Citizens Gas Company: Addressing Challenges In Natural Gas Distribution And Transmission

Detailed Analysis and Discussion:

Question:

Discuss about the Strategic Information System: Science and Public Policy.

Citizens Gas Company is a public utility engaged in the distribution along with transmission of natural gas. The entity was formed in 1951 and has been in the domain for over 150 years or so. The group currently serves a host of residential, industrial and commercial consumers in the region of Australia. The organization serves its services and solutions to a host of consumers. The group has been serving natural gas servicers to a wide range of consumers the likes of, industrials, commercials and residential. The company has been in the domain for a considerable period (Ahlqvist et al. 2012). But in recent past, the company has been in somewhat doldrums. The residential consumer gas usage is in relation with that of weather. On the other hand, commercial consumer usage is dependent on the weather in partial context. The company offers a vast range of services and solutions regarding sale and distribution of gas, sales department and an array of consumer service programs which are aimed at offering best possible services and solution to the service users by and large. The given proposition discusses organizational paraphernalia which is causing impediments in the operations of the business to some extent. The following analysis encompasses over reviewing of the existing concern and provides some insights about resolving the same. The company has included a new director in corporate planning who is at the helm of resolving the issue and devising a new information system which will aid in the analysis of demand and supply of gas.

Detailed Analysis and Discussion:

The given proposition states that the company has initiated a contract that of purchase of natural gas from ten pipeline organizations for five to fifteen years. The firm generates revenue from industrial consumers worth 65 million USD (Diesendorf 2016). The strength of the consumers in this segment is near about two thousand. On the other hand, the company rakes up 25 million USD from a base of thirty thousand consumer base. Concerning some contracts, the supply is in equal monthly increments, while for others, the supply is variant in accordance with the heating season. For meeting the consumer demands, gas is being pumped into the storage field when the supply surpasses the demand of the consumer. However, there are no such restrictions concerning storage of the gas barring that the field must be full at the beginning of each year. Accordingly, in the event of supply of the gas being less during the year than that of the required amount CGS curtails its operations to industrial clients. It must be noted in the perspective that restrictions imposed on the industrial consumers are ought to be diligently managed to maintain the overall business prospects (Boie et al. 2014). But the factual reality is that that move propelled with a loss in sales and resulted in excess supply towards the end of the year.

The top brass of the firm took stock of the predicament and inducted a new director in the Department of corporate planning. The role of the new resource is to plan a conceptual design in the light of an information system which will enable a clear analysis of supply and demand of the fuel to respective divisions. The system as devised by the corporate planner aims to create a monthly plan in keeping with a five-year roadmap. However, it is to be considered that the emphasis should be on the first year to begin with. The plan entails over a detailed report that would assist in the decision-making process of the management. The forthcoming system aims to use actual data during the entire year of the project. The beneath discussion highlights about various criterion that the firm may mull over for specification and identification of the structure and systems of the company’s new system to negate the current predicament (Yeo and Yee 2014).

Criteria for consideration of CGC’s new system:

Criteria for consideration of CGC’s new system:

At the outset, it is important to note that CGS is in need for a suitable and appropriate strategy in place that would aim to explore the nuances of criteria for bettering the business operations of the firm. The diverse elements concerning the criteria in the light of the development of CGS’s new system are elucidated below.

Market Information:

The features that are responsible for impacting the supply and demand for gas must be isolated. The management needs to assess the market conditions in the first place. The firm has been offering premium services and products to a host of consumers ranging from industrials, domestic households, and residential consumers. Hence, the firm should strive to accumulate as much as exhaustive information possible about the market conditions where the firm operates. It is also to be seen that the effect of such move is quantified. The management should determine the relative importance of the assessment and diligently weigh the options which should aid the firm to make strategies in making inroads into the diverse markets (Correa-Henao et al. 2013).

Need for Precision:

The accuracy level that is required for the system to be implemented determines the essential quality of the input data, the level of data and also erudition of the system logic. The firm should be meticulous about the accuracy in the operations. Hence, it is imperative for the firm that it creates a robust design to provide accuracy in the assessment. However, the accuracy should aim to meet the need and appropriate measures that need to be undertaken in the correct perspective. It is crucial for the management and the recent corporate planner to consider that unwarranted effort is not utilized in the process of being exceedingly accurate concerning specific areas in the light of overall accuracy being inherently less owing to planning standpoint (Tonts and Taylor 2013).

