Predicting the failure of ICTD projects: the ROI approach
Abstract—To understand the high failure rates of ICTD projects, and
the factors behind the rare successes, this paper examines eleven such
projects, based in India, in which the author has had a direct role.
These projects are examined on the following simple questions: 1) Is
the goal of the project well defined and measurable? 2) Can a precise
ROI (return on investment) be calculated? 3) Is the implementing agency
driven primarily by the above ROI considerations?
Defining measurable goals and attaching a dollar value to these goals
are major barriers to the practical application of the above approach.
However, even with qualitative data concrete conclusions can be arrived
at: An application of the above questions to the eleven projects clearly
shows that if the answer to even one is a clear NO, then the project ends
in failure.
We recommend that for constructive use of this approach implementors
of ICTD projects and researchers in the area rope in economists and
sociologists in arriving at measurable parameters for every ICTD project
and make cost benefit analysis a mandatory exercise. Further, a study of
many of the projects presented in this paper can provide valuable lessons
for future ICTD projects.
I. I NTRODUCTION
A study of the ICTD field today reveals a dark landscape bright-
ened locally at numerous places by firebrands of pilot successes,
occasional steady flames from tall towers, and littered by the dying
embers of attempted large scale projects. Undaunted, more and more
crusaders are optimistically working on newer technology lights to
bring in the dawn of development to this bleak landscape. In this
paper we attempt to understand the high failure rates of ICTD
projects, and the factors behind the rare successes.
The literature on ICTD in the Indian context is strangely skewed.
Very few papers present comprehensive studies of successfully com-
pleted projects, or unsuccessfully abandoned projects. Such a study
is critical in identifying the parameters of success or failure and in
using the learning to strengthen future projects.
Most papers about Indian ICTD projects fall into three broad
categories. First and most prominent are those that use the standard
format: Use a development related problem, a specific technology so-
lution, a pilot implementation, qualitative surveys, anecdotal evidence
and some human interest story, to present the potential for the use of
the specific technology for development. [1] and [2] are illustrative
examples.
The second category of papers starts with some area of develop-
ment, like health care or agricultural information, shifts the attention
to specific technology issues and after describing the technology
innovation, concludes with optimistic projections about the impact
of widespread application of the presented technology. Examples are
[3] and [4].
The third category of papers is most relevant to the present
discussion. The papers in this category attempt to study ICTD projects
with the aim of learning from the successes, to enable replication,
and from failures, in order not to repeat them.
Kenniston [5] writing specifically about India, laments “Unfortu-
nately, such hopes are built almost entirely on an empirical vacuum.
Almost nothing is known about factors that make for effectiveness
or ineffectiveness of grassroots ICT projects in developing nations”.
A systematic study by Sreekumar [6] of the much lauded Gyandoot
project in the Dhar district of Madhya Pradesh concludes with the
sobering observation:
“The idea that ICT is inherently a liberating technology and
hence e-governance is a new way of transcending inept and
inefficient bureaucratic systems which empowers end users
appears to be completely inaccurate in the rural societal
setting.” [6]
Pal [7] studies the Akshaya telecenter project with the focus on the
effectiveness of the telecenters for e-literacy and concludes (emphasis
added)
”Finally, if it is agreed that e-literacy qualifies as a public
good, the data from Akshaya presents strong evidence to
uncouple it from telecenters.”
The research by Heeks and his group targets e-governance projects
in the developing world in general [8]. In particular, [9] cites
references to show that most e-governance projects around many
developing countries have ‘failed’ and then presents theoretical
frameworks to help future projects apply the learnings from the
failures. The major shortcoming of this work is the lack of focus
on measurable economic benefits of development projects. This is
especially glaring since there is clear recognition that failure of such
projects incurs more than the direct financial costs.
For example, six categories of costs incurred by such projects
are listed: direct and indirect financial costs, opportunity costs,
beneficiary costs, future costs, and political costs. However, there
is no corresponding detail on the benefit side of the projects. The
failure or success of such projects is determined based on fuzzy goals
(like, taking government to the citizens, empowering the citizens,
minimising bureaucracy, etc) and by surveying participants in the
projects and using their subjective conclusions about whether the
stated goals of the project have been met.
Vasudevan [10] studies the impact of the STAR project for land
record computerisation in Tamil Nadu. Benefits to the stake holders
are evaluated using detailed surveys and personal interviews. These
benefits include reduced time for transactions, increased reliability
and efficiency of services, and digitisation of transaction records.
The costs of the project are not analysed in detail except to note the
important fact that since the users of the system pay an additional
charge per transaction, the project is self sustaining without the need
for diverting any government resources.
The work by Patra [11] analyses computers in schools from a cost
benefit perspective. Various deployment models (single ownership,
single user per shared device and multiple user per shared device)
of computers in schools to cover all the school children in India are
considered and costs computed for each model. However, the focus is
entirely on the cost of the devices and their replacement once in five
years. The benefits of computers in schools, accepted by the authors
as a very controversial and unfinished debating agenda, are studied
using a simplistic word recognition application and conclusions are
drawn based on qualitative interviews. However, this is among the
few papers that even consider economic analysis of ICTD projects.
Thus there is a clear paucity of work in the ICTD literature that
focuses on cost benefit analysis of ICT projects. A model for such
work, worth emulating, is the one by Jensen [12], who systematically
studied over a five-year period the economic impact of the use of
mobile phones by the fishermen of Kerala, and concluded that there
