How Alliances Can Help India Meet Its Lofty Growth and Energy Goals

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I recently returned from a trip to India where I met with executives from some of our industry partners and also attended a meeting of the Association of Strategic Alliance Professionals, where I met representatives from potential future partners. One of my big takeaways from the trip was there’s a real desire to collaborate with each other, understand alliance management and get better at collaborating. And it couldn’t be happening at a better time.

By way of background, a couple of things are happening in India to drive the need for collaboration. For one, India’s electric grid has a significant problem with “non-technical” losses, which is a fancy way of saying people are stealing electricity. In essence, they simply connect some wires to the grid and use electricity without paying for it.

The Indian government wants to do something about it so has launched an effort called Restructured Accelerated Power Development and Reforms Programme, or R-APDRP. Each of about 29 Indian states has issued requests for proposals that each address two separate sides of the equation: the operational technology (OT) and information technology (IT) required to address the issue. On the OT side is the infrastructure components that go into the electric grid while the IT angle is to gather up all the data from the OT side, analyze it and determine where losses may be occurring, how to make the grid more efficient, and so on. The RFPs specifically ask for separate bids to address OT and IT requirements; no joint bidding.

The other big backdrop is that India is seeing tremendous population growth and is trying to build new cities and trade corridors between major cities, namely Delhi-Mumbai, Chennai-Bangalore and Bangalore-Mumbai. Along each corridor several cities may be built, each massive in scale – hundreds of square kilometers. Consortiums are being developed to build all these cities but it’s all being handled in a fairly traditional, closed manner.

From my meetings with IT companies in India, it’s clear they think more open collaboration between OT and IT firms is a good idea. Some private developers are already testing the waters on a small scale.

For the most part, though, the way it’s done in India is the IT companies deal with the IT side and they look to OT companies like Schneider to deliver the hardware infrastructure, R-APDRP being a prime example. Schneider is intimately involved in the process, having secured contracts to implement R-APDRP Smart Grid projects in Kerala, Jammu & Kashmir, Bihar and Puri. In another example, our Energy business unit is also helping with transportation infrastructure projects including providing power and, in some instances, SCADA control systems for the Metro system in cities including Delhi, Jaipur, Mumbai and Hyderabad. These systems lay the foundations for future smart cities. The power infrastructure can eventually be tied to the city’s enterprise IT systems, which enables city managers to exploit all the available information and help them to manage their resources more efficiently.

Effective alliances would go a long way toward helping India meet its goals in terms of building new cities, modernizing its electric grid and upgrading existing cities with new infrastructure. If an OT company can forge an alliance with an IT partner and offer a joint solution to a project, it can save time and money for all involved. The two companies have a predefined working relationship, they understand each other’s solutions and what it takes to deliver them effectively. The more they work together, the stronger the alliance becomes.

Forcing OT and IT companies to submit separate bids means you never – or rarely – get that kind of benefit. An OT company may be working with a different IT company on each project, effectively starting from scratch each time.

We may be seeing small steps in the right direction. The Indian power distribution company BSES Rajdhani Power Ltd recently entered into a partnership with Schneider Electric to offer energy saving solutions to electricity consumers. Initially, we’ll target energy intensive consumers like industries, hotels, malls, hospitals and commercial buildings, with the goal being to help customers reduce their energy bills from 10% to 30% without sacrificing on their energy requirements.

Alliances are also emerging to develop integrated townships, which are like small-scale smart cities. They include residential, light industrial, commercial, hospitality and retail buildings all designed together on the same power, water and ICT infrastructure; they point the way to how larger scale infrastructure projects might look in the future. Companies such as Cisco are collaborating with Schneider Electric along with urban planners, engineering design firms, local developers and contractors to accelerate innovation in these exciting new developments. The technology companies bring complementary technology, which they then integrate with the help of urban planners and engineering design firms to provide an environment that offers new services in a highly efficient way.

These examples show the kind of benefits that can be had from alliances. India would do well to more fully examine the role alliances can play in helping it meet its lofty growth and energy requirements.