Coursework2

Strategic Management and Information Systems

(BIS 3324)

“THE USE OF

INFORMATION SYSTEMS TO ENHANCE STRATEGIC

MANAGEMENT”

A Case study of MTN Nigeria.

By

ETATUVIE ENAI TEGA M00479384

Lecturers

DR SURAJ JUDDOO

MRS DIANA MUNGUR

The Use Of Information Systems To Enhance Strategic Management

Strategic Management and Information Systems 1

Table of Contents

ABSTRACT......................................................................................................................................3

INTRODUCTION ............................................................................................................................4

LITERATURE REVIEW .................................................................................................................5

RESEARCH METHODOLOGY ......................................................................................................6

STRATEGIC ISSUES FACED IN THE NIGERIAN TELECOMMUNICATION INDUSTRY .......7

UNDERSTANDING INFORMATION MANAGEMENT .............................................................. 10

THE ROLE OF CONSENSUS IN TERMS OF INFORMATION MANAGEMENT ...................... 10

THE CHANGE MANAGEMENT PROCESS ................................................................................ 11

THE ROLE OF EMPATHY IN CHANGE MANAGEMENT ........................................................ 11

CASE STUDY ................................................................................................................................ 12

BACKGROUND INFORMATION ................................................................................................ 12

CASE STUDY 1: MTN OUTSOURCING ...................................................................................... 12

THE ROLE OF CONSENSUS........................................................................................................ 13

THE ROLE OF EMPATHY ........................................................................................................... 14

CASE STUDY 2: MTN INFORMATION TECHNOLOGY ADOPTION....................................... 14

THE ROLE OF CONSENSUS........................................................................................................ 15

THE ROLE OF EMPHATY IN THE MANAGEMENT OF CHANAGE ....................................... 15

CROSS ANALYSIS USING SATIR’s CHANGE MANAGEMENT MODEL ................................ 15

RECOMMENDATIONS ................................................................................................................ 16

THE USE OF INFORMATION ASSETS IN THE TELECOMMUNICATION INDUSTRY......... 17

MTN’S USE OF ITS INFORMATION ASSEST TO PERFORM DATA MINNING ..................... 18

CUSTOMER CHURN ANALYSIS................................................................................................. 18

Operational Level ........................................................................................................................... 19

Tactical Level.................................................................................................................................. 20

Strategic Level ................................................................................................................................ 20

CONTENT AND STRUCTURE FOR INFORMATION DELIVERY TO STRATEGIC

MANAGERS AT MTN................................................................................................................... 21

Strategic Managers ......................................................................................................................... 21

Tactical Managers .......................................................................................................................... 22

Operational Managers .................................................................................................................... 22



CONCLUSION ............................................................................................................................... 23

REFERENCES ............................................................................................................................... 24



ABSTRACT

The purpose of this project is to identify the effectiveness and use of information systems to

enhance strategic management. Information technology have been designed around different

perspective of needs. Strategic managers can adopt these technologies to take strategic decisions.

Lots of research problems has motivated this project ranging from the strategic issues to the

information adoption at the managerial levels in the organization. This study explores the effective

use of information assets by managers and how the information is disseminated at the different

managerial levels. This project entails the success and failure in consensus and change

management in telecommunication, a case of MTN Nigeria. It also analyses the role of consensus

in information delivery, and recommendations for dealing with change in the organization. It

explores the preliminary and significance of result gathered from research done. It also entails

recommendation on effective principles.

KEY WORDS: Strategic Management, Managers, Information Systems, Change management,

Empathy. Information assets, Consensus, Strategic Decision



INTRODUCTION

Amongst other telecommunication companies in Nigeria, MTN is one of the leading

telecommunication companies not only in Nigeria, but in Africa. MTN came to Nigeria with an

overriding mission of being a catalyst for Nigeria's economic growth and development, which has

greatly helped Nigeria to relinquish its strong developmental potential not only through the

provision of world class communications but also through innovative and sustainable corporate

social responsibility initiatives. (Mtnonline.com, 2014). However, MTN’s network exist on the

core brand values of leadership, relationship, integrity, innovation and information.

Accomplishing its vision, MTN has lead the delivery of new digital world to its customers.



