PROJECT REPORT

FINANCIAL AND INVESTMENT

PLANNING IN REFERENCE TO
MUTUAL FUNDS INDUSTRY

TO BE SUBMITTED UPON THE COMPLETION OF THE TWO MONTH INTERNSHIP

AT

SUBMITTED BY: SUBMITTED TO:

ISHAAN KUMAR Dr. Karminder jit ghumman
501904154

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Executive Summary

This project was a wonderful learning opportunity for me at the same time it gave me the room to apply my
analytical skills and develop my skills.

Mutual Fund has emerged as a method to ensure one's financial well-being in just a few years. In addition to
contributing to India's growth story, Mutual Funds have also helped families tap into Indian Industry
success.

As knowledge and understanding grow more and more people appreciate the advantages of investing in
mutual funds. The key reason the number of investors in retail mutual funds remains low is that nine out of
ten people with income in India do not know there are mutual funds.

Once people become aware of mutual fund investment opportunities, the amount that they want to invest in
those opportunities become available to them. Mutual funds are growing to as many as one in five. The trick
for turning a person with no awareness of mutual funds into a new Mutual Fund buyer is to consider which
of the prospective buyers are more likely to purchase mutual funds and use the right arguments in the selling
phase that customers would recognize as significant and relevant to their decision.
 Acknowledgment
I sincerely acknowledge the help received from various persons and sources in collection of data
and information in completing this satisfactory project.

The entire project report is titled “Financial and Investment Planning in Reference to Mutual
Funds Industry”.
The entire project report owes its credit to the chlorite guidance and encouragement rendered by
Dr Karminder Jit Ghumman, I record my sincere thanks to him with deep gratitude.

I also take the opportunity to acknowledge my sincere and deep sense of gratitude to the Industry
mentor Mr Yugal Bhushan whose perception and sagacity was always opened for us.
Last but not the least I would like to thank all the faculties of the institute, and friends for their kind
co-operation throughout the project.
 Table of Contents

Page
Sno. Table of Content No.
1 Executive Summary 2
2 Acknowledgment 3
3 Table of Contents 4
4 Introduction 5
5 Industry Profile 7
6 Organization Profile 11
7 Review of Literature 13
8 Problem Formulation, Methodology 15
9 Project/Training Description 16
10 Conclusions, Major Findings, Learning, Recommendations, and Future Scope 26
11 References 29
 Introduction
Origin of the Report

Internship means receiving practical experience through attending particular work physically. Practically
internship means a way through which an internee, can gather experience about the related subjects and be able
to apply his theoretical experience in the field of real life action. Practical training is necessary to achieve
complete knowledge about something. Internship program is actually a form of practical training. Though, due
to COVID-19 Situation looming over the world, the mode of internship had to be conducted virtually.

Project Setting

The internship comprised of a holistic project which helped both the students who were interested in marketing
and finance as major domains in their respective future.
In the project, the students were given regular tasks from creating online marketing material for the company to
building financial planning questionnaires for research to conducting a holistic distribution channel for people
who were interested in building their careers in mutual fund industry.

Industry Setting

What mutual fund industry really is?

A mutual fund is a type of financial vehicle that consists of a pool of money that many investors have collected
to invest in securities such as stocks, bonds, money market instruments and other assets. Mutual funds are
operated by professional money managers, who allocate the assets of the fund and try to generate capital gains
or income for investors of the fund. The portfolio of a mutual fund is structured and managed to suit the
investment goals set out in its prospectus.
Mutual funds offer access to professionally controlled portfolios of equities, shares, and other assets for small
or individual investors. Consequently, each shareholder shares proportionally in the fund's gains or losses.
Mutual funds invest in a large number of stocks, and performance is typically measured as the shift in the
fund's overall market cap — derived from the aggregate performance of the underlying assets.

Importance of the project

All in all, this internship project provided interns with learning about financial services and careers present in
mutual fund industry, skill & competency development which involved reaching out to the people around us
and explaining them about what mutual fund industry is?
How mutual fund industry has out grown other investment options in the market? And some many other
incentives offered by the industry.
The project provided a platform even in these tough times to explore their potential without even stepping out
of their homes and learning about real world scenarios and work on those situations to develop their acumen in
the world business.
Objectives of the project

Mutual fund industry has witnessed an increasing trend in past few years, numerous new players have entered
the market with numerous unique selling propositions.
1.

