Session1-SimonBell_ppt

8/22/2019 Session1-SimonBell_ppt

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Transformation of Indiaransformation of IndiaPost for Vision 2020:ost for Vision 2020:

Developing Efficient Service Delivery (Postal,Developing Efficient Service Delivery (Postal,

Financial, ICT) within the Context of aFinancial, ICT) within the Context of a

Commercially Viable Postal InstitutionCommercially Viable Postal Institution

Simon Bell, World Bank, June 15, 2005Simon Bell, World Bank, June 15, 2005

New Delhi, INDIANew Delhi, INDIA


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These next couple of days are designed to

result in a very concrete ACTION PLAN.

We are NOT here just to talk but to

move towards an operational agenda.

The potential developmental impact of

India Post is HUGE. Its outreach isimpressive. Its capacity to touch the

lives of over a billion people is

unsurpassed.

The time for TALKING is past the timefor DOING is NOW!


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VISION. In November 2002 a conference on

India Post provided a VISION. A vision ofwhat India Post could become.

That vision was an exciting one with IndiaPost, in public-private arrangements,providing a wide range of important goods

and services to the Indian public particularly to RURAL INDIA in a win-

win scenario for all.However, realizing that vision was recognized

as being the difficult part how was itpossible to operationalize that vision?


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REALIZING THE VISION. As severalcommentators said back in 2002

strategizing is easy but implementing ishard.

The main message that I took away from the2002 proceedings was that the three most

important things for India Post are,Implementation, implementation,

implementation.


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PROGRESS MADE TO 2002. Steps hadbeen taken prior to 2002 and continue to

be taken by India Post.

At that time, we were informed aboutexciting new business arrangements with

MasterCard, Western Union andIDBI/Principal, for electronic moneytransfers and the sale of mutual fund

instruments, among other things.

Further new developments have taken placesince then.


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THE NEED FOR A NEW BUSINESS

MODEL. A lot was also said about the need forIndia Post to change its business model. It wasdetermined that the existing system of the Post

Office working as a department of the Ministry ofCommunications WILL NOT WORK in achieving

the exciting partnerships that we had been

discussing.

There was a need to consider different business

models: corporatization, privatization, restructuring,re-engineering, etc.

However, one thing was clear.The Status Quo was No Longer Acceptable.


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EMERGING NEW BUSINESS DEALS. In addition, many newprospective deals public-private partnerships with India Post

were discussed as new business possibilities over the course ofthat conference. They included:

1. Employees Provident Fund for distribution ofprovident fund

benefits;

2. PRIME Praxis Consulting for Data Miningpossibilities;

3. Smart Card pilotswith the Ministry of IT;

4. E-Government Supporting rural connectivity in AndraPradesh for e-government(and now support for NEGAP?);

5. Ogilvy Outreach for outreach to rural markets;

6. Basix from Hyderabad for micro finance applications.

Many others are possible.


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During that conference as will happenduring this conference we were provided

with excellent examples of corporatization by

New Zealand Post/Transend.

We were provided with successful examples

of privatization by Deutch Post/Postbank.

The examples of the United Kingdom and

the Netherlands were also explained.

They all provided alterative business models

for India Posts consideration.


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DISTINCT TYPES OF BUSINESS ACTIVITY.

Another point which came out of the 2002 conference was thatmost post offices have at least two very distinct types of

business activity.

1. The first is their core postal activities.2. The second is their non-core activities generally built,

although not exclusively, around financial services.

In addition, the Post Office network could provide:

3. e-government, e-business, micro finance, data mining, etc

built upon ICT capabilities.

While that conference indicated that the non-core activities

tend to assume increasingly greater prominence over time

the main message was that all types of activities must be

developed in tandem.


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For example, the Post Office Savings Bank is a very

important bank in India it is the largest holder of

non-public sector savings deposits in the country (over$45 billion).

Financial Services now contribute around 1/3rd of the

revenue stream of India Post.

This weeks Economist has an article on Japan Post

which characterizes it as the biggest financial

institution in the world ($3.6 trillion in assets).

The Indian Post Office Savings Bank ranks up there

with the most important financial institutions .certainly within India.


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SOME MAIN THEMES EMERGING FROM THE 2002

CONFERENCE. Several quotes from the 2002

conference were continually repeated. The ones thatstruck me most were:

1. India Post is a great vehicle forpublic-private partnerships.

2. India Post can help deliver development that last mile

3. Dont devalue the Brand Trustof India Post by selling

products poorly

4. Do what you do do well. Dont become a second rate pensioncompany. Dont become a third rate IT company.

5. India Post can become the ultimate touch point for theIndia Public

6. The Owner, Operator, Regulatorfunctions of India Post

must be debundled.


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THE INCREDIBLE MARKETAVAILABLE IN RURAL INDIA.

Another important theme that came through during

the conference was that the rural economy in India is

a very important market for goods, services and

financial products.

This is a market which doesnt want subsidies

but it DOES want access.

Could India Post provide the appropriate interface

for this potentially hugely profitable (and

developmentally important) market?


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REALIZING THE VISION. However, something

more must be done if this vision is to become more than amere dream.

Perhaps the only problem with the 2002 conference and

one that we must rectify in this current conference wasthat we did not explicitly plan a way forward. A concrete

ACTION PLAN.

We cannot afford to leave this conference without a plan for

going forward. As this would make it a hollow conference

the feel-good, post-conference afterglow would soon

dissipate.

In 2002 I suggested that a plan had emerged from those

proceedings and I tried to lay out what I thought I had

heard was the best way forward.


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A FOUR POINT PLAN OF ACTION. In 2002 weconcluded the conference by suggesting the following Four

Point Plan of Action:

1. Immediately commence a Business Plan which, among

other things, provides guidance on AlternativeBusiness/Restructuring Plans for India Post;

2. Commence the process of separating the Owner,

Operator, and Regulator functions of India Post;

3. Actively pursue the various business opportunities which

emerged within the context of that conference;

4. Initiate Pilots in Five different regions in Five PostOffice circles which provide a wide range of new

products (both postal and non-postal both financial andnon-financial) in conjunction with private sector partners.


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In the 2002 conference, India Post was described

as having many suitors many companies andgovernment agencies which would like to combine

with India Post to take advantage of its huge

distributional network.

However, it was further indicated that these

marriages required India Post to be efficient,effective and cost competitive.

We further offered the World Banks helping handin supporting India Post achieve these lofty goals.

That offer remains valid TODAY.


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In conclusion I would like to leave you with two quotes from SamPitroda a principal architect of the telecommunications revolution

in India in the 1990s:

The policies of development agencies .. too often limit

appropriate technology to the two dimensional, two penny

solutions that bring the poor to the doorway of the modern

world but not actually across the threshold

In short, high technology can put unequal human beings onan equal footing, and that makes it the most potent

democratizing tool ever devised.

Together, in the postal system of the 2000s, India Post can achieve asimilar revolution to what telecoms reform provided India in the

1990s .. to the overall benefit of this nation.

Let us cross that threshold together!


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Session1-SimonBell_ppt