LITERATURE REVIEW

Providing telecom services requires a massive amount of information system support. Information

system cost nearly 5 percent of telecom revenues compared to other industries. In telecom,

complex and constantly changing tariff structures require sophisticated information system for

rating and billing. Real-time processes such as prepaid accounts require a fully information system

automated process chain. Moreover, information system has become an integral part of telecom

products and services, and will continue to be in the future. (atkearney.com, 2010). Consequently,

Information systems is now has become a weapon used by strategic managers to gain competitive

advantage. These systems aided with availability of genuine information helps strategic managers

enhance the management process. Handzic (2001) underlines the impact of information

availability enhances a manager’s ability to process and use information in decision making as

well as short and long term planning. Also, the efficiency and accuracy of organizational decisions

depends on the availability of information. Factors including information sources, analytical tools

and the role of information systems influences the quality of strategic decisions (Skyrius, 2001).

Similarly, O'Neill & Adya (2007) noted that organizations with no formal information sharing

culture will fail to leverage their managers' intellectual capital for organizational innovation and

growth. Hence, Information systems aids the dissemination and transfer of required information

across managerial levels to sustain competitive advantage this improves the quality of decision

making and quality of services provided.



RESEARCH METHODOLOGY

The qualitative method of research was adopted for this project, because of the use of different

case studies, and information supplied has gone through series of observations. Primary data

were Information were gathered through the use of questionnaires sent to the case company

and secondary data are collected basically from Journals, Brochures, Annual Reports, Papers,

Magazines, Publications, Books, and others form of publications as well as websites. We have

analyzed the data using my own judgments.



STRATEGIC ISSUES FACED IN THE NIGERIAN TELECOMMUNICATION

INDUSTRY

The telecommunications industry is among one of the best performing industries in the world

today. However, the advancement of technology and changing customer demands results it’s to

unique set of challenges and the Nigerian Telecommunication sector is not left out of these

challenges. According to Dr. Eugene Juwah, the Executive Vice Chairman of the Nigerian

Communications Commission (NCC) in a consultative forum held by the regulatory authority

stated that, “the achievements of the industry in the last 10 years notwithstanding, the sector is

currently facing some challenges which all critical stakeholders need to address in order to achieve

pervasive service availability and ultimately, improved quality of service.” (Vanguard News,

2012). The achievement of the sector is burdened and dwarfed by the following issues;

Unstable power supply: Power supply is an important part of the telecommunication sector.

Telecommunications equipment depend on power supply to function, therefore, unstable supply

of power to run equipment’s affects the quality and increases the cost of operation. Presently, there

is inadequate electricity generation in Nigeria. With less than 4,000 megawatts power in a country

of about 160 million people, the country requires 160,000 megawatts generating capacity for stable

power supply. (Energymixreport, 2014). As a result, telecommunication operators rely on

generators as their primary source of power thereby investing huge amount of money to keep their

generators running. MTN is said to spend about N660 million ($5.5 million) on diesel fuel

monthly. The whopping sum is spent on fuelling the company's 6,000 generators at its base stations

across Nigeria (Balancingact-africa, 2014). Last year, MTN replaced over 1,200 generators with

new heavy-duty generators. However, the investments in these generators have not yielded the

desired positive impact as the cost of diesel has continue to rise in geometric progression. MTN

can re-strategize on its power resource by the adoption of the green energy initiative. Green energy

is a combination of hybrid power, solar energy, gas turbine and wind energy. With this initiat ive,

the use of generators come up only when the battery discharges to a certain level. The generator

would then be used to repower the batteries. With the hybrid energy solution, less diesel is burnt

as these batteries needs at least 5 hours of power to be fully charged and last for almost 24hrs. A

considerable amount of money spent on diesel would be reduced compared to amount used in

fuelling the current generators to supply power to their base stations for about 20 hours a day.



Outsourcing: Outsourcing practice no doubt has some effects on the performance of

telecommunication operators. However, the Nigerian telecom operators face issues of

disengagement of employees and cheap labor which in most cases leads to legal war with the

Nigerian Labor Congress. Depending on the severity of the issues, these telecom operators are

sometimes made to pay huge amount of compensation fee to affected employees. MTN in its bid

to improve operation and cut cost has had issues of the outsourcing providers unduly exploit ing

and shortchanging staffs against its payment standards. The outsourcing providers sees the high

unemployment ratio in Nigeria as an opportunity to take the advantage of the unemployed youths

for cheap labor. To curb this issue, MTN ensures outsourcing providers are selected through a

rigorous bidding process to ensure that the winner has demonstrable abilities in management and

insist that their policies are aligned to MTN’s best practice with respect to the ethical treatment of

employees. Also, MTN makes sure that staff provided by its outsourced partners were remunerated

in line with the current levels for their particular job profile and geographical area. In spite of their

efforts to avoid this major outsourcing challenge, they recently faced a confrontation with the

Nigerian Labor Congress which was discussed in Case Study 2. Though Nigeria lacks proper legal

framework for outsourcing, MTN in order to ensure that workers stay engaged and not lose value

or suffer arbitrarily, should set Transfer of Undertakings (Protection of Employment) Regulations,

stating the legal repercussions if contract is bridged. Also, they should ensure records of

employee’s payroll is kept which shall be produced for inspection from time to time.

