Leveraging ICT for the BOP: Innovative Business Models in Education, Health, Agriculture and Financial Services

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Hystra, a consulting firm specializing in hybrid (social and business) strategies, presents the opportunity to find out “what works” in terms of full projects - as opposed to technologies - combining both an economically viable model and socio-economic impacts on their end-users, in the field of ICT for development (ICT4D).

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Leveraging ICT for the BOP: Innovative Business Models in Education, Health, Agriculture and Financial Services

  1. 1. JimenaBetancourtCoordinación TIS Talksjbetancourt@telecentre.org@jimebeta
  2. 2. SustainabilityModelsTrends &OpportunitiesTIS Talks Phase 1.Product Developmentoriented• Syrian TelecentreProject• BIID N BangladeshPartnership oriented• ATN Brasil• Colnodo Colombia• SocialInnovation• Social Enterprise• ICT Businessmodelsleveraging ICTfor the Base ofthe Pyramid1. 2.
  3. 3. LucieKlarsfeldPresentationProject Manager – HystraAt Hystra since 2009: Developing hybrid strategies for housing, education, ICTand energy sectorsPrevious work experience: Bain & Company Paris, French EmbassyBucharest, UNEP New York and UNDP Mali.Master in International Affairs from Columbia UniversityMaster of Engineering from Ecole Centrale Paris
  4. 4. TIS Talks, September 13, 2012Leveraging ICT for the BOPInnovative business models in education, health, agriculture and financial services
  5. 5. In collaboration with
  6. 6. A word about HystraOur methodology: learning from what works to scale upproven solutions3 types of business models emerge, each with their keychallengesIn financial and agro-services, viable models serve theBoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key toscalingAgenda
  7. 7. We work with business, social and public sector pioneersto design and implement hybrid strategies, i.e. innovativebusiness approaches that:•are profitable, scalable and eradicate social and environmentalproblems•combine insights and resources of business, public and citizensectors.Hystra mission
  8. 8. Hystra is a hybrid organization,a for-profit tool for social changeAdvisory Board vets our choice of clients/ projects based on theexpected social impactBoard members: Rodrigo Baggio, Valeria Budinich, Bill Drayton,Emmanuel Faber, Jay Naidoo, Muthu VelayuthamSupport to leading social entrepreneurs with 5% of our mandaysOpen source policy: we publish all our knowledge, exceptconfidential information developed for specific clientsHystra vision:“Be the change we want to see in the world”
  9. 9. A word about HystraOur methodology: learning from what works to scale up provensolutions3 types of business models emerge, each with their key challengesIn financial and agro-services, viable models serve the BoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key to scalingAgenda
  10. 10. 11Initial scan280projects15 casestudieswith minscale<140projects1st selection:On-going projectswith market-basedmechanismsProjectclassificationWe learn from solutions that workto craft scale-up strategiesNote: No implied hierarchy of projects,but good examples representativeof best modelsAnalysis on 3 criteria Effectiveness(in solving theproblem) Financialsustainability Scalabity andreplicability Obstaclesto scale Strategies toovercometheseobstaclesLessons learnt andrecommendations
  11. 11. Number of projects screened:Many projects do not have an economically viablemodel, limiting their lifespan and impactTested market-based mechanismsFully grant-based, “dead pilots” olderthan 2 years or feasibility studies57103642111971223022
  12. 12. Case studies span 3 continentsIndia - Bangalore• Narayana HospitalNigeria• mPedigreeUganda• CKWKenya• Txteagle• MpesaBangladesh• Healthline• BBC JanalaEast India• Drishtee• EkutirGhana• mPedigree•• EsokoMYC4Brazil• BradescoIndia - Mumbai• FINO• Reuters Mobile LightIndia - Nagpur• Echoupal13
  13. 13. 14A word about HystraOur methodology: learning from what works to scale up proven solutionsAt this early stage, 3 types of business models emerge,each with their key challengesIn financial and agro-services, viable models serve the BoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key to scalingAgenda
  14. 14. Key take-away: the potential of market-based ICT approaches for the BoP isstill largely untapped
  15. 15. *Maximum estimates from Hystradatabaseof 280 projectsCaveat: It is still earlydays!ICT may transformyour business(… or not?)Most successfulprogramsuse ICTas an enabler,not as a driverUsers of ICT servicesworldwide in 2011*(in million)Users of ICT worldwide(in million)… yet limited reach of ICT-based social servicesUnprecedented growth ofconnectivity worldwide…Sources: ITU WorldTelecommunication /ICTIndicators database, Hystraanalysis
