Tag Archives: outsourcing

Why GovIT reform is so slow?

Posted on 28/10/2011 | 2 comments

By Tony Collins

An NAO report “A snapshot of the Government’s ICT Profession in 2011”  depicts government CIOs not as business leaders who are passionate for change but as middle-managers who are more or less dispensable.

The impression given in the report is that CIOs are, in general, necessary but not of strategic importance,  not necessarily party to key business decisions.

The NAO reports concludes that there is “more Government and departments could do” to:

– raise the influence of CIOs in departments;

– move the ICT profession from a support service or overhead to taking an active or lead role on business decisions; and

– develop people to a level so that they become leaders and bring ICT into the heart of the business.

Of 17 departments the NAO investigated a CIO sat on the main boards of only two. One department abolished the role of CIO in April 2011. The NAO quoted a CIO as describing his department’s perception of ICT as “at best an overhead”.

What CIOs told the NAO

CIO comments to the NAO on the impact of cost reduction measures were generally negative:

“We are having to re-prioritise and delay IT service enhancement projects.”

“A significant headcount reduction… and consequently a new operating model and a new strategic approach which will affect the roles of all IT professionals significantly.”

“Continual focus on cost-out and scrutiny of spend – in some ways this has helped engender a positive culture of efficiency but the constant demand for information/data is distracting. Skills shortage owing to recruitment freeze on external candidates and reduction in contractors. Requirement to broker cross-network relationships to drive out costs/savings.”

“Pressure to reduce costs/headcount to the Iowest levels means desirable things such as career development opportunity planning, implementing SFIA etc are left on the shelf whilst we divert resource to focus on significant projects to deliver running cost savings to the dept. … The consequences for the lCT function are not yet fully known.”

“The situation has been uncertain and reviews have caused some loss of momentum, but the set of future projects is now clear and we are progressing. Austerity measures have limited our ability to obtain the level of IT skills required for our portfolio.”

“As part of our change programme, the Central Department is reducing cost by approximately 30%. IT is included within this envelope. No money and everybody having to re-apply for jobs.”

[Source National Audit Office survey of central government CIOs 2011]

Skills most needed

It’s a shortage of IT people with business skills that appears to be one of the biggest barriers to change. Demand is greatest, says the NAO, for programme and project managers, procurement specialists and business analysts.

In particular CIOs perceive the need for good people who have contract and supplier management skills, and the ability to manage stakeholders.

On the technical side the skills most needed, as perceived by CIOs, are architecture, analysis and design, and information management/security. The biggest barriers to recruitment, as perceived by CIOs, are public sector pay constraints and inflexible civil service recruitment processes. [On pay some departments are still able to pay large bonuses – see near end of this article.]

NAO recommendations

The highest immediate priority for Government is to continue to motivate and reinforce the value of its ICT profession, says the NAO.

“ICT leaders need to dig deep to manage their teams whether in development projects, service management or operations. CIOs themselves need to continue to reinforce their standing in departments ideally by sitting on departmental boards or, if this is not appropriate, finding other ways to develop their influence so that ICT is properly included in strategic and business decisions.”

ICT leaders will have to find innovative ways to develop skills to fill roles.

“… government cannot ignore the capability gaps because it is so reliant on ICT to conduct its future business.”

The NAO said that CIOs described the same business and technical skills as being in short supply. It advised “structured on-the-job experience and mentoring”.

Greater collaboration across departments and with suppliers may “help to make optimum use of the skills that the profession already has to offer”.  Where
necessary, government must “find practical ways to recover lost skills”.

It added: “With more services being delivered through technology channels, there is a real need to ensure that service delivery is being driven by a skilled and capable ICT workforce.”

The Government Digital Service has at least made a good start – it has begun recruiting innovators.

And when it comes to paying bonuses to keep valued staff, departments still have scope. The Financial Times reported yesterday that the Department for Work and Pensions was the most generous employer in the civil service: it paid more than £45m to its staff in bonuses in the year ending April 2011.

**

Thank you to ComputerworldUK.com for spotting this report which was not distributed by the NAO to the media.

