ERPNext helps SELCO decentralize its operations by connecting 60 Energy Centers

One of the core values Frappe believes in, is staying environmentally conscious. Early this year, we were planning for our quarterly offsite team meet. The plan was to skip air travel and rather commute via train just to reduce carbon emission. We calculated our carbon footprint and took a poll on Telegram to understand the traveling feasibility of our teammates. Because the second wave of covid was just about to begin, due to travel restrictions and unavailability of the resort, we had to swap the destination and choose a different one. We missed out on the train travel, but the thought of going ahead with lower carbon emission stayed.

Highlighting the fact that even a minuscule contribution in saving our ecosystem goes a long way. SELCO is one such company that believes in reaching out to the masses and provide solar energy at an affordable cost. Especially in the remote villages where electricity is considered a luxury and is difficult to use by poor people.

Here’s a small video of SELCO’s work:

Shedding some light on SELCO

Dr. Harish Hande co-founded SELCO with Neville Williams in 1995. They perceive energy as a catalyst that can help change the lives of the community and people who find it difficult to use.

Their goal is to create a sustainable model and reach out in the remote areas, where energy can act as an enabler to help people with their education, health, jobs, and living. SELCO believes in need-based designing, door-step servicing, and affordable financing. It works with Rural Banks and Microfinance which provides long-term financing to make the solutions affordable for economically poor communities. SELCO is one of the first companies in the world whose customers got a long-term solar loan from a rural bank in 1995. They have been awarded several national and international awards including Ashden and Ramon Magasasay awards for Dr. Harish Hande.

With a presence in 5 states in India, SELCO is a team of 600 people. SELCO has 60 energy centers and has catered to approximately 6.5 lakh, powering 2600 schools, 5000 institutions, 200 health centers. Their head office is based out of Bangalore. SELCO family has other entities namely, SELCO Foundation working on building the decentralized energy ecosystem, and SELCO Fund, and SELCO Incubation which incubates energy entrepreneurs.

SELCO is an experiment of a functioning social enterprise that has created processes, business models, and solutions that have inspired people across the world. SELCO is a case study at some of the premier institutions in the world like Harvard, Yale, IIMs, etc.

The need

SELCO has always focused on process innovation both internally and externally. The organization is based on the philosophy of decentralization of structure and function. 63 energy service centers carry out most of the activities with various departments planning and monitoring those activities. This kind of decentralization also comes with its challenges in terms of data capture, analysis, and monitoring. So there have been various efforts to take advantage of technology and move on to a platform that will seamlessly integrate various functions of the economically poor communities.

Over the years, SELCO has shifted from manual to a mix of manual and IT-based accounting package. Before SELCO moved into a comprehensive ERP platform, it had been using Tally for Accounting and Inventory management purposes. The rest of the processes were managed by a mix of paper-based mechanisms and isolated tools like electronic mail, excel sheets, and documents.

This is when SELCO started exploring an integrated ERP platform. It started looking for a solution that will help the organization in achieving its objectives.

Objectives

SELCO wanted to achieve the following objectives:

• Simplify the operations processes through automation and integration of ERP. Single source of data for an accurate and detailed report.
• Make available the entire organization details within real-time.
• Easy to use and low learning curve for a largely non-English speaking staff
• SELCO believes that processes should be need-based and not a dogma. Hence the platform should have the capability for easy customization of processes. Low capital investment and license cost.
• Easy extensions of new functions and features like field data collection and monitoring.
• An ERP can be used in the context of Decentralised Renewable Energy (DRE) and Social Enterprises that can transit to a sophisticated software environment with ease.

The background

There have been a few initiatives in the course of SELCO’s history to transit to a modern software platform. These initiatives include efforts like developing the organization’s customized solution to trying off-the-shelf products.

• A very thorough process mapping for all day-to-day activities was carried out. This helped in understanding the actual requirement and also to convey to the software vendors about the requirements.
• A detailed market survey was conducted to understand the available options and relative advantages and disadvantages.
• Based on this assessment a list of vendors was shortlisted.
• An in-depth analysis of the strengths and weaknesses of each of those vendors was then carried out for various requirements.
• SELCO tried out a few of the potential platforms for some of the Use Cases.
• Finally, SELCO selected ERPNext as a solution to be deployed.

Why ERPNext?

SELCO selected ERPNext after evaluating it from different aspects.

• Maturity of the product in terms of availability of functionalities off-the-shelf ERPNext has been globally rated as one of the fastest-rising solutions. Ease-of-use for a regular user. A pilot site was set up and leaders from different internal teams were asked to evaluate the solution.
• Integrated solution with almost all business processes on a single platform. This helped SELCO in avoiding complex integrations across different platforms. Ease of Customization was an important aspect to incorporate a matured operation structure.
• FOSS-Free and Open Source solution which aligns with SELCO’s philosophy of shared knowledge system. Any functionalities developed are freely available for anyone to use.
• This is the affordable ERP solution around. There is no individual charge for each module and all modules are available for all in the package.

