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Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
Final ppt seminar ii
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Final ppt seminar ii

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Sustainability and Financial viability of common service centers(CSCs: Internet connected service delivery kiosk) in India.These slides analyse the factors responsible for sustainability and financial …

Sustainability and Financial viability of common service centers(CSCs: Internet connected service delivery kiosk) in India.These slides analyse the factors responsible for sustainability and financial viability of CSCs.

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  • 1. Seminar IISustainability and Viability of Commom Service Center(CSC) in India:A Strategic Analysis of Business Model of CSC<br />Student:Satya Prakash Patel Mentor-Dr .Prof . Peter Stanonvik<br />(email:sppatel06@rediffmail.com) <br />Green Industry MBA/MSc (Ecotechnology)<br />
  • 2. Agenda<br />The presentation contains three parts-<br />Part-I: Background and Introduction<br />Growth India story; Rural –Urban divide; Rationale for CSC ;Service need matrix of CSC and National e Governance Program(NeGP)<br />Part-II: T-S-M Analysis<br />T=Technological framework of CSC<br />S=Service Framework of CSC<br />M=Market opportunity/size and customer need<br /> Part- III : Strategic Analysis of CSC<br />Challenges and issues in CSC’s Implementation<br />Tools of Strategic Analysis-(i)SWOT (ii) Porter’s Five Forces Method(iii)Value Chain(iv) Business Mapping/content –services Ecosystem of CSC<br />Business Model analysis of CSC—Value Proposition; Framework of CSC; Cash Flow Analysis of CSC.<br />Discussion-Suggestion and followed by Conclusion <br />
  • 3. Growth India Story :Facts and Figure<br />5000year old civilization and incredible history and culture. Having 18 official languages and 325 spoken languages.<br />28 States and 7 union territory,638,596 villages<br />India’s Population=1.12 Billion and --700 million working population. In 2020 worlds largest working force to take demographic dividend to achieve continuous growth of country.<br />World largest dynamic democracy and honest election system<br />4thlargest economy of the world(after USA, China and Japan) with growth rate 8% to 9%.<br />55%share in worlds IT-BPO Industry(World IT-BPO industry=1.6trillion USD)<br />Worlds largest English speaking population=300million in 2010<br />Explosion of middle class in India 368million(32% of total population) in 2010 -main driver of Indian economy.<br />India has a vibrant private sector and market led economic growth not the state induced growth like China.<br />706 million telephone user(fixed phone-36million+670 million mobile phone) till September 2010 in India<br />Internet user in India 81 million till September 2010 in India. Among it 10.3 millions are broad band internet user.<br />
  • 4. Contrast and divide between Urban India vs. Rural India<br />
  • 5. Rationale for Internet connected service delivery kiosk(CSC) in rural India<br />To bridge the urban and rural developmental and digital divide in India<br /> Empowerment the rural people through access to government information/public services(e-governance) at their door step on affordable cost.<br /> Reduce the poverty in rural area through : (i)increasing job opportunity, (ii)enhancing empowerment, (iii) improving financial security. <br />New access to knowledge ,information and education in the remotest part of India.<br />Achieve an inclusive growth in India .<br />
  • 6. Service Need Matrix of CSC<br />
  • 7. NeGP and CSC<br />Approved by the Union Cabinet in May, 2006- The NeGP, comprising of 27 Mission Mode Projects (MMPs)and 8 components.<br />Vision of NeGP-“Make all Government services accessible to the COMMON MAN IN HIS LOCALITY, through Common Service Delivery Outlets and ensure EFFICIENCY, TRANSPARENCY & RELIABILITY of such services at AFFORDABLE COSTS to realize the BASIC NEEDS of the common man.<br />CSC is an integrated mission mode projects(MMP)of National e Governance Plan (NeGP) of India<br />The goal of the CSC Project – ‘To empower the rural community and catalyse social change through modern technologies’. <br />The Government of India has approved and launched a Common Services Centres (CSCs) Programme in 2006, for providing support for establishing 100,000 CSCs in 600,000villages of India on “honey –comb model” i.e. each CSC will cover six villages<br />CSC scheme comprises –technological, organizational and service framework.<br />
  • 8. Part-II :T-S-M Analysis of CSC<br /><ul><li>T=Technological framework of CSC and Organization Framework
  • 9. S=Service Framework of CSC and Analysis of CSC offered Services.