is clear economic benefits directly attributable to the use of mobile
phones. However, the technology domain in this work is that of
mobile phones acquired by individuals rather than a traditional ICTD
project, the focus of the current paper. Jensen summarises this aspect
very nicely in the concluding section of his excellent paper:
“Also unlike most development projects, the service is self-
sustaining; mobile phone companies provide the service
because it is profitable to do so, and fishermen are willing
to pay for mobile phones because of the increased profits
they receive. This point is also relevant for reconciling our
results with anecdotal evidence that government or NGO
projects setting up internet kiosks or other information
services for farmers in other developing countries often do
not meet similar success.”[12]
In contrast to research reported in ICTD literature, most other
developmental projects run by global organisations like the World
Health organisation or the UN are obsessively focused on cost benefit
analysis. A pre-requisite to this is impact assessment (for example,
health impact assessment [13]) that plays a key role at every stage of
a development project. A striking example is the work by Horton [14]
where there is painstaking level of detail of the cost benefit analysis,
cost effectiveness and target goals. For instance,
“Additional investments in iron fortification and salt iodiza-
tion would cost $286 million, with only small DALY gains
but large returns in dollar terms. Although the resource cost
is $286 million, the cost to governments could be consider-
ably smaller, if consumers absorbed the modest per-person
cost of the fortificant. Deworming preschoolers would cost
$26.5 million, yielding $159 million in benefits.” [14]
Definitions of terms like DALY (disability adjusted life year)
used widely in global health related literature and the fact that a
dollar value can be attached to DALY gains are lessons that ICTD
community can emulate. Of course there are ongoing debates about
the validity and appropriateness of measures like DALY, but the key
factor of interest to us is that detailed cost benefit analysis is a critical
component of most Development projects around the world.
Thus ICTD projects currently appear to be the exceptions to the
rule that cost benefit analysis is central to Development projects. This
is obviously an indication of the immaturity of the field as much
as that of the technologies involved. Another factor is the lack of
coherence in the ICTD literature itself. An excellent critique of ICTD
literature can be found in [15]. ICTD literature at present lacks depth
in any of the component disciplines because it is a newly created
inter-disciplinary field.
The difference between the quality of analysis of ICTD projects
found in the ICTD literature and those in well established literature
is starkly brought out by two papers. Jensen [12], is published in the
Economic quarterly. Reuben [16], published in ITID Journal, studies
the same scenario (impact of mobile phones on the same fishing
community in Kerala), comes to similar conclusions, but is based
on very fuzzy data, subjective interviews and minimal analysis. It is
all the more surprising since Jensen thanks Reuben for the latter’s
valuable comments on his paper.
The objective of the current paper is to underline the need for
rigorous cost benefit analysis of ICTD projects. This is attempted
using the following plan: present eleven different ICTD projects with
which the author was directly inovlved. Study these projects using
a simplistic cost benefit analysis. Demonstrate that even with such a
simplistic analysis actual projects can be evaluated for their potential
success or failure. Highlight the difficulties involved in defining costs
and benefits in development projects using the example projects.
Finally conclude with a plea that implementors of ICTD projects
and researchers in the area rope in economists and sociologists in
arriving at measurable parameters for every ICTD project and make
cost benefit analysis a mandatory exercise. It is also suggested that
systematic study of many of the unstudied projects presented in this
paper can provide valuable lessons for future ICTD projects.
II. COST- BENEFIT QUESTIONS
We propose a set of three simple questions as the basis for studying
ICTD projects.
1) Is the goal of the project well defined and measurable?
2) Can a precise ROI (return on investment) be calculated?
3) Is the implementing agency driven primarily by the above ROI
considerations?
Clearly all these questions require only qualitative answers. And it
is also evident that the questions themselves are fuzzy and subject to
multiple interpretations. However, as we proceed in the next section
to apply these questions to real projects, it will be clear that many
projects get implemented without attempting to answer even such
fuzzy questions. There are many difficulties in defining specific terms
like ’goals’, ’measurable parameters’, and ROI. For instance, ROI is
calculable only when we have dollar figures for the investment and
dollar figures for the returns. These difficulties will be addressed in
the concluding sections of this paper.
III. E LEVEN PROJECTS
The projects described in this section have some common threads.
First, the author has had direct involvement in some way with almost
all of the projects. Second, all projects are located in India and
third, with a few exceptions, these projects have not been described
in the ICTD literature and the only source of reference is usually
media report archives on the web. Hence there are no authoritative
sources for some of the data and inferences presented and hence these
should be investigated further before final conclusions can be drawn.
Many of the details in this paper relating to government projects are
based on the author’s involvement in some of the bidding processes
or based on private communication with individuals who executed
some of the projects. Where available, relevant URL’s have been
listed as reference. Fortunately, the Right To Information Act (RTI)
passed by the government of India, a major facilitator of transparency
in Government, provides fairly well defined processes for accessing
details of any of the projects from the concerned government officials,
and is a valuable tool for researchers.
In what follows, we briefly describe each project, apply the above
questions and tabulate the answers in Table 1, along with the author’s
conclusion about the state of the project.
A. The Simputers in Education Project (2002-2003)
A grant of Rs 50 lakhs (about US$ 100,000, in 2001 exchange
rates) was given by the South Asia Foundation to PicoPeta Simputers
to deploy Simputers for primary education of tribal children. This was
meant to be an exploration of the potential benefit of the Simputer
