BCS/DIP/ITPM/TUTORIAL 01

DEFINITION
A Project is a temporary endeavor undertaken to create a unique product, service or a result.

Project Management is about applying our knowledge, skills, tools and techniques to project activities to meet project requirements.

1.)    List and explain very briefly the four main criteria for assessing the success of a project.

Ø   

Ø   

Ø   

Ø   

2.)    For each of these factors above, describe at least TWO potential problems that might arise to jeopardize the eventual success of the project.

3.)    What is the purpose of a business Case ?

4.)    Describe the main sections to be found in a business case report.

a.        

b.       

c.        

d.       

e.       

f.         

5.)    Identify FOUR events which might lead to an updating of the business case.

6.)    What are the main project management Processes?

a.       Initiating Process: authorizing the project or phase

b.       Planning Process: define and verify requirements, objectives, goals and the way forward.

c.        Executing Process: coordinating people and other resources to carry out the plan

d.      Monitoring and  Controlling Process: measuring and monitoring progress regularly

e.       Closing Process: formalizing the completion of project

7.)    Define the word project Stakeholders?

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or completion.

Ø  Project Manager

Ø   Project Sponsor

Ø   Project team members

Ø   Project Steering committee

Ø  Customers

8.)    Identify the role and responsibility of each and every stakeholder in the above.

9.)    Nine knowledge Areas of Project Management.

10.)  Explain the project Development Life Cycle.

11.) Explain the advantages and disadvantages of In-house development, outsourcing and cloud-computing.

In-house development

Outsourcing

Cloud computing

Off-the-shelf packages

 Question A1

The Tyre-It Company sells and fits tyres from a number of different manufacturers to a wide variety of motor vehicles. This is a very competitive market and it is important that the company always has a ready stock of the most popular car tyre brands. It must also be able to answer immediately any telephone enquiry for the price and number of tyres of a specific type available at that time.

In addition, good management information and the strict control of costs are essential in order for the organisation to maintain its competitive position.

It has become clear that the existing computer-based stock system, which was developed by the in-house IT section, is no longer adequate and a decision has been made by the Tyre-It senior management to adopt a new more advanced stock recording and enquiry system.

Some major tyre manufacturers offer such systems as on off-the-shelf (OTS) package, but the Tyre-It management are concerned that such packages might be too restrictive and thus not suitable for the wide range of tyres that it sells. The alternative would be to design and develop a new in-house system. However, the IT section has no experience of on-line or cost-based systems.

                         

Write a memorandum to the Tyre-It management setting out the advantages and disadvantages of acquiring an ‘off-the-shelf’ system as opposed to developing a new application in-house using its own staff, bearing in mind the scenario outlines above

(15 marks)

                         

A decision has been made to acquire an off-the-shelf package. Describe the activities that would now be needed to select and acquire the software and to set up a fully operational stock system.

(10 marks)

 Question A3

a) Explain the main reasons for using:

i) change control and

ii) configuration management

when developing a new in-house computer system. Highlight at least TWO advantages and ONE disadvantage of each.

(12 marks)

b) List and explain briefly FIVE major stages in the change control process.

(7 marks)

c) List and explain briefly the THREE major elements of a configuration management system. (6 marks)

2011 –Sep

a) Costs and benefits are two essential sections within a business case. List FIVE other sections in a business case.(5 marks)

b) List FIVE categories or types of benefits that are associated with an IT project and provide an example for each one.(10 marks)

c) List FIVE estimating techniques that can be used to identify costs.(5 marks)

d) There are some projects that will be given approval even though the costs exceed the benefits in the business case. Describe ONE example of when this might be legitimate.(4 marks)

Question 1

a) Explain what is meant by a successful project, giving the four main criteria of success. (4 marks)

b) Identify and describe SIX of the major types of activity that would be carried out in a software development project, highlighting those in which the eventual users should be involved and explaining how.  (6 marks)

c) A large distribution company wishes to implement a new warehouse system, and is undecided whether to develop the system internally (i.e. an “in-house system”) or to acquire and adapt an “off-the-shelf” (OTS) package for this purpose.

For EACH of the six types of activity listed in part b, compare the work to be undertaken for each of these two possible methods of system development, highlighting the key differences.                 (12 marks)

d) Identify one significant risk specific to the “in-house” approach and one risk specific to the “OTS” approach. (3 marks)

BCS / DIP / PGD/ CORE /CSM / COMPUTER MISUSE ACT 1990

The Computer Misuse Act (1990)

Hacking has been around almost as long as the Internet; some people just love to try and break into a computer system.