  • 10. M=Market opportunity/size and customer need; </li></li></ul><li>Technological Framework of CSC<br />Technological framework of CSCs is based on the core infrastructure of NeGP---(i)Networks (SWANs)(ii) State Data Centres (SDCs) (iii) Common Services Centers (CSCs).<br />All services supported on these 3 infrastructure pillars to facilitate -web-enabled Anytime, Anywhere access<br />(i) State Wide Area Networks (SWANs)/NICNET.--- Connect the CSC with SDC with speed of 2 mbps.State Wide Area Network(SWAN) is serving government to government (G2G) services and government to citizen services(G2C), especially for various mission mode projects(MMPs) like CSC.<br />(ii) National Data Bank/ State Data Centres ( SDCs) :(Back end ):There is a National Data Center (NICNET) which is connected to all government department and agencies of central and state government of India to their respective state data centers(SDC).<br />SDCs are securing and hosting of data and its application and act as the- Central repository of the State, provide secure data storage, disaster recovery and remote management functions etc. <br />(iii)Common Service Centres (CSCs): primary mode of delivery : The CSCs are envisaged to provide high quality and cost effective video and data services in the areas of e-governance, education, health, agriculture, entertainment as well as other private services.<br />CSCs are broad band enable service provider kiosk having at least following technical infrastructure-two P.C.s/laptop ,two printer ,web/digital camera, wireless connectivity ,UPS/invertor/ generator. <br />
  • 11. Technical Framework of CSC<br />Three Pillar of NeGP Infrastructure<br />Connectivity Network of CSC<br />
  • 12. Organizational Framework of CSC<br />
  • 13. Implementation Status of CSC Project<br />The CSCs project is being implemented with private sector partnership (PPP Model).<br /> Total approved cost of Rs 57.42 billion (USD 1.44 bn). The 71% will be provided by the private sector, 15% by the central government and 14% by state governments. <br />The implementation is being coordinated by a National Level Service agency (NLSA) appointed by Department of Information Technology, Government of India, which oversees a 3-tier implementation framework(SDA,SCA and VLE).<br />As on 30th April 2011, a total of 94,786 CSCs have been rolled out in thirty one States/UTs.<br />100% CSCs have been rolled out in 12 (Twelve) States--- Chandigarh, Delhi, Goa, Gujarat, Haryana, Jharkhand, Kerala, Madhya Pradesh, Manipur, Puducherry, Sikkim & Tripura.<br />More than 70% of the rollout has been completed in 13 (Thirteen) States--- Assam, Arunachal Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Maharashtra, Meghalaya, Mizoram, Nagaland, Orissa, Tamil Nadu, Uttaranchal and West Bengal. <br />3 (Three) States (Jammu & Kashmir, Rajasthan and Uttar Pradesh) implementation of CSCs have crossed half way mark (more than 50%). <br />It is expected that the roll out of 100,000 CSCs would be completed by June 2011.<br />A total of about 14,236 CSCs have been affected due to termination/ re-bidding. 8,785 CSCs have been affected due to SCA termination in 6 States. These States are Andhra Pradesh, Bihar, Haryana, Mizoram, Tamil Nadu and Uttarakhand. <br />About 5451 CSCs have been affected due to delay in the SCA selection process in the States of Andaman, Karnataka and Punjab. <br />Due to naxal affected and difficult areas, about 5331 CSCs are likely to be delayed<br />
  • 14. Implementation Status of CSC Project: continued-----<br />
