The “best implementation of Cerner Millennium yet”?

By Tony Collins

Edward Donald, the chief executive of Reading-based Royal Berkshire NHS Foundation Trust, is reported in the trust’s latest published board papers as saying that a Cerner go-live has been relatively successful.

“The Chief Executive emphasised that, despite these challenges, the ‘go-live’ at the Trust had been more successful than in other Cerner Millennium sites.”

A similar, stronger message appeared was in a separate board paper which was released under FOI.  Royal Berkshire’s EPR [electronic patient record] Executive Governance Committee minutes said:

“… the Committee noted that the Trust’s launch had been considered to be the best implementation of Cerner Millennium yet and that despite staff misgivings, the project was progressing well. This positive message should also be disseminated…”

Royal Berkshire went live in June 2012 with an implementation of Cerner outside the NPfIT.  In mid-2009, the trust signed with University of Pittsburgh Medical Centre to deliver Millennium.

Not everything has gone well – which raises questions, if this was the best Cerner implementation yet,  of what others were like.

Donald said there had been an inevitable impact with:

– patients attending for clinics that did not exist

– patients receiving multiple requests to attend clinics

– patients not receiving follow-up appointments.

Personal letter to patients

Donald told the trust’s board that patients affected would receive a personal letter.  He also said that it was becoming clear that the level of administrative support required to underpin the new system was “high”.

The level of additional support for go-live, and then on an ongoing basis was being quantified. There were 24 additional staff in post. Donald said that he would be discussing this further with the managing director of Cerner “with a view to being reimbursed for this additional cost”.

Was the trust was aware of the additional costs before buying the system? To this question Donald advised the board that the business cases submitted to the board had assumed that administrative costs following implementation would be lower. Donald undertook to distribute a briefing note to the board on the additional short and long term administrative costs to support Cerner Millennium.

[The trust’s Board papers say that Berkshire’s Cerner Millennium system is costing about £30m, which would make it one of the most expensive EPR implementations in the NHS. The papers show that Berkshire’s EPR is funded through loans.]

Had the additional administrative costs had been included in the revised financial forecast for the trust? The Director of Finance advised the board that this was not the case. “However, the additional costs had been included as a potential risk to the achievement of the forecast position,” said the trust’s minutes.

The board noted that the impact of the implementation of the Cerner Millennium system on the ability to deliver performance standards had been considerable.

“In particular, it had been necessary to undertake high volumes of manual data validation to assure accurate reporting. Given this, Monitor had agreed to accept the final validated performance of the Trust at the end of each quarter as the basis for the Trust’s governance rating.”

Cancer waiting times

On some cancer waiting times the EPR system “has had a significant impact on the ability to manage the referral process”,  said the trust’s papers. In addition, there was a backlog of work to be cleared and the production of summary information in key clinical areas.

Patient complaints

The latest information from the trust on its Cerner system is from a freedom of information request submitted by the Health Service Journal which reported last week:

“The Royal Berkshire Foundation Trust’s nursing director has suggested that a high level of complaints about staff is in part down to the implementation of the Cerner Millennium electronic patient record system.”

EPR a “long journey”

In September the head of health informatics at Royal Berkshire was reported as informing a meeting of the trust’s Council of Governors that staff can now start to think of the benefits of the Cerner implementation. She added:

“It’s very important to remember that implementing [Cerner] Millennium is just the start of the process. It will take many years. We’ve got a very long journey until we’ve got the electronic record.”

In response to the getreading.co.uk article Cerner spokesman Simon Hill said:

“The Royal Berkshire NHS Foundation Trust and Cerner have embarked upon a trust-wide change management programme.  The cornerstone of these changes require the installation of Cerner Millennium, the new information system, which gives clinicians real-time access to high quality patient information.

“As with all significant change management programmes, there will be challenges; the Trust and Cerner are working hard to ensure that any disruption is kept to an absolute minimum.

“By improving clinicians’ access to real-time high quality information, the Trust will be able to continue to improve its services to local people throughout the region.”

Comment:

Royal Berkshire NHS Foundation Trust is one of the largest general hospital foundation trusts in Engand. It employs about 4,800 staff and provides acute medical and surgical services to Reading, Wokingham and West Berkshire.

It’s inevitable that in such a large trust the widespread implementation of an all-encompassing system such as Cerner will hit some patients. Some Cerner implementations go well and bring important benefits to hospitals and their patients. Some implementations go badly. One question the NHS doesn’t ask, but perhaps should, is: what level of problems is acceptable with a new electronic patient record system?

