Thursday, 8 December 2011

The NHS IT system procurement fiasco or Gateway Review fiasco?

Yet again The Times has provided an exclusive on the on-going procurement saga of the NHS IT system.  Initially it was to cost £6.2bn now it's £11.4bn.  No one could deny this does indeed rank high in any challenge for 'procurement case study classics'.  Yet what lessons have we learnt? Before I start to answer that question, let's pick up on some of The Times story.

The Times report:
  1. Health trusts were threatened with cuts unless they agreed to implement the system;
  2. Civil servants had privately estimated that the software had a three-in-one chance of being delivered;
  3. £250,000 was paid in bonuses to DH staff for exceptional contribution to delivery;
  4. Applications installed had failed to function or put on ice;
  5. The estimated cost of scrapping the system were estimated as zero if things went wrong, now it's billions;
  6. The key provider's CX and Chairman quit with a golden handshake worth millions of pounds;
  7. The NHS has pulled the plug on the system but the provider has allegedly boasted it expects a contract extension until 2017 and £2bn extra (we can add that to the potential saving from the Vaccine Purchasing strategy).
In 2007 I picked up on an earlier Times report on the procurement of the system - at that stage it was stated "[the system] is not working and is not going to work".

But I asked above what lessons can be learnt?

To me, although not identified by The Times, had a robust approach to Gateway Review been applied we would have been in a different position.   How have I arrived at that conclusion?
  • Gateway 0  should have identified alternative ways of achieving the outcomes - from memory GPs had put forward alternatives, were they given due consideration?
  • Gateway 1 Should have identified two risks, firstly, an unrealistic timetable, and secondly, the right people did not appear to be in place to ensure delivery.
  • Gateway 2 should have asked at least five questions, none of which appear to have been robustly challenged: Are there suppliers who can deliver? Is the specification clear? How can we control risk, indeed what's the risk management strategy?  Is the procurement strategy appropriate? Have [GPs] been consulted?
  • Gateway 3 should have tested the incentives to ensure good supplier performance.
  • Gateway 4 would have provided reassurance that the business case was still valid and KPIs were being met.
  • Gateway 5 awaits - I hope!
Of course there's a further question which, to me, isn't addressed in the review process 'what's the exit strategy?'  Compare that question with Tony Blair's initial 2002 question 'how fast can you get it/how long will it take?' The response was to accelerate the initial timeline - was that clever?

So, while we may look at this as an IT procurement fiasco, I really want to highlight that the real lesson to be learnt relates to how robustly we approach Gateway Reviews?  Were the Gateway Reviews robust?  Were they cosmetic? What did they uncover?  Were green lights given? If green lights weren't given why did the process continue?

Space doesn't permit a comparison against MSP and PRINCE2 methodologies but it's clear only lip service was paid those too!

Hindsight is a wonderful thing and that's how we collect lessons learnt (or should collect AND LEARN FROM).

My argument is that it is now timely to have an evaluation of the application of Gateway Reviews across the whole of the public sector and senior decision makers need to evaluate and learn from the application of Gateway Reviews in their own organisations.

To me gateway reviews, MSP and PRINCE2 methodologies are worthy of praise and adoption - they do not appear to be at fault.  Isn't it a pity that the appropriate application of the methodologies is sometimes lacking!

Each organisation should by now have had a root and branch review all their projects, challenged against by gateway reviews and particularly, how does this fit with austerity priorities and what's the exit strategy.

The Austerity Strategy needs to address these issues before reducing the delivery of services to citizens.  

Background reading and sources:
Kennedy, D., Smyth, C. and Pitel, L. (2011) 'Exclusive NHS computer fiasco still costing billions'. The Times, 8 December 2011, p. 1.
Kennedy, D. (2011) 'Software firm is banking on getting £2bn extra for its failed system', The Times,  8 December 2011, p.6.
Kennedy, D., and Frean, A. (2011) '$7m payoff for boss behind IT 'nightmare'', The Times, 8 December 2011, p. 8.
Robertson, D. 'We pay toll for road of good intentions', The Times, 8 December 2011, p.8. 
Rose, D. (2007) '£6,2bn IT scheme for NHS 'is not working and is not going to work', The Times, 13 February 2007.
Smyth, C. (2011) 'Project blighted from the start by bad decisions', in The Times, 8 December, 2011, pp.6-8.

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