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iSPIRT’s Official Response to the Draft Drone Rules 2021

This is our response to the Draft Drone Rules 2021 published by the Ministry of Civil Aviation on 14 July 2021.

Introduction

The potential commercial benefits that unmanned aviation can bring to an economy has been well established in several countries. A primary and immediate use-case for drones is in Geospatial data acquisition for various applications such as infrastructure planning, disaster management, resource mapping etc. In fact, as argued in the recently announced guidelines for Geospatial data, the availability of data and modern mapping technologies to Indian companies is crucial for achieving India’s policy aim of Atmanirbhar Bharat and the vision for a five trillion-dollar economy.

The current situation in India, however, is that the drone ecosystem is at a point of crisis where civilian operations are possible in theory, but extremely difficult in practice. Because the regulations in place are not possible to comply with, they have led to the creation of a black market. Illegally imported drones are not only significantly faster, cheaper and easier to fly but also far more easily acquired than attempting to go through the red tape of the previous regulations to acquire approved drones. Thus, rather than creating a system that incentivises legal use of drones, albeit imported, we’ve created a system that makes it near impossible for law-abiding citizens to follow the law of the land and discourages them from participating in the formal system. This not only compromises on the economic freedom of individuals and businesses but it also poses a great national security risk as evidenced in the recent spate of drone attacks. If we do not co-opt the good actors at the earliest, we are leaving our airspaces even more vulnerable to bad actors. This will also result in a failure to develop a world-class indigenous drone & counter-drone industry, thus not achieving our goals of an Atmanirbhar Bharat.

The Draft Drone Rules (henceforth the draft) have addressed some of these problems by radically simplifying and liberalising the administrative process but haven’t liberalised the flight operations. Unfortunately, closing only some of the gaps will not change the outcome. The draft rules leave open the same gaps that cause the black market to be preferred over the legal route.

With the three tenets of Ease-of-Business, Safety and Security in mind, it is our view that while the intention behind the draft rules is laudable, we feel that the following areas must be addressed to enable easy & safe drone operations in India:

  1. Remove Requirement of Certificate of Airworthiness: The draft mandates airworthiness certification for drones whereas, no appropriate standards have been developed, thus, making the mandate effectively impossible to comply with.
  2. Lack of Airspace segregation, zoning and altitude restrictions: The draft doesn’t mention any progressive action for permitting drone operations in controlled airspaces.
  3. Business confidentiality must be preserved: The prescribed rules for access to data is not in consonance with the Supreme Court Right to Privacy Judgement
  4. Lack of transparent Import Policy: This results in severe restrictions on the import of critical components thus disincentivizing indigenous development of drones in India
  5. Insurance & Training must be market-driven and not mandated: We must let market forces drive the setting up of specialised training schools & insurance products & once mature they may be mandated & accredited. This will result in the creation of higher quality services & a safer ecosystem.
  6. Fostering innovation and becoming Atmanirbhar:
    A. Encouraging R&D: by earmarking airspace for testing for future drones
    B. Encouraging the domestic drone manufacturing industry: through a system of incentives and disincentivizing imports should be inherent in the Drone Rules.
    C. Recognition of Hobby flying: Hobbyists are a vital part of the innovation ecosystem; however, they are not adequately recognised and legitimized
  7. Encouraging A Just Culture: Effective root cause analysis would encourage a safety-oriented approach to drone operations. Penal actions should be the last resort and dispute resolution should be the focus.
  8. Enabling Increased Safety & Security: NPNT and altitude restrictions would enhance safety and security manifold.
  9. No Clear Institutional Architecture: Like GSTN, NPCI, NHA, ISRO, and others a special purpose vehicle must be created to anchor the long-term success of Digital Sky in India based on an established concept of operations
  10. Lack of a Concept of Operations: Although drone categories have been defined, they have not been used adequately for incremental permissions, as in other countries; rather the draft appears to prefer a blank slate approach. The failure to adopt an incremental approach can arguably be considered as one of the root causes of the drone policy failures till date in India as regulations are being framed for too many varied considerations without adequate experience in any.
1. Airworthiness

In the long term, it is strategically crucial to India’s national interest to develop, own and promulgate standards, to serve as a vehicle for technology transfer and export. The mandatory requirement for certification of drone categories micro and up is the key to understanding why the draft does not really liberalise the drone industry. It would not be too out of place to state that the draft only creates the facade of liberalising drone operations – it is actually as much of a non-starter as the previous versions of regulations.

The standards for issuance of airworthiness certificates have not been specified yet the requirement has been stipulated as mandatory for all operations above nano category in the draft (pts 4-6). However, most of the current commercial operations are likely to happen in the micro and small categories. And for these categories, no standards have been specified by either EASA or FAA. EASA’s approach has been to let the manufacturer certify the drone-based on minimum equipment requirements. On the other hand, It is only fairly recently that the FAA has specified airworthiness criteria for BVLOS operations for a particular drone type of 40kg, and which it expanded to 10 drone types in November. Building standards is an onerous activity that necessitates a sizable number of drones having been tested and criteria derived therefrom. The only other recourse would be adopting standards published elsewhere, and as of date these are either absent (not being mandated in other countries) or actively being developed (cases noted earlier). Given the lack of international precedent, the stipulation for certificate of airworthiness in the draft needs to be eliminated, at least for micro and small category drones.

2. Airspace

One of the major concerns since the early days of policy formulation in India has been the definition of airspace and its control zones. All regulations till date, including the draft, require prior air traffic control approvals for drone operations in controlled zones. However, given that controlled airspace in India starts from the ground level for the controlled zones upto 30 nm around most airports (unlike many other countries where it starts at higher levels), it effectively means no drone operations are possible in the urban centres in the vicinity of airports in India. While the Green/Yellow/Red classification system is a starting point for Very Low-Level airspace classification, the draft does not move to enable the essential segregated airspace for drone operations up to an altitude limit of 500ft above ground level.

3. Business Confidentiality

In the domain of Privacy Law, India has taken significant strides to ensure protection of individual and commercial rights over data. The draft (pt 23.) in its current form seems to be out of alignment with this, allowing government and administrations access to potentially private and commercially sensitive information with carte blanche. The models of privacy adopted in other countries in unmanned aviation are often techno-legal in nature. It is recommended that DigitalSky/UTM-SP network data access be technically restricted to certain Stakeholder-Intent mappings: executing searches for Law Enforcement, audit for the DGCA, aviation safety investigations and for Air Traffic Control/ Management. This would need due elaboration in the detailed UTM policy complemented with a legal framework to penalise illegitimate data access.

