Knowledge Management and Its Benefits in Relation to Warid Telecom - Case Study Example

How Can Knowledge Management Benefit Warid Telecom TABLE OF CONTENTS Executive summary……………………………………………………………………2 A. What is knowledge management……………………………………………………..3 B. Advantages of knowledge management…………………………………………….3-4 C. Company introduction……………………………………………………………….4-5 D. How can knowledge management benefit Warid Telecom………………………..5-7 Telecom industry of Pakistan…………………………………………………….5-7 E. Current knowledge management practices…………………………………………7-9 F. First step: Developing a learning culture…….……………………………………..9-10 G. Second step: implementing the KM palm………………………………………....10-15 H. Third step: Action programme timeline……………………………………………...15 I. Recommendations……………………………………………………………………...16 J. Conclusion………………………………………………………………………….......17 K. References……………………………………………………………………………18-19 Executive Summary Warid Telecom is one of the emerging telecom companies in Asia. With the period of time, the company has grown and attracted around 16 million subscribers in Pakistan and 2.25 million in Bangladesh. However, the customer retention rate in telecom industry is very low due the rapidly changing customer demands, expectations and behaviors. Moreover, services of the competitors are not distinctive which has threatened the future revenues of the company. The current structure of the organization is centralized and tall which has made the decision making process slow. The flow of communication is one-way (from top to bottom) and employees are not empowered. Furthermore, the inter-relations between departments and employees are limited, which serves as a hindrance to generate new ideas. Contradictory to this, changing trends of the market indicates that Warid needs to continuously introduce new campaigns, distinctive offers, better quality and technological advancement in order to improve its goodwill and competitive position. The proposed knowledge management plan will be outsourced from INLECOM Ltd which will integrate the business and KM strategies and develop a learning culture in the organization. KM committee will be responsible to initiate the modern KM practices with the help of experts from INLECOM Ltd who will be responsible to train employees about the use the kBOS platform software. This software will help employees in data management and information modeling. Business processes will be modernized with the implication of KM initiatives and continuous improvement will be incorporated for the improvisation of service quality. The final results will measured through performance evolution done on periodic basis. A. What Is Knowledge Management: Knowledge management is new phenomena developed in early 1990’s and proved to be a successful indicator in managing information and generating new ideas. As defined by Ron Young, CEO of Knowledge Associates International, "Knowledge Management is the discipline of enabling individuals, teams and entire organizations to collectively and systematically create, share and apply knowledge, to better achieve their objectives". From organizational perspective, this means providing the culture and necessary tools needed to share the knowledge and experiences in order to make better decisions. In other words, it is about getting the right information from the right people in a manner that will significantly improve the performance and productivity of the organization. To better understand, knowledge can be divided into two categories, tactic knowledge and explicit knowledge. “Tacit knowledge represents internalized knowledge that an individual may not be consciously aware of, such as how he or she accomplishes particular tasks. On the other hand, explicit knowledge represents knowledge that the individual holds consciously in mental focus, in a form that can easily be communicated to others” (Alavi & Leidner 2001). Tactic and explicit knowledge collectively helps the company to enhance creativity, improve performance, create competitive edge and most importantly creates a proactive approach rather than reactive approach. B. Advantages Of Knowledge Management: In today’s information age, knowledge has a profound impact on the actions we take and the decisions we make. Whether it’s about designing a business strategy or implementing your plans into daily routine, information is needed to do things right. In today’s business world the fundamental rules of business have been changed. The market conditions, technology, customer expectations, demands and behaviors are changing so rapidly that organizations have to continuously come up with innovations, new offers and better products in order to maintain their leadership in the market. Therefore, it is important to build a culture in the organization that is future-oriented and focuses on new ideas, information management and creative decision making in order to do things better. Also, in order to effectively deal with the changes and crises, knowledge management is fruitful to make right decisions at the right time. KM, in fact is a practical approach in dealing with people in an organization, because it sees employees as an asset, not as expenses or liabilities. It has shifted the centralized decision making approach to the decentralized approach. Employees feel valued and give their input in the form of new ideas, identifying on-site problems and increasing the productivity of the organization. It keeps employees satisfied and results in getting satisfied customers. C. Company introduction: Warid Telecom is a joint venture between Abu Dhabi Group & SingTel Group. Abu Dhabi Group is one of the largest business groups in the Middle East and provides global systems mobile (GSM) telecommunication services in Pakistan and Bangladesh. “The company offers voice and data services, customer relationship management services, wireless Internet, data cards, email solutions, call management services, call conferencing, and voice mail services. It also provides corporate value added services, such as corporate tunes, financial centers, Web to SMS services, and international roaming” (Waridtel 2009). According to Pakistan Telecommunication Authority, currently Warid Telecom has more than 16 million subscribers in Pakistan and