The Computer Misuse Act of 1990 is a law in the United Kingdom that makes certain activities illegal, such as hacking into other people’s systems, misusing software, or helping a person to gain access to protected files of someone else's computer. So, in 1990, the Computer Misuse Act was passed.

The Computer Misuse Act (1990) recognised the following new offences:

1. Unauthorised access to computer material

The first section in the act forbids a person to use someone else’s identification to access a computer, run a program, or obtain any data, even if no personal gain is involved in such access. Individuals also cannot change, copy, delete, or move a program. The Computer Misuse Act also outlaws any attempts to obtain someone else’s password. Obviously, if someone gives another person his identification and he may legally use the computer, these laws under unauthorized access do not apply.

2. Unauthorised access with intent to commit or facilitate a crime

The second provision in the law is gaining access to a computer system in order to commit or facilitate a crime. An individual can’t use someone else’s system to send material that might be offensive or to start worms or viruses. He also can’t give someone his identification so that he can use a system for this purpose. This second part means that the individual would be facilitating someone else’s intent or crime.

3. Unauthorised modification of computer material.

Unauthorized modification in the Computer Misuse Act means that a person can’t delete, change, or corrupt data. Again, if someone puts a virus into someone else’s system, he would be violating the act. Usually, committing unauthorized access only is thought a crime punishable by fine. Access with intent and unauthorized modification are considered more severe and may be punished by heavy fines and/or jail time.

3a. Making, supplying or obtaining anything which can be used in computer misuse offences.

Making: This includes the writing or creation of computer viruses, worms, trojans, malware, malicious scripts etc.

Supplying: This part covers the distribution of any of the above material whether you have created it yourself or obtained it from elsewhere. It is an offense to supply or distribute these files to others.

Obtaining: If you purposely obtain malicious files such as computer viruses or scripts that you know could be used to damage computer systems then you have committed an offence under the Computer Misuse Act.

BCS/DIP/CER/PGD/ BCS CODE OF CONDUCT SUMMARY

BCS Code of Conduct

 As a professional body the British Computer Society (known as BCS, the Chartered Institute for IT), has a responsibility to set rules and professional standards to direct the behaviour of its members in professional matters. It is expected that these rules and professional standards will be higher than those established by the general law and that they will be enforced through disciplinary action which can result in expulsion from membership.

Members are expected to exercise their own judgement (which should be made in such a way as to be reasonably justified) to meet the requirements of the code and seek advice if in doubt.

• ·         sets out the professional standards required by BCS as a condition of membership.
•  ·         applies to all members, irrespective of their membership grade, the role they fulfil, or the jurisdiction where they are employed or discharge their contractual obligations.
•  ·         governs the conduct of the individual, not the nature of the business or ethics of any Relevant Authority*.

1. Public Interest

You shall:

a. have due regard for public health, privacy, security and wellbeing of others and the environment.

b. have due regard for the legitimate rights of Third Parties*.

c. conduct your professional activities without discrimination on the grounds of sex, sexual orientation, marital status, nationality, colour, race, ethnic origin, religion, age or disability, or of any other condition or requirement

d. promote equal access to the benefits of IT and seek to promote the inclusion of all sectors in society wherever opportunities arise.

2. Professional Competence and Integrity

You shall:

a. only undertake to do work or provide a service that is within your professional competence.

b. NOT claim any level of competence that you do not possess.

c. develop your professional knowledge, skills and competence on a continuing basis, maintaining awareness of technological developments, procedures, and standards that are relevant to your field.

d. ensure that you have the knowledge and understanding of Legislation* and that you comply with such Legislation, in carrying out your professional responsibilities.

e. respect and value alternative viewpoints and, seek, accept and offer honest criticisms of work.

f. avoid injuring others, their property, reputation, or employment by false or malicious or negligent action or inaction.

g. reject and will not make any offer of bribery or unethical inducement.

3. Duty to Relevant Authority

You shall:

a. carry out your professional responsibilities with due care and diligence in accordance with the Relevant Authority’s requirements whilst exercising your professional judgement at all times.

b. seek to avoid any situation that may give rise to a conflict of interest between you and your Relevant Authority.

c. accept professional responsibility for your work and for the work of colleagues who are defined in a given context as working under your supervision.

d. NOT disclose or authorise to be disclosed, or use for personal gain or to benefit a third party, confidential information except with the permission of your Relevant Authority, or as required by Legislation.

e. NOT misrepresent or withhold information on the performance of products, systems or services (unless lawfully bound by a duty of confidentiality not to disclose such information), or take advantage of the lack of relevant knowledge or inexperience of others.

