IT project failures in Sydney Water’s
customer relationship management
system
Group members:
932506 劉彥徵
932540 王櫻婷
932520 葉佩昀
932545 黃巧瑛
Teacher: 吳思佩 老師
May/13th/2008
932539 張芷璐
932547 許郁欣
About Sydney Water
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The largest water services provider in Australia
Provides filtered drinking water, treats and recycles
wastewater, provides water and wastewater services
Sydney Water has three equal important principal
objectives:
- To protect public health
- To protect the environment
- To be a successful business that shows a sense of
social responsibility
About Sydney Water (Conti.)
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In recent years it has completed a number of projects
including:
-- the $90 million upgrade of the Cornell sewage
treatment plant
-- the $460 million Alliance for the North side Storage
Tunnel
-- The CIBS project with a final budget of $60 million
was Sydney Water’s largest IT project.
Other IT projects had ever
implemented in Sydney Water
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Customer Relationship Management System
Performance Management System
Quality management system
Online transaction system
About Customer Information and Billing
System (CIBS)
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The CIBS project was Sydney Water’s largest IT
project
CIBS project was intended to improve service to
customers, to fill gaps in existing information systems
and to provide business efficiencies
The CIBS project required integrated with 12 existing
major internal business systems
Sydney Water contracted PwC in June 2000 to build
and implement CIBS
About Customer Information and Billing
System (CIBS)
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release 1 (R1) – a tool to service major customers
release 2 (R2) – electronic interaction with
commercial land developers
release 3 (R3) – the substantial phase of the project,
being the core customer information and billing
engine
The R1 and R2 components were implemented,
although R2 did not achieve its full functionality.
About Customer Information and Billing
System (CIBS)
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Sydney Water terminated the CIBS project on 30
October 2002.
The CIBS project was not reaching acceptable
standards and that there were excessive costs and
delays
From Sydney Water Corporation
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Sydney Water’s Board concerned that the project was
not reaching acceptable standards, and that there were
excessive costs and delays. (2002/10/31 terminated)
Sydney Water originally expected the CIBS project to be
operational by February 2002, at a cost of $38 million.
Before the decision to stop the project, the budget had
increased to $60 million, with a further revision pending.
Sydney Water advised in September 2002 that the
increase in the budget was due to some scope changes
and some underestimation of the time required for
system, user acceptance and system integration testing.
Australian IT News reports (2007) :
Sydney Water gears for court
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Sydney Water launched legal action against PwC over
the customer information billing system (CIBS) debacle
in 2003.
Sydney Water dumped the CIBS project following
lengthy delays and a massive blow-out in the system's
anticipated cost from an initial budget of $38.2 million to
more than $135 million.
A May 2003 report from then NSW Auditor General Bob
Sendt found that the CIBS failure would cost Sydney
Water about $61 million and in part attributed problems
with the project to poor management and governance.
Australian IT News reports (2003) :
Water bill fiasco sends $61m down drain
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The board of Sydney Water and its senior executives
had failed to effectively oversee or even "understand the
complexity" of the project.
Sydney Water had also failed to adequately disclose the
status of the Customer Information and Billing System
(CIBS) despite the auditor questioning the project in
previous reports and clear warnings that it was flawed.
There was a belief in Sydney Water that IT projects of
this nature and complexity would inevitably go over
budget and be delayed.
A report published by the New South
Wales Audit Office
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They believed that it did not detail risks, problems, and
the reasons for cost increases and delays to the
project.
They advised the GM-Corporate Affairs and Corporate
Secretary, and GM-Finance that they believed the
disclosure was inadequate.
They believe that the commentary on CIBS in the
Annual Report did not adequately discharge Sydney
Water’s obligations for accountability.
According to papers of "Review of Sydney
Water’s Customer Information and Billing
System"
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The project could not continue because the Board had
lost confidence in the ability of its contractor.
The principal cause of the project’s failure is that the
contractor, PwC did not meet its obligations under the
contract.
Sydney Water’s approach to the CIBS project would
stand up well to objective scrutiny, but there were clearly
weaknesses in execution by its contractors.
Why IT project (CIBS) fail?
