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"It is early days for PPP model in India"

26 May 2009

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In a discussion with iGovernment, IBM India's Public Sector General Manager Puneet Gupta shares his views on the company's offerings for the government sector in India.

It's been over three years since you set up the public sector practice in IBM India. Are you happy with the achievements of the division in the government vertical so far?

Image credits: iGovernment / Puneet Gupta

We made the right decision of setting up the government business unit as e-Governance had started taking shape at that point of time with the deployment of MCA-21. Our experience has been pretty good, be it the fitment with the right kind of technology and solution, and also willingness to change amongst the bureaucracy.

Besides, there has been a considerable increase in the number of consulting projects—drafting of RFPs, evaluating proposals—over the last 5-6 years. We definitely see a lot of openness and willingness for change in the segment. 

So how would you rate IBM's success in the space?
MCA-21 and passport projects are complex projects. In the Passport project we are not the prime contractors but we are involved as a partner. The passport project will also offer a fundamental change and will impact the life of common citizens since it is a complex project and needs lot of hard work.

We won the income tax project where Bharti provided the bandwidth and we did the networking piece. The CBDT Project is under implementation by IBM. It is worth US $46 million and extends to 745 offices over a five year period where the focus is on infrastructure, messaging, asset management, security and facilities management system. We have won smaller projects in multiple areas say defence and Indian Railways.

We have also won some large high performance computing (HPC) deals, the largest HPC deal in India in ten years. The deal is under implementation and will get completed in 3-6 months time. On high computing solution there are only a few companies in India that have the technology and IBM is pretty strong in the space.

Have there been misses as well?

We always count on our misses as it tells us where to focus on. In government, there are 100 things to focus on and it takes almost 2-3 years to start the project. However, instead of going for all of them we would like to focus on, say 20 projects, and complete them well. And whatever we have focused, we have won.

And what are these focus areas?

In the fourth quarter of 2008, we were the number one services company. We have made significant investment and got a fair share of business in terms of corporate, telecom, banking and government and it has been a pretty good going.

In the last few years, we have got fair amount of business from the government vertical. Our focus is departments where we can add value. Our business is different from many of our competitors as we bring solutions for taxation and revenue, customs, port and border management, homeland security and trusted identity. 

We have recently added home land security and public safety as of late there has been an active interest in the area amongst the government agencies.

True, homeland security and public safety have recently become areas of prime focus in the country. How is IBM geared up to provide solution on this front?      
One of the things we have started is creating awareness about technologies and solutions and the traction is happening. There are several homeland security technologies and solutions available in other parts of the world. The bureaucrats know what they need and at any stage if it translates into project we will go for the project.

One of the things we are trying to figure out is to adapt to the Indian environment as different parts of the government have different problems with respect to homeland security. We think about technology, the problem areas and solve it by looking at our solution and adapting it to the Indian environment.

In terms of unique identity, what is the solution that IBM can bring on to the table? Are you planning to participate in this project? 
If you look at all the databases, be it driving license, pan card and election card there are elements of duplication. There is a technology which helps in eliminating duplication. Essentially, it is granular and also provides detailing so that one can associate the person with address and telephone number. In software suite we have a powerful combination. We are also pretty strong on infrastructure side, both on the hardware as well as software.

We had limited discussion for last 3-4 years. It is early days for the Unique Identification project but we will definitely participate. If associated, we will have the privilege as no country has a project of this size in terms of population, geography, multiple languages and all complexities. But I must admit that execution of this project would not be an easy task.

What are the activities conducted by IBM Research Lab for the government vertical?  
This is unique for IBM as we have two labs—IBM Research Lab and IBM Software Lab. We are actively involved with our labs as some of these projects are planned to happen in the next few years. 

This is the first of its kind research lab where the focus is on developing solutions to be used by government agencies. For instance, we are building a  solution on a handheld device whereby a person in a field can feed in the data, the data is verified at the server end and the result is sent on the handheld through an SMS. Once it becomes operational in the next few months, the solution will touch almost every citizen of India. In terms of revenue, this is pretty small but it makes value as it will help make things change in our country.

Looking at the recent NeGP projects, IBM has not bagged too many projects under Public Private Partnership (PPP) in the country. Why?    
We may not have been direct bidder in many of the projects, but we are working with several of the prime bidders and have a good number of projects that are under implementation and execution stage. We have associated with some of them with respect to hardware and software. Yes, it's a fact that we have not got any projects under the PPP model. There are a lot of projects being rolled out under PPP and we have to focus on what form and shape we will participate in the project.

How do you see the future of PPP model in rolling out e-Governance projects in the country?
It is early days to comment about PPP models as many of the business projects are business modules. The PPP projects are of two types—revenue per transaction and cash flow based. The revenue per transaction is based on number of transactions whereas cash flow is based on quarterly cash flow on a pre-agreed service level agreement (SLA). The cash flow is successful if it is executed according to the plan and transaction based is successful if they have the requisite traffic.

It is early days as the prime bidders will be in a best position to come back once the project is fully scaled up and once it is fully implemented. And it will all depend on the experience of both the sides. 
Some companies have gone on record saying that since they have a large exposure in the government vertical, their revenues may shrink as timely collection of payment is a big problem. Have you faced similar situations?   
Government RFPs have clearly defined payment parts as these are different from corporate. The important part is to know it upfront and make a detailed cash flow plan. We never had a problem of payment getting delayed if it was due. Our experience with the government has been good as we have got our payment whenever it was due. The payments are structured in RFP, and one gets the money later then one gets in the corporate sector.

Do you see signs of slowdown in the government division?
Government spending has not slowed down. The projects are on track and it has not slowed down. All long term projects are absolutely on course as government continues to make investments in public sector business.

How do you see usage of ICT for social sector reforms in the country? 
India has been making rapid stride in this direction. While the trend was not much visible during mid 90s, there has been a lot of change in the space over the last 6-7 years. There has been lot of activity from the government side on the e-Governance front and the need is increasing.

However, one needs to look at the unique challenges that the country has. No country in the world can be compared with India—no other country has a challenge of dealing with so many languages that a solution provider needs to handle for a pan India deployment or while doing projects across various states.

Besides, while deploying technology in rural areas one needs to be practical and prudent in their approach in terms of understanding the infrastructure in these areas. They should first go for a pilot and then opt for a full scale deployment. There is no dearth of technology as it can be delivered but infrastructure in India's rural areas are not so good, non existent in certain areas and hence one has to look at solutions which are more pragmatic and relevant and can meet the needs of these local markets.

Puneet Gupta has been with IBM India for over 10 years and is credited with setting up the company's government division in 2006 and is presently responsible for business development for all IBM products and services in the country's government sector.

Source : iGovernment

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