Category Archives: IBM

Ban the “g” word from outsourcing lexicon?

Posted on 25/07/2013 | 2 comments

By Tony Collins

Is the word “guaranteed” as in “guaranteed savings” just spin –  perhaps the most misused word  in the lexicon of outsourcing? Should it be banned by general voluntary agreement?

It’s commonly used when suppliers are bidding for council contracts; and it is used almost as much by cabinet councillors when they are marketing an outsourcing proposal to fellow councillors and the public.

 It was used a lot by BT in its bid marketing documents that were shown to Cornwall councillors before  they signed a contract with the company. Cornwall’s ruling councillors last year, too, used the phrase “guaranteed savings” to batter their outsourcing critics. 

These are mentions of “guaranteed” from a single marketing document – BT’s Cornwall Council Briefing Strategic Partnership for Support Services, October 2012

– “£149.6m of guaranteed savings”

–  “jobs supported by formal commitments and guarantees on delivery along with clarity on the nature and type of jobs”

– “Guaranteed savings of £60.6m year Core Contract Savings Years 1-10”

– Contractual guarantees for both job creation and performance levels reached

– sales and marketing team and guarantees – £2mpa

But when “guaranteed” faces its most critical test –  in a legal dispute – it appears to mean little or nothing. It’s not a contractual word. [That’s wrong. It is a contractual word says Ali Mehmet in a comment at the end of this blog.]

Somerset County Council portrayed the lowered costs of outsourcing as guaranteed when it contracted out IT and other services to the IBM-owned “Southwest One” joint venture.

Said an IBM-sponsored article on Southwest One in 2008, a year after the joint venture was formed,

“The contract calls for guaranteed [the article’s emphasis] lower costs for service delivery. IBM knows it can lower costs for the partners’ processes, so all three government agencies come out ahead. So do citizens.”

In the end the claimed savings were not achieved, the contract between the council and IBM went into a legal dispute which was settled at a cost to the council of £5.9m, and Somerset’s Cabinet member for resources, David Huxtable, told the BBC last week:

“It was a very complex contract and lots of the savings were predicated on an ever-increasing amount of money being put into public services and we know in the last four years that has gone into reverse.”

Barnet Council uses the word “guaranteed” liberally as it prepares to outsource its New Customer Services Organisation [NCSO] to Capita in a 10-year £320m contract which is part of the One Barnet transformation programme. Says a Barnet statement on the choice of Capita as preferred supplier for NCSO: 

“The contract is worth £320 over ten years and guarantees a saving to the council of £126 million over that period.”

Guarantees are subject to …

The g word may have little meaning in a contract because it is usually tied to variables – such as level of spend – which the public and most councillors rarely ever know the detail of, because the contract is kept confidential.

And against what – subjective? – basis, and baseline, are the guaranteed savings measured? Again it is in the commercially confidential contracts.

Once in a legal dispute between outsourcing supplier and customer, lawyers will argue over the sense, meaning and purpose of contractual guarantees that are subject to an ambiguous string of variables.

 If political parties made manifesto commitments that were “guaranteed” would anyone believe them? If a double-glazing salesmen offered security and thermal insulation that was guaranteed would anyone believe them? 

So why are ruling councillors so inclined to believe outsourcing bidders when they sprinkle their documents with the “g” word? How does it come to mean so much at the pre-contract stage – and nothing afterwards?

A ban on the “g” word? 

If a voluntary ban on the “g” word, at least with reference to outsourcing and related proposals, would be a good idea, please let me know when you see it used and, most likely, abused.  tony@tonyrcollins.co.uk

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Posted in BT, Campaign4Change, IBM, IT-related failures, jargon, legal disputes, local government, public sector, public services

The story of Southwest One

Posted on 16/07/2013 | 2 comments

By Tony Collins

Dave Orr worked in a variety of IT and project management roles for Somerset County Council and retired in 2010. For years he has campaigned with extraordinary tenacity to bring to the surface the truth over an unusual joint venture between IBM, Somerset County Council, a local borough council and the local police force.

Now he has written an account of the joint venture and the lessons. It is published on the website of procurement expert Peter Smith.

Orr questions whether Southwest One was ever a good idea, since it was formed in 2007.

The deal has not made the savings intended, a SAP implementation went awry, the contract has been mired in political controversy and criticism, Southwest One has repeatedly lost money, and many of the transferred staff and services have returned to the county council, and some services returned to the borough council. IBM and the county council have ended up in a legal dispute that cost the county council £5.5m to settle. Southwest One was not exactly the partnership it set out to be.

The contract may show how an outsourcing deal that doesn’t have the support of the staff being transferred is flawed fundamentally from the start (which is one reason few people will be surprised if a 10-year £320m deal for Capita to run Barnet Council’s new customer service organisation [NSCSO]  ends in tears).

These are some of Orr’s points:

–  Like other light-touch regulators, the Audit Commission repeatedly gave Southwest One positive reports, without ever qualifying the accounts, even as problems with SAP implementation mounted in 2009 and procurement savings were not being made in line with forecasts.

 – The contract called for transformation based upon ‘world-class technologies’, yet all of the IT Service was placed into Southwest One with no IT expertise back in the Somerset County client (until after a poor SAP implementation in 2009). Was the lack of retained IT skills in the Somerset County client behind the formal acceptance of a badly configured SAP implementation?

