IRCTC opens up a new train of thought

While the Indian Railway Catering and Tourism Corporation’s 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 wasn’t 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 Asia’s biggest e-commerce success story—contributing more than 50 percent to IRCTC’s revenues.

Chugging away

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 IRCTC’s 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.”

IRCTC’s success is enviable—not 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.

Key challenges

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 don’t 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. IRCTC’s 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 IRCTC’s system succeeds

IRCTC’s 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 passenger—IRCTC 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.

ystem architecture

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 wasn’t 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 back-end systems.”

IRCTC’s 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

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, don’t store credit card details in our system”.

Future route

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 doesn’t 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 BroadVision’s advanced personalisation capabilities to the fullest extent. In the next phase, IRCTC’s 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,” says Pandey.

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 route—soon 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, IRCTC’s initiatives have shown how a simple initiative can make a big impact—not only for the customer but for the organisation as well. There are lessons to be learnt from IRCTC’s example, lessons that both the government and other public sector organisations in the services sector can gain from.

IRCTC facts

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

venkatesh@expresscomputeronline.com