Category Archives: private sector lessons for the public sector

Big IT suppliers and their Whitehall “hostages”

Posted on 30/01/2013 | 6 comments

By Tony Collins

Mark Thompson is a senior lecturer in information systems at Cambridge Judge Business School, ICT futures advisor to the Cabinet Office and strategy director at consultancy Methods.

Last month he said in a Guardian comment that central government departments are “increasingly being held hostage by a handful of huge, often overseas, suppliers of customised all-or-nothing IT systems”.

Some senior officials are happy to be held captive.

“Unfortunately, hostage and hostage taker have become closely aligned in Stockholm-syndrome fashion.

“Many people in the public sector now design, procure, manage and evaluate these IT systems and ignore the exploitative nature of the relationship,” said Thompson.

The Stockholm syndrome is a psychological phenomenon in which hostages bond with their captors, sometimes to the point of defending them.

This month the Foreign and Commonwealth Office issued  a pre-tender notice for Oracle ERP systems. Worth between £250m and £750m, the framework will be open to all central government departments, arms length bodies and agencies and will replace the current “Prism” contract with Capgemini.  

It’s an old-style centralised framework that, says Chris Chant, former Executive Director at the Cabinet Office who was its head of G-Cloud, will have Oracle popping champagne corks. 

“This is a 1993 answer to a 2013 problem,” he told Computer Weekly.

In the same vein, Georgina O’Toole at Techmarketview says that central departments are staying with big Oracle ERP systems.   

She said the framework “appears to support departments continuing to run Oracle or, indeed, choosing to move to Oracle”. This is “surprising as when the Shared Services strategy was published in December, the Cabinet Office continued to highlight the cost of running Oracle ERP…”

She said the framework sends a  message that the Cabinet Office has had to accept that some departments and agencies are not going to move away from Oracle or SAP.

“The best the Cabinet Office can do is ensure they are getting the best deal. There’s no doubt there will be plenty of SIs looking to protect their existing relationships by getting a place on the FCO framework.”

G-Cloud and open standards?

Is the FCO framework another sign that the Cabinet Office, in trying to cut the high costs of central government IT, cannot break the bond – the willing hostage-captive relationship –  between big suppliers and central departments?

The framework appears to bypass G-Cloud in which departments are not tied to a particular company. It also appears to cock a snook at the idea of replacing  proprietary with open systems.

Mark Thompson said in his Guardian comment: 

– Administrative IT systems, which cost 1% of GDP, have become a byword for complexity, opacity, expense and poor delivery.

– Departments can break free from the straitjackets of their existing systems and begin to procure technology in smaller, standardised building blocks, creating demand for standard components across government. This will provide opportunities for less expensive SMEs and stimulate the local economy.

– Open, interoperable platforms for government IT will help avoid the mass duplication of proprietary processes and systems across departments that currently waste billions.

–  A negative reaction to the government’s open standards policy from some monopolistic suppliers is not surprising.

Comment

It seems that Oracle and the FCO have convinced each other that the new framework represents change.  But, as Chris Chant says, it is more of the same.

If there is an exit door from captivity the big suppliers are ushering senior officials in departments towards it saying politely “you first” and the officials are equally deferential saying “no – you first”. In the end they agree to stay where they are.

Will Thompson’s comments make any difference?

Some top officials in central departments – highly respected individuals – will dismiss Thompson’s criticisms of government IT because they believe the civil service and its experienced suppliers are doing a good job: they are keeping systems of labyrinthine complexity running unnoticeably smoothly for the millions of people who rely on government IT.

Those officials don’t want to mess too much with existing systems and big IT contracts in case government systems start to become unreliable which, they argue, could badly affect millions of people.

These same officials will advocate reform of systems of lesser importance such as those involving government websites; and they will champion agile and IT-related reforms that don’t affect them or their big IT contracts.

In a sense they are right. But they ignore the fact that government IT costs much too much. They may also exaggerate the extent to which government IT works well. Indeed they are too quick to dismiss criticisms of government IT including those made by the National Audit Office.

In numerous reports the NAO has drawn attention to weaknesses such as the lack of reliable management information and unacceptable levels of fraud and internal error in the big departments. The NAO has qualified the accounts of the two biggest non-military IT spending departments, the DWP and HMRC.

Ostensible reformers are barriers to genuine change.  They need to be replaced with fresh-thinking civil servants who recognise the impossibility of living with mega IT contracts.

Mark Thompson’s Guardian article.

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Posted in Agile, Campaign4Change, Capgemini, change management, Cloud, Cloud Computing, cost avoidance, cost reduction, culture, DWP, G-Cloud, Government IT, HMRC, innovation, managing change, managing outsourced services, open source, open standards, operational issues, Oracle ERP, Politics, private sector lessons for the public sector, procurement, project management, reducing cost strategically, supplier relationships

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We spend more on IT per capita than any other government – Maude

Posted on 08/11/2012 | 3 comments

By Tony Collins

Cabinet Office minister Francis Maude, in a speech at the FT Innovate Conference on 6 November 2012, said:

“In the last decade our IT costs have gone up – while our services remained patchy. According to some estimates, we spend more on IT per capita than any other government.” Estimated annual IT spend in the public sector is between £14bn and £20bn.