It appears from some EPR implementations in the NHS that there is no such thing as a low point. No level of disruption or damage to healthcare is deemed unacceptable.

Berkshire’s chief executive Edward Donald speaks the truth when he says that the trust’s implementation of Cerner was more successful than at other NHS sites. This is despite patients at his trust attending for clinics that did not exist, receiving multiple requests to attend clinics and not receiving follow-up appointments.

Do all such problems matter? To patients yes. To the NHS perhaps not. It would appear that the NHS is geared to care in only a perfunctory way about patient record IT implementations that worsen the care and treatment for patients. The promise of better patient care in the long-term seems to justify any problems in the meantime.

If problematic IT, data quality, or poor practice in data collection, affect the safety and health of patients – which became a potential issue at Imperial Healthcare NHS Trust – how much does anybody in the NHS really care?

The unfortunate truth is that inherent secrecy within the NHS means that the full impact on patients and details of an unsuccessful EPR implementation can remain hidden.

It is a mark of complacency of the Department of Health and the NHS that the board of the Royal Berkshire NHS Foundation Trust learned that it had met all its Care Quality Commission quality registration standards and would achieve an amber-green governance rating for the quarter. This was an improvement on the amber-red rating for the previous quarter.

In the same minutes the board noted that the trust had “failed to achieve the targets in respect of cancer 62 day waits for first treatment and cancer two week from referral to first seen for all urgent cancers”. Even so this would result in an amber-green governance risk rating.

One wonders whether NHS trusts can receive good ratings for their performance, whatever the actual performance.

The worrying thing for those who use the NHS is that, as far as new IT is concerned, it is like flying in a plane that has not been certified as safe – indeed a plane for which there has been no statutory requirement for safety tests. And if the plane crashes it’ll be easy for its operators and supplier to deny any responsibility. They can argue that their safety and risk ratings were at “green” or “amber-green”.

The lack of interest in the NHS over the adverse effect on patients of patient record implementations means that trusts can continue to go ahead with high-risk EPR go-lives without independent challenge.

Unless there is a political intervention, trusts in England will continue to repeat the cycle in a number of Cerner implementations:

– go-live

– chaos

– a trust admission that potential problems, costs and risks were underestimated

– a public apology to patients

– a trust promise that the problems have been fixed

– trust board papers that show the problems haven’t been fixed or new ones have arisen

– ongoing difficulties producing statutory and regulatory reports

– provision in trust accounts for unforeseen costs

– continuing questions about the impact of the new system on patients

– a drying-up of information from the trust on the full consequences of the EPR implementation, other than public announcements on its successful aspects.

As a commentator on E-Health Insider said: “When will this nonsense stop?”

Success in outsourcing needs political stability says councillors’ panel

By Tony Collins

A group of councillors has found, after investigating several large local authority outsourcing contracts, that political stability may be a critical factor in successful deals.

Cornwall Council’s “Support Services Single Issue Panel” investigated outsourcing deals that involved Birmingham City Council (Capita), Liverpool City Council (BT),  Taunton Deane Borough Council (IBM), Suffolk County Council (BT) and South Tyneside Council (BT).

The panel is not,  in principle, against outsourcing. It found that,

“Information from other authorities has highlighted the importance of political stability for a project which will extend for many years. This has been the single most important lesson that they have learnt.”

In those councils that have an inherently stable majority of one particular
party, outsourcing has not necessarily been a problem. “Likewise it has not been an issue for those councils who have achieved a cross-party consensus, even where there has been a change of administration,” says Cornwall’s panel of councillors. But …

“For those councils who do not have a cross-party approach the process of going into a strategic partnership has caused significant problems; in some  cases a polarised membership which has also impacted on their staff…”

The finding indicates that the risks of a large-scale failure of outsourcing contracts at Cornwall and Barnet councils – where political dissent has been marked – could be greater than its officials realise.

Cornwall may outsource a range of services, including IT, to BT in a contract that is likely to be worth at least £200m, and possibly hundreds of millions of pounds more,  over 10 years.

Barnet has chosen Capita as its preferred outsourcing supplier as part of its “One Barnet” transformation programme. The plan includes outsourcing IT.

A need for cross-party support

The findings of Cornwall’s Single Issue Panel also suggest that the initial major decision to outsource may need a cross-party consensus to succeed..

“What has proved both corrosive and destructive is where a major decision has been made without the support of a substantial majority of members,” says Cornwall’s panel.

Cornwall Council is putting the major decision of its outsourcing deal with BT to the full council. A yes or no decision is expected in December.

