Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 21 APRIL 1999
MR GEORGE
MCCORKELL,
MR PETE
SHARKEY and MR
BRIAN BARNES
20. The minute amount I know about it is
that you will not be able to scan that sort of information, because
literally the paper will be of a type that cannot scan, it will
be too damaged, it will be too dog-eared, and everything about
scanning requires quite precise things, you will not be able to
scan the information, the vast majority of it; so what will you
do, what is this "looking at it"?
(Mr McCorkell) What has to be done in those circumstances
is to establish exactly what information will be required and
by whom and in what timescales, so, although there are mountains
of information there, not all of it is required immediately, every
day, so the key is to establish which parts of that information
are vital to the day-to-day operation. There will be some part
of that information where, in terms of the process, it is perfectly
acceptable because it does not affect the customer, that if you
do have to go to a file and find it and take a day to do it then
that is acceptable. But the key is to establish which parts of
that information are vital to the day-to-day operation, and then
work out which method you use and which technologies you use to
make that immediately available, or available in whatever the
required timescale is; that could well be scanning. And, as you
say, it may be, some of this information that is vital, that cannot
be scanned, a decision will then have to be taken whether you
use perhaps a more expensive method of transferring this on to
electronic means. That is the sort of thing you go through in
an overall detailed analysis and design.
21. So, given the huge volume and the poor
conditions and the often poor quality of the way the information
has been stored so far, are you actually confident you can do
that?
(Mr McCorkell) I am confident we can make major
improvements in the current systems for accessing documentation.
22. It is not the same thing though, is
it; are you confident that you can do what you just described
earlier to me?
(Mr McCorkell) I am confident we can meet the
requirement.
23. So you are not confident you can do
what you described?
(Mr McCorkell) I hope I did not, because, if I
did describe that we were intending to computerise all of that
information, or to scan all of that information, if I gave the
impression I was saying that then I apologise, I did not intend
to say that. What I intended to say was, we will be looking at
that information and its use and its need and its requirements,
and looking at maximising the use of information technology to
take that off paper and to make it electronically available.
24. And you are confident that you can carry
out the sheer volume of work that needs to be done? As we discovered,
it is not purely an easy scanning operation that can be mechanically
done, it is obviously a lot more detailed and interrogative than
that, really, is it not? So are you confident that you can do
that?
(Mr McCorkell) I am confident we can do that at
the level that would be necessary to make a major improvement
in the way the business of the Department operates at the moment.
Ms Buck
25. Have you learned anything, or talked
to, the project they are now trying to do, a smaller scale but
similar exercise for the IND?
(Mr McCorkell) I personally am not aware of that
project.
Ms Buck: Which has
gone hideously pear-shaped.
Kali Mountford
26. Can I ask a very simple question, but
I need to clarify my understanding of what you are saying. Are
you saying that people will have to do data input as and when
information is required, and at that point input the data so that
it is there, available, thereafter; is that what you are saying?
(Mr McCorkell) Can I just try to clarify the question?
Are you talking in respect of when somebody is making a benefit
claim?
27. Or at some point where there is some
action required during the course of the claim where inputting
that data might be of advantage, so it is an opportunity, for
example, to do the data input and have it available; or are you
saying it has to be only at the beginning of the claim, or a reclaim?
I do need to understand exactly what you are saying?
(Mr McCorkell) The overall design objective of
the entire process is that when we capture data from the public
or internally, because we are doing something, that data will
be captured electronically and will be stored electronically and
will be capable of being accessed electronically; so we will not
be continuing to create the paper mountains.
