AUSTIN ENERGY’S
BILLING SYSTEM CAN’T
LIGHT UP
INTRODUCTION
Handles electrical water and waste disposable for a city of
Austin, Texas and surrounding countiies
Serving more 1 million residents
Publicity 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
Has one of the largest renewable energy program in the
country
PROBLEM
It also lacked newer
customer assistance
options, like ability
to choose the time of
the month that the
customer prefers to
pay bills.
Billing system did not
integrate with smart
meters and other
newer technologiest
PROBLEM
SOLUTION
CONTRACTED WITH IBM
In 2009 to create COST
a
centralized Agreed to pay IBM
billing system and $38 mill for
to run the system building and
for 5 year
installing the new
billing system and
$17 mill for
operating the
system for 5 years
after it
completion
NEW SYSTEM
Was slated to
handle
electricity, water,
trash and
recycling
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.
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 epayment 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.
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.
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.
Q4. WHAT WERE THE SPECIFIC ORGANIZATIONAL OR
TECHNICAL FACTORS AS WELL AS MANAGEMENT FACTORS
INVOLVED IN THIS PROJECT FAILURE?
ORGANIZATIONAL
TECHNICAL
MANAGEMENT
No realignment
No specific
internally and externally infrastructure
No planning and strategy
which cause time
slippage
Involved a lot of budget
– exceed the budget
No business solution
Fail to meet customer
satisfaction
Lost trust – Customers
away
Unreliable systems
caused money loss
Inter related with man
power
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
of resources
to
accomplish
the work
Organization
the work
Directing
execution
Analysis the
result
5 MAJOR VARIABLES IN PROJECT MANAGEMENT FOR IS
Cost
Scope
Time
Quality
PROJECT
MANAGEMENT
Risk