through its intranet that helps to integrate its core business process. Hence, this paper will provide us an overview of Ethio Telecom’s enterprise system and how this system integrates different functional units of the company.
1.2 History of Ethio Telecom The introduction of telecommunications services in Ethiopia dates back to 1894, when Minilik II, the King of Ethiopia, introduced telephone technology to the country. Ethiopian Telecommunications Corporation is the oldest public telecommunications operator in Africa. In those years, the technological scheme contributed to the integration of the Ethiopian society when the extensive open wire line system was laid out linking the capital with all the important administrative cities of the country. The Imperial Board of Telecommunications of Ethiopia, which became the Ethiopian Telecommunications Authority in 1981, was placed in charge of both the operation and regulation of telecommunication services in the wake of the market reforms. In 1996, the Government established a separate regulatory body, the Ethiopian Telecommunication Agency 2|Page
(ETA) by Proclamation 49/1996, and during the same year, by regulation 10/1996, the Council of Ministers set up the Ethiopian Telecommunications Corporation (ETC). Ethio Telecom is launched on December 2, 2010. The company is fully owned by the state government, but management is outsourced to France telecom known as Orange Company for two years. The government is outsourced the old company ETC because of unable to meet the demands of the fast growing country. The contract is aimed at uplifting the service of ethiotelecom to international standards and to facilitate technology transfer for domestic professionals. France telecom brought major international management practice, they drafted 460 business processes and 402 processes are applied. Voucher card sales (mobile scratch able card) had significantly increased from null to 39000 retails or distributers across the country. The companymanagement and control thetelecom infrastructure throughout the country from a central location NNOC (National Network Operating Center) through NMS (Network management system). Totally, the company have 21 million clients among this 20 million are mobile subscriber. This figurehas made the country one of the leading mobile user country in sub-Sahara Africa. The internet and data user have also reached 3.7 million including GPRS (mobile internet). In the past fiscal year the telecom giant registered 12 billion birr in profit, while in the first five months of this budget year, it has earned 7 billion birr. By the end of 2015, ET has planned to double the mobile subscription from current 20 million to around 40 million subscribers. In order to do this huge expansion, the corporation is in negotiations with two Chinese telecom company called ZTE and Huwai who won the bid for new telecom infrastructure expansion. The new expansion is estimated to cost 30 billion birr.
1.3 Organizational Structure of Ethio Telecom Ethio Telecom organizational structure includes different functional divisions that are under direct administration of Board of Directors. As the picture below shows the organizational structure of Ethiotelecom depends on functional structure. The company has six major significant divisions, which is led by chief officer, departments led by officer and section led by managers. Even if this is create divisional rivalries it is best suit the company for the easy implementation of Enterprise solutions applications. To grasp on our target divisions, Residential 3|Page
division is responsible for the sales generated from residential people. Enterprise division is responsible for all enterprises like government organization, profit and nonprofit organizations. Marketing and communication division take care of marketing related activities like tariff revision, new product or service launch and sales guides different sales analysis including market research. Customer service divisions undertake after sales and presales activities mainly 994, 980 for VIP customers. Technical Division the core division of the company which is responsible for entire network management of the company. Information system division facilitates and ensures the automation part of the company as well as provides necessary detailed and summarized information for managers depending on their request. We tried to elaborate the above divisions because, we can see in detail for our paper.
Ethio Telecom organizational chart
4|Page
2. Literature Review 2.1 Enterprise Application One of the major challenges facing firms today is putting together data from different systems of an organization to make information flow across the enterprise. Electronic commerce, electronic business, and intensifying global competition are forcing firms to focus on speed to market, improving customer service, and execution that is more efficient. The flow of information and work needs to be orchestrated so that the organization can perform like a well-oiled machine. These changes require powerful new systems that can integrate information from many different functional areas and organizational units and coordinate firm activities with those of suppliers and other business partners. Many business processes are cross-functional, transcending the boundaries between sales, marketing, manufacturing, and research and development. These cross-functional processes cut across the traditional organizational structure, grouping employees from different functional specialties to complete a piece of work. For example, the order fulfillment process at many companies requires cooperation among the sales function (receiving the order, entering the order), the accounting function (credit checking and billing for the order), and the manufacturing function (assembling and shipping the order). Today’s firms are finding that they can become more flexible and productive by coordinating their business processes more closely and, in some cases, integrating these processes so they focus on efficient management of resources and customer service. Enterprise applications are designed to support organization-wide process coordination and integration. These enterprise applications consist of enterprise systems, supply chain management systems, customer relationship management systems, and knowledge management systems. Each of these enterprise applications integrates a related set of functions and business processes to enhance the performance of the organization as a whole. Generally, these more contemporary systems take advantage of corporate intranets and Web technologies that enable the efficient transfer of information within the firm and to partner firms. These systems are inherently cross-level, cross-functional, and business process oriented.