Chairman
28. I maybe contributed to this confusion.
I am asking these questions for a very specific reason, and I
am talking about, the dungeons that I am talking about are historically-based,
National Insurance records, which are actually there for legal
reasons. And the Committee is going on, in its future work, to
look at the future of the contributory principle of National Insurance,
and all the rest of it, and I think that there is a substantial
cost to maintaining some of these records, which have to be done
for legal reasons, it has nothing to do with you; but I do not
want that to be confused with the actual current, day-to-day eligibility
for benefits, I am talking about something else. But it is a factor,
in terms of whether the bother, the trouble and the expense of
dealing with some of these things is actually going to be worth
continuing the contributory principle, because you have got to
carry the can for some of these documents that are written in
hieroglyphics, in some of these dungeons. I think there are versions
of the Dead Sea Scrolls in some of these departments. So maybe
I am causing some of the confusion myself. Just one more question
from me. I cannot resist, because I asked Pete Sharkey this question
when I was in Blackpool, and I got the most convincing answer
I have ever had, I am not saying it was entirely convincing, but
I want an explanation as to why people, and I think it was a JSA
workstation I was standing behind, have to use Workaround 155
to get the systems to produce the answers that they are supposed
to get, in order to do their work properly. Pete nearly convinced
me that this was necessary and not such a bad thing. I think it
is bizarre that we ask professionals, highly motivated they must
be, if they are working with systems and terminals that have got
a sheet attached to them which says "Workaround 155";
now, Pete Sharkey will tell us why that is necessary and why it
is not such a bad thing?
(Mr McCorkell) In the hope that Peter gives you
an equally good answer this time, I will ask him to reply.
(Mr Sharkey) The first thing to say, clearly,
at the outset, is that the systems we have out there are not perfect,
notwithstanding previous comments, there are faults in them. The
number of workarounds arise for a number of reasons. One reason
is that there is a fault in the system, it is expensive or difficult
to fix, and therefore it is easier, more cost-effective, for the
business development people, who come out with the procedures
to use these systems, to say "Well, instead of fixing this,
either now or in an immediate timescale, we'll have a workaround."
I think it is a very unfortunate phrase. It was coined in about
1988, when we were developing the Income Support system, and became
a departmental phrase, workaround. So where there is a fault in
the system that it is not cost-effective to fix, or too difficult
to fix, we could have a workaround for those purposes. In fact,
and I do not know the exact figures, I could probably find them,
if you wished, many of the workarounds are not caused for those
reasons, they are caused by either operational or policy changes
that happen, that either it is not worth the cost of reflecting
in the system, or they are too difficult to reflect in the system.
And a typical reason might be, a case goes to a tribunal, it is
lost, as far as the Department is concerned, and the Department
is told to treat something differently than it did before because
of the result of a tribunal ruling; that would typically lead
to a workaround, because where they might have typed X instead
of Y and Z, and if it was a Tuesday, because of the tribunal ruling,
they might be told to type Z instead of Y, and that will result
in ten coming out at the other end. You cannot change these systems
very quickly by definition; so that would lead to them. The other
ones are where the policy people just have a change of mind, and
this can happen quite quickly, and often that is not worth fixing.
You mentioned JSA, when you came up; we wrote JSA, and, as I told
you at the time, I was the IT Project Manager for that, and it
was a very challenging thing to do. It sometimes hurts me, when
members of the Committee, or people who say that these systems
are not very good. JSA was actually a triumph, in IT terms, to
get it there in the timescale we did, given the difficulty of
the legislation, the lateness of that legislation, the late changes,
the huge amount of operational and organisational changes that
came along. I am actually very proud of JSA, I think we could
have done it better, but it is a very good system. But JSA has
not stood still. It was developed in about an 18-month to two-year
timescale; operationally it has been changed quite a lot, as both
the Employment Services and the Benefits Agency have learned to
live with it, the policy has changed quite a lot, the interactions
it has with other systems, such as Income Support, have changed
quite a lot through time, things like winter fuel payments come
along. There has been a tremendous work programme of improvements
to JSA, some of which are improvements on the original system,
but some are because Parliament, quite rightly, and the Department,
changes it as it learns about it.
29. Do you get consulted about all these
changes?
(Mr Sharkey) Yes, we certainly can be; there is
a patchy history of this through time. But what the Department,
I genuinely believe, has got much better at recently is bringing
in the IT people much earlier in the policy thinking that goes
on, so that we can both avoid some of the sillinesses that might
come out from, if you will forgive me, non-IT-literate people
assuming things about a system, but also we can come up with ideas
that allow them to be more exploitative. Some people intuitively
think something must be very difficult to do on an IT system,
and often it is very simple; and people often think that something
very simple is on an IT system, and it is actually very difficult.