4. Insurance

One constant hindrance to compliance is the requirement of liability transfer. While the principle of mitigating pilot and operator liability in this fashion is sound, the ground reality is that as of date, very few insurance products are available at reasonable prices. The reason behind it is that insurance companies have not been able to assess the risks of this nascent industry. Assuming the regulation is notified in its current form (pt 28), arguably affording a clean start at scaling up drone operations, we will continue in this vicious dependency loop in the absence of incentives to either end. Again, market forces will drive the development of this industry with customers driving the need for drone operators to obtain insurance for the respective operations. Therefore it is recommended that initially, insurance should not be mandated for any category or type of drone operations, and instead be driven by market or commercial necessity. Over a period of time, insurance may be mandated within the ecosystem.

Similar feedback has been shared by Insurers: “Though the regulator (aviation regulator) has made mandatory the third party insurance, the compensation to be on the lines of the Motor Vehicles Act is somewhat not in line with international practices,” the working group set up by Insurance Regulatory and Development Authority of India (IRDAI) said.”

5. Training

Currently, there’s a requirement of training with an authorized remote pilot training organization (RPTO) (pt 25), applicable for micro-commercial purposes and above (pt 24). While the intent is right, it should not be mandated at the initial stage. The reality is that there are very few RPTO’s that offer training and the cost of such training is often higher than the cost of the drones themselves, while quality is inconsistent. While the current draft rules try to address this problem, they do this with the assumption that liberalizing the requirements for establishing RPTO’s will solve this problem. While this incentivizes more RPTO’s to be established, it still does not incentivize quality and leaves in place the same bureaucratic process for registration. This has been the experience of the ecosystem so far. While it is certainly reasonable to expect that remote pilots should receive training, the goal of better informed and equipped pilotry is better achieved, at this time, if left to manufacturers and market participants to drive it.

There are currently two types of training – Type training and Airspace training. Type training can be driven by manufacturers in the early days, as is the current practice, and Airspace training can be achieved through an online quiz, based on a Concept of Operations. It is our view that customers of drones will have a natural incentive to seek training for their pilots, thereby creating the market need for better quality training schools. Furthermore, as manufacturers establish higher levels of standardization and commoditization, they will partner with training schools directly to ensure consistent quality. In the upcoming years, as the drone ecosystem grows more mature, it will become reasonable to revisit the need for mandating pilot training at approved training schools, and DGCA may create a program that accredits the various RPTOs.

6. Fostering innovation and becoming Atmanirbhar
6A. R&D

To encourage institutional research and development further, we recommend authorised R&D zones be designated, particularly where low population and large areas (like deserts, etc) are available, some key areas of experimentation being long range and logistics operations which might require exemptions from certain compliance requirements.

6B. Import policy

Rather than simply delegating the entire import policy to DGFT (pt 8), there needs to be a clear statement of the import guidelines in the rules based on the following principles in the current draft:

  1. No barriers for the importation of components and intermediary goods for local assembly, value addition and R&D activities
  2. Disincentivising import of finished drone products, both pre-assembled and Completely Knocked Down. Possible avenues could be imposition of special import duty as part of well-considered policy of “infant industry protection”, a policy used successfully in the recent past in South Korea and is considered a part of the policy of Atmanirbhar Bharat by the Principal Economic Advisor to the PM, Sanjeev Sanyal.
  3. Incentivising investments in the indigenous manufacturing industry by aligning public drone procurement with the Defence Acquisition Procedure (2020) and supplemented by targeted government programs such as PLI schemes and local component requirements, which will help realise the PM’s vision of ‘Make in India’ and “Atmanirbhar Bharat’.
  4. In the long term, developing incentives for assemblers to embed themselves into global value chains and start moving up the value chain by transitioning to local manufacturing and higher value addition in India, to be in line with the PM’s vision of Atmanirbhar Bharat. Some suggestions here would be prioritisation for locally manufactured drones for government contracts, shorter registration validity for non-locally manufactured drones etc.
6C. Hobby Fliers

While research and development within the confines of institutions is often encumbered by processes and resource availability, hobby and model flying has enjoyed a long history in manned aviation as a key type of activity where a large amount of innovation happens. Hobby clubs such as The Homebrew Computer Club, of which Steve Jobs and Wozniak were members, and NavLab at Carnegie Mellon University are instances out of which successful industries have taken off. Far from enabling hobby or recreational fliers, they are not even addressed in the draft, which would only limit indigenous technology development. Legally speaking, it would be bad in law to ban hobby flying activities considering hobby fliers enjoy privilege under the grandfathering rights. A solution could lie in recognising hobbyists & establishing hobby flying green zones which may be located particularly where low population and large areas are available. Alternatively, institution-based hobby flying clubs could be authorised with the mandate to regulate the drone use of members while ensuring compliance with national regulations. The responsibility of ensuring safe flying would rest with these registered hobby clubs as is the case in Europe and USA.

7. Encouraging A Just Culture

Implementation is the key to the success of any policy. One of the key factors in encouraging voluntary compliance is an effective means of rewarding the compliant actors while suitably penalising any intentional or harmful violations. Therefore, arguably, an important step could be to build such rewards and punishments. In the context of aviation safety and security, the key lies in effective investigation of any violation while fostering a non-punitive culture. Effective investigations enable suitable corrective actions whilst minimal penal actions encourage voluntary reporting of infringements and potential safety concerns. ICAO encourages a just and non-punitive culture to enhance safety. Penal actions, if considered essential, should be initiated only after due opportunity and should have no criminal penalties except for deliberate acts of violence or acts harming India’s national security. However, considering the fallout from any unintentional accident as well, there should be adequate means for dispute resolution including adjudication.

8. Enabling Increased Safety & Security

The draft while taking a blank slate approach clearly aims to reduce hurdles in getting drones flying. However, we argue that lack of clarity on several issues or not recognising certain ground realities actually reduces the chance of achieving this. We list the details of these issues in the subsections below.

Points 13-14 acknowledge the existence of non-NPNT (No Permission No Takeoff) compliant drones and makes airworthiness the sole criteria for legally flying, provided such drone models are certified by QCI and are imported before the end of this year and registered with DigitalSky. This is a great step forward, however, keeping in mind the win-for-security that NPNT provides through trusted permissioning and logs, it is recommended that NPNT be phased back in with an adoption period of 6 months from the date of notification.

To bring back a semblance of safety to the thought process and keeping in mind that manned aviation would be operating above 500 ft except for takeoff, landing and emergencies, it would be pragmatic to enforce altitude fencing in addition to two-dimensional fencing going forward. Permissive regulation has the effect of encouraging good and bad actors alike, and this measure ensures the correct footing for the looming problem of interaction between manned and unmanned traffic management systems, where risk of mid-air collisions may be brought back within acceptable limits.

9. Institutional Architecture

The draft indicates that institutions such as QCI and Drone Promotion Council (DPC), along with the Central Government, would be authorised to specify various standards and requirements. However, no details have been specified on the means for notification of such standards as in the case of the Director-General (Civil Aviation) having the powers to specify standards in the case of manned aircraft. Such enabling provisions are essential to be factored in the policy so as to minimise constraints in the operationalisation of regulations e.g. as was observed in the initial operationalisation of CAR Section 3 Series X Part I which did not have a suitable enabling provision in the Aircraft Rules.