is ranked as the fourth largest operator in Pakistan. Warid Pakistan claims it has the largest "post-paid" subscriber base. In Bangladesh, Warid telecom is operating in 64 districts and is the 6th largest mobile phone operator with 2.5 million subscribers. D. How Knowledge Management Can Benefit Warid Telecom: Telecom Industry of Pakistan: The current situation of the telecom industry of Pakistan is very unpredictable. According to Pakistan Telecommunication Authority (PTA) telecom growth for FY 2008‐09 was 17%. The competition is getting extremely intense and the revenue per call (RPC) of the telecom operators is declining faster than anticipated. Also the introduction of mobile number portability (MNP) proved to be the biggest hindrance in retaining customers. Moreover, the type of service provided is more or less same by all operators and its becoming extremely difficult for customers to distinguish between new offers. The call rates are getting cheaper, government regulations are getting tighter and customer defection is threatening the revenues of mobile operators. The above figure clearly explains that, Warid ranks as number 4th in terms of revenue generation. In order to increase its revenues Warid has to come up with technological innovation, better service quality, lucrative price offers, creative marketing campaign and distinctive features. The total subscribers of Warid are given below: Apart from revenue, the basic problem of Warid is to retain valuable customers. This can be achieved with the help of customer database management. Currently, the company is only recording the number of customers and their basic information (name, gender, NIC #, city, address and monthly usage etc) in its database. But rather than focusing on customer relationship management (CRM) it focuses on record keeping only. If managed effectively, this database can be very helpful in managing information and detecting the cause of losing customers. Also this database can identify the strong areas that can serve as benchmark and the weak areas that can be improved through effective knowledge management practices. E. Current knowledge management practices: Currently, simplified knowledge management has been implemented and its scope is very limited. Warid’s general manager marketing, Mr. Moin Qadri, says “the culture of organization is centralized and vertical. Knowledge management is not practiced in all the departments but recently, a knowledge management process is adopted specifically in the marketing department”. The reason for adopting this plan is to introduce innovative ideas than can help to attract corporate clients, who are the most valuable customers. The aim of creating a knowledge sharing environment is to involve employees to design a new marketing campaign starting from Jan 2011. However, the below mentioned factors can cause hindrances in implementing a comprehensive knowledge management plan: Top management shows lack of trust in the proposals of middle management. The leadership of the company is more focused on satisfying customers rather than satisfying employees, irrespective of the fact that satisfied employees lead to satisfied customers. Warid telecom is vertical organization with several middle layers. The decision making is centralized and very slow. Senior managers give directions to subordinates for most of the issues and employee suggestions are not appreciated and transferred to top management. The company will have to bring huge structural change in the organization in order to implement knowledge management plan completely. Managers will need training in order to identify productive ideas and filter out vague ideas. Also all the departments should be inter-connected in order to cover all aspects of information. The industry is changing rapidly. Competitors are introducing better offers every other week. Therefore, practically employees are facing shortage of time to respond to the changing trends. The biggest challenge being tackled is no time to take on additional role in KM processes. Employees give priorities to their routine tasks and don’t have time to work on long term knowledge management plans. The departmental conflicts in Warid Telecom are very intense. Departments withhold information from one another and focus on their personal interests only. As a result, the common interest of the organization is compromised. Despite of the above mentioned barriers, knowledge management plan can be fruitful in Warid Telecom in order to fully benefit from the intellectual capital. The basic focus should not be on collecting customer data but to get maximum benefits from the information obtained. Warid telecom needs to implement KM plan throughout the company through streamlined processes facing customer services area like billing, franchises, new campaigns, complaint/call centers, self service, cross sell and up sell. However, most importantly the knowledge management plan should be aligned to the customer and organizational processes. KM process needs high level of commitment from senior management, middle management and especially from front line employees because they have direct interactions with the customers. The input from every employee will help Warid to better understand its customers and differentiate between premium and average customers. Simply put, if managed effectively knowledge management will bring a visible difference in the service quality, customer care, employee satisfaction and the goodwill of the company. But if not managed effectively, the information overload will become a burden and company will not be able to distinguish between productive and non-productive ideas. F. First Step: Developing A Learning Culture: Knowledge management can’t be implemented without building a learning culture. Currently the organization is centralized and tall. The process of communication is one-way. Decision making is slow. Problem identification and solving process is poor and empowerment of employees is not encouraged at all. Therefore, the perspective of every employee from top to bottom has to be changed. The daily behaviors of management and organization have to be modified with the emphasis on continuous learning and development. According to Peter Senge (1990: 3) learning organizations are “organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together”. On the whole Warid Telecom needs to exhibit five main characteristics into its daily routine: 1. System’s Thinking: currently the organization is very scattered. The chain of command is from top to bottom and the interrelationship between departments is limited. Systems theory’s has the ability to comprehend and address the organization as a whole, and to examine the interrelationship between the departments and teams (Wikipedia 2010). This will help to improve the relationships between departments and will develop mutual co-operation and trust. 