Internatinal_Issues

International Issues with System Integration Our Organization Our organization is the National Enrichment Facility (NEF) located in Eunice, New Mexico. We are a privately owned, federally licensed Uranium enrichment facility that will provide low cost commercial grade Uranium to Nuclear Power plants in both the US and Canada for commercial energy production applications. We have been issued the first dual license for both construction and operation ever issued by the Nuclear Regulatory Commission (NRC), we have begun construction of our facility and expect to be fully operational by the Fall of 2009. Our mission it to use the world’s most advanced, energy efficient and cost efficient enrichment technology to provide the United States and Canada with a domestic source of low-enriched Uranium essential for fueling commercial nuclear power plants[i]. Our organization’s parent Company is URENCO Inc. a Dutch company with plants operating in four European companies providing the means to provide 15% of the European Unions power supply2. In order to be an effective organization that provides both energy resources to the nuclear industry as well as profit to our shareholders and owners, it is very important to understand the international issues associated with our business and provide a means of overcoming and adapting to the challenges of implementing enrichment technology new to the US market, and provide our employees and managers with the most comprehensive and up to date training, that will facilitate a seamless integration of European technology to the US market. Our organization needs to focus on two separate areas essential to the proper integration of our business systems; (1) uses of internet technology, and (2) training and overall integration. Therefore, this paper will provide recommendations to aid overall system integration highlighted by the two areas mentioned above. I will also provide historical reference points for international integration, discuss our current use of existing systems, and finally, provide my recommendations for changes to be implemented based on the information provided. Uses of Internet Technology Internet technology is the application of freely exchangeable and easily accessible information from another network connected digitally3. Internet technology can be used in a variety of different ways, from the creation of a company or business intranet, to the automated and internationally accessible use for ordering and shipping3. The latter is used throughout the world to process orders and ship merchandise more efficiently. And while some of this aspect of internet usage will be used to promote our business activities, the focus of our internet usage will be in the form of person to person and plant to plant communication. Internet technology can help a company manage it’s assets from top to bottom, and also aid in company decision making. It is also an internationally recognized system of communication and can be used to link a business throughout the world. Almost every type of management program that are computer operated can be used effectively using internet technology3. The strategic implications to our business of applying internet technology can be far reaching. Business decisions that now require teleconference can be made through a series of emails or virtual presentations using internet based technology to and from the home office in Amelo, Netherlands. Currently, no system exists to communicate digitally over a secure network from NEF to its European counterparts. However, all Urenco facilities in Europe share the same intranet and have been communicating using this method for over seven years. Due to the exclusive and tenuous nature of the information regarding the specific plant design and implementation of Uranium enrichment technology, the NRC has granted certain classifications to information regarding enrichment processes as either Confidential Data, Secret Data or data classified as SGI or safeguards information protected by the Atomic Energy Act of 19544. All classifications of information are considered to be protected and must not be transferred to foreign countries as part of the Nuclear Nonproliferation Treaty of 1968, and makes it difficult to create a network to connect our parent company URENCO Inc. and the NEF5. Waivers can be granted by the NRC for business deemed vital and accepted by international agreement5. NEF as a separate company has a strong and well managed intranet that services the needs of facilitating construction as well as communication within the company as well as with US regulatory agencies such as the NRC and the Department of Energy. The internet technology built into the current NEF intranet services the US side of the business very efficiently and also provides a method of secure transfer of information to other NEF and parent company offices within the US. That is, the NEF intranet can effectively communicate with URENCO USA, based in Cherry Hill, New Jersey. This communication is allowed and sanctioned by the NRC and DOE, as intercompany communication not in violation of the Nuclear Nonproliferation Treaty. Security will of course be the main concern when determining not only the cost and system needed to be developed, but will also serve as the template for the additional organizational support required to establish and maintain the secure network. Currently NEF contracts out its network services to CDR Systems, with a dedicated NEF office located in Hobbs, New Mexico. CDR currently employees thirty-one network engineers and programmers in support of NEF. CDR provides services to NEF as a Business Solutions Provider and an Applications Solutions Provider6, this allows NEF to meet IT deadlines and also tracks NEF budgeting and systems integration. The waiver from the NRC would require NEF and URENCO to have a dedicated in-house network support staff. The size of which would be approximated at 50 people. With an average annual salary of $82,0007, network engineers and programmers would add an additional 4.1 million dollars to the annual budget of NEF. The current cost of having CDR services handle all network related issues is less than 1.2 million dollars per year based on 2007 contract8.