Sustainability Performance: At a glance (31 March 2012) - Safaricom

Innovation
The Gate Process — rapid, responsible
innovation
This process helps to ensure regular
evaluation during product development
and only allows a product to move to the
next ‘Gate’ once the Gate committee,
the CEO and Executive Committee, is
convinced the product is ready to move
to the next level. The process is divided
into the normal phases for a project,
although projects can be fast tracked
due to urgency or technical readiness.
The gates start at concept overview and
end at project management and post
implementation.
There are a number of sub-risks associated
with innovation, including:
• Stagnation
Safaricom needs to ensure that it does
not stagnate within the market, which
could lead to a loss of revenue growth
and market leadership to our competition.
Constantly developing innovative products
and solutions is the most effective way of
mitigating this risk.
• Cost
Most social innovations are ideas brought
to Safaricom by partners. Ideas usually
come from three sources and require three
different levels of engagement:
• Category 1 —— partners who have
ready-developed solutions and are
simply looking to integrate into the
Safaricom network, with minimum
modifications. The business model
adopted upon commercialisation is
normally a revenue-sharing model.
• Category 2 — partners who have
ideas, but lack the capacity to develop
the solutions. They partner with us to
develop and integrate the solution.
The business model adopted upon
commercialisation is normally either
revenue-sharing or outright purchase.
• Category 3 —internally developed,
integrated and taken to market.
In order to keep the overall costs of
social innovations low, the majority of
projects are Category 1 and 2, which
require minimum budget. Since most
of the inclusion services require our
partners and their expertise to take
the products to market, Safaricom has
adopted a revenue-sharing model to
reflect the shared risk.
• Competitive edge
Increasing competition between players in
the telecommunications market has driven
prices and revenues down. Safaricom
has chosen to not be drawn into these
‘price wars’ and to gain a competitive
edge by providing value added services
that complement its basic voice and data
offerings, instead.
As well as helping us to maintain our
competitive edge, this continuous
innovation and staying ahead of the
technology curve helps us reduce the risk
of new technology disruption.
• Speed of deployment
Cross-functional teams are used to
accelerate development, integration
and getting to market. The same crossfunctional
teams are also involved in
testing the service and determining
readiness to launch.
Streamlining internal administrative
processes also helps reduce deployment
timelines and this has been achieved
by standardising as much internal
documentation and as many internal
processes as possible, for example, the
introduction of a cross-departmental Service
Level (SL) document that has standardised
project plans and delivery processes.
• Consumer awareness
To keep our customers engaged and
loyal, Safaricom is focusing on social
innovations that meet health, education
and agriculture needs. These innovations
give our customers a reason to remain with
Safaricom as the competition grows.
Stakeholder group
Medical service providers
Agriculture service providers
Education service providers
Content aggregators
What we engage them on:
As well as developing solutions, Safaricom
needs to ensure its target markets are aware
of them and has adopted an innovative below
and through-the line marketing approach,
which keeps communication costs low while
effectively generating the required levels of
customer awareness.
These partners provide the required medical expertise and are also
responsible for running our mobile health services. They get the
necessary approvals from the medical regulators and indemnify
Safaricom from any medical responsibility.
In running Daktari-1525, a tele-triage service, for example, Call-adoc
Ltd is responsible for recruiting and scheduling doctors, getting
the required approvals from health boards and ensuring patient
confidentiality is maintained, while we are responsible for keeping the
service level high, for marketing the service and for ensuring service
uptake is above the necessary thresholds.
These partners offer the agricultural expertise required to run our
agro-based services, while we provide the enabling technology for
farmers to access services, content and information. In this instance,
our partners champion the interactions with farmers.
These partners are experts in education and are approved by the
Kenya Institute of Education (KIE). Our engagement with them is to
provide learning courses and content on a revenue-share basis.
These partners are responsible for ensuring course content quality and
we provide the platform to manage online and mobile learning. As in
other services, Safaricom provides integration into payment systems
for the courses and content.
These are VAS providers licensed by the CCK to offer content to
network operators.
Safaricom engages with content aggregators on a revenue-share
basis. Safaricom provides them with connectivity and access to the
Safaricom network elements to facilitate their services.
68 Safaricom Sustainability Report 2012 Safaricom Sustainability Report 2012 69
Innovation
Stakeholders with whom we engage
From an innovation perspective, our key stakeholders include: our shareholders, customers, solution
partners, NGOs, universities, research organisations, regulators and various Government ministries. The
table below describes each stakeholder group and what we engage them on.