Frequency of usage:

The incidence of system usage offers trend and direction concerning to the level of erudition and automation required. As a matter of fact, the system is planned that aims to be used only once in a month for projection of the effect of the actual and recent data. It is also estimated for development of a less complicated system in place. The level of sophistication along with automation those are required to be implemented in the place must be devised on a frequent basis. On the other hand, it may be adequate for the development of a less sophisticated structure. If at all it is probable that a large variety of alternatives be evaluated on a monthly basis, a refined method may be more desirable and enviable (Ricard 2015).

Turnaround Requirements:

This element by far assumes greater importance amongst all. Turnaround refers to the proportion of results post implementation of any plan or progress. In other words, it is the total time taken between the submission of a project for execution and the return of benefits associated with the same. This period is termed as completion of a process cycle which is commonly expressed regarding average of previous times (Martin and Rice 2012). Hence, the requirement for appropriate and timely reporting at the end of a stipulated period offers assistance and regulation regarding the degree of automation along with the level of intricacy that will be appropriate in the given perspective. The factual reality is that the system would be utilized regarding multi-year planning and also on a tactical planning on a monthly basis. Therefore, it is crucial that the information system is instituted in such a manner that provides for a rapid turnaround of results and outcome at the end of the month. In accordance to that, adequate considerations must be rendered aimed to minimize the data input requirements (Pollitt 2012).

Market Information

Cost or Benefit Analysis:

The management of CGS should weigh its chances of making an appropriate cost and benefit analysis or study. The corporate planner should take into consideration all the essential factors that are responsible for implementation of the information system in CGS. CBA is most useful when the planner is analyzing the policy to determine whether the project’s total benefits exceed the costs or when alternative programs are being compared to observe which one achieves the greatest benefit to the organization (Soma et al. 2016). The major difficulty with CBA is that it is often difficult to place dollar values on all (or most) costs and benefits. On the other hand, CEA is most useful when you know the outcome you desire, and you are determining which of a set of alternative programs or projects achieves the greatest outcome for the costs. It is also useful in cases where major outcomes are either intangible or otherwise difficult to monetize. The major difficulty with CEA is that it provides no value for the output, leaving that to the subjective judgment of the policymaker. Although some deem CBA or cost-benefit analysis as a superior technique, it is sometimes complex and time-consuming. On the other hand, Cost Effective analysis may offer a proper starting point by requiring the corporate planner to spot an essential outcome and also recount the result with that of funds spent on the project in consideration (Dowd and Hobman 2013).

Supportability:

The resources of CGS should be able to offer support to the structure on an enduring basis. This action includes the likes of collection and input of data along with updating of the system. Having said that, depending on the support system being extreme, the structure will undergo from shortcomings of timely reporting and other measures. The system may be run by usage of simplified assumptions that may impact the extent of credibility and accuracy of the structure that would be implemented in the ranks of the organization. The flip side of it is, that if the system is unable to be readily modified and maintained, the same will degenerate in a state of collapse and may not be used further (Freeman and Hancock 2016).

Data Process Management:

In general, the planning system and premise would require a considerable amount of system and equipment and other relevant and appropriate resources which would be utilized in areas of data processing and also storage of valuable and indispensable data and information. Hence, it is imperative that the key personnel at the helm of affairs is well versed with system resources, the likes of computer resources, and other important equipment required in the system (Zhao et al. 2012).

Data incorporation into CGS new structure:

The multifarious factors those are responsible for identification of data that are required to be incorporated into the system for provision of appropriate planning facility are explained as under.

Number of consumers:

The count of consumers should be reflected by the means of the month or on a monthly basis. The fact of the matter, in this case, is, in keeping with the regularity of growth of consumer wherein the customer base may be used in concurrence with the factor of growth. The volume of the consumer needs to be segmented into various categories by relevant types. Such groups are estimated to assist estimation of demand, the likes of, commercial, residential or for that matter, industrial heating or industrial non-heating consumers. Here, it is important to note that consumer count exert major factor regarding identification of planning capability of the firm is concerned.