Quality of service: With the increase in mobile and broadband subscribers in Nigeria, telecom

operators are forced expand their data carrying capacity to provide quality service to both existing

and new subscribers. The unsatisfactory quality of service provided by telecom operators in

Nigeria compelled the regulator to begin strict enforcement of operators’ compliance to Key

Performance Indicators (KPI) on Quality of Service (QOS) set for the telecoms firms by the

Nigerian Communication Commission in 2011. Last year, MTN, Airtel, Etisalat and Globacom

were fined N1.17 billion ($7.3million) for poor services (Businessday, 2014). The MTN’s Chief

Technical Officer, Mrs. Linda Saint-Nwafor, in an interview stated that to improve network

connectivity and services rendered, MTN have deployed 3,000 3G base stations in addition to the

ones in existence and has upgraded its transmission backhaul infrastructure to internet protocol

which delivers fast data services and have embarked on the deployment of fiber optic cables across

the country to boost the transmission capacity on the network. Also, MTN Nigeria has sought to



improve the quality of service is by outsourcing part of our network to third party

specialist vendors for more efficiency (Mobile World, 2013). This however, has helped improve

the quality of network to a certain extend yet subscribers still pill up complaints over poor services.

For a better quality of service, MTN should start making strategic plans to deploy the latest telecom

technology “Long Term Evolution” commonly marketed as 4G LTE, it is a standard for wireless

communication of high-speed data for mobile phones and data terminals. It increases the capacity

and speed using a different radio interface together with core network improvements.

Fraud: Fraud permeates the whole sector of Nigeria’s economy, the telecommunication industry

is no exception. Telecommunication fraud has been a major hindrance to the rapid growth of the

industry as it has caused both the telecommunication operators and its subscriber’s loss of revenue.

As a result, telecommunication subscribers lose confidence in their mobile operators. MTN has

had challenges of tackling both fraud within and outside the organization. They have had issues of

Customers who have been swindled out of exorbitant amounts of airtime and receiving unsolic ited

spam messages and content to its subscriber base via unauthorized (and often internationa l)

partners amongst a host of others. Within the company, they have had issues of staffs hacked into

their account and wired money. There was a recent case of 2 employees charged with stealing N1.3

billion belonging to the firm’s cooperative society (pmnews, 2014). In response to growing

customer frustration and recent crimes within the organization, MTN took a strategic decision to

fight against crime by creating a Subscriber fraud unit which is responsible for preventing,

detecting and managing incidents of fraud by MTN subscribers and a forensic unit of the business

risk management department which carries out its responsibilities through its employees and

contractors' awareness programs, anti-fraud programs campaigns, extensive fraud risk assessments

which are geared towards minimizing fraud and its effects (Mtnonline, 2014). Additionally, MTN

should build an organizational culture where managers observe and listens to employees. This can

help them identify potential fraud risk. It is important for management to be involved with their

employees and take time to get to know them. Often, an attitude change can clue you in to a risk.

This can also reveal internal issues that need to be addressed.

Customer Satisfaction and Customer Churn: In recent times, consumers have become more

demanding, expecting always-available support services and prompt solutions. With the influx of

more mobile network providers in the country, customers have become very complex in making

http://en.wikipedia.org/wiki/Wireless



of decision as regard which service or product to enjoy. MTN with over 42 million subscribers,

face the challenge of providing immediate support to subscribers because of inability to handle the

amount of calls coming through. Customer Relations Executive, MTN Nigeria, Mr. Akin

Braithwaite stated that the company has a five-year plan that kicked off about two years ago. The

plan is a strategic and holistic approach, which involves rolling out various contact centers so that

people have access not just on the phone, but can use other facilities. As regards, a lot more

customer contact centers have been rolled out and have invested in state of the art equipment and

infrastructure that will help ensure customers get speedy service (Consumer.ncc, 2014). In spite

their customer service investment, many customers still complains of having to wait for a long

time to get someone to talk to at its call centers. As part of their strategic plan, MTN should roll

out services on the Internet so that from the comfort of the subscriber’s home, they can access

these services as well. Furthermore, they can plant various self-service kiosks in different locations

which will afford their customers the convenience of carrying out services like PUK retrieval, SIM

swaps and bill payments by themselves without contacting any of their online or walk-in assistance

centers.