But Barnet is going ahead with its major decision to award a large outsourcing contract to Capita without a vote of the full council, although dissent over the plans are widespread. An inner circle of councillors, the “Cabinet”, is expected to approve a deal with Capita 0n 6 December.

This is part of what Cornwall’s panel says on the importance of political stability to successful outsourcing deals:

“Throughout the investigatory work of the Panel the importance of political leadership has been consistently stressed.

“It has been regarded by most authorities as the single biggest activity to get right and failure of this function will at best lead to problems and at worst to failure of the partnership.

“The form of the leadership is in itself not important and both cross-party support and a stable base from one political party have both been effective…

Comment:

BT in Cornwall and Capita in Barnet have made promises of large savings which, understandably, makes some councillors and officers want to sign large, long-term outsourcing deals.

If suppliers provide money upfront for transformation projects this eases, or even releases, the burden on councillors and officers to make big cuts.

But how will BT at Cornwall and Capita at Barnet pay for savings, and for new investment in changes, if they fail to attract new business?

This was among the findings of Cornwall’s investigating panel of councillors:

“Members of the SIP [Single Issue Panel] have supported the investigation of ways in which jobs in Cornwall Council could be retained by trading shared services.

“All other authorities that have started with a similar ambition have failed to deliver that aspiration. In one case the business model was substantially reliant on trading and growth and has been in place since 2006.

“No significant trading has taken place and this is a similar story in all other authorities that the SIP has been in contact with.”

This finding shows how the promises of suppliers to attract new business can prove over-optimistic; but at least all of Cornwall’s councillors will have a chance to vote on a deal. Barnet is not giving its full council the same opportunity.

If Barnet’s officers and ruling members read Cornwall’s Single Issue Panel report they will be aware of evidence that it can be corrosive and destructive for a council to make a major decision without the support of a substantial majority of members.

If Barnet’s inner circle then goes ahead with making a major decision in the face of widespread and strong dissent among some staff and councillors, could its decision amount of maladministration if the subsequent deal turns sour?

One concern is that the suppliers may put up money in advance and charge for this – with interest – in the latter part of the contract, as in discredited PFI deals.

Today’s councillors and officers would have money for investment in the early stages of the contract. But they may leave future generations of councillors and officers with a legacy of large payments. The full facts should be known before any deal is signed.

Another concern is that the suppliers may rely on major legislative and organisational change – both of which are inevitable – to provide much of their profit.

If a future council does not want to pay the suppliers’ invoices for changes a dispute may arise, for which the suppliers will be much better prepared than the councils.

A further concern is that the savings promised by suppliers may be smaller than the savings the councils could make on their own,  with suppliers acting as consultants, for the costs of technology fall annually – as do some cloud services as competition increases. Again the facts should be known before any long-term deal with a single supplier signed.

It may also be important for officers at Cornwall and Barnet to be aware that Suffolk County Council has decided after its outsourcing deal with BT that it is better to outsource to multiple “expert” suppliers than a single one.

In Barnet the public needs to be able to hold those responsible for a major decision to account, if all goes wrong. The problem is that the individuals on any minority group that is responsible for a outsourcing decision today are unlikely to be in post when any dispute arises.

Links:

Councillor Andrew Wallis – The Single Issue Panel Releases its Third Report on the Support Services Proposals

Capita preferred bidder at Barnet

The Barnet Eye

Shared services disaster

Are HMRC’s IT costs under firm control?

By Tony Collins

 The costs of IT outsourcing at HMRC have soared despite a well-written contract that promised large savings. When, as Inland Revenue, the department first outsourced IT in 1994, annual IT costs were around £100m.  Now it has emerged that HMRC’s  annual IT spending was running at more than  £1bn between April 2011 and March 2012.  Only some of the 10-fold increase is explained by new work.

Are there lessons for Barnet, Cornwall and other public authorities as they ponder large-scale outsourcing, given that HMRC did almost everything right and still faces a costly contractual lock-in to major IT suppliers until 2017 – a 13-year outsourcing contract?

HMRC has made some extraordinary payments to its outsourcing suppliers since 2011  – more than mid-way through a 13-year contract.

HMRC figures collated by former Inland Revenue IT employee and now payroll specialist Matt Boyle of Research4paye show that HMRC paid its “Aspire” IT partners £964.2m in a single year, between April 2011 and March 2012.

HMRC paid a further £42.6m of invoices from Serco for one year of website development and support. These figures do not include all of HMRC’s IT costs between April 2011 and March 2012, such as invoices from Accenture for maintenance fees and for work relating to Customs.

