final p and pd it

8/13/2019 FINAL P AND PD IT

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FEASIBILITY REPORT (SAP AND AGILE IMPLEMENTATION)

ZONG

P AND PD IT

S UBMITTED T O

S IR N AVEED U MAR .

SUBMITTED BY

AMAN QURESHI .

ZAHOOR ELAHI .

AND SAAD ZEB .

BBA-8B

BAHRIA UNIVERSITY ISLAMABAD CAMPUS


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Table of Contents

1. Companys Introduction and Background

2. Interview Results:-

Implementation of ERP in ZONG

Challenges faced during SAP implementation

Development plus management, during SAP implementation process

Financials Calculation of ROI (Projected / assumed)

HR

Marketing

Benefits of SAP to ZONG (Interview Results)

SAP SWOT Analysis

3. Agile SWOT Analysis


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INTRODUCTION TO ZONG

ZONG operates as the leading Information and Communication Technology Service Provider in

Pakistan, making possible communication globally. They strive towards mobilizing the world for

the future. Leading in innovation, ZONG is among the industry leaders, shaping a future that

offers telecom services to bring the world closer.

ZONG Positioning Statement

SAY IT ALL

Say it All is an amalgam of their vision, brand philosophy, brand values and strategy. The

essence is futuristic approach. The positioning statement Say it All is basically comprised of

two words say and all that provides the inward communication through the word say, i.e.

ZONG welcomes its customers. Also it offers the outward communication through the word

All by promising custome rs the futuristic ideas and products.

Brand Values

Evolving

Innovative

Human

Trustworthy

Quality Conscious

If we closely observe ZONG brand values, we would see that their emphasis on quality

conscious is being practically applied by the effective implementation of their IT - operations

like usage of SAP and Agile, for their core business operations. The usage of modern technology

equipped with enhanced customization and efficiency, is no doubt, in actual, making them the

leaders of the industry.


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ZONG is one of the largest telecom companies of Pakistan. Being the largest telecom company

in Pakistan, it holds huge telecommunication infrastructure in Pakistan. It is a common sight

that almost every telecom company uses ZONG infrastructure as their basic infrastructure,

whether it is mobile business or other.

Company Background

ZONG is the first international brand of China Mobile, launched in Pakistan in 2008. Thecompany is often cited as China Mobile (Pakistan) or CM Pak. As of June 2013, it had asubscriber base of more than 20 million.

China Mobile Communications (CMCC) incorporated in the year 2000, is the world's largesttelecom operator, dominating 66.5% of Mainland Chinas market share. It operates as a 100%

state owned entity in 31 different provinces and employs in excess of 175,000 people. CMCCnetwork covers 99.7% of Chinas population and has over 900,000 BTS sites. Its customer baseis over 672 million and has operating revenue of $8.3 billion.

CMCC is perhaps the only cellular network that provides uninterrupted, reliable coveragethrough tunnels, on highways, inside sky scraper elevators as well on top of Mount Everest. Ithas a global presence in Hong Kong, Pakistan, San Francisco and London and currently hasinternational roaming partnerships with 406 operators in 237 countries and regions.The company is listed on the New York Stock Exchange as well as the Stock Exchange of HongKong Ltd. By the end of 2011, 2G base stations exceeded 700,000 and 3G base stationsincreased to approximately 220,000 covering country level and above cities which strengthenedthe depth and contiguous coverage in the main districts.

The four main brands for CMCC are; Gotone (for high-end subscribers), Easy-own (for mass), M-Zone (for youth), G3(for 3G). TD-LTE is the future network, which will carry high bandwidth andhigh quality wireless broadband business. The development of TD-LTE is a core component ofCMCCs development strategy, where the Group will actively promote TD -LTE scale-trial andcommercialization and drive the technical and supply chain integration of TDD and FDD.

CMCCs first overseas subsidiary, China Mobile Pakistan has the license to offer and operatevoice, data and all value added services in the entire country. One of the fastest growingcellular markets in the world, Pakistan is a key region that is likely to offer expansionopportunities as well as the chance to make a difference in the lives of a growing clientele thatis demanding and understands and appreciates better quality and service standards.
http://en.wikipedia.org/wiki/China_Mobilehttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/China_Mobile


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ZONG is committed on attracting and retaining the best human resource from all over Pakistan.It also provides a working environment which satisfies the professional and personal needs ofits employees.