And is the spend worthwhile?

“The same people who do their shopping, banking and social networking online are still interacting with Government on the phone, in person or on paper at less convenience to them and more cost to us…

“Government provides more than 650 transactional services, used about 1 billion times every year – but presently there are only a handful where a large majority of people who could use the online option do so.

“Half don’t offer a digital option at all – and apart from a handful of services, if there is a digital option few people use it because it’s not a sufficiently fast or convenient option.

Car tax online – under-used

“In some cases users try online and then have to revert back to other channels – in 2011 around 150 million calls coming into government were self-reported as avoidable.

This leaves us with a situation where, for example, three-quarters of people use the internet for car insurance, but only half buy car tax online.

“This is simply not good enough …”

GOV.UK

He praised the agile-based GOV.UK government website as easier to use and faster than Directgov and Businesslink which it replaces.

Mosquitoes

The Cabinet Office is also reducing the “incomprehensibly large number of Government websites”  – down from 424 to 350 in the last year.

“We closed a site dedicated to British mosquitoes – no doubt mosquitoes is a serious issue. We just didn’t feel it warranted a whole website.”

£15,000 to change a line of web code

“Departments can be asked to pay £15,000 to change a single word on a website because they are locked into legacy contracts negotiated at a time when the digital capacity lay almost entirely outside government.

“This is changing. We are moving away from legacy IT and our reliance on a few large System integrators. And introducing smaller contracts; shorter terms; a more diverse supplier community that is welcoming to SMEs; open standards; open source; more use of commodity. These are the new parameters.”

Francis Maude’s speech in full.

 

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Posted in change, change management, cost reduction, Government IT, managing change, private sector lessons for the public sector

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A mega-outsourcing plan in Cornwall beset by naive fanaticism?

Posted on 01/10/2012 | 6 comments

By Tony Collins

Comment and analysis

An inner circle of councillors at Cornwall council is rushing plans to sign a big outsourcing deal despite a council vote against it.  The aims of the deal include an IT-based transformation of services,  the creation of “up to” 500 new jobs and tens of millions of pounds in savings – all too good to be true? 

The warning signs are there. The council’s remarkable naivety,  a hurried enthusiasm for signing a deal, and a confident waving aside of internal and external concerns,  may be early indications of a possible disaster.  An internal report warns of a potential “catastrophe” over service delivery.

 If all turns sour could accusations of maladministration follow? Is there still time for the full council to stop the inner circle from pressing ahead with a contract signing?

Major IT suppliers have some exceptional salespeople. They don’t merely sell hardware, software and services. They inspire. They rouse to action. Their promises are believable because they believe them with a conviction that can be contagious.

Joe Galloway might have been a one-off.  He was managing director of a part of one of the world’s largest IT companies EDS (now HP).  He helped to strike a CRM [Customer Relationship Management] deal with BSkyB in 2000. The contract ended in a £709m legal dispute in which Galloway was a main witness for HP. The judge in the case of BSkyB v HP found that some of Galloway’s evidence was untrue.

He demonstrated an “astounding ability to be dishonest, making up a whole story about being in St John [part of the Virgin Islands], working there and studying at Concordia College. EDS properly distance themselves from his evidence and realistically accept that his evidence should be treated with caution,” said the judge.

The judge also said

“I am driven to the conclusion that he proffered timescales (on the CRM project) which he thought were those which Sky desired, without having a reasonable basis for doing so and knowing that to be the position… I consider that he acted deliberately in putting forward the timescales knowing that he had no proper basis for those timescales. At the very least he was reckless, not caring whether what he said was right or wrong.”

During the High Court hearing, when HP discovered Galloway’s dishonesty, it sacked him.

He had held a senior position at EDS and the company’s customer BSkyB believed what he had said.  The case cost HP £318m plus tens of millions of pounds in legal fees – and the dispute lasted more than seven years. HP, it could be said, became a victim of some of the statements made by one of its executives.

The point about mentioning the case is that supplier promises, even if made with the best of intentions, may in the end come to nothing – or worse, a costly and prolonged legal dispute. Good intentions were behind the setting up of a joint venture between IBM and Somerset County Council – Southwest One – in 2007. The two sides are now immersed in a legal dispute that looks like going to court. Other councils have gone into joint ventures with major IT suppliers only to be disappointed.

So why do councils still want to sign mega outsourcing deals?

Councils keen to enter a large outsourcing deal become convinced that failures of such ventures elsewhere do not apply to them because their plans are unique. Indeed Cornwall council says on its website:

“Our strategic partnership is unlike any that has happened before, and as such, we cannot compare our programme accurately to others.”

But how do potential suppliers explain failing contracts?

In talks with potential customers IT companies correct or clarify reports in the media about outsourcing deals that have failed or are failing. It is customary during the bidding process for salespeople to take potential clients to reference sites where the representatives will agree that the media reports of a failing partnership were inaccurate or hyperbolic.

[Councils that have signed failing outsourcing deals will sometimes be reluctant to publicise the fact – and may put on a brave face in which they align themselves with the supplier; until a council changes hands, as at Somerset County Council, when a new administration is happy to publicise the mistakes of the last, and the full extent of the problems begins to emerge publicly.]

