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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 311-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE WORK AND PENSIONS COMMITTEE (WORK AND PENSIONS SUB-COMMITTEE) DWP'S MANAGEMENT OF INFORMATION TECHNOLOGY (IT) PROJECTS
Monday 23 February 2004 MS SARAH ARNOT, MR TONY COLLINS and MR AVI SILVERMAN MR JOHN CORNEILLE, MS JAN GOWER, MR KEVIN SAUNDERS and MR DEREK WARD Evidence heard in Public Questions 184 - 301
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Work and Pensions Sub-Committee on Monday 23 February 2004 Members present Sir Archy Kirkwood, in the Chair Miss Anne Begg Rob Marris ________________ Witnesses: Ms Sarah Arnot, Computing, Mr Tony Collins, Computer Weekly, and Mr Avi Silverman, Government Computing, examined. Q184 Chairman: Good afternoon, ladies and gentlemen. We are in the course of an inquiry into information technology (IT) projects within the Department of Work and Pensions and we have set up a sub-committee for the purposes of the inquiry. We have this afternoon been joined by a set of witnesses who are professional journalists, who have been covering this area for some time and who have written very effective books about the subject, for which many thanks. We have been provided with written evidence and we are grateful for that. We have this afternoon Sarah Arnot who is from the journal Computing, Mr Tony Collins from Computer Weekly and Avi Silverman from Government Computing. You are all welcome and thanks again for your written memoranda. Can you each briefly give us a sense of what you believe the extent of the problem is and whether the current OGC framework is capable of dealing with the extent of the problem as you see it? Mr Collins: We are not experts but we have seen and chronicled IT disasters and failures to meet expectations for quite a number of years. We have seen common problems emerging. One of the difficulties seems to be that the people who have experience of projects that fail to live up to expectations tend to move on in departments and therefore that valuable experience, which in the private sector would lead to a once bitten, twice shy approach to a second computerisation, does not tend to happen. Each major project is dealt with as if it were unique. The gateway reviews are one of the best developments that we have seen in government for many years. Indeed, I was talking to some people in the States last week. They see the gateway reviews as potentially a model for the US government because we see legislation as one route and they have adopted the legislative approach over there with something called the Klinger Cohen Act, but it is not perfect. They think that gateway reviews could supplement the enforcement of best practice over there. The difficulty with gateway reviews though - and they were surprised to hear it - is that they are not published. Ms Arnot: To some extent, it is hard to know what the extent of the problem is because we only tend to hear about the projects which fail. Granted, they tend to be extremely big, extremely complicated and extremely expensive, but it is difficult to gauge the proportion of how many other technology based projects are successful. The same problems tend to surface again and again. There is the question of sufficient programme management skills in departments: who takes responsibility ultimately for the success or failure of a given programme; clarity from the government about exactly what they are trying to achieve and then sticking to that all the way through to the delivery. Some of the mechanisms that have been put in place by the OGC such as the gateway review process and the senior responsible owner and senior industry executive positions potentially go a long way to addressing some of the concerns. It is difficult to tell how far they will go because only programmes which are in procurement now or just finishing procurement now have been through those mechanisms from the very beginning. Only with the success or failure of these will we be able to see how effective the OGC implementations have been. It is difficult to tell at this stage. On the question whether the gateway reviews should be public, it is a slightly difficult question because, while it would be very interesting to know what they say and to find out how often things which are flagged up in gateway reviews are subsequently dealt with, equally it might inhibit the openness of the reviewers to an extent where it became slightly meaningless. Mr Silverman: One way of looking at it is by comparing it private and public sector. There has been research suggesting that there is a 28 per cent or just under a third success rate in projects across the public and private sector. By far, a lot of IT projects fail for various different reasons and in various different elements of the project. Q185 Rob Marris: Whose figure is that 28 per cent? Mr Silverman: It is from the Standish Group in the US. There are a lot of problems inherent to IT projects as a whole. One area of debate is: is it worse in the public sector? There are a lot of reasons to suggest that it is worse in the public sector than in the private sector. People talk about the procurement for public sector IT projects being a factor in the procurement process. People talk about the inherent nature of policy and the effect that that has on IT projects in complicating factors as well. In terms of what the OGC has done, I would concur that the gateway review process seems to be a step in the right direction. Also, it does appear to be changing. They appear to be modifying the gateway review process which seems to indicate that they are looking at various things that perhaps are not working quite so well with the gateway review process and changing them - things like the code of best practice from suppliers and concept viability. The code of best practice is quite an interesting one for suppliers because the endemic problem is that suppliers say at the beginning that they can deliver something but it is questionable whether they can deliver it and this is an attempt to get a little more stringent with suppliers over that. Q186 Chairman: You are saying it is getting better. There are gated reviews and there are all these standards and guidelines, but is it getting better? From what I know, I think the tax credit process went through a gated system of analysis. So did the Child Support Agency and the customer management system. Yet, I think there are problems in all three with the implementation roll-outs of all of these things. Is it really getting better? Ms Arnot: Maybe. Q187 Chairman: Are we doing it better now than when Mr Collins wrote this rather excellent book in 1997? Is it better since then? Mr Silverman: One thing that we are better at, it seems, is people holding up their hands and admitting failure. Q188 Chairman: That is progress. Mr Silverman: Maybe that is the first step. Q189 Chairman: You can be sure in future that people will do this? Mr Silverman: You cannot be sure that people will do this but you can certainly say that more so in the past people have stood up and beaten themselves up about things that have gone wrong. Q190 Chairman: On international comparators, are we better or worse or is there any real international comparison? Are there any other countries apart from America, which is on a scale that is much bigger than anything you have experienced? Is there any comparator value that we could usefully seek, looking at sister European nations or other western states? I see that Singapore is very good at doing some of these things better because they have a different cultural background, but is the UK better, worse or the same as other sister western democracies? Mr Collins: My experience is pretty limited in terms of international European implementations. From the few conversations I have had with people in Australia, for example, they have quite a few projects which fail there but they have more mechanisms for accountability, for explanations, when they do go wrong. Over here, coming back to your earlier question about are things getting better or worse, from my point of view I do not know but my impression is that, at the lower end of the scale where less money is spent, the smaller scale implementations are working very well. It is surprising to some people in government that such large sums seem to be devoted to projects where the scale is enormous and where the risks are very high, where it is recognised that those risks are high, but the policy driving those decisions is such that the IT has to be implemented. For example, in the NHS. Everyone agrees with what they are trying to achieve but the scale of computerisation is enormous and the extent to which they consult people is limited. It is difficult to say whether things are getting better or worse or how we compare. Q191 Chairman: Is the OGC framework equal to the task? Sir Peter the other afternoon was quite persuasive. He seemed to think it is getting better. Things are settling down and we are learning lessons. People have been saying this for a long time now. You have made suggestions in your written evidence that we should use mandatory systems more. Are there difficulties that Sarah adverted to in terms of making people frightened to come into the process if it all becomes mandatory and gateways get published? Is that something we need to be careful about if we make it a recommendation? Mr Collins: I understand that concern entirely. I think it is a legitimate concern of gateway reviewers. In the submission we highlight the case of the Arthur D Little report which the Transport Committee published. Unlike gateway reviews where the reviewers would tend to have a relationship with the department and rely to some extent on the department telling them what the position is and then they trust the information they are given, the Arthur D Little report was as independent as it could be. There was a company brought in under competitive tender and a very detailed report was carried out against the wishes of the department. Obviously, that is not ideal but if you asked Arthur D Little again whether they would be concerned if they carried out another report either on the same organisation or other organisations and whether they felt that the department concerned would not be as open with them as was necessary, I am sure they would say, "It is our job to get to the truth." In that case, in their report, they talked to existing staff and former staff. They had access, with the Transport Committee's endorsement, to the letters and memos. They felt they had got to the truth whether the department was opposed to them or not. I am sure the department in this case fully endorsed the audit once it was being carried out but we have a concern as to whether the reviewers themselves feel they would not get the information they need and whether they are too culturally close to the people they are carrying out these assessments on. Q192 Chairman: How realistic is it for us to expect large scale suppliers whose