Middle East and North Africa

Alexandria Electricity Company Re-engineering Project

Client: United States Agency for International Development

2001-2002, Segir GBTI

For the Alexandria Electric Company, under a subcontract to Nexant, CARANA re-engineered the cost accounting functions of the generation and distribution companies. Re-engineering included the implementation of automated accounting systems at each of the converted enterprises. In addition, CARANA re-engineered the metering, billing, and collections processes within this company.

CARANA worked with two energy enterprises to implement Activity-Based Accounting (ABC) so that the true costs of generating electricity could be determined; this implementation included establishing cost centers and profit centers to rationally allocate indirect costs to the services that generate these costs and to provide managers with a framework for making sound business decisions. CARANA:

  • Prepared ABC models that showed the application of ABC techniques within the enterprise;
  • Created an ABC breakdown of processes, tasks, and costs to provide information in building the database of enterprise processes; and
  • Constructed an automated time-logging capacity to help gather the implicit costs of each task.

In re-engineering the company's billing and collection functions, CARANA:

  • Reviewed inefficiency and cost ineffectiveness of meter reading and bill preparation cycles to identify ways to reduce cycle time, increase cash flow, and reduce cost;
  • Reviewed collection efforts to improve billing and cash collection cycles; and
  • Reviewed handling of cash collections to identify areas for improved service and alternative arrangements.

For the project, CARANA developed a series of training courses and manuals on the subjects of 1) activity-based cost accounting; 2) process mapping; 3) business process improvement and benchmarking; and 4) value-added analysis, best practices, and total quality management.