Delta Electricity

25 Pages   |   4,631 Words

Abstract (No need for abstract)

Since the demand for electricity is growing worldwide the usage of IT can be beneficial for Delta Electricity. This paper guides Delta electricity in this direction. In order for Delta Electricity to operate in an efficient and effective manner it would have to incorporate IT with its business. To ensure that Delta Electricity achieves its goals and objectives, it needs a clear understanding with proper strategies designed on how it can be done. This is done by a better IT and business alignment. This paper aims to develop elements of the IT strategy combine with Delta Electricity business.

 
Contents
Abstract 1
Introduction. 3
Company Overview.. 3
Scope. 4
Approach. 4
Strategic analysis. 4
Business Maxims. 4
IT-Business Alignment Maturity Evaluation criteria. 6
Communication. 6
Competency/Value Measurement 7
Scope and Architecture. 8
Partnership. 9
IT Governance. 10
Skills. 10
Strategic objectives 11
Maxim driven. 12
Alignment driven. 12
IT Strategy Definition. 13
Strategy Implementation and Evaluation. 16
Conclusion. 21
Bibliography. 21
 

Introduction

Company Overview

Delta Electricity produces electricity using coal, gas, biomass and water. It was formed in 1996. Most of Delta´s output generation takes place at 5 PowerStation’s, Mt Piper, Wallerawang, Colongra, Vales Point and Munmorah. Delta operates under the Energy Service Corporations Act (1995). Delta is Government Trading Enterprise. It is also governed by the State Owned Corporations Act (1989) (Delta, 2011).Delta sells electricity mainly to energy retailers and industrial customers in South Australia, Queensland, New South Wales, Victoria, and the Australian Capital. Delta has its headquarter in Sydney, Australia (Global Data, 2011).
Total number of employees is 705. Below is the organizational structure for the company.

(Delta Sustainability Report, 2010).
The IT department for the company is being given growing importance over recent years. It puts focus on using technically efficient ways in electricity generation. Before that all (Before when? Need to be specific) IT work was outsourced by now with its growing importance a department has been established in the company itself (Delta Elecricity Annual Report, 2008). (Check your evidence! As far as I know Delta has a well- established IT steering committee.
 

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Scope

This analysis looks at the business metrics and IT level strategy and aligns IT to Delta business. The recommendation help will contribute towards achieving this IT-Business Alignment.

Approach (This is unclear to me .check the feedback on the interim report I have Cleary outlined what you can do and how ) Also read sample project .

The report looks at business metrics which focus on:
  • Human Resource
  • Cost Reduction
  • Growth
  • Flexibility and environment protection
It than combines these with IT strategies and ends with recommendations to incorporate IT and business.

Strategic analysis

Business-driven IT infrastructure creation requires executives to thoroughly understand their firm's strategic context. By formulating a series of business and IT maxims, the managers than develop the IT infrastructure capabilities needed to achieve their business goals (Broadbent & Weill, 1997).

Business Maxims (OK maxims)

  Business Plan Category
  1.  
To be efficient, safe and reliable producer of energy for industry and the community
The company wants to support the community with reliable power while demonstrating responsible environmental performance.
Flexibility and environment protection
 
  1.  
To adapt to climate change and a low carbon future (This sound more pf a management orientation rather than cost reduction, especially for a firm in a power sector)
Delta Electricity was to implement its greenhouse response strategy by further developing low
Emission generation technologies.
Cost reduction
  1.  
To be recognized by the community as a responsible environmental manager by promoting environmental culture among Delta staff managing the clients well.
The company wants to Undertake a survey of community attitudes to Delta’s environmental management and than
Implement recommendations in accordance with program.
Flexibility and environment protection
  1.  
To continuously improve the efficient use of resources and by-products(Cost)
The company wants to pay attention on its water usage and wants to minimize it and secure sufficient water to ensure supply of electrical services.
 