NAO report “A snapshot of the Government’s ICT profession in 2011”

Government CIOs are undervalued, official audit report finds.

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Posted in Campaign4Change, change, change management, Government IT, managing change, procurement, public sector, public services, reforms, Uncategorized

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Government’s new ICT plan – the good, bad and what’s needed

Posted on 24/10/2011 | 3 comments

By Tony Collins

There is much to commend the 102-page Government’s ICT Strategy – Strategic Implementation Plan”.  Its chief assets are the touches of realism.

In the past Cabinet Office documents have referred to the billions that can be cut from the annual government IT spend of £15bn-£20bn. This document is different.

In promising a saving of just £460m – and not until 2014/15 – Cabinet Office officials are not being ambitious, but neither are they making impossibly unrealistic claims. [The press release refers to £1.4bn of savings but there’s no mention of that figure in the document itself.]

The Implementation Plan also points out that the oft-quoted annual government IT spend of £16bn-£17bn is not spending in central government IT alone but includes the wider public sector: local government, devolved administrations and the NHS. The Implementation Plan concedes that there is “no definitive or audited record of ICT spending in central government for 2009/10”, but it adds, “the best estimates suggest this to be around £6.5bn in central government…”

Now at last we have a figure for the cost of central government IT. But we’re also told that the Cabinet Office has no control or strong influence over most of the ICT-related spending in the public sector. The document says:

“Though implementation is not mandatory outside central government, Government will work with the wider public sector to identify and exploit further opportunities for savings through greater innovation, and sharing and re-use of solutions and services.”

That said the document has some laudable objectives for reducing ICT spending in central government. Some examples:

–         50% of central departments’ new ICT spending will be on public cloud computing services – by December 2015. [Note the word “new”. Most departmental IT spending is on old IT: support, maintenance and renewal of existing contracts.]

–         First annual timetable and plans from central government departments detailing how they will shift to public cloud computing services – by December 2011.

–         Cost of data centres reduced by 35% from 2011 baseline – by October 2016. [What is the baseline, how will the objective be measured, audited and reported?]

Drawbacks:

It is a pity the document to a large extent separates IT from the rest of government. If simplification and innovation is to be pervasive and long-lasting senior officials need to look first at ways-of-working and plan new IT in parallel with changes in working practices, or let the IT plans follow planned changes.

Not that this is a black-and-white rule. Universal Credit is an essentially IT-led change in working practices. The technology will cost hundreds of millions to develop – an up-front cost – but the simplification in benefit systems and payment regimes could save billions.

Another problem with the Implementation Plan is that it is in essence a public relations document. It is written for public consumption. It has little in common with a pragmatic set of instructions by a private sector board to line managers. Too much of the Cabinet Office’s Implementation Plan is given over to what has been achieved, such as the boast that “an informal consultation to crowd source feedback on Open Standards has taken place…” [who cares?] and much of the document is given over to what the civil service does best: the arty production of linked geometric shapes that present existing and future plans in an ostensibly professional and difficult-to-digest way.

And many of the targets in the Implementation Plan parody the civil service’s archetypal response to political initiatives; the Plan promises more documents and more targets. These are two of the many documents promised:

“Publication of cross-government information strategy principles – December 2011” …

“First draft of reference architecture published – December 2011.”

Platitudes abound: “Both goals are underpinned by the need to ensure that government maintains and builds the trust of citizens to assure them that the integrity and security of data will be appropriately safeguarded.”

There is also a lack of openness on the progress or otherwise of major projects. There is no mention in the Implementation Plan of the promise made by the Conservatives in opposition to publish “Gateway review” reports.

What’s needed

More is needed on specific measures to be taken by the Cabinet Office when departmental officials resist major reform. The promise below is an example of what is particularly welcome because it amounts to a Cabinet Office threat to withhold funding for non-compliant projects and programmes.

“Projects that have not demonstrated use of the Asset and Services Knowledgebase before proposing new spend will be declined.