Background Research
In order to define the project scope,
 Industry Profile

A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a
company that brings together a group of people and invests their money in stocks, bonds, and other
securities. Each investor owns shares, which represent a portion of the holdings of the fund.
Mutual fund is a trust that pools the savings of a number of investors who share a common financial goal.
This pool of money is invested in accordance with a stated objective. The joint ownership of the fund is thus
“Mutual”, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through these investments
and the capital appreciations realized are shared by its unit holders in proportion the number of units owned
by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity
to invest in a diversified, professionally managed basket of securities at a relatively low cost. A Mutual Fund
is an investment tool that allows small investors access to a well-diversified portfolio of equities, bonds and
other securities. Each shareholder participates in the gain or loss of the fund. Units are issued and can be
redeemed as needed. The fund’s Net Asset value (NAV) is determined each day. Investments in securities
are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification
reduces the risk because all stocks may not move in the same direction in the same proportion at the same
time. Mutual fund issues units to the investors in accordance with quantum of money invested by them.
Investors of mutual funds are known as unit holders.

You can make money from a mutual fund in three ways:

 Income is earned from dividends on stocks and interest on bonds. A fund pays out nearly all income it
receives over the year to fund owners in the form of a distribution.
 If the fund sells securities that have increased in price, the fund has a capital gain. Most funds also pass on
these gains to investors in a distribution.
 If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price.
You can then sell your mutual fund shares for a profit. Funds will also usually give you a choice either to
receive a check for distributions or to reinvest the earnings and get more shares.

The competition among funds has led to the launch of newer products, tailor-made
To suit the requirements of investors. Mutual funds now offer products for the entire range of needs of
investors. The encouraging response to index funds and sector funds shows the growing maturity among
investors. Open-end funds, which provide liquidity to investors at daily NAV related prices are growing in
popularity. The funds have been adopting technology to provide good service to investors and with the
proposed introduction of electronic funds transfer and the growing trend towards E-Commerce; the efficiency
of service will increase even further.
In the coming years mutual funds as saving intermediaries will play a greater role in bringing the gap between
investors and issuers, especially in the area of equity funds. At present these funds represents 13% of BSE
market capitalization. This is expected to go up with increasing flows into financial savings, especially the
mutual fund with the growth and stability in the capital market flows into equity funds are expected to go up.
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.
The money thus collected is then invested in capital market instruments such as shares, debentures and other
securities. The income earned through these investments and the capital appreciation realized is shared by its
unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost.
Mutual funds, also referred to as investment companies, offer an alternative investment choice for individuals
with a long-term horizon. The way they operate is that individual investor money are pooled and invested in
many different companies. Assets are professionally managed to meet various investment objectives. They
issue and sell shares to share holders and also redeem them (buy them back) upon request. Prices of shares are
set daily at the close of business, based on the value of all investments in the mutual fund’s portfolio. Their
major advantages are diversification and professional management, which are not readily available to small
investors outside the mutual fund arena. Money market mutual funds are short-term funds. They invest in short-
 term cash and cash equivalent instruments, such as Treasury bills, certificates of deposit, and short term notes.
Mutual funds may own stocks and bonds of many different companies.
A mutual fund is the ideal investment vehicle for today’s complex and modern financial scenario. Markets for
equity shares, bonds and other fixed income instruments, real estate, derivatives and other assets have become
mature and information driven. Price changes in these assets are driven by global events occurring in faraway
places. A typical individual is unlikely to have the knowledge, skills, inclination and time to keep track of
events, understand their implications and act speedily. An individual also finds it difficult to keep track of
ownership of his assets, investments, brokerage dues and bank transactions etc.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the
same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund
investor is also known as a mutual fund shareholder or a unit holder.
Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is
reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund
scheme's assets net of its liabilities. NAV of a scheme is calculated by dividing the market value of scheme's assets
by the total number of units issued to the investors.
Organization Profile
Amplify Wealth Consultants LLP is an innovative financial service organization duly registered with the
Association of Mutual Funds in India (AMFI) for offering mutual fund solutions and others financial
Products like Fixed Deposits, Insurance (Life, Health, Motor), Loans (Home Loan, Personal Loan, LAS,
LAP, etc.) to the investors, individuals, and organizations, which can benefit from them.
Amplify Wealth has been established by a team of well informed financial intermediaries, industry veterans,
and senior academic professionals who can guide investors in their best interest. Our aim is to be one-stop
solutions for offering financial products to help clients to manage their wealth efficiently and effectively.
The primary goal of the company is to provide high-quality financial advice for investors seeking better
investment opportunities.
Amplify Wealth is creating a network of financial intermediaries through individual financial services
professionals, women entrepreneurs, university students to create a healthy investment environment for
clients to invest in the right asset classes. Currently we are a team of 50 financial intermediaries who are
operating from different towns and cities in Himachal Pradesh, Punjab, and Chandigarh with a passion to
educate and empower individuals to make right investment decisions that can amplify their wealth.