– Large scale outsourcing over a long contract of 10 years or more requires an ability to foresee the future that is simply not possible to capture in a fixed contract. In a 10-year contract, there will be three changes of national government and three changes of local government. That is a great deal of unpredictable change to cope with via a fixed, long-term contract.

– Local Government will always be at a disadvantage in resources and skills, to a large multi-national contractor like IBM, when it comes to negotiating, letting and managing a complex multi-service contract.

– What was the culture of Southwest One (75% owned by IBM)? Was it private, public or a hybrid? The management culture remained firmly IBM, yet the councils and police workforces were seconded and remained equally firmly public sector rooted. There is such a thing as a public service ethos. In fact, Southwest One was run like a mini-IBM based upon global divisions, complete with IBM standard structures and processes. Southwest One seconded employees were not allowed anything like a full access to IBM internal systems, thus creating additional complexity, as “real” IBM employees relied entirely upon on-line systems.

–  Mixed teams in a single shared service were hard to amalgamate. This meant the IBM managers of Southwest One never really gained the sort of command & control of the multi-tier workforces that their bonus-oriented model needs to function. “I doubt that IBM would ever again contemplate the seconded staff model over the TUPE transfer model,” says Orr.

– Somerset County Council ran with a “thin” client management team that, in Orr’s view, did not have sufficient expertise or enough staff resources to effectively manage this complex contract with IBM. The councils relied upon definitions of “partnership” that meant one thing to the councils’ side and quite another thing to IBM, says Orr.

– In Southwest One, Somerset County Council handed their entire IT Service over lock, stock and barrel. “Can you really consider IT as wholly a ‘back office’ service? Many successful private Companies see IT as a strategic service to be kept under their own control.”

– The real savings might have been found in optimising processes in big departments (like Social Care, Education, Highways) that lay outside of Southwest One’s reach. “The focus on IT rather than service processes was another flaw in the model.”

Orr  concludes that nobody who played a major part in the Southwest deal has in any way been held to account for what has gone wrong.

Southwest One – the complete story from Dave Orr

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Posted in Campaign4Change, change management, excessive secrecy, FOI, Freedom of Information, governance, IBM, IT-related failures, legal disputes, local government, managing change, managing outsourced services, openness and transparency, Politics, private sector lessons for the public sector, procurement, project management, public-private partnerships, SAP, shared services, supplier relationships

Universal Credit – good for its IT suppliers?

Posted on 11/07/2013 | 1 comment

By Tony Collins

The DWP is conceding in its own tangential way that the IT for Universal Credit is not up to scratch; and an article in the Daily Telegraph suggests that Universal Credit this year (and perhaps well beyond) will handle so few claimants that the calculations for the time being could be done by hand, or on a spreadsheet, and not automatically by IT systems. The Register, through anonymous sources, has confirmation of this.

The FT says there will be a progressive national rollout of the coalition’s welfare reform in just six additional jobcentres which it said was the “latest sign the project is falling behind schedule”. It added that a significant shake-up of the IT underpinning universal credit is under way. 

The DWP said David Pitchford, the Whitehall troubleshooter who took over the running of Universal Credit for three months, had been asked to “review” the IT and ministers had “accepted his recommendation that they should explore enhancing the IT for universal credit working with the government digital service”.

“Advancements in technology since the current system was developed have meant that a more responsive system that is more flexible and secure could potentially be built,” said the DWP.

The FT quoted Howard Shiplee, who has led the Universal Credit  project since May, as denying claims from MPs that the original IT had been dumped because it had not delivered. “The existing systems that we have are working, and working effectively,” he said.

He added that he had set aside 100 days not to stop the programme, but to reflect on where it has got to and start to look at the entire total plan.

Iain Duncan Smith, the work and pensions secretary, doesn’t concede that the  timetable for the implementation of Universal Credit has changed. He told the work and pensions committee on Wednesday that numbers of claimants would ramp up during 2014 and he insisted that all claimants would be on the system by 2017, as originally planned.

“We get fixated on things like IT; the reality is it’s about a cultural shift,” Duncan Smith told MPs.

Comment

Iain Duncan Smith makes it clear that his DWP staff and suppliers, with the help of HMRC, are implementing Universal Credit with extreme care. Labour’s  work and pensions spokesman Liam Byrne says the Universal Credit project is a shambles. The truth is hard to fathom.

For years the DWP has rejected press reports that the IT for Universal Credit was in trouble. It is able to do without fear of authoritative contradiction because it keeps secret all its consultancy reports on the state of the Universal Credit project, despite FOI requests.

The Cabinet Office minister Francis Maude and his officials talk much about the need for openness and transparency. Isn’t it time they persuaded DWP officials to release their internal and external reports on the detailed challenges faced by suppliers and civil servants on Universal Credit and other major government IT projects?

All big government IT projects are characterised by secrecy and defensiveness, although a little information about them is in the vague and subjectively-worded Major Projects Authority annual report.

One by-product of departmental defensiveness and secrecy is that the IT suppliers – in Universal Credit’s case HP, IBM and Accenture – are likely to continue to be paid even if the project is halted and redesigned. It’s probable the suppliers would argue that they have successfully done what they were asked to do in the contract. Who knows what the truth is?

The DWP is in effect protecting its suppliers from public and parliamentary scrutiny. It has been this way for decades and nothing has changed.