UNDERSTANDING INFORMATION MANAGEMENT

Information management is a key focus for many organizations, it is the collection and

management of information via several sources and the distribution or delivery through mult ip le

channels or more than one audiences. Hence, Information Management is the ability of

organizations to capture, manage, preserve, store and deliver the right information to the right

people at the right time (AIIM, 2014). Information management is, however, much more than just

transferring information through multiple channels, different format and different people. It

encompasses the structure and flow of the information, the technology used to create and transfer

information, the people’s knowledge of information passed, the content quality as well all other

business practices and processes that underpins the use and creation of information. Each of these

much be addressed for effective information management.

THE ROLE OF CONSENSUS IN TERMS OF INFORMATION MANAGEMENT

Consensus is reaching agreement between all members of a group. It is considered to be critical in

resolving differences, promoting a unified direction for the organization, increasing strategic



commitment, and enhancing the successful implementation of a given strategy (Dess and Priem,

1995). Further, higher organizational performance is directly related to greater level of consensus.

It has been designated as a significant variable in apprehending effective strategic management

and organizational performance. However, to achieve consensus there has to be clear

communication and information distribution within the organizations different level as the success

or failure of an organization is highly dependent on how information is managed and utilized. This

implies that all information passed across should be timely, relevant, credible, topical, accessible

and clearly defined with constant reviews and feedbacks.

THE CHANGE MANAGEMENT PROCESS

Due to the evolving technological advancement in the world, cultural changes, globalizat ion,

changing customer’s tastes, political instabilities and intense competition that has increased

drastically over the years. Change has become inevitable as telecom operators are under high

pressure to evolve with these changes. They are keen on providing good enough services that must

attract customers with unique and relevant valued services. At the same time, the cost of operations

needs to be kept within the budget as well as constant efficiency improvements. Either of this

pressures requires change that the organizational work force is not used to and leaders/managers

in this sector realize the importance of change management in the change process (Beshtawi &

Jaaron, 2014). As organizational changes has become recurrent and essential for sustaining the

organization, the employee’s resistances to change in this sector has become an important human

resources management obligation and a priority for top management to increase chances of success

of different change projects (Tang and Gao, 2012). Based on Prosci’s research, Change

management is the application of a structured process and set of tools for leading the people side

of change to achieve a desired outcome (Creasey, 2014).

THE ROLE OF EMPATHY IN CHANGE MANAGEMENT

A lot of issues a bound to arise in organizations during a change process. Managers must also deal

with employees emotions besides the technical parts of the change. Often times, employees when

confronted with organizational change may experience intense negative emotions such fear, anger

and frustration or positive emotions such joy and excitement. Thus, it is essential for managers to

understanding and manage the emotions of employees during the change process (Liu & Perrewe,



2005). This is otherwise known as empathy. Empathy it is the ability to experience and relate to

the thoughts, emotions, or experience of others (Gentry et al, 2007). Research has shown that the

consequential behavior of employees who show negative emotions results to; Resistance amongst

employees due to the failure to emotionally adapt to the change (Spiker, 1994). Many a times,

employee’s belief that the change is unnecessary (Ford et al, 2008; Kotter, 1995; Lines, 2004) and

leads to suppressed participation during change. While positive emotions can help employees

manage or adjust to the change (Avey et al, 2008). Positive reaction to change however, increases

the level of commitment and emotional behavior resulting to loyalty even in times of chaos (Staw

& Barsade, 1993).

CASE STUDY

The two case studies shows the different roles of empathy in the management of change and the

role of consensus in effective information management. Case study 1 is a case scenario of the

success of outsourcing at MTN due to consensus and proper change management whereas case

study 2 represents the failure of information technology adoption due to lack of consensus and

proper change management.

BACKGROUND INFORMATION

With over 45 million subscribers and counting, MTN Nigeria Communications Limited is the

biggest mobile operator in Nigeria and West Africa. It is also the largest subsidiary in the MTN

Group – a multinational telecommunications group offering world-class cellular network access

and business solutions to over 182 million subscribers in 21 countries across Africa and the Middle

East.

In Nigeria, MTN provides network coverage to 88.8% of Nigeria’s land mass, while 86.2% of the

population have access to their services, has a total of 16 Service centers and 102 Connect Stores

located in every state of the federation.

