Open source point of sale data management using mobile devices

An open source software platform to help renewable energy-focused SMEs track sales and other business information using mobile phones. The software will facilitate access to capital through carbon finance, and support due diligence from MFIs and other investors, by making sale, supply, and energy use records available in real time.

About You

Organization: E+Co and E+Carbon Visit websitemore ↓↑ hide↑ hide

About You

First Name

Michael

Last Name

Benedict

Your Organization

The Earth Institute

Country

United States, DC, Washington

About Your Organization

Organization Name

E+Co and E+Carbon

Organization Website

Organization Phone

973.680.9100

Organization Address

383 Franklin Street, Bloomfield, NJ, 07003

Organization Country

United States, NJ, Essex County

Organization Type

Non-profit/NGO/Citizen-sector Organization

Your solution

read more↑ hide↑ hide

Name Your solution

Open source point of sale data management using mobile devices

Describe Your Solution

An open source software platform to help renewable energy-focused SMEs track sales and other business information using mobile phones. The software will facilitate access to capital through carbon finance, and support due diligence from MFIs and other investors, by making sale, supply, and energy use records available in real time.

Country your work focuses on

n/a

If multiple countries, please list them here. If your solution targets an entire region, please select it below

Region(s) your solution focuses on:

Africa, East Asia and the Pacific, Latin America and the Caribbean, Middle East and North Africa, South Asia.

Range of turnover in your target firms, in USD

Less than $1 Million.

Average turnover in USD of your target firm

350,000

Number of employees in your target firms

5-24.

Average number of employees of your target firm

20

Specify the size, average and range of expected loans or investments in each target firm

Individual firms will not need loans or external investment to use the proposed software platform. Initial investment of $150,000 will be required to develop the software and expand existing pilot implementations, but the resulting product will scale with little marginal cost. Firms will need to make a modest investment in hardware and training when they start using the software.

What stage is your solution in?

Operating for less than a year

Innovation

read more↑ hide↑ hide

What makes your innovative solution unique?

The proposed software will enable entrepreneurs who sell end user energy devices such as household cookstoves, small solar systems, and water filters to collect information about their businesses using standard mobile phones. Carbon finance* can be a transformative source of capital for energy-focused SMEs, but accessing carbon markets requires rigorous record keeping and monitoring. This is a challenge for small businesses because they typically keep records on paper, an inefficient and error-prone approach that does not scale. The new platform will allow users to update a central database using standard mobile phones, smart phones, and device specific sensors, reducing the burden of monitoring and allowing smaller entrepreneurs to obtain carbon finance. Business owners will access automated reporting and analysis through a password protected website.

The product will be the only open source platform designed to help SMEs in the developing world access capital though international carbon markets. It will likely also be useful to a broad range of businesses that need to monitor geographically dispersed products in remote areas. The software will be built on field proven, open source tools for data collection, made freely available over the web, and will be readily customizable by other programmers.

* Carbon finance is the process of documenting and verifying emission reductions, and then selling the reductions as emission offsets to organizations in the developed world wishing to reduce their environmental impact.

How does your proposed innovation leverage public intervention in catalyzing private SME finance?

Efficient cook stoves, biogas digesters, water filters, and other household energy devices provide compelling development benefits while also reducing GHG emissions. E+Co specializes in linking entrepreneurs in these sectors with public funds and business development support, but access to capital is still a barrier to scale. In the past decade carbon finance has emerged as an important new source of revenue. We hope to use an initial public investment, and lessons learned from an ongoing pilot, to build mobile tools for increasing SME access to carbon finance.

Generating saleable emission offsets involves complex, detailed monitoring that can be prohibitive for all but the most organized and well-funded organizations. Typical monitoring tasks include sales records, follow-up surveys with customers, and measuring product use and performance in the home with electronic equipment. For many small businesses the cost and complexity of carbon project monitoring are insurmountable barriers to entry.

New technologies including mobile devices, sensors, and database-driven web applications have the potential to streamline data collection at the point of sale and in the field, making carbon finance and other private investment more accessible. We propose to build on open source, field-proven hardware and software to create an integrated platform for data collection, monitoring and reporting.

Starting from software being piloted in Tanzania, we will develop a suite of tools that is robust, scalable, and easy to use. It will be designed for SMEs seeking carbon finance but suitable for a wide variety of businesses offering products to end users. The platform will support data collection at the point of sale and in the home, and allow web-based reporting and data analysis. Sales records and other information will be available to business owners and investors in real time over the web, with different levels of access as appropriate.

Even for businesses not pursuing carbon finance, effective record keeping is a prerequisite for accessing private capital. Potential investors need to see evidence of strong sales, a reliable supply chain, and financial stability before committing resources to an entrepreneur in the developing world. Entrepreneurs also need records for marketing purposes and, where applicable, to follow up with customers for routine maintenance. The software being built will help address these information management needs.

What barriers does your proposed solution address?

Asymmetry of information, Lack of SME access to skills / knowledge / markets.

