In this report, we therefore identify 24 examples of successful
programmes and projects; one third of them are drawn from British
central government departments and agencies, and the rest from
elsewhere in the public and private sectors in the United Kingdom,
and from the public sector overseas (Figure 1). The diversity of
the case studies (which appear in Volume 2 of this report)
demonstrates that success is achievable in both public and private
sectors. The report draws out the activities and behaviours that
have helped deliver this. Our report also draws on widespread
contact with the IT industry and central government departments in
Britain and our consultations in the United States.
Figure 1: 24 examples of successful IT-enabled business
change
Central government
Department for Work and Pensions: The Payment Modernisation
Programme has transformed the payment of benefits and pensions by
paying entitlements directly into recipients’ bank accounts.
Programme/project costs*: £824 million
Department of Trade and Industry: Consumer Direct provides
consumers with a single access number to free advice when problems
arise when dealing with traders.
Programme/project costs*: £34 million
Department of Trade and Industry — Small Business Service:
Businesslink.gov.uk is a website providing support, advice and
services to businesses in the UK.
Programme/project costs*: c.£17 million
Department for Environment, Food and Rural Affairs – Eaga
Partnership: For citizens at risk of fuel poverty, the Warm Front
Scheme provides a package of energy efficiency and heating measures
to install or upgrade insulation and heating systems in their
homes.
Programme/project costs*: c.£1 million
The Pension Service: Pension Credit was a new entitlement that had
less rigorous means testing and replaced the Minimum Income
Guarantee.
Programme/project costs*: £297 million
Vehicle and Operator Services Agency: Operator Self Service has
modernised the approach to issuing Heavy Goods Vehicle Licences by
redesigning the business process and IT support for the vehicle
licensing business, enabling operators to carry out most licence
transactions online at any time.
Programme/project costs*: £9 million
OGCbuying.solutions: eSourcing provides secure collaborative tools
used by procurement professionals and suppliers to conduct
strategic procurement activities online, including tendering,
negotiation, contract award and management, to deliver value for
money procurement solutions to the public sector.
Programme/project costs*: £2 million
Environment Agency: The Fishing Rod Licences project transformed
a fixed-hours Post Office based service for 1.2 million
transactions a year to a self-service system enabling customers to
purchase fishing licences online at any time.
Programme/project costs*: £200,000
Other public sector
Transport for London: The congestion charge was introduced to
reduce traffic congestion in Central London by levying a flat rate
fee upon drivers entering the congestion zone during the
Monday–Friday working day.
Programme/project costs*: £234 million
Northern Ireland Criminal Justice Directorate: The Causeway
Programme links the case management systems of the six main
Northern Irish criminal justice agencies.
Programme/project costs*: £48 million
Transport for London: The Oyster® card is an electronic smartcard,
introduced in 2003, as part of the Prestige Project, a private
finance initiative to renew, operate and maintain all the Transport
Authority’s ticketing infrastructure.
Programme/project costs*: £40 million capital cost
Scottish Water: “Promise to resolution” – an integrated customer
management and field service programme – introduced a new customer
service contact centre and work scheduling system to improve both
efficiency and performance.
Programme/project costs*: £14 million
UK Transplant: The National Transplant Database provides a fast and
accurate matching system to enable organs to reach patients as soon
as organs become available for transplant.
Programme/project costs*: Running costs part of annual budget of
c.£14 million (2005-06)
Cambridgeshire County Council: The Council transformed its
governance structures following the introduction of portfolio
management.
Programme/project costs*: £90,000 provided by the
ODPM (now the Department for Communities and Local Government),
plus internal staff and senior management time
City of Edinburgh Council: As part of its “Smart City Programme”
to modernise the Council’s back office systems and processes, the
Council undertook a modernisation of its services of Planning and
Building Standards to enable individuals, construction firms,
architects and solicitors to submit applications electronically and
to find planning related information online.
Programme/project costs*: Part of wider “Smart City Programme” to
modernise the Council’s back office systems and processes
International public sector
United States Department of Defense: The Identity Management
Programme provides military personnel with a Common Access Card to
improve identity assurance and reduce fraud.
Programme/project costs*: n/a
New York City Mayor’s Office: The New York City 3-1-1 Citizen
Service Center provides access to all government information and
non-emergency services in the New York City area through a single
telephone number. NYC 3-1-1 is available 24 hours a day, with
operators providing services in over 170 languages.
