Essay: Strategic Information Systems Enhance Business Efficiency.

Types of Strategic Information Systems

Questions:

1. Discuss the criteria to consider in specifying the structure and features of CGC’s new system.

2. Identify the data that should be incorporated into CGC’s new system to provide adequate planning capability. Explain why each data item it is important and the level of detail needed for the data to be useful. 

The current global scenario has witnessed an increase in the rise of globalization and competition amongst the firms. In this regard, it is worth mentioning that adaptation of strategic information system becomes vital in nature since it enables gaining a competitive advantage.  Specifically mentioning, strategic information systems are designed with respect to corporate business initiative (Grant, et.al., 2010). Use of strategic management system enables an organization to deliver products and services to the customers at lowest possible prices which can be differentiated and/or are innovative in nature. In this constantly changing world of Information Technology (IT), strategic information systems play a key role in enabling organizations to store, analyze as well as process the information that it creates and obtains from other sources. It further enables organizations to gain an understanding of the growth opportunities and determine the manner in which operational efficiency of the organization can be enhanced.  In addition to enhancing the level of business efficiency, strategic information systems offer management with a considerable level of information concerning the manner in which businesses can be operated in a smooth manner. In general, there are three types of strategic information systems that include financial systems, operating systems and strategic systems (Khosrow-Pour, 2006). Hence, with regards to the case of Citizen’s Gas Company (CGC), this essay aims at providing an understanding of the criteria that needs to be taken into consideration for highlighting the features as well as structure of the new system of CGC. Correspondingly, the essay would further recognize the information that needs to be incorporated within the new system of CGC in order to offer sufficient planning capability. On a similar note, the essay would explain why each of the data items is beneficial as well as the level of detail that is required for the data that is useful.

An assessment of the case scenario provides an understanding of the fact that in order to mitigate the problems faced by the company; CGC has hired a director who has been allocated the role of corporate planning. A conceptual design has been presented in relation to the strategic information systems which would play a key role in determination of the overall gas supply as well as demand. In this regard, it is worth mentioning that the system is associated with offering information on monthly gas plan, wherein the first year will be provided utmost significance. Moreover, the plan is associated with offering detailed reports that would play a key role in fostering the decision-making process. Furthermore, it is likely that the system would utilize actual data that is available during the year in order to project demand for natural gas. In this regard, a number of criteria can be determined with regards to highlighting the structure as well as features underlying CGC’s new system. Herein, it must be noted that one of the most important criterions that needs to be considered towards suggesting the feature of new system is supportability (Galliers & Leidner, 2014).

Features of CGC's New System

Supportability can be considered as one of the most important steps underlying the organization, which requires that personnel associated with the company are capable of supporting the system on a continuous basis. Moreover, there is a need to highlight the fact that supportability would involve gathering and analyzing the data that can be uploaded to the information system towards ensuring that the information is appropriate. Moreover, in case of high level of support burden, there exists a chance that the system might face challenge of lack of reporting in a timely manner. Correspondingly, excessive burden could result in operating the system with the help of simplifying assumptions that have a negative impact on the level of accuracy along with credibility pertaining to the system. Hence, the inclusion of supportability criteria becomes vital in nature (Porter & Millar, 1985). Another important reason that can be highlighted with respect to inclusion of supportability criterion can be attributed with the fact that in case the system is incapable of being modified as well as maintained, it can result in improper or no use of the system, which would have a negative impact on the planning process. Hence, in order to ensure that the system operates in a successful manner, there is a need to include supportability as one of the criterions in establishment of new system (Cassidy, 2005).

Cost benefit analysis can be considered as another important criterion that needs to be included as a highlighting feature of the system in order to ensure that the business operates in a successful manner. Specifically mentioning, the cost benefit analysis is associated with analyzing and comparing the benefits that can be derived with the help of incurring a specific amount of cost. Notably, the new system needs to be analyzed and justified with the help of a cost benefit analysis (Xu & Quaddus, 2013). This would play an important role towards ensuring that the business operates successfully and provides high level of benefits in comparison to the costs incurred. Environment underlying data processing can be considered as yet another important criterion that can be included in the system. Since, the system is largely dependent on the use of information technology for its operations; there is a need to ensure that proper resources are available in order to manage the technological requirements. Specifically mentioning, tools such as computer systems capable of processing as well as storage of information plays a vital role in the process of ensuring that the system meets the technological requirements (Schultheis, 1991).

Another significant criterion that must be taken into consideration towards highlighting the features of new system can be attributed with the requirements pertaining to market information. In this regard, it is worth mentioning that the a number of factors can suggest the rise in the requirement of market information that includes factors influencing the demand as well as supply of gas, such as the climactic factor as can be noted from the case scenario. Herein, it must be noted that there is a need to isolate such factors towards determination of the relative importance of these factors. Moreover, the effect of these factors needs to be quantified towards ensuring that the business operates successfully based on the implementation of new system (Khosrow-Pour, 2005). Another significant criterion that can be highlighted with regards to development of an understanding regarding the new system of CGC is the frequency pertaining to use. In this regard, due consideration needs to be placed on the fact that the frequency underlying the use of system enables gaining an understanding of the level of innovation, automation as well as sophistication that is required in the system. For instance, in case CGC is concerned with operating the system only once in a month, a system characterized with lower level of sophistication can be considered apparent in nature since it will be capable of addressing the organizational requirements. On the contrary, it must further be noted that in case there is a need of evaluating a number of alternatives that requires operating the system several times in a month, a much complex as well as sophisticated system such as the ones dependent on internet can be considered as crucial in nature (Rainer & Cegielski, 2009).

