GST 5083 - INFORMATION SYSTEMS & ELECTRONIC COMMERCE

MASTER OF BUSINESS ADMINISTRATION

Malaysian Graduate School of Entrepreneurship & Business

UNIVERSITI MALAYSIA KELANTAN( UMK SARAWAK )

GROUP MEMBERS

1. Arni B. Hj. Morshidi P14D461P2. Anisah Bt Ismail P14D389P3. Syarifah Rohaya Bt Wan Idris P14D397P4. Dayang Adelina Bt Hj Abang Muan P14D394P5. Norhana Aini Bt Saini P14D398P

INTRODUCTION

1. Handles electrical water and waste disposable for a city of Austin, Texas and surrounding counties

2. Serving more 1 million residents3. Publicity owned company and an arm of city government and returns its profits to the

community each year4. 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 libraries5. Has one of the largest renewable energy program in the country

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.

SOLUTION

CONTRACTED WITH IBM

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

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

NEW SYSTEMWas 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 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.

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 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 of resources to accomplish

the work

Organization the work

Directing execution

Analysis the result

5 MAJOR VARIABLES IN PROJECT MANAGEMENT FOR IS

PROJECT MANAGEMENTTime

Scope

Cost

Quality

Risk