1) Do you think NICT should take up PBI Offer?

Ans)
NICT should take up the PBI offer but under some terms and conditions.
The offer from PBI should be accepted because of the following reasons :
a) NICT's Common Service Centres are already into providing services like banking, microfinance,
insurance services etc due to its relationship with its other banking clients. Hence this is their core
competency and the new offer fits nicely in line with this. With regards to the issue of skilled workforce
only a minimal amount of training cost is required to train the
b) Source of fixed Income : As NICT had struggled initially to attain financial stability, this new project
would give them a steady source of cash flows and would be the panacea to their financial problems.
Also it would help the credit ratings for financing, due to an excellent Relationship formation with one
of the largest banks in India.
c) Beneficial to their stakeholders : This would be beneficial to the stakeholders i.e the VLE ( Village
Level Entrepreneurs) who would also benefit from this new partnership in the form of more regular
employment, new business opportunities, and increased revenues.
d) Would help NICT to achieve economies of scale : As PBI has the largest reach, serving around
7176 citizens, this would help NICT lower its costs by achieving economies of scale. This would in
turn boost up profitability.
e) It would also help NICT to build up a pan-India network with an infrastructure that was unparalleled.
They would have a near monopoly in this sector.
Some of the disadvantages of accepting the proposal in its entirety are as follows :
a) PBI may enforce its own processes and software on NICT : As PBI has more bargaining power
being the larger entity, it may force NICT to adopt new processes and software. However the
founders have been in this industry for a long time, and hence may know better than PBI. Thus this
problem of beurocratic behavior from the side of PBI may prove to be a disadvantage.
b) May foster complacency and corruption NICT employees: As PBI is a primarily a Government run
enterprise, the work culture may be against the culture followed in PBI of delivering quality work and
putting in maximum effort.
c) PBI workload may affect NICTs capability to offer diverse service portfolio.
d) No guarantee of success of the PBI project.
This opportunity should not be rejected by NICT, as PBI may choose some other third party vendor or
may directly bypass NICT's processes by approaching the VLE's directly. This would eat into NICT's
business and may permanently hamper their future prospects, given the scale of the PBI project.
Thus NICT should accept the project with some terms and conditions such as :
a) PBI should allow NICT autonomy in this project to develop ICT as per their guidelines.
b) Define rigid corporate structure and responsibility in-order to discourage complacency and
corruption and preserve NICT's corporate work culture.
c) Outsource ICT development projects for faster implementation.
d) Provide increased incentives to VLEs in-order to preserve them from defecting to competitors.



2) What are ramifications with respect to SBI & BOI if it takes up SBI Offer?
Ans)
The business of SBI and BOI would take a hit if NICT partnered with PBI. If NICT takes up this
project, it would probably risk losing business from SBI and BOI.
a) The risk was always there that that PBI being the larger body would dictate terms to SBI and BOI,
which this may be unacceptable to them. As a consequence, they may give NICT the ultimatum to
choose between partnering with them or PBI. Thus SBI and BOI's business would be adversely
affected.
b) Also from the perspective of NICT, as PBI was the larger organization, they would probably be
more favored towards taking care of their demands vis-a-vis SBI and BOI. This may not go well with
SBI and BOI.
c) It is most certainly possible that PBI would be direct competitors to SBI and BOI. Hence SBI and
BOI would definitely be opposed towards sharing the same CSC kiosk with PBI for rolling out their
portfolio of services. Also setting up separate kiosks for each bank would be unviable from NICT's as
well as SBI and BOI's perspective.
d) If in case SBI and BOI decide to sever their contract with NICT, there is a possibility that they
would have to directly approach VLE's to roll-out their services by giving them higher incentives. Thus
they would have to build their whole infrastructure again increasing the costs of SBI and BOI.