Further, effective implementation demands that responsibility for implementation be accompanied by the authority to lay down regulations which is sadly missed out in the draft. In the instant draft, the authority to lay down standards rests with QCI/ DPC but the responsibility for implementation rests with DGCA which creates a very likely situation wherein the DGCA may not find adequate motivation or clarity for the implementation of policy/ rules stipulated by QCI/ DPC.

It is not clear that setting up a DPC would advance policy-making and be able to effect the changes needed in the coming years to accelerate unmanned aviation without compromising safety and security. We argue that for effective policy and making a thriving drone ecosystem, Digital Sky is a unique and vital piece of digital infrastructure that needs to be developed and nurtured. In the domain of tech-driven industries, the track record of Special Purpose Vehicles (SPV) is encouraging in India, the NSDL, NPCI and GSTN being shining examples.

The field of unmanned aviation has its own technical barriers to policy making. Its fast-evolving nature makes it extremely difficult for regulators who might not have enough domain knowledge to balance the risks and benefits to a pro-startup economy such as that of India. With the context formed through the course of this paper, it is our view that an SPV with a charter that would encompass development of a concept of operations, future standards, policy, promotion and industry feedback, would be the best step forward. A key example of success to model on would be that of ISRO, which is overseen by the Prime Minister. This would remove inter-ministerial dependencies by overburdening the existing entrenched institutions.

10. Lack of a Concept of Operations

The difference in thought processes behind this draft and the rules notified on 12th March 2021 is significant and is indicative of the large gap between security-first and an efficiency-first mindsets; keeping in mind that mature policymaking would balance the three tenets. It also points to the lack of a common picture of how a drone ecosystem could realistically evolve in terms of technology capability and market capacity while keeping balance with safety and security. The evolving nature of unmanned aviation requires an incremental risk-based roadmap; the varied interests of its many stakeholders makes reaching consensus on key issues a multi-year effort. To this end, taking inspiration from various sources and focusing on the harsh realities peculiar to India, we are in the process of drafting a Concept of Operations for India.

Concluding remarks

With the goal of raising a vibrant Indian drone ecosystem, we recommend the following actionable steps be taken by policy makers:

Immediate Term – Enabling The Ecosystem

Changes to the draft

  1. Airworthiness Compliance requirements for all drone categories be removed till such standards are published
  2. Hobby flying and R&D Green zones be designated in low risk areas
  3. Guiding principles for Import policy formulation be laid out to incentivise import drone parts and de-incentivise drone models
  4. A privacy model be applied to DigitalSky ecosystem data access that technically restricts abuse while laying a foundation for a legal framework for penalties
  5. Insurance be not mandated for any drone categories
  6. The provision for setting up the Drone Promotion Council be subsumed by a SPV as discussed below
Next six months – Setting the ecosystem up for long-term success

A) NPNT be re-notified as a bedrock requirement for security

B) An SPV outside of entrenched institutions be set up with a charter to

1. Envision India’s concept of aviation operations for the next few decades

2. Formulate Future Policy and institutionalize some aspects of key enablers of operations currently missing in India:

  • Development / update of ConOps
  • Monitor / develop / customize International standards
  • Establish Standards for Airworthiness and Flight Training

3. Develop and operationalise DigitalSky in an open, collaborative fashion with oversight and technical governance mechanisms

4. Redefine control zones and segregate airspace for drone operations

5. Establish an advisory committee with equitable membership of stakeholders

6. Address all charter items of the Drone Promotion Council

Key Authors

1) Amit Garg – [email protected]

2) George Thomas – [email protected]

3) Hrishikesh Ballal – [email protected]

4) Manish Shukla – [email protected]

5) Siddharth Ravikumar – [email protected]

6) Sayandeep Purkayasth – [email protected]

7) Siddharth Shetty – [email protected]

8) Tanuj Bhojwani – [email protected]

About iSPIRT Foundation

iSPIRT (Indian Software Product Industry Round Table) is a technology think tank run by passionate volunteers for the Indian Software Product Industry. Our mission is to build a healthy, globally competitive and sustainable product industry in India.

For more, please visit www.ispirt.in or write to [email protected]

iSPIRT’s Official Response to the Draft Drone Rules 2021 from ProductNation/iSPIRT

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iSPIRT Balloon Volunteering Open House #4 – Opportunities in Technology

Building on the previous Balloon Volunteering Open House Sessions, we will give a flavour of available volunteering opportunities in the Technology space.

In the fourth Session, we have Dr Pramod Varma, Chief Architect of Aadhaar and IndiaStack, giving you an insight into what it takes to volunteer in iSPIRT. He describes our design principles for building digital public infrastructure and gives you a peek into the thought process of an architect in iSPIRT. Finally, he breaks down how we are redefining the approach towards solving societal problems. We are playground builders. We orchestrate or create a playground so that market players can bring out an array of solutions.

iSPIRT is addressing solvability. We have a multi-decade horizon as a mission-oriented volunteer-based Think-and-Do-Tank. 

As part of this session, we have some of our volunteers explaining the technical challenges you can embrace as new volunteers at iSPIRT Foundation. The problems that we are tackling require a thought process that is new and innovative. We use cutting-edge technology.

In addition to the new technical volunteering options outlined in this session, other policy-related and ecosystem-building volunteer options also exist. Apply now on https://volunteers.ispirt.in.

How do you build using Lego Blocks? Watch the recording to learn more.

iSPIRT Balloon Volunteering Open House Session #4 – Opportunities in Technology [30 June 2021] from ProductNation/iSPIRT

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iSPIRT’s Third Balloon Volunteering Open House Summary

Following the success of our previous two sessions, we are back again. We are presenting this next session of our open house on the theme of Market Mavens and Market Architecture.

Please find attached the video, which will talk about the available opportunities and what it means to be a volunteer at iSPIRT.

There are many volunteering challenges available. So, if in the past you wanted to volunteer but couldn’t, please do check out the additional challenges listed here. We are adding to the existing challenges that we are working towards. So go ahead and choose any of the options that resonate with you.

This Balloon Volunteering process takes anywhere from 3-4 weeks to start. Also, to get a better idea please do read our Volunteer Handbook and Playground Coda here https://volunteers.ispirt.in/. 

iSPIRT Volunteering is about being mission-oriented and being self-motivated, for there is no glory here. So if you have the bandwidth and want to write the new India script, please reach out to us.

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iSPIRT’s Official Response to Non-Personal Data Governance Framework

A Committee of Experts under the Chairmanship of Shri. Kris Gopalakrishnan has been constituted vide OM No. 24(4)2019- CLES on 13.09.2019 to deliberate on Non-Personal Data Governance Framework. Based on the public feedback/suggestions, the Expert Committee has revised its earlier report and a revised draft report (V2) has been prepared for the second round of public feedback/suggestions. iSPIRT had provided a past response to the previous report and in this blog post contains a response to the revised report. 

