IMPROVING THE DELIVERY OF GOVERNMENT IT
PROJECTS
MANAGING PROJECTS
Senior management has a crucial role to play in
championing the successful development of IT systems
27. Decisions about IT are now crucial to the development
and success of the business of public bodies, and cannot be treated
in isolation from other aspects of their work. Failure to deliver
an IT system can have a profound effect on an organisation's ability
to provide services to its customers. In addition, many IT systems
require significant resources. Key decisions on IT systems are,
therefore, business decisions, not technical ones and should involve
senior management. There is also considerable evidence that board
level ownership of projects is a critical success factor.
Key lessons
28. Senior management in all public bodies have a
crucial role to play in championing the successful development
of IT systems. In particular, it is essential that senior staff:
- recognise the opportunities that information
technology can give them to improve their administration and provide
other business benefits;
- create an environment within their organisation
in which project management can succeed, for example, by supporting
the development of high quality project management skills and
experience;
- ensure that there is clarity about the aims and
objectives of major projects, and there are clear criteria against
which the success of a project can be judged;
- insist on having regular feedback on the progress
of projects and do not have information on progress filtered out;
- use trusted sources of advice on the benefits
that technology can bring;
- where they are not IT specialists, are provided
with appropriate training so that they have sufficient awareness
of risk management and evaluation; and
- are accountable for ensuring that specific anticipated
benefits from IT projects are achieved.
Council for the Central Laboratory of the Research Councils financial accounting system (Annex A No 8)
Greater understanding of project management principles would have avoided some of the problems associated with the introduction of the financial accounting system at the Council for the Central Laboratory of the Research Councils. The Council were wrong to treat the introduction of a new system as an off the shelf purchase rather than a project, and so not apply good project management principles to what they acknowledged was a business critical process. In our report we found it unacceptable that the Council did not effectively grip the management of the project until over a year after the project implementation date. The Comptroller and Auditor General reported that there had also been a failure to ensure clear reporting lines to senior management consistent with their responsibilities. Scrutiny of the project was compromised because the Audit Committee was presented with insufficient and over-optimistic information on the problems being encountered.
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The development of high quality project management
skills within Government is essential
29. The management and oversight of IT projects by
skilled project managers is essential for ensuring that projects
are delivered to time and budget. Project managers must have a
thorough grounding in the principles and practices of project
management, as well as relevant experience, but this is not enough
by itself. Successful implementation of IT systems calls for imagination
and well-conceived risk management, as well as sound project management
methodologies.
Key lessons
30. The development of high quality project management
skills within Government is essential. In particular:
- the Committee consider that the professional
status and standing of project management within Government as
a whole needs to be developed and enhanced. This could be done
by establishing project management as a distinct profession within
Government, along similar lines to the position of the new Government
Procurement Service;
- work should be undertaken to ensure that the
principles of good project management are understood and followed
throughout Government;
- Government must find ways of rewarding project
managers for their part in delivering IT projects successfully,
and so retaining them to provide continuity and experience for
future projects; and
- project managers must be encouraged to draw risks
to the attention of senior management in order to alert them to
problems. They must be encouraged to undertake active management
of changes to project contracts, costs, benefits, risks, timescales,
technology and organisation, and not simply adhere to original
project plans or project management methodologies.
The Department of Employment - The Field System (Annex A No 19)
Our predecessors reported in 1994 on the introduction of the Department of Employment's new integrated computer system (The Field System). The Department experienced problems in developing and implementing it, and by spring 1993, when they ceased supporting the System, and Training and Enterprise Councils became responsible for their own information technology requirements, the Department had spent £48 million on it. In their report, our predecessors commented that effective management was essential to the success of such a project. They were disturbed that the Department had entrusted the responsibility for this project to staff who did not possess the necessary background and experience, and had underestimated the amount of skilled input needed.
The Hospital Information Support Systems Initiative (Annex A No 15)
In our predecessors' report on the Hospital Information Support Systems Initiative in 1996, delays in the progress of many of the projects examined by the National Audit Office under this initiative were put down to poor project management. Our predecessors suggested to the NHS Executive that projects could have been done considerably better had they brought in their monitoring earlier. Our predecessors were extremely disappointed that some of the project management problems seen in the case of the Wessex Regional Health Authority's Information Systems Plan had been repeated in certain projects under this Initiative.
The Northern Ireland Vehicle System Replacement Project (Annex A No 16)
The Comptroller and Auditor General reported in 1997 that project management of this project had been a significant problem, which must have contributed to the slippage and cost overruns. The project management structure, whereby DVLA acted as an interface between DVLNI and DVOIT, was cumbersome and inefficient. In addition, project managers had to adapt to the changing nature of the relationship with the contractor from in-house supplier, to executive agency, to external commercial supplier. Problems were exacerbated by the lack of continuity of key project staff.
