Ethics of Risk in Public Sector IT

@tonyrcollins via @glynmoody and @Mark_Antony asks Should winning bidders tell if they suspect a new contract is undeliverable? (8 June 2011) and raises some excellent ethical points about public sector procurement.

One of the functions of good journalism is to hold people and organizations to account. Tony fishes out a speech given in 2004 by Sir Christopher Bland, then chairman of BT, in which he acknowledged incomplete success in previous ventures, and admitted the extraordinary challenges involved in the NPfIT, for which BT had just won three contracts then valued at over £2bn.

There is obviously a difference between something's being extremely difficult and its being impossible. BT executives can fairly claim that they were always open about the chance that it was going to be difficult, and that they didn't know for sure that it was going to be impossible. But at the same time, there is an asymmetry of information here - the supplier is presumably in a better position to assess certain classes of risk than the customer. (Meanwhile, there may be other classes of risk that the customer should know more about than the supplier.)

In my opinion, the ethical issues here are not to do with deliberate concealment of known facts, but of misleading or inadequate assessment of shared risk. The key word in Tony's headline is the word "suspect". So what are the ethics of doubt?

From Organizational Stupidity to IT Disaster

@robbowley and @flowchainsensei have been looking at @tonyrcollins Anatomy of an IT disaster (November 2009).

Tony's article extracted several key points from the Public Accounts Committee report (pdf) on the C-Nomis project. As he points out, C-Nomis is by no means an isolated example of failure, and much the same could be said of other big IT-based change programmes such as the NPfIT. So I thought I'd try and map his key points against the Symptoms of Organizational Stupidity I outlined a few days ago.

On a preliminary analysis of Tony's summary, at least six of these symptoms are strongly indicated, and can be clearly linked to a very poor outcome. I should be very interested to carry out a more detailed analysis.

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Denial

• Bending the truth. "The programme team running C-NOMIS reported that the programme was delivering on time and to budget, when it was not."
• Over-optimistic 'good news' culture.
• NOMS significantly underestimated the technical complexity of the project.

Guesswork

• No-one was actively monitoring the budget .
• NOMS cannot provide the detail.

Meddle

• There was no sustained effort by NOMS to simplify and standardise its business processes reflecting management's misplaced confidence in C-NOMIS, their unrealistic expectations of what could be achieved by an IT solution and their underestimation of the time and costs to deliver it.
• "Prison and probation information requirements were quite different and each of the 42 probation areas had different ways of working. End-to-end offender management was little more than a concept, and what it meant in practice and the IT needed to support it had not been worked through."

Muddle

• Remarkable lack of insight and rigour, coupled with naivety and over-optimism.
• No-one has been held to account. ... The vacuum of leadership within NOMS contributed to confusion and created challenges for suppliers and the project team.

Repetition

• Poor decision taking and weak project management on many occasions. The same lessons have still not been learnt.
• It is deeply depressing that after numerous highly critical PAC reports on IT projects in recent years, the same mistakes have occurred once again.

Short-sighted

• Serious failure to understand the magnitude and cost of the changes which would be needed.

IT Procurement - Too Messy to Sue

Following my previous post on IT procurement - Too Big to Fail, a new twist has emerged - projects that are too complicated or expensive to hand over to the lawyers.

An HR system for the Metropolitan Police is currently running late and over budget [TimesOnline 17 May 2010, The Register 17 May 2010, via @exmosis.]

	Original Plan	Current Plan
Cost	£38M	£48M
Annual Savings	£15M	£15M
Expected delivery	December 2009	Late 2010

Not only is the payback period now gone from 2.5 years to over three years, but the benefits will be delayed by nearly a year - so the true additional cost is not just the extra £10M in cost but nearly £15M in delayed benefits. The system was originally supposed to “generate significant efficiencies to release additional funds for front-line policing”, but on these figures that isn't going to happen until 2014 at the earliest.

Who is to blame for this? According to an anonymous source, “Lawyers have been consulted but the cost of litigation would be greater than the cost of trying to fix it.” Seems hardly any point having procurement contracts at all, if it's too expensive to enforce them.

Payback period is a pretty crude measure of ROI, but it is quite commonly used. Some organizations might have a policy that all projects should have a payback period less than three years. But that creates a temptation for budgets to be deliberately underestimated in order to conform with this policy, only to be reevaluated once the project was too far gone to cancel. That couldn't have happened here, could it?

UK Government's love of IT complexity

@tonyrcollins has been posting quotes on his blog from the BBC Radio4 File on Four programme about IT public sector projects in the UK, including the IT problems hurting farmers.

• A terrible price for the Government's love of IT complexity?
• Bright people at IT suppliers treat ministers as playthings 

So where is that podcast? I'm sure I must have already downloaded it ...

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The programme opens with a comment by Edward Leigh, the retiring chairman of the House of Commons’ Public Accounts Committee.

"We the taxpayer are paying enormous sums to people for these IT projects, to run them for us, and to waste money for us. So I think once a general election is over whoever wins I hope will take a scythe through all these precious IT systems."

Here is Dr Phyllis Starkey MP, chair of the parliamentary select committee, talking about a failed system for the fire service.

"There have clearly been massive mistakes about the way in which the project was first formulated and the way in which the contract was originally drawn up with the main contractor and they've led to huge delays and massive additional costs to government and to the various fire authorities."

Aha, I just got to the bit where Tony Collins himself appears on the programme. For those of you that don't know him, Tony is the executive editor at Computer Weekly and has been a public observer and critic of public sector IT in the UK for a long time. Very sound.

I was particularly interested in Edward Leigh's suggestion that ministers are subject to the illusion that it is easy to add functionality.

"They’re very short-termist. They want to create a quick impact …[and] are very naive about IT systems and the cost of IT staff, so they’re taken for a ride by very bright people who earn very large salaries in the private sector running these companies."

“Ministers come they go and they add onto these things like a Christmas tree. You need one simple – piloted – [system] … you stick to it. Rough-justice politicians just keep changing their minds – constantly new ideas – and of course they are just playthings for the private sector."

But will anything change after the election? Tony Collins sounds a note of caution: A few big IT suppliers may have Tories over a barrel. So more of the same then?