Programme/project costs*: US$25 million
City of Anaheim: The Enterprise Virtual Operations Center brings
together real time data from the City of Anaheim’s emergency
services and makes the data securely accessible via the Internet,
enabling city officials to see what is happening on all the City’s
critical response fronts.
Programme/project costs*: US$1.2 million
Office of the Revenue Commissioners: The Republic of Ireland’s
Revenue On-Line Service (ROS) enables customers to both pay their
taxes and file their returns online. The ROS Customer Information
Service allows customers and their agents to view details of their
Revenue Account.
Programme/project costs*: €40 million
British Columbia: Network BC is a dedicated project office within
the Ministry of Labour and Citizen Services that works with British
Columbia’s remote communities and the private sector to improve
citizens’ access to the Internet.
Programme/project costs*: Leveraged existing government
telecommunications spending of Canadian $245 million (over 4
years)
Private sector
APACS: The UK payments trade association's chip and PIN programme
is a new, more secure way to pay with credit or debit cards.
Programme/project costs*: £1.1 billion
Britannia Building Society: The “Really Big Programme” involved
replacing the Society’s complete IT infrastructure to create a
“single view” of each of its customers and their savings and
investment accounts, mortgages, loans and other financial
products.
Programme/project costs*: £60 million
Prudential UK: The “Single View” customer service transformation
programme was introduced to improve customer marketing and account
administration by providing staff with an integrated view of all
the products and services each customer has purchased from
Prudential UK.
Programme/project costs*: £37 million
Norwich Union: ‘Pay As You Drive’™ insurance uses Global
Positioning Satellite (GPS) technology to calculate monthly
insurance premiums based on how often, when and where people
drive.
Programme/project costs*: n/a
*Costs are those incurred by the programme/project in its life
time, as provided by the case study body. They are not the subject
of National Audit Office audits.
Responsibility for IT-enabled business change rests with
individual departments and the nine Key Questions below are
designed to assist Accounting Officers and their boards to put in
place the appropriate capability and capacity to deliver programmes
and projects successfully. We also draw the attention of Accounting
Officers to implications for their departments of the
Recommendations for central departments (Figure 3 on pages 20 to
23); in particular Recommendation 7 – that the Recommendations of
this report form part of the basis of an “annual stock take” being
developed by central departments, drawing on the Leadership and
Delivery strands of departmental capability reviews, and
Recommendation 8, which emphasises Accounting Officer
responsibilities, which would include for example the mandatory
nature of Gateway Reviews.
Nine Key Questions for departments embarking on IT-enabled
business change
Ensuring senior level engagement
Q1 Is the board able to make informed
judgements about the department’s capacity to manage change?
- Our case studies (for example Prudential UK, Cambridgeshire
County Council) highlight the importance to organisations in
managing their portfolio of programmes and projects of establishing
a clear overview of the range of business change activities planned
or underway at any one time and assessing their capacity to handle
the change. For departments and agencies, this will be aided by
adopting the common approach to portfolio management being
developed by the Chief Information Officer Council along the lines
of their American counterparts who exercise critical oversight over
Federal Government Agencies’ IT-enabled programmes and projects
through a process of annual review.
- Key success factor in our case studies: mechanisms to
prioritise the programme and project portfolio in line with
business objectives.
Q2 Does the department have in place a decision
making structure that will ensure strong and effective leadership
of the IT-enabled business change?
- Successful delivery requires an accurate assessment of risk,
the scale of the change proposed and whether it involves a new
business process or upgrading of existing systems, the degree of
innovation involved in the change itself and the supporting IT, and
the likely effect on those having to operate the system and upon
customers and clients. As our case studies illustrate, these issues
need to be addressed at board level with direction and support
provided by the board for those charged with delivery, underpinned
by clear governance arrangements and internal and external scrutiny
and challenge.
- Key success factor in our case studies: a clear
decision making structure with agreed lines of accountability so
that the right decisions are made swiftly and in line with business
strategy.
- In departments and agencies, the Senior Responsible Owner holds
prime responsibility for the successful delivery of IT-enabled
programmes and projects. For those Senior Responsible Owners in
charge of programmes, our survey showed that while 76 per cent
discussed progress with their Accounting Officer at least once a
month, only 52 per cent did so with their Minister at least once a
quarter.