4. Duty to the Profession

You shall:

a. accept your personal duty to uphold the reputation of the profession and not take any action which could bring the profession into disrepute.

b. seek to improve professional standards through participation in their development, use and enforcement.

c. uphold the reputation and good standing of BCS, the Chartered Institute for IT.

d. act with integrity and respect in your professional relationships with all members of BCS and with members of other professions with whom you work in a professional capacity.

e. notify BCS if convicted of a criminal offence or upon becoming bankrupt or disqualified as a Company Director and in each case give details of the relevant jurisdiction.

f. encourage and support fellow members in their professional development.

BCS/ PGD /SE2/MIS/CSM OR BCS/DIP/ITPM / CAPABILITY MATURITY MODEL(CMM)

Capability Maturity Model

The Capability Maturity Model (CMM) is a methodology used to develop and refine an organization's software development process. The model describes a five-level evolutionary path of increasingly organized and systematically more mature processes. CMM was developed and is promoted by the Software Engineering Institute (SEI), a research and development center sponsored by the U.S. Department of Defense. 

The Software Capability Maturity Model describes the principles and practices underlying software process maturity and is intended to help software organizations improve the maturity of their software processes in terms of an evolutionary path from ad hoc, chaotic processes to mature, disciplined software processes.

It is important, as it is an objective assessment of an organization’s software capability with a proven approach to improvements.

SCMM has five levels:

Initial - The software process is characterised as ad hoc, and occasionally even chaotic. Few processes are defined and success depends on individual effort and heroics.

Repeatable - Basic project management processes are established to track cost, schedule and functionality. The necessary process discipline is in place to repeat earlier successes on projects with similar applications.

Defined - The software process for both management and engineering activities is documented, standardised and integrated into a standard software process for the organisation. All projects use an approved, tailored version of the organisation's standard software process for developing and maintaining software.

Managed - Detailed measures of the software process and product quality are collected. Both the software process and products are quantitatively understood and controlled.

Optimising - Continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies.

ISO Vs CMM

The CMM is similar to ISO 9001, one of the ISO 9000 series of standards specified by the International Organization for Standardization. The ISO 9000 standards specify an effective quality system for manufacturing and service industries; ISO 9001 deals specifically with software development and maintenance. The main difference between the two systems lies in their respective purposes: ISO 9001 specifies a minimal acceptable quality level for software processes, while the CMM establishes a framework for continuous process improvement and is more explicit than the ISO standard in defining the means to be employed to that end.

BCS/CER/IS/Hard System Methodology(SSADM)

Hard System methodology

Hard problems

In hard systems approaches (or Structured Systems Analysis and Design Methodology (SSADM)), rigid techniques and procedures are used to provide unambiguous solutions to well-defined data and processing problems. These focus on computer implementations.

·         Problems can be well defined

·         Assumption of definite goals & solutions

·         Can pre-define success criteria

·         Technologically-oriented

e.g. - SSADM

What is SSADM?

Stand for Structured Systems Analysis and Design Method, a set of standards developed in the early 1980s for systems analysis and application design widely used for government computing projects in the United Kingdom. SSADM uses a combination of text and diagrams throughout the whole life cycle of a system design, from the initial design idea to the actual physical design of the application.

Stage 0: Feasibility

The Feasibility stage is a short assessment of a proposed information system to determine if the system can meet the business requirements of an organization, assuming the business case exists for developing the system. The analyst considers possible problems faced by the organization and produces various options to resolve these issues. Either the organization or you must decide if the cost of resolving the problems is worth the likely benefit to the project.

Stage 1: Investigation of the Current Environment

Detailed requirements are collected and business models are built in the Investigation of the Current Environment stage. This stage is where you develop a business-activity model, investigate and define requirements, investigate current processing in the data flow model, investigate current data and derive the logical view of current services.

Stage 2: Business System Options

The Business Systems Options, or BSO, stage allows the analyst and you to choose between a number of business-system options that each describe the scope and functionality provided by a particular development and implementation approach. After you present these to management, the management then decides which BSO is the better option.

Stage 3: Definition of Requirements

This stage specifies the details in the processing and data requirements of the selected BSO option. In this stage you define the required system processing, develop the required data model, determine the systems for existing or new functions, develop the user job specifications, enhance the required data model, develop specific prototypes and confirm the system objectives.