  • 15. Service Framework of CSC<br /><ul><li>The Common Services Centers (CSC) are proposed to be the delivery points for Government, Private and Social Sector services to rural citizens of India at their doorstep . </li></ul> The CSC Scheme is envisaged to be a bottom-up model for delivery of content, services, information and knowledge on Private Public Partnership (PPP)Model. <br /><ul><li>End-to-end Services: This means that a specific content/ service should be in a marketable format for it to be selected as a part of the service network in the CSCs. Broadly, the services selection would be on their ability to impact the consumer through the saving cost, helping income generation and enabling socio –economic generation</li></li></ul><li>Basket of CSC Offered Services<br />
  • 16. Impact of CSC offered Services :<br />Empowering the rural people and bring transparency and accountability in government functioning,<br />Creating new job and enhancing their income. <br />Provide new access to education, knowledge, micro- financing, agriculture extension and health Services. <br />These services catalyse the social change and social development. <br /> Provide new distribution channel for products and service in rural area, this market linkage opens new economic opportunity in rural India<br />Customer Need: <br />Government services to save their time and cost.<br />Build income and promote livelihood through Need market linkage of agricultural and other productive activities to build their income and promote their livelihoods.<br />Need Health and Educational services for their social development.<br />Need entertainment and e-commerce services to enhance their quality of life.<br />Utility of CSC offered Services and Customer Need<br />
  • 17. Market Potential/opportunity space for CSC offered services<br />ANC –ORG MARG Survey report 2006 states that a conservative estimate of the total expenditure that a household could spend on CSC offered different services will be 6.75% of a mean monthly expenditure of Rs.4739<br />Sahaj Srei Sahaj e-Village pvt. ltd( a SCA) estimated in 2008 that a rural Indian citizen spend Rs.639 per month on CSCs offered services. Average population in the catchment area of one CSC is 8159 on the basis of population of India in 2007(total population of India=1.02 billion and rural population=815million estimated). So total opportunity per CSC per month is around Rs. 5,213,000(5.2 million rupees.) hence the total opportunity available for 100,000 CSCs in country is around Rs.521 billions. Presently on an average only 5%to 10% opportunity is tapped by one CSC. <br />
  • 18. Market Analysis of CSC offered Services-G2C Services<br />e-Government service offered by CSCs have their significance that they helps CSCs to recognise in rural community as an authenticated service provider .These service provide assured source of income to CSCs. <br />Analysis of four government services in a tehsil Anoopshahar, district- Bulanadshar,Uttar Pradesh-India<br />These four government services provides Rs.4894 per month to each CSC, while govt. of U.P. proposed to include 35 government services in the basket of CSC . This indicates the financial viability of CSC e-Government service offered by CSCs have their significance that they helps CSCs to recognise in rural community as an authenticated service provider .These service provide assured source of income to CSCs. <br /><ul><li>These four government services provides Rs.4894 per month to each CSC, while govt. of U.P. proposed to include 35 government services in the basket of CSC . This indicates the financial viability of CSC.
  • 19. e-Government service offered by CSCs have their significance that they helps CSCs to recognise in rural community as an authenticated service provider .These service provide assured source of income to CSCs.