- It is essential that senior management invest sufficient time
and priority to ensure effective oversight of the change. While our
case studies demonstrate clearly the benefits of strong leadership
and direction exercised by experienced and skilled individuals, the
results of our survey of Senior Responsible Owners across
government show that half are in their first ”SRO” role and around
half spend less than 20 per cent of their time on the role. This
lack of experience and focus is compounded by the limited amount of
support given to Senior Responsible Owners, with a striking 38 per
cent of Senior Responsible Owners having no involvement with a
Centre of Excellence and 20 per cent rating their support as
poor.
- There is particular risk where a business change involves
several organisations coming together to join up activities,
requiring additional governance arrangements to promote a common
sense of purpose and a culture of joint responsibility. Here a
cross-departmental board is needed, as happened in the case of the
Department of Trade and Industry’s Businesslink.gov.uk initiative,
with sufficient seniority to demonstrate the commitment of the
partner bodies, clear and up-front terms of reference, and a
capacity to take collective decisions for the benefit of the
programme as a whole rather than for the individual interests. A
cross-department project board will also be needed. For its
initiative to improve citizens’ access to the Internet, British
Columbia’s Ministry of Labour and Citizen Services set up a
dedicated project office – Network BC – to bring together the
government ministries, health authorities and other public bodies
and to manage the upgrade programme.
- To ensure that risks are well-managed, Boards and Audit
Committees will need to satisfy themselves that the department’s
programmes and projects are proceeding in a timely manner through
external and internal assurance processes. In particular, in
accordance with earlier guidance[Footnote 4] ,
they will need to take steps to assure themselves that IT
governance is sufficiently robust to deliver key services by
requiring regular advice and reports from internal auditors where
large changes and upgrades to IT infrastructure are planned or in
progress; that business cases are robust, projected benefits are
measurable, and financial and other controls are sufficient to
track benefits; and that programmes and projects are making timely
progress through Gateway Reviews, the outcomes of which are
communicated to the Audit Committee. Forty-two per cent of Audit
Committees were never briefed on the results of Gateway Reviews;
only 26 per cent received quarterly briefing; and only 42 per cent
of internal audit and assurance departments received copies of all
Gateway Reviews.
Q3 What incentives exist to drive
performance?
- In the commercial sector, IT-enabled business change is often
the prime factor in whether a business succeeds or falters. As our
case studies demonstrate (for example Britannia Building Society’s
“Really Big Programme” to replace its complete IT infrastructure to
create a “single view” of each customer’s savings and investment
accounts, mortgages, loans and other financial products) these are
essential building blocks for competitive advantage. Reflective of
that risk, incentive and performance regimes exist in the private
sector to make sure that those charged with delivery are motivated
to succeed and that they drive through the benefits.
- Key success factor in our case studies: senior
management who demonstrate commitment to the change.
- In departments and agencies, while there is a clear commitment
to public service, there are few material incentives. The Review
Body on Senior Salaries [Footnote 5]
has recommended that Government should consider the payment of
non-consolidated market allowances and “golden hellos” to attract
high level specialists to the Senior Civil Service. This is helpful
for recruiting those with the skills and expertise needed to manage
large programmes of IT-enabled business change. But not all
government departments have yet created a “risk culture” that
rewards well managed risk taking.[Footnote 6]
Beyond basic salary levels lies the important issue of financial
incentives and career planning to help motivate senior management
to undertake the well-managed risk taking entailed in delivering
successful IT-enabled business change.
- A lack of longer-term commitment to realisation of benefits in
departments and agencies is also demonstrated across government in
that currently (April 2004–June 2006) only five per cent of all
Gateway Reviews are Gate 5 Benefits Evaluation Reviews, a
percentage that has increased little since 2002-2004 (Appendix 2,
Figure 11).The Department for Work and Pensions’ Payment
Modernisation Programme, which has been through a successful Gate 5
Gateway Review, has developed a benefits realisation plan assigning
responsibility for promoting and securing benefits to named
individuals – benefits owners – over the medium-term of the first
few years’ following implementation.
Acting as an intelligent client
Q4 Does the department have the necessary
programme management skills?
