Course Handout - IT Project Management Disasters

Copyright Notice: This material was written and published in Wales by Derek J. Smith (Chartered Engineer). It forms part of a multifile e-learning resource, and subject only to acknowledging Derek J. Smith's rights under international copyright law to be identified as author may be freely downloaded and printed off in single complete copies solely for the purposes of private study and/or review. Commercial exploitation rights are reserved. The remote hyperlinks have been selected for the academic appropriacy of their contents; they were free of offensive and litigious content when selected, and will be periodically checked to have remained so. Copyright © 2001-2018, Derek J. Smith.

First published online 12:45 BST 9th May 2001, Copyright Derek J. Smith (Chartered Engineer). This version [2.0 - copyright] 09:00 BST 4th July 2018.

IT Project Mismanagement Disasters

CENTRAL ELECTRICITY GENERATING BOARD: Wrote off years of work on a £60 million project known as ISIS following technical problems (Collins, 1991).

DEPARTMENT OF EDUCATION AND EMPLOYMENT: The Department of Education and Employment's FIELD SYSTEM was a 1988 initiative intended to integrate the then training and enterprise programmes. The project was inherited by the new Training and Enterprise Councils (TECs) in 1990, but the consequent restructuring meant that the design was no longer fully appropriate. The £48 million development therefore went far from smoothly. In the 1999 Public Accounts Committee Report, the lack of full involvement of prospective users of the system was highlighted as a major cause of this failure. Other key recommendations were for a systematic risk analysis and properly experienced project management staff.

DEPARTMENT OF SOCIAL SECURITY: Development began on the Department of Social Security's OPERATIONAL STRATEGY system in 1984. It was intended to compute welfare benefits for 20 million claimants administered from 400 benefit offices. However, by 1996 the system had not only cost around £2,600 million instead of an estimated £700 million (Collins, 1991, 2000), but had realised few of the originally foreseen benefits.

DEPARTMENT OF SOCIAL SECURITY: Nearly 130,000 pensioners were "cheated" out of more than £43 million because of computer errors with the NIRS2 national insurance system. The system was installed in 1997 as an upgrade to the NIRS1 system, but soon proved unable to cope with the volumes of data being directed at it. (The Times, 18th November 2000.) In the 1999 Public Accounts Committee Report, a backlog of 1,500 unresolved system problems was identified.

HILLINGDON SOCIAL SERVICES: This department lost 8 months' worth of data on 5th November 1998 after its service provision system crashed without an effective back-up (Computer Weekly, 27th November 1998). Staff had to resort to manual records. Recovery experts eventually saved more than half the data, but the remainder was lost irretrievably. Investigations indicated that the back-up system had in fact failed well before the main failure, but had gone undetected.

HOME OFFICE: The Home Office's PUBLIC SAFETY RADIO COMMUNICATIONS PROJECT (PSRCP) is a £2,500 million contract to establish a state-of-the-art police radio network. It was designed, for example, to allow beat officers to access criminal records databases from mobile terminals. Unfortunately, the system brings with it a high cost to individual local police authorities, many of whom simply cannot afford to implement it; at the same time, the project only costs in if implemented nationally (Computer Weekly, 20th May 1999).

HOME OFFICE: The Home Office's CASE RECORD AND MANAGEMENT SYSTEM (CRAMS), a national database of dangerous offenders, has recently been scrapped at a cost of £100 million, because it was too slow and not easily adapted to changes in legislation (Computer Weekly, 23rd September 1999). Probation officers are having to resort to an old-fashioned card index system (The Times, 2nd November 2000).

HOME OFFICE: The Immigration and Nationality Directorate's CASEWORK system, designed to speed up the processing of asylum applications, has recently been scrapped at a cost of £80 million, and immigration service officers are resorting to fallback procedures to deal with the casework backlog. In announcing the cancellation of the project, the Home Secretary, Jack Straw, described the system as "overcomplex and out of touch with current working practices" (Daily Mail, 16th February 2001). Other sources report that the contractor started to build the system before the requirements had been fully specified, in direct contravention of all the principles of safe systems engineering (Computer Weekly, 22nd February 2001).

INLAND REVENUE: More recently, the INFRASTRUCTURE 2000 (I2K) project has also run into major problems. This £1,000 million project was authorised in 1994 and involved the installation of 56,000 desktop microcomputers running under Windows NT. By autumn 1999, however, staff productivity was going down rather than up as the result of repeated systems downtime, lock-outs, and poor response times. At the same time, it emerged that final costs were going to be close on £2,000 million. The Inland Revenue's IT Director blamed the problems on "the scale, complexity, and volume of the changes" (Computer Weekly, 28th October 1999).

LONDON AMBULANCE SERVICE: This was a healthcare super-system withdrawn in 1992 after a short period of service during which a host of system inadequacies were exposed. Cost - not known, but almost certainly included several unnecessary fatalities. [For detail, click here.] The much more tightly managed replacement system went live in autumn 2000, but still suffered occasional delays due to staff shortages and training delays (Computer Weekly, 7th December 2000).

LONDON STOCK EXCHANGE: The TAURUS system was the London Stock Exchange's proposed "super-system". It went live in 1993, tottered about for a few days, and was then withdrawn. Cost - not known.

