Executive Project Management - MBLEPMY

Group Assignment 2: Field Study

Group Name: ZIM0112A

Module Lecturer: Prof P. M. D. Rwelamila

Field Study Academic Mentor: Dr S. Henning
GROUP MEMBER DETAILS
TAFADZWA COMFORT NYAMBIRA 77454685 tcnyambira@gmail.com 100%
VIMBAYI COLLETA MAWIRE 77442350 vimbayim@equityproperties.co.zw 100%
PRINCE BHURABHURA 77457374 bhurabhuraprince@gmail.com 100%
CHRISTINA TAPESANA 77433351 ctapesana@cbz.co.zw 100%
HAPPIAH JANE REVAI 77459458 hrevai@gmail.com 100%
COURAGE SHONIWA 77435834 shoniwac@ta.co.zw 100%
NORMAN TAFADZWA MHONDIWA 77442555 nmhondiwa@cbz.co.zw 100%
NIXON NEHANDA 77480465 77480465@mylife.unisa.ac.za 100%

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TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ............................................................................................................... 3
2. INTRODUCTION ......................................................................................................................... 5
3. APPROACH TO FIELD STUDY ....................................................................................................... 5
4. ORGANISATIONAL PROFILE AND CHOSEN PROJECT .................................................................... 7
5. COMPLIANCE OF THE PROJECT TO KEY DEFINITIONS OF A PROJECT ........................................... 9
6. PHASE 1: THE BUSINESS ENVIRONMENT SURROUNDING THE PROJECT .................................... 11
6.1. BACKGROUND ON MACRO ENVIRONMENT ...................................................................... 11
6.2. ENVIRONMENTAL SCAN OF THE ZIMBABWEAN ECONOMY .............................................. 12
6.2.1. ECONOMIC ............................................................................................................... 12
6.2.2. POLITICAL, LEGAL AND REGULATORY ........................................................................ 17
6.2.3. SOCIAL...................................................................................................................... 18
6.2.4. TECHNOLOGICAL ...................................................................................................... 18
6.3. MICROENVIRONMENT OF ECOCASH................................................................................. 19
6.3.1. SWOT ANALYSIS OF ECOCASH................................................................................... 19
6.3.2. SUMMARY OF SWOT ANALYSIS................................................................................. 25
6.4. MARKET ANALYSIS ECOCASH ............................................................................................ 26
6.4.1. PORTER’S FIVE FORCES MODEL................................................................................. 26
7. PHASE 2: THE STRATEGIC POSITIONING OF THE PROJECT ......................................................... 26
7.1. ANSOFF MATRIX – ECOCASH ............................................................................................ 26
7.2. REQUIREMENTS FOR MOBILE MONEY SERVICE IN ZIMBABWE.......................................... 28
7.3. THE FIVE FORCES MODEL – ECOCASH ............................................................................... 29
7.3.1. THREAT OF NEW ENTRANTS ..................................................................................... 30
7.3.2. COMPETITIVE RIVALRY ............................................................................................. 31
7.3.3. THREAT OF SUBSTITUTES .......................................................................................... 32
7.3.4. BARGAINING POWER OF SUPPLIER ........................................................................... 33
7.3.5. BARGAINING POWER OF BUYERS .............................................................................. 33
7.4. VALUE CHAIN ANALYSIS ................................................................................................... 34
7.4.1. INTERNAL ANALYSIS ................................................................................................. 34
8. PHASE 3: THE PROJECT ENVIRONMENT AND DYNAMICS WITHIN THE ORGANISATION ............. 36
9. PHASE 4: RECOMMENDATIONS TO THE BOARD ....................................................................... 43
10. STUDENTS’ PERSONAL REFLECTIONS .................................................................................... 49
LIST OF REFERENCES ........................................................................................................................ 53

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1. EXECUTIVE SUMMARY
The roll-out of a mobile money technology by Econet Wireless Zimbabwe in October 2011
was of strategic significance as it had a nation-wide scope and formed the bases for future
sustainable increase in the telecommunications group’s revenue. We found interest in
reviewing this EcoCash project which surpassed USD 1 Million mark in terms of dollars
invested right from its onset. The roll-out of EcoCash required specific resources in terms of
technology and skills separate from the organisation’s primary operations. Econet Wireless
Zimbabwe is the largest of Zimbabwe’s three mobile telephone operators (Telecel and
NetOne being the other two). Although EcoCash would become an additional service offered
to Econet subscribers, it is significantly different from the usual voice and data business.

Project management has become a necessity in managing today’s organisations. The merits
of a project based organisation in project management cannot be overemphasised. Yet many
organisations seem to still be in the process of transitioning themselves towards the ideal
structure recommended for successful project management. Our observation indicates that
there is some resistance in completely embracing project based organisational structures as
organisations are still stuck with the old ways of doing things. Such reluctance can usually be
justified or explained on a case by case basis. As such the transition process takes time, in
many cases years.

Background

The group carried a field study on our organisation of interest, Econet, regarding the
implementation and conduct of its revolutionary EcoCash project. The group analysed
information available from secondary sources, previous research on the subject matter and
discussed with personnel familiar with the history of the EcoCash project.

Objective of the field study

The objective of the field study was to two pronged:

 Analyse the organisational set-up at Econet (the parent for the EcoCash project) and
the business environment within which this project was implemented
 Analyse the project environment within Econet and the dynamics of managing a
project at the strategic level with special focus on Econet and the EcoCash project

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Tools used

The team used a variety of tools to analyse the Econet organisational set-up and its business
environment. PEST analysis was used to determine wider business environment with an
impact on the EcoCash project. SWOT analysis was used to determine the strengths,
weaknesses, opportunities and threats that confront Econet. The porters five forces model was
used to analyse the competitive forces within EcoCash’s industry. Ansoff matrix was used to
determine the product market strategy that Econet used when introducing EcoCash.

The team also analysed the dynamics around project management within the economy
including the planning that goes into new projects, the staffing, project teams, strategic
importance of projects, upper management control, resource support, importance of deadlines
and timelines etc.

Results

The field study revealed that EcoCash as a project was implemented during a difficult time in
Zimbabwe’s economy characterised by high unemployment, declining economic growth, low
levels of demand and liquidity challenges (lack of cash) within the economy. However, the
field study revealed that EcoCash was able to turn these negatives into positives and exploit
them to its benefit riding on the back of Econet’s large subscriber base.

The field study also revealed certain strengths in the way projects are managed at EcoCash.
The main one being the involvement of senior management in projects and resource support.
However, they are glaring gaps which also came to the fore chief among them being the fact
that Econet has not fully embraced the project based organisation concept. It is thus our
belief that there is more that Econet still needs to do to become a truly project based
organisation and be able to enjoy from the benefits that accrue from being structured as such.

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2. INTRODUCTION

Over the years project management has evolved from just being a tactical concern to being a
strategic concern. Companies are increasingly linking their projects to their overall strategy.
The accountability, flexibility, innovation and speed associated with project managements is
enabling organisations to deliver products on the market faster, cheaper and better. In other
words project success is now vital for long term business success and project management
has become indispensable for business results. It is with this in mind that we conducted a
field study on a prominent mobile money service (EcoCash) project undertaken by Econet
Wireless Zimbabwe (Econet) a network operating giant in the country. The project was of
strategic significance to Econet. The purpose of the study was to evaluate the mobile money
service project by assessing the potential impact of the Zimbabwean business environment on
the project, assessing the strategic positioning of the project in Econet, assessing the project
environment in the organisation and the dynamics of initiating a project efficiently at
Econet’s strategic management level. We conclude by providing recommendations that can
improve the effectiveness of supporting a project management environment at Econet.

3. APPROACH TO FIELD STUDY

After careful consideration and deliberations the group eventually resolved to select Econet’s
EcoCash project. The decision was motivated by the strategic significance of the project to
Econet, the size of the project, the manner in which the project has altered the financial
services in the country and the availability of information. The group appointed a project
leader who was responsible for coordination of the field study, monitoring progress of the
study, overseeing subgroups, ensuring the study is moving as per the set timetable and that
the report is completed on time and submitted. The group then created four subgroups to
tackle the four phases outlined in the study. A time table to guide the group was compiled.
Below is the group’s timetable.

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Table 1: Time-plan for completion of field study by 29 August 2014

30 May 30 June 15 June 31 July 21 Aug 29 Aug 29 Aug

2014 2014 2014 2014 2014 2014 2014

Selection of project

Interviews of relevant
Econet staff

Collection of all data

Data compilation

Write report

Finalise report

Submit report

Not much information was made available by Econet on the modalities of the EcoCash
project. However we were able to get some information on how projects are identified,
initiated, approved, implemented and the manner in which the project teams are set up at
Econet. Another notable challenge was that an independent company has since been set up to
operate EcoCash thus more information was not easily accessible at Econet.

The group also collected their information from secondary data. Econet is a listed company
thus some of the information was collected from their financial statements, annual reports,
analyst briefings and other publications. As a result of its success EcoCash has sizeable
reports and articles available on media platforms. Each subgroup was responsible for
compilation of data relevant to its phase and writing the report for that particular phase.

The group ensured optimality by;

 Making use of some of its group members who work for Econet. Three of the group
members work for Econet as Operations Manager, Transmission Planning Engineer
and Radio Network Support Engineer
 Making use of reports, press statements and financial statements released by Econet.
 Checking collected information for correctness and completeness.
 Constantly meeting as group and sharing insights, brainstorming and reviewing work
done at that point.

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4. ORGANISATIONAL PROFILE AND CHOSEN PROJECT

Econet Wireless is a diversified telecommunications group with operations and investments

in Africa, Europe, South America and the East Asia Pacific Rim, offering products and
services in the core areas of mobile and fixed telephony services, internet and satellite. It is
headquartered in South Africa. Its flagship subsidiary is a Zimbabwean listed telecoms
company Econet Wireless Zimbabwe (Econet) which is the country’s largest mobile
telecommunications group. Econet is a holding company with several businesses involved in
various sectors of the economy and is listed on the Zimbabwe Stock Exchange (ZSE). Over
the years Econet has grown to be Zimbabwe’s leading technology company. It is one of the
largest quoted companies on the ZSE in terms of market capitalisation and directly and
indirectly employs in excess of 15 000 people. Its market capitalisation is in excess of US$1
billion (Econet Annual Report, 2013).

Econet’s activities include mobile cellular networks, enterprise networks, fibre optic cables,
and satellite services. It also provides payment solutions to banks across Africa. Econet has
close to 9 million subscribers making it the most dominant mobile operator in Zimbabwe
representing 66% of the mobile telecommunications market. Primarily through Econet's
continued investment in capacity, Zimbabwe's mobile penetration rate has increased from
74% in 2012 to 103% in 2014 (Econet Analyst Briefing, 2014). To date Econet has invested
over US$1 billion in network infrastructure in Zimbabwe. As a result its geographical
coverage is the most extensive in Zimbabwe.