So bringing us in early in policies; and, JSA, I do believe, we
are very good with that, both from operational and the policy
angles, we are in and consulted very early. So, yes, there are
workarounds, and, yes, I did not know the biggest number was 155;
but they are not all IT, some are policies, some are organisational,
some are operational. Some of it is just not worth fixing. I do
not know if that sounds convincing, or less convincing.
30. A final question from me. Tell me about
outsourcing, and whether you think that is successful; some of
us are a bit concerned that some of these big players, like EDS,
and others, are getting a bit of a monopoly in the government
field of big systems operations? But tell us a bit about what
your experience is of outsourcing, and whether it has brought
the benefits that were anticipated for it?
(Mr McCorkell) I think, in terms of outsourcing,
the ITSA experience, our big major experience was what we called
the FOCUS project, Future Operations for Customer Service. I remember
that well because I happened to be in charge of it, because I
was in ITSA at the time. That project transferred responsibility
to a set of suppliers, EDS, ICL, and Sema, for the day-to-day
operation of the computer systems, not the development of the
software, or fixing the software, but the day-to-day operation
of the systems and the fixing of things, if a PC breaks it is
one of those contracts where it goes and fixes it. That previously
had been an in-house function, and we transferred, I think it
is, probably in the region of 1,500 staff, but I can check that
figure, to that range of suppliers. That has been an extremely
successful outsourcing from all points of view. There have been
NAO inquiries into it, and they have always concluded, as we have
monitored, that it brought significant financial savings to the
Department, the cost of those operations dropped significantly
after that outsourcing. We continue to monitor that, and because
the operations have changed now, since they took over in 1995,
and it is difficult to compare because you are not comparing apples
with apples any more, we monitor against the market-place, and
we believe we are getting very significant value for money from
that outsourcing. Also, I believe, and I was very conscious of
this at the time I was in charge of doing it, it has been very
successful for the staff involved, the staff who transferred from
the Civil Service to these companies. We were very conscious at
the time of their concerns and worries, and it was a particular
strand of the project paid particular attention to make sure that
that process happened successfully and that we helped the people
through these worries and these concerns, and we helped the transfer
of the staff to take place smoothly. Again, all the evidence is
that has been very successful. I think, each of us round this
table, every now and again, bump into one of our old colleagues
who used to work for us, and we find he has now got a job three
stages up the ladder, in EDS, or Sema, and is probably earning
more money than we are. But I can give you very direct evidence
of the success of that, in that, on my return to ITSA, my office
is based in Peel Park, and one of the in-house operations we still
have is what we call the Service Help Desk, where we have a whole
set of people who are helping doing the overall management of
this; that remains an in-house operation, but all around it are
people from Sema, ICL and EDS, and mostly they are people we transferred
to them, because they are still performing these functions to
them. On my second day in the office, I did a walkabout, and I
went to see my people in the Help Desk, to introduce myself and
say hello, and I also walked about these other areas, and I spoke
to many of the people who had been transferred; and I did not
get any bad news stories, they were all perfectly happy, they
were very content with their jobs and very happy with their future.
And people did say to me "Yes, at the time, I was extremely
concerned about this, but it went very smoothly, there have been
no hiccups, and, frankly, we are very happy where we are."
So I think it has been successful for the Department and I think
it has been successful for staff. I assume the suppliers who undertook
the contracts are making the profit they intended to make, but,
obviously, I have no details of that.
31. Are you using the Business Excellence
Model, in the Modernising Government process, for bench-marking?