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We are going to re-examine each phase in
the System Development Life Cycle and
factors that also contribute to a project’s
success to find out what went wrong in the
CIBS project.
Now let’s review what SDLC is.
SDLC consists of 5 phases, they are:
 Project planning phase
 Analysis phase
 Design phase
 Implementation phase
 Support phase
Project planning phase
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Define the problem.
(To identify the scope of the system)
Produce the project schedule.
Confirm the project feasibility. (Such as
economic, organizational, technical, resource,
and schedule feasibility.)
Staff the project.
Launch the project.
Analysis phase
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Gather information.
Define system requirements.
Build prototypes for discovery of
requirements.
Prioritize requirements.
Generate and evaluate alternatives.
Review recommendations with management.
Design phase
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Design and integrate the network.
Design the application architecture.
Design the user interfaces.
Design the system interface.
Design and integrate the database.
Prototype for design details.
Design and integrate the system controls.
Implementation phase
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Construct software components.
(This means coding.)
Verify and test.
Convert data.
Train users and document the system.
Install the system.
Support phase
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Maintain the system.
Enhance the system.
Support the users.
Other factors that affect a project’s success
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project governance
project maintenance
project management
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Combine phases in SDLC with factors that
help IT project become successful, such as
project governance, project maintenance
and project management, to find out what
actually went wrong and contributed to the
failure of the project.
In the project planning phase
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What should be done are:
Confirm the project feasibility. (Such as
economic, organizational, technical, resource,
and schedule feasibility.)
Turn out to be:
Technologies selected to make up the system
have been too complex and
incompatible.
In the project planning phase (Sol.)
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Do the feasible analysis
It is necessary for Sydney Water and PwC to do a
complete understanding about Sydney Water’s hardware
equipment and IT infrastructure
Consider all the possible problems mat occur after
implementing the system before they construct the
system.
Consider the need for additional budget for the purchase
of new hardware equipment to meet the system.
In the analysis phase-A
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What should be done are:
Gather information.
Define system requirements.
Turn out to be:
PwC admitted that insufficient time having
been spent in analysis.
In the analysis phase-A (Sol.)
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Each stage of the project management should be
completed, so as any phase in SDLC
Sydney Water should know whether the system can
meet their requirement.
PwC should do more on analyzing the system.
In the analysis phase-B
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What should be done are:
Build prototypes for discovery of
requirements.
Define system requirements.
Turn out to be:
Project specifications were inadequate.
In the analysis phase-B (Sol.)
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At initiation stage of the project, PwC should evaluate
the system and design appropriate activities and
milestones.
PwC and Sydney Water should have full discussion
on the Project Charter and definition of the scope.
In the design phase
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What should be done is:
Prototype for design details.
Turn out to be:
PwC did not build prototype, as they should
have, to test the possibility for the
establishment of the system.
In the design phase (Sol.)
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PwC build a prototype to Sydney Water and let
Sydney water know that if the system meet their
goals or discover another requirement.
PwC and Sydney water can discuss the scope or
system.
In the implementation phase
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What should be done is:
Verify and test
Turn out to be:
PwC did not have a complete test plan.
In the implementation phase (Sol.)
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After developing the system, PwC should have
another people who didn’t code for the system test
the system to find bugs and see whether this project
meet the requirement (user’s needs)
After testing, the people should give the project
manager a testing report. Project Manager should
determine how to improve or don’t need to improve.
In the support phase
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The 3 activities in the project analysis phase are:
Maintain the system.
Enhance the system.
Support the users.
Sydney Water terminated the CIBS project on
30 October 2002.
Therefore, 3 major objectives for the support
phase have never been performed.
Project governance
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The board did not oversee the project effectively as it
might have. Its understanding of the project, in light of
its complexity, was limited.
Knowing that IT architecture for the Sydney Water
group was not in place but the Board still approved it.
Do not start the project with careful thought.
An external auditor was not engaged to review the
performance of Sydney Water and PwC.
Project maintenance
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PwC did not have integrated project plan
maintained well.
Project management
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Sydney water project team lacked experience
in large, fixed price IT contracts.
Poor communication between project team
members.