The turning point was just around the corner. I woke up at 2 am one day and jotted down a few key points that I wanted to share with the team, he says. Later that day, he addressed his team, especially the young recruits. He told them that while it was easy to go back to the parent organisation, he would fight tooth and nail to regroup IRCTC if they were willing to fight alongside him. The key for me was the enthusiastic response I received from the younger lot, he says. Then Tandon laid down the ground rules. Each member had to think of himself or herself as a mini entrepreneur. They could no longer look at this as a 10-to-5 job. The way to turn profitable at the macro level was to ensure that each unit is run as efficiently as possible so that we make each activity profitable at the micro level, he says. His first move was to aggressively push to expand IRCTC’s catering business in the corporate world. Today, customers include corporate offices such as HCL as well as several management institutes. He also started providing housekeeping services. The strategy was to forge partnerships at the local level. IRCTC supplied the brand, the front-end interaction and the billing but the actual work was largely outsourced. He backed such outsourcing with close monitoring to ensure quality. Later, ironically, as the number of trains grew, the Railways found it difficult to provide catering for them. It turned to IRCTC that now services several new trains, including all the Duronto Expresses. In just two years, then, Tandon has rebuilt the catering business to the scale where it was at the end of financial year 2010-11. But while catering brings in the most revenue, profits are reeled in by the e-ticketing and tourism businesses. Today, IRCTC sells 4.7 lakh tickets a day on an average. In 2008, it was just 40,000. The figure will go up by another 50,000 over the next year. Add to this the tourism business, which accounts for 25 percent of total revenues, the same proportion as e-ticketing, and IRCTC generates a daily business of Rs 50 crore. This makes it the biggest e-commerce portal in the Asia Pacific region. At a turnover of Rs 704 crore in FY13, IRCTC is back to where it was in 2011 (Rs 760 crore). What is remarkable is that Tandon has achieved these numbers without a bulk of the railway catering business, which is valued at Rs 400 crore. Nalin Shinghal, currently CMD of Central Electronics Limited, worked as director-tourism at IRCTC between 2009 and 2012. He [Tandon] led the fight very well and on all fronts. He was very supportive of his team and had the ability to delegate — something that not many leaders are able to do, Shinghal says about his stint under Tandon. As for the never-say-die spirit of the IRCTC team during the setbacks, he says: It was as if the owner of the shop [the Railways] wanted to shut it down but the shop floor guys were determined to run it well!” Going the Distance Tandon has only one more year left at the helm of IRCTC but he continues to push growth through innovation. For instance, he is trying to reduce the transaction time for online reservations by starting an e-wallet type service where you can store a certain amount of money with IRCTC. Similarly, he has brought ISO certification into IRCTC tourism packages with payment to some service providers linked to the feedback from customers. He is aggressively signing MoUs with state governments and their tourism departments to expand the coverage of rail-based tourism. On the catering front, IRCTC has recently started a state-of-the-art centralised kitchen in Noida, which can produce 25,000 meals daily. The idea is to have better control over the quality of food. Previous innovations include green tickets (or SMS tickets) which today save 1.5 lakh pages every day. It took Tandon two-and-a-half years to convince the government to give this facility—which air travel started using only a few months ago — the green signal. Tandon had struck upon the idea of green tickets in unusual circumstances. While travelling from Dehradun to Delhi by train, he had a young techie from Bangalore occupying the berth facing him. When the ticket collector made his rounds, Tandon saw the techie quietly paying Rs 50, the fine at the time for not carrying a printed copy of the e-ticket. When asked, the techie explained his choice of paying the fine instead of taking a printout: He called the process a headache; in any case, what purpose did the printout serve? Tandon was taken aback, and came to the conclusion that asking for paper proof of the ticket, or penalising people for not carrying one, was unnecessary — identity proof should be enough. The government had serious security concerns about this scheme. Tandon eventually suggested a three-month pilot on two trains; he also assumed responsibility for any negative fallout. And that’s how green ticketing started in India. But more than any specific initiative, Tandons ability to lead an organisation in the public sector—which is usually not attuned to entrepreneurial zeal — out of crisis has been extraordinary. Even more noteworthy is his humility despite such achievement. After all, he says, working in Indian Railways has prepared me for crisis management because it has a crisis almost every day. I always say: The army goes to war just once but the Railways goes to war every day. Read more at: moneycontrol/news/features/rakesh-tandon-steeringresurgenceirctc_975681-1.html?utm_source=ref_article
Posted on: Thu, 31 Oct 2013 10:59:23 +0000
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