Wednesday, July 23, 2014
More ICT grief
When I informed the Finance Committee of the National Assembly for Wales that the insourcing of the Assembly Commission's ICT service had actually saved more money that anticipated my news was met with astonishment. After all, as the chair said, it is very rare for any public sector ICT project not to overrun and cost more than planned.
Alas, this is true and for good reasons. ICT projects are often not about technology at all. They are change management projects. Not only is that misunderstood but it is common for those commissioning them to overlook that essential truth because they are dazzled by ICT goodies that they only partly understand and often do not deliver on expectations.
ICT projects fail or cost more than anticipated because they are not properly procured, because they are not properly project managed, because they do not secure buy-in across the organisation, because benefits are exagerated and accepted without proper scrutiny and because of an over-reliance on penalty clauses that are not worth the paper they are written on. I know as I have been involved at both ends of the spectrum, albeit on a political level rather than in managing the project.
So, none of us should be surprised by the news in today's Times that HMRC has been censured for “unacceptably poor” management after an IT project spiralled out of control to cost the taxpayer more than £10 billion:
HM Revenue & Customs showed a “lack of rigour” in handling a contract for processing millions of tax returns, the spending watchdog said yesterday. The Aspire deal was costed at £4.1 billion in 2004 but it is predicted that the figure will have more than doubled to £10.4 billion by the time the contract runs out in 2017.
In a highly critical report, the National Audit Office (NAO) also disclosed that Capgemini, the contractor, and Fujitsu, its subcontractor, have already reaped profits of at least £1.2 billion on the deal, or more than double the £500 million forecast.
The NAO revealed that the original contract gave HMRC some of the profits from the scheme, but this right was given away when the deal was renegotiated in 2012. Profits received have only been worth £16 million instead of £71 million.
The contract, which provides 650 IT systems for collecting income tax and national insurance, now costs the taxpayer about £813 million every year and no longer provides value for money, the NAO said. However, time is running out for a replacement contract, which could put tax collection “at risk”.
The paper goes on to say that this is the latest in a string of troubled Whitehall IT projects. They say that the Department for Work and Pensions has written off part of its computer program for universal credit and the Home Office scrapped a £347 million immigration IT project last August. And that is just the tip of teh iceberg.
What disturbs me is that nobody seems to be learning any lessons from these failures.
Alas, this is true and for good reasons. ICT projects are often not about technology at all. They are change management projects. Not only is that misunderstood but it is common for those commissioning them to overlook that essential truth because they are dazzled by ICT goodies that they only partly understand and often do not deliver on expectations.
ICT projects fail or cost more than anticipated because they are not properly procured, because they are not properly project managed, because they do not secure buy-in across the organisation, because benefits are exagerated and accepted without proper scrutiny and because of an over-reliance on penalty clauses that are not worth the paper they are written on. I know as I have been involved at both ends of the spectrum, albeit on a political level rather than in managing the project.
So, none of us should be surprised by the news in today's Times that HMRC has been censured for “unacceptably poor” management after an IT project spiralled out of control to cost the taxpayer more than £10 billion:
HM Revenue & Customs showed a “lack of rigour” in handling a contract for processing millions of tax returns, the spending watchdog said yesterday. The Aspire deal was costed at £4.1 billion in 2004 but it is predicted that the figure will have more than doubled to £10.4 billion by the time the contract runs out in 2017.
In a highly critical report, the National Audit Office (NAO) also disclosed that Capgemini, the contractor, and Fujitsu, its subcontractor, have already reaped profits of at least £1.2 billion on the deal, or more than double the £500 million forecast.
The NAO revealed that the original contract gave HMRC some of the profits from the scheme, but this right was given away when the deal was renegotiated in 2012. Profits received have only been worth £16 million instead of £71 million.
The contract, which provides 650 IT systems for collecting income tax and national insurance, now costs the taxpayer about £813 million every year and no longer provides value for money, the NAO said. However, time is running out for a replacement contract, which could put tax collection “at risk”.
The paper goes on to say that this is the latest in a string of troubled Whitehall IT projects. They say that the Department for Work and Pensions has written off part of its computer program for universal credit and the Home Office scrapped a £347 million immigration IT project last August. And that is just the tip of teh iceberg.
What disturbs me is that nobody seems to be learning any lessons from these failures.
Comments:
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Given that we currently have a culture that glorifies the technophobic especially in older people it is not really surprising that these projects spiral out of control
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