- Key to the success of our case studies was a recognition of the
need to build the capability and capacity to deliver major
programmes and projects and, within this, the key role played by
the programme manager. While there have been previous initiatives
to build a cadre of such managers within government, some of whom
are now running major programmes and projects, these initiatives
have not been completely successful. Numbers in the programme and
project management specialism have doubled since 2004, but remain
low at 2,300 across the civil service. In recognition of the need
to strengthen this aspect of delivery capacity, one of the current
main initiatives of the e-Government Unit is to broaden and deepen
professional skills in managing IT-enabled programmes. This
includes adopting the competency and skills framework of Skills for
the Information Age.[Footnote
7]
- Key success factor in our case studies: building
capacity and capability.
- Where third party consultancies are used, mechanisms are needed
to build in-house capability and to provide a return on consultancy
spend by requiring knowledge to be transferred from consultants to
programme and project staff within the department. The Vehicle and
Operator Services Agency, for example, agreed at the outset of the
Operator Self Service project that its consultants would facilitate
transfer of knowledge and skills throughout the business
change.
Q5 What is the natural division of duties
between the Programme and Project Management Centre of Excellence
and the Chief Information Officer?
- The Office of Government Commerce’s Embedding Centres of
Excellence Programme, introduced in 2003, measured departments’
progress in setting up Programme and Project Management Centres of
Excellence against established standards. Since completion of the
centrally-run programme in 2005, the role of Centres of Excellence
has developed at different rates and in different ways across
government. In some departments, Centres of Excellence have the
requisite authority to influence procurement and recruitment
strategies, while in others their role is restricted to that of
information management. In our survey, only half of Senior
Responsible Owners considered their Centre of Excellence a hub for
the dissemination of good practice or lessons learned; while only
38 per cent rated their contribution as very or fairly good.
- The Programme and Project Management (PPM) Specialism supports
staff in government who wish to follow a career in programmes and
projects rather than line-oriented career paths. It brings together
all PPM specialists in central government and agencies,
concentrating on helping, advising and supporting those individuals
who are experienced or qualified programme and project staff, to
develop their skills and careers.
- Key success factor in our case studies: building
capacity and capability.
- In part because they are the creation of two different parts of
central government – the e-Government Unit and the Office of
Government Commerce, as yet the relationship between Chief
Information Officers and Programme and Project Management Centres
of Excellence is not fully clear. While there are examples of where
both are working well, there is a danger that the two will
duplicate the actions of one another, with vague responsibilities
and confused reporting lines.
Q6 How will the department establish and
promote an open and constructive relationship with suppliers?
- Our case studies indicate repeatedly the importance of
establishing from the outset strong, constructive relationships
between clients and suppliers, typified by shared governance
arrangements, joint teams and establishing an environment in which
each side is comfortable challenging the other. Sometimes these
involve simple devices such as the Republic of Ireland’s Revenue
On-Line Service where the suppliers and Revenue staff were
co-located in an open plan office away from existing offices, or in
the case of the Britannia Building Society where all team members
wore Britannia’s badge. Open relationships between clients and
suppliers also bore fruit in the case of Pension Credit where the
joint team was able to offer constructive challenge to some 50
requests for requirement changes.
- Key success factor in our case studies: creating
constructive relationships with suppliers.
Q7 How clear is the department about the
business process that it is seeking to change or develop?
- Before embarking on change, a department must have a complete
understanding of its current business processes and how its
stakeholders interact both with the business and between themselves
and a clear understanding of what it wants the new business process
to achieve. These need to be coupled with good appreciation of the
likely impact of the business process change on service levels,
productivity and different stakeholders. Our case studies (for
example the Northern Ireland Criminal Justice Directorate’s
Causeway Programme) show the commitment and amount of time taken by
those embarking on complex transformations to get the business
process clear to start with. This knowledge is crucial if an
organisation is to engage with the IT industry as an intelligent
client, providing a clear specification to potential suppliers to
enable them to determine the most cost-effective system for
achieving the department’s goal and to design proposals to
implement the business change. Uncertainty over possible impacts
should be probed and tested by organisations piloting new business
processes, building prototypes to demonstrate practicalities, and
canvassing opinions from those who will actually have to change
their behaviours to engage with the business change.
- Key success factor in our case studies: designing and
managing the business the change.
