GSM Operator Selection for a Call Center Investment by Using AHP

GSM Operator Selection for a Call Center Investment by Using AHP Ozcan Cavusoglu, Mustafa Canolca, Demet Bayraktar, cavusogluozcan@yahoo.com, canolcamc@yahoo.com; demet.bayraktar@itu.edu.tr Istanbul Technical University, Faculty of Management, Department of Management Engineering Maçka, 34367, Istanbul, Turkey In today’s worldwide competitive business environment, effective investment planning and partner selection is one of the key issues for companies which are planning investment in abroad. The purpose of study is to propose a selection system, will provide a comprehensive approach for selecting the best GSM operator for Call Center, is selling GSM operator’s prepaid minutes, investment. For this purpose, a literature review is performed about GSM. Then, extensive interviews have been carried out with authorized experts, and qualitative and quantitative decision factors have been defined for alternative regions, countries and GSM operators, which have been evaluated by using AHP respectively. Finally, by using developed evaluation formula, each alternative has been evaluated and, the best alternative GSM operator has been selected by using Goal Programming to investment, raw material cost, labor cost, profit and market share goals. In the conclusion of our study, the results have been discussed in detail and the future work is presented as well. Key words: GSM, Call Center, AHP, Investment Planning, GP. Introduction In recent years, increasing importance of information and communication technologies dramatically, have been changed companies competition’ strategies and road maps, so main structure and type of investments, which are realized all over the world, have been changed [1]. Especially, due to effective network structure, low transaction cost, market growth rate and information diffusion rate, investment in telecommunication sector, have been increasing in recent years [2]. Because of that, in today’s worldwide competitive business environment, effective investment planning and partner selection become crucial issues for companies which are planning investment to GSM companies in abroad. The aim of this study is to propose a selection system, which will provide a well-defined, and a comprehensive approach for selecting the best GSM Operator for Call Center, which is selling selected GSM operator’s prepaid minutes, investment in abroad. For this purpose, in the next section, a detailed literature review is performed in the context of investment planning about GSM and telecommunication sector. Then, extensive interviews have been carried out with authorized experts whom are working at the GSM and the Call Center companies, where the application is performed. Accordingly, qualitative and quantitative decision factors have been defined in this phase for alternative regions, countries and GSM operators. In the third section, in the first step, alternative regions have been evaluated by using AHP. In the second step, secondary data which are representing alternative countries’ characteristic have been evaluated by using AHP. In the third step, secondary data which are representing alternative GSM operators’ characteristic have been evaluated by using AHP. In the final step of this section, by using developed evaluation formula, all candidates’ GSM operators have been scored, ranked and the best alternative has been selected. Finally, in the last chapter, the results and the future work are argued. Literature Review In literature, many tools using for investment planning, analysis and partner selection such as Analytic Hierarchy Process (AHP), Analytic Network Process (ANP), Fuzzy AHP, Linear Programming, Goal Programming, etc. Multi objective decision support system tools are generally used to evaluate investment alternatives. In this research we evaluate some article about investment planning, analysis and partner selection then criticize what this tools are, why this tools was used to evaluate investment alternatives, who(s) is used to this tools. Summary of articles presented in Table 1. Table 1: Methods and Tools Using in Investment Project Evaluation Subject / PurposeTools / MethodologyReferenceTo determine production location selectionAnalytic Network Process (ANP)[3]To determine production technologyAnalytic Hierarchy Process (AHP)[4]Created AHP model for foreign direct investment[5]IT and Communication Investment alternatives modeling by using AHPA decision support model for investment decision in new ventures[6][7]Concentrated breakeven point to evaluate financial investment alternativesBreakeven Point Analysis[8]Decision support system for facility selectionProject selectionFuzzy AHP[9][10]Applying concepts of fuzzy cognitive mapping to model in the IT/IS investment evaluation processFuzzy Cognitive Mapping[11]Evaluation of an investment’s finalization and closing conditionsAn approach in multivariable situation for decision to firms.Dynamic Programming[12][13]Investment decision in under uncertainty and risk Decision support system in energy productionSensitivity Analysis[14][15]By using Cash Flow and other financial indicators, giving decision processes are observedSensitivity Analysis and Cash Flow[16]0-1 goal programming method was used to determine efficient information technology for a hospital0-1 Goal Programming[17]IT investment are evaluated by using DEAContrarian investment strategy with DEAData Envelope Analysis[18][19]Calculation of Net Cash Flow and evaluation of investment alternativesCash Flow and ROI, Net Present Value[20]Investment of production technologyNeural Networks[21]Selection of investment project portfolioInteger Linear Programing[22]By using Expert System decision support system is development in catering firmExpert System[23]On the other hand, there are so many evaluation criteria’s for region, country and GSM operators selection, which are presented in literature. These are summarized in Table 2. Topic/ScopeMain Criteria’sSub Criteria’sReferenceSelection of suitable production technology StrategicFinancial PositionGovernment SupportMarket Position[4]TacticalFlexibilityMaterial HandlingHuman ResourceDesignQualityMonitoringOrganization CostFacility CostProduction CostForeign investment analysisGlobal Concentration Number of CompetitorsGlobal Concentration RateRivalry Rate[5]Global Synergy Global Economy of ScopeKnow-How SharingMarket SharingR&D’s Source SharingR&D’s Personnel SharingManufacturing Personnel SharingMarketing Personnel SharingLogistics System SharingGlobal Strategic Motivation Availability of Strike the Global CompetitorsAdaptation of Future MarketsLocationCloseness to SourcesCloseness to MarketsCultural DifferencesDifferences in Economic Conditions CompetitivenessMarket Share BalanceNumber of Local CompetitorsRatio Between Fix Costs and Value Added Cost of Third Party Changing Selecting suitable production facilityCloseness to customer[9]InfrastructureQuality of human resourceFree Trade AreasAdvantages of rivalryMarket share forecasting in mobile communicationAdvertisingCampaign Advertising Period Advertising Effect Environment Effect[24]PricingSame GSM Different GSM WAP-GPRSNetworkNetwork Coverage Network ProblemsBrand ImageReliability Customer Care Campaign Sustainability