In order to diversify revenue streams and deal with the limited scope of growth in voice and
short message service (sms) Econet launched EcoCash in 2011. EcoCash is a wallet based
mobile money service with offerings such as person to person (P2P) remittances, merchant
payments, bank interoperability, bill payments, bulk payments, payroll among other things. It
is an innovative mobile payment solution that enables Econet customers to complete simple
financial transactions such as sending money, buying prepaid airtime and paying for goods
and services.

Econet’s goal is to become the dominant payment service and infrastructure in Zimbabwe by
ensuring that EcoCash becomes the primary mode of payment by Zimbabweans. According
to Econet’s CEO Douglas Mboweni the arrival of EcoCash means that the millions of

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Zimbabweans without access to traditional banking services will now be able to send and
receive money, without opening bank accounts (Moyo, 2011). Econet saw an opportunity in
the growing Zimbabwean informal sector where payment services are lacking and mobile
penetration is high

According to the World Bank mobile money transfer (MMT) services have significantly
stimulated economic activity in other African markets, especially in East Africa. In 2010
alone, some 14 million Kenyans transferred US$7-billion across their country via mobile
money transfer. According to estimates by global telecoms researchers Pyramid Research, the
value of money transfers over mobile networks in Africa will reach US$200 billion by 2015,
almost 8% of Africa’s nominal GDP. They go on to say that in 2012 there were $519 billion
remittance payments and of the said amount US$1.8 billion was estimated to have been sent
to Zimbabwe (Moyo, 2011). Hence EcoCash is well positioned to benefit from such
significant scales of transfer.

With its EcoCash mobile money service, Econet intends to position Zimbabwe as the most
advanced mobile money market in Africa, establishing the country as the most “cashless”
society in the region. Econet is also seeking to provide financial stability and inclusion to a
country that experienced economic instability for over a decade before the introduction of the
multi-currency system. Econet’s goals extend to the banked and unbanked members of
society by offering a range of services, from basic person-to-person (P2P) transfers to
enhanced mobile wallet services.

In 2012 Econet set up an independent company called Econet Services which now operates
the EcoCash project. Econet Services has its own management, governance, and resources.
This unique business model had a beneficial impact on the development and performance of
the EcoCash services. According to Levin (2013) 31% of Zimbabwe’s adults registered for
EcoCash within 18 months of its launch. EcoCash’s fast start was achieved through an
effective operational strategy, but also through an unusually large investment in mobile
money by Econet. Excluding customer support, EcoCash staff number totals 110 full-time
employees and represents the largest component of Econet’s marketing budget. Econet’s
leadership justifies this investment as necessary to achieve its equally big ambitions. Part of
its strategic moves was to begin by focusing on mobile money services based on person-to-
person (P2P) money transfers. This basic offering enabled EcoCash to rapidly build a core

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customer base. Additional services have since been added to EcoCash to allow it to provide a
more fully formed mobile wallet service.

To date EcoCash has 3.5 million registered customers and 4.2 million people have been
impacted by EcoCash. According to Econet’s CEO EcoCash has been cited as the second
fastest growing MMT service after the world renowned M-PESA system that operates in
Kenya (Econet Annual Report, 2013). To date EcoCash has processed over 170 million
transactions worth over US$4.5 billion since its launch.

In September 2013 Econet launched a money transfer scheme under its EcoCash mobile
platform that makes it easy for Zimbabweans living in South Africa to send cash back home.
The company decided to launch the scheme in South Africa after impressive results on the
EcoCash mobile phone platform in Zimbabwe. The new scheme will compete with Western
Union, Money-Gram, Mukuru.com and other money transfer agencies. Zimbabweans living
in the diaspora send close to US$500 million to Zimbabwe every year (Chanakira, 2010).

EcoCash has also struck a landmark agreement with MasterCard which is set to increase its
financial inclusion through the provision of electronic payments in Zimbabwe. The
collaboration will result in more than three million MasterCard debit cards being issued to
EcoCash customers in the next five years (Bizday, 2014). This is the first time that physical
MasterCard debit cards are available to people using mobile money services in Africa, and is
the largest rollout of secure payment cards in Zimbabwe to date.

5. COMPLIANCE OF THE PROJECT TO KEY DEFINITIONS OF A PROJECT

Kerzner (2004) defines a project as an endeavour that has a definable objective, consumes
resources and operates under time, cost and quality constraints. He goes on say that projects
are regarded as activities that are unique to the company. The EcoCash project appears to
have complied with the key definitions of a project. The EcoCash project was certainly
unique to Econet. Econet is a network operator which predominantly focuses on cellular
networks as mentioned above. The mobile money transfer was a first for Econet and is
regulated by different statutory authorities such as the Reserve Bank of Zimbabwe. Econet’s
goal is to become the dominant payment infrastructure in Zimbabwe.

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The project carried definable objectives which include;
 Converging mobile telecommunications with financial services in line with global
trends.
 Making EcoCash a way of life for Zimbabweans by creating mobile wallets which
can be used for all their payment needs.
 Providing financial needs for the poor in Zimbabwe.
 Growing new revenue streams.

The EcoCash project consumed significant resources. Econet invested millions of dollars to
set up the network system and the EcoCash platform. Their investment in capital equipment
has seen them rolling out of WiMax Base Stations throughout the country. Econet has also
invested considerable amounts in its agency network. EcoCash is currently consuming the
biggest portion of Econet’s marketing budget. Furthermore Econet did not just create a new
department for EcoCash but established a completely new entity to house and focus on
EcoCash services. Another major investment was the recruiting of hire calibre executives
who were bringing experience from a range of relevant industries and African markets
(Levin, 2013). Lastly Econet acquired TN Bank for US$20 million to accelerate the
convergence of mobile telephone and financial services.

The EcoCash project was operated under time, cost and quality constraints. The project was
broken down into phases with a total budgeted costs of US$6.25 million with specific
deadlines for the completion of each phase. Kerzner (2004) also says that there are others
who contend that a project should also be defined as a multifunctional activity because the
role of the project manager has become more of an integrator than a technical expert.
However Econet appears to not fully comply with this aspect of the definition as there is only
one project manager (PM) in the entire organisation who is responsible for coordinating all
the different projects in Econet. The PM appears to not play the role of an integrator but is
more of an administrator with little or no power to make critical decisions. It has also been
noted that managers from the different departments still want to operate in a hierarchical way
where departmental managers remain with control on some aspects of the project.
Furthermore they are not always keen to release their subordinates thus giving the PM little
power to run the project with his/her desired team.

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6. PHASE 1: THE BUSINESS ENVIRONMENT SURROUNDING THE
PROJECT

6.1. BACKGROUND ON MACRO ENVIRONMENT

Following a decade of hyperinflation which had rendered the local currency, the Zimbabwean
Dollar, worthless coupled with negative economic growth the Government of Zimbabwe
abandoned the local currency and introduced the use of a basket of foreign currencies (multi-
currency system) on 29 January 2009. The basket of currencies had the following currencies
USD, ZAR, BWP, EUR and GBP. Under this multi-currency regime, the United States
Dollar (US$) has been the most actively and significantly traded currency accounting for
about 80% of all national payments transactions (African Economic Outlook, 2011).

Following the changes announced in the monetary policy statement of January 2014 released
by the Central Bank, the Reserve Bank of Zimbabwe (RBZ), additional currencies were
added to the basket of currencies recognized as legal tender in Zimbabwe. There are currently
nine currencies legally trading under the multi-currency framework in Zimbabwe which are
as follows:
 United States Dollar (USD);
 British Sterling Pound (GBP);
 South African Rand (ZAR);
 Botswana Pula (BWP);
 Euro (EUR);
 Australian Dollar (AUD);
 Chinese Yuan (CNY);
 Indian Rupee (INR); and
 Japanese Yen (JPY).

The EcoCash project is likely to benefit from the economic stability brought about by the
introduction of the multi-currency regime in the following ways:
 Preservation of value created by EcoCash through stable currencies which unlike the
Zimbabwean Dollar are not expected to experience significant value depreciation or
loss.
 Planning ahead becomes easier with stability due to less uncertainty and risk.

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  Low inflation rate ensures that the EcoCash product or service offering will not
experience wide fluctuations in pricing and will remain affordable.

6.2. ENVIRONMENTAL SCAN OF THE ZIMBABWEAN ECONOMY

In this paper we have used the PEST analysis to scan and monitor the environment in which
the EcoCash project is being implemented and the effect or likely impact on EcoCash of such
environmental factors. These environmental factors are beyond the direct influence of the
company. According to Bensoussan and Fleisher (2013) environmental conditions affect the
entire strategic management process. We begin by looking at the economic conditions
followed by the political, social and technological factors.

6.2.1. ECONOMIC

6.2.1.1. Liquidity constraints

The Zimbabwean economy in general and the banking sector in particular, is characterized by
an acute shortage of liquidity (the amount of cash and cash equivalents circulating within the
economy). The liquidity constraints have been exacerbated by the fact that the Central Bank
is incapacitated to increase the supply of currency in the economy through printing more
money as there is no local currency in circulation. This shortage of liquidity has seen the cost
of borrowed funds being very high with lending rates averaging 17% as shown in the table 1
below:

Lending rates Min Max Median Mean

30-Days 6 30 18 17.3
60-Days 6 30 18 17.2
90-Days 6 30 17.3 17.0
180-Days 3 30 18 17.0
360-Days 3 30 18 17.0
Over 1 year 6 30 18 18
Table 2
Source: Ministry of Finance National Budget 2014

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This increase in lending rates has seen the operating costs for local businesses going up
resulting in local businesses losing out in terms of price competitiveness compared to their
regional competitors who have been exporting a lot of products into Zimbabwe. This has seen
a number of businesses in Zimbabwe going out of business, downsizing and cutting down on
capacity utilization. For individuals the high lending rates have seen demand for borrowed
funds going down and consequently aggregate demand supported by credit purchases has
gone down.

The prevailing tight liquidity environment is likely to negatively impact EcoCash in the
following ways:
 Low levels of liquidity limit the extent of money flow in the economy between
individuals, companies and other institutions. EcoCash is essentially a money transfer
medium and is thus directly affected by reduced flows of money in the economy.
 Low supply of money result in high interest rates through the interaction the demand
and supply of money. High interest rates by their nature reduce demand for borrowed
funds which in turn reduce credit financed purchases. EcoCash being a medium for
making purchases is thus negatively affected.

6.2.1.2. Zimbabwe Investment Climate

Zimbabwean Investment climate as measured by the doing business ranking which is jointly
done by the International Finance Corporation and the World Bank is shown in figure 1
below the country’s ranking indicated in figure 1 below.