IT costs soar

1994. £100 annual IT costs. Inland Revenue first outsources its 2,000-strong IT department to EDS. The annual cost of the 10-year contract is about £100m a year according to the National Audit Office.

2004.  £250m annual IT costs. The end of the EDS contract. HMRC’s annual IT costs have risen to about £250m a year (National Audit Office figure).

2004. £280m annual IT costs. Capgemini wins from EDS a new 10-year HMRC outsourcing deal called Aspire (Acquiring Strategic Partners for the Inland Revenue). Capgemini’s main subcontractors are Fujitsu and Accenture. Capgemini’s bid is for £2.8bn, an average of £280m a year.

2005. £539m annual IT cost.  Inland Revenue merges with Customs and Excise to form HMRC which takes on £1bn Fujitsu IT contract from Customs. The first year of the Aspire contract costs £539m, nearly double the expected amount. The NAO blames most of the increase on new work.

2007. In return for promised savings of £70m a year from 2010/11, HMRC extends Capgemini’s contract by three years to 2017. There’s an option to extend for a further five years.

2010. £700m annual IT costs. Under FOI, HMRC releases a statement saying that the Aspire annual contract costs are running at about £700m.

2011/12. £964.2m annual IT cost. HMRC’s list of invoices from its Aspire suppliers for one year between April 2011 and March 2012 add up to £964.2m. A further £42.6m is invoiced by Serco for website development and support.  This puts HMRC’s IT annual outsourcing costs at 10 times higher than they were when Inland Revenue let its first outsourcing deal in 1994. Some of today’s HMRC systems pre-date 1994 [BROCS/CODA].

Aspire – a good contract?

It appears that HMRC did everything right in its Aspire contract. Indeed the National Audit Office has found little to criticise. Aspire is committed to “open book”, so Capgemini, Fujitsu and Accenture must account for their costs and profit margins.

The contract has some innovations. The suppliers’ margin is retained by HMRC until trials are successfully passed. Even then 50% of the margin is retained until the final Post Implementation Trial about six months after implementation.

Charges under Aspire are split into two categories: “S” and “P”.  The former is mainly a commodity pricing arrangement with unit prices being charged for all service elements at a commodity level (e.g. per Workstation, volumes of printed output etc). The charge to HMRC will vary by volume of demand for each service line.

The ‘’P’’ series charge lines are charged on a man-day basis. Application development and delivery is charged mainly on what HMRC calls an “output basis utilising function points“.

Where IT spending goes

There are more than 800 invoices from Aspire covering the year from April 2011 to March 2012. Some of the invoices are, individually, for tens of millions of pounds and cover a single month’s work.

The invoices cover services such as data centre output, data centre operations, systems software maintenance, software coding changes, licences, IT hardware and data storage.

For some of the Aspire invoices HMRC gives a brief explanation such as £57.6m – “June monthly payment for development and support”. But some of the biggest invoices have little explanation:

May 2011:  invoice for £24.7m – IT Software. A further invoice of £61.7m – “data output prod”.

June 2011: invoice for £55.8m – “data output prod”. A further invoice £56.8m – “data output prod”.

On top of these payments HMRC paid about 24 invoices of management fees in the year. Typical monthly invoice amounts for Aspire management fees ranged from about £390,000 to £2.9m.

There are dozens of Aspire invoices in the year for IT software changes to support day-to-day HMRC’s business. Quite a few of those invoices for software changes are each for tens of thousands of pounds but more than 30 invoices for IT changes in the year 2011/12 each bill more than £100,000. The biggest single invoice in the same year for software changes to support day-to-day HMRC business is  £469, 964 in December 2011.

Transparency

Matt Boyle collated the figures on HMRC’s IT spending from spreadsheets published by HMRC . All credit to Francis Maude, the Cabinet Office minister, for making government departments publish details of their invoices over £25,000.

And credit is due to Matt Boyle for collating and totalling HMRC’s IT-related invoices. Boyle says he is surprised at the high costs of Aspire. He is also surprised that the contract excludes web development and support.

Comment:

HMRC appears to have done nearly everything right and still its IT outsourcing costs are soaring, apparently uncontrollably.

It is hard to avoid the conclusion that the department and taxpayers would have been much better off if Inland Revenue had not outsourced and instead spent the millions it pays annually on, say,  management fees, to building up an in-house IT force and expertise.

Central government seems now to shun big outsourcing deals but local authorities including Barnet and Cornwall are at the stage Inland Revenue was in 1994: they are considering saving money by outsourcing major IT and other services to one main supplier.