At the iSPIRT Foundation, our view on data laws stems from the following fundamental beliefs: 

  1. Merits of a data democracy (that is, the user must be in charge)
  2. Competitive effects must be well understood, for creation of a level playing field amongst all Indian companies, and some ring-fencing must exist to protect against global data monopolies
  3. Careful design enables both high compliance and high convenience

It is with these perspectives that we have analyzed the revised Non-Personal Data report in our response.

Key Sources of Ambiguity in the NPD Report 

The key sources of ambiguity in the report are: 

  1. Purpose of techo-legal framework for Non Personal Data: The non personal data framework is meant to provide the right legal and technology foundations for world class artificial intelligence to be created out of India for the betterment of financial, health, and other socio-economically important services. The current version of the report sidesteps this completely by constraining the applicability to only “public good” purposes rather than taking a holistic approach to “business & public good purposes” 
  2. Data Business entities need a harmonised definition (given the interplay with data fiduciaries as proposed in the MeitY Personal Data Protection Bill) and clear incentives for participation. The current report relies excessively on regulation & processes for data businesses to achieve the outcome. 
  3. Institutional structure for Data Trustees: The report restricts Data Trustees to government agencies and non-profit organisations; however, in a domain consisting of fast evolving technology by excluding the private sector in offering the base infrastructure creates a severe limitation on the ecosystem of modellers that can be created. 
  4. Technology Architecture: The illustrated technology architecture is unclear around the public infrastructure (through the form of open standards, public platforms, and others) that need to be created & adopted to bring to life the non-personal data ecosystem in an accelerated manner. 

Conclusion

While we’re aligned with the vision of the committee, it’s critical that the above ambiguities are resolved in order to create a strong non-personal data ecosystem created in India. Till these ambiguities are resolved, the recommendations of the Report should not be operationalized.

For any press or further queries, please drop us an email at [email protected]

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Ten key considerations for Build vs Buy in your product journey

As we begin 2021, let’s explore some salient points and key considerations for a build vs buy decision in your product journey. If you come from an engineering mindset, the natural inclination is to build things as that is what you take pride in. If you come from a business perspective, the interest is to get a profitable product, often leaning towards a buy to make an impact in the market. As a product manager, let’s take a balanced approach to making the right decision or advising to build or buy.

Penned down some 10 Key considerations that can be useful in making this decision based on my experience of doing some due diligence as well as being part of the decision making process. The focus of this blog is in the context of software products companies, but could be applicable for other products as well.

  1. Faster to market: as pointed in one of my earlier blog, timing to market is a key aspect for products. Let’s consider the current pandemic situation and one of the areas is digital foray including video / online platforms. Many companies have looked at getting to the market faster and may lean towards a buy as it could get them faster by 2-3 years.
  2. Solved vs Unsolved Problem: solved problems are another area for usual buy whereas for unsolved problems you may need more R & D, and therefore a build approach may be more suitable. Solved problems with a good market could be bought over and integrated for better penetration.
  3. Unique IP: connected to the previous consideration, there may be a unique solution IP that solves some unique problems, while it may make sense to invent and build if you find that unique IP, it’s very much possible that you can consider buying out for the IP. We have seen a lot of such things in ML / AI area or in other emerging tech.
  4. Aligned Tech architecture: in software, one of the other consideration when making a buy decision is to understand the tech architecture and if it would be easy to align and integrate the tech into the overall architecture, how much effort is it to integrate, whether the buy would stay standalone, etc. Many times, while the decision may be towards buy to get faster to market if the tech is too different and if there is enormous effort to integrate, it may be more suitable to build it.
  5. Culture fit: the faster to market is ticked, the tech architecture is also ticked, but when you buy it’s not just the product but also the culture that matters a lot. Lot of buy decisions may make sense, but have failed with a misfit in culture of the companies that are buying vs that is being bought. The company that is buying may be a large company and the company that is being bought is a small startup but with some passionate folks, or they may be having a risk-taking vs risk-averse culture.
  6. Price of buy vs cost to build: beautiful, the reasoning is all good, there is tech alignment, and sounds like the culture will be good – but what about the price. What is the viability of investments? This is more of a financial decision, sometimes it could be based on product-market fit, and the timing balanced with price of the buy. What would it take to build this, whether the market is going to grow after a certain period, so building would be better option?
  7. Customers or Users: this is another clear business reason to buy a product. A certain product may be a very successful product, has a huge user base, the buyer company sees a huge synergy of upselling their other products to this customer base or users. This may be useful when you want to expand to a new user base e.g. selling to Sales while you have momentum with Finance.
  8. Talent: we have seen this sometimes, there is a niche product or a popular product, but more than the product, the consideration is the talented engineers or the founder behind the product, their knowledge of the domain, their unique understanding of the problem statement or their reach to the customer network. When you have to build something, it’s going to be hard to build a product team that runs together in unison. Another side of the argument here is if you have a talented team that has a great understanding of the problem statement as well as the technical acumen, it may make more sense to build the product.
  9. Expansion front and back: often product needs more features or needs certain areas for vertical/horizontal expansion on the front or back of existing products. It could be some failed attempt at building that will lead to buy or could be an unsuccessful buy that would lead to build. Sometimes it could be buying an application that showcases an use-case for your product  and at other times it could be building a platform that is behind your application to bid adieu a competitor dependency
  10. Data: this is another new area for buy decisions. To expand your platform you need data, for which another product acquisition can help. Leaving aside any legal implication, this has become an important consideration in a buy vs build decision

Making a buy or build decision is a key aspect of software product lifecycle and growth. Hope the above helps a bit

Wishing you all a great 2021!

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iSPIRT’s Second Open House on Balloon Volunteering

We had our second Open House session on Balloon Volunteering on 14th December over Zoom Conference. Do watch the session video to decide if you would like to explore volunteering with iSPIRT.

Till recently, all our new volunteers (aka Balloon Volunteers) came in through referrals from existing volunteers. Eight weeks back, on 20th Sep, we experimented with an open process in the first Open House session (https://pn.ispirt.in/balloon-volunteering).

We explained the process of Balloon Volunteering and shared a few volunteer challenges. Dozens of people registered. We spoke to each of them and worked with them on the next steps. Three applicants have been accepted as Balloon Volunteers so far. This has given us the confidence to go further in opening up our Balloon Volunteering process.

As you know, iSPIRT is a mission-based non-profit technology think tank. In this second Open House session, we talk about this mission so that you can ask yourself if our cause and theory of change animates you. To understand what volunteers do and how they work, you can read our Volunteer Handbook and Playground Coda. Pointers to these documents are on our new Volunteering page https://volunteers.ispirt.in

If our mission motivates you and volunteering is your passion, see if one of the open volunteering challenges resonates with you. You can then apply using one of the forms on the webpage.

However, keep in mind, volunteering is not for everybody. So, don’t be disheartened if you aren’t able to become a Balloon Volunteer right now. All of us grow with time. Volunteering may be the right thing for you a few years down the line. iSPIRT sticks with hard problems for 20-30 years, so you can be sure that there will be many volunteer opportunities in the future!