“Departments, in order to obtain spend approval, will need to move to adopt mandatory common ICT infrastructure solutions and standards, and spending applications will be assessed for their synergy with the Strategy.”

But these threats stand out as unusually unambiguous. In much of the Implementation Plan the Cabinet Office is in danger of sounding and acting like PITO, the now-disbanded central police IT organisation that had good intentions but could not get autonomous police forces to do its will.

Unless Cabinet Office officials take on more power and control of largely autonomous departments – and overcome the uncertainties over who would take responsibility if all goes wrong – the Implementation Plan could turn out to be another government document that states good intentions and not the means to carry them through.

It’s as if the Cabinet Office has told departmental officials to drive at a maximum speed of 50mph when on official business to cut fuel costs. Will anyone take notice unless the speed limit is monitored? It’s the policing, monitoring and open objective reporting of the Implementation Plan’s intentions that will count.

Otherwise who cares about nameless officials making 100 pages of boasts and promises, even if the proof-reading is impressive and the diagrams look good if you don’t try to follow their meaning?

SMEs and agile to play key role as Government launches ICT plan.

Cabinet Office’s Government ICT Strategy – Strategic Implementation Plan.

Puffbox analysis of Implementation Plan.

Is there a useful job for the Cabinet Office?

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Posted in Campaign4Change, change, change management, Cloud, Cloud Computing, collaboration, G-Cloud, Government IT, improving communications, innovation, open source, openness and transparency, private sector lessons for the public sector, procurement, public sector, public services, reforms, supplier relationships, Uncategorized

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Fiddling savings on shared services? Officialdom in need of reform

Posted on 21/10/2011 | 3 comments

 By TonyCollins

An NAO report today suggests that some officials are fiddling projected savings figures from a shared services deal involving seven research councils.

It all began so well. A Fujitsu press release in 2008 said:

“UK Research Councils to implement shared services with Fujitsu. £40 million project will generate cost and efficiency savings across the organisations.”

An executive who representedFujitsu Services’ was quoted in the press release as saying at the time:

“Fujitsu is consistently proving that it can deliver effective shared services infrastructures and is playing a vital role in driving forward the transformational government agenda through shared services.

“Organisations that adopt a shared services approach can experience genuine economies of scale and reduction in costs which can be essential in their drive for continuous improvement.

Twenty-one months later Fujitsu and Research Councils UK parted company. The 10-year shared services contract began in August 2007. It was terminated by mutual consent in November 2009.

A revealing report, which is published today by the National Audit Office, shows how, despite the best intentions by the Cabinet Office to improve the management of IT-related projects and programmes, and decades of mistakes to learn from, some officials in departments are still making it up as they go along.

The worrying thing in the NAO report is not only what happened in the past – few will be surprised that the NAO report characterises the shared services deal as lacking professionalism. What’s worrying is officialdom’s more recent disregard for the truth when claiming savings for its shared services arrangements.

The NAO’s report”Shared Services in the Research Councils” suggests that officials manipulated – some could say fiddled – projected savings figures.

The NAO also found that officials awarded a £46m shared services contract to Fujitsu which came second in the bid evaluation. Exactly how the contract came to be awarded will be investigated soon by MPs on the Public Accounts Committee.

Origins of shared services contract  

In 2004 a review led by the Government adviser Peter Gershon suggested that the public sector should save money by sharing support services such as IT, HR and finance. In 2006 officials at the Department of Trade and Industry (now the Department for Business, Innovation and Skills) encouraged their colleagues at seven research councils to set up a shared service centre, which they did.

The UK Research Councils is an important organisation. In 2009/10 it spent £3.7bn, mostly on giving research grants to universities, the European Space Agency and other organisations. Its biggest recipient of grants is the Medical Research Council.

Fujitsu contract

Public servants appointed Fujitsu in August 2007 to put in place the ICT systems to underpin the shared service centre in a ten-year contract worth £46m. Fujitsu came second in the initial bid evaluations.

The NAO said that the bidding process produced a shortlist of three companies including Fujitsu. Said the NAO:

“The initial weightings applied by the [bid] panel had placed Fujitsu second: although the bid had scored well on quality, it was 19 per cent more expensive than the cheapest bid.”

