Literature 11 Final

8/2/2019 Literature 11 Final

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CHAPTER 1

INTODUCTION



Introduction

Information and Communication Technology can be broadly viewed under two sectors

,Information Technology and Communication. In India, the growth of both these sectors is very

significant in the past two decades. Indian IT industry has built up an enormous confidence for

itself in the global markets. IT industry in India comprises of software industry and information

technology enabled services (ITES), which also includes business process outsourcing (BPO)

industry. India is considered as a pioneer in software development and a favourite destination for

IT-enabled services.( Annual Report 2009-10 of the Department of Information and Technology,

Ministry of Information and Communication Technology)In the past 10 years or so, the availability and use of ICTs has grown dramatically around the

world. In the developing world especially, this growth has been largely due to the growth of

mobile telephony. India is well-known around the world for its rapid economic growth rates over

the last fifteen years or so, fuelled in part by the spectacular growth in its export-oriented

software and ICT-based services sector. Many other countries look to India as a model for global

outsourcing and try to imitate elements of this in their own strategies (Carmel 2003; Heeks and

Nicholson 2004). Success at a particular period of time does not, of course, guarantee its

continuation and commentators have expressed concerns such as rising wage rates and skills

shortages of ICT professionals (CACM 2007), and increasing competition from countries such as

China (Negroponte 2003). It is likely, however, that India will remain a major player in the ICT

industry for years to come and thus its global image as an ICT success story will continue.

Information and communication technology (ICT) and e-business applications provide many

benefits across a wide range of intra- and inter-firm business processes and transactions. ICT

applications improve information and knowledge management inside the firm and can reduce

transaction costs and increase the speed and reliability of transactions for both business-to-

business (B2B) and business-to-consumer (B2C) transactions. In addition, they are effective

tools for improving external communications and quality of services for established and new

customers.Despite these advantages, rapid growth in businesses¶ purchases and sales over the

Internet has yet to materialise. E-commerce is increasing but still accounts for a relatively small



share of total commerce. Broad definitions of e-commerce (including established EDI as well as

Internet transactions) suggest that in 2000 total on-line transactions were generally 10% or less

of total business sector sales andare mainly business-to-business, and business-to-consumer sales

are even lower, generally less than 2% of the total retail transactions. On-line transactions are

mainly B2B and domestic, rather than B2C or cross-border.The situation is similar for small and

medium-sized enterprises (SMEs), although they lag behind larger firms in Internet transactions.

For small firms to adopt e-business and e-commerce strategies and tools, benefits must outweigh

investment and maintenance costs. Commercial considerations and potential returns drive

adoption. Beyond a certain level of connectivity (PC, Internet access, on-line information or

marketing), not all SMEs will necessarily ³catch up´ with large firms, simply because e-

commerce may not bring large benefits and SMEs will stay with traditional business processes.

Other barriers have been seen to be the availability of ICT competencies within the firm, and

availability and cost of appropriate interoperable small-firm systems, network infrastructure and

Internet-related support services. Lack of reliable trust and redress systems and cross-country

legal and regulatory differences also impede cross-border transactions. (Vickery, 2004)





2. Introduction

Information and communication technology (ICT) is a crucial driver behind innovations in

Internet computing and drives economic growth and citizens¶ quality of life.( Stephen Ezell

and Scott Andes July/August2010)

Information and communication technology, or ICT, is defined as the combination of

informatics technology with other, related technologies, specifically communication technology.

ICT has been recognized as the engine for growth and a source of energy for the social

and economic empowerment of any country, specially a third world country.¶ (Nirmaljeet Singh

Kalsi1, Ravi Kiran and S. C. Vaidhya -ICT and Good Governance: A Study of Indian

Environment) While the common use of ICTs tends to refer to the newer technologies of phone

and internet, the term ICT is best used to also include the more traditional communication media

such as radio and television. Digital convergence is gradually bringing devices to the market that

include the traditional media (phones with radio, media centers with computing capability and

television) which will increasingly blur the distinction between old and new ICTs. Information

and communication technology (ICT) connectivity (PCs and Internet) is very widespread in

businesses of all sizes. As is the case with all technologies, small businesses are slower than

large ones to adopt new ICTs. Potential small business benefits and firm and sector-specific

strategies drive the adoption and use of ICTs. Principal reasons for non-adoption are lack of applicability and little incentive to change business models when returns are unclear. The issues

for governments are to foster appropriate business environments for e-business and ICT uptake

(e.g. to diffuse broadband, enhance competition), and target programmes to overcome market

failures to the extent that they are needed in particular areas (e.g. skill formation, specialized

information) Broadband connectivity is a key component in ICT development, adoption and use.

It accelerates the contribution of ICTs to economic growth, facilitates innovation, and promotes

efficiency, network effects and positive externalities. The development of broadband markets,

efficient and innovative supply arrangements, and effective use of broadband services require

policies that: promote effective competition and continued to stress liberalization in

infrastructure, network services and applications across different technological platforms;

encourage investment in new technological infrastructure, content and applications; and



technology neutrality among competing and developing technologies to encourage

interoperability, innovation and expand choice.

2.1 Evolution

The changes the ICT evolution has wrought affect every sector of society. Without

microprocessors, hospitals would have to close, airlines would be grounded and the bank is

enabled to closely monitor the details of my current account through on-line banking.

The evolution of ICT has occurred in five stages:

·Computer

·PC

·Microprocessor

·Internet

·Wireless Links

The story begins during World War II with the large electro mechanical calculator,

Harvard Mark I. It was 50 feet long, eight feet tall and weighed 5 tons. Some years later theENIAC was presented in Philadelphia. It used 18000 vacuum tubes and weighed 30 tons. Each

task to be performed required the throwing of 6000 switches covering three walls, a mammoth

machine occupying a large space.

In 1947 the first transistor was invented and the use of transistors allowed for the development

of smaller, more versatile and more powerful computers. ³Computers´ became a catchword and

input-output technology graduated from punch cards to magnetic tape; new computer languages

were designed to allow interaction with the new technology. Applications were expanded.

The second stage in the evolution of ICT began in the 1970¶s when it became possible to place

processors on a ³chip´, and magnetic discs were constructed. In 1977 Ken Olsen, the President

of Digital asserted that ³There is no reason why anyone would want a computer in their home.´



At the same time, Steve Jobs and Steve Wosniak began to sell their Apple II machine and a

young man called Bill Gates founded a firm called Microsoft. Within a few years the PC had

changed from being regarded as an esoteric toy to a valuable work tool for word processing,

accounting and later graphics.

IBM first launched its Personal Computer on the world in 1981. Now the PC has become

popular.

The third part of the ICT evolution is that microprocessors have now become embedded in a

myriad of products to the extent that the world as we know it would grind to a halt without the

humble microprocessor. The steering systems of planes, the traffic lights on our streets, the

control panels of power stations, air conditions systems all depend on microprocessors.

Microprocessors control every facet of our lives; they are constantly expanding their capacity,

applications and users.

The fourth evolution of ICT has its origins in the 1960¶s when the US Dept of Defence drew

up guidelines for a communications network among computers called ARPANET. Universities

within the US and later from outside the US began to link up to this system and to use it to send

messages.

France developed a variant ± Minitel system ± at the start of the 1980¶s. The US National

Science Foundation set up its own network as also did a number of universities on the east coast

of the US. In Europe EARN became a network among academic institutions and CERN in

Geneva was crucial in the development of the World Wide Web which only got its name in

1990. Within a few years ³surfing´ on the net became a social phenomenon. The advent of

broadband will accelerate this phase in the evolution of ICT. What is important about this

evolutionary phase of ICT is that users have built social networks to make them useful and

effective.

The fifth and current stage in the evolutionary process of ICT is the wireless one. This

phase began with the invention of the mobile phone.The initial mobile phones were large and



bulky. Reduction in size has been accompanied by a greatly expanded range of functions. Now,

depending on the age of the user, mobile phones are used for talking, transmitting messages,

pictures and music. Linking without phone lines is now taking place not just inter-continentally

but via satellite. High frequency short-range radio transmitters that cover a specific area and

³blue tooth´ and infra red communication within buildings make wireless communication a

world-wide phenomenon.

The speed and impact of the ICT evolution is a practical proof of Says¶s Law: Supply creates its

own demand. Contrary to Ken Olsen¶s prediction, PCs have become a household appliance.

When they became linked to a telephone line they were transformed into networks and their

usefulness increased exponentially when access was available to libraries, information and email.

The PC was a household gadget that became a necessity. The PC itself has become synonymous

with globalization. Components come from all continents, chips from Asia, software from

America, mobile phones from Europe. Brand names are instantly recognizable all over the world.

The development of new products and services has been to the forefront of burgeoning

economies over the past ten years. The development of the WorldWideWeb and the Internet has

led to the development of an interactive network of individuals. It is by and for interacting

people. This epitomizes what the ICT evolution has been all about. It has been about spotting

opportunities and inviting everybody to participate and to make good use of them. The ICT

evolution has been an evolution in learning. The individual has realized the potential of the new

tools and has introduced them into his/her home.