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New OSP Guidelines – a major reform (Ease of Doing Business)

The new guidelines on Other Service Provider (OSP) issued by DOT on 5th November is one big step taken by Government of India under leadership of Prime Minister Modi in Ease of Doing business for IT and ITeS sector.

You can find the DOT publication here https://dot.gov.in/sites/default/files/2020_11_05%20OSP%20CS.pdf 

iSPIRT Organised a Panel discussion in PolicyHacks to understand the changes that have been announced and how they impact the Industry.

The panellist included
1. Shri R.S. Sharma, Ex-Chairman TRAI
2. Rahul Matthan, Partner, Trilegal
3. Shanmugam Nagarajan, Founder and Chief People Officer, [24]7.ai
4. Chocko Valliappa, CEO, Vee Technologies
5. Sudhir Singh, Core Volunteer, iSPIRT, Policy Hacks Host

The panel discussion can be watched at below given Youtube video or you can read through the excerpts of the discussion given below in this blog.

Background

IT and ITeS companies looking for seamless cross border communication between the Indian Centers and their foreign counterparts centers use a telecom circuit service (IPLC, MPLS, Sip trunk), obtained from an Indian Telecom Service Provider (TSP). Traditionally, they were supposed to apply and get registered as OSP. The application and approval process were cumbersome and required them to submit detailed network diagrams and satisfy that authority of a legitimate use of the Circuits. The process was cumbersome, more bureaucratic than technical in nature and often subject to undue harassment by TERM cell even when use was fully legitimate.

Industry has been demanding this reform for long, as the Circuits were always subscribed through a licenses TSP in India. The Reform will give way to a new era of opening in telecom services. It is most likely to benefit IT and ITeS industry the most, boost innovation and synergistic alliance in Industry. Most importantly this will make India more attractive for FDI, as this was one major irritant in deploying most important part of the International operations i.e. International Communication.

The move will not only help large offshore IT and BPO Centers but also will empower domestic Software product companies. It will give a huge impetus to work from home and hence will be very instrumental in promotion of SaaS industry, both for their internal operations and also promote SaaS product adoption.

Some of the main highlights of this decision are.

1. No need for a Registration any more to operate as an OSP

2. Interconnection of multiple OSP centers and remote agents

3. Work From Home and Remote locations allowed

4. Centralised Infra and consolidated Traffic between Indian POP and International POP

5. Sharing of EPABX and PSTN lines by domestic and International Center

6. Distributed Architecture with main Infra at central POP and media gateways at other centers

7. CUG allowed for internal Communication

8. CDRs, access log, configurations of EPABX and routing tables to be maintained and aggregated for each media gateway for a period of one year

9. No toll bypass allowed and no telecom services to be provisioned

Excerpts of the Panel Discussions

The panel discussions started with a round of Introduction and inviting Rahul to summarise the new regulations.

Rahul Matthan started the panel discussion with a summary of the guidelines announced. He termed the new guidelines issued as Radically simplified.

Starting the introduction to new Guidelines, he said, “OSP or the Other Service Provider regulation in essence regulates Business Process Outsourcing companies and the definition of the types of entities that are regulated by this is very important. Earlier the definition used to include things like call centers, Business Process Outsourcing and other IT services, but also had very broad language at the end which included all IT enabled Services.

So, the first amendment is that it’s been restricted now to voice based business process outsourcing services.”

“The second very significant amendment that has happened is that the registration requirement has been entirely removed. Earlier you had to register with the TERM cell of DOT and that that requirement has been entirely removed,” Said Rahul.

He further mentioned that work from home (WFH) is allowed without any restriction of site or permissions and submission of network diagrams. He added. “it is work from anywhere” and “also, infrastructure sharing has been permitted there are some significant changes in the interconnectivity regulations have been permitted”.

“Bank guarantees used to run into crores for many large companies. The requirement for submitting performance bank guarantee has now been removed”, mentioned Rahul.

He also informed that the general provisions about penalty provisions with regard to inspection have been removed. “In fact, the entire chapter with regard to penalties and inspection has been removed”, mentioned Rahul.

Shri RS Sharma informed the panel how the consultation papers and discussion at TRAI on the subject progressed at TRAI. He informed that whereas the OSP regulation was very old, TRAI got a reference to start the consultation process in September 2018 and the Consultations were submitted by TRAI to DOT in 2019, which is exactly one year back.

“Essentially thought which we had was OSPs are the ones who are the customers of the TSPs telecom, they are paying money to the main service provider which is the TSP, so why should we really come in between and you know ask for all kinds of you know compliance” said Ex-TRAI chief, recalling developments.

He further informed that, next thing that was taken up is the definition, and as these are the entities which are taking resources from the telecom service providers or ISP and actually doing somebody’s work or providing services to some other entity, they should all be called application service providers (ASPs).

“Unfortunately, the OSPs also included those people who were actually providing services internally. We said any entity which provides service to itself after taking resources from the telecom service providers will not be coming within the definition of logical OSPs”, Said Shri Sharma.

He also recalled that it was recommended that everyone need not register, and only voice based OSPs need to be registered, Data based OSP need not be Registered.

The new definition given at chapter 1 point 7 states these recommendations. As said by Rahul earlier, the new guidelines limit OSP to voice-based processes only.

Shri Sharma further recalled that the TRAI recommended the removal of the requirement to submit network diagrams in OSP registration. He also further mentioned that TRAI also took a stand not to include hosted contact center service infrastructure or cloud hosted infrastructure, in OSP application scrutiny.

Shri Sharma said,” Interestingly in the last 10 years not even a single bank guarantee has been encashed.” He said bank guarantee was the most ridiculous part of the provision, as Govt. was not earning any revenue from OSP,

Similarly, he recounts the recommendations made on interconnectivity among the various OSPs, that also we said should be allowed. “I feel really satisfied”. Said shri Sharma, citing that most recommendations have been accepted.

In further discussion, Sudhir added that we were not having regulation at par with the developed world and called Rahul to give his perspective on regulatory aspects of OSP provisions.

Rahul emphasised in past Data was scarce and a licenced kind of regime was brought in with some sort of a performance guarantee to ensure compliance. Data today is not scarce and with the advent of smartphones and choices one has to make calls, the OSP regime was just giving comfort to the Inspector raj of the TERM cell.

“Country ran out of static IP Addresses”, said Rahul, when it tried to tackle the work from home during the Pandemic. Although DOT cooperated in providing relaxation, the actual need was to remove regulations relating to logical separation between Voice and Data and the need for physical EPABX.

S. Nagarajan, joined the discussion and said, “antiquated rules only hurt the industry by not letting us expand freely within the country. We are in other countries like Colombia, Philippines, Guatemala and none of these countries have these regulations”.