Cornwall council says on its website that it has received responses from its two shortlisted suppliers BT and CSC to specific negative press articles. The Council is now untroubled by any of the articles.

Says Cornwall

 “The feedback we received from the references contacted were balanced and gave us no significant causes for concern… We do need to reflect that these are press stories and we know only too well from our own experience that you can find negative reports on most major companies if you look for them.

“As global companies, it is to be expected that you will find a whole range of perspectives on each; it is important we take a balanced and independent view.  Please be assured that we will continue to work with both companies to deal with any issues that may arise throughout the procurement process and beyond…”

Articles BT and CSC were not asked to respond to included one in the Financial Times which said of NHS IT contracts:

“There are big doubts as to whether the government can fire BT and CSC, its two main suppliers, without paying huge sums in compensation.”

Cornwall says it continues to monitor press coverage, with the help of BT and CSC. It suggests that articles not yet written may be biased.

“… We actively monitor the press, and both companies [BT and CSC] make sure that they let us know if a negative or positive story is going to break, making sure that we understand the background. It is important to note that these articles do not always present an unbiased view,” says Cornwall.

Does setting up a “critical friend” group give a false assurance?

On the face of it Cornwall deserves praise for setting up an independent panel of “critical friends” to scrutinise the council’s outsourcing plans. It is called the “Support Services Single Issue Panel” which comprises mostly Cornwall councillors. It had help from, among others, council officers, and BT and CSC. The Panel also visited some customers of BT and CSC that the suppliers chose.

But when the Panel later expressed serious concerns about Cornwall’s outsourcing plans the council’s inner circle simply replied that it did not accept those concerns. This may strike some as a naive response to real risks.

This was part of the council’s response to the Panel:

“We do not accept the magnitude of some of the risks raised in the SIP [Single Issue Panel]. This includes the risk of service delivery failure and the risk of losing senior officers to the partner. Nor do we think there is a significant conflict between profitable trading and a public service commitment. We do not think our timescales are risking service delivery but will advocate delaying those timescales if this is judged necessary to protect the Council’s interests and/or to achieve greater contractual benefit…”

Is there a danger the council will use the setting up of the critical friend group to say that it has considered all the risks – even if it has considered then dismissed the most serious of them?

A poor supplier would be in breach of contract – but then what?

To the Panel’s concerns that the joint venture may fail to deliver, or costs escalate, Cornwall responds that if its suppliers do not deliver they will be in breach of contract.

But then what?

Said the council:

“The contract obliges the strategic partner to deliver. Any initial failure to deliver would be dealt with through a service credit arrangement. Persistent failures would represent a breach of contractual conditions which would lead to breach of contract where the Cornwall Partners would exit the contract.

“The cost for this would be picked up by the strategic partner. Financial difficulty is covered by a guarantee that the parent company would step in and continue delivery. Costs are largely within our control…”

Is it straightforward to exit a contract after an alleged breach of contract? The Department of Health was in dispute with CSC over alleged breaches of contract on the National Programme for IT, NPfIT. CSC made it clear in its statements to US regulators that the DH was unable to exit the NPfIT contracts without large payments. CSC and the Department ended up accusing each other of breaches of contract which made negotiations for a settlement long and costly.

Heading for claims of maladministration?

Is Cornwall being naive when it says simply that after any breach of contract the council “would exit the contract”? In the past this has been the legal cycle of events in some major legal disputes on IT contracts

– Customer alleges breach of contract

– Supplier makes counter-claim

– Customer withholds money

– Supplier instigates legal action

– Customer wishes to exit contract but cannot because of potential costs, counter-claims and need for supplier’s cooperation to maintain existing services.

– Long and costly settlement negotiations – which is good for lawyers – while service delivery remains in the “hold” position, unresponsive to changes that may need to be made or remedial action that may need to be taken.

International IT companies are experts in the legal side of contracts and dealing with disputes. Do Cornwall’s ruling councillors believe that the council’s expertise and legal advice would trump the supplier’s in the event of an alleged breach of contract?

When Cornwall says that in a breach of contract it would exit the contract and “the cost for this would be picked up by the strategic partner”, do the council’s ruling councillors trust that the supplier would say to the council in any dispute, “Let us know your costs of exiting the contract and we’ll settle up.”

There is another worrying sign of Cornwall’s apparent naivety. The council says “The costs would only escalate if the Cornwall Partners make changes to the services required.”

Unforeseen change is endemic in the public sector: governments change, policies change, legislation changes, organisations change, particularly the NHS which is a potential party to Cornwall’s outsourcing plans.

Is any public authority that signs up to a large and complex outsourcing deal on the basis of ‘no unforeseen change’ leaving itself open to accusations of maladministration?

Has Cornwall’s democratic process broken down?

The most extraordinary single thing about Cornwall’s outsourcing plans is that, at a full council meeting on 4 September, a majority of councillors voted against a deal but the inner circle is going ahead anyway.

Says the council’s website: “A motion calling on Cornwall Council to change its decision to enter into a partnership with the private sector to deliver a range of support services was supported by a majority of 17 Members following a three hour debate at County Hall on 04 September.”