5|Page
2.2 Enterprise systems/Enterprise Resource Planning (ERP) Round the globe, companies are increasingly becoming more connected, both internally and with other companies. If you run a business, you will want to be able to react instantaneously when a customer places a large order or when a shipment from a supplier is delayed. You may also want to know the impact of these events on every part of the business and how the business is performing at any point in time, especially if you are running a large company. Enterprise systems provide the integration to make this possible. A large organization typically has many different kinds of information systems that support different functions, organizational levels, and business processes. Most of these systems were built around different functions, business units, and business processes that do not “talk” to each other and thus cannot automatically exchange information. Managers might have a hard time assembling the data they need for a comprehensive, overall picture of the organization’s operations. For instance, sales personnel might not be able to tell at the time they place an order whether the items that were ordered were in inventory; customers could not track their orders; and manufacturing could not communicate easily with finance to plan for new production. This fragmentation of data in hundreds of separate systems could thus have a negative impact on organizational efficiency and business performance. Enterprise systems, also known as enterprise resource planning (ERP) systems solve this problem by providing a single information system for organization-wide coordination and integration of key business processes. Information that was previously fragmented in different systems can seamlessly flow throughout the firm so that business processes in manufacturing, accounting, human resources, and other areas can share it. Discrete business processes from sales, production, finance, and logistics can be integrated into company-wide business processes that flow across organizational levels and functions. The enterprise system collects data from various key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources and stores the data in a single comprehensive data repository where they can be used by other parts of the business. Managers emerge with more precise and timely information for coordinating the daily operations of the business and a firm wide view of business processes and information flows.
6|Page
Enterprise systems used client/server architecture but have been redesigned to take advantage of the Web. Users can now access these systems through a Web browser and link to the systems of other companies. Although initially designed to automate the firm’s internal “back-office” business processes, enterprise systems have become more externally oriented and capable of communicating with customers, suppliers, and other organizations. Enterprise software consists of a set of interdependent software modules that support basic internal business processes for finance and accounting, human resources, manufacturing and production (including logistics and distribution), and sales and marketing. The software enables data to be used by multiple functions and business processes for precise organizational coordination and control.Organizations implementing this software would have to first select the functions of the system they wish to use and then map their business processes to the predefined business processes in the software.
2.3 Benefits of Enterprise Systems Enterprise systems promise to integrate diverse internal business processes of a firm into single information architecture, and that integration can have a very large payback if firms install and use enterprise software correctly. Enterprise systems can produce value both by increasing organizational efficiency and by providing firm wide information to help managers make better decisions. A uniform organization Companies can use enterprise systems to support organizational structures that were not previously possible or to create a more disciplined organizational culture. For example, they might use enterprise systems to integrate the corporation across geographic or business unit boundaries or to create a more uniform organizational culture in which everyone uses similar processes and information. An enterprise-enabled organization does business the same way worldwide. More efficient operations and customer-driven business processes Enterprise systems can help create the foundation for a more customer-driven organization. By integrating discrete business processes in sales, production, finance, and logistics, the entire
7|Page
organization more efficiently respond to customer requests for products or information, forecast new products, and build and deliver them as demand requires. Manufacturing is better informed about producing only what customers have ordered, procuring exactly the right amount of components or raw materials to fill actual orders, staging production, and minimizing the time that components or finished products are in inventory. Firmwide information for improved decision-making In addition to monitoring operational activities such as tracking the status of orders and inventory levels, enterprise systems also improve organization-wide reporting and decision-making. Enterprise systems create a single, integrated repository of data for the entire firm. The data have common, standardized definitions and formats that are accepted by the entire organization. Performance figures mean the same thing across the company and can be provided automatically without human intervention. Senior management can more easily find out at any moment how a particular organizational unit is performing. For example, an enterprise system might help management immediately determine which products are most or least profitable.