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Interview Results

Interview was taken from one of the IT employees at ZONG headquarters, located in

Islamabad, who told us various things about the software usage details in their organization.

We came up with the following results after the interview:-

Starting with the SAP initiation process at ZONG in 2008, we were told that ZONG

incurred around one -hundred and nineteen Million , when it started its operations with SAP.

ZONG is using A-SAP module of SAP software, where they used just Agile (scrum) methodology

concepts when their operations were in the rapid product development phase. They at the

present moment are operation in their maturity phase, where according to them; they do not

require any such Agile implementations. At the present moment they consider their presenceon MEGA SCALE as their core competency, with the further enhancement in their system

selling strategy and system operations with advanced up-gradation in their current SAP module,

with the passage of time.

Implementation of ERP in ZONG

In order to make employees perform the business activities in better way they were in

need of an integrated system in ZONG which led to initiate an integrated ERP project in March2007. ZONG selected SAP keeping in view the requirements of the functionaries and business

processes. ZONG called for the vendor selection process and received RFPs from almost 10

vendors. The entire project was expected to take 20 months with significant deliverables every

six months. Before ERP implementation, the training was conducted at functional level in the

form of structured training sessions.


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Challenges faced during SAP implementation

The implementation process made ZONG face challenges such asconflict within the

management because, for the whole management to understand the working of ERP their

involvement was necessary but most of the top management was busy in their daily operations

and re- engineering some of the business processes for aligning them with ERP processes and

collection of data from different departments.

Another complex challenge faced by the execution team was relocation of the data and

converting them to the new format; so that it can be readable by the new system and

understandable by the users and management for making decisions.The management had

some idea about this issue and they were facing quite many challenges during implementation

phase because they had to restructure departments and their operations including personnel

based on their skills so that they can be aligned with the implementation.

This process required daily meeting and discussion about incentives for work force

reduction. Moreover the biggest challenge here was from stakeholders and top management

who wanted to see the results produced by this system and how it can help the organization for

smooth and efficient business operations and how it can help compete with other subsidiaries

and the implementation team organized training sessions for the management including the

users based of different skills which was time consuming. The implementation teams have to

prepare and compile manual instruction documents; CDs and books for the users to

understand the new system and how it can help their daily operations including the top

management.

ZONG point of view was that the current hardware should be used for working out with

the new ERP system but there was a conflict between technical department and the top

management because the technical department knew that old heritage systems and hardware

are not feasible for the new ERP system. ZONG decided to adopt the new hardware platform

after discussion with implementation team in the initial phase. These issues made ZONG


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perform necessary adjustment in their cost. However, during the implementation phase while

interacting with the users for gathering knowledge some peoples were reluctant to sharing

knowledge. The reasons were due to the organizational policy and also because some peoples

did not want their work to be brought up in front of others.

ZONG required the knowledge for some of their desired business processes and

informationhiding and barriers was creating problems for the implementation team to align the

customprocesses along with the SAP processes. The knowledge was necessary to construct the

newbusiness processes so the management used a systematic way to capture knowledge for

the desired processes. As the documents were compiled manually some terms were misleading

because of the phenomenon that manual work is sometimes prone to human errors.

ZONG wanted to customize some of the business processes because of their specific

needs. The implementation team has to focus towards how to align the customization along

withthe SAP processes. It was a challenging task because it does not only involve aligning the

processes but also making changes to meet the specific need of ZONG business strategy. ZONG

wanted to improve the employees performance by providing them with knowledge of

particular functional area and they were asked to take part in other functional activities apartfrom their normal daily routine work. This situation was burden on employees because now

they have to take part in two activities, one their normal routine work andsecond the

requested work load. It distressed the functional efficiency of the employees.

ZONG also has to work on the customer response due to no access of updated

information tothe customer representatives and the problem of dealing with retaining

subscribers. ZONG along with the implementation phase was restructuring some areas whichcaused downtimeto the customers and its services.


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DEVELOPMENT PLUS MANAGEMENT, DURING SAP IMPLEMENTATON PROCESS

Material Management

It dealt with the basic data, purchasing, inventory management and invoice verification

of ZONG.

Human Capital Management

It dealt with organizational management and employee master data.