  16. 16. There are three different business models,with different barriers to scale
  17. 17. Technologyfront-endTechnology back-end: sourceof information and serviceTechnologyat localagent’sClientorganizationgathering data“Direct access”: 1-way, accessed by end-users“Local agents”: 1-way,accessed via local agents“Crowdsourcing”: 2-wayon 2 sides of techno platformClient /end-userKey challenge: Creating andmarketing relevant localservicesKey challenge: Recruitingand training enough localagentsKey challenge: Ensuringcrowdsourced dataaccuracy
  18. 18. Our study analyses the various cases bysectorand by business model
  19. 19. Learnings for:Analysis of sectorial outcomeAnalysis of potential of ICT to fill current value chain gapsIdentification ofobstacles to scaleCost efficiencyanalysisCross sectoropportunitiesLearningsfor:1-wayin directaccess1-wayvia localagents2-wayon 2 sidesof technoplatformCKWtxteagleEducationHealth FinancialservicesAgriculture andsupport toeconomicactivitiesInsurancevia mobileM-PESAMYC4mPedigreeHealthLineBBCJanalaReuters RMLEsokoDrishtee(education)eChoupaleKutirDrishtee (FMCG)SectorsNarayanaHrudayalayaHospitalBusinessmodelFINOBradesco
  20. 20. 21A word about HystraOur methodology: learning from what works to scale up proven solutionsAt this early stage, 3 types of business models emerge,each with their key challengesIn financial and agro-services, viable models serve the BoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key to scalingAgenda
  21. 21. ICT viably brings financial servicesto previously unbanked people,lowering risks of carrying cash andtransaction costs
  22. 22. .See FINO case study for more detailsLargest project seen:FINO37 million usersAfterMoneytransfers, remittances,paymentsSavingsLoansInsurance24/7 service,cheap, safe and fast✗BanksMFIsBeforeMoneytransfers, remittances, paymentsSavingsLoansInsuranceLimited availability,high costs,long wait linesand delaysFIs
  23. 23. In rural development, farmersand the agro-ecosystem areready to pay for local serviceswith direct financial benefits
  24. 24. SourcingCulti-vationSalesChoice ofcropLocal and integrated servicesInfo and expert advice on weather,best agro-practices and plant healthInfo on local market prices, demandand availability for inputs and outputsAggregation of farmers for purchaseand grouped sale and direct order/salesData on farmers’ income and harvests,construction of credit historyBeforeICT serviceAfterICT service+5 to +400% offarmers’ incomeincrease**Anecdotal evidence from cases studied for this work:CKW, eChoupal, eKutir, Esoko, RMLLargest project seen:eChoupal:4 million users
  25. 25. A word about HystraOur methodology: learning from what works to scale up proven solutionsAt this early stage, 3 types of business models emerge,each with their key challengesIn financial and agro-services, viable models serve the BoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key to scalingAgenda
  26. 26. Market-based models in healthleverage the financial interests ofdiverse stakeholders
  27. 27. ICT service Examples PayersConsultation End-users: 3-min phone consultation ($0.2)Integrated,optimizedmanagementHospitals generating productivity gains, i.e.first screening of patients byteleconsultations free to end-usersDrugauthentificationPharma companies avoiding sales ofcompeting fakes, i.e. drug verificationmessage free to end-usersLargest project seen:Healthline:3.5 million users
  28. 28. ICT is yet to fulfill its potential totransform education systems, withvery few market-based projects todate
  29. 29. AttendingclassesMonitoringof perfor-manceTrainingteachersDesigningcurriculum andcontentLearningPracti-cingClasses viavideo-conferences(including forvocationaltraining)Mobile phonebased coursesPedagogytraining viaICTDesigningclasses on ICTFinding classcontent on thewebSharing classcontentUsing ICT aslearning toolsInteractionswith teachersthrough ICTQuizzes onmobileAccessingclassesarchivesOnlineforumsReportinggradesReachingstudentsReportingattendanceof teachersandstudentsBefore school At school After schoolLegendService provided by ICTNot market-basedLargest project seen:BBC Janala:6 million users
  30. 30. A word about HystraOur methodology: learning from what works to scale up proven solutionsAt this early stage, 3 types of business models emerge,each with their key challengesIn financial and agro-services, viable models serve the BoP…… whereas only a few exist in healthcare and educationEntrepreneurship is key to starting successful services,while cross-actor and cross-sector collaboration is key to scalingAgenda