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Posted in Accenture, Agile, Campaign4Change, excessive secrecy, FOI, Freedom of Information, Government IT, IBM, IT-related failures, Major Projects Authority, managing change, managing outsourced services, openness and transparency, operational issues, outsourcing, oversight, project management, public sector, public services, software quality, supplier relationships

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EC probes IBM CIO secondment at the Met Office

Posted on 08/07/2013 | 1 comment

By Tony Collins

A part of the European Commission is investigating a decision by the Met Office to appoint an IBM executive as CIO while he worked at the same time for IBM, the organisation’s main IT supplier.

The investigation was prompted by concerns of campaigner Dave Orr who wrote to the EC about the Met Office’s appointment of an IBM secondee David Young as CIO for two years between 2010 and December 2012.

Now Michel Barnier, the EC Commissioner responsible for internal market and services, says in a letter to Orr’s MEP Sir Graham Watson that the EC’s Directorate-General for Internal Market and Financial Services has been carrying out “an in-depth analysis” of the facts presented by Orr.

As part of this, the EC has written to the UK government seeking clarification on a number of points.

Some of Orr’s concerns arise from the Met Office’s responses – and non-responses – to his freedom of information requests. One of his concerns is of a potentially cosy relationship between the Met Office as a publicly-funded organisation and its principal IT supplier IBM; and he has wanted to know why the job of Met Office CIO was not openly advertised in a competitive recruitment process and whether its appointment of an IBM secondee had the potential for a possible conflict of interest.

Orr said that the secondment had the potential to confer a unique and significant intelligence and relationship advantage for IBM that other supercomputer suppliers could not hope to match. “In my view, that is anti-competitive and may in spirit at least, fail the EU procurement rules,” said Orr.

Barnier said that the existence of a conflict of interest would “depend on a number of factors such as the precise role and responsibilities the position entails, in particular whether it includes formulating and preparing technical specifications or tender documents for future IT contracts that the Met Office may put out to tender”.

It is also relevant, said Barnier, whether the terms and conditions of the secondment “impose any obligations or restrictions on the head of the department to prevent conflicts of interest, both during the secondment and afterwards”. He also wanted to know if internal rules were in place to prevent conflicts of interest in the course of tendering procedures.

The Met Office and ministers said that Young was not involved in procurement decisions relating to existing supercomputer facilities. Norman Lamb, then minister at the Department for Business Innovation and Skills, said last year:

“Any potential conflicts of interest regarding David Young’s appointment were fully considered prior to his appointment and his terms of engagement specifically cover these …

“David Young had no involvement in the procurement process for existing supercomputing facilities, either for IBM or the Met Office, and he will have completed his secondment and left the Met Office prior to the selection of replacement supercomputer facilities.”

A wise decision?

The decision to second an IBM employee to run the 300-strong IT department, which is based at the Met Office’s supercomputer site in Exeter, raises questions that may go beyond the potential for a conflict of interest.

As Young was unable to be involved in some buying decisions and was unable to attend the technology strategy board to avoid any potential for a conflict of interest, did the Met Office restrict itself unnecessarily in hiring a CIO who faced these constraints?

Did the Met Office waste money – and a precious two years – hiring a lifeguard whose terms of employment required him to wear handcuffs?

The secondment of Young came at a difficult time for the Met Office – and some of the main difficulties it faced in 2010 are largely the same today.

Responses to Orr’s FOI requests and a report by the House of Commons’ Science and Technology Committee highlight some of the Met Office’s challenges:

– A need for modernised software that will take advantage of next-generation supercomputers.

– A need for a replacement supercomputer that has twice the power of the existing one which operates close to one petaflop (one thousand million million floating point operations per second).

– Funding a new supercomputer (with optimised software) at a time of cut-backs in government spending.

A Met Office Executive Board paper said that its executives have had “soft” negotiations with various suppliers about next generation supercomputer technology. They spoke to Bull, Cray, Microsoft, NEC and SGI.

“Vendor presentations indicate that performance increases will come from increasing the number of processors and/or adding co processors designed to process arrays of data efficiently, rather than increasing the speed of individual processors,” said the Met Office paper.

The Met Office says that “significant optimisation work will be needed [on the code] and, if this is not completed around 2014, a delay in the launch of the procurement may be unavoidable.” It has been seeking software engineers with experience of Fortran (which was originally developed by IBM) or C, Unix or Linux and Perl.

A House of Commons report in 2012 emphasised the need for new technology at the Met Office. The report of the Science and Technology Committee “Met Office Science” said in February 2012:

“It is of great concern to us that these scientific advances in weather forecasting and the associated public benefits (particularly in regard to severe weather warnings) are ready and waiting but are being held back by insufficient supercomputing capacity. We consider that a step-change in supercomputing capacity is required in the UK.”

MPs acknowledged that “affordability is an issue.”

The Met Office declined to answer Orr’s FOI requests about the cost to the taxpayer of employing Young.

Since Young’s  secondment ended in December 2012 the Met Office has hired one of its own employees as CIO. Charles Ewen has worked for the Met Office since 2008. He works with science teams to operate the Met Office’s high performance computing facilities. He is responsible for the development and implementation of the Met Office’s ICT Strategy and for the internal technical teams within the Technology Information Services Directorate.

