Category Archives: managing outsourced services

Bridging the divide: an engineered approach to IT projects

The State Auditor in California recently criticised a planned high speed rail system between San Francisco and Los Angeles because the project suffered from critical, on-going oversight problems. In this guest blog, Bob Evans, founder and Managing Director of TestIT Software Assurance, explains why it is critical to have a ‘single source of truth’ for any IT development, to provide the required level of cohesion, discipline, control and transparency that should be expected from any engineering project.

The risks associated with developing or changing IT systems are well documented. IT failures always bring despair and reputational damage to all involved.

Do you remember the scene in Blackadder where General Melchett suggested that walking slowly (again) towards the German machine guns would be “the last thing they’d expect” – and so “that’s what we’re going to do”? This seems to be the attitude found in many IT procurements. What’s needed is a fresh, radical and innovative approach, especially in these changed times where senior management focus is on delivery and cost.

Keeping Control

Establishing and maintaining control of an outsourced project is the single, most important part of IT development; it is imperative for the purchaser to remain in full control at all times. In all of the failure scenarios that we have researched, it is obvious in every case that control has been lost, with always calamitous consequences.

The nature of the procurement process and inevitable time pressure means that the requirements of a new software system aren’t always well-defined at project inception. Typically, specifications are incomplete or ambiguous and put together from a range of disparate sources, with non-existent internal process and control. The “silo” attitude that is often encountered across departmental organisations is usually a key factor here.  Requirements that are not made clear at the start of the project will inevitably lead to confusion, delays, additional cost and even to dispute.

And if a contract is awarded on the basis of a flawed specification, the chosen vendor is in a strong position to justify delays and ramp up the costs. When planned schedules are missed and costs spiral out of control, well intended remedial actions can then create new, unforeseen problems, leading to even more rework.

The culture of care and diligence found in many traditional engineering environments is sometimes lacking in the IT industry and in our experience, engineering discipline is usually the first casualty when pressure is applied. Very quickly, the focus shifts to fire-fighting and a project loses sight of its objectives. It’s like building a bridge – but when halfway across, only fitting every other bolt.

 Contrived Tests

It’s no surprise that applications that have seemingly passed an Acceptance Test, when deployed on a live system, prove to be problematic. Validating the effectiveness of an IT system is typically a contrived process – put simply, tests are designed to pass! They would be – they are usually designed, controlled and often even run by the software vendor.

If you were buying a used car from a local garage, you’d get the RAC to come along and check out the mechanics. You wouldn’t even think of asking the mechanic who worked at that garage to do the inspection would you? But invariably this is the case in IT.

As discussed above, it is imperative that full control of the project remains with the purchaser. But without, continual up to date feedback and independent metrics, it’s hard to know what’s really going on. And the critical decision – when to go live – cannot be made with confidence.

Agile Development

The concept of Agile Development has been round for many years. However, it is still to be seen whether this approach can really work on a large, complex project. A properly managed set of sprints – with precise objectives, proper controls and diligent, independent validation at appropriate times may indeed lead to a more rapid and successful conclusion. However, it should be noted that as development continues, the needs of the business will necessarily change. If controls are not adequately maintained, no process – not even “Agile” ones – can keep up. What is delivered is what the vendor believes is required, rather than what is actually required by the business. And no matter what methodology is used for developing software, at the end of the development cycle it is essential to verify, independently and thoroughly, that the product meets the needs of the business.

The Agile Manifesto focuses on “working software over comprehensive documentation”. Documentation is of course often cumbersome. However, minimising the amount of information while maximising the value of the information is what’s really needed.

When it’s too late – and organisations end up mired in a legal dispute, we’ve been called in to play the part of the pathologist. It is soon apparent that the project was doomed from the start – no spec, no metrics, no control, no hope. Suppliers who didn’t listen, purchasers who didn’t actually know what they needed in the first place.

But there is another way. The Maritime and Coastguard Agency recently used independent software assurance to ensure success of its high-profile CERS/SVD project. There was an acknowledgement right from the start that requirements were bound to change and controls put in place to manage this. There were efficient, timely tests – not at the project end, but continuous tests, right from project inception. There was an approach that asked:  “What can we do given the available time and budget?”, rather than the popular “one-shot, whistle and bells” approach. And there was pro-active searching for and identifying issues early on – when the supplier was still on site – which meant that remedial actions were fixed by the supplier, at no additional cost to the project. Independent, constantly updated metrics also meant that the Maritime and Coastguard Agency stayed in complete control.

It isn’t rocket science. But for IT projects, the discipline driven by an engineering-based approach is generally more likely to lead to success. That’s why bridges get built – and IT projects often don’t. 