Our Mission:
To generate wealth for the investors by providing them with deep insights and detailed analysis in an ethical
manner so that they can make right investment decisions.

Our Values:
Professional Ethics, Trust, Competence, and Relationship are our core and non-negotiable values. For us
ethics and corporate governance are extremely important and we shall never compromise regarding these.

Product and services offered:

Review of Literature
Literature Review
Since technological capabilities fundamental for supporting a digitalization revolution have started
gaining momentum and become relevant to multiple fields in only recent years, existing literature in
regards to the digitalization of the power industry is scarce. In order to supplement this meager
existing data, the current scenario of the power industry in each of the selected countries along with
their energy policies, specifically those that address the future of renewable energy in the said country
was extensively studied.

India
In the case of the Indian power sector, research was conducted to gather information about energy mix
for the Indian power sector, this task involved studying the latest energy output figures provided by
the CEA (Central Electricity Authority), for gathering data in regards to renewable energy, annual
reports published by the Ministry of New and Renewable Energy were studied. CEA, IREEED
(Indian Renewable Energy and Energy Efficiency Policy Database) and IEA (International Energy
Agency) were consulted to understand and evaluate the future of the energy sector and to study the
policies related to the energy sector.

Malaysia
To paint a picture for the Malaysian power sector, research was one on the current scenario and the
future outlook. The research included studying annual reports of Malaysian energy regulators to
gather information regarding energy mix and their plans and framework on meeting energy demands
for the next year. Additionally, Malaysian energy and renewable energy policies were studied to gain
an understanding of Malaysian outlook towards renewable energy and their efforts to meet targets for
emissions reduction, their energy policy was studied extensively. Malaysian energy policy has been
published by the International Energy Agency on its official website for public use.

Bangladesh
For the Bangladeshi power sector, the research included studying annual reports of Bangladeshi
energy regulators to gather information regarding energy mix and their plans and framework on
meeting energy demands for the next year. Additionally, Bangladeshi energy and renewable energy
policies were studied to gain an understanding of Bangladeshi outlook towards renewable energy and
their efforts to meet targets for emissions reduction, their energy policy was studied extensively. The
Bangladeshi energy policy has been published by the International Energy Agency on its official
website for public use.

South Korea
Regarding the South Korean power sector, the research included studying annual reports of South
Korean energy regulators to gather information regarding energy mix and their plans and framework
on meeting energy demands for the next year. Additionally, South Korean energy and renewable
energy policies were studied to gain an understanding of South Korean outlook towards renewable
energy and their efforts to meet targets for emissions reduction, their energy policy was studied
extensively. South Korean energy policy has been published by the International Energy Agency on
its official website for public use.
 Thailand
For the Thailand power sector, the research included studying annual reports of Thailand energy
regulators to gather information regarding energy mix and their plans and framework on meeting
energy demands for the next year. Additionally, Thailand energy and renewable energy policies were
studied to gain an understanding of Thailand outlook towards renewable energy and their efforts to
meet targets for emissions reduction, their energy policy was studied extensively. Thailand energy
policy has been published by the International Energy Agency on its official website for public use.

Australia
For the Australian power sector, the research included studying annual reports of Australian energy
regulators to gather information regarding energy mix and their plans and framework on meeting
energy demands for the next year. Additionally, Australian energy and renewable energy policies
were studied to gain an understanding of Australian outlook towards renewable energy and their
efforts to meet targets for emissions reduction, their energy policy was studied extensively. Australian
energy policy has been published by the International Energy Agency on its official website for public
use. Furthermore, the website of the Clean Energy Council is responsible for publishing reports and
figures regarding policies and the adoption of clean energy technologies in Australia.
In addition to that, to gain better insights into the opportunities and challenges of digitalization,
numerous reports, insights and future outlook compiled by consulting agencies McKinsey and Bain
were studied. McKinsey compiled insight titled ‘The digital utility: New Opportunities and
Challenges' elaborated upon many the numerous opportunities and challenges confronting the utility
sector with the rise of digital disruption. It also listed benefits of digitalization for the utility sector as
a whole, covering each facet of the sector for example optimized plant performance in the generation
and a decrease in power loss during transmissions.
In an article published by Bain consulting titled ‘Digital Transformation for Utilities: More Tortoise,
Less Hare’ highlighted the challenges in implementing digital solutions in the utility sector and
suggests pragmatic methods to commit the required resources.
This was followed by analyzing the entire portfolio of Siemens for digitalization services including
the perceived benefits, marketing campaigns, and interactions with the technical and sales team for
digitalization services.
In the Energy Journal Volume 3 issue May 2017, article titled "How utilities are using blockchain to
modernize the grid" James Basden and Michael Cottrell discuss how the digitalization technologies
and blockchain, in particular, is causing disruption in the utility industry and the opportunity it
presents such as, autonomous network configuration, self-serve maintenance, asset, and inventory
tracking and cross- asset/industry data sharing.
Problem Formulation, Methodology
Problem Formulation
1. Background
Siemens power division aims to provide digitalization solutions to enhance productivity, life cycle
and flexible operation of conventional power plants. It also aims to provide solutions that simplify
plant operation and maintenance via automation and predictive data modeling.
2. Problem
For all the advantages and value offered by digitalization solutions, persuading clients to adopt the
same remains a significant challenge. The existing industry paradigm is towards long term investment
and faster quantifiable returns. This stands in contrast to the digitalization's rapidly changing and
evolving technologies and a delayed return on investment (ROI) compared to conventional
investments in the power sector.
Furthermore, awareness regarding digitalization is yet to achieve desirable levels, as a result, many
clients are hesitant to add digitalization capabilities.

