NICT can leverage the relationship with one large client, which means harnessing scale economies and emerging as a pan India organization from a localized player in a BIMARU state.
d) It would give NICT an opportunity to its CSC kiosks for the generation of an augmented stream of fee based revenue that would stabilize its free cash flows e) Risk involved in refusal as ending up this commercially respectful gesture would mean losing up all subsequent opportunities for NICT to include PBI in its subsequent portfolio. f)
Strong opportunity for NICT to expands its current netw ork .Also depending upon the contract terms with PBI, it may think of diversifying into core banking services
g) The offer also fits nicely into the business model of NICT and is sustainable social intervention, coupled with regular employment and pay for CSC VLEs. h) If NICT refuses the proposal then PBI may completely bypass an engage with kiosks VLEs directly which will severe franchisee links with NICT impacting its re gular stream of income. PBI might even create newer network systems which can be a threat to NICT as its current clients like SBI and BoI may exhibit opportunistic behavior in future and shift to newly developed systems by PBI. i)
This also opens up a chance for NICT to utilize PBI’s presence in across remotest locations of India. It can be used for deepest penetration into market and serving new customers
j)
This would even serve as an end to end project mode of variable stream o f earnings for NICT by involving rural population via financial inclusion.
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Disad vanta ges
Complacency within the ranks and files of NICT VLEs might become inefficient and corrupt. With the increased workload, NICT might get constricted in terms of portfolio management. No guarantee of PBI being a success
Advan tages
A sustainable social intervention, coupled with regular employment and pay for the CSC VLEs. Empower the rural population through financial inclusion. By leveraging the relationship with one large client, NICT might harness scale economies and emerge as a pan India organization.
PBI would likely to be mandated to engage the rural population with financial inclusion. PBI might bypass NICT and engage the kiosk VLEs directly, by providing them resources to set up a standardized compatible network Present collaborators of NICT namely SBI and BOI, might exhibit opportunistic behaviour in future. Rejecting the PBI offer essentially implied maintaining the status quo situation and enjoying the fruits and repose of a stabilized system. Send a strong message to the current collaborators that NICT believed in stable relationship. Could deepen present ties and bring in newer collaborators. Rejection of the current RFP would not necessarily exclude NICT from future engagements with PBI.
Accept
Rejection
Core Analytical Framework
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Building Core Competencies Use of technology to provide Banking Service through Kiosks in rural India
Competency & Capability based Scale Economies
Core Analytical Framework (shown above)
Sustainable Inclusive growth through employment and empowerment (CSCs and VLEs)
Scope Economy Based Diversification Strategies Not yet but possible with PBI offer
Planning Based Success Financial Inclusion through alliances with SBI &BoI
Five Pasteur Model
Question 2 : What are ramifications with respect to BoI and SBI if NICT takes up PBI offer?
Ans: Ramifications with respect to BoI and SBI in case NICT takes up the offer a) PBI might force it to migrate into third party operating systems (OS) and procedures re sulting in organization wide unlearning and learning in rural setup, which had been a big competitive advantage of NICT while serving ties with SBI and Bo I. b) When PBI mandates to engage the rural population via financial inclusion, and if NICT takes up the project it sends strong signals that NICT will be serving SBI’s prospective threat and rival in rural market. c)
It may even severe ties with SBI and NICT may also loose future contracts from both SBI and BoI as later banks might consider NICT incapable to serve multiple big c lients simultaneously.
d) SBI contract had been a corollary to NICT’s investment in CSC kiosks and directing entire organizational efforts towards once contract may leave SBI unattended that leaves SBI with to
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look for alternative rural vendor that may severe impact NICT revenues from the franchisee kiosks in rural India. e) Taking a chance that may severe ties with its old alliances like SBI that helped NICT diversify into core banking services and make its outsourced pre sence dominant in rural market, may affect its reputation by sending signals to prospective alliances that NICT fails to re spect and service old business alliances. f)
Taking up this large project could be risky and may leave SBI and BoI unsatisfied as NICT may fail to service properly its previously entered contracts s
g) If NICT takes up the PBI offer, efficient execution of the contracts might not necessarily result in reciprocal payment releases and NICT as an organization was not willing to learn the tricks of t he trade in government projects. It’s a double edged sword , PBI as well as SBI and BOI which would have developed a negative attitude towards NICT till then.
