Saturday, 20 April 2013

A future full of energy, A future full of light

A few months back I got a rare chance to visit my native town near Patna in Bihar. Courtesy of this being a visit that was made after a whopping gap of 9 years, I couldn't help but feel flummoxed at all that caught my eye. There were certain stereotypes and certain predispositions which I had associated with my native place. These developed partially due to the reminiscents from the last visit and partly due to media reports that always promulgated the plight of the state. However, just as the media seems to be changing its stand and prejudices towards the state, so has the state transformed in what was unimaginable at one point of time.

The state has progressed and the progress has been exorbitant. What was once a small town that seemed so very secluded, has now become a hub of commercial activity.There are roads and highways that seem to be extending till eternity, connecting even the most remotest of places. And then there is a newly found prosperity which flourished as the natives of the place got a chance to capitalize on their talents and their expertise. What was once a place where people resided mainly in slums has now become a place with a pleasant visage of the newly built houses and the associated public infrastructure to supplement the development. So much for the progress but yet there is something which will take at least another decade to resolve - the Electricity Crisis !

When I roamed around the streets of the town during the day, bemused by the changes I noticed, I was really delighted to know that progress and true progress has actually touched this state. But as the clock struck 7 in the evening, darkness seemed to amass the whole area into its cloak. Not even a single source of light was there to be seen till people took out their torches, emergency lights and the evergreen candles. I waited for the power to come back. Having stayed in different metros, I knew power cuts are an inevitability but power almost always came back in a maximum span of an hour or two. But this time, the scene was different. The power came back only at 3 PM, the next day. And as if to add further woes to the tribulation, the voltage supplied was incapable of running almost any appliance - even an incandescent bulb ! It was the summers and I was almost soaked in sweat. I inquired a few  of my relatives about what happens when someone actually needs power in a town like this. They understood my predicament and told that even their need of power was desperate but asked me to stay patient till their time comes. I was rather bewildered. I was wondering if there was a pattern about the power cuts and perhaps this locality would get its chunk of workable power, sooner or latter.

In the evening, even the voltage that we got, was gone. I was angry. But then was the time for "our time" to come. There was a small cart attached to a mini truck and a humongous generator was being unloaded from it. In a matter of minutes, the original lines of power in our house were conjoined to the generator's output and every single appliance in the house commenced operation. I was somewhat perplexed and asked one of my cousins that what was the need of bringing a 20 KVA generator for a mere power cut. He replied that there are no mere power cuts and told me that every single time power went, it came back properly after 2-3 days at least.20 KVA generators are needed because the families are big and so is the consumption. That was the explication behind renting a generator during the meanwhile. I delved a little more into what my native members considered a blabber and too mainstream to talk on, but yet I continued. They told me that there were a few generator operators operating throughout that town and in case of a prolonged power cut like that, which is a frequent thing and happens once in every 10-15 days, they would lent the generators on a first come first serve basis. These local operators had 10-15 such generators and they would deploy all of them during these power cuts.I then inquired a little more about the pricing of the service and the utilization of the equipment. What I found formed the germ of an Idea. An Idea that may someday turn into a business.

I was stunned to know that the operating margin in this pied sized business is very high. The neighborhood was opulent enough to spend that extra chunk of money for the comfort of getting a power supply for all those 3-4 days when the power wasn't available. The system ran in a smooth flow of steps. The power cuts are more or less periodic and follow a set pattern. Every area in the town experiences a scarcity on fixed days of a month, with 1-2 days of margin. Hence the people would start booking the generators a good 3-4 days before such a power cut was either anticipated or scheduled to take place. The local papers in most cases were a step ahead in pronouncing the occurrence of the cut a good week in advance. Hence by the time the cut actually happens, the slots of all generators are already booked. Some people tend to book the generators for as long as the power cut lasts. Hence they pay a fixed amount and keep the generator in their premises as long as the power does not come back properly. The other scheme is that one can book the generator on a finite time basis where you initially book it for a day or two and then rebook it in case power doesn't come back within the stipulated time. Both schemes have pros and cons.The first scheme may make you shed a little more in case the power came back too early and the second scheme is such designed that the per day amount is much more and in the event of say a 3 day power cut, the second scheme will cost you around 15 percent more than the first one. Most of the people go with the first scheme. When I visited the town, the owners charged 1500 rupees for that first scheme. The average power cut duration is three days and hence the average turns out to be 500. The second scheme costs around 600 rupees per day.The rates seemed good to me as long as I didn't find out the missing link behind the gargantuan profit margins - you've got to buy your own fuel.