[The motion was put and seconded by two councillors, Andrew Wallis and Andrew Long, who are not members of the major political parties.]

In dismissing the vote of the council, a spokesman for Cornwall’s pro-outsourcing group said

“All the concerns which have been raised today have already been considered by the Cabinet… This is a very complex proposal and unfortunately the decision by Members not to move into private session meant that we were unable to share the detailed confidential information they needed to make an informed decision”.

Should the Council rush to sign a deal?

Somerset County Council’s joint venture was characterised by a rush to sign, which culminated in the signing at 2am at the weekend. The failed NHS IT plan was also notable among potential suppliers for the haste before the signing of contracts, as was the failed Firecontrol contract. Is Cornwall’s deal being rushed? Cornwall’s Support Services Single Issue Panel said

“The timetable restrictions placed on the SIP [Single Issue Panel] has condensed the available time such that this report has had to be compiled within one working day. Had the timetable slipped by just that one day it is certain that no report would have been submitted.”

The Panel also said

“The risk is that this timescale is far too short for detailed evaluation and due diligence to be carried out. This is a significant value contract. The estimated value of the contract in the Prospectus for Cornwall …was £210m to £800m. The current estimated value is not known to the Panel…”

The council’s inner circle concedes that its timescales are “tight but achievable”.

Conclusion

When outsourcing plans have taken up much time and money there is always a danger a contract will have to be signed to justify the effort.  But would the signing of a mega deal at Cornwall be a triumph of ideology over objective reasoning?

One has to wonder how a mega outsourcing deal can improve services, provide a good profit margin for an international IT company, save the council money and create hundreds of jobs. Doesn’t something have to give? Is there so much inefficiency, and so much money floating around the council and its potential NHS partners, that a major supplier can cut tens of millions of pounds, spend to transform services, and make money?

In evidence to MPs last year SOCITM, which represents ICT professionals in councils, said of outsourcing ICT that it “carries many risks for local authorities and can come at a heavy price”.

Some praise for Cornwall’s approach

Cornwall’s ruling councillors should be applauded for two things:

– There is every sign that the inner circle’s plans are motivated are by the best of intentions: to save money, improve services, protect existing jobs and create more.

– Although some criticise the council’s lack of openness, the inner circle is not hiding all of its papers and discussions in a blanket of secrecy. It has published the report of the “critical friend” Panel and the council’s responses. There is much information – and links – on the planned deal on the council’s website. This doesn’t always happen in the run-up to a large public sector outsourcing contract.

But good intentions do not make up for naivety and a wish for outsourcing that may border on fanaticism – the pursuit of a Cause whatever the dangers.

If a majority of councillors at a full council meeting cannot stop the signing of a mega-deal can anyone?

It appears that a tiny group within the council will make the final decision – although it is arguably the most momentous decision in the council’s history.

Says the council: “The final approval of, and the date for, the issuing of the said invitations to submit final tenders be determined by the Chief Executive in consultation with the Leader of the Council and the Portfolio Holders for Environment, Waste Management Policy and Shared Services, Health and Wellbeing and Human Resources and Corporate Resources.”

The final decision is due next month. If Cornwall enters a deal in which it relies on the contract to protect services and the council’s reputation is it being naive? Could it end up facing accusations of maladministration, particularly after side-lining a council vote against the deal?

**

Thank you to Dave Orr and a journalist in Cornwall for your emails on Cornwall’s outsourcing plans.

Council says its joint venture is failing – BBC

Some papers on Cornwall’s outsourcing plans

Local MP’s website on Southwest One.

An ill-judged outsourcing?

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Posted in BT, BT Health, Campaign4Change, CSC, legal disputes, local government, managing outsourced services, outsourcing, oversight, Politics, private sector lessons for the public sector, public sector, public-private partnerships, risk, supplier relationships

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Government Digital Service sets an example on cloud

Posted on 18/09/2012 | Leave a comment

By Tony Collins

The Government Digital Service is putting its money where its mouth is. A leading public sector advocate of the cloud, GDS says that the first cloud hosting provider it is working with is Skyscape.

Mark O’Neill, Head of Service Delivery and Innovation at GDS, which is a team of innovators based at the Cabinet Office, writes that GDS is building GOV.UK, currently in beta at http://www.gov.uk.

“In the past, we might have looked at dedicated servers or possibly even our own rack in a datacentre somewhere. We would then have had to decide if we wanted to own the servers or if we should rent them some time to break out amortisation tables and spreadsheets.

“We would have to make sure that we were not locked in if we needed to move servers, so it would be necessary to negotiate break clauses in contracts; we would need to arrange access to server rooms for security accreditation; we would need to… well, the list goes on and on.

“The cloud has transformed all of this. Through the G-Cloud framework we are able to simply and rapidly buy highly reliable, highly cost-effective hosting services.

“Colleagues in GDS put together a statement of our requirements based on the experience we had gained during the alpha and the ongoing beta releases of GOV.UK and experience from the delivery of other major online services, both public and private sector.

“We then tested that statement of requirements against the list of suppliers on the G-Cloud framework. This allowed us to sift the number of potential providers down to four who met the statement of requirements.

