Category Archives: outsourcing

Is Francis Maude starting to spin – without realising it?

Posted on 16/03/2012 | 6 comments

By Tony Collins

Francis Maude is, perhaps, the most effective Cabinet Office minister in decades.

If the business world divides into two main types of character, black and white, and grey – neither being better or worse than the other –  Maude is black and white.

He wants clarity. He shuns subtlety and complexity. He has no time for civil service sophistry and equivocation, or the coded language of some supplier representatives. He wants cuts in the cost of contracts and doesn’t want to hear long arguments on why things are not that simple. He had deep reservations over doing a new deal with CSC over the NPfIT.

A strength of Maude and his colleagues at the Cabinet Office has been the absence, or at least scarcity, of exaggerated and unsubstantiated statements of efficiency savings, of the sort made repeatedly during Labour’s tenure.

Is that beginning to change?

In the past fortnight Maude has made two major claims that are not based on published evidence.

• Maude said spending on SMEs has risen from 6.5% to 13.7%.  It’s not clear how that figure is calculated. There’s a good analysis of the tenuousness of the claim by Peter Smith of Spend Matters. How much of the increase in SME work is down to unaudited claims by large companies that they are giving their SMEs more work?

• He said that £200m has been cut from Capgemini’s Aspire contract with HMRC. [Aspire also involves Fujitsu and Accenture.] He has received much good publicity for the claim. Said the Telegraph yesterday:

“He [Maude]  announced that ministers had successfully renegotiated one deal on computers and tax systems for HM Revenue and Customs.

He said the new contract, with Capgemini, would save £200 million on the deal previously agreed.”

Last year Mark Hall, deputy CIO at HMRC was reported as saying that the Aspire contract was on course to save more than £1bn. Is the £200m quoted by Maude in many news articles this week new?

And none of the articles mention the total cost of the Aspire contract – so from what is £200m being cut?

At one point, according to Mark Hall, the estimated cost of Aspire rose to £10bn from its original estimate of £2.83bn over 10 years. This means that cost increases on the Aspire contract are measured in billions – which puts the £200m savings figure mentioned by Maude into context.

And have Maude and his team offered Capgemini anything in return for a price cut, such as an improved profit margin? [The contract is on an open-book accounting basis]. This week’s Cabinet Office statement on the £200m cut gives no help here. An HMRC FOI response in 2010 and an NAO report in 2006 show that costs of Aspire are fluid. They change according to internal demand; and pricing arrangements are complex. HMRC has refused FOI requests to publish the contract so how can anyone put the claimed £200m savings into a contractual content?

In 2007 negotiations between HMRC and Capgemini extended the 10-year contract by three years, to June 2017; and there’s an option to extend Aspire  for a further five years to 2022. In return for the contract extension Capgemini has already guaranteed savings of £70m a year and a further £110m a year from 2012. Are these savings in addition to the £200m a year Maude has announced? Or the £1bn savings mentioned by Mark Hall?

The good news is that HMRC’s CIO is Phil Pavitt who is a natural sceptic of big outsourcing deals. If anyone is going to achieve genuine savings on Aspire it is Pavitt. Indeed he has given some details of his negotiations. But the contractual context remains abstruse.

Comment

Doubtless Maude believes the figures he has announced on SMEs and Aspire are correct but without substantiation they will mean little to anyone except the media. Maude, perhaps, needs to trust his own cautious instincts than listen too much to his advisers. Otherwise he’ll begin to sound more like Labour ministers who repeatedly made claims the NAO found difficult to substantiate.

The important and impressive work Maude is doing to cut the costs of running government should not be trivialised and debased by spin. Announcements on what he is doing to cut costs and make government more open are usually helpful. But Maude should the first to differentiate the real – in other words the factually corroborated – from aggrandising and flimsy political claims.

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Posted in Campaign4Change, compliance with spending review, cost avoidance, efficiency savings, Freedom of Information, Government IT, managing change, managing outsourced services, outsourcing, Politics, procurement, public sector, public services, reducing cost strategically, supplier relationships

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New child support system has 90,000 requirements – in phase one

Posted on 29/02/2012 | 3 comments

                               A new old-style government IT disaster?

By Tony Collins

While officials in the Cabinet Office offcials try to simplify and cut costs of Government IT, a part of the Department for Work and Pensions has commissioned a system with 90,000 requirements in phase one.

