Team 2: Ali Dabak, Jodie Dressler, Kristen Fly, Mykela Foster, Elizabeth Dinnella,

Katy Forshee

1. What was ITC’s motivation for creating the eChoupal? What problems (discuss
from a data and process focus) does it address?

Choupal is a Hindi term meaning a community meeting space. Choupals are a staple in
Indian farming villages where farmers would stop by on their way from the fields or from town
to chat, gossip, or share stories and news from their days. The choupal was an informal assembly
where knowledge could be shared and captured. ITC built on this concept when it introduced its
eChoupal service. The eChoupal service was introduced because ITC’s agriculture commodities
export division was severely lagging behind the other divisions of the company, and that, in
order to boost their profits, they needed to upset the supply chain that had been in place for years.
By integrating information systems into the cultural infrastructure that already existed in the
villages instead of taking over the value chain from top to bottom, ITC had a solid foundation to
start from. Traditional choupals were a great place for knowledge sharing amongst the villagers,
but it was very limited due to only verbal communication being used to transmit ideas. When the
eChoupal system took over, knowledge was able to be shared across the entire country instantly.
This knowledge sharing addressed the three main problems that hurt ITC’s business: low quality
yield, the broken mandi system, and the low productivity of the farmers. 

Villages being so isolated from each other meant that the sharing of ideas and new
farming methods was severely restricted. If a farmer experimented and discovered a new
technique that yielded better crops, the information could not be spread due to the fragmentation
of the villages. The limited technological resources, mixed with this isolation, kept farmers from
accessing useful inputs that could have boosted their production quality. For example, access to
herbicides, pesticides, and accurate weather reports would drastically change the way farmers
grow crops and bring them to market. Farmers were losing 60-70% of the potential value of their
crops, with agricultural yields only a third to a quarter of global standards (Upton & Fuller, 2004,
p. 2). 

The eChoupal service provided features that would target these specific issues. India had
no private weather service, only the government provided weather information (Upton & Fuller,
2004, p. 6). The weather forecasts were rarely communicated to remote villages, and were too
generalized and inaccurate to cover the entire Madhya Pradesh. Also, the difference between
harvesting before and after a big rainfall had a huge impact on the quality of the crops. Without
accurate weather information, farmers tended to err on the frugal side, but knowing when the
rain would come gave the farmers more incentive to spend money on quality seeds that would
result in better quality produce. Another feature eChoupal provided was a Best Practices page.
This page provided farmers with practices that other farmers with similar land area and crop
volume were using that they could compare their methods and harvest to. This page also
provided “ideal” practices so that farmers could compare what was actually being done with the
way they should have been doing things for the best quality crop. 
 Another issue was the broken mandi system. Soybeans would spoil if they got wet after
being harvested (Upton & Fuller, 2004, p. 4), so farmers did not have long until they had to sell
their crops. At harvest time, all the farmers who relied on soybean products descended upon the
nearest mandi at once. On any given day, at least 1,000 farmers could be found at the smaller
mandis, 1,500 farmers at the medium sized mandis, and more than 4,000 farmers at the larger
mandis. The smaller mandis had 2-3 commission agents buying from the farmers, and
somewhere between 25-30 agents at the larger mandis (Upton & Fuller, 2004, p. 4). These agents
would bid on the crops until a price was settled and they sold. Companies like ITC would
contract with a specific agent and would authorize prices to be bought at. These agents knew
what price the companies would buy at, so they would regularly purchase crops at a much lower
price and sell to the companies at market price, and pocket the difference. The weight of the crop
would be manipulated by these agents to further increase their profits. 

The eChoupal network provided the farmers an alternative to this system. Now, farmers
could sell directly to ITC to eliminate the cost inflation and cheating that occurred through the
middlemen (Upton & Fuller, 2004, p. 7). The eChoupal site provided pricing at nearby mandis
and compared them to prices offered by ITC’s hubs, so farmers could make informed decisions
of when and where they wanted to go to sell their crops. By building hubs and warehouses, ITC
was able to reach 80% of the soybean and wheat growing areas in the state (Upton & Fuller,
2004, p. 9). ITC had to strategically place its hubs to be a similar distance away from farms as
the traditional mandi was. In order to make this system attractive to farmers, ITC needed to put a
kiosk within walking distance (<5 km), and a hub within driving distance (<30 km). ITC also
reimbursed farmers for the cost incurred while delivering the harvest to the hubs (Upton &
Fuller, 2004, p. 9). On top of now making fair wages, farmers are also earning $8/ton more due
to this reimbursement (Upton & Fuller, 2004, p. 11). 

