Tuesday, September 17, 2013

ITC Case study analysis and solution part 1

     ITC took the initiative to build out the eChoupal platform because soybeans were under performing as a revenue stream. An analysis of the soybean supply chain found much inefficiency in the process leading to lost gains from trade for both ITC and its farmer suppliers.  ITC chose to deliberately focus IT solutions on their core supplier, the soy farmer.  They realized that the lack of information (weather, local and global pricing, best farming practices) made available to farmers had a negative effect on the quality of the crops being grown, the costs associated with transporting crops, and the resulting quality and quantity of crops being purchased and sold by ITC in global markets. Based on this information the solution should encompass information aggregation to make information easier for farmers to find and a high level of shared data.
It is important to note that the information technologies being employed by ITC were nothing new at the time.  Fundamentally, the internet was already offering those connected to it a wealth of information, and some level of infrastructure existed for access to the internet.  The difference for an eChoupal platform versus any alternative form of communication was the capability to aggregate and customize relevant information without sacrificing the cultural tradition of trust rooted within a village’s choupal.  (See Exhibit 1 for specific capabilities offered by ITC’s implementation of the eChoupal network.)
This information system reorganized the supply chain and then allowed for new value propositions for farmersPrimarily, the eChoupal platform reduced uncertainty in pricing at an ITC outlet versus a mandiThis led to increased volumes at ITC trading points.  Also, the acceptance of online farming guidance and Q&A modules gave farmers the faith to trust in the seeds, fertilizers, and soil testing services then developed by the company. 
A risk to this type of infrastructure was that no barrier existed to prevent suppliers from selling to a mandi, regardless of ITC’s investment.  ITC was willing to bank on their ability to compete with (and within) the old mandi model.  Another risk was in the information itself, which relied on local experts to teach and train others.  If the experts chose not to share their expertise or decided to share the wrong information the entire system would become suspect and would be avoided by suppliers. The new system also utilized individuals from the old system which suffered from some corruption and unfair business practices.
     The business processes and IT platforms implemented by ITC provided for a vastly different profit model for both the Indian agricultural farmer and ITC itself. (See Exhibits 2 and 3 for illustrated comparisons between old and new channel models regarding physical flow and information flow.) 
     The new channel to the eChoupal hub was streamlined and relevant information was made available at one location versus relying on inconsistent delayed information delivered via word of mouth.   ITC was able to implement their new process by deliberately addressing social and technological challenges:
     The soy crop was the life-blood of the soy farmer, so trust and credibility were essential in this transition.  In fact, redefining the roles of CA and head farmer into samyojak and sanchalak were keys to this new channel as it maintained the trust and face-to-face interaction. Accessibility to information on trends and expert advice pushed farmers’ resource boundaries from a local to a more global level.
      Moving forward, as rural India evolves into a wired society[1]; ITC should invest and develop the capabilities of the eChoupal platform further to significantly increase direct services toward farmers for better crop cultivation and trade with ITC.  The network should be more cell phone friendly with SMS integration (e.g., real time weather and crop pricing updates).
     ITC should replace monitors and computers to tablet like devices and finance the development of a mobile platform with apps that are structured with distinguishable icons, pictorials and videos to simplify and communicate relevant information to illiterate farmers and allow participation (e.g., Instagram, YouTube, and Facebook) by all parties in the supply chain regardless of demographics.  Also, conduct further research into the feasibility and legality to allow online auctions.
      The eChoupal platform should support text to speech functionality and allow for a more moderated open forum where the farmers can post and reply questions rather than just the sanchalak.  For farmers with no internet, eChoupal hubs should serve as Wi-Fi hotspots, as well as provide training tutorials on how to effectively utilize the platform.
            As each village becomes more closely integrated to one another through mobile connectivity, ITC can partner with a vendor to provide equipment rental or agriculture services.  ITC can develop an app to provide local villages and/or independent farmers the opportunity to co-op together to harvest crop or install irrigation systems at a reduced cost than individually paying for such rentals or services.

How should ITC develop this platform for the future?

·         Make this platform usable by every farmer. According to the case only one username was given per village. Open it to public.
·         The platform should also be developed more like a moderated open forum where the farmers can post and reply other questions. This information should be available to public as well.
·         With current technology every farmer owns a Mobile phone eChoupal should also enable SMS integration to SMS replies to farmers and SMS weather update to farmers.
·         Advertise this website on their ITC products like fertilizers ,pesticides and in today’s world they should also use gamification to integrate their products by developing a eChoupal app for tablet computers .
·         eChoupal should also allow users to share /upload their video’s and integrate facebook, twitter to their website.
·         eChoupal should also have more wiki kind of information on better soybean cultivations..
·         eChoupal could have also integrated online bidding process into their website where people can bid real time.
·         They should also convert this into a replication model with shared services.

Capabilities Offered by the Implementation of ITC’s eChoupal Platform
     Communication channels were streamlined:  Farmers could receive relevant information without the need to travel long distances, use old information via word of mouth, or put stock in unscrupulous informers.

     Information was aggregated: one need not go to multiple websites (IndianWeather Service.com, IndianSoyAuctionPrices.com, FarmingPractices.com, SoilTesting.com) in order to gather the information needed to successfully raise and sell crops.

Information was customized: User id’s created information that was custom tailored to the user’s weather and history. This localization of information lowered the learning curve to find and use the information accessible via the internet.

     Personal communication was maintained: Sanchalaks could continue to translate the technology into actionable guidance to farmers that were illiterate or technically adverse.

EXHIBIT 2 - Physical Flow Comparison

EXHIBIT 3 - Information Flow Comparison

Income per Person v. Internet Users and Cell Phones per 100 people*
India (1995 – 2011)

Below graph depicts cell phone usage is growing faster than internet usage in India.** 

[1] See Exhibit 4 for graph depicting evolution of cell phone/internet usage within Indian population.  

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