TestIT Software Assurance

Some success in cutting Whitehall costs

By Tony Collins

The coalition government, Cabinet Office, Treasury, departments and agencies have succeeded in cutting central government costs, according to a National Audit Office report published today.

The NAO found that “in particular, large reductions have been made in spending on consultants, temporary staff, property and information technology” in 2010-11.

Departments cut their spend on consultants by £645m in – a real-terms reduction of 37%, said the NAO which also identified “£537m reduced capital spending on IT-related items”.

Unlike some previous reports of the NAO that have questioned the credibility of officialdom’s claims of savings, the NAO’s latest report “Cost reduction in central government: summary of progress” found that the savings claimed by the Cabinet Office, Treasury and government were usually genuine.

Where departments have cut costs by cancelling IT projects or having contracts renegotiated – as opposed to simplifying and streamlining the way they work – the NAO was unsure whether the savings could be sustained.

Said the NAO

“Central government departments took effective action in 2010-11 to reduce costs and successfully managed within the reduced spending limits announced following the 2010 election.

“This resulted in a 2.3% real-terms reduction in spending within departments’ control, compared with 2009-10. Some £3.75bn or around half the reduction was in areas targeted by the Efficiency and Reform Group for cuts in back‑office and avoidable costs.”

Are IT cuts sustainable without a change in working practices?

The NAO said:

 “The fall of 35 per cent in IT capital spend is partly the result of decisions to permanently halt or reduce spending on specific projects, and partly the result of action to reduce the costs of IT products and services including through contract renegotiation.

“However, it is unlikely that IT capital spending will remain at this lower level in total, given the key role of IT and online services in increasing productivity.”

The NAO mentioned the actions of some departments by name.

–          The Home Office cut costs in part by “significant reductions in IT, estates and consultancy spending”.

– HM Revenue & Customs, the Department for Work and Pensions and the Ministry of Defence aimed to secure the bulk of cost reductions from within their organisations. HM Revenue & Customs has established comprehensive governance arrangements to reduce costs, with a central team and programme management infrastructure. The Department for Work and Pensions put in place a transformation programme board in May 2011 to oversee the redesign of its corporate centre and broader cultural change. “However, it cannot finalise plans beyond 2011-12 as they depend on the future business model after the introduction of Universal Credit,” said the NAO. The DWP’s finance team has provided ‘What the Future Holds’ updates and interactive briefings for staff.

– The NAO said it “identified strong leadership as a key factor in the success of the Foreign and Commonwealth Office’s cost reduction efforts”.

– The Centre for Environment, Fisheries and Aquaculture Services within the Department for Environment, Food and Rural Affairs “held sufficiently detailed information to be able to challenge its project managers to reduce costs without affecting services”. The NAO said the “resulting savings identified from some 200 projects made up 30 per cent of the Agency’s efforts to meet their efficiency savings target”.

In July 2011, the Cabinet Office’s Efficiency and Reform Group reported to the Public Accounts Committee that it had helped save some £3.75bn through various initiatives. “Our analysis of the audited accounts of the 17 main departments confirms that spending in the areas targeted was reduced on this scale”, said the NAO.

Comment

The NAO report shows that within some departments officials are cutting costs by simply reducing grants but some parts of central government are making an effort to do things differently.

We hope the coalition and Cabinet Office keep up the pressure for cost-cutting because, in IT alone, the potential savings are in the billions. The NAO report shows there has been a good start. We hope that the officials who are achieving lasting success will pass on their learning experiences to those who are struggling to make cuts sustainable.

NAO report Cost reduction in central government – a summary of progress

IT company’s “tea at the Ritz” offer to GP leaders

By Tony Collins

An IT supplier to the Department of Health and the NHS has offered “tea at The Ritz” or two tickets to a West End show to GP leaders in return for helping to organise an event that would give the company a chance to demonstrate its systems.

TPP SystmOne, which says in its marketing literature that its systems hold a third of the country’s patient records and have more than 90,000 users, has ceased to offer the incentives, the Department of Health told Campaign4Change.

“We were made aware and asked the supplier about this activity,” said a Department of Health spokesperson. “The supplier has subsequently confirmed that they have ceased offering incentives to GPs.”

TPP also offered GP leaders a £25 Marks and Spencer voucher; and wished Merry Christmas and a Happy New Year to some potential customers with an offer of a box of Hotel Chocolat chocolates.