The original system did not offer farmers empowerment, and they had very little freedom
to do what they wanted. Farmers were locked in an unproductive cycle that they could not break
free from. Due to financial strain, farmers were not willing to take risks with their crops. They
did not want to risk hurting their already low income for a marginal gain. Not willing to take
risks meant farmers minimized investing in their crops. This lack of investment resulted in low
value crops, which resulted in low profit margins for the farmer when he went to sell. Since these
farmers are not willing to experiment and take risks, the value of their crops remained the same,
and the cycle continued unchanged (Upton & Fuller, 2004, p. 2). ITC’s eChoupal system broke
this cycle. By offering farmers more money for their produce and tools such as an accurate
weather forecast, they increased the profits made by farmers and lowered the financial strain on
them. By also providing alternative farming methods that were proven to increase the quality and
the quantity of a farmer’s yield, they took the risk away from experimentation, as well as
increased the value of the harvest with small changes that resulted in exponential growth. 
 2. What were the old and new physical flows and information flows in the channel, i.e.,
how does it work? 

ITC properly introduced a new technology and information system to realign their
business, organizational, and information strategies to best serve all stakeholders in their soybean
business (Pearlson 2016, p.18). The diagrams above illustrate the flow of physical goods and
information from before and after the introduction of the eChoupal. 

Prior to the eChoupal, goods and information flowed through one messy pipeline. The
CA purchased soybeans from farmers who had traveled long distances from remote villages that
had little connection to the developed world. After purchasing the soybean, the CA would take it
to an ITC facility where ITC would buy it and process it to create soymeal and oil. About 80% of
soybeans were made into soymeal and exported as cattle and poultry feed to countries like China,
Pakistan, Bangladesh, and the UAE. The other 20% was made into soybean oil and sold in India
as a popular food product. This process gave the CA rare bargaining power as both a supplier
and customer (Pearlson 2016, p.39). CAs were not only the center for moving the physical
soybeans, but also as the source for any information farmers might get about prices, weather, and
other market factors.

When it came to IS strategy, ITC received information from their resources such as the
government, market traders, and research institutions to help them decide how much money to
spend on soybeans. Once ITC determined how much they should spend, they informed their CA
in each mandi market. At the mandis, the CAs had lots of control over the entire supply chain.
They could buy soybeans for less than they told ITC and make additional profits for themselves.
They could also cheat the farmer by spreading outdated information and by using manipulated
scaling tools to weigh soybeans. The farmers could share what they learned with each other only
through word of mouth, and by the time information reached some villages, it was often out of
date. In this system, ITC had no way to communicate with or buy directly from farmers.
Although moderately successful, both ITC and farmers were missing out on large profit
opportunities. The process was inefficient due to the CA middlemen, and the quality of the
soybeans was poor due to farmers lack of weather and market information.  

In order to fix these problems, ITC introduced the eChoupal, a truly unifying IT platform
that was aligned with ITC’s business strategy and its stakeholders (Feld, 2004). Sivakumar
understood the importance of Choupal as a central point of a village’s culture and used it to his
advantage to create an IS strategy (Pearlson 2016, p.66). With the eChoupal, products and
information were able to flow efficiently between farmers and ITC in a community based way
they already embraced. At the core of this new IS strategy was the eChoupal website, but the
website was just an IT asset. It was only successful because it was a true product of ITC looking
at their business strategy and creating an IS strategy that properly complemented it (Pearlson
2016, p.36, 28). The information resources that only ITC was privy to before, such as weather,
pricing forecasts, and farming best practices were now shared directly with farmers through the
website (Pearlson 2016, p.37).  ITC saw the importance of data as a control variable in their new
organizational design and kept the website updated from their Bhopal office using information
provided by their Bangalore based information technology subsidiary (Pearlson 2016, p.58). This
website acted as a direct line from ITC to the farmers for the first time ever. The information was
organized into 8 links: weather, best practices, crop information, market information, Q&A,
news, feedback, and ITC information (HBP, p.6). The government played a big role in this
information exchange as they provided local meteorological information for this new system,
helping to empower farmers to make better decisions (Pearlson 2016, p.192). The Q&A section
worked as a social network allowing experts from the industry as well as experienced farmers to
share science and best practices on growing better quality soybeans. Even as such a basic form of
social media, this website was able to encourage several functional blocks including identity,
sharing, conversations, reputation, and relationships (Kietzmann, 2011).

