2.0 OVERVIEW OF LAHORE ELECTRIC SUPPLY COMPANY (LESCO) PAKISTAN

2.1 History

The electricity supply service in Pakistan, initially, was undertaken by different agencies, both in public and private sectors in different areas. In order to provide for the unified and coordinated development of the water and power resources, Water and Power Development Authority (WAPDA) was created through WAPDA Act, 1958. In 1994, Government of Pakistan approved the strategic plan of restructuring and privatization of power sector. As a result, power wing of WAPDA was unbundled into twelve companies for generation, transmission and distribution of electricity. Lahore Electric Supply Company (LESCO) was formed in March, 1998 with the aim of commercialization and eventually privatization.

2.2 Region-wise Segmentation

LESCO holds the Distribution license from National Electric Power Regulatory Authority (NEPRA) to supply electricity in the areas that covers Civil Districts of Lahore, Kasur, Okara and Sheikupura. It serves over 2,000,000 customers 24 hours a day, 365 days per annum. In order to provide un-interrupted electric supply and quality service to customers, LESCO has divided its jurisdictional area into six distribution operation Circles.

2.3 Organizational Structure

According to Balle, M (1996) organizations represent systems, not just structures. They are composed of interdependent people who rely on another for work-someone starts it, someone delivers it to the customer- for relationships and for self-realization. Likewise, in LESCO Superintending Engineer looks after the affairs of the whole Circle as being an incharge through functional/administrative control over various Divisional and Sub-Divisional Engineers including their liaisoning offices (WAPDA, 2000). However, Figure 1 shows the organizational structure of LESCO as being the focus of this study.

3.0 A SUMMARIZED VIEW OF INFORMATION SYSTEMS IN LESCO

As, defined in the mission statement of LESCO that the primary goal is to supply the un-interrupted electricity and quality services to all category of consumers at the minimum possible cost (Mission, 2009). Keeping in view the mission statement, major milestone was set for LESCO Main Computer Centre to computerize electricity billing and collection procedures, which was met through in house development of billing and collection software. A brief note on each of these systems is as follows:

3.1 General Description of Billing System

Meter reading and billing are carried out over all available days in a month in a complete cycle process in order to provide service to different categories of customers. Meter reading lists are prepared in advance by LESCO Main Computer Centre Lahore and its sub-centre at Sheikupura, which provide services to Sheikupura Circle only. They are sent to the liaison Divisional Office that is Revenue Office, who arranges for meter readings to be entered on the lists by the meter reading staff in the Sub- Divisional Office, follow up meter readings are prepared manually in Sub-Divisions. After entry of the readings, the meter reading lists are returned to the Revenue Office where the control records over the computer billing are maintained. After entry in the Revenue Office computer Records the meter reading lists are collected together in a batch file for each sub-division. The batch files are then passed to the LESCO Computer Centres on a storage device for further processing. Consumer’s bills are prepared in the Computer Centres and sent to the Revenue Office for distribution to consumers through Bill Distributors, who are under the control of Sub-Divisional Officer (WAPDA, 2000). Figure 2 shows the block diagram of the system.

Figure 2— Block Diagram of Billing System

Director Customer Services

Billing Schedule

Computer Centres

VAX 4000Server/VMS/COBOL

Revenue Office

(Computer Section)

Printed Reading Lists and other reports

Batch files alongiwth updated Meter Reading lists

Sub-Divisional Office

Printed Reading Lists and other Reports

Manually updated Meter Reading Lists

MIS Reports

Source: Developed for this report

The following reports, lists and notices are also forwarded by the Computer Centres to Divisional and Sub-Divisional Engineers for taking appropriate decision/action (WAPDA, 2000):

Customers’ assessment list showing the charges on each bill along with running total and also the total number of consumers connected, temporarily disconnected and with equipment removed in each batch.

Disconnection notices, which are sent to the consumers, who have not paid their bills by due date.

Each Month Computer Centre prepares analysis of energy sales by Tariffs for each feeder, each Sub-Division and Division and analysis of outstanding debts showing arrears by Tariffs and age.