Stage 4: Technical Systems Options

This stage allows you and the analyst to consider the technical options. Details such as the terms of cost, performance and impact on the organization is determined. You identify, define and select the possible technical system option in this stage.

Stage 5: Logical Design

This stage involves you specifying the new system through designing the menu structure and dialogues of the required system. The steps in this stage include defining the user dialogue, defining update processes and defining the inquiry processes.

Stage 6: Physical Design

This is the implementation phase of SSADM. The Physical Design stage is used to specify the physical data and process design use the language and features of the chosen environment and incorporate installation standards. This stage concentrates on the environment in which the new system will be running.

BCS/CER/IS/Soft System Methodology

Soft System Methodology

Soft problems

• ·         Difficult to define - they are problem situations
• ·         High social, political & human activity component
• ·         Sometimes wicked!
• ·         Soft systems thinking

Soft systems methodology is a qualitative methodology developed by Peter Checkland and his colleagues at Lancaster University.  It applies systems concepts to qualitative research (as does the Snyder process).

The 7-stage description

1   The problem situation unstructured

The problem situation is first experienced, as it is, by the researcher.  That is, the researcher makes as few presumptions about the nature of the situation as possible.

 2   The problem situation expressed

In this step the researcher develops a detailed description, a "rich picture", of the situation within which the problem occurs.  This is most often done diagrammatically.

Throughout the 7 stages, both and logic and the culture of the situation are taken into account.  These twin streams of enquiry, logic and culture, are incorporated into the rich picture.

Checkland puts it this way.  In addition to the logic of the situation, the rich picture also tries to capture the relationships, the value judgments people make, and the "feel" of the situation.

3   Root definitions of relevant systems (CATWOE)

Now the "root definitions", the essence of the relevant systems, are defined.

For the logical analysis, Checkland provides the mnemonic CATWOE as a checklist for ensuring that the important features of the root definitions are included:

·         Customers...................who are system beneficiaries

·         Actors......................who transform inputs to outputs

·         Transformation..............from inputs into outputs

·         Weltanschauung..............the relevant world views

·         Owner.......................the persons with power of veto

·         Environmental constraints...that need to be considered

 "transformation" element is one of the features that signal this as a "systems" approach.

The cultural analysis has three parts:

A role analysis, focusing on the intervention itself.  This seeks to identify the client, the would-be problem solver (the researcher), and the problem owner (roughly, stakeholders).  In the terms that we used in earlier sessions you could think of this as the diagnostic part of entry and contracting.
 A social system analysis.  This identifies, for the problem situation, three sets of elements: roles, norms, and values.
 A political system analysis.  This identifies the use of power in the problem situation.

4   Making and testing conceptual models

The researcher now draws upon her knowledge of systems concepts and models.  She develops descriptions, in system terms, of how the relevant parts of the situation might ideally function.

One of the important questions here is: ideals from whose point of view? If you adopt those who pay you as your client, you may well just help the organisation exploit its members more effectively.  If you adopt everyone in the system as a client, you will avoid this problem.  But perhaps people outside the system will bear some of the cost of this.  Here, as elsewhere, a careful identification of stakeholders can make a large difference to the outcomes.

 5   Comparing conceptual models with reality

The purpose is not to implement the conceptual models.  Rather, it is so that models and reality can be compared and contrasted.  The differences can be used as the basis for a discussion: how the relevant systems work, how they might work, and what the implication of that might be.

 6   Identify feasible and desirable changes

From the discussion at step 5, certain possible changes are identified.  They are likely to vary in desirability and feasibility:

desirable: is it technically an improvement?

feasible: especially, does it fit the culture?

 7   Action to improve the problem situation

The most desirable and feasible changes identified at step 6 are now put into practice.

 I would like now to offer a different description.  My hope is to do this in such a way that the cyclic nature of the process, and the use of dialectic comparisons, are made more evident. 

BCS/ CER / IS / FEASIBILITY STUDY

Feasibility Study (TELOS)

Feasibility study is carried out to select the best system that meets performance requirements.
The main aim of the feasibility study activity is to determine whether it would be financially and technically feasible to develop the product. The feasibility study activity involves the analysis of the problem and collection of all relevant information relating to the product such as the different data items which would be input to the system, the processing required to be carried out on these data, the output data required to be produced by the system as well as various constraints on the behavior of the system.

Technical Feasibility

This is concerned with specifying equipment and software that will successfully satisfy the user requirement. The technical needs of the system may vary considerably, but might include :
• The facility to produce outputs in a given time.