The projected costs of the child maintenance system have risen by 85% and the delivery date has slipped by more than two years.

Even with 90,000 requirements, phase one, which is due to go live in October, excludes 70 requirements that are “deemed critical” says a report published today by the National Audit Office.

The NAO report indicates that the Child Maintenance and Enforcement Commission has commissioned an old-style large IT system using traditional developing techniques and relying on large companies.

G-Cloud and SMEs have not featured in the Commission’s IT strategy – and it abandoned agile techniques last year on its child maintenance project.

The Commission put the cost of its new child maintenance system at £149m in January 2011. Ten months later it put the cost at £275m, an 85% increase. The Commission was unable to give the NAO a full explanation for the difference.

Lessons from past failures not learned?

Today’s NAO report says there is a risk the Commission will repeat mistakes by the Child Support Agency whose IT system and business processes were criticised in several Parliamentary reports. The Commission takes in the work of the Child Support Agency – and indeed runs its own systems and the Child Support Agency’s in parallel.

Officials at the Commission told the NAO they have a good track record of holding back IT releases until they are satisfied they will work.  “Nevertheless, we found that the Commission is at risk of repeating many of the mistakes of 2003,” said the NAO. Those mistakes include over-optimism and a lack of internal expertise to handle suppliers.

Mixing “agile” and “waterfall” doesn’t work

Initially civil servants at the Commission tried to “mix and match” agile and traditional developing techniques – which Agile advocates say should not be attempted.

In 2011 the Commission gave up on agile and “reverted to a more traditional approach to system development” says the NAO report.

The mix and match approach meant there were two distinct routes for specifying requirements and “resulted in duplicated, conflicting and ambiguous specifications”.  The Commission did not have previous experience of using the agile approach.

The Commission’s child maintenance system was due to go live in April 2010 but the delivery date has slipped three times. Phase one is now due to go live in October 2012 and phase two in July next year but the NAO report raises questions about whether the go-lives will happen successfully. The Commission has not planned in its financial estimates for the failure of the system.

The NAO finds that the Commission has struggled to make its requirements for the new system clear. The Commission’s main developer Tata Consulting Services has had protracted discussions over the meaning and implementation of requirements.

The NAO also hints that IT costs may be out of control. It says the Commission may not secure value for money without properly considering alternative options for restructuring and “adequately controlling its IT development …”

These are some of the NAO’s findings:

IT costs could increase further

“The new system is based on ‘commercial off-the-shelf’ products. However, a recent audit by Oracle identified that the performance, maintainability and adaptability of the new system would be key risks. This could increase the cost of supporting the system. The scheme does not yet include plans for the integration with HM Revenue & Customs’ Real Time Information system due to be implemented in 2013, or introducing Universal Credit because of the differing timescales,” says the NAO which adds:

“Achieving the Commission’s plans without further cost increases or delays appears unlikely. The Commission reported to the audit committee in October 2011 on the high risk that the change programme may not deliver phase two functionality within agreed timescales … The Commission did not develop a benefits realisation plan until November 2011.”

103,000 of Commission’s 1.1m cases are handled manually

“Ongoing technical problems have resulted in a large number of cases being removed from the IT system and managed manually. These are known as clerical cases … The Commission has had to operate the ‘old’ and ‘current’ schemes in parallel.  Due to flaws in the IT systems for each scheme, some 100,000 cases have had to be processe:d separately by clerical staff at a cost of £48 million,” says the NAO. It takes 900 contractors to manage the clerical cases.

Comment

Despite numerous NAO reports on failures of Government IT-based projects over the past 30 years the disasters are still happening, with the same mistakes repeated: over-optimism in every aspect of the project including timetables and financial estimates; excessive complexity and over-specification, no sign of cost-consciousness and, worst of all, an apparent indifference to being held accountable for a major failure.

A glance at the monthly outgoings of the Commission (well done to the coalition for requiring departments and agencies to publish contracts over £25,000) show sizeable and regular payments to familiar names among the large suppliers: HP Enterprise Services (formerly EDS), Capgemini, Tata Consultancy Services, BT Global Services and Capita. There is hardly an SME in sight and no sign of imaginative thinking.

Meanwhile some senior officials at the Commission put in monthly expenses for thousands of pounds in travel, accomodation and subsistence for “Commission meetings”. One wonders: to what useful effect?

