Business Processes in an evolving business

ITC eChoupal Case Study

S. Sivakumar

The Sequence
1. What is ITC eChoupal? 2. Business
eChoupal Process related challenges in

3. Howve we dealt with them?

S. Sivakumar

What is ITC eChoupal?

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The way Indian farmer sold his produce, for decades

Ramdeo Patel Mandi Theoretically, open outcry auction is an ideal price discovery system However, in this case, the farmer is under pressure to sell, although he may not be happy with the bid price
Because of the sunk cost of transport

But there is no other go

when the farms are small, the villages are geographically dispersed, and the quality of the output is not standardised
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Price Discovery @ ITC eChoupal

Price Information Video Price Fixation Video Now the farmer is empowered to decide when and where to sell If he decides to sell to ITC, he will bring and deliver at ITC Warehouse
Reducing the net transaction costs for both himself and for ITC

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What has eChoupal done?

Unbundled price discovery, selling and delivery as separate components of the transaction And, offered freedom of choice to the farmer

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How was it achieved?

Digital Infrastructure within Walking Distance (eChoupal) Physical Infrastructure within Distance (Choupal Saagar) Tractorable

Human Infrastructure at both these points (Sanchalak and Samyojak)

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Business Process related challenges in eChoupal?

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Whats Business Process?

Strategy for Value Creation

Business Model for Value Capture

Business Process for Value Delivery

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Strategic Challenge in eChoupal, as described so far

Sustainability of todays physical inefficiency as a source of margin Thought 1: Since we discover price in the village, how else can we leverage it?
Idea of Identity preserved produce

Thought 2: Since we have an infrastructure that can unbundle and rebundle components of a value chain, where else we can use that?
Idea of marketing farm inputs Video

Thought 3: Since we have farmers coming into our warehouse, how can we leverage those footfalls?
Idea of Hypermarket at Choupal Saagar
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Foods from Identity Preserved Produce

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Hypermarket @ Choupal Saagar

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Business Process related Challenges because of this New Strategy

1. 2.

Challenge of multiple business models Challenge of collaborative business model

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Challenges of multiple business models

Different pricing models Different data needs Different Operations Procedures

Requiring flexibility in business processes that cant be optimised to one model Solution:
Modular Organisation Structure Component Based Enterprise Application
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Challenges of Collaborative Business Model

Personalised solutions to every partner Transparency in Value Sharing

Solution:
Fora for co-creating processes Open architecture with plug & play capability

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Organisation Structure that delivers this

Management Position Role in Customer focused cross-selling (Traditional Role) Operations Team (Execution) Middle Mgmt (Coordination) Senior Mgmt (Strategy, Control) Top Mgmt (Vision, Values) Contextual Relationship Mgmt Specialised Functional Knowledge Orchestration Resource Mgmt Portfolio Management Corporate Governance
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Role in Community based Innovation Community Interface Idea Generation Experimentation Derisking Cross Fertilisation Conceptualisation Challenging Resourcing

Resultant New Businesses

Financial Products Health Services Education Services Power Tourism eGovernance

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Challenge in a Community Driven Organisation

Alignment of Community
and Organisation goals Solution:
Sanchalak profile Sanchalak incentives

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Bottomline

Business processes need to be live in an evolving business

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Thank You

S. Sivakumar