• Response time under certain conditions.

• Ability to process a certain volume of transaction at a particular speed.

• Facility to communicate data to distant locations.

In examining technical feasibility, configuration of the system is given more importance than the actual make of hardware. The configuration should give the complete picture about the system’s requirements:
How many workstations are required, how these units are interconnected so that they could operate and communicate smoothly. What speeds of input and output should be achieved at particular quality of printing.

Economic Feasibility

Economic analysis is the most frequently used technique for evaluating the effectiveness of a proposed system. More commonly known as Cost / Benefit analysis, the procedure is to determine the benefits and savings that are expected from a proposed system and compare them with costs. If benefits outweigh costs, a decision is taken to design and implement the system. Otherwise, further justification or alternative in the proposed system will have to be made if it is to have a chance of being approved. This is an outgoing effort that improves in accuracy at each phase of the system life cycle.


Operational Feasibility

This is mainly related to human organizational and political aspects. The points to be considered are
• What changes will be brought with the system?

• What organizational structure are disturbed?

• What new skills will be required? Do the existing staff members have these skills? If not, can they be trained in due course of time?

This feasibility study is carried out by a small group of people who are familiar with information system technique and are skilled in system analysis and design process.

Proposed projects are beneficial only if they can be turned into information system that will meet the operating requirements of the organization. This test of feasibility asks if the system will work when it is developed and installed.

BCS / PGD/ MIS/ MIS Development (Approaches)

MIS Development

Traditional approach – development is undertaken in a series of steps, with each one being completed before the next starts. Steps may be requirements determination, design, coding, testing and installation. Maintenance can be seen as the next cycle, or the last of the series of steps. Another name used for the traditional approach is the waterfall approach, as it can be depict as a waterfall from one stage to the next in the development process. The motto of this approach is to “get things right first time” and backtracking to a previous stage is seen as weakness in the quality of the work within the previous stage. The approach is suitable for developments that have static and clear requirements at the outset of the development.

Evolutionary approach – where a series of prototypes are produced and examined by the users, feedback is received and the prototype amended, and this cycle of “creation and feedback” continues until the final prototype becomes the actual system to be used. The motto of this approach is “don’t expect to get things right first time”, as iteration is expected until the prototype is deem acceptable to satisfy the needs of the users. Normally, this approach is used with small scale systems that have dynamic or initially unclear user requirements.

Phased approach – similar to the traditional approach, except that the project is carved up into phases of development, so that each phase is suitably manageable, and can be delivered within a relatively short timescale. Users then gain benefits earlier than in the traditional approach. This approach is suitable when the project has defined aspects that can be separated and developed at different times. The overall requirements still need to be clear and well defined, so that phases can be identified and appropriately scheduled.

Overall user requirements for data within a data warehouse will probably be fairly well defined and the data structures will not change rapidly. It is also stated to be a large data warehouse. For these reasons, it is probably best that a phased approach is used (indeed, a phased approach is frequently used in practice e.g. in the case of the well-documented First American Corporation (FAC) data warehouse development) so that some parts of the data warehouse (i.e., the implementation of the support for 1 or 2 Key Performance Indicators (KPIs)) can be developed quickly and thus the benefits of the data warehouse can be felt quickly within aspects of the organisation: this would be much slower if a pure traditional approach was used. Indeed, a criticism often levelled at the traditional approach is that the time it takes to develop the entire data warehouse is very long and consequently management lose interest in the system (as it is not visibly producing anything of value for potentially several months). An evolutionary approach would not be as suitable, given the generally easy identification of the data requirements, and indeed may be quite difficult to manage in the case of such a large data warehouse.

BCS / PGD / MIS / SHORT NOTES

Enterprise Resource Planning (ERP) software.

ERP software is really an integrated suite of software modules which is developed to support the whole range of company functions (e.g., human resources, production, marketing & sales). It helps a manufacturer (typically) or other business manage the important parts of its supply chain, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service and tracking orders, and also includes application modules for the supportive aspects of the business such as finance and human resources. ERP modules can be used alone or in combination. An ERP system typically uses a relational database system as its data store and integrating mechanism. Deploying a comprehensive ERP system involves considerable business process analysis, and possibly substantial changes in employee work practices and associated training. Leading ERP products are provided by companies such as SAP.

Benefits:

• The integration of ERP data enables external MIS applications to draw off a consistent and integrated pool of data rather than data “silos”. (You could say that the ERP database is essentially acting as an “operational-level data warehouse” although a data warehouse would need its own data store due to the different emphases between that and the ERP database – management support vs. operational efficiency). Examples of MRS reporting and DSS drawing upon ERP data stores, etc., could be provided to support the above narrative.

