System Development and Analysis

Executive Summary – In this research project report includes the conceptual system design for distributing company name as CGC. Citizen’s Gas Company is gas Distribution Company who supplies gas to the residential, commercial and industrial customer. Company some time face the problem of short supply of gas. In order to fulfil the demand of gas company curtails the supply of industrial customer to meet the demand of other customer, whereas sometime over supply of gas is stored in storage field. Currently to meet the demand of customer at the time of short supply company use the gas stored in storage field though some time storage also not sufficient to meet demand. Therefore to reduce all the problem of non availability of gas, CGC appointed corporate director for planning and conceptual system design. Hence in research report we will cover the planning and conceptual system design that helps to meet supply and demand of company.

Introduction – In the research report we cover the conceptual system design for CGC which helps to meet the demand and supply of the company. Plan includes the detail report which helps to decision making about it. CGC have a business of purchase and sales of natural gas. Customer strength of CGC is 2, 00,000 and from that 1, 60,000 customer is residential customers which is 80% of total customer, whereas 38,000 customers is from commercial field and only 2000 customers are from industrial use. Company serve to the customer by purchasing gas from various suppliers based on different contracts between CGC and suppliers. Some contracts with suppliers is about the equivalent monthly instalment where suppliers provide equal gas in each months, whereas in some contract supplies depend on availability of gas based on heating season. In orders to meet all the demand to customer, CGC going to develop conceptual system design hence in the project report we covered the development of conceptual system design, implementation of system, cost and benefit from developed system etc.

Criteria considered in system development of CGC and feature added to the system-  

System Development – In order to develop the system that can meet all the demand of CGC and add new required feature in CGC, we are going to develop system by using SDLC approach of system development. In system development approach we will understand the needs of CGC from system being developed and expectation of executive from system. Based on executive’s expectation we will develop the system which can meet the demand of CGC. From the following way we will develop the system –

System Requirement Analysis (SRS) – System requirement analysis is initial level of system development. In this phase we will understand the expectation of CGC from new system. For analysis of user’s expectation we will draft questionnaire or conduct interview with users. Draft questionnaire will be objective type of which answered by users. Based on answer received from user, we will understand the feature required on the system. Other way to analyse the system is meeting in which we will conduct with the user of system and based on their expectation from system. In the given case it is very clear that we have to develop the system which can provide the accurate report about the demand and supply of gas. As we know CGC purchased gas from contractor and sales it to the supplier hence first report from system is about the sales to customer and purchased record from suppliers.  Secondly CGC have need to match demand with supply hence there is no need to curtail demand to customer. In order to meet demand with supply, system should provide the report of storage available with us and additional storage needed to meet demand during the year. From the analysis of requirement of CGC, we have got following expectation of CGC from new system.

·         System should have capability to analyse the past record of company and based on past record system should generate the report about expected demand of Gas during the year based on the analysis and report we can expect the storage needed.

·         System should be able to generate report with classification of types of customer in previous year, their demand in previous year hence based on detail and past analysis we can add some storage additionally to meet the demand.

·         System should be able to match demand with supply generate based on that which help to maximum storage we have needed.

·         It also have capability to analyse the cost and benefit from storage as some time storage will take higher cost hence we may not be able to met demand rather we curtail demand. Hence cost benefit analysis also embedded in the system.  

·         Developed system also have function of prior notification if available storage is not sufficient to meet demand hence CGC should take care about the storage of gas.

·         System should also have capability to books demand in advance basis so that CGC can store the required amount of gas in storage.

Months	Opening balance in storage	Purchased New Supply	Sales to Customer	Closing balance of Gas	Expected Demand	Sufficiency of demand
January	97000.00	35000.00	48000.00	84000.00	47000	37000.00
February	84000.00	56000.00	47000	93000.00	49000	44000.00
March	93000.00	106000.00	49000	150000.00	78000	72000.00
April	150000.00	130000.00	78000	202000.00	87000	115000.00
May	202000.00	123000.00	87000	238000.00	98000	140000.00
June	238000.00	135000.00	98000	275000.00	110000	165000.00
July	275000.00	139000.00	110000	304000.00	86000	218000.00
August	304000.00	144000.00	86000	362000.00	137000	225000.00
September	362000.00	120000.00	137000	345000.00	120000	225000.00
October	345000.00	87000.00	120000	312000.00	142000	170000.00
November	312000.00	65000.00	142000	235000.00	90000	145000.00
December	235000.00	45000.00	90000	190000.00	110000	80000.00
		1185000.00	1092000.00		1154000.00

Based on this kind of report organisation can predict the storage needed to met with future demand.

Diagram reveals the demand and supply of the organisation. In the same manner another report reveals the expected demand for one month and current storage. Also notify if current storage is not sufficient to meet demand.

Demand and supply report, expected demand and available storage all the report are needed from the system, which should be like the report prepared on the assignment.

System Design – After the analysis of whole feature which is needed in the system we will move to the next phase of system development is system design.  In system design phase we will follow the information gathered from system analysis phase as system will be design based on information and expectation of CGC received from system requirement phase. Once the system being design by considering the CGC expectation, it should be shown to the executive of CGC.  Based on any changes needed to the executive, we will develop prototype which is sample of system. Prototype is used by the CGC for few days so that executive of CGC can understand the compatibility of system, loopholes and weakness of system and any more needed in the system. After feedback received from the users of CGC we will change and add in the system accordingly. New system should be fully equipped with the requirement of CGC.

System Evaluation and cost benefit analysis – Before installation and development we should aware about the benefit and cost from the system as if benefit from system is more than cost then only we will move towards development otherwise development project of system should be placed on hold. In evaluation phase first we will analyse the cost and benefit from the system by considering annual benefit from the system, maintenance cost of system, system development cost and any other benefit and cost from the development of system.

