The effects of natural gas deregulation and increased competition have made the application of information technology at once vital and extremely difficult. The time to evaluate potential transactions has been reduced from days to a matter of hours. Individual transactions are more complex in terms of creative pricing, take-or-pay implications, and charges for unbundled services. Gas is no longer committed under long-term contracts but under spot contracts that do not last as long as it takes to enter them into most information systems.
If a natural gas company can successfully apply information technology to managing natural gas transactions, the company can gain a competitive advantage. To date, efforts to build information systems using conventional techniques have not been uniformly successful. This is not because people are not working hard on the problem, but rather because some of the tools we are using do not fit the situation well. The nature of deals in natural gas are constantly changing. The problem we are trying to solve is not well-defined. These characteristics make it difficult to build systems using conventional infomation systems techniques. These characteristics, however, lend themselves to an alternative approach, the use of knowledgebased syszems.
Artificial Intelligence and Knowledge-Based Systems vs. Conventional Systems
Developed as a branch of the study of artificial intelligence, knowledge-based systems, sometimes called expert systems, provide an alternative method of attacking the complex problems faced in the natural gas industry. Though used in other industries to solve complex problems, knowledge-based systems have yet to make a significant impact in the natural gas industry.
The best way to explain knowledge-based systems is to define some key terms and to contrast them to conventional systems. Some of the terms used to describe knowledgebased systems have caused a great deal of confusion. We