If they learn from HMRC’s experiences – and the sums it has had to pay to outsourcing partners – it may take a little of the sting out of HMRC’s enforced prodigality.

[It may also be worth mentioning that some including Boyle ask how it is possible to credibly justify a spend of £46m in one year on a website.]

IBM is “surprised” by SAP project lawsuit

By Tony Collins

US-based Avantor Performance Materials manufactures chemicals and raw materials used in laboratories for research, pharmaceutical production and medical lab testing. Its electronics products are used in the manufacturing of semiconductors and flat panel displays.

The company has issued a press release saying it has filed a lawsuit against IBM in connection with a failed SAP software implementation.

Its complaint was filed on 8 November in New Jersey. Avantor says it retained IBM to upgrade the company’s global computer systems to an SAP platform. Avantor claims that IBM misrepresented the capabilities of its proprietary software solution.

“IBM representatives assured us that its Express Life Sciences Solution, a pre-packaged software solution, was suitable to run Avantor’s core business processes,” says John Steitz, President and CEO of Avantor. “In fact, the solution—and the service and support offered by IBM throughout the implementation—proved to be woefully misaligned with the unique needs of our company and our customers.”  IBM’s Express Life Sciences Solution runs on SAP.

“Over the past approximately seven months, Avantor has undergone an aggressive, company-wide initiative to recover from the failed SAP implementation, and Avantor is now largely operating at pre-SAP implementation service levels,” says the company which is seeking damages of tens of millions of dollars.

IBM told Reuters the accusations were blown out of proportion and that it was surprised by the move.

“We believe the allegations in the complaint are exaggerated and misguided and are surprised that Avantor chose to file suit,” said IBM which added that it had “met its contractual obligations and delivered a solution that Avantor continued to use in its operations.”

The writ is reported to claim that the SAP implementation caused a “near standstill” of Avantor’s business.  Avantor in 2010 chose to replace its ERP (enterprise resource planning) platform with SAP.  A global SAP roll-out was planned as part of a rebranding and growth strategy.

Avantor says the implementation failed to provide crucial functionality that Avantor needed to run its core business processes. In the writ Avantor also criticised some of IBM’s consultants.

After go-live a number of errors are said to have emerged, ranging from failure to track or process orders correctly to directing “that dangerous chemicals be stored in inappropriate locations”.  The company paid IBM $13m. It claimed that IBM was seeking more to remedy issues around the software implementation.

Computerworld reports an allegation by Avantor that IBM failed to tell Avantor about risks to the project and hurried towards a go-live date.

Computerworld says the lawsuit alleges that IBM conducted inadequate and truncated testing and recommended that Avantor proceed with the go-live as scheduled – even though Avantor had emphasised that meeting a projected go-live date was less important than having a fully functional System that would not disrupt Avantor’s ability to service its customers.

The resulting system did not process orders properly, lost some altogether, and did not generate paperwork for customs officials, the writ is reported to state.

IBM and Avantor met one of Avantor’s biggest customers, which expressed a concern that its EDI (electronic data interchange) with Avantor for product ordering wouldn’t work after the changeover, according to the suit. The EDI interface failed on go-live, the lawsuit is reported to say.

Avantor was told to cancel every pending order and reset the entire system in the light of pervasive warehouse problems. This was necessary to discover the root cause of the problem, IDG reports the lawsuit as saying.

IBM said it disagreed with the claims and will defend itself against them vigorously. Avantor’s lawsuit is said to accept that IBM made efforts to right the project’s course following a June meeting with Avantor’s then-CEO, Rajiv Gupta.

IBM “began to acknowledge the severity of the situation” and replaced many of the original consultants, according to the ;lawsuit. These workers did extensive redesign and programming.

Is Universal Credit behind schedule and over budget?

By Tony Collins

The Independent on Sunday claimed yesterday that the Universal Credit programme is a year behind schedule, software issues could push that back further, and the budget has been exceeded by £100m.

It says the launch of Universal Credit, which is scheduled for next October, “ will now be limited to small regional projects”.

There is little in the article to support its claims. But the Department of Work and Pensions has provided no evidence to indicate that the claims are wrong.

“A reorganisation of the complex IT system, following the departure this month of key senior civil servants in charge of universal credit, could mean an overrun of £500m by next spring,” says the paper. “Six pilot projects that are testing direct payment of benefits to tenants in housing associations have reported errors including the wrong amount of money being sent on the wrong date.”