Comment:

The Met Office hired Young for the best of reasons: after a succession of internal management changes it wanted a highly professional, stabilising CIO. But did it need a CIO from IBM, its principal IT supplier?

That the Met Office was sheepish about the appointment of an IBM secondee was, perhaps, revealed by its website which, in giving a profile of Young, did not mention – at first – that he was seconded from IBM. After Dave Orr’s FOI requests the Met Office corrected its website omission, making clear that Young was on secondment from IBM.

The Met Office has been in existence nearly 16o years. It was founded by Vice-Admiral Robert FitzRoy in 1854 as the Meteorological Department of the Board of Trade. It is highly regarded internationally. A testament to the quality of its computer models  – which are used for daily forecasts – is that its “Unified Model” is licensed in Norway, Australia, South Korea, South Africa, India, New Zealand and the US Air Force.

Scientists say that a three-day forecast today is as accurate as a one-day forecast was 20 years ago. But in the UK the Met Office gets a bad press – not always unjustifiably.  There is a perception that the accuracy of forecasting is not improving. Sometimes it seems poor.

The algorithms that form the basis of weather and climate models place huge demands on supercomputing architectures. The models produce exceptionally large volumes of data. Although the Met Office had a new IBM supercomputer in 2008 it soon needed more powerful hardware and modernised software.

So was it a good idea, with all the challenges the Met Office faced in 2010 – including the need to persuade the government of the need to fund  new supercomputer facilities – to appoint a CIO for two years who, because he was an IBM secondee, had understandable restrictions on his freedom to do his job, restrictions the Met Office has been reluctant to reveal, despite Dave Orr’s FOI requests?

Hole in the head

The Met Office may regard an EC inquiry into its appointment of an IBM secondee as the last thing it needs now. But accountability should not be left to the occasional scrutiny by a Commons committee – or to Dave Orr’s FOI requests.

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Posted in Campaign4Change, capacity building, EU procurement, excessive secrecy, FOI, Freedom of Information, Government IT, IBM, innovation, managing outsourced services, Met Office, outsourcing, procurement, technology

Somerset County Council settles IBM dispute – who wins?

Posted on 28/03/2013 | 10 comments

By Tony Collins

Somerset County Council has settled a High Court legal dispute with IBM-led Southwest One. It will bring some services back in-house.

The Conservative leader of Somerset council John Osman said, “This agreement will save Somerset residents millions of pounds and will make the contract fit for the future.”

Osman added that the agreement involves settlement of Southwest One fees, which the council had been withholding, for a mutually- agreed sum.

“Most importantly the cancelling of the gainshare agreement will save Somerset County Council residents millions of pounds in the future as those sums can now be kept by the Council,” said Osman.

But as the deal includes payment of an undisclosed sum by the council to Southwest One it is unclear which side is the beneficiary in the dispute. [See Dave Orr comment on this post.]

The council says the settlement will bring benefits for the council including securing “greater strategic control and capacity back with SCC  in terms of Procurement, Property and ICT”.

The agreement also “removes some barriers to ensure successful delivery of our Change Programme – with greater alignment to the operating model, commissioning capacity, service reviews, and technology enablers.”

And the settlement allows officers to focus on improving services rather than on a series of disputes.

Southwest One had issued a writ against the council – what the authority calls a “substantial claim” – and a date for a High Court hearing was set provisionally for November 2013.  Yesterday [March 27 2013] the council agreed to settle the High Court claim, and an unspecified number of other disputes.   

IBM, Somerset County Council, Taunton Deane Borough Council, and Avon and Somerset Police set up Southwest One as a joint venture company in 2007.  IBM  owns 75% of the company.

Somerset’s officers said in a report yesterday:

“Following a series of discussions between the Council and Southwest One we are now in a position to settle the disputes and the Procurement legal proceedings against SCC will cease.

“The agreement includes a settlement payment to SWO which is substantially lower than the claim against SCC and releases payments to SWO that were held by SCC as part of the dispute.”

Somerset County Council will take back several services and about 100 people who had been seconded to Southwest One. The council says that taking back staff and services will “reduce the potential for further disputes and align those services much closer to the operating model the Council has adopted”.

Services returning to SCC include:

• Strategic and Operational Procurement
• Property Services
• Estates Management
• ICT Strategic Management including some web management posts
• Some business support posts for the above functions

The council says there will be little change in day to day activities and no changes to locations of staff. Somerset’s staff will have their secondments terminated and revert to the council’s terms and conditions.

The High Court action was because of a disagreement  about the quality of Southwest One’s procurement service and what payments Southwest One was entitled to as a result of savings made through the joint venture.

Secrecy

Whereas a High Court hearing would have been open to the public, the sum paid by Somerset to IBM as part of the settlement,  and the risks of bringing staff and services back in-house, are being kept confidential because of what the council calls “commercial sensitivity”.

Risks

Some of the settlement’s main risks for the council are listed in yesterday’s report:

• The confidential nature of the discussions held to secure an agreement has
meant that full consultation with a wide range of officers and partners has not
been possible.
• The transfers of staff and functions will take place during the new financial
year. The proposed transfers create some risk due to SAP changes required.
• There will be some risks in the hand-over of programmes of work.
• Despite all efforts to mitigate risks to services, it is possible that some
disruption may occur. Transition workshops are planned to identify and preempt such instances, which significantly reduces the risk.
• Implications for partners have also been estimated. It is possible that partners
may take a different view of the implications for them.

