Before you start consumer indexing...

There has been a huge hue and cry about the unavailability of consumer data with the Indian utilities. However, the question that needs to be asked is that whether we have really made an effort to collect the right data set? And if we have, do we have the processes to continuously update the database and maintain it?

In this post, I've tried to list down baby-steps that would go a long way in creating a reliable and comprehensive customer database through the Consumer Indexing (CI) process.

# 1 Create consensus on how the data is required across the teams within utility 
A lot needs to be done to really come to a common consensus across the utility stakeholders about how the utility plans to use the consumer data, not just to create a database because it's a mandate in the contract. This would also require the utility to project and decide how the data will be maintained finally when the utility operations smoothen up in due course.

Further, one also needs to take a call on what data is the priority and when and how it will be collected.

# 2 Create a methodology to collect the data
Now, most widely used methodology currently adopted is the consumer surveys or consumer indexing, as many call it. However, the whole process is extremely tedious and static. One needs to think destructively to really create a methodology which will be, not just fast, but also reliable enough to feed data continuously to the other internal teams. 

This could encompass use of social media to really entice and engage the customers to voluntarily post their data and update their data.

What precaution needs to be taken is to adopt a infrastructure to really accept data from multiple sources and consolidate the same into one piece of data.

# 3 Support systems needs to be designed and put in place to receive and organize the customer data
As the process of consumer data upgradation picks up pace, the utility should really be ready to receive huge chunks of data from various sources - viz. legacy systems, new connections, on-field checks, consumer indexing process, social media, etc.

I believe that MS Excel is fairly strong a tool to manage such data, provided the data structure is correctly created. At the same time, appropriate end-to-end integration needs to be done for the data collection methodology.

# 4 Selecting the right tool for the right data
GIS systems, though being one of the latest of technologies adopted by the utilities, has a major drawback. The data once imported into a GIS system is static. A GIS system will always take only that data as input that you'll feed to the system without doing any sanity check.

Now this creates a major loop hole in the system that can only be fixed by selecting a robust tool for data collection. This tool should also take into account that at times, the data might need to be collected from the field. Our experience in the field of customer data collection has proved that even a simple smart phone integrated with web-based forms is good enough. However, a well-designed consumer survey form is the easiest of all techniques used to initially populate the customer database.

Once the base-data is ready, the Billing Centers and Customer Care Centers should be developed to act as the nodal touch-points to gather the customer data on a more regular process.

# 5 Create the right training and monitoring modules
Even with the best of the methods and tools, without a systematic training and monitoring methodology, a good consumer indexing process could go for a toss. Right tools for training, and data audits are indispensable parts of the CI process

One of the speakers at the recently concluded India Utility Knowledge and Networking Conference (12-Feb-2013, New Delhi) pointed out that the utilities will go slow when it comes to adoption of technology and partner with smaller, local players to help them roll out the operations. We believe that there is a whole lot of internal thinking that needs to go in to really ensure that the utilities hit the ground running. Lack of clarity from the utility, coupled with the inefficiencies of the local players could kill the effort spent in the consumer indexing process.

Further readings: Putting your best foot forward - Best Practices in Consumer Indexing

Optimum infrastructure planning and better utilization of existing infrastructure: An alternative to new capacity building

Driving further into the 2010s, one gets a feeling that inadequate and poor performance of infrastructure available present a grave economic as well as social problem for economies. For economies to meet their full growth potential along with human and economic development, the lever that's imperative is more investment in infrastructure, be it transport or grids or water pipelines.


As we stare at the wide gap between existing infrastructure and the one required for optimized growth, one of the major concerns is how to find the money to fund the bridge. However, one of the other key factors which one needs to consider is to improve planning, delivery and operations of the infrastructure to get more and high quality capacity for less money to improve infrastructure efficiency. The attention needs to be focused on how governments together with the private sector, select, design, deliver and manage the infrastructure projects and make more out of the existing infrastructure available.

The exhibit below shows the estimated infrastructure sector-wise investment required in the period 2013 - 2030:

Sector-wise investment required in global infrastructure

The key challenges in the poor service delivery of the infrastructure are:

• inaccurate planning and forecasting leading to poor project selection
• bias of the public administrations to build new capacity rather than make use of existing ones, leading to more expensive and less sustainable infrastructure
• lack of incentives, accountability, and capabilities clubbed with risk aversion towards new technology and 
• a general inability of the public administrations to negotiate on equal terms with the infra developers, thereby leading to inefficient oversight and poor performance monitoring

The levers controlling the cost efficiency of the project portfolios of economies are:

1. Improving the project selection and optimizing infrastructure portfolio - 
• Clear definition of needs for the infra projects together with the due consideration provided for complimentary capacity planning is required to ensure lowered spending on projects
• Sophisticated evaluation methods to determine costs and benefits and prioritizing the project selection based on transparent, fact based decision making, is another critical factor
• One estimates US $200 billion saving in the infrastructure spending globally, if the project selection is done appropriately
2. Delivery Streamlining -
• Heavy investment in the project planning and design phase bears an importance in stream-lining the project delivery
• Appropriate incentives need to be designed and incorporated into the contract design helps in achieving prescribed performance specification
• An estimated saving of US $400 billion annually can be achieved by streamlining the project delivery 
3. Optimizing existing infrastructure assets - 
• One may end up with a savings of US$ 400 billion a year by boosting the asset utilization, optimizing maintenance planning and better demand-management. For eg., reducing transmission and distribution losses in water and power may come at a nominal cost of just 3% of the cost required for equivalent new production 
• Governmental measures, through the use of tools and charges to allow the demand management, are an effective solution for greater benefits 
4. Up-gradation in infrastructure governance systems - 
• A wholistic understanding of broad socio-economic growth and common understanding between various infrastructure development authorities, is basic requirement in the governance of infrastructure
• Clear division of technical and political responsibilities for infrastructure management will be required to ensure a more transparent and efficient asset management
• Appropriate role-definition for public and private players providing for role clarity on market structure, regulation, pricing and subsidies, ownership and financing, is the key
• Most importantly, a trust based engagement of all stakeholders through-out the process is must to avoid sub-optimal solutions and unnecessary delays

The figure below shows an estimated savings that can be achieved by implementing appropriate measures towards optimum infrastructure deployment:

Estimated savings possible through optimization in infrastructure portfolios and better asset utilization

Ref: Infrastructure Productivity: How to save $1 trillion, January 2013, McKinsey Global Institute

Efficient Billing and Collection - Key to reducing NRW

While exploring the various methodologies used by the water utilities to reduce Non-Revenue-Water (NRW), one of the better avenues available is achieving higher efficiency in the billing and collection processes. This blog explains the ideology behind the principle of higher billing and collection efficiency for reduced NRW.

Now, the main components of losses in the whole water distribution system and the details of the commercial losses are explained in the figure.

Categorization of losses

Billing and Collection efficiency are the customer facing processes of the utilities and are quite independent from the other internal processes. Whatever consumer meter data is read and recorded, is used for billing. Further to that, recoveries from the consumers who are billed, is to be made. And hence, we are talking of Billing & Metering efficiency as a combined package, and area of focus.

Improvements on these parameters are measurable as well as traceable to a bit higher degree than most others. Above all, these are processes which an utility can outsource to a vendor managed process. Optimum service delivery agreements and appropriate process control, guided using a Balanced Scorecard, can be designed and implemented, and therefore, do not burn a hole in the pocket of the operator to set up.

Recommended readings:

• Introduction to The Balanced Scorecard Approach
• Improving revenue cycle efficiency for high performance 
• Improving efficiency in customer service without reducing customer satisfaction

Challenges in and Levers for success of the 24x7 water supply projects in India

As one wonders what has been holding back the operationalization of the 24x7 water supply projects in India, we thought of penning down our observations around it.

Even before kicking-off the operations, one observes that the long gestation period (5+ years) to engage and realize even first pilot is a show-stopper. This is primarily because of:

• lack of standardization of the model, and various agency issues at Central, State & ULB level
• delays in contract sign-off & getting consensus on SLAs and new Tariff agreement
• Delayed financial closures - constricted investments flow from investors, because of perceived high risk of regulated (& politicised) utility

Levers for Successful Implementation of 24x7 Projects

As the operators take-over and start the operations, the first challenge hitting them in the face is the inaccurate baselines. Revisions in tariff, SLAs, employee deputation follow. The lack of education of customers, employees and local politicians on the PPP models affect all the other stakeholders. 

The nascency of the industry has created an acute shortage of skilled middle management resources that are ready to engage on-ground in Tier-2/3 towns. Further to this, the lack of investment from operators in Strategy, Structure, Systems and Processes, and doing it right from long term perspective creates a totally different shade of problems.

The technological levers of GIS modelling based on low confidence data collection, and fast obsoletion, no useful optimization and design possible. Only static view is captured on GIS and no real  updates happen in the system. Even though water metering (bulk and end-customers) and regular auditing is being stressed upon & invested in, no useful actions are enforced based on analytics. (Power sector has long been metering and doing energy audits, but losses have only increased, because of missing actions. Water is just starting to walk on same trail, and will likely see similar results.)

Finally, there seems to be a total lack of SLAs performance monitoring and enforcement institution. This gives rise to ever-moving targets, and cross blaming.

Overall, currently Management change, and Technology are being stressed upon for the success of 24x7 water supply projects. We believe that there is a need for two additional levers - Performance Monitoring and Customer Engagement, to bring effective Change Management. We strongly believe, that its operationalisation of these models that has to be improved, and rest will follow.