Financial Controlling

Encompasses accounts payable, invoice verification, bank accounts, payable, receivable,

general ledger, extended general ledger and credit management, control upon profit center

accounting, consolidation and business planning, treasury / risk management and costing.

Network Life Cycle Management It dealt with major maintenance and operations activities relating to access, switching

and transmission networks. It dealt with different activities of the project for example project

creation, material planning, project scheduling, ad project execution.

Human Resource

The impact of change in an organization tends to affect all equally especially the human

capital which is the driving force of the organization. One of the key effects of the above

technological change in ZONG would bring about an alteration in the culture of the

organization. For example, people who are tech-savvy will be preferred than those who are


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resistant to technological advancement. Moreover, all records will be maintained on the

software rather than the traditional file keeping.

It is highly likely that the HR at ZONG would seriously consider lay-offs by minimizing its

losses as those employees who are not technologically apt would be asked to let go. The HR is

required to play its role towards the betterment of the organization as a whole and is entailed

to remove all barriers that act as a hindrance between the achievements of the goals.

Training is an integral component of the HR. While implementing such advanced software at

ZONG, it would be necessary to ensure that the required personnel who are operating on the

respective software possess the ability to run the software and are familiar with all its

dimensions. This is where regular training workshops for the employees will be required to be

administered by the HR at ZONG. The HR also needs to make sure that employees attend these

workshops and that they are scheduled after regular work hours so as no one gets to miss a

session. Training sure does take up a lot of time, effort and costs. The cost of hiring qualified

technical trainers is to be borne by the organization. But its results will be harvested in the long

run.

Marketing

Internal marketing can be used at ZONG to initiate awareness about SAP/AGILE.

Through this process the employees of ZONG can be motivated and empowered to work as a

team for the overall wellbeing of the customers and thereby the company itself. This is actually

the core to success of a company. A harmonized effort within ZONG would be an utmost

necessity to provide customers with services at a desired level. If ZONG is unable to deliver the

service they promise their customers in the marketing campaign, they will fail for sure.

Therefore to keep that promise, ZONG has to have all of its employees at all levels realize what

actually they are going to deliver.


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Financials Calculation of ROI (Projected)

Estimated cost for the implementation of the SAP at ZONG was around Rs. 119 million.

Following is the impact of the cost on the Return of Investment (ROI) in the Income Statement

of ZONG before and after the initiation.

Projected Income Statement for the Year. (Beforethe implementation of SAP)

PKR 000

Revenue 60,038,254

Cost of services (44,898,012)

Gross profit 15,140,242

Administrative and general expenses (9,770,295)

Selling and marketing expenses (5,478,537)

Other operating income 3,596,103

Operating profit 34,875,13

Finance costs (481,745)

Profit before tax 3,005,768

Taxation 75,144,2

Profit for the year 2,254,326

Projected Income Statement for the Year. (After implementation of SAP ERP)

PKR 000

Revenue 90,058,289

Cost of services * (77,900,120)

Gross profit 12,158,169

Administrative and general expenses * (8,550,254)


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* After the implementation of SAP, we can see that there is a prominent increase in the yearly

profit of ZONG. As the profits have been increased from PKR 22, 5432, 6000 to

PKR 57, 9500, 4000

Selling and marketing expenses * (3,489,500)

Other operating income 7,890,002

Operating profit 80,084,17

Finance costs* (281,745)Profit before tax 7,726,672

*Taxation (19,31,668)

Profit for the year 5,795,004


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Cost of services include the cost of investment when SAP was implemented in ZONG

(as per told by the interviewee) cost of implementation was around PKR 119 Million.

Administrative and general expenses include the cost of training, cost of technical

expertise, cost of layoffs, infrastructure cost etc,

Selling and marketing expenses include the overall general marketing expenses of the

ZONG products plus the cost for internal marketing, as when creating awareness about

the SAP inception amongst internal employees at ZONG etc,

We assume that with the implementation of SAP, the financial costs are reduced, as

with SAP, there is more risk management, more data customization, and more accuracy

of the results. So fewer costs are there with fewer risks present.

Tax rate has been assumed to be 25 %.

In the above graph 1 indicates profits before SAP ERP implementation in ZONG,

while 2 - shows the ZONG yearly gains after operating with SAP ERP

The projected return on investment will be as follows:-

ROI = 90,058,289 - (77,900,120) / (77,900,120) = 15.6 % approximately equals to 16 %.