Need for Precision

Weather Information:

As far as planning competence is concerned, weather data and information assume substantial importance in the regard. The detailed data relating to the weather is required for projection of heating requirements that forms an essential data for project implementation of the CGS. In the primary year, meteorological tendency or trend may specify the nature of the weather or climate prevalent in the region which may be the cold or unusually warm year. And for the subsequent year, or years to follow, an average monthly data or information may be utilized in the research. Finally, as the year in on a progression, forecasts may be made which would be of short-term and more accurate in nature. This information should be of immense help to the planner which should enable the user for improving the predictive ability of the weather conditions (Tsokhas 2016).

Heating factors:

This type of data is required by the concerned authority for determination of planning capability of the new information system of CGS. The heating factors are the information required for conversion of project data into consumers’ demand. Hence, this aspect is deemed to be an essential element in the scheme of things. They are required to be provided for specific and each type of consumer which utilizes heating in various forms and utilities. The type of consumers that may be classifies by heating factor are mainly, industrial heating, residential as well as commercial heating. Here, it is worthwhile to learn that heating factor may not vary month wise, except, it is established about the existence of a seasonal relationship or for that matter the likelihood of conversion trends (Tampakis et al. 2013).

Consumer unit demand:

The average consumption on a monthly basis aimed to serve both industrial and commercial purposes must be made available. This information must be available on a varying or constant basis over time, for reflection of both important dynamics that of seasonal fluctuations as well as trends and tendencies that are long term in nature. This information or data may be utilized for projection and estimation of a non-heating segment of industrial as well as commercial demand and requirements (Mohammed et al. 2014).

Sales forecast:

Sales forecasting is an important tool regarofding project appraisal and estimation. It is the process using which the entity predicts what the futures sales would be. The forecast is performed for a particular period usually in a fiscal year. Here, it is clear that accurate sales forecasting aids the firm for making informed business decisions (Gliedt and Hoicka 2015). Here, in this regard, the sales of the esteemed and popular industrial accounts ought to be projected by the corporate planner on a monthly basis or the basis of a five-year plan. This, in turn, will help the future years for making of annual growth rates. As a matter of fact, non-heating and heating sales for a range of consumers by the means of revenue class (Patt and Weber 2014).

Consumer rate structure:

Consumers Energy is a regulated utility; wherein the regulatory bodies approve all rates for electric and natural gas service provided to customers. The rates are primarily established based on regulatory proceedings that entail over base costs of utility services that incorporate the pipes and wires using which the service is being delivered and the costs of operation and owning. Here, in this case, the consumer rate structure should endow with rate information on a monthly basis at a different revenue level of class, the likes of, industrial, residential and commercial. The data or information must be provided on a monthly basis for the provision of changes in rate, periodically by revenue class (Mangoyana et al. 2013).

Frequency of Usage

Supplier terms of contract:

In the context of CGS, the corporate planner ought to draft a contract in keeping with each supply contract. Here, it must be noted that the term of the contract means beginning and end dates of the contract respectively. The monthly volumes, cost of units, and different paying conditions must be maintained by the organization (Head 2014).

Capacity of Storage:

As far as Citizen’s Gas Company (CGC) is concerned, the corporate planner should determine the storage capacity of the gas field. This measurement is required to establish the quantity of the gas remains in storage which may be taken back in case of any exigencies to provide supplementary gas supply to other divisions or so (Kim et al. 2012).

Priority method:

A priority system needs to be established in case the company needs to curtail service to its customers due to an inadequate supply of gas. The corporate planner should be at the helm of affairs which would enable her to prioritize the firm’s operations in the event of exigencies in operation wherein the supply may have to be curtailed in keeping with a uniform supply of gas in a wide range of area (Khaliliâ€ÂDamghani and Tavana 2014).

Conclusion:

In fine, it may be said that the primary six factors are indispensable for determination of demand for the gas and fuel. The last element or indicator is important which elucidates that whenever the supply is inadequate for meeting the demand of a large scale of consumers all across the geography. It is essential to note that the firm must consider data on a monthly basis since variations happen in the same business environment and domain. Owing to the volatility of the domain in which CGS operates, plans and policies should be flexible in nature to accommodate the emerging changes and alterations on the rather complex business domain and to the host of consumer needs that the firm in consideration caters to.

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