The ranking is based on 11 indicator sets measuring business regulation and covers 185
economies. Some of the key indicators are protecting investors, access to credit, registering
property, resolving insolvency and dealing with construction permits. The best ranked
economy is Singapore, followed by Hong Kong and China, New Zealand and United States
respectively. The best ranked country in Africa has consistently been South Africa while
that of Zimbabwe has been at the tail end with the worst ranking achieved in 2013. This
shows that there are strong negative perceptions about the investment climate in Zimbabwe
largely due to lack of private property rules and the indigenisation law which requires non-

13
 locals to cede 51% of their shares to locals. This has seen Zimbabwe receiving low levels of
Foreign Direct Investment coming to Zimbabwe’s shores couple with huge capital flight.

39
South Africa 35
36
32

59
Botswana 54
52 Doing Business 2013
50
Doing Business 2012
87 Doing Business 2011
Nambia 78
74
68 Doing Business 2010

173
Zimbababwe 171
168
156

0 50 100 150 200

Figure 1
Source: World Bank Doing Business reports 2010, 2011, 2012, and 2013

The negative perceptions about Zimbabwe and its economy will mean that EcoCash’s
chances of spreading its wings beyond the borders of Zimbabwe are limited. The uptake of
the product/ service outside Zimbabwe will always be clouded by the perceptions around
Zimbabwe.

Moreover, the negative perceptions about the investment climate in Zimbabwe will result in
capital flight and low levels of FDI. FDI has the potential to increase a country’s growth
through injection of liquidity and capital which in turn increase aggregate demand. Thus a
lack of FDI arrivals in Zimbabwe will constrain growth in aggregate demand and aggregate
spending which in the overall will negatively impact mots projects in Zimbabwe including
EcoCash.

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 6.2.1.3. Capacity Utilisation Levels

The slowdown in the economy has seen manufacturing capacity utilisation going down with
less than 50% of the available capacity being used. This has resulted in Company closures,
increased unemployment which is estimated to stand at around 80-85%.

Capacity utilisation levels as determined by CZI manufacturing survey reports were as

follows:

2009 2010 2011 2012 2013

% % % % %
Capacity utilisation 32.3 43.7 57.2 44.9 39.6

Table 3
Source: CZI Manufacturing Surveys (2009, 2010, 2011, 2012, 2013)

Low levels of capacity utilisation in companies result in low production levels, high
unemployment and low consumption. This will reduce potential utilisation of the EcoCash
services.

6.2.1.4. Zimbabwe Economic highlights covering 2010-2014

From table 2 below it can be seen that when the economy adopted the use of the multi-
currency system in 2009 the economy reported a strong growth rate of 9.6% in 2010 largely
due to the fact that the economy was starting from a low base following a decade of
economic decline. This trend continued in 2011 but has since tapered off. The slowdown in
economic growth has largely been attributed to liquidity constraints, low manufacturing
capacity utilisation, high cost of funding, high unemployment, net imports, low FDI inflows
and lack of support from multi-lateral international financial organisations such as the IMF
and World Bank.

Inflation has remained steady in the single digit range since the introduction of the multi-
currency system with deflation being reported in the year 2014. This is largely a reflection of

15
low aggregate demand in the economy due to illiquidity, high unemployment, low disposable
incomes, high level of imports versus exports, among other things.

The figures from the central government in table 2 below are showing that expenditures and
revenue are indicative of the fact that since the introduction of the multi-currency
environment the government has been running a budget deficit with expenditures surpassing
revenues. This is not sustainable in the long term as the government has to keep borrowing in
a high interest environment to cover the deficit. This point is buttressed by the growth of the
domestic debt since 2009 as shown in the figures below.

2010 2011 2012 2013F 2014F

Real GDP Growth (%) 9.6 10.6 4.4 3.4 5.7

Prices
Inflation Average (%) 3.0 3.5 2.9 2.9 3.0
Exchange rates USD to ZAR 7.4 8.1 8.5 10.3 10.2

Central Government
Revenues (US$ Billion) 2.199 2.921 3.496 3.960 4.341
Expenditures (US$ Billion) 2.310 3.189 3.655 4.081 4.215

External Sector
Exports (US$ Billion) 3.317 4.496 4.054 4.189 4.515
Imports (US$ Billion) 5.162 7.562 6.710 6.862 7.007

Monetary
Broad Money Supply(US 2.568 3.376 4.411 4.625 5.435
$Billion)
Domestic Credit (US 1.669 2.761 3.472 3.966 4.552
$Billion)

Table 4
Source: IMF Country Report No.13/193, RBZ Monetary Policy Statement 2013
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From the above analysis of the environmental factors prevailing in Zimbabwe it will seem as
if it is all doom and gloom for EcoCash. On the contrary, EcoCash looks set to benefit from
the conditions prevailing in the Zimbabwean economy in a number of ways:
 Due to the decade long economic decline in Zimbabwe which saw a number of
Banking institutions closing or unable to avail deposited funds to depositors on
demand the Zimbabwean community has lost trust in the Banking sector and is thus
keeping a lot of its money outside formal banking systems. EcoCash thus stands to
benefit from these individuals when they are sending money to each other as they are
likely to use non-Banking channels such as EcoCash.
 The economic challenges in Zimbabwe have seen unemployment levels increasing
significantly leaving the bulk of the population in informal employment. The informal
sector again is known for not keeping its money in Banks and is likely to respond
positively to EcoCash.
 Finally Zimbabwe has a large rural population without access or with limited access
to formal Banking services. EcoCash is geared to exploit this unserviced market.

6.2.2. POLITICAL, LEGAL AND REGULATORY

Following the disputed general election of 2008 a government of national unity was formed
in the year 2009 comprising the three main parties in Zimbabwe. This government brought
about some level of economic stability compared to the period before which had been
characterized by hyper-inflation and the decimation of the local currency. The unity
government was in power from 2009 to 2013 when its tenure of office expired and general
elections were held. The general elections were held in a peaceful environment and were
resoundingly won by the current ruling party, ZANU PF. Since then the country has
experienced political stability and peace. However, policy inconsistencies by the government
continue to create uncertainties in the market.

The issues in the regulatory environment that have caused some discomfort include the
introduction of the Indigenisation law which seeks to empower previously disadvantaged
blacks by transferring majority ownership in companies domiciled in Zimbabwe from current
majority owners to indigenous Zimbabweans. In addition the continued disregard for private
property rights and failure to respect bilateral investment protection agreements with other
countries has seen investors shunning Zimbabwe or otherwise disinvesting from Zimbabwe.
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The restoration of stability from a politics and peace point of view is a positive development
for all businesses operating in Zimbabwe, including the EcoCash project. Peace and stability
enables planning, attracts foreign tourists, and does not attract the wrath of multi-lateral
lending institutions such as the IMF and World Bank and economic sanctions.

The policy inconsistencies, and the indigenisation laws and lack of the rule of law with
regards to private property rules are issues that will need attention as they have the impact of
scaring investors away resulting in capital flight and low levels of potential demand. This will
thus result in a shrinking market for the EcoCash project.

6.2.3. SOCIAL

The public’s confidence in the banking sector has been battered and bruised due to the
collapse of many banking institutions during the hyper inflationary era. As a result a lot of
money is circulating outside of the formal banking system. This is conducive for EcoCash
which seeks to bring these unbanked individuals into the banking system. The Savings
culture in Zimbabwe is weak due to the mistrust by the population of the banking sector and
the fact that a large part of the population still lives in the rural areas where banking has yet
to penetrate in a significant way. The Zimbabwean market remains subdued due to low
income levels and limited national developments.

6.2.4. TECHNOLOGICAL

The country has witnessed a growth in technology. The 2013 fiscal policy statement by the
Minister of Finance noted that the tele-density or voice penetration rate continues to improve
and is estimated around 80%, whilst the internet penetration rate, though still below the
international levels of 26.6% but above the regional average of 11%, continues to steadily
improve and is estimated at levels of about 19%.

18
6.3. MICROENVIRONMENT OF ECOCASH

6.3.1. SWOT ANALYSIS OF ECOCASH

In this section we shall use the SWOT technique to assess the microenvironment of EcoCash.
SWOT Analysis is a simple business technique that is used to analyse a company’s current
situation. The SWOT pursues an integrated approach which includes key company and
environmental variables. The objective is to look at the company’s internal strengths and
weaknesses as well as a company’s external business opportunities and threats in order to
generate possible strategic options (Bohm, 2008). The basic advantage of the SWOT lies
within its simplicity and its integrativity. However among its major limitations is that it does
not prioritise issues nor does it provide solutions or offer alternative decisions (Bohm, 2008).

6.3.1.1. Strengths

Market Leadership
Econet has a subscriber base of over 8 million subscribers and a market share of 66% on
mobile subscribers. The mobile penetration in Zimbabwe is currently at 103% and Econet has
been leading the growth in market penetration. Econet is able to leverage its significant
subscriber base and network coverage to promote and extend the EcoCash project. This also
means that Econet has a much greater reach than the formal financial institutions. Moreover
market awareness and education of EcoCash is easily carried out on their network platform.

High level of consumer trust

Econet also has a strong brand image and the widest network coverage. The brand is known
by many because of its nationwide coverage. There is a high level of consumer trust which is
certain to play to Econet’s advantage more so because of the current general distrust by the
Zimbabwean population towards banks.

Strong financial position

Econet has a strong financial position. The company’s total assets are about US$1.2 billion
and is one of the largest quoted companies on the ZSE in terms of market capitalisation. Over
the years Econet has rolled out massive investments in infrastructure to improve coverage
and capacity. Econet has the financial capabilities to undertake a project such as EcoCash.

19
For instance the company acquired a bank grade switch which allowed it to integrate speedily
with banks.

Know-how of specialised teams and management

Econet has the know-how of specialised teams and work groups. The company also has
creative and innovative capabilities. Another key strength of Econet is its commitment,
passion and visionary leadership which is led by founder and group Executive Chairman
Strive Masiyiwa.

Strategic subsidiaries
Econet also has strategic subsidiaries which are able to offer supporting structures for the
EcoCash project. For instance TPS (Transaction Payment Solutions), a subsidiary company is
providing merchants with a high level of technical support. They set up new terminals,
provide support and maintenance for existing terminals and train the merchants. In 2012
Econet began its acquisition of TN Bank and in 2013 acquired the remaining shares of the
bank. The bank is critical in the regulatory environment in which EcoCash operates. As a
result Econet is able to accelerate its convergence of mobile telecommunications with
financial services. The bank will provide the support required to leverage mobile money
services.