MINISTRY OF DEFENCE: The Ministry of Defence's TRAWLERMAN project was a £41 million defence system developed during the early 1990s. It was formally accepted in January 1995, despite the fact that it was by then apparent that the design was fatally flawed (it nevertheless had to be accepted because it did what the original contract had requested). It was then abandoned and written off in 1996 (Computer Weekly, 3rd December 1998).

NATIONAL HEALTH SERVICE: The National Health Service's READ CODES 3 project was an attempt to standardise medical reporting by allocating short letter and/or number codes to a range of symptoms, diseases, diagnoses, and treatments. The system began life in 1982 as a local development by a Dr James Read, "a GP, with no qualifications or background in IT ..... an enthusiastic amateur" (Computer Weekly, 6th May 1999; correspondence). The system was then purchased by the NHS for £1.25 million in March 1990, and upgraded at considerable extra cost for national distribution as READ CODES 2. In March 1998, the National Audit Office estimated the investment to date at £32 million, and were expressing concerns that Version 3 of the system was only operational in 12 NHS sites. They were particularly critical of the NHS Executive for not having prepared a full business case, cost-benefit analysis, or investment appraisal to justify this expenditure.

NATIONAL HEALTH SERVICE: The National Health Service's HOSPITAL INFORMATION SUPPORT SYSTEMS (HISS) project was a 1988 initiative to explore the integration of fragmented hospital information systems. However, by 1996 it had cost £106 million, and achieved cost savings of only £3.3 million (Collins, 1996). In the 1999 Public Accounts Committee Report, the serious effect of not involving prospective system users - in this case, NHS clinicians - during the development process was noted. 

NATIONAL HEALTH SERVICE: The Wessex Regional Health Authority's REGIONAL INFORMATION SYSTEM PLAN (RISP) project (commonly known as the "Wessex Health" project) was another high profile NHS super-system collapse, exposed by the BBC "Panorama" program in early 1994. It was a high functionality network system which "bit off more than it could chew". Ker (1994) provided more or less instant comment, identifying three of the Wessex team's critical mistakes. Firstly, the network transmission capability simply was not up to the traffic. Secondly, Wessex tried to do too much by attempting to pass document images around the network (image processing is always far slower than text processing). It was especially unnecessary, Ker states, to bring past microfilm archives into the system. This was computerising for computerising's sake, and the penalty was severe. And thirdly, there was concurrent change. Having completed the basic design in 1985-1987, the system then ran up against global NHS reorganisations. Administrative functions were pushed out from Regions onto Districts and from Districts onto Hospitals, thus "radically altering the information flow requirements" which had originally been analysed. But instead of starting again from scratch - and systems redesign is one of the (usually forgotten) costs of corporate reorganisations of this sort - Wessex tried to "make do and mend", and one of the golden rules of IT is that this is always a recipe for disaster.  Collins (1996) estimates the cost at "up to £63 million". 

NATIONAL HEALTH SERVICE: The strategic plan for the ongoing modernisation of the British NHS relies heavily on bringing retail pharmacists into the chain of care. Thus "the government wants pharmacists to counsel some patients, be the first point of call for some of those with minor illnesses, manage repeat prescriptions, and in some areas handle primary prescribing" (Collins, 2004, p1). Unfortunately, this otherwise laudable proposal has not been fully thought through, for the £2.3 billion parallel upgrades to the NHS's IT systems had until recently overlooked that profession's needs. Pharmacists have played no direct part in drawing up the enhanced Requirements Specification, resulting in there being no allowance, for example, for an interface into the patient records system. And this despite a quarter of a century of continuous and very loud advice that user involvement is the sine qua non of successful IT project management!

PASSPORT AGENCY: The Passport Agency's PASSPORT ISSUING AND MANAGEMENT INFORMATION SYSTEM (PIMIS) system was a 1988 initiative to computerise passport issue. The business case was based on 20% staff savings, but the Unions involved predicted that more staff rather than less would be required. The Unions were right, and when the system went live at the Liverpool Passport Office it raised the average issue time roughly three-fold (from 25 days to 73 days). A Home Office spokesman later admitted having underestimated the difficulty of the transition from manual systems to computerised (Computer Weekly, 8th July 1999). 

PASSPORT AGENCY: The Passport Agency's DIGITAL PASSPORTS system was a troubled attempt at a general upgrade of the earlier system (see preceding). It was commissioned in 1997 subject to very tight deadlines, and in the spring and summer of 1999 there were further serious delays in processing passport applications (the turnround time for which was 50 days in July 1999). One reason for this was that staff found the system more complex to use, and another was that the Agency's roll-out timetable had too little tolerance built in to allow for troubleshooting (1999 Public Accounts Committee Report). Much queuing in the streets and adverse publicity ensued, and the passport cost was increased in order to pay for all the overtime required to clear the backlog. 

Note: The fact that this debacle and the preceding one read so similarly is discussed in the main study unit as evidence of how bad large organisations can be at not learning from experience.

POST OFFICE COUNTERS: The Post Office's PATHWAY project was a £1 billion contract let by the Benefits Agency to use smartcards to automate the payment of benefits. It was in development from May 1996 to May 1999, whereupon it was cancelled at a net waste of £180 million following a change in corporate strategy in favour of credit transfer payments. An investigation by the House of Commons Trade and Industry Select Committee concluded that the project had been "blighted from the outset", not least by the fact that there were always two distinct customer departments to be satisfied (Computer Weekly, 7th October 1999 and 9th November 2000).

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