businesses depend on government contracts to be absolutely open and honest with us in terms of whether they think the department is doing things rightly or wrongly? Is it realistic? You obviously have difficulty, according to your evidence, getting through some of the commercial confidentiality but do you think it is really feasible, in terms of the prejudice it might cause for the contractual relationships with government departments, for suppliers to tell us the truth if we ask them whether they think that departments are not adequate and equal to the task in terms of these big ICT projects? Mr Silverman: I do not think that commercial organisations like that would be open unless they were absolutely forced to be. I feel they would do anything not to be open about a whole wide variety of issues, contractual arrangements and all the rest of it. Ms Arnot: I would have said the same. It would be too much of a prejudice against any future business. Q193 Chairman: Is that unanimous? Mr Collins: Probably. Q194 Rob Marris: Is the Freedom of Information Act going to change that in terms of your access to information and ours as parliamentarians? Mr Silverman: Yes, to an extent. With government, I would be quite hopeful that the Freedom of Information Act would make commercial details potentially more available. There are a lot of issues with government departments complying with the Act and getting themselves geared up to being able to cope with the Act. Q195 Rob Marris: You think they might not meet the deadline? Mr Silverman: There are question marks over how ready areas of government are for the Act. Ms Arnot: I do not know enough about it to give you a sensible answer. Mr Collins: I do not know much about it. I was at a conference and they were talking about some of the difficulties that some of the departments are going to have in meeting the terms of the legislation. I think there are enough exclusion clauses in the Act from our point of view as journalists for it to make little difference. Ms Arnot: If government wants something to be a secret, it will probably remain a secret. Q196 Rob Marris: Can you give us one or two examples of where public disclosure of information from them is being unjustifiably refused, where you have been trying to get stuff and, for example, they have used commercial confidentiality as a smoke screen because you are an annoying little journalist, trying to make life difficult for them? Mr Collins: It is difficult to make any distinction between how open or otherwise a department is with journalists and how they are internally. We have been now and again lucky to have access to a department as it is going live with a major system and we have seen some of the discussions that take place between suppliers and the representatives in the department. I have found both sides to be extraordinarily open with each other in their discussions. We are under some difficulty at that stage in reporting what is going on. It will be interesting to see how professional and open each side is. That is with an open attitude. As to how a department deals with the media, that can be a different thing entirely. I have had some difficulties particularly with the CSA. I have quoted to them things that have been in the public domain which your committee has discussed with them and I have asked them, "Is that still the case?" They have quoted commercial confidentiality back at me. Ms Arnot: I am broadly agreeing with what Tony is saying. There is a difference between commercial confidentiality when it is the press office speaking to a journalist and when it is a department speaking to a committee or in another situation. It is difficult to get away from my experience as a journalist, which is obviously quite different. Q197 Rob Marris: Is your experience as a journalist that they are saying no to you when you think they should be saying yes? Ms Arnot: My experience is that nearly always -- I do not particularly want to give specific examples - if you have sources telling you that, for example, a given contract was signed having ignored recommendations in a gateway review or ignored earlier recommendations from the National Audit Office on the administration of IT projects or what have you, you will be told that it is commercially in confidence, which may be fine speaking to a journalist but potentially it is not putting it into the public domain that a deal has been signed which has blatantly ignored a whole raft of best practice. That is slightly more serious. The term is pretty standard. Q198 Rob Marris: Do you get the sense that such deals are being sought in breach of best practice? Ms Arnot: Probably, yes. They certainly have been in the last year or so. Q199 Chairman: You are absolutely covered by privilege. You can say what you like and I will protect you. You can tell the whole truth and nothing but the truth if you feel that is the best way of talking to Mr Marris. Ms Arnot: I think there are deals. Gateway reviews are highly confidential, as quite possibly they should be, so it is hard to find out what is recommended and therefore what is ignored. It can be hard to find out the details. We have certainly run a story in the last year that a deal was signed. It was not a particularly huge deal but it was signed with the last supplier that was left in the bidding which, after Libra, was suggested was not such a fantastic idea. It was difficult to find out whether that was true from official sources on the basis that procurements are commercially in confidence, so we are not going to tell you anything at all. Q200 Rob Marris: Did you find out through unofficial sources that that was the case? Ms Arnot: Yes. Q201 Rob Marris: The last man standing, I think you called him? Ms Arnot: Yes. Commercial confidentiality is certainly used as a smoke screen at times. Q202 Rob Marris: Have you come across this sort of thing, where stuff is being withheld that you think should not be withheld? Mr Silverman: Yes. I do come up against it. One good example that I can give is unfortunately not the Department of Work and Pensions but the NHS IT programme. Obviously, it is an area that has huge media interest in it so people are very wary about what they are saying, especially at sensitive times, especially during a sensitive procurement stage. A lot of that is legitimate, but at the same time I remember there was a specification for integrated care records for the NHS IT programme that was not published. The reason given was commercial confidentiality with the suppliers. When it was published - some journalists saw it before it was published - there was nothing in that specification that was commercially confidential, that you could possibly say was commercially sensitive. There was a lot in it about the programme that they were going to do and a lot of detail about their ideas for care records, which you could say are in the public interest. I would argue they are definitely in the public interest. Q203 Chairman: The doctors might like to know about it. Mr Silverman: And probably patients would like to know as well, but that was the reason given. Q204 Rob Marris: That is a concrete example where you look back, when you subsequently get access to a document and you cannot understand why on earth they were hiding it from you earlier on in the process. Mr Silverman: Yes. Q205 Rob Marris: Politicians do not like surprises. Where we hear about these problems is from constituents coming to our surgeries and saying that such and such an agency is not delivering for them. Have you any hot tips as to when I might get a string of people in, in six months' time? Ms Arnot: NHS IT is huge and enormously complex. It would probably be unrealistic to imagine that the whole thing and all its multiple, interconnected strands would be implemented with no problem at any time for anybody. There are bound to be problems. Whether these problems become catastrophic or are merely teething troubles remains to be seen. Q206 Rob Marris: Are you hearing anything through the grapevine at the moment that there are question marks about? Ms Arnot: Not that I can verify and not that there are huge problems with, but it has only just started. The deals have only just been signed and the work has only just started. If it had gone wrong already when nothing has been done, it would be a disaster indeed. Q207 Chairman: It starts in a year? Ms Arnot: I think the first bit of the e-bookings goes live in the summer. Q208 Rob Marris: Tony, any hot tips? Mr Collins: No, other than the NHS. The feedback we get is that there has been a lack of consultation with the end users and that has been a common factor in projects like Libra, the Criminal Records Bureau and the report last week by the National Audit Office. Q209 Rob Marris: Not enough discussion with doctors and nurses? Mr Collins: For example, the Klinger Cohen Act in the States. One of the things it mandates is a look at revising business processes before you implement an IT project. They have awarded the contracts in the NHS's case and now they are discussing how business processes will be changed. Q210 Miss Begg: On competitiveness, EDS is the third largest IT supplier with something like 54 per cent of the UK's central government business, whereas IBM and CSC are obviously big IT companies and are grossly under-represented. Is this an imbalance and might it cause problems? Mr Silverman: It has been interesting from a journalist's point of view to note recently the decisions going against EDS in government. I am not suggesting that that tips the balance back, away from EDS again necessarily, but there is an awareness in certain areas of government that at least publicly it is not a particularly good publicity move necessarily to be going too much with EDS at the moment. Maybe I am reading too much into it and there are probably other reasons, but, for example, the NHS IT programme not going with EDS. A lot of it is obviously speculation. That is probably what I spend a lot of my time doing. Q211 Miss Begg: Should we be concerned that these big projects are in so few hands and some of the world leaders in the industry are simply not bidding for them? Mr Silverman: Absolutely. That is obviously a key issue with these IT projects. Maybe you would sit in a public accounts committee inquiry here and you would hear various MPs suggest to government officials that the supplier had them over a barrel because of the lack of competition. It certainly is a big issue in major IT projects. Q212 Miss Begg: You used the phrase about the government departments being over a barrel. Is it not a catch 22 for government departments? In order to get the IT system working, there has to be close collaboration between the supplier and the customer. They need to work together so that they understand both sides of the business, but does that not mean compromising the department's ability to deal strongly with the supplier if the supplier is not delivering? Is that a difficulty? Is there a way round that? Mr Silverman: Yes, it is definitely a dilemma. I think more can