[pic] Training and Overall Implementation Two different regulations have to be considered when discussing training of system operators and implementation of an international secure network to link NEF with its parent company in Europe; (1) The Nuclear Nonproliferation Treaty of 1968 and (2) The Atomic Energy Act of 19564. Both regulations were put into place in an attempt to protect sensitive nuclear information and prevent it from being distributed to foreign countries without a need to know. However, the regulations also placed very strict limits on the training of nuclear workers and the security clearances necessary to handle such information. Currently in order to handle SGI information a person must receive a Department of Energy “L” Clearance, this allows the individual holding the clearance to view and handle information up to but not exceeding SGI material5. In this case fifty additional employees will be required to receive “L” Clearances. The average cost of receiving such a clearance costs around $150,000 per person, and commonly takes six months to one year to complete. This would add an additional 7.5 million dollars to the acquisition cost of the international network, and add an additional six months to one year to system availability time. CDR Services personnel all have current “L” Clearances that do not require additional NEF funds. Company wide training would also be required to properly implement the new network. Although with the current network being the template for a new proposed international network, only specific security and internet protocol training would be necessary. This would increase the level of awareness throughout the company, and also place strict guidelines on the use of the Company intranet for business other than NEF official business. Security protocol would have to be firmly established in the form of company wide directives and security procedures. However, this cost would be relatively minimal in relation to the overall cost of acquisition, and its overall effect to the bottom line can be negated. Recommendations 1 Assess the Value of Developing an International Secure Network The information provided above has shown a clear need for a company based intranet capable and allowed to communicate freely with our European counterparts at URENCO Inc. However, the significant cost of applying for and receiving as well as developing and testing of a new international network may be cost prohibitive to implement. As such, the cost of the new network must be weighed against the current cost of doing business which includes several trips per year by top management to Europe to obtain information vital to proper plant performance and operation. There fore it is my recommendation that NEF conducts a risk and value analysis to determine the true cost and value of creating a secure international network capable and licensed to transmit classified material over the internet. So as before a final determination is made, the risks and costs of this development process may be weighed properly against its true benefits. Value wise, development of an international network will cut down on the lost productivity of managers and operators by allowing them to access information needed to properly run and facilitate the US plant without having to make costly trips to Europe to obtain the same information. Development of the network will allow the business to run more smoothly on both sides of the ocean and have the added benefit of better customer tracking and communication across the entire range of company holdings, which would allow NEF and URENCO to be more responsive to industry and market changes, allowing the development of more cost effective methods of enrichment and delivery to better suit customer demands, and allow internal conflicts to be resolved without excessive cost to the company3. On the risk side, there is no guarantee the application for an NRC waiver will be approved, and the process for applying for a waiver includes the initial development stages to be complete. This could place a large financial burden on the company for development of a system that might not be approved for use. The application fee from the NRC is listed as $300,000, plus costs of development of the initial system plan. This could place the investment of capital over one million dollars before any approval is given to transmit information. Further complications could arise on the Urenco side of the network if the already established URENCO intranet is not fully compatible with the NEF network. This places a very heavy burden on system developers, and could leads to lost functionality of the entire system while trying to solve the compatibility issues. Implementation of this system can be measured in years not months, so the very real possibility is a non-functioning network at the time of plant startup. This could be devastating to NEF from an operational and managerial viewpoint. a. Assess the Cost of System Implementation and Training While the potential cost of system implementation including the development of a completely in-house IT and network security department, may seem staggering it will be easy to tell from the above mentioned value and risk analysis, whether the value added to the overall network will be an asset that overwhelms the associated risk in the development of an international network. Many examples of successful international network integration are available including Microsoft who managed to create a successful international network, linking manufacturers, suppliers and retailers while preserving and protecting US patent rights for the technology being utilized. A international secure network that provides uninterrupted service and information sharing between NEF an URENCO could be an asset to the company for years to come, allowing the free flow of information and ideas providing a boost not only to the bottom line but also to the pockets of the shareholders. A careful analysis must be made to determine if the overall cost of implementation out weighs the need for instant access to needed information3. Attachments Reference List ----------------------- [i] National Enrichment Facility, http://nefnm.com 2 Urenco Inc., http://www.urenco.com/ 3 Don Tapscott, David Ticoll, Alex Lowy, Digital Capital: harnessing the power of business webs, Harvard Business School Press, Boston, MA, 2000. 4 Nuclear Regulatory Commission, http://www.nrc.gov/who-we-are/governing-laws.html 5 Nuclear Regulatory Commission, http://www.nrc.gov/security/info-security.html 6 CDR Services Inc., http://www.cdrservices.com/frame_index.asp 7 US Department of Labor, http://www.dol.gov/ 8 CDR Services/ National Enrichment Facility, Contract for Services for Fiscal Year 2007, public document found on NEF intranet, October 2006.