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Thursday January 13 2000 |
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Thursday January 13 2000 |
By Meg Carter
High-profile computer failures and late delivery of systems have shown that government departments and management consultants are not communicating effectively, says Meg Carter.
Concern over how public money is being spent on private sector consultancy for major government information technology projects has highlighted the need for greater professionalism in project management.
Last week's report by the Commons Public Accounts Select Committee urged government to act swiftly to prevent further "fiascos" stemming from basic project errors. It identified a possible need for greater central co-ordination and monitoring across all Whitehall departments - a suggestion many civil servants and consultants believe is long overdue.
The government's recent track record in project management has been, to say the least, poor. Last November, the Home Office admitted that 13 of its 17 IT projects were behind schedule or over budget. Other problems have included those at the Passport Agency, where delays in issuing passports caused major problems last summer. Siemens Business Services, which provided the systems under the government's private finance initiative, is not expected to complete a computer and printing system at the agency's six offices until February 2001, almost two years late.
A project to install a new generation of national insurance computers, undertaken by Andersen Consulting, is having to deal with a backlog of contributions more than two years after the system was meant to be installed. And ICL's Horizon project to automate Post Office Counters and provide a fraud-resistant benefits payment card was three years late by the time it was partially abandoned in May.
Civil servants have blamed computer companies and IT specialists for these delays. In a written explanation, Home Office officials referred to "revised consultancy costs and staffing levels" delaying a project to upgrade prison phone systems.
The committee has highlighted problems with government IT projects on 25 occasions during the 1990s, including 14 since Labour came to power in 1997. It claims such failures could jeopardise Labour's "modernising government initiative" which aims to make 25 per cent of the public's interaction with government achievable by electronic means by 2002.
Government spending on IT in 1998-99 reached #7bn, with contracts ranging widely in scale and complexity. In view of the huge sums involved and potential disruption to public services, government bodies have been urged to make greater efforts to secure unambiguous contracts with private sector suppliers.
Some consultants have taken advantage of public sector imprecision in commissioning projects, observers admit. While leading firms insist they share common best practice standards, many have distinct ways of doing business. Although top consultancies pride themselves on their expertise and internal systems, not all firms are as efficient as they might be (see below).
"While best practice values are common among responsible firms, not all (firms) do business the same way," says David Grant, chair of the Institute of Management Consultancy's public sector special interest group. "There could also be better management in certain cases of client expectations," he adds. And greater transparency and a more open dialogue would build trust. "In some areas of consultancy, such as accountancy, firms have their own 'best methodology' which they apply to any situation, which may not always be appropriate."
Civil servants must share the blame. Lack of specialist knowledge among some civil servants and ministers has resulted in unrealistic deadlines. The National Audit Office has warned that many projects have been "too ambitious", with no penalties for missing deadlines.
Government departments stand accused of unwieldy structures, unclear lines of command and different approval systems.
In buying consulting services, the public sector has a tendency to buy the cheapest, says Geoffrey Morton-Howarth, vice-president of AT Kearney, London. "What they end up buying is the lowest price, rather than lowest cost," he adds.
Civil servants often believe they are able to define a brief and solve it - bringing in a consultant only to prove the point, according to Phil Topping, lecturer in organisational development in the strategic management group of Cranfield School of Management.
"This generates a brief to a consultant that may be off the mark - with the result that what the consultant delivers is wrong," he says.
It is against this backdrop that government departments and consultancies are attempting to implement best practice guidelines unveiled by Steven Timms, financial secretary to the Treasury, in November.
"The problems in Whitehall's approach to some of our projects is well-known: poor project definitions, poor project management, poor contract management and poor management of suppliers. We have had some nasty surprises," says Mr Timms.
The code, drawn up by representatives from consulting firms and the Treasury, sets out how consultants and government departments should work together - from general principles, defining a project, pre-qualification and tendering, to contract award and conditions, execution and post-project review. The challenge will be to create a degree of conformity and open dialogue between different government departments and the rapidly expanding consulting sector.
Last year, UK management consulting revenues were #5.7bn - #1bn of which was from export earnings, according to MCA estimates. About one-tenth of domestic consulting business comes from government departments whose combined expenditure in the current financial year is expected to be #500m. Overall, total revenues are growing by about 15 per cent a year.
"In the last five years there has been a sea change in the pattern of consulting," says Richard Popple, president of the Institute of Management Consultancy. "There was a time when someone became a consultant having been a specialist in a particular subject. Quite often, implementation was left to the client - and it didn't always work ... today it is very much more about partnerships."
With a framework for public sector consulting in place, the ability of both sides to make such partnerships work is likely to receive scrutiny.