An independent review commissioned by the project board backed the evaluations which put Fujitsu second. But the bid panel and the project board had concerns about the evaluation. The supplier chosen in the evaluation – which the NAO refuses to name – did not score well on quality requirements.

It appears that the bid panel and the project board preferred Fujitsu.

Mathematical error

Then officials happened to spot a mathematical error in the bid scoring. The corrected scoring left Fujitsu on top, as the new preferred bidder.

Said the NAO:

“… a mathematical error was identified by a member of the project team that changed the order of the preferred suppliers, leaving Fujitsu as the front runner

“The [bid] panel reconvened to discuss this but, rather than re-performing in full the quantitative and qualitative analysis and submitting this to independent review, it decided to appoint Fujitsu on the basis of a vote.

“In September 2007 the gateway review team concluded that the incident had weakened the value of the overall process and had left the project at risk of challenge.”

User requirements unclear

Full delivery was due in September 2008 but the project team and Fujitsu “quickly encountered difficulties, resulting in contract termination by mutual consent in November 2009”.

The NAO said there was “miscommunication between the parties about expectations and deliverables, primarily because design requirements had not been sufficiently defined before the contract started”.

Fujitsu consequently missed agreed milestones. “Fujitsu and the Centre told us that the fixed-rate contract awarded by the project proved to be unsuitable when the customers’ requirements were still unclear.”

Officials paid Fujitsu a total of £31.9 million, of which £546,000 related to termination costs. Despite the payments to Fujitsu, parts of the system were withdrawn and rebuilt in-house.

Overspend on Fujitsu contract

The NAO found there were “significant overspends on design and build activities and the contract with Fujitsu.”

At least £13m wasted on Fujitsu deal

Said the NAO:

“Had the Fujitsu contract worked as planned, we estimate that the additional £13.2m design and build costs … would not have been needed. In addition the project management overspend of £9.1m would have been lower, as, after termination of the Fujitsu contract, a significant overhead in managing contractors was incurred by the project.”

Fujitsu out – Oracle in

The breakdown in relations with Fujitsu led to the appointment of Oracle as supplier of the grants element of the project. “The contract with Oracle suggested that lessons had been learnt by the project following its experience with Fujitsu, with greater effort given to specifying the design upfront,” said the NAO.

Did officials know what they were doing?

In deciding how to share services the research councils came up with six options including setting up a centre run jointly by the councils or joining with another public sector agency such as one supplying the NHS.

But two of the options including the NHS one were dropped without proper analysis, said the NAO. The remaining four options were each given a score of one to three, against seven criteria. “The scores appear to be purely judgemental with no quantified analysis,” said the NAO.

Even if the six options had been properly appraised, the evaluation would have failed because it did not include a “do-minimum” option as recommended by HM Treasury.

“Overall, the quality of options appraisal was poor,” said the NAO.

Fiddling the figures?

 The NAO found that:

–         Initial estimates were of zero projected procurement savings from shared services. But by the time the first draft of the business case had been written the projected savings had soared to £693.9m.

–         When this project board queried this figure the research councils’ internal audit service scaled down the figure to £403.7m – but this included £159.3m of savings that internal audit had concluded were not soundly based.

–         Since the shared services centre began officials have recorded procurement savings of £35.2m against the business case and while of these are valid savings some are not. The NAO investigated 19 high-value savings that represented 40% of savings recorded to the end of 2010 and found that 35% “should not be claimed against the project investment”.

–         The research councils have been “unable to provide paperwork to substantiate the claimed saving”.

–         Savings claimed were indistinguishable from normal business practice such as disputing costs claimed by a supplier.

–         Clear evidence exists that the budget holder had no intention or need to pay the higher price against which the saving was calculated

–         Last month the research councils claimed that savings were £28m higher than they had reported previously owing to errors in the original numbers. But the NAO found that the councils were unable to reconcile fully the two sets of numbers; had not used a single method for calculating benefits or tracked these effectively; and had not included £7m of spending incurred by the councils. “Overall, this review has highlighted that Councils have not put in place proper processes to track benefits and forecast future operational savings,” said the NAO.