Methodology
A questionnaire was formulated to gather responses from internal departments of the sales and
technical departments of Siemens Technology. Questions were open-ended in nature in order to
encourage the respondents to elaborate on their answers and to gather in-depth responses that could
better help in gaining an understanding of the digitalization services. Follow up questions were asked
based on the responses given by the sales and technical representatives. Telephonic interviews were
conducted with field representatives who are responsible for the on-site implementation of the
digitalization solutions.
Further telephonic interviews were conducted with people responsible for the digitalization business
development in different countries under consideration to gain an understanding regarding the
awareness of digitalization solutions in each of the countries as mentioned earlier.
The research was conducted with the intent to analyze business models currently in usage in the
power industry to ascertain their feasibility for digitalization solutions. Once a negative relationship
emerged between both of them, research shifted towards identifying business models outside of the
power industry in order to evaluate their feasibility for cross-industry application.
Project/Training Description
Throughout the duration of this project, the existing power sector scenario in all the chosen countries
was extensively analyzed along with their government policies regarding the power sector and
renewable sources of energy in particular.

India
The Indian power sector is the world's third-largest producer of electricity, the fourth largest
consumer as well as possesses the world's fifth-largest generation capacity. The total installed
capacity of the Indian sector is 3,56,100 MW of which, thermal power forms a major part of the
generation.

Energy Mix

Thermal (64%) Nuclear (2%) Hydro (12%) Renewables (22%)

Energy Mix, Indian Power Sector

Source: Central Electricity Authority

The current power sector is further broken down into three major players: State, Private and Central.
State power sector supplies 1,05,075 MW of total installed capacity whereas Private and Central
sector provides 1,64,427 MW and 86,596 MW respectively.
Fuel-Wise Breakdown of the energy mix is as follows:
1. Thermal (2,26,279 MW)
2. Nuclear (6,780 MW)
3. Hydro (45,399 MW)
4. Renewables (77,641 MW)
Indian government taking steps to ensure that the majority of energy generated in the future is from
renewables. The Indian government has initiated policies such as the National Wind-Solar Hybrid
Policy. It has set itself a target to generate 175 GW (gigawatt) of installed renewable energy by 2022.
The main objective of the National Wind-Solar Hybrid policy is to provide a framework for the
promotion of large grid-connected wind-solar PV (Photo-Voltaic) hybrid system for optimal and
efficient utilization of transmission infrastructure and land, reducing the variability in renewable
power generation and achieving better grid stability. Under this policy, the government will encourage
the development of wind-solar hybrid systems through different schemes and programs. The Indian
government will also support the technology development projects in the field of wind-solar hybrid
systems.
 Malaysia
The Malaysian power sector is predominantly dependent on conventional resources coal and natural
gas respectively. Conventional resources form 89% of the total energy generated in Malaysia with the
rest coming from hydropower respectively. A large number of conventional power plants are reaching
the end of their life cycle in the next five years and are set to be decommissioned, as a result, the
Malaysian government is set to emphasize the exploration and establishment of renewable energy
resources meet future energy demands.