• There are also some management functions available from within ERP software modules to “pick up and use”, such as that found with functionally oriented modules such those supporting marketing and sales activities, and also in dedicated management modules such as a Data Warehousing ERP Module. These can directly benefit, with or without tailoring, management activities within a business.

Content Management System (CMS)

As its name implies, a Content Management System (CMS) is a software system for the management of content. They can be used across several contributors, each of which provides content. The content managed includes computer files, image media, audio files, electronic documents and web content. Nowadays, the CMS term is frequently used to refer to system that aids the development of web-based systems, by enabling the web page content to be created and updated (and employing versioning to manage such updates) more easily than without such a facility.

A CMS may include support for the following features:

• Importing and creating of documents and multimedia material

• Identifying the key users and their roles with regard to content management

• The capability to allocate roles and responsibilities to different content types.

• The capability to track and manage several versions of a single content aspect.

• The ability to copy the content to a repository which enables effective access to that content. Increasingly, the provision of a central repository is becoming an inherent part of a CMS.

• Some CMS allow the textual aspect of content to be somewhat independent of its formatting.

Benefits:

• Much easier management of the information within a web-based application system. Having the information, of many different forms, integrated within a central repository and the easier access to that information as a consequence, facilitates management decision making.

• The typical result of employing the CMS is that a company has a web based system that enables effective management support of content - candidates may expand on what they means here, such as more effective management of data currency, data access, etc.,

Business Intelligence (BI) tool.

A Business Intelligence (BI) tool is an “umbrella” term for all software systems that facilitate decision making via enabling data analysis. BI tools typically run on top of a data warehouse (consolidated and consistent pool of management-oriented data drawn from several data sources within a business). Each BI tool may take its own copy of the DW data it needs and in the format it requires for it to function effectively

(i.e., it possesses its own Data Mart). BI tools include OLAP tools, DSS, tools for Data Mining, and even EIS.

Benefits:

• BI tools enable the exploration, either driven by user or by tool, of the data for any patterns or trends that could have implications for the company.

• BI tools enable companies to find out aspects about the company and its environment so that it can take actions to strengthen the company’s position in the marketplace.

• Human data exploration tasks that used to take days can now be a matter of seconds/minutes. BI tools can make tedious tasks less tedious and/or impossible data exploration tasks possible (there must be a suitable data repository base, though, for maximum effectiveness).

BCS / PGD / ITE / SMART GRID

A Smart Grid Technology

A smart grid is a modernized electrical grid that uses analogy or digital information and communications technology to gather and act on information, such as information about the behaviours of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.

Roll-out of smart grid technology also implies a fundamental re-engineering of the electricity services industry, although typical usage of the term is focused on the technical infrastructure.

The Smart Grid represents an unprecedented opportunity to move the energy industry into a new era of reliability, availability, and efficiency that will contribute to our economic and environmental health. During the transition period, it will be critical to carry out testing, technology improvements, consumer education, development of standards and regulations, and information sharing between projects to ensure that the benefits we envision from the Smart Grid become a reality. The benefits associated with the Smart Grid include:

• ·         More efficient transmission of electricity
• ·         Quicker restoration of electricity after power disturbances
• ·         Reduced operations and management costs for utilities, and ultimately lower power costs for consumers
• ·         Reduced peak demand, which will also help lower electricity rates

·         Increased integration of large-scale renewable energy systems

The Smart Grid will consist of millions of pieces and parts—controls, computers, power lines, and new technologies and equipment. It will take some time for all the technologies to be perfected, equipment installed, and systems tested before it comes fully on line. And it won’t happen all at once—the Smart Grid is evolving, piece by piece, over the next decade or so. Once mature, the Smart Grid will likely bring the same kind of transformation that the Internet has already brought to the way we live, work, play, and learn.

The Smart Grid is not just about utilities and technologies; it is about giving you the information and tools you need to make choices about your energy use. If you already manage activities such as personal banking from your home computer, imagine managing your electricity in a similar way. A smarter grid will enable an unprecedented level of consumer participation.

For example, you will no longer have to wait for your monthly statement to know how much electricity you use. With a smarter grid, you can have a clear and timely picture of it. "Smart meters," and other mechanisms, will allow you to see how much electricity you use, when you use it, and its cost. Combined with real-time pricing, this will allow you to save money by using less power when electricity is most expensive.