“So this has many benefits for us in all the dimensions, one leading to the other.. ease of doing business, geo competitiveness, location diversity, workforce diversity, talent pool expansion and increased quality of delivery through reduced attrition, (taking it back to geo competitiveness) and there by increasing our business potential for the country, creating millions more direct and indirect jobs for the nation. Thus, it is a better stimulus to the economy than just a monetary stimulus.”

Extending the panel discussions further,

Chocko Valliappa, recalled how the Government brought in Texas Instrument to Bangalore and facilitated them with a Red Carpet but in due course with such regulations the Red Carpet became Red Tape.

He mentioned that, “We employ 6000 employees between US, India and Philippines and in US for example 95% of our work is done work from home and that’s how we always operated and but in India, we are operating in just 3 cities, Bangalore Chennai and Salem and I’m sure this (the new OSP guidelines) would give us a big footprint across India and set up offices across other places.”

“In the next 35-40 years India will be capable of handling 15% of the global economy. By 2050, India will be poised to become the manufacturing hub of the world replacing China by harnessing 3D design and printing capabilities.  I think India engineering talent would be sought after much more, so I think its a step in the right direction”, he further added.

Shri RS Sharma spoke further in response to a question by Rahul on whether the OSP regulation will fully go away in future. He recalled his experiences and how and why bureaucracy could not implement the ease of doing business issues easily.

Shri Sharma said, “TRAI had given two sets of recommendations, one to Ministry of Information and broadcasting another to the Department of Telecom, where we actually targeted ease of doing business.”

He also said that he has seen that the honourable Prime Minister is passionate towards ease of doing business and ease of living. He wants it, but I think we all need to come together, and we all need to sort of continuously work towards it.

“It’s a great thing which has been done actually and I was so happy, and I complimented each one of the people who are involved including the Department of Telecom”, mentioned Shri R.S Sharma at the end.

Discussion ended thanking all participants.

Disclaimer: The discussion and ideas expressed here should not be construed as legal advice. The discussion is conducted with Industry practitioners and experts for purpose of benefiting the Industry members in Software product, IT or ITeS Industry.

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Alex Osterwalder on building The Invincible Company

iSPIRT Foundation, Confederation of Indian Industry (CII), The CII-Suresh Neotia Center for Innovation, NSRCEL at IIM Bangalore, CIIE at IIM Ahmedabad and Mahindra Leadership University came together to host the first of the Global Leadership Seminar series on 25th September, 2020.

Our inaugural speaker was Dr. Alex Osterwalder, the well known author of the Business Model Canvas, who spoke about his latest book, The Invincible Company. The talk was followed by a fireside chat with two industry veterans, Rajan Anandan, MD of Sequoia, former VP of Google South East Asia, and a prolific angel investor, and Sanjay Behl, CEO India & Co-Founder Nextqore Private Limited, and Chairman of the CII National Committee on HR & Leadership.

Prof. Rishikesha Krishnan, Director of IIM Bangalore, gave the welcome address and said that he was a big fan of the Business Model Canvas and has given many copies of the book away. Alex started his talk by saying that no company is invincible. The only thing they can do is to constantly reinvent themselves. The most successful companies reinvent themselves when the going is good. In a crisis, it is often too late for a company to reinvent itself. Great companies compete on superior business models in which technology, services and innovation and price are embedded. Great companies are also able to transcend industry boundaries easily. An example of an innovative company that transcends industry boundaries is Tesla, which sells cars, batteries and data. Alex said that his favorite example is China’s Ping An, which transformed itself from an insurance company into a conglomerate. Ping An broke out of industry boundaries to build Ping An Good Doctor, which now has 300 million users. Alex said that the pharma companies of the world could have also made such a transition but they defined their industry boundaries too rigidly. 

Note: The full video of the seminar and fireside chat embedded below

Alex said that companies need to be ambidextrous and be able to both exploit existing business models and explore new ones, but both these require very different skill sets. 

Quoting Clayton Christensen, Alex said that there are three types of innovation:

Efficiency innovation: Using robots in warehouses would improve efficiency, but was not enough for survival. 

Sustaining innovation: New car models, digital transformation etc are good examples 

Transformative innovation: Completely new business models. For example Amazon started as a book seller but went on to become an infrastructure provider with Amazon Web Services.

He said that most companies were not doing enough of transformative innovation that created value for customers and organizations. He said that it was possible for a company to disrupt an industry with inferior technology. Sharing the example of Nintendo WII, he said that it was not based on proprietary technology, but off the shelf components including motion sensors, that appealed to an underserved market of casual gamers who did not worry much about graphics and technology. 

He suggested that companies could build an Explore portfolio by investing a small amount of money in a large amount of ideas. You cannot pick the winners upfront but learn from the VC industry where typically 6 out of 10 ideas will fail, 3 out of 10 will make some money, and 4 out of 1000 will be home runs. The German engineering company, Bosch is exploring this model. It gave 200 teams 120,000 Euros each and gave them three months to test their ideas. Seventy percent of these teams were cancelled after six months. 60 teams get a follow-up investment of 300,000 Euros, and finally 15 got further investments and were moved to the Exploit phase. This is what companies like Amazon have been doing for a long time. 

Rajan kicked off the fireside chat by saying that innovation is a leader’s job, and that titles like Chief Innovation Officer are dead-end jobs delegated to those who cannot run businesses. He pointed out the trillion dollar market cap companies that exist today are founder driven companies. Sharing the example of Google, he said that, in Google people get noticed for doing the Big New Thing, and not just for keeping the machine running. Rajan argued for purposeful, targeted innovation, and for making adjacent bets. He said that Google Payments was one of the bets that they made, which has paid off well. Another was the Internet Saathi, which was an idea brought to him by Google employee, Neha Barjatya, which made sense as an initiative that aimed to bring women online. His take was that one has to think like a VC and make selective calls. He felt that the approach of making 200 bets and seeing what would work, was not feasible and gave the example of Sequoia, which manages $5.5 billion dollars but has a portfolio of only 200 companies. He also argued that, when it comes to innovation, and chasing new areas, you have to put your best people on the job. 

Sanjay, who has worked in large companies like Levers, Reliance, Nokia, and raymonds before going on to start his own IOT company, NextQore, said that most of our larger companies are built for efficiency and not innovation and disruption. These companies rewarded predictability, but the world is now unpredictable. They are vertical, matrix organizations in a world that is flat, and has moved to platforms. They were trained to manage scarcity, but we now live in a world of abundance. These organizations were trained to manage linear change, but change has now become exponential. He said that the immune system of large companies was trained to reject innovation, and they need to now look at replacing scalable efficiency with scalable learning. 

Alex said that innovation is becoming a profession. Therefore, these frameworks will become essential since CEOs now want a process for innovation, and less of an ad-hoc process. Rajan seemed to be all for targeted innovation and big bets while Alex’s model was to take a lot of small bets, and scale them up. Which approach should CEOs go with? Can innovation be turned into a predictable process, or is it something that depends on the leadership driving it. Write to us with your comments and let us know what you think.

