From Carrefour to Dena Bank

There are some vital pointers that you learn when in a business school. And especially when you are in a b-school that’s ever so evolving you really get to know the stuff that really matter to the current world. That’s one good thing about SPJCM. They are always open to improve themselves, to the extent that they ask us on a periodic basis about how to improve and what to do. Not many b-schools take the student’s suggestions so seriously.

Anyways, so I was talking about pointers. And one such piece of advice that I learned, is that business is not about doing business in a business-like way! People from venture capital derive newer business practices from the way a mother divides a cake between her 2 siblings! It sounds funny but it’s true. So to do your business in a better way, it’s necessary to understand how someone else does business and then borrow ideas from other fields as well.

One such syllogism which I felt would be really cool is the barcode reader at a Carrefour aisle. To give you a bit of a background, Carrefour is the second largest retail chain in the world, with a very large presence in Dubai, where I was for like 6 months. Now, at any of the Carrefour hypermarkets you find a simple barcode reader at the end of every aisle. Dubai surprisingly has no MRP system in place (so they can charge anywhere from 1dhs to 5dhs for a can of coke). Thus, the price tags at Carrefour for each product are printed at the edge of the shelf where a product is placed. Now if you can’t find the price tag for whatever reasons, you can just go to the barcode reader, point the barcode of the product towards the scanner, the scanner immediately scans the barcode, consults the main system and displays the ‘Carrefour price’ for the product (since there’s no MRP). The entire process takes less than 5 seconds to complete (if you exclude the time taken to walk to one of the barcode readers that is).

Typically what you are doing is asking the customer to do the job instead some attendant assisting him/her.

Now let’s keep Carrefour away for a while and talk about Dena Bank. Like any nationalised bank, Dena Bank too has its own set of drawbacks when it comes to service. Its true many nationalised banks are now providing services that are at par or even better than what the private banks do, but sadly Dena Bank isn’t one of them. Now my home town is a shanty old place which virtually hasn’t changed at all since a long...long time. And that town has a Dena Bank where I have an account.

One fine day I was standing in the queue for cheque deposits. More than half of the people in the queue were there to get their account balance checked. The people who were with me in the queue were somewhere in the bottom of the pyramid segment. These people earn not more than $3 a day. Their account balances would never cross the Rs.10,000 threshold. For these people, owning an ATM card that has a yearly fee of Rs.299, and carries a penalty cost for having a lower balance is out of question. And that’s the reason why they keep pestering the teller guy by giving him their pass books and asking for the account balance. That’s the reason why more than half the people in my queue were not there to deposit a cheque. What I also saw while I was waiting for my turn were the ‘Target 2000 cr’ tags dangling from the ceilings. Apparently Dena Bank seems to have initiated a target to achieve a pan-India bank deposit of Rs.2000 crores by 2008 I think.

Now get a load of this: The teller guy, who’s one small entity in this ‘target’ of achieving Rs.2000 crores of deposits by 2008 wastes more than half of his time in just checking account balances! And there must be innumerable such teller guys throughout India who must be wasting some part of their time just checking balances only! If that guy is too busy checking balances when will he accept cheques that directly help him in his objective of getting more deposits?

Can’t the ‘balance checking’ activity be deskilled? So that even the customer can check the balance without the need of having an ATM card?

Can’t we help the teller guy by allowing him to do what he’s really supposed to do?

Can’t we bring the barcode readers from Carrefour and install them in Dena Bank?

That gadget will occupy less than 12 square inch on the wall but will do a lot of things. It will de-skill the job of balance checking. You are co-creating value along with the customer without having to invest in large ATM machines and plastic cards. All you need is a normal passbook with an embedded unique barcode. If the bank doesn’t have a centralised banking system it’s ok to implement this system even on a local scale. You are removing all the unproductive work done by the teller guy. The barcode reader empowers the customer, it gives more productive time to the teller guy and it decreases clutter.

The system is scalable (since it can be implemented on a large-scale basis if required. All you need is to hook up all the barcode readers with the mainframe)

The system is robust and can work under harsh environments (since a barcode reader doesn’t involve any moving parts. It just has a laser scanner and an LCD display screen)

The system is fool-proof (obviously you don’t expect someone to hack into the mainframe using a barcode reader do you?)

The system does deliver a better price-performance relationship (because by charging somewhere around Rs.20 from the customer as a onetime payment for getting an embedded barcode, I’m giving the customer an opportunity to check his balance as many times as he wants till the time he no longer remains the bank’s customer)

This is how Dena Bank can derive learning from Carrefour.

This is how the teller guy can do what he’s actually meant to do (i.e. to deposit cheques)

This is how Dena Bank can achieve its pan-India ‘Rs.2000 crore by 2008’ target.

What say?