“To find out why 1800 GP practices have already moved to SystmOne, just call me on the number below to book your short GP demo. Book before 24th December to get a box of Hotel Chocolat chocolates on the day of your demonstration …”

In its separate offer of tea at The Ritz, a TPP SystmOne manager told the senior partner of a London health centre last year that the company’s system was available free of charge through the government-funded GP Systems of Choice initiative.

“Following recent success in the London area, TP are looking to sponsor local practice manager meetings. We’ll provide lunch and refreshments for all your attendees. As a thank-you the organiser of the event will receive afternoon tea at The Ritz or two tickets to a West End show of their choice! All we ask in return is a short slot at your meeting so we can demonstrate the benefits of SystmOne.”

Parts of the NHS have clearly-defined rules on the acceptance of gifts or hospitality. NHS Sheffield tells its staff:

“All offers of hospitality should be approached with caution. Modest hospitality, for example, a drink and sandwich during a visit or a working lunch is normal and reasonable and does not require approval of a manager. Offers of hospitality relating to theatre evenings, sporting fixtures, or holiday accommodation, or other hospitality must be declined…”

The guidance adds:

“Casual gifts by contractors or others, e.g. at Christmas time, must not be in any way connected with the performance of duties …”

TPP’s offer was not against the law. If all GP system suppliers offered the same or similar incentives, though, GP leaders could be inundated. Under the government’s health service reforms GPs who form part of Clinical Commissioning Groups will take on responsibility from primary care trusts for paying for GP systems.

We asked CSC, which supplies TPP SystmOne under the National Programme for IT, whether it was aware of the incentives and whether it, or TPP, wished to comment.

“Because we are in active negotiations with the government, we are not able to comment in depth on the programme until those negotiations have concluded,” said a CSC spokeswoman who said that the same applied to TPP as “they are a supplier to us working on the National Programme”.

DWP defends £316m HP contract

By Tony Collins

The Department for Work and Pensions could lead the public sector in technical innovations. It has had some success in cutting its IT-related costs. It has also had some success so far with Universal Credit, which is based on agile principles.

It has further launched an imaginative welfare-to-work scheme , the so-called Work Programme, which seeks to get benefit claimants into jobs they keep.

Despite media criticism of the way the scheme has been set up – especially in the FT – a report by the NAO this week made it clear that the DWP has, for the most part, taken on risks that officials understand.

Some central government departments have updated business cases as they went through a major business-change programme and not submitted the final case until years into the scheme, as in parts of the NPfIT.

But the DWP has implemented the Work Programme unusually quickly, in a little more than a year, by taking sensible risks.  The NAO report on the scheme said the business case and essential justification for the Work Programme were drawn up after key decisions had already been made. But the NAO also picked out some innovations:

– some of the Work Programme is being done manually rather than rush the IT

– suppliers get paid by results, when they secure jobs that would not have occurred without their intervention. And suppliers get more money if the former claimant stays in the job.

– the scheme is cost-justified in part on the wider non-DWP societal benefits of getting the long-term unemployed into jobs such as reduced crime and improved health.

So the DWP is not frightened of innovation. But while Universal Credit and welfare-to-work scheme are centre stage, the DWP is, behind the safety curtain, awarding big old-style contracts to the same suppliers that have monopolised government IT for decades.

Rather than lead by example and change internal ways of working – and thus take Bunyan’s steep and cragged paths – the DWP is taking the easy road.

It is making sure that HP, AccentureIBM and CapGemini are safe in its hands. Indeed the DWP this week announced a £316m desktop deal with HP.  EDS, which HP acquired in 2008, has been a main DWP supplier for decades.

DWP responds to questions on £316m HP deal 

I put it to the DWP that the £316m HP deal was olde worlde, a big contract from a former era. These were its responses. Thank you to DWP press officer Sandra Roach who obtained the following responses from officials. A DWP spokesperson said:

“This new contract will deliver considerable financial savings and a range of modern technologies to support DWP’s strategic objectives and major initiatives such as Universal Credit.

“The DWP has nearly 100,000 staff, processing benefits and pensions, delivering services to 22 million people.

“DWP is on schedule to make savings of over £100m in this financial year for it’s Baseline IT operational costs, including the main IT contracts with BT and HPES [Hewlett Packard Enterprise Services].

“All contracts have benchmarking clauses to ensure best value for money in the marketplace.

“The five year contract was awarded through the Government Procurement framework and has been scrutinised to ensure value for money.”

My questions and the DWP’s answers:

Why has the DWP awarded HP a £316m contract when the coalition has a presumption against awarding contracts larger than £100m?