platform for education and on successful completion of the pilot,
funding to scale up the project was to be made available by the same
agency.
The project was taken up and implemented with missionary zeal
since this was the first project of any scale involving the Simputer.
Detailed interaction with teachers of two schools in Chattisgarh
(which themselves were identified after a long drawn process) over
periods extending to several months, development of suitable software
and content creation tools, training of the teachers and the students in
the technologies and iterative improvement of these were all carried
out over a period of nine months. 100 Simputers were shared and used
by over 600 students for a period of four months after the preparatory
work.
The feedback from the teachers and the students were heart-
warming, and so were the personal experiences of the project staff.
However, at the end of the pilot project, which was delayed by
more than a year due to many reasons, a review was done by
the SAF founder to understand the implications of the project. In
hindsight, it was not surprising that he did not find the results worth
replicating or scaling up. As Table I indicates, the project had no
clear measurable goals, no measure of ROI, nor the concurrence of
the project funding agency on an agreed set of measurable goals
and performance parameters. The project was approved based on
excitement of the potential of a new technology and the funding was
given based on a one page proposal that simply stated that Simputers
will be used to aid education in tribal schools.
The fact that education and the measurement of learning outcomes
and the economic value of such learning are among the most slippery
of activities is not an excuse for not even attempting to discuss end
goals of such a large project.
So making an entry for this project in the table is very simple: the
answers are clear NOs for every question and the project was a clear
failure.
B. Electricity Bill metering (2002 onwards)
Plugging leakages and iImproving efficiencies of government ser-
vices like electricity generation and distribution, water (both for
irrigation and consumption), public transport, road infrastructure, etc.,
in developing countries will directly impact the resources available
for poverty alleviation and employment generation. Hence the use of
ICTs for such projects is directly relevant for Development.
Till 2001, all electricity meters were read manually by agents
physically visiting each and every location of the meters. The current
reading will be noted by the agent, the information taken back
to the office and after about two to three weeks, a bill for that
month’s consumption would be sent either by post or by another
agent individually dropping it off in each metered location. In addition
to the inherent errors in such manual reading and transcribing, this
process resulted in the time gap between the reading of the meter and
the actual paying of the bill by the consumer to be on an average six
to eight weeks. There were frequent complaints of wrong reading by
the consumer, as well as loss of revenue due to collusion between
the consumer and the reading agent in consistently under reporting
the consumption. This was among many other reasons why the state
electricity agencies were perpetually bankrupt and had to be shored
up by government subsidy.
The Simputer along with a printer was used by a small scale
entrepreneur to provide a computerised solution for meter reading,
billing and back end database integration. Based on the widespread
interest generated by the initial pilot and realisation of the benefits by
the distribution agencies, over the next three years, computerisation
and use of handheld devices for meter reading and billing have
become widespread across Karnataka, Andhra Pradesh and Maha-
rashtra, three progressive states in India and many other states are
moving to catch up. The initial focus on technology was quickly
replaced by a comprehensive return on investment based approach:
the Distribution Company sought competitive bidding for complete
billing solution and awarded contracts based on a single number:
the lowest cost bid for generating and issuing one bill to one end
customer.
For example the project may be awarded to a vendor for servicing
hundred thousand households for a period of one year at the rate of
Rs. 2.00 (about 4 cents) per bill delivered to the customer’s premises.
The actual technologies used by the vendor are of no interest to the
Agency.
The use of handheld devices combined with back-end computeri-
sation have resulted in the entire billing cycle, from meter reading to
payment of the bill by the customer, to be completed within a month,
which implies the Distribution Company is able to collect a month’s
revenues within the next month. The Table entry for this project is a
clear YES for all three questions and is an ongoing successful project.
C. Bus ticketing system (2003 onwards)
Public buses are the primary mode of transport used by a large
segment of rural population as well as the majority of urban popula-
tion that cannot afford their own private vehicles. In a move similar
to that of the Electricity agencies, the Karnataka state road transport
corporation embraced technology solutions for improving its oper-
ational efficiencies. The result after a few years of experimentation
has been phenomenal: more than twenty thousand buses are now
equipped with ticket issue machines. The machines themselves are
very simple: microcontroller based devices with a 4 line display and
a printer attached, with sufficient batteries to last a day of operation.
This project is one where every stakeholder can actually show
a measurable return on the investment: the passengers get their
tickets very quickly, their currency transactions with the conductor
are smooth, the conductors have a much reduced workload, much
reduced harassment from inspectors who scrutinise the activities of
the conductors, and at the end of the day, the settlement of the ticket
sales and cash by conductors is reduced from about 45 minutes to
a few minutes. The cost savings to the corporation purely in terms
of savings on printing and managing multicolored tickets used in the
manual mode is about US$200,000 every year. All of this information
is anecdotal from one of the solution providers [17]. There has been
no systematic study of this project to understand the key parameters
and learnings from such an obviously successful project. Even the
’success’ of the project is only being inferred from the fact that the
number of buses provided with the technology enabled solution has
been rapidly increasing over the past three years and continues to be
replicated in many other States, including Tamil Nadu and Andhra
Pradesh. So the entry for this project is a clear Yes for all columns.
D. NSSO (2004-2005)