I was initially standing near the scene observing the generator being set up but then I saw one person from the family paying these people in advance for the diesel cans they brought. I was stunned to see the profit model. These generators were around 10 years old and yet the owner reaped in as much as 550 Rupees per day on an average without having to pay anything for the fuel. Considering the fact that these operators operate in a small loop of areas, all plagued with the power shortage, and subsequently deploy every generator at least 5-6 times every month, this would mean that every generator stays deployed for around 15-20 days every month, on an average. This would mean every generator earns around 550 * 20 = 11000 Rupees every month. There are 15 such generators with the owner whom we lent from and that owner would earn 11000 * 15 = 165000 per month just out of circulation of these generators. Assuming that the 3 people who transfer the generator get about 10000 per month, and considering a 20000 expenditure on transport and other inadvertent sources, there is a rock solid monthly profit of 115000. I surfed on the net to find out that such generators cost around 30000 and considering that one buys them in bulk, one can get them at around 25000. Hence 15 generators would cost 25000*15 = 375000. Given the rate at which profits are coming, the recovery would be made in 4 months and after that, the owner gets pure income of over a lac rupees a month. This, according to me, was the very reason that such a business sustained for such a long time.

I then took a few hours off to acquaint myself with the vicissitudes of the power situation in my town and nearby towns and connected villages. I found out that these places get power from the same grid and they get the power that is leftover after the main towns have consumed a substantial chunk of it. Hence, these towns always run with dwindling power supplies. I then looked at the prospects and found out that these places would get proper power in 4-5 years time when a proposed grid starts supplying more power to the state. However, it will take around a decade for the power situation to come to a stable state of affairs as the demand has also been increasing all the time.Moreover, I also tried to find out why these people don't buy their own generators. I found that people don't want to run into the trouble of maintaining a 30000 Rupee machine and one more thing is that the town has just two petrol pumps. Hence, one has to travel 20-25 Kilometers to buy the diesel, which these operators supplied with the rented generator at no extra cost.And the most encouraging thing about this business is that there are at least a score of towns similar to mine, all in close vicinity, which have this similar pattern of power cuts.

So it was then when it struck in my mind. For me always having a craving for management and entrepreneurship, I started seeing this as a strong and a very potential area for starting a business. I saw this opportunity because the existing ways in which this system is being handled has some inherent flaws. One, the rates being charged are too high. One reason for this is the monopoly that has crept in with just a few owners operating in the realm and all of them following the same pricing structure. As it turns out, even a per day cost of around 300 Rupees is enough to get a recovery in 10-12 months. Even after scaling down the base rate to such an extent, one would get a good enough profit. But what I intend to do in order to increase the profits, is to increase the running time of every generator. By making a network of a large number of generators, and having more men to transfer them and covering more and more nearby areas, one can get a utilization of 23-25 days per month. The concerned areas don't fall short of power all at the same time.They fall short in a criss cross pattern. Hence, by covering more and more areas, the utilization of generators would only increase. It's true that transportation cost too would increase, but the heavy profit margin in one single extra transaction negates that escalation. The generators are rock solid machines and would be at ease even if they are run for 365 days a year. The second change I intend to bring is a more structured and variable pricing. Instead of asking for the same cost on zero power and less power days, I intend to ask less for less power days. This would make the perspective customers think once about shelling just that little extra money for that extra comfort of getting usable power.In a nutshell, my business plan is about utilizing every single generator in the best possible way. The men employed in the business would not be just a means of transporting a generator. They would be the ones who would be the local contact person to book one in case of need. They all have to be connected with each other at each and every point of time. They all have to be aware of the status of a generator at each and every point of time. This is where the need of automation comes in. This is where Microsoft Office 365 comes into the picture.

As I envisage, one can start this network with 2-3 towns and 20-30 generators. But with time, this business can grow up to 20-30 towns with at least 500 generators. And given the opulence and the enormous need of power, even this big a network will not suffice, thereby inducing more flux of growth. The extremely low pricing will act as an added impetus. Hence to manage such a large network of generators with just 1-2 personnel managing every 10-20 generators in a business zone, all these personnel in all these zones will have to stay connected to the surrounding business zones. Some areas will at times need more generators and some areas will at time need less. This is where the need of proper booking and record keeping comes in. By using a consummate product like Excel and Word, this can be done with ease. And the sharing facilities of sharepoint, render it almost a child's play for all these zones to stay acquainted with the upcoming demand of generators in the nearby zones. Hence, at every point of time, there would be excel sheets and word documents maintained for every generator and every zone, and these would be accessible to all the men on field. When there's a need for a new generator, the sheets for generators will come handy to find out which ones are free. And the sheets of zones would be used to transport generators at the right time and to see if a nearby area is falling short or has a surplus of generators for the upcoming days. The situation will be extremely dynamic and without sharepoint and simple yet powerful tools like MS Excel and Word, this wouldn't be possible.

