Appendix: The BBC's response
This document should be read in conjunction with
the BBC's acceptance of, and response to, PwC's report on the
BBC's management of the Digital Media Initiative. The joint BBC
Trust and BBC Executive review of BBC Internal Governance (published
December 2013) should also be considered. The responses below
refer to 'projects' which, in the interests of brevity, includes
both projects and programmes.
Recommendation 1: The BBC should ensure that governance
and assurance arrangements match the scale, strategic importance
and risk profile of its major programmes and projects.
BBC Executive response
The BBC introduced simpler and stronger corporate
governance arrangements for projects from April 2014, following
the review of BBC Internal Governance, which clarify and strengthen
individual accountability for delivery.
The Trust has further clarified the role of the Executive
Board, which now includes additional non-executive directors,
so that it is clear that it has full responsibility for running
the organisation. As the principal decision-making body, the Executive
Board has oversight of the BBC Portfolio of Critical Projects,
comprising those projects assessed as carrying high strategic
value combined with a high level of complexity or delivery risk.
Complexity criteria for projects have been standardised, and risk
and confidence factors are based on accepted industry-wide analysis
of project failure.
The Executive Board receives a monthly performance
report on each and every project within the BBC Portfolio of Critical
Projects, as well as a quarterly Portfolio report that considers
cumulative or interdependent risks and BBC-wide project-related
challenges. This function is discharged by the BBC Project Management
Office (PMO) which has been repositioned to provide a more direct
and independent assessment of project performance and delivery
confidence, and to ensure action is taken to mitigate the risk
of project failure.
The BBC PMO reports to the Managing Director, Finance
and Operations, but also has an independent line to the non-executive
Chair of the BBC's Executive Audit Committee and, if required,
to the Director-General.
Individual projects now have a single point of accountability
- the Project Sponsor. The role of the Sponsor is set out in our
response to the Committee's second recommendation below. These
strengthened governance and assurance arrangements are in line
with the recommendations made in PwC's report on the BBC's management
of DMI, and seek wherever possible to follow accepted industry-wide
best practice.
Recommendation 2: Projects like the DMI need to
be led by an experienced senior responsible owner who has the
skills, authority and determination to achieve transformational
change, and who sees the project through to successful implementation.
BBC Executive response
As described above, individual projects now have
a single point of accountability - the Project Sponsor (the equivalent
of the senior responsible owner, or SRO, in Government).
The Sponsor is accountable for the delivery of the
project's stated outcome and benefits, and chairs the project's
steering board which sets the direction and addresses overall
design, organisational change, and delivery challenges. The Sponsor
continually reviews the viability of the project's business case,
through costs, benefits, strategic alignment and delivery confidence.
The Sponsor is also accountable for a project's integrated
assurance and approvals plan (IAAP). IAAPs are based on Cabinet
Office standards and are agreed and overseen by the BBC's Executive
Audit Committee. They seek, for each critical project:
· To
be pre-planned and agreed at inception;
· To operate
at three levels - project performance, corporate governance, and
independent external review (thereby ensuring the right level
of expert independent advice);
· To be proportionate
to the level of project complexity and risk (thereby minimising
administrative burden and maximising value);
· To systematically
propagate lessons learnt (including from DMI).
The Project Sponsor is appointed on the basis of
skill, experience, authority and determination to achieve the
project's stated outcomes and benefits. The BBC has a standard
role description (available on request) which, in summary, requires
the Project Sponsor to set up the project for successful delivery,
to create an environment in which the project is able to succeed,
and to ensure and confirm the delivery of the benefits and/or
the implementation of the required change.
All current projects which fall within the Portfolio
of Critical Projects have a single named Sponsor, and training
for Sponsors is routinely made available.
Recommendation 3: In its reporting on major projects,
the BBC needs to use clear milestones that give the Executive
and the Trust an unambiguous and accurate account of progress
and any problems.
BBC Executive response
Progress against schedule is one important indicator
of a project's performance and delivery confidence (others including
costs, financial and non-financial benefits, and the management
of risks, issues and dependencies). The Executive Board now requires
monthly reports, project by project, on progress against key milestones
and gated approval points, drawing on project reports, independent
assurance and independent PMO reviews.
Over and above key milestones, gated approval points
within a project's lifecycle are part of the required integrated
assurance and approvals plan (IAAP). They allow projects to be
reviewed at key decision points, such that stakeholders can have
confidence that the project is on track to deliver its expected
outcomes and benefits; that it is ready to progress to its next
standard lifecycle phase; and that it remains aligned to the BBC's
overall strategic objectives.
Gated approval points allow the opportunity to look
back - to assess whether what was planned actually happened -
and to look forward, to confirm the conditions necessary for the
success of future phases are in place. They also help to limit
potential losses in the event that unresolvable problems occur.
The Executive Board also receives a cumulative and
future-focused view of the project portfolio that exposes overall
delivery pinch points and cumulative risk exposure.
Recommendation 4: The BBC Executive should apply
more rigorous and timely scrutiny to its major projects to limit
potential losses that will ultimately fall on licence fee payers.
BBC Executive response
As set out above, revised monthly reporting for critical
projects is now established and working well. The Executive Board
receives a performance report on each and every project within
the BBC Portfolio of Critical Projects, as well as a quarterly
Portfolio report that considers cumulative or interdependent risks
and BBC-wide project-related challenges.
By systematically addressing the lessons learned
from DMI, the BBC believes it is taking positive and effective
action to mitigate the future risk of project failure. This is
in large part (but not exclusively) due to our renewed focus on
critical aspects of project management - clear sponsorship and
a single point of accountability, integrated and independent assurance,
gated approval points, and more regular, rigorous and independent
reporting. It is also due to the systematic capture and propagation
of lessons learned from other projects within and across the BBC's
divisions.
The BBC remains vigilant about the lessons learnt
from the DMI experience. We recognise that there remains (and
always will be) room for improvement as we continue to move towards
a common approach for effective and timely project delivery.
Recommendation 5: The BBC Trust should set out
in response to this report what changes it will make to be more
proactive in chasing and challenging the BBC Executive's performance
in delivering major projects, so that it can properly protect
the licence fee payers' interest.
BBC Trust response
Responsibility for project delivery lies with the
BBC Executive but the Trust has a duty to ensure that effective
processes are in place to monitor progress and respond quickly
if things start to go wrong.
As set out in the rest of this note, the Trust and
the Executive have acted on the conclusions of the PwC and the
NAO reports. The Executive has taken steps to improve the management
of individual projects and the population of projects as a whole.
Project management guidance has been updated, and project assurance
arrangements are reviewed routinely to ensure they are coherent.
The Non-Executive Director role has been strengthened and more
robust reporting arrangements have been introduced to ensure that
the information received is clear and up to date.
The BBC Trust now monitors critical BBC projects
through a standardised three stage process:
· The
Executive presents the Trust with a new quarterly business update
including a status report on major projects. The status report
covers key developments including assurance activity, sets out
progress against time and budget (including both costs and benefits),
and provides the Trust with an overall assessment of project risk.
· In the case
of exceptional issues arising outside the normal quarterly reporting
cycle, the Executive will be expected to report any risk of a
major project not delivering on its intended objectives or where
the project may put public confidence in the BBC at risk. Any
exceptional report to the Trust will be accompanied by an action
plan that will address the issue at hand. The Trust also has the
authority to conduct its own investigation or require action to
be taken.
· When a major
project has been completed, the Trust could choose to conduct
an end-of-project appraisal and in doing so would seek to ensure
that the lessons from DMI have been learnt.
To supplement this three stage process, the Trust's
value for money committee regularly discusses progress on critical
projects with the Managing Director of Finance and Business and
the non-Executive Chairman of the BBC's Audit Committee.
Later this year, the Trust plans to commission a
review to test the arrangements now in place within the BBC management
structure to identify, report and mitigate any significant risks
to the organisation and, in particular, to the value for money
that it provides. This work will include an assessment of the
contributions made to risk management and reporting by both Internal
Audit and the BBC's Project Management Office.
Recommendation 6: The BBC Executive should report
back to us on which of its original requirements for the DMI are
still essential, how and when it will meet them, and at what cost.
BBC Executive response
The BBC Executive Board approved a business case
on 12 May 2014 for the End-to-End Digital project to proceed in
order to resolve a fundamental challenge the BBC continues to
face in having programmes delivered on tape.
The End-to-End project's short-term objective is
to remove videotape from the delivery, distribution and archiving
of all new pre-recorded scheduled TV programmes, starting in October
2014. This is in line with the move to file-based delivery which
is happening across the UK broadcast industry from that date.
The End-to-End project differs fundamentally from
DMI in the way it is structured and managed, and the scope is
considerably smaller. Whilst it is still seeking to deliver a
digital archive, it is doing so with the minimum required intervention
within the production and broadcast chain.
The BBC Executive Board has approved the implementation
and operation of an immediate solution to enable the BBC to begin
removing videotape from its day-to-day operations.
Furthermore, it has approved that the project enter
into procurement for the first phase of a long-term solution:
providing a pan-BBC digital archive and file-based delivery operation
for broadcast programmes to deliver in 2016.
Total approved investment in the immediate solution
and long-term procurement activity is £7.7M
Recommendation 7: We expect the BBC to be completely
transparent in its dealings with us and the NAO and inform us
of any potentially significant evidence or facts in a timely way.
BBC Executive response
The BBC is committed to being open and transparent
in its dealings with the Committee and the National Audit Office,
and to provide information in a timely manner.
| 
