Sunday, August 28, 2005

India, operating models and innovation

In the recent Businessweek issue on India and China, BW had a piece on some unique business operating models in India. It talks about ITC limiteds e-choupal scheme which is the name given for a VSAT linked computer terminal in a village which farmers can use to seek latest prices of crops before selling the same. It prevents the farmers from getting cheated at the hands of middlemen.

...would access the company's intranet -- dubbed e-chaupal, for electronic "town square" -- twice a day to check ITC's own offer price for produce, as well as prices in the closest village market, in the state capital, in New Delhi, and on the Chicago commodities exchange. The site relayed daily weather conditions and educated users about new farming techniques worldwide. In the evening, the local children took free lessons on the computer. In return, the farmers would usually give ITC first dibs on their crops, thus eliminating the middlemen...

The other example it provides is of Bharti Telecom which recently outsourced its entire network management operations to Ericsson.

... in February, 2004, Bharti became the largest telco in the world to try something truly radical. It outsourced its entire cellular network to its three existing equipment suppliers: Ericsson (ERICY ), Nokia (NOK ), and Siemens (SI ) -- a $725 million, three-year deal. The move to "deep outsourcing" was revolutionary. Networks are as crucial to telecom players as engines are to auto makers. But it worked, and the effect on Bharti was profound. With executives no longer focused on managing the network, Bharti has turned its attention to marketing and customer service. In a year it has added 6 million subscribers...

It also talks about ICICI bank, which it says, has turned itself into a low-cost consumer bank by building its own high-tech back office and is expanding in rural India by setting up automated teller machines in villages...

Some other innovations that I think are unique are: ICICI (and a few other banks) allow transactions where one can use an ATM to donate money to temples. (Indians donate so much temples that the Tirupati temple is second only to Vatican in terms of the money received. Some say it is the richest.) Volvo in India leases buses rather than sell them to transport corporations (both private and government). The Simputer is another innovation from India, as is the home delivery of financial instruments (drafts) by some banks. There is also Air Deccan, which, at its cheapest, is perhaps the cheapest airline in the world (some of its tickets sell at INR 1, which is well, about 1/40th of a USD). Hindustan Lever Ltd., Unilevers subsidiary in India has a Project Shakti which is a micro credit program using SHGs (self help groups)

It is not to say that these models are the best or that working in India gives answers to every problem faced by any company in India, but with its diversity and population, it is a unique place by all means. India is slowly moving onto the international corporate resume as a "must have" destination.

5 comments:

Anonymous said...

Good to see more operational innovations being embraced by fast growing Indian companies.Indians should start redefining the way world do business..that is my dream..

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