Utilities need to have an integrated financial management system. The flow of data across modules in case of capital projects resulting in asset creation demonstrates succinctly the value of having such an integrated system.Fig. shows how the Fixed Assets Register of a distribution utility can be updated with accurate details that are captured right from the stage of creation of a capital expenditure job.
 | ||||
| Online Updating of Fixed Assets Register |
• Projects
• Purchasing
• Inventory
• Payables
• General Ledger
• Assets
Apart from the modules mentioned above, a number of additional modules such as Payroll, Cash Management, Material Requirement Planning, etc., may be opted for depending on the nature of the utility’s requirement.We now describe ERP in brief.
Enterprise Resource Planning
Enterprise Resource Planning is an integrated information system that serves all departments within an enterprise. Evolving out of the
manufacturing industry, the term ERP originally implied systems designed to plan the use of enterprise-wide resources. Thus, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organisation’s own software with varying degrees of effort, and, depending on the software,ERP modules may be alterable via the vendor’s proprietary tools as well as proprietary or standard programming languages.
An ERP management information system integrates areas such as planning,purchasing, inventory, sales, marketing, finance, human resources, etc. It can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. It is thus a method of using computer technology to link various functions − such as accounting, inventory control, and human resources −across an entire company. ERP is intended to facilitate information sharing, business planning, and decision making on an enterprise-wide basis.For example, the same system could be used to forecast demand for a product, order the necessary raw materials, establish production schedules,track inventory, allocate costs, and project key financial measures. ERP acts as a planning backbone for a company’s core business processes. In addition to directing many of them, the system also ties together these varied processes using data from across the company. For instance, a typical ERP system manages functions and activities as different as the bills of materials, order entry, purchasing, accounts payable, human resources, and inventory control, to name just a few of the 60 modules available. As needed, ERP is also able to share the data from these processes with other corporate software systems. Another important benefit of ERP systems is that they allow companies to replace a tangle of complex computer applications with a single,integrated system.
You could think of ERP as the glue that binds the different computer systems for a large organisation. Typically each department would have their own system optimized for that division’s particular tasks. With ERP, each department still has their own system, but they can communicate and share information in a far easier way with the rest of the company.ERP systems integrate (or attempt to integrate) all data and processes of an organisation into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.
ERP is not just another level in computerisation. It streamlines the system and ensures adherence to the best business practices. While any other application software does the job of recording transactions, file updating and database management, the ERP aids in monitoring the fund flow by keeping track of each and every transaction, helps in maintenance of cash estimates and even aids the management in funds forecasting. Also, the ERP supports management of vendor chain and customer relations that gives it an edge.Many utilities have adopted the ERP system. For example, the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) is all set to implement the Enterprise Resource Planning (ERP) regime. The major areas to be taken up for automation include general ledger management, asset management, budgeting and costing, treasury and cost management, bank reconciliation, Management Information Systems (MIS), auditing, work order management and Accounts payable and receivable. The levels in the company involving finance and accounts are the Tirupati headquarters, the six circles, the scores of divisions and the numerous sections, besides the Electricity Revenue Offices (EROs) spread over the districts of Chittoor,Cuddapah, Nellore, Prakasam, Guntur and Krishna. While keeping track of every rupee earned is next to impossible in the manual system, it is also a daunting task in a computerized environment. However, it is easily manageable under ERP.
Another trend in ERP development and use involves vendors making the software available to client companies on the Internet. Known as hosted ERP or Web-deployed ERP, this trend has also contributed in making ERP systems available to smaller businesses. When a company chooses to run its ERP systems through a Web-based host, the software is not purchased by orinstalled at the client company. Instead, it resides on the vendor’s host computer, where clients access it through an Internet connection. Rather than dispersing ERP to multiple corporate sites and incurring the costs of many servers needed to run the software, Web-deployed ERP centralizes the system. The use of the Worldwide Web to access a single ERP system at a central location can enable companies to reduce their IT investment on two fronts − hardware and personnel. This new delivery model is changing the way large enterprises perceive the value of software.
