UK Public Sector IT Procurement

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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?
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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.

Transcript of UK Public Sector IT Procurement

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