Following a meeting between federal government officials and the leadership of the Nigeria Labour Congress and the Trade Union Congress, Nigeria’s government has extended the suspension of the implementation of new electricity tariffs by an additional week up to October 19. The parties also agreed to reduce the tariffs by 10 percent for band A, 10.5 percent for band B and 31 per cent for band C.
While ongoing consultations between government officials and the labour unions may lead to further tweaks to the implementation of the new electricity tariffs, most distribution companies (DISCOs) already have several challenges on their hands.
One challenge is potential complaints from consumers about the quality of service. The new tariff bands are based on specific service delivery commitments by the DISCOs and the Nigerian Electricity Regulatory Commission, the industry regulator, has said that the DISCOs are required to compensate consumers when they fail to meet the agreed service level. Therefore, to dismiss frivolous complaints and to assess valid ones, each DISCO must be prepared to show how much power it supplied its consumers. However, doing so with the manual record keeping methods adopted by many DISCOs today can be challenging and problematic.
In addition, the new tariff regime elevates the need for greater transparency about information relating to electricity distributed to the DISCO’s feeder stations. Such insight eases the transition to a regime where the operations of DISCOs are increasingly scrutinized. DISCO operators can no longer afford to be sloppy with how they organize their operations but may struggle to monitor a complex value chain if they fail to improve how they capture information about what they do.
DISCOs will be under pressure to improve response times to address faults that cut off electricity supply to consumers. In the case of pre-paid customers, DISCOS will have to work out an efficient way to issue credit notes to compensate deserving customers. These require accurate data. Those who struggle to manage the requirements of the revised tariff environment may see their costs rise and revenues come under further pressure.
Cloud technology is underpinning solutions that are transforming how utility and other large companies with complex value chains are able to automate their operations and enhance the customer experience. For example, software as a service (SaaS), is a growing software licensing and delivery model in which software is licensed on a subscription basis. Adopters of such technology are able to achieve greater automation and efficiency in their business operations through collaborative tools for workflow management, inventory management and customer self-service. Some analysts have estimated that SaaS is currently a $158 billion market and is expected to almost double to $307 billion by 2026.
Crown Interactive’s CICOD suite of software have been successfully adopted in Nigeria’s power distribution sector to good effect. The great thing about SaaS is the flexibility it offers users to select what they need and avoid purchasing expensive off-the-shelve enterprise solutions with redundant modules. The CICOD product suite offers a workflow manager that enables the automation of approval-based business processes across departments, including complaint handling, task management and inventory request management. There is also the Energy Management Control Centre (EMCC) which can be deployed as a private cloud for the DISCO.
The EMCC is Crown Interactive’s control system architecture that allows DISCOs setup a utility network, read data from communication nodes and control feeders and distribution transformers as required, providing timely notifications of electricity downtime to the DISCOs.
Another valuable CICOD module is the inventory management system that enables efficient real-time allocation, disbursement, and tracking of business assets, minimizing losses and leakages in the process. This helps users adopt more efficient inventory management strategies such as just-in-time inventory.
DISCOs must embrace enterprise software as a way to manage the transition to a new tariff regime. Cloud technology offers a cost-effective way to automate their increasingly complex operations. Technology greatly enhances DISCO operations, shoring up revenues by improving response time to operational failures. Additionally, it allows DISCOs to truly redefine the customer experience in a market where consumer apathy and suspicion is rife. Imagine a world where consumers can verify if a DISCO is meeting its obligations under the new tariff regime by viewing the information on a website. With CICOD, this and more is possible at a price that does not break the bank.
-Wumi Oghoetuoma is the CEO of Crown Interactive, a software company with its head office in Lagos, Nigeria.
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