Energy Mix

Coal (40%)Gas (49%)Hydro (11%)

Energy Mix, Malaysian Power Sector

Source: Peninsular Malaysian Energy Outlook, 2017

Furthermore, as Malaysia grows from the upper-middle-income level to a high-income level nation,
growth is going to drive energy consumption. To meet short-term energy goals, the Malaysian
government has initiated projects to establish coal-based power plants in the next five years. To
improve competition and quality, the government has deregulated gas prices, opening the gas sector to
private competitors.
In addition to that, the government has taken steps to promote renewable energy and solar power in
particular. It has set itself the goal to generate 1000 MW of solar energy from LSS {Large Scale Solar
Photovoltaic Plant} in the time period of 2017-20.
 Bangladesh
The Bangladeshi power industry is dependent on natural gas for electricity generation. Bangladesh
has an installed capacity of 15,821 MW. Coal and LNG are the most important energy resource after
Natural Gas. Bangladesh is a net importer of energy.

Energy Mix

Coal (4%)Oil & Gas (27%)Gas (63%)Hydro (4%)Renewables (2%)

Energy Mix, Bangladeshi Power Sector

The government of Bangladesh has enacted several policies to promote the establishment of
renewable energy programs. The Renewable Energy Policy of Bangladesh was enacted in the year
2009 with the objective of harnessing the potential of renewable energy sources and dissemination of
renewable energy technologies in rural, semi-urban and urban areas. The policy has introduced
incentives to promote the use of renewable energy such as eliminating taxes on the import of
renewable energy equipment as well as exemption from paying corporate income taxes for both
government and private sector investors.
In 2012, the Bangladeshi government passed the "Sustainable Renewable Energy Development
Authority Act” leading to the establishment of SREDA (Sustainable Renewable Energy Development
Authority) to ensure energy security.
In 2015, the Government of Bangladesh initiated SREP (Scaling up Renewable Energy Programme)
to outline potential development and investments in the Bangladeshi renewable energy sector and to
launch an aggressive drive towards the integration of renewable energy generation into the grid, and
to expand off-grid electrification programs in the country. Under SREP, Bangladesh aims to increase
renewable energy capacity by 3.1 GW (Giga-Watt) with 98% being generated by Solar and Wind
energy.
 South Korea
South Korean power industry is primarily dependent on coal and nuclear power to meet their energy
needs owing to the country’s lack of natural energy reserves.

Energy Mix

Coal (40%)Natural Gas (22%)Nuclear (30%)Hydro (1%)Oil (5%)Others (4%)

Energy Mix, South Korean Power Sector

To ensure energy security and a move towards a sustainable future, South Korea has enacted several
policies to encourage renewables. National Energy Master Plan was implemented in 2015 to
strengthen climate change response by applying GHG (Green House Gas) reduction technologies to
thermal power plants, promote innovation in the nuclear industry as well as raise the renewable
energy deployment rate to 11% by 2035.
The South Korean government has enacted the National Strategy for Green Growth which provides
outlines for further sustainable, environmentally friendly renewable energy-based and energy-efficient
economic development. Under this, the government aims to increase the share of environmentally
friendly products by up to 18% by 2020 and the establishment of a tax system supporting new and
renewable energy sources and energy efficiency.
South Korean Government also made revisions to the Alternative Energy Act, 2002 under which
South Korea will establish a center for new and renewable energy development and dissemination,
and introduce a certification system for new and energy facilities.
 Thailand

Energy Mix

Purchases(69%) Renewable (4%) Lignite (8%) Natural Gas (19%)

Energy Mix, Thai Power Sector

Thailand has proven reserves of crude oil and natural gas, but at the current rate of usage, they will be
depleted within the next ten years. In order to ensure that demand is energy demand is met Thailand
has enacted several policies to safeguard the country’s long-term energy future. As a result, Thailand
is heavily dependent on purchases to meet its energy needs.
Government of Thailand enacted Renewable Energy Development Plan (REDP) in 2009 to bring
renewable energy to nearly 20% of the energy mix, increase energy security and encourage high-
efficiency energy technologies.
REDP aims to generate 500 MW of solar energy, 800 MW of wind energy, 324 MW of hydro by the
year 2022. Under REDP, the government has implemented a set of initiatives such as import duty
exemption on machinery, eight-year corporate tax exemption and a further 50% reduction for the year
eighth through thirteenth.
In 2015, the Thai government enacted EEDP (Energy Efficiency Development Plan) (2015-36) with
the intent of improving electricity security, addressing projected demand growth, and reducing the
need for additional generation and related state-backed investment. Under EEDP, the government has
outlined five strategic approaches to improving energy efficiency and to reduce energy intensity by
30% in the year 2036, in comparison with 2010. To achieve this target, the government has
formulated a strategy consisting of compulsory measures such as the enforcement of Energy
Efficiency Resource Standards (EERS), voluntary measures such as promoting greater use of LED by
price mechanism and complementary measures such as supporting the energy efficiency technology
research and development respectively.
 Australia
Coal is the dominant energy source for electricity generation in Australia followed by natural gas.
Australia has a total installed capacity of 44,769 MW.