The National Statistics and Survey Organisation is the principal
agency in India entrusted with the collection of socio-economic
data. For example, prices of all commodities that determine the
weekly inflation rate, household income and expenditure, number
of households that have access to credit, and similar data that is
used by the Central and State governments to take short and long
term measures for the welfare of the population, are all collected by
NSSO. All of this data is collected across the country, both in urban
and rural areas and across all sample demographics. NSSO is thus a
large data gathering, collating and report generating machine of the
Central government with a organisational structure that reaches out
to the farthest corners of the country.
Data collection and collating is still a manual process, with
different paper forms used for different purposes. Each of these
forms is fairly complex and requires skilled survey takers (called
Investigators) to collect the data. These paper forms are then verified
by an Assistant Superindentant and then a Superindent to ensure
that the form has been filled properly and completely. Then the
paper forms are sent to a Data Processing Center, where data entry
operators transcribe and enter the handwritten forms into machines.
After verification and validation steps of this process, aggregation and
report generation create the reports that reach decision makers. The
lag between the collection of data and the dissemination of useful
information to decision makers can be anywhere between several
months to a few years.
A simputer-based solution for speeding up the process was pro-
posed by PicoPeta Simputers Pvt Ltd. With full support and directions
from the Minister in charge of NSSO, and close interaction with the
NSSO officials of the Karnataka unit of the NSSO, the complete
solution that included the conversion of a key set of forms (schedules
0.0, 1.0 and 2.2, called the National sample survey) into an efficient
client application of the Simputer was implemented by Picopeta.
The completed solution was also field tested by Investigators and
checked out by NSSO officials. In a large meeting involving all
stakeholders, including Ministry officials, NSSO bureaucrats and field
officers, it was agreed that the Simputer-based solution meets the
requirements of efficient survey operations and it was suggested that a
proposal for a pilot project that involves about 25 Investigators be sent
in by PicoPeta for approval and funding by NSSO. A proposal was
sent with the total cost of a pilot project of approximately US$80,000.
This included the complete software to be owned by NSSO for use on
any number of Simputers in the full-scale project, 25 devices, training
for field personnel, debugging and field support for the duration of
the project. No decision was taken on this proposal despite all efforts.
It was learnt that part of the hesitation was due to the fact that
a year previously, NSSO had spent close to US$400,000 on buying
handheld devices from a multinational vendor, and the devices have
remained unused because the purchase of the hardware was not part
of a planned complete solution. Hence the reluctance to go after a
new solution that involved different handhelds.
With reference to the Table, the key missing link is the value that
can be attached to efficient collection of data and its rapid aggregation
and availability. Given that most Developmental projects depend on
NSSO data it is ironic that the author could not find any study on
the economic impact of dependence on the NSSO data that is usually
out of touch with reality by at least a year.
E. TB treatment monitoring (2003-2004)
A WHO-funded Tuberculosis Institute project, for health workers
to monitor the medication for TB patients spread out in Bangalore
rural district was, implemented. The driving agency was the National
Tuberculosis Institute (Directorate General of Health Services) with
funding from the World health Organisation, as part of the Health
InterNetwork (HIN) Project, with the broad aim of bringing together
the Government, private sector, non-governmental organizations and
resource institutions to ensure equitable access to health information.
This project involved design, development and implementation of
Simputer based mobile application as part of the HIN Mobile Data
Management System. After a year of interactions with the end users a
Simputer-based solution was created to help in the better supervision
and data collection, for the Senior Treatment Supervisor (STS) and
Senior Tuberculosis Laboratory Supervisor.
The project goals were to equip the STSs with handheld devices
that contain complete patient information. The patients are required
to take medication for periods upto a year. The STS’s task is to
periodically visit the patients in her area, ensure regular intake of the
medications, refill as needed and pass on the information to the TB
institute for overall monitoring of TB treatment in the project area.
There was no analysis done to compare the existing method with
any technology assisted alternates, in terms of effectiveness, cost, or
achievable objectives. Hence there was no question of ROI calculation
and hence any commitment to meet the goals.
In a process of typical of ICTD projects in India, a public
event was held in which the Simputers were handed over to 16
STSs, and speeches were made by dignitaries on how ICT will
improve healthcare [18]. After a year of the pilot project, the agency
approached the solution provider (Bharat Electronic Limited) to port
the solution to the newer version of the Simputer. This task was
successfully completed. As far as the author is aware, the technology
involved in the solution met the operational requirements of the
project. The entry in Table 1 for this project has negative answers to
the first three questions, and at the time of writing of this paper, the
project appears to have been abandoned.
F. India Health Care Project in Andhra Pradesh (2002-2004)
Basic health care delivery in rural India is minimal and patchy.
Where present, the service is delivered through health workers
from the local communities, called Auxiliary Nurse and Midwives
(ANMs). These are usually women who work with dedication and
are the sole deliverers of health care and information for up to
a few thousand individuals. The ANMs take care of prenatal and
postnatal care, provide general immunisation, treat and collect data
about endemic and epidemic diseases among the population that she
is responsible for and perform deliveries as well. These are some of
the most hardworking and underpaid government servants in India.
In order to decrease the burden of work for the ANMs (including
the sheer physical burden of having to carry two or three large
registers that contain the data and past medical history of everyone
in her care while walking or cycling from village to village), a