(Mr McCorkell) We are very heavily committed to
the Business Excellence Model in ITSA, and coming back as Chief
Executive I was particularly pleased to see that, because in my
time with the Benefits Agency I became an assessor for the European
Quality Award, which is also based on the Business Excellence
Model. I am fundamentally behind the Business Excellence Model,
and I think it is a structure that tells you to do the right sorts
of things and the things you ought to do, and we are using it
in ITSA. I think, if you look at our business plan, you can see
evidence of that, in that we try to structure the targets around
Business Excellence results. So we are very heavily into it. We
still have a requirement to make sure that we push it through
the organisation. One of the things, obviously, that I find, when
I am doing assessments in Europe, is that you can get the Chief
Executive Management Team very committed to this new idea, but
it does not quite go down through the organisation, and our target
next year is to make sure that we implement this right down throughout
the organisation. We are very committed to that, we believe that
it is the right way of working, and we will continue to do so.
Mr Pond
32. I would like to probe a bit further
on your memorandum, section 2, on The DSS Corporate IS/IT Strategy,
and at paragraph 2.4 in the memorandum you explain that the purposes
of the strategy, which were intended to move towards a new approach
to management systems, are to improve the accuracy and consistency
of information, to reduce vulnerability to fraud, to improve the
quality of management information, and enable efficiency improvements
in the business units. Could you, first, tell us how you define
business units, in this context?
(Mr McCorkell) By the business units, in the main,
we define those as the operational business units, the Benefits
Agency, the Child Support Agency, the War Pensions Agency, and
the Northern Ireland Social Security Agency; those are the main
business units where the bulk of the work is done. But, equally,
we have business units in Headquarters, because we have to support
Headquarters with management information, statistics, and things
like that. ITSA itself is a business unit, because we need management
information, in order for us to run our business. So the business
units are the various sections across the entire Department, but
the major ones are, obviously, first of all, the Benefits Agency,
then Child Support Agency, War Pensions Agency, and so on.
33. And then, in terms of the central operation,
Headquarters operation itself, is that treated as one business
unit, for this purpose?
(Mr McCorkell) That is treated as a business unit,
but it will obviously break down within Headquarters into different
units with different requirements; policy-makers have different
requirements from the financial management people, who have different
requirements from the human resources people.
34. Thank you. Moving on quickly to paragraph
2.9 of the memorandum, under the heading of Timescales, you make
the point that the move to IS/IT strategy services is large and
complex and will be delivered in several stages, and you go on
to say the first tranche,"Modern Service One" is currently
scheduled to be delivered in 2001. I was not clear, from the memorandum,
how MS1 would operate; can you clarify that a bit for us?
(Mr McCorkell) Yes; perhaps a little bit of clarification
on that. The first tranche, in terms of the operational business,
it is targeted against replacement of the Income Support and the
Child Support computer systems, and clearly targeted at bringing
those much closer together and getting a common view across them.
But we are not simply replacing those systems; we are replacing
those systems but, at the same time, we are starting the future
forward strategy, so they will be built on what we call, and I
will go into acronyms now but I will try to explain them, the
Shared Systems Infrastructure. The heart of this overall design
is one corporate database that everybody uses and has access to,
so that everybody is using the same information, no matter what
particular job they are doing. As part of Modern Service One,
we will start building that database. Obviously, it will be initially
populated with Income Support and Child Support data, but then
it will be designed and built in a way that the other systems
can then start to populate that data as well. So that will be
the main part of Modern Service One, in terms of its delivery
of changing the benefit processing. However, around that, we will
also be building the new management information systems that allow
us to manage the work better, to manage work flow and manage accounts,
and all of that; they will all be part of Modern Service One.
So it is really putting in the building-blocks for the total system
and, at the same time, putting in the first two systems, which
are Income Support and Child Support.
35. How confident are you on that estimated
time of arrival?
(Mr McCorkell) It is a very aggressive timescale,
and we will be monitoring it extremely closely. I believe it is
achievable, but it is aggressive and we will have to keep a very
close watch on progress.
36. And then if we can move on again quickly
to the effect of the Comprehensive Spending Review and the departmental
investment strategies, what implications will that have, that
strategy, for ITSA?
(Mr McCorkell) I think the major difference for
ITSA that we are potentially looking at in the Department is that
we will specifically set aside funding for future IT infrastructure.
