Thursday, 19 December 2013

Can the loss of £100m be a good news story for procurement?

The PwC report into the failed BBC Digital Media Initiative has now been published. We know masses
 of public money was wasted and we know, with the benefit of hindsight, that we'd all have done a better job and pulled the plug earlier. But I think this report is actually a good news story, particularly for complex contracting, if the high profile of the debacle leads to the report being read and learnt from. Learning the lessons could lead to many more doomed projects being aborted earlier and therefore unnecessary costs avoided.

The report suggests that there was an absence of an effective governance structure which enabled challenge of time, cost and quality. This has been a common problem with complex contracts and reminds me of the problems with the Scottish Parliament building when David Steele announced he was kept in the dark by civil servants on progress. It is not enough for those in decision making roles to 'approve' they also need the confidence to ask challenging questions as part of risk management.

There was a failure recognise that the DMI was more than a technology solution and needed effective business change management too. Reporting was based on the technology risks and failed to give due attention to the business change management risks. Again this isn't a first but remains, to me, one of the key reasons IT projects fail - it's a bit like giving someone who has never had a telephone a brand new iPhone and assuming they will immediately understand why and how to use it. The power in technology, to me, isn't in the machine but the capacity and willingness of stakeholders to harness its potential.

Of course we all know that a business case needs to be constantly updated and reviewed - that's basic. But because something is basic it should not be taken for granted. Unfortunately the DMI failed on this basic. Had the changes in the business been scrutinised and it's value challenged it seems the plug may have been pulled a lot earlier when it was recognised there was no longer a business justification. Such bravery avoids unnecessary costs.

There was a lack of an integrated approach to project assurance - too many components without a holistic view only leads to blindness of the real issues.

So there you have it, the key lessons are the need for:
  1. An effective governance structure with effective challenge of cost, quality and delivery;
  2. Recognition the business change management is critical to successful technology improvement;
  3. Keeping the business case 'current' and under review and challenge;
  4. An integrated project assurance approach.
Not new, not rocket science, straight out of PRINCE2 and MSP, yet will the lessons be learnt and save money for other complex contracts? Come to think of it, why didn't the BBC know all that too? Knowing is one thing, not doing it is the failure.

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