One project involving just 400 claimants initially proved chaotic, says the paper. It quotes a government adviser on information technology as saying that work and pensions secretary Iain Duncan Smith,  like other ministers before him, has been “hypnotised by promises of what an online system can deliver”. Warnings were given to him more than a year ago. “They were ignored.”

The paper also suggests the Department for Work and Pensions is hiding £300m of rising costs by reallocating them to child support payments.

Comment:

Pilot projects are supposed to highlight things that need rectifying; and the DWP has long planned only a limited go-live next October. But the DWP’s repeated claim that key executives are leaving the programme because UC is moving from design to delivery and implementation is wearing thin. The DWP is hiding its internal reports which could reveal the programme’s uncertainties, challenges and assumptions.

This is a pity because there are parts of UC that appear to be going well and others that are not. It is difficult to obtain an overview.

In some ways UC is following the usual train tracks of a conventional government IT disaster:

– Defensive, secretive programme leaders saying, disingenuously, that their programme is the most scrutinised in history.

– The programme’s benefits are always referred to in the future tense.

– Well-meaning realists who point out the problems, uncertainties, and assumptions are derided as defeatists.

Iain Duncan Smith appears to be isolating himself by telling Parliament that all is going well. Tradition on IT disasters dictates that those responsible for a project hear only what they want to hear; they filter facts according to their internal mind map, and they don’t wish to have around them any executive whose version of the truth is off-message. As in Barnet Council’s outsourcing plans, the official programme consists of what is going well and the risks that are being satisfactorily mitigated. Nothing is going badly. But in the case of UC few are convinced, not even the DWP’s permanent secretary Robert Devereux.

Some third-party software specialists say that HM Revenue and Customs is trying to cope with difficult if not impossible deadlines on implementing Real-Time Information, on which the success of UC depends.

They say that HMRC has been making shortcuts with scoping and definition of requirements.  Certainly HMRC has found that national insurance numbers are not useful unique identifiers for employee records because many people don’t have them or have meaningless duplicates such as AB123456. This puts employers under pressure to come up with consistently unique identifiers for staff, for the benefit of HMRC’s RTI systems.

It could end up with employers being blamed, at least in part, for HMRC’s many duplicate records. Indeed employers could be among the scapegoats for any failure of Universal Credit.

If the DWP wanted to separate itself from the IT disasters of previous governments it would publish the facts on UC, the pilot projects and RTI. It’s only when the problems are admitted that they can be tackled.

RTI is a good idea: it could cut HMRC’s administration costs in the longer run; and UC is a good idea if properly implemented, so long as the disabled are not penalised because of it. UC may greatly simplify the benefits systems in the long run.

But while the DWP and Duncan Smith have a bunker mentality people will continue to think they have much to hide. And they probably do.

PS: There are allegations from within the UC teams that there is charging by some contractors for man-days not fully worked, and that over-charging is not difficult because of the thousands of man-days being worked and invoiced. There are also claims that the main UC systems have gone through several versions – version eight at last count – but none has yet been shown to the main groups of business users. Clearly these allegations need investigating.

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

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.

 

Another Universal Credit leader replaced

By Tony Collins

Earlier this week it emerged that Malcolm Whitehouse, Programme Director, Universal Credit, Department for Work and Pensions, has stepped down from the role.

Now  Government Computing reports that Steve Dover, Corporate Director, Universal Credit Programme Business, is being  replaced on the UC programme by two directors whose roles are new. Dover’s future role within DWP has not yet been announced.

The overall head of Universal Credit, Terry Moran, who is COO and second permanent secretary, DWP  – and the senior responsible owner of UC (person in charge of making sure UC’s benefits are realised)  – is on sick leave.

Comment:

It’s regarded as good practice on successful programmes to have a continuity of leadership.  The DWP says changes at the top are because the programme is moving from design to delivery and implementation, which is puzzling.

Whitehouse is being replaced by DWP benefits director Hilary Reynolds. Dover is being replaced by Janice Hartley and Sue Moore who have been appointed to director posts for the delivery of Universal Credit, reporting to Hilary Reynolds as Programme Director. The roles are new, not direct replacements for Steve Dover’s job.

The DWP’s organisation chart shows that Dover reported to Whitehouse, and Whitehouse to Moran.

The DWP says it is aiming to bring in new people with different skill sets. But how does disrupting continuity at the top of UC help a programme that, according to work and pensions secretary of state Iain Duncan Smith, is already so successful?

Universal Credit departures continue.

Director of Universal Credit steps down.

Director of Universal Credit programme steps down

By Tony Collins

Malcolm Whitehouse, the programme director and man in charge of Universal Credit, has stepped down from the role.