 Thanks to the informational value from the eChoupal, ITC could prove to the Indian
government that they should be allowed to purchase soybeans directly from farmers, adjusting
governance in favor of farmer empowerment (Pearlson 2016, p.192). With these new regulations,
ITC created 44 hubs where they would accurately weigh, purchase, and process soybeans.
Farmers now had the appropriate decision rights of where and when they would sell their
soybeans (Pearlson 2016, p.58). ITC was able to institute more control through evaluation of
soybeans by offering additional information by offering soil testing by scientists at the hubs.
Farmers could also purchase farming products such as pesticides and fertilizer in the hopes of
improving their crops, which result in a better price for their soybeans (Pearlson 2016, p.68).
These changes to the flow of information and products altered primary and support activities of
the value chain, leading to better quality soybeans in turn leading both farmers and ITC to
making more profits (Pearlson 2016, p.41). 

 ITC aligned their business strategy and new IS strategy almost flawlessly with their
organizational strategy by creating a new organizational structure to handle informational and
goods separately while levering leveraging the human points that already existed. ITC selected
Sanchalaks to be the gatekeeper of the new technology and therefore information (Pearlson 2016,
p.58). Each Sanchalak received log in credentials for the computer and basic IT training, further
developing new IT capabilities (Pearlson 2016, p.36). They printed out important weather and
market information to display in the village, helped farmers use the website when they had
specific questions, and verbally communicated information with farmers who could not read.
Sanchalaks could also sell farming products to farmers and placed orders for these products via
email. Having Sanchalaks, running their own businesses and using this technology created the
necessary accountable culture (Feld, 20014). Meanwhile, those who had previously been CAs,
moving information and goods through the supply chain, became Samyojaks and focused only
on physical aspects of the chain. Samyojaks also received IT training to help setup and maintain
eChoupals. They also transferred soybeans and farming products to and from ITC hubs and
villages when farmers could not go themselves or when they placed orders through their
Sanchalaks. 

ITC truly used their business strategy and their interest in stakeholders to fuel a new
technology centered IS strategy and a community leveraging organizational strategy. 
1. Draw a diagram to represent the old and the new physical flows.
 3. What made this implementation successful?  How was value created in this model? 
a. Can everyone in this value system (supply chain) “win”?
b. Were there any losers?

As the ITCs management team started their discussions, surrounding the current choupal
supply chain model the team identified the need to understand the product globally as it relates to
the culture of the villages.  Being able to incorporate the national and organizational culture of
the farmers and villages will have great impacts on “planning, governance, and perceptions of
service quality” as the plan comes to fruition (Pearlson, 2016, p. 68).  Understanding the
limitations of the choupals digital capacity helped navigate the path ITC wanted to move with
the new business model. The ITC wanted to move forward with a plan that would provide a
confident solution to the current system, which was not economical or efficient thus far.  This
approach lead to the eChoupal system, which incorporated digital technology as a means of
enhancing a cost savings model as well as creating efficient channels for the villages and farmers
to sell their product directly to the ITC, eliminating the cost increase and cheating middlemen
(Upton & Fuller, 2004, p. 7).  