be done to open up competition amongst IT suppliers but at the same time you want to have suppliers you know you can deal with. Personally, if I had the answer, maybe I would be quite a rich man. Ms Arnot: Partly, it is a difficult question because the European procurement law specifies that each deal has to be looked at in isolation. It would be illegal to be making decisions about one deal based on how much of a shore that company had elsewhere. Obviously, nobody lives in a vacuum and there will be people who are aware of what is going on but that is the legal position. There is not much that can be done in terms of deciding that a given supplier has too much or too little of a share. Having said that, things are changing a bit. EDS has lost a huge chunk of its central government business with the Inland Revenue deal in December, which was a huge deal for them. That is the second example of a major deal going to a non-incumbent supplier. There was also the DVLA deal which was also lost by EDS. Q213 Chairman: Is that the start of a trend? Ms Arnot: Potentially. It will depend on how easy it is to transfer from the incumbent to a new supplier. In the DVLA's accounts, they said it cost them 33 million for transition costs. Whether that would be a similar figure for another department I do not know. For the Inland Revenue, it will be interesting to see how smooth the transition is because if it is really problematic that will be something which other departments will be bearing in mind when their deals come up for reprocurement. Q214 Miss Begg: Is there something that makes the whole system complicated because of the way public procurement works? It is taxpayers' money. Therefore, costs have to be kept under control. Therefore, inevitably the customer government department wants to make sure that the IT supplier is not overspending the budget and that therefore leads to an antagonistic relationship rather than a partnership working. It is the buzz word in all issues that we hope will result in a more successful outcome. Ms Arnot: This has changed in the last few years. There are definitely attempts to move away from a supplier/client relationship to a more partnering approach. That is partly because the deals are getting bigger and bigger and more and more complex so much closer working is required in order to implement them. Also, it is a recognition that there needs to be more communication so that problems can be dealt with as they occur, rather than being allowed to fester into some enormous, life-threatening condition. It remains to be seen how successful it is. Q215 Miss Begg: Towards the end of a project, if it is obviously not working, is there anything in the competitive rules that permits a government department to say, "We are going to stop that and move on to a new one"? Ms Arnot: As far as I understand it, for the deal for the defence information infrastructure that the Ministry of Defence is procuring at the moment, the bidders are all consortia. There are specifications within the terms of the contract, as far as I understand it, that if any given member of the winning consortium is considered to be not doing well enough they can be knocked out and replaced at any time. From the government side, they are becoming much more robust in writing into the deal that if you do not do what you say you are going to do we are going to throw you out. Q216 Chairman: Reading the written submissions and all the evidence we have had so far, there are a number of things that leap out at me as lessons. It is important that we should try and learn from the lessons. I am going to read a list of six that I think are effectively leading questions to you, because I would be astonished if you disagreed with any of the propositions I am about to put to you, but I want you to try and give me an indication of which are the really important ones. The first one is that there should be a statutory basis for best practice. We have already heard from Mr Collins about that and his book is eloquent testimony to that. I assume you would all agree. Sarah does not necessarily agree. I think there was more of a mixed reaction to that proposition from you, on the basis that it would make the relationship with suppliers that much more difficult. Ms Arnot: There are different issues here. As far as the gateway review process goes, that should possibly be made mandatory and OGC should be given more power to enforce their recommendations. As to legislation, on the question of best practice, I am not sure how that would work because I am not sure who that is aimed at. Ultimate responsibility for an IT project is with a politician. Would they be the person to be prosecuted or would it be the supplier? If it would be the supplier, I think prices will go so high the government could never afford it any more. Q217 Chairman: The thinking behind it would be that you would require departments and suppliers to go step by step through a best practice system or procedure that was absolutely set out from beginning to end, transparent, and if they erred in any of these things they would be breaking a law. It must be a bit like America, the Act that Tony referred to earlier. It would be possible for us to recommend that there should be a statutory basis for best practice enshrined in statutory instruments in the House of Commons. We could do that. I am not saying that we will recommend that but we could if we wanted to, to try and get people to live up to best practice, because it seems to me that the things you need to do are staring everyone in the face. Ms Arnot: Possibly, but I think it is more of a cultural change. Is that something which can be legislated on? Mr Silverman: I agree with all those points and also the issue of judging what best practice is you would have to be very careful about. Q218 Chairman: We have Intellect and Gartner and all sorts of things floating around that industry has accepted. Everybody says, "We agree with all this" but when you start threatening them with it they start saying, "It will cost you a lot more if you make us go through this." This is an easy one: politicians should not set unrealistic deadlines. We will take that as unanimous. Technical realities should be taken into account when agreeing an IT system. You would all presumably agree with that. Okay. Contingency planning should be designed into the system. I like the NASA analogy in the evidence that you enshrine systems to fail safe. You are looking puzzled. Mr Silverman: I am nodding. Q219 Chairman: Projects should be subject to an independent audit. As journalists, that would be meat and drink to you, would it not, if it was published? Mr Collins: If it was published. Chairman: Otherwise, that is a yes. Finally, there should be greater discipline with the public sector. That is the point that people should take responsibility for the successes as well as the failures. Would that be agreed? Okay. Q220 Rob Marris: Compared with the private sector, does the public sector have sufficient in-house management expertise to assess and manage projects or are private IT suppliers running rings round civil servants? Mr Silverman: That is quite an interesting question. I do not want to make any sweeping judgments on Whitehall without knowing the exact number of project managers and things, but my feeling is, just looking at pay grades and staffing issues that you get in Whitehall for IT project managers, that government public sector IT project managers are not sufficiently at a level that you would want. Q221 Rob Marris: So not enough in-house expertise? Mr Silverman: Yes. Ms Arnot: That has certainly been a problem in the past. On the bigger, more high profile programmes which are starting now, there are more and more examples of specialists being brought in from the private sector who have experience of running big IT programmes. This seems to be a trend. It is probably rather expensive for departments to do. Q222 Rob Marris: Is that happening in the NHS? Ms Arnot: Richard Granger, who was brought in to run the national programme, was from Deloitte, from the private sector, and he has a lot of experience in programme management. He is not a career civil servant with a policy interest who is now accidentally running an IT programme. He was brought in specifically because of his experience as a programme manager. Q223 Rob Marris: Is there sufficient depth below him in-house? Ms Arnot: I do not know. I would imagine that he would have tried to bring in people he felt were suitably qualified to support him. Q224 Rob Marris: You think there formerly was not enough in-house expertise but that is starting to change. Ms Arnot: I think so. I think departments have recognised that they really need to get people in who know what they are doing. Q225 Rob Marris: And they are starting to do it? Ms Arnot: They are. Mr Collins: In the NHS they have brought in not just Richard Granger at the top but different layers of people have been brought in from the private sector. There is a programme office which has a staff roughly of half civil servants and half by the private sector. That is very unusual. Some of the departments are run, IT-wise, by ex-suppliers who have joined the Civil Service, who are running things extremely competently. My experience in government tends to be that things are done virtually according to the book, right up to the point where things start to go wrong. It is at that point that some of the best practice goes out of the window. Q226 Rob Marris: Panic stations. Have you any sense of what is going on in the DWP with Rob Westcott? Do you get a sense that there is improving in-house expertise within DWP or not? Mr Collins: From what little I have been told by the department, there is certainly an attempt to move in the right direction with off the shelf software, introducing things incrementally, doing everything that they are supposed to do. We find that departments tend to do that in the early stages of the project. You could not fault them. It is when things go wrong when there is a difference between public and private sector approaches. Q227 Rob Marris: Your sense is that the private sector approach is more satisfactory when things go wrong? Mr Collins: Yes, generally speaking, or that they learn the lessons once from a bad experience and try to apply those lessons a second time. Q228 Rob Marris: The government does not always learn those lessons the first time round? Mr Collins: No. Q229 Chairman: Is that because people are frightened to go to Mr Gordon Brown and say, "It is not working, Gordon"? What is the difference? Mr Collins: Take, for example, the Passport Agency which had the well known disaster in 1999 in the implementation of new, secure systems. They knew that the lesson from that was not to go ahead with a role out of systems when they had already found in one or two offices that it slowed down the working processes and led to a productivity dip. All those experiences were known about from a project ten years earlier but the new people there seem to have ignored the NAO report