AUSTIN ENERGY’S BILLING SYSTEM CAN’T LIGHT UPSAMIHAH BINTI AHMED

ALIAA BINTI MOHAMAD ZIYADI

NITIRAJ A/L PERUMAL

INTRODUCTION OF AUSTIN ENERGY

Handles electrical water and waste

disposable for a city of Austin, Texas and surrounding counties

Serving more than 1 million

residents

Publicly owned company and an arm of city

government and returns its profits to the

community each year

Has provided $1.5 billion in dividends back to Austin

since 1976 which help fund city services such as fire,

police, emergency medical services, parks and libraries

Billing sy

stem

did

not in

tegra

te w

ith

smar

t met

ers a

nd

other

new

er

tech

nologies

.

Proble

m

It also lacked newer customer assistance

options, like ability to choose the time of the

month that the customer prefers to pay bills

SOLUTIONCONTRACTED WITH IBM

In 2009 to create a centralized billing system and to run the system for 5 years

COST

Agreed to pay IBM $55 mill, which $38 mill for building and installing the new billing system and $17 mill for operating the system for 5 years after it completion

NE

W SYSTEM

Was slated to handle electricity, water, trash and recycling

Q1:IS THE AUSTIN ENERGY PROJECT A FAILURE? EXPLAIN YOUR ANSWER• Yes. The old billing system did not integrate with smart meters and other newer

technologies. It also lacked newer customer assistance options like ability to choose the time of the month customer prefers to pay bills.

• The new billing system (contracted with IBM) – also failure due to the following reason.

a) The system was supposed to go alive in early 2011, but it not fully operational

b) The software bugs have led to errors in thousands of bills. Over 65,000 customer naver received a bill and another 35,000 have received inaccurate bills. E.g one business that owed Austin $3000 was instead Charged $300,000

c) Austin was able to identify affected accounts and work with customers individually to correct the problems, the company was ill-prepared to handle the outpouring of customer service department was in denger of being overrun.

d) Continous to give the costly impact to their business and customer.

Q2: DESCRIBE THE BUSINESS IMPACT OF THE FALTERING AUSTIN ENERGY PROJECT

• Instability which caused by the poor and inefficiency system that continues to have serious and costly impacts to their business and customer

• Lack of application of related knowledge, skills tools and techniques. Eg not using internet facilities- lack options to customer to pay such as smart billing or e-payment system

• High rise of complaints received when they actually modernized the billinf system e.g software buds leads to errors, system is not user friendly

• Continous mistake by IBM which caused disappointment to Austin and the customers.

• Blamming game between Austin and IBM officers – unclear roles & responsibility.

Q3: TO WHAT DEGREE WAS IBM RESPONSIBLE FOR THE PROBLEMS COUNTERED BY THE AUSTIN ENERGY BILLING PROJECT? WAS AUSTIN ENERGY BILLING AT FAULT FOR THE PROBLEMS? EXPLAIN YOUR ANSWER.

• IBM was responsible for the problems countered by the Austin are as follows:

Delay to complete the system.

The system not fully operational.

Persistent system errors prevented Austin from billing apartment residents for water, balancing its books anf fillng audit report.

Austin losing revenue due to unability the system to bill for utility properly.

Lack quality of services

WAS AUSTIN ENERGY BILLING AT FAULT FOR THE PROBLEMS? EXPLAIN YOUR ANSWER.• Yes. Austin also at fault for the problem are as follows:

Austin should clearly stated what is the project management involved between Austin and IBM.

Project management to develop billing system must deal with 5 major variables such as scope, time, cost, quality and risk.

The role and responsibility of the both party should clearly define.

Austin also should monitor the progress of the project.

Q4: WHAT WERE THE SPECIFIC ORGANIZATIONAL OR TECHNICAL FACTORS AS WELL AS MANAGEMENT FACTORS INVOLVED IN THIS PROJECT FAILURE?Organizational Technical Management

No realignment internally and externally

No specific infrastructure No planning and strategy which cause time slippage

Involved a lot of budget – exceed the budget

Unreliable systems caused money loss

No business solution

Fail to meet customer satisfaction

Inter-related with man power

Lost trust – Customers away

SOLUTION/LOOKING AHEAD

• Planning the implementation of the project/contract

• Monitor the progress based on the milestone and achievement

• Clearly stated the objective or output should deliver from the project

• Risk analysis and how to mitigate the risk

Q5: DESCRIBE THE STEPS AUSTIN ENERGY AND IBM SHOULD HAVE TAKEN TO BETTER MANAGE THIS PROJECT

Planning the work

Assessing the risk

Estimating and acquired

resources to accomplish the

work

Organization the work

Directing execution

Analysis the result

5 MAJOR VARIABLES IN PROJECT MANAGEMENT FOR IS

Project management

Time

cost

Quality

Risk

Scope