Wits Business School
MBA Part-Time (Weekend) – Class of 2013
information systems management (BUSA 7014)
“johannesburg billing crisis”
PAGE COUNT: 8 pages
WORD COUNT: 1506
2. The Disaster
3. Lessons for Management…insights, options and opinions
Project Phakama was initiated in 2006 by The City of Johannesburg Metropolitan Municipality. It was rolled out at the beginning of 2010, when the Customer Call Centre Function, billing and credit control functions had their information technology platforms for billing changed from Venus to SAP.
Early in January 2011, the City of Johannesburg (COJ) was faced with an uproar from residents, who had received exhorbitant and incorrect utilities bills. About 800 000 residents received their bills late, due to technical glitches, several residents complained about double billing issues and wrong billing, to inadequate assistance, if any, from the City of Johannesburg’s call centre. Also, houses could not be transferred into their new owners' names, because of a backlog with issuing rate certificates. Arising from these issues, was the fact that COJ was now owed R10billion by its residents.
Despite the media frenzy, the Mayor of Johannesburg, Amos Masondo, claimed that there was no crisis and only 8% of Johannesburg residents had issues with their billing. Masondo said the problems were the result of issues with data integration from the city's assorted platforms onto the SAP system, integration of the new system and some departments, and negligent staff. He detailed the issues as follows:
1. Data integration: The city had implemented a number of SAP modules, including human resources, finance, customer relations management, land information system and SAP industry-specific solutions for utilities for billing and revenue management. There were problems with interfacing these modules with some departments, such as the deeds office and credit control management. A new interface is being tested. 2. Human and Process Issues: There was manual authorisation of statements of exhorbitant bills. Despite the fact that the system prevents such bills being sent out, Masondo claimed that staff must have authorised issuing the statements. A disciplinary process was under way to hold negligent staff accountable.
According to Masondo , the implementation of the SAP human resources module and the finance module had been successful. Since implementation was completed in the middle of last year, the number of accounts that Johannesburg has been able to issue has grown from 744 852 to a million, he says.
Overall, he claimed the implementation of SAP was a success.
The local offices of SAP also came under the spotlight for granting a quality award to the City of Johannesburg (COJ), for its implementation of a new billing system, despite its many problems. SAP quality manager SAP quality manager, Josef Huber, said that Joburg was nominated because of its clear governance policy and for implementing the project on time. It competed against 19 other companies in Africa for this award. SAP’s Corporate Affairs Executive Sunil Geness said that SAP implemented systems in municipalities around the world, and all installations at public entities are complex in nature, because of the multiplicity of systems. He explained that most post-implementation challenges come from data, integration or people, which is currently the case at the City of Johannesburg.
From the case data, the following issues are highlighted as the cause of the billing crisis:
1. Interface Issues
2. Human Issues
3. Process related issues
Lessons for Management:
Firstly, in order to implement SAP properly, there needs to be certain levels of governance and processes in place. A steering committee as well as an operating committee,...
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