or just not known about it because they were new to the team. For example, the senior responsible owner that Sarah referred to earlier. Some of the things the suppliers say are supposed to be the same person are still changing, despite the fact that the whole idea of the concept was to have the same person running it. Q230 Miss Begg: Obviously we are a sub-committee of the Work and Pensions Select Committee and we have heard about tax credits. That was strictly the Treasury but it impacted on the work of the department and within a couple of months we knew there were serious problems. We have not heard much about pension credit. It seems to be going well. Are we being naïve? Is that about to blow up or is it working okay? Mr Collins: There are two sides to the story about suppliers who have a poor history of delivery in government. Sometimes, the project manager who had had a failure is often the best project manager to hire the next time. EDS probably has quite a lot of experience of projects that have gone wrong. It may well be that it is applying those lessons in a way which means major suppliers coming in. Q231 Miss Begg: The CSA, for us, is the biggy. Is it going to work? Is it ever going to work? Is it time to abandon it? Is it just throwing good money after bad? What has gone wrong? Is it recoverable? Mr Silverman: To an extent with the CSA there are a lot of very inherent problems. If they were able to be confronted and dealt with, you might say it would have been done by now. It appears that it has had this legacy of difficulty in terms of the policy level with the CSA and also at an organisational level with the various different manifestations that the Department of Work and Pensions as an organisation in the CSA has gone through which have made it very difficult. Q232 Miss Begg: What percentage is the failure of the IT system and what percentage would be the failure of the management systems, the working practices, within the CSA? We tend to hear that it is all the IT's fault but from what you say it is a bit of both. Mr Silverman: I am sure people would have different opinions to this but I would argue it is where the IT system meets the policy and the organisation of it which is where you get the problems. A lot of the time suppliers might say that it is not an IT problem. To an extent, maybe they are misrepresenting it slightly and there is a tendency for suppliers to talk up their IT systems and claim there are no problems with them when there are. At the same time, often it is not just a simple IT issue either and it is really where these factors meet each other and the policy constraint from a political point of view that has been put on the whole thing as well that seems to be from my experience where you start getting problems. Q233 Miss Begg: At what stage should we be deciding this has gone on too long and is not working? Let's abandon it and go for something else. Should we be thinking along those lines with regard to the CSA? Mr Silverman: From where I am standing, it does not appear as though there is much real prospect for turning it round. I do not know whether my colleagues would suggest continuing with it or not. I would not expect the prognosis for it being successful to be particularly high. Ms Arnot: I do not know enough about it to answer. Mr Collins: I was asked a very similar question when the Transport Committee was looking at the new en-route centre at the Swanwick Air Traffic Control Centre: would it work? Is it worth putting more money into it? This was a couple of years before it went live. We suggested that there should be an independent audit which is available to the committee and on which you can make those judgments. They ordered in that case two audits, one a technical audit of the system itself and the other a management audit. I think it was the combination of those two things that led to the system successfully being retrieved and going live. Q234 Miss Begg: That was two years before it went live. This is now a year after it was meant to go live. Mr Collins: There are two factors to consider. One, is the system retrievable? The other is are the organisational problems so profound that they were used as an excuse in order to cancel the project. I am sure there were factors to take the focus away from those organisational issues and get another supplier in. We saw with the Assist project and the DSS as it was then a perfectly satisfactory system being abandoned and legal action taken against the supplier when, if they had both worked harder at it, they would have got a good system going. You cannot make a judgment unless you have had an audit of the system done. Q235 Miss Begg: Does that mean that the IT projects that are going to be spectacular disasters do not stick out necessarily? With the benefit of hindsight, is it obvious in the ones that go badly wrong, like the CSE, that that is the type of project that is going to go wrong and that really alarm bells should have been ringing much sooner? Mr Collins: My experience is that they go wrong day to day. You get put off by a week and then another week. That becomes a month and you find yourself a year off or even longer. It is very difficult to tell clear early warning signs of a system that may have problems but may well be salvable. Maybe the best way is to strengthen management accountability and skills to go forward or it may be cutting back a project. It may be that you can deliver 80 per cent of the benefits through the computer system and 20 per cent manually. I am not qualified to say but I come back to the audit being a very useful thing or the gateway reviews being published so that outside people can make a decision. It is very often difficult for those people involved in a team to express criticism and yet remain at the heart of that project, because there can be an attitude on that project that we must win. We must succeed with this and if you are seen to criticise you are seen not to be culturally part of the rest of the team. Therefore, it is easier if someone comes in from outside. We have seen some projects saved by someone running a project which was being operated by someone else who comes in from outside and can take a dispassionate view. If that is not possible maybe an audit is a much easier way to make that dispassionate judgment. Q236 Chairman: We had a very interesting session with some IT experts and at the end of the session all of them, in their different ways, suggested that they did not have a huge amount of confidence that large scale IT failures were a thing of the past. What is your view of that and do you think we are getting to a stage where we can be confident in future that these big ICT systems will work better and that the taxpayer will get better value for money in the future? Do any of you have any confidence that that will happen in the future? Ms Arnot: I would not be confident that there will be no more problems or even no more spectacular failures. The situation is more positive than a few years ago, if only because the string of horrific disasters has focused people's minds much more on things like specifying exactly what you want before you do it, so that there is considerably more time and effort spent on the right way to do these things. I would say things are better but not guaranteed. Mr Silverman: I agree. Mr Collins: I do not know. I have seen so many lessons that should have been learned that have not been. New people come in and I think there is a great awareness of the risks now. People are not going for the big bang but there are also some risks inherent in large scale, incremental approaches. Rob Marris: Mr Silverman, your publication is Government Computing. Do people in government read it? I do not mean that disrespectfully. Q237 Miss Begg: It comes to us. Mr Silverman: Yes. I would naturally say that they do read it and my experience is that they do. We have the magazine on the website as well and the website is obviously a broader audience so you get public and private sector audiences, whereas the magazine is primarily public sector. Q238 Rob Marris: I wondered if people were learning from it. Mr Silverman: Increasingly over the past couple of years it has been more of an editorial focus of the magazine to be looking at the lessons from IT projects and things like that. Q239 Chairman: I still wait to learn about what happens over Westcott's departure in the diary columns. We are now going to talk to the suppliers who are obviously very important players in all this and it is very easy to cast them in the role of the rogues but life is not that simple. If there was any one, single thing that suppliers could do to help from your journalistic point of view, what would it be? If you were a CEO in some of these big companies, what would be the thing you would say to your key strategic staff that they should do in the future differently when they are dealing with government departments? Is there anything obvious? Ms Arnot: I do not want to suggest that this is not going on so it is slightly difficult but they need to be honest with the government as a customer about what they can do and what they cannot. If the government chooses to ignore that, that is fine. They are elected and can be un-elected. They have to make an informed decision and I think the pressure of these deals is enormous, really high profile and high prestige. The pressure is on not to prejudice your chance in the race by saying that it is a ridiculous idea. Mr Silverman: Linked with that, there is the issue of communication as well and behind that the things that people say are the problems between public and private sector with cultural differences. If there can be more open communication between a government department and its suppliers, that would help. I remember in the past speaking to officials at the Child Support Agency and them saying that communication was a problem with the supplier. Mr Collins: I think suppliers would like to see more openness and honesty. Chairman: This has been a very interesting. This is an important inquiry for us and you have contributed significantly to its success. We are trying to get positive recommendations to help the situation but you, as professional journalists, are very important in lifting the lid on some of the reality of what is going on in government departments and we, as lay people, have to rely on your information to make judgments about what is happening. Thank you and thank you for your written submissions. Witnesses: Mr John Corneille, IBM, Ms Jan Gower, IBM, Mr Kevin Saunders, SchlumbergerSema, and Mr Derek Ward, SchlumbergerSema, examined. Q240 Chairman: Ladies and gentlemen, can I welcome our high powered team of suppliers? We are very grateful for the written evidence that you have sent us and we are very pleased that you have been able to join us this afternoon for what we think is quite an important piece of work for us as a committee, in terms of keeping Parliament advised on what is a big issue in terms of public expenditure and public policy generally. This