Feeder wise line losses for reach Sub-Division

3.2 General Description of Collection System

Customers pay their current bills, Demand Notices for new electricity connections and reconnection fee for restoration of disconnected supply to the specified banks and post offices. The bank/post office receives the bill or Demand Notice, enters the receipt on the Banks scroll, and retains the counterfoil. Banks daily sends a copy of bank scroll and counterfoils to the Revenue Office. The Revenue Office Accounts section checks the bill counterfoils to the bank scroll for any discrepancy/error. The scrolls and counterfoils are then sent daily to the LESCO Computer Centres and where each consumer’s payment is processed by the Computer into the Consumers ledger database. The Computer supplies a total of cash posted to each billing batch and total of unidentified cash, new connection/ reconnection fees and other receipts, to reconcile with the total of all bank scroll for each Division. However, in the event of difference not being discovered during this check Computer Centres will process the amount shown on the counterfoils and return the scroll to the Revenue Office for re-checking and verification. Moreover, the bank branch remit the amounts collected to collection account in their local head offices as designated by LESCO and send a copy of the bank statement to the Revenue Office indicating total money received during the week and money remitted to the Head Office Collection Account each week and at the end of each month. The Revenue Office Account Section reconciles the bank statement with the report forwarded by the Computer Centre and sends a copy of reconciliation to the LESCO’s Finance Director (WAPDA, 2000).

3.3 Recent Improvements in the Payment Channels of Collection System

Electricity bill payment was very tedious task as customers had to stand outside banks for an extended period of time due to manual procedures of payment. Also, there were issues such as bank timings and delays in remittance processing. Realizing the need to resolve the quality of service to customers, Chief Executive Officer LESCO decided to explore the payment channels. LESCO Computer Centre took the initiative and proposed a plan for starting e-service and printing of machine readable electricity bills. Accordingly, the system was formally launched from March, 1995. At present, 355 branches in LESCO are equipped with this system collecting about 25% of bills. However, the bills are paid at designated bank branches, post office and retail stores as usual, but with a technical difference. The bills are scanned by the cashier using a barcode scanner just like a retail store cashier does for grocery items. With a single scan, all the information encoded in the barcode is instantly transferred to the software. In this way, bank cashiers can generate daily/monthly scrolls and collection summary (Collection, 2009). Figure 3 shows the cashier user-interface of the cash collection software.

Also, the customer can deposit electricity bill using LESCO’s website, wherein he/she is required to login by providing his/her unique electricity bill reference number. Thereafter, s/he will enter the debit/credit card information for making the payment, which is then referred to the Card Processor for verification and charging. If the card got validated the amount will be credited to the consumer account and transaction will be committed to the database. And online receipt is provided to the consumer for printing(Collection, 2009). Figure 4 shows the network diagram of current collection system.

As, depicted in Figure 4 the collection data from Banks is transferred to online servers on daily basis using a simple internet connection. Alternatively, if no internet connection is available a collection file may be generated and carried on a portable media. Hence, the billing data is uploaded to the online server whenever it experiences any change. Customers are able to access true online web-based services at the company website, which includes the following:

• Viewing monthly bills
• Printing duplicate bills
• Payment
• Consumption & Payment history
• Account Status

3.4 Payroll Information System

Payroll of various departments of LESCO is prepared by the Computer Centre on monthly basis. Master files for officers and staff are maintained separately. Data relating to each employee of a particular department is stored on respective master file. The Payroll Master File contains one record for each employee. The main attributes of payroll data are:

Department Code

Employee Code

Processing Code

Name & Designation

Station Code

Pay Account Head

Conveyance Allowance

Medial Allowance code

Income Tax Deduction

Union Fund Deduction

GPF Number

GPF Deduction

voluntary contribution

National Tax Number

Type of Advance

Total Amount of Advance

Bank Branch Code

Bank Account Type

The records in the File are maintained sequentially (Sorted on Department Code and Employee Code). Data is received from various departments on prescribed Performa’s by the coordination section of Computer Centre. The Data coded in these Performa’s can be New Addition of an employee’s payroll data, a Change in an existing record or deletion of an existing record. Figure 5 shows the Data Flow diagram of the Payroll System.

