By Tony Collins
CSC is not quite as confident as it was on new NPfIT contracts
CSC is meeting UK Government officials next month to discuss the company’s £3bn worth of NHS IT contracts. It follows a review of the NPfIT contracts by the Cabinet Office’s Major Projects Authority.
It’s likely officials will discuss a major revision of CSC’s contracts – and possibly an end to them. The Cabinet Office minister Francis Maude is thought to favour termination but the Health Secretary Andrew Lansley, on the advice of NHS Chief Executive Sir David Nicholson, wants to keep CSC in a revised NPfIT.
Recommendations from the Cabinet Office have gone to David Cameron for a decision.
In a conference call yesterday on the company’s first quarter results CSC’s executives said the outcome of the NHS contracts represented an “elevated” risk factor. But they said CSC is still on target for signing a new deal.
Mike Laphen, CSC’s Chief Executive, said his company has included in its forecasts about $250m [£155m] of NHS turnover until the end of its financial year in April 2012. Any delay in reaching a new deal in September could affect the $250m forecast said Laphen.
He said: “Right now we are assuming that we are still on target with the MoU [Memorandum of Understanding between CSC and the Department of Health]. We are absolutely staffed up ready to execute. We’ve got the products in the delivery pipeline and we believe we have the demand…”
On its NHS work CSC continues to “execute and deliver against our current commitments across primary and secondary care”. CSC’s iSoft “Lorenzo” remains in production routinely supporting daily operations at three early adopter sites.
“We are progressing delivery modules… including emergency care and outpatient prescribing which are anticipated to be installed at the University Hospitals Morecambe Bay once an agreement is reached with the authority,” said a CSC spokesman.
The company told analysts that for its 2012 financial year “there are still a number of large balls still in the air” which include the NHS contract, integration of iSoft and US government spending. “Our business is sound and we have one of the strongest balance sheets in our industry,” said the company.
UK IT market analysts Techmarketview said CSC’s management team “isn’t quite as confident of a positive outcome [on talks over NHS contracts] as it was a few months ago – and rightly so.”
CSC also noted there had been a “significant shift in the market” from outsourcing to cloud, though with cloud many companies are still deciding “what they’re going to do, or not do”.