afternoon, we are joined by John Corneille who is the IBM global relationship partner for DWP. We have Jan Gower, who is also from IBM; Kevin Saunders from SchlumbergerSema, who is a DWP account director and Derek Ward, who is vice-president of the public sector for ATOS Origin. You are all very welcome. It is so easy to set suppliers up as the fall guys in all of this and I just do not think it is as simple as that. This is a very complicated set of public policy issues. In the last session, we were hearing about the interface between the policy and the technology. It does not matter how you cut that. It is always going to be difficult if you have the scale that we are dealing with, with UK-wide systems. I would like to ask whether there is a problem and, if there is, what the extent of it is from your own perspectives. I think it is very difficult for you as suppliers to give us your innermost, heartfelt thoughts about some of the worst excesses of what the politicians and the department do to you. You have to win business and these contracts are important to your commercial viability. It is certainly not in our interests to try and prejudice that in any shape or form but as parliamentarians you have to understand that we are at this table as well. In essence, Parliament provides the money for you to do these things. At the moment, all we have available to us is National Audit Office reports and they are very good but they are historic. They are retrospective. There is absolutely nothing we can do to pull back some of the losses that there have been - and some of them have been spectacular, never mind whose fault that was - and I think that we as a sub-committee believe that Parliament needs to know a bit more about what is going on in an adult way and be more directly involved in setting the framework within which you do your business. I think that is an essential position for us as parliamentarians to take. That is the basis on which we are approaching this afternoon's session. What is the extent of the problem of this complicated interface between the policy making, technological problems and solutions that you have to deal with as suppliers? Is it getting better or worse? Ms Gower: The hypothesis that says if we simplify the policy the IT systems will be much simpler and therefore we will all get to a better answer more quickly is too simplistic. Although most of the thinking we are now coming to, which is yes, we should get suppliers involved in the earlier stages in the process to find out whether the concepts are viable, whether suppliers can contribute to the things that can be done, yes, they could be involved earlier in the process. The huge legacy which exists within the department ensures that any prospect of simplifying policy and expecting it therefore to retain simplicity when you get to an IT solution is somewhat naïve because of the need to link back to the existing systems which the department has. The department's new strategy which is around a more modular approach which says let's try and think of ourselves in the same way as any other business, which accepts that commercial, off the shelf packages could be of use to us, could be a very good approach. That will however require much earlier in the process for people to think through the changes in the business processes that will be required before the IT projects are met, because that is a precursor. Coming back to your question, I think there are ways in which this could be done. Parliamentary accountability and the issues around whether the supplier, the departmental officials and the people in Parliament who are accountable - does that have to be a problem? Personally, I do not think it does because there are ways in which those things can be communicated. The fact that we are indulging in a series of bilaterals probably contributes to that problem, if there is a problem, rather than helping it go forward. Q241 Chairman: It is getting better? Ms Gower: I think there is the potential for it to get better but all parties engaged need to understand. It is a bit like any formal partnership. You need to have a joint, agreed objective that says, "This is what we are trying to get out of it. Is that congruent with what you are trying to get out of it?" Mr Ward: Historically, I think there may have been a problem. From where I sit, the problem comes down to this: that we are expecting as a society at all levels more and more functionality. We need it to be faster. We want it tomorrow and we want it to cost less. All those things are pertinent in this arena. Whether policy can dictate technology and whether technology can deliver the policy for me is not the nub of the issue. I see a growing maturity both on the industry side and on the department side in terms of engaging earlier. Somebody mentioned communication which I think is extremely important. Through dialogue, I think we are together reducing the risks of getting technology out of synch with policy. The timeliness and the expectations of IT projects in general cause all sides quite a lot of challenge. Mr Saunders: I would agree with the sentiment that the potential is there for the improvement that we are seeking in terms of policy simplification. There are some things on the other side of the equation though which I think are important. One of them is that if we do involve suppliers earlier in the process and so on that could make the process last longer. There may have to be an acceptance that to change and improve things there may be some kind of time impact on some projects. Earlier evidence was talking about the need to do things quickly and politicians setting deadlines. The fact is that some things may have to move and there may have to be a time lag for some of those things to prove of benefit. We have to recognise as a supplier that some of the things that the Department of Work and Pensions does are quite genuinely complex. It is not just a case of a simple benefit. There are interactions and interrelationships which we need to be mindful of. To be fair to the department, there is in some areas a great deal of complexity in the business they transact. From our perspective, the earlier we have sight of that the better. The potential is there, I think that we all need - us and other suppliers - to see it happening I guess a little more quickly than we have done up to now. Certainly the potential is there for improvement, yes. Q242 Chairman: Would you all be apprehensive if we made some of this good practice that is floating around more mandatory? Shall we start with Kevin. Mr Saunders: I think in principle we do not have an emotional issue. There are two things which occur to me. The first thing is that if we are talking about working more closely with any Government department, DWP in this case, would the department themselves though have a greater onus of responsibility on themselves in terms of ownership responsibility, in terms of the ability to make decisions quickly, in terms of the SRO having the authority needed to execute the job. If we saw the equations being equalised I think that would be helpful for us, in other words it is not all just one way. The second thing would be there is a limit to which, I think, there may be some cost impacts. In other words, if it was overly onerous or overly legal then probably we would have to look at the financial aspects to make sure that we could do the same job at the same price and meet all the criteria that were set. In principle we would have nothing, shall we say, fundamental against the idea. Q243 Chairman: Derek? Mr Ward: I would go along with what Kevin said. I think that it is very difficult to mandate best practice. I think some of the comments we heard earlier were all how would you prove what best practice was, one person's best practice is not another's. I think it takes us into a real minefield. I think the striving for best practice and being able to demonstrate that consistent improvement is probably more important than trying to mandate some base level of it. Q244 Chairman: John? Mr Corneille: My comment would be I think we would support best practice being applied wherever possible. My only concern is even best practice has to be applied in a sensible way by experienced people. We have had examples before in Government, for example, of methodologies being mandated and then being applied to the letter of the methodology rather than being applied with experience. I think it is true of all the process type stuff that is built around good practice. It is not just the application of the process, it is how sensibly it is applied in any particular case and it needs to be applied with people with the right experience to enable the right questions to be asked at the right time. Q245 Chairman: This is slightly in parenthesis - I will come to Rob Marris in a moment - am I right in thinking that in your evidence you refer to an off the shelf package designed for social administration? Mr Corneille: Yes. Q246 Chairman: Is it Cúram? Mr Corneille: Correct. Cúram. Q247 Chairman: Speaking for myself, I would not mind seeing some more details on that if that is possible. Mr Corneille: Okay. We are happy to provide that. Chairman: That is something we would like to study a bit more. Q248 Rob Marris: Can I ask some questions on transparency, there are four of you and I have got three questions so I will run through them. Firstly, as to whether you object to Gateway reviews being published? Secondly, what other stuff which is not currently in the public domain would you, from your side of the table, be happy to see in the public domain? Thirdly, what differences do you think the Freedom of Information might make? Firstly, on the Gateway reviews? Mr Saunders: Would we be happy to see them published? Q249 Rob Marris: Yes? Mr Saunders: I cannot see any problem that we would have with them being published, providing there is a clear understanding of the framework, obviously. I think the reviews would have to be perhaps even more tightly controlled in terms of the management and input to them but I cannot see why we would have a problem with publication because we have been through them, we know how they work and they make key decisions. Q250 Rob Marris: Is there any other stuff that is not published currently that you would be happy to see published? Mr Saunders: Things which are not published now that we would like to see published? Q251 Rob Marris: Yes? Mr Saunders: Off the top of my head I cannot think of anything to be honest with you, specifically. Q252 Rob Marris: Can you come back to us if you do think of anything? Mr Saunders: I will. Q253 Rob Marris: It may be there is not anything. Mr Saunders: Nothing springs to mind. Q254 Rob Marris: Is the Freedom of Information Act going to make any difference? Mr Saunders: I am not sure, honestly, if I know enough about that from my own perspective really at this Committee to pass judgment on that so I will say I do not know in this case because I do not. Q255 Rob Marris: Derek? Mr Ward: The publication of Gateway reviews, I