DWP spokesperson: “The Government IT Strategy says (page 10) ‘Where possible the Government will move away from large and expensive ICT projects, with a presumption that no project will be greater than £100m. Moving to smaller and more manageable projects will improve project delivery timelines and reduce the risk of project failure’.

“HM Treasury, Cabinet Office and DWP’s commercial and finance teams have scrutinised the DWP Desktop Service contract to ensure that it represents the most economically advantageous proposition.”

What is the role, if any for SMEs ?

DWP: “There are a number of SMEs whose products or services will form part of or contribute to the DWP Desktop Service being delivered by HP, for example ActivIdentity, Anixter, AppSense, Azlan, Click Stream, Cortado, Juniper Networks, Quest Software, Repliweb Inc, Scientific Computers Limited (SCL), Westcon etc.”

Why is there no mention of G-Cloud?

DWP: “Both the new contract and the new technical solution are constructed in such a way as to support full or partial moves to cloud services at DWP’s discretion.”

Comment:

For the bulk of its IT the DWP is trapped by a legacy of complexity. It is arguably too welcoming of the safety and emollients offered by its big suppliers.

The department is not frightened by risk – hence the innovative Work Programme which the NAO is to be commended on for monitoring at an early stage of the scheme. So if the DWP is willing to take on sensible risks, why does it continue to bathe its major IT suppliers in soothingly-large payments, a tradition that dates back decades? What about G-Cloud?

DWP reappoints HP on £316m desktop deal

DWP signs fifth large deal with HP

“DWP awards Accenture seven year application services deal”

“DWP awards IT deals to IBM and Capgemini”

Halt NPfIT Cerner deployments after patient safety problems at 5 hospitals, says MP

By Tony Collins

Conservative MP and member of the Public Accounts Committee Richard Bacon called today for a halt on deployments of the NPfIT Cerner Millennium system after patient safety problems at hospitals in Oxford and North Bristol.

Other hospital deployments underway include Royal Berkshire and Imperial College London.   The BBC has reported that patient-booking software at North Bristol was regarded by some consultants as ‘potentially dangerous’.

The software was installed at the Trust last month under the National Programme for IT [NPfIT].    According to a BBC Points West investigation, the implementation led to some patients missing their operations and, in other cases, the wrong patients being booked for operations.

One consultant told the BBC he had been put down to operate on patients from a completely different speciality.  Patients were also being booked for unlikely appointment times, such as five minutes past midnight, and patients were said to have turned up for phantom appointments on the New Year bank holiday.

Separately the Oxford Mail reported this week that Oxford University Hospitals NHS Trust, which includes Nuffield Orthopaedic, John Radcliffe, Churchill, and the Horton General hospitals, has difficulties booking in patients for treatment.  It deployed the Cerner Millennium software in December.

According to the Oxford Mail, some patients ringing in to book appointments waited up to an hour to have their calls answered and appointments were so delayed the Trust abandoned car parking charges for three days.

Patients reported problems that included ambulances queuing outside of A&E as staff struggled to book in patients.

Pensioner John Woodcock told the Oxford Mail that it took a week of calling the local contact centre to book an appointment for an important stomach examination.

The contact centre gives patients the option of leaving a message for staff to call back, or to join a phone queue. The 75-year-old said “I managed to get an appointment in the end by staying on the phone but it took half an hour almost.”

An Oxford University Hospitals spokesman was unable to say when the system would be able to function without delays but suggested it could be up to three months. Hospital officials blamed the disruption on deployment problems and training issues.

Bacon has long criticised the National Programme for locking the NHS into buying software that was unreliable, subject to serious delays and, even after contract renegotiations, unreasonably expensive.

He disclosed that the costs of a Cerner Millennium deployment at the North Bristol NHS Trust are about £29m over seven years. This is more than three times the reported £8.2m price of a similar system, bought outside the National Programme, at University Hospitals Bristol Foundation Trust.

Bacon said the lessons from major patient safety problems at the Royal Free Hampstead, Barts and The London and Milton Keynes General Hospital had not been learnt.

“We now have two of our leading hospitals brought to their knees by this system.  These deployments need to be stopped until we are sure that they can be managed safely.”

He added “Effective, affordable and robust IT systems are vital to the future of the NHS, but it is clear that the fiasco that is the National Programme cannot deliver them.”

One patient emailed the Oxford Mail to say that the gain will be worth the pain.

“… A word of congratulations to staff. I too had problems with booking an appointment a few days after launch, but sent an email to which I first received an answer in the form of a call-back to fix an appointment and then a personalised apology and explanation…

“Think about the time, effort and accuracy gains of an electronic records system, and not having all those sometimes thick files being ferried round the different departments; think too of the gains in patient confidentiality – now every time someone accceses your records, that will be logged.