Blame

Osman blamed the previous Liberal Democrat administration for the problems which he said were owing to the way the contract was worded, the actions of the previous Lib Dem administration transferring services to Southwest One that should never have transferred and the failure to clarify the savings sharing element of the agreement. Osman said this was the “equivalent of the Lib Dems writing a blank cheque”.

The 10-year joint venture, which started in 2007, will continue. 

Comment:

As the terms of the settlement and the risks associated with transferring staff and services back in-house are being kept secret nobody outside an inner circle of the council can know how bad the joint venture and the dispute have been for Somerset council’s taxpayers.

If anything is clear it is that IBM held the dominant legal hand all along. It issued a High Court claim, and now it has received a payment from the council.

It seems to be a feature of big council outsourcing deals and joint ventures that councillors are easily swayed by promises of enormous savings, often upfront savings, and are not too concerned about the risk of things going wrong because they won’t be in office when or if any mud hits the fan.

Yesterday Cornwall Council’s Interim CEO, along with the Chairman of Cornwall Partnership Foundation Trust and the Director of Finance at Peninsula Community Health signed a contract for a joint venture with BT.

As Andrew Wallis, an independent councillor in Cornwall, says

“Lets hope the Council does not regret this day.”

The Southwest One joint venture was flawed joint venture from the time a rushed contract riddled with literals was signed in the early hours of a Saturday morning in 2007.  For years afterwards, Somerset Council has been trying to dig itself out of a hole. It is now near the surface – except that yesterday’s council report says there is a potential for further disputes. 

Will other councils learn from Somerset’s experiences? Cornwall’s deal shows that any learning will be very limited.

And the secrecy that tends to go with big outsourcing deals and joint ventures means that a small group of councillors can sign joint ventures and outsourcing contracts without proper accountability  – and can settle any legal disputes later without accountability, and indeed with impunity.

Whenever a  major supplier offers a council large upfront savings from an outsourcing deal or a joint venture why would the authority’s inner circle of councillors say no?

Thank you to campaigning Somerset resident and former county council employee Dave Orr who provided the links and information that made this post possible.

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Posted in Campaign4Change, IBM, IT projects, IT-related failures, law, legal disputes, local government, managing change, managing outsourced services, outsourcing, public-private partnerships, SAP, supplier relationships

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Another Universal Credit leader stands down

Posted on 11/03/2013 | 1 comment

By Tony Collins

Universal Credit’s Programme Director, Hilary Reynolds, has stood down after only four months in post. The Department for Work and Pensions says she has been replaced by the interim head of Universal Credit David Pitchford.

Last month the DWP said Pitchford was temporarily leading Universal Credit following the death of Philip Langsdale at Christmas. In November 2012 the DWP confirmed that the then Programme Director for UC, Malcolm Whitehouse, was stepping down – to be replaced by Hilary Reynolds. Steve Dover,  the DWP’s Corporate Director, Universal Credit Programme Business, has also been replaced.

A DWP spokesman said today (11 March 2013),

“David Pitchford’s role as Chief Executive for Universal Credit effectively combines the Senior Responsible Officer and Programme Director roles.  As a result, Hilary Reynolds will now move onto other work.” She will no longer work on UC but will stay at the DWP, said the spokesman.

Raised in New Zealand, Reynolds is straight-talking. When she wrote to local authority chief executives in December 2012, introducing herself as the new Director for the Universal Credit Programme, her letter was free of the sort of jargon and vague management-speak that often characterises civil service communications.  It is a pity she is standing down.

Some believe that Universal Credit will be launched in such a small way it could be managed manually. The bulk of the roll-out will be after the next general election, which means the plan would be subject to change. Each limited phase will have to prove itself before the next roll-out starts.

Reynolds’ letter to local authorities suggests that the roll-out of UC will, initially, be limited.  She said in her letter,

“For the majority of local authorities, the impact of UC during the financial year 2013/14 will be limited. .. Initially, UC will replace new claims from single jobseekers of working age in certain defined postcode areas.

“From October 2013 we plan to extend the service to include jobseekers with children, couples and owner-occupiers, gradually expanding the service to locations across Great Britain and making it available to the full range of eligible working age claimants …by the end of 2017.”

Some IT work halted? 

Accenture, Atos Origin, Oracle, Red Hat, CACI and IBM UK have all been asked to stop work on UC, according to shadow minister Liam Byrne MP, as reported on consultant Brian Wernham’s blog.

Wernham says that Minister Mark Hoban did not rebut Byrne’s statement but said that HP was committed to carrying on with the project. HP is responsible for deployment of a solution, not development, says Wernham’s agile government blog.

Comment

The DWP says that Pitchford has taken over from Reynolds – but separately the DWP had confirmed that Pitchford was leading UC temporarily and that Reynolds had a permanent job on the programme. Pitchford’s usual job is running the Major Projects Authority in the Cabinet Office.

All the changes at the DWP, and the reported halting of work by IT contractors, imply that the UC project is proving more involved, and moving more slowly,  than initially thought. It’s also a reason for the DWP to continue to refuse FOI requests for internal reports that assess the project’s progress.