  • 20. These four government services provides Rs.4894 per month to each CSC, while govt. of U.P. proposed to include 35 government services in the basket of CSC . This indicates the financial viability of CSC.</li></li></ul><li>Market Analysis of CSC offered Services-B2C and B2BServices:Top 80% Revenue Generating Services of CSCSource: AC Neilson –ORG MARG survey on CSC(2006)<br />
  • 21. Market Analysis of CSC offered Services-B2C and B2B Services---Continued---<br />CSCs have a potential to become the gateway for tapping the rural market by companies offering different product and services. CSCs opening new distribution channel for product and services.<br /> Indicus Analysis Pvt. Ltd., New Delhi market survey report 2008-09 - despite of economic slowdown the market of personal care and home care product was bulking trend because these companies have discovered rural markets, which now contribute a little more than half the total sale for such product in country.<br />CSC empowers the rural people through government service and save their money and time .It creates new jobs and a helps in poverty reduction. It also offers new access to financial, agricultural and health related services as well as new knowledge, information and education. <br />The average number of professionals emerged as 60 youths in sample villages of Uttar Pradesh(India). Of those who attained some professional education, 38% were employed as professionals and 7% were service (govt., private or tuitions). However, 32% such professionally qualified were still engaged in cultivation or in some kind of labour work.”--[ANC-ORG MARG Survey]<br /> These 32%professional educated youth can enhance their skill through CSCs offered vocational education , computer education and English speaking course and can be engaged in IT-BPO industry. These IT educated youth become a prime driver of emerging rural economy of India. <br />
  • 22. Part-III: Strategic Analysis of CSC<br />1.CSC: Challenges and Issues<br />2.Tools of Strategic Analysis—(i)SWOT (ii)Porte’s Five Forces (iii)Value Chain (iv) business Mapping<br />3.Business Model Analysis of CSC<br />(i)Value Proposition (ii) Cash Flow Analysis of CSC<br />
  • 23. Challenges and Issues in CSC Project Implementation<br />Despite of this remarkable progress, CSC project is facing some major challenges in the following field<br /> [A]–Major Challenges-- <br />Delay in deployment of G2C services<br />Insufficient back end computerization in government department<br />Lack of Entrepreneurship in VLEs<br />Inadequate capacity building effort<br />Inconsistent Connectivity and Electricity supply<br />Insufficient content in regional languages<br />Lack of Awareness about ICT and CSC project<br />[B] Minor challenges--- that are equally affecting the rollout progress of CSC scheme and its sustainability e.g.<br />Suitable place selection for CSCand population in the catchment area of CSC<br />Inappropriate monitoring system for VLEs, <br />lack of credibility of VLEs in local rural community due to inconsistent service delivery, <br />maintenance of computers in remote area etc. <br />
  • 24. Strategic Analysis(S.A.) and Its Tools<br />Objective of S.A.: To understand and identify the core issues and barriers which are affecting the sustainability and financial viability of CSC<br />Framework for translating core issues identified through S.A.--Thisframeworkmakes core issuesmore quantifiable , measurable, and responsible teams of organization become more accountable. They are-<br />1.Product ------(what are we selling?)---CSC offered services<br />2.Process ------(how are we selling it?)---Through CSC<br />3.Customer------ (to whom are we selling it?)----To rural people of India<br />4.Distribution----- (how does it reach them?)---- Technical frame work of CSC<br />5.Finance----- (what are the prices, costs and investments?)—Investment in CSC project and by VLEs<br />6.Administration---- (and how do we manage all this?)-Through Organizational framework of CSC.<br />Tools of S.A.- (i) SWOT Analysis(ii)Porter’s Five Forces Method<br />(iii)Value Chain Analysis(VCA) (iv)Business Mapping/Ecosystem of content and services of CSC.<br />
  • 25. SWOT Analysis of CSC<br />
  • 26. Porter’s Five Forces<br />
  • 27. Porte’s Five Forces Matrix for CSC:<br /><ul><li>Michel porter develop the five forces model for understanding the competition in business and take appropriate decision
  • 28. G2C services very important for sustainability and viability of CSC.
  • 29. The capacity building of VLE is important for their survival and beat their rivals.</li></li></ul><li>Value Chain Analysis (VCA) of CSC and its framework<br /><ul><li>VCA -Powerful diagnostic tool to identify the critical issues and blockages for target customers and provide framework for intervention to change the circumtances.
  • 30. VCA identify the factors which are responsible for economic viability and commercial sustainability of CSC offered service in market
  • 31. Primary Activities of CSC—Establishing and operating the CSC to deliver services to rural people by VLEs.
  • 32. Support Activities of CSC–includes the activities under technical, organizational and service framework of CSC.
  • 33. Result-The VCA identyfiedthe core issues and barriers that are hampering the sustainability and fiancial viability of CSC.
  • 34. The support activies are mainly responsible for the poor implementation of CSC project. </li></li></ul><li>Content and Service Eco system of CSC<br />
  • 35. Business Map of CSC and its Ecosystem<br /><ul><li>This is a description of ecosystem of CSC.