“When things have bedded in properly, and I believe this will be sooner rather than later, if the committed and dedicated staff have anything to do with it …  we’ll soon come to be grateful, both for the increase in efficiency and the financial savings – which can then be used on frontline services…”

NPfIT Cerner go-live has “more problems than anticipated”

System still causing chaos – Oxford Mail

London trusts in chaos

 

G-Cloud – it’s starting to happen

By Tony Collins

Anti-cloud CIOs should “move on” says Cabinet Office official, “before they have caused too much harm to their business”.

For years Chris Chant, who’s programme director for G Cloud at the Cabinet Office, has campaigned earnestly for lower costs of government IT. Now his work is beginning to pay off.

In a blog post he says that nearly 300 suppliers have submitted offers for about 2,000 separate services, and he is “amazed” at the prices. Departments with conventionally-good rates from suppliers pay about £700-£1,000 a month per server in the IL3 environment, a standard which operates at the “restricted” security level. Average costs to departments are about £1,500-a-month per server, says Chant.

“Cloud prices are coming in 25-50% of that price depending on the capabilities needed.”  He adds:

“IT need no longer be delivered under huge contracts dominated by massive, often foreign-owned, suppliers.  Sure, some of what government does is huge, complicated and unique to government.  But much is available elsewhere, already deployed, already used by thousands of companies and that ought to be the new normal.

“Rather than wait six weeks for a server to be commissioned and ready for use, departments will wait maybe a day – and that’s if they haven’t bought from that supplier before (if they have it will be minutes).  When they’re done using the server, they’ll be done – that’s it.  No more spend, no asset write down, no cost of decommissioning.”

Chant says that some CIOs in post have yet to accept that things need to change; and “even fewer suppliers have got their heads around the magnitude of the change that is starting to unfold”.

“In the first 5 years of this century, we had a massive shift to web-enabled computing; in the next 5 the level of change will be even greater.  CIOs in government need to recognise that, plan for it and make it happen.

“Or move on before they have caused too much harm to their business.”

He adds: “Not long from now, I expect at least one CIO to adopt an entirely cloud-based model.  I expect almost all CIOs to at least try out a cloud service in part of their portfolio.

“Some CIOs across government are already tackling the cloud and figuring out how to harness it to deliver real saves – along with real IT.  Some are yet to start.

“Those that have started need to double their efforts; those that haven’t need to get out of the way.”

Cloud will cut government IT costs by 75% says Chris Chant

Chris Chant’s blog post

NPfIT Cerner go-live at Bristol has “more problems than anticipated”

By Tony Collins

The BBC reports that there are “more problems than anticipated” with a patient-booking system at two Bristol hospitals run by North Bristol NHS Trust.

The trust describes the problems as “teething”.  Consultants say the problems are “potentially dangerous”.

Last month North Bristol went live with the Cerner Millennium system under an NPfIT contract with BT. The Trust says problems are due to software being used incorrectly. They have led to some patients missing their operations and the wrong patients being booked for operations, says the BBC.

Emails from executives at Frenchay and Southmead hospitals, seen by the BBC, said staff should be “vigilant” to check lists were “completely accurate”.

BBC Points West’s health correspondent Matthew Hill said emails sent by consultants to hospital bosses claimed operation lists printed by the system were “complete fiction” and “potentially dangerous”.

One consultant told the BBC he had been put down to operate on patients from a completely different speciality.

The trust said there had been “teething problems” and that there had been “more problems than anticipated”.

In an email to staff the trust said the change of system had been “a very big change” so there was “no surprise” there had been difficulties.

A trust spokesman said there were a series of problems around outpatients and the associated clinics and some of the data moved from old systems had not migrated as planned.

“We need to ensure that we rebuild and recreate the clinics to match what people expect them to be on the ground,” he said.

“In theatres we have had some issues but have absolutely ensured from the outset that clinical safety has been at the top and have ensured any risks and issues have been mitigated.”

Conservative MP Richard Bacon, a member of the Public Accounts Committee, has established through a Parliamentary question that the cost of the North Bristol Cerner implementation is much higher than for a non-NPfIT installation in the same city.

Health Minister Simon Burns told Bacon that the costs of a Cerner Millennium deployment at the North Bristol NHS Trust were £15.2m for deployment and an annual service charge of £2m.

This brought the total cost of the Cerner system over seven years to about £29m, which was more than three times the £8.2m price of a similar deployment outside of the NPfIT at University Hospitals Bristol Foundation Trust.