Running ERP systems on a host computer relieves small businesses from the need to purchase a mainframe computer or hire information technology specialists to support the system. In addition, this arrangement allows client companies to save money by paying only for the ERP applications they use rather than having to buy a certain number of modules. In effect, ERP vendors act as application service providers (ASPs) for several client firms.The following case study will provide you more information about such a web- based system. It has been adapted from an article by Shri Sunil V. Rao, CEO,CLOSED GAP ENZEN, Bangalore and is thankfully acknowledged. He can be contacted at sunelrao@enzenglobal.com for further information. METER TO CASH SOLUTION – A CASE STUDY OF SOFTWARE AS A SERVICE
Adopting the integrated internet based Meter-To-Cash (MTC) solution is an excellent way forward for the power distribution utilities of the world. It can provide real time data and insightful information to enable the Discoms to take immediate corrective steps for reducing losses, and improving billing and collections. This solution should be built on open standards and should be able to seamlessly integrate with the existing applications at Discoms as well as open standard GIS platforms. This solution must be implemented using a‘SaaS’ (Software as a Service) model. It is increasingly being preferred by customers worldwide and is subscription-based rather than license-based contracts.
What is Software as a Service (SaaS)?
Software as a Service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery whereby software can be delivered to any customer including home consumers, small business, medium and large business without any need for investing huge sums in capital expenditure.
Key characteristics of software delivered by SaaS include
• minimal capital expenditure;
• network-based access to management;
• activities that are managed from central locations rather than at each customer’s site, enabling customers to access applications remotely via the Web; and
• application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics.
Types of SaaS Providers
There are two types of SaaS providers:
• The first has often been referred to as an Application Service Provider(ASP) where a customer purchases and brings to a hosting company a copy of software, or the hosting company offers widely available software for use by customers, such as hosting Microsoft Office and making that available across the web to customers who pay a fee per month for access to the software.
• The second type of SaaS provider offers what is often called “Software onDemand” where a company offers to customers, software specifically built for one-to-many hosting. This means that one copy of the software is
installed for use by many companies who access the software across the web.
ASP versus SaaS
The reason for moving away from the term Application Service Provider (ASP) is that the ASP generation was merely traditional client server applications with HTML front ends added as an afterthought. These applications were hosted by third-parties who ordinarily did not have application expertise, but were managed servers. Because the applications were not written as net-native applications, performance was poor and application updates were no better than self managed applications. By comparison, the current net-native SaaS applications or independent portions are updated by many on regular basis.This gradual shift in the terminologies is also a direct reflection of the change in the business requirements demanded by clients. The focus in SaaS is more on what the customer wants rather than what the vendor could give as was the case in an ASP.
Major SaaS providers in the world
• WebEx
• Salesforce.com
• Netsuite
• eMeta Corporation
Meter to Cash Solution – An Overview
The solution is ideally configured to automatically interface with Spot Billing Machines, any open GIS application and other applications such as Accountsreceivables, Banks, Post offices and Other Bill Collection Agencies (Fig.).
• General Ledger
• Assets
Apart from the modules mentioned above, a number of additional modules such as Payroll, Cash Management, Material Requirement Planning, etc., may be opted for depending on the nature of the utility’s requirement.We now describe ERP in brief.
Enterprise Resource Planning
Enterprise Resource Planning is an integrated information system that serves all departments within an enterprise. Evolving out of the
manufacturing industry, the term ERP originally implied systems designed to plan the use of enterprise-wide resources. Thus, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organisation’s own software with varying degrees of effort, and, depending on the software,ERP modules may be alterable via the vendor’s proprietary tools as well as proprietary or standard programming languages.
An ERP management information system integrates areas such as planning,purchasing, inventory, sales, marketing, finance, human resources, etc. It can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. It is thus a method of using computer technology to link various functions − such as accounting, inventory control, and human resources −across an entire company. ERP is intended to facilitate information sharing, business planning, and decision making on an enterprise-wide basis.For example, the same system could be used to forecast demand for a product, order the necessary raw materials, establish production schedules,track inventory, allocate costs, and project key financial measures. ERP acts as a planning backbone for a company’s core business processes. In addition to directing many of them, the system also ties together these varied processes using data from across the company. For instance, a typical ERP system manages functions and activities as different as the bills of materials, order entry, purchasing, accounts payable, human resources, and inventory control, to name just a few of the 60 modules available. As needed, ERP is also able to share the data from these processes with other corporate software systems. Another important benefit of ERP systems is that they allow companies to replace a tangle of complex computer applications with a single,integrated system.
You could think of ERP as the glue that binds the different computer systems for a large organisation. Typically each department would have their own system optimized for that division’s particular tasks. With ERP, each department still has their own system, but they can communicate and share information in a far easier way with the rest of the company.ERP systems integrate (or attempt to integrate) all data and processes of an organisation into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.