Officials at the Cabinet Office are trying to change the culture of departments and agencies. They are encouraging departmental heads to do things differently. They advocate the use of  SMEs to show how new ways of working can trounce traditional approaches to projects.

But the Cabinet Office has little influence on the Department of Work and Pensions. Indeed the DWP has lost its impressive chief innovator James Gardner.

We praise the NAO for noting that the Commission risks repeating the IT-related and project management mistakes of the Child Support Agency. But we note with concern that the NAO still puts up with Whitehall’s non-publication of  Gateway reviews, which are independent reports on the progress or otherwise of big and risky IT-based projects.

Would the Commission have been so apparently careless of the risks if it had known that regular Gateway reports on its shortcomings would be published?

How many more government IT-based projects are late, over budget and at risk of failing, their weaknesses hidden by an unwritten agreement between the coalition and civil servants to keep Gateway reviews secret?

NAO report – Child Maintenance and Enforcement Commission: cost reduction

Government repeating child support mistakes – ComputerworldUK

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Posted in Agile, capacity building, change, change management, CIO, Gateway reviews, Government IT, India, IT projects, managing change, managing outsourced services, openness and transparency, operational issues, outsourcing, private sector lessons for the public sector, project management, public sector, public services

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Can officials stop TPP offering gifts to GPs?

Posted on 10/02/2012 | 3 comments

By Tony Collins

On 13 July 2011 CSC gave this written assurance to NHS Connecting for Health at its headquarters in Leeds.

“CSC can confirm that its subcontractor TPP will no longer be sending out letters to practices offering  gifts in return for organising demonstrations of SystmOne.”

TPP has continued to offer gifts, and the Department of Health is now concerned enough to divulge the letters it has sent to CSC.

It can do little more, for GPs are not bound by NHS rules on the acceptance of gifts.

NHS Connecting for Health became involved after TPP sent out a letter in April 2011 offering tea at The Ritz or two tickets to a West End show of the GP choice.

“All we ask for in return is a short slot at your [local practice manager] meeting so we can demonstrate the benefits of SystmOne,” TPP said. “We’re [sic] a proven system and a real alternative to EMIS and Vision. With a third of the country’s patient records and more than 90,000 users, SystmOne is the leader in hosted clinical systems.

“Following recent success in the London area, TPP 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 will also receive afternoon tea at The Ritz or two tickets to a West End show of their choice …Don’t wait around for an alternative that might not arrive – SystmOne is available, right here, right now…”

SystmOne is supplied to the NHS by CSC under the National Programme for IT, at a cost to taxpayers that remains confidential under NPfIT contracts. GPs can also buy the system directly under GP Systems of Choice. Some PCTs are said to be putting pressure on GP practices to replace existing systems with SystmOne.

Three months after TPP’s “tea at The Ritz” letter, on 6 July 2011, NHS Connecting for Health’s Programme Director, GP IT, wrote to CSC.

Dear Sirs

GPSoC [GP Systems of Choice] Marketing Activity by Subcontractor (TPP)

It has come to the attention of the Authority [Connecting for Health/Department of Health] that TPP have been sending letters to practices which include offers of gifts in return for organising meetings of practice managers  during which SystmOne would be demonstrated. The gifts on offer include tea at The Ritz, two tickets to a West End show and £50 of Marks and Spencer vouchers.

The activities being carried out by TPP state that they are in relation to the provision of SystmOne through GP Systems of Choice. As the Supplier of SystmOne under the Framework Agreement, the Authority requests that CSC review these activities and provides a response to the Authority, by no later than 13 July, to advise whether TPP, as their subcontractor, will be continuing with such activity.”

CSC’s Primary Care Product Executive replied on 13 July:

“CSC was not aware of such activities being undertaken by TPP and immediately entered into dialogue with TPP.

CSC can confirm that its subcontractor TPP will not be sending out letters to practices offering gifts in return for organising demonstrations of SystmOne.”

In December 2011 Campaign4Change learned that TPP was offering £25 Marks and Spencer vouchers to GPs in return for a “short slot at your meeting so we can talk to you and demonstrate the benefits of SystmOne”. By that time TPP put the number of its users at more than 100,000.