2.4 Challenges of Enterprise Systems Very difficult and costly to build Reengineering of business processes to make information flow smoothly. New job functions and responsibilities of employees Requirement of large pieces of software and large investments of time, money and expertise Centralized organization coordination and decision making which is promoted by Enterprise Systems may not be needed or the best way for some firms.
8|Page
3. Ethio Telecom Enterprise systems Currently, Ethio Telecom is integrated different divisions, departments using the modern enterprise system. The integrated divisions are Sales and marketing, Finance, Human Resource, Network and procurement and facility units of the company. Ethio telecom implements this ERP system to automate and transform the edge of company culture and also to make its vision of becoming“World Class Telecom Operator”. Ethio-Telecom enterprise software consists of a set of interdependent software modules that support basic internal business processes like z-smart, ERP production, NNOC SMS, and others. These enterprise system modules enable data to be shared by multiple functions and business processes for precise organizational coordination and control. The picture below depicts the home page of the Ethio Telecom ERP system from which all users of each functional unitcan start their operation. This site contains all links through which users can get access to their respective link, as shown below under “Quick link”. There is also many auto links from this page like: Reset domain password used users to manage their application log in password. Ethio mail, it is web based company email, which is used by all company staff. Internal Vacancy to check currently posted vacancy for company employee. CC&B Z smart portal, it is application used for sales purpose. ERP production portal used to order inventory from warehouse for sales and office use. CRBT web portal used to manage caller ring back tone of customers. Company Blog used to see what is new on the blog. Enterprise search used for customized search. ALL Divisions (from right side) to easily explore different divisions. And many more. N.B All company computers are logged in to this site as a home page when we open internet explorer, no one can’t change this home page except dedicated IT specialist.
9|Page
Picture1: Home page of Ethio Telecom ERP
3.1 Sales and Marketing Systems Z-smart application (customer care and Billing) is a product of ZTEsoft Technology Co. ltd Company. The application provides solutions for creating and implementing complex business support solutions for Telecom companies. The product portfolio of the software includes ZSmart Interconnect Settlement (charges made between different operators like Ethio Telecom and Vodafone, MTN and Etesalat across country in our case), ZSmart Customer Care, ZSmart Order and Customer Management, Fraud Management System, ZSmart Provisioning, ZSmart Resource Management, amongst others. Further, it offers solutions including ZSmart workforce management, ZSmart CC&B solution for 3G, ZSmart OCS solution, ZSmart self-care solution, ZSmart CRM solution, Integrated Network Management solution and other solutions. ZTEsoft will provide a multi-service customer care and billing system which is built to support convergent billing for all services such as GSM, CDMA, and WCDMA, PSTN, NGN Voice and broadband. Using this application, sales people will activate and deactivate Ethio Telecom product and service. The managers generate sales reports that are sold in different region. With the rapidly increasing number of on-line subscribers and the advancement of telecom services in the international 10 | P a g e
market, the legacy billing system could not meet the huge requirement. This system greatly improve Ethio Telecom performance in the areas of customer relation, billing capability and speed up response time thereby aiding its marketing strategy and the long term development of the company.
Picture2: Web page of ZSMART Sales and marketing uses Z-smart Application, which automate the sales activity of the company. This application is integrated with Network division so as to fasten and create reliable and accessible service while sales people and those at technical level will communicate easily.
3.2 National Network Operating Center System National Network Operation Center (NNOC) is backbone division of the companyresponsible for the entire network of the country. It is known that network division is the core element for every company which operates in the communication industry. Part of the Ethio Telecom enterprise system used for this division is national network operating center system (NNOC) which is shownas picture below. This system undertakes many tasks which enhance the performance of the division and more over the efficient utilization of network infrastructure.