–         Further, investments needed to deliver projected savings have not been included in calculations.

–         Double counting. A revised target for projected procurement savings procurement “includes elements of double counting …”

Other NAO findings:

–        Four Gateway review reports of progress on setting up the shared services centre, including a review which put the project at “red – immediate action needed”, were not fully followed up. 

–         There was no evidence of intervention by the Department for Business, Innovation and Skills when it became clear the shared services project was likely to overspend.

–         The shared services centre has begun to match the pre-shared services payment performance of the research councils but a high number of invoices was on hold at the end of July 2011 because of problems with the end-to-end processes. About 5,900 invoices were on hold, awaiting payment, in July 2011, which was 21 per cent of all invoices due to be paid in that month. The reason for the delay was being investigated.

–         Despite the shared services arrangements, some research council staff were at times running parallel systems, or managing their businesses without adequate data.

–         In July 2011 the shared services centre had 53 key performance targets to meet but was only able to measure activity against 37 of them and of these met only 13..

–         Five of the seven research councils did not file annual accounts on time in 2011 in part because functions in the finance ICT system were not delivered by the project.

Some good news

Said the NAO:

“The grants function and its associated ICT system developed by the project has allowed the Councils to replace older systems that were increasingly at risk of failing. This is of critical importance, given that the processing of research grant applications lies at the heart of what the Councils do. The single grants system has the potential to make it easier for the Councils to collectively modify their processes in the future…”

Comment

The commendably thorough NAO investigation has shown once again how badly departments and their satellites are in need of independent Cabinet Office oversight when it comes to major IT-related projects. In that respect thank goodness for the Cabinet Office’s Major Projects Authority. But how much influence can it really have? How much influence is it having?

This NAO report suggests that some officials are fiddling the figures without a care for professional accounting practices. Double counting, not including full costs in projected savings calculations, not having paperwork to support figures and other such administrative misdemeanours indicates that some officials are making up savings figures as they go along.

What is to be done when some departments and their agencies are not to be trusted in managing major projects?

NAO report on shared services at seven research councils

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Posted in Campaign4Change, change, change management, collaboration, Government IT, improving communications, legal disputes, managing change, openness and transparency, outsourcing, private sector lessons for the public sector, procurement, public sector, public services, reforms, research, Uncategorized

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Maude: “We want services to be run by mutuals, social enterprises and small businesses”

Posted on 20/10/2011 | Leave a comment

By David Bicknell

Cabinet Office minister Francis Maude is to reinforce the message that the government wants its  services to be run and delivered by mutuals, social enterprises and small businesses.

Maude will tell a conference: “In the current climate we can no longer afford waste – demand for services is growing at a time of fiscal constraint.

“But we should not tolerate wasting public money whatever the economic climate. We need to find new ways of delivering public services that are high quality, cost effective and genuinely responsive to the needs of individuals, communities and businesses at local level.

“We believe that nearly all public services can be improved by being delivered by a wide range of organisations. What and how services are delivered are more important than who they are delivered by, and competition breeds innovation and creativity. These in turn will deliver service improvements.

“We want services to be run and delivered by mutuals, social enterprises and small businesses; and we want the talented people who are enthusiastic about what they do to be freed up to deliver services in the way that they think is best.”

Maude’s message comes as most public sector managers say they outsource work to save money, with few believing it leads to improved services.

A survey of 100 human resources directors from government departments, local authorities, NHS trusts and police forces revealed concerns that outsourcing services to private firms would lead to a loss of expertise in the public sector.

The research, by Totaljobs.com, found that almost two-thirds of managers believed outsourcing would cut costs, while only one in four said it would deliver better quality services.

The report will be discussed at the conference aimed at examining the implications on recruitment and skills of Government plans to achieve £40 billion of procurement savings in the next three years

Mike Booker of Totaljobs.com said: “The perception that the skills needed in the public and private sector are somehow different is being swept away by the more pressing need to work together to achieve £40 billion in savings.