Strong market presence

Econet has strong market presence and EcoCash is benefitting from this. The agency network
that supports the EcoCash project grew by 242% to over 3 000 agents in the second year of
operation. To date EcoCash has over 10 000 agents and 700 green kiosks countrywide. The
large number of agents has led to the wide coverage of EcoCash services making EcoCash
easily available anytime and anywhere. The increase in accessibility of EcoCash has led to an
increase in the volume of transactions processed as well as the worth of the transaction.

20
 6.3.1.2. Weaknesses

Liquidity management
Liquidity shortage by merchants is a weakness. Merchants may have problems managing
their cash because they do not want to keep too much cash in case the cash is stolen by
employees. Others may not want to expose themselves to the risk of being robbed. As the
liquidity crisis in the market deepens working capital for others may dwindle reducing their
capacity to transact. Once clients are unable to cash out they are likely to switch to
competitors.

Resources and capabilities can be easily copied or imitated

The EcoCash resources and capabilities can easily be copied or imitated. One of Econet’s
competitors Telecel has been poaching EcoCash’s staff for its own TeleCash project.
Furthermore TeleCash won the battle to share agents after it lodged a complaint with Postal
and Telecommunications Regulatory Authority of Zimbabwe accusing EcoCash of refusing
to share agents’ services. All this puts TeleCash in a strong position to acquire the same
distribution capabilities, technical know-how and innovative capabilities as EcoCash and to
ride on the investments EcoCash has made in its agent network.

Network interruptions
Network interruptions or malfunction is a weakness. The weakness is exacerbated by the
protracted power cuts across the country. This can lead to frustration by the clients who may
resort to conventional banking to circumvent such problems. Despite Econet’s developed
mobile network, one can assume that an increase in demand for service is likely to threaten
the capabilities of the system, causing further interruptions.

Lack of awareness and adequate education of services

In some sections there is a lack of awareness of the services. Illiteracy is often a barrier to
understanding how the services operate and for some client they do not see the need to load
their eWallet to pay for everyday items.

21
Security concerns
There are also security concerns relating to the EcoCash services. There are also increased
cases of fraud associated with the EcoCash services. Such cases can lead to lack of
confidence by the customers.

Retail payment challenges

There are also retail payment weaknesses such as reluctance by larger retails to adopt
EcoCash for fear it will create queues and confusion at the tills and for other merchants they
do not see why they should pay a fee for accepting payment, something that is normally free.

6.3.1.3. Opportunities

Loss of faith in the banking system

A large proportion of Zimbabwe’s population is unbanked. There is widespread mistrust of
the formal financial system following a volatile decade of currency collapse and
hyperinflation. The population has lost confidence in the banking sector. According to the
Ministry of Finance between US$2 billion and US$3 billion is circulating outside the formal
banking channels (Newsday, 2012). This has presented a huge opportunity for Econet to use
its wide reach and consumer trust to play a role in the financial services.

The rise of the informal sector

One of the results of the economic collapse was a rise in unemployment. Zimbabwe has an
unemployment rate of over 80% and the majority of the unemployed are in the informal
economy. The informal economy is not a minor underground economy, according to
Makochekanwa (2013) about US$2,8 billion passes through Zimbabwe’s informal sector
every year and in 2009 it accounted for more than half (52%) of the country’s productive
output. Needless to say most of those employed in the informal sector do not have bank
accounts and do not have access to payment services. There is an opportunity for Econet to
bring an electronic transaction system that would capture these massive amounts of payment
flows without requesting customers to open bank accounts.

22
Resolving the change problem
There is also an opportunity for Econet to solve the current Zimbabwe change problem that
has characterised the retail environment since the introduction of the multi-currency system.
Often change of less than US$1 is not available and in turn retailers have to offer credit notes
or sweets as change. Payment by mobile money services will eliminate the change problem
as customers would pay the exact price.

Bridging the formal and informal sectors

Another opportunity for EcoCash is providing a bridge between the formal and informal
sectors. There is often interaction between the two sectors where the banked population make
payment to the informal sector and where the unbanked population makes payments to the
formal sector for example utility bills and school fees. Through the interoperability of the
banking system and the mobile money services, linkages between the two sectors are created
thus allowing EcoCash to leverage on this opportunity.

Expanded Markets
Following the limited scope of growth in Voice and SMS due to a mobile penetration rate of
103% and declining revenues in voice an opportunity was created for Econet to diversify and
grow new revenue streams. With the rapid increase in mobile subscribers and the acceptance
of mobile technology even in rural areas the opportunity for a bigger market was made
available for mobile money services. There are also opportunities for EcoCash to expand into
new geographic markets. Zimbabwe has a huge diasporan market and such mobile money
services can be used to transfer money home as it is convenient and easy to use.

Extended Services
There are also opportunities to extend their services to meet a broader range of customer
needs. For instance EcoCash through a debit card can be linked to MasterCard or Visa thus
users can use it to pay, anywhere in the world. There are opportunities to serve additional
customer groups and market segments. The mobile money services can include savings
products and loan facilities which do not require bank accounts and do not have arduous
processes.

23
Exploit emerging technology
There are also opportunities to exploit new emerging technology. For instance the technology
advancements in mobile handsets can allow for rich features to be embedded in the
applications. As the market is made aware and educated there are opportunities in increased
demand for services. EcoCash has grown its registered customers from 1.3 million in 2012 to
3.5million in 2014. According to Econet 4.2 million people have been impacted by EcoCash
and to date they have processed transactions worth over US$4.5 billion.

6.3.1.4. Threats

Economic Slowdown
Zimbabwe’s economy remains fragile with a decelerated growth in the last 2 years. The
economic slowdown is due to liquidity challenges and is marked by deflationary pressures
which are a result of low effective demand. The drop in demand is due to weak consumer
spending which is a reflection of the intensification of the liquidity crisis in the country.
Government has been forced to adopt a contractionary fiscal policy because of the
constrained fiscal place it is in. At the same time government is unable to use monetary
policy instruments because of the multicurrency system. In other words government’s ability
to address the liquidity constraints is limited. Such challenges are a real threat to the EcoCash
business as it is mainly driven by consumer spending and consumer liquidity.

Challenges of doing business in Zimbabwe

Zimbabwe’s business environment remains hostile. The challenges to doing business in the
country include policy inconsistencies by government, limited sources of capital, corruption,
inefficient government bureaucracy and inadequate infrastructure. Such challenges continue
to stifle business and threaten their existence. Erratic power supplies are also a direct threat to
the EcoCash business as most of Econet’s network operations are powered by electricity from
Zimbabwe Electricity Supply Authority (ZESA).

Regulation reviews
EcoCash operates in a regulated environment as all payment systems are overseen by the
Reserve Bank of Zimbabwe (RBZ). However there are no existing mobile money regulations
but the RBZ has begun reviewing the regulatory framework which covers all aspects of
mobile banking. Such review could see government putting in place legislation that could

24
extensively tax and restrict mobile money operations. For EcoCash this could curtail their
growth and potential.

New Competition
EcoCash is also embroiled in feuds with banks over Econet’s reluctance to open its network
so banks can roll out their own mobile money services. Econet is obviously unwilling as this
is direct competition to EcoCash. Econet has so far been successful in stopping the banks
because of the absence of relevant legislation but the threat is that the RBZ might be
sympathetic to banks and take punitive measures against Econet. This in turn also has the
potential of further opening up the competitive space in mobile money services.

Financial Exclusion
The use of plastic money is likely to take over mobile money services. EcoCash’s debit card
is well positioned to circumvent this threat but its operations outside the ZimSwitch platform
are a possible threat as this may lead it to financial exclusion in the local market. ZimSwitch
is the sole national electronic funds switch for Zimbabwe (Newsday, 2014). Telecel a rival
company has been able to partner with ZimSwitch.

6.3.2. SUMMARY OF SWOT ANALYSIS

Strengths
 Market Leadership
 High level of consumer trust
 Strong financial position
 Know-how of specialised teams and
management
 Strategic subsidiaries
 Strong market presence
Weaknesses
 Liquidity management
 Resources and capabilities can be easily
copied or imitated
 Network interruptions
 Lack of awareness and adequate education of
services
 Security concerns
 Retail payment challenges

Opportunities Threats

 Loss of faith in the banking system  Economic Slowdown

 The rise of the informal sector  Challenges of doing business in Zimbabwe
 Resolving the change problem  Regulation reviews
 Bridging the formal and informal  New Competition
sectors  Financial Exclusion
 Expanded Markets
 Extended Services
 Exploit emerging technology

Table 5

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6.4. MARKET ANALYSIS ECOCASH

6.4.1. PORTER’S FIVE FORCES MODEL

According to Thompson, et al., (2012) the most powerful and widely used tool for
systematically diagnosing the competitive pressures in a market is the Porter’s Five Forces
model of competition. In this paper we shall use the simple five forces framework to assess
and evaluate the competitive strength and position of EcoCash. The competitive pressure for
EcoCash is relatively low. The threat from new entrants is low because of the regulations and
high capital. The threat from substitutes is low because EcoCash is catering mainly to
unbanked and informal sectors. Supplier bargaining power is also low as the buyers have
more bargaining power due to their size and EcoCash’s buyer bargaining power is also weak
as buyers are fragmented and distrusting of other substitute services. The only strong force is
the competitive rivalry where other mobile operators have introduced their own mobile
money services and price wars and agent control wars have already marked the sector. To
avoid repetition the Five Forces Model is discussed in more detail in the following section.

7. PHASE 2: THE STRATEGIC POSITIONING OF THE PROJECT

7.1. ANSOFF MATRIX – ECOCASH

The Ansoff growth matrix assists companies to map strategic product market growth
strategies. It is a tool to help you identify opportunities to grow your business. The mobile
telecoms industry in most developed countries has reached a saturated stage which makes it
highly competitive for the big companies in the industry. The same is the case for the
Zimbabwean market. Although the mobile telecommunications industry has only been in
Zimbabwe for less than 20 years their existing product offering had become saturated. This
was worsened by the stiff competition amongst the three telecommunications operators
(Econet, Telecel and Netone).

26
Figure 2

The safest way to expand your business is by market penetration which involves selling
more of your existing product to your existing market. However, this was extremely difficult
for Econet because with more than 8 million subscribers it had almost reached a ceiling in
terms of getting additional subscribers. Thus this strategic option was not feasible for Econet.

Another potential growth strategy available for consideration by Econet was market
development. This involves selling more of your existing product to new markets. The new
markets could be geographical, for example, opening a new store in a new location or it could
be advertising in different media to attract a different type of customer. Geographically all the
three Zimbabwean networks had almost covered the whole of Zimbabwe in the past 5 years.
The cellphone was no longer for the few elite as almost everyone who wanted a handset
could afford to buy one. As such Econet could no longer sell more of its existing product to
new markets.