CASE STUDY 1: MTN OUTSOURCING

With the constant evolving of competition in the business world today, it’s become imperative for

organizations to source for new ways to generate value and achieve its objectives. The world has

embraced the phenomenon of outsourcing and companies have adopted its principles to help them



expand into other markets (Bsu.edu, 2014). Outsourcing can be defined as “the strategic use of

outside resources to perform activities traditionally handled by internal staff and resources (Pine,

2014). Outsourcing enables organizations entrust part of its in-house operations to a third party

which in turn gains full control over that operation/process. Managers now employ this strategy

by contracting out its major functions to specialized and effectual service providers. It gives

leverage to managers to focus on new opportunities and future products as well as positions them

to capitalize on the core competencies of the organization.

Despite the fact that outsourcing is beneficial to the organization mostly financially, it as well has

its disadvantages. The major issues faced with outsourcing is the threat of security and

confidentiality. This is due to the fact that the organizations confidential information would be

transferred to the outsourcing company hence there is a risk that confidentiality may be

compromised. Other issues includes poor quality of service, hidden cost and disengagement of

employees.

As a consequence of dwindling revenue and high cost operating expenses MTN reached a decision

to outsource its ancillary services. A consensus was reached by the board of directors to focus

strictly on areas that would directly impact on its operations, while outsourcing ancillary services

to independent service providers. Prior to this decision, MTN signed a managed services contract

with global telecommunications solutions providers, Ericsson and Huawei. Though, MTN will

retain ownership and full control of its network assets and continue to have responsibility for

strategic design and planning, as well as equipment purchasing decisions. As a result, MTN

disengaged 252 of its engineers who were responsible for the operation and maintenance of its

base stations nationwide (The Punch, 2014).

THE ROLE OF CONSENSUS

The role of consensus in terms of effective information management was played by:

Forming a committee from the management across the different levels that would take full

charge of the outsourcing process from start to finish.

Involving stakeholders at the early stage of the outsourcing process and assessing their

requirements.



Stating the importance of outsourcing by highlighting the value-adding aspect of

outsourcing to stakeholders. This helped to avoid resistance from stakeholders.

Reaching a clearly stated agreement between both outsourcing companies as regards state

of employees.

THE ROLE OF EMPATHY

MTN played the role of empathy in the management of change by:

Reassuring the staffs of being outsourced as well; as part of the contract agreement, the

disengaged employees would now work with both Ericsson and Huawei.

Specifying that the disengaged engineers would be mandatorily engaged for one year and

placed on the same salaries as they were earning in MTN, or even more, after which the

firms could decide to continue with their services or not.

MTN implemented a “generous” severance package for the affected workers, and ensured

that they did not join the growing list of unemployed people by moving on to another job

straight away in order to make their disengagement seamless and devoid of controversies.

Additionally, in respect to securing of information assets while outsourcing, MTN secured its

information assets by having full control and retaining the ownership.

CASE STUDY 2: MTN INFORMATION TECHNOLOGY ADOPTION

As a result of technological advancement, the adoption of Information Technology in

organizations has become a necessity to keep up with the highly competitive environment.

Information technology can generate new business opportunities and improve organiza t ion

performance. Information Technology tools are significant in supplying the required

infrastructure, which is necessary for providing appropriate types of information at the right time.

In order to meet and improve customer service and meet market demands, MTN took a strategic

decision to adopt a new customer relationship management tool in its call centers to better facilitate

customer satisfaction and customer service improvement. The management demands was that the

new customer relationship management tool should meet international standard, offer possibilit ies

the old one didn’t and an improvement in some of the old functionalities. Consequently the

adoption of the new customer relationship management software wasn’t very successful at the



initial stage due to employee’s resistance to the change. This lead to slow productivity, dissatis fied

employees and unwanted turnovers.

THE ROLE OF CONSENSUS

The management didn’t not seek the consent of the customer service unit employees before stating

requirements to the customer relationship management software vendor. Hence there was no

agreement on what functionalities would aid their use of the new software. As a result, employees

found the new software difficult to use thereby taking a longer period for them to adjust.

THE ROLE OF EMPHATY IN THE MANAGEMENT OF CHANAGE

The change was not managed properly as the management didn’t not plan for resistance

prior to the deployment of the software.

The management was more focused on adopting a customer relationship management

software based on features and not ease of use by the employees.

Employees were resistant to change because the new software would require new learning.

Also, they had fear of inability to use the new software and being evaluated based on their

productivity which might in turn result to them getting displaced from their job.