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It is vital that Departments pay attention to
the management of risks and have contingency plans in case projects
are not implemented as planned
31. As well as wasting enormous sums of public money,
failures in IT can have disabling impacts on public services and
on citizens. These have included the failure to pay social security
benefits to vulnerable people and major delays in issuing people
their passports. In addition to planning and managing projects
positively, Departments should put contingency plans in place
to monitor adequate levels of service in the event of project
failures.
Key lessons
32. It is vital that Departments pay attention to
the management of risks and have contingency plans in case projects
are not implemented as planned. In particular:
- decisions on projects, both prior to inception
and during development, should be soundly based on a rigorous
assessment of costs and benefits, and a realistic assessment of
risks;
- major IT projects call for competent risk managers,
who quantify and prioritise risks on an on-going basis throughout
the life of the project, and raises issues at an appropriate level;
- there should be a risk management framework for
projects, within which people are empowered to make decisions
as the costs, benefits and risks change during the project's life;
and
- risk assessments should be carried out throughout
the project, in particular, to assess whether the business case
continues to be viable in the light of actual costs incurred and
changing business requirements.
West Midlands Regional Health Authority Electronic Trading System (Annex A No 22)
Our predecessors reported that development of the electronic trading system began in May 1990. The project was not viable because information contained in the business plan was speculative and unrealistic. Proper market research was not carried out and suppliers were not consulted. Estimates of supplier take up were significantly overstated. Potential customers were not consulted and the royalty projections were unrealistic.
NHS Executive: The Purchase of Read Codes and the Management of the NHS Centre for Coding and Classification (Annex A No 9)
We noted that total expenditure on the Read Codes to March 1998 was some £32 million and implementation would cost many times more. We considered it was a serious failing that the NHS Executive did not prepare a full business case to assess the benefits and risks of different options to justify investment in the clinical terms projects. We considered it axiomatic that sound project appraisal includes a rigorous assessment of costs and benefits and a realistic assessment of risks.
The passport delays of Summer 1999 (Annex A No 1)
In his report on the implementation of the new passport processing system, the Comptroller and Auditor General commented that many of the risks associated with implementation had been identified by the Passport Agency at the planning stage. But the risks and the response required had not all been realistically assessed, and when things began to go wrong the Agency's plans proved insufficient. Whilst the Agency took action to make up for lost production in Liverpool and Newport, it was not able to make up for the increase in applications. The Agency was too reliant on using routine solutions, such as staff and managers working longer and longer hours, to cope.
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- Departments need to be clear about those risks
that cannot be transferred to the supplier, in particular, the
wider business risks that might mature if they do not have a fully
operational system on the date required;
National Insurance Recording System (Annex A No 2a and 2b)
The Contributions Agency identified the risks associated with the project. The main risks that the suppliers were prepared to take on were the risks of developing a system and not being paid until it worked; of possible claims for compensation in the event of slippage or service failure; of a service credit system which put at risk some of their revenue if they did not meet certain defined performance targets; and that when the provision of NIRS2 was re-tendered, the existing supplier would not receive a transfer payment if a new supplier won the competition and chose not to use the incumbent supplier's system. However, the Agency accepted that, although they had transferred the financial risk of non-delivery, they would always retain the business risk.
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- departments should draw up contingency plans
to cover the risk that the system is not implemented successfully
on time and as specified.
Foreign and Commonwealth Office Accounting System (Annex A No 25)
In 1989 the Office started parallel running of a new accounting system which had been delayed by supplier problems. In February 1990, before the problems could be resolved, the old system failed irreparably without backup, forcing the Office to run the new system live. The new system did not operate satisfactorily and the department were unable to complete their accounts to the agreed audit and publication timetables.
Intervention Board Executive Agency (Annex A No 12)
In introducing their new integrated accounting system in 1996 the Intervention Board decided not to undertake parallel running because of the cost, and on the basis of technical advice that it would not work. They sought to minimise the risks of not parallel running by extensive user testing, but this did not identify the problems that arose after implementation. The Board did have a fall back position when they went live, but on reflection they felt that they should have maintained it for longer than five days. In the event, we reported that the new system did not work and the Board failed to produce proper accounts for Parliament.
Council for the Central Laboratory of the Research Councils financial accounting system (Annex A No 8)
We reported that a new integrated accounting system was due to be introduced on 1 April 1997 for full operation by June 1997. The Council ceased to operate their old system on 31 March 1997, but did not follow the normally accepted practice of running the two system in parallel, as this would have incurred costs of up to £2.5 million in 1997-98. The Council encountered problems with the operation of the new system, which together with delays and errors in the migration of data from the previous system, contributed to a number of problems, including difficulties with the preparation and audit of the Council's 1997-98 accounts.
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