  • 36. What other player are working in same field and what are the main stakeholders and what is the interrelation among them.
  • 37. This matrix shows the interrelationship among different stakeholder in CSC ecosystem and choices available for user/sellers.
  • 38. VLEs can only sustain if they provide cheap and qualitative service to rural consumers.</li></li></ul><li>Results of Strategic Analysis of CSC : Core Issues and critical success factors Responsible for sustainability and Viability of CSC<br />Deployment of G2C services and mounting of monitoring devices(OMT) should be as early as possible.<br />Connectivity of SWAN must be uniterrupted connectivity to CSCs to reduce the operating cost of CSCs. .<br />Speed up the back end computerisation process of government department and speedy e-readiness of states.<br />Select appropriate place for CSC<br />Select appropriate VLEs that have entrepreneurial quality and technical knowledge<br />Provide better B2B and B2C services to rural people so that they do not shift towards non CSC private players.<br />Content and services must be available in local languages.<br />Awareness campaign must launched regarding CSC and services offered by CSC.<br />Capacity building of VLEs ,government functionaries and other stakes holder must takes on priority basis.<br />Sufficient and uniterrupted supply of electricity to CSCs ,so that their operating cost should be minimum.<br />
  • 39. The Business ModelAnalysis of CSC: Sustainability and financial viability of CSC<br />Value Proposition of CSC<br />Concept of business model<br />Around 70% population lives in rural area but they are still struggling for basic amenities and spent more money and time for getting government and business services.<br />100,000 common service centres are going to be establish till June,2011 on honey comb model(one CSC covers six adjacent villages) to cover all 600,000village of India. <br />CSC are Internet connected service delivery kiosk providing G2C,B2C and B2B services on affordable prices at their door step of rural people.<br />CSC will empower the rural community and catalyse the social changes through modern technology.<br />Although B2B and B2C service provider are exist in market but CSC are unique because they have fast internet connectivity through SWAN and access to government information and have exclusive right to deliver G2C services to rural people. <br />The rural people will save billions of rupees every month by getting G2C services at their door step.<br />CSCs can tapped the Rs. per month 520 billion market of CSC offered services. <br />
  • 40. The Business ModelAnalysis of CSC: Sustainability and financial viability of CSC<br />Basic Business Model of CSC <br />Cost sharing Business model of CSC<br />80% of capital cost bore by SCA. and 20% of capital cost bore by VLEs<br />NICT a SCA in the state of M.P. (India) followed this model successfully.<br />Sahaj Seri a SCA also follow this model initially in Uttar Pradesh but later drop that model and focus on to choose a VLE who can bear total capital and operating cost. They only facilitate services and training to VLEs. <br />Employee Model-<br />Entire capital cost bore by SCA and VLEs work as their employee and SCA pay them fixed salaries. <br />SCA helped the CSCs with initial operating expenses till the time the CSCs become sustainable. <br />SCA de-motivated VLEs in taking loan to avoid financial burden in the initial stages of the project. <br />BASIX a SCA working in the state of Orrisa and Meghalaya(India) implementing that model successfully.<br />Developed by IF&FS for draft document of CSC(2006)<br />Objective--to trap the market potential of CSC by adding values to rural people. <br />This model describe-Capital cost and operational cost( fixed cost+ variable cost).<br />Cost sharing formula—85% of capital cost financed by banks to VLEs and 15% bear by SCA.<br />Interest rate=12% p.a., annual maintenance of hardware=10% of asset value, Insurance of hardware=1% of asset value,<br />Revenue sharing Model= SPV(government body):SCA:VLE: : 5%:40%:55%<br />Business Model developed by SCAs from Field Experience <br />
  • 41. Framework of CSC’S Business Model and model cash flow Graph<br /><ul><li>A business model is defined as a summation of core business decision and trade- offs employed by a company to earn the profit. It framework have four parts----</li></ul>Revenue Sources- of CSC from G2C,B2C and B2B services.<br /><ul><li>Revenue model--membership/subscription, volume/unit based, transaction fee and advertising. </li></ul>Key Expenses—Capital cost and Operational cost(Fixed cost + variable cost)<br />Investment Size<br /><ul><li>Investment size of CSC is the sum of capital, variable and fixed
  • 42. Maximum investment is the amount of cash required before a company achieves positive cash flow.