CROSS ANALYSIS USING SATIR’s CHANGE MANAGEMENT MODEL

Having identified the causes of success and failure in change management, empathy and

consensus, the cases would be further analyzed using the Satir’s change model approach. The

Satir’s approach has five stages that describes the effects each stage has on feelings, thinking,

performance, and physiology. Using the principles embodied in this model, managers can improve

how they process change and how they help employees process change (Smith, 2014). The stages

includes:

Late status quo: This stage describes a system where things have remained the same for a long

time. Members of the system knows what to do and how to do it and understand how they fit. They

may be or not be satisfied with the situation but they are comfortable. Then a foreign element

comes into play that shatters the familiarity of the Late Status Quo. A significant event occurs, or

they become aware of information that you had not expected, that invalidates one of their

assumptions. How managers sustains the foreign elements will greatly affect the employee’s



reaction to the foreign elements. In case study 1, the foreign element was the decision to outsource .

This decision came as a desire to reduce the cost of operation. However, the management

maintained the status of the employees by not changing the system in which they operate, they

were only transferred into a different management but retained their usual positions. Whereas, in

case study 2, the management completely change the customer relationship management software

from the regular one they are used to. As a result, the employees felt pressure of adjusting to the

new system. They were scared of losing their jobs due to lack of productivity. They blamed the

managers and complained endlessly to cope with their fear and anger.

Chaos and Resistance: In case study 1, the employees accepted the change and didn’t fall into

any form chaos because the change was well communicated to them. They were used to their

working system and only had to adjust to a new management. They were assured of their job and

were further issued other benefits to compensate the change. On the other hand, employees in case

study 2 found their selves in an unfamiliar environment where their usual behaviors didn’t fit.

Their performance dropped, they felt stressed and insecure, afraid and confused.

Practice and Integration: In case study 1, there were no need to practice as only the management

was changed. Employees were excited as they saw the change as a new opportunity for identity

and belonging. They believed that the change may lead to salary increase and wouldn’t only be

beneficial to MTN but would also help to improve their skills. They were motivated by the

information passed to them by MTN hence it improved their performance. Meanwhile, the reverse

was the case in case study 2. It was an issue of lack of communication and empathy from the

management. The employees were resistant to the change fearing it would turn them into novices

and didn’t consider the benefits that comes with working with a new system, hence there was

unwillingness to practice and performance level dropped rapidly.

RECOMMENDATIONS

Before a change is implemented, In order to avoid resistance from employees due to lack of

information, managers should try to generate enthusiasm for the change by sharing their goals and

vision through communicating and educating of employees. This way, awareness about the

organizations reasons for the change and risk for not changing is created. Managers should design

communications such that the right messages are share and at the right time. They should further



encourage employees to seek improvement from the change. In doing so, they should help

employees open up and overcome the reaction to avoid, deny or blame caused as a result of

resistance by building a safe environment that enables employees focus on their emotions,

acknowledge fear and help their support system. Before the change occurs, managers should come

to an agreement with employees. This can be done through data collection and feedback analysis.

With this, corrective action based on their feedback would provide an incentive for implementin g

change. Managers should also offer reassurance and seek new methods to help employees cope

with difficulties. Additionally, managers shouldn’t fail to recognize and celebrate employee’s

adjustment to change. This would enhance employee’s motivation and reinforce the change in the

organization.

THE USE OF INFORMATION ASSETS IN THE TELECOMMUNICATION INDUSTRY

Intangible assets such as data, documents, content, and knowledge are critical to the operation of

every organization. These intangible assets are referred to as Information Assets. Information

Assets drive, record, and enforce organizational strategy, growth and enhance efficiency of

resource allocation. They also help managers to make informed decisions to improve customer

acquisition/retention, employee recruitment/retention, and enhance employee motivation and

loyalty (Steenkamp & Kashyap, 2010).

In telecom organizations, tremendous amount of data is generated on a daily basis. These data’s

are regarded as the organizations core assets and are used by strategic managers to make informed

decision in order to increase its competitive advantage and most importantly improve customer

satisfaction. The information asset includes:

Call detail data: describes the calls that traverse the telecommunication networks

Network data: describes the state of the hardware and software components in the network

Customer data: describes the customers’ demographics (name, address, gender and age).

Consequently, most telecommunication organizations because of their huge customer base are faced

with the problem generating information. For instance, an operational manager in the customer

service unit is required to produce a report regarding subscribers in a particular region. To do this,

he has to extract the data, do some analysis, and take some other steps to make it presentable to

the executive which process due to the large data repository is tedious and time consuming. As a

result, Telecom organizations have employed various information technologies to enhance the ease



of accessing information and help managers make more effective decisions. MTN maintains an

enormous amount of information about their customers and due to its extremely competitive

environment, have great motivation for exploiting this information. For these reasons, MTN has

adopted the use of data mining to identify customers and retain customers (Customer Churn

Analysis), maximize the profit obtained from each customer, improve its marketing efforts, identify

fraud, and better manage their telecommunication networks.

