Wednesday, December 09, 2009

IT suppliers face architectural risk

@tonyrcollins reports on the implications for large IT contracts of the Centrica v Accenture dispute (Computer Weekly, 9 December 2009). The dispute concerns a "best-of-breed" replacement billing system for the entire British Gas business, which Centrica ordered from Accenture in 2002.

Centrica is invoking a clause in the contract that refers to "fundamental defects", and a lot of the legal activity has been trying to determine what this phrase actually means. Although Accenture argues that the various problems experienced with the system have been unconnected and therefore don't count as fundamental, the High Court has accepted Centrica's interpretation that the cumulative effect of these defects may indeed be regarded as fundamental.

 The article quotes Peter Clough, head of disputes at law firm Osborne Clarke:

"One of the important points to note about this case is that IT suppliers can be liable for claims for fundamental breach arising from the cumulative effect of a series of faults, each of which could look relatively minor in isolation. The majority of systems will of course be inter-linked so that a defect in part of the process could affect another part, snowballing into a more serious issue."

So this is about architecture and risk. From a risk management perspective, a critical responsibility of the architect is to make sure that a lot of small problems don't add up to a big problem.

And it is also about procurement and risk. If this judgement stands, it appears to shift certain kinds of risk from the customer to the supplier. Obviously one solution to this would be to redraft procurement contracts. But another solution may be that large IT suppliers may be required to engage much more proactively with the broader architectural context for the systems they are building.

So can we expect all the major IT suppliers to look at architecture and risk from a new perspective?

1 comment:

Chris Bird said...

I anticipate that the big consulting and IT suppliers will start to do this - especially if they can make big money doing so. Of course we know they can, I am sure thatthere are documented cases of large companies finding fault with other large companies' architecture, design and implementations. So get the company to look at its own work with the same glee it uses to take down the work of others.