Emp. File

Pay Rates

Employee

Validation Check

Compute Gross

Produce Cheque

Compute. Net Pay

Determine Deductions

Tax Table

Personal Data

Account Rerecord

Payments and Deductions

S.S Data

Figure 5— Data Flow Diagram of Payroll System

Source: Courtesy of MIS Department, LESCO

Data is entered into the Computer through the Entry Machines by the Key Punch Operator. After Entry an edit List is prepared through edit listing program. This List is thoroughly checked by the Data Coordinators with the actual data on input Performa’s and the punching or coding errors are removed.

Any change, addition of new record or deletion of existing record is intimated by the concerned department to Computer Centre on prescribed Performa’s. Using this data, Master files of officers and staff are updated. After updation, different types of output reports are prepared, which includes:

Payroll Listing

Listing of different types of schedules

Account Head wise Summary

Pay Slips

Bank Summary Etc

Reports are sent to respective departments after through checking.

Also, every year in the first week of December when Payroll processing for the month of November has been completed the annual increments are assigned to the Pay of each employee in accordance their respective scale of pay. A Pay Fixation list is prepared prior to the running of Pay Increment step which shows Current Basic Pay with the addition of one increment. This department wise list is sent to each department for checking & verification. If any department wants to hold the increment of an employee then the action is taken accordingly.

3.5 Management Reporting Systems

At LESCO Computer headquarter; two Alpha 2100 computers equipped with Alpha processors have been installed. These computers are being optimally utilized to assist in timely analysis, generating vital information for the top management. For instance, division-wise computerized receivables reporting and monitoring system providing twenty different arrears analysis reports have been expanded to provide tariff wise information as well. These reports have also been further extended to support monitoring at the sub division level. Moreover, Performance data monitoring report reflecting various types of billing, consumers’ statistics and line losses monitoring system (Technology, 2009).

4.0 CRITICAL ANALYSIS OF INFORMATION SYSTEMS EMPLOYED BY LESCO

Information System (IS) is defined as an organized combination of people, hardware, software, communications networks, and data resources that stores and retrieves, transforms, and disseminates information in an organization. Importance of information management is highlighted by the fact that in addition to capital, labor and land, primary factors of production also include material, energy and information. As, the world is making a rapid transition from an industrial society to a service-driven economy, information is becoming the catalyst for economic development and change. In view of above, it may be argued that effective Information Systems play a vital and expanding role in business activities, practices and processes. Furthermore, business professionals rely on variety of information systems that uses various Information Technologies, which refers to the various software and hardware components necessary for the system to operate(). In short, computer-based-information systems use the following technologies:-

• Computer hardware technologies
• Computer software technologies
• Telecommunications network technologies
• Data resource management technologies

Moreover, rapid advances in Information Technology (IT) are likely to result in shifts away from traditional role for both the IT professional and the Information users. A new generation of skilled users will participate in the development of mission critical applications and the IT department will move from a centralized repository and control of information into the business function areas as client-server technologies replacing main frames. the 21st century Chief Information Officer (CIO ) will be expected to enhance the value of information at multiple points along the value chain and his/her responsibility will extend far beyond the traditional boundaries of the IT department. Indeed, the CIO will be required to exercise leadership across the width and breadth of the enterprise. From the forgoing discussion, it can fairly be deduced that the role of IT department has moved from one of technical implementation to strategic planning and from reactive support of business to driving innovation and competitive advantage.

There is natural decay of business processes over a period of time because systems are designed years ago when both the organization and available technology were very different from today. Likewise, if Billing System of LESCO is analyzed from today’s technology perspective then it has become a legacy system and no more delivering optimal performance and quality service to its internal/external customers due to manual procedures involved. Site-visit reading of residential power , water, and gas meters is a tedious, inconvenient and prone to human error. Moreover, it is not always guaranteed that the consumer will be present when utility personnel visit to read meter readings. It is possible in such case that utility personnel will estimate consumption inaccurately, which later may lead to consumer dissatisfaction. The recent advances in metering technology, mobile networks, and internet services have resulted in the proposal and development of measurement techniques, billing, and energy management systems. As, many utilities are implementing automated meter reading (AMR) systems. In addition to meter reading, AMR can be used in the power restoration process. While others have advanced the concept of AMR systems by proposing potential metering communication services using the wireless mobile public networks for measuring and billing system.

