Opinion

Empowering India — A business perspective

India Inc. suffers direct tangible and quantifiable losses of up to 20,000 crore per annum (approx $4.6 billion) due to power outages and poor quality of power. The key to being a player in a fast-paced, competitive, globally interconnected economy is to configure network uptime solutions that allow businesses to run independent of the prevalent geographical power conditions, says Shrikant Bapat

Over 50 years of planning and putting up 1,00,000 MW generating capacity with associated transmission and distribution systems later, India continues to be a power-starved nation.

Power shortage is a result of low capital investment in the sector and inefficient operations by the state-controlled enterprises. Our energy shortage is at 7.5 percent on a nationwide basis and the peak deficit is at over 12 percent. The Central Electricity Authority (CEA) has estimated that India needs an additional 1,00,000 MW at an estimated investment of approximately $100 billion to meet its power requirements over the next 10–12 years.

Power deficiency is a norm for most Indians and more than one-third of the time, when a business suffers downtime; it can be attributed to power failures and surges. The crippling effect of lack of power or poor power quality can be seen across India and is not limited to rural areas alone. Over 60 percent of Indian corporates face power disruptions more than once a month, of which more than 15 percent suffer more than twice a day.

The power situation and quality does differ across states, as it is a combination of state and central government funding that helps build power infrastructure. What does remain the same, though, is its devastating effect on businesses and the economy.

While we may believe that the power situation affects verticals that either require customer interaction or are healthcare related, e.g. telecom, hospitals, ITES and tourism, the reality goes far deeper. Power may be the most critical aspect to ensure business continuity for these sectors but others like BFSI, manufacturing and IT services are also in queue.

For all these industries, loss of power has a cascading effect that affects business far beyond just bottom lines. Downtime losses can be categorised into three primary areas: Tangible and quantifiable, tangible but unquantifiable and intangible. The tangible and quantifiable losses include loss of man/machine/air hours, productivity, quality reject rate and restart time. Tangible but unquantifiable losses encompass data loss, long-term damage to equipment and communication disruption. The third, most critical but often-overlooked area consists of intangible losses: loss of reputation, goodwill and confidence among customers, shareholders, vendors and partners.

While the average time for restoration of power and business lies within the timeframe of half to one hour, the impact could already be tremendous—India Inc. suffers direct tangible and quantifiable losses of up to 20,000 crore per annum (approx $4.6 billion) due to power outages and poor quality of power alone.

As industries in India modernise, markets develop, and customers become more discerning and demanding, businesses will increasingly feel the need for preventing breakdowns and downtime in their networks. This will drive demand not only for single products but also for a range of power conditioning products that work as a solution to assist maximisation of network uptime.

One primary myth is that the more superior the power infrastructure, the lower the power conditioning spend. This would mean that evolved economies like the US invest far less in ensuring network uptime. In fact, the US, where power quality is hardly an issue, the network uptime market is at least 30 times bigger than the Indian market. The reason being that these products are an integral enabling part of an advanced, sophisticated and highly interconnected economy, ensuring high service levels demanded by customers.

Initially, companies focused on getting their business in place as fast as possible, to derive an early-mover advantage. Many of them did not consider the extraordinarily high costs that network downtime could have on their businesses. In an unconnected manual operation, breakdown of any one element can be easily worked around. However, the impact of network downtime on an interconnected system can be catastrophic, as there is no manual backup available and everything comes to a grinding halt. Such downtime not only directly influences business revenues but can also drive customers away.

The key to being a player in a fast paced, competitive, globally interconnected economy is to configure network uptime solutions that allow businesses to run independent of the prevalent geographical power conditions. These solutions need to be configured into the network blueprint and those that do not are now working on retrofitted uptime solutions.

Shrikant Bapat is Emerson Network Power India’s country champion for uptime solutions. He can be contacted at shrikant.bapat@emersonnetwork.co.in