Further memorandum from Simon Bowers,
The Guardian
I thought it might be of assistance to the committee
to note that in February 2006 two of the Local Service Providers
(LSPs) to the National Programme for IT (NPfIT)—Accenture
and Computer Sciences Corporation (CSC)—produced an assessment
report on the deliverability and fitness for purpose of Lorenzo,
a software package being developed in India for the NPfIT by the
LSP's chosen software partner iSoft.
The report found that, beyond a basic version
of Lorenzo tailored for GPs, there was "no well defined scope
and therefore no believable plan for releases".
iSoft had send Accenture and CSC a series of
release dates for different versions of Lorenzo. iSoft said the
final, fully functional version, would not be available until
the second quarter of 2008.
The Accenture/CSC report concluded "These
releases must be viewed as `indicative at best and are likely
to be highly optimistic". It labelled 13 out of 39 matters
relating to Lorenzo "red", meaning they raised issues
requiring immediate work.
The report found "no evidence for the development,
nor testing of, technical procedures that would be required for
operation and maintenance of the live system... this is the main
risk to the successful delivery of a fit-for-purpose solution".
The report, which I have seen, was marked confidential.
All of the above information was included in an article published
in the Guardian on August 21, 2006, a copy of which is printed
below.
It subsequently emerged, in iSoft's 2006 annual
report and other filings, that both Accenture and CSC had written
to iSoft alleging material contractual breaches. iSoft denied
all the allegations and registered claims for additional work
done outside the scope of the basic contracts. The annual report
states that iSoft had taken legal advice from its law firm Ashurt
on these matters. It said: "Having reviewed the legal advice
the board has taken the view that, in the view of the complexity
of the potential claims and counter-claims, a commercial settlement
is the most likely outcome."
On September 28, 2006 Accenture struck a deal
with NHS Connecting for Heath terminating the LSP's two NPfIT
contracts. The contracts were transferred to CSC. On the same
day iSoft issued a statement saying: "Under the termination
arrangements, iSoft and Accenture have agreed that no further
payments will be made between the two parties and any potential
litigation relating to the period between 2 April 2004 and today's
date will be annulled."
21 Aug 2006: The Guardian—Page 18—(696
words)
"No believable plan" for completion
of iSoft work on NHS overhaul: Review flags up 13 "red"
areas of acute concern: Software firm insists parts of system
are being set up
By: Simon Bowers
One of the most important pieces of software
in the NHS's pounds 6.2 billion IT overhaul—which is being
developed by iSoft—may miss its already delayed release
dates, according to a review by the two consultancies responsible
for delivering the systems.
In iSoft's annual report last year, the troubled
developer said the programme, known as Lorenzo, was already "on
the market" and had been "available" from early
2004.
In January this year, however, it issued a profits
warning saying the NHS's National Programme for IT "had been
experiencing a significant degree of rescheduling... as a result,
it is now clear that delivery of iSoft application solutions to
NHS trusts will occur, in general, later than previously expected".
No revised delivery date was given, and the company did not mention
progress on Lorenzo.
A month after the profits warning, Accenture
and Computer Services Corporation (CSC), iSoft's partners on three
NHS contracts covering 60% of Britain, produced their own review
of Lorenzo's "deliverability and fitness for purpose".
The review, seen by the Guardian, is highly
critical of the Lorenzo software development and iSoft's expectations
of a likely release date. Beyond a basic version of Lorenzo, which
has been tailored for GPs, the review found "there is no
well defined scope and therefore no believable plan for releases".
Last night a spokesman for iSoft said: "The
Lorenzo solution is broad and far- reaching, and elements are
in the process of being implemented... we will be providing an
update in our full-year results."
ISoft had sent the review's authors a series
of release dates for different versions of Lorenzo and said the
final, fully functional version would not be available until the
second quarter of 2008.
"These releases must be viewed as `indicative'
at best and are likely to be highly optimistic," the report
concluded. No Lorenzo system has been installed in the UK, and
iSoft has been working on an interim version, which largely involves
a repackaging of older software.
Last year, iSoft's then chief executive, Tim
Whiston, told shareholders that "Lorenzo has achieved significant
acclaim from healthcare providers, analysts and the leading technology
organisations".
The Accenture and CSC review took a different
view from that of Mr Whiston, who quit iSoft two months ago. It
labelled 13 out of 39 matters relating to Lorenzo "red",
meaning they raised issues requiring immediate work.
Among the areas of acute concern was about iSoft's
ability to plan and estimate how long the development process
would take and its confusing "progress management".
Even "clinical safety" was labelled red by the reviewers.
Most seriously, however, the Lorenzo review
found "no evidence for the development, nor testing of, technical
procedures that would be required for operation and maintenance
of the live system... this is the main risk to the successful
delivery of a fit-for-purpose solution."
This month, iSoft confirmed its auditor, Deloitte,
had found accounting irregularities for the 2004 and 2005 financial
years. Steve Graham, one of the group's founders, was suspended
as commercial director and iSoft said "other employees",
who had since left the company, may also have been involved. A
"more formal" investigation has been started.
The Guardian recently reported that Connecting
for Health, the NHS IT procurement department, had made an up-front
payment to iSoft in 2005, days before the company's year-end.
ISoft confirmed at least some of this payment was booked in the
accounts for that year.
Following irregular accounting revelations,
iSoft has delayed its 2006 results and adopted a far more conservative
accounting policy. Its figures must be filed by Thursday and are
expected to be accompanied by news of Lorenzo's progress.
Connecting for Health expects Lorenzo to be
deployed by 60% of Britain's GPs and hospitals. It is believed
to be one of the largest IT projects in the world, with Lorenzo
alone to be used by about 600,000 clinicians and managers looking
after up to 30 million patients.
Last month, basic administrative computer systems
at about 90 NHS trusts, including at least eight acute trusts,
failed for about four days. They included iSoft software provided
predominantly by CSC. Connecting for Health said the disruption
followed a power cut at a CSC central data centre, adding that
a standby disaster recovery unit had failed to provide a back-up.
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