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UK Chancellor targets IT projects in £6 billion cuts

ThomPete 16y ago
This could potentially be a good thing. The budgets we currently see when the public sector is involved are borderline vulgar. Most of these projects could be made for 1/10th of what they are currently being made for. By being forced to cut spending perhaps the governmental institutions will start to listen to more lean oriented approaches. Unlikely, but possible.
- gaius 16y ago
  It's a weird and emotive thing. One thing that is very risky in UK politics is cutting NHS spending. It is the amount you spend that the unsophisticated electorate judges you on, not the results. So New Labour spent GBP 20Bn on IT systems that don't work and no-one wanted anyway and were lauded for it. The Tories could slash that in an instant, but then they'll have to deal with accusations of "cutting the health budget".
  - ThomPete 16y ago
    I agree and think it's like that in most European countries. Someone (normally the opposition) complain that the government isn't doing enough for the schools where to the government answer we spend X amount of money on this. There are however times when this backfires. When some long awaited and praised system goes 300% over budget, at least in Denmark it's not going down well with the public. Another area that no country yet seem to have solved satisfactory is the digitalization of patient journals. But the main problem there seem to be incompatibility between different divisions which I have a hard time believing can be that difficult to solve. Anyway it sure is quite sad to see how bad the government is at running IT projects. Although large corporations don't seem to be doing much better. It needs to be solved.
    - gaius 16y ago
      Really we ought to have two healthcare budgets, "services" that delivers actual healthcare and "support" that does the IT, manages the carparks (another controversial thing in UK politics, believe it or not), does the paperwork and so on. Then you would have an absolute defence against accusations of "cutting frontline services". It is a fiction maintained by the NHS bureaucracy that any cuts must affect the frontline. But the NHS has more managers than beds...
      - arethuza 16y ago
        Someone was pointing out to me that the NHS bureaucracy will probably cut front line services first - to try and reinforce this view. It's such a crying shame - the NHS frontline staff can be utterly wonderful, I just hate the layers of parasitical managers gaming the system of daft metrics to get their bonuses.
    - nradov 16y ago
      I have participated in some of the same international healthcare IT standards bodies as UK NHS staff, attempting to resolve those incompatibility problems. It really is that difficult to solve. Unless you've worked in the industry for years it's hard to appreciate how complex the data is, and how many different forms it can take. In most cases these aren't accidental differences, they're driven by real requirements for patient care.
      - ThomPete 16y ago
        Ok Can you give some examples of the difficulties?
      - arethuza 16y ago
        Its a classic mistake to try and make a large IT system meet all the individual requirements of a large heterogeneous organization - witness many ERP disasters. You have to rationalize the processes in an organization then make them use the same systems. In fact, I've seen scenarios where having totally inflexible IT systems was actually a bit of a blessing - there was no endless wrangling over requirements, people were told "you are going to use this and like it" and they had to change their processes to fit in with the systems. I wouldn't have believed how well this can work unless I had seen it happen in a fairly large multinational.
  - acg 16y ago
    I heard something recently from a colleague about one of these NHS systems. The consultants that were brought in advocated that the system be written in COBOL and with similar technology. Whether this is true or not it. It would be easy to imagine that the wrong technology decisions can be made to make the work roll on for years. With the way the world works now, much of these systems could be put together from fixed priced components built under tender.
    - ThomPete 16y ago
      Chosen framework certainly is a major problem but even bigger. Unrealistic scoping of the project. Most governments believe that they can simply will a successful solution into existence. Instead of thinking how they would like the system to be used they should think about how to get to a point where the system is used and then expand from there. What a wonderful world it would be if they actually learned to think like entrepreneurs. Start simple, stay simple Add as the needs arise Don't do everything that is possible only what is necessary Think how not what Make it for the actual citizens rather than for some political goal. And for @#((@# sake. Lets get all the data available, yesterday!
      - gaius 16y ago
        It is also a problem of self-identifying politically as a "progressive". They kinda have to go for anything that's shiny and new. Whereas conservatives (note the small c) say if it ain't broke, don't fix it. In the specific case of healthcare, look at Matrons on the wards. Yes it reeked of old-fashioned attitudes, but the Matrons ran a tight ship. Now we have outsourced cleaners with the lowest bid and MRSA epidemics. All because New Labour wanted to sweep the 1950s under the carpet.
        acg 16y ago
        I'm not sure that New Labour really identified themselves with being progressive until they felt they needed to attract would-be liberal voters. Labour might have had some progressive policies but was supposed to be a blend I thought: hence the "Third Way". I found that Labour took an utterly unprincipled bid for power at the end, dropping many of the principles on which they were elected while simultaneously accusing the other parties of the same. What an irony labour spokespeople accusing the liberals of having no principles, when the Liberals are the true progressives. The cynical way that the public has been mislead is unbelievable. The public ought to be treated like shareholder, instead they were treated like fools. Expenses is not the only reason for loss of faith.
- arethuza 16y ago
  I don't know your definition of vulgar - but as far as I am concerned most of the projects are obscene. You have the naive amateurs that seem to run the higher reaches of the civil service trying to handle voracious monsters of consulting companies and getting reamed in the process. And nobody really cares as it is "only taxpayers money". Very few things make me really angry - this whole mess is one of them.
  - ThomPete 16y ago
    Peter F. Duckert calls this the Pork-Barrel State. This is when the fiscal state has no discipline. The government spending becomes the means to buy votes. This was seen probably most obviously when Chancellor Helmut Kohl bought the votes of the former East Germany by promising them beyond what the state could deliver driving germany into one of it's worst crises since the thirties. He has some really interesting ideas on how to solve many of the problems we face today IMHO.
    - arethuza 16y ago
      I could at least understand (while strongly disapproving) of simple buying of votes through spending taxpayers money in the right areas - I'm from Scotland. However, none of these projects made any sense from that perspective. Massively overpaid consultants probably don't vote Labour anyway (even New Labour) and there weren't that many of them. Simplest answer I can come up with is that the people who commissioned and ran these projects were, in the best British tradition, bumbling idiots.
      - gaius 16y ago
        London is a bubble politically speaking, and can be an echo chamber. Many of these consultants probably were Guardian-reading champagne socialists.
joubert 16y ago
Will they also start taking the tube without complaining that they're not riding in a rolls Royce?
- gaius 16y ago
  Probably. It was reported in The Times that Cameron has slashed the size of the PM's entourage, e.g. no motorcycle outriders for his motorcade. He says if he gets stuck in a traffic jam he'll just wait like anyone else. Whereas I remember when Tony Blair wanted to go for a drive, entire roads were shut. Nothing like going for a sandwich at lunch and finding all of Ludgate Circus cordoned off and I just wanted to get to Pret on the other side of the road!
  - arethuza 16y ago
    If he keeps up stuff like that I might actually start to like the man.
    - hugh3 16y ago
      Wow, can we make him President of the United States too? I've only seen a US presidential motorcade once, but it had some thirty vehicles and travelled at about sixty miles an hour down a closed-off street. That, combined with the private 747, is probably the most obscene thing about the modern US presidency. Waiting in traffic in an unmarked car would do the President a lot of good. Yes, I know it's for security, but nobody has taken a shot at a Presidential motorcade for nearly fifty years, and simply having a roof would have solved Kennedy's problem.
      - gaius 16y ago
        Tony Blair wanted a private jet too but the media derided it as "Blair Force One" and the idea was quietly scrapped. New Labour got a lot of credit from some for scrapping the Royal Yacht, but they neglected to point out that in wartime the Royal Yacht was a actually fully-functional hospital ship. When we're not at war, why not use it for diplomatic functions?
simonsquiff 16y ago