We asked the Department of Health in December 2011 whether it approved of TPP’s incentives. It replied:

“We were made aware and asked the supplier about this activity. The supplier has subsequently confirmed that they have ceased offering incentives to GPs.”

Then we learned of a TPP offer of Hotel Chocolat chocolates.

“Happy Christmas and a Happy New Year from TPP.

“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…”

This month, February 2012, TPP sent out this message:

TPP sponsorship for your practice meeting

“TPP are looking to sponsor your practice manager meeting! We’ll provide lunch and refreshments for all of your attendees. As a thank-you, the organiser of the meeting will also receive £25 Marks and Spencer vouchers! All we ask for in return is a short slot at your meeting so we can talk to your attendees and demonstrate the benefits of SystmOne to those practices not yet using it. Anyone that books a SystmOne demonstration on the day of the meeting will also recieve £25 Marks and Spencer vouchers!

“You already know all the great reasons to move to SystmOne, why not share them with other practices in your area? The more practices that move to SystmOne, the more benefits you’ll see.

“To arrange sponsorship for your next meeting and take advantage of this great offer, just contact us on the number below or reply to this email.”

We asked DH why it had suggested that the gift offers had ceased when they hadn’t. Its reply:

“The Department contacted CSC (as the GPSoC supplier) about this activity by their subcontractor TPP. CSC confirmed that TPP would cease offering gifts to GPs in return for organising demonstrations of SystmOne. We have contacted CSC about TPP’s position which is not in line with the assurances previously provided.”

We also asked the DH why it was concerned about the gifts. It did not reply directly but sent us copies of the letter it had sent to CSC, and CSC’s reply.

Is the DH powerless to stop TPP offering gifts?

TPP told Pulse this week:  “We momentarily stopped offering the incentives over Christmas but will be resuming during February … The incentives were offered only to GPs and practice managers and were completely optional.

“Our ‘Tea at the Ritz’ offer actually costs considerably less than the cost of catering for such a practice meeting. We at TPP appreciate that GPs and their staff are extremely busy and so any thank-you gifts we offer staff are simply that, a thank-you for an hour or two of their time.”

CSC has made no comment.

Pulse reports that the GP Systems of Choice framework agreement prohibits software providers from offering gifts to any servant of the authority or a PCT. The ban does not include GPs because they do not sign the framework. Suppliers can offer gifts to GPs without breaching the framework agreement says Pulse.

It quotes Dr Charlie Stuart-Buttle, a former chair of the EMIS user group and a GP in Tonbridge, Kent, as saying the incentives were an unacceptable way of going about things. It also quotes Dr Trefor Roscoe, a GP in Sheffield and former medical IT consultant, as saying the incentives were not a problem as long as the GPs felt the system in question was worth demonstrating in the first place.

Comment

Some will say that GPs are bombarded with offers of freebies from drug companies. So why does it matter if an IT company offers gifts?

Another argument is that drugs are different. GPs can stop offering drugs that become too expensive. They cannot simply stop using a GP system. It’s a big decision for any GP practice to choose a new system even with subsidies from the Department of Health under GP Systems of Choice GPs, while the GPSoC framework lasts. Any new GP system is likely to be a long-term commitment because of the disruption of changing.

GPs should surely choose their IT supplier on the basis of the facts and after shortlisting suppliers.

We dislike the expression “level playing field” but if applied here it would mean that GPs chose new systems only after demos at which all shortlisted suppliers offered tea at the Ritz or Marks and Spencer vouchers to certain GPs.

Alternatively the suppliers could agree that none offers gifts.

IT company’s tea at The Ritz offer to GPs.

Pulse article on TPP incentives

Are PCTs putting GPs under pressure to switch to SystmOne?

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Posted in change, Government IT, health, health records, managing outsourced services, NHS, npfit, outsourcing, Politics, procurement, supplier relationships

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Mutuals: a novel means of driving down demand for public services?

Posted on 09/02/2012 | Leave a comment

By David Bicknell

A recent piece in the Guardian local government network has come up with the intriguing idea that mutuals can help drive down demand for public services.

The article, by Ross Griffiths, a partner at law firm Cobbetts,  suggests that if  as a service user, you are dealing with a provider that is your mutual, you are more likely to think twice about the demands you are making on it, and the effect that might have on the service and other users. It argues that this is the ‘Holy Grail’ of the mutual project – allowing providers to deliver services more cheaply not by making cuts, but by reducing demand.

