UK Public Sector IT Procurement


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An overview of issues in public IT project delivery, their causes and possible mitigating strategies. Presented to the National Audit Office.

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UK Public Sector IT Procurement

  1. 1. UK Public Sector IT Procurement Of shoes and ships and sealing wax, and whether pigs have wings or… Can IT procurement ever work better than it does?
  2. 2. What are the issues? <ul><li>Too many IT projects run late, over-budget and fail to deliver </li></ul><ul><ul><li>“ You can always tell the expert in the crowd – he’s the one who says it will take longest and cost the most.” (Murphy’s Laws of almost everything) </li></ul></ul><ul><li>Is it just bad luck? </li></ul><ul><ul><li>If projects continue to fail despite the application of management methodologies and processes what else is there? </li></ul></ul><ul><li>If there are specific causes, can they be avoided? </li></ul><ul><ul><li>By formal methods or otherwise </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  3. 3. IT procurement failures <ul><li>Government IT spend 2003-2004 = £12.5bn </li></ul><ul><ul><li>Of which, central government spending = £3bn </li></ul></ul><ul><li>Failures achieve very high prominence </li></ul><ul><ul><li>Computer Weekly described NAO’s report on the Libra project as “damning” </li></ul></ul><ul><ul><li>(Sir) David Omand, then Permanent Secretary at the Home office described the Immigration and Nationality Directorate's Casework Application programme as “in effect a doomsday machine” and the cancellation featured in the media for weeks </li></ul></ul><ul><li>Public sector failures are more prominent </li></ul><ul><ul><li>Because the government is accountable to parliament and the taxpayer – and its failures attract strong media interest </li></ul></ul><ul><ul><li>But there are also private sector failures </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  4. 4. Uncommon sense <ul><li>The Unknown </li></ul><ul><li>As we know, There are known knowns. There are things we know we know. </li></ul><ul><li>We also know There are known unknowns. That is to say We know there are some things We do not know. </li></ul><ul><li>But there are also unknown unknowns, The ones we don't know We don't know. </li></ul><ul><li>Donald Rumsfeld, Feb. 12, 2002, Department of Defense news briefing </li></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  5. 5. What do we know? <ul><li>We know we know </li></ul><ul><ul><li>The objective </li></ul></ul><ul><ul><li>The planned route </li></ul></ul><ul><ul><li>How to follow the route </li></ul></ul><ul><li>We know we don’t know </li></ul><ul><ul><li>What changes may occur to the objective, and what changes to the route they will entail </li></ul></ul><ul><ul><li>How well we can follow the route </li></ul></ul><ul><ul><li>What other changes to the route may be required </li></ul></ul><ul><li>We don’t know </li></ul><ul><ul><li>Anything else </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  6. 6. Consequences <ul><li>What we know can be formalised and managed </li></ul><ul><ul><li>Determining the objective, the route and how to follow it is the domain of methodologies and processes </li></ul></ul><ul><li>Change can be managed but not controlled </li></ul><ul><ul><li>Formal methods propagate the effects of change in a controlled manner, but cannot tell us what those effects will be </li></ul></ul><ul><ul><li>If the route is blocked, whilst one may have criteria for selecting an alternative, the choices presented are not inherent in the system </li></ul></ul><ul><li>Conclusion </li></ul><ul><ul><li>The problem is one of dynamics – how confronting changes causes changes – and how we cope with the unforeseen </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  7. 7. Message of the day <ul><li>Project management is replete with rules </li></ul><ul><li>Rules encapsulate knowledge of regularities gleaned from prior endeavours </li></ul><ul><ul><li>“ Experience is what you get just after you needed it” (Murphy’s Laws of almost everything, again) </li></ul></ul><ul><li>But they are not enough </li></ul><ul><ul><li>The best strategy would be to learn how to work within and without the rules </li></ul></ul><ul><ul><li>Can we create a strategy for working outside the rules? </li></ul></ul><ul><li>… and IT is not a goal in itself – it supports business change and development </li></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  8. 8. What is generally right? <ul><li>Methodologies etc. </li></ul><ul><ul><li>PRINCE2, ITIL </li></ul></ul><ul><li>Processes </li></ul><ul><ul><li>Gateway Reviews </li></ul></ul><ul><li>OGC guidance generally </li></ul><ul><ul><li>Impressive output </li></ul></ul><ul><li>Standards </li></ul><ul><ul><li>ISO 9001 for design , development, production, installation and/or servicing </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  9. 9. What is less right? <ul><li>Process detail </li></ul><ul><ul><li>The stages between gateways </li></ul></ul><ul><ul><ul><li>Especially between Gateways 3 & 4 (“Investment Decision” and “Readiness for Service”) – delivering the IT </li></ul></ul></ul><ul><ul><ul><li>And between Gateways 0 & 1 (“Strategic Assessment” and “Business Justification”) – establishing the business case </li></ul></ul></ul><ul><li>Attitudes to methodologies </li></ul><ul><ul><li>“ Lip service” to PRINCE2 etc. </li></ul></ul><ul><li>Quality assurance </li></ul><ul><ul><li>Recognition that there is a substantial and important difference between defined quality and high quality </li></ul></ul><ul><li>Development approach too linear </li></ul><ul><ul><li>Less “big bang”, more iterative and scalable developments, use of “model office” environments </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  10. 10. Specific contributory weaknesses <ul><li>Governance </li></ul><ul><ul><li>Inappropriate and ineffective decision-making </li></ul></ul><ul><li>Risk, issue and change management </li></ul><ul><ul><li>Risk is not transferred, “ownership” of risk and issues is indeterminate, risk and issues are neither understood nor well managed; change is “managed” not confronted </li></ul></ul><ul><li>Application of methodologies and processes </li></ul><ul><ul><li>Minimal compliance </li></ul></ul><ul><li>People, their abilities, relationships and cultures </li></ul><ul><ul><li>These are areas of difficulty where formalisation is impracticable and where leadership is most needed </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  11. 11. Weaknesses of governance <ul><li>Lack of clear management structures </li></ul><ul><ul><li>Especially roles & responsibilities </li></ul></ul><ul><li>Lack of clear Terms of Reference </li></ul><ul><ul><li>Especially relating to automatic escalation according to defined Risk/Issue criteria </li></ul></ul><ul><li>Lack of appropriate authority </li></ul><ul><ul><li>And willingness to exercise it </li></ul></ul><ul><li>An indirect function of people </li></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  12. 12. Weakness of risk, issue & change management <ul><li>Risk is not transferred </li></ul><ul><ul><li>Suppliers establish their margins as a function of their success rate and recover costs from previous failures on subsequent projects </li></ul></ul><ul><ul><ul><li>They should improve with time, but someone else will get the benefit </li></ul></ul></ul><ul><ul><li>Risk management for suppliers includes resistance to minor changes and willing acceptance of larger changes that lead to non-competitive re-negotiation </li></ul></ul><ul><li>Change is a “known unknown” </li></ul><ul><ul><li>But is not catered for </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  13. 13. Weaknesses of application <ul><li>Lack of appreciation for the value of well maintained systems and project documentation </li></ul><ul><ul><li>Documentation must be intelligible to external readers </li></ul></ul><ul><li>Emphasis on the letter rather than the spirit </li></ul><ul><ul><li>PIDs are “rote documents” </li></ul></ul><ul><li>Documentation weak and rarely current </li></ul><ul><ul><li>Maintaining documentation is not seen as a contribution to current work – it is done afterwards </li></ul></ul><ul><li>An indirect function of people </li></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  14. 14. Weaknesses of people – ability <ul><li>The average is average </li></ul><ul><ul><li>IT projects are no more likely to be completed on time, to budget and to requirements than </li></ul></ul><ul><ul><ul><li>An extension to your house </li></ul></ul></ul><ul><ul><ul><li>The Christmas shopping </li></ul></ul></ul><ul><li>Responsibility & Authority </li></ul><ul><ul><li>Knowledge and know-how do not necessarily correlate with a willingness to accept responsibility and exercise authority – even if “responsibility” is part of the role </li></ul></ul><ul><ul><li>Even if the willingness is there, adequate and effective authority may not be delegated </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  15. 15. Weaknesses of people – relationships <ul><li>“ The Customer is Always Right” </li></ul><ul><ul><li>No, pleasing the customer is not the objective on all time-scales: the goal is to achieve a specified business benefit </li></ul></ul><ul><ul><ul><li>Consider general optimisation methods, to reach a new optimum one must pass through places that are less good; if one cannot move away from a local maximum one cannot reach any other </li></ul></ul></ul><ul><li>Lack of respect and trust </li></ul><ul><ul><li>“ Wreckers” – passive rather than active opposition: those whose support is required for success do not give it because they believe their efforts will be wasted; they do not trust the strategy/approach etc. </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  16. 16. Weaknesses of people – culture <ul><li>Asymmetric Cultures </li></ul><ul><ul><li>Business is used to monthly, quarterly and annual performance objectives with rewards for success and penalties for failure </li></ul></ul><ul><ul><li>The public sector does not generally place the same emphasis on timeliness </li></ul></ul><ul><ul><li>Business is used to leading and responding to market developments </li></ul></ul><ul><ul><li>The public sector is accustomed to working within the more rigid constraints of legislation and policy – it may be considered less flexible </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  17. 17. Governance – thoughts <ul><li>Governance structures etc. should be proposed in the “Procurement Strategy” </li></ul><ul><li>Bids should specifically address governance issues </li></ul><ul><li>Contract negotiation should include initial roles, responsibilities and authorities </li></ul><ul><ul><li>… and key named individuals: a project should not be a repository for unwanted business personnel </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  18. 18. Risk, issue & change management – thoughts <ul><li>Investigate and develop change metrics </li></ul><ul><ul><li>What are the incidence and costs of changes to specifications through the life of a project, as e.g. a function of the number of changes to specification/requirement line items (by level)? </li></ul></ul><ul><ul><li>Recognise that change is a major source of risks and issues </li></ul></ul><ul><ul><li>Do audit trails exist, sufficient to be able to compare the specification as implemented with that originally established? </li></ul></ul><ul><li>Standardise risk and issue metrics </li></ul><ul><ul><li>e.g. five probability bands, five impact levels </li></ul></ul><ul><ul><li>Include risk & issue assessments in bids – and require bidders to make specific provisions for avoidance and mitigation </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  19. 19. Application – thoughts <ul><li>Require “no notice” audits </li></ul><ul><ul><li>Carrot & stick –reward for superior performance, penalties for inadequate performance </li></ul></ul><ul><ul><ul><li>Make the criteria relative e.g. bottom quartile performance leads to penalty, upper quartile performance leads to reward; lesser deficiencies and achievements carry forward </li></ul></ul></ul><ul><ul><ul><li>This could be made self-financing if more is taken in penalties than is paid out as rewards </li></ul></ul></ul><ul><ul><li>Whether a particular audit is to be wide ranging or focussed, the possibility of either requires all areas to be properly maintained </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  20. 20. Other broad issues Auxiliaries of porcine aviation
  21. 21. Communications - the importance of being earnest <ul><li>Earnest </li></ul><ul><ul><li>adjective intent; sincere in intention; serious in disposition; determined or whole-hearted; fervent or impassioned </li></ul></ul><ul><li>Unearnestness </li></ul><ul><ul><li>Leads to poor communication </li></ul></ul><ul><ul><li>Poor communication creates and sustains ambiguity, confusion and error </li></ul></ul><ul><ul><li>“ Management-” or “Consultant-” speak is not earnest – it is euphemistic </li></ul></ul><ul><ul><ul><li>Death to “expectation management”! </li></ul></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  22. 