A double helping of Christmas cheer and IT procurement woes

This morning I read Peter Smith's exclusive on a previously undisclosed undisclosed procurement capability review.   I gave a cheer for Freedom of Information.

I then picked up my paper at the local shop and read the wonderful headline 'Patients get right to see medical records online' and laughed.  I laughed for three reasons.

Firstly I have spend the best part of a year

Ministry of Justice finds IT Offender for Probation Services

When I last wrote about IT fiascos I referred to the need for political ownership and effective use of gateway reviews.  But IT procurement just seems to keep on giving lessons, if not unwarranted public monies to the IT wizards in the midst of an Austerity Strategy.

The latest debacle is found in the Probation Service's new £250m IT system for the whole of England and Wales.

Political ownership of risk management and procurement scrutiny

If there has been one mantra since the coalition came to power regarding public procurement, it has been that transparency in public procurement is paramount - hold on to that context for a few minutes.

Yesterday I discussed the procurement of the NHS IT system and argued that if we really wanted to learn from the experience we had to move beyond criticising the procurement but instead probe what went wrong with the application of Gateway Reviews (http://drgordy.blogspot.com/2011/12/nhs-it-system-procurement-fiasco-or.html).  Now we find that the risks of failure were concealed from MPs - this echoes the defence of David Steele when he was asked to account for the procurement problems with the building of the Scottish Parliament, he said the civil servants concealed the true state of the project from politicians.  Politicians clearly have to be in a stronger position to scrutinise and, I would argue, be a part of Gateway Reviews or see those reports.  Elected members need to be fully appraised of risk assessments if scrutiny is to be effective. Is there a potential script being written here for a Christmas Special of 'Yes Minister'?


Furthermore, today we've learnt that the NHS will not respond to a FoI request on the fiasco. How does that fit with the transparency mantra? What's changed?


Well, allegedly the FoI request cannot be acceded to in case the supplier who has been unable to deliver to contract (for example, 3,128 defects) suffers a fall in their share price.  Correct me if I'm wrong, but should share price not reflect company strength and long-term sustainability?  Do public procurement specialists not consider financial stability when awarding contracts? Is it not the responsibility of the supplier to argue when bidding the grounds for non-disclosure of commercially sensitive aspects of their bid, therefore did the supplier argue when bidding that in the event of such a catastrophic failure to deliver they would prefer no disclosure would take place regardless of the UK public interest in achieving value for money?  How on earth can we collect lessons learnt, in line with the UK public sector best practice, if secrecy prevails even when a procurement disaster has struck? If I was a public procurement practitioner and was carrying out a supplier appraisal on the supplier, would the NHS suggest all is well and let me waste more money with the supplier?




Background reading
Kennedy, D., Pitel, L., and Hohmann, I. (2011) 'Dead wrong, the software that NHS says it just cant't discuss', The Times, 9 December 2011, pp.19-20.
Pitel, L., Smyth, C. and Kennedy, D. (2011) 'American 'cowboys' blamed for NHS fiasco', The Times, 9 December 2011, p. 1 and p.19.

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.