The Smart Home

How will the Smart Grid affect your home? It won’t look very different, but behind the scenes a lot will be happening. Even right now, in many cities across the nation, new equipment, appliances, and software are available that use emerging Smart Grid technologies to save energy, seek out the lowest rates, and contribute to the smooth and efficient functioning of our electric grid.

Smart Meters and Home Energy Management Systems

A key element that allows all of the emerging Smart Grid technologies to function together is the interactive relationship between the grid operators, utilities, and you. Computerized controls in your home and appliances can be set up to respond to signals from your energy provider to minimize their energy use at times when the power grid is under stress from high demand, or even to shift some of their power use to times when power is available at a lower cost.

Smart meters provide the Smart Grid interface between you and your energy provider. Installed in place of your old, mechanical meter, these meters operate digitally, and allow for automated and complex transfers of information between your home and your energy provider. For instance, smart meters will deliver signals from your energy provider that can help you cut your energy costs. Smart meters also provide utilities with greater information about how much electricity is being used throughout their service areas.

This energy information coming to and from your home through your smart meter can be run through a home energy management system (EMS), which will allow you to view it in an easy-to-understand format on your computer or hand-held device. A home EMS allows you to track your energy use in detail to better save energy. For instance, you can see the energy impact of various appliances and electronic products simply by monitoring your EMS while switching the devices on and off.

An EMS also allows you to monitor real-time information and price signals from your utility and create settings to automatically use power when prices are lowest. You can also choose settings that allow specific appliances and equipment to turn off automatically when a large demand threatens to cause an outage—avoiding peak demand rates, helping to balance the energy load in your area, and preventing blackouts. Your utility may provide financial incentives for doing so.

Smart Appliances

In your smart home, many of your appliances will be networked together, allowing you to access and operate them through your EMS. An EMS provides the ability to turn on your heater or air conditioner from work when you’re about to go home or keep track of the energy use of specific appliances or equipment—like tracking the energy use of your pool pump, or seeing how much energy you saved with your new Energy Star dishwasher.

Smart appliances will also be able to respond to signals from your energy provider to avoid using energy during times of peak demand. This is more complicated than a simple on and off switch. For instance, a smart air conditioner might extend its cycle time slightly to reduce its load on the grid; while not noticeable to you, millions of air conditioners acting the same way could significantly reduce the load on the power grid. Likewise, a smart refrigerator could defer its defrost cycle until off-peak hours, or a smart dishwasher might defer running until off-peak hours.

Home Power generation

As consumers move toward home energy generation systems, the interactive capacity of the Smart Grid will become more and more important. Rooftop solar electric systems and small wind turbines are now widely available, and people in rural areas may even consider installing a small hydropower system on a nearby stream. Companies are also starting to roll out home fuel cell systems, which produce heat and power from natural gas.

The Smart Grid, with its system of controls and smart meters, will help to effectively connect all these mini-power generating systems to the grid, to provide data about their operation to utilities and owners, and to know what surplus energy is feeding back into the grid versus being used on site. A potential feature of the Smart Grid will be to allow your community to use your solar array—and your neighbor’s—to keep the lights on even when there is no power coming from a utility. Called “islanding,” it will allow a home to grab power from “distributed resources,” such as local rooftop solar, small hydropower, and wind projects, until utility workers can bring the grid back online.

Renewable energy

Geography issues aside, the current grid has difficulty accommodating variable sources of power like wind and solar energy, the fastest-growing sources of renewable power on the grid. As these resources begin to supply increasing percentages of power to the grid, integrating them into grid operations will become increasingly difficult.

The Smart Grid will be able to make better use of these energy resources. It will give grid operators new tools to reduce power demand quickly when wind or solar power dips, and it will have more energy storage capabilities to absorb excess wind and solar power when it isn't needed, then to release that energy when the wind and solar power dips. In effect, energy storage will help to smooth out the variability in wind and solar resources, making them easier to use.

Building an electric superhighway can also help solve the problem, as it will help to ship the power to where it is needed. Studies have shown that connecting wind resources from a diversity of geographic locations helps to balance out fluctuations in wind power. In other words, when the wind isn't blowing in Iowa, in may be blowing in North Dakota or Wyoming. Having such geographically diverse wind resources on a single electric superhighway will result in a more steady supply of wind power to the nation's power grid, making it easier for grid operators to make full use of this resource.

Distribution intelligence

"Distribution intelligence" refers to the part of the Smart Grid that applies to the utility distribution system, that is, the wires, switches, and transformers that connect the utility substation to you, the customers. The power lines that run through people's back yards are one part of the power distribution system.

