Enterprise Monitoring Handbook November 2016

Transcription

1 Enterprise Monitoring Handbook November

2 Enterprise Handbook (1/11) Step 1: Assess external environment and overall sector to take business decision Off-grid enterprises should ideally conduct an assessment of the external environment as well as the sector before starting business or expanding operations into a new market Assess the ease of doing business and political stability in potential regions of operation External Factors Consider geography related factors like the availability of basic infrastructure as well as percentage split of rural-urban population Most importantly, evaluate the target market to assess the need for off grid solutions along with customer s ability to pay for the products/ services Off-grid sector Assess the potential of renewable sources in different geographies and hence, success of the business operations Evaluate the intended timing of grid penetration and presence of competitive solutions in target geographies 2

3 Enterprise Handbook (2/11) Step 2: Track basic financial and operational data to assess performance Enterprises are suggested to track basic financial data from the start of operations This would ensure that over years data can be aggregated to derive more meaningful insights. Enterprises may start tracking only basic data in year 1, and include second level data from year 2 or 3, as depicted in the adjacent table Depute dedicated resources to track performance metrics within a year of beginning operations Metrics Year 1 Year 2 Year 3 Revenue from operations Variable Costs Net Profit No. of solar panels procured Cost of wires purchased No. of LED procured Total power generated (MW) No. of employees No. of customers Cost of goods sold Short term debt Long term debt Accounts receivable Accounts payable Fixed assets Total Assets Cash Flow balance Investments Metrics to be tracked in addition to year 1 metrics 3

4 Enterprise Handbook (3/11) Step 3: Assign resources to track direct impact created An early stage enterprise may allocate existing or dedicated field staffs to track direct impact numbers every 6 months. Secondary level impact metrics can be tracked with time as well. When reporting impact data, enterprises may track first level impact during initial years of operation, and gradually collect second and third level impact as well. First level impact metrics Number of households/ beneficiaries Total number of villages connected Number of people provided direct employment Number of hours of power supply Second level impact Average monthly savings per household Indirect livelihoods supported GHG emissions reduction Reduction in indoor pollution Increased study time for children Third level impact Improvement in health Household safety Increased awareness/ connectivity in communities Enterprise-level Metrics to be tracked Year 1 Year 2 Number of mini grids set up Number of products sold/ installed by enterprise Total number of villages reached Total no. of households connected No. of people provided direct employment Total number of beneficiaries Village-level Number hours of power supply Expenditure on fuel before energy access Expenditure on fuel after energy access Average monthly electricity bill 4

5 Enterprise Handbook (4/11) Step 4: If feasible, depute a dedicated resource as Impact Officer Once the enterprise has stabilized business operations, enterprises may depute a dedicated resource for impact assessment as the Impact Officer The Impact officer may be responsible for gathering financial data from the finance team and impact numbers from the field team The best time to depute a dedicated resource for impact monitoring is when an enterprise is transitioning from an early stage* into the growth phase # Note: * An early stage enterprise is one which has put its business plan into action after pilots, is still building customer base and supply chain, and has completed 1-3 years of operations # A growth stage enterprise is one which has completed around 3-5 years of operations, has achieved sustainability, has a strong customer and distribution network along with good organizational capacity and market linkages 5

6 Enterprise Handbook (5/11) Step 5: Design impact data collection process and formats for the field teams The Impact officer/ allocated personnel may develop data collection systems for the field staff to collect required impact data from the customers and suppliers. This will lead to uniformity in type of data collected across the enterprise Questionnaires comprising of social and environmental impact metrics to be provided by the head office to the field team to collect data during field visits on a periodic basis. Find attached a questionnaire for field data collection Field questionnaire Standardized reporting formats may also be developed to submit impact numbers and for the finance and operations team submit performance figures Once the data from field team is obtained, the Impact officer may ask the operations and finance teams to submit enterprise figures on key metrics and parameters Refer to the attached format for gathering enterprise level numbers Head Office questionnaire 6