“We then invited each of the suppliers in and used a consistent set of questions to explore their ability to meet our needs, their approach to operational service delivery and how they could provide flexible, scalable services through the cloud.

“To meet the needs of GOV.UK, we are planning to work with a number of different Infrastructure as a Service providers. We are happy to announce that the first cloud hosting provider we are working with is Skyscape.

“We have used G-Cloud previously for a number of small projects covering services like hosting and operations. We were very happy to discover that letting a major service contract for our flagship platform, GOV.UK, was equally straightforward and quick.

“Whilst the GOV.UK contract is the largest we have let so far, it is one of an increasing number we are letting through G-Cloud, which is now our standard way of procuring infrastructure services… If you have not used G-Cloud before then take a look, you will be pleasantly surprised. In the words of a song of my youth, ‘It was easy. It was cheap. Go and do it!'”

Introducing a new supplier – Skyscape

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Posted in Campaign4Change, Cloud, cost reduction, efficiency savings, Government IT, IT projects, private sector lessons for the public sector, procurement, public sector, public services, reducing cost strategically

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Fujitsu on blacklist? Cabinet Office issues statement

Posted on 14/09/2012 | Leave a comment

By Tony Collins

The Cabinet Office has denied it is operating a blacklist of poorly-performing suppliers – but says that suppliers deemed high risk may find it “more difficult to secure new work with HMG”.

In its statements to Kable’s Government Computing, the Cabinet Office also made it clear that suppliers deemed high risk can redeem themselves.

“Mechanisms exist to remove suppliers from the High Risk classification when performance improves dramatically.”

This suggests that Fujitsu would no longer be deemed high risk if it settled its dispute with the government over the NPfIT. Fujitsu has been seeking £700m after the failure of its NPfIT contract. A settlement has proved elusive and the case may go to court.

The FT said on Tuesday that Fujitsu has “in essence” been blacklisted. Neither Fujitsu nor the Cabinet Office are denying that Fujitsu has been put in the high-risk classification.

A Cabinet Office spokesman told Government Computing:

“We cannot comment on the status of individual suppliers, but we are absolutely clear that this Government will not tolerate poor supplier performance.

“We want to strengthen our contract management by reporting on suppliers’ performance against criteria and sharing the information across Government. This means that information on a supplier’s performance will be available and taken into consideration at the start of and during the procurement process (pre-contract). Suppliers with poor performance may therefore find it more difficult to secure new work with HMG.

“This policy will include the identification of any high-risk suppliers so that performance issues are properly taken into account before any new contracts are given.

“High-risk classification is based on material performance concerns. Suppliers deemed high risk will be subject to particularly close scrutiny when awarding new work.

“Overall, this is simply good commercial practice and in line with how we are improving the way government does business and emulating the best of the private sector.”

The spokesman said that contract extensions are within scope of the poor-performance policy but will be tackled in a proportional way – depending on the overall cost of the contract, the relative cost of extending it, and how critical the extension is.

The high-risk classification “applies to strategic suppliers who do business across Government, and is not limited to any specific sector”. Frameworks are also included.

“Our performance policy will apply to central government departments, where we have direct control of spending,” said the spokesman. But it is still unclear what direct control the Cabinet Office has of departmental spending.

That said, the Cabinet Office announced in June spending controls on central government that “allow government to act strategically in a way it never could before”. It added that there were “strict controls on ICT expenditure”.

That means that large ICT contracts to be awarded by departments must go to the Cabinet Office for approval; and the Cabinet Office has introduced a single point of contact for major suppliers, which means that the performance of strategic suppliers will be viewed in the round.

In the past suppliers have been able to tell departments that were about to award contracts that rumours of alleged poor performance in other departments were incorrect.

Comment

While not a blacklist the high-risk classification seems a good idea. Francis Maude, the Cabinet Office minister, is sending a message to suppliers that if they take legal action against a department it could stop them getting business across Whitehall.

But he’s also saying in effect: settle and we’ll remove you from the high-risk list.

Is there a danger that the power could swing too much in the government’s favour, allowing departments to poorly manage contracts with impunity? Probably not. Suppliers will have to take the high-risk list into account when signing deals.

They know that, in the insurance industry for example, if they mess up one contract word will soon get around.

Poorly-performing suppliers risk being frozen out of Government business – Government Computing

Fujitsu banned from goovernment contracts?

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Posted in Campaign4Change, cost reduction, Fujitsu, Government IT, innovation, legal disputes, Major Projects Authority, operational issues, private sector lessons for the public sector, procurement, supplier relationships

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Universal Credit – a chance to do things differently.

Posted on 13/09/2012 | 2 comments

By Tony Collins

Comment

In his comment on the article “Is Univeral Credit really on track – the DWP hides the facts”  Nik Silver asks in essence: why shouldn’t progress reports by IBM and McKinsey on Universal Credit be kept between the parties and not made public?

He says that criticism is usually helpful if the two parties can speak frankly without external interference.

It’s a reasonable point – if you are judging the public sector by the private sector’s standards. A private company would not make public consultancy reports it has commissioned on the progress or otherwise of a particularly costly project. Why should it?