Q8 Does the technology exist to deliver the
change?
- Our report Improving Procurement[Footnote 8]
recommended more proactive management of suppliers and earlier
engagement before and during the earliest stages of procurements.
For IT-enabled business change, departments should consult at an
early stage with the industry to take market soundings and to test
the viability of proposed IT-enabled changes and the robustness of
the procurement strategy to deliver these; for example, by making
use of mechanisms such as Intellect’s Concept Viability
Service.
- Key success factor in our case studies: managing the
risks of the IT solution.
- Within this, there needs to be robust and well-evidenced
discussion about why and where the business change cannot make use
of off-the-shelf systems and software and how the change will
address issues of connection between the department’s new and
existing systems. For example, for the Department for Environment,
Food and Rural Affairs’ ”Warm Front” Scheme Manager, Eaga
Partnership was confident that its in-house IT staff had the skills
and capacity to develop the secure web-based portals needed;
whereas for Scottish Water’s new integrated customer management and
field service programme, to keep down costs the business lead of
the project made an early decision to adopt off the shelf
technology, despite significant pressure from the IT department
that a bespoke system was needed.
Realising the benefits of change
Q9 Beyond immediate technical success, how will
wider benefits be secured?
- Many of our case study organisations needed to engage in
significant work with customers, users and wider stakeholders to
ensure that the design of the change met their needs and that
interested parties supported the change. To realise the benefits
projected in the business case of a major IT-enabled change,
departments will need to identify the key stakeholder groups at the
earliest stage and to engage with them throughout the change to
ensure that their needs are addressed and their support and
commitment gained and maintained.
- Key success factors in our case studies: selling the
benefits to users and winning the support of wider
stakeholders.
- When embarking on an IT-enabled business change, our case
studies, for example the Republic of Ireland’s Revenue On-Line
Service, illustrate the importance of being clear from the outset
about issues such as who will champion change amongst users, and
how their energies and support can be put to best effect.
Conversely, areas of potential resistance and doubt need to be
identified, and steps taken to counter and convince; otherwise
there is a danger that the change does not fulfil its potential,
even where the technical solution is successful. Here, the use of
market research (an approach taken for example by the Department
for Work and Pensions’ Pension Credit) can assist departments in
identifying how best to phase the roll out of the change to
different key customer groups.
- To realise the benefits of change, departments need to ensure
therefore that business cases are not used solely as mechanisms to
secure funding, but set out how the business change will be
achieved, what the benefits will be and, importantly, what
machinery will be put in place to drive the achievement of those
benefits. This requires assigning clear responsibility for
promoting and securing benefits to named individuals (for example,
the Department for Work and Pensions’ Payment Modernisation
Programme benefits realisation plan).
- Key success factor in our case studies: optimising the
benefits.
- Business cases and benefit plans need to be subject to robust
internal scrutiny by the department’s Centre of Excellence, which
should also be involved in regular reviews and revisions of the
business case throughout the programme or project to ensure that in
the light of policy changes and other changes to the external
environment, the projected benefits remain realistic, relevant and
realisable.
- The introduction of resource accounting, combined with the
drive for increased efficiency means that, elsewhere in government,
there is a clear incentive – and need – for departments to be in a
position to know how well they are using their assets. Yet,
historically, for IT-enabled change, this information has often
been lacking, with few OGC Gateway Reviews at Gate 5 (Benefit
Evaluation) having been carried out to assess for each programme
and project whether the benefits hoped for have actually been
secured. While the percentage of programmes and projects that reach
Gate 4 (Readiness for Service) and go on to Gate 5 has improved
(Appendix 2, Figure 12), more needs to be done. As a consequence,
the Office of Government Commerce Supervisory Board has agreed that
from 2006-07 all programmes and projects must undertake a Gate 5
Review within 12 months of completing a Gate 4 Review. Gateway
Reviews are only one aspect, but with increasing cross-departmental
programmes and projects, clear and firm arrangements will need to
be put in place to ensure accountability and responsibility for
realisation and optimisation of business benefits across the
departments and agencies involved.
- Management of the department’s portfolio of programme and
projects should include monitoring of benefit realisation plans to
ensure that benefits are optimised, both in terms of financial
savings and in improved services to citizens.
Eight recommendations for central departments