Growth
  1.  
To provide options for generation capacity expansion(growth)
Delta wants to focus on more ways to generate electricity in a cheap manner
Cost reduction
  1.  
To retain multi-cultural, hardworking employees
The company wants hardworking people in its workforce and for it the company tries to give equal opportunities to everyone
Human Resource
  1.  
To sponsor research
The company is focusing on research on renewable energy
Technologies with emphasis on grid integration and energy storage.
Growth
  1.  
To integrate sustainability into the workplace
The company aims to promote positive behaviors and achievements that align with sustainability
Values amongst their management.
Human Resource
  1.  
To improve efficiency and reduce waste within the business by focusing on consumers
The company aims to review the efficiency by focusing on consumers.
Cost Reduction
(Delta Electricity, 2010)
Table 1: Business Maxims of Delta Electricity.(There is no clear flow of maxims into the analysis )

IT-Business Alignment Maturity Evaluation criteria (If this is the approach you plan to take , you need to provide some background of the IT department of Delta –how many people work there ,their skill make up, what applications are supported, etc

 
You need to scope your analysis to selected categories and focus on teasing out the specific IT related issues – see sample report
The model for IT- Business Maturity Evaluation criteria is helpful for determining the position of Delta Electricity. The diagram below highlights its 6 important features that are than studied for Delta.

(Edifice, 2010).

Communication

Communication is important at every level of Delta Electricity. A number of consultative meetings are held on a regular basis. Discussions regarding matters which impact the electricity industry, Delta Electricity, employee related matters and significant initiatives are considered and proposed by Delta Electricity. This includes the meetings held between Delta Electricity executive managers and Union officials and the Business Unit level meetings. Delta allows using information of a commercial or confidential nature in an authorized manner (Delta Electricity Employees Enterprise Agreement, 2009). The IT personals at Delta Electricity are quite aware of the business goals and objectives (How did you establish this?) and thus, provide their expertise to grow and develop the business. Moreover, the high officials as well a people of the board also have basic understanding of the IT information needed for Delta Electricity. The board meets on regular bases where the information is exchanged between each department including the IT department and the attendance of all Board Directors is made mandatory to all such meetings (Delta Elecricity Annual Report, 2008). Focus is given on a two way communication between the employee and leader through emails, news alerts, phone calls and instant messenger in some cases. (You need to focus on IT issues) The employees are well aware of the advantaged of using IT in electricity generation. They know that using IT helps provide multiple additional standards and helps modify energy production and ultimately reduces their cost (Boutin, 2011).Delta also outsources most of its IT work to companies like Mincom (Mincom, 2011) and Consultel (Consultel IT, 2011) for its IT work in work management software and other important key IT services to the company. For this reason, the IT might not be clear to every employee in Delta since much work is not done inside but an attempt, none the less, is made to help the employees understand the IT process.

Competency/Value Measurement

Delta Electricity does not have a proper laid out metrics to define the overall cost and benefits of IT strategy. However, managers at Delta do follow up a proper procedure for accepting or rejecting any project. Any project chosen is to be under Environmental Planning & Assessment Act 1979 (EP&A Act) and under the Protection of the Environment Operations Act 1997 (POEOAct).(This is rather strange! Check your facts .You are probably confusing IT projects with power generation and distribution projects) These acts have a list of actions required in order to ensure that the Project complies with its legal and compliance obligation (AECOM, 2011). There are many differences between the IT and business metrics as IT on many occasions is outsourced(Give concrete examples ). However, the IT metrics shows (what Do they cover)that new class of decision-support technologies has been developed. This is to meet the needs of the current proposal development environment; technologies that fully integrate the process of cost estimating, unit performance analysis, and financial analysis.(Not that coherent! )
the management keeps a check on the investment taking place in IT and concentrates on the development of new electric generating plants and the upgrading and repowering of existing units. The management focuses on soft wares that enables the user to access the past and current information on power plant technology alternatives, to integrate technology selections into a conceptual plant design and financial analysis and to evaluate selected alternatives in a site-specific context. For any project being considered, the IT helps in the following way. The estimated costs and benefits are developed and the decision regarding the project is made with the help of IT.(I do not see the relevance of the diagram to either your case or your analysis. Plus the analysis hardly touches the eight areas of IT value measurement)

(Ringhausen, 2011).

Scope and Architecture(Same here! The discussion hasn’t touched IT issues of primary systems, standards, architectural integration, IT infrastructure perception)         

The IT design in Delta Electricity is such that it takes the entire financial aspect into account from starting the project to ending it. Interactive multimedia tools are used that use background and technical information, support decision-making, and train engineers in new technologies. Calculation products (?? ) are used that enable the user to input basic design using IT and economic criteria. Than s an appropriate technology configuration is selected and the resulting conceptual plant design is evaluated. Input for is divided into four data groups:

The Site Data group includes ambient conditions (temperature, elevation, etc.), site conditions (seismic zone, cooling water conditions, etc.), environmental criteria (emissions limits), and certain site-specific cost and economic inputs. The Fuel Data group looks at the available fuels and fuel usage. Primary and secondary fuels are noted, along with an identified secondary fuel usage factor. The Economic Data contains the information needed to perform the capital and operation and maintenance (O&M) cost estimates, along with the financial analyses (Ringhausen, 2011). (??? Relevance???