Private v public sector approaches on big projects

But if the project goes wrong the private sector board will be accountable for the loss of money, or opportunity, or both. A private company’s board cares about a failed project because it cares about the bottom line.  If there is cogent criticism in a consultancy report, it will ignore that criticism at its peril.

Those standards don’t always apply in the public sector. There is no bottom line to worry about, no individual responsibility. What matters is reputation. We have seen too many public sector failed projects where the desire to maintain face, politically and internally, distorts the truth on projects.

Several ministers were proclaiming the £11bn NHS IT plan, the NPfIT, to be a success while it was going disastrously wrong. On the Rural Payment Agency’s IT-based Single Payment Scheme Parliament discovered that bad news was covered up. Ministers Lord Bach and Lord Whitty said they were misled by their officials.

When the truth financially came out it was too late to turn around the project cheaply and easily. The Environment, Food and Rural Affairs Committee said that if such a failure had happened at a major plc, the board would have faced dismissal.

Cover up when a project goes wrong also happens in the private sector. But case studies indicate that when a private sector board finds out it has been lied to, it does its utmost to put things right. The bottom line is the motivation.

In the public sector it sometimes happens that nothing is done to put serious problems right because there is no acceptance there are any serious problems. Nobody is allowed to accept internally that things are going wrong. A state of unreality exists. Some know the project is doomed.  Some at the top think it’s on track. The truth in the consultancy reports remains hidden, even internally. [The DWP couldn’t find the IBM and McKinsey reports when we first asked for them.]

Like Nik Silver, we would like Universal Credit to succeed. We are not sure it will, because the truth is not coming out. Unless serious problems are admitted they cannot be tackled.

Public sector

In the public sector a disaster does not usually become apparent until things are so bad the seriousness of the problems cannot be denied. It may be that Universal Credit will be a success if it is delayed or changed substantially in scope. That won’t be possible without reports such as IBM’s and McKinsey’s being published.  In the meantime Iain Duncan Smith, the Work and Pensions Secretary, will  continue to be given papers showing that all is well.  If the IBM and McKinsey reports are published now, and they contain some serious high-level criticisms, perhaps impinging on policy and excessive complexity, the ills may be cured or at least tackled. If these and other progress reports are made public now the corrigible criticisms could create a political climate to address those ills.

At present Universal Credit looks like so many IT-based change programmes of the past.  One side says the project is becoming a disaster and the other side says all is well.  The truth I am sure is that some things look good and some things bad. The bad probably won’t be addressed unless Parliament, together with all those who have a professional interest in the project – and the public – know about it.

The way of the past is to keep everything hushed up until it’s too late. Now there’s a chance to do things differently.

Is Universal Credit really on track? – The DWP hides the facts.

Nik Silver’s website

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Posted in Agile, Campaign4Change, change management, Government IT, IBM, IT projects, npfit, openness and transparency, operational issues, private sector lessons for the public sector, project management, public sector, public services, Universal Credit

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Fujitsu banned from Whitehall contracts?

Posted on 11/09/2012 | 6 comments

By Tony Collins

The FT reports today that Fujitsu has been deemed for the time being too high risk to take on new public sector deals, along with another unnamed IT services contractor.

The newspaper quotes “people close to the situation”.

It’s likely the article is correct in naming Fujitsu as a supplier that is deemed by the Cabinet Office to be high risk. It is unclear, though, whether being categorised as “high risk” by the Cabinet Office amounts to a ban for the time being on future government contracts.

The FT says that Fujitsu has “in essence” been blacklisted.  “The Cabinet Office refused to confirm the identities of either of the companies that have in effect been blacklisted,” says the FT.

It is also unclear whether the Cabinet Office could exclude a supplier from shortlists even if it wanted to. The Cabinet Office awards few large IT contracts of its own; contracts are awarded by departments, and the Cabinet Office has no unambiguous power to exclude particular suppliers from shortlists drawn up by autonomous departments that take their own decisions on which companies to award contracts to.

Mega-contracts to be awarded by central departments must, however, must go to the Cabinet Office’s Major Projects Authority for approval.  The Authority could in theory require that Fujitsu be excluded from a shortlist before it gives approval.  This blacklisting would require Francis Maude, the Cabinet Office minister, and the minister signing the mega-contract to be in agreement.

If a departmental minister refused to exclude  a supplier from a bid or shortlist because of its past performance what could the Cabinet Office do, especially if the minister argued that the supplier’s continued work , in the form of a renewed contract, was not just desirable but essential?

The FT says that the latest initiative to ban companies with troubled histories in government from new contracts is being spearheaded by Bill Crothers, formerly of Accenture.

He was appointed as chief procurement officer two months ago to inject private sector rigour into Whitehall’s contracting system. He is quoted in the FT as saying that his new approach would allow past performance to be taken into account for the first time when a company is bidding for a fresh tender.

Comment

The idea of a blacklist is a good one; indeed it would be the most important innovation in government IT since the general election. For decades MPs and others have said that under-performing suppliers should not be awarded new contracts. Now at last that may be happening.

After Fujitsu sued the Department for Health for about £700m over the NPfIT a settlement has been elusive, despite the intervention of the Cabinet Office. It is likely that Fujitsu UK’s hands will have been controlled by its parent in Japan.