Then comes the second aspect of my business - communication. With IM features,Online meetings and voice calling provided by Lync,it would cater to all the communication needs at just the initial cost. Comparing this with using face to face communication and normal cellphone calling, the hold on costs would be considerable. One thing is that face to face meetings in such a business would serve only as much of purpose as an online meeting through Lync.And at the same time, Lync would save the personnel from mustering at a point and save their cost of commute, thereby saving substantially and yet ensuing the communications with efficacy at a very low cost.

Third important aspect of my business would be the infrastructure.Courtesy of these towns being in an area where electricity in itself is the problem, a network of pcs can never even be thought of. However, the mobile networks in these areas are good and support data transfer and even 3G. Hence, the field men of my business would be using tabs with 3G connections. Hence we can either use Webapps on our tabs which would allow us to use office products online through our browsers or we can actually save the office suite on the tabs because Office 365 can run on virtually any platform and any architecture.This would go a long way in narrowing our responsibilities and the circle of considerations while putting the initial setup.  All that we'll be needing would be tabs with an internet connection and all of our data would be stored in a cloud whose security,maintenance and accessibility would be ensured by Microsoft. Hence for a business which is so niche, Office 365 would go a big way in parrying all the infrastructure related burden away from us. The field men would use the Excel,Word and other products of the office suite as and when they need and would stay connected through Lync. And all our data would be available to us as and where we like. And not to forget, the sharepoint would allow multiple field men to make changes to the documents simultaneously, which is the heart of the dynamicity of this business.

All in all, in the beginning, this would be a small business with very little accountability and management. However, as the business would cross the 30-40 towns barrier, there would be a need of bringing a dedicated small management and making the task somewhat easier for the field men. Since these towns are not erudite and apposite for having a management set up on their own, the management and the hierarchical responsibilities would be setup in a remote place. Hence the model would work with the field men booking generators and supplying generators but the management, working from some other place, deciding which generators from one zone to be supplied to some other zone. But even after this restructuring, the same Office 365 suite will suffice for all the needs. The field men would still work with the same tabs.Now, the field men would create and edit the booking documents and sheets and upload them on cloud, from where the remote management can make modifications at the same time and would access these documents to create the utilization charts of generators. Different members of the management would then work on these utilization charts simultaneously, courtesy of cloud and sharepoint, and would generate supply charts that the field men would view on the cloud and would supply the generators accordingly. And the fact that Office 365 obviates any client platform dependency makes the task of putting up the management infrastructure task all the more easy. Like always, the management and the field men can use the single Lync to connect among themselves and connect with each other, thereby handling all communication needs of even this scaled up business.

With time, the business may expand to more areas of Bihar and to more areas of states with a similar predicament. Hence the same model would be replicated with management remaining the same but new field teams being constituted in these areas. Hence more and more connectedness would be needed amongst all these units and Office 365 will take care of that for us. As the business will grow, so will the management. And then we would have the need of our own email to make actions more informed and more accountable. With Outlook in Office 365, we will get an email service with our own domain name and with 25GB of inbox space per user. Hardly would any user need anymore than that. And with time, as our business expands, we'll be needing to go global so as to attract more and more venture capitalists and prospective investors whose investments will help us in expanding our models. This is where the need of having an online portfolio on a website comes in. Office 365 allows us to create websites with ease and also gives us the option of hosting them our own domains. Hence Office 365 will take care of these two additions.

With time, we will also be propelled to have more things shared between the management and the field sites. In case of such a restructuring, the Team sites feature would come handy. For our being a business where awareness of each other's tasks and outputs is of the paramount importance, team sites would help the entities share each and every sort of information, be it calendars,reports and would also keep all of them in sync. As the model would be transported to other places, some kind of training may have to be imparted to the new members of the organization. Lync would once again come at our disposal with its rich set of interfaces. The trainees could be trained online through conferences and through world class presentations which PowerPoint now has a reputation of helping in. All in all, virtually everything in my business could be managed through Office 365.

Coming to the more abstract picture, by going for Office 365 instead of a mere automation alongwith separate processes for communication, we'll not only be incorporating all units into one single conglomerate but we'll also be making every one's task simpler.Moreover, Office365 ensures a 99.9 percent uptime and is also very scalable. Since our business is something which will stay more or less the same with just the scale being extended at every conjecture, Office 365 seems to be the most apposite way of handling all the operations. It's reliable, administration is very simple and for a location like this, seems to be the perfect candidate.When 10 years down the line, these towns start getting ample of power on their own, we'll move into new avenues. During those times, villages would be facing the same problems in which they would be having power but only intermittently. We may be needed to shift our operations from one area to another but the intrigue of cloud services provided by Office 365 would make sure that the management still works from the same place, hence helping us substantially. I plan to do this business not to reap in huge benefits but to bring some more happiness in the lives of those who are our sojourns in our journey. I dream of a future that is full of energy, I dream of a future that us full of light.

In order to know more about Office 365, please visit this link.      

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