As an evolution in learning, ICT has transformed the available technologies; the means of

studying, the modalities of school operations, investment and expenditure on resources, and the

way we think about what education should be.

The development of the Web and the Internet and the increasing availability of broadband will

allow schools to post course material on the web, assignments can be communicated and

received via email, and teachers can be accessed at any time. Indeed the new technologies will

allow schools to reach out to many students who up to now might have slipped through the

educational net .The evolution in ICT should make us question the way we think about organized



education. ICT liberates the provision of education from time and place constraints. Education

and training can be customized by allowing materials to be adapted to individual needs and

paced according to individual progress

Information Technology Era

Information technology (IT) is a term that encompasses all forms of technology used to create,

store, exchange, and use information in its various forms (business data, voice conversations,

still images, motion pictures, multimedia presentations, and other related forms) including the

both telephony and computer technology that have been the driver of what has often been called

"the information revolution."

Electronic calculating machine: In 1946, the first entirely electronic calculating machine

ENIAC was made up of 30 separate units, weighing 30 tons, occupying 1,800 square feet with

17,468 vacuum tubes. The machine had a capacity for doing nearly 400 multiplications per

second.

Mainframes: Thereafter, the decades from the 1950s to 1970s are deemed as the ones for

organizational mainframe and mini-computers .In this mainframe era, an IBM computer that

could perform 10 million instructions per second and was costing a hefty $10 million in 1975.

Evolution of the Microprocessor: In 1969, Intel produced the first microprocessor i4004. This

is the time when the computer¶s entire Central Processing Unit (CPU) was placed on a single

silicon chip. The rapid development of microprocessor in 1980s, the microprocessor revolution,

brought a major acceleration of downsizing: replacement of traditional mainframe and

minicomputers with micro ±based alternatives. This trend also drives users to low-cost solutions

based on PCs, LANs, network servers, and multiple microprocessor-based systems.

The Internet era: The internet is a worldwide system of computer networks, communicating

and facilitating rapid information flows. Today, the Internet is a public, cooperative, and self-

sustaining facility accessible to hundreds of millions of people worldwide. More recently,

Internet telephony hardware and software allows real-time voice conversations.



2.2CONDITION FAVOURING GROWTH OF ICT

The following conditions favoured the growth of ICT in India and around theWorld :

y The technical capacity has far exceeded the capacity of governments, commercial

organisations and educational communities to respond fully to the opportunities and

challenges this rapid change has brought.

y Free trade and lower labour costs in developing countries in manufacturing and in

resource-based industries such as agriculture and forestry have forced many former

industrial nations, as well as some newly emerging "economic tigers" such as Malaysia

and India, to move more aggressively into knowledge-based businesses heavily

dependent on ICT technologies. Thus there has been a rapid growth in ecommerce,

software development, hi-tech design (such as micro-processors, digital routers,computers and digital telephone switches), entertainment (video and computer games,

film and television) and financial industries in developed countries.

y Technologies such as wireless and the Internet are disruptive in the sense that they bring

about radical change to previously stable sectors. Companies such as Apple, Netscape,

and amazon.com have helped revolutionise certain industry sectors, forcing previously

dominant corporations either to radically change their operations or to close down. These

same forces have the potential to bring about similar changes in other sector.

2.3 Development

The Information and Communication Technologies (ICT) are being increasingly used by the

governments to deliver its services at the locations convenient to the citizens. The rural ICT



applications attempt to offer the services of central agencies (like district administration,

cooperative union, and state and central government departments) to the citizens at their village

door steps. These applications utilize the ICT in offering improved and affordable connectivity

and processing solutions. Several Government-Citizen (G-C) e-Government pilot projects have

attempted to adopt these technologies to improve the reach, enhance the base, minimize the

processing costs, increase transparency, and reduce the cycle times. A large number of rural E-

Government applications, developed as pilot projects, were aimed at offering easy access to

citizen services and improved processing of government-to-citizen transactions. Some of these

have drawn international attention and have won prestigious awards for their innovative

approaches. They have demonstrated the power of ICT in rural context and are seen as reference

models for future e-government project implementations. Most of these projects have seen

developments in the Internet technology and dropping costs of PCs as opportunity to reach

remote locations. They used the existing telecom infrastructure and the Internet access through

ISPs as inexpensive connectivity solution. They tried to package in all possible information

services for the rural

citizens as a single point access through PC based kiosks connected to ISPs. Some projects have

experimented with the wireless technology to reach the remote locations However, a large

number of rural ICT applications have slipped in performance and are facing acute problems of

sustenance after their successful launch by the dynamic project champions. Some of the

important observations by CEG-IIMA based on its evaluations of some of these projects and the

experiences on developing proof-of-concept projects are:

y Design of citizen-centric services and dependable service delivery mechanisms.

y Selection of appropriate (dependable, maintainable and cost effective) technologies for

rural connectivity and information processing solutions.

y Design of cost-effective delivery stations (kiosks) to enable private entrepreneurs operate

the services profitably and build new services for sustainability

y Re-engineering of back-end processes and introduction of changes that take advantage of

the storage, processing and distribution powers of the emerging ICTs

y Ensuring employee participation with well designed change management processes



y Demonstration of transparency and efficiency to remove distrust and build confidence

among the citizens on the functioning of service delivery mechanisms.

y Inviting private participation to reduce the burden on the central servicing agency, bring

in the expertise, enhance the speed of implementation, and offer better value proposition

to the citizens.y Identifying and preparing project champions, ensuring appropriate tenures, facilitating

smooth transition, and internalization of the changed procedures

2.4DEFINITIONS OF ICT:

The term ³ICT´ describes the use of computer-based technology and the Internet to make

information and communication services available to a wide range of users. The term is used

broadly to address a range of technologies, including telephones and emerging technology

devices. Central to these is the Internet, which provides the mechanism for transporting data in a

number of formats including text, images, sound, and video. Technology is the proce ss of u sin g

scient i f ic, mater ial and human re source s in or d er to meet human need or purpo se. If we then

consider a simple definition of Information as 'that which can be communicated and und er stood' ,

we can then put together a basic definition of IT as:

y Information Technology is the u se of in format ion in or d er to meet human need or

purpo se.The definition of ICT therefore: ³the use of information in order to meet human

need or purpose including reference to the use of contemporary devices such as the

Internet´.

y ICT (information and communications technology - or technologies) is an umbrella term

that includes any communication device or application, encompassing: radio, television,

cellular phones, computer and network hardware and software, satellite systems and so

on, as well as the various services and applications associated with them, such as

videoconferencing and distance learning.

y "Information and Communication Technologies" ICT refers to technologies that provideaccess to information through telecommunications It is similar to Information

Technology (IT), but focuses primarily on communication technologies. This includes the

Internet, wireless networks, cell phones, and other communication mediums.



y According to ND Century Code, I n format ion Technology means the u se of har d ware,

software, service s , and support in g in fra structure to manage and d el iver in format ion

u sin g voice, d ata, and vid eo. To further this definition for the sake of IT budgeting, ITD

offers the following guidance.

y ICT is any technology that enables communication and the electronic capture, processing,

and transmission of information. Radio, television and print media are vital in many

developing countries. In recent years µnew¶ ICT, such as mobile phones and the internet

(and associated applications such as µVOIP¶, transmitting telephone calls over the

internet) have become available to growing numbers worldwide.

In 1998 OECD member countries agreed to define the ICT sector as a combination of

manufacturing and services industries that capture, transmit and display data and information

electronically. The ICT breaks the traditional dichotomy between manufacturing and services

making it possible for activities producing and distributing ICT products to pervade all sectors of

the economy (OECD 2002). The definition, thus, paves way for understanding the multi-

dimensionality of the ICT and its applicability across various sectors.

y The term, information and communication technologies (ICT) refers to forms of technologies that

are used to create, store, share or transmit, exchange information. This broad definition of ICT

includes such technologies as: radio, television, video, DVD, telephone (both fixed line and

mobile phones), satellite systems, computer and network hardware and software; as well as the

equipment and services associated with these technologies, such as videoconferencing and

electronic mail. (UNESCO 2002)

y ICTs stand for Information and Communication Technologies and are defined, as a ³diverse set

of technological tools and resources used to communicate, and to create, disseminate, store, andmanage information.´ These technologies include computers, the Internet, broadcasting

technologies (radio and television), and telephony. (UNDP, 2000)

y Information and Communication Technologies consist of the hardware, software, networks, and

media for collection, storage, processing, transmission and presentation of information (voice,

data, text, images), as well as related services. ICTs can be divided into two components,



Information and Communication Infrastructure (ICI) which refers to physical telecommunications

systems and networks (cellular, broadcast, cable, satellite, postal) and the services that utilize

those (Internet, voice, mail, radio, and television), and Information Technology (IT) that refers to

the hardware and software of information collection, storage, processing, and presentation.

