IRCTC opens up a new train of thought
While the Indian Railway Catering and Tourism Corporations
website may never win any best website of the year award, the site
has made life simpler for millions of Indian railway passengers. However, IRCTC
did not have a smooth journey to where it stands now. Venkatesh Ganesh traces
the history, the problems the company overcame, and both present and future
strategies that will take IRCTC to new heights
Not too long
ago, a journey by train was not something the average urban Indian looked forward
too. India has one the largest railway systems on the planet, but the safety
record of Indian Railways is pretty spotty and you have to experience dirty
trains, crowded platforms, unauthorised passengers and worse. Leave alone the
travel experience, even the process of getting a ticket was an ordeal in itself,
despite the Indian Railways pulling off a pretty amazing job of computerising
the ticketing and reservation system. However, touts ruled the roost at booking
counters and despite the best efforts of the authorities, the tout menace has
continued, inconveniencing genuine passengers.
While a very functional website did come up a few years ago, and passengers
could check availability of tickets and do lots more through the website, online
booking wasnt allowed. A passenger had to personally make a trip to a
reservation centre, stand in queues for hours, or, use the touts, which is exactly
what most busy people did. Finally, the Indian Railway Catering and Tourism
Corporation (IRCTC), a marketing arm of the Railways, handling catering and
hospitality-related functions, was given the mandate of building and operating
an online reservation system. Today, this initiative has turned out to be Asias
biggest e-commerce success storycontributing more than 50 percent to IRCTCs
IRCTC launched its online ticketing services in August 2002 and in its first
month of operations, it sold 3,343 tickets. By December 2002, it sold 30,300
tickets valued at Rs 4 crore. The company doubled its turnover by December 2003,
selling 70,132 tickets valued at
Rs 9.8 crore. Of IRCTCs turnover of around Rs 400 crore through services
like catering and bottled drinking water (at stations and in trains), the online
ticketing service during 2002-03 fiscal contributed about Rs 27 crore. The online
ticketing revenues include cost of the ticket and service charges. The average
turnover of the Railways through Internet booking is currently at Rs 8 crore
a month, of which IRCTC gets a share of Rs 40 per sleeper class ticket and Rs
60 per higher class ticket.
The IRCTC reservation site allows passengers to buy tickets,
pay for them using credit/debit cards, check train fares, routes and availability
in real-time and also receive alerts about rail schedules. In addition to this,
passengers can subscribe to an alert service that advises them about reservation
status at fixed intervals. Passengers can also track their tickets from the
time of booking till third-party courier services make the delivery. IRCTC now
handles bookings for about 8,500 passenger trains of the over 14,500 trains
operating daily on the Indian Railway network, the second largest after Russia
under a single management.
The tickets are delivered to any place specified by the user once the payment
gateway authorises a transaction. Initially this facility was offered only in
the Delhi and NCR regions, but it is now spread across 83 locations all over
India and more locations are being added. NRIs and foreign travellers can benefit
too. Says Amitabh Pandey, group general manager, IT services, IRCTC, We
have even made an option available for the foreign traveller and can deliver
tickets to their chosen place of stay in India.
IRCTCs success is enviablenot only because of the fact that it is
a government-owned organisation but also considering the complexity of the Indian
railway system. The Indian Railways system books approximately 5.5 lakh tickets
a day. Today, IRCTC only handles approximately 3,200 ticket bookings per day,
which nets them revenues to the tune of Rs 40 lakh per day. However, the numbers
are bound to rise fast as more and more people use the Net and experience the
convenience of buying tickets online.
But with electronic payment numbers still quite minuscule in the whole Indian
payments scenario and credit cards still finding their way into Indian wallets,
does IRCTC have any other modes of payment in mind? Explains Amitabh Pandey,
We are well aware of the low credit card penetration and relatively poor
online payment scenario in India. The other option that online retailers follow
is the Cash-On-Delivery (COD) model where the end-user pays in cash
after the product is delivered. However, since the IRCTC system is connected
to the Indian Railways reservation system and there are many other factors that
come into play while booking a ticket online, the COD model is a non-feasible
model for IRCTC, despite it making eminent commercial sense.
Another problem is that many Indians hate the concept of credit cards since
they dont like buying goods on credit. To counter this, banks have gone
on the overdrive with debit card launches, where bank accounts are directly
debited. IRCTC too realised this, and for customers who did not want to have
credit cards, an additional payment mode of direct debit from their accounts
through online banking is now available.
IRCTC has tied up with 10 banks, including Corporation Bank, State Bank of India,
ICICI Bank, IDBI Bank and HDFC Bank, to enable direct debit facilities for account
holders of these banks. IRCTCs move has paid off with this facility already
bringing huge volumes. It is estimated that ICICI Bank accountholders buy about
Rs 70 lakh worth of tickets per month, while HDFC Bank accounts for transactions
averaging around Rs 90 lakh a month.