“While we’re seeing large numbers of public sector workers looking to migrate to the private sector, it must not be forgotten that essential private sector skills are in high demand in the public sector with our site alone housing 326 postings for public sector procurement professionals.”

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Posted in Campaign4Change, procurement, public sector, public services, SME, social economy, social enterprise

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CSC’s chairman and CEO to retire

Posted on 19/10/2011 | Leave a comment

By Tony Collins

CSC’s chairman and CEO, Mike Laphen, is to retire within a year,  reports ComputerworldUK.com.

His announcement comes at a time when the company faces some of the toughest challenges in its history with a US SEC regulatory investigation, an accounting controversy and a legal challenge over its statements in relation to its work on the NPfIT.

Anthony Miller, chairman of analysts TechMarket View, said CSC has undergone several “meaning of life reviews” as contract margins have been squeezed.

CSC has yet to sign a new agreement with the Department of Health over the future of Lorenzo and its NPfIT work. CSC’s share price today is a little above its five-year low.

ComputerworldUK.com

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Posted in Campaign4Change, change management, Government IT, NHS, npfit, public sector, public services, Uncategorized

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Head of NPfIT remains in post says DH

Posted on 11/10/2011 | 1 comment

Sir David Nicholson, the Chief Executive of the NHS and Senior Responsible Owner [SRO] of the NPfIT, will remain as the programme’s SRO until the scheme is dismantled, the Department of Health said this week.

The DH’s statement contradicts a suggestion in the media that, as the NPfIT programme board has been disbanded, Nicholson is no longer the scheme’s senior responsible owner.

Had Nicholson stood down as the NPfIT SRO there would have been no direct accountable owner for the £4bn worth of contracts with local service providers BT and CSC, or the scheme’s remaining systems such as Choose and Book, the Summary Care Record and the data “Spine”.

A project’s SRO is held by Parliament to be the “business owner” of a central government project, the person responsible for the scheme’s results. Nicholson took on the job of NPfIT overall SRO when he accepted the appointment of NHS CE in 2006.  He has become the programme’s staunchest supporter.

A spokesperson for the Department of Health said: “We have already announced that we are dismantling the National Programme for IT and establishing new governance arrangements to support more local decision making.

“Sir David Nicholson will remain Senior Responsible Owner to ensure a clear line of accountability whilst this work is undertaken.”

It’s unclear when Nicholson will stand down as head of the NPfIT or whether he can be held accountable for the problems on the project under his leadership. In 2008 he declined to order an independent investigation into the NPfIT.

Nicholson tries to keep NPfIT alive.

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Posted in Government IT, NHS, npfit, public sector, public services, Uncategorized

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NPfIT – criminal incompetence says The Times

Posted on 05/10/2011 | 2 comments

By Tony Collins

In an editorial not everyone would have seen, The Times said the history of the NPfIT was “one of criminal incompetence and irresponsibility”.

The main leader in The Times on 23 September had the headline “Connecting to Nowhere”.

It said:

“The comically misnamed Connecting for Health will continue to honour its contracts with big companies and to swallow taxpayers’ money for some time to come: up to £11bn on current estimates. The figure demonstrates the truly egregious scale of the previous Government’s incompetence on this issue: this vast sum seems to have been committed irrevocably, even though the project has never achieved its objectives.

“The story is a dismal catalogue of naivity, ambition and spinelessness. NHS managers and officials …were [not] brave enough to question the direction of travel at crucial moments when IBM and Lockheed pulled out of the project early on. Whitehall was sold a grand vision by consultants, software and technology companies charging grandiose fees. It signed contracts that appear to have been impossible to break when the promised land did not appear. Yet no one seems responsible. No one has been sacked. Most of the officials involved have long moved on…

“There have been spectacular failures in the private sector too. But businesses, with tighter controls on spending, tend to halt things earlier if they are going wrong. Many prefer off-the-shelf systems such as SAP or Oracle, which are tried and tested. They know that it is cheaper to adapt their processes, not the software.

