QUESTION:

Information System (IS) strategies must be closely integrated with business strategies. Discuss the FOUR (4) barriers to IS/IT effectiveness in connection to the Organizational Challenges and Opportunities found in the Vodafone Egypt case study.

NEED TO DISCUSS 4 BARRIERS IN DETAIL.

* READ THIS CASE STUDY TO ANSWER IN DETAIL *

Vodafone Egypt has been consistently progressing since its establishment in 1998 until itranked the first mobile provider in Egypt in May 2012. ICT enabled the company to address anumber of challenges and to exploit many opportunities particularly during the period aftertheEgyptianrevolutioninJanuary2011.

By that time, the migration from Oracle to SAP enabled the company to align its IT systemswithVodafoneInternational.IntegratingFinance,HRandSupplyChaindepartmentsenabled the company to realize many benefits including more control and efficiency inoperationalprocessesandbetterworkflow forpurchaseorders(POs).

Yet, it is difficult to always maintain the company's position in the Egyptian market wherecompetition - with the two other mobile operators in Egypt (Mobinil and Etisalat) - is fierce,andcustomers arecontinuouslyhavinghigherexpectations. Due to the relatively low subscription prices and the different offers provided by the three telecom companies in Egypt, mobile penetration has increased significantly from 2010 to2013 (from 70.66 to 99.7 millions) unlike fixed lines, where the number of subscribersdeclined duringthesameperiodfrom9.62to6.82million.

Background:

Vodafone is a telecommunications company that offers mobile services, solutions andproducts in Egyptsince 1998, providing consumers with great variety of technological solutions for bothbusinesses and consumers. It developed considerably, as it was established, was able todominate the market successfully.they adopt the latest informationtechnologytoolsandconcepts intheirdifferent operations.

in April 2015, the number of mobile subscribers in Egypt is 96million representing around 110 per cent penetration. Vodafone has the highest marketshare at 41.5 per cent (around 40 million subscribers). Customers are provided high-end, efficient and excellententerprise services through the use of ITIL methodology (The Information TechnologyInfrastructureLibrary),whichisbasically thecollectionofbestpractices thataimstoimprovethecompany'sperformancetoachievegoalsandobjectives,especiallytechnological ones.

Typesofservices

VodafoneEgyptprovidesavarietyofservicestoitscustomers:

• Voice:VodafoneEgyptisthelargestcarrier ofmobilevoiceservices,providing domestic, international and roaming voice services to more than 370 million customersworldwide.
• Messaging: Vodafone Egypt's network received and sent over 292 billion text, picture,musicandvideoin2011.
• Data: More than 75 million customers bought Vodafone Egypt's mobile data servicesthat allow access to the internet, emails and other applications on their phones, tabletsoranyotherdevice.
• Fixed line: Vodafone Egypt provides fixed line services to all its customers worldwide.Theyprovidewholesalecarrierservicestoover40Africancountries.
• Other: Other revenue generating services include secure remote network access andrevenuefromMVNOsgenerated fromsellingaccesstoVodafoneEgypt'snetworkatthewholesalelevel

Managementstructure: Bytheendofitsfiscalyearon31March2011,VodafoneInternationalchangeditsorganizational structure to ensure the delivery of the company strategic goals. Europe regionconsists of all existing controlled businesses in Europe plus the ones in Czech Republic,Hungary, Romania and Turkey. Africa, Middle East and Asia Pacific region comprisesEgypt, India, Ghana, Kenya, Qatar South Africa, Australia, New Zealand and Fiji. TheorganizationalstructureofVodafone usuallypromotesteamwork.

Marketposition:By the end of December 2011, Vodafone Egypt customers reached 36.3 million: a marketshare of 43.4 per cent. Furthermore, the company leads its competitors in driving theircustomers tomigratetosmartphonesanddatapackages. InEgypt,therewasageneraldecline inservicerevenueduetoacombinationofterminationratereductions,competitivepressureonpricing andsocio-politicalunrest.

Technologydescription:

With IT being the core of the company, Vodafone has to ensure that the software theydepend on is efficient and up to date. Technology used in the operations is classified intotwomaincategories:

• networking; The Networking part is the core IT system of the company, where one can check thecoverage of the data and its quality (2G, 3G or 3.5G). The system also enables thegatheringofstatisticsthatpinpointthedefectedareas.
• billing:

Asforthebillingsystem,itisdividedintosixmainsoftwareapplications:

1. Ericson billing system: Responsible for recording voice call information (duration of thecall, call per minute, total cost, etc.). Moreover, it is the main database of all Vodafonecustomers (30 million). It is always up-to-date, as Vodafone checks continuously withits customers for any updated information. In case of any missing personal information,theaccountisconsideredillegal andcannotbeactivateduntilitscorrespondentcustomer completes her/his information. The system is therefore a very useful tool foreliminatingallunregisteredconsumers.
2. SBill:Concerned aboutconsumerrelationshipmanagement.Itmainlysuppliesconsumers with the usual "superior" customer services for Vodafone two main users segments:
   • Regular customers- Retrieve all their personal and usage pattern information fromtheir phonenumberorfromtheserialcodeatthebackofthephone'sSIMcard.
   • Premium customers- Provide a variety of offers such as giving free minutes, textmessages, free points, etc. "Premium Vodafone Consumers" are detected by thesystembasedontheirusagecapacity,pattern,andtypeofservice
3. Businessintelligence(BI)system:Usedbysales/marketingteams.Itsolely givesinformation and statistics for promotional campaign purposes without interfering witheach customer's personal account. Output of this system constitutes a competitiveedge for Vodafone Egypt due to the valuable information obtained from sophisticateddataanalysis.Ahmedseesthat"TheBIsystemhassolutionsforalmostanything inthecompany starting with the IT department and ending with the Supply Chain. It dealswith a large amount of information - about almost everything; hence, we are 100 percent dependent on it in our daily business processes". The system also providesinformation about promotional offers and incentives provided by the competitors fortheir loyal customers. Reliable and up-to-date information in this regard serves thecompanyinrespondingefficientlytocompetitors'initiatives.
4. Pointofsalessystem(POS):Abasicinventorysystem forVodafoneEgyptofficialstore that keeps track of every product's stock. As soon as a product reaches a minimumlevelsetbythestaff,itsendsanordertothemaininventorysystemofVodafoneEgypt,whichordersautomaticallythismissingproduct withoutanyhumanintervention.
5. Externalsystem:Basicallyfornon-Vodafoneretailers tokeeptrackoftheirperformance and their relationship with customers (outside the company retailers'network).
6. Internalsystem:Theprimary financialmanagementsystemthatcovershumanresources,warehousesandcontactors'management.

Integrating both networking and billing systems serves in providing superior customerservice

Thechange:

The migration to SAP ERP at Vodafone Egypt was part of a project that covers Vodafonecompaniesworldwide.Thecompany'sEvoERPproject(Evoisshortfor"Evolution")wasits"largest ever business transformation" that covers finance, human resources and supplychain.

Vodafone'sheadofERP,MarcusCotesdeclaresthat"it'snotanITprogrammeforthesakeof Technology; it's sponsored by the Chief Financial Officer to deliver broad benefits. It's acaseofITdelivering amajorstrategictransformation".

He confirms also "the project was vital because itenabledVodafonetooperateonaglobal basis with common processes and systems".

Evo system would help in reducingtransactioncosts,increasingbackoffice efficiencyandfacilitatingglobalprocurement.

At Vodafone Egypt, the implementation project of Evo programme started in 2007 and wascompleted in 2011. The first project's stage was in 2008;

SAP modules were implementedinaSharedServicescentre,aProcurementcentreandtheHungarianandGermanmarkets.

Ayearlater,PortugalandTheNetherlandswentlive.In2010,Vodafonetransferred to SAP in its other functions in its London headquarters, Spain and Africa. By2011, the system was expected to cover the remaining company branches: Italy, Greece,Turkey,NewZealand,EgyptandCzechRepublic.

The first phase of implementation targeted employees that would work directly - or evenindirectly with the new system. It started by introducing Evo and its benefits not only inadding value to the business but also in smoothing and facilitating business processes forthe employees. Next, employees were given three weeks of intensive training by Evoagentstoensuretheircapabilityinusingthesystem.Moreover,aninternalcommunication strategy was executed to allow a smooth transformation process for all employees. For example, a Super User was selected in each department, whose responsibility is to assistemployeesinusingthenewsysteminher/his department.SuperUsersweretherepresentatives of their department to work with the overall company's implementationteam. Although it was hard for the employees to shift to SAP in the beginning, whichresulted sometimes in delays in some daily business processes, the entire transformationwassmoothandtookfrom2to3months.ThiswasduetothefactthatEvo'simplementationin Vodafone Egypt was the fifth wave; hence, the migration was tested in several countriesearlier.

Furthermore, Vodafone's culture enhances constant change to ensure that thecompany isalwaysafrontleaderinthemarketandnourishestheindividualisticdevelopmentofemployees.

By the end of 2011, the implementation process became half way through, with most datatransferred to the new system. Employees started to use the system and were reportingimmediatelyanyproblems thatoccurtobesolvedthesoonestpossible.

Organizationalchallenges andopportunities:

Employees from both IT and HR departments revealed the challenges and opportunitiesVodafone Egyptfaces.

Asamultinationalcompany,VodafoneEgyptusually faceslocalaswellasglobalchallenges.

Locally,itwasverydifficult tokeeptrackofallunlicenseddealers andunregisteredcostumers.

This fact prevented the organization from controlling the quality of serviceofferedtoitscustomers,andfromobtaining fullinsightaboutsellers'activitiesandcustomers' behaviour. Furthermore, sharing information and smoothing processes withinand among departments were inefficient, which results always in delays and unnecessary effortfromthepartoftheemployees.