think, providing it is done across the board and not selectively, I would have no issues. In terms of additional information it is not covered quite by the Gateway reviews. We have long said it would be really nice to see, if you like, a league table of suppliers in terms of those who have delivered and those who have not. There are some legal implications of that. One of the earlier journalists who spoke very well on the subject said there were some legal implications in that we would dearly like to see people's successes and track records being taken into account in the evaluation of another bid, yet I do not think currently that is allowed. That is one thing I think we would like to see. I am not sure, again, that I know enough about the Freedom of Information Act to comment. Q256 Rob Marris: IBM? Mr Corneille: Generally, I agree with what has been said to my right. The one thought I have is that I think there is a lot of focus around Government IT on failure and I think one of the things which might be usefully more widely disseminated is reasons why projects succeed because they do in Government. I think understanding what constitutes success rather than focusing on what constitutes failure would be a very healthy thing. Q257 Rob Marris: You would be happy for Gateway reviews to be published? Mr Corneille: Absolutely. Good stuff is what it is all about. Q258 Rob Marris: What about additional information? Mr Corneille: I cannot think of anything off the top of my head. Q259 Rob Marris: If you do, can you let us know, unless Jan can think of something now? Ms Gower: Just to add to John's comment about the success, I think when we met before Christmas we talked about the fact we were talking about IT projects whereas actually we should possibly be focusing on the bigger picture which is what is the policy intent meant to achieve and therefore how do we get people around the department or in the business to engage with us more because it makes a difference to them and think about the business benefits which come out of it. I think often if we go into some of the review IT projects with that in mind we might come to a different outcome in terms of whether we should be stopping projects or keeping them going. Sometimes I think the IT project becomes an end in itself rather than to say "Are we meeting to the objectives that we intended to get to? Are there other things we should be doing instead?" Q260 Rob Marris: Finally, have you any thoughts on the Freedom of Information Act? Ms Gower: I agree with what Tony Collins said in his earlier comments. I think the process by which procurements etc are run will mean that there are enough get out clauses that information would not get published if that was required. I would not hang my hat on the Freedom of Information Act. Q261 Rob Marris: It is unlikely to make much difference is your sense at the moment? Mr Corneille: Yes. Q262 Miss Begg: I have some questions on competitiveness. Can I just ask IBM, you are the largest IT supplier in the world, you have a small proportion of British Government IT projects, why? Mr Corneille: I think there is a bit of history here which was to do with PFI and the organisations that were willing to sign up to PFI deals early on. EDS got very quickly into that market place and were prepared to take on PFI type deals. Q263 Miss Begg: That has changed? Mr Corneille: Yes, that has changed but it has only recently changed. I would expect to see a wider range of suppliers getting a larger share of the Government market place. Q264 Miss Begg: Did the PFI nature of the earlier projects put other suppliers of IT projects off as well? Mr Ward: Speaking for my own organisation, we entered into PFI contracts quite successfully and I think there is a question of scale. I think it probably stops smaller companies from bidding because in order to finance them and absorb those sorts of financial implications you need to be one of the big players. That is fortunate for people like ourselves but I am not sure the model worked particularly well in terms of getting additional suppliers into the market place. Q265 Miss Begg: From IBM's point of view you are saying things are likely to change from now on? You are competing? Mr Corneille: Yes. Despite the fact that we have not got any of the NHS work, we did bid for bits of that and I think our track record of bidding has been much more aggressive in recent times. In the last six months we have got ourselves into more of these deals. Q266 Miss Begg: I asked a series of questions of the journalists about this difficult relationship between the supplier and the department. Obviously they pay you money, you have got the contract and you are the supplier to them so - I do not know - obviously you have to make sure you are satisfied with what they say but at the same time you are expected to work in partnership. Is that a difficult relationship to get right as far as your working and do you feel sometimes the position you are in is compromised because you have to deliver a contract and if you are as open as you might want to be then that might be to your detriment? Mr Corneille: I think the true answer is that partnership working requires some conditions which are quite difficult to generate in Government departments, things like driven by behaviours and openness and all the rest. Those things do not come automatically, you have to marry the culture of a commercial organisation with the culture of a Government department. Some organisations are better at that than others. Q267 Miss Begg: Are you saying Government departments tend to be less open than most organisations in the private sector? Mr Corneille: I think my experience is, having worked with the private sector organisations, that yes you will find you are quicker to get to a dialogue about the things which are causing them angst in terms of what you are trying to deliver than I found the case in Government departments. I think that is because private sector organisations tend to deal with lots of other private sector organisations in the way they do their business and are used to that kind of business to business dialogue. That is not something which comes naturally to many Government departments. Q268 Miss Begg: In some cases when there is a new IT project coming in and they are looking for a culture change within the department as well, is that culture change easier to achieve in the private sector than it is in the public sector? Is that one of the biggest stumbling blocks of all, the attitude "We have always done it this way so why should we be changing to fit in with the IT"? Ms Gower: I think that at the ground level in all the Government departments I have worked in, and in particular in the Department for Work and Pensions, I have never experienced resistance to change per se. What I have experienced is a difficulty in actually making that change real from the point of view that often the enabler of that change is an IT system delivery which is some way out so positioning globalisation and the management processes in the organisation to be ready for that is often a sort of "Well we are marching the people up the mountain and this thing will be coming" but it does not ever quite come. I think there has been quite a lot of disappointment in some of the areas of the department that I have worked in. I think also the private sector is much more able to use levers to change culture incentives and also disincentives to change which the public sector does not have at their disposal. Often in the private sector a good way of getting change is because you have business survival to deal with as an incentive whereas in the public sector that is not on the agenda. Sometimes the management drive to get change through is not as great. Mr Corneille: Could I add something. One of the comments I wanted to make earlier was that in my judgment, having seen a lot of big private sector programmes, the DWP must rank as having one of the largest change programmes of any organisation. When you think about what it is trying to do, it is not only just replacing legacy systems and modernising, it is trying to get more customer centric, it is trying to drive out inefficiencies and that is an extremely complex change programme we are dealing with. Q269 Miss Begg: Do you think it is succeeding in doing that from where you are, from the outside? Ms Gower: I think it is. I think if you look round various parts of the department - the Child Support Agency, the Pension Service, Job Centre Plus - you would see in some cases experience that rivals best practice in the private sector. You mentioned the Pension Credit earlier, I think the feedback on how pensioners have been treated when phoning the line, the fact their claims have been taken on line, does demonstrate that the public sector can step up to this. I think it is difficult because, as we alluded to earlier, it is better press to report bad things happening rather than good things happening sometimes. We do not often hear about some of the good bits of the modernisation programme that are out there already. Q270 Miss Begg: I am just wondering, as a company which has been involved on a lot of occasions, are you finding it is much harder to change the culture in the public sector? Mr Saunders: It can be more difficult. Our own experience though is that we see sometimes in the immediate group or department we are working with in, say, a project group that desire to change can be very immediate and very quick. Sometimes we feel that their frustration is that sometimes their colleagues are not quite as quick to move forward as they might be themselves. It is a very big department, there are over 100,000 people there, changing that size of organisation is extremely difficult and particularly changing it all at the same time is even more so. Sometimes we pick up, shall we say, some internal frustration that not all of the parts are moving at the same pace but certainly we have seen willingness and ability to deliver that kind of willingness to change very quickly on most programmes we have worked on. Sometimes what we see though is a frustration that it is not working everywhere. Q271 Miss Begg: I am just wondering if there is somewhere within the public procurement process - it is taxpayers' money that is being spent - whether it means the relationship you have with the department is actually a bit more tense and a bit more awkward and a bit more difficult than it would be with the private sector? Mr Saunders: I understand exactly what you are saying. Again, in our experience the tenure for the programme and the project tends to be set very, very early on at the procurement stage, in fact at the beginning even before the procurement stage when we get invited. The way the negotiations and the development of the contract works does tend to create some fairly important relationships and how that moves and how that is shaped does tend to shape the future direction of the project. If it starts with openness and honesty, it tends to stay that way; if it starts with suspicion