Solved: 1 Is the Austin Energy project a failure Explain

your

1. Is the Austin Energy project a failure? Explain your answer.

2. Describe the business impact of the faltering Austin Energy project.
3. To what degree was IBM responsible for the problems countered by the Austin Energy billing
project? Was Austin Energy at fault for the problems? Explain your answer.
4. What were the specific organizational or technical factors as well as management factors
involved in this project failure?
5. Describe the steps Austin Energy and IBM should have taken to better manage this project.

Austin Energy handles electrical, water, and waste disposal for the City of Austin, Texas, and
surrounding counties, serving more than 1 million residents. It is a publicly owned company and
an arm of city government, and returns its profits to the community each year. The company 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. Austin Energy has one of the
largest renewable energy programs in the country, but its legacy billing systems did not
integrate with smart meters and other newer technologies. It also lacked newer customer
assistance options, like the ability to choose the time of the month that a customer prefers to
pay bills. To modernize the billing system and to bring its information systems up to date with
newer energy conservation methods, Austin Energy contracted with IBM in 2009 to create a
centralized billing system and to run the system for five years. Austin agreed to pay IBM $ 55
million with $ 38 million allocated for building and installing the new billing system, and $ 17
million for operating the system for five years after its completion. The new billing system was
slated to handle electricity, water, trash, and recycling. Austin was optimistic that a successful
installation would eventually pay for itself in savings.

ANSWER
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