Econet had to look for new products to sell to either existing markets (Product
Development) or new markets (Diversification). For product development there is need to
make sure that the new products are wanted by the current clients and this can be a very
effective way to achieve higher product penetration amongst your loyal customers.
Diversification involves taking a new product to a completely new market. Whilst this
carries the most risk, it is very lucrative if properly executed.

27
For EcoCash, Econet chose Product Development because EcoCash (the new product) was
introduced into the existing markets (the current Econet subscribers). This was mainly done
to adapt to the changing demands and accordingly modify the current products offerings and
at the same time take advantage of the large client base that Econet had built over the years. It
is important to understand why Econet invested in a mobile money project which is not part
of its core business; and has little to do with the voice or data products that drive Econet's
revenue streams. Econet operates in a highly competitive market where continuous product
innovation is necessary to prevent product obsolescence and loss of market share. As such
EcoCash was one of the ways of bringing additional exciting products to complement voice
and data products which had become saturated in the market and whose growth had reached a
probable ceiling.

Econet has large market share of more than 65% and a strong brand (the Econet Brand is one
of the most notable brands in Zimbabwe) and iin December 2011 the Marketing Association of
Zimbabwe awarded Econet the first position in top superbrands of the year in its Superbrands 2011
Awards (Herald, 2011). EcoCash benefited from network effects of Econet’s existing products
and customer base.

The excellent early reception of EcoCash in Zimbabwe strongly suggests that the service met
an unserviced need in the market. In addition to the millions of person-to-person (P2P),
customer-to-customer (C2C) and customer-to-business (C2B) transactions, Econet has made
a big impact to people’s lives in many ways. There are additional products such as EcoSave
that also helps the unbanked public to make savings and earn interest on their savings.

7.2. REQUIREMENTS FOR MOBILE MONEY SERVICE IN ZIMBABWE

In Zimbabwe there were three main requirements for Econet to offer Mobile Money services.
These are discussed below:

REQUIREMENT HOW ECONET ACHIVED IT

Enabling technology Econet invested millions of dollars to set up

the network system and the EcoCash
platform. Their investment in capital
equipment has seen the rolling out of WiMax
Base Stations throughout the country. Econet

28

Regulatory Approvals
Solid financial institution as a partner
have also invested in a Fibre-Optic Project
that is designed to increase the country’s
access to world-class, high-speed internet
services. This modern telecommunication
technology is geared to present the real
Broadband that offers new and endless
possibilities to all sectors of the economy.
Lengthy lobbying of the central Bank, the
Reserve Bank of Zimbabwe. The approvals
have since been granted.
Econet took a strategic decision to acquire a
licensed banking entity (TN Bank) after
realizing the need to accelerate the
convergence of mobile telephone and
financial services, in line with global trends.
TN Bank’s licence was critical to the
regulatory environment in which EcoCash
operates. This acquisition allowed Econet to
develop, sustain and enhance its mobile
based financial services products. TN Bank
has since been rebranded to Steward Bank.

Table 5

7.3. THE FIVE FORCES MODEL – ECOCASH

Pearlsson, et al., (2004) noted that the

Porter’s Five Forces model presents a classic view of the major forces that shape the
competitive environment of a business. This view is a reminder that competitive forces do not
derive only from the actions of direct competitors but also from the surrounding environment
(Kotler and Keller, 2006). The five forces model helps various market players to know how
competitive an industry is and these forces also determine whether a particular industry is
attractive enough to enter or not.

29
Every business has suppliers, buyers, competitors or industries offering same products and
services, substitute goods and other businesses wanting to get into that particular industry.
Hence with all these players, the industry does become competitive and the firms have to
create strategies to keep their business running. In Zimbabwe the Mobile Money service
concept presented a significant opportunity for telecoms companies to develop new revenue
streams through uplifted ARPU (Average Revenue per User).

Figure 3
Source: Marketing Management, Kotler and Keller, 2006

7.3.1. THREAT OF NEW ENTRANTS

The entry and exit barrier in an industry will determine the attractiveness of the market. A
market in which the entry barriers are high and exit barriers are low is considered to be
attractive (Kotler and Keller, 2006). This is because abnormal profits can be earned without
the threat of new entrants coming into the industry to push those profits to normal levels
through price competitiveness and other forms of competition.

In the case of the Zimbabwean telecoms industry, the threat of new entrant is relatively low
due to the strict licencing requirements from the telecoms regulator - POTRAZ. Moreover,
the fees required to obtain a licence which are currently in the region of US$100 million have
proved prohibitive in a market characterized by lack of funding and low levels of FDI. The
telecommunications companies have also made it difficult for Banks to successfully launch
their own mobile money transfer services by restricting access to their telecommunications
platforms and Gateways. As such for the past ten years only the three companies (Econet,
Telecel and Netone) have been able to penetrate the telecoms industry. All three network

30
operators have mobile money services namely EcoCash, TeleCash and One Wallet
respectively.

For Econet and EcoCash, the existence of entry barriers is a good thing in that it protects the
EcoCash market share, it allows EcoCash some flexibility in pricing and allows the
recoupment of investment costs without the threat of new entrants.

7.3.2. COMPETITIVE RIVALRY

The telecommunications market in Zimbabwe has three players namely Econet, Telecel and
Netone. In the voice and data service provision the competition amongst these players is
cutthroat with allegations of price-cutting and under-pricing always flying around.
Promotions for voice and data services are the order of the day in this industry. EcoCash was
the first successful mobile money transfer service to be launched in Zimbabwe. The lack of
competition at its launch and for the next two or so years thereafter enabled Econet to capture
a significant market share and become a pioneer in the industry.

Econet’s main competitor, Telecel, launched TeleCash in late 2013 as a competitive response
to EcoCash. The uptake for TeleCash is still low due to EcoCash’s first mover advantage and
secondly, due to Telecel’s low relative market share. Econet and EcoCash’s bigger market
share and significant subscriber base gives it a competitive advantage vis a vis its competitors
due to the fact that its significant sales volumes allows it to recoup investment costs quicker
and also allows it to ride the storm of low prices and intense marketing costs.

The competition among the mobile telephone service providers in Zimbabwe has been
characterized by the advent of a number of new products being developed to create
differential advantage in the marketplace. After Telecel launched its TeleCash platform,
Netone, Zimbabwe’s third largest network launched it One Wallet platform as a direct
response to EcoCash and TeleCash. The competitive rivalry is thus strong in mobile money
services.

Telecommunications companies are making efforts of their own to build market share in the
money-transfer business. T-Mobile, Boost Mobile, Sprint and similar companies all benefit
from large, captive audiences that are already using their products daily. Their customers are
literally holding the phone in their hands. It’s tough to offer a more convenient platform than
that. In less-developed countries such as Kenya, telephone-based asset transfer has already
been successfully implemented.

31
7.3.3. THREAT OF SUBSTITUTES

The potential of a substitute within a market depends on the buyers’ willingness to

substitute, the switching cost and the relative price‐to‐
performance of the substitute (Pearlsson, et al., 2004). A number of platforms that provide
the same service as EcoCash but in a slightly different way can be considered to be the
substitutes for EcoCash. These include traditional money transfer systems available through
Banks, Bank mobile products, internet banking, point of sale, VISA, MasterCard among
others.

These platforms are unlikely to offer significant competition to EcoCash owing to the fact
that a large number of Zimbabweans are unbanked and thus do not have access to Banking
services. Moreover, Zimbabwe has a large informal sector due to the high levels of formal
unemployment and this sector has traditionally shunned formal banking systems and will
likely adopt EcoCash as opposed to these Banking products tainted by the mistrust that the
Zimbabwean informal sector has in the Banking system.

It is important to note that when Econet launched EcoCash the banking industry immediately
took notice as it was a perfect subsitute for their products. EcoCash allowed people to send
money to each other from their cellphones. EcoCash proved to be a potentially disruptive
innovation and signaled the beginning of the end for traditional banks’ monopoly of services.

Another reason why EcoCash can potentially outdo banks at their own game is that Econet
already has a massive captive audience. Latest results from the company suggest that there
are now more than 8 million subscribers. That number far exceeds the number of bank
customers for the whole banking industry which estimates put at 1 million (Levin, 2013).
Bankers have long been scratching their heads over how to reach the unbanked population
which EcoCash has been able to achieve in a period of no longer than 3 years.

In other markets retailers are also getting into the money-transfer business, with retail giant
Wal-Mart offering a service of its own. This thus is another area that could potentially result
in substitute threats for EcoCash. Strategies to counter this threat should be developed.

32
7.3.4. BARGAINING POWER OF SUPPLIER

The bargaining power of suppliers is low because of the fact that the industry is characterized
by high competitive rivalry, huge customer base with high bargaining power, low revenue
margin, and regulatory environment. All these factors lead to lesser power in the hand of the
suppliers. Point of Sale (POS) terminals, support and maintenance of such POS are done by
TPS, a subsidiary company of Econet thus the threat there is low. EcoCash relies mainly on
agents and merchants to facilitate its mobile money services. Whilst their threat is low
because of their need to offer their clients enhanced services their acceptance of the service is
of importance to EcoCash.

7.3.5. BARGAINING POWER OF BUYERS

Although the mobile industry in Zimbabwe is dominated by only 3 players, the buyer power
is quite high in the industry. This can be attributed to cut throat competition in the industry
which has resulted in shrinking profit margins. Moreover, mobile number portability has also
had a negative impact on the industry as it makes it easy for customers to switch to another
mobile operator for a better deal. This makes buyers even more powerful and this forces the
company to offer better and more attractive bundled offers to keep them loyal. This thus
limits the extent to which EcoCash can cream the market and make super profits and this also
requires EcoCash to actively be engaging its customers and offering them discounts and
promotions to remain the market leader.

However, a number of factors also limit the bargaining power of buyers in the
telecommunications and mobile money market. The fact that there are over 13 million
subscribers means the buyers are many and segmented and therefore cannot coordinate and
collude to the detriment of the service provide and the actions of each individual buyer in
isolation are insignificant to the operations of EcoCash as a whole. This is good for EcoCash
because it means it cannot be held to ransom by its customers.

Furthermore, the current substitutes for mobile money, the Banking products, are not
available to all especially the rural communities where Banking facilities are lacking. In
addition the informal sector participants do not usually meet the requirements of opening a
Banking account, such as, proof of source of funds. Furthermore the public distrusts Banks
following their inability to recover some of their deposits during the hyperinflationary
environment when a number of Banks closed.