Partnership

The need of time with the electric power industry growing increasingly competitive, both domestically and internationally, the partnership between the business side and IT side of Delta is growing. Delta Electricity is trying to itself develop a positive outlook towards IT being an asset to the organization in mostly time and financial aspects. The company’s involvement in the overall strategic business planning is quite impressive. The IT- business relationship focuses on full software support and administration of Delta’s implementation of Mincom Ellipse software for Enterprise Asset Management (EAM) and Enterprise Resource Planning (ERP), as well as other IT services (Mincom, 2011). The IT- business relationship had been biased towards business side but now is being balanced.( Ok here! See the Luftman model for what needed to be covered in this dimension)

IT Governance (Same as above!)

IT strategic planning, IT organizational reporting and budgeting and IT investment decisions for Delta Electricity are on a growing importance with lots of importance being given to the development of IT (Delta Electricity, 2010). In today’s world, the project developer must be quick, accurately, and cost-effectively in decide ding whether a project is feasible or not. Delta Electricity recognizes the need to mix both, technical and economic decision-making into one software package.  Thus Delta focuses on developing IT and software’s to help facilitate plant design process: generating heat and material balances, equipment sizing, site, environmental, fuel, drawings, cost estimates, construction schedules and financial analysis based on user-selected equipment, and economic criteria.  The integration of both, technical and financial analysis along with advanced automation makes it possible for the user to make business and technical decisions simultaneous and together, rather than independently as in the past (Ringhausen, 2011).Delta in its management structure does not have a pronounced group of senior IT steering committee.( incorrect! Delta has an Executive IT steering Committee) Yet, IT is being given increasing importance. Formal meetings take place to discuss the direction of IT projects on regular bases (Delta Elecricity Annual Report, 2008).

Skills (Same here – not adequately addressing what needs to be analyzed under the Luftman model

Delta Electricity employees a highly skilled workforce. A new recruitment and human resources (HR) processes has been developed to attract apprentices and graduates. Lots of employment opportunities for young people with engineering or trades qualifications are available. This is coupled with the likely retirement of a high proportion of staff over the coming years; there is an increasing pressure on recruitment (Delta Elecricity Annual Report, 2008). Employees at Delta are encouraged to give their ideas and share it with the team. Employees at Delta are protected against harassment and discrimination. No employee or applicant in Delta is discriminated due to race, nationality, age, gender, religion, color, disability or other factors. Employee’s performance evaluations are conducted in Delta using the Performance Management and Development (PMD) system. Besides Deltas basic employee policy, it has always paid attention to its employee's opinions and aims to allow every employee to live up to their potential. To develop a better understanding of employee's opinions regarding work and management, Delta Electricity conduct employee opinion surveys on a regular bases and ensures the validity and confidentiality of the results. The survey gives employees the chance and opportunity to offer the company their suggestions and thoughts regarding various matters like management, interactions, personal issues and workplace environment for future improvement (Delta, 2011).( How is this relevant to IT skills as discussed on the Luftman model.

(Frankjcoster, 2010).
Using Luftman’s IT-Business Alignment Maturity criteria, Delta Electricity can be currently positioned at Level 3 –Established Process( There is hardly any connection between the analysis above and this summary) .It means that Delta has an established process. However, it needs to improve furthermore on its IT-Business Alignment to achieve its goals.

Strategic objectives

A mix of two approaches is being used for Delta Electricity for defining the Strategy. Combining Maxim driven and Alignment driven approach enables to device the right Strategy Definition for the Delta Electricity.

Maxim driven

The Business Maxims of Delta Electricity express its competitive stance in a clear way that is to coordinate business units and IT strategy for improvement. Therefore, the approach needed to be made is quite easily identifiable. Delta Electricity focuses on improving its centralized management and communication levels amongst different units. It aims to be cost effectiveness in all its projects it undertakes. This focuses on being efficient in whatever that is being done. Maxim Approach also aims to enhance customer satisfaction to increase its market share and grown. Provide timely information for a sustainable growth for future is also important. Strategic considerations are also towards developing an environmental friendly business. Operations while projecting the environment, retaining skilled employees and improving human resource management are also considered. The Maxims dictates the type of management information and IT needs, which is used later as IT maxims. IT maxims are being generated jointly by the business and IT executives of Delta Electricity.