Fujitsu’s performance on the “Libra” contract for IT in magistrates’ courts was strongly criticised by MPs and the National Audit Office which exposed repeated threats by the supplier to withdraw from the contract unless its terms were met.

Fujitsu could circumvent any blacklisting by becoming a subcontractor on a mega-contract, as it is at HMRC on the “ASPIRE” contract and at the DWP where its hardware runs benefit systems. Or a department could ignore the Cabinet Office and award non mega-contracts to Fujitsu.

We hope the Cabinet Office finds a way to make its blacklist – if that is what it is – stick. A  private sector company would not award a new contract to a supplier that had bitten in the past. Why would the public sector?

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Posted in EU procurement, Fujitsu, Government IT, IT-related failures, legal disputes, Major Projects Authority, private sector lessons for the public sector, procurement, project management, public sector, supplier relationships

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More agile-thinkers like Roo Reynolds please

Posted on 15/08/2012 | Leave a comment

By Tony Collins

There’s a useful “keep-it-simple” article on agile software development principles by Roo Reynolds who a product manager at the Government Digital Service.

Reynolds quotes Marissa Mayer, former Google product manager, now Yahoo CEO, who said that there are two types of developer: those who seek perfection and those who seek something working today that they can improve on tomorrow.

“You probably want to work with the second sort of developer as much as possible,” says Reynolds. He quotes Voltaire as saying ‘the best is the enemy of the good’.  From Reynolds’ article:

“We start with a Minimum Viable Product, asking ourselves, what’s the simplest thing that could possibly work? We aim to have a working product, albeit a limited one, within a week or two.

“Having something you can point at and get feedback on as soon as possible is definitely better than attempting to polish something to perfection without anyone being able to tell you whether what you’re making is actually what they need.”

He warns against using made-up data, such as Lorem Ipsum text, because:

– it causes existing assumptions to be reinforced rather than challenged

– it lazily misses an opportunity to iron out any difficulties in getting hold of the real data

He concludes that “nothing beats feedback from real users”.

“Testing products with real users is vital. We always start with user needs (generally captured as user stories) and in meeting those needs I’ve learned not to get too comfortable with any implementation until we’ve tried it with a range of real people. Best of all, it’s ok to be wrong. The best way of getting closer to being right is to test real ideas with real people.”

Comment

If these principles had been applied to the NPfIT it might never have been started.  The NPfIT launched with the principle: what’s the most complicated thing that could possibly work?

Too often assumptions were made on the basis of unrepresentative data such as patient records that were up-to-date, accurate and not duplicated. The NPfIT was tested on real users – but then the bad news was all but ignored.

If Reynolds had been advising on the NPfIT, and Tony Blair hadn’t been so gung-ho when he chaired a discussion on NHS IT at a meeting in Downing Street on 18 February 2002, perhaps billions would not have been wasted on the programme.

More like Roo Reynolds in government please.

@rooreynolds

Reynolds’ article, Government Digital Service.

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Posted in Agile, Campaign4Change, change management, cost reduction, e-health, Government IT, health records, IT-related failures, npfit, private sector lessons for the public sector, reducing cost strategically

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How to identify a high-risk supplier – Cabinet Office works out details

Posted on 25/07/2012 | 5 comments

By Tony Collins

Francis Maude, the Cabinet Office minister, has agreed mechanisms for officials to identify high-risk suppliers where “material and substantial underperformance is evident”.

On his blog Spend Matters, Peter Smith has published parts of a letter from Maude.

Where under-performing suppliers are identified “departments will be asked to engage with the Cabinet Office at each stage of any procurement process involving the affected supplier to ensure that performance concerns are taken fully into account before proceeding”.

The implication is that the Cabinet Office will draw up a blacklist of bad suppliers which departments will take account of when buying. Smith says that two suppliers are already on the blacklist.

Comment: 

For more than 20 years the trade press has identified the same suppliers in a succession of failed or failing IT-based projects but poor performance has never been taken seriously into account.

This is usually because the suppliers argue that the media and/or Parliament has got it all wrong.  Departments, it appears, will always prefer a potential supplier’s version to whatever is said in the media or in Parliament.

The Office of Government Commerce, now part of the Cabinet Office, kept intelligence information on suppliers but it seems to have made no difference in procurements.

It is unlikely the Cabinet Office’s blacklist will rule out any suppliers from a shortlist. As Smith says, suppliers will claim that any problem was all the fault of ministers or civil servants who kept changing their minds, were not around to make key decisions, or didn’t understand the nature of the work.

But still the blacklist is a worthwhile innovation. At least one big IT supplier has made a habit of threatening to withdraw from existing assignments when officials have refused to revise terms, prices or length of contract. The blacklist will strengthen the negotiating hand of officials.

The challenge for Maude will be persuading departments to take the blacklist idea seriously.

Peter Smith, Spend Matters.

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Posted in Campaign4Change, EU procurement, Government IT, innovation, IT-related failures, legal disputes, managing outsourced services, operational issues, private sector lessons for the public sector, supplier relationships

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All change for police IT – again?