33
7.4. VALUE CHAIN ANALYSIS

A value chain is a chain of activities that a firm operating in a specific industry performs in
order to deliver a valuable product or service for the market. “A company’s value chain
identifies the primary activities that create customer value and the related support activities.”
(Thompson, et al., 2012:157). According to Porter’s Value Chain Model supply chain
management, operations, distribution, sales and marketing and services are the primary
activities that are foremost in creating value for the customer. General Administration,
Human Resource Management, R&D, Technology and Systems Development are supporting
activities that facilitate and enhance the performance of the primary activities (Thompson, et
al., 2012). Econet, in the supply chain management, deals directly with suppliers to minimise
costs and save time. They also buy for stock so that it is readily available when needed in
future. In operations and maintenance, engineers are now working from home to reduce
operating cost. Product distribution is done through accredited agents and Econet’s customer
care shops. In sales and marketing, advertising is done by agencies whilst promotions are
done by in house teams. Services include call centres and face to face services at Econet
Shops. For R&D, development is done by equipment vendors whilst support systems are
done by the internal IT department. The Human Resource Management is done by the
Human Resources department and occasionally subcontracts external agencies. For General
Administration there is a dedicated department in house but security is outsourced.

7.4.1. INTERNAL ANALYSIS

The strategic analysis of a company could not be complete without considering the internal
factors affecting the company’s competitiveness. The three resources of the organisation are
human, financial and operation (Richard Lynch, 2003: 197).

For a company to be sustainable, competitive advantage needs to be more deeply embedded

in the organization’s resources, skills, culture and investment over time (Richard Lynch,
2003: 125). This is sometimes determined by the organization’s organogram. This forms part
of the organizational characteristics. An organizational characteristic refers to the general
conditions that exist within the organization. The various organizational characteristics

34
influence organizational effectiveness. The major organizational characteristics are structure,
technology and size (Robbins 2012).

Group CEO - Econet Zimbabwe

CEO - Steward Bank CEO - Services Finance Director Technical Director Chief HR Officer Chief Commercial Officer

The bank is an independent subsidiary CFO - Planning Network Surveilence Head of HR GM - Product Manager
CFO - Treasury Netwok Management HR Officres GM - Marketing services
CFO - Operations

Chief Technical Officer - Services CEO - Ecocash CFO - Services Chief Sales Officer - Services

Technical support staff - Ecocash COO - Ecocash FM - Ecocash Marketing personel - Ecocash

Product Dev Manager Marketing Mgr Operations Mgr Business Dev Manager Business Analyst

Figure 4: Reproduced from discussions with the ECONET Finance Manager - Reporting
and HR Officer

The organizational organogram is part of an organizational structure. An organizational

structure defines how job tasks are formally divided, grouped and coordinated. For
organizational effectiveness, the following six elements need to be addressed namely work
specialization, departmentation, chain of command, span of control, centralization,
decentralization and formalization.

The strategic analysis of the internal environment facilitates the assessment and development
of competitive capabilities and resources that underpin and ignite Econet’s corporate and
business strategies for the subsidiaries and the business units. Secondly, they purposefully
develop favourable relative cost positions for the corporation using value chain analysis and
benchmarking. They embrace the strategic management perspective of the resource – based
view of the firm which asserts that cutting - edge knowledge and intellectual capital are
valuable competitive resources to be managed diligently.

35
8. PHASE 3: THE PROJECT ENVIRONMENT AND DYNAMICS WITHIN THE
ORGANISATION
Project management became a necessity for many companies as they expand into multiple
product lines, many of which were dissimilar, and organizational complexities grew (Graham
and Englund, 2004). This growth can be attributed to the following factors: Technology
increasing at an astounding rate; more money invested in R&D Projects; more information
available and shortening of project life cycles; the need for easy adaptation to an ever-
changing environment, better orientation toward customer problems and easier identification
of activity responsibilities. As a result, Graham and Englund (2004) argue that management
was compelled into organizational restructuring as the traditional organizational form that
had survived for decades was inadequate for integrating activities across functional
“empires.” In other words organisations have to change the way they operate in order to
remain competitive and succeed.

In order to provide the total solutions to the customers, organisations have to move from
being product based organisations to project based organisations (Graham and Englund,
2004). This requires that project managers are sent for training. As part of their EcoCash
Project manager and his team were sent to Kenya to assess how a similar product, MPESA
operates in the Kenyan market. They also got technical training from India on how to put into
practise their newly acquired skills. Graham and Englund (2004) also point out for a project
being done in an existing organisation, focusing on the change to project management means
everyone in the organisation needs to be attuned and trained to support projects. They
remark:

“A successful environment encompasses the entire organisation not just the

organisation of project management” (Graham and Englund 2004:31).

The observation is that in the EcoCash project, the focus was more on the organisation of
project management than on creating an organisational environment that was ready to support
projects. This was evidenced in that work from the departments still seemed to take priority
over project work in some instances. At times project team members key to the success of the
project where pulled out to attend to operational work showing that the organisation was not
reoriented to fully support projects.

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To create successful organisations senior executives must develop a strategic emphasis for
projects (Graham and Englund, 2004).It is important to link projects to strategy. In order to
create this link between project and strategy, Econet has created a council known as the
Product Review Team (PRT) which comprises of senior managers who review and authorise
all projects. This is very much in line with what happens at HP where a council of executives
oversees the running of projects in the organisation. Graham and Englund (2004). One of the
key roles of the PRT is to ascertain that projects are in line with the strategy of the
organisation and as a result they review project progress on a weekly basis throughout the
lifecycle of the project to ensure this alignment is maintained. Graham and Englund (2004)
say that successful projects must be linked to strategy and must be a good fit with the overall
strategy. Econet strives to make this good fit through the establishment and use of the PRT.

People on projects are looking for direction when setting project goals and this direction is
easy to determine whenever there is a clear relationship of the project to the strategic thrust of
the organisation (Graham and Englund, 2004). A clear link to strategy helps develop inter-
project cooperation (Graham and Englund, 2004). Despite the sitting of an executive
committee to oversee projects, there however appears to be very little inter-project
cooperation at Econet. Graham and Englund (2004) also point out that it is important to have
project priority outlined at organisational and not at departmental level. The relationship of
the EcoCash project with other projects running at the same time however seemed to reveal
that the priority of projects was not shared at the organisational level leaving projects to jostle
for resources from the departments. This fighting for essential resources is detrimental to
project quality and outcomes (Graham and Englund, 2004).
Graham and Englund (2004) argue that one factor in motivating project team members is for
senior management to show that the project has been selected as a result of strategic plan.
This is well reflected at Econet by the sitting of the PRT as team members will know that
their project has a strategic significance once it gets the nod. Upper management must
reinforce the idea of participation on the project and avoid attempts of too many projects or
associating a project to a particular department (Graham and Englund, 2004). It could be
observed from the EcoCash project however that though project teams are cross-functional in
their composition, they are still heavily attached to particular departments. This is because
key decisions pertaining to projects still await the approval of the hierarchy of the initiating
department before they can be tabled at the PRT for final consideration. Similarly,

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departments still opt to pull out their staff for other activities even in the middle of the project
– only the department ‘owning’ the project appears to have people who are dedicated to
project work. Another observation to reinforce this point is that some departments are still
able to replace project members even mid-way the project which often causes delays and
disrupts the dynamics of the project team as the new member takes time to adjust to the
project environment. Econet is running multiple projects with interdependencies and which
need to share resources and clearly powerful or influential departments may threat the
progress of key strategic projects that do lie within their domain if the departments are
permitted to wield so much control over projects. Graham and Englund (2004) suggest that
projects must be wholly owned at the corporate level in order to create proper priorities and
resources allocation.

Project success is not only dependent on the project manager but on senior executives
influences as well. In new project management environment, the old habits need to
change.The responsibilities attributed to the project manager should receive top executives
support and be given authority to run project successfully. Senior management support play a
key role in project team success by creating an environment which aligns the project support
systems with the project team.Senior executives can no longer afford to ignore or undermine
the role and importance of project management in organisations. The senior executives have
to approach these changes with authenticity and integrity as that often determines success or
failure (Graham and Englund, 2004). They have to ‘walk the walk” and “talk the talk”
(Graham and Englund, 2004).Graham and Englund (2004) also pointed out the need of
change of behaviour of upper management so that they can make everyone in different
departments to rally behind the project. Many upper managers are unaware of their influence
on project success. Upper managers should not attempt to schedule too many projects at one
time. Upper managers are advised to develop a project support system that incorporates such
practices as negotiating the project deadline, supporting creative process, support for project
plan and avoid any useless scope changes. There is need to appreciate the importance of
project planning. Proper planning is needed to cater for the triple constraints of time, cost and
quality. The cost of introducing the paperless money via EcoCash was a bit heavy because
Econet Wireless Zimbabwe had to buy TN Bank to drive the adoption of Econet’s mobile
money transfer service, EcoCash at around USD$27m (Bulawayo24News). Initially Econet
wanted to have the EcoCash project only but the government required that there should be a
bank that supports all these transactions hence the need to have own bank that could be easily

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controlled. Econet wants a paperless money economy that’s why the need for EcoCash.
Presentation of project to management went smoothly and though a lot of painful meetings
were held by management and sponsors, the project took reduced time to complete. It is easy
to underestimate the importance of role of upper management team work in choosing projects
that are aligned to organisational strategy. If not done well this will affect the components of
good project environment. Therefore there is need to select a team of upper managers that
represent the whole organisation. A successful project requires that a project manager be
appointed who have authority from top executives. Successful projects develop a plan for
project manager selection and development (Graham and Englund, 2004). At Econet
Wireless Zimbabwe, the upper management team is closely involved in selecting and
monitoring EcoCash project and also appoint the chief project officer of that project.
Management is also responsible for rewarding project work by giving incentives to the
employees after meeting set targets.

