Technology and Society Class 7 ISM P 3

Technology and Society Class 7: ISM P 3 January 2005

Product & Information Flows Price discovery by word -of-mouth Authorized price Mandi (CAs) Farmer ITC PRE By oxcart; no travel Weight measure reimbursement (payment to farmers) Other buyers Mandi (CAs) Authorized price 50% Farmer Sanchalak Soybeans (travel expenses reimbursed) 50% Oil, lamps, seed, etc. Samyojak Prices Market Conditions Internet Weather Class 7: ISM Best Practices P 3 January 2005 ITC POST

Impact and Value Creation ü Richness: ü Improved information quality ü Decreased uncertainty ü Increased knowledge ü Reach: Increased ITC’s access to more farmers ü Disintermediation: Decreased role of mandi intermediaries ü Increased process efficiency (e. g. logistics) ü Reduced corruption ü Enables new options (e. g. to sell other products through the network) VALUE DISTRIBUTED AMONG ALL KEY STAKEHOLDERS Class 7: ISM P 3 January 2005

Starting Point of Analysis Factors (observable pre-implementation!) Stakeholder Analysis Technology Analysis 1. IT sophistication? 2. Impact: a. Changes needed vs. flexibility ratio? b. How much is on stake for them? c. How autonomous are they? 3. Size: organizational scope and coordination needed? 1. Size: technology scope (number of processes and systems affected)? 2. Is the use of the technology discretionary? Mandatory? 3. Software changes/customization needed? 4. Is it modular? 5. How complex and/or novel is it? Mc. Afee, SMR 2003 Class 7: ISM P 3 January 2005

Key Difficulties ü Extremely low IT sophistication of farmers ü Farmers very slow to change, very risk averse, but many changes potentially needed ü A lot “on stake” by some stakeholders (e. g. CAs? ) ü Large IT scope, high IT complexity (no existing IT infrastructure), discretionary IT ü Logistics problems: physical products are still involved ü Trust to ITC and the new “IT way” of working ü Legislation constraints ü Overall readiness of rural India for IT (how to assess this? ) Class 7: ISM P 3 January 2005

Overcoming Risks: Key ITC Strategies Factors (Difficulties) Solution Extremely low IT sophistication Train one Sanchalak who is the link to the rest (“train the trainer”) Move from “single user” model to “community user” model Incremental phasing – start with simple IT Very high changes/flexibility ratio Build on existing social structure: “e. Choupal = Choupal with e” Incremental phasing (“Roll out, fix it, scale up”) Heavy communication (“signs on walls”) A lot on stake for some stakeholders (e. g. CA, middlemen) Role redesign of CA, Everyone wins including ITC Large IT scope Start simple: bare bones PCs Incremental phasing (“Roll out, fix it, scale up”) Logistics Created many hubs Shared transportation costs Trust Use existing social structure: the role of the Sanchalak (oath, ITC logo at home, reputation/pride) Clear value communicated to everyone Leave open the old practice of the mandi Legislation constraints Involve government, ensure it sees the benefits, change legislation Class 7: ISM P 3 January 2005

Assessing National IT Readiness Access Policy Networked Readiness Index Enabling Factors Society Economy World Economic Forum: Global IT Report, 2002 Class 7: ISM P 3 January 2005

Readiness for IT: A Macro View Networked Readiness Index (NRI): The degree to which a community is prepared or has the potential to participate in the networked world (WEF report 2001 -2004) 1. IT infrastructure access: teledensity, PCs person, waiting time for phone lines (US, Sweden, Finland, Denmark, UK, Germany, Canada, France, Singapore, Italy, Korea, Argentina, Greece, India…) 2. Policy and regulation : Telecom/ISP competition, security and other IT related laws, legal support for IT business, IT as overall government priority (Finland, Singapore, US, Iceland, Hong Kong, Norway, Germany, France, Japan, Spain, Thailand, Greece, Poland, Latvia, Turkey, India, China, Mexico, Indonesia, Bulgaria…) Class 7: ISM P 3 January 2005

Readiness for IT: A Macro View 3. Social capital and IT sophistication: Employees IT training, Internet in education, Quality of education (Finland, US, Netherlands, Iceland, Norway, Sweden, UK, Singapore, France, Israel, Japan, Spain, Hong Kong, Poland, Italy, Chile, Portugal…) 4. IT in economic activities: internet payment possibilities, e-government availability, business IT sophistication, (Finland, US, Sweden, Singapore, Iceland, Germany, Canada…) Class 7: ISM P 3 January 2005

ITC in the News ü More than 2. 4 million farmers in 21, 000 villages through 4, 100 e-Choupals (6 new e-choupals per day) ü ITC added more commodities (coffee, mustard, etc) and plans to take up trade in chillies and turmeric in collaboration with government agencies ü ITC may sell gas via e-choupals in collaboration with BPLC ü ITC is planning to set up large-scale supermarkets ü ITC wins "World Business award“ by the International Chamber of Commerce and the United Nations Development Programme on May 18 in Paris Class 7: ISM P 3 January 2005

Key Lessons ü Key Social Factors for IT Adoption: ü ü ü The importance of trust National IT readiness (Infrastructure, Policy/Regulation, IT Sophistication, IT in economic activities) The standard stakeholder and IT analysis factors (what is on stake, how flexible versus how many changes are needed, scope, IT complexity) ü Key Strategies of ITC: ü ü ü Fit existing social structure and practices, minimize required changes Use a “community user” model instead of a “single user” model “Train the trainer” who links to the rest All involved stakeholders win, stakeholders’ roles are redesigned if needed Work with the government, consider regulatory constraints ü Impact of IT: ü ü ü Richness (more information and knowledge, less uncertainty) Reach (more farmers accessible) Disintermediation Enable future options Increase efficiency, decrease corruption Everyone gains including ITC Class 7: ISM P 3 January 2005

The Top Three. . 1. It is hard to change the world: 1. Start by fitting existing social structure and practices to minimize required changes 2. Let IT change the world later… 2. People are skeptical about new technology ü Assure people trust the new “IT way” of living 3. Move from a “single user” to a “community user” model Class 7: ISM P 3 January 2005