0

2,000,000

4,000,000

6,000,000

1 2


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*So company is able to get good returns on investments done.

*Cost of investment equals the cost of investment in SAP plus the added costs of

implementation (other service charges/expenses).

Benefits of SAP to ZONG (Interview Results):-

For the training costs they said that they did all this implementation in co-ordination

with Siemens Pakistan that helped them to save up a large amount of cost for trainings.

So their post-implementation cost was basically shared with Siemens Pakistan. A significant cut on the number of employees hired, that saved both time and cost for

recruitment proceedings. From 2005 when there were around seventy-six thousand

employees, it is with the implementation of SAP, that their major chunk of core business

is on SAP, and so the in 2012, their no. of employees were just twenty-four thousand.

According to the interviewee, they are in their post implementation era, using an

updates version of ERP. In comparison to the time when there was no SAP, there used

to be problem with the information management as everything had to be done in silos

and it required a lot of time to monitor each and every department separately. It is with

the introduction of SAP that their life has become easier, and they are now able to

organ ize and integrate various departments data or information, well.

Financial cycle has improved a lot. Financial data is managed well and properly, in less

time.

ZONG operates with ECC.6 (ENTERPRISE CENTRAL COMPONENT) module of SAP ERP. SAPERP consists of several modules, including utilities for marketing and sales, product design, field

service, and development, production and human resources, inventory control, finance and

accounting. SAP ERP integrates companys data from the separate modules to provide the

organization with enterprise resource planning.


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Although there can be major benefits for customers of SAP ERP, but one thing to worry

about is that the implementation and training costs are a bit expensive. Many companies

experience problems when implementing SAP ERP software, such as failing to specify their

operation objectives, absence of a strong commitment or positive approach to change, failing

to deal with organizational differences, failing to plan the change to SAP ERP properly,

inadequate testing etc,. All these factors basically establish that having a successful

implementation of SAP ERP is either possible or not. If SAP ERP is implemented correctly an

enterprise can go from its old calculations system to a fully integrated software package.

Potential benefits comprise of e an efficient business process, lead time reduction (reduction in

the latency between the initiation and execution of a process).and inventory reduction.

SAP (Systems Applications and Products in Data Processing) (SWOT Analysis)

SAP computer software is designed by SAP AG and very popular worldwide for to coordinate all

the resources, information and activities needed to complete a enterprise wide information

system's billing included accounting and finance. It is very popular computer based software

and widely used for billing around the globe. It has many releases named SAP 3.1; SAP 4.0B and

the latest one is SAP 4.70.

SAP ERP software was manufactured mainly to target business software requirements. The ERP

software applications provided by SAP helps a lot to develop the operational efficiency and

productivity of business process of any of the enterprise. SAP Software uses the concept of

modules.


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SAP provides a lot of advantages that made it so useful and popular. Some of the advantages

are as below:

(Strengths or Opportunities)

1. It allows easier global integration.

2. It allows bridging some barriers like currency exchange rates, language, and culture

automatically.

3. It provides real time information.

4. It reduces the possibility of redundancy errors.

5. By using it the company or enterprise have more efficient work environment.

6. It provides a good knowledge like an expert about building and implementation of a system.

Along with the advantages listed above SAP also have some drawbacks that can be listed asbelow:

(Weaknesses or Threats)

1. A contract is required to sign by the company to use SAP software and it holds thatcompanies to the vendor until the expiry of the contract.

2. It is inflexible because sometimes the vendor package does not fit a companys business

model.

3. To implement and use SAP can be very expensive.

4. This is not secure as a risk of project failure is there.

So as we saw a lot of advantages and disadvantages are associated with SAP software so these

should keep in mind before going for SAP software. If a good SAP software is used it will let you

have the maximum advantages.


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Introduction to Agile (SWOT ANALYSIS)

Agile software development is a group of software development methods based on iterative

and incremental development, where requirements and solutions evolve through collaboration

between self-organizing, cross-functional teams. It promotes adaptive planning, evolutionary

development and delivery, a time-boxed iterative approach, and encourages rapid and flexible

response to change. It is a conceptual framework that promotes foreseen interactions

throughout the development cycle. The Agile Manifesto introduced the term in 2001.