Comment

Several Cerner implementations under the NPfIT have gone awry but the problems have eventually been resolved. The question is whether patient care and treatment is affected in the meantime. The lack of openness over problems with patient care in the NHS mean that the answer will probably never be known, which underlines the need for better regulation of hospital IT implementations.

Does hospital IT need airline-style safety certification?

CSC to change hands in 2012?

By Tony Collins

Techmarketview analyst Tola Sargeant who has followed the NPfIT closely, and particularly the ups and downs of CSC, says the implications for CSC of the government’s tough stance against the company are “dire”. She adds:

“Indeed, we wouldn’t be at all surprised to see CSC change hands in 2012 as a result”.

Maude gets tough 

Within the Department of Health and CSC in May last year executives were confident a new memorandum of understanding under the NPfIT would be signed.

Now the Government, in the form of the Cabinet Office minister Francis Maude, has declined so far to sign any new deal with CSC. This is the way CSC put it in a filing to the SEC, the US regulators, on 27 December 2011:

“… Since mid-November 2011, the parties [Department of Health, Cabinet Office and CSC) have been engaged in further discussions relating to the MOU [Memorandum of Understanding], which have included discussions regarding a proposed contract amendment with different scope modifications and contract value reductions than those contemplated by the MOU.

“However, CSC recently was informed that neither the MOU nor the contract amendment then under discussion would be approved by the government.

“Notwithstanding the failure to reach agreement, CSC anticipates that the parties will continue discussions in January 2012 regarding proposals advanced by both parties reflecting scope modifications and contract value reductions that differ materially from those contemplated by the MOU.

“As a result of the circumstances described above, CSC has concluded, as of the date of this filing, that it will be required to recognize a material impairment of its net investment in the contract in the third quarter of fiscal year 2012.

“Until CSC and NHS conclude their on-going discussions concerning a possible contract amendment, including any scope modifications and contract value reductions that might be part of any such amendment, the Company is unable to estimate the amount of such impairment.

“However, depending on the terms of such an amendment or if no amendment is concluded, such impairment could be equal to the Company’s net investment in the contract, which, as of November 30, 2011, was approximately £943m ($1.5bn).

“Additional costs could be incurred by CSC depending on the nature of such an amendment, or if no amendment is concluded. The Company is unable to estimate the amount of such additional costs; however, such costs could be material.”

Why the Cabinet Office has left draft MoU unsigned?

The non-signing of a new deal with CSC is the firmest indication so far that the Cabinet Office is prepared to bring a rigorous, independent scrutiny to big IT projects and contracts.

Though the DH had wanted to sign a new deal with CSC, at least to assure continued support and upgrades to the few NHS trusts that have installed CSC and iSoft’s “Lorenzo” patient records system,  Maude is said to have seen a new deal with CSC as rewarding the company for failings in the past.

Also Cabinet Office officials regarded the terms of a new deal with CSC as unattractive. One Cabinet Office official wrote in a memo dated March 2011 that CSC’s proposals would mean a reduction in Trusts using CSC IT from the original number of 220 Trusts to 80.

 “My view is that, on the face of it, while the additional savings are appealing, the offer is unattractive. This is because the unit price of deployment (per Trust) under offer roughly doubles the cost of each deployment from the original contract.

“Ultimately, we [Cabinet Office] are not convinced the [Department of] Health commercial team are approaching this in the best way.”

It is possible that a new deal for signing was put before Maude – and went unsigned. Had any appeal gone to the Prime Minister David Cameron it is highly likely he would have given his full backing to Maude.

David Cameron’s view?

Cameron may be delighted that at least £2bn remains uncommitted to the NPfIT and could be saved by not signing a new deal with CSC.

Conservative MP Richard Bacon, a member of the Public Accounts Committee who has become an authority on the NPfIT, said of CSC’s warning of write-offs on the Programme:

“It was always a worry that the Department of Health was initially keen to sign a new deal with CSC that would have been poor value. Now it seems the Cabinet Office has done its job as an independent scrutineer and has made sure the interests of taxpayers are protected.

“This shows how important it is for the Cabinet Office to have the final say on big Government IT-based projects.”

What does CSC’s plight mean for the NHS?

NHS trusts have long wanted open competitive tendering and now, to a large extent, they have it. More than a dozen acute trusts are likely to tender for major systems replacements this year which is a big increase on the annual rate for past years.

Some iSoft and Cerner sites may also seek to renew contracts or find replacement systems. CSC, which may be lifted of the burden of meeting high-priced NPfIT commitments, may be a strong competitor in the UK health market.