Perhaps the DWP doesn’t want people to know that the project is on track for such a limited roll-out in October that it could be managed, in the main, by hand. With the bulk of the roll-out planned for after the next general election Labour may be denied the use of UC as an effective electoral weapon against the Conservatives. In other words, the riskiest stage of UC is being put off until 2016/17.

 Francis Maude, who is worried that UC will prove an IT and electoral disaster, has his own man, David Pitchford, leading the project, if only temporarily. Meanwhile UC project leaders from the DWP continue to last an extraordinarily short time. Reynolds had been UC programme director for only four months when she stood down. Pitchford is in a temporary role as the programme’s head, and Andy Nelson has recently become the DWP’s Chief Information Officer.

So much for UC’s continuity of leadership.

The truth about the project hasn’t been told. Isn’t it time someone told Iain Duncan Smith what’s really happening – Francis Maude perhaps?

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Posted in Accenture, Agile, Atos, DWP, FOI, Government IT, IBM, local government, openness and transparency, Oracle, outsourcing, Politics, Universal Credit

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Cornwall Council rushes to sign BT outsourcing deal before elections

Posted on 08/03/2013 | 2 comments

By Tony Collins

Cornwall council logoCornwall Council was a model of local democracy in the way it challenged and then rejected a large-scale outsourcing plan. Now it has gone to the other extreme.

Amid extraordinary secrecy the Council’s cabinet is rushing through plans to sign a smaller outsourcing contract with BT – a deal that will include IT – before the May council elections.

Councillors who have been given details are not allowed to discuss them. No figures are being given on the costs to the council, or the possible savings. The Council’s cabinet is not releasing information on the risks.

Councillors are being treated like children, says ThisisCornwall. Documents with details of the BT outsourcing plans have to be handed back by councillors, and cabinet papers are being printed individually with members’ names as a watermark, on every page, to guard against copying and to help identify any whistleblowers.

The council’s Single Issue Panel has a timetable for the IT outsourcing plan.

– Recommendation to Cabinet to approve release of ITT – 27 February 2013

– Evaluation of bid – March 2013

– If contract awarded, commencement of implementation work – April 2013

– Staff transfer date – July 2013

The SIP report emphasises that the timetable for signing a deal is tight. “Evidence received is that there is little room for slippage in the timetable, but that potential award of contract is achievable by the end of March 2013… It is expected that a contract could be ready to be issued as part of the ITT [invitation to tender] pack by early in the week commencing 4 March 2013.”

The SIP report concedes that the plan is “fast moving”.

In the past, the SIP group of councillors has been open and challenging in its reports on the council’s plans with BT (and CSC before the company withdrew from negotiations). Now the SIP’s latest report is vague and unchallenging. The risks are referred to in the report as a tick-box exercise. Entire paragraphs in the SIP report appear to have little meaning.

“Risk log and programme timelines are reviewed and updated on a regular basis… 

“The Council and health partners have been working on and have reached agreement on their positions in relation to commercial aspects in the contract and their expectations have been part of the dialogue with BT.”

“Previous concerns of the Panel relating to the area of new jobs have been addressed with BT in contract discussions and contract clauses have been revised to reflect this…”

It is also unclear from the SIP report why the council is outsourcing at all, only perhaps a hint that the deal will be value for money.

“The contract will be fully evaluated by the Head of Finance and her team to ensure value for money once the final bid is received. No savings have been assumed for 2013/14 budgetary purposes, although there are assumptions of savings for the indicative figures for future years,” says the SIP report.

Comment

It is a pity that Cornwall Council’s cabinet is rushing to sign a deal for which it won’t be accountable if things go wrong. In a few weeks a new council will be voted in and, if the outsourcing deal with BT ends up in a dispute or litigation, the new council will simply blame the old, as happened when Somerset County Council’s joint venture deal with IBM, Southwest One, went into dispute.

In essence, with the local elections only two months away, Cornwall Council’s cabinet has a freedom to make whatever decision it likes with impunity; and it appears to be taking that freedom to an extreme, almost to the point of sounding, in the latest SIP report, as if the council is an arms-length marketing agent of BT.

Cornwall Council’s cabinet has a mandate from the full council to move to a contract with BT. The full council has voted to “support” a deal. But that vote was a mandate to negotiate, not to sign anything BT wants to sign.

Openness has gone out of the window and BT, it seems, is no longer being rigorously  challenged – by Cornwall’s cabinet, the full council, the public or the media.

How exactly can BT guarantee jobs and make savings? We don’t know. The Cabinet isn’t saying, and its members are doing all they can to stop councillors saying.

Are BT’s promises reliant on the fact that IT is subject to constant and sometimes costly change – often unforeseen change – and that is bound to continue, at least in the form of supporting changing legislation and reorganisations?

Unforeseen changes could add unforeseen costs which the council may have to pay because IT is at the heart of business continuity.  In any dispute with the council  – and BT knows its way around the world of contested contracts – the company would have the upper hand because of its experience with litigation and the fact that the council would need undisrupted IT at a time of change and could not afford, without risk, to take the service back in-house.

We have seen how normality broke down at Mid Staffs NHS Foundation Trust amid a lack of openness and excessive defensiveness;  and we have seen, in Somerset County Council’s joint venture with IBM, Southwest One, what can happen when a contract signing is rushed.

Cornwall Council’s cabinet is doing both. It is rushing to sign a contract; and it is rushing to sign it amid excessive secrecy.