5.0 IT Technology Deployed by LESCO

Hardware Components

LESCO is using VAX 4000 minicomputers (midrange) for centralized processing of data in various Information Systems. Experts believe that many midrange and mainframe systems have become obsolete by the power and versatility of client/server networks composed of microcomputers and servers. Others industry experts have predicted that the emergence of network computers the on internet and intranets will replace many personal computers, especially in large corporations ().

Software technologies

Most the software packages for the Information Systems as described above are developed in COBOL structured language. However, modern applications are built in using Object Oriented languages such as Java, C++, and VB.Net etc.

Network Technologies

As shown in Figure 4, In LESCO mainframe-based network with many end user terminals are deployed for centralized processing of data, which has recently been linked with Application and Online Web server for handling payment channels of customers. Moreover, in Billing and Collection System batch files created in Revenue Office Computer Section are delivered by special messengers on a portable media to LESCO Computer Centers for centralized processing. However, wireless Wide Area Networks (WAN) can be used alongwith client/server technology to handle the geographically distant processing and network communications.

Database Technologies

LESCO has designed its database structures in COBOL language, which is a traditional flat file system. As, there are many anomalies associated related to management of flat file such as redundancy of data, complex operations for retrieval of reports, more storage, time and cost etc. Whereas, modern Database Management Systems based on relational and object oriented techniques are very efficient and free from such complexities and errors.

6.0 CONCLUSIONS AND RECOMMENDATIONS

Integration of IT and Customer Service

E-service provides a unique opportunity for businesses to offer new models for service design strategies and new service development. While e-service has rewritten many of the rules of customer engagement, it has not fundamentally changed the fact that a key component of service delivery is building and maintaining strong customer relationships. What is important therefore, in adopting IT-based computer based customer service functions, is ensuring that the technology used, enhances rather than undermines the relationship between the customer and the company. The interface between customer and company is critical. With specific reference to web-sties, Meister et al (2000), point out that one of the major challenges of e-service is balancing the greater customization, which typically results in more complex Web sites, with a simple, accessible and easy to use Web interface. Also, the companies that keep track of customer’s individual preferences keep up with market trends, supply products, services and information anytime, anywhere, and provide customer services tailored to individual needs. And so, Internet technologies can make customers the focal point of customer relationship management (CRM). Today many companies are implementing customer relationship management (CRM) business initiatives and information systems as part of customer focused strategy to improve their chances for success in the contemporary business environment. CRM that uses IT to integrates and automates many of the customer-serving processes in sales, marketing, and customer services, push the company ahead in competition with other competitors. Furthermore, CRM systems include a family of software modules that provides the tools that enable a business and its employees to provide fast, convenient, dependable and consistent service to its customers.

E-Service in LESCO

A review of the e-service started by LESCO to facilitate the customers regarding electricity bill payment and other allied services reveals that LESCO is at an early stage in the development and implementation of a complete e-service strategy. However, they have taken a radical step to improve the bill payment channels in order to improve the customer services in this respect. As, it has already been discussed that computer based information systems rely on Information Technology. Therefore, a time to time up gradation of the technology employed by LESCO in Information Systems is essential to keep pace with the rapidly changing IT environment.

7.0 REFERENCES

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Available at: http: //www.sari-energy.org/PageFiles/WhatWeDo/SmallGrants/ newsletter.asp [Cited: 13 July, 2009]

Segmentation, 2009. The Organization, Available at: http://www.lesco.gov.pk/Organization/1000077.asp [Cited: 13 July, 2009]

WAPDA, 2000. WAPDA Book of Commercial Procedures-Computer Billing, Vol. II, 6th Eidition, Nov 2000. WAPDA Printing Press, Lahore.

Organogram, 2009. Organization Structure at LESCO Headquarter, Available at : http://www.lesco.gov.pk/Organization/1010001.asp [Cited: 13 July, 2009]

Mission, 2009. Mission Statement, Available at: http://www.lesco.gov.pk/Organization/1000086.asp [Cited:13 July, 2009]

Collection, 2009. Management Information System, Available at: http://www.lesco.gov.pk/Organization/1020002.asp [Cited: 13 July,2009]

Technology, 2009. Information Technology in WAPDA, Available at: http://www.wapda.gov.pk/htmls/infotech-index.html [Cited: 13 July,2009]

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