The other most important component of project environment is support of an all-important

project core team. These are important in success of a project. Project teams represent the
cornerstone of the post bureaucratic organization. Graham and Englund (2004) suggest that
project managers must be empowered to make key decisions in consultation with their project
teams. The authors however note there is some fear associated with empowering project
managers as this may be taken as a loss of power for people in the departments. There
appeared to be a fear of this loss of power for management to project teams during EcoCash
implementation and in our view this is what then led to the scenario were all project decisions
had to be ratified by at the departmental level before being tabled for final endorsement at the
PRT. This led to repeat meetings with upper management which caused some delays in the
commissioning out of the completed product. The literature suggests that the way in which a
project team is structured affects the outcome of the project and the power in the departments
depends on the level in the hierarchy (Graham and Englund, 2004). These teams come from
different most important departments that ought to stick with the project from beginning to
end. The core team members represented their affected departments and directed the work of
the people in their departments for the EcoCash project though as has been alluded to earlier
on, some of these core team members were often “recalled” by their departments and
replaced by new members appointed by the departments. Organisations now need
multidisciplinary project teams that seek to provide the total customer solution by moving
across the organisation on their behalf. Such project teams have made project management

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the future of organisational management (Graham and Englund, 2004). Project management
is a concept based on cross-functional teams that are assembled to achieve a specific purpose,
usually in a specific time and within a limited budget (Graham and Englund, 2004). This
team need support of upper management. For the EcoCash project, the project team members
were sometimes told to do other departmental duties which almost derailed it’s time for
success and causing unnecessary delays. However, Econet still emphasize the need of
organisation supported cross departmental team work. Graham and Englund (2004) say that
in order to get highest quality at minimum time, projects need a full time core team members
preferably in one location. Collocated team members can easily and frequently exchange
ideas and many difficult communication problems are eliminated and it also encourages team
building. In the case of EcoCash project, team members were not physically located at same
place with Vendors who supplied the servers. Team members were in different departments
at different physical locations and were communicating via email and sometimes got late
response even on important enquiry. Some managers were arguing that involving many
people from different departments’ waste human resources and money but in actual fact this
reduces cycle time and saves money in the long run. Core teams also encourage creativity
because they come from different departments with variety of different points of view

There is also need to organize for project management. Upper managers have a mandate to
come up with structures that support successful projects. All bureaucratic procedures
ultimately lead projects to fall behind schedule in the classical organizational structure.
Changes to project management requires change in behavior of senior management. It will
require a team of senior executives and project managers to embark on the change. It requires
a change in behaviour and an understanding that decisions by an individual affects the system
as a whole. The change also requires that planning and participation of key stakeholders such
as customers become a necessity (Graham and Englund, 2004). Senior executives of Econet
Wireless Zimbabwe must act together as change agents and direct the change before the
period of cultural distortion begins. The setting up of the PRT and the Project Management
Office (PMO) itself are evidence that there is an effort from the executive management to
ensure full support for projects is there and also that the organisation itself is prepped to fully
support projects. In this period organisational inconsistencies become so great that the
organisation will begin to experience a decrease in productivity and may begin to lose money

40
(Graham and Englund, 2004). Econet has a matrix structure because it has a mix of standards
products for example voice and data and also new projects like EcoCash.

The sharing of information is also critical to the success of the project (Graham and Englund,
2004). Sharing of information is power as it empowers project team members to make
informed decisions while reducing anxiety and reshaping behaviour for project success in the
same process (Graham and Englund, 2004). Graham and Englund (2004) advocate for the
development of a Project Management Information System (PMIS) which makes information
more accessible to project team members and also across projects. To facilitate
communication for the EcoCash project and other ventures, Econet has an established
sharepoint which is an online repository of project documents. These documents include
minutes of project meetings, specification documents and dashboards. Project members are
then granted access to and can reference all project documents as required. The Project
Manager (PM) retains the right to edit and update documents through the project lifecycle.
Notifications of the next version of a project document is announced through electronic mail
(email). An electronic dashboard is also present to remind team members of milestones and
tasks as they become due thereby aiding the PM in keeping the project on track.
It has been observed that though project information is easily accessible to staff on the project
team, little if any information is shared across projects. Often, some key information from the
departments or changes in project scope may be communicated late thereby impacting on
project timelines and quality. Graham and Englund (2004) say that some upper managers
regard poor communication as beneficial as it minimises the impact of poor planning, cuts
down on questions and helps to shroud project in secrecy making mysterious. These
tendencies to delay or not communicate were also observed during the EcoCash project. The
reason for the poor communication of key issues was at times given to be that the matters
were of strategic importance and if communicated early, may be leaked to competition who
could then imitate the product and erode any potential competitiveness that was envisaged
from product launch. This however should not discount the tremendous efforts made by the
senior executives in setting up a PMIS.

It is important to note that the major role of the PM on the EcoCash project was to coordinate
project activities and maintaining an accurate record of project activities and progress. This
seems to be the case for all Econet run projects. Therefore progress has been made to develop
and train PMs instead of relying on the accidental project manager from the departments

41
(Graham and Englund, 2004). The benefits for EcoCash has been that efforts of project team
members have been well directed and accountability of tasks clearly outlined. Though
organisational dynamics still came into play, power and politics have not had a major
disruptive impact on the project as would have been the case should the project have been led
by an untrained PM. Hence the PM has been a conduit of vital information from the PRT to
the project team and vice-versa and the project has generally been on schedule for most of its
life.
The PM on the EcoCash project has also made efforts to ensure that the project is well
resourced and that cross-functional representation is feasible at all times during the project. In
this sense, senior management show full support and have empowered the PM to freely
coordinate matters. The PM has also had the effect of identifying key stakeholders and
solicited their support on time and this has allowed for milestones to be easily achieved at
each step of the project. By observing the PM at work the five top competencies of PM
suggested by Graham and Englund (2004) could be easily identified proving that Econet
senior management has made an effort to solicit for capable PMs. The PM was enthusiastic
drumming support for the project at the PRT and constantly motivating team members to
keep all hands on deck as it were. They exhibited the ability to coordinate the team, drive
forward the project even in situations when it was not clear if they had the authority to make
certain decisions at their level or not. All the decisions were then presented to the steering
committee and eventually to the PRT for ratification. Though the visible support from senior
management for PMs is there for all to see, it is the apparent lack of full support from the
departments and the lack of a shared vision or priorities that still requires attention.

Graham and Englund (2004) say that because organisations are made up of people, they have
the ingredients to create a learning organisation. They go on to say that it is the leadership
that is crucial in this process and also that people learn from experience. Since information is
not actively shared across projects, it was observed that organisational learning related to
projects occurs at a slow pace. The benefit there is however is that project teams often
comprise of more or less the same members and these tend to carry their experiences from
one project to another making it possible for other team members to learn from their previous
work on other similar projects. Organisational learning is however one area which is yet to
mature but nonetheless the intentions of senior management to develop this area are evident.
Project audits do take place and the presentations to the PRT can be regarded to be part of
this audit process. However since little information is shared across projects, the lessons from

42
one project seem to take time to be officially translated or transferred to other projects.
Project reviews post launch have been more about how the product or service is performing
in the marketing place than what can be learnt from the project itself.
The setting up of the PMIS as an information sharing tool and the willingness to take PMs on
training are but two of the things that show this move towards organisation learning for
project success. Econet also has an e-learning system from where members of staff can learn
and take quizzes on a variety of business subjects including project management. The
EcoCash project team also had the opportunity to be exposed to some learning to enhance
their skills as was indicated earlier on in this report.
Thus, there is an intention to create a learning organisation and one that will be adept to a
project environment as can be seen.
One key observation made was that senior management rarely interacts with the project team
to enable the management to teach and lead for project success.

9. PHASE 4: RECOMMENDATIONS TO THE BOARD

9.1 Changing to a project based organisation

Firstly Econet needs to appreciate the need for better and effective project management in
future organisations as businesses battle for competitive advantage through the developments
on new products and business processes. In this regard all managers should act as change
agents in the process of creating an environment that supports project management. Integrity
and authenticity should characterise leader behavior in order to positively influence
organisational culture for effective project management. Project management best practices
should be developed and implemented across the entire organisation with the direction of
senior management. Changing to a project based organisation entails moving toward a post
bureaucratic organisation that places strategic value on teamwork and empowerment in an
environment where open communication and trust are key pillars of organisational strength.

9.2 Giving Projects a Strategic Emphasis

There is need to assign and train a senior management sponsor for each project. This ensures
that at all times all projects are given the strategic emphasis they deserve

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Econet should strategically manage shared resources across various projects and
interdepartmental collaboration. It is also critical to ensure cooperation across the
organisation so that shared resources are not abused within Econet’s system of projects.
EcoCash represents the largest component of Econet’s marketing budget. This is justified by
management but might strain other departments’ morale.

Econet should set up a senior management team that oversees project selection. The team
should select projects based on how the projects contribute to organisational goals and
strategy. There are currently several projects running concurrently within Econet and there is
need to reduce the number of projects in order for the organisation to be more focused with
minimized disruptions. In turn the number of projects for all individuals should be carefully
considered so that every individual can effectively focus his or her attention.

9.3 The role of senior management

Econet’s senior management should strongly support and spearhead the project planning
process rather that to devote everything to the project sponsor. The project sponsor must be
there to lead the project operations after critically important senior managers have
collectively gone through the project planning process.

Senior management should also positively influence project success by negotiating and
setting reasonable project deadlines in accordance with the project plan and available
resources. Unrealistic deadlines create unnecessary pressure and anxiety on the project team
and this may have negatively impacted project success on the EcoCash project.

It has to be understood that projects are aimed at developing new products and ways of doing
business. During project execution the project team can make new discoveries which and if
this is not carefully managed may result in major project specifications being changed. It is
thus recommended for senior management to ensure that the project team remains focussed
without making changes to the project specifications. On the other hand, worthwhile pursuits
into the various and emerging capabilities of this technology based project may result in
subprojects coming out of the major project. For instance, technicians may discover that apart
from the initially intended functions of EcoCash, other functions can be developed much to
the benefit of the targeted customers. The development of these functionalities may represent
subprojects which if managed properly may enhance the outcome of the initial project.

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When the EcoCash project started it was inadequately staffed and this negatively affected the
completion of the project on time. It is strongly recommended for Econet to ensure all future
projects are adequately staffed. How do they do this? Further to the above it must be ensured
the organisational reward system systematically rewards all individuals in a way that
motivates working on projects in order to get the best out of the entire organisational
workforce. The development of a dual career ladder may enable staff to pursue and enjoy
their roles of choice as either technical experts or project managers.

9.4 Developing and supporting core teams for project success

EcoCash project did not have permanent and dedicated team members. A project core team is
made up of representatives from each functional area that is involved in the development and
implementation of a new product or application. Econet should ensure that each project has a
core team with a specified project manager for each core team. A core team facilitates project
success by reducing hand-offs from one department to another. This significantly reduces
project cycle time whilst increasing creativity and product quality. It is further recommended
that the members of a team remain unchanged until the project is completed. Senior
management should also assist core teams to effectively focus their work through careful
prioritisation of projects.

9.5 Organising the project management effort

Econet is an organisation that lies in a technology driven industry. As technological
developments continue to unfold in the telecommunications industry Econet needs
continuously innovate and create new products for its customers. It is therefore inevitable that
Econet will continue to be engaged in several projects at any given time for it to remain
competitive in a very dynamic business environment. It is therefore critically important for
Econet to be carefully structured in a manner that facilitates effective and efficient project
management.

It is recommended that Econet adopts a matrix organisational structure. In a matrix

organisation several projects run concurrently. The matrix organisational structure allows for
the efficient and effective use of resources due to the fact that physical resources such as tools
and equipment can be shared across different projects. Furthermore the functional expertise

45
within the organisation is available to all projects. Thus the wastage of resources is greatly
minimised in a matrix organisation.

