Philly Officials Try to Revive Billing System

City, Oracle negotiate over future of apps rollout after delays, cost overruns

After three years and a higher-than-expected investment of $18 million, the city of Philadelphia has yet to deploy a new billing system for its half-million water customers and is now working with lead vendor Oracle Corp. to try to revive the project.

The billing system, code-named Project Ocean, was designed to replace a 30-year-old, custom-built application that relies on punch cards and doesn't collect all the revenue it should, according to city officials and municipal records. The new system was supposed to take just one year to implement, but the city halted work on Project Ocean last October after having spent more than twice as much money as it initially expected to.

The effort has stumbled because of technical complexity, Oracle's inexperience at building such a system and the departures of several project managers and executive sponsors who were overseeing the rollout, according to Philadelphia's CIO, Dianah Neff. She also now plans to leave her job and said that she doesn't expect the negotiations with Oracle to be completed before her scheduled last day on Sept. 8.

Neff, who has pushed the development of a municipal Wi-Fi network in Philadelphia, is taking a consulting job focused on Wi-Fi in another city. She said that Project Ocean will remain on hold until officials from the Mayor's Office of Information Services and other city departments can reach "a settlement" with Oracle.

Neff declined to elaborate on the type of settlement that the city is seeking, saying she doesn't want to compromise its position. But she said that the project could be modified or replaced by "a workable solution." In both cases, Neff said, the city wants to protect its investment "and deliver a modern utility and collection system within 18 months."

An Oracle spokeswoman said only that the implementation is "still in progress, and Oracle believes that the work performed to date conforms with the current agreement." She added that the vendor will deliver on its obligations to complete the project.

City Controller Alan Butkovitz said his office is reviewing what happened on Project Ocean and that it's too soon for him to speculate on what went wrong. Asked about the talks with Oracle, Butkovitz said, "Anything the city administration does to make sure there's a workable product for its money is commendable, and we wouldn't get in the way of that."

Handling Complexity

One Project Ocean critic, former Philadelphia Water Commissioner Kumar Kishinchand, said he never felt that the project would work when it was being discussed by city officials in 2002 and 2003.

"One reason is that they picked a company that had never done a water billing system," he said. "Oracle had only done viable customer service systems with a small portion for billing purposes. Municipal billing systems tend to be tremendously complex."

The off-the-shelf components of such systems have to be heavily modified, noted Kishinchand, who left the water commissioner's job in 2004 after holding it for 12 years.

He also argued that problems resulted because the city's water department, which is supposed to be the principal user of the billing system, wasn't put in charge of the project. "Most of what went wrong had to do with empire-building more than anything else," Kishinchand said, accusing city officials of "putting all their eggs in one basket without consulting the water department."

Neff said that her office was involved in choosing Oracle's E-Business Suite ERP software for an array of city uses, including human resources. Most large organizations start with HR because those systems are "fairly well defined," she said. But Philadelphia's finance department decided to make water billing the first application, according to Neff.

She described the Project Ocean system as "very complicated, with very unique features." But, she added, "hindsight is 20/20, and ERP is difficult anyway."

Another difficulty cited by Neff was the heavy turnover among project managers and the department heads who were championing the rollout.

"Continuity was a problem, and we should have better defined business processes," she said. "Problems came up between the contractor and business people. As we put it, it was a project that 'washed ashore' " for IT to handle.

Janice Davis, the first city finance director involved in overseeing Project Ocean, left Philadelphia to become chief financial officer of Atlanta's municipal government in August 2004. Reached in Atlanta last week, Davis denied Kishinchand's claims that organizational power grabs were part of the project. "There was no effort on anyone's part to build an empire, only to upgrade the system," she said.

A year ago, Neff's office was appointed to analyze the work that had been done on the project. The analysis led to the halting of the project last fall and the related suspension of several consultants, including some Oracle employees.

Neff, who was a Computerworld Premier 100 IT Leaders honoree this year, said her impending departure has nothing to do with the Project Ocean problems. "I'm very proud of all the improvements and successful projects that have been instituted under my term as CIO," she said.

Copyright © 2006 IDG Communications, Inc.

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