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Over the years, technology change has been a major challenge that every manager has to face. This is no different even for government-owned institutions. During such changes, it is important for the organization to adopt the new technology, which will help them match the ever-changing customer demands, leave alone remaining profitable. Notwithstanding, some companies lag behind in implementing new technologies, and thus, as it is in the case of monopolies and government agencies, the customer demands are not met and if they are met, it is at unreasonably high prices.
This is the case in the US, where the existing electricity infrastructure is outdated and thus is unable to meet the requirements of the users. This paper is a review of the Smart Grid, an alternative to the existing system, with the aim of persuading stakeholders to implement the up-to-date system.
The smart grid, unlike the existing technology, has several added capabilities, which are beneficial both to the stakeholders and to the users. Smart grid transfers electricity using digital technology thus improving the reliability and the flow of information between the user and the service provider. Furthermore, the system is a more cost-efficient alternative and improves transparency among the parties.
This system, unlike the existing one, is able to provide information regarding the usage and the production of electricity to both parties on a minute basis (Laudon and Laudon, 1999). Such information is important for the purposes of planning to the producer. On the other hand, given that the system provides information regarding supply and demand, the customer has the golden chance to control the use of the commodity during the demand peaks to reduce the costs. These are just but a few of the opportunities offered by the grid system.
Having seen some of the advantages of this new technology, the next fundamental question is; what considerations do organizations have to make when developing the smart grid? One of the paramount considerations is the investment decision. The adoption of this technology is a multi-billion dollar investment and every manager must consider the viability of the investments. This is clear considering that the costs incurred by the pilot studies, for instance, the $35 million investment by Duke Energy in its pilot study (Laudon and Laudon, 1999).
In addition, given the diverse methods of production of electricity, it is important for managers to consider the compatibility of technology with different production technologies. This would ensure that the technology remains viable even when more cost-efficient production technologies emerge.
Even though the smart grid technology seems to offer excellent opportunities, its implementation, in my opinion, is not without a couple of obstacles. The chief among them all is the resistance from the average resident, in this case, the target consumer. The costs of buying the new power meters coupled with the purchase of a new billing system are estimated to be on average between $250 and $500.
The question is who will finance the purchases? Surveys already have indicated that the customers do not actually consider technology as a way to energy conservation implying that the technology seeks to solve a problem that does not exist (Laudon and Laudon, 1999). Further, having someone control how you use the power in your home is an idea that many might consider as intrusive, in which case, they will resist the technology.
In conclusion, the smart grid is an excellent technology, which offers more opportunities for the nation as a whole. However, the implementation of the technology, if not accompanied by proper legislation and thorough civil education might prove to be futile.
Laudon, Kenneth and Laudon, Jane. Management Information Systems: Organization and Technology in the Networked Enterprise. Canada: Prentice Hall, 1999. Print.