If you checked any of these barriers, describe how your solution addresses them

-Asymmetry of information:
SMEs that sell products to end users need accurate, timely information about their sales and supply chain to manage their businesses effectively. Without this information small businesses are unable to present themselves effectively to potential lenders, and entrepreneurs lack the data needed to efficiently assess the performance of their sales outlets and retail staff. The proposed platform will help business owners manage information more effectively, and make it easier for investors to assess the viability of SMEs.

-Lack of SME access to skills/knowledge/markets:
Many small businesses in the developing world do not maintain sales records, and those that do typically use notebooks and paper forms. The problem is compounded when SMEs operate in multiple regions or rural areas where tracking sales and stock is inherently difficult. This is often the case in the context of carbon finance project development. Data collected using mobile devices can be made available in real time over the web, allowing SME owners and investors to monitor business performance even when operations are remote or geographically dispersed.

For small businesses working to access capital though global carbon markets, point of sale data collection and ongoing monitoring are among the most costly, time consuming aspects of the process. By streamlining data collection using mobile technology and the web, more and smaller businesses will be able to access this source of revenue.

There are many robust, open source software packages for field-based data collection, but no tool can fully meet the needs of most SMEs off the shelf. Many businesses that could benefit from improved data management lack the time, funding, and technical experience necessary to customize software for their specific use case. They need a flexible, readily deployable tool that is designed with carbon finance record keeping in mind. The software will provide a standard approach to tracking end user information and key business indicators, providing entrepreneurs who are not used to collecting this information with a structured and well supported approach.

Impact

read more↑ hide↑ hide

Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact

A mobile phone based data collection system is currently being piloted with two small businesses in Ghana and Tanzania. Both businesses sell efficient household cooking stoves and are participating in carbon finance projects run by E+Co, a US-based nonprofit that invests in renewable energy businesses in the developing world. Retail staff record sales using their mobile phones by sending a specially formatted text message (SMS) at the point of sale. As of this writing the sales of 450 household stoves worth approximately USD 3,200 have been tracked using the system. These stoves alone will yield approximately USD 14,000 in carbon revenue over their useful life assuming a market price for carbon of USD 10/ton. In November 2010 we will be expanding the pilot implementation in Tanzania to include 3 businesses and 6,000 stoves. While E+Co’s initiative in Ghana sells over 50,000 stoves per year, further development of the pilot system will be required to record all of these sales.

Several entrepreneurs and organizations have expressed interest in software for improved record keeping, but most cannot fund custom software development themselves. For example, the Earth Institute at Columbia University is developing a program to sell improved cook stoves in the Millennium Village clusters throughout sub-Saharan Africa. They see clear value in using mobile devices to track sales and stock levels as 50,000 stoves are sold over the first three years of operation. More than 6 other businesses and NGOs that support SMEs in Kena, Mali, Mexico, Guatemala and China have indicated that the proposed software platform would be helpful for managing their operations.

How many firms do you expect to reach?

Through carbon finance projects being developed by E+Co, 4-6 SME’s in sub-Saharan Africa will be initial users. By year two we will reach 40 businesses through 10 medium sized carbon finance projects in Africa and Latin America. We will work to scale aggressively in future years.

What is the volume of private SME finance you aim to catalyze?

We estimate that over USD 10 million will be generated annually by cookstove carbon projects currently in development, and new projects are continually starting. We intend to build a tool that will be used by many of these projects as well as SMEs in other sectors.

What time frame will be required to reach these targets?

The software will be piloted with 4-6 businesses during the first year while core development is still taking place. These pilots will provide a chance to learn the details of different enterprises’ information needs and adjust the system design accordingly. Once the platform is developed it will be easily replicable and readily scale to a large number of businesses. Approximately 40 SME’s will be served by the end of year two, and in future years scale will only be limited by demand.

Does your solution seek to have an impact on public policy?

No

What would prevent your solution from being a success?

Mobile and web-based technology show clear potential to benefit SME’s and make it easier for them to access finance, but the tools must fit into business’ existing practices or they will not be used. Many of the target users have little experience collecting data with mobile devices. As a result, if the software platform is too complex, or data entry is time consuming and demands significant behavior change, the system is unlikely to be adopted. It will be critical to ensure that the software design is based on the realities of the way that SMEs do business, and that the mobile data collection component requires a minimum of training and expertise to use. Increasingly large and complex pilot implementations will provide opportunities to understand potential use cases and refine the software design.

Describe the social impact of your innovation. Please include both numbers and stories as evidence of this impact

At the pilot scale, the proposed software is already having an impact by helping increase access to improved household cookstoves. Over 2.5 billion people in the developing world, nearly half the global population, rely on wood, dung, and other solid biomass for cooking and heating. The resulting indoor air pollution (IAP) is the largest risk factor for disease and death in less developed countries behind only malnutrition, unsafe sex, and lack of clean water and adequate sanitation. Dangers of cooking with biomass disproportionately impact women and children because they spend the most time in the kitchen, and they suffer lost productivity and physical risk while foraging for fuel. Traditional cooking practices also damage the environment through deforestation and emission of greenhouse gases (GHGs), black carbon, and other pollutants. Efficient cook stoves dramatically reduce IAP and have the potential to mitigate deforestation while contributing to improved health and livelihoods throughout the developing world. They also reduce GHG emissions; by decreasing fuelwood and charcoal consumption they curb the emissions that occur when non-renewable biomass is consumed. In our current pilot over 2700 individuals in 450 households in Sub-Saharan Africa are benefiting from household stoves tracked using mobile devices.