Agile Manifesto

In February 2001, 17 software developers met at the Snowbird, Utah, resort, to discuss

lightweight development methods. They published the Manifesto for Agile Software

Development to define the approach now known as agile software development. Some of the

manifesto's authors formed the Agile Alliance, a nonprofit organization that promotes software

development according to the manifesto's principles.

The Agile Manifesto reads, in its entirety, as follows:

Through this work we have come to value:

Individuals and interactions over processes and tools Working software over comprehensive documentation

Customer collaboration over contract negotiation

Responding to change over following a plan

Agile methodolgy follows this:

Individuals and interactions in agile development, self-organization and motivation are

important, as are interactions like co-location and pair programming.

Working software working software will be more useful and welcome than just

presenting documents to clients in meetings.


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Customer collaboration requirements cannot be fully collected at the beginning of the

software development cycle, therefore continuous customer or stakeholder

involvement is very important.

Responding to change agile development is focused on quick responses to change and

continuous development.

Criticism (Drawback)

(Threat)

Agile methodologies can also be inefficient in large organizations and certain types of projects

Agile methods seem best for developmental and non-sequential projects. Many organizations

believe that agile methodologies are too extreme and adopt a hybrid approach that mixes

elements of agile and plan-driven approaches.

Advantages of Agile model

(Strengths)

Customer satisfaction by rapid, continuous delivery of useful software.

People and interactions are emphasized rather than process and tools. Customers,

developers and testers constantly interact with each other.

Working software is delivered frequently (weeks rather than months).

Face-to-face conversation is the best form of communication.

Close, daily cooperation between business people and developers.

Continuous attention to technical excellence and good design.

Regular adaptation to changing circumstances.

Even late changes in requirements are welcomed

Disadvantages of Agile model

(Weaknesses):-

In case of some software deliverables, especially the large ones, it is difficult to assess the

effort required at the beginning of the software development life cycle.


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There is lack of emphasis on necessary designing and documentation.

The project can easily get taken off track if the customer representative is not clear what

final outcome that they want.

Only senior programmers are capable of taking the kind of decisions required during the

development process. Hence it has no place for newbie programmers, unless combined

with experienced resources.

When to use Agilemodel?

(Opportunity):-

When new changes are needed to be implemented. The freedom agile gives to change is

very important. New changes can be implemented at very little cost because of the

frequency of new increments that are produced.

To implement a new feature, the developers need to lose only the work of a few days, or

even only hours, to roll back and implement it.

Unlike the waterfall model in agile model very limited planning is required to get started

with the project. Agile assumes that the end users needs are ever changing in a dynamic

business and IT world. Changes can be discussed and features can be newly affected or

removed based on feedback. This effectively gives the customer the finished system they

want or need.

Both system developers and stakeholders alike, find they also get more freedom of time

and options than if the software was developed in a more rigid sequential way. Having

options gives them the ability to leave important decisions until more or better data or

even entire hosting programs are available; meaning the project can continue to move

forward without fear of reaching a sudden standstill.
http://istqbexamcertification.com/what-is-waterfall-model-advantages-disadvantages-and-when-to-use-it/http://istqbexamcertification.com/what-is-waterfall-model-advantages-disadvantages-and-when-to-use-it/http://istqbexamcertification.com/what-is-the-purpose-and-importance-of-test-plans/http://istqbexamcertification.com/what-is-the-purpose-and-importance-of-test-plans/http://istqbexamcertification.com/what-is-the-purpose-and-importance-of-test-plans/http://istqbexamcertification.com/what-is-the-purpose-and-importance-of-test-plans/http://istqbexamcertification.com/what-is-waterfall-model-advantages-disadvantages-and-when-to-use-it/


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References

Details on ZONG Financials, Accessed: 10 th May 2013

Available at: http/:/ZONG.com.pk/financial_items.php/.

Details on ZONG company, Accessed 11 th May, 2013

Available at: http/:www.ZONG.com.pk/financial_items.php/.

Information on SAP and Agile, Accessed 12 th May, 2013

Available at:http://saptech-edna.blogspot.com/2011/05/waterfall-methodology-vs-agile .html //

Details on SAP ERP, Accessed 13 th May, 2013

Available at: http://en.wikipedia.org/wiki/SAP_ERP //

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