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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