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Predicting the failure of ICTD projects: the ROI approach

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

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

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

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.
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

7 e-choupal Yes Yes Yes. Remarkable

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.

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

11 Gram Suvraj No. Fuzzy No. No Ongoing large

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