The ITC management team identified the needs of eChoupal and then equipped each
village with the proper Information System technology to implement their business strategy,
adding to the success of implementing eChoupal (Pearlson, 2016, p. 26).  The ITC then supplied
each village with the following information technology tools (Upton & Fuller, 2004, p. 5): 
 A PC with Windows/Intel platform, multimedia kit, and connectivity interface
 A connection line- either a telephone or Very Small Aperture Terminal (VSAT)
 Uninterruptible Power Supply (UPS) and solar-powered battery backup
 A dot-matrix printer

The new eChoupal system would create access to the World Wide Web site, which was
modified with valuable information specific to the village’s geographical region for the farmers
use. The information links, developed with “full involvement of the farmers using the system”
(Upton & Fuller, 2004, p. 6).  This new method of selling led to the selection of a “lead Farmer”
also known as the “Sanchalak”.  This individual would act as the liaison between ITC and the
farmers.  The Sanchalak received training to use the eChoupal and provided them with effective
methods of communication techniques.  The Sanchalak receives a fixed commission for each
transaction that his village completes through the ITC procurement hub. Through the customized
information on the eChoupal kiosk, individual farmers could log on themselves and navigate the
system. 

This new information system provided a sense of empowerment to the villages and more
importantly to the farmers.  Having the knowledge necessary to make decisions for their crops,
the best practice for selling their crops and ways to minimize the loss of their crop added value to
their business.  Many farmers were choosing to sell their products directly to ITC as this
provided a cost savings. The “transparency” created by eChoupal offered the farmers a real look
into the pricing, which also established “trustworthiness” of the eChoupal system (Upton &
Fuller, 2004, p. 9).  
 There were many values added with the implementation of eChoupal.  The payment
process for the farmers improved efficiency and the farmers received payment upon delivery. 
ITC also provided reimbursement to the farmers for transporting the product to the factory.  At
the ITC processing plants, it was important to create a better selling experience for the farmers. 
They offered several services at their facilities, which aided the farmers in maximizing their time
away from their farm. The farmer could also bring a soil sample for testing, which would take
three days to process; whereas, the alternative testing would take much longer.  

The ITC chose to convert the commission agents (CA’s) of the ITC to Samyojaks. 
Operating out of mandis, Samyojaks allowed the eChoupal to still coexist with mandis, thus
creating a cross collaboration for ITC.  The responsibilities that the Samyojak took on included:
setting up the eChoupals; facilitating ITC’s purchasing transactions; and assisting the ITC’s
selling transactions.  They also managed warehousing hubs, assisted in the fund disbursement to
farmers and assisted farmers who could not find transportation to the ITC processing facility.
The new business model of eChoupal led to an enhanced value chain for ITC (Pearlson 2016, p.
42).

The ITC established a transaction system that provided a “one-stop-shop” (Upton &
Fuller, 2004, p. 11).  Allowing the farmers to buy all the items needed to grow their soybeans,
the sanchalak was responsible for facilitating the orders in his village and the Samyojak acted by
moving the goods purchased by the villages.  This multifaceted model proved to become a
“winning” value system for eChoupal and all channels within the system.  ITC was able to create
a larger value system with the implementation of eChoupal.  As a result, this new model created
many new opportunities for ITC, the Sanchalak and the Samyojak, which would not have been
possible with Choupal alone (Upton & Fuller, 2004, p. 11). 

4. How did the principles espoused by ITC help overcome the obstacles (e.g.
legislation) facing the eChoupal?

Because the village of Dahod had not been introduced to the wealth of technology, they
had many issues, all of which stemmed from the lack of knowledge. The inability to
communicate outside of the village caused a hardship for everyone in the soybean supply chain
in that village. Such as:
 No access to pesticides.
 No knowledge of the market value for soybeans.
 Negative returns on investments.
 No other options because of legislation.

As ITC took a step back, they realized that implementing a telecommunication network
could benefit all parties involved. By 1999 eChoupal was introduced and its introduction
changed things forever. eChoupal built a conceptual bridge helping the often-illiterate farmers to
use information technology to their great advantage (Proctor, Nof, & Yih, 2011). Implementing
this network allowed farmers to have options on who to sell to and provided insight as to what
price they should accept for their product.
 Before the eChoupal was implemented, the government put into place the Agricultural
Produce Marketing Act, which prohibits farmers from selling their crop anywhere but the mandi.
This was something put into place to help farmers, but the result was exactly the opposite.
Because ITC would not be using the mandi infrastructure anymore, the government offered to
waive the mandi tax on the produce procured through the eChoupal.  ITC recognized that the tax
was a major source of revenue for the government and locals mandis and as ITC’s competition
was also subject to tax, the tax itself was not making ITC uncompetitive, as a result, ITC
continued to pay tax rather than risking the relationships with the government (Annamalai &
Rao, 2003).  ITC was able to convince the government of the potential benefits to the farmers
and the economy, so the government amended the act to legalize the purchase of soybeans (and
other agricultural commodities) outside the mandi (Upton & Fuller, 2003).