A key component of distribution intelligence is outage detection and response. Today, many utilities rely on customer phone calls to know which areas of their distribution system are being affected by a power outage. Along with smart meters, distribution intelligence will help to quickly pinpoint the source of a power outage so that repair crews can be immediately dispatched to the problem area.

A utility's outage response can also improve. Most utilities count on complex power distribution schemes and manual switching to keep power flowing to most of their customers, even when power lines are damaged and destroyed. However, this approach has its limitations, and in many cases an automated system could respond more quickly and could keep the power flowing to more customers.

By having sensors that can indicate when parts of the distribution system have lost power, and by combining automated switching with an intelligent system that determines how best to respond to an outage, power can be rerouted to most customers in a matter of seconds, or perhaps even milliseconds.

It may even be possible to react quickly enough to power disturbances so that only those in the immediate neighborhood are affected, while other customers' power source are rerouted fast enough to avoid any interruption in power. This capability could be the first example of the highly touted "self-healing" aspect of the Smart Grid in action.

The "Self-Healing" Power Distribution System

Outage response is one aspect of distribution intelligence that is commonly referred to as distribution automation(DA). DA may actually be the oldest segment of the Smart Grid, because utilities have been automating their distribution systems since the 1960s. But while DA initially focused just on remote control of switches, the Electric Power Research Institute now considers distribution intelligence to mean a fully controllable and flexible distribution system.

Combining DA components with a set of intelligent sensors, processors, and communication technologies will lead to distribution intelligence. When fully deployed, distribution intelligence will enable an electric utility to remotely monitor and coordinate its distribution assets, operating them in an optimal matter using either manual or automatic controls.

Helping the Grid Run More Efficiently and Reliably

Along with outage detection and response, another potential application of distribution intelligence is the ability to optimize the balance between real and reactive power. Devices that store and release energy, such as capacitors, or that use coils of wire to induce magnetic fields, such as electrical motors, have the ability to cause increased electrical currents without consuming real power; this is known as reactive power.

A certain amount of reactive power is desirable within a power system, but too much reactive power can lead to large current flows that serve no purpose, causing efficiency losses as they heat up the distribution system wires. An intelligent distribution system can use power electronics to maintain the proper level of reactive power in thesystem.

Distribution intelligence can also help to protect and control the feeder lines, the power lines that make up the distribution system. Most feeder lines are now protected by breakers or relays that trip when high currents flow through the line, a situation normally caused by a fault somewhere in the system. These relays sometimes incorporate time delays to allow for momentary flows of high current, which may be caused by industrial equipment powering up, rather than a fault. Protection systems are often a combination of instantaneous breakers with high current settings and time-delayed breakers or relays with lower settings.

These systems of automated breakers and relays end up being a balancing act: they must allow the system to operate with high currents when needed but protect the system and the people around it from high current flows when a fault exists. Distribution intelligence can provide a more elegant approach to protecting the feeder lines, using sophisticated monitoring and controls to detect and correct for faults while maintaining the highest level ofsystem reliability during non-fault conditions.

An intelligent system could even detect and isolate faults in specific pieces of equipment and route power through a backup system instead, maintaining power reliability. Distribution intelligence can also incorporate more sophisticated ground-fault detectors to minimize the possibility that people can be shocked or electrocuted when encountering downed power lines.

Most utilities are only starting on the road to true distribution intelligence, but the market is expected to boom in the coming years.

Consumer Engagement

The Smart Grid offers many opportunities for consumers to save energy and for utilities to operate the grid in a more efficient, effective, and reliable way. But some features enabled by the Smart Grid also involve some sacrifice on the part of consumers, such as holding off on running your dishwasher until later in the evening.

A smart consumer will ask, "What's in it for me?" And the answer is: money. Specifically, participating in these programs will earn consumers extra savings on their energy bills. And for people who generate their own power, it can even result in something you never thought you would see: your utility could mail a check to you.

Many utilities already offer their customers ways to save extra money on their utility bills. For people with central air conditioning systems, for instance, some utilities will place a remote-control switch on the air conditioner to cycle the air conditioner on and off during times of peak power demand. In return, customers receive a credit on their electrical bill.

The Smart Grid will allow programs like these to operate in more sophisticated ways, resulting in greater energy savings with less inconvenience to businesses and homeowners. Some examples include time-of-use pricing, net metering, and compensation programs for plug-in electric vehicles (PEVs)