(WORLD BANK 2002)

2.4.1 Definitions:

Author Years Defination

Simon Mukenge

Tshinu,Gerrit

Botha,Prof.Marlien

Herselman

2008 Information & Communication

Technology (ICT) infrastructure

needs to be regarded as the

integration of different

components that interact with

one another directly and

indirectly for sustainability

of organisation¶s objectives.

Robert Chapman and TomSlaymaker

2002 ICTs are those technologies thatcan be used to interlink information technology devicessuch as personalcomputers with communicationtechnologies such as telephonesand their telecommunicationnetworks.

Michiels and Van Crowder 2001 ICT is defined as a range of electronic technologies whichwhen converged in newconfigurations areflexible, adaptable, enabling andcapable of transforming

organisations and redefiningsocial relations.

Khvilon et al., 2002 Information and communicationtechnology, or ICT, is definedas thecombination of informaticstechnology with other, relatedtechnologies,



specifically communicationtechnology.

Victoria L. Tinio 2000-2002 ICTs are defined, for the purposes of this primer, as a³diverse set of technological

tools and resources used tocommunicate, and to create,disseminate,store, and manageinformation.´ Thesetechnologies include computer s ,the I nter net,

broad ca st in g,technolog ie s( radioand television) , and telephon y.

2.5 Application of ICT

2.5.1 ICT in Agriculture

Today a new paradigm of agricultural development is fast emerging: in both developing and

developed countries the overall development of rural areas is expanding in new directions; old

ways of delivering important services to citizens are being challenged; and traditional societies

are being transformed into knowledge societies all over the world. Applications of IT in support

of agricultural and rural development fall into five main areas, as outlined by

Don Richardson (FAO, 1996). These are:

economic development of agricultural producers;

community development;

research and education;

small and medium enterprises development; and

media networks.

Some agricultural development services that can be provided in the developing world,

using ICT, are:

online services for information, education and training, monitoring and consultation, diagnosis

and monitoring, and transaction and processing;

e-commerce for direct linkages between local producers, traders, retailers and suppliers;

the facilitation of interaction among researchers, extension (knowledge) workers, and farmers;



question-and-answer services where experts respond to queries on specialised subjects ICT

services toblock- and district-level developmental officials for greater efficiency in delivering

services for overall agricultural development;

up-to-date information, supplied to farmers as early as possible, about subjects such as

packages of practices, market information, weather forecasting, input supplies, credit

availability, etc.;

creation of databases with details of the resources of local villages and villagers, site-specific

information systems, expert systems, etc.;

provision of early warning systems about disease/ pest problems, information regarding rural

development programmes and crop insurances, postharvest technology, etc.;

facilitation of land records and online registration services;

improved marketing of milk and milk products;

services providing information to farmers regarding farm business and management;

increased efficiency and productivity of cooperative societies through the computer

communication network and the latest database technology;

tele-education for farmers;

websites established by agricultural research institutes, making the latest information available

to extension (knowledge) workers and obtaining their feedback.

2.5.1.1 ICT initiatives for agricultural development in India

There have been some initiatives in India, using ICT for agricultural development. In most of

these projects, agriculture is only a small component. Indian experiences with IT projects are:

Gyand oot project (Madhya Pradesh);

WaranaWired Village project (Maharashtra);

Information Village project of the M S Swaminathan Research Foundation (MSSRF)

(Pondicherry);



iKisan project of the Nagarjuna group of companies (Andhra Pradesh);

Automated Milk Collection Centres of Amul dairy cooperatives (Gujarat);

Land Record Computerisation ( Bhoomi) (Karnataka);

Computer-Aided Online Registration Department (Andhra Pradesh);

Online Marketing and CAD in Northern Karnataka (Karnataka);

Knowledge Network for Grass Root Innovations ± Society for Research and Initiatives

(SRISTI) (Gujarat);

Application of Satellite Communication for Training Field Extension Workers in Rural Areas

(Indian Space Research Organisation);

In adddition to the above, a few non-governmental organisations (NGOs) have initiated ICT

projects such as:

Tarahaat .com by Development Alternatives (Uttar Pradesh and Punjab);

Mahit iz-samuha (Karnataka);

VOICES ± Madhyam Communications (Karnataka);

Centre for Alternative Agriculture Media (CAAM);

(Meera N, 2004)

2.5.2 ICT in Education

Globalization and technological change²processes that have accelerated in tandem over the past

fifteen years²have created a new global economy ³powered by technology, fueled by

information and driven by knowledge.´1 The emergence of this new global economy has serious



implications for the nature and purpose of educational institutions. As the half-life of information

continues to shrink and access to information continues to grow exponentially, schools cannot

remain mere venues for the transmission of a prescribed set of information from teacher to

student over a fixed period of time. Rather, schools must promote ³learning to learn,´ : i.e., the

acquisition of knowledge and skills that make possible continuous learning over the lifetime.2

³The illiterate of the 21st century,´ according to futurist Alvin Toffler,³will not be those who

cannot read and write, but those who cannot learn, unlearn, and relearn.´

Concerns over educational relevance and quality coexist with the imperative of expanding

educational opportunities to those made most vulnerable by globalization²developing countries

in general; low-income groups, girls and women, and low-skilled workers in particular. Global

changes also put pressure on all groups to constantly acquire and apply new skills. The

International Labour Organization defines the requirements for education and training in the new

global economy simply as ³Basic Education for All´,³Core Work Skills for All´ and ³Lifelong

Learning for All´.Information and communication technologies (ICTs)²which include radio

and television, as well as newer digital technologies such as computers and the Internet²have

been touted as potentially powerful enabling tools for educational change and reform.When used

appropriately, different ICTs are said to help expand access to education, strengthen the

relevance of education to the increasingly digital workplace, and raise educational quality by,

among others, helping make teaching and learning into an engaging, active process connected to

real life.(ICT in Education By Stephen Browne ,United Nation Development Program Bureau

for Development Policy)

However ,in past several decades ICTs are introduced in the classroom and other educational

institutes all over the world .It was experienced that the full realization of the potential

educational benefits of ICTs is not automatic. The effective integration of ICTs into the

educational system is a complex, multifaceted process that not only involves but also curriculumand pedagogy, institutional readiness, teacher competencies, and long-term financing, among

others. This primer is intended to help policymakers in developing countries define a framework

for the appropriate and effective use of ICTs in their educational systems by:- First, providing a

brief overview of the potential benefits of ICT use in education and the ways by which different

ICTs have been used in education. Second, it addresses the four broad issues in the use of ICTs



in education²effectiveness, cost, equity, and sustainability. The primer concludes with a

discussion of five key challenges that policymakers in developing countries must reckon with

when making decisions about the integration of ICTs in education namely: educational policy

and planning, infrastructure, capacity building, language and content, and financing.

ICT greatly facilitate the acquisition and absorption of knowledge, offering developing countries

unprecedented opportunities to enhance educational systems, improve policy formulation and

execution, and widen the range of opportunities for business and the poor. One of the greatest

hardships endured by the poor, and by many others, who live in the poorest countries, is their

sense of isolation. The new communications technologies promise to reduce that sense of

isolation, and to open access to knowledge in ways unimaginable not long ago.( World Bank

(1998), TheWorld Development Report 1998/99. Quoted in Blurton, C., New Directions of ICT-

Use in Education.)

2.5.3 ICT in the Health Sector

There is an enormous range of opportunities for significant cost reductions, service

enhancements and behavioral change through what is often broadly referred to as 'ehealth'.

Payers: The major impact of ICTs on payers will be the ability to manage the system in order to

better account for expenditures, to manage the flow of funds and contain costs. There will be

strong motivation to adopt systems which enable payers to track expenditures and exercisecontrol over the processes of referral and prescription ± the initiators of health services. From the

payers' perspective, ICTs are tools for demand management and cost containment.

Providers: It is clear that the entire healthcare system could be significant gains from integrated

approach to supply chain management that includes the entire range of hospital and medical

supplies and linkages to other players in the healthcare system.

Electronic scheduling and patient management systems could improve scheduling of tests and

procedures, and thereby reduce the length of hospital stays and reduce the need for multiple

visits. Linking insurers, healthcare providers, financial institutions and consumers into claiming

and payments systems also has the potential to reduce significantly administrative costs and

improve quality of service. There are already some examples of leading-edge activities, but for

many progresses towards realizing these benefits has been relatively slow.



