A

ASSIGNMENT

OF

MANAGEMENT INFORMATION SYSTEM

CASE STUDY ON E-CHOUPAL

SUBMITTED TO

MRS maitriyee

SUBMITTED BY

BHAVSAR NIYATI

09MBA03
 FACTS OF THE E-CHOUPAL INITIATIVE

Traditionally, a farmer sold his agriculture produce to a small trader referred to as a

‘Kaccha adat.’ The small trader called the ‘Pakka adat.’ Who sold the produce in a ‘mandi’
(market place). Here, brokers interacted with this large traders& helped theme sell their produce
to corporate. This whole procedure involved many intermediaries who resulted in procurement
cost being as high as Rs. - 700/- per ton of Soya.

Typical, farmer did not have enough resources to take his produce to mandi. He had depend on
like – weather report given by intermediaries. Consequently, the farmer did not get a fairs hare of
money.

Initially, ITC’s main objective was to reduce number of intermediaries in the whole

process. Primary task for ITC was to bring this information to the farmer’s. The company
decides to utilize IT tools to network the villages.

ITC also began to gather all information required by the farmer like the daily mandi prices,
weather reports, global prices, best farming practices and other services like water, soil and PCR
testing made available each choupals. Current information like mandi prices, weather reports,
and global prices were down loaded via the internet. Static information like best forming
practices was made available on compact discs (CD’s) or was installed in the PC’s hard disk
while setting up the choupals.

Next important step for the company was to deal with the commission agent at the man dies.
These commission agents had a strong influence on the prices and where therefore consider
being very powerful. But, implementation of e-Choupal totally disrupted there business and most
of these commission agent were upset. ITC knew that for smooth functioning of its project, it
could not afford to totally ignore these agents. Therefore the company devised a new roll for
them and called them as ‘samyojkas’. Like – sanchalak, samyojkas. Also underwent training and
took an oath before being appointed to office The samyojak were also responsible for collecting
the produce from village that were located far away from the processing center and bringing it to
 these centers. The samyojak was paid 1 percent commission for his service. ITC’s reduce cost by
500 tones on procurement.

IDEA GENERATION

The idea of creating and leveraging an electronic market place came from the brainstorming
session done by senior executives of ITC-IBD. ITC believes in using a business model that does
well to society and helps in improving the standard of living of stakeholders as well as add value
to the shareholder wealth. He also believed that to tap the Indian rural market opportunity, and to
reach across a wide range in rural India, the leaders have to understand and unleash the power of
the small-scale entrepreneur in village communities.

VISION

• Rural India’s largest & most effective Interactive Transaction & Fulfillment Channel

– Covering 200,000 villages across 14 States through 50,000 choupals

– 1/3rd of all Indian Villages

– Building capability to deliver superior shareholder value sustainably

• Also contributing to

– Enhancing global competitiveness of Indian Agriculture

– And, Raising the standard of living in Indian villages

MISSION

“Improve the Quality of Life in Rural India.

 UNIQUE BUSINESS MODEL: E-CHOUPAL

The e-Choupal model has been specifically designed to tackle the challenges posed by the unique
features of Indian agriculture, characterized by fragmented farms, weak infrastructure, and the
involvement of numerous intermediaries, who block critical market information from passing to
the farmers and use that information for getting a big margin for themselves. The intermediaries
capitalized on the economies of information and economies of physical things, which are tied
together in a bundle. Due to this, the farmer does not get the proper price of its product & they
continue to live below the poverty line. But e-Choupal sets things in order as it smoothens the
flow of information to the farmers by disinter mediating intermediaries from the chain of
information flow and at the same time leverages the physical transmission capabilities of them as
they deliver critical value at every link for a very low cost in a weak infrastructure environment.
 I.T. DRIVEN SOLUTION

Though the IT component constitutes only 20% of e-choupals business model, it is the
most crucial part. There are two goals here:

1. Delivery of real time information independent of the transaction

2. Facilitating communication between different parties involved to bring about

transparency in the whole system

TECHNOLOGY USED IN THE E-CHOUPAL

 POWER CONSTRAINTS- Sporadic availability of power and substandard quality of power

 ITC overcame this constraint by installing battery based UPS backup. Now solar
battery chargers are used. 1 charge = 70 to 80 minutes of computer usage.

 TELECOM INFRASTRUCTURE: Usually poor infrastructure. As of now rural

telecommunications infrastructure is designed to carry voice traffic only. Transmission speed
being slow-->-restricts internet access

 Initial solutions to this constraint was to help C-DOT improve their RNS kits to allow
for increased transfer up to 40 kbps from the earlier 12 kbps (Dial-Up connection)

 Dial-Up to VSAT: Dial-up connection was not sufficient to drive future proposed
applications. In order to support transactional capabilities and multimedia
applications, ITC adopted a satellite based technologyà VSAT. Now has speeds up to
256 kbps. (Cost per installation=Rs 120,000)

 APPLICATIONS: The Web site www.soyachoupal.com is the gateway for the farmer. The Web
site is protected and requires a user ID and password to login. As of now sanchalaks are the only
registered users.
  Weather: .Localized weather information is presented on regions within a 25
kilometer range. Typically 24- to 72-hour weather forecasts are available along with
an advisory. Weather data is obtained from Indian Meteorological Department

 PRICING: The e-Choupal Web site displays both the ITC procurement rate and the local mandi
rates. ITC’s next day rates are published every evening. The prices are displayed prominently on
the top of the Web page on a scrolling ticker.

 News For the soyachoupal Web site, relevant news is presented from various
sources. In addition to agriculture related news, this section also includes
entertainment, sports, and local news.

 Best practices: Best farming practices are documented by crop. Here again, the
information presented is action-based. For instance, this section not only
highlights what kind of fertilizers to use but also how and when to use them

 Q & A: This feature enables two-way communication. Here a farmer can post any
agriculture related question he needs answered.

 SYSTEM SUPPORT: ITC has about 15 engineers who provide field infrastructure support to the
e-choupals. They average about one or two calls a day. Each e-Choupal is visited about twice a
month for infrastructure support. The support cost is estimated at Rs. 300 per visit. In the future
ITC proposes to improve service and lower costs of infrastructure support through remote help
desk tools and network automation.
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Benefits:

•
E CHOUPAL SUPPLY CHAIN

 Able to differentiate between ‘Risks in Farming’ and ‘Financial risks in Trading’

 Also allows the farmer an enlarged choice set – whether he wants to sell to ITC or
to the mandi

ITC’S MODEL IDENTIFIES TWO SOURCES OF VALUE THAT HELP

SCALE THE MODEL

Crop Specific Intervention: ITC recognized that agrarian systems vary by crop. For
example, the systems, and consequently the e-Choupal models and payback streams, for
coffee and shrimp are very different from those for soy.

Low-Cost Last Mile: The same system of physical and information exchange that brings
produce from the village can be used to transfer goods to the villages. Products such as
herbicides, seeds, fertilizers, and insurance policies, as well as soil testing services are
sold through e-Choupal. E-Choupal as a distribution channel begins in agriculture but
extends well into consumer goods and services.