Alignment driven

The review of the IT and Business Alignment using Luftman’s model has outlined the various Alignment Dimensions in Delta Electricity. Due to this, the current alignment maturity level of Delta Electricity has been determined to be at Level 3 -Established Process. Hence, the Alignment Driven approach is used to drive a proper Strategic Action to attain the desired alignment maturity level, which is the next level, Level 4 – Improved Process. At this level IT is considered as a Value Center (Riggs, 1993).
With a clear understanding of the Business-IT Processes (Not shown in this report!), and the things needed to be considered to develop a stigmatic action, proper implications need to  be specified and laid down to be at Level 4 and then sustain tithe major objectives are to be able to improve in all of aspects of Delta in the following ways:
  • Improved communication and information sharing between all units at Delta.
  •  Proper value metrics defined to understand IT usage effectiveness for Delta.
  • Improve governance at Delta.
  • Develop more strong partnership between IT and business of Delta.
  • Promote Innovation and give more support to Delta´s employees. (The analysis didn’t identify what needs to be improved in these areas

IT Strategy Definition

The proposed IT strategy for Delta Electricity aims to help the business reach its missions and objectives. It also aims to overcome the difference or the gap between the present and the desired state of IT. The table below summarizes the Business and IT plan for Delta Electricity in consideration with business maxims and the business IT alignment. This table also proposes some recommendations and actions desired to achieve the intended plans.
Business Plan IT Plan Business Maxim
Category
Six Alignment
Category
To be efficient, safe and reliable producer of energy for industry and the community A cost saving IT plan using IT infrastructure should be set up in offices and sites of electricity generation. Flexibility and environment protection Governance and
Metrics
(This is a reasonable approach! The problem is that the actions do not deliver the IT plan. The link between the six alignment category and the maxims need to be made more clear and transparent.
 
 
Action needed: Conservation practices should be adopted amongst all of Delta management. All electricity generation plants should be redesigned with such a systemic that is environment friendly and energy efficient. (This and all actions that follow should be based on the IT plan .
 
There need to be closer alignment between the business and IT plan
  1.  
To adapt to climate change and a low carbon future Usage of IT automate processes in electricity production should be made more common. A high speed network should be installed. (Your analysis didn’t identify this as a problem.
 
Cost Reduction Communication,
Technology and
Governance
  1. Action needed:  Facilitate and develop new IT and technological ways that produce electricity. (how dose  IT produce electricity ????
(Overall, in this section
  1.  You need to make sure that the business plan and the IT plan are aligned
  2. The IT plan addresses the problem that you have identified in the analysis
  3. There is a tight link between the IT plan and the actions
  4. How the IT alignment categories map to the business maxims, IT plan and business plan should be clearly established
  5. Do not assume that one action is suffice for one IT plan.
 
 
To be recognized by the community as a responsible environmental manager by promoting environmental culture among Delta staff managing the clients well. To provide employees of Delta with  the client information and proper access to a
Client information system, when and where required.
Flexibility and environment protection Communication
and Partnership
  1. Action needed: New server and a CRM application to properly manage clients information needed. Accessibility of client’s information across all branches is need. Moreover, an offsite backup will help monitor the new updated data.
 
To continuously improve the efficient use of resources and by-products Stress tests should be carried on existing systems
 
Growth Governance and
Technology
  1. Action needed: Better understanding of current utilization of the existing applications, server resources is required. Load tests needs to be carried on existing resources to check the capacity of the current infrastructure. This helps decide whiter a new system is needed to be designed for the company.
To provide options for generation capacity expansion Using technology
for communication to reduce the time and cost spent by meeting up to draft new plans for electricity generation
 
 
Cost Reduction Communication
and Technology
  1. Action needed: To explore cheap methods of communicating like a  Video Conference over the web
To retain multi-cultural, hardworking employees More technical trainings should be provided. Staff should be encouraged
to pursue continuous
education in all matters
Human Resource Human Resource
  1. Action needed: Reward systems and incentives should be used as a tool to increase motivation. Staff should be enrolled into technical seminars and training workshops should be provided.
To sponsor research To assess how IT can be
used to promote changes in
new ways of electricity generation
Growth Governance
  1. Action needed: Determine what needs to be done and in which aspect of electricity generation more efficiency and research is required.
To integrate sustainability into the workplace To integrate the human
resource systems situated at
different regions where Delta serves
Human Resource Human Resources
and Technology
  1. Action needed: Managing staff information by a HRM system that links the management of all departments. A head of Delta regional Human Resource director should be appointed to deal with all HR matters where Delta operates.
To improve efficiency and reduce waste within the business To train employees on how to users access information securely along with creating an awareness on
the confidentiality of the
information
Cost Reduction Communication,
Technology and
Partnership
  1. Action needed: To integrate all client information and develop a CRM system.
 