One problem for NHS trusts will be finding enough strong candidates for their shortlists. They may look to the US market – but end up with products that need anglicising, which will be risky process.

Techmarketview says that what is doom and gloom for CSC is an opportunity for others. Rival suppliers “will be cheered by the prospect of more NHS Trusts procuring systems that CSC should have delivered by now”.

School report on Govt ICT Strategy – a good start

By Tony Collins

In a review of progress on the Government’s ICT Strategy after six months, the National Audit Office says that the Cabinet Office has made a “positive and productive start to implementing the Strategy”.

The NAO says that at least 70 people from the public sector have worked on the Strategy in the first six months though the public sector will need “at least another 84 people to deliver projects in the Plan”.

The UK Government’s ICT Strategy is more ambitious than the strategies in the US, Australia, Netherlands and Denmark, because it sets out three main aims:

– reducing waste and project failure

– building a common ICT infrastructure

– using ICT to enable and deliver change

The US Government’s ICT Strategy, in contrast, encompasses plans for a common infrastructure only – and these plans have not produced the expected savings, says the NAO.

In a paragraph that may be little noticed in the report, the NAO says that senior managers in central government have plans to award new ICT contracts (perhaps along the pre-coalition lines) in case the common solutions developed for the ICT Strategy are “not available in time”.

The NAO report also says that “suppliers were cautious about investing in new products and services because of government’s poor progress in implementing previous strategies”.

Of 17 actions in the Strategy that were due by September 2011, seven were delivered on time. Work on most of the other actions is underway and a “small number” are still behind schedule says the NAO.

The NAO calls on government to “broaden the focus to driving business change”.

Some successes of the UK’s ICT Strategy as identified by the NAO:

* The Cabinet Office has set up a small CIO Delivery Board led by the Government CIO Joe Harley to implement the ICT Strategy. The Board’s members include the Corporate IT Director at the DWP, CIOs at the Home Office, MoD, HMRC, Ministry of Justice and Department for Health, together with key officials at the Cabinet Office. The departmental CIOs on the Board are responsible directly to Francis Maude, Minister for the Cabinet Office, for implementing the ICT Strategy in their departments and are accountable to their own minister. No conflicts have arisen

* Senior managers in central government and the ICT industry are willing to align their strategies for ICT with new cross-government solutions and standards but need more detail.

*  Some suppliers have offered help to government to develop its thinking and help accelerate the pace of change in ICT in government.

* The Cabinet Office intended that delivering the Strategy would be resourced from existing budgets. Staff have been redirected from other tasks to work on implementing the Strategy. “We have found collaborative working across departmental boundaries. For example HMRC and the MoD have combined resources to develop a strategy for greener ICT. Teams producing the strategies for cloud computing and common desktops and mobile devices have worked together to reduce the risk of overlap and gaps.

* The BBC has shown the way in managing dozens of suppliers rather than relying on one big company. For BBC’s digital media initiative, the Corporation manages 47 separate suppliers, says the NAO.

* The Cabinet Office intends that departments will buy components of ICT infrastructure from a range of suppliers rather than signing a small number of long-term contracts; and to make sure different systems share data the Cabinet Office is agreeing a set of open technical standards.

* Some of the larger departments have already started to consolidate data centres, though the NAO said that the programme as a whole is moving slowly and no robust business case is yet in place.

* The Cabinet Office is starting to involve SMEs. It has established a baseline of current procurement spending with SMEs – 6.5% of total government spend – and hopes that the amount of work awarded to SMEs will increase to 25%. Government has started talking “directly to SMEs”, says the NAO.

Some problems identified in the NAO report:

* Cloud computing and agile skills are lacking. “Government also lacks key business skills. Although it has ouitsourced ICT systems development and services for many years, our reports have often stated that government is not good at managing commercial relationships and contracts or procurement.”

* Suppliers doubt real change will happen. The NAO says that suppliers doubted whether “government had the appropriate skills to move from using one major supplier to deliver ICT solutions and services, to managing many suppliers of different sizes providing different services”.

* The Government CIO Joe Harley, who promoted collaboration, is leaving in early 2012, as is his deputy Bill McCluggage. The NAO suggests their departures may “adversely affect” new ways of working.

* The NAO interviewed people from departments, agencies and ICT suppliers whose concern was that “short-term financial pressure conflicted with the need for the longer-term reform of public services”.

* The culture change required to implement the Strategy “may be a significant barrier”.

* The Cabinet Office acknowledges that the government does not have a definitive record of ICT spend in central government (which would make it difficult to have a baseline against which cuts could be shown).

* The Cabinet Office has not yet defined how reform and improved efficiency in public services will be measured across central government, as business outcomes against an agreed baseline.

