Category Archives: public sector

‘Penny wise and pound foolish’ to postpone IT project

By David Bicknell

Sometimes you make decisions over the future of IT systems in the public sector with the best intentions – but still you can’t win. Someone, somewhere, will be unhappy.

Yesterday, I mentioned that a $92m overhaul of a Department of Revenue system in Oregon had been postponed to save money. Now, it seems,  the postponement is a bad idea that will hamper legislators’ ability to make well-informed decisions.  

“I think it is penny wise and pound foolish, if I could use an old saw,” said Vicki Berger, co-chair of the committee that oversees state taxing and revenue policy, according to the Statesman Journal. “We have to bite the bullet. We have to get a better system. We have to know better, more viable information on what impacts our revenue stream.”

Richard Devlin, co-chair of the legislature’s Joint Legislative Audits, Information Management and Technology Committee, has reportedly characterised the announcement as a “nine-month delay” rather than a cancellation of the project.

“I don’t see that as an end to the project, because the need is very real. They need to upgrade their systems, and they will continue to work to that end,” said Devlin. “I can understand the counter-argument, that you do have antiquated systems in the Department of Revenue, but I think citizens in Oregon would want when we invest in this fully that we do it right,” he continued. “I would not want to spend $92 million and then have a project that doesn’t really work.”

Comment

It’s a sign of the times that you can get such polarised views over the future of an IT project, but it’s perhaps not surprising when the project is going to cost $92m. I think the current climate is likely to see cost/benefits for IT projects become an issue for many organisations, both in the public and private sectors, but especially in the public sector.

It doesn’t necessarily mean that IT projects are at risk, simply that those making decisions on new systems/upgrades are going to need hard evidence of the real change benefits to justify any decision they make to proceed.

US state government and defence IT projects face uncertain future

By David Bicknell

Local newspapers in the US are offering some insight into the cloudy future of two significant IT projects.

In Salem, Oregon, a planned $92 million upgrade of the state’s Department of Revenue computer system is reportedly on hold because the state can’t afford $13 million in start-up costs.

The Register-Guard website says local officials chose to put the  project on hold rather than ask legislators to make a choice between paying for the computer system and paying for public safety and human services.

The computer system is said to be responsible for processing $7 billion a year and 94 percent of Oregon’s general fund revenue, but officials are apparently concerned about its future effectiveness.

The agency’s ability to collect taxes rests on a “myriad of disparate, aging software applications and databases,” according to a 96-page business analysis the Department of Revenue produced in 2010.

Meanwhile,  in Beavercreek, Ohio, a US Air Force computer modernisation project which has already cost $1 billion, is said to be at risk of Washington defence cuts.

US Air Force officials have acknowledged that the Expeditionary Combat Support System project, on which at least $986.5 million has been spent, won’t be completed in 2016 as had been hoped. Work began in 2007, but the local Springfield News-Sun newspaper reports that the completion date has been repeatedly postponed because of delays.

Are officials pressing GPs to switch IT supplier to SystmOne?

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.

 

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

By Tony Collins

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Comment

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

Does hospital IT need airline-style safety certification?

FBI chooses Accenture for IT project to modernise its HR systems

By David Bicknell

Yesterday I mentioned the challenges that the FBI is having in bringing a case management IT project in on time.

It’s good to know then that the FBI will now be assisted in its ongoing delivery of IT by Accenture.  Not for the case management project, but for an enterprise resource planning (ERP) system  to support the FBI’s Human Resources Information System (HRIS).

The award, under a  General Services Administration IT schedule that provides technology support services to the FBI through a ‘Blanket Purchase Agreement’ (BPA) plus four task orders’ will enable Accenture Federal Services to oversee selection, installation, testing and support to the agency’s HR systems.  Accenture also will complete a fit gap analysis to determine possible future costs to replace the FBI’s current HRIS systems.

Accenture said that by modernising its Human Resources information System, the FBI ‘will be able to increase effectiveness and streamline processes. These improvements will help the FBI develop a modern, on-demand system for accessing personnel information.’

The contract, which includes one base year with four option periods, also requires Accenture to submit a report with recommendations the FBI can use to determine whether to customise software, re-engineer business processes or combine both options to support future needs.   
 
Accenture, as its press release puts it, will also be ‘eligible to receive additional task orders under the BPA.’
 