7 Enterprise Handbook (6/11) Step 6: Aggregate data in a standardized format to facilitate easy assessment The Impact officer may put in place reporting formats to be followed by all field staff and employees to collate data and submit on a quarterly basis. The reporting format attached guides the enterprises on how to collect data on a single format at every review period. Microsoft Excel Worksheet The format also lists enterprise documents where the required information should be gathered from For example, revenue or profit can be found in audited financial statements, and operating details on individual projects can be tracked from the Detailed project reports 7

8 Enterprise Handbook (7/11) Step 7: Plan field visits on regular intervals The field visits to be conducted on a periodic basis: Field staff to visit the customer locations every 2 months One visit every 6 months by members of the operations team to check report and validate figures on operating efficiency Field visit to be scheduled by the impact officer every year to validate the data points received Step 8: Train and sensitize staff on significance of M&E for the enterprise The Impact officer may conduct training sessions with all employees on the importance of monitoring performance over time Keeping track of enterprise performance will assist in easy identification of inefficiencies Makes it easier to re-engineer operating procedures by learning from past operating processes and subsequent performance Having operating and financial figures handy will help the enterprise in accessing finance when required 8

9 Enterprise Handbook (8/11) Step 9: Plan schedule and evaluate performance on a periodic basis Consolidated performance and impact data may be analyzed by using the M&E tool Timelines for M&E may be outlined by the Impact officer Individual factors can be reported at different intervals: Financial metrics submitted by the finance team on a quarterly basis Operations data compared every quarter Impact data may be collected on every field visit and an impact report created annually Internal process reviews to be conducted annually (as a part of the stakeholder reviews) 9

10 Enterprise Handbook (9/11) Step 10: Develop annual work plan for monitoring Day 0 The Impact officer /responsible personnel may develop an annual monitoring plan with welldefined timelines to organize the M&E effort Q1 Q2 Q3 Q4 1) Allocate responsibility to people 1) Track financial data 1) Analyze first level impact created 1) Track second level impact metrics during field visits 1) Report financial and operational performance in Annual report 2) Finalize monitoring formats 2) Track operational metrics 2) Track financial metrics and report financial performance 2) Conduct analysis of financial performance 2) Analyze performance by using M&E tool 3) Train field staf 3) Start tracking first level impact metrics 3) Report operational performance 3) Analyze operational performance 3) Publish Impact report as part of Annual report 4) Conduct financial analysis 10

11 Enterprise Handbook (10/11) Step 11: Conduct annual stakeholder reviews The Impact officer/ responsible personnel may conduct annual reviews with all the stakeholders of the business Review with investors and lenders to evaluate company performance and realign processes to achieve goals Review with employees to know operational and other issues being faced and rectify processes Review with customers to validate product performance and future expectations in product design Review with suppliers or vendors to assess their own financial reputation in the market as well as market expectations 11

12 Enterprise Handbook (11/11) Step 12: If required, hire a third party impact evaluation agency Enterprises may choose to hire a third party evaluation agency for a professional impact assessment and impact audit to be conducted A third party assessment usually lends more reliability to the reported figures for external financiers Step 13: Publish impact results as part of the annual reporting exercise Enterprises can choose to publish separate impact reports annually to highlight performance and impact on ground. Early stage enterprises may choose to include an impact section in their annual reports to provide details on social and environmental impact created along with the company s operational and financial performance 12

13 Basic M&E steps for early stage enterprises Track basic financials and operational details from Day 1 of business operations Train field staff in monitoring impact during field visits Plan to monitor direct impact metrics by allocating additional responsibility to existing field staff Define standardized data collection surveys to collect data from field Develop reporting formats to collect all data in one format across the organization Plan field visits and Collect data on a regular basis Evaluate performance annually from the data collated Develop internal annual report for yearly performance that can be used when approaching financial institutions 13

14 Thank You