The piece asks whether in today’s local government, where efficiency must be a big part of any changes to services, this is something that mutual structures can deliver. Or are they, as the article asks, ‘little more than a frivolity that should be saved for less straitened times?’

Links

http://www.guardian.co.uk/local-government-network/2011/dec/08/new-mutuals-pick-winners

http://www.number10.gov.uk/take-part/public-services/start-a-public-service-mutual/

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Posted in Campaign4Change, mutualisation, mutuals, outsourcing, private sector lessons for the public sector, public sector, public services

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Part equity models for mutuals could revive outsourcing sector

Posted on 06/02/2012 | 1 comment

By Robert Morgan

Few can be in any doubt of the coalition government commitment to worker inclusive mutuals and the potential for not only smaller government as a result but a revival of the outsourcing services industry.  This model acts as a template to appease European workers councils who have long held back the greater use of outsourcing in country like France and Germany.

Headline grabbers like ““Ministers are poised to launch one of the biggest experiments in public sector reform … a John Lewis-style mutual – the first to be created in central government”, and “… three or four more Mutuals THIS year …” and “…1,000,000 public sector workers in Mutuals by 2015” in the Financial Times this week has not been picked by the bulk of the popular press. But they and the continental press soon will.

Francis Maude, Mutualisation’s marketing guru has said of the MyCSP mutual ““I don’t … view this as the ultimate model … we have learnt … The next one should be easier to do”. The award of the MyCSP contract, rumoured to be ten years with a break clause at year seven, will administer 1.5m government pensions, transfer 500 DWP staff into the SPV, see CEO compensation capped at 8% above average employee salary, net profits shared with the supplier but only after 1% going to charity and 1% going to apprenticeships, and employees interests will be represented by an externally advertised director. So part of the model are clear – a new form of privatisation with Jon Lewis style employee participation and share ownership and a “caring” social charter.

But has government learnt from Labour’s disasters in PFI / PPP – you know the £120 to change a light bulb stories. Key questions need answers:

  • To what extent will the mutual be given freedom to operate?
  • At least in the short-term, a mutual remains tied to its public sector background and delivery and is therefore subject to the rigours and constraints of regulation, OJEU and accountability to the Auditor General. Will these restrictions be “officially loosened” any time soon?
  • Everyone agrees that the public sector will continue to shrink and by definition therefore, so will a dependent mutual’s service revenues, this throws up questions on it’s ability to survive – and to attract external revenues, and so …
  • … will the choice of partner be heavily dependent on their demonstrated ability or commitment to develop such services?
  • What penalties are there for NOT securing external business?
  • How might the Mutual formula vary and evolve between different circumstances?

More importantly for the outsourcing industry is, are more commercial models going to spring up and be accepted. The consensus of clients I have spoken to is “yes”, but this needs to be balanced with the fact that there was not a single tier one outsourcer (IBM, CSC, HP) in the short-list for MyCSP.  Demand says “yes” and Supply says “yawn”. 

Robert Morgan, formerly the founder of Morgan Chambers and now director of outsourcing advisory Burnt Oak Partners, is delivering a speech on Part Equity models for commerce on Wednesday 8th February 2012 at Berwin Leighton Paisner – the event is free and tickets can be coordinated via  shan,murad@blplaw.com  – yes it is a comma!

Robert also writes the influential Outsourcing Lex column at

http://www.burntoak-partners.com/viewpoint/outsourcings-lex-column/

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Posted in Campaign4Change, mutualisation, mutuals, outsourcing, procurement

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NPfIT Cerner go-live at Bristol – Trust issues apology

Posted on 31/01/2012 | 4 comments

By Tony Collins

North Bristol NHS Trust has issued an apology on its website after problems with the implementation of a Cerner Millennium patient record system under the National Programme for IT.

Some Bristol consultants had regarded the software as installed at the Trust as “potentially dangerous”.

The Trust went live on 9 December 2011 with a Cerner patient administration system at Frenchay Hospital and Southmead Hospital that replaced two systems. But the Trust has had to revert to paper in some areas.

On its website the Trust says that its “65 wards and maternity department are all using the new system successfully”.

It accepts that it has “experienced significant problems” in outpatient clinics. It says “These problems have been caused by the incorrect set up of clinic lists, which meant staff could not access the system and errors in the data migration of existing appointments.