11 | P a g e
E-guard, special monitoring and management system for power equipment and environment and Trouble Ticket System (TTS) can provide a full process of close-loop management complaint, assignment handling, and acknowledgement and archiving of troubles and alarms from different sources. Resource Management System (RMS) provides inventory management, resource assignment cutover and resource prewarnings. Uniform Report Platform is a platform or which each national network operating center subsystem will implement its own reporting flexibly. Service management system (SMS) is used to realize automatic management of service process by means of effective management workflows, with less manual intervention. The last task is fraud management system (FMS) is a system used to effectively prevents fraud phenomena, detects various fraudulent behaviors and means, roots out all kinds possible fraud phenomena in time in order. Thus, all above-mentionedtasks are done through NNOC module of the company’s enterprise System. This makes the company to easily control, manage and maintain the whole network throughout the country from single location. Despite easy control and management of network the company insures business continuity through less cost and easily locate fault with possible minimum time. Without such sophisticated and integrated software, managing optical fiber is very difficult.
Picture3: Web page of National Network Operation Center 12 | P a g e
3.3 Procurement and Facility System Procurement and facility is one of the major divisions with many ups and down is usual. Much of the organization work is affected due to bureaucratic and unnecessary long chain process of this division previously. But currently every division and staff knows the warehouse equal to warehouse keeper not only branch warehouses but also central warehouses. Thesetremendous changes happen because of procurement and facility system implementation, which integrated both branches and central warehouses together. This system perform many tasks like distribution of customer products, office supplies and contractors material requisition. First, we search the material or product then select the warehouse and check the amount of the stock and we need to withdraw, if it is right amount, we finish shopping and send for approval to assigned approver. Finally, when it is approved we get notification through our email and receive the material from the warehouse.
Picture4: Web page of iProcurement
3.4 Finance and Accounting Systems Finance and accounting system called oracle finance module in another information system component of the Ethio Telecom enterprise system. Since finance function of the company more interact with other functions, most finance related entry in other systems like sales of products 13 | P a g e
and services in sales division, item procurement and purchase in procurement and facility division and employee related payment system can automatically update the finance and accounting system of the company. Therefore, the finance system track total items sold at each branch and regional office, cost of inventory on the hands of sales person and cost of inventory at each store, track employee related expense and disbursements, control budgets, etc. The system handles all accounts payable, daily cash receipt and payment, accounts receivable, and asset management. The system also prepares the financial statement of the company.
Picture5: Web page of Oracle Finance
3.5 Human Resources Management System (HRMS) The HRMS also named asOracle HR and Payroll system is a module integratedto Enterprise Resource Planning of the company. As Personnel are valuable assets, and empowering and supporting them is key to their successand retention. At the same time, managing personnel issues can be complex and timeconsuming.Oracle HR and Payroll system provides human capital management capabilities thatsimplify and streamline workforce-related processes. The system handlesemployee profile, placement, benefit package, promotion, leave, attendance, etc.
14 | P a g e
3.6 Ethio-Mail system Ethio-mail is an office automation system integrated to Ethio Telecom Company’s Intranet Enterprise system that provides email service for the company’s employee. Every day-to-day activity of the company is supported by email. This system make easy of communication throughout the company and dramatically reduced paper or letter circulation. Downward and upward communication is very easy. Among benefits of outlook emails, every division, department, Region, chief officer, officer, managers, supervisor, staff and various support groups makes fast communication and transfer of message easily throughout the company. There is also newspaper that states about achievement of the week of the company, and published weekly sharing so many information. Detail of payroll also sent to each and every staff monthly using this ALL STAFF group email.