Computer Weekly says he’s been replaced by the benefits director at the Department for Work and Pensions Hilary Reynolds who will remain in his position in the short-term to help manage the leadership transition. His next position is yet to be announced.

Reynolds reports directly to Terry Moran, the senior responsible owner for Universal Credit and second permanent secretary at the DWP.

Computer Weekly reports on speculation that up to five senior figures will depart from the Universal Credit programme.

A DWP press office spokeswoman said Whitehouse’s departure was part of the programme’s move from design phase to implementation. She said the department was aiming to bring in new people with different skill sets.

“With the early roll-out of Universal Credit starting in less than six months’ time, the programme is moving from system design to delivery. To reflect this, there have been some staff changes as we shift the focus onto implementation.”

The Public Accounts Committee and the Public Administration Committee, in their separate reports on the lessons from IT disasters in government, have urged permanent secretaries to keep key people in post from project design to delivery of benefits.

Whitehouse has worked at the DWP for nine years, having taken the role as programme director in July 2011. This summer he gave a positive report on the progress of Universal Credit to the House of Commons’ Work and Pensions Committee.

Thank you to David Moss for alerting me to Whitehouse’s stepping down.

How’s the Universal Credit programme going?

Malcolm Whitehouse steps down.

Barnet’s undemocratic BT/Capita outsourcing plan?

By Tony Collins

Barnet Council is remarkably defensive about its plan to outsource IT, customer services, finance, payroll, HR, corporate procurement and other services to BT or Capita, by the end of December 2012.

After the controversy in Cornwall about whether the full council or an inner circle of councillors – the “Cabinet” – should make momentous decisions affecting the council’s future, Campaign4Change asked Barnet whether it was putting its decision to outsource to BT or Capita to the full council.

Cornwall’s decision on whether to outsource to BT or CSC was going to be taken by the Cabinet alone but Cornwall’s leader Alec Robertson changed course and decided to put the idea of a mega-outsourcing deal to the full council.

Straightforward question

So would Barnet council’s decision to award a mega-outsourcing contract to BT or Capita go to full council for a vote? It was a straightforward question for Nick Griffin, Media Officer, Chief Executive’s Service, Barnet Council. He did not answer the question directly.

His reply:

“There is quite a bit of information available on our website. Please see the links (at the bottom of this post)  …

But was the information on the council’s website out of date? We wanted to be clear on the facts. We asked Griffin again. His reply was polite but insistent: he would not say whether the council was putting its outsourcing decision on BT or Capita to the full council.

Neither would he answer directly another straightforward question on local democracy: Has the decision to approve/reject One Barnet [transformation programme] gone to full council for a vote?

From the council’s website it appears that all key decisions on the outsourcing plans have been made by Barnet’s Cabinet’s alone. This is from the council’s website:

“A decision will be made by Cabinet in late 2012 as to which bidder [BT or Capita] will win the contract. The new provider will start to run the NSCSO [New support and Customer Services Organisation] in spring of 2013.”

Barnet’s website lists as the relevant previous decisions those taken by the council’s Cabinet alone.

– Cabinet, 29 November 2010 – approved the One Barnet Framework and the funding strategy for its implementation.

– Cabinet …2 March 2011 – Customer Services Organisation and New Support Organisation Options Appraisal

– Cabinet … 29 June 2011 – approved the New Support and Customer Services Organisation business case and the start of the competitive dialogue process…

So one of the most momentous decisions affecting the council, its staff and council services is not being made by the full council.

Undemocratic?

Barnet Council comprises 38 Conservatives, 22 Labour, and three Lib-Dem councillors. Most of them will not have a say on the outsourcing of:

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

The decision will be taken by the Cabinet’s 10 councillors, and perhaps not all of them. Is this local democracy in action?

Accusations of Maladministration?

Given that the decision to outsource to BT or Capita could have a major effect on the council’s future for good or ill, and is controversial –councils including Suffolk and Cornwall are rethinking large outsourcing plans – could Barnet’s decision not to put its outsourcing plans to a vote of the full council leave the Cabinet open to accusations of maladministration if things turn sour?

Links provided by Nick Griffin (1)  (2)

SI’s price for hosting was 80 times higher than SME’s

By Tony Collins

The Cabinet Office minister Francis Maude has criticised the high cost of Government IT and called on CIOs to be innovative, radical and pioneering as their departments move away from the “big, sclerotic SI contracts”.

His speech at an event for IT professionals was not unlike Chris Chant’s last year when Chant said the vast majority of GovIT was  “outrageously expensive”. Chant was then Executive Director in the Cabinet Office , heading  G-Cloud initiative.