Energy Mix

Coal (45.2%)Gas (19.0%)Hydro (16.1%)Wind (11.2%)Other (8.6%)

Energy Mix, Australian Power Sector

Australia has abundant coal and natural gas reserves most of which are exported, leading to a shortage
in meeting domestic energy demand. As a result of this, Australia has become a net importer of
energy.
To address these issues, the Australian government has enacted several policies, such as Research and
Development program in 2014, Clean Energy Finance Corporation (CEFC) in 2015, National Wind
Farm Commissioner and Independent Scientific Committee in 2015, Solar Communities Program in
2016.
Research and Development program aims to address the challenges that need to be overcome to
realize the full potential of the country's solar energy opportunities in the future. The program
addresses the challenges such as the reduction in solar costs, improvements in the capacity of existing
grids to accept intermittent supply sources for solar electricity generation, identifying and developing
attractive new applications and fostering a supportive regulatory environment.
The Clean Energy Finance Corporation (CEFC) was established in 2012 AU$10 billion in funding
available over a period of five years. CEFC has committed a total of AU$6.7 billion to research and
develop clean energy.
National Wind Farm Commissioner and Independent Scientific Committee were established in 2015
with the objective of providing transparency on proposed and operating wind farms.
Solar Communities Program was established in 2016 by the Department of the Environment and
Energy. The program will provide for community groups in selected regions across Australia to install
rooftop solar PV, solar PV, and solar connected battery systems. A budget of AU$5 million has been
granted to this project.
The entirety generation and distribution aspect of the power industry is a B2B (Business to Business)
channel, as a result, business to business marketing channels and sales processes were extensively
studied.
As the biggest players in the industry tend to be state regulators and large private generators and
distributors, a marketing plan and business models that generated interest and communicated value in
an effective and authentic manner was required, to effectively accomplish this, the basics of
marketing mix in the context of B2B marketing were revisited and leveraged to help in identifying
important parameters such as:
1. Customer Identification: National power regulators, State electricity boards and large scale
private power generation and distribution firms are already the customers of Siemens power
division and they formed a significant part of Siemens digitalization services business model.

2. Introduction to Clients: Siemens being an established name in providing technical expertise

and solutions is a well-known name in the power industry but this time, it was introducing a
new service as well as shifting its focus away from just being an OEM and a parts supplier, as
a result, there was a need to reintroduce the firm and its new direction to its existing customer
base and communicate the value that implementation of digitalization services will provide
them.

3. Personalized Meetings and Presentations: Once the customer has been communicated the
value proposition and is interested enough to take talks further, meetings and presentations
shift focus to provide a more in-depth and personalized look on how the implementation of
digitalization solutions and tangible value proposed will benefit the clients in achieving their
performance and economic gains.