At the moment, funding is allocated to the various business units
and then we do work for them and get paid for that work, and that
is how we earn our money, it all balances out in the end. Clearly,
the difficulty with that process is, if you need to fund a major
infrastructure project, which potentially will benefit all of
the business units, then the first one who needs it does not want
to be the one in the frame to find all the money. So the Department
is now looking very carefully at the need to have central funding
for infrastructure, and I believe that is a very positive move
and will have major benefits for ITSA in helping us to take forward
our work.
37. And that, presumably, fits with MS1,
because you have got the `across the board' approach?
(Mr McCorkell) Indeed.
38. If I can just ask, in terms of this
overall review of the role of the Private Finance Initiative for
big IT projects, which is going on at the moment and involves
Cabinet Office and CCTA, etc., what role does ITSA have in that
review, are you informing that process, are you being consulted?
(Mr McCorkell) We are, obviously, informing that
view and heavily inputting our experience of the Private Finance
Initiative into that review, and hopefully putting forward some
of our ideas on how we make this better and make this more workable.
39. And, at this stage, is any of your advice
publicly available, or available in a form that the Committee
could look at, in terms of your own views about how the PFI, for
those sorts of projects, might be developed?
(Mr McCorkell) I believe certainly it is public
knowledge that we recognise that the way PFI on IT projects has
worked for us, or has been operated for us, frankly, has not worked,
and that we cannot and will not continue to operate it in that
way. In very, very crude terms, it operated on the basis of we
drew up a specification of a requirement, we got a price for that
requirement, we handed it over to the supplier; it was private
finance so we were not taking any development risk. He had to
go off and develop it and he did not get paid for it until we
started to use it, therefore we had moved the development risk,
and that all sounded very fine until you realise that what you
have passed over is the development risk, you have not passed
over the risk of it going wrong or being late. And what you find
is that if something goes wrong with it, or if it is late, then
the Department still has the risk, because we have all the operational
risk and all the operation costs, and I am sure you are very aware
of the sorts of things that went on in NIRS precisely for that
reason. So that was one clear indication to us that if we cannot
pass over that risk, which we clearly cannot, then we have to
be much more directly involved in what is going on, because we
have to manage the overall risk of the total system and not just
the IT system. That was the first thing. The second thing you
will see and we will realise that a specification for an IT system
is never absolute, they tend to take some years to develop, and
the world changes, therefore you have to keep updating it and
keeping it up to date. Equally, it is a written-down specification,
which is very precise in many areas, but when you come to turn
it into an IT design you have to start interpreting that specification.
If you are not working very closely with the people who are going
to use this system, you may well get your conversion wrong, you
may misinterpret what that specification says; another clear indication
that you cannot ask this private sector supplier to go off into
his box and develop this thing, you have to work very, very closely
with him. Another indication that we have seen is that, the scale
of these projects and the scale of the contracts you let, if you
let a massive project, over a long time period, to start with,
then you are constantly going to be in difficulty and contract
renegotiation and trying to get this right, and "It's not
my fault and it's your fault." And we believe that cannot
work either. So, within ITSA and the Department, we have taken
specific action on the new contracts that we are now letting to
tackle all of those issues. We now perhaps call it Private Sector
Partnership more than Private Finance, although there is obviously
a strong element of Private Finance Initiative in it. But we are
taking a "partnership approach", and lots of people
talk about partnership approaches, but if you take Modern Service
One, for example, we are working directly with the AFFINITY consortia
on the current stages of that project, they are currently at a
high level design stage, in order to totally understand the requirement
that we are putting to them, not just in terms of IT but in terms
of the business; we are working directly with them on that process,
to make sure that that process works. That does not mean that
they lose their responsibility for delivering the eventual system,
they will still undertake that responsibility, but we are in there,
working with them, to make sure that they understand that. We
are also contracting for this overall procurement in phases, we
are not contracting for the total replacement of this system immediately,
we are contracting for phases, and each phase we will contract
for when we are able to sit down with AFFINITY, and having worked
together agree that they really do understand what the requirement
is and that they really do understand the timescales, and they
have really convinced us that they can do it in the timescales,
and then we will let the contracts.
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