either way - and I have seen that happen, for whatever reasons - then that does tend to set a tone for the future. The message I think that we would add to this particular question is that the way that the partnership develops in the very, very early stages, before procurement, before we have won anything, really is crucial to how the actual programme goes in terms of delivery, that is our experience. Q272 Miss Begg: Is it possible to keep the cost of the bidding process and the competition process down, again because obviously does that not put people off and also expose the public purse to a degree of risk? Has that got better or worse? Mr Saunders: Derek alluded earlier on to the difficulty that that might give some smaller companies. Certainly we have seen in the last year, 12 to 18 months, decisions being made more quickly in terms of procurements that we ourselves have been involved in. We welcome that because one of the obsessions of the private sector IT companies is the cost of bidding. IBM referred to the very large health service bids, we were bidding for those as well and they are pretty important to the way we run and to our profits so we welcome any improvements and any increase in speed of procurement. We have seen that, we would like to see it continue into the next year and beyond. Q273 Chairman: Can I ask for your comments against some leading questions which I think are pretty self-evident lessons which emerge from reading the evidence. I would like your reactions to some of these no brainers really. The first one is "Politicians should not set unrealistic deadlines". The problem behind that, as far as I am concerned, is I wonder if any of you are strong enough to say to the minister "You cannot do this" particularly if the minister happens to be a big beast like the Chancellor of the Exchequer. Who, as a supplier, might say "Chancellor, you cannot have this"? How does that prejudice your opportunity of getting the work? For all that you know IBM might have been losing all these contracts because they were saying the wrong things to ministers. Mr Corneille: The corollary of that though, surely, is why would we want to take on a project that we know cannot be delivered. Q274 Chairman: It is littered with examples of exactly that. Mr Corneille: I doubt whether there is any one supplier who has actually taken on a contract to deliver a system in Government believing it cannot be delivered; that would be commercial suicide. You come to this kind of scrutiny and it is very public when you fail, unlike with the private sector. I think one of the issues is that very rarely is there a dialogue early in that process such that the suppliers can offer an opinion. I cannot remember a case when a minister has approached us and said "I am thinking this needs to be delivered on this timescale, what do you think?". Q275 Chairman: They do not make that approach? Mr Corneille: I cannot think of a situation where a minister has approached us. Q276 Chairman: If such an approach was made, obviously you would --- tell the truth, would you not, I was going to say? You would welcome it but how big a risk can you take? Political timetables are all about general election dates, it do not matter about anything else. Mr Corneille: What would typically happen, and let me draw on the private sector because they want to implement some things quickly too in certain circumstances, what generally happens when that dialogue takes place early on is the supplier would say "No we cannot deliver that but actually what we can deliver is this". This might take you towards the target you want to get to. Q277 Chairman: If I was the Chancellor of the Exchequer I would say "EDS can do it in that time", what is your reaction to that? Mr Corneille: Personally, if I felt that it could not be delivered by my organisation I would not want to expose my organisation to it and nor would my organisation allow me to. Q278 Chairman: That is the right answer. Okay. Presumably we all accept that the political timetables do visit on you programmes of implementation which are at the margins of what is possible professionally from your own contractual assessments which you do? Mr Corneille: Yes. Q279 Chairman: You are always being asked to do things against tighter deadlines that you would like. I do not want to make this too much of a leading question. Ms Gower: I think if you refer back to best practice, as we were discussing earlier, there are only a number of things that you can change if you are going to meet a timetable. You can change the extent and the scope of what you are doing, and you can change the quality. In my experience dealing with these things, if somebody says "You have to do it by this time" then I think they need to be aware of the level of risk that might create, the scope which could be included and more specifically what is not included because I think sometimes that is where ministers get nasty surprises because they do not know what the limitations are. I think the risk issue is very significant because in the public domain, as we are discussing, we need to be very clear that failing is going to cause probably a disproportionate level of concern. As John suggests in the private sector these things are not public, within the public sector they are. I think those issues need to be addressed when that decision is made rather than when you are coming to the gate that says "Can we go live next month or not?". By that time all the expectations have been set and it is very, very difficult to row back from them. Q280 Chairman: We must try and get on with this because I can talk all day here. "Technical realities should be taken into account when agreeing an IT system". Technical realities are an essential part of all this. Is there a consensus on that? Mr Corneille: Yes. Q281 Chairman: "Projects should be subject to an independent audit". I was really quite taken by the evidence that the Committee got in writing from Tony Collins about the Arthur Little impact and the Transport Committee's role in getting that audit done on the Swanwick issues, presumably we could do the same for the CSA if it came to that. How difficult is that for you on your side of the table? If that is the only way that Parliament can be sure they can get to know what is going on and there is a legitimate reason for that question to be asked, is there a better way of doing it and if there is which makes it easier for you, what is it? Ms Gower: It comes back to one of the points that Derek made earlier. I think personally if such things were applied across the board and all suppliers knew they would be subject to such a thing then I do not see why anybody would say "No, you cannot do it". Q282 Chairman: It is a level playing field issue. Ms Gower: I think the level playing field but also if you go back to the CSA experience, when that contract was let it was let under a PFI contract which basically suggested a transfer of risks to EDS to determine how they would go about doing things. As a consequence of that certain expectations were set, and I do not know how many audits or reviews of the various IT systems around Government have been done, but many of them do not come up with the sort of audit that says "Yes, it would pass or fail" it is always a question of shades of grey and risk and I think that would need to be taken into account. Q283 Chairman: Finally "There should be greater discipline with the public sector". That is the question of people saying "I am responsible for this, right or wrong", presumably that would help? Mr Saunders: It would help immensely but I would like to repeat the point I made earlier, it is all very well saying to somebody "You are responsible as a civil servant for the delivery of a programme" but they have to have the authority and the teeth to be able to exercise it and I do not think they always do in reality. Q284 Chairman: Maybe you know what has happened to Mr Rob Westcott? Mr Saunders: No. Q285 Rob Marris: Picking up on the subject of DWP having the willingness and the ability to shape decisions being made more quickly in the last 18 months. Compared with the private sector have DWP or other Government departments sufficient depth of in house IT management expertise in order to adequately assess alternative technical solutions suggested by IT suppliers and also the management side of things: job shape, the holistic stuff? Is there enough inside the DWP? Mr Saunders: That was discussed earlier and again we repeat very briefly - I know your time is pressing - we have seen a big increase in the number of private sector individuals being brought into the department in varying roles. Again, sometimes though the issue is not just about the individual, it is also quite complex as an organisation because there is quite a large matrix of different departments and different user groups and sometimes even with the best expertise in the world getting decisions made quickly, especially on things like changes to major programmes for example, can take time. Still I think we would see room for improvement perhaps in the ability of these key people to make decisions very quickly. Again I think we would like to see some improvement in those areas on the big projects. Q286 Rob Marris: Is that because there is not enough depth in the expertise or no-one has taken the responsibility? Mr Saunders: What I am saying is even if the expertise is there unless the organisational model is geared up to take decisions quickly, because there are a number of different stakeholders in the Department for Work and Pensions and different projects, trying to get a consensus which sometimes has to happen can take time even if you have the most experienced person in the world. What I am suggesting is that allied to the experience you do need to look sometimes at the ability of the organisation to make those decisions quickly and efficiently so the project can deliver on time. Q287 Rob Marris: Derek? Mr Ward: I would echo exactly what Kevin said and the only rider I would add is the role of the SRO, senior responsible officer, and the industry side, the SIRE, is critical to all of this. I know there have been some moves to suggest even joint training of those sorts of people because I think getting that relationship right and making each side more aware of the constraints and pressures on the other can only help matters. Q288 Rob Marris: I understood Kevin to say in his experience of DWP it is getting better; is that your experience? Mr Ward: We are the same organisation and it is exactly the same experience so yes. It is a question of quality of people and I think we have seen a very high quality of individual. Some of the empowerment things that Kevin alluded to, things will always be improved. Mr Corneille: We would agree with that. Over the last year we have seen a growing of what they call the intelligent customer within DWP. I think that has helped the debate, certainly, between ourselves as suppliers and the department. The one thought though that I would have around this is that I think