Table 2: Evaluation Criteria’s for Region, Country and GSM Operators SelectionMethodology In this study, for selecting most suitable GSM operator partners, 4 main steps are followed. These are; 1st Step: To determine region evaluation criteria’s priority coefficients (RECPC). 2nd Step: To determine country evaluation criteria’s priority coefficients (CECPC). 3rd Step: To determine GSM operator evaluation criteria’s priority coefficients (GOECPC). 4th Step: To determine GSM operator’s scoring (GOS), ranking and select the best one. NoTypeNameDescriptionReferenceAMain CriteriaINPUTHuman resource inputs[5]1Sub CriteriaCharacteristic of Labor ForceGeneral human resource characteristic and behaviors in region[3], [4], [5], [9], Expert Advice2Sub CriteriaCharacteristic of CustomersGeneral customer characteristic and behaviors in region[5], [9], Expert AdviceBMain CriteriaECONOMICBasic economical criteria’s in region[3], [5], Expert Advice1Sub CriteriaInflation RatesGeneral and/or average inflation rate in region[5], Expert Advice2Sub CriteriaFTAs (Free Trade Agreement)Current situation, number and efficiency of FTAs in region[4], [9], Expert Advice3Sub CriteriaPolitical & Economic StabilityRegion ’s current political and economic situation [4], Expert AdviceCMain CriteriaCONDUCTING BUSINESS COMPETENCYMain business related topics in region[4], Expert Advice1Sub CriteriaStarting Business CompetencyStarting conditions to business in region[4], Expert Advice2Sub CriteriaDoing Business CompetencyDoing business conditions in region[4], Expert Advice3Sub CriteriaCompetitors SituationNumbers and effectiveness of competitors in region[5],[9],Expert Advice4Sub CriteriaFDI (Foreign Direct Investment) SupportsDegree of FDI[3], [4], Expert Advice5Sub CriteriaRegulation LawsLaws and regulation degree in region[4], Expert Advice 1st Step: In this step, region evaluation criteria (REC) are determined according the literature review an expert interviews as shown in Table 3.Table 3: Main and sub criteria are for region evaluation. AHP decision tree has built as shown Figure 1. By using AHP model [24], RECPC is determined and, for selection of the best GSM operators, results are used in 4th Step. Figure 1: AHP model for region selection 2nd Step: In this step, country evaluation criteria (CEC) are determined according the literature review an expert interviews as shown in Table 4. Table 4: Country Evaluation Criteria NoNameTime PeriodUnitReference1Population2008 million person[5], Expert Advice2GDP2008million $[5], Expert Advice3GDP per capita2008$/person[5], Expert Advice4# of Credit Cards in the country2008million unitExpert Advice5# of Debit Cards in the Country2008million unitExpert Advice6Total # of Cards in the Country2008million unitExpert Advice7# of CC Transactions / year2008million unitExpert Advice8 # of DC Transactions / year2008million unitExpert Advice9Total # of Transactions / year2008million unitExpert Advice10Credit Card Transaction Volume / year2008billion $Expert Advice11Debit Card Transaction Volume / year2008billion $Expert Advice12Total Card Transaction Volume / year2008billion $Expert Advice13# of Payments per capita2008unit/personExpert Advice14Payment per capita2008$/personExpert Advice15Debit Cards Usability for e-commerce2008-Expert Advice16# of POS Terminals2008unitExpert Advice17# of Mobile Cellular Phone2008million unit[15], Expert Advice18Mobile Telecommunication Penetration Rate2008-[5], [15], Expert Advice19Total Mobile Cellular Subscribers2008unit[5], [15], Expert Advice20Total Fixed Line Telephone Subscribers2008unit[5], [15], Expert Advice21Total Telephone Subscribers2008unit[5], [15], Expert Advice Source: [26], [27], [28] CEC are classified under some main criteria’s such as Obtainable, Usability and Representative. Then AHP decision tree has built as shown Figure 2. By using AHP model CECPC is determined and, for selection of the best GSM operators, results are used in 4th Step. Figure 2: AHP model for country evaluation criteria’s Main criteria for evaluating CSC are; Obtainable: Relevant evaluation for criteria about how providing criteria is difficult than others.

