Skip to main content

COMPETITIVE BUSINESS PLANNING: LINKING MARKET CONSIDERATIONS TO PERFORMANCE TARGETS IN PUBLIC UTILITIES

Buy Article:

$9.50 plus tax (Refund Policy)

Or sign up for a free trial

The concept of business planning is not new. Successful private businesses understand their product lines, costs, customer demands and competition within the marketplace. Business plans are used to focus on future goals and objectives in order to assure long-term success. They are also used to develop strategy as well as performance parameters that must be met to remain competitive. In the public sector, business plans are generally viewed as financial guidance documents built upon the prior year's budget and factored up or down depending on the financial condition of the rate base. Seldom do public sector business plans address the need to work within a specified level of service, at a closely related cost that is comparable and competitive with alternative service providers. Most public utilities have come to realize that they are operating in a competitive environment and that they need to plan their business activity as carefully as any private company in order to remain in a preferred service provider position.

The Competitive Business Planning (CBP) process was developed to help public sector service providers make the most of local ratepayer/taxpayer dollars. The process is designed to encourage public utilities to think carefully about the services they want to provide, how much they cost, and what an alternative provider would charge if given the opportunity to operate the utility. CBP's call for the careful assessment of the utility's history, its current, and future business. A mission statement is developed to reflect the need to demonstrate that the utility would compare favorably with alternatives available in the marketplace. The CPB will take into account external factors like technology and a changing economic environment while also focusing on legal, political, social, and cultural issues that are likely to impact the utility's ability to fulfill its mission. The CPB will examine internal factors including the utility's organizational structure and culture with a detailed look at reporting structures and current staffing levels. A complete menu of services provided along with measurable indicators of quality as well of quantities of service currently provided should be included. The CBP process incorporates policy direction to identify the level of service desired or targeted and its related cost and pricing targets. Market based data will be included in the CBP to illustrate the utility's service and pricing relationship to alternatives that exist in the region. To the degree that a gap exists between current performance and market indicators, the CBP describes strategies that will be employed to close the gaps. Those strategies will be broken onto incremental performance improvements related to regulatory compliance, customer service, employee safety and development, as well as financial indicators. CBP's are reviewed by policy and citizens advisory panels for process compliance and credible content. Upon acceptance by policy makers, the CBP is used as the overall management vehicle and foundation for performance monitoring. Utilities that follow their CBPs will find that they plan their way to success, insulate themselves from competitors, and pave the way for rewards based on performance against measurable indicators.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Article Media
No Metrics

Document Type: Research Article

Publication date: 2002-01-01

More about this publication?
  • Proceedings of the Water Environment Federation is an archive of papers published in the proceedings of the annual Water Environment Federation® Technical Exhibition and Conference (WEFTEC® ) and specialty conferences held since the year 2000. These proceedings are not peer reviewed.

    A subscription to the Proceedings of the Water Environment Federation includes access to most papers presented at the annual WEF Technical Exhibition and Conference (WEFTEC) and other conferences held since 2000. Subscription access begins 12 months after the event and is valid for 12 months from month of purchase. A subscription to the Proceedings of the Water Environment Federation is included in Water Environment Federation (WEF) membership.

    WEF Members: Sign in (right panel) with your IngentaConnect user name and password to receive complimentary access. Access begins 12 months after the conference or event
  • Subscribe to this Title
  • Membership Information
  • About WEF Proceedings
  • WEFTEC Conference Information
  • Learn about the many other WEF member benefits and join today
  • Ingenta Connect is not responsible for the content or availability of external websites
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more