Part two - Probability analysis with ChatGPT’s assistance.
Feel free to pull this apart. I won’t get upset. DYOR.
Cheers Anton
E & EO
Analysis of Findi’s Probability of Winning a Share of SBI’s 11,000 ATM Tender
1. Overview of the Tender
•Tender Name: SBI RFP (SBI/ACV/2024-25/005)
•Scope: Procurement, installation, and management of 11,000 ATMs under a 7- to 10-year contract.
•Timeline:
•Submission Deadline: July 30, 2024
•Technical Bid Opening: July 30, 2024
•Reverse Auction: August-September 2024
•Award Notification: Expected October-November 2024 (delays may push this to December 2024 or January 2025).
2. Competitive Landscape
Major Competitors for SBI’s ATM Tender
CompanyPast SBI EngagementsRecent ATM WinsMarket Position
Findi (ASX: FND)10-year direct contract for 4,219 ATMs (2023)2,550 ATMs for Central Bank of India (CBI)Leading operator of 20,900+ ATMs in India
CMS Info Systems7,850 ATMs (SBI, 2013)N/AOne of India’s largest cash management firms
AGS Transact TechMultiple ATM orders, including 1,350 ATMs (2023)2,500 ATMs for multiple Indian banksStrong bidder with local procurement capacity
Hitachi Payment ServicesMultiple contracts with WLA ATMsDeployed 10,000 WLAs in 2024Global player with tech expertise in WLA ATMs
NCR CorporationProvides ATM hardware and softwareMajor supplier of ATM hardwareLeader in ATM hardware in India, but less focus on OPEX model
3. Findi’s Strengths & Competitive Advantages
**1. Proprietary ATM Management System
•Customizable Platform: Findi has developed a proprietary ATM Management System that offers advanced remote monitoring, predictive maintenance, and downtime reduction.
•Uptime Advantage: Banks like SBI prioritize system uptime. With Findi’s proactive alert system, downtimes are significantly reduced.
•Predictive Maintenance: Using AI-driven data analytics, Findi can anticipate failures before they happen, keeping ATM uptime above 99%, a crucial metric in RFP evaluations.
**2. Specialized Security System
•Advanced Security Features: Findi deploys integrated solutions with anti-skimming technology, camera surveillance, and real-time event-based alerts.
•Fraud Prevention: Findi’s fraud detection system allows rapid response, further boosting operational efficiency.
**3. Operational Expertise & Scale
•ATM Deployment History:
•10-year direct contract with SBI for 4,219 ATMs (Oct 2023)
•Ongoing contracts with CBI for 2,550 ATMs (with an additional 638 ATMs added in Oct 2024)
•20,900+ ATMs in Operation: Findi is one of the largest ATM operators in India, giving it the logistical and technical ability to deploy large-scale ATM rollouts.
•Network Uptime: Findi boasts uptime of over 99%, while RBI benchmarks uptime at a minimum of 95% for operators.
**4. Regulatory Compliance & Local Supplier Status
•Local Supplier Status: TSI India (a subsidiary of Findi) is likely to be classified as a Class I Local Supplier under India’s Public Procurement (Preference to Make in India) Order, 2017.
•ISO & RBI Compliance: Findi is compliant with RBI’s security, software, and operational uptime requirements.
**5. Pricing & Cost Competitiveness
•OPEX Model Expertise: Findi has successfully executed OPEX (operating expenditure) contracts, including its recent CBI and SBI deals. This is vital since the SBI ATM tender follows an OPEX model.
•Cost Control & Scale Efficiencies: Findi’s ability to manage large networks of ATMs (20,900+ units) allows for economies of scale, enabling it to price its bids competitively.
4. Probability Analysis
The probability of Findi winning a portion of the 11,000 ATM tender depends on three key success factors:
•Technical Score (Capability, Uptime, and Maintenance)
•Commercial Score (Pricing and Cost Structure)
•Risk and Award Split (50% to L1, 30% to L2, 20% to L3)
FactorWeightProbability (Findi’s Score)Reason
Technical Score40%90%Proven uptime, custom ATM management software, proprietary systems, and compliance with RBI and SBI requirements.
Commercial Score40%75%Experienced in OPEX pricing, competitive with AGS, Hitachi, and CMS. Ability to secure L2 or L3 if not L1.
Award Split Probability20%70%SBI’s tender strategy distributes awards among L1, L2, and L3 bidders (50%, 30%, 20%). Findi’s history with SBI and CBI suggests it could win as L2 or L3.
5. Calculation of Probability of Winning
1.Chance of Achieving L1 (50% Share of Contract)
•Assume 5 competitors (Findi, AGS, CMS, Hitachi, NCR) have an equal chance to win L1.
•Probability of being L1:
•Based on Findi’s cost advantages and existing contracts, its probability of L1 increases to 25%.
2.Chance of Achieving L2 or L3 (30% + 20% = 50% of the Contract)
•Probability of being L2 or L3:
•Given Findi’s local supplier status, operational expertise, and relationship with SBI, the adjusted probability is increased to 50%.
3.Total Probability Calculation
•Probability of winning a share as L1, L2, or L3:
6. Final Probability Estimate
ScenarioProbability (%)
Findi is L125%
Findi is L2 or L350%
Total Probability75%
7. Key Risks to Findi’s Probability
•Competitive Pricing Pressure: Aggressive bidding by AGS, CMS, or Hitachi could reduce Findi’s competitiveness.
•Bank Regulatory Delays: SBI might delay the award if audits or re-evaluation of bids are required.
•Supply Chain Challenges: Delays in component sourcing due to global issues could impact delivery timelines.
8. Conclusion
Probability of Findi Securing a Share of the 11,000 ATMs Tender = 75%
•Findi’s ability to meet SBI’s technical, regulatory, and commercial requirements increases its probability of being one of the top 3 bidders.
•The most likely scenario is that Findi will be awarded a share as L2 or L3, securing 30% to 20% of the contract (i.e., 2,200 to 3,300 ATMs).
•If Findi wins L1, it could secure 50% of the 11,000 ATMs, equivalent to 5,500 ATMs.
•Overall, Findi has a 75% chance of winning a share of this tender.
Summary
1.Probability of Findi winning L1 = 25%
2.Probability of Findi securing L2 or L3 = 50%
3.Total Probability of Winning Any Share = 75%
Given Findi’s history with SBI, its proprietary ATM management system, uptime guarantees, and local supplier advantage, it is well-positioned to secure a share of this tender. With award notices likely to be announced by December 2024 or January 2025, Findi is a strong contender to win up to 50% of the 11,000 ATMs.
