ASSIGNMENT

ON
TO DIVERSIFY OR TO CONSOLIDATE: NICT AT A CROSS ROADS







B.MOUNICA 2013PGPM014











1) Do you think NICT should take up PBI Offer?
I think NICT should take up PBI offer. I would justify by stating the following advantages for the
proposal:
The PBI offer fits into the business model of NICT. It would be a sustainable social
intervention, coupled with regular employment and pay for the CSC VLEs
A firm contract with PBI would mean an end to the project mode of variable earnings
for NICT there would be a fixed source of income to tide over difficult situations.
By leveraging the relationship with one large client, NICT might harness scale economies
and emerge as a pan India organization from a localized player in a BIMARU state.
Also if NICT could manage to become the sole technology (along with infrastructure)
partner of PBI, then it might emerge, like the core of banking services industry with
near monopoly over technology.
If NICT does not take up there is a probability that PBI might bypass NICT and engage
the kiosk VLEs directly, by providing them resources to set up a standardized compatible
network, this would lead to a severe blow to NICT as a large part of its revenue comes
from the franchisee fees.
India post is one of the largest organizations in India with over one hundred and fifty four
thousand post offices and around two hundred and seventy thousand employees throughout
the country. India Post had always been a vehicle for inclusive growth. Being associated with
such a large organization would be a highly profitable offer that NICT could ever get. Based on
the above advantages NICT can take up the PBI offer.


2)What are ramifications with respect to SBI & BOI if it takes up PBI Offer?

A) NICT received an RFP from India Post, requiring it to be the exclusive infrastructure cum
operational partner of the newly proposed Post Bank of India (PBI). Mukesh was contemplating
on a suitable response to the proposal and had come up with few possible pros and cons of the
proposal and the ramifications based on them.

The ramifications that would occur with respect to SBI & BOI if NICT takes up PBI offer are:

1) The present collaborators of NICT namely SBI and BoI, might exhibit opportunistic behaviour
in future with PBI, they can migrate to PBIs newly created network using the public sector
linkages. So if NICT takes up the offer there will low chances that SBI & BoI would collaborate
with PBI.

2) Being a bigger party PBI might unduly dictate terms against its current clientele like SBI, BoI if
it collaborates with NICT.

3) The PBI workload might constrain NICTs flexibility to offer a diverse service portfolio
affecting its ecosystem and reputation. Therefore it might affect its collaborators SBI&BoI.