“This newspaper is in favour of serious investment in technology, which could play an important part in economic growth. The NHS debacle has done enormous damage to this country’s reputation for expertise in IT systems. The lessons for the future are clear. Governments must hire people who can make informed and responsible procurement decisions. Patients, in every way, are going to end up paying the price.”

A separate article in The Times 0f 23 September included comments by Campaign4Change whose spokesman said that if the Department of Health continues to spend money on NPfIT suppliers it will probably get poor value for money.

Comment:

Compare the remarks in The Times with those of David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NPfIT who refused to agree to a request by 23 academics to have an independent review of the scheme. Nicholson could not contain his enthusiasm for the NPfIT when he told the Public Accounts Committee on 23 May 2011:

 “We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

“So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.”

It’s difficult to accept Nicholson’s figures. But even if we do, we’d have to say that the 20% that hasn’t been delivered was the main reason for the NPfIT: a national electronic health record which hasn’t materialised and isn’t likely to in the near future.

The contrasting comments of The Times and Nicholson’s are a reminder that the civil service hierarchy at the Department of Health operates in a world of its own, unanswerable to anyone, not even the Cabinet Office or Downing Street.

Can the Department of Health be trusted to oversee health informatics when it has such close relationships with major IT companies and consultants? While Katie Davis is in charge of health informatics there is at least an independent voice at the DH. But as an interim head of IT how long will she last? The DH has a history of not being keen on independent voices.

Nicholson: still positive after all these years.

NPfIT goes PfffT.

Beyond NPfIT.

Surge in tenders for non-NPfIT systems.

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Posted in Campaign4Change, Government IT, legal disputes, NHS, npfit, openness and transparency, outsourcing, procurement, public sector, public services, supplier relationships, Uncategorized

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Investors’ writ against CSC on NHS contracts – more detail

Posted on 03/10/2011 | 5 comments

By Tony Collins

The Guardian has published the 123-page writ against CSC by lawyers acting behalf of some of the supplier’s investors. The writ contains many allegations against CSC and named directors. The company’s response is that it is corporate policy not to discuss litigation.

The legal action appears to have been based, in part, on CSC’s poor share price, which is today near a five-year low, and the supplier’s repeated positive statements and assurances on the performance of its NHS IT contracts and its iSoft Lorenzo software

These are some of the claims made in the document:

– Lorenzo was originally designed by iSoft as a one-size-fits-all software for use in local medical practices. “However, the UK healthcare system is highly diverse, ranging from large university hospitals to small private medical practices to prison medical facilities. Thus, according to the Deputy Head of Testing for Lorenzo, Lorenzo was never the correct software for the job. Lorenzo therefore required significant development before it could be deployed throughout the UK’s healthcare system.”

– In September 2008, after years of delays in Lorenzo’s development [CSC] sent a Delivery Assurance Review Team to England to assess the development and testing of Lorenzo. In mid-September, the Testing Review Team met with the Deputy Head of Testing for Lorenzo, a CSC employee from December 2007 until April 2011. The Deputy Head of Testing told the Testing Review Team that the level of testing and test results for Lorenzo was “abysmal,” and that the various releases on which the project was based could not be delivered on time. Subsequently [a CSC employee] told the Deputy Head of Testing to “shut up,” which he took to mean that he should not further criticise the quality of the testing nor the testing results.

– The Deputy Head of Testing claimed that the Lorenzo software was rife with severe defects that were unacceptable under the NHS Contract. The Deputy Head of Testing said that the software defects were subject to the following ratings: Severity Level I: the defect cause important part of the Lorenzo system to fail. Severity Level II: similar to Severity I, but the defect has a workaround. Severity Level III: the defect is an important defect, but one that would not stop the system from functioning. Severity Level IV: defect is a minor defect and would not impact the Lorenzo system’s function, but would be a nuisance to a software user.

– According to the Deputy Head of Testing, throughout 2008 and 2009, the level of Severity I and II defects in every release of Lorenzo was “high and grossly beyond” what the NHS would accept. According to the Deputy Head of Testing, while CSC publicly reported that it had met certain delivery milestones and therefore could recognize revenue, CSC’s statements in this respect were misleading in view of the software defects detailed above.