pilot project, funded by InfoDev of World Bank, and overseen by
the Government of Andhra Pradesh was executed by Computer
Maintenance Corporation (CMC), a public sector company at that
time, since acquired by the Tata Group.
The project consisted of about 225 Compaq Ipaq PDAs with client
software developed by CMC that managed all the data from all the
registers of the ANM, allowed access to specific data as well as the
addition of new data. This software was developed with considerable
difficulty since the data managed by the ANM was large and complex,
the screen size of the PDA was small and the interface capability
offered by Windows for PDA’s during 2002-2003 (the period of
the project implementation) had several serious limitations. The total
hardware cost per device was close to Rs 35,000 (inlcuding the cost
of a 32MB memory upgrade). the software development cost must
have been significant. 225 ANMs were trained on the use of this
software (which was initially done in English since local language
support in Windows on PDAs was non existent at that time, with
a plan of converting it into Telugu subsequently). A pilot phase of
the ANMs using the PDAs was conducted with accompanying media
coverage about PDAs bringing healthcare to rural Andhra Pradesh.
The author has not been able to locate a report on the results of
the pilot project. However, post the pilot project, it appears that the
project is no longer on the field. There is brief outline of the software
solution in CMC’s website [19] promoting it as a solution offering
from CMC.
There were no measurable goals, but just the acceptable assumption
that digitisation of the data from the multiple notebooks of each
ANM and the provision of random access and update capabilities
will reduce the workload and improve the delivery of helathcare.
Hence there were no ROI measures specifed. The costs of the scaled
up version as well as the returns from the scaled up version were
never studied or presented. The implementing agency, namely, the
Government of AP was more focused on projecting itself as a leader
in IT rather than on specific ROIs from this project. Predictably, the
project has been abandoned after the pilot phase with no learnings
to show from the huge amounts of donor development money, time
and resources spent on the project.
G. Tamil Nadu Sugars (2005 onwards)
Another project going forward beyond the pilot stage is the
Simputer project with Tamil Nadu Sugars. Here Simputers are used
a s part of the sugarcane farming information systems tied intimately
with the sugar mill that will buy the harvested sugarcane. Each
Simputer handles the information of about 50 farmers and their
sugarcane fields. Data is collected at every stage of the sugarcane
cycle and this data is periodically updated to the data center of the
sugar mill where the data from all the Simputers is consolidated. The
mills then take decisions about the agricultural support to be given to
the farmer as well as to schedule the harvest from different holdings
in line with the requirement of the mill.
This project was driven by the government agency that runs the
sugar mills and with the support of the large farming community that
is dependent on the effective functioning of the sugarcane grower-
harvester-sugar mill relationship.
After a year of effort, the pilot project with about 200 Simputers
has been declared a success and a public function was held to publcise
the initiative with representatives from other Sugar mills in the State
invited to study the project and to replicate in their procurement areas.
The followup of scaling up the project in the same location as well as
to spread similar solution to other sugarcane growing areas in Tamil
nadu has been taken up.
H. ITC-echoupal
This is one of the most successful kiosk projects in India and has
been written about extensively. Essentially, Indian Tobacco Corpora-
tion, a large corporation set up VSAT-connected computer kiosks in
representative farmers’ houses in villages in the procurement areas
of the company. Farmers bid with ITC to sell their produce without
the involvement of traditional middlemen. It has been a tremendous
success as measured by the fact of its continued replication targeting
10 million farmers using 20,000 echoupals in 10 years [20].
The author’s interaction is with ITC during the early stages of the
e-choupal project when a Simputer-based solution was considered as
an alternate to a full fledged PC. It was clear from the interaction
that ITC had very clear goals for what each kiosk is to accomplish,
the location of the kiosk, the business model for the farmer hosting
the kiosk, and the procurement target to be achieved. It was also
clear that they were completely neutral about what technology to
be used, so long as the technology met their goals. There was no
obsession about ’low cost’. Thus all the entries in Table 1 for this
project are clear affirmatives and the project is meeting the predicted
success. Incidentally, the Simputer-based solution though it might be
less expensive was not pursued since the overall cost of introducing
a new system was not worth the per-kiosk savings achieved. The
benefit of mobility afforded by the Simputer was weighed against
the need for a second operational model and the concomitant training
and management overheads.
The wise decision of sticking to a single setup for the kiosk and
keeping the focus on scaling up the model has enabled this project
to succeed. Many lessons can be learnt from this project, key being
that commercial agencies can do good while doing well.
I. Bhoomi-Suggi Project (2003-2005)
The Bhoomi project, operational for the past few years in Kar-
nataka, is a land record computerisation project that has received
several e-governance awards. As an extension of the Bhoomi project,
it was proposed that handheld computers be given to Village Ac-
countants, the grass root government functionaries. The idea is to use
the backend infrastructure and digitised data created for the Bhoomi
project and to extend its utility and reach. Multiple applications are
possible. But to start with harvest data collection by the village
accountants was chosen as the end task. A complete solution (called
the Bhoomi-Suggi, Suggi meaning harvest in Kannada) was created
and deployed in 2003. The following are the components of the
solution:
• Hand-held devices (Simputers) with the end users (Village
Accountants)
• Client application on the Simputer in Kannada (data collection
with smartcard access control for security),
• Application on Taluk Windows PCs for data upload and down-
load (integration of the data with back-end Microsoft platform
database)
• Training of over 600 Village accountants to date
• Hardware Field support over an extended geography comprising
of several districts of Karnataka
• Software upgrades, bug fixing and improvements over three