in line with a question we had earlier about partnership there is a trick here in if you get the right kind of intelligent customer they know how to leverage the best knowledge out of your suppliers. We were talking earlier about the department growing its project management function, I do not think the department wants to project manage, what it wants to do is to be able to judge how well its suppliers are project managing. I think there is probably a need to bring with this growing of the customer function some partnership skills as well. Q289 Rob Marris: So in-house there would be some project management expertise rather than relying on the supplier? Mr Corneille: In-house good project management expertise but the project management expertise would be used to judge how well the suppliers are project managing rather than project managing themselves because they want the risk out there with the suppliers. Q290 Rob Marris: It is the expertise to audit project management? Mr Corneille: Yes. Q291 Miss Begg: Can I tempt any of you to give an explanation as to what has gone wrong with the CSA from the outside? Mr Ward: You can tempt us but I would not know. Mr Saunders: We honestly do not know. Q292 Miss Begg: I had to try. Can I ask questions in general then when it becomes clear the projects are going badly awry. What do IT managers need to have available to them to make the decision that enough is enough this project is not going anywhere and they need to abandon it? Ms Gower: I think somebody in the previous discussion raised a question about contingency. Every project should have contingency and that should be real. You should be able to invoke it, you should know when you get to the point when it needs to be invoked. I think, again, the partnership agenda should encourage both suppliers and people in the department to think through what that real contingency might be rather than for it to be seen as a sign of failure that you are thinking about contingency. It is actually good planning and good management. I think one of the issues for a lot of the projects that we perceive now to have gone wrong is that there is not a possibility of invoking any real contingency other than moving a date back, and I think that is one of the areas where there is a problem. I do not think there is ever a single point at which you could say as an IT manager or a manager of a contract "Ah, I can see that is the point, 9 June 1982 or whenever, when it went wrong". As John referred to earlier, experience tells you when you need to ask further questions and challenge further but there are always a set of circumstances around that which you would need to take into account also. Q293 Miss Begg: We have to break the mindset that says contingency planning is planning for failure. Ms Gower: Exactly. Q294 Miss Begg: I do know that in the case of tax credits the minister did say we did not think it would go wrong and therefore a lot of problems subsequent to going live would have been solved by the contingencies act coming in because they had not built into the relationship the software ? Ms Gower: Exactly. Q295 Miss Begg: I will ask the same question as well that I asked of the journalists. Is it easy to identify IT projects that are going to go wrong? Do they stick out like a sore thumb or is it almost impossible to tell which ones are the ones which have teething problems and will eventually work if they keep working away and solving all the problems or is the whole system designed to fail and collapse? Mr Corneille: Can I have a crack at that one? I think any good project manager would tell you that there are some obvious things that come through, measurement systems and measuring against plans and things, which would give you early warning that not all is right with the project. My experience is that the very best project managers use the good old fashioned method of management by walking about, going and talking to people, going and seeing for yourself and actually if you have enough experience of running large scale projects you begin to pick up the feel for when things are not right because quite often it is not just one thing that is going wrong, it is the interaction of several factors on our project which are going to cause failure in the long run. I think you have to get out there amongst the project team, you have to get out there amongst the stakeholders because quite often projects begin to fail because users, for example, are starting to change their mind about their requirements, their expectations are something different from what is being delivered. That is very difficult to pick up off of formal project management reports, that is going out, talking, interacting with the people involved. Q296 Miss Begg: Kevin, have you anything to say? Mr Saunders: There are a couple of things we can say. One of the tests that we use is how many change requests we receive from when the contract was actually let. Q297 Chairman: Change requests? Mr Saunders: Yes, requests to change something: the system, the requirement, the specification. If you look at any large IT project anywhere, and that includes DWP, often they are characterised when there has been a difficulty by the sheer weight of changes that have been introduced for whatever reason and they may be very good reasons. Change requests are one of the things that we use sometimes to gauge whether things are in problems. The other aspect though is as a supplier we are working within a contractual framework so what we can do initially is to voice concerns and maybe go and have a dialogue, ultimately though we are in a contract that we have to deliver to, and we all try to honour that. Sometimes it may be difficult for suppliers to step outside that box and, I think, to pick up the point that Jan made, to see something as a positive, a contingent idea being good, because there is a contract there that we have to meet. An earlier point was made about the independent review approach, it may be useful sometimes when projects reach a certain point, maybe when spend has gone X per cent over budget or whatever there may be a cause to have a review then because sometimes as a supplier we cannot change as much as we would like to. Q298 Miss Begg: The contract is acting as the barrier to making any earlier decision that we should abandon or change tack. The other thing is, from the contract side, are the contracts sufficiently clear if the worst comes to the worst who picks up the cost? Mr Saunders: Indeed. Q299 Miss Begg: Are the relative failures shared out between the departments? Mr Saunders: I am sure the contract could potentially be a barrier to enacting some of those decisions early on because the contract is the contract and we are bound by it as a supplier. It is something that could be looked at perhaps in terms of finding a way to arbitrate; finding a way to get round those problems in the event that a programme looks like it is going off the rails, just an idea. Q300 Chairman: There is one specific set of questions I would like to address to our colleagues from IBM. This is not intended to be an ambush at all but we have had some interesting evidence from the PCS about the customer management system. The information we get from the department is that powers are going well, the PCS evidence is quite contrary to that. It says that the post strategy for call centres is threatened and the functionality in terms of doing calculations is at risk. Now we will be seeing PCS on 22 March. What I am prepared to do is let you see the evidence because I think it is a bit unfair to bowl questions at you. It is safe to say this, if it is partly improved it is of some concern and is yet another example of the kind we have been talking about. Could I ask you if we provide a copy of the evidence in time for us to see the PCS so we have a complete picture and two sides of the story, if you could give us your reaction to that that would be extremely helpful. Mr Corneille: We are happy to do that. Q301 Chairman: Finally, just two final wrap up questions. Are failures a thing of the past? I think I have got a sense of what your answer to that might be. Is there a final comment on that? The final question is what should we be saying to DWP? We were asking the professional journalists what the supplier should do. Can we ask you what you think the DWP in its strategy and policy handling should do to make all this better because at the end of the day that is what we are all interested in trying to achieve? Mr Saunders: If I try to wrap that up into one concept or idea. It was discussed earlier that the involvement with us and other suppliers early in the process, there really is no better way to try and ensure future success than that. I will leave it as one comment. Mr Ward: I think creating the atmosphere and the point you made of creating an atmosphere where if somebody did come to the minister and say "It is unrealistic" that would be taken as a positive rather than a negative. Creating that space for the communication in an open and honest way I think will mitigate the major risks of those things. Mr Corneille: I believe in the last year the Department has moved quite considerably in terms of learning the lessons of difficulties in the past. For example, the growing of an intelligent customer base within the department, the new ISIT strategy I think is a real attempt to try to do things a different way and my hope is that they can make that ISIT strategy stick because it is all right having a strategy, actually delivering on that strategy is a different and more difficult thing to do. I think that strategy is going to be a challenge to make work in the right sort of way. I think the strategy is dead right in terms of the response to minimising the risks in the future. Ms Gower: I think the only thing I would add to that - and I have seen more of it in the last 12 to 18 months - is engaging the people in the decision making processes who are going to be accountable for the delivery of the DWP business, so the people who run the operations of Job Centre Plus or who are responsible for those or the Pension Service or the CSA much earlier in the process rather than just having project people taking those responsibilities I think is very important because unless and until the people who are going to have to operate these things day to day and whose staff are going to operate them day to day, until they are engaged in the thinking and the no go decisions then I still believe we will end up with an expectation gap which our suppliers will find difficult to meet. Chairman: Absolutely. It is no consolation to you but to reinforce the point the private sector has problems as well. When I went to my branch of the Bank of Scotland to do some financial business, increase my overdraft and the like, all the systems were down. I thought somebody is watching what I am doing. This has been an important evidence session for us and it has been very helpful to have your written submissions and your personal appearance this afternoon. Thank you very much. |