ERP is not just another level in computerisation. It streamlines the system and ensures adherence to the best business practices. While any other application software does the job of recording transactions, file updating and database management, the ERP aids in monitoring the fund flow by keeping track of each and every transaction, helps in maintenance of cash estimates and even aids the management in funds forecasting. Also, the ERP supports management of vendor chain and customer relations that gives it an edge.Many utilities have adopted the ERP system. For example, the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) is all set to implement the Enterprise Resource Planning (ERP) regime. The major areas to be taken up for automation include general ledger management, asset management, budgeting and costing, treasury and cost management, bank reconciliation, Management Information Systems (MIS), auditing, work order management and Accounts payable and receivable. The levels in the company involving finance and accounts are the Tirupati headquarters, the six circles, the scores of divisions and the numerous sections, besides the Electricity Revenue Offices (EROs) spread over the districts of Chittoor,Cuddapah, Nellore, Prakasam, Guntur and Krishna. While keeping track of every rupee earned is next to impossible in the manual system, it is also a daunting task in a computerized environment. However, it is easily manageable under ERP.
Another trend in ERP development and use involves vendors making the software available to client companies on the Internet. Known as hosted ERP or Web-deployed ERP, this trend has also contributed in making ERP systems available to smaller businesses. When a company chooses to run its ERP systems through a Web-based host, the software is not purchased by orinstalled at the client company. Instead, it resides on the vendor’s host computer, where clients access it through an Internet connection. Rather than dispersing ERP to multiple corporate sites and incurring the costs of many servers needed to run the software, Web-deployed ERP centralizes the system. The use of the Worldwide Web to access a single ERP system at a central location can enable companies to reduce their IT investment on two fronts − hardware and personnel. This new delivery model is changing the way large enterprises perceive the value of software.
Running ERP systems on a host computer relieves small businesses from the need to purchase a mainframe computer or hire information technology specialists to support the system. In addition, this arrangement allows client companies to save money by paying only for the ERP applications they use rather than having to buy a certain number of modules. In effect, ERP vendors act as application service providers (ASPs) for several client firms.The following case study will provide you more information about such a web- based system. It has been adapted from an article by Shri Sunil V. Rao, CEO,CLOSED GAP ENZEN, Bangalore and is thankfully acknowledged. He can be contacted at sunelrao@enzenglobal.com for further information. METER TO CASH SOLUTION – A CASE STUDY OF SOFTWARE AS A SERVICE
Adopting the integrated internet based Meter-To-Cash (MTC) solution is an excellent way forward for the power distribution utilities of the world. It can provide real time data and insightful information to enable the Discoms to take immediate corrective steps for reducing losses, and improving billing and collections. This solution should be built on open standards and should be able to seamlessly integrate with the existing applications at Discoms as well as open standard GIS platforms. This solution must be implemented using a‘SaaS’ (Software as a Service) model. It is increasingly being preferred by customers worldwide and is subscription-based rather than license-based contracts.
What is Software as a Service (SaaS)?
Software as a Service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery whereby software can be delivered to any customer including home consumers, small business, medium and large business without any need for investing huge sums in capital expenditure.
Key characteristics of software delivered by SaaS include
• minimal capital expenditure;
• network-based access to management;
• activities that are managed from central locations rather than at each customer’s site, enabling customers to access applications remotely via the Web; and
• application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics.
Types of SaaS Providers
There are two types of SaaS providers:
• The first has often been referred to as an Application Service Provider(ASP) where a customer purchases and brings to a hosting company a copy of software, or the hosting company offers widely available software for use by customers, such as hosting Microsoft Office and making that available across the web to customers who pay a fee per month for access to the software.
• The second type of SaaS provider offers what is often called “Software onDemand” where a company offers to customers, software specifically built for one-to-many hosting. This means that one copy of the software is
installed for use by many companies who access the software across the web.
ASP versus SaaS
The reason for moving away from the term Application Service Provider (ASP) is that the ASP generation was merely traditional client server applications with HTML front ends added as an afterthought. These applications were hosted by third-parties who ordinarily did not have application expertise, but were managed servers. Because the applications were not written as net-native applications, performance was poor and application updates were no better than self managed applications. By comparison, the current net-native SaaS applications or independent portions are updated by many on regular basis.This gradual shift in the terminologies is also a direct reflection of the change in the business requirements demanded by clients. The focus in SaaS is more on what the customer wants rather than what the vendor could give as was the case in an ASP.