“As a result, some patients may have received the wrong appointment dates, no confirmation of appointment or letters being sent out in error.  Again, processes are in place to minimise further disruption to out-patient appointments and ensure patient safety.”

TheTrust says it has engineers and technicians re-building the clinics’ system or they are “in clinics correcting problems as they happen, providing solutions and resolving issues”.

The intention is that 90% of areas will be using Cerner by the end of today [31 January]. “Our aim is that by early February all outpatient clinics will be using Cerner. All other outpatient appointments are being managed via other systems and paper processes.”

The Trust says it is contacting patients by phone or letter to advise them of their current appointment slot. “We have ensured that any urgent referrals including cancer two week waits have been prioritised to ensure they are unaffected.”

It adds “During the process of correcting the issues with outpatient clinics and to support GPs and their patients we have written to them to advise them that all patients who have been referred to us either through Choose & Book, fax or Fast Track are within our appointments system.

“We have advised GPs of a dedicated telephone number, fax number and email address for GPs or their patients to contact for further advice. To provide further reassurance to patients and GPs we will keep the helpline service running until the end of February.”

Apology

The Trust says on its website:

“We apologise and would like to thank the public for their patience and our staff for their hard work and dedication in ensuring that patient safety is not compromised.

“These issues have caused disruption and frustration for our patients and our staff and we recognise that this has not delivered the level of service that we expect, and the public expect, from us.

“It has also placed extra workload on our staff, who nevertheless, remain dedicated to ensuring the best possible patient care during this period, and managing the issues that the Trust faces.

“Our Information Management & Technology Team, supported by our suppliers BT and Cerner, have been working very hard to sort out these initial issues and we are already seeing improvements.

“We remain confident that once the new system is fully implemented, it will significantly improve services for our patients and better equip us to meet future challenges.”

Meanwhile the Bristol Evening Post reports that the Chief Executive of the hospital trust, Ruth Brunt, has called for an independent inquiry into the issues surrounding the implementation of the Cerner system.

She said people who have turned up to appointments and operations that have been cancelled or were not on the system would be compensated.  A hotline has also been set up so that people can check whether their appointments are in the system.

The Bristol Evening Post also reported that reception staff had walked out due to the pressure of dealing with patients who were unhappy to find their appointments not on the new system.

“It is horrendous – what used to take us five or six clicks is currently taking 24 and we cannot access the details,” a staff member said. “The notes have not been available when people turn up.

“We have all worked hard and I am sure if it was anywhere else we would have gone on strike. The people on the ground are struggling. It is really demoralising because we are doing our best. Girls on reception are dealing with queues of people and there has been an occasion where a receptionist has walked out because they were so stressed.

“When patients call up we want to be able to help them, but at the moment we don’t know where to look.”

The employee did not believe the trust’s claims that everything would be sorted out by 13 February.

Halt Cerner implementations says MP

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Posted in Campaign4Change, capacity building, change management, Government IT, health, innovation, NHS, npfit, outsourcing, risk

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DWP defends £316m HP contract

Posted on 27/01/2012 | 1 comment

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, Accenture, IBM 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”

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Posted in Agile, Campaign4Change, capacity building, change, change management, Cloud, Cloud Computing, G-Cloud, Government IT, IT projects, managing change, managing outsourced services, outsourcing, private sector lessons for the public sector, procurement, project management, public sector, public services, Real-Time Information, reducing cost strategically, reforms, supplier relationships, Universal Credit

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Are officials pressing GPs to switch IT supplier to SystmOne?

Posted on 12/01/2012 | 5 comments

By Tony Collins

There’s concern in the NHS that Primary Care Trusts, which are due to be abolished next year, are putting GP practices under pressure to switch their IT systems to TPP SystmOne, a patient record system that is supplied by CSC under the National Programme for IT.

The conversions are being subsidised by taxpayers under unpublished NPfIT local service provider contracts. The concern of at least one aspiring Clinical Commissioning Group – which is one of the CCGs being formed under Andrew Lansley’s health reforms –  is that GP system conversions to TPP SystemOne under local service provider NPfIT contracts could leave CCGs a legacy of financial commitments that are as yet unknown.

One CCG contacted Campaign4Change to express concern that it may have uncertain financial commitments when it begins to take on SystmOne commitments next year. On 1 April 2013 PCTs and strategic health authorities are due to be abolished and their responsibilities passed to authorised CCGs.