4. Maintaining a good working relationship: At the conclusion of the sale of service and
implementation of the solution, it is imperative to maintain a good working relationship by
providing the clients with assistance in ensuring smooth operations and to inform them of
further upgrades and innovations that can be beneficial to them in the future.
This exposure to B2B marketing and sales was instrumental in helping me in evaluating opportunities
for digital solutions and to give a perspective on how the customer’s thought process when it comes to
large-scale industrial procurement.
Once the B2B marketing and external customer approach were studied, it was imperative to evaluate
how internal customers i.e. company employees in general and the sales and technical team assigned
to work on the power industry business in particular perceived digitalization solutions. To evaluate
this, a questionnaire was formulated and one-on-one interview sessions were conducted with the
members of these teams.
Questionnaires formulated for this purpose were made up of open-ended questions to encourage
respondents to give in-depth answers and to elaborate on the process that works behind the scenes on
deploying digitalization solutions to clients, follow-up questions were asked based upon their
responses in order to encourage them to elaborate further and share extensive knowledge regarding
the process.
A questionnaire that was used for interviewing the sales team focused more upon how the process of
approaching clients with digitalization solutions worked and some common concerns and perceived
ideas for digitalization that cut across various clients and queries regarding value proposition and
performance gains offered and how they were going to be realized in the real world working
conditions.
Similarly, questions presented to the technical team touched upon topics such as the deployment and
functioning aspects and how they coordinated with the sales team in helping address the technical
queries and concerns of the client over various aspects such as cyber-security and data-safety as well
as readiness.
Additionally, telephonic interviews were conducted with field officers who had been assigned the task
and responsibility of deploying and implementing digitalization solutions on location where client's
assets were functioning, they provided valuable insight on real-world implementation and how
compatibility with client resources was being optimized to ensure tangible performance as stated
during value communication were being realized.
Once these interviews have been concluded, project focus shifted towards researching existing
resources on digitalization services marketing, deployment and business models in general and the
power industry in particular, inferences gained from this research indicated that existing literature on
these aspects was minimal at best and was focused upon software aspects instead of complete
solutions. Moreover, none of these presented a feasible business model that could be applied to
Siemens digitalization solutions.
To address this lack of research material it was decided that it is better to expand the scope of the
literature review to analyze digital disruption in other related and unrelated industries. The intention
behind this was to study business models that were prevalent in these areas and functioning
successfully and evaluate them on the basis of their feasibility for cross-application to power industry
digitalization solutions.
Once suitable business models were identified they were researched in-depth to optimize them for
power industry conditions and regulations.
Once the evaluation of business scenario as well as the formulation of business models for
digitalization solutions was completed, focus once again shifted towards collating all the data that had
been gathered including facts and figures, it was imperative that all this information is interconnected
and made sense. This was made possible by constant revisions based on mentor feedback over the
course of this internship period.
At the conclusion of this internship, I have gained significant insight on the application of research
models to evaluate problems and formulating prospective solution alternatives to effectively resolve
them in a manner that is practical, workable and can be effectively deployed in real-time.
Areas of Challenges
A major challenge that needs to be addressed is the compatibility of the clients existing assets
with the digitalization solution's hardware. Their assets score low on digital readiness. On
average, conventional power plants in the selected countries have been in operation for thirty
years at the very least, their construction and technology were not designed to be compatible
with digitalization technologies, as a result, installing these solutions face major difficulties.

Another thing to consider is most of these conventional energy plants are reaching the end of
their life-cycle in which they have operated at peak load for most of their operating duration
as a result, the components have suffered tremendous wear and tear, and some of them have
been extended to operate beyond their life cycle in order to meet the increasing demand for
energy. This has forced the client to invest in the overhauling of their hardware to ensure
plant productivity.
As they have already made a significant investment in their resources, clients will be hesitant
to invest in digitalization solutions unless an effective value proposition plan is in place.
Business Models
1. Pay as you save business model

This is the defacto business model that is in use in the industry when it comes to digitalization
utility solutions. Initially, the client makes a lump sum payment that covers the installation
costs of the solution, once the solutions come online, the client makes a payment based on the
performance gains achieved and profits recorded since the functioning of digital systems.

Once the entire cost of the digitalization solutions has been recovered, the client keeps
making payments in the future for the continuation of the services and to cover costs of any
and all future updates.

2. Specialized service lease payment model

Under this business model, clients are rented out digitalization solution initially at a
subsidized rate that covers installation and manpower costs. The client pays an additional
fixed rent as decided under leasing contract to gain access to digitalization assets such as data
modeling, predictive analysis and human resources to operate and maintain digitalization
services.

The idea is to give clients complete access to secondary parts of the solution i.e. hardware and
maintain the control of the primary parts of the solutions i.e. competency and expertise and
the knowledgeable insights being provided by the digitalization solutions.

3. Subscription style business model

Subscription style business models allow the vendor to lock in clients for the period as agreed
upon by both parties. The client invests in digitalization solutions for their plants and under
the subscription model is provided support and capabilities of digitalization.

Under this business model, the investment made by clients covers the setup and running costs
for an initial period of the first two months. On the completion of the second month,
subscription charges are activated and they are to be paid based on the period agreed by the
client which can be monthly, quarterly, half-yearly or annually respectively. Subscription
charges will cover the operating costs, value costs as well as the cost of system updating and
maintenance.

4. Guarantee based business model

This model works based on an organizations reputation for expertise. The guarantee is backed
up by the proven performance of the digitalization solutions and the tangible value added to
the client's resources. This model has been formulated specifically for A.I. and machine
learning- based solutions.