Major SaaS providers in the world
• WebEx
• Salesforce.com
• Netsuite
• eMeta Corporation
Meter to Cash Solution – An Overview
The solution is ideally configured to automatically interface with Spot Billing Machines, any open GIS application and other applications such as Accountsreceivables, Banks, Post offices and Other Bill Collection Agencies (Fig.).
 |
| Meter to Cash Solution |
In order to implement this solution, utilities may like to implement a Pilot without any disruption to the existing business process. The solution must be hosted using the vendor’s own infrastructure, i.e., its own software, tools and licenses. During the pilot project implementation, the relevant data can be migrated into the solution, integrated with hand-held devices, consumption data captured and bills produced. These bills can be compared against the bills produced through the existing process, for validating accuracy. During the pilot the vendor can also strive to analyze and provide Real Time data,Balanced Scorecards and Decision Support Information to Senior Management to improve billing and collections. The implementation of this solution would entail and must ensure the following:
• setting up of data centre with adequate redundancies for disaster recovery and backup facilities,
• procurement of all necessary licenses,
• procurement of necessary servers,
• robust internet connectivity to the data centre,
• security management and intrusion detection,
• networking and fire-walling of the data centre, and
• provision of web-based interfaces to Meter to Cash (MTC) solution to allow existing systems and other third parties to interface with MTC solution.
This solution can make a large contribution to the power sector reforms by:
• making metering, billing and collection more efficient and less error prone;
• accurate monitoring of faults and pilferage by reconciling distribution transformer outputs with the aggregate consumption of the consumer meters;
• increase in accountability of employees;
• supply of raw data to aid energy accounting and auditing;
• always up-to-date Customer Information System (CIS);
• providing necessary statistics to aid in regulatory reporting; and
• enabling the solution to produce dashboard reports for operational, MIS and regulatory purposes, to aid the industry in its reforms process.
The SaaS model incorporates a transaction based costing for the usage of this solution. The charges will be based on the transactions, i.e., the number of bills generated each month for the consumer.
Benefits of Hosted Software
•The vendor is on the hook: The typical hosted software provider holds the responsibility for:
− managing both the software and hardware components of the application;
− network issues such as redundancy, data backup and disaster recovery planning;
− managing the data centre or centres that deliver the application; and
− upgrading the software automatically for customers on a regular schedule.
Simply put, hosted software can save a company the headaches of ongoing maintenance, time and money in IT support and equipment costs.
• Lower total cost of ownership (TCO): Hosted software carries a set price per user per month. Traditional software, even for small businesses,can cost thousands to tens of thousands of dollars in implementation fees,hardware, maintenance, services and support. With zero maintenance,end user support and administration costs coupled with comparatively low implementation and customization costs, hosted solutions offer a much better TCO than on-premises offerings.
• Scalability: Hosted offerings are designed and finely-tuned to scale seamlessly for large numbers of simultaneous users. As such, they are able to easily maintain performance levels and uptime as the organisation grows and the volume of data stored expands over time. Customers bearthe burden of getting on-premise solution, managing performance and maintaining uptime. They can involve additional costs in database licenses, skilled personnel, hardware and infrastructure.
• Frequent upgrades: Updates are made frequently and, for the customer,effortlessly. Because the software is delivered over the Internet, hosted providers have greater flexibility in upgrading the applications and rolling out changes to customers. Traditional software vendors, by contrast,might upgrade software once a year but the customers bear the burden of reconfiguring it and paying for the newer version. Using the hosted model means customers can do more to shape the application.
• Accessibility: Hosted software can be accessed from any Web browser around the world. Users in different states, countries or even continents can access the same information in real time without the delay of synchronizing off-network changes as is the case with a client-server on-premise solution, or needing additional infrastructure in the form a Web server that has to be purchased and maintained with a Web-based on- premise solution.
What is required is a forward outlook and keenness to progress and actively pursue avenues for using technology as an enabler to support growth ambitions and modernization initiatives. Such state-of-the-art offerings would give utilities the freedom to focus on their core competencies and singularly pursue the goal of efficient distribution.