As part of integrating with Vodafone group, Vodafone Egypt had to unify its IT systems withthose of Vodafone International. Although this movewould help in integrating informationandprocessesinthecompany(hence,addressingthechallengestatedearlier),itrepresentedagreatdealofresponsibility.Thechangetooklong-termplanning andconstant training to ensure a smooth migration process. The crucial issue in the entireprocess was in transferring data. The main focus during the transformation process wasdirected toward the efficiency of the system avoiding any breakdowns. This sometimes ledtofewcasesofduplicationormissingofdataduringtransfer.

As for the opportunities, even though a number of businesses were negatively affected bythe25thofJanuary revolution,VodafoneEgyptwasgiventhechancetocontributepositively to the development of the country. Egyptians valued the role played by socialmedia during the revolution. This fact was clearly witnessed when looking into the increaseof internet users by 3 million just one month after the revolution and Facebook subscribersby 1 million. The rate of technological literacy is still in constant increase and people arebecoming more and more dependent on technology especially mobile phones, henceprovidingVodafone withwideropportunities.Currently,thenumberofinternet usersreached 46.2 million constituting a penetration of 53.2 per cent, and Facebook subscribersbecamemorethan12million.

Solutions:

One of Vodafone Egypt's competitive edges is its ability to deal with continuously arisingbusiness risks and challenges. The challenges faced during Evo's implementation wereaddressed thanks to the teamwork spirit of the company' employees. Both HR and ITdepartments worked collaboratively step by step throughout the transformation process.Theshort-termphasecomprisesHR,FinanceandSupplyChaindepartments.Integrating other departments with their correspondents at Vodafone International is planned to takeplaceatalaterstage.

Trackingunlicenseddealers washandledbytheCustomer Servicedepartment.Customer serviceagentsstarted contactingthosedealers andexplainedtheprivilegestheywouldreceive incasetheybecameVodafonelicenseddealers.Theyalsodrewtheirattention tothelegalconsequencestheymightfaceiftheydidnotcorrecttheirstatus.Unregisteredcustomerswerecontactedthroughtextmessages andphonecallsthat urge them to provide all their personal information to avoid the deactivation of theservice.

Informationtechnology support:

Besides its alignment with Vodafone international, the new Evo system helped VodafoneEgypt in linking the three departments - Human Resources, Supply Chain and Finance -which provided better control over the joint processes between them. The communicationprocess is nearly eliminated, as the system allowed for immediate access to informationamongthethreedepartments

Theoverallsupplychainbecamemoreefficient,asinformationarrives complete,accurateandinstantlytotheSupplyChaindepartmentfromHR,thusallowingforquickactions.

Also,insteadofbeingmostlyoccupiedindailyroutine operations,employees' tasks changed gradually into ones with higher value added. As an example,staff in the Supply Chain department - which encompasses supply chain management,procurement and logistics activities - who were in charge of issuing POs, shifted theirresponsibilities to negotiating with suppliers as the entire PO cycle became automated;everyemployeecannowpurchase onlinethroughthecatalogueofthecompany intranet

Furthermore, Evo provided greater control over the financing processes. For example, if anew contract is registered onto the system by the HR staff, this contract's details aretransferred automatically to the Supply Chain staff, then directly to responsible employeesattheFinance department.Immediatemanagementofmonetaryterms meansmorecontrol overcashflowsandgreater efficiencyintheoverall performance.ThesystembeingconnectedtoVodafoneheadquartersallowsthemtomanageandwatchoperations,crossingboundariesandeliminatingbarriers.

Furthermore,connectingallregistereddealers tothecompany'sextranetfacilitatescommunication with them and enables Vodafone Egypt to identify unauthorized ones.Monitoring their activities and knowing their geographical distribution helped VodafoneEgypt to ensure correct selling practices and improve quality of networks and services provided to vendors and customers (e.g. accurate and timely delivery of product andmanagement of streams), and point out places where Vodafone Egypt needs to widen itsavailability.

Having authorized dealers helps the company in registering consumer's data. By analyzingthese data using the Business Intelligence system, the marketing department could catermorerelevantoffers andcampaignsbasedonconsumers'demographicsandusage.VodafoneEgypthencebecameverysuccessfulintargetingdifferent segmentsofconsumers through customized advertising. In addition, S-Bill system assists in managing relationshipswiththecustomersbyallowingend-to-endtestingstrategiestobetterunderstandcustomerneeds.

Nextstep:

The IT systems adopted by Vodafone Egypt in 2011 helped the company in solving manyproblems.Notonlytangible butalsointangiblebenefitswerereached.Forexample,employees in different departments shifted their activities to more strategic ones sinceday-to-dayoperationsrequiredlesstimeandeffort.

In 2012, there was still a need for new frameworks to manage these strategic practices(e.g.fasterdecision-making,assessmentofthevalueofnewapproaches,costreduction,etc.),especiallywiththegrowing volumeofthecompany,theincreasingcustomer demandsandcompetitionoftheothertwoplayers inthemarketandtheplanningoflaunchingaforthoperator.Moreover,thesepressures weretakingplaceduringaleadershipsuccessionstage.Thesituationbecameeventougher inanunstablepoliticalandsocialenvironment