**

Amyas Morse, head of the National Audit Office, said today: ” ICT is going to play an increasingly important role in changing how government works and how services are provided.

“The Government’s ICT Strategy is in its early days and initial signs are good. However, new ways of working are as dependent on developing the skills of people in the public sector as they are on changes to technology and processes; the big challenge is to ensure that the Strategy delivers value in each of these areas.”

NAO report:  Implementing the Government ICT Strategy: six-month review of progress.

HM Courts Service hides “Libra” IT’s new shortcomings

By Tony Collins

A report published today by the National Audit Office highlights how limitations in Libra, a case management IT system in use across magistrates’ courts, has contributed towards  HM Courts Service’s inability to provide basic financial information to support the accounts.

HM Courts Service claimed a success for the troubled Libra system in 2008 – but the failure of the system was more enduring and deep-rooted than thought. The problems were kept hidden until today’s NAO report because the present and past governments have kept “Gateway” progress reports on IT-based projects confidential.

In an unusual step, the head of the NAO, Amyas Morse, has “disclaimed” his audit opinion on the accounts of the HM Courts Service, largely because of a lack of financial information.

Disclaiming an audit opinion is more serious than qualifying the accounts of a government department or agency. Qualifying the accounts means that Morse has reservations on whether figures presented to the NAO are accurate. Disclaiming an audit opinion means that Morse lacks the basic information on which to give any opinion on the accounts.

MP Richard Bacon, a member of the Public Accounts Committee, says that disclaiming an audit opinion is the “auditor’s nuclear button”.

The NAO report today puts the focus on inadequacies in the “Libra” system which is supplied by Fujitsu and STL, with integration work by Accenture.

Fujitsu originally estimated the cost of Libra, a case management system for magistrates’ courts, at £146m. By March the estimated costs were £447m and were expected to rise further. The Libra project took 16 years to complete.

Problems and cost increases on the Libra system were well known in 2003 when the NAO criticised the management of the project. After that all went quiet until in 2008 when HM Courts Service declared Libra a success.

Now the NAO’s Morse says:

“Because of limitations in the underlying systems, HM Courts Service has not been able to provide me with proper accounting records relating to the collection of fines, confiscation orders and penalties. I have therefore disclaimed my audit opinion on its Trust Statement accounts.”

In a statement the NAO criticises the Libra system directly:

“Today’s report highlights how limitations in Libra, the case management IT system in use across magistrates’ courts, and similar systems have contributed towards  HM Courts Service’s inability to provide information at an individual transactions level to support the accounts.”

The NAO says that the Ministry of Justice plans to investigate further the functionality of Libra to determine whether it is possible to provide evidence to support accruals-based financial reporting.

Says the NAO:

“In particular, the Ministry and HMCTS [HM Courts and Tribunals Service] believe that it may be possible to obtain evidence over fines and confiscation orders if a suitable report is run shortly after the month end.

“ However, the Ministry and HMCTS have informed me that they may not be able to address these fundamental issues until Libra is significantly enhanced or replaced with a new case management and accounting system. The timing of this enhancement or replacement is currently uncertain. However, the Ministry have committed to ensuring that any replacement for Libra includes accounting functionality to enable financial reporting.”

MP Richard Bacon, who has followed the Libra project for many years, says:

“This is a disgraceful position for the Courts Service to have reached.  It is true that the Libra computer system is both expensive and useless but we have known this for many years (Cost of Courts’ IT system triples) and public bodies still have a duty to keep proper records.

“We are now looking at a possible £1.4 billion loss in uncollected fines and penalties partly because of the longstanding shambles that passes for record-keeping in the courts service.

“For centuries, people have kept accurate records and accounts using pen and paper. This could still be done now if needed and if there were sufficient will to do it.”

Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

“It is really worrying that HM Courts and Tribunals Service can’t produce basic financial records.  HM Courts Service is responsible for collecting fines and penalties, but we can’t tell if this money is accounted for properly.

“The Comptroller and Auditor General has taken the rare step of disclaiming his audit opinion – the Committee will be looking for HM Courts and Tribunals Service to improve.”

Comment:

It is astonishing that HM Courts Service has been able to continue in operation without MPs having idea until today that the costly Libra computer system was unable to provide basic financial information.

Parliament was kept in the dark about Libra’s new shortcomings because “Gateway” review reports in IT-based projects and programmes are kept confidential. It is a pity for taxpayers and accountability on major projects that ministers are surrendering to the wishes of civil servants who want Gateway reports kept confidential.

NAO report on Courts Service.