Assignment 17 : Austin Energy
Austin's Energy's Billing System Can't Light Up
1) Is Austin Business Project is a failure?
Yes, the Austin Business Project is failure because :
Modernization billing project delays
• Austin
and IBM project late completion, delay schedule, software bugs
• Complexity
new billing system with 73 different interface
Software bugs
• Error
of thousand of bills
• 65000
never received bills
• 35000
in accurate bills, overcharging
Instability issues
• Seriously
impact business and customer
• Persistent
system error from billing department
• Revenue
loses
Customer services employee
• Employee
response one to one assistant for account accessing and correcting error.
• Called
them selves as alpha tester
Customer
• Unable
to access system online portal
• System
causes a lot of problem, not friendly and hard time for customer.
IBM failure
• Billing
software system failure
2) Describe the business impact of the faltering Austin
Energy project.
Operation
- Mostly affected is billing department.
- Difficulties of issuing bills because of billing
software failure.
- Common error of customer not received bills, customer
receive in accurate bills, account automatically cancelled.
- Incurred more cots in utilities and operation. Since
business function is interconnected, one function failure give impact of
another function such as production.
- Business service is inaccurate, it give impact in
revenue and profit even though they don’t have pressure of competitor.
Customer service
- The department mostly affected.
- Employee work in high level of stress.
- Extra effort need to solve customer problem. They still
need to serve customer better even though customer angry to show their
disappointment towards the company.
- Employee also treated in the same way as usual, do not
receive any appreciation from the company.
- Give impact of public relationship disaster.
Sales and marketing
- Company also faced difficulties in determining the actual
sales since the system leads more error.
- Sales and profit decreasing.
- Company might face law suit for this issues. If it is
happening, more cost to handle legal costs. It is bad for company since
give negative impact in their legacy.
- Company also incurred more cost in advertising to give
explanation to the public about what happen.
Finance and accounting
- Inaccurate financial report since the actual value of
revenue and profit inaccurate recorded.
- Give impact of financial planning and investment.
- The project is delayed, suppose fully operational in
early 2011 but it still not fully operational and incurred more cost.
Management
- Wrong decision making of having IBM to develop the
software as the bad experience IBM performance in inventory management.
- The service give by IBM is bad and disappointment.
- Need to train all employees with new technology.
Customer
- Mostly affected.
- System also not user friendly, Austin portal also
always have problem, customer cant access account information.
- Company also doesn’t think of their preference such as
ability to choose time of the month that customer prefers to pay bills.
3) To what degree was IBM responsible for the
problem countered by the Austin Energy billing project?
- IBM not really responsive to the problems.
- It made Austin Energy appealed so many times to IBM
officials ranging from the managers of billing system project up to IBM
CEO.
- IBM responsible in find the roof of problem, make
system correction, test the latest system version and implement the
system.
Was Austin Energy at fault for the
problem?
Yes, Austin Energy is at fault for the problem. It is
because:
- Austin Energy as a user had to be committed to the
system.
- Probably, Austin Energy did not plan very properly in
the project to develop the billing system.
- They must have clear and proper project management
objective which should deal with five major variables: scope, time, cost,
quality and risk.
- The agreement should clearly define the roles and
responsibilities of both party.
4) What were the specific organizational or technical
factors as well as management factors involve in this project failure?
Organizational
- Employee could not be committed enough and described as
if they are alpha tester when they encountered bugs and issues that never
have made it to a live version.
- Unable to meet customer satisfaction.
- No realignment internally and externally.
- Caused vastly on costs that exceed budgets.
- Fail to meet customer expectation.
- Lost trust draws customer away.
Technical
• No
specific infrastructure.
• Unreliable
system caused money loss.
• Did
not work closely with third party vendors like oracle.
• Customers
unable to access the system’s online portal.
Management
• No
strategy which cause time slippage.
• No
business solutions.
• Interrelated
with manpower.
• Repeating
mistakes and delays.
• Improper
project management objective.
5) Describe the steps Austin Energy and IBM should have
taken to better manage this project.
Austin Energy and IBM need to develop an information system
plan which indicates :
1. The
direction of system development
• Overview
of plant contents
• Current
and future business organization
• Key
biz process
• Management
strategy
2. The
rationale
• Current
situation and current business organization
• Changing
environment
• Major
goals of the biz plan
• Firm’s
strategic plan
3. The
current systems / situation
• Major
system supporting biz function and process
• Current
infrastructure capabilities
• Difficulties
meeting business requirement
• Anticipated
future demand
4. New
developments to consider
• New
system project
• New
infrastructure capabilities required
5. The
management strategy
• Acquisition
plan
• Milestone
and timing
• Organizational
realignment
• Management
control
6. The
implementation plan
• Anticipated
difficulties in implementation
• Progress
report
7. Budget
requirement
• Requirement
• Potential
saving
• Financing
• Acquisition
cycle
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