22. The bidding process <ul><li>Competition is “all or nothing” </li></ul><ul><ul><li>It’s a set menu, not à la carte </li></ul></ul><ul><li>Questions – would it be possible to…? </li></ul><ul><ul><li>Require bids to be anonymised for </li></ul></ul><ul><ul><ul><li>Technical evaluation </li></ul></ul></ul><ul><ul><ul><li>Risk assessment </li></ul></ul></ul><ul><ul><li>Only identify bidders to assess their costs and risk carrying capacity </li></ul></ul><ul><li>Bear in mind that “supplier’s staff” may be sailing under flags of convenience </li></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  23. 23. The interplay of business and IT <ul><ul><li>One fine winter's day when Piglet was brushing away the snow in front of his house, he happened to look up, and there was Winnie-the-Pooh. Pooh was walking round and round in a circle, thinking of something else, and when Piglet called to him, he just went on walking. </li></ul></ul><ul><ul><ul><li>&quot;Hallo!&quot; said Piglet, &quot;what are you doing?&quot; </li></ul></ul></ul><ul><ul><ul><li>&quot;Hunting,&quot; said Pooh. </li></ul></ul></ul><ul><ul><ul><li>&quot;Hunting what?&quot; </li></ul></ul></ul><ul><ul><ul><li>&quot;Tracking something,&quot; said Winnie-the-Pooh very mysteriously. </li></ul></ul></ul><ul><ul><ul><li>&quot;Tracking what?&quot; said Piglet, coming closer </li></ul></ul></ul><ul><ul><ul><li>&quot;That's just what I ask myself. I ask myself, What?&quot; </li></ul></ul></ul><ul><ul><ul><li>&quot;What do you think you'll answer?&quot; </li></ul></ul></ul><ul><ul><ul><li>&quot;I shall have to wait until I catch up with it,&quot; said Winnie-the-Pooh. </li></ul></ul></ul><ul><ul><li>Business and IT are in constant flux – if your vision is rigid, you will probably never see it realised . Nor will any fixed route get you to your destination – you need options, alternative routes; organisations should be networks not chains of command, ideally Scale Free Networks. </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  24. 24. Scale Free Networks <ul><li>What is a scale free network? </li></ul><ul><ul><li>A scale-free network is a network in which some nodes are hubs – nodes that are &quot;very connected&quot; – and overall connectivity is described by a power law </li></ul></ul><ul><li>So what? </li></ul><ul><ul><li>Most organisations are not scale free: information and knowledge flows slowly – if at all – between units </li></ul></ul><ul><ul><li>The more knowledge is shared, the greater the understanding and the fewer the problems </li></ul></ul><ul><li>The Smoking Room </li></ul><ul><ul><li>If you want to know what’s happening on a project or in an organisation, go to the smoking rooms (where still lawful) or stand outside with them. </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  25. 25. Fundamental issues <ul><li>Project Inertia </li></ul><ul><ul><li>Compare a project with driving a stage in the driving rally: </li></ul></ul><ul><ul><ul><li>The co-driver uses “pace notes” to describe to the driver the course section immediately ahead so he can drive it quickly but safely </li></ul></ul></ul><ul><ul><ul><li>Pace notes may indicate the tightness of an approaching bend, its direction and an appropriate gear. It takes time to prepare a change of speed and direction and there is a limit to the speed at which the bend can be safely taken </li></ul></ul></ul><ul><ul><ul><li>Trying to take an unexpected corner (risk or issue) may be beyond the grip and turning ability of the car or driver – expect to overshoot or crash </li></ul></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  26. 26. General suggestions <ul><li>Maintain sources of independent advice </li></ul><ul><ul><li>The Public Sector should be willing to spend a considerable sum to maintain a pool of particularly able individuals </li></ul></ul><ul><ul><ul><li>To audit, conduct “red team” reviews </li></ul></ul></ul><ul><ul><li>Let them rove to create a scale free network </li></ul></ul><ul><ul><ul><li>To mentor and advise and bring the benefit of skills and experience </li></ul></ul></ul><ul><li>Reduce timescales between deliveries </li></ul><ul><ul><li>Developments should deliver to the business at relatively short intervals </li></ul></ul><ul><li>Embrace business dynamics </li></ul><ul><ul><li>Increase use of dynamic simulation modelling </li></ul></ul><ul><li>Embrace the co-evolution of processes & IT </li></ul><ul><ul><li>Remember that the best systems are open systems </li></ul></ul><ul><ul><li>… and that enforced homogeneity of systems and processes stifles development </li></ul></ul>11/08/10 NAO/RAND Europe - IT Projects - Copyright (C) 2004 Julian Moore,
  27. 27. Can pigs fly? Yes, but not without help