years.
The total cost for all of the above paid by the government of
Karnataka was US$75,000, inclusive of everything. Obviously very
low total cost. And on every technical, operational, training, and
support parameters, the solution was validated over three years where
a sequence of pilots were done in different districts of Karnataka.
This project did not scale up to cover the 9000 village accountants
as originally envisioned. The reason is obvious if we evaluate the
project as in Table 1. There are clear measurable goals for the project:
the productivity of VAs, the expedient access to data, and given the
infrastructure of handhelds, connectivity, back-end, a trained end-
user group (the village accountants in this case), the potential for
additional services that can be provided to the village communities.
However, none of these goals were part of the tendering process.
Without such measurable benefits being part of the debate, the
discussion about this project was sidetracked into which is the right
handheld to use, and how to bring down the cost of the device so
that 9000 units can be bought cheaply. The project has not scaled up
beyond the pilot.
J. SKS Microfinance
Access to credit has been recognised as one of the major tools
for poverty reduction and hence organisations around the world are
striving to create means of reaching credit to the rural poor. In India,
there is a thriving SHG model in many parts of the country, most
modeled on the Grameen bank and some others on local models.
SKS Microfinance, a for-profit company is one of the most
successful MFIs in the country. It clearly does not fit the ICTD project
category. However, what is of interest here is that in the early years
of SKS, considerable focus was put on technology: smart cards for
members and handheld devices for the agent were tried out to improve
the efficiencies of the process. A Simputer-based solution was also
considered as a possibility. However, very soon, the focus shifted to
the real goals of SKS: offering credit to the rural poor, ensuring that
the disbursement and collection process was made most efficient,
increasing the number of customers, and ensuring that the overall
business was profitable. So all the entries corresponding to SKS are
very strong affirmatives and hence it is no surprise that SKS today is
a thriving business with over 2.5 million clients, 1200 branches and
more than RS 15 billion in loans.
K. Simputers and BPL benefits project in Chhattisgarh (2005 on-
wards)
The definition of poverty line, by The Government of India (GoI),
defined in terms of per capita per month earning [21] is Rs 356 for
rural and Rs 539 for urban areas, essentially about $0.40 per day.
The World Bank’s definition of the poverty line, for under developed
countries, like India, is US$ 1/day/person or US $365 per year. It
is especially important to keep these numbers in mind when dealing
with ICT projects for poverty alleviation.
The GoI has numerous schemes to benefit Below Poverty Line
(BPL) families. However, there are three major problems with these
schemes; cost of delivery of the benefits, given the extremely low
values for daily earnings, second the delivery of the benefits to all
the persons entitled to the benefits and third, to prevent pilferage
of the benefits by persons not entitled to them. There is widespread
belief that the proper use of ICT can help overcome these problems.
ChIPS (Chhattisgarh Information technology promotion Society)
is a government agency charged with all aspects ICT deployment in
the State of Chhattisgarh. After extensive evaluation of the Simputer,
starting from the time of the education projects with the Simputer
in the state discussed above, ChIPS eventually procured in 2004,
900 Simputers for the implementation of a statewide project called
e-Gram Suvraj for providing decision making support for village
sarpanchs (secretaries) [22]. The objective of this project is to ensure
that many benefit schemes from the GoI and the state government
reach the intended beneficiaries through the Village Sarpanchs. How-
ever, there are no measurable goals, nor a clear statement on RoI for
this project. Hence one would expect this project to close down after
the ongoing large pilot phase. This is another candidate for a future
study.
L. Other projects
There are many other projects that have been excluded due to space
constraints. We present a few pointers to two major domains in which
massive investments in ICT are imminent.
Bhamasha project: The Government of Rajasthan has taken major
steps in bringing the 5 Million BPL families in the state into banking
and health insurance services. As a first step, the registration of
all the 5 Million families including the details of all the family
members and issue of a unique identity number to each family has
been completed, itself a massive IT supported initiative. The second
major step is to issue smartcards for each of the families containing
biometric identification of all the family members, photographs and
other information and will be tied to the BPL family database with
the unique identity numbers created in the first phase. These cards
will be used as basis for providing no-frills bank accounts. The
Government of Rajasthan has earmarked Rs 750 crores using which
each BPL family’s bank account will be deposited with Rs 1500.
The cards will also allow access to health insurance through partner
insurance companies. Over 13,000 business correspondents equipped
with mobile transaction terminals will provide the banking services at
the doorsteps of these families. Such terminals will also be available
at health centers to manage access to health insurance services. The
RFP for the project [23] is very instructive. This is another project
that is a very good candidate for detailed study.
Financial Inclusion: Recognising that access to banking services
is critical for Development, the Reserve Bank of India (RBI) has
recently mandated that all banks and financial institutions in the
country (both public and private) extend their services to reach more
than 400 Million people who are currently beyond the reach of such
services. In a recent address, the RBI Deputy Governor outlines the
potential for ICT to make a difference:
“The use of IT solutions for providing banking facilities
at doorstep holds the potential for scalability of the FI
initiatives. Pilot projects have been initiated using smart
cards for opening bank accounts with bio metric identifi-
cation. Link to mobile or hand held connectivity devices
ensure that the transactions are recorded in the banks
books on real time basis. Some State Governments are
routing social security payments as also payments under
the National Rural Employment Guarantee Scheme through
such smart cards. The same delivery channel can be used
to provide other financial services like low cost remittances
and insurance.“ [26]