As the software is developed further it has the potential to catalyze finance for a wide variety of SMEs. At scale, effective data management can increase access to a range of devices that promote health and safety, improve livelihoods, and hep protect the natural environment. Such products include Water filters, water pumps, small solar systems and solar lanterns, household scale biogas digesters, improved seeds, and agricultural equipment.

Sustainability

read more↑ hide↑ hide

List all the funding sources that are required for the sustainability of this solution

Software development is currently being funded on an as needed basis by organizations interested in elements of the proposed feature set. This limits the rate of development and makes it difficult to build a more generic product that can meet the needs of a wide range of SMEs. Public funding for core development and marketing would accelerate the process of reaching scale, and result in a more widely applicable, polished product.

Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?

Public finance will allow for faster progress towards a generic tool that will meet the needs of many SMEs, but it will not be needed for long term maintenance. Ongoing software development will be funded on an as-needed basis by organizations that require assistance or additional features. This support could be provided by any professional programmer or firm familiar with the underlying technologies.

Alternatively, or in parallel, a hosted (i.e. software-as-service) version could be provided. The system would be centrally managed and supported by fees from users. For example, medium sized businesses might pay an annual fee for account maintenance, plus a small fee for each device tracked. Very small enterprises would pay little or no fee. This would allow entrepreneurs to get started with mobile data collection quickly, try out the system before committing significant resources to the approach, and facilitate very rapid scale up.

Demonstrate how your proposed solution will survive a potential loss of its largest private funding source

The proposed software is not dependent on a single large source of funding, and is currently being developed without one. If a large source of private funds is secured and then lost it would slow the pace of development and expansion but not stop creation or use of the tool.

Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation

In the short term it will be important to partner with organizations that have close ties to developing world SMEs, detailed knowledge of private finance and field-based monitoring techniques, and expertise with software development. Several such partnerships are already in place. As the platform matures more broad, non-financial partnerships with the public sector will become relevant, as ministries of energy and national level programs become target users of the product.

Are there non-financial issues that could threaten the sustainability of your proposed solution?

As discussed above, any new technical solution carries an element of risk. It has to meet users’ needs, integrate smoothly with existing business processes, and be easy to use with minimal training. Any one of these factors can slow or prevent widespread adoption if not addressed.

It will also be important to take literacy levels into account in designing an effective system. Many sales staff, especially informal employees such as street hawkers, will need to record information but are illiterate, partially literate, or are only literate in a local language. Literacy and internationalization will be important considerations during the design process to ensure that the platform can be widely adopted.

A potential approach to addressing concerns around training and literacy is to create a module for E+Co’s Invisible Schoolhouse online learning platform. These web-based training materials would provide an opportunity to quickly learn how to use the system through instructions and examples, and connect users with experts to answer questions as needed.

Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically

Initially the software will be developed to serve SMEs that sell efficient household cooking stoves. Stoves present a clear opportunity for electronic record keeping because the potential market size is large, as over 3 billion people worldwide cook with inefficient, traditional stoves. Cookstoves also stand out among household energy technologies as able to generate significant revenue through carbon finance. Initial pilots will focus on individual entrepreneurs and NGOs that support small businesses. Once developed the software will be shared with national level stove programs such as the one being implemented in India in order to scale more rapidly.

At the same time the software will be promoted to SMEs in other sectors and regions that can benefit from improved data management. Most carbon finance projects that are focused on end user energy efficiency devices (e.g. small solar systems and water filters) have similar record keeping needs. Such projects are already taking place in Africa, Asia and Latin America. SMEs that are not pursuing carbon finance will be targeted as well. The software will be applicable to tracking the sales of many types of products, but most suitable for those that require periodic followup for maintenance, monitoring, or marketing.

AttachmentSize
Old_paper_sales_records.JPG615.29 KB
Pilot_System_User_Guide_and_Examples.png299.54 KB
Sample_SMS_Data_Aug_28_and_30_2010.png67.94 KB
SMS_training_for_retailers.JPG611.6 KB
210 weeks ago Matt Guttentag said: On October 27, 2010, the judges reviewed entries for the Changemakers G-20 SME Finance Challenge competition and would like to pass on ... about this Competition Entry. - read more >
219 weeks ago Josh Middleman said: Michael, I've really enjoyed reading your entry and wanted to suggest that you take some time to look at some of the other entries, ... about this Competition Entry. - read more >
220 weeks ago Michael Benedict updated this Competition Entry.
220 weeks ago Michael Benedict submitted this idea.