For credit card payment, IRCTC has a tie-up with ICICI Bank and Citibank. The
company is also in the process of signing up with American Express.
Why IRCTCs system succeeds
IRCTCs service charges work out lower than the charges levied by an agent
or a tout, who charge anything from Rs 25 to Rs 100 per passengerIRCTC
has a flat charge for up to six passengers (Rs 40 for lower class and Rs 60
for higher class). The only drawback so far has been that IRCTC does not offer
facilities for onward journey, cluster station or circular journey with provision
for halting at different destinations.
BroadVision Inc., a provider of enterprise business portal applications, based
out of California, USA, runs the IRCTC site on its BroadVision e-commerce platform.
The big challenge for BroadVision was integrating the legacy system with the
existing reservation system and verifying credit card information in real-time
as the booking had to be confirmed on the Passenger Reservation System (PRS)
of the Indian Railways immediately.
Initially, it wasnt exactly smooth sailing for IRCTC. Reminisces Pandey,
Firstly, the Passenger Reservation System had to handle close to the tune
of 6 lakh reservations per day. Internet connectivity at that time was poor
and pages took a lot of time to load and sometimes customers used to book a
ticket multiple times since they kept clicking repeatedly.
IRCTC had initially anticipated a maximum of 100,000 to 200,000 hits and enquiries
based on the numbers witnessed by online shopping sites. Instead, they were
suddenly confronted with over 1.3 million enquiries daily, besides over 2,000
actual bookings. This resulted in terrible traffic jams and their payment gateways
also went down. As a result of this, ICICI Bank and Citibank (their payment
gateways) were asked to upgrade their services. Also, there were issues related
to failed transactions and this cost the company around 20 percent of overall
transactions. Besides, they had to deploy extra people whose primary job was
to refund money for failed transactions.
Some customers also complained of the relatively non-user-friendly systems being
an inhibitor for many users. Says Pandey, Since the Railways have huge
legacy systems, which are working perfectly well, we could not fiddle with the
IRCTCs system runs on Intel-based servers and they opine that it provides
them with cost efficiency, robustness and reliability for Web-enabling the system.
The application and database management components run on four separate four-way
servers powered by Pentium III Xeon processors in addition to four Pentium III
processors that power the Web servers. Further, our Intel-based servers
integrate smoothly with legacy applications and provide us with a cost-effective,
reliable and scalable solution, says Pandey.
Also, IRCTC uses a combination of Oracle and Linux to run its internal ERP system.
Security is the other major inhibitor for online commerce in India as people
are still uncomfortable about revealing their credit card numbers on the Net.
Says Pandey, The IRCTC site is secure and stealing credit card details
is not possible since we use 128-bit encryption and further, dont store
credit card details in our system.
While the number of customers and transactions will definitely go up because
of the monopoly factor, IRCTC has outlined a number of plans, which prove that
the company doesnt believe in resting on its laurels. Plans are on the
anvil to cater to the corporate sector, wherein companies can sign up on the
site and book tickets for employees through a single account.
Besides, IRCTC intends to expand its travel portal to leverage BroadVisions
advanced personalisation capabilities to the fullest extent. In the next phase,
IRCTCs travel portal will add other tourism and reservation touch-points
and expand ticket delivery services to all major cities in India.
Our target is to provide Internet booking and delivery service to a total
of 100 cities and focus on improving facilities with value-added services,
The hottest area in payments systems today is payments through mobile phones.
Users no longer need to carry credit cards, with the mobile phone itself acting
as a wallet. Besides, India is a booming market for cellular phones. IRCTC has
realised this and is now looking at taking this routesoon you should be
able to book tickets from your mobile itself. Says Pandey, The next major
step is mobile and we are looking at mobile convergence in a big way.
Considering the fact that government organisations are generally resistant to
change and in some cases even deploy IT half-heartedly, IRCTCs initiatives
have shown how a simple initiative can make a big impactnot only for the
customer but for the organisation as well. There are lessons to be learnt from
IRCTCs example, lessons that both the government and other public sector
organisations in the services sector can gain from.
| Users register their credit card numbers and then
book their tickets. The system dashes a query to the Passenger Reservation
System to check for fares and availability. After the above process is done,
it checks the validity of the credit card with the payment gateway. Once
this verification is carried out, it prints the physical ticket in Delhi
and they are sorted out on a city-wise basis and sent by courier.
- IRCTC handles bookings for 8,500 passenger trains daily
- In its first month of operations (August 2002) it sold 3,343 tickets
- In December 2003, IRCTC sold tickets valued at Rs 9.8 crore
- Handles approximately 3,200 ticket bookings per day