  • 43. cash flow diagram provides the means for capturing and summarizing information relating to the cash requirement of a business model</li></ul>Critical Success Factor-is an operational factor or competency that a company must possess in order for it to be sustainable and profitable. <br />
  • 44. Cash Flow Analysis of a CSC :(Village- Jalalpur, District –Raebarelly, Uttar Pradesh- India)<br />Cost Details of CSC<br />Asset details of CSC<br />Total Capital cost=hardware cost + other assets cost=Rs.118,100<br />Rate of interest=12% p.a.<br />Maintenance of hardware=10% of its asset value<br />Insurance of hardware=3% of its asset value<br />Tax rate =30% p.a.<br />Depreciation of hardware=25% and other assets 10% of its value p.a.<br />Monthly expenditure on contingency=1% of monthly revenue<br />Monthly expenditure on business promotion=5% of monthly revenue<br />Travelling cost monthly=5% of monthly revenue<br />Miscellaneous Expenditure=3% of monthly revenue<br />
  • 45. The Business ModelAnalysis of CSC: The cash flow detail of a VLE-Village- Jalalpur, district- Raebarelly,(Uttar Pradesh), India<br />
  • 46.
  • 47. Profit and Loss Statement of Jalalpur CSC<br />Revenue Inflow Analysis<br />Revenue Outflow analysis<br />major source of revenue inflow is from G2C services and B2C and B2B services have minor contribution.<br />Growth rate of revenue from G2C services gradually decreasing in four year as-21%>18%>9%. Due to poor support activities of CSC project.<br />G2C services have vital and pivotal role in the sustainability and financial viability of CSCs.<br />Delay in G2C services adversely affecting the sustainability and viability of CSC and VLEs are forced to exit from CSC operation.<br />Cause of minor contribution of B2B and B2C services is-lack of awareness about ICT and CSC project in rural community..<br />Major revenue out flow source is repayment of loan( interest+ principle component)=Rs.37,320/-per year.<br />Second major revenue out flow source-depreciation –R. 21,935/- every year<br />Amount of taxes paid in four year is Rs.7,945.>Rs.16,853>Rs.24,633,>Rs.29,134.<br />Expenses on generator and on electricity is almost equal total around 9,000/- p.a.<br />Expenditure on internet connectivity is around Rs. 4,800 p.a. <br />Net cash flow in four year is Rs.16,008>Rs.33,691>Rs.48,419>Rs. 54,910.<br />Cost expenses are so high in compare to net cash-flow. No VLE can survive only on the income of CSC in initial year.<br />Where G2C are not deployed there survival of VLEs is very difficult. <br />
  • 48. Cash Flow Analysis of a CSC :(Village- Jalalpur, District –Raebarelly, Uttar Pradesh- India)<br />Balance Sheet of CSC<br />Cash Flow Statement of CSC<br />
  • 49. Cash Flow Analysis of a CSC :(Village- Jalalpur, District –Raebarelly, Uttar Pradesh- India)<br />Cash Flow Graph of Jalalpur CSC: X-axis shows months; Y-axis shows-Amount of monthly cash flow in rupees <br />Cash Flow Analysis of Jalalpur CSC<br />The revenue growth of said CSC in four year is 24%>20%>11% respectively<br />The operating margin in four year is 40%>46%>49%>48% respectively.<br />The post-tax (PAT) margin in four year is 12%>21%>25%>27% respectively <br />Net cash flow in four year is Rs.16,008>Rs.33,691>Rs.48,419>Rs. 54,910respectively. Total=Rs.153,028<br />Total interest paid in four year+ principle amount=149,280<br />The cash flow statement shows that CSC attained breakeven point in around four year.<br />