Surely Cornwall Council can do better than slip into the shadows to sign a deal with BT before the council elections in May?  If it is such a good deal, the new council will want to sign it. A new council should have the chance to do so.

For Cornwall Council to outsource now what is arguably its single most important internal resource – IT – is bad for local democracy: it is snub to anyone who holds true the idea that local councillors are accountable to local people.

Thank you to campaigner Dave Orr who drew my attention to information that made this post possible.

* Cornwall Council, by the way, has one of the best local authority websites I have seen.  If the website is a reflection of the imagination and efficiency of its IT department, Cornwall Council should be selling its IT skills to BT for a small fortune – not giving staff away.

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Posted in BT, Campaign4Change, change management, excessive secrecy, IBM, IT-related failures, legal disputes, local democracy, local government, managing outsourced services, openness and transparency, operational issues, private sector lessons for the public sector, procurement, project management, public sector, public services, public-private partnerships

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Barnet’s inner circle ratifies Capita deal – now the challenge begins

Posted on 07/12/2012 | Leave a comment

By Tony Collins

Conservative-led Barnet Borough Council’s inner circle of “cabinet” members  agreed  unanimously last night to confirm Capita as the supplier for a 10-year £320m back-office services contract, subject to financial reports.

The deal was agreed despite widespread opposition, without a vote of the full council, and without a political consensus.  A report published by Cornwall Council’s Support Services Single Issue Panel has said that a political consensus is critical to the success of partnership deals.

Capita promises to save £120m over the 10 years, and make an £8m investment in new technology. Up to 200 jobs could go. Capita will run:

  • Estates
  • Finance and Payroll
  • Human Resources
  • IT Infrastructure and Support
  • Corporate Procurement
  • Revenues and Benefits
  • Commercial Services.

About 100 people gathered outside the Town Hall in The Burroughs, Hendon, to voice their opposition to the contract.

Standing on chairs and holding banners, members of Barnet Alliance for Public Services called on the cabinet members to listen to residents’ concerns.

Councillors vacated the room and continued their meeting next door. Speaking at the meeting, Labour councillor Alison Moore said: “This is an end to democracy as we know it… There is no such thing as guaranteed savings.”

Council leader Richard Cornelius said:

“I look forward to getting the savings we desperately need. This is not a gamble. This is not a quick fix – we have been talking about this for a long time. If we were to reject these proposals we would have to find savings elsewhere, which would be very unpleasant.”

Cornelius said the combination of a saving to the taxpayer of a million pounds a month and an £8m investment in technology by Capita made it a “very, very good deal for the Barnet taxpayer”.

The council will set up a monitoring committee in the next couple of months to scrutinise the contract.

Capita’s New Support and Customer Services Organisation deal will be the first of two major contracts awarded under the Barnet council’s One Barnet outsourcing programme. Capita’s contract is due to start in April 2013.

Comment:

Barnet’s cabinet has made an important and controversial decision about the council’s future without a vote of the full council, which is a snub to local democracy.

Somerset County Council’s joint venture with IBM has failed in part because the staff were opposed to it,  the promises were over-optimistic, the finances were on fragile foundations, and the political leadership changed.

In Barnet the opposition to the deal with Capita is more pronounced than at Somerset, particularly among staff. Can the contract survive so much animus, and will opposition to Barnet’s cabinet grow now that local democracy has been flouted in such a macho way?

Cornwall is putting its joint venture decision to a vote of the full council, on 11 December. Whatever the outcome one thing is clear. Cornwall Council’s approach to local democracy puts Barnet to shame.

Barnet approves outsourcing plan

Political consensus key to success in outsourcing

Capita contract approved despite protests

Resident seeks judicial review 

Barnet’s fire-sale

A day Capita will rue?

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Posted in Campaign4Change, Capita, change management, cost reduction, IBM, local democracy, local government, managing outsourced services, outsourcing, public-private partnerships

Somerset’s dispute with IBM is “escalating”.

Posted on 22/10/2012 | 3 comments

By Tony Collins

Somerset County Council says in a paper due to be discussed next week that its dispute with the IBM-led Southwest One joint venture is “escalating” and that there is a need to “restore a deteriorating relationship with a supplier”.

The poor relationship is in contrast to the mutually content position in 2008, one year after Somerset signed its unique, ground-breaking deal with IBM. At that time Somerset refused a request by Unison for a copy of the business case for Southwest One saying, “We can record, however, that all our cost and performance criteria within the business case were met or exceeded”.

Now Southwest One and the council are in a legal dispute on several fronts. The council’s paper for its cabinet meeting next week says:

“The history of Southwest One [SWo] poor performance is continuing; during 2012 the Client Team have been holding SWo to account; resulting in the serving of 8 contractual notices to SWo.

“Over the past 3 weeks SWo have commenced disputes on several other matters, issuing further financial claims and disputing Somerset County Council’s warning notices.

“With a number of escalating disputes, we need to take action to:

• Conduct proceedings

• Respond to these disputes and restore a deteriorating relationship with a strategic supplier.

• Seek to improve value for money and service performance and ensure it is fit for purpose.

• Continue to assertively manage Southwest One to ensure it meets its contractual obligations.