MTN’S USE OF ITS INFORMATION ASSEST TO PERFORM DATA MINNING

Data mining is the process of automatically discovering useful information in large data

repositories (Tan, Steinbach and Kumar, 2006). Data mining creates an opportunity for managers

to analyze the large amounts of data that have been collected in their network databases in order

to improve the short-term and long-term operations of the organizations. Careful analysis of these

data can provide managers with the ability to optimize internal network operations and better

manage external customer-facing activities such as churn and marketing. (Haggerty, 2010).

MTN applies data mining for sales, marketing, financial management, future prediction, and for

many different needs. However, MTN major use of data mining is to carry customer churn

analysis.

CUSTOMER CHURN ANALYSIS

Customer loyalty is something that telecommunications companies have to take into account. It

can cost ten times as much to recruit a new customer as it does to retain an existing one (Todman,

2000). On the other hand, the cost of keeping customers around is significantly lower than the cost

of bringing them back after they leave (Berson, Smith and Thearling, 1999). The process of a

customer leaving a telecom operator to another is referred to as churn, and churn analysis involves

building a model of customer attrition. MTN uses Data mining techniques identify churn behavior

patterns before the customers are being lured away by better offers from its competitors. In this

way they can come up with strategic plans to prevent the churn in advance.

At MTN, every level of management participates in customer churn analysis, the analysis is

predicted by mining the organizations information assets. Data mining techniques used for this

purposes typically utilize billing data, call detail data, subscription information and customer

information. On the 26th of March 2013, the Nigeria Communications Commission (NCC)



announced the launch of Mobile Number Portability (MNP) otherwise known as SIM swap (The

Punch, 2014). Mobile number portability is a service that enables you to retain your mobile number

when changing from one mobile service provider to another. It allows you as a customer to choose

the network you prefer to be on without having to change your mobile number. MTN realized that

the Nigerian telecom market is highly competitive and due to various issues including poor quality

of service and cheaper price of services offered, subscribers would embrace the mobile number

portability scheme and port to other networks.

MTN had to come up with new strategies such as new innovative plans, promotional offers and

customer loyalty packages that would ensure customer retention. Consequently, the management

of MTN decided to carry out a churn analysis to determine what kind of customers are most likely

to port other telecom providers, and which ones are most likely to remain loyal. The result would

thereby help MTN’s strategic managers to better understand its customer’s needs which would

determine the kind of strategic action that would be taken to minimize to number of customers that

are least likely to port. To carry out this analysis, the involvement of the different level of managers

in the organization was critical. On the different level of management, different information were

assessed to carry out the analysis;

Operational Level: Through data mining techniques information was gathered based on;

Customer demographics, i.e., age, gender, marital status, and location.

Call statistics: length of calls at different times of the day, number of long distance and

local calls.

Billing information for each customer what the customer is paying for local and long

distance.

Extra service information, that is, what extra plan the customer is registered on, e.g. special

long distances rates.

Complaint information: how many customer service calls are made for disputed billing,

dropped calls, slow service provisioning, unworking special services, and so on.

The information collected was analyzed for a specific period of time. The operational manager

further identified the data quality problems, discovered first insight into the data and then

structured and passed it on to the tactical managers for further analysis.



Tactical Level: Information gather through data mining by the different operational managers

were used by managers in the tactical level to predict and understand the subscribers churn

behavior. The raw data file that was generated were structured into the following;

Customers: basic customer information

Call data record: call data records aggregated by month

Services: basic information concerning service subscripted

Revenues: basic billing data aggregated by month

With this information, tactical managers prepares the information to pass through the churn model

process. At this stage, the data analysis results were defined. Two major variables where then looks

upon to determine subscribers who would likely churn and passed to the strategic managers.

Strategic Level: The result gotten from the churn model process and passed to the strategic level

includes:

Call detail records analysis

In-net call duration: customers who don’t often make phone calls to others in the same operator’s

mobile network are more likely to churn. In-net unit price is relatively lower than that of other call

types. Price-sensitive subscribers may leave for the mobile operator his/her friends use.

Service quality analysis

Poor network coverage: subscribers located in areas with poor MTN coverage issues and reception

quality may influence customers to move to other mobile operators with broader reach and better

reception quality.