  • 50. Results of Cash Flow Analysis of Jalalpur CSC<br />The main critical success factor responsible for the sustainability and financial viability of CSC <br />G2C services play vital and pivotal role for the sustainability and financial viability of CSC. Major source of revenue inflow is from G2C services.<br />Growth rate of revenue of G2C services is decreasing due to poor support activities in the value chain of CSC.<br />Revenue from B2C and B2B services is less due to lack of awareness about ICT and benefits of CSC project.<br />Government and SCAs should support the VLE in initial years so that they can able cross the valley of death and early achieve the breakeven status.<br />Operating cost of CSC are very high in initial year of operations. Loan liabilities are very high when combined with tax liabilities, depreciation of assets and operational cost the financial burden on VLE become unbearable. Ultimately they forced to stop the operation of CSC or exit from project. If G2C services are not deployed then situation become worst.<br />Net cash flow is less in compare to expenses. No VLE can survive for four year on that net cash flow from CSC.<br />CSC reaches its breakeven point in four year. This time period is long for his/her survival under such condition.<br />
  • 51. Knowledge Based Business Model of CSC<br />Knowledge base business model of CSC –Proposed for long lasting sustainability of CSC <br /> 1.Make access to education; information and knowledge through ICT enable CSC to rural youth.<br />2.The CSC offered IT-Computer and English skill courses will transform the young rural population into skilled human resources for IT-BPO industry<br /> 3.SCAs will play the role of driver in this business model. SCA will bags the IT/ITes contracts/business from domestic and offshore markets and then they sublet to CSC. These CSC will distribute work among IT and English educated rural youths. CSC will acts as coordinator between SCA and these rural youth.<br />4.This IT enable rural workforce is cheap in compare to urban based workforce in India. Indian IT/ITes services become cheap in compared to other IT/ITes providing countries in the world.<br />5.Rural youth and specially women who are engaged in agriculture but their productivity is insignificant, they can be successfully shifted in service sector.  <br />6. IT/ITeS industry will penetrate in rural area and generate wealth through creating new job opportunity for rural people. If income of rural people increases it leads towards building more disposable income in rural community that can be tapped by CSC for their sustainability and profitability.<br />Example- NASSCOM Foundation Mumbai(India) and an NGO Multipurpose Social Service Society trained 24 student for IT-BPO sector in Cuddalore near Pondicherry(India). <br />
  • 52. Core issues for the sustainability and Viability of CSC: Suggestions<br />
  • 53. Conclusion<br /><ul><li>The CSC is a great effort by the government of India making government and commercial services accessible to rural people at their doorstep on an affordable prices with a vision to bridge urban-rural development .The goal of the CSC project is to empower the rural community and catalyse social change through modern technologies.These CSCs will become a vehicle for rural inclusion and inclusive growth to unlock the potential of rural India.
  • 54. 3.Analysis of technological framework of CSC indicates need for improving connectivity and infrastructural facility on priority basis.
  • 55. 4.organisational cohesion and better coordination between SCA and government agencies like SDA is needed.