Posted on 18/07/2012 | 4 comments

By Tony Collins

Police IT is supposed to have undergone a transformation over the past 13 years, thanks in part to a Home Office national police IT programme called NSPIS – for which Securicor Information Systems was awarded contracts worth more than £140m.

NSPIS contracts awarded in 1999 included:

– Case preparation: acquisition and delivery of forms, photographs, police reports, statements and other materials required in court for trying cases.

– Custody: booking in, tracking and monitoring of individuals held in police cells.

– Command and control: coordination and management of police operations.

– Crime: analysis of case histories and crime statistics.

With some reluctance, dozens of police forces took NSPIS systems with mixed success. The national transformation did not happen, though large sums were spent. NSPIS [National Strategy for Police Information Systems] was followed by another national IT-led transformation programme ISIS [Information Systems Improvement Strategy].

Now the government plans another police IT-led transformation. It is setting up a new company to improve police IT [as if the last so-called transformation programmes had not existed].

In a joint statement, the Home Office and the Association of Police Authorities say the new company will give strategic ICT advice to forces and procure, implement and manage ICT solutions for forces.

The company will “help police forces to improve their information technology and get better value for money from contracts”.

The police ICT company Ltd is now owned by the Association of Police Authorities and the Home Office but will be handed over to police and crime commissioners following elections in November.

In setting up the company Nick Herbert, the policing minister, says

“While some police IT is good, such as the new Police National Database, much of it is not.  There are 2,000 systems between the 43 forces of England and Wales, and individual forces have not always driven the most effective deals.

“We need a new, more collaborative approach and greater accountability, utilising expertise in IT procurement and freeing police officers to focus on fighting crime.

“By harnessing the purchasing power of police forces, the new company will be able to drive down costs, save taxpayers’ money, and help to improve police and potentially wider criminal justice IT systems in future.”

Chairman of the Association of Police Authorities Councillor Mark Burns-Williamson says that when the new company is handed over to police and crime commissioners “we want it to be fit for purpose and efficient in delivering IT tasks”.

The aim of the new company, says the Home Office and the Association of Police Authorities, is to “free chief officers from in-depth involvement in ICT management and enable greater innovation so officers have access to new technology to save time and ensure better value for the taxpayer”.

Police IT in a poor state?

UKAuthority.com reports that Tom Winsor, the new chief inspector of police, is “staggered” at the ineffectiveness of police IT.

Giving evidence to MPs he said

“I was staggered when I did my field work, in the police pay review, at just how low-tech the technology of the police is in volume crime and so on. It is extraordinary. They have computer screens that resemble those that we saw in the early 1980s. I mentioned the police officers doing their own two-finger typing and so on.

“It is the most extraordinarily archaic system. I think it is part of HMIC‘s role to expose inefficiency – and that surely is massively inefficient.”

Winsor said he had watched police officers standing in a queue for up to four hours at a time to book in a suspect. The private sector would not tolerate such delays, and would quickly change the system, he said.

Comment

With 43 forces buying their own IT it seemed sensible for the Home Office to try and introduce national systems.  As Neil Howell, the then IT Director at Hampshire Police Authority, said in March 2006, there was “political pressure to take up some systems – e.g. NSPIS Case and Custody ” but some national systems did not “match current level of functionality or requirements …”

In the NHS, several national IT-led transformation programmes preceded the NPfIT, but nobody in power wanted to know about the past when NPfIT was launched in 2003.

An extraordinary effort – and money – went into NSPIS  but police forces resented being told what to buy and in general were happy with own IT choices. Many were particularly happy with NSPIS rival systems from Canadian company Niche.

Perhaps the Home Office should accept that, apart from natural national systems such as the  Police National Database, Automated Numberplate Recognition, and the “Impact” intelligence sharing system, police IT is too complicated to be done nationally.

Mandating rarely works

Mandation rarely if ever works in the public sector. The Home Office and its agents cannot tell 43 autonomous police forces what technology to buy and implement.  Public bodies can, and do, circumvent mandation, sometimes by simply ignoring it, as National Audit Office reports point out.

The Department of Health  tried to tell trusts what to buy under the NPfIT and that didn’t work. Like police forces NHS trusts are largely autonomous.

Governments don’t have memories when it comes to failed IT-led transformation programmes. It may be good for civil servants and suppliers to learn new skills and experiment with IT on recycled transformation programmes.

But should suppliers learn at the expense of taxpayers? And should new ministers and civil servants keep launching new and exciting IT-led transformation programmes that fail as miserably as the last – giving excuses for a replacement set of ministers and civil servants to renew the cycle?

The Department of Health has finally learnt that what’s needed before the launch of any major  IT-led initiative is a frank appraisal of what has gone wrong in the past, and what can be learnt.  The DH achieves this in the “Impact Assessment” section of its latest IT strategy.  It’s not beyond the wit of police forces, the Home Office and the Association of Police Authorities to follow the DH’s example.

Unless they do, perhaps David Pitchford’s Major Projects Authority at the Cabinet Office should think twice before allowing large sums to be spent on new police IT.

Joint statement of Home Office and Association of Police Authorities

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Posted in outsourcing, Politics, private sector lessons for the public sector, procurement, project management, public sector, public services, public-private partnerships, reducing cost strategically

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