Longview Cbrs

Introduction

Longview Water, a corporation owned by city of Longview provides water services to the city. Longview Water is in the midst of implementing a new customer billing and relationship management system (CBRS), their biggest information technology initiative to date. The project had been budgeted at $50 million and was scheduled to end by July 2009. To date more than $90 million had been spent and project completion was delayed to at least the first quarter of 2010.

Longview Water's Customer Billing and Relationship System (CBRS)

The main objective of implementing the customer billing and relationship management system was to improve services to the customers. The CBR system would allow Longview Water to assess the value and commitment of each customer to the organization; this would help the organization to provide competitive offerings to promote loyalty among high value customers and also attract new customers. The new system would also enable Longview Water to improve the complex and challenging process of administering contracts to new and existing clients. The implementation of CBR system was highly complex as it warranted the integration of 10 major business systems and over 50 third-party interfaces.

Vendor Selection

In January 2006, management prepared a business case for a new customer billing and relationship system and issued a Request for Proposals (RFP). Twenty vendors responded to the RFP. After a thorough evaluation, four of them were invited to bid for the project. Management evaluated all four bids thoroughly and recommended to the board that the contract be awarded to Johnson Information Technology Company (JIT).

Johnson Information Technology Company (JIT)

Johnson information technology (JIT) was a large, turnkey solutions provider with offices worldwide. The firm had worked on a number of projects in Normandia for large private and public sector organizations. It enjoyed a positive reputation in the business community for completing projects on time, on specification and on budget

Contract

Longview Water thus contracted with JIT in July 2006 to build and implement CBRS. Total funding for the project was $50 million. Of this $35M was allocated to JIT for fees and $15 million to Longview Water to cover staff and capital costs. The contract required a technical proof of concept (POC), a working prototype, to be provided before the final contract was signed.

The project was divided into three phases that were to take three years to complete altogether:

 Phase I - a tool to service major customers by July 2007

 Phase II - electronic data interaction capabilities with commercial land owners - by July 2008

 Phase III - integration of core systems across Longview Water by July 2009

Project Problems

The major problems that Longview Water faced with respect to the CBRS project were,

1. The whole project was going over the specified budget of $50 million and till now close to $90 million had been spent on the project.

2. The project was to be delivered in three phases and was scheduled to be completed in three years. The first two phases were delivered month behind the original schedule. The third phase continues to have unresolved technical problems and the original release date of December 2009 has been deferred and no new date has been specified.

3. There have been concerns over the feasibility of the project which was highlighted in the technical POC at the start of the project which were overlooked by the steering committee at Longview Water.

4. The on-going viability of the project was raised by the CBRS project director who in his forecast of 'cost to completion' of $100 million noted that the project would have a negative NPV.

What Went Wrong?

There is no single