Strategy Implementation and Evaluation

This section discusses the actions needed and the barriers associated with the actions needed. It will focus on ways to solve the barriers after defining an IT strategy to act upon, this section will discuss on some of the tasks. Table below looks at actions and recommendations as proposed for Delta Electricity for the IT Strategy Definition.
Recommendation 1
How to Do it? Old PCs and servers should be replaced by Green PCs that use energy efficiently. Even when new PCs are to be purchased, the greener ones should be preferred. System to improve air circulation and heat should be redesigned in an efficient manner.
What are the Barriers? High cost of replacing PCs with greener ones.
How to solve barriers? Keep an amount to replace the PCs out of the profit on monthly or quarterly bases.
How to assess? Compare energy consumption and bills before and after Green PC usage.
 
Recommendation 2
How to Do it? The current internet bandwidth should be upgraded and improved the best Internet Service Provider should be used that is efficient and cost effective.
What are the Barriers? Cost to upgrade the internet may be much.
 
How to solve barriers? Select the package that provides the best speed and cost.
How to assess? Interval connection testing along with a cost and amount of work done can be compared before and after.
Recommendation 3
How to Do it? Acquire a CRM system to manage client’s information. Accessibility should be provided to each network.
What are the Barriers? Security issues and difficulty in getting client information.
How to solve barriers? Make every customer fill up a detailed form before applying.
How to assess? Regularly update information on clients’ data.
Recommendation 4
How to Do it? Company can use software’s like SOAPP products that will incorporate technology for a better utilization of current servers.
What are the Barriers? Such software’s might be difficult to get as they are only available in USA up till date.
How to solve barriers? Import from USA by drafting a proper budget to cover the cost of getting it.
How to assess? Use the software’s on a trail bases and adopt it if it suits the company.
Recommendation 5
How to Do it? Explore Video conferencing rather than meeting up to avoid costs.
What are the Barriers? Network may be limited. The effect of video conferencing might not be as effective as meeting up. Employees need to be trained in video conferencing.
How to solve barriers? Review and upgrade internet options available and train employs on how to use it.
How to assess? Compare cost before and after using it along with the time saved up.
Recommendation 6
How to Do it? Enforce proper training at all levels of management in Delta Electricity. More opportunities and chances of growth should be provided to the employees.
What are the Barriers? Cost of training is huge.
How to solve barriers? Budget a certain amount for training each year and motivate employs by a proper reward system.
How to assess? Conduct employee surveys to monitor employee satisfaction before and after.
Recommendation 7
How to Do it? Look into ways of generating electricity and potential new ways of cheap electricity generation.
What are the Barriers? Lots of money and cost is needed, at least initially.
How to solve barriers? Look at new ways adopted by leading electricity generating company’s world wide and by its competitors.
How to assess? Try adopting those ways along with using renewable sources for electricity generation.
Recommendation 8
How to Do it? Link up HR systems for the entire Delta network. Top management should be chosen form which a HR head for all areas should be appointed.
What are the Barriers? High cost along with training is needed.
How to solve barriers? Offer high rewards for this position so that the returns can be shown quickly.
How to assess? Compare results before and after.
Recommendation 9
How to Do it? Acquire a system to store client’s information or outsource this to some company where proper records of information can be kept and maintained.
What are the Barriers? Staff may be not much trained and upgrading information may be a problem as the customer may not provide or update information with time.
How to solve barriers? Provide proper tanning and check customer’s information on a regular bases and update it if needed.
How to assess? Admin should observe any changes updated over time and the customer should also be made aware of any changes made against his name.
 

Conclusion

This papers looks at different IT strategies that could be adopted by Delta Electricity. All these aim at collaborating the IT and business for the company together. Using information and the business metrics as input, the report provides output in the form of various strategic outcomes that can be adopted by the company. Using Liftman’s model, Delta has been assessed in terms of its current level of the IT-Business alignment. The current state of the business at Level 3 (Established Process) and aims to reach level 4 and ultimately level 5. With this, a strategy objective to bring Delta at level 4 and than 5 has been proposed to establish. With business maxims drawn initially, clear IT strategy propositions for Delta electricity are suggested to ensure a merge of both business and IT. The company can improve the entire process by incorporating IT usage.

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