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

1. 6th Regional Conference
Innovation Systems & Innovative Clusters in Africa
Kunduchi Beach Hotel & Resort,
Dar es Salaam – Tanzania
October 28 – 30, 2009
Using SMS as a Business
Communication Tool for
SMEs - Tanzania
29th Oct. 2009 Cluster Initiatives - ICT 1

2. Introduction
 Purpose of Presentation / Discussion
 To bring the facts into the public attention
 Policy makers
 Private sector associations
 Development partners
 Entrepreneurs (SMEs)
 To encourage seminar participants
 Act as change agents to spread the information in
their areas of influence.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 2
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

3. Introduction
 The Presenter: Amani Nakembetwa
ICT Cluster Member (T)
From:
Pink
Prime Solutions Ltd
e - Business Development Service Provider (e-BDS)
e –Business Process Outsourcing (e-BPO)
&
ICT - Enabled Solutions
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 3
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

4. Topics of Discussion
1. Introduction.
2. Characteristics of SMEs in Tanzania in regard to use of
e-Commerce facilities.
3. Why SMS is a Proper Channel to Implement e-
Commerce for SMEs.
4. Why Does SMS Make Sense for SMEs.
5. Examples Where SMS has been Used as Business
Communication Tool.
6. Challenges for SMEs when Developing and Operating
Mobile SMS Services.
7. A Friendly Framework for SMEs to Implement SMS
Based Communication Tool.
8. Real example of SMS Based Service Provider in
Tanzania
9. Conclusion.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 4
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

5. 1. Introduction
 The National Vision 2025
“Tanzania should have created a strong, diversified, resilient and
competitive economy, which can effectively cope with the challenges of
development and, which can also easily and confidently adapt to the
changing market and technological conditions in the regional and global
economy”.
 SME Policy 2003 – 2013
Why SMEs don’t grow and become completive ?
“Lack of Information and appropriate use of ICT facilities (e-
commerce) to enhance their efficiency and effectiveness in
productivity”
 E-Commerce
E-commerce is in short, conducting commercial and business
transactions by the use of computer mediated networks (internet).
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 5
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

6. 2. Characteristics of SMEs in Tanzania in
Regard to Use of e-Commerce Facilities
 Young, small and often die before maturity.
 Often less structured and less formal, with fewer
fixed procedures, because there has not been
time to develop them
 Less opportunity to automate and introduce IT or
to have its own IT department with resident
expertise.
 They live in environments where there are no or
limited infrastructures for implementing ICT
enabled business solutions.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 6
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

7. 2. Characteristics of SMEs in Tanzania in
Regard to Use of e-Commerce Facilities
 They have the advantage of flat hierarchies and
thus being very flexible esp. in decision making.
 They have little or no knowledge on use of
computer facilities & ICT enabled solutions to
enhance their effectiveness in business.
 They have limited resources, cannot afford to by
notebooks, PCs, get internet connection or even
to employ highly specialized ICT support staff.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 7
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

8. 2. Characteristics of SMEs in Tanzania in
Regard to Use of e-Commerce Facilities
 Majority of SME living in the areas where there is
mobile network coverage, do own or use mobile
phone services (for calling and SMS texting).
“When questioned if they agree with the statement – ‘I
cannot imagine life without my mobile phone’, almost
70%of people in the age of 16-34 said that they either
agree or strongly agree with this statement” [1]
[1] Source: Research by Henley Management College and Teleconomy
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 8
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

9. 3. Why SMS is a Proper Channel to
Implement e-Commerce for SME
 Internet penetration in Tanzania < 2% while mobile phone
penetration >30%. and increasing at a rate of 10% [2]
 Nowadays, mobile phone has a dominating presence in all of our
lives. Unusually, mobile phone ownership is very evenly spread
across the different group categorizations of age, gender and
social grade.
 People are using their mobile phones all the time, in and outside
of work, mainly for calling and texting people.
 Mobile phones are cheaper compared to notebooks or tablet PCs
 SMS service is available on every mobile phone gadget regardless
how simple or cheap it is.
[2]-Source: Tanzania Mobile Fact Book 2009 - by Blycroft Publishing.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 9
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