Usability: Evaluating a relationship between criteria and investment analysis according to presentation level to alternatives.

Representative: Evaluating a relationship between criteria and investment analysis according to importance level to alternatives.

3rd Step: In this step, GSM operator evaluation criteria (GOEC) are determined according the literature review an expert interviews as shown in Table 5.

Table 5: Criteria’s for GSM operator evaluation.NoNameDescriptionTime PeriodUnitReference1Total # of SubscribersTotal subscription number2008person[5], Expert Advice2# of Prepaid SubscribersTotal prepaid subscription number2008person[5], Expert Advice3# of PostpaidSubscribersTotal postpaid subscription number2008person[5], Expert Advice4Market ShareMarket share2008% [5], [15], Expert Advice5Blended ARPUTotal ARPU2008$/person[15], Expert Advice6Prepaid ARPUPrepaid ARPU2008$/person[15], Expert Advice7Postpaid ARPUPostpaid ARPU2008$/person[15], Expert Advice Source: [29] GOEC are classified under some main criteria’s such as Obtainable, Usability and Representative (also used in 2nd Step). Then AHP decision tree has built as shown Figure 3. By using AHP model GECPC is determined and, for selection of the best GSM operators, results are used in 4th Step. Figure 3: AHP model for GSM operator criteria’s evaluation 4th Step: In this final step, by using 3.1 formula, each GSM operators score (GOS) is calculated by using coefficients which are calculated in first three steps.For calculation this formulation is used: aGOSa=bRECPCb x cCECPCcx dCCNSDd+eGOECPCex aGOCNSDa (3.1) Detailed information about formulation is given; GOS = GSM Operator Score

