The ITC e-choupal initiative

1. The ITC e-choupal initiative • Group 5: • Curtis Branson • Tabish Mohammad • Astrid Vidal

2. ITC LIMITEDEXECUTIVE SUMMARY • ITC was founded in 1910. • ITC is one of India's leading private companies. • The earlier decades of the company's activities centered around the tobacco industry. • India’s agricultural sector represent 60% of the nation’s workforce. • In 1999 his chairman was Y.C. Deveshwar.

3. ITC’S DIVISIONS INTERNATIONAL BUSINESS DIVISION OTHER DIVISIONS • Agricultural commodities export division. • Soybean and its derivatives represented two-thirds of ITC’s agricultural export business. • In 1998 IBD was generating $100 million in sales. • Tobacco, paperboard, retail, hospitality, food and other. • In 1998 ITC’s others divisions were generating $2 billion in sales

4. NEW BUSINESS PLAN • Rethink the soybean supply chain. • Study the farmer’s villages and market yards. • Reduce costs and inefficiencies. • Exploring digital technologies (IT) ITC’s eChoupalinitiative

5. BUSINESS STRATEGY: • Innovation: Reorganizing the Supply Chain. • Growth: Applying the model to other products. • Differentiation ORGANIZATIONAL STRATEGY: • Social mission. • Training. • Transparency: Accessible to anyone. • Trust: Winning people on the long run. • Hubs: Attractive destinations. • New ITC sales and opportunities INFORMATION SYSTEMS STRATEGY: • Computer kits. • Website: www.soyachoupal.com

6. India • Madhya Pradesh is central • State is the “soy basket” of India • India population is 1.2 billion • India has 119 million “cultivators” or farmers

7. ITC’S Motivation Benefits to farmers Benefits to ITC • Increase farmer’s share of profits in soybeans • Increase farmer’s ability to grow higher-yielding and higher quality crops • Reduce uncertainty for farmer regarding sales and payment • Increase ITC’s share of profits • Shorten the total lead time from farm to factory • Greater control of supply chain including inputs, process, and outputs for growing/harvesting cycle

8. Product and Information Flow

9. Product and Information Flow

10. Keys to implementation success • Leveraged high trust in global brand of ITC • Enhanced existing high-trust relationships in choupals as a cultural norm • Gained buy-in from key stakeholders (gov./CA’s) • Did not attempt to displace mandi system

11. How was value created • Better forecast and best practices raised crop quality and yield • ITC control and tracking of product allowed for premium and lower grade segments • New consumer market opportunities opened up at warehouses and processing hubs

12. Barriers to Success • Winning over the CA’s and Farming Community • Training of Sanchalaks and Samyojaks • Weather Page • Indian Meteorological Department • Agriculture Produce Marketing Act • Convincing through transparency and potential benefits

13. Approach that led to success • RajnikanRai, Vice President of trading In IBD hyderabad, commented: • “We feel that this is how we can win people in the long run, by giving them the tools. Communication and information are developing; mobile phones are here, the Internet is here, we must use these things for education, and let there be no question of hiding information. We let the farmers understand and let them decide who is best in an open, competitive market scenario, Let them decide. They are the judges.”

14. Recommendations • Continue to build out eChoupal framework to new commodities and new states in India • Develop business intelligence regarding eChoupal transactions and other relevant data to provide business insights • Look for ways to increase density of eChoupal information available while reducing footprint of hardware/Kiosk sites (mobile tech)

15. Lessons Learned • Radical redesign of even deeply entrenched processes can be successful if cultural barriers are properly addressed • Stakeholders beyond owners, employees and shareholders MUST be considered in business strategy

16. QUESTIONS and DISCUSSION