10. 3. Why SMS is a Proper Channel to
Implement e-Commerce for SME
 SMS service is well known and friendly to users so there is no need
for training on how to use. The service has been tested and
implemented for long time by the GSM operator and there is no risk in
implementing this technology in new innovative ways.
“It is predicted that there is set to be a continued rise in
the number of text messages sent and growth in the way
that text messages are used, while the popularity of
phone calling remains popular, but constant.” [3]
 Mobile phone has the ability to reach mass audiences in a way that no
other technology has had the potential to do before now. Indeed, in
many parts of the world mass communication is leaping straight to
mobile phones and bypassing both the internet and landlines.
 100% of GSM mobile phones support SMS services. [3]
[3]-Source: http://www.clickatell.com,
SMS Marketing - Promote your business via mobile marketing.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 10
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

11. 3. Why SMS is a Proper Channel to
Implement e-Commerce for SME
 Reach more customers - More people can be reached via SMS than
internet, email or fax. Using a reliable SMS gateway with global reach,
allows access to recipients at any time, anyplace on the globe and at the
cost of a local message.
 To reach an audience of 50 million users, it took:
 Radio - 38 yrs; TV – 13 yrs; Internet – 4 yrs; iPod – 2 yrs;
Facebook (100 million) in less than 9 month
Mobile Phone (SMS ???) [4]
 When used for marketing, promotion and advertisement, SMS Increase
sales with higher response rates. SMS is an extremely personal means of
communication, and invariably an SMS is viewed immediately and the
whole message read. This high level of attention induces a higher call-to-
action response rate than email or fax typically would. [5]
[4]-Source: www.newsplex.com – The Power of Internet & Television
[5] http://www.clickatell.com,
SMS Marketing - Promote your business via mobile marketing.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 11
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

12. 4. Why Does SMS Make Business Sense for
SME
As compared to e-mail
i). SMS is Omnipresent.
 Messages can be sent globally via a single SMS provider. All
cell phones can receive SMS, and there is a high uptake of
SMS by users as more people have cell phones than have
access to email
 Extensive reach: The number of people with a mobile device
in their hand is growing at an exponential rate globally
 A mobile phone is always within hand’s reach of the owner,
it’s nearly always ON and the number of people, who own a
phone, is continuously growing globally at a higher rate. SMS
makes the most financial sense, especially in communicating
with an audience on the move (e.g. Machinga & Masai).
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 12
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

13. 4. Why Does SMS Make Business Sense for
SME
ii). The immediacy of SMS or Real Time Delivery.
 An SMS is typically delivered within seconds and
therefore valuable for Time critical information.
 It is delivered directly to a user's phone irrespective of
location (where there is network coverage). There is also
a high likelihood of an SMS being read immediately
when received, unlike email where messages might only
be opened days later.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 13
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

14. 4. Why Does SMS Make Business Sense for
SME
iii). SMS ensures less spam to an end user.
 Unsolicited messaging is significantly reduced as SMS
are predominantly sent to users who have a current
commercial relationship with the business
 High response & effective rates: SMS enjoys a higher
response rate than email as it is targeted and personal,
and is less invasive & less costly than a telephone call
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 14
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

15. 4. Why Does SMS Make Business Sense for
SME
iv). Cost Effective.
 SMS makes the most financial sense, especially for SME
wanting to communicate with an audience on the move /
clients / vendors etc. Bulk SMS sending lowers the cost
even more, i.e. the Extreme SMS service for Tigo and
Vodacom
 Time-saving: Less time spent on briefing business
partners of an issue as compared to mail services.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 15
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

16. 4. Why Does SMS Make Business Sense for
SME
iv). Automation.
 If integrated on website or on systems applications
software, SMS sending can be automated. This is good
for Bulk SMS sending for campaigns (product promotion
or marketing).
 Trackable ROI: reporting from automation systems
allows determining exactly how effective the campaigns
have been.
 Total control: SME using these systems enjoys the
flexibility of running their programmes according to their
own timing and planning their schedule of
communicating messages.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 16
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

17. 5. Examples Where SMS has been used
as a Communication
i). Mobile Financial Services.
 Vodacom (T) Ltd with NMB partnership offering ATM
recharge services for prepaid customers
 NMB Mobile Banking – Balance inquiry, Mini-statement,
Money transfer to any NMB account, payment of bills –
electricity (LUKU), water (DAWASCO)
ii). Mobile Security Service.
 A mobile phone with an integrated SIM card and private
key signature using SIM tool kit client software becomes
a mobile security tool for m-commerce payments
example of this service is ZAP services for Zain and
M-Pesa for Vodacom.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 17
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

18. 5. Examples Where SMS has been used
as a Communication
iii). Mobile Information Provision.
 Localized information such as updates on news
headlines, weather, events, sports results, stock prices,
business news, transport news, entertainment, yellow
pages services, etc.
iv). For Social Networking.
 An SMS is typically delivered within seconds and
therefore valuable for time critical information such as
death announcement to a group of members of society
like church, mosque, sports clubs (simba & yanga).
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 18
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

19. 5. Examples Where SMS has been used
as a Communication
v). Mobile Loyalty (Customer Services) Programs
 Reminders and updates be sent to customers, i.e. confirmation of
appointments, overdue video rentals. SMS provides a simple, and
low cost way of keeping in touch with customers. Effectively can
be used by SACCOS to remind members of loan payment or
meeting date.
 School – Parent communication. It is perhaps the most viable and
effective solution to the issue of communication gap often faced
by the parents and school management in matters related to
acquiring information about their children’s attendance, fees
updates, education and academic activities
 Greetings - Wishing customers a Happy New Year or sending a
seasonal wish via SMS is a great way to remain in contact with
customers with a personal touch. Festive and other bulk greetings
are especially easy to send using bulk sms sending programs.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 19
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

20. 5. Examples Where SMS has been used
as a Communication
vi). Market Campaign and Promotion of Products.
 As a communications medium, SMS is the most cost-effective
way of communicating to any business audience. When
integrated with bulk sms sending programs, market
information about a product can reach a targeted audience in
a fraction of a minute
vii). Voting or Short Surveys.
 An Creating an SMS voting poll or short survey is an excellent
way of instantly getting to know customers thoughts or
feelings (i.e. KIPIMAJOTO or Bongo Star Search programs)
viii). Trucking and Fleet Management Systems – Car Track,
Trace Masters use sms enables platforms.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 20
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

21. 6. Challenges for SMEs When Developing
and Operating Mobile SMS Services
 There are some challenges that SMEs would face in developing
mobile services. In this paper two categories of challenges are
discussed. These are technical and operational challenges on the
one hand; and challenges arise due to the nature of mobile
device/terminal on the other
 Technical and Operational Challenges
 Sending Bulk SMS
For the SMS services to make the most financial sense, especially for
SMEs wanting to communicate with large group of audience, sending
of bulk SMS at once lowers the cost even more.
To set-up a platform for this operation needs computers, a bit of
computer knowledge with associated software - Application
Programming Interface (API).
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 21
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

22. 6. Challenges for SMEs When Developing
and Operating Mobile SMS Services
 Operation Cost
Although it is cheaper, convenient and timely as compared to phone
calls and internet accessibility, there is cost associated with sending
every single sms or per every transactions using sms enabled
services.
 Decision Making Process in SMEs
While in big companies decisions about new technologies are made
by special departments with experts, in SME it is often the owner of
the firm who makes such decisions. Without proper information, it is
even harder to assess the potentials embedded in this service.
 Enforcement and Enactment SLA
Uncertainty to the formation and enforcement of contract
enacted via SMS and more importantly to the protection of
consumer interests
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 22
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

23. 6. Challenges for SMEs When Developing
and Operating Mobile SMS Services
 Nature of Mobile Terminal (MT) Devices
 Display quality:
MT have only a small display with low resolution and
reduced color-depth, there is no real keyboard or
“mouse” available for user input.
 Limited Resources:
MT have limited resources like memory, CPU-power
and battery capacity, the available bandwidth for
wireless data communication will be not as good, cheap
and reliable as for wired data communication.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 23
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

24. 6. Challenges for SMEs When Developing
and Operating Mobile SMS Services
 Data protection concerns:
Wireless data communication is more vulnerable with
regard to security threats (i.e. password securing of
data). There is also the danger that a MT with sensible
data on it is lost or stolen.
 Existence of Different types of MT:
They all have different capabilities and support
different formats for data exchange and therefore no
unique way of handling information
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 24
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

25. 7. A Friendly Framework for SMEs to Implement
SMS Based Communication Tool
The Concept
Of
Business Process Outsourcings
(BPO)
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 25
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

26. 7. A Friendly Framework for SMEs to Implement
SMS Based Communication Tool
 Business Process Outsourcing (BPO)
 BPO is the process of hiring or contracting another
company (third-party service provider) to handle specific
business activities or tasks that are considered “non-
core” to the primary business strategy.
 BPO can be of much help to SMEs because it's like
“getting it done by the experts”.
 It not only boosts efficiency, but also enables significant
time savings and hence automatically results in
significant cost savings.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 26
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

27. 7. A Friendly Framework for SMEs to Implement
SMS Based Communication Tool
 Operationalization of the Concept of BPO by SMEs
 An SME hires/contracts a competent firm (Service
Provider – SP, usually another SME) to host its SMS
Communication Service and hence signs an SLA (Service
Level Agreement).
 At any time (24/7) an SME can instruct the SP (by
phone call, by SMS text or by e-mail) to carry that
assignment on its behalf according to the SLA.
 The SP performs the task and is obliged to give the
feedback to the SME (deliver report) – by call, SMS, e-
mail, etc.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 27
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

28. 7. A Friendly Framework for SMEs to Implement
SMS Based Communication Tool
 Payments for the Service
 Based on the nature of SMEs and experience working
with them, in this paper we encourage the use of pre-
payment modality
 For instance with NMB SMS Bank Service, if both SP &
SME have NMB accounts, payment can be done instantly
by SMS cash transfer service regardless of where one is
provided there is mobile phone network coverage.
 Once both parties confirm transfer and receipt of
payments, the service is offered as per SLA
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 28
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

29. 8. Real Example of SMS Based Service
Provision in Tanzania
Pink
Prime Solutions Ltd
e - Business Development Service Provider (e-BDS)
e – Business Process Outsourcing (e-BPO)
&
ICT - Enabled Solutions
Dar es Salaam
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 29
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

30. 8. Real Example of SMS Based Service
Provision in Tanzania
Pink
 Who is Prime Solutions Ltd
 PPS Ltd is a Tanzanian entrepreneurial firm that has
decided to embark its immense potential in e-Commerce
& ICT enabled solutions to offer Business Development
Services to SMEs that can be done electronically (e-
BDS), scaled down to happen in mobile handsets using
SMS - Based Services via Wireless GSM networks
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 30
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

31. 8. Real Example of SMS Based Service
Provider in Tanzania
Pink
Prime Solutions Ltd Offers:
 e-BPO
 Bulk SMS Sending Service for Marketing Campaign and
Promotion of Products for SMEs
 Provision of Information for Agricultural inputs and
products
 Performs survey and opinion solicit from customers
 Provision of School – Parent SMS based communication
platform.
 Provision of examination results using SMS.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 31
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

32. 9. Conclusion
 Summary:
 What all these means
 e-Commerce is the good for SMEs but not readily available.
 SMS stands to cover the last mile where internet can not
reach or is not affordable
 SMS service are best for SMEs as communication tool
based on their nature and implementability.
 SMS provides a convergent “Enterprise” communication
solutions using the lowest common denominator of
technology to communicate with internal, external and
extended customers or clients.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 32
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

33. 9. Conclusion
 Summary:
 What all these means (cont…)
 BPO – ‘getting it done by experts’
 Boosts efficiency, enables significant time savings and
hence automatically results in significant cost savings.
 SMEs needs end-to-end mobility solutions where parts
of the value chain are owned by other players (BDS)
through BPO.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 33
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

34. 9. Conclusion
THIS PRESENTATION THEREFORE ASKS THE
AUDIENCE TO:
(being representatives from:-
- Government,
- Academic institutions,
- Private sector Associations,
- Development partners,
- Entrepreneurs)
 SPREAD THE INFORMATION and
 FACILITATE DEVELOPMENT OF BDS OFFERING BPO
SERVICES.
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 34
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania

35. 9. Conclusion
IT CAN BE DONE IF EVERYONE
PLAYS HIS PART
THANK YOU FOR LISTENING
Amani Nakembetwa
nakembetwa@gmail.com
Cluster: ICT
Date: 29th Oct. 2009 Topic: Using SMS as a Business 35
Place: Dar es Salaam Communication Tool
for SMEs - Tanzania