The Meter to Cash Solution would enable dashboard reports in near REAL TIME and on Demand for Operational, MIS, decision support and Regulatory purposes. Key decision makers can use this to plan various initiatives that will ensure guaranteed reduction of AT & C losses, increase in revenue realisation and decrease of the arrears position.
In sum, by employing an integrated strategy, Information Technology can be used as a strategic tool for the electricity distribution business for achieving its key objectives of incorporating best practices, improving process efficiencies and delivering superior customer service. In this unit, you have studied the applications of IT in diverse areas such as metering, data acquisition and management, asset management and financial management. You have learnt about the hardware and software requirements as well as the deliverables in these areas. We now end the unit and summarise its contents.
• setting up of data centre with adequate redundancies for disaster recovery and backup facilities,
• procurement of all necessary licenses,
• procurement of necessary servers,
• robust internet connectivity to the data centre,
• security management and intrusion detection,
• networking and fire-walling of the data centre, and
• provision of web-based interfaces to Meter to Cash (MTC) solution to allow existing systems and other third parties to interface with MTC solution.
This solution can make a large contribution to the power sector reforms by:
• making metering, billing and collection more efficient and less error prone;
• accurate monitoring of faults and pilferage by reconciling distribution transformer outputs with the aggregate consumption of the consumer meters;
• increase in accountability of employees;
• supply of raw data to aid energy accounting and auditing;
• always up-to-date Customer Information System (CIS);
• providing necessary statistics to aid in regulatory reporting; and
• enabling the solution to produce dashboard reports for operational, MIS and regulatory purposes, to aid the industry in its reforms process.
The SaaS model incorporates a transaction based costing for the usage of this solution. The charges will be based on the transactions, i.e., the number of bills generated each month for the consumer.
Benefits of Hosted Software
•The vendor is on the hook: The typical hosted software provider holds the responsibility for:
− managing both the software and hardware components of the application;
− network issues such as redundancy, data backup and disaster recovery planning;
− managing the data centre or centres that deliver the application; and
− upgrading the software automatically for customers on a regular schedule.
Simply put, hosted software can save a company the headaches of ongoing maintenance, time and money in IT support and equipment costs.
• Lower total cost of ownership (TCO): Hosted software carries a set price per user per month. Traditional software, even for small businesses,can cost thousands to tens of thousands of dollars in implementation fees,hardware, maintenance, services and support. With zero maintenance,end user support and administration costs coupled with comparatively low implementation and customization costs, hosted solutions offer a much better TCO than on-premises offerings.
• Scalability: Hosted offerings are designed and finely-tuned to scale seamlessly for large numbers of simultaneous users. As such, they are able to easily maintain performance levels and uptime as the organisation grows and the volume of data stored expands over time. Customers bearthe burden of getting on-premise solution, managing performance and maintaining uptime. They can involve additional costs in database licenses, skilled personnel, hardware and infrastructure.
• Frequent upgrades: Updates are made frequently and, for the customer,effortlessly. Because the software is delivered over the Internet, hosted providers have greater flexibility in upgrading the applications and rolling out changes to customers. Traditional software vendors, by contrast,might upgrade software once a year but the customers bear the burden of reconfiguring it and paying for the newer version. Using the hosted model means customers can do more to shape the application.
• Accessibility: Hosted software can be accessed from any Web browser around the world. Users in different states, countries or even continents can access the same information in real time without the delay of synchronizing off-network changes as is the case with a client-server on-premise solution, or needing additional infrastructure in the form a Web server that has to be purchased and maintained with a Web-based on- premise solution.
What is required is a forward outlook and keenness to progress and actively pursue avenues for using technology as an enabler to support growth ambitions and modernization initiatives. Such state-of-the-art offerings would give utilities the freedom to focus on their core competencies and singularly pursue the goal of efficient distribution.
The Meter to Cash Solution would enable dashboard reports in near REAL TIME and on Demand for Operational, MIS, decision support and Regulatory purposes. Key decision makers can use this to plan various initiatives that will ensure guaranteed reduction of AT & C losses, increase in revenue realisation and decrease of the arrears position.
In sum, by employing an integrated strategy, Information Technology can be used as a strategic tool for the electricity distribution business for achieving its key objectives of incorporating best practices, improving process efficiencies and delivering superior customer service. In this unit, you have studied the applications of IT in diverse areas such as metering, data acquisition and management, asset management and financial management. You have learnt about the hardware and software requirements as well as the deliverables in these areas. We now end the unit and summarise its contents.
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