Practitioners: From the perspective of individual medical practitioners, knowledge enrichment

or education, practice administration, and clinical tools are among the most important ICT

applications. Knowledge enrichment and practice administration systems are widely used, but

the adoption of clinical tools has been relatively slow because of the complexity of such

applications and a range of doctor concerns (eg. patient privacy and security of patient records,

the possibility that the tools will generate activities that are not billable and/or reimbursable, the

cost of integrating clinical tools with current systems, the difficulty of use and possible

interruptions to workflow and doctor patient interactions, and the time needed for training to

effectively use the new tools).Nevertheless, clinical tools hold significant promise, both in terms

of direct efficiency and cost savings and in terms of influencing the behaviour and practices of

doctors. Ultimately, Clinical Decision Support Systems (CDSS) will provide a key component

for evidence-based care. The use of CDSS in prevention and monitoring has been shown to

improve compliance with guidelines in many clinical areas. CDSS drug prescribing is

particularly useful in such areas as drug selection, dosing calculations and scheduling, screening

for interactions and monitoring and documentation of adverse reactions. Computer assisted

diagnosis and management aids are at an earlier stage of development, due to the complexities

involved, but their potential to enhance health care outcomes is enormous. The potential for such

applications to enable a range of care management and funding agencies to monitor and

influence the behaviour of doctors at the critical point of prescription and referral is of great

significance for all stakeholders.

Patients: ICTs are altering the relationship and balance of power between patients and providers,

leading to more empowered consumers and enhanced self, home and community care

capabilities. Perhaps the greatest change in the patient-provide relationship will be brought about

by the use of internet by patients. Broshy et al (1998) suggested that two types of information

will be particularly important ± information about managing health and chronic disease, and

information about provider quality and cost.W

ith the rise of more informed consumers, therewill be increasing scope for stakeholders to influence healthcare behaviour, prescription,

treatment and referral decisions and compliance through patients, as well as through doctors.



When Goldsmith (2000) explored how the internet would change the US health system he

concluded that:

"The Internet has a greater potential to fundamentally transform both the structure and the core

processes of medicine than any new technology we have seen in the past fifty years. Professional

resistance to adoption of the technology and political problems associated with protecting the

confidentiality of patient records pose the two biggest hurdles to fully realizing this potential. I

see the Internet generating some demand for new products and services. However, that demand

is likely to be counterbalanced by a more careful weighing of potential benefits, reduction in

medical errors, and the elevation of less expensive substitute therapies to parity with traditional

invasive medicine, as well as savings from improved disease management. As a consequence,

the impact on health care costs may be surprisingly benign."

Goldsmith, J. (2000) 'HowWill the Internet Change Our Health System?,

Broshy, E. et al (1998) Manag in g for a W ired Health Care I nd u stry, Boston Consulting Group.

Available at (www.bcg.com)

Tollerman, P. et al (2001) A Revolut ion in R&D: The I mpact of Genomic s , Boston Consulting

Group, pp3-5; and Tollerman, P. et al (2001) A Revolut ion in R&D: Part II The I mpact of

Genet ic s, Boston Consulting Group, p5. Both available at (www.bcg.com)

ICTs have clearly made an impact on health care. They have:

Improved dissemination of public health information and facilitated public discourse and

dialogue around major public health threats

Enabled remote consultation, diagnosis and treatment through telemedicine

Facilitated collaboration and cooperation among health workers, including sharing of

learning and training approaches

Supported more effective health research and the dissemination and access to research

findings



y Strengthened the ability to monitor the incidence of public health threats and respond

in a more timely and effective manner

Improved the efficiency of administrative systems in health care facilities.

In developing countries, preventable diseases and premature deaths still inflict a high toll.

Inequity of access to basic health services affects distinct regions, communities, and social

groups. Under-financing of the health sector in most countries has led to quantitative and

qualitative deficiencies in service delivery and to growing gaps in facility and equipment upkeep.

Inefficient allocation of scarce resources and lack of coordination among key stakeholders has

made duplication of efforts, overlapping responsibilities, and resource wastage common and

troublesome problems.

Most countries are at some stage of health sector reform to try to provide expanded and equitable

access to quality services while reducing or at least controlling the rising cost of healthcare.

Health reform processes have many facets and there is no single model being adopted by all

countries (PAHO, 1998). However, ICTs have the potential to make a major contribution to

improving access and quality of services while containing costs. Improving health involves

improving public health and medical programmes designed to provide elective, emergency and

long-term clinical care, educating people, improving nutrition and hygiene, and providing more

sanitary living conditions. These in turn ultimately involve massive social and economic

changes, as many health challenges go well beyond the health sector.

The health sector has always relied on technologies. According to WHO (2004), they form the

backbone of the services to prevent, diagnose and treat illness and disease. ICTs are only one

category of the vast array of technologies that may be of use. Given the right policies,

organization ,resources and institutions, ICTs can be powerful tools in the hands of those

working to improve health (Daly, 2003).

Advances in information and computer technology in the last quarter of the 20th

century have led

to the ability to more accurately profile individual health risk (Watson, 2003), to understand

better basic physiologic and pathologic processes (Laufman, 2002) and to revolutionize



diagnosis through new imaging and scanning technologies. Such technological development,

however, demands an increased responsibility of practitioners, managers, and policy-makers for

assessing the appropriateness of new technologies (Hofmann, 2002).

The methods people use to

communicate with each other have also changed significantly. Mobile telephony, electronic mail

and videoconferencing offer new options for sharing perspectives. Digital technologies are

making visual images and the voices of people more accessible through radio, TV, video,

portable disk players and the Internet, that change the opportunities for people to share opinions,

experience and knowledge. This has been coupled with steps to deregulate the

telecommunications and broadcast systems in many countries, which open up spaces and

platforms, such as community radio, for increased communication.

Reliable information and effective communication are crucial elements in public health practices.

The use of appropriate technologies can increase the quality and the reach of both information

and communication. On one hand, the knowledge base is about information, which enables

people to produce their own health. On the other hand, social organisations help people to

achieve health through health care systems and public health processes. The ability of

impoverished communities to access services and engage with and demand a health sector that

responds to their priorities and needs, is importantly influenced by wider information and

communication processes, mediated by ICTs.(Chetley et al.,2006)



F i g -Trends in Emerg in g Bu sine ss Mod el in Healthcare

Source: The electronic jour nal on in format ion s y stem s in d evelopin g countr ie s.

(Walsham. G) 2010

2.5.4 ICT for e-Environment

a) The use and promotion of ICTs as an instrument for environmental protection and the

sustainable use of natural resources

b) The initiation of actions and implementation of projects and programmes for sustainable

production and consumption and the environmentally safe disposal and recycling of discarded

hardware and components used in ICTs

c) The establishment of monitoring systems, using ICTs, to forecast and monitor the impact of

natural and man-made disasters, particularly in developing countries, LDCs and small

economies.( (http://www.itu.int/wsis/docs/geneva/official/poa.html#c7-20) )

The impact of human activities on the environment ± and on climate change in particular ± are

issues of growing concern confronting life on Earth. At the same time, information and

EMERGING TREND

PRIMARY HEALTHCARE

TELE-MEDICINE

HEALTHCARE INFORMATIONSYSTEM

HOSPITAL ONWHEEL

SECONDARY

HEALTHCARETELE-MEDICINE



communication technologies (ICTs) are being rapidly deployed around the world. Although ICTs

require energy resources, they also offer a number of opportunities to advance global

environmental research, planning and action. This includes monitoring and protecting the

environment as well as mitigation of and adaptation to climate change.

For example, there is a need to undertake life cycle assessments (LCAs) of ICT impacts on the

environment and especially on GHG emissions and energy consumption. Newly developed high

speed processors using energy efficient CPU designs along with the rapid diffusion of advanced

broadband networks and deployment of web-based services are transforming the way

environmental research, learning and decision-making are taking place. Faster processors using

ever larger, accurate and detailed data sets are increasingly linked together through GRID

networks and this is permitting more accurate, predictive and complete modeling of

environmental processes. This in turn is facilitating decision-making thanks to new technologies

such as geographic information system (GIS) and a new generation of web-based services such

as virtual globe browsers which may gradually replace stand-alone software platforms. Today, a

broadband Internet connection is probably the most important tool to support environmental

research, learning and decision-making. But not all countries have the capacity to take advantage

of these technologies in order to use the fullpotential of ICTs for environmental action. There is a

need to strengthen the capacity of developing countries to benefit from the use of ICTs for

managing the environment to help countries mitigate the impact of and adapt to environmental

and climate change ± all while helping them to achieve the Millennium Development Goals

(MDGs).

There is a clear need for a more comprehensive and integrated approach to global environmental

action through access to ICTs and the use of information technologies and management practices

to eliminate duplication of efforts. This can be done by consolidating action at national levels on

the many and varied environmental conventions and initiatives that developing countries have

already agreed to in principle. ICTs provide a unique opportunity to do so while assisting in

building local capacity to use these tools and practices. There is also a need to assign the

environment a more important profile in ICT strategic planning initiatives at the national level

and, in particular, in e-Government initiatives so that the use of ICTs for the environment is



integrated into planning processes from the beginning, along with other national priorities and

initiatives.

Strengthening ongoing research activities is another proposal as well as placing more focus on

the environment sector in e-Government initiatives. Working on a regional basis may be the best

approach for smaller, landlocked or island jurisdictions, such as small island developing states

(SIDS). Whatever approach is taken to support the use of ICTs for environmental action in

sustainable development, it must be undertaken in close collaboration with key development

partners at the national and international level and in consultation with actors in the public and

private sectors as well as civil society.

