Fujitsu bows out in latest NHS IT fiasco

Outsourcing may be a tricky business, but nobody makes it look harder than the Government...

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Last Updated: 31 Aug 2010

It emerged on Thursday that the Department of Health had terminated its £900m contract with Fujitsu, in the latest blow to the NHS’s disastrous £12.7bn ‘Connecting for Health’ IT programme. The scheme – intended to create a single electronic medical records system – is already running four years behind schedule, and now Fujitsu has followed Accenture (who quit two years ago) out of the door, we can expect even longer delays. Another textbook Government outsourcing deal...

The DoH was keeping tight-lipped about the reasons for terminating the contract, but given that not even 10 months of talks managed to resolve the issue, it was obviously pretty serious. Fujitsu – one of the UK’s top IT outsourcing companies – was one of four suppliers chosen to implement the new BT-designed system (with responsibility for the south of England). But with the project way behind schedule, the government has been desperately trying to negotiate contracts and set tougher delivery targets to prevent big budget over-runs – and clearly Accenture and Fujitsu didn’t like the new deal on the table.

Clearly this massive project – the biggest non-military IT scheme ever attempted, some say – has turned into a complete cock-up. But it’s a bit hard to know whose fault this is. The National Outsourcing Association (as you’d expect) is blaming the government: