2 The in-house delivery of the Programme
10. After the contract with Siemens was terminated
the BBC brought the Programme in-house, but did so without testing
the value for money of this approach. In February 2009 a review
commissioned by the BBC concluded that taking delivery in-house
was the highest risk option, yet by July 2009 the BBC had decided
this was the only option. The BBC considered that time was a crucial
factor, because the move of some BBC operations to Salford depended
on the Programme technology being ready by May 2011 and it would
take six to nine months to procure a new contractor competitively.
The Trust believed the most important thing was getting the Programme
back on track.
11. Since bringing the Programme in-house, the BBC
has successfully delivered four technology releases and early
feedback from users is positive. The Programme is running five
months later than the BBC estimated when it took the Programme
in-house, but the BBC is on track against its revised schedule
to deliver the complete technology for the Programme by summer
2011 and to deliver the technology required for the move to Salford.
12. When it brought the Programme in-house, the BBC
adopted a more iterative 'agile' approach to delivery. This involved
breaking down technology development into smaller steps and getting
quick feedback from users to improve products.
The BBC attributed the successful delivery so far both to adopting
this 'agile' approach and to having a strong supplier management
team. The BBC also emphasised the importance of having the capacity
and skills to develop aspects of the Programme in-house and then
integrate the software.
Under the leadership of its now-departed Director of Future, Media
and Technology, it had built up its in-house software development
13. We asked the Director of Future, Media and Technology
about the lessons learned from the in-house delivery of the Programme.
The lessons highlighted included the importance of:
- A senior leader who has a track
record of successful delivery of large, complex software development
- Clear roles and responsibilities;
- Cooperation between, and integration of, the
various functions on a project, including development, deployment
and support; and
- Clear and effective project governance with the
appropriate representation on each group or board from across
the project, business and suppliers.
14. The estimated cost of delivery and implementation
of the whole Programme to the end of March 2017 is £133.6
million. The increase is largely because of a wider rollout across
the BBC than originally approved by the Trust in January 2008,
offset by the £27.5 million available to the BBC as a result
of the settlement with Siemens.
The BBC expects the Programme will end up saving the BBC money
and aims to work in partnership with independent commercial companies
and other public organisations to get as much value as possible
out of its investment.
15. However, the financial case for the Programme
has weakened over time. The BBC originally approved the Programme
on the basis that it would cost £81.7 million and deliver
benefits of £99.6 million, giving a net benefit of £17.9
million. It now forecasts costs of £133.6 million and benefits
of £95.4 million - a net cost of £38.2 million.
16. As the estimated costs were higher than the estimated
financial benefits, when the Trust approved a revised investment
case for the Programme in June 2010, the non-financial benefits
expected from the Programme, such as improved creativity and partnership
working with other organisations, were a crucial factor in the
decision. The Trust therefore pressed for greater clarity on the
deliverability of such benefits. It also gave weight to the strategic
benefits of the BBC moving more fully into digital technology.
The BBC saw the Digital Media Initiative as transforming the way
the BBC makes programmes and supporting the forthcoming move to
Salford, and considered it essential to the BBC's future rather
than a 'nice to have'.
17. The Programme is being delivered by a team within
the Future, Media and Technology division. We questioned the BBC
on the cost of BBC senior management and on the number of organisational
layers, specifically within the Future, Media and Technology division.
The BBC told us that it intended to reorganise this division following
the recent departure of the Director of Future, Media and Technology.
The BBC was also planning to simplify its structure and was reviewing
both the number of layers and the way in which different divisions
18. Over a year ago, the BBC announced its commitment
to reducing the salaries for senior managers by 25%, and the number
of senior managers by 20%, by the end of 2011. The Trust told
us it believed the BBC should have tackled these issues sooner.
It acknowledged that the BBC's senior management costs and numbers
were a matter of legitimate public concern and assured us that
it was committed to seeing the reductions were implemented. As
we requested, the BBC subsequently provided a breakdown of the
expenses of the 39 senior managers in the Future, Media and Technology
division. In addition the Trust told us that from April 2011 the
BBC will publish the salaries and expenses for all senior managers
earning more than £150,000 a year.
20 Qq 90-94 Back
Q 85 Back
Qq 1, 93, 95, C&AG's Report, paragraph 13, and Figure 6 Back
Qq 1, 93, 95, C&AG's Report, paragraph 3.14 Back
Qq 109-110 Back
Qq 90, 93-94, 112, 115 Back
Ev 24 Back
Q 23, C&AG's Report, paragraphs 1, 3.6 Back
Qq 1, 12-17, 56 Back
C&AG's Report, paragraph 15 and Figure 1 Back
Q1, C&AG's Report, paragraphs 3.8, 3.9 and 4.5 Back
Qq, 98-106, Ev 17 Back
Q 103 Back
Qq 103, 118, Ev 17 Back