Source: ICTs for e-Environment,www.itu.int/ITU-D/cyb/app/e-env.html(pg10-pg12)

2.6Models

2.6.1 Structural Equation model for ICT

Research Model and Hypotheses

In this study, a research model which is based on the DoI explains the ICT usage for higher

education. It consists of ICT facilities (ICTF) and five perceived attributes: relative advantage,

compatibility, ease of use, observability, and trialability. Several previous studies have shownthat there are various external factors that influence the adoption of innovation (Davis, 1989;

Venkatesh & Davis, 2000; Venkatesh et al. 2003). In this study we expect ICTF to be an external

factor affecting the usage of ICT for higher education.

The research model is shown in Figure 1.

The following three hypotheses are proposed:

H1. ICT facilities have a positive effect on the ICT usage

H2. Perceived attributes have a positive effect on the ICT usage

H3. ICT facilities have a positive effect on the perceived attributes



Existing model of ICT are:

2.6.2. Technology acceptance model (TAM)

Usage behaviour

Perceived

usefulness

Technology

specific valuation

Perceived ease of

use

Number of user



Source : ICT adoption in developing countries, perspective from small scale agribusiness

(Bartholomew Aleke, Udechukwu Ojiako, DavidW.Wainwright)2010

In this context, this focuses on the consideration of various attitudes that may affect the usage of

ICT. Previous studies such as that of Mustonen-Ollila and Lyytinen (2003) showed that user

resistance to technology was a major driver for its non-adoption, thus establishing a relationship

between the DOI and TAM framework, investigated various influences of technology acceptance

and came up with two significant determinants ³perceived usefulness´ and ³perceived ease of

use ³as a theoretical base for specifying the causal link between attitudes and behavioral

intensions towards technology. The technology acceptance model (TAM) relies on the theory of

reasoned action, which posits that behavior is logically processed in the following order: belief-

attitude-intention-behavior. Within an organizational context, perceived usefulness is defined as

the prospective user¶s subjective probability that using a specific technology will increase job

performance, while perceived ease of use refers to the degree to which the prospective user

expects the technology to be free from over excessive effort during application.

Source : Usluel, Y. K., Akar, P., & Ba, T. (2008). A Structural Equation Model for ICT Usage in

Higher Education. Educational Technology & Society, 11 (2), 262-273

2.6.3Social network theory (SNT)

Social network theory refers to a social structure of relationships and links (which can be

established in the form of an exchange) between individuals, businesses, organizations and

political units (Burger and Buskens, 2009). Such relationships might be within small units, or

units of a global scale. Social networks form the basis for the generation of network knowledge,

which is the accumulation of knowledge generated through interlinks that exist between persons,

groups and organizations. This knowledge extends beyond an awareness of ³friend of friends

³with respect to providing an orientation to the social world in terms of sets, patterns and

linkages.



Source : ICT adoption in developing countries, perspective from small scale agribusiness

(Bartholomew Aleke, Udechukwu Ojiako, DavidW.Wainwright)2010

The theoretical and empirical justifications for the establishment of social networks exist in

three areas. While the first area focuses on the role of social networks in entrepreneurial activity

(McCarthy and Torres, 2005; Jack, 2010), the second area relates to the area of entrepreneurial

and agricultural social capital which addresses how interactive networks in agricultural

communities can create advantages for both individuals and social groups (Sharp and Smith,

2003; Slangen et al., 2004). The third area relates to the area of transformational learning and its

relationship with agripreneurship (Foster and Rosenzweig, 1995; Seppanen, 2004; Pyysiainen et

al., 2006). Of particular relevance is that these studies were able to conclude that not only did

proprietors use informal networks to facilitate business growth, but also that a direct relationship

existed between the effective use of such networks and the performance of businesses (Watson,

2007). The fact however is that a majority of the perspectives of SSA operators are developed

through cultural assimilation and socialization created through networks.



Model of Microentrprise Growth

Model depicting a continuum of approaches to ICT developments in school

Emerging InfusingApplying Transforming



Strategic Use Of ICT to improve public information:

Figure given below illustrates how using ICTs more strategically could both increase the use of

public information and reduce the amount of public information captured by political and business elites. Information sharing between communities can be improved through increasing

access to public information at both local and national levels.

Reduction in public information and knowledge capture.

Source: Working Paper ± 192,ICTs and Rural Development, Robert Chapman And TomSlaymaker (November 2002)

Model at the three levels of study:

Figure schematically shows the discussed ³Strategic model for enhancement of ICT diffusion

for BPM´ at the three study levels. It can be summarized as under: If Strategic use of ICT is

implemented at the Industry and Organization levels, I twould lead to effective ICT adoption by

the people in the project teams. This would lead back to the successful implementation of

Organization level strategies, further leading to successful implementation of the Industry level

strategy. Thus, it is a cyclic process, which in totality would lead to the strategic diffusion of ICT

for BPM.

Schematic diagram of model for strategic diffusion of ICT in the

Indian construction industry for BPM

Public and local

knowledge captured by

political and economic

elites

Public and localizedknowledge freely

available and



Source: IT-enhanced communication protocols for building project management ( Vanita

Ahuja, Jay Yang, Ravi Shankar) 2010



Country Perspective

Global Context:

London

Role Of ICT In Rural Development

ICTs have the potential to support and enhance rural development initiatives in the following key

areas:

y Managing, storing, and sharing information.

ICTs offer unprecedented information storage capacity, increases in processing power and speed,

coupled with dramatic reductions in costs. ICTs can facilitate the improvement of existing

information management processes by improving ease of access, transparency, accountability,

efficiency, speed of delivery and providing new information sharing opportunities through

affordability, availability and ease of use. ICTs can help address good governance concerns of

greater administrative efficiency by improving existing formal information systems operated by

local government and development agencies and also facilitate improved cataloguing and

storing.

y Access to more information, especially public information.

The context of rural development has changed rapidly in recent years. Globalisation and

continuing liberalisation of agriculture have substantially changed the market and inst itut ional

environment in rural areas. In order to be able to cope with and adapt to these changes the rural

poor require improved access to information regarding market opportunities and information

about their rights and the roles and responsibilities of institutions supposedly designed to benefit

them. ICTs offer huge potential insupport of improved education and training and need to be



harnessed to build long term decision making capacity in rural areas. ICTs can also support

improved provision of short-term information required by the rural poor for livelihood strategies.

ICTs offer considerable potential to increase the benefits and reduce the opportunity costs of

participation.

y Creating linkages for partnerships in information sharing (mutual, two-way,

participatory).

Local information exchange can help the rural poor organise as groups, articulate needs, defend

interests and increase bargaining power. ICTs can help pro-poor institutions listen to the poor,

engage in more meaningful dialogue and build consensus and mutual understanding around

development objectives. ICTs provide practical opportunities for improved information exchange

between different groups and new and innovative knowledge partnerships.

By: Robert Chapman and Tom Slaymaker (November 2002)

By enabling Thai citizens and businesses to use public services more conveniently and rapidly,

the country is hoping its e-government strategy will create an environment conducive enough to

facilitate economic development in the Kingdom, said the National Electronics and Computer

Technology Center (NECTEC).

"It will lead to a number of ICT projects in which the private sector can participate," NECTEC

said in its report on the ICT Master Plan. "It enables Thai software and hardware companies to

use government agencies as leading markets for their products in order to create future

opportunities."

The country's aim to make services provided by government agencies to its citizens available

online, should spur continued growth in the government and education sectors throughout the

year, said Gartner's Freddie Ng and T. J. Singh ( Market Overview: I T Service s Provid er s ,

Thailand report they co-authored, published in November 2006).

South Korea



South Korea has one of the most advanced ICT infrastructures in the world²computer

penetration is extensive,and broadband Internet access is one of the best globally.The

pervasiveness of ICT use in South Korean society has spilled over to the higher educational

system. South Korea currently has 15 single-mode virtual universities that offer only ICT-based

courses. Among these are the Korea Cyber University, the Korea Digital University, and the

Open Cyber University. These universities specialize in lifelong learning and vocational

education²a deliberate strategy to prevent unnecessary competition with more established

campus-based universities²and have a combined projected enrolment of 17,200 in 2002.

Courses offered cover a wide range of fields, including technology, management, law,

languages, social sciences, education, and theology. Online courses are also offered by over 100

of South Korea¶s dual-mode universities. Ewha Woman¶s University, for instance, offers

Internet-based courses in language, e-learning, drug prevention, in-service teacher training, and

Korean andWomen¶s studies for local and foreign students as well as working adults.

The accelerated adoption of virtual education in South Korea was a result of deliberate planning

by government.

It began in 1998 with the launch of the Virtual University Trial Project (VUTP).With 65

universities and five companies participating, the VUTP was designed to:

1) create a cost-effective virtual education system without diminishing quality;

2) develop and implement Web-based or other types of distance education courses;

3) identify appropriate policies and standards for running a virtual university; and

4) share experiences during the trial period.

