GSBI Planning Excercise 3.3
Business Model with its critical success factors / key assumptions for sustainability
Business model is described in brief on following basis.
Proposed activities on CSC:
Morning Hours : IT Education: in morning hours for school kids
Business Hours
B2C: eProcurement / eMarketing (agri-business services)
Agri-Clinics
Micro-finance / Micro-insurance etc
G2C: Citizen Service
Info Retailing plus info-processing
(Application form processing with back-office automation)
G2G: eGovt for remotely located govt. offices employees
(On ASP based Back-End computerization)
B2B: ASP for Rural banks & others
Evening Hours
IT Education : in the evening for driving adult education program(govt. pays the bill)
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Under the Proposed Model give above we have made following assumptions:
Long term Time frame:
We have considered 9 years of time frame (first year for Implementation +4 year phase1
with viability gap funding support already committed by government + 4 years self
supported sustainable operatin. In phase-1 operation; consortium will work towards
enhancing eGovernment revenues to ultimately become self supporting after 5th year.
Aggregation under loosely structured co-operative for mutual win-win for all:
Market discovery / Price discovery mechanism based for collective / loosely structured
business as co-operative combine of Several Village level entrepreneurs(VLE’s) working
under Vama as SCA(Service Center agency). Diverse background, skill sets of VLEs gets
each one sufficient aggregation of demand / revenue.
Critical success factors:
Government commitment by way of viability gap funding
Government’s willingness to enable more & more service thru common service centers.
Governance / decision making shift towards villages leading to development project
decision happening at village levels with more proactive participation of rural citizens.
Village citizen’s are beginning to be more concerned about children’s education / health.
CSF Continued : Who or what organization will pay for these goods and services?
All Government departments, rural banking institutions, buyers & sellers in rural
markets, rural citizens will pay for these services.
(On CSC every one pays) Except Below poverty line 65% citizens; for whom if
government will not pay, then it will be paid for by CSC network to the extent possible.
Such gesture is possible only from rural citizens for their fellow citizens. (validated
concept on1999- 2000 Stockholm Challenge Award winning Gyandoot project)
CSF Continued : Why will they find the opportunity compelling (irresistible)?
Cost economical eGovernment solutions on ICT-Volunteering based industry standard
softwares & innovative protypes based delivery mechanisms will be irresistable
opportunity for all government departments.
Reduced cost of administration & efficiency/productivity enhancements of remote
employees will make the PKC-CSC shared services irresistable for eGovernment.
Online audit capability offered through CSC units vide their ‘World class, industry
standard “Outsourcing framework” for “scanned document image based DMS solutions
will allow “Realtime checking of beneficiaries case file & developmental spending
related documents.
(We have computers, we have eGov on Database applications & we have frauds of bogus
beneficiaries, bogus spending which doesn’t get detected, audited in time to be a
meaningful deterrant .One Rupee starting from National / state Capital becomes hardly
Rs. 0.10-0.15 by the time it reaches villages, it evaporates in thin air…)
Avoidance of “Capital expenditure” & its conversion into “Revenue expenditure” will be
irresistible for rural banks because they will be in a position to enhance their coverage to
all its branches with their limited budgets.
IT-Education, IT-enabled education will be an irresistable opportunity to bridge the
digital divide for all concerned.
It is irressitible opportunity for Financial lending institutions which will be lending
money based on “co-borrower status” based “Unique franchising model” wherein
“VAMA-IT consortium CSC ” Federation will undertake joint responsibility for
repayment of the borrowed capital along with the village entrepreneur, establishing the
village units.
Village entrepreneur coming forward to establish “CSC ” village entity will find the
opportunity irresistible because he will be assured of long term commitment of
“Franchisor” & he will feel secured that the loan borrowed on his project will be repaid
& franchisor will be their always to guide him through on this “Unique mentored
entrepreneurship development model”. For this, Village entrepreneur will be agreeing to
become “Responsible borrower & “Owner with a difference” i.e. “Owner-Manager with
exit options” till the time loan is repaid & “Full fledged autonomous owner” after the
loan is repaid.
Persons with disability currently keeps preying to get government jobs under 3%
reservation quota for handicapped. They very rarely get jobs. Handicapped youths with
disability will find “CSC ” village unit as a compelling opportunity for self employment
which will not only give them livelihood but enhance their self esteem as they become
not only productive but “do-gooder” for their community & villagemen.
Rural Citizens will find it irressistible as it will take care of all its service needs;
CSC-Mandated & optionally, local relevant needs for G2C, C2C, C2B & rural B2B
Exercise 3.1
Income & revenue opportunities exist as “Blended revenue model” for Vama’s CSC
Sr. Nos. Activity Revenue Mode
Revenues at “VAMA-IT consortium as “CSC Federation” i.e. “At FRANCHISOR’s end”
1 eGovernment software
1.1 eGovernment software outright sale One time sale
1.1.1 Annual Maintenance support chargs Monthly/quarterly
1.2 ASP deployments in government offices One time sale
1.2.1 Annual Maintenance support chargs Monthly/quarterly
1.3 ASP deployments in Co-operative banks etc. One time sale
1.3.1 Annual Maintenance support chargs Monthly/quarterly
1A High end training , train the trainer kiosk operator Monthly/quarterly
2 Innovative prototypes
2.1 Innovative Prototype based outright sale One time sale
2.2 Annual Maintenance support chargs Monthly/quarterly
3 20% contribution of all PKC-CSC kiosks franchisee Monthly/quarterly
4 Fiscal incentives, One time, regular
government incentives, payments,Ad-Hoc
developmental grants for Federation case to case basis
Total Revenue at VAMA-IT consortium District/Block HQ and CSC ( 1+1A+2+3+4 )
Revenues at “CSC ” kiosk in various villages i.e. “At FRANCHISEE’s end”
5 Shared Services
& ASP deployments by “CSC ”
5.1 Shared services used by multiple government employees in Monthly/quarterly
village based kiosk location subscription
5.2 Shared services for co-operative banks, credit societies Monthly/quarterly
Subscription
6 IT education for students & Adult education
6.1 IT education for girls in school (16 districts by govt) Monthly fees
6.2 IT education for boys in school (6 district by parents) Monthly fees
6.3 IT education for students ( 11 districts by parents) Monthly fees
6.4 IT enabled Adult education for village illiterates Monthly fees
7 Common Service Center based revenues
7.1 Government Mandated 15 revenue earning services on Citizen’s usage
which government policy commits usage & levy of charges based,
from citizens. per use basis
7.2 Rural citizen’s local need based, services made operational Job-work based,
at “CSC ” due to local entrepreneur’s initiatives or or
“VAMA-IT consortium “CSC federation’s” initiative. per use basis
Centralized collective marketing based job works etc,
getting executed in dispersed location.
7.3 Micro-finance/ agri-biz revenues as margin / commission Monthly basis
8 Capital incentives for investments on rural KVIC units One time
Total revenue at “CSC ” franchisee center : 80% of (5+6+7+8)
Exercise 3.1
“CSC “ Perfectly Blended Revenue model : for Sustainability and Growth
Indirect Model:
o Indirect market customers indirectly benefits from CSC such as Person’s
with disability, Unemployed youths, government departments (other than
those responsible for success of 100000 village connectivity program)
Fee Based Revenue
o CSCs services on Fee per use or output
Micro financed or deferred payment financial models
o ASP based deferred payment deployments on CSC
Subscription Model
o Shared services usage by Multi-Department Government employees
Subsidy Model
o Below poverty line citizens will get services for free
o Girl student’s IT Education subsidized by government
Market Place Models
o Buying selling services under CSC
Franchising Model
o CSC kiosks outlets on franchising network
Distribution Model
o Job work & other such outsourcing, data entry works
Exercise 3.1
Identifying the Revenue (income)drivers
Fishbone diagram for major, planned revenue streams and the costs identifying the
2nd order revenue and cost drivers.
Revenue FISH
Exercise 3.2
Identifying the cost (expense) drivers
COST FISH