Agile approach ‘reduces risk’ but offers no delivery guarantee for FBI as Sentinel project slips again

By David Bicknell

A recent story by the US magazine InformationWeek Government has cast some doubt over whether a move to Agile development will necessarily bring IT projects in on time and to budget, despite the best intentions. Sometimes other technology factors, such as legacy hardware, come into play.

The report says an FBI project to develop a digital case-management system to replace outdated, paper-based processes has been further delayed, despite a move to use Agile development to hasten the project’s completion.

The system, dubbed Sentinel, is now due to go live in May, eight months later than the FBI planned when it embarked on the Agile development plan.

It follows a number of delays going back to 2006 in the plans to build a replacement for the FBI’s 17-year-old Automated Case Support system, which is used by agents and analysts to manage their cases.

 In 2006, Information Week Government reports, the FBI awarded Lockheed Martin a $305 million contract to lead development of Sentinel, but took back control of the project in September 2010 amid delays and cost overruns.

Then, the FBI said it planned to finish Sentinel within 12 months using Agile development. But that worked has slipped (the FBI had earlier pushed Sentinel’s deployment from September 2011 to January 2012), and a four-hour test of the system in October resulted in two outages, according to a report by  the Inspector General released in December which contains details of the Agile development’s sprints’ progress.

The FBI said the glitches  were down to overburdened legacy computer hardware and said the hardware will need to be upgraded to support Sentinel’s use across the agency, according to the Inspector General.

The report’s conclusion says:

The FBI’s transition to an Agile development approach has reduced the risk that Sentinel will either exceed its budget or fail to deliver the expected functionality by reducing the rate at which the FBI is spending money on Sentinel and by instituting a more direct approach to the FBI’s monitoring of the development of Sentinel.

!When we provided our initial draft of this report to the FBI in October 2011, we expressed concern that the rate at which the FBI was developing Sentinel’s functionality indicated the project was at risk of falling behind the FBI’s then planned January 2012 deployment date.

“In December 2011, after we completed our fieldwork for this report and after we provided the FBI with a revised draft report, FBI officials told us that the FBI extended the Sentinel deployment date to May 2012. While we have not had the opportunity to fully review the FBI’s plan to meet these revised completion dates, we continue to believe it will be challenging for the FBI to meet this latest goal for deploying Sentinel to all FBI users in this timeframe.

“It is too early to judge whether the FBI’s Agile development of Sentinel will meet its newly revised budget and completion goals and the needs of FBI agents and analysts. While the Sentinel Advisory Group responded positively to the version of Sentinel it tested, results from wider testing were not as positive. Also, none of the Agile-developed Sentinel has been deployed to all users to give them the ability to enter actual case data and assist FBI agents and analysts in more efficiently performing their jobs.

“Despite the FBI’s self-reported progress in developing Sentinel, we are concerned that the FBI is not documenting that the functionality developed during each sprint has met the FBI’s acceptance criteria.

“Our concerns about the lack of transparency of Sentinel’s progress are magnified by the apparent lack of comprehensive and timely system testing. Our concerns about the lack of transparency also extend to Sentinel’s cooperation with internal and external oversight entities, to which Sentinel did not provide the necessary system documentation for them to perform their critical oversight and reporting functions. We believe that this issue could be resolved, at least in part, with a revision to the FBI’s Life Cycle Management Directive to include standards for Agile development methodologies.”

Responding to the report the FBI said:

“The Federal Bureau of Investigation (FBI) appreciates the opportunity to review and respond to your draft report entitled, “Status of the Federal Bureau of Investigation’s Implementation of the Sentinel Project.”

“We are pleased with your conclusion that, by adopting an Agile development approach, the FBI bas “reduced its rate of spending on Sentinel” and instituted a more “direct approach to monitoring the development of the system’s functionality.”

“Indeed, as the FBI’s figures included in this Report demonstrate, while we have expended only 52% oftbe Agile development budget of$32.6 million. as of December 6 we had completed 88% of the required system functionality. The percentage of functionality completed has further increased during the time that has passed since your report was last updated.

“This accomplishment is significant. In mid-2010, the FBI charted a new course for completing the remaining two phases oftbe Sentinel program using an Agile development approach, which represented a substantial departure from its prior development activities. As a result, you concluded in this Report that the FBI is “expending significantly fewer dollars per month than it had in Phases 1 and 2 for the project.”