Participating institutions experimented with various technologies: satellite broadcasting,

videoconferencing, video-on-demand, intranets, and the Internet. Based on the VUTP

experience, detailed criteria for establishing virtual universities in South Korea were added to the

Lifelong Education Law.( Source: Jung, In Sung,³Virtual Education at the Tertiary Level: The

Experience of Korea´. Available Online ( http://www.TechKnowLogia.org)

Europe:



The use of ICT in education and training has been a key priority in most European countries

during the last decade.Broadly, three major types of ICT induced studies can be identified since

ICT has been introduced in schools in Europe.

1. Many studies have tried to measure ICT integration into education in terms of infrastructure

and access, such as the availability of computer hardware, the pupil-computer ratio, average

number of computers per school and levels of connectivity and bandwidth. The availability of

computers in most EU countries is substantial.

2. education can be transformed using ICT which brings new capabilities and capacities to

learning. For example, ICT has the potential enabling teachers and students to construct rich

multi-sensory, interactive environments with almost unlimited teaching and learning potential.

3. to identify and measure the use of ICT in educational settings and also the home use of ICT

for educational purposes, not simply its presence.

Source: The ICT Impact Report By Anja Balanskat,Roger Blamire,Stella Kefala(11 December

2006)

ICT used indicators in Canada

Agency responsible for

data gathering ICT Indicators Components of ICT Indicators

Pan-Canadian EducationIndicators Program(PCEIP)

Pupil±Computer Ratio

The pupil-computer ratio is a proxy measure of the access or availability of computers to studentsin schools. Only computers used for educational purposes are included in the ratio.

Internet Connectivity

This is a measure of the percentage of studentsattending schools that were connected to theInternet for educational purposes at the time of the survey. Schools that were connected for administrative purposes only were excluded.

Internet activities of students

School ICT coordinators were questioned aboutinstructional activities involving the use of theInternet. They were asked to identify typicalactivities that students at certain grade levelswould have engaged in by the end of the school



year.

Obstacles to fuller useof information andcommunicationstechnologies

Principals were asked to identify the major barriers hindering the achievement of their school¶s computer-related goals for students. In

this section we present items identified as major obstacles by principals of schools representing atleast 50% of enrolments at each of the three levelsof schools. The obstacles noted have beengrouped into three categories: those relating tohardware and software, those relating toinstruction, and those relating to the training of teachers.

ICT indicators used in Indonesia

Agency responsible

for data gathering ICT Indicators Components of ICT Indicators

GovernmentGovernment¶s goals and

objectives

Student understanding of ICTs benefits,disadvantages as well as challenges ininformation technology

Student¶s use of ICT knowledge in getting, processing, arranging, distributing and keepinginformation.

Student¶s application of knowledge, skills andattitudes in designing information technologysystems, solving problems relating to ICT.

ICT Indicators Used in Europe (Denmark , Sweden, Finland, Norway and UK )

Agency

responsible for

data gathering ICT Indicators Components of ICT Indicators

Eurydice, TheInformation Network onEducation in

Primary

Inclusion of ICT in the curriculum Percentage of teachers who use computers and/or internetin the classroom Approaches to ICT defined in the curriculum Objectives defined in the curriculum for the teaching or the use of ICT



Europe Inclusion of ICT in the initial training of all teachers(except specialist ICT teachers)

Secondary(lower and upper secondaryeducation)

Inclusion of ICT in the curriculum Percentage of teachers who use computers and/or internetin the classroom

Reasons given for not using internet with pupils Approaches to ICT defined in the curriculum Annual number of hours recommended for teaching ICTas a subject in its own right Objectives defined in the curriculum for the teaching or the use of ICT Inclusion of ICT in the initial training of all teachers(except specialist ICT teachers) Percentage share of compulsory teaching related to ICT,and the number of hours devoted to such teaching, in theinitial training of all teachers (except specialist ICT

teachers) Desirable ICT skills according to officialrecommendations for the initial training of all teachers(except specialist ICT teachers)

Both

Number of pupils per computer, and number of pupils per computer with an internet connection (primary andsecondary education) Responsibility for the purchase and maintenance of hardware (primary and secondary education Distribution of the specific budget between the purchaseof equipment and expenditure on human resources (primaryeducation, general lower secondary education, generalupper secondary education) Average periods during which primary school teachers usecomputers (with or without internet connection) in theclassroom, hours per week Specialist ICT teachers Percentages pf primary and secondary school teachers inEurope who have received official training in the use of computers and/or internet in their



ICT policies of different governments

In Ethiopia 40% import tariffs on ICT equipment makes it too costly for all but the elite. The

incumbent public telecom operator has a monopoly over all telecom services. Although thenumber of mobile phone subscribers is growing, uptake in Ethiopia is among the lowest in

Africa. About 60% of telephones and 94% of the 6,000 internet accounts are concentrated in the

capital, Addis Ababa. This is due to the limited telecom infrastructure, low levels of

computerization outside the capital and lack of human resources. However the government¶s

attitude to ICT may be changing, with the establishment of an Ethiopian ICT Development

Authority, and changes in management of the two key telecommunications agencies.

In China, the number of internet subscribers increased from 33 million in 2001 to 94 million in

2004. This growth is partly due to market forces, namely consumers¶ increasing desire to go

online and competition among service providers. It is thought that competition is possible

because the government views the ICT sector as an engine for economic growth. Some analysts

argue that most growth is in urban areas, while ~60% of the population live in rural areas.

In Egypt a dynamic Ministry of Communications and Information Technology has played a

strong role in catalysing ICT development in collaboration with the private sector. For example,

its transfer of internet subscription charges from consumers to Telecom Egypt and internet

service providers (ISPs) coincided with a sharp rise in new users: from ~9 users per ten thousand

inhabitants in 2001, to ~55 per ten thousand in 2004.1

(Statistics sourced from www.itu.int.)

Multi-users benefits in low-income areas: the E-Choupal experience in India

ITC is one of Indiaµs leading private companies, with annual revenues of USD 2 billion. Its

International Business Division was created in 1990 as an agricultural trading company; it nowgenerates USD 150 million in revenues annually. The company has initiated a project called ³E-

Choupal´ that places computers with Internet access in rural farming village. The computer,

typically housed in the farmer¶s house, is linked to the Internet via phone lines or, increasingly

by a VSAT connection. It serves an average of 600 farmers in 10 surrounding villages within

about a five kilometres radius. Each E-Choupal costs between USD 3 000 and USD 6 000 to set



up and about USD 100 per year to maintain. Using the system costs farmers nothing, but the host

farmer, called a Sanchalak, incurs some operating costs and is obliged to serve the entire

community; the Sanchalak benefits from increased prestige and a commission paid for all E-

Choupal transactions. The farmers can use the computer to assess daily closing prices on local

markets, as well as to track global price trends or find information about new farming

techniques. They could also use the E-Choupal to order seed, fertilizer, and other products such

as consumer goods from ITC or its partners, at prices lower than those available from village

traders; the sanchalak typically aggregates the village demand for these products and transmits

the order to an ITC representative. Farmers benefit from more accurate weighing, faster

processing time, and prompt payment, and from access to a wide range of information, including

accurate market price knowledge, and market trends, which help them decide when, and at what

price to sell. In mid-2003, e-Choupal services reached more than 1 million farmers in nearly

11,000 villages. Most of those farmers are illiterate, and the Sanchalak serves also as scribe. The

E-Choupal serves as both a social gathering place for exchange of information (choupal means

gathering place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the

procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India

has also created a highly profitable distribution and product design channel for rural India

ICT in retail :

For small firms to adopt e-business and e-commerce strategies and tools, benefits must outweigh

investment and maintenance costs. Commercial considerations and potential returns drive

adoption.Beyond a certain level of connectivity (PC, Internet access, on-line information or

marketing), not all SMEs will necessarily ³catch up´ with large firms, simply because e-

commerce may not bring large benefits and SMEs will stay with traditional business processes.

Other barriers have been seen to be the availability of ICT competencies within the firm, and

availability and cost of appropriate interoperable small-firm systems, network infrastructure and

Internet-related support services. Lack of reliable trust and redress systems and cross-country

legal and regulatory differences also impede cross-border transactions.(Organisation for

Economic Corporation And Development)

ICT Benefits In Retail



ICT and e-commerce offer benefits for a wide range of business processes. At firm level, ICT

and its applications can make communication within the firm faster and make the management of

the firm¶s resources more efficient. Seamless transfer of information through shared electronic

files and networked computers increases the efficiency of business processes such as

documentation, data processing and other back-office functions (e.g. organising incoming orders

and preparing invoices). Increasingly sophisticated ICT applications such as KMS (Knowledge

Management System) and ERP (Enterprise Resource Planning) allow firms to store, share and

use their acquired knowledge and know-how. For example, customer databases with a history of

client-specific correspondence help managers and employees to respond more effectively to

customers.