Aspiring CCGs are now taking a close interest in PCT financial commitments because the Groups are due to inherit any of their local PCT deficits incurred from 1 April 2011 to 31 March 2013.

At present, GP practices receive PCT funding whether they take replacement SystmOne patient record technology from CSC  under the NPfIT or acquire new IT under a scheme known as GP Systems of Choice.

But the Group’s spokeswoman said that PCTs are putting pressure on GP practices to replace their systems with SystmOne. She said it’s because it can cost PCTs less – or nothing – for a GP switch to SystmOne under NPfIT-funded local service provider contracts. In comparison PCTs may have to pay costs such as hardware maintenance when GPs acquire systems under GPSoC.

Incentives for GPs to switch IT supplier

Our inquiries show that at least one PCT has received what it called “incentives” from its strategic health authority for GP practices to change computer systems, according to the PCT’s response to an FOI inquiry. The FOI response said: “The PCT can confirm that the incentives passed to [GP] practices to change computer systems as follows”.

It went on to say that its strategic health authority gave the PCT a £10,000 implementation fee [for each GP practice that changed its systems]. The PCT passed £3,000 of the £10,000 to the GP practice to part fund its implementation costs.

The PCT’s preferred GP system supplier was SystmOne, as supplied by CSC.

What happens when CSC’s NPfIT contract expires in 2015?

At that time Clinical Commissioning Groups may have to pay whatever costs are levied because GP practices with SystmOne could be reluctant to switch systems again, said the CCG spokesperson.

The Department of Health’s Informatics Directorate, which has subsumed NHS Connecting for Health, has confirmed that the prices it pays CSC for TPP installations are confidential.

Said a DH spokesperson “While prices within the LSP [Local Service Provider] contracts are commercially confidential we are in partnership with Intellect, the Technology Trade Association, to develop an open and transparent approach to costs and quality, as part of working to create a vibrant marketplace.”

A spokesperson for CSC said  “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.”

The spokesperson said the comments applied to TPP as it is “a supplier to us working on the National Programme”.

Department of Health response

When asked if GP practices are taking on non-transparent NPfIT commitments for TPP systems, the DH spokesperson said “If a GP practice chooses to take a system under an LSP contract they are made fully aware of the product they are taking and the length of the contract.

“We are committed to ensuring transparent and trusting working relationships between suppliers and their NHS customers.”

Asked whether GP practices that choose GPSoC systems cost the PCT more than TPP acquired through the LSP contracts, the DH spokesperson said “ It is up to the GP practice as to whether they choose a system through GPSoC or through the LSP contracts.

“The GPSoC PCT/ Practice agreement provides a mechanism for GPs to raise and resolve any concerns they may have.”

Comment

Centrally-funded incentives to PCTs to encourage GPs to switch to SystmOne as supplied by CSC under the NPfIT keep alive one of the original objectives of the national programme, which was to have health IT dominated by a few suppliers that would be under firm central control.

But that strategy creates an imbalance in the health IT market, inhibits open competition and leaves the NHS with unquantifiable future costs given that SystmOne is being supplied under NPfIT contracts that are secret.

Favouring central control, Labour created the NPfIT. In contrast the coalition favours decentralisation so it makes sense for GPs to have a genuine choice of suppliers, with the funding PCTs remaining neutral on the decision.

TPP SystmOne is good enough to compete freely in the open market. It does not need a leg up from the PCT or the Department of Health – just for the sake of keeping a part of the original NPfIT alive.

 

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Posted in Campaign4Change, IT projects, NHS, npfit, openness and transparency, outsourcing, procurement, public sector, public services, reforms, supplier relationships

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

Posted on 11/01/2012 | 7 comments

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?

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Posted in Campaign4Change, change management, Government IT, health, improving communications, IT projects, managing change, managing outsourced services, NHS, npfit, openness and transparency, operational issues, outsourcing, private sector lessons for the public sector, project management, public sector, public services, risk

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CSC to change hands in 2012?

Posted on 03/01/2012 | 1 comment

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”.

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Posted in Campaign4Change, change, change management, Government IT, health, IT projects, managing change, managing outsourced services, NHS, npfit, outsourcing, procurement, project management, public sector, public services, reducing cost strategically, supplier relationships

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