Austin's energy's billing system can't light up

1. INTRODUCTION
1. Handles electrical water and waste disposable for a city of Austin, Texas and
surrounding counties
2. Serving more 1 million residents
3. Publicity owned company and an arm of city government and returns its profits to the
community each year
4. 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
5. Has one of the largest renewable energy program in the country

2. PROBLEM
PROBLEM
Billing system did not
integrate with smart
meters and other newer
technologiest
It also lacked newer
customer assistance
options, like ability to
choose the time of the
month that the customer
prefers to pay bills.

3. SOLUTION
CONTRACTEDWITHIBM
CONTRACTED WITH IBM
In 2009 to create a centralized
billing system and to run the
system for 5 year
COST
COST
Agreed to pay IBM $38 mill for
building and installing the new
billing system and $17 mill for
operating the system for 5 years
after it completion
NEWSYTEM
NEW SYSTEM
Was slated to handle electricity,
water, trash and recycling

4. Q1. 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 option like ability to choose
the time of the month customer prefers to pay bill.
 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 never received a bill and another 35,000 have received
inaccurate bills. E,g one business that owed Austin $3,000 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 danger of
being overrun.
d) Continuous to give the costly impact to their business and customer.

5. 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 billing system. E.g software buds leads to
errors, system is not user friendly.
 Continuous mistake by IBM which caused disappointment to
Austin and the customers.
 Blaming game between Austin and IBM officers – unclear roles
and responsibility.

6. Q3. TO DEGREE WAS IBM RESPONSIBLE FOR THE PROBLEMS
COUNTERED BY THE AUSTIN ENERGY BILLING PROJECT?
 IBM was responsible for the problems countered by the Austin
are as follow:
a) Delay to complete the system.
b) The system not fully operational.
c) Persistent system errors prevented Austin from billing
apartment residents for water, balancing its books
and filing audit report.
d) Austin losing revenue due to unability the system to
bill for utility properly.
e) Lack quality of services.

7. Q3. WAS AUSTIN ENERGY BILLING AT FAULT FOR THE PROBLEM?
EXPLAIN YOUR ANSWER.
 Yes, Austin also at fault for the problem.
 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.

8. 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

9. 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

10. 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 of
resources to
accomplish
the work
Organization
the work
Directing
execution
Analysis the
result

11. 5 MAJOR VARIABLES IN PROJECT
MANAGEMENT FOR IS
PROJECT
MANAGEMENT
TimeScope
Cost
Quality Risk