• Maintain Partner relationships

Somerset’s officers recommend to the cabinet that:

“The Leader of the Council authorises the Chief Executive, Deputy County Solicitor, Director of Finance & Performance and other relevant SCC officers to serve and proceed with the defence and any counterclaim, to carry out all subsequent steps in the litigation process and any engagement in connection with the disputes.”

The paper  adds:

“It is also recommended that the Leader of the Council and the Chairman of Scrutiny Committee agree urgency in respect of the above recommendation…

“The Deputy County Solicitor is authorised to institute defend or settle any legal proceedings and to lodge an appeal. This report seeks authorisation to be given to SCC officers to serve and proceed with the Defence and any Counterclaim, to carry out all subsequent steps in the litigation process and any engagement and commit to financial considerations (such as legal costs) in connection with the disputes…

“Due to the contractually binding timetable for resolving disputes SCC officers need a mandate. Risks will be reported and managed through SCC’s governance arrangements.”

A budget exists to support the council’s approach.

The report says that the council is in disagreement with Southwest One over the quality of the procurement service and what payments it is entitled to as a result of savings made by getting better deals through the joint venture. “We had hoped we would be able to settle this through negotiations, but unfortunately that has not been the case.”

Comment:

In mid-2007, about two months before Somerset signed its deal to set up Southwest One with IBM, an external consultancy report on the proposals by consultants “Maana” praised the “immense amount of research and thinking” that went into the IBM bid.

It said that the “whole of the procurement process, from market investigation to preferred bidder selection has been well planned and executed”. Maana added:

“The evaluation process has been more extensive, well thought through and executed than any we have seen before.”

And look what happened to the best laid plans. Many saw at the time that the joint venture was too complicated and put too much responsibility IBM’s way, but the council pushed aside their concerns.

Who now is responsible for the failure of Southwest One? Nobody.

Thank you to Dave Orr whose information made this article possible.

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Posted in Campaign4Change, IBM, IT projects, IT-related failures, legal disputes, local government, managing change, outsourcing, oversight, Politics, procurement, public services, risk, shared services

Cornwall Council’s extraordinary attack on outsourcing critic

Posted on 10/10/2012 | 1 comment

By Tony Collins

A “Cabinet” councillor in Cornwall has launched an extraordinary attack on a former IT strategy analyst Dave Orr who emailed members of the county council with his analysis of its outsourcing plans.

Orr is concerned that the council may sign a deal similar to the Southwest One joint venture contract between IBM and Somerset County Council which has been branded a failure.

His email to Cornwall’s members included links to articles, board papers and a BBC regional TV item on Southwest One’s problems. The email provided evidence on the dangers of succumbing to over-optimistic promises.  He sent it as a Somerset resident and local taxpayer.

In response, a Cabinet councillor in Cornwall sent a lengthy email to all members which defended the outsourcing proposals but also attacked Orr’s credibility.

Said the Cabinet councillor: “I understand that David Orr was employed by Somerset County Council within ICT before being seconded into SouthWestOne.  I also understand that he was a Unison representative and that he no longer works for either company. He has submitted 92 FOI requests between 5 April 2011 and 24 September 2012 to Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police .

“Whilst he is clearly a ‘Somerset resident and local taxpayer’, we do feel he is potentially misrepresenting himself by not making his previous employment with Somerset County Council and SouthWestOne explicit.

“We do not dispute the information Mr Orr has provided about SouthWestOne, although it should be noted that he was not in the contract management team and much of his information appears to have been gleaned from FOI requests and media reporting. However, Mr Orr is clearly not well placed to comment on the proposed Cornwall deal …”

Comment:

The personalised attack on Orr suggests that Cornwall’s Cabinet councillors might have lost sight of the need for independence and objectivity, particularly when close to signing a deal with BT or CSC that could be worth £300m or more.

In the response to Orr’s legitimate concerns, Cornwall’s Cabinet – the councillor uses “we” in his email – appears to have played the man as well as the ball.

Orr has nothing to gain by criticising Cornwall’s outsourcing plans;  and his FOI requests about the Southwest One deal have helped to make Somerset County Council much more open than it was.

He is right to warn on the basis of experiences in Somerset that optimistic statements by Cornwall council and the bidders could come to little or nothing. Neither CSC nor BT is infallible. Both companies were notified by the Department of Health of a breach of contract over deals they had signed as part of the National Programme for IT [NPfIT], the UK government’s largest civil IT programme.

Cornwall has had a genuinely independent assessment of its outsourcing plans by a panel it set up. But the ruling councillors dismissed the panel’s biggest concerns.

Pro-outsourcing enthusiasts on the council negotiating with optimistic potential suppliers doesn’t sound like a recipe for a successful deal.

Three centuries ago Jonathan Swift warned of the dangers of over-optimism. “The most positive men are the most credulous,” he said.

Cornwall’s ruling councillors are entitled to defend their outsourcing proposals – and they have made it clear they will continue to argue their case vigorously. But objectivity is all-important especially as an outsourcing deal on the scale proposed could be the most momentous decision in the council’s history.

A meeting of the full council will vote on the outsourcing plan later this month.

At that meeting the council’s cabinet members will argue that, without a deal, council jobs will be at risk. But has the council looked seriously at other options for saving money?  By its own admission it hasn’t. So is it really ready to sign a mega-contract with CSC or BT?

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Posted in BT, Campaign4Change, CSC, decision-making, IBM, local government, managing outsourced services, npfit