2. Shared vision: the employee goals, departmental goals and performance goals should be aligned to the organizational goals. This can be achieved by incorporating “Management by objectives” (MBO). The overall goal of the organization will be to “develop a learning organization that takes input from every employee and apply its learning to provide better quality to its customers”. Then this goal will further be broken into sub-goals aimed at measurably improving the performance. 3. Mental Models: In creating a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust. Learning new skills is necessary that challenges the traditional ways of doing things, un-learning the contemporary methods that don’t contribute in a visible manner and re-learning those theories that complies with the organizational objectives but are not practiced in daily actions. 4. Team Building: it is said that “two heads are better than one”. The working environment in Warid Telecom is individualistic and employees show lack of trust in their subordinates, colleagues and supervisors. Therefore, this trust has to be built by emphasizing on the greater output that teamwork can bring. Cross-functional and multi cultural teams should be formed so that the communication among employees improves. 5. Personal Mastery: organizations can only learn if the individuals in those organizations learn. Organizational learning is the sum of individual learning. Therefore learning programs in the form of formal and informal training should be designed. However, personal mastery goes beyond the discipline of improving skills and competencies. It is about applying that knowledge towards continuous growth and development. It is about reaching one step further than your competitors. This learning approach will give a new vision and direction to the organization which will serve as a pillar to the road map of knowledge management plan. G. Second step: Implementing The Knowledge Management Plan: Before moving ahead, the most important thing to consider is to link the knowledge management strategy to the business strategy in order to improve the management practices and periodic performance. Given below is a proposed knowledge management process given by INLECOM Ltd., which provides business solutions with the help of their leading edge software technologies. a. In the first step knowledge management committee will be formed which will act as a mentor in initiating the knowledge management project and will provide necessary tools to implement the plan. The committee will comprise of board members, general manager, and departmental heads and KM manager picked from IT department. b. The second step of the model will link the business strategy to the KM strategy. The vision of the organization will be re-defined. The new vision of the company will be “to improve the competitive position of the company with the help of “integrated” business processes that accumulates the use of best practices to satisfy the customer needs”. c. Te third step is to direct people, processes and technology (which are the key enablers of knowledge management practices) towards the acquisition and dissemination of knowledge. Knowledge acquisition: new knowledge will be acquired through the introduction of workshops, seminars and e-learning. This knowledge will help to identify the gaps in the management practices which therefore will be refined through better processes and technologies like kBOS software defined in point c. Knowledge dissemination: in this step people will share their experiences, information and observations to learn from the knowledge assembled which in result will make people and organization grow. d. The fourth step is the formal training of employees. Experts from INLECOM Ltd will provide training to the employees within the organization. In this process, the CEO, executive manager, general manager, senior managers, assistant managers and people from IT department will get a mandatory training course to learn the use kBOS platform software. This software will train employees on the following core fields. Document management. Web services middleware. Organizational, business and information modeling tools. Data warehousing. Application and Process Integration (A2A and B2B) tools. Development Support for Applications (plug-ins).  Content management. Work flow engine. After getting the training each of these managers will make a team with their departments and train their team leaders the use of kBOS platform software. These team leaders will provide training to their colleagues. This process will ensure that every employee gets an understanding of the implication of the new system. e. Next step is Knowledge Management. “KM comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of new experiences and information” (Wikipedia 2010). Here the company needs to integrate the whole learning session and apply it to the daily business processes. In other words, the kBOS software system should be incorporated into the daily routine which will help Warid telecom to improve its document and content management, work flow, data ware housing and web services. As a result, knowledge will be managed effectively that will assist in new idea generation, making innovations, improving core competencies and understanding customer needs effectively. f. After knowledge management, company needs to do business process management. “A business process is a set of coordinated tasks and activities, conducted by both people and equipment that will lead to accomplishing a specific organizational goal” (searchCio 2005). The business processes