After three years of work and US$18 million spent, Philadelphia still has not deployed a water billing system for its half-million customers and is now working with Oracle Corp. -- the major vendor behind the project -- to get it back on track.

The billing system, Project Ocean, was designed in 2003 to replace a 30-year-old, custom-built operation that relies on outdated technologies and fails to collect all the revenue it should, according to city officials and records. It has taken two years longer than planned and more than twice as much money as initially projected.

The effort stumbled because of technical complexity, changes of administrators overseeing the rollout and Oracle's inexperience building such a system, according to critics and Philadelphia CIO Dianah Neff. The current talks with Oracle are taking place even as Neff prepares to leave her job Sept. 8 -- before the negotiations are expected to be done.

Neff, who has pushed Philadelphia's municipal Wi-Fi effort and is about to start a WiFi-focused consulting job in another city, said Project Ocean is on hold until the Mayor's Office of Information Services (MOIS) and other city officials can reach "settlement that will put the project back on track." She said the project could be modified or replaced by a "workable solution" to protect the city's 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 said the vendor will deliver on its obligations to complete the project.

City Controller Alan Butkovitz said his office is midway into a review of what happened with Oracle and Project Ocean, but added that it is too soon to speculate on what went wrong. Meanwhile, he 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."

One Project Ocean critic, former City Water Commissioner Kumar Kishinchand, said he never felt the project would work when it was discussed in 2002 and 2003. He left the commission in 2004 after 12 years.

"One reason is that they picked a company that had never done a water billing system," Kishinchand said yesterday. "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, a complex and time-consuming effort, he said.

Kishinchand also argued that project managers "did not have much to lose if it failed," since the city's Finance Department would be in charge -- not the Water Department, which is the principal operator and user of the system. "The city's Water Department could have managed to tweak it to get it to work, because they had a compelling interest to get it to work."

He also said Neff and MOIS wanted to take over the water billing system -- which brings in US$300 million a year in revenue -- because it was "the most complex and biggest" IT system in government. "Most of what went wrong had to do with empire-building, more than anything else," Kishinchand said, accusing officials of "putting all their eggs in one basket [Oracle], without consulting the water department."

Neff said that her office was involved in choosing the Oracle Enterprise Resource Planning E-Business suite for an array of city uses, including human resources and that the Finance Department decided to make water billing its first application. Once that decision was made, MOIS was brought in to implement the move. "Hindsight is 20/20, and ERP is difficult anyway," Neff said.

Instead of water billing, human resources ERP is the application most organizations start with because it is "fairly well defined in the industry with lots of productivity," Neff said. As for the water billing system, "it was a big system, very complicated, with very unique features," she said.

Another problem was that the system was designed to be run by multiple city departments, and there was constant turnover among executive sponsors, Neff said. "Continuity was a problem, and we could have had a better-defined business processes. Problems came up between the contractor and business people. As we put it, it was a project that 'washed ashore'" for IT to handle, she said.

The first finance director involved in Project Ocean, Janice Davis, left Philadelphia to become chief financial officer of Atlanta in August 2004. Reached in Atlanta, Davis responded to Kishinchand's critique, saying, "There was no effort on anyone's part to build an empire, only to upgrade the system."

A year ago, MOIS was appointed to analyze the work done so far, leading to a halt in the project and the suspension of several consultants, including Oracle employees and at least one private contractor, Jeanette Foxworth of New Orleans, Neff said. Foxworth has been indicted by a federal grand jury in Connecticut on unreleated charges of paying a Connecticut state senator $3,000 to help her win consulting contracts. She has pleaded innocent and faces trial in November, according a spokesman for the U.S. attorney in Connecticut.

Neff said her impending departure has nothing to do with the Project Ocean problems. After five years as CIO, she said, "I am very proud of all the improvements and successful projects that have been instituted under my term as CIO."