Adoption of Internet e-commerce by SMEs

Computers and access to the Internet have become common in most OECD countries, but sales

and purchases over the Internet have yet to take off. While available data suggest that electronic

commerce is growing, it still accounts for a relatively small proportion of economic activity for

firms of all sizes. Taking a wide definition of electronic commerce to cover transactions over

computer-mediated networks(including traditional EDI) and inter-firm transactions, e-commerce

sales were 13.3% of total business sector sales in Sweden and 7.9% in Finland. Excluding the

financial sector they were 10% in Norway, and6% in the United Kingdom and Denmark. For

retail sales (B2C) shares were much lower, around 1.4% in the United Kingdom, 1.2% in the

United States. Shares for SMEs are probably lower than these shares for the whole economy (see

OECD 2002b and 2002c). Purchasing over the Internet is more common than selling. For 16

countries for which both Internet purchasing and Internet sales data are available, only onein

eight on average reported making Internet sales.

ICT adoption in retail section provides detailed information about the Information Technology

(IT) industry in India as a whole followed by the IT market scenario within the retail sector outlining the share of retail within IT industry and the IT spending pattern of retail players. It

further explains the factors influencing IT adoption in retail including increased operational

efficiency, favorable demographics, Government initiatives and availability of skilled manpower.

Key challenges identified for the IT adoption in retail includes high cost. It further discusses the

selection criteria of ICT tools / applications for retailers followed by a brief description of the



key ICT solutions commonly used in retail sector. This section also features a vendor¶s

opportunity segment wherein it provides a clear idea about the type of ICT tools / applications

used in various retailing formats.

Business Outlook on Retail

As highlighted above, Indian situation is different from other nations. The country is dotted with

over 11 million retail shops employing 35 million people. These shops are small, managed by

people with low education levels, and with low dexterity for the tradit ional technology, high cost

and complex solutions.

Retail in India consists of following type of formats:

y Grocery Stores (250 square feet in size) sell primarily unbranded staples along with

small range of branded personal care products in different sizes. Space constraints oftenlimit the selection to no more than one or two brands.

y General merchandise ( Kirana) stores (400-600 square feet) are somewhat larger than

the small grocery stores and stock a wider range of cleaning and personal care products,

as well as snack foods and confectionery. These stores form an ideal target for

technological up gradation.

y Convenience Stores (50-150 square feet in area) are found on virtually every street

corner. They are owned and operated by a single owner and sell cigarettes, soft drinks,

confectionery, medicines apart from a restricted range of household & personal care

products,.

y Independent Vendors operate small booths or carts, or simply spread their products on

the ground along every sidewalk. They usually sell a single product.

y Organized Shops These are similar to the big malls present in other developed countries

in US and Europe.

We believe that unorganized retailing in the long term will remain by far the largest segment in

the country¶s retail scenario. This is based on the following broad factors.

Organized retailing in India still faces numerous roadblocks namely:

High Real Estate Costs

Unplanned cities and poor infrastructure

Unfriendly Tax laws



And weak consumer laws

Power of the Unorganized Sector:

Unorganized sector commands huge social and political power due to its size. Further they are in

a fundamentally strong position as they can offer extremely personalized relationships built over

in-depth customer knowledge, imbibed over decades of interaction. The sheer landscape of the

country and the significant income disparity among the masses provides a natural protection for

the unorganized retail.However, they lack scientific management tools and suffer from

significant inefficiencies (intra shop management and supply chain) and an unleveraged pool of

in-depth customer understanding.

Source: Shop Owner Management Assistant By Girish Prabhu and Vivek Singh,HP Laboratories

India(February 7, 2005)

1Retail Scenario in India:

As the corporate ± the Piramals, the Tata¶s, the Rahejas, ITC, S.Kumar¶s, RPG Enterprises, and

mega retailers- Crosswords, Shopper¶s Stop, and Pantaloons race to revolutionize the retailing

sector, retail as an industry in India is coming alive. Retail sales in India amounted to about

Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the

upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace

of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly

than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003-

2008 is 8.3% per year, compared with 7.1% for consumer expenditure. Modernization of the

Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores

and hypermarts.Sales from these large-format stores are to expand at growth rates ranging from

24% to 49% per year during 2003-2008, according to a latest report by Euro monitor

International, a leading provider of global consumer-market intelligence. A. T. Kearney Inc.

places India 6th on a global retail development index. The country has the highest per capita

outlets in the world - 5.5 outlets per 1000 population. Around 7% of the population in India is

engaged in retailing, as compared to 20% in the USA .In a developing country like India, a large

chunk of consumer expenditure is on basic necessities, especially food-related items. Hence, it is

not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in



2002. The share of food related items had declined over the review period, down from 73% in

1999. This is not unexpected, because with income growth, Indians, like consumers elsewhere,

have started spending more on non-food items compared with food products.

The factors responsible for the development of the retail sector in India can be broadly

summarized as follows:

Rising incomes and improvements in infrastructure are enlarging consumer markets and

accelerating the convergence of consumer tastes.

Liberalization of the Indian economy which has led to the opening up of the market for

consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to

make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers.

Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. The internet revolution is making the Indian consumer more accessible to the growing

influences of domestic and foreign retail chains. Reach of satellite T.V. channels is

helping in creating awareness about global products for local market.

The Indian retail sector is estimated to have a market size of about $ 180 billion; but the

organized sector represents only 2% share of this market. Organized retailing in India has a huge

scope because of the vast market and the growing consciousness of the consumer about product

quality and services.

A McKinsey report on India says organized retailing would increase the efficiency and

productivity of entire gamut of economic activities, and would help in achieving higher GDP

growth. At 6%, the share of employment of retail in India is low, even A McKinsey report on

India says organized retailing would increase the efficiency and productivity of entire gamut of

economic activities, and would help in achieving higher GDP growth.

3.2. Indian retail sector can be broadly classified into:

3.2(1) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing sector. Traditional types of

retailers, who operate small single-outlet businesses mainly using family labor, dominate this

sector .In comparison, super markets account for a small proportion of food sales in India.



However the growth rate of super market sales has being significant in recent years because

greater numbers of higher income Indians prefer to shop at super markets due to higher standards

of hygiene and attractive ambience.

3.2(2) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on health and beauty products

Here also small, single-outlet retailers dominate the market. However in recent years, a few retail

chains specializing in these products have come into the market. Although these retail chains

account for only a small share of the total market , their business is expected to grow

significantly in the future due to the growing quality consciousness of buyers for these products .

3.2(3) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets operate allover India.

Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing

and footwear stores have modern products and attractive displays to attract customers. However,

with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely

that the traditional outlets will survive the test of time.

3.2(4) HOME FUR NITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market, very few large

and modern retailers have established specialized stores for these products. However there is

considerable potential for the entry or expansion of specialized retail chains in the country.

3.2(5) DURABLE GOODS

The Indian durable goods sector has seen the entry of a large number of foreign companies

during the post liberalization period. A greater variety of consumer electronic items and

household appliances became available to the Indian customer. Intense competition among



companies to sell their brands provided a strong impetus to the growth for retailers doing

business in this sector.

3.2(6) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have encouraged consumer

expenditure on leisure and personal goods in the country. There are specialized retailers for each

category of products (books, music products, etc.) in this sector. Another prominent feature of

this sector is popularity of franchising agreements between established manufacturers and

retailers.

3.3 Malls in India

Over the last 2-3 years, the Indian consumer market has seen a significant growth in the number

of modern-day shopping centers, popularly known as µmalls¶. There is an increased demand for

quality retail space from a varied segment of large-format retailers and brands, which include

food and apparel chains, consumer durables and multiplex operators. Shopping-centre

development has attracted real-estate developers and corporate houses across cities in India. As a

result, from just 3 malls in 2000, India is all set to have over 220malls by 2005. But malls in

India need to have a clear positioning through the development of differential product assortment

and differential pricing, in order to compete effectively in a growing mall market. Segmentation

in malls, like up-market malls, mid-market malls, etc. , proper planning, correct identification of

needs, quality products at lower prices, the right store mix, and the right timing, would ensure the

success of the µmall revolution¶ in India.

3.4 Challenges of Retailing in India:

Automatic approval is not allowed for foreign investment in retail.

Regulations restricting real estate purchases, and cumbersome local laws.

Taxation, which favors small retail businesses.

Absence of developed supply chain and integrated IT management.

Lack of trained work force.



Low skill level for retailing management.

Intrinsic complexity of retailing ± rapid price changes, constant threat of product obsolescence

and low margins.