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Announcing Healthathon 2020

  1. Context
  2. Format
  3. Ideas & Themes
  4. Speakers & Judges
  5. Event Calendar
  6. Sponsors & Partners
  7. Prizes
  8. Registration Details

Context

Those of you who have been following this blog would know that as we speak, India is rolling out a piece of public digital infrastructure known as the National Health Stack (NHS). This project, which is being put into place to futurize the nation’s health technology ecosystem, has exciting and important ramifications for the entire country.

The ground reality in India is that the doctor:patient ratio in the country is low and inequitably distributed. Moreover, the digitization of health data is minimal and the availability of care facilities is sporadic. Taken together, these factors contribute to a relatively subpar standard of public health, which in turn affects happiness and productivity. In a country like India in which each percentage point of productivity and growth corresponds to millions of people moving out of poverty, it is doubly important to bring up the standard of public health as quickly as possible.

One of the components of the NHS which can do this is the Personal Health Records (PHR) system. This system establishes a standardized interface for storing, managing, and sharing medical data, all with user consent. If users can assert greater control over their own health data, they can derive more utility, convenience, and value. This might take expression through easier access to teleconsultations, or perhaps through a better consumer interface to canvas second opinions about some test reports or medical images. The PHR could also allow for individuals to securely and voluntarily contribute their anonymized healthcare data towards data sets used to map and manage public health trends over time.

The possibilities for the PHR system are many, but it will require a collaboration between the public sector, private sector, and medical community to make the most of this technology. For this reason, we are excited to announce the launch of the Healthathon 2020.

This four-week long virtual conference aims to bring together different stakeholders to work on solutions and products stemming from the PHR system. One key group of stakeholders is the public sector bodies like the NHA and MoHFW,  without whose support this initiative can never reach all of the 1.3 billion Indians. The second group is the private sector players such as health tech companies, entrepreneurs, private equity investors, and technology providers – without their creativity, capital, and execution capacity, it will be hard to make any project sustainable or scalable. The last stakeholder group is the medical community of doctors, hospitals, labs, and others; it is clear that without the buy-in and support of this group, no technology intervention can pinpoint or solve the most pressing problems. 

Format

The Healthathon 2020 will feature two competitions: the Hackathon and Ideathon. The Ideathon is a 2-week long event aimed at students, medical practitioners, and non-technical parties. During this event, teams will compete to come up with the best business plans and product ideas around the PHR system. 

In contrast to the Ideathon, the Hackathon is a 4-week long event aimed at startups, corporates, entrepreneurs, developers, and health tech enthusiasts. As part of the Hackathon, teams of developers will work on building projects on top of the new PHR APIs provided by our sandbox providers. 

Participants in both competitions will receive the mentorship, guidance, and resources they need to put out the best possible submissions. Panels of judges will then award prize money to the best teams from each competition. 

In addition to the Ideathon and Hackathon, there will also be a slew of masterclasses, panel discussions, and other events. These sessions are intended to generate engagement, awareness, and innovation around the PHR system, and they will all be recorded and open to the public. 

We hope that the event will draw in participants from different fields and backgrounds, united in the purpose of leveraging technology to make India healthier, more inclusive, and more efficient.

Hackathon & Ideathon Themes

Some of the themes that teams could choose to work on for the two competitions could include:

End Use Apps:
  • Apps that can read healthcare reports and provide some additional context or insight using AI
  • Platforms to help create real time monitoring and alerts for doctors using their patient’s wearable device data
  • Doctor-facing apps that help unify and analyze patient’s health records across different data sources
  • Health lockers for secure and convenient long term storage of health data
  • Matching systems that pair patients with the right kind of care provider given a medical report or treatment history
  • Anonymised health trends/dashboards for epidemiological studies
  • Preventive care applications that promote healthy living by tracking health markers and gamifying healthy living
  • Applications that provide and track continued & personalized care plans for chronic disease patients (eg. cancer care) 
  • New insurance products, possibly featuring fraud prevention and auto-adjudication based on PHR 
Consent Management:
  • Apps that help the user discover, link, and share access to their medical data
  • Building assisted and accessible consent flows for low-literacy or non-smartphone users
  • Systems to delegate patient consent in case of emergencies or other extenuating circumstances
  • Consent lifecycle management systems ie. generating, storing, revoking, and  safeguarding consent
  • Easy and informed consent experiences eg. “scan to share data”, “understand what you are consenting to”
Middleware and Utilities:
  • Secure data storage and management facilities
  • Tools to help medical institutions adopt and use the PHR system
  • AI utilities to decipher and parse medical data
  • Developer tools to simplify and abstract the workflows for PHR development 

Speakers and Judges

Here is a list of some of the speakers and judges for the event:

  • Kiran Mazumdar Shaw, Executive Chairperson, Biocon
  • Dr. C. S. Pramesh, Convener, National Cancer Grid
  • Sanjeev Srinivasan, CEO, Bharti Axa General Insurance
  • Arvind Sivaramakrishnan, Group CIO, Apollo Hospitals
  • Nachiket Mor, Commissioner, Lancet Committee on Reimagining Healthcare in India
  • Shashank ND, CEO, Practo
  • Gaurav Agarwal, CTO, 1mg
  • Dr. Ajay Bakshi, CEO, Buddhimed
  • Dr. Aditya Daftary, Radiologist, Innovision
  • Kiran Anandampillai, Technology Advisor, NHA
  • Dharmil Sheth, CEO, PharmEasy
  • Pankaj Sahni, CEO, Medanta
  • Veneeth Purushotaman, Group CIO, Aster Healthcare
  • Yashish Dahiya, CEO, Policybazaar
  • Abhimanyu Bhosale, CEO, LiveHealth
  • Prabhdeep Singh, CEO, Stanplus
  • Rajat Agarwal, Managing Director, Matrix Partners India
  • Tarun Davda, Managing Director, Matrix Partners India

Prospective Talks and Masterclasses

  • “An overview of the NHS architecture and objectives”
  • “A deepdive into the PHR APIs”
  • “Medical imaging data: Changing the Status Quo”
  • “Using delegated consent to bolster efficacy in emergency care”
  • “Technology challenges and opportunities for hospitals and labs”
  • “Health Tech in India: successes and areas of improvement”

Sponsors and Partners

Principal Sponsors
  • Matrix India Partners
  • Swasth Alliance
Knowledge Partners
  • CHIME India
  • HIMSS India Chapter
Sandbox Providers
  • National Health Authority
  • LiveHealth
Organization Partner:
  • Devfolio

Cash Prizes

Six teams in the hackathon will be eligible to win prizes of Rs. 50,000 each

Five teams in the ideathon will be eligible to win prizes of Rs. 20,000 each.