RECPC = Region Evaluation Criteria’s Priority Coefficients

CECPC = Country Evaluation Criteria’s Priority Coefficients

CCNSD = Country Criteria Normalized Secondary Data

GOECPC = GSM Operator evaluation criteria’s priority coefficients

GOCNSD = GSM Operator Criteria Normalized Secondary DataIndexes are; a:GSM operators in the world a=1,2,…,656 (USA-1,ING-2 etc.) b=Regions in the world b=1,2,..,7 (Africa, Americas, Asia Pacific, Europe: Eastern, Europe: Western, Middle East, USA/Canada) c= Country evaluation criteria’s c=1,2,….,21 (Population (million), ….. , Total Mobile Cellular Subscribers). d=County in the world d=1,2,..,222 (ABD, China…, Turkey) e=GSM operator evaluation criteria e=1,2,..,7 (Total # of Subscribers, … , Prepaid ARPU). Implementation As mentioned in methodology section, four main steps have been applied. End of 1st Step, to determine 7 region evaluation criteria’s priority coefficients (RECPC) AHP decision tree has built as shown Figure 1. In this process, ten experts’ cross comparison matrix are used and, by taking results’ geometric average for each RECPC is calculated. After all expert’ evolution, Europe: Western has the highest coefficient by 0,254 (See Table 6) Table 6: Evaluation of regions Relative Weighted(RECPC)Europe: Western0,254Europe: Eastern0,252USA/Canada0,153Middle East0,136Asia & Pacific0,095Americas0,067Africa0,038SUM1,00 End of 2nd Step, to determine 222 country evaluation criteria’s priority coefficients (CECPC) AHP decision tree has built as shown Figure 2. In this process, ten experts’ cross comparison matrix are used and, by taking results’ geometric average for each CECPC is calculated. After all expert’ evolution, Total Telephone Subscribers has the highest coefficient by 0,117 (See Table 7). Table 7: Evaluation of country evaluation criteria’s Relative Weighted(CECPCTotal Telephone Subscribers0,117Total Mobile Cellular Subscribers0,102Mobile Telecommunication Penetration Rate0,092# of Mobile Cellular Phone0,079Total Fixed Line Telephone Subscribers0,073# of POS Terminals0,051Debit Cards Usability for e-commerce0,045Population0,039Payment per capita($)( / year )0,033# of Payments per capita( / year )0,033Credit Card Transaction Volume / year0,032Debit Card Transaction Volume($) / year (billion)0,031GDP per capita0,027Total # of Transactions / year0,026Total Card Transaction Volume / year0,027GDP0,027# DC Transactions / year (million)0,019Total # of Cards in the Country0,018# of CC Transactions / year0,017# of Credit Cards in the country0,016# of Debit Cards in the Country0,015SUM1,000 End of 3rd Step, to determine 656 GSM operators evaluation criteria’s priority coefficients (GOECPC) AHP decision tree has built as shown Figure 3. In this process, ten experts’ cross comparison matrix are used and, by taking results’ geometric average for each GOECPC is calculated. After all expert’ evolution, Prepaid ARPU has the highest coefficient by 0,305 (See Table 8). Table 8: Evaluation of GSM operator evaluation criteria’s Relative Weighted(GOECPC)Prepaid ARPU0,305Blended ARPU0,191Postpaid ARPU0,184# of Prepaid Subscribers0,105# of Postpaid Subscribers0,072Total # of Subscribers0,071Market Share0,071SUM1,000 End of 4rd Step, 656 GSM operator’ score has been calculated by using Equation 2.1. Then each GSM operator’s score divided by all GSM operator’s total score, scores have been normalized by percentage. After the all process, 656 GSM operators have been ranking by normalized score, and the best 5 GSM operators, which are in different countries, have been selected for investment alternatives. Results are shown in Table 9. In summary, for investment; USA-1

GSM Operator Selection for a Call Center Investment by Using AHP

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