Creating transparency in the village with the eChoupal faced little opposition at its
inception. Everyone had access to the system, which made it easy for farmers, buyers and the
government to monitor and ensured that the system did not just benefit one person or one group
of people. eChoupal also helped with transportation issues. With the farmers being able to
compare pricing against travel expenses, they could decide whether the trip was worth it or
whether they should utilize another buyer closer to the area. ITC hubs were the alternative to the
mandi. This provided multiple locations where the farmers could sell theirhis soybeans, which
eliminated the farmers waiting four days for payment. Farmers now received cash on delivery for
their yield, and were reimbursed for travel expenses related to the soybean transaction. eChoupal
insured that all involved in the transaction were fairly treated and compensated for their
involvement.

To combat the problem of a bad yield from crops, eChoupal provides soil testing so the
farmers would know exactly why they are having the problems they are having, as far as the size
and quality of the crop. They also ensured that the farmers had access to things such as pesticides
and fertilizers. In addition, the ITC processing facilities cut out 4 to 5 individuals in the supply
chain, keeping the farmers purchasing cost as low as possible.

The CA’s were all kept on at ITC as well. Now known as Samyojak, they  were provided
the capability to make much more money. Their new role consisted of:
 Setting up eChoupals
 Facilitating ITC’s purchasing transactions
 Helping with ITC’s selling transactions.  (Upton & Fuller, 2003)

ITC’s “one stop shop” feature included everyone who was previously involved by
making everything accessible and implementing information systems and logistical policies.
Adopting this system provided an immense amount of information to the farmer so they would
be better informed on how to get the best quality for the soybean crop while insuring the
financial gain for all involved.
5. What should be ITC’s next steps?
 Information systems must be in place so that ITC has continued success. As the
relationship between ITC and farmers grows, so should the technology they use to do business.
Since farmers were so receptive to the new computers, ITC should also consider introducing a
social media strategy. Part of creating this strategy should include who they want to give access
to, what platforms they should use and a clear policy. Article, “Social Media? Get Serious!”,
created building blocks that organizations can use to understand social media. “By analyzing the
seven building blocks—identity, conversations, sharing, presence, relationships, reputation, and
groups—firms can monitor and understand how social media activities vary in terms of their
function and impact, so as to develop a congruent social media strategy based on the appropriate
balance of building blocks for their community… The seven social media building blocks would
help ITC answer important questions about social media and how they can use social media to
create more business (Kietzmann, Mcarthur, and Silvestre, 2019).”

Not only can ITC use social media, but the farmers would also benefit from using it.
Social media is a tool that helps connect people around the world. While ITC’s website also
helps, social media gives farmers an outlet that they can control because they steer the
conversation and decide what social media platforms to be a part of. ITC can use social media to
build more trust and communicate to even more farmers.

Since trust is so important to the farmers, ITC should also consider better performance
reviews for employees. They don’t want to have more issues with the commission agents being
dishonest. They also want to ensure that key players, like the Sanchalak, understands new
technologies and can teach others how to use it. “People are more likely to adopt a new
technology if they think that they technology’s embedded values match those of their national
culture (Pearlson, p. 68).” This means that if the Sanchalak believes that ITC’s values match his
own, he is more likely to promote others to partner with ITC.

1. What criteria should ITC use in evaluating its emergent opportunities?

Evaluation is an important part of any organization. “Information collected for evaluation

may be used to provide feedback so that the employee can improve personal performance; it also
can be used to determine rewards and compensation” (Pearlson 2016, p. 65).  ITC should review
each employees performance, especially those that are key players such as the Sanchalak and
Samyojak.

ITC should consider creating a steering committee to help assess IT decisions. “the
steering committee is an excellent mechanism for helping the business units realize the
competing benefits of proposed IT projects and develop an approach for allocating among the
project requests” (Pearlson 2016, p. 199).