Dates, Registration, and Outreach

Registration Link (for both events): https://healthathon.devfolio.co

Registrations Close (for both events) : 22nd October, 2020

Opening Ceremony: 24th October, 2020

Ideathon submissions: November 6th, 2020

Hackathon submissions: November 19th, 2020

Closing Ceremony: 22nd November

Outreach: [email protected] (Email subject: “Healthathon”)

Blog Post Image Source: SelectInsureGroup.com

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Open House Session #1 on iSPIRT’s Balloon Volunteering

We held an impromptu Open Session on Balloon Volunteering on 20th September 2020. Watch the recorded video and presentation below to learn if iSPIRT volunteering is right for you.

This session will cover some of the available volunteer opportunities and tell you how to engage with us.

Open House on iSPIRT Balloon Volunteering from ProductNation/iSPIRT

In case you want to explore Balloon Volunteering with iSPIRT, we request you to fill out the form here: bit.ly/iSPIRTForm

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iSPIRT Third Open House on OCEN: API Specifications & Next Steps

On 7th August we hosted the third open house discussion on Open Credit Enablement Network (OCEN). This week’s session featured a deep dive into the underlying OCEN API flows, covering different entity interactions in-depth and addressing common technical queries. 

To recap, OCEN (O-Ken) is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale. In last week’s session, we shed light on several potential Loan Service Provider (LSP) products and business cases. We also talked about the various opportunities for ecosystem participants across an OCEN-enabled cash flow lending value chain.

This week we dove into the API flows that make up the standardised end-to-end process of applying for a loan via an LSP, also illustrating how Account Aggregators will fit into this reimagined value chain. Our volunteers also covered the role of CredAll which is a collective of lending ecosystem players to drive cash flow based lending. 

The third session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Ankit Singh
    • Recap of what OCEN is, and how LSPs fit in to the framework
    • Query 1: Is OCEN aggregating and sending loan applications to different lenders or does LSP make API requests with each lender separately?
    • Query 2: Are all API calls asynchronous? Are there Turnaround Time SLAs for the different services?
    • Query 3: Architecture diagrams – General LSP and Sahay GST
  • By Sudhanshu Shekhar
    • Query 4: API flow sequence diagrams
    • Query 5: How do I represent other loan products?
  • By Ankit Singh
    • Query 6: Using OCEN APIs and becoming an LSP
    • CredAll – a collective of lending ecosystem players

After the presentation, our volunteers answered some questions from the community including:
– What is the role of LSPs in the collections process?
– What is the difference between an LSP and a TSP?
– How does the Common Pledge Registry fit in?

We will be hosting weekly open house sessions to keep diving deeper into OCEN. The next such event will take place at 5pm on 14 August 2020.

Readers who wish to learn more about OCEN are encouraged to share this post and sign up now for the session below or click here.

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address. We shall do our best to answer these questions during next Friday’s open house discussion. 

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)

Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow

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iSPIRT Second Open House on OCEN: Varied LSP Possibilities

On 31st July we hosted the second open house discussion on Open Credit Enablement Network (OCEN). This week’s session covered several potential Loan Service Provider (LSP) products and business cases, and answers to questions that came up following last week’s introductory presentation.

To recap, OCEN is a new paradigm for credit that seeks to provide a common language for lenders and marketplaces to build innovative, financial credit products at scale. OCEN seeks to reimagine the lending ecosystem so that any service provider that interfaces with consumers and MSMEs can become a Fintech-enabled credit marketplace, or more specifically, a Loan Service Provider.  

The discussion this week centred around what kind of role LSPs could play in an OCEN-enabled cash flow lending value chain. OCEN APIs can enable lending products for both consumers and businesses, and for both capital and operating expenses. They are designed to allow for several different types of LSPs and financial products to flourish. 

To build this new credit economy, we need to move from the ‘Lend and Forget’ mindset of traditional lenders to the holistic ‘Lend, Monitor and Collect’ model allowed by the myriad of service providers and marketplaces in our tech ecosystem. These platforms not only have insightful data into their user’s commercial activity but they have an ongoing interface and interaction with potential borrowers.

With OCEN standardisation, LSPs can improve and contribute to all the five aspects of lending i.e. acquisition, underwriting, ROI, collections and monitoring. Tailored credit products can be plugged in at every stage in a typical supply chain (from ‘Procurement to Pay’) to help ease liquidity concerns and ensure business continuity. 

Our volunteers illustrated this with two examples:
1) A seller on the Government e-marketplace (GeM) obtaining invoice financing through the Sahay GeM LSP

2) A truck owner availing of Business-Vehicle Trip Financing through a logistics company performing the role of an LSP

OCEN is also enabling the creation of a new type of credit product that is digitally applied for and disbursed, where the end use of the loan is identified and paid for, and where repayment of the loan is enabled by the locking of incoming cash-flow.

Every participant in our fintech ecosystem is incentivised to take part in this new open credit economy enabled by OCEN. There is an opportunity here for lenders, service providers, aggregators and tech providers to all play their role in bridging India’s credit gap and giving our people and businesses the support they need.

The second session on OCEN covered the following topics broadly, and the entire webinar is also available on our official Youtube channel:

  • By Siddharth Shetty
    • An introduction to iSPIRT and our values
  • By Ankit Singh
    • Recap of what OCEN is, and how LSPs fit in to the framework
    • Recap of Sahay, the reference app for OCEN (and the first LSP)
    • Becoming an LSP (and the role of CredAll)
  • By Nipun Kohli
    • Examples of different cash-flow-lending products enabled by OCEN
    • Key differences between traditional lending and credit products on OCEN
    • How LSPs can participate across the lending value chain
    • ‘Procurement to Pay’ credit products
    • Product example 1: GeM – Procurement to Pay
    • Product example 2: Business-Vehicle Trip Financing
  • By Praveen Hari
    • Building new credit products on OCEN
    • The Type 4 loans

After the presentation our volunteers answered some questions from the community including:
– How is Sahay different from TReDS?
– How does the underwriting take place for LSP-enabled loans?
– How can risk be managed between the LSP and the lender?

We will be hosting weekly open house sessions to keep diving deeper into OCEN. The next such event will take place at 5 pm on 7 August 2020


Readers who wish to learn more about OCEN are encouraged to share this post and sign up now for the session below or click here.

As always, in order to successfully create a new credit ecosystem for Bharat it will take the collaborative effort of participants from every corner of our fintech ecosystem.

If you’re interested in participating as a:

  • Loan Service Provider
  • Lender
  • Technology Service Provider

please drop us an email at [email protected]

Readers may also submit any questions about the OCEN to the same email address. We shall do our best to answer these questions during next Friday’s open house discussion. 

If you would like to know more about becoming an LSP, please check out www.credall.org (CredAll is a collective of lending ecosystem players to drive cash flow based lending)

About the Author: The post is authored by Rahul Sanghi

Recommended Reading:

Chapter 7 and 8 in RBI UK Sinha MSME committee report: https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924

Introduction to India Stack’s fourth layer – Data Empowerment & Protection Architecture: https://www.youtube.com/watch?v=mW__azI8_ow