3.7 Ethio Telecom Enterprise System’s Cross-function and Cross-level facility Some sales activity is simply done at front desk while other activity need high involvement of other division like operation and maintenance (O&M) and Fixed access network (FAN) department. This three departments work are integrated through Z-smart application while the sales division use the commercial part (z-smart), the network division will use the operational part of the application called SMS. For example if sales person want to sale broadband service to Shakiso gold mining company simple this sales person select the nearest ethiotelecom shop and create survey order for the customer and send to that shop, then those network people get the order through their SMS system and make survey of the site and respond to sales person by filling necessary information used for payment purpose like length in meter. This two people will not have any further communication except following their application system. This system monitor both divisions performance regarding to the time taken to finish the job, if the job is delayed more than predefined duration, it starts alarm by changing his color to red this have negative impact for the order handler. With regard to finance system, finance clerks do not do any paper work since both facility (material requisition) system and Sales and marketing systems are integrated with finance and accounting system. They simply open their application and see the transaction of sales person son Zsmart application and the actual material withdraw from warehouse. 15 | P a g e
This system highly reduce the burden of finance, which is boring to count the inventory and collect supporting document which justify the stated amount of payment. Delivering printed bill to each and every site by sending car and their staff but now every Ethio Telecom shop is online and accessible easily with limited period of time. Finance and accounting system is not only limited to follow the report of sales but also for the management of budget and disbursements, they don’t have any in touch with paper money all payment like salary, allowance, bonus, credit, payroll preparation all are done with minimum possible time. When we come to human resource management system they are also using Oracle HR and Payroll system, which is integrated with finance to make any change updated on employee record like to create payroll, deduction of salary in case of reported absent, leave without payment, promotion and demotion, the known Nile dam construction, housing contribution and so on.All these changes affect the benefit and the salary of employee. This all change is simply done or apply to whole ET staff with fraction of time, at the end of the month every staff get their payroll detail and balance paper attachment on the company work email. When we come to procurement and Facility system, they check the whole warehouse online and keep track of inventory. Shipment also ordered when the stock reach minimum order quantity and fill the gap from where inventory is highly accumulated to shortage warehouse. In addition, they order purchase to replenish the depleted inventory from the warehouse. They create purchase order then finance department approve the purchase order. Finally all known supplier are registered on the application system and invitation is send to all supplier by their email and also phone contact is done. Therefore, as the success of today’s telecom companies depends on their efficient operationalprocesses, wise investments in technologies that enhance internal efficiencies, and the abilityto respond rapidly to dynamic market conditions,the implementation of thisenterprise system that integrate the core business processes of Ethio Telecom of helps it toaddress these challenges, while enabling rapid business growth. By maximizingthe value of existing assets and customer relationships, reducing paperwork, and more tightlymanaging processes, the companies can reduce costs and realize newrevenues. Beside its cross functional facility, the ERP of Ethio Telecom also have the facility of crosslevel. Currently the system supports employees and operational level managers like section 16 | P a g e
heads and branch managers and the middle level managers like regional managers, and division managers by providing timely information at daily, weekly, monthly, quarterly and annum as required. Hence, the system has the facility of Transaction processing system (TPS) and management information system (MIS). However, the project to develop Decision support system (DSS) and Executive support system (ESS) to support middle level managers and top-level managers to give sound decision is already initiated.
4 Gaps identified/limitations of the Ethio Telecom Enterprise System Lack of training to use the enterprise system, still there are staff that prefers manual system. Lack of immediate support in case of operational difficulty and system failure. In adequate training creates gap among the staff and staffs learn by themselves through trial and error. Incompatibility with some products of the company like when to sale VSAT, and Euronet services done manually. Highly centralization of the system. Still customer didn’t have any platform to use for their self service like online recharging, bill settlement and online order. Frequent system interruption due to network disconnection. Lack of system support and technical staff at regional and branch levels.
5 Recommendations Training should be provided for each users of the system to gain full advantage of the system. Communicating and providing documentation (user manual) for users of the system as new improvements(customizations) are done on the system. Continuous training and support to employee prior to implementation of new application and also make sure they are fully implemented so as to go ahead with the system. 17 | P a g e
Decentralize some privilege so as to make the lower level staff also responsive to fault and error easily this create motivation and self-confidence to employee rather than escalating every easy task. Launch customers, supplier, contractor and business partner self-service interface. Provide an access to these parties by developing a system that supports extranet facility. The company should provide enough system support and technical staff at regional level in order to provide consistent service for customers and reduce the risk of system failure.
18 | P a g e
Reference Kenneth C.Laudon and Jane P. Laudon (2012). Management Information Systems: Managing the Digital Firm, 12 editions. http://intranet.ethiotelecom.et/default.aspx http://www.ethiotelecom.et http://www.ethiotelecom.et/press/news.php?id=53 http://www.infosys.com/industries/communication-services/whitepapers/Documents/telecom-product-management.pdf
19 | P a g e