Under this model, the client is provided complete access to all the resources and capabilities
offered by the Siemens digitalization solutions. Once the solutions have been installed and the
control has been handed over to the client, operating the solutions becomes the sole
responsibility of the client and the client pays back the vendor on the basis of the
improvements in operating efficiency and performance gains achieved.
Conclusions
Digitalization can serve as a viable solution for the power sector, improving the availability,
reliability, and performance of the power plant as well as providing the facility of remote monitoring.
Its application in all the different parts of the power industry has produced noticeable gains in
performance as well as added tangible and intangible value to the clients in power generation,
transmission and distribution.
In power generation, digitalization solutions enhanced the availability of power plants by improving
turbine start-up times. As a result of faster start-up times, power plants achieve their operating range
and peak load faster leading to improved performance over a period of time.
Similarly, these solutions improve the reliability of the power plants by offering predictive data
modeling and diagnostic analysis, enabling clients in identifying breakdown points and deviations
from optimum working range faster and with greater accuracy, thereby extending the plant life cycle.
Additionally, the digitalization service will enable the clients to extract even more performance from
the plants. Digitalization of plants will allow them to be run in a flexible operating pattern allowing
the plants to be run below peak load and for a longer period of time and facilitate running of a
conventional power plant in conjunction with renewable power. This will also lead to a reduction in
the emission of harmful pollutants.
Furthermore, digitalization solutions also provide the facility of plant automation and remote
monitoring allowing the power plants to be run with minimal human contact and interaction, enabling
minimization of human-based errors.

Findings
The most viable way to gain value from digitalization solutions based upon the current scenario is to
use these services to improve existing processes and operations to deliver immediate value and build
momentum for the future.
In the current market and governmental scenario, it is much more viable to use digitalization services
as an accelerant/enhancement to existing client resources rather than persuading them to start from the
beginning and build all digital inclusive capability from scratch.

Learning
1. Practical application of the marketing concepts that have been taught in college.
2. Exposure to B2B (Business to Business) marketing.
3. Application of questionnaire formulation and response gathering techniques.
4. Evaluating the cross-application of concepts and innovations within different fields.
5. Ability to collate different information, data and insights into a single cohesive knowledge
to paint an overreaching picture.
6. Application of research methodology in a live business project scenario.
Limitations
i. Buyers awareness of the digitalization solutions
Buyers are slow to adopt digitalization solutions even though they are aware of the paradigm shift
taking place in the power industry right now. A significant cause of this reluctance is their low
awareness of implementing digitalization solutions even though they are aware of the benefits
presented by digitalization.

ii. Vendors and OEM's (Original Equipment Manufacturers) evaluation of the Digitalization
market scope and profitability.
Power and Utility industry consists of multiple stakeholders such as government and private sector
clients as well as vendors. Additionally, OEM dominates the market when it comes to providing the
required equipment and installation capabilities.
A major problem plaguing the industry is the lack of insight and clarity regarding the market scope
and profitability of providing digitalization solutions. The stakeholders are caught within the dilemma
of being an early adopter and risk going in the wrong direction or to wait and observe the market
conditions and sacrifice the first-mover advantage to become a fast follower.
Another significant obstacle to gauging profitability is that digitalization services are ‘OEM agnostic’
i.e. both the hardware and digitalization solution need not be provided by same company for
achieving optimum performance as a result a multitude of large, medium and small digital services
providers have entered the power industry market providing an expansive range of digitalization
solutions that are customized according to the client’s needs and are compatible with their existing
systems. This cross- industry competition has further complicated matters and made existing vendors
and OEMs more hesitant to invest in digitalization capabilities.
Furthermore, there is no clear framework that can effectively measure ROI (Return on Investment),
quantifying tangible and intangible values effectively in monetary terms.

iii. Business Model Formulation

A lack of clarity on market scope, deliverables and profitability have raised questions regarding the
utility and effectiveness of the conventional business model for digitalization services. Traditionally,
the power industry has functioned on a lump sum and long term payment options. This conventional
business and payment model is not feasible for digitalization services due to technological disruption
and due to most solutions being customized to the user's needs and capabilities as well as the rapid
implementation of system improvements.
Moreover, the implementation of digital solution requires a change in the relationship between the
industry players from client-vendor relationship towards an equal partner relationship. The players are
now required to work in synergy with each other to implement digital solutions.
Recommendations and Future Scope
With the increase in adaptation of digitalization technologies in power sector and increasingly
stringent emissions norms and the ever-increasing role of renewables in the energy mix of the
countries to meet the demand for energy, digitalization will play a major role in helping the industry
players to meet and exceed performance expectations on all these parameters.
As of this moment the future holds nearly limitless possibilities for the growth of digitalization
solutions in the power sector. Exponential improvements in technology will continue to occur as
cross-industry competition and the emergence of non-traditional players will be the driving factor.
Additionally, as digitalization solutions gain acceptance among major governmental and private sector
players, business models will be further refined by the market forces until an industry-wide adaptable
model emerges. It will also lead to a fundamental shift in the client-vendor relationship away from
just being a customer- supplier relationship towards being a partnership and focus on achieving
synergy for the goal of mutual benefit and value addition respectively.
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