Hence, this is a project domain that holds huge potential for develop-
ment for the underservered population of India and at the same time
offers fertile ground for study of the impact of ICT.
IV. D ISCUSSION AND POINTERS TO FUTURE RESEARCH
The projects presented contain a wealth of unexplored lessons.
Looking at the Table, we see that projects 2, 3, 7 and 10 are
outstanding successes: We attribute the success to the fact that
there were clear ROI considerations driving all stakeholders in these
projects. And many of the goals of the project were measurable and
monitor-able.
Projects 1, 4, 5, 6 and 9 have been failures even after successful
demonstration of the technology during pilots. Again, it is clearly due
to the lack of well defined and articulated ROI objectives. Projects 8
and 11 are in successful pilot phase and need to be followed up to
see if they scale up.
There are two issues here. First, whether there are goals that
are measurable. For instance, in the education project, the goals
themselves are fuzzy, with no universally accepted measurable goals
Second, even when there are measurable goals, as in the case of
the NSSO project, where one can use the time for data collection,
accuracy of the data, time for aggregation and report generation
as measurable goals, there is no accepted way of converting these
improved efficiencies into tangible monetary values. For instance,
there are no known ways by which statements like “reducing time of
NSSO household income survey process from 9 months to 1 month
will result in saving of X crores of rupees”. Given this gap, the focus
of government agencies is directed only on cost reduction of the
technology solution rather than on the potential benefits.
A related issue is the decoupling of the Development goals from
the project implementation goals. In this context we can add one more
to the list of gaps gaps that cause e-governance projects to fail, listed
by Heeks [9]. This is the ROI gap as perceived by the initiating
government agency and the project implementing Contractor. So
many ICTD projects continue to get funded in spite of the widely
acknowledge failures because the ROI from the project for the
government is not the same as or even linked to the ROI from the
project for the Contractor.
The project implementor, usually tendered and contracted private
sector (in India primarily on the basis of lowest cost) views the project
from clear commercial terms: what are the parameters on which my
delivery is measured? how can I deliver these at the lowest cost?
How much margin can I make after deducting the costs from the “... in each case only a small fraction of overall resources
money I receive from the government. By this measure, most ICTD reaches the poor due to, in varying degrees, targeting
projects are roaring successes for large IT companies that implement inefficiency (inability to reach the poor), leakages (to the
them. The right way to proceed is to tie the returns of the contractor non-poor), participation costs (foregone earnings that are
to the benefits generated by the project. The bus ticket solution and especially consequential in employment programmes) and
the electricity bill metering solution are clear examples where such large administrative costs. ...”
an approach has succeeded. This is the most important conclusion of “... in 2005, the Planning Com- mission estimated that the
this paper. government spends Rs 3.65 to transfer Re 1 worth of food,
suggesting leakage of about 70 percent.” [25]
A. Some general observations ICTs have the potential to improve efficiencies in all the develop-
The study of these projects brings out three major negative con- ment projects. However, there is a real danger that ICTs add another
sequences of the excessive focus on technology: first, the real goals major cost layer to the process without removing the underlying
of development are shortchanged and precious resources squandered inefficiencies or reducing leakages.
due to the excess attention paid to glamorous technology, an example Every rupee spent on an ICTD project is a rupee that could
of which is the focus on PDA for healthcare project. Second, have been directly given to an intended beneficiary (the direct
many technologies that can accelerate development are prematurely cash subsidies approach advocated by [25]). Hence it is critical for
discarded because of incorrect understanding of the non-technology everyone involved in ICTD projects to put the ROI of any project
causes of failure. An example of this is the Simputer in education as the overriding parameter and use rigorous econometric analysis as
as well as the Bhoomi-Suggi project were it is easier to conclude an integral part of all stages of ICTD projects, from conception to
that the Simputer is the cause for the project failure and for other implementation and evaluation.
technologists to then spend energies on building a better device.
Third, many projects that have successfully used ICT for development
have not received the kind of attention they deserve since they have
used unremarkable technologies. Both the utility billing projects fall
in this category.
Many of the ICTD projects that have garnered very large global
media and literature attention are, as per the ROI test proposed in this
paper, unlikely to succeed. A short list of some of the key projects
that fall under this category follows.
• Technology for school education: This is one of the major areas
were billions of dollars are spent worldwide without clear goals.
Even in the developed world there is no consensus on the
benefits of ICT in school education [24].
Projects that start with a candidate device and proceed to address
education are clear instances of the technology tail wagging the
education dog. The $100 laptop/OLPC, the Classmate PC, and
other similar projects all fall in this category.
• Telecenters: LINCOS, MSSRF Knowledge Centers, Gyandoot,
Warana and very many other kiosk projects around the world
with the goal of ’bringing internet to remote village communi-
ties’ all are technology windmills. Countless Quixotes tilting at
the kiosk windmill will be humorous but for the tragic waste
of billions of dollars of developmental monies that are being
squandered on these projects. Successful projects like the ITC
e-choupal clearly demonstrate that ROI goals must take the
dominant role and technology just another enabler among many
other factors.
Paucity of local research: There is a general paucity of social
scientists involved in researching ICTD projects in India. This gap is
slowly being filled by multinational R&D labs establishing presence
in India and encouraging quality social sciences research. The general
lack of systematic study and learning from ICTD projects based on
solid econometric analysis is adversely affecting our ability to harness
the real benefits of ICT for development.

V. C ONCLUSION
Kapur et al. [25] provide details of developmental expenditure by
the Government of India and the inefficiencies in the process: an
astounding Rs 79,000 crores (US$ 17.5 billion) is allocated in the
2008-09 budget for central schemes.
Table 1: Summary of Projects
Serial ICTD Project Did the Is there some ROI Is the ROI a Status of the
No. Name project have measure? key factor project
measurable driving the
goals? project?

1 Chhattisgarh No. Just “use No. No. Just the Pilot

Education Simputers for excitement of !successfully"
rural supporting a completed. No
educations” new technlogy scale up.
for education Closed.

2 Electricity Bill Yes: read Yes; Cost per bill Yes. Successful
metering meters and fixed. Increased pilots. Scaled to
distribute bills revenue collection. cover many
within a States.
fortnight every Expanding to
month other utilities
billing.

3 Bus ticket Yes. Simplify Yes: Cost per ticket Yes. Successful
vending conductors issued is basis of pilots. Scaled to
workload. tender. Increased cover many
reduce revenue collection. States.
pilferage. Expanding
Improve rapidly to cover
revenue all buses, local
collection. and long
distance.

4 NSSO yes: Reduce NO: the cost of NO; since Did not go to
the time for hardware and there was no even the pilot
data collection, solution known. No clear idea of stage in spite of
aggregation attempt to evaluate returns. successful
and report the economic demonstration of
generation benefit of goals. technology.

5 TB Monitoring Yes. Improve NO: No clear No Successful pilot.

the efficiency of enunciation of Abandoned after
Field value of the goals. WHO funded
Inspectors and project was
to have completed.
immediate
access to data

6 ANM PDAs Yes. Reduce NO: Unclear as to NO Project

workload, how the abandoned after
improve health improvements pilot phase.
care delivery. translate to
measurable
benefits.

7 e-choupal Yes Yes Yes. Remarkable

success.
Expanding.
Table 1: Summary of Projects
Serial ICTD Project Did the Is there some ROI Is the ROI a Status of the
No. Name project have measure? key factor project
measurable driving the
goals? project?

8 TN Sugars Yes: Improve Possible: Cost of Funded by Pilot

sugarcane solution known. But government to successfully
procurement by unknown if benefits study the completed.
continuous have been possible Work in progress
interaction with quantified. benefits. to scale. Needs
farmers. to be studied.

9 Bhoomi-Suggi Yes: Decrease No: No clear No. Successful pilot

workload of enunciation of running for 8
VAs. Reduce value of the goals. harvests in many
data collection districts. Not
and been scaled up
aggregation so far.
time

10 SKS Microfinance yes. Number of Yes. Profitable Yes: A for- Very successful
customers, operation of the profit company
amount of loan business.
loans to be
disbursed

11 Gram Suvraj No. Fuzzy No. No Ongoing large

Chhattisgarh goals about pilot. Requires to
access to be studied.
Government
schemes
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