If An IT Project Wastes US$16B, Is It The CIO’s Fault?

by drjim on May 7, 2014

The British NHS IT project is going to end costing a lot and delivering very little

The British NHS IT project is going to end costing a lot and delivering very little
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It seems like a classic IT problem. You’ve got a lot of separate medical facilities all trying to provide medical services to people who live in the same country. What’s even better is that everyone is taking part in a nationally provided health care program. It sure seems like creating a single database to hold everyone’s healthcare records would be an almost no-brainer. Over in the U.K. they tried to do this, and things have not gone as they were planned.

The Problem With Lorenzo

In the U.K. the National Health Service (NHS) is the branch of the government that is responsible for providing health care to British citizens. As you might well imagine, the amount of data associated with this task is huge. Back in 2002 a decision was made to create a single unified database system that would store customer information. Sounds like a typical IT project doesn’t it?

The new NHS computer system was to be called Lorenzo. This IT system was supposed to store data for 220 trusts in the north, eastern England and the Midlands at a cost of £3.1bn (US$4.96B). As is the case in far too many IT projects, things didn’t go well. Now the final contract for that project alone is likely to cost the Department of Health £2.2bn (US$3.52B) and cover only 22 trusts.

This project is being called the biggest IT failure ever seen. The causes of the problem are many and a lot of different people contributed to them. However, it is believed that the NHS’s particular problems stem from the original contracts signed before 2002. When there’s an IT failure of this size, the question has to be asked: where was the CIO while all of this was going on?

What The CIO Should Have Done

So who is the CIO of the NHS? It turns out that the CIO position has been a bit of a revolving door. Christine Connelly held the CIO job from 2008 – 2011. Katie Davis then held the position from 2011 – 2012. Christopher Rieder now holds the position. It can be hard to tell who’s in charge when the players keep changing!

So what did the CIO not do here? The Lorenzo project was launched in 2002 but was beset by changing specifications, technical challenges and disputes with suppliers which left it years behind schedule and over budget. In September 2011 ministers announced they would dismantle the National Programme but in an effort to salvage something from the failure said they would keep the component parts in place with separate management and accountability structures.

This attempt to get something out of the program ended up not working. The new structures have been examined and a number of significant failures have been found. The end result, is that very little of a very expensive project is going to produce any real value.

So what did the CIO fail to do? Ultimately, the negotiation of the contract with the IT vendors was the responsibility of the CIO. The CIO should have renegotiated its original £3.1bn contract with the IT systems group Computer Science Corporation for care records systems across 220 trusts in the North, Midlands and East, following delays and problems.

However, this never happened. As of today, CSC has still not delivered the software and “not a single trust has a fully functioning Lorenzo care records system”. CSC’s contracts could not be cancelled because a legal challenge by the company may well have succeeded. The CIO did not play a significant role in setting up these IT contracts and that’s why things got so far out of hand.

What All Of This Means For You

The Brits have a real problem on their hands. They’ve spent a lot of money to create what should be a fairly straightforward IT database system of the people who are using their national healthcare system. However, after having spent US$16B, they still don’t have a working system. Is the CIO to blame?

What went wrong here? It appears as though this is a pretty simple case of the IT arm of the British government entering into some poorly worded long-term contracts. The contracts seem to have not spelled out how changes were going to be handled and somehow let the vendors get off the hook without having to deliver a working solution. The CIO is ultimately responsible for every contract that the IT department signs, so yes – this is the CIO’s fault.

What should have happened is that given the importance of information technology, professional contract negotiators should have been brought in to handle the creation of the IT contracts. People who do this for a living would have never signed the contracts as they stand today. A CIO always needs to know when to reach outside for assistance.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: What should have been the warning sign to the IT staff that the contracts were getting out of control?

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What We’ll Be Talking About Next Time

Your company’s customer service is something that all too often people who have the CIO job don’t spend a lot of time thinking about. However, considering the impact that a company’s level of customer service can have on its bottom line, perhaps we should be paying more attention to this critical business function.

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