“In sum, we agree with your conclusion that the FBI’s transition to an Agile development approach has “reduced the risk that Sentinel will either exceed its budget or fail to deliver the expected functionality.” As you note, “at this point in time, the FBI does not foresee exceeding the $451 million budget to complete the Sentinel project.”

“With that in mind, we are mindful of the short delay we have recently encountered under our new” Agile” approach. The Sentinel development schedule has recently been extended by two months (from December 2011 to February 2012), and the FBI-wide deployment is now scheduled for May 2012, as described in this Report.

“This modest extension is due primarily to the need to implement a standard five-year “refresh” of computer hardware, so the Sentinel software will provide the required functionality as intended. Indeed, you have determined that, given the pace at which the program has proceeded under the Agile approach over the time period you reviewed, your estimate for completion is essentially the same – June 2012.”

Inspectorate General report

Agile for Universal Credit a good choice

Will companies be counting the cost of DIY IT in 2012?

By David Bicknell

I enjoyed this piece by Susan Cramm commenting on what she calls ‘DIY IT projects’ where business executives think they can meet their technology needs more efficiently by circumventing IT.  She suggests that these are almost always a bad idea, but adds that killing the project can be worse.

As she argues, ‘nobody wins in these do-it-yourself projects. The executive who sponsors the project puts his or her reputation on the line by promising outcomes dependent on technologies that he or she is ill-equipped to develop, implement, or manage. The IT executive finds him – or herself powerless, relegated to integration and support tasks without having had adequate resources and time allocated for the project. Meanwhile, the CFO watches dollars flying out the window as the budget for ill-conceived and poorly executed initiatives becomes a moving target.’

With managing consumerisation arguably the hottest topic for IT organisations, I wonder how many business (IT) projects that don’t effectively involve IT will turn out by the end of the year to have been failed projects that in today’s austere times, their companies can ill afford.

ConsumerizeIT

Cloud specialist claims China public sector IT success

By David Bicknell

It’s not too often you see a press release announcing the successful conclusion of a public sector IT project.

But it’s perhaps a sign of the times that there is such an announcement, and that it comes not from the West, but from the East. It’s in China.

China Intelligence which provides virtualisation technology application and cloud computing related consulting services, products, solutions and implementation service in China says it  has completed the third phase of a datacentre virtualisation project for the Hebei Maritime Safety Administration of China.

‘Hebei MSA’ is a governmental agency which oversees all matters related to the safety of the sea, including shipping, of  Hebei Province in the north of China. The project which began in October 2010 was completed in November 2011.

I have to admit I didn’t know too much about China Intelligence, but apparently, it’s a virtualisation and cloud computing specialist and a VMware partner  with a string of Chinese clients, including  the State Grid Corporation of China, China Unicome, China Southern Power Grid, China Life Insurance Group, China Huaneng Group and China Power Investment Corporation.

I have at this stage no way of verifying whether the virtualisation project was as successful as has been claimed, but it’s rather interesting that a Chinese IT services company announces a successful project on PR Newswire.

Perhaps it’s looking for overseas business.

Australia faces public sector IT challenges in 2012

By David Bicknell

It may be early 2012, but it sounds as it if  will be later in the year before the Australian state of New South Wales gets on top of the latest in a series of public sector  IT headaches that are challenging the Aussies.

Last last year, it was the state of Victoria that warned that an extra A$1.44bn of expenditure would be needed on failing IT projects. Now, it looks as  remedial action to try and save a A$386m New South Wales schools administration system will be needed throughout 2012. A$176 million has already been spent for little tangible reward so far.

The  ‘Learning Management and Business Reform (LMBR)’ project for the NSW Department of Education, has already failed to deliver what was promised, which was a system replacing finance, human resources, payroll and student administration systems.

According to reports Down Under late last year, IBM and Accenture are bidding for a multimillion dollar contract to implement the system. Accenture reportedly wrote the business case for the SAP-based system.

The LMBR project has been likened in a YouTube video to root canal therapy or even giving birth to a 20 pound baby – with teeth.

Schools IT scheme ‘a stuff-up’

CSC to change hands in 2012?

By Tony Collins

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

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

Maude gets tough 

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

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

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

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

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

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

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

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

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

Why the Cabinet Office has left draft MoU unsigned?

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

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

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

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

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

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

David Cameron’s view?

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

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

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

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

What does CSC’s plight mean for the NHS?

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

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

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

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