  • 56. 5.Success and sustainability of CSC is very much dependent on selection of appropriate SCAs and VLEs
  • 57. 6.Analysis of services framework suggest that delay in deployment of G2C services and road blocking attitude of government functionaries are demotivating the VLEs that hampering the progress of CSC roll out
  • 58. 7.CSC scheme is facing major challenges like -----lack of content in local language, lack of awareness about CSC in rural community, inadequate capacity building effort to enhance the efficiency of VLEs and government functionaries. These challenges must be addressed in an integrated manner. </li></li></ul><li>Conclusion—continued------<br />8.Strategic analysis of CSC gives a broad picture of internal and external potential and challenges that determine the sustainability and viability of CSC.<br /> SWOT analysis show s that maintain and build the strengths(G2C and connectivity) and opportunities (market potential of CSC ) should prioritise and optimise. The weakness(connectivity,G2C services deployment, content in regional languages , poor capacity building efforts)of CSC should be removed and threats(lack of awareness, competition with market players) must be counter effectively in time.<br />Porter’s Five forces analysis helps in understanding the competition in the market. VLEs are facing tough competition in B2C and B2B2 services. The capacity building is necessary for them to counter the competition.<br />Value Chain analysis of CSC indicates that support activities(technical ,organizational and services framework) of CSC are not satisfactory and they are affecting the sustainability and viability of CSC.<br />Business mapping and ecosystem analysis of CSC indicates the interrelationship with different market players.<br />Business model and cash flow analysis of CSC—quantified and specified the core issues and critical success factors that determine the sustainability and viability of CSC.<br />G2C service are vital and their early deployment should be done on war footing.<br />Operating cost should be minimize.<br />Choose VLEs who have entrepreneurship quality and financial capability to bear initial cost of CSC.<br />9.Critical analysis of existing business model of CSC is suggests that the some new model should also be adopted for sustainability and profitability e.g. knowledge based business model..<br />10.This strategy will bridge the urban-rural divide and India will able to achieve an inclusive growth. <br />
  • 59. References<br /> Administrative Reform Commission (India) Report, 2008, page. 129) <br /> Base line survey to identify location criteria, basket of priced services and revenue potential foe CSCs-National Report ,Executive Summary January, 2008 by ORG Center for Social Research-A division of AC Nielson ORG-MARG Pvt. Ltd.]. <br />Business model analysis by Richard G. Hamermesh, Paul W. Marshall, Taz Piromhamed; January22, 2002, page 1, Harvard Business School Publication No-9-802-048].<br />Creating the Value chain. (Harris,R.W.,A. Kumar,et al.-2004 –“Sustainable Tele centers? Two cases from India”).<br />Draft document of CSC,(2006) Department of Information Technology, Government of India,Volume-I,chapter-8, Capacity building, page 17. <br /> Draft document of CSC, (2006)Department of Information Technology, Government of India,Volume-I,chapter-5 Connectivity.<br />e-Governance Approach in India – The National e-Governance Plan (NeGP) Dhrupad Mathur, Piyush Gupta and A Sridevi.,; - Fostering e-Governance : Compendium of Selected Indian Initiatives Edited by – Piyush Gupta, R K Bagga, & Sridevi , Ayaluri Published by The Icfai University Press, 2009 ISBN 978-81-314-2632-6<br />http://www.mit.gov.in/content/common-services-centers access on 22-05-2011.<br />http://en.wikipedia.org/wiki/Cash_flow access on 17-05-2011].<br />How Competitive Forces Shape Strategy By M.E.Porter,Havard Business School Review, March-April 1979.<br />Khelldi,Y.-2001-What Works: The Infocenter Model W.e. center<br />Market Survey 2008-09, by Indicus Analysis pvt. ltd., New Delhi, web site:www.indicus.net].<br />Sahaj(A SCA) Mitra portal, www.sahajcorporate.com, access on 25-02-2011<br />Status of common service center programme in India: Issue, challenges and emerging practice for rollout. By-Rajanish Das and Atashi Battacherjee-I.I.M. Ahmadabad ,India ,February 2011,W.P. No-2011-02-03, page 20.<br />State level workshop on e-Governance (17th April2008) at Luck now, Uttar Pradesh, India organised by department of IT& Electronics, Government of Uttar Pradesh, India.<br />Transforming Government – e Government Initiatives in India, Editors: R K Bagga and Piyush Gupta, Published by : The ICFAI University Press, The Icfai University Press52, NagarjunaHills, PunjaguttaHyderabad, India–500 08, 2009.page33<br />The World Bank: World Development Indicators database. World Bank. 27 September 2010.<br /> What is the Strategy? By Porter,M.E.(1996),Harvard Business School Review,Nov.-Dec.-61-78.<br />www.csc-india.org.<br />
  • 60. Thank you!<br />?<br />

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