Part of the problem is the ridiculous procurement processes that the government departments make you go through. The cost of sale is therefore amazingly large, which leads to large project costs for the few companies that are willing to put up with this process, while erecting a barrier of entry for smaller and cheaper organisations.
- Silhouette 16y ago
  Most of the high profile, high budget projects they are talking about have been outsourced to big name consulting companies at absurdly high rates. Cutting those en masse is probably no bad thing. In other news, there is talk of changing the rules so that a substantial proportion of such work must be given to smaller, independent companies, who frankly could probably do a better job given the track record of places like EDS. As long as they don't then find they "need" to bring in expensive management consultancy firms to co-ordinate the smaller teams, that is...
  - gaius 16y ago
    I think the new government could get away with levying a windfall tax on all the big outsourcing firms.
- deleted 16y ago
  [deleted]
- buro9 16y ago
  Having come from a background in which I saw a lot of how the tendering works I wholeheartedly agree with you. Most large suppliers build into their bid a lock-in period and extra revenue streams tied to that. For example if Company A supply server hosting, hardware and support for the Government Department then if you want to get new servers in there you have to pay the prices they quote and you have no choice (it's way above normal cost, of course it isn't comparable as your configuration differs from the mass market configuration). Then to install a new version of SharePoint on the server will mean that the server isn't supported unless that specific version of SharePoint has been through testing with the Department version (so many group policies in place that it's best to think of them having their own version) of Windows Server an Windows desktops. Of course, they will charge for testing and that will be at least £50k for a basic server app, head skywards for anything else. Finally when you have paid £60k for a £12k piece of hardware, and perhaps £100k for your testing, and £50k in software licenses... you get into maintenance mode. During maintenance mode nothing will happen... nothing at all. If you want a change you will have to accept all responsibility for the impact of that as they manage the server and don't want any risk. Any risk at this point is a cost to them so they will damn well act to limit change, usually by charging to implement any changes (effectively a cost penalty). And if Windows Updates come along, well who needs those anyway. Service Packs on the other hand can re-trigger the test cycle (ka-ching!). So for a team installation of something like SharePoint it isn't unrealistic to be thinking in terms of hundreds of thousands of pounds... wherein you and I know perfectly well that it can be achieved for less than a tenth of the cost. This isn't just a procurement problem, it's a problem with the whole lifecycle and how the incumbents shape contracts that benefit the vendors rather than the service being provided.
didroe 16y ago
I'm pretty sure you could save £6 billion just by never ever using EDS again. It's like some kind of abusive marriage, the government keeps getting screwed over and then goes back for more.
- parenthesis 16y ago
  `EDS' sounds like a disease: `Eternal Development Syndrome', or somesuch.
rythie 16y ago
If the IT project doesn't in end save money more than it cost, it's a failure in most cases. The ID card system was never going to save any money nor make the country safer (it's original selling point). The NHS system seems to be going very badly so far and is late.
simonsquiff 16y ago
These massive project just don't work. 1) Pay consultants vast money to 'spec' out an insanely complex requirement. 2) Go through very long winded and expense tender exercise, with the usual suspects - all expensive and with many failed projects under their belt 3) Company builds from scratch to the spec. 4) Spec is obviously incomplete, discover too late, company asks for lots more money to fill the gaps. 5) Rinse and repeat (minus the tender) You end up with something that has taken 10 years, and is delivering a 'requirement' that is 10 years old and now not relevant (even less relevant than the imperfect 10 year old spec). The only real way to do this is to break these projects up - either in scope or in size - ideally get something as off the shelf as possible and iterate it until it suits the needs, and then roll out wider. I.e. get well away from a waterfall process of massive scope. For example, instead of trying to put in place an NHS wide system (which then fails at great expense), get each individual Trust to go on their own with off the shelf suppliers or at least smaller, cheaper bespoke organisations. Smaller, more manageable and cheaper. You can define interoperability standards if that's needed; you can buy enterprise licenses if one supplier does end up being obviously better.

This could potentially be a good thing. The budgets we currently see when the public sector is involved are borderline vulgar. Most of these projects could be made for 1/10th of what they are currently being made for. By being forced to cut spending perhaps the governmental institutions will start to listen to more lean oriented approaches. Unlikely, but possible.

gaius 16y ago
It's a weird and emotive thing. One thing that is very risky in UK politics is cutting NHS spending. It is the amount you spend that the unsophisticated electorate judges you on, not the results. So New Labour spent GBP 20Bn on IT systems that don't work and no-one wanted anyway and were lauded for it. The Tories could slash that in an instant, but then they'll have to deal with accusations of "cutting the health budget".
- ThomPete 16y ago
  I agree and think it's like that in most European countries. Someone (normally the opposition) complain that the government isn't doing enough for the schools where to the government answer we spend X amount of money on this. There are however times when this backfires. When some long awaited and praised system goes 300% over budget, at least in Denmark it's not going down well with the public. Another area that no country yet seem to have solved satisfactory is the digitalization of patient journals. But the main problem there seem to be incompatibility between different divisions which I have a hard time believing can be that difficult to solve. Anyway it sure is quite sad to see how bad the government is at running IT projects. Although large corporations don't seem to be doing much better. It needs to be solved.
  - gaius 16y ago
    Really we ought to have two healthcare budgets, "services" that delivers actual healthcare and "support" that does the IT, manages the carparks (another controversial thing in UK politics, believe it or not), does the paperwork and so on. Then you would have an absolute defence against accusations of "cutting frontline services". It is a fiction maintained by the NHS bureaucracy that any cuts must affect the frontline. But the NHS has more managers than beds...
    - arethuza 16y ago
      Someone was pointing out to me that the NHS bureaucracy will probably cut front line services first - to try and reinforce this view. It's such a crying shame - the NHS frontline staff can be utterly wonderful, I just hate the layers of parasitical managers gaming the system of daft metrics to get their bonuses.
  - nradov 16y ago
    I have participated in some of the same international healthcare IT standards bodies as UK NHS staff, attempting to resolve those incompatibility problems. It really is that difficult to solve. Unless you've worked in the industry for years it's hard to appreciate how complex the data is, and how many different forms it can take. In most cases these aren't accidental differences, they're driven by real requirements for patient care.
    - ThomPete 16y ago
      Ok Can you give some examples of the difficulties?
    - arethuza 16y ago
      Its a classic mistake to try and make a large IT system meet all the individual requirements of a large heterogeneous organization - witness many ERP disasters. You have to rationalize the processes in an organization then make them use the same systems. In fact, I've seen scenarios where having totally inflexible IT systems was actually a bit of a blessing - there was no endless wrangling over requirements, people were told "you are going to use this and like it" and they had to change their processes to fit in with the systems. I wouldn't have believed how well this can work unless I had seen it happen in a fairly large multinational.
- acg 16y ago
  I heard something recently from a colleague about one of these NHS systems. The consultants that were brought in advocated that the system be written in COBOL and with similar technology. Whether this is true or not it. It would be easy to imagine that the wrong technology decisions can be made to make the work roll on for years. With the way the world works now, much of these systems could be put together from fixed priced components built under tender.
  - ThomPete 16y ago
    Chosen framework certainly is a major problem but even bigger. Unrealistic scoping of the project. Most governments believe that they can simply will a successful solution into existence. Instead of thinking how they would like the system to be used they should think about how to get to a point where the system is used and then expand from there. What a wonderful world it would be if they actually learned to think like entrepreneurs. Start simple, stay simple Add as the needs arise Don't do everything that is possible only what is necessary Think how not what Make it for the actual citizens rather than for some political goal. And for @#((@# sake. Lets get all the data available, yesterday!
    - gaius 16y ago
      It is also a problem of self-identifying politically as a "progressive". They kinda have to go for anything that's shiny and new. Whereas conservatives (note the small c) say if it ain't broke, don't fix it. In the specific case of healthcare, look at Matrons on the wards. Yes it reeked of old-fashioned attitudes, but the Matrons ran a tight ship. Now we have outsourced cleaners with the lowest bid and MRSA epidemics. All because New Labour wanted to sweep the 1950s under the carpet.
      - acg 16y ago
        I'm not sure that New Labour really identified themselves with being progressive until they felt they needed to attract would-be liberal voters. Labour might have had some progressive policies but was supposed to be a blend I thought: hence the "Third Way". I found that Labour took an utterly unprincipled bid for power at the end, dropping many of the principles on which they were elected while simultaneously accusing the other parties of the same. What an irony labour spokespeople accusing the liberals of having no principles, when the Liberals are the true progressives. The cynical way that the public has been mislead is unbelievable. The public ought to be treated like shareholder, instead they were treated like fools. Expenses is not the only reason for loss of faith.
arethuza 16y ago
I don't know your definition of vulgar - but as far as I am concerned most of the projects are obscene. You have the naive amateurs that seem to run the higher reaches of the civil service trying to handle voracious monsters of consulting companies and getting reamed in the process. And nobody really cares as it is "only taxpayers money". Very few things make me really angry - this whole mess is one of them.
- ThomPete 16y ago
  Peter F. Duckert calls this the Pork-Barrel State. This is when the fiscal state has no discipline. The government spending becomes the means to buy votes. This was seen probably most obviously when Chancellor Helmut Kohl bought the votes of the former East Germany by promising them beyond what the state could deliver driving germany into one of it's worst crises since the thirties. He has some really interesting ideas on how to solve many of the problems we face today IMHO.
  - arethuza 16y ago
    I could at least understand (while strongly disapproving) of simple buying of votes through spending taxpayers money in the right areas - I'm from Scotland. However, none of these projects made any sense from that perspective. Massively overpaid consultants probably don't vote Labour anyway (even New Labour) and there weren't that many of them. Simplest answer I can come up with is that the people who commissioned and ran these projects were, in the best British tradition, bumbling idiots.
    - gaius 16y ago
      London is a bubble politically speaking, and can be an echo chamber. Many of these consultants probably were Guardian-reading champagne socialists.

joubert 16y ago

Will they also start taking the tube without complaining that they're not riding in a rolls Royce?

gaius 16y ago
Probably. It was reported in The Times that Cameron has slashed the size of the PM's entourage, e.g. no motorcycle outriders for his motorcade. He says if he gets stuck in a traffic jam he'll just wait like anyone else. Whereas I remember when Tony Blair wanted to go for a drive, entire roads were shut. Nothing like going for a sandwich at lunch and finding all of Ludgate Circus cordoned off and I just wanted to get to Pret on the other side of the road!
- arethuza 16y ago
  If he keeps up stuff like that I might actually start to like the man.
  - hugh3 16y ago
    Wow, can we make him President of the United States too? I've only seen a US presidential motorcade once, but it had some thirty vehicles and travelled at about sixty miles an hour down a closed-off street. That, combined with the private 747, is probably the most obscene thing about the modern US presidency. Waiting in traffic in an unmarked car would do the President a lot of good. Yes, I know it's for security, but nobody has taken a shot at a Presidential motorcade for nearly fifty years, and simply having a roof would have solved Kennedy's problem.
    - gaius 16y ago
      Tony Blair wanted a private jet too but the media derided it as "Blair Force One" and the idea was quietly scrapped. New Labour got a lot of credit from some for scrapping the Royal Yacht, but they neglected to point out that in wartime the Royal Yacht was a actually fully-functional hospital ship. When we're not at war, why not use it for diplomatic functions?

simonsquiff 16y ago

Part of the problem is the ridiculous procurement processes that the government departments make you go through. The cost of sale is therefore amazingly large, which leads to large project costs for the few companies that are willing to put up with this process, while erecting a barrier of entry for smaller and cheaper organisations.