– CSC said in November 12, 2008, when analysts asked about missed deadlines, that “Our confidence continues to build on the program. We are pleased with our progress.”

–  In financial statements CSC continued to assert that the NHS contract was profitable and the Company expected to recover its investment.

– Shortly before the Deputy Head of Testing retired from CSC in early April 2011, he sent an email directly to a CSC director, copying several other CSC executives, in which he said ‘You hope that you will succeed by August 2011. I do too but you won’t. The project is on a death-march where almost as many defects are being introduced as are being fixed.”

–  by 2006 CSC had determined that it had no believable plan for delivering on the NHS Contract and should not have booked revenue under the contract from that point forward.

– The significance of the NHS Contract to CSC “placed the project squarely in the spotlight of Wall Street analysts”.

–  CSC “continuously denied media reports critical of CSC’s performance of the contract”

CSC is expected to file its response to the allegations in due course.

CSC sued on losses over disastrous NHS contracts – Observer

CSC class action – document in full on Guardian’s website

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NPfIT to be “dismantled” – brick by brick

Posted on 22/09/2011 | 6 comments

By Tony Collins

A Department of Health press release issued this morning is headlined:

                        Dismantling the NHS National Programme for IT

I asked a senior official at the Department what is new in the announcement. The official’s diplomatic reply was simply: “I am not sure how to answer that.”

There is nothing new. There is no evidence in the press release of the Department’s claim that the NPfIT is being dismantled. Negotiations continue with CSC over its £3bn worth of NPfIT contracts and BT’s deals will remain in place.

Spending on the NPfIT has been about £6.4bn so far – and about £4bn has yet to be spent. The Government has succeeded in persuading some in the general public that the NPfIT is dead. The Daily Mail’s front page has the headline:

                                £12bn NHS Computer System is Scrapped

The online version of the story has had more than 460 comments, which suggests it has been widely read.

The actual announcement gives a hint of the conflicting views among civil service and ministers. The first paragraph of the Department of Health’s press release says the NPfIT is being dismantled and the second paragraph praises the scheme.

“The government today announced an acceleration of the dismantling of the National Programme for IT, following the conclusions of a new review by the Cabinet Office’s Major Projects Authority (MPA). The programme was created in 2002 under the last government and the MPA has concluded that it is not fit to provide the modern IT services that the NHS needs. In May 2011 the Prime Minister announced in the House of Commons that the MPA would be reviewing the NHS National Programme for IT. 

 “The MPA found that there have been substantial achievements which are now firmly established, such as the Spine, N3 Network, NHSmail, Choose and Book, Secondary Uses Service and Picture Archiving and Communications Service.  Their delivery accounts for around two thirds of the £6.4bn money spent so far and they will continue to provide vital support to the NHS. However, the review reported the National Programme for IT has not and cannot deliver to its original intent.”

The signs are that the scheme will be dismantled brick by brick – and will be almost completely dismantled by the time the NPfIT contracts with BT and CSC expire in 2013 and 2014.  The coalition has achieved a PR coup with the Daily Mail story because the public has the impression that in these austere times a £12bn NHS IT scheme initiated by Labour has been scrapped.

The reality is that nothing has changed.

Department of Health announcement

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CSC optimistic on new NPfIT deal – officials less so

Posted on 24/08/2011 | 1 comment

By Tony Collins

CSC is due to meet officials from the Cabinet Office next month to discuss a possible new deal over the company’s £3bn worth of NHS IT contracts. Proposals from the Cabinet Office’s Efficiency and Reform Group have gone to the Department of Health and Downing Street for approval.

Nobody seems to know yet what the ERG has proposed but CSC remains confident that a new NPfIT deal will be signed that is good for the supplier’s finances and for the NHS.  Not all Whitehall officials share CSC’s confidence, however.

A new deal may be signed – but perhaps without the exclusive arrangements in the original contracts and the NHS commitments to place a minimum amount of business with the company.

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