  31. 31. A long trial-and-error phase hasproved necessaryto start successful services
  32. 32. “We did lots of pilots, spending a year and a halfdeveloping just the technology.”“This is a truly new field, no one has the answers,we can only succeed through trials and errors.”“It requires a significant time and money investmentto design an effective service for specific cultures andlanguage speakers.”Sources: Interviews“We did a pilot for two years before launching RML.An entrepreneurial spirit is fundamental.”Sara Chamberlain,BBC JanalaAmit Mehra,RMLNathan Eagle,txteagleTim Vang,MYC4Entrepreneurs on their own need time……as do intrapreneurs within larger organizations
  33. 33. Collaboration is key to scaling
  34. 34. PolicyRecruitment andtrainingPartnershipsFundingTechnologyConnectivityLiteracyChallenges to scale faced by entrepreneurs Collaboration requiredGovernments, local authorities,international agenciesCSOs, aid agencies, universitiesTelcos, providers of complementaryproducts and servicesTelcos, software and infrastructurecompaniesGovernments, telcosSources: Entrepreneurs’ interviews, Hystra analysis
  35. 35. Regulations: Legislators have animportant role as buyers ofservices enabled by ICT
  36. 36. PolicyRecruitment andtrainingPartnershipsFundingTechnologyConnectivityLiteracyChallenges to scale quoted by entrepreneursSources: Entrepreneurs’ interviews, Hystra analysisDrivers for success: Legislators as promoters,first movers and buyersMonitoring of successful programs to shaperegulations helping their scale-upPurchase of efficient systems for public health oreducation initiativesFinancial inclusion or national health programsensuring minimum revenues to companies in thatspaceBarriers to success: Legislators as prescribers✘Regulations that limit entrepreneurs’ solutions ordo not allow to import best practices from othercountriesRegional initiativesCreating regional incubators for cross learningsHarmonizing regulations
  37. 37. Financing, though not the mainchallenge, is required for bothentrepreneurs and technologypurchasers
  38. 38. PolicyRecruitment andtrainingPartnershipsFundingTechnologyConnectivityLiteracyChallenges to scale quoted by entrepreneursSources: Entrepreneurs’ interviews, Hystraanalysis1) Entrepreneurs’ needsSeed funding to develop adequate offerEquity funding (patient capital)•To sustain operational expenses•To finance the set up of new kiosksShared advertising and marketing costsGrants•To raise digital and financial literacy•To reach the very poorest2a) Local agents’ needs“Meso loans” to finance the set up of newkiosks (in models with intermediaries)2b) End-users’ needsMicro finance to pay for the technology(in models where end-users accesstechnology directly)Financing required
  39. 39. The full report is available on thesponsors’ websitesand at www.hystra.com
  40. 40. Report structure:Sponsor’s ForewordHystra and Ashoka IntroductionAcknowledgements1. About this project: Methodology2. Executive summary3. The basis for ICT4D: Connectivity4. The “Direct access” model5. The “Local agent” model6. The “Crowd” model7. ICT4Financial services8. ICT4Agriculture9. ICT4Health10.ICT4Education11.Socio-economic impact of ICT4D projects12.Environmental impact of ICT4D projects13.Conclusion on findings and recommendationsAppendix
  41. 41. Key questions: what does itmean for you?
  42. 42. Do you have capabilities that could contribute to thesuccess of some of these entrepreneurs?Could you leverage the capabilities of some of theseentrepreneurs?Could ICT enable productivity gains for you and yourstakeholders (remote access, automation of processes), toreach underserved populations?Could you use ICT to fundamentally re-engineer yourbusiness processes (like Narayana Hrudayalaya Hospital)?Could ICT allow you to create an entirely new businessmodel in your industry?Easy winsHighrisk, highreturnopportunities
  43. 43. Thanks for your attention!
  44. 44. TIS Talks Phase 2.• Identify potential partners to develop distributionchannels of products and services (E-health, distanceeducation, telecomunications solutions, and others)• .Identify solutions for network’s management basedin open software applications• .Identify solutions to lower hardware cost• .Identify partners to develop applications for greaterimpact in the communities served by telecentrenetworks
  45. 45. Schedule and information:http://www.telecentre.org/sustainability/http://community.telecentre.org/group/tis-talkshttp://www.facebook.com/telecentre.org@telecentreorg@telecentrosLAC@MiguelRaimilla@jimebetaFollow the conversation:

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