Press Release - Improving IT procurement: The impact of the
Office of Government Commerce’s initiatives on departments and
suppliers in the delivery of major IT-enabled projects
5 November 2004
Sir John Bourn, head of the National Audit Office, reported
today on progress made by the Office of Government Commerce (OGC)
to improve the procurement of information technology (IT) systems
by departments and agencies. He concluded that OGC has put
structures in place to minimize the risk of future IT failure and
that department and supplier behaviour is positively changing, but
that the OGC and departments need to ensure that this momentum is
maintained for improvements in IT procurement to be realised.
In 2002-03 central civil government spent £2.3 billion on IT,
representing 16 per cent of all procurement expenditure. The
history of failure of major IT-enabled projects has been
characterized by overspends, delays, poor performance and
abandonment of projects at major cost. In December 2002 Cabinet
ministers agreed six actions proposed by Peter Gershon, then Chief
Executive of OGC, designed to improve the successful delivery of
government IT programmes and projects. Those actions included
establishing departmental Centres of Excellence in programme and
project management and a requirement for departments to prioritise
all existing and new projects as Mission Critical, Highly Desirable
and Desirable.
OGC has introduced four key initiatives aimed at improving IT
and other procurement: (i)Gateway Reviews, to provide independent
assessments of IT-enabled projects at stages of the procurement
cycle; (ii) Centres of Excellence within departments, to provide a
co-ordinating function for programme and project management; (iii)
the Successful Delivery Toolkit, bringing together best practice in
a single reference point; (iv) and the Programme and Project
Management Specialism and the Successful Delivery Skills Programme
which aim to improve the commercial skills of departments.
Departments reported that the Gateway Review process, introduced
in February 2001, was the most effective of OGC initiatives. The
NAO found that the process is improving IT procurement and should
increase the likelihood of successful delivery. Since a
Red-Amber-Green rating system for Gateway Reviews was introduced in
June 2002, 43 per cent of IT-enabled projects have improved their
red-amber-green status as they have passed through successive
Reviews, and 38 per cent have maintained the same status. There is
a major risk, though, that projects are entering the process too
late – after the business case has already been prepared; and
exiting too early – before assessments of the continuing need for
the service, value for money, and contract management arrangements
can be made.
The OGC’s Successful Delivery Toolkit has the potential to
generate improvements but inexperienced users can find it difficult
to know what advice is available from OGC, and how to make best use
of it at the right time. There is clear evidence that departments
lack appropriate project and programme management skills and
experience, presenting a major risk to the successful delivery of
IT-enabled projects.
The NAO found that OGC’s close working relationship with
“Intellect”, the IT industry representative, is helping to build
trust between the industry and the public sector. Case studies
involving five IT-enabled procurement programmes found good
practice in establishing formal links between departments,
agencies, and suppliers as well as good working relationships
between individuals. More can be done, though, to make project
teams aware of frameworks and codes of practice that have been
established, and to clarify the respective roles and
responsibilities of industry and clients.
Today’s report makes eight recommendations to OGC and
departments, including the need for OGC to action their review of
the impact of its non-Gateway Review activities, such as use made
of its Successful Delivery Toolkit. For their part, departments
need to ensure that their Boards exercise clear leadership and
commitment to make certain guidance is followed, skills are
developed and maintained, risks properly identified and managed,
and the rigour of the Gateway process becomes ingrained in
departmental thinking.
Sir John Bourn said:
"Government Departments have a chequered history in the
handling of IT-enabled projects and programmes. OGC has made
significant strides in identifying reasons for past failure and in
establishing structures, such as Gateway Reviews, that allow for
increased scrutiny and independent check upon the feasibility and
progress of IT-enabled projects and programmes. These remain,
however, early days and my report makes recommendations to build on
these foundations in order to reduce the likelihood of future
failure."
Notes for Editors:
- This report makes use of survey information and findings
carried out for the NAO study Improving Procurement: Progress by
the Office of Government Commerce in improving departments
capability to procure cost-effectively (HC 361, 2003-04).
- Case studies of five mission-critical IT projects were
conducted for this study. These were: the Department for Work and
Pensions’ Payment Modernisation Programme and Jobcentre Plus
Implementation, the Home Office’s Case Information Database
Enhancement Programme and the Prison Service’s Offender Assessment
System Project, and the Driver and Vehicle Licensing Agency’s
Partners Achieving Change Together Project.
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk. Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 63/04
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