In the matrix organisation functional departments collaborate to jointly solve problems. Thus
effective lines of communication are established and maintained between functional
departments and this allows for quick decision making. In fact, in matrix organisations there
is both vertical and horizontal flow of information and this greatly enables managers to
respond quickly to the needs of customers and the organization. The organisation can quickly
organise itself to respond to changes in the business environment.

A matrix organisational structure allows employees to constantly interact with experts from
other functional areas in project teams. Precisely individuals have the opportunities to
broaden their set of skills than they would in a purely hierarchical functional structure.
Employees with wider skills benefit the organisation in the long run when it comes to
operational excellence in the execution of projects. Consequently there is increased learning
and knowledge transfer across the whole organisation in resonance with one of Econet’s
values of pioneering in the development of new products and services.

In a matrix organisation a project manager takes ownership of a project whilst smooth

coordination and control of projects is maintained across the organisation.

Econet should also strongly support the project management professional by providing the
necessary training, scoping and authoring to project managers. This must be carefully done
such that the project manager’s position is the ‘desired’ position across the organisation. It is
also important to point out that Econet should ensure that project leaders and mangers
understand that it may be necessary give up control and employ a democratic leadership style
in order to get the best out of every individual towards accomplishing set goals. In fact
Econet should ensure that its project management systems are well known and trusted
throughout the organisation.

9.6 Project Management Information System

Graham and Englund (2004) explain that sharing information is power. Econet can indeed
enhance its project success levels through investing in an appropriate Project Management
Information System (PMIS). Such a system would help to alleviate anxieties that arise whilst
projects are ongoing, anxieties that result in uninformed and inappropriate decisions being

46
made to the detriment of project success. Management and staff alike, experience anxieties
resulting from questions whether ongoing projects will succeed, whether each project is on
schedule for timeous completion and whether teams and resources are being prioritized on
projects appropriately. Technology based projects experience a lot of evolution with major
decisions being made on adjustments as the project progresses. This causes additional anxiety
regarding the final outcome and whether it will satisfy the customer.

A good PMIS enables all staff to ease the above mentioned anxieties. We recommend that
Econet will benefit from designing and implementing a PMIS that enables management and
staff to answer any questions that they may have during the progress of any project. Critical
information presented real-time, in summary on a ‘dashboard’ would enable management to
make critical decisions. A good PMIS would also create an environment where people
collaborate instead of competing and sharing instead of hiding. Project teams often compete
for resources and without a mechanism that enables organizational optimization such as a
good PMIS this sub-optimisation becomes detrimental to organizational success. An element
of culture enhances the successful utilization of a good PMIS; honesty. Leadership should
invest in creating a culture of open and honest communication.

9.7 Selecting and Developing the Project Manager

Graham and Englund clearly discourage the use of an accidental project manager. One
chosen to lead a project should essentially desire to lead. The authors go on to explain that
technical expertise is not paramount to success at project leadership. Many organisations tend
to falter toward the technical expert as the project leader. This may hinder project success as
critical characteristics for project leadership which are ownership and mission, political
awareness, interpersonal and relationship development and management as well as action
orientation may not be possessed by technical experts. Graham and Englund (2004) further
explain the importance of vision, focus and resources management in determining project
success. Econet could enhance their project success prospect significantly if their recruitment
process incorporates situation based tests in order to identify the suitable candidates.
Successful incumbents could do well with mentorship support as well as project managers
networking facilities to promote the growth of the requisite skills. Training in other critical
business management skills will also help Econet project managers. Subjects such as business
development, client relationship management, communication, finance, planning, monitoring
and reporting, problem detection and resolution and staff development and management
would be trained to project managers to help them better manage their projects.

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9.8 Developing a Learning Organisation
As indicated above, a learning organization enables an environment conducive for excellent
project management. Econet can enjoy adaptive learning where teams learn from their
experiences. The company can also enjoy generative learning. Graham and Englund (2004)
state that generative learning emanates from the development of new practices not previously
considered. Learning can result from project audits and reviews, centralized schedule
management and integration, schedule tracking with rigorous dependency identification as
well as training. Surveys also help as a learning tool. Leadership at Econet are encouraged to
foster the spirit of learning from failure. This can start by simply teaching management to
embrace failure with the view to learn from it. Teams should welcome bad news bearers
instead of suppressing them, according to Graham and Englund (2004). An organization
where staff are encouraged to question the status quo and recognition is there for any team
member who demonstrates the effort of learning. Leadership should not wait for problems
(such as dwindling revenue streams for Econet) to become bad enough before something has
been done. Leadership should ideally not be docile as doing nothing amounts to prioritizing
the status quo. Individuals with nonconformist freethinking (mavericks) should be
appreciated and their freethinking should be given platform. If Econet promotes the creation
and exchange of new knowledge it will excel in its project management pursuits.

9.9 Developing a Project Management Initiative

A project management initiative is evident when resources are expended towards improving
the organizational environment and skills for effective management. Graham and Englund
(2004). The authors go on to explain the component of a project management initiative as
consisting of a team, a project management council, consulting services, training resources,
information resources, conferences and workshops. For Econet, the development of a
comprehensive initiative in this regard would pave way to better success at project
management.

9.10 Creating an Environment for Successful Project Management at Econet

The process of creating a more conducive environment for project success begins with the
leadership. Graham and Englund (2004) explain that the first step is that someone in senior
management ought to desire to learn. The leader will then spearhead the development of a
process for project selection. The organization will likely experience some significant
changes in its culture as staff are shaken off from their previous ways of doing things. The

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action that should follow is a Project Inventory Meeting which is basically a status check of
all ongoing projects. The introspection stage follows where the organization carries out a
Project Environment Assessment Test, to measure how well the organization supports project
management. Environment success factors include the following:

 Strategic Emphasis
 Upper Management Support
 Project Planning Support
 Customer / End-user Input
 Project Team Development
 Project Execution Support
 Communication and Information System
 Organisational Support and Human Resources Graham and Englund (2004)

10. STUDENTS’ PERSONAL REFLECTIONS

Norman

When conducting field study it helps to be on the ground, to go into the field and muddy your
boots. It is also important to be guided by secondary sources of data as they give you
direction or act as a compass in your study. The EcoCash project showed me that problems
can be turned into successes, weaknesses into strength – EcoCash exploited the negatives in
the external environment to its advantage. First mover advantage is key in many an industry
and to succeed, businesses and projects should endeavour to move fast and not rest in the
comfort of their earlier victories through continuous innovation – EcoCash moved first into
the mobile money market and has been difficult to dislodge from that position. An existing
large customer base and database is an important source of competitive advantage – the
EcoCash project exploited this well. Project endeavours require upper management support to
be successful, they need all the necessary human and material resources, they need to
engrained in the company’s vision and strategy, require flexibility along the way when the
environment and assumptions change and require on-going attention even when the initial
launch phase is complete.

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Vimbayi
The concept of project management is not just academic jargon but a reality that 21st
corporations should embrace in order to achieve long lasting business results. At the same
time I also noticed that companies have to be truly resolute and committed in order to migrate
to a POO because of the amount of changes that need to take place in an organisation. The
way project team members interact and pursue the objectives of the project is also of
paramount importance to the success of projects. This also made me reflect on the groups that
we were assigned to by SBL at the beginning of this program and how the institution was
trying to foster and train us so we are fully equipped and are fully effective in the project
teams we are going to be part of in our various organisations.

Tafadzwa
It is a reality that today’s organisations find themselves battling to achieve a sustainable
competitive advantage over competitors in ever changing business environments. It is
critically essential for organisations to move towards project oriented organisations because
the use of traditional management methods in functional organisations to solve problems is
no longer applicable. There is now need for combined efforts through teams to solve
contemporary business challenges. The field study enlightened me to understand that
executive project management enables an organisation to incorporate customers’ views while
carefully prioritizing organisational effort through sound strategic decisions. Moving towards
a project oriented organisation requires strong influence from senior management and a
change of attitudes and behaviours across the entire organisation in a manner that encourages
innovation, continuous improvement and better organisational responsiveness.

Happiah

My observation with the Econet Wireless Zimbabwe’s EcoCash project was very
enlightening. I found that the education regarding the merits of creating an environment
suitable for successful project management is now commonplace and organisations are not
ignorant of these. However, the process of embracing and adopting the wisdom of, for
instance, a project based organisational structure reflects challenges. Organisations which
have successfully operated on traditional structures face reluctance from members who fear
that their fate may be ill-disposed if structures are radically changed. Organisational

50
leadership may also be holding on to past success formulae and deliberately disregard new
ideals. Leaders also face the dilemma of having to deal with the human resources cost of
making changes to structures. They also fear the pain of going through the learning curve
once new structures are adopted. Change is never easy and it appears almost human nature to
avoid it as much as one can. All the same, the success of today’s organisation is hinged on
facing these fears and adopting change appropriately.

Courage

The project was an eye opener for me as I married my theoretical knowledge with the
practical experience I received from discussing and meeting the EcoCash project team
members and the Econet family in general. It gave me insight into how projects should be
planned and executed in a 21st century organisation. I was particularly impressed with the
way the EcoCash project was organised within the Econet structure as this helped decisions
to be made faster. This led to the successful implementation of the EcoCash project.

Prince
Our field study was extremely interesting one since we had time to chat with EcoCash
project team members, their experience and lessons learnt from the project. The team seems
to be motivated by rewards. I think the company is trying hard to go for PM and I noted that
the issue of having a single Project manager for all projects is not best and there is need to
train employees on project management skills in order to have successful projects and have a
PM who is in control and be creditable as the overall person responsible for the EcoCash
project.

Christine
From the analysis of the EcoCash project it seems to indicate that while today’s mobile
banking systems are providing good money transfer and payment services to early users,
there will need to be better marketing and training involved to help consumers understand
what the systems are capable of, as well as improved policy measures to ensure that the
benefits of mobile banking are evenly distributed across all banking and consumer sectors.
When embarking on a project there is need for thorough research on the internal and external
environment. The structure of the project should be product sensitive and should promote

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growth and integration between different departments. Successful and long lasting projects do
not operate in isolation.

Nixon

I work around projects 60% of the time and it was quite impressive to see how Econet as an
organization is making strides in becoming a project oriented organization. Of particular
interest to me was how they are working towards building a strategic emphasis for their
projects by setting a committee of senior executives to review each project. Also interesting
to me was how much information about projects was/is collected but is yet there appears to
be little learning from project to project because information is not shared. My prediction is
that once the realization that the sharing of information does not translate to loss of control
and power but rather to better control and empowered teams, Econet may become unbeatable
in the arena of completing projects on time and with the desired quality.

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