With this knowledge gained, the executive head of marketing came up with a strategic decision to

introduce a new tariff plan which would offer discounted call rates to other networks “MTN

Smooth Talk”. The plan allows subscribers to call their friends on other networks at a flat rate of

20k/s after you pay a daily access fee of NGN5.00 (MTN Online, 2014). Also, to enhance quality

of service in in areas with poor coverage, MTN re-strategized its network upgrade plans to focus

more on areas with poor connectivity. So far so good, this strategies has helped reduce the rate of

customer churn as customers are mostly after cheaper call tariffs and good network quality.



CONTENT AND STRUCTURE FOR INFORMATION DELIVERY TO STRATEGIC

MANAGERS AT MTN

Information requirements related to a specific level of management differ due to the difference in

scope of responsibilities. Information needed at these levels are in varying forms, content and

structure. Therefore, it is imperative for that data collected are analyzed correctly, disseminated in

formats they can be best understood and used appropriately in decision making. Further,

technological improvement has dramatically changed the way in which managers obtain and

transmit information it has become a crucial tool to help improve management by the use of

available information for decision making. Organizations now implore different information

system tools to gather, process, use and disseminate information (Bocij, Chaffey, Greasley &

Hickie, 2003). Effective use of this systems in management decision making gives power to

managers and helps the organization succeed.

STRATEGIC MANAGERS

Managers at the strategic level use strategic information to define organizational goals, take

strategic decisions and for the development of policies and the acquisition and implementation of

cooperate resources. Also, information at the strategic level is used for identifying and evaluating

informed choices to gain or maintain competitive advantage against its rivals. Information at

strategic level at MTN contains detailed information about globalization, potential overseas

market, extend of competitors activity, key performance indicator, financial statements,

information on gross domestic product, inflation rate within the country, status of customers

satisfaction, as well as information regarding the suitability of MTN’s product and services. This

information’s in most cases are delivered as graphical representation of information gives a more

detailed explanation and enhance analysis of information. The graphical representation may

include the different types of charts and power point slides.



TACTICAL MANAGERS

Information at the tactical level is usually from internal as well as external sources. It focuses on

short term trends and used by middle level managers in the allocation of resources and establishing

controls for the implementation of the organization’s top level plans. They make decisions

cornering the utilization of specific resources as well as the allocation and acquisition of the

organizations fixed assets. However, they report to the top level managers. Information required

on this level at MTN includes; breakdown of the organizations product and services by a region

or branch, sales of a product and service. Information transferred to them usually in excel formats

mostly based on results from survey carried out by the operational managers and is used to come

up with solutions before sending it to the top level management for approval.

OPERATIONAL MANAGERS

Operational information relates to the day-to-day organizational operations and thus, used to

exercise control over the operations that are carried out on a daily basis. Information on this level

is based on current and historical performance by the organization and usually gotten internally. It

includes information about employees, products and services, daily and weekly sales information,

stock availability, customer credit ratings, availability of human resources and operational

resources as well as customers complains and request. They are usually in surveys, questionna ires

and word document.

For example, the table below shows the structure and content of information delivered to strategic

managers during the customer churn analysis process.

MANAGERIAL POSITION CONTENT STRUCTURE

Operational Managers Customer demographics (age,

gender and location)

Customers Call statistics

Customers billing information

Customer Complaint

information

Word documents

Questionnaires



Tactical Managers Basic information concerning

service subscripted by

customers, such as: handset

(cellphone model/class), length

of service (contract duration in

months), number of dropped

calls, tariff plan and tariff type

used for billing.

Excel formats

Strategic Managers Result of analysis carried out.

Graphs (pie charts, bar charts)

Power point presentation

Reports

Table 1.0: Structure and Content of information delivered to strategic managers during the customer churn analysis

CONCLUSION

It’s of no doubt that information system has improved the way organizations function. It has helped

expand their reach, improve efficiency and productivity and most importantly helped managers

take and implement strategic decisions. Nonetheless, this research has been able to outline key

managerial aspects that should be looked upon. Change management plays a vital role in the

adoption of information systems and other aspects at MTN. Hence, a strategic decision that would

result in change should align to the organizations vision and objectives. Information regarding

change should be properly disseminated and consensus should be reached between the

management, stakeholders and employees in order to avoid cases of resistance which would result

in failure. However, this research focuses on the telecommunication industry though it might not

be applicable to different organizations. It only propounds a theoretical knowledge for any

organization who would want an effective knowledge of the use of Information systems to enhance

strategic management. Notwithstanding the limitations, this research is still a good case to study.



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