ITC can also use mathematical equations like ROI, EVA to evaluate opportunities. It
should also review the Global Leadership and Organizational Behavior Effectiveness (GLOBE)
research program. This research program is a collection of data on cultural values and practices
and leadership attributes from over 18,000 managers in 62 countries (Pearlson, p. 69). ITC can
use the information found to determine how to deal with different managers, farmers and even
different countries.

6. eChoupal introduced modern technology to the rural poor in India. Similarly iCall
introduced modern technology to the urban poor in Taiwan, especially Taipei.
a) What lessons can we learn about introducing new systems from these two
case studies?
eChoupal and iCall are two systems that integrated modern technology into poor
populations in India and Taiwan, respectively. eChoupal was widely successful while iCall did
not live up to its full potential. From comparing these two case studies, we can learn a lot about
introducing new systems into untapped user groups. Although one would suspect eChoupal
would be less successful than iCall since eChoupal’s target user lived in a rural environment and
iCall’s user lived in an urban environment, eChoupal was able to incentivize utilization and earn
trust through incorporation of cultural norms leading to its overall success.
Lesson 1: Incentivize Utilization
eChoupal was able to successfully balance its business strategy, information systems
strategy, and its organization design, also known as the Information Systems Strategy Triangle
(Pearlson, 2016, p. 18). eChoupal balanced its organizational design and information systems
(IS) by incentivizing the Sanchalak to adopt the eChoupal IS and encouraged other soybean
farmers in their region to adopt it as well. “It was in the Sanchalak’s best interest to advise the
farmer correctly, for better quality produce from each farmer would fetch a higher price from
ITC, and this meant a greater commission for the Sanchalak, as well as supporting his reputation
as an honest broker” (Upton & Fuller, 2004, p. 8). In the textbook, we are provided a seemingly
unrelated example of how Kaiser Permenente was able to align their organizational design to
incentivize use of their information system.  “Physicians were all paid a flat salary and end‐of‐
year bonuses if their patients achieved better health. All caregivers were rewarded for guiding
people into making behavioral choices that were likely to keep them well.” Pearlson, 2016, p.
18) While these cases are in different cultures and different times, the alignment of
organizational design and IS is evident and proves to be an effective way to incentivize product
utilization. Alternatively, iCall lacked incentives for drivers. Taiwan Taxi was launched in an
oversaturated market of 1,200 other taxi companies, including two other GPS enabled ones.
Since there was such a large market,drivers were deterred by Taiwan Taxi’s NT$1,500 monthly
fee (HBP, 2009, p. 2-3). In this case, the business strategy was out of alignment with the IS, and
the incentives did not outweigh the cost of using the product as it did in the cases of eChoupal
and Kaiser Permenente. 

Lesson 2: Earn Trust

 eChoupal’s developers were able to earn the rural population’s trust by incorporating
cultural references, providing education, and developing a no hassle business strategy. The name
itself, eChoupal, “incorporated “e” into the age-old tradition of village choupals to facilitate a
reorganization of the channel” (Upton & Fuller, 2004, p. 4). Additionally, the business strategy
made education of the system users a priority so rural soybean farmers would know how to
operate the system. “The total setup cost to ITC was Rs. 170,000 ($3,762) per choupal. Another
Rs. 100,000 ($2,213) was spent on people, travel, communication, software, and
training” (Upton & Fuller, 2004, p. 5). Although this upfront training cost was almost as
expensive as the equipment itself, the developers realized that this was part of the business
strategy; they could either invest now or face downstream effects later. “Don’t provide your
teams new tools to leverage old skills; ask them to learn the new skills that will move your
learning organization forward, and abandon the old, irrelevant skills (Carson, 2017).” 
In Taiwan, iCall struggled to earn trust with their taxi drivers. One example of this is the
business model in the case that more than one driver was available to pick a customer up, “this
bidding model proved inappropriate in Taipei’s context because cab drivers were easily upset by
unsuccessful bidding. The loser was likely to harbor resentment toward the call center” (HBP,
2009, p. 7). Lastly, eChoupal was able to earn the soybean farmer’s trust by providing a no
hassle service. ITC provided the equipment and the training free of cost to the farmers, and if the
farmers wanted, they could use all of the eChoupal services and still sell at the mandi. Since
farmers were not locked into any commitment with the ITC, the brand was able to earn the trust
of the rural population quickly, and further contributing to eChoupal’s overwhelming success. 

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