Maude said that the government spends more than £1.2bn a year on hosting contracts. “Much of that is spent with just one or two suppliers,” said Maude. “And it’s more money than those suppliers are investing in their own cloud, the future of their own business.”

He continued:

We know we’re not getting value for money – recently a big SI and an SME bid on the Cloudstore for hosting. The SI bid £4m. The SME bid £50k.

Maude said the plan is to consolidate hosting and use collective requirements to run it.

“I’m particularly keen to explore mutualising it. I’ve asked my IT Reform team to come up with proposals by Christmas and I hope you will contribute to their work with your own energy and ideas.”

Reform is too slow

Much of Maude’s speech appeared to show a frustration that change in government IT is happening too slowly.

“We’ve made progress on all aspects of the IT strategy – but we need to go much further and faster.”

He did not mention any department in particular but the Department for Work and Pensions is among those that continue to award large long-term contracts to major IT companies, much as it used to, on the basis that civil servants do not want to risk any disruption to benefit systems .

Maude said:

“At the moment we spend more than 1% of GDP on the administrative IT to run government.  That’s far too much. It is imperative that Government reduces its IT budget further in the next 3 years – while delivering more digital, innovative, user-focused services.

Big is not beautiful

“So how can we get there? Firstly it’s crucial that we continue to move away from the mentality that big is beautiful.

“For too long Government IT has been too expensive, over-specified and run in contract structures that encourage complexity, duplication and fragmented user services.

“For the most part contracts were consistently awarded to a limited number of very large suppliers on long-term, exclusive contracts – whilst we shut out smaller more innovative suppliers.

“… Government repeatedly found itself paying large amounts for systems that were delivered late, over budget and not even to the quality required…

“Shockingly when we came into office SMEs – despite accounting for half the turnover in the UK economy – were winning only around 6.5% of Central Government’s procurement spend.

“This Government has set out an aspiration for a quarter of our business to go – directly or indirectly – to SMEs by 2015. And that means creating a more competitive and open marketplace for buying IT services and solutions.

“This process has started – we have cut red tape, introduced G-Cloud and increased the visibility of contracts across the board and we are giving firms a chance of redress through the Cabinet Office’s ‘Mystery Shopper’ Scheme.

“But there’s more to do. I am reiterating my requirement that for any IT programmes not being displaced by digital solutions, no project, framework or contract can be over £100m.

No contract extensions

And to ensure we are in charge of our own destiny rather than the supplier – we will have no contract extensions – the conditions and pricing that were signed up to even three years ago are ruinous in comparison to what is available now, when the price of IT keeps dropping.”

Open standards

“We need to change the way we procure and run technology systems – introducing Open Standards and using a wider group of smaller, innovative suppliers…”

Allowing Government to inter-operate would mean “we don’t have to build the same thing thirty or forty times”.

He said that open standards will improve competition for government contracts.  In a consultation on open standards more than 70% of respondents supported the view that mandation of open standards, or of particular standards, would improve value for money in the provision of government services.

“Following this consultation I am today publishing our Open Standards Principles. These set out that Royalty Free open standards are key to levelling the playing field for open source and proprietary software in government IT.

“And that competition between open source and proprietary software can result in lower licensing costs and increased innovation in government IT.

“…All Government bodies must comply with the Open Standards Principles or apply for an exemption. And a challenging comply or explain process is being implemented, through the existing IT spend controls process.”

Maude said that reforms can happen only with strong, radical, innovative leadership – “people who will challenge the status quo and can inspire change in every corner of Whitehall. And that’s where I expect you to come in.”

Cloudstore

The Government’s CloudStore allows public sector organisations to purchase a range of the best IT services off the shelf from on a pay-as-you-go basis, rather than having to develop their own systems.

Maude said there have been 99 purchases of IT services totalling over £2.2m through the CloudStore and 70% of this  has been with SMEs.

He thanked Chris Chant – who retired in April –  and the current Director Denise McDonagh and her team for their work on G-Cloud.

“I’ve heard suppliers say they can’t believe how easy G-Cloud is to use – which is not what you’re used to hearing about Government procurement,” said Maude.

Comment:

Maude says all the right things  – as did Chris Chant last year. Bill CrothersLiam Maxwell and Mike Bracken are among the excellent adjutants to Maude. But if this strong team – which is backed by the Prime Minister –  cannot significantly change the way government runs, and how much it spends on IT, who can?

Maude’s speech

DWP defends £316m contract award to HP