CGC
Cost benefit Analysis  for New System development of CGC                                                                                ( Amount in $)
	Years
Cost	0	1	2	3	4	5	6	Total
System Development Cost	75000.00							75000.00
System Operating Cost		20000.00	22000.00	24200.00	26620.00	29282.00	32210.20	154312.20
Total Cost	75000.00	20000.00	22000.00	24200.00	26620.00	29282.00	32210.20	229312.20
benefits
Tangible benefit from System		25000.00	27500.00	30250.00	33275.00	36602.50	40262.75	192890.25
Reduction in storage cost		2500.00	3630.00	3993.00	4392.00	4831.53	5314.68	24661.21
Total benefit		27500.00	31130.00	34243.00	37667.00	41434.03	45577.43	217551.46
Net Cash flow	-75000.00	7500.00	9130.00	10043.00	11047.00	12152.03	13367.23	-11760.74
Discount factor @10%		1.00	0.91	0.83	0.75	0.68	0.62
Discounted Cash Flow	0	7500	8308.3	8335.69	8285.25	8263.38	8287.683	48980.30
Cumulative cash Flow	0	7500	15808.3	24143.99	32429.24	40692.62	48980.3
Net Present Value	48980.3

From the above analysis it is very clear that company will be beneficial from the system implementation. As company have incurred high amount of cost in year 0 which will be recovered in next 6 years of company business. Hence we will develop system according. Evaluation of system development reveals that from development of new system company have profit of $48980 within six year. For analysis we assume that new system have life of six year. 

With the financial benefit from the system development we also considered the non financial benefit from the system as well –

Decision making – Developed system will help in decision making about the storage capacity of the company.

Customer Satisfaction- With developed system we need not to curtail customer demand which leads to satisfaction of customer. Also fulfilment of demand customer as and when required will help to increase the customer towards CGC.

Quick report – New developed system provide report as and when needed even it can provide report in urgency as well.

Accurate report – Report generated from the newly developed system will provide accurate report hence chances of inaccuracy and inefficient decision will reduce at lower level. 

System development – Once we are fully sure about the benefit from system development we will move towards the development of system. At the time of system development we will use the prototype which we last develop after modification. If any additional demand rose by executive, we will add into the system at the time maintenance.

System implementation-   In the system implementation phase we will implement the system in CGC gradually as implementation of whole system by replacing existing system is little beat risky for the organisation. Direct implementation cause loss of data some time hence we will use the implementation by phase.  In implementation of system we also provide training to the users of CGC.

System maintenance - Development of system is not sufficient to use the system in proper manner hence in order used the system regularly it should be maintained as and when needed.

Data which should incorporated in the new system of CGS and importance of incorporated data in the system-

Now company serving to the 200000 customer in total, of which includes different category of customer like industrial, commercial and residential. From all the customer strength 80% customer are from residential group. As we know that demand of gas is not equivalent in whole year. From some of suppliers we receive our gas based on equivalent instalment of monthly basis and some suppliers provide the gas based on availability with them. Availability of gas depends on heating, weather and some more factors. It is given that demand of gas of residential customer depends on the weather condition whereas demands of industrial customers depend on the business related factors, in the same manner supplies from suppliers also fluctuating over the year. So it is very complex for the company to maintain the storage according to the demand, as due to certain factors it is very difficult to predict the demand in prior. If company predicts the demand from customer in prior manner then CGC may fulfil the customer demand from storage as prior demand helps to store adequate gas in to storage. It is very clear that now to meet customer Demand Company curtail the demand of industrial customer. Hence to meet sufficient demand of customer organisation should use information system which helps to predict demand in prior manner based on past data, whether and other factor which is relevant for prediction. In order to use the system we have many other inputs also needed then only system can provides output to us. Based on all the analysis we reach to the conclusion that CGC have to provides following data for system input –

·         In the case of CGC, it is provided that company received the gas from number of suppliers, from which CGC entered into the contract. CGC paid to the suppliers according to the clause of contract between the suppliers and CGC even consumed any amount of gas. Hence in order to gather all the information about it, CGC should collect all the actual supply from the suppliers in the past years and compared the supply with demand from customer. From both demand and supply we can get the variance between demand and supply. If variance is positive then it will be stored into storage and if variance is negative then it is short fall in supply which is used from storage. If past analysis in this manner reveals, even storage also inadequate to meet demand then CGC should add storage by more quantity equal to short fall. This calculation helps to CGC for understanding about the supplier’s capabilities. If supplier’s capability looks inadequate then CGC may arrange from other suppliers. This analysis helps to understand the needs of additional storage.

·         For analysis of cost and benefit from storage system should have storage cost as well. Hence storage cost should also be considered in report of cost and benefit from the storage. As it is very clear that prior understanding of demand motivates to CGC for store sufficient amount of gas into storage but if storage is increased with the cost of storage also increased. So it is necessary to analyse the cost and benefit from storage prior to store it. Input of storage cost helps to analyse the maintenance cost of storage.

·         Company normally curtails the demand of industrial user by looking to the number of customer but when we look at the total revenue then CGC get 26% of total revenue from industrial customers. So, in order to meet the demand of industrial customer, CGC should analyse the demand and supply by gathering information. To meet the demand of industrial customer, CGC should input accurate supply information in the system. Reduction of supply lead to curtail the demand of industrial customer due to low margin customer but when we curtail the demand of customer regularly then it will cause reduction of trust of customer.

·         Report preparation includes the budget as well hence in order to prepare the budget of company it is also necessary to provide the information which is relevant for budget.

Conclusion- In order to meet the demand of customer, we will developed the system. According to the report generated from developed system we will store the gas into storage to comply with the demand of customer. Company will focus on the fulfilment of customer demand.