Indian retailers must use innovative retail formats to enhance shopping experience, and try to

understand the regional variations in consumer attitudes to retailing. Retail marketing efforts

have to improve in the country -advertising, promotions, and campaigns to attract customers

building loyalty by identifying regular shoppers and offering benefits to them; efficiently

managing high-value customers and monitoring customer needs constantly, are some of the

aspects which Indian retailers need to focus upon on a more pro-active basis. Despite the

presence of the basic ingredients required for growth of the retail industry in India, it still faces

substantial hurdles that will retard and inhibit its growth in the future. One of the keyimpediments is the lack of FDI status. This has largely limited capital investments in supply

chain infrastructure, which is a key for development and growth of food retailing and has also

constrained access to world-class retail practices. Multiplicity and complexity of taxes, lack of

proper infrastructure and relatively high cost of real estate are the other impediments to the

growth of retailing. While the industry and the government are trying to remove many of these

hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this

industry. Organized retailing in India is gaining wider acceptance.

3.5 Retail as an Employment Generator

The retail sector can generate huge employment opportunities, and can lead to job-led economic

growth. In most major economies, µservices¶ form the largest sector for creating employment.

The retail sector in India employs nearly 21 million people, accounting for roughly6.7% of the

total employment. However, employment in organized retailing is still very low, because of the

small share of organized retail business in the total Indian retail trade. The share of organized

retailing in India, at around 2%, is abysmally low, compared to 80% in the USA, 40% in

Thailand, or 20% in China, thus leaving the huge market potential largely untapped. Retail can

creates many new jobs as the BPO/IT sector in India. A strong retail can also provide the

necessary fillip to agriculture & food processing, handicrafts, and small &medium

manufacturing enterprises, creating millions of new jobs indirectly. Through it¶s strong linkages



with sectors like tourism and hospitality, retail has the potential of creating jobs in these sectors

also. Though the Planning Commission has identified retail as a prospective employment

generator, in order to strengthen the multiplier effect of the growth in organized retailing upon

the overall employment situation, a pro-active governmental support mechanism needs to evolve

for nurturing the sector.

3.6 MAJOR KEY PLAYERS IN RETAIL INDUSTRY

3.6(1) PANTALOON INDIA(RETAIL) LIMITED

Pantaloon Retail, a Future Group venture started its operations with Pantaloon Shoppe in 1993

and has since emerged the retailing giant of India with over 5 million square feet of retail space

spread over 450 storesacross40 cities in India. Pantaloon Retail operates in over twenty diverse

store formats, with a spectrum of offerings ranging from food and grocery to carpentry services.

It operates some of the immensely popular retail outlets of India, including the Central chain of

malls, Big Bazaar and Brand Factory.

3.6(2) SHOPPERS STOP

The group offers formats in the lifestyle and luxury segment, with the growing affluent middle

class population as their target consumer base. Shoppers Stop and Hypercity Retail (India) Ltd.

have jointly entered into an agreement with Home Retail Group Plc,United Kingdom, to develop

the format of catalogue retailing in India under an exclusive franchise. The firm has forayed into

the entertainment industry by acquiring 45 percent stake in Time zone Entertainment Private Ltd.

which has 5 outlets spread across 35,606 square feet at Mumbai, Ahmadabad, Kolkata and

Hyderabad.

3.6(3) TATA TRENT LTD.



Trent is a retail operations company that owns and manages a number of retail chains in India.

Established in 1998, Trent runs lifestyle chain Westside, one of India¶s largest and fastest

growing chain of lifestyle retail stores, Star Bazaar, a hypermarket chain, Landmark, a books and

music chain, and Fashion Yatra, a complete family fashion store.

3.6(4) RPG ENTERPRISES

Spencers Retail is one of the India¶s largest and fastest growing multi format retailer with over

200 stores,including 30 large format stores across 35 cities India.Spencer's focuses on verticals

like fresh fruit and vegetables, food and grocery, personal care, garments and fashion

accessories, home and office essentials, electrical and electronics. Established in 1996, Spencer's

has become a popular destination for shoppers in India with hypermarkets and convenient stores

catering to various shopping needs of its large consumer base.

3.6(5) GLOBUS

Launched in January 1998, Globus is part of the Rajan Raheja group. The company opened its

first store at Indore in 1999, followed by the launch of its second store in Chennai (T-Nagar).

Soon to follow was another store in Chennai located in Adyar. The flagship store in Mumbai

opened on 1st November 2001 followed by a swanky new outlet in New Delhi in SouthExtension Part-2. The sixth & seventh stores opened in Bangalore in Koramangala & Richmond

Road respectively. The eighth store opened in Ghaziabad at Shipra Mall and was followed by the

ninth at Kalaghoda in Mumbai; tenth in Thane and eleventh in Ghaziabad. The twelfth,

thirteenth, fourteenth stores opened in Kanpur, Ahmedabad ,indore , Lucknow and many other

places.

3.6(6) BATA

Bata is one of the world's leading footwear retailers and manufacturers with operations across

5 continents managed by 4 regional commercial business units (CBUs). The MBU approach

provides quality resources and support in key areas to the companies operating in similar

markets such as product development, sourcing or marketing support. Each MBU is

entrepreneurial in nature, and can quickly adapt to changes in the market place .



3.7 IMPACT OF ICT IN RETAIL INDUSTRY-

ICT and e-business can be beneficial for the whole supply chain of the retail industry. It can

support procurement, internal operations as well a sales and distribution.

3.7(1) INCREASE OF ICT AND E-BUSINESS USE SINCE 2003: The results of the 2007

survey can be compared with a similar survey conducted by e-BusinessWatch in 2003. The 2003

study found that the use of e-business in the retail sector was far from being a pervasive reality

and below the average adoption rates in other sectors. The 2007 survey found that ICT and e-

business use have become more prevalent in firms of all size classes. The 2003 study argued that

the main opportunities stemming from e-business, similarly as in other sectors, were efficiency

and productivity gains and, thus, cost savings. This was found to be still the same in 2007.

3.7(2) ICT INFRASTRUCTURE, SKILLS AND INVESTMENTS IMPROVED: The

quality of SMEs' internet access has significantly improved between 2003 and 2007. However,

there is scope for further improvement. Currently, retailers comprising about 45% of the sector's

employment are connected by broadband (>2 Mbit/s). Diffusion of internal W-LANs has been

fast. More than 50% of large retailers operate a W-LAN, and 35-40% of small and mediumretailers. As regards ICT skills, only about 10% of all retail companies employ ICT specialists;

even among large retailers, only about 50% do. Many companies completely outsource ICT

services to external service,providers. The attitude towards ICT investments and budgets is more

positive than a couple of years ago. A third of the retailers plans to increase their ICT budgets,

only few expect budget cuts for the forthcoming financial period.

3.7(3) ELECTRONIC PROCUREMENT: Online procurement practice can offer considerable

cost reduction benefits to the retail industry, mainly through process streamlining and improved

purchasing conditions. The level of retail firms ordering online increased from firms representing

43% of the industry¶s employment in 2003 to 55% in 2007, and the share of e-procurers

increased in all size classes. In those companies that procure goods through the internet or

computer-mediated networks, the share of goods actually ordered online increased, too. The use



of Supply Chain Management (SCM) systems also increased considerably, from 6% in 2003 to

19% in 2007 (weighted by employment), but this is exclusively due to a higher level of SCM use

in medium-sized and large firms.

3.7(4) INTER NAL E-BUSINESS SYSTEMS: Internal e-business operations can significantly

enhance workflows and business processes and thus increase productivity. However, companies

representing almost half of the industry¶s employment said that they only conduct some

processes by e-business. 22% even said ³none´; a ³good deal´ was stated by 20%, and in 11%

most processes are conducted electronically. As regards particular systems, firms representing

60% of th industry¶s employment reported to have a software application to manage the placing

or receipt of orders, 59% a bar-coding system, 51% a warehouse or depot management system,

and 16% an ERP system. RFID is not yet very common inthe retail industry. Retail firms

representing 8% of employment reported to use this technology, and RFID use is very rare in

micro and small retail firms.

3.7(5) ELECTRONIC SALES AND DISTRIBUTION: Retailers representing 38% of the

industry¶s employment stated that they sell goods ³through the internet or other computer

mediated networks´. Almost half of the large retail firms (45%) and 35% of the medium-sized

ones sell online, but only 24% of the small retailers and 26% of the.micro retailers do so. The

share of companies that sells online doubled from 19% (employment-weighted) in 2003 to 38%

in 2007. There was an apparent increase in all size classes. There has also been an increase in

the amount of sales conducted online. Compared to the figures about general sales areas, it

appears that online sales helps to extend the geographic focus slightly from regional to national

sales while the international focus remains on the same low level. The e- Business Survey 2007

also found that retailers representing 20% of the industry¶s employment use a CRM system, an

increase from 8% in 2003.

3.7(6) MICRO AND SMALL FIR MS LAG BEHIND MEDIUM-SIZED AND LARGE

ONES: Micro and small firms lag behind medium-sized and large firms in almost all indicators

of ICT and e-business . Exceptions include the level of internet access which is close to 100%,

the average share of employees with internet access which is higher than in large firms, and the



practice of sendingelectronic invoices to customers which is on the same level in all size classes.

However, micro and small firms have been increasing their ICT adoption in recent years.

Documents

Literature 11 Final