Challenges faced

SELCO faced several challenges on the way :

• Migration of Data from Tally to ERP was a major challenge. The migration demanded certain flexibility in the process which led to issues down the line and took significant time and resources to rectify.
• It took time to get acclimated with an integrated system where one transaction can only take place if the previously linked transaction has been executed. This created an impression that the overall process has slowed down but in reality, it was driving in structure and efficiency in the long run.
• User hesitancy to learn a new way of working. This is more for the Users who were used to working in a certain way in Tally and had to adapt to a new way of working.
• SELCO has decided to always be on the latest version of the Software. This means upgrades, both major and minor, regularly. We had to handle the disruptions caused by some of these changes.

Impact

Migration to a modern ERP platform has led to far-reaching changes within the organization:

• It has created a Foundation for adopting new technologies and an appreciation for data-based decision-making.
• Availability of real-time data on Revenue, Stock, Purchase, etc which helped in quick decision making.
• Now SELCO can streamline many processes with improved visibility of gaps. It created a group of Champions who became change makers. The process awareness has led to many new suggestions and implementations. Reduction of paper, emails and excel sheets leading to leaner processed and easier monitoring.
• Significant saving in resources that was spent on Reporting and monitoring.

Engineer on-the-field

Rohit has been playing with code in Frappe for the past 5 years. He has worked majorly on modules like selling, buying, accounts, and manufacturing. While he is off-field, he legit plays cricket, enjoys trekking, and street food. At work, he has been interacting with the SELCO team. He has reviewed and rectified their code, polished the system which made the team SELCO start with ERPNext. With a team of 500 people, it took about 2 years to streamline the system.

One of the major issues faced by SELCO was related to performance issues with the system due to end-of-month transactions. At the start of the month, SELCO had around 500 transactions daily, and by the end of the month, the transactions increased to approximately 10,000. And with around 150 users making entries, the system slowed down considerably affecting the Users.

Rohit and the team came up with a solution to the problem. He managed to optimize the code to improve the performance. They also enhanced server specifications, which helped in resolving the issues. They simultaneously increased the number of CPUs from 4 to 12, and upgraded ram from 16 to 64 GB.

On the customization front, the team came up with a feature called “Goods-in-Transit”. Being a mix of service and product industry, SELCO was unable to track the goods in transit moving from one Warehouse to another. If they were transferring goods from one location to another, they could track it in one entry system, whereas the system should ideally reflect two entries, source location, and destination. This feature helped them track the goods efficiently.

There was a major challenge faced by SELCO after the upgrade from Version 10 to Version 11. The way User Permission was re-designed messed up the way User Permission was assigned in SELCO. Nabin and Rohit worked on this and the setting, and configuration page were simplified. Earlier the customers were unable to understand them.

SELCO faced challenges to migrate from the legacy software to ERPNext. To migrate the Stock related data, Negative Stock and Backdated posting was allowed. There were 2 fall-outs of this. One was that SELCO could not submit many backdated entries from the front-end due to time-out issues. The other was that reposting was not happening correctly which created Stock Valuation errors. The team fixed that issue and ensured that reposting happens via the backend. And along with that, the time-out issue has been fixed. With an upgrade from Version12 to Version13, the issue of Stock valuation also has been resolved.

ERPNext features appreciated by SELCO

The first few departments that were picked for automation were those not dependent on Tally. This was decided as the departments which were dependent on Tally had the additional complexity of data migration. Once the initial department functions were launched, users got used to the basic features of the platform and were ready for the larger release of the core modules like Accounting and Logistics.

List view and report building feature

It seamlessly integrates various functions. SELCO has non-English speaking users working on the ERPNext system. It was an intuitive working experience with the List view and Report Building feature because the time spent on the learning curve was less. The general look of each doc-type helped them and was a success.

Easy customization on the client-side

The ease of customization has been of great use for SELCO. SELCO has a thorough and complex process tailored to the needs of its operational processes. This means tweaks are required on the standard system to handle some of the use cases. In this context, SELCO could easily Customise without much coding knowledge.

Feedback for team ERPNext

“SELCO believes, with ERPNext they have grown as a company. Each version’s release has had a good amount of improvement. SELCO speaks highly of the team ERPNext and demands that the team should be rewarded! Rohit has been of great help to them and with 600 people, resolving the issues on an immediate basis is appreciated by SELCO. The team passionately helped them in the wee hours of the day and midnight. Since both organizations share the same amount of enthusiasm to work together it helped us build a better connection.

Thorough documentation of ERPNext will bring in more clarity and less learning curve for Users. Though ERPNext has come a long way in this, there is scope for further improvement.

Customer contact time can be improved by the team which will make the decision-making from SELCO more efficient bringing down deployment time and reducing mistakes.”

We are in it for a long haul

By implementing ERPNext at SELCO, Frappe believes to have resolved their major problems. The need for simplifying various operational processes and having visibility of real-time data in one place with seamless integration was successful. Hence SELCO’s need to achieve sustainability goals just accomplished with the help of an open source software, ERPNext.

This is a long-term association between SELCO and Frappe to promote open-source, penetrating, and enlightening places where darkness hardly seems to disappear. The need for alternative power sources is imperative, and both organizations are up for the cause.

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