Criteria for Highlighting the Features of the New System

The requirements pertaining to gathering turnaround information can be considered as yet another vital criterion associated with specifying the attributes pertaining to the new system of CGC. Herein, it must be noted that there is a need to ensure timely reporting of the data at the end of each month which is further associated with providing support in relation to the degree of automation along with the degree of complexity that can be considered as appropriate in nature. Moreover, there is a need to note that since CGC can use the system for monthly or multi-year tactical planning, hence, the system needs to be designed in a manner that is capable of offer quick turnaround results at the end of a specific month (Löser, 2015). Due Emphasis must further be placed on reducing the amount of requirements of data inputs in the system. Finally, the need for gaining accuracy can be regarded as yet another significant criterion underlying the successful implementation of system in CGC. Specifically mentioning, level of accuracy has a key role to play in relation to the system that plays an important role in the determination of level of sophistication, input data quality along with detailing of the system. To be specific, the system needs to be designed in a manner that is capable of offering high level of accuracy. Moreover, due care needs to be taken towards ensuring that high level of effort is not spent in situations where in the level of accuracy is lower as a result of planning environment (Hunter, 2008). 

In order to foster planning capabilities, there is a need to recognize the information that must be included in the new system of CGC. Each of the data items can be considered as crucial in nature that further requires a certain level of detailing towards making the system useful in nature. In this regard, it is worth mentioning that data regarding the customers’ needs to be taken into consideration.  Projections must be made with regards to the number of customers on a monthly basis, unless it is observed that the growth of the customers is regular in nature. In such scenarios, the customer count can be aligned with the growth factor. Moreover, there is a need to divide the customer count into various categories based on the utilization that would further enable gaining an understanding of the estimated demand. The demand can be estimated from various types of customers such as residential, industrial and commercial customers. Another data that needs to be incorporated within the new system of CGC towards providing proper planning capability is the weather data (Tan, 2009). As can be noted from the case, weather has a considerable impact on the usage of gas by residential customers and commercial customers to a certain extent. Hence, it must be noted that the weather data needs to be included in the new system to analyze the heating requirements of customers and estimate the demand. Since due emphasis would be placed on the first year of operating the system, it must be noted that meteorological trends can play a key role in highlighting a warmer or colder weather. With regards to the remaining years, weather data on an average monthly basis can be utilized. As the years of using the system progresses, there is a need to make much accurate short-term forecasts that is required to be uploaded in the system in order to enhance the predictive abilities pertaining to the system (Information Resources Management Association, 2001).

Supportability

Heating factors might be considered as yet another significant data that can be used in the company’s new system towards offering planning capabilities. Specifically mentioning, data pertaining to heating can play an important role in converting the weather data into predicting the demand of customers. Heating data needs to be further offered to all the specific customers associated with the use of gas for heating purposes, which might include industrial, commercial or residential heating (Ward & Peppard, 2016). Moreover, it must be noted that the factors underlying heating do not entail change based on month, except in such cases where it has been determined that there is a seasonal relationship or it is likely that there are trends such as conservation. Likewise, data pertaining to customer unit demand can be considered as another vital data that needs to be incorporated within the CGC system. Hence, it must be noted that the average monthly consumption with regards to each of the industrial and commercial non-heating customers is required to be offered, either in a constant manner or that varies with respect to change in time. It further aims at reflecting information pertaining to seasonal fluctuations as well as longer term trends. The data pertaining to customer per unit demand can further be utilized in order to make projections with regards to demand for industrial and commercial non-heating gas (Papp, 2001).

Sales forecasts can be considered as yet another significant data that can be used in the system. Herein, there is a need to note that the information regarding the sale of industrial accounts must be forecasted in an individual manner that is based on every month of the first year. After the first year, annual rates of growth can be used to make sales forecast. Moreover, revenue class will be used as a measure to estimate the heating as well as non-heating sales in case of the customers. The next important data that needs to be incorporated in the system is the customer rate structure (Koerner, 1990). The customer rate structure is associated with offering information pertaining to monthly rates with respect to all the classes of customers, i.e. for industrial, residential as well as commercial customers. Additionally, there is a need to note that the data needs to be offered on a monthly basis for offering information on changes in the periodic rates based on revenue class. Herein, there is a need to consider that the aforementioned factors are considered vital in nature towards assessing the gas demand (Galliers & Leidner, 2013).

On a similar note, emphasis needs to be further placed on terms of supplier contract that can be considered as another important data that can be used in the system. In this context, it must be noted that information regarding unit costs, take-or-pay, and contract terms along with monthly volumes needs to be provided in every supply contract. Another significant data that requires to be inserted in the new system in order to foster planning can be associated with the data underlying storage field capacity (Power, 2004). Herein, due consideration needs to be placed on the fact that data pertaining to the gas storage field capacity is considered vital since it enables determining whether the gas outstanding in the storage can be reserved in order to increase pipeline supply of gas. The above two data that needs to be inserted in the system can be considered vital towards analyzing the gas supply. Finally, a priority system can be considered as another significant data that can be used in the system towards assessing such situations when the company requires curtailing gas services offered to the customers with regards to inadequate gas supply. Priority system is further considered an important data since it enables providing effective direction in situations wherein supply of gas is unable to meet the demand for gas (Beynon-Davies, 2013). 

Conclusion

With changes pertaining to the competitive modern-day scenario, there has been a significant rise in the use of strategic information systems. With respect to the case, the study noted the various criteria that needs to be considered for highlighting the features underlying the new system, which includes factors such as frequency of use, need for accuracy, turnaround, supportability, cost benefit analysis and need for market information. Correspondingly, the study highlighted data that can be included in the system towards fostering planning, which includes data pertaining to heating factors, number of customers, weather data, customer unit demand, sales forecast, customer rate structure, priority system as well as storage field capacity. 

References

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