Silhouette 16y ago
Most of the high profile, high budget projects they are talking about have been outsourced to big name consulting companies at absurdly high rates. Cutting those en masse is probably no bad thing. In other news, there is talk of changing the rules so that a substantial proportion of such work must be given to smaller, independent companies, who frankly could probably do a better job given the track record of places like EDS. As long as they don't then find they "need" to bring in expensive management consultancy firms to co-ordinate the smaller teams, that is...
- gaius 16y ago
  I think the new government could get away with levying a windfall tax on all the big outsourcing firms.
deleted 16y ago
[deleted]
buro9 16y ago
Having come from a background in which I saw a lot of how the tendering works I wholeheartedly agree with you. Most large suppliers build into their bid a lock-in period and extra revenue streams tied to that. For example if Company A supply server hosting, hardware and support for the Government Department then if you want to get new servers in there you have to pay the prices they quote and you have no choice (it's way above normal cost, of course it isn't comparable as your configuration differs from the mass market configuration). Then to install a new version of SharePoint on the server will mean that the server isn't supported unless that specific version of SharePoint has been through testing with the Department version (so many group policies in place that it's best to think of them having their own version) of Windows Server an Windows desktops. Of course, they will charge for testing and that will be at least £50k for a basic server app, head skywards for anything else. Finally when you have paid £60k for a £12k piece of hardware, and perhaps £100k for your testing, and £50k in software licenses... you get into maintenance mode. During maintenance mode nothing will happen... nothing at all. If you want a change you will have to accept all responsibility for the impact of that as they manage the server and don't want any risk. Any risk at this point is a cost to them so they will damn well act to limit change, usually by charging to implement any changes (effectively a cost penalty). And if Windows Updates come along, well who needs those anyway. Service Packs on the other hand can re-trigger the test cycle (ka-ching!). So for a team installation of something like SharePoint it isn't unrealistic to be thinking in terms of hundreds of thousands of pounds... wherein you and I know perfectly well that it can be achieved for less than a tenth of the cost. This isn't just a procurement problem, it's a problem with the whole lifecycle and how the incumbents shape contracts that benefit the vendors rather than the service being provided.

didroe 16y ago

I'm pretty sure you could save £6 billion just by never ever using EDS again. It's like some kind of abusive marriage, the government keeps getting screwed over and then goes back for more.

parenthesis 16y ago
`EDS' sounds like a disease: `Eternal Development Syndrome', or somesuch.

rythie 16y ago

If the IT project doesn't in end save money more than it cost, it's a failure in most cases. The ID card system was never going to save any money nor make the country safer (it's original selling point). The NHS system seems to be going very badly so far and is late.

simonsquiff 16y ago

These massive project just don't work. 1) Pay consultants vast money to 'spec' out an insanely complex requirement. 2) Go through very long winded and expense tender exercise, with the usual suspects - all expensive and with many failed projects under their belt 3) Company builds from scratch to the spec. 4) Spec is obviously incomplete, discover too late, company asks for lots more money to fill the gaps. 5) Rinse and repeat (minus the tender) You end up with something that has taken 10 years, and is delivering a 'requirement' that is 10 years old and now not relevant (even less relevant than the imperfect 10 year old spec). The only real way to do this is to break these projects up - either in scope or in size - ideally get something as off the shelf as possible and iterate it until it suits the needs, and then roll out wider. I.e. get well away from a waterfall process of massive scope. For example, instead of trying to put in place an NHS wide system (which then fails at great expense), get each individual Trust to go on their own with off the shelf suppliers or at least smaller, cheaper bespoke organisations. Smaller, more manageable and cheaper. You can define interoperability standards if that's needed; you can buy enterprise licenses if one supplier does end up being obviously better.