can be divided into three types: Management processes: the company needs 100 % commitment from top and middle management. Managers should adopt an open door policy so that the flow of ideas gets smoother and easier. Every day, one consulting hour should be given by managers to employees so that the accessibility to the supervisors becomes easier. Operational process: the core responsibility of the service falls on the telecommunication department. It should regularly check the service quality, call drops, network jamming and frequency. The recorded data will then be transferred to the IT department. IT department will codify the data and check the flaws, if present. These flaws will then be communicated to R&D department which will develop the technology investment plans as per the given budget. On the other hand, the marketing, sales and public relation departments should record and assemble customer feedback on a regular basis. Supporting process: in order to effectively manage the continuation of KM strategies, HR department should regularly arrange training and development sessions so that employees acquire new skills. Also accounting department will perform the functions of recording and comparing the past and present data so that future goals can be set accordingly. g. Moving ahead, the above steps will enable the organization to produce better quality products/services. Here the organization needs to introduce total quality management (TQM) tools, for e.g. zero defect processes, Kaizan or continuous improvement so that organizational competitive position gets better. After this, the organization will practically reach one step ahead from where it is standing right now. The continuous improvement in the service quality will ensure the continuous learning and growth of the organization. h. Last but not the least, performance management is essential to numerically measure the results achieved. First of all the organization needs to establish performance standards like the following: Numbers of complaints received should decrease every month. profit shall be increased by 30% Customer satisfaction rate shall be maximum (close to 95%). Revenue of the company will increase by 30%. Employee satisfaction and morale must increase. Number of implemented innovative designs shall be counted by the year end. The subscription of new customers shall be measured in numbers and percentage both. If the above mentioned plans are achieved with a variation of + 10%, it means that the KM plan is implemented effectively. However, if the desired results are not obtained, the company needs to revise its implementation cycle again and find the gaps between the actual and desired performance. For the first 6 months, the performance evaluation (PE) must be done on a monthly basis to check if the organization is on track. After comparing the outcomes of the first six months, PE will be done on quarterly basis. Finally annual audit will be conducted by the audit team of INLECOM Ltd to ensure the success/failure of the new business practices. H. Third Step: Action Programme Timeline: ACTION PROGRAMME TIMELINE (2011) Tasks Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 developing a learning organization 2 establishing a KM committee 3 aligning the business strategy 3 knowledge acquisition and dissemination 4 Training 5 process management 6 continuous improvement 7 performance appraisal Note: continuous improvement and performance appraisal are the long-term procedures of the KM process. These steps will continuously improve the productivity of the organization and eventually make Warid a learning organization. On the other hand, KM committee needs to start its practices from Jan 2011 and by the end of the month it should integrate the business strategy and KM strategy. However, special seminars are workshops will be arranged in Jan and Feb to bring the knowledge acquisition and dissemination plan into action. The knowledge collected from these seminars will assess managers and employees in the training session held in the first three months of the coming year. Furthermore, since employees take time to learn new technologies and processes therefore, first half of the year is allocated to the learning and familiarization of the new business process. I. Recommendations: 1. The Knowledge management plan should be comprehensive enough to achieve desired results and it should be simple enough to be understood by all employees. 2. Before contacting the client company (INLECOM Ltd.) top management should make careful decisions about which information to share and which information to withhold from the outsourced company. 3. The kBOS platform software should make job easier not complicated. Employees show hindrance to learn sophisticated IT related software’s therefore, employees shall be given time and training to capitalize the usefulness of the new technology. 4. Idea generation should be backed up by incentives and rewards. Realistic and practical ideas which are applied to the business operations should be appreciated with monetary and non-monetary rewards to the respective employee. 5. In addition to measuring the performance of the organization, performance of employees should also be measured on periodical basis to identify between productive and non-productive employees. 6. Technological upgrading should be continuous and backed up by training programs. J. Conclusion: In order to overcome the challenges of changing trends and market conditions, Warid telecom needs to bring a structural change in the organization. The company needs to overcome the barriers of centralization and limited access to information. The proposed knowledge management structure from INLECOM Ltd will give a new vision to the company. Knowledge will be acquired and disseminated through team building, seminars and workshops and employees will get training to modernize their work practices according to the new system. Together with employee participation and data management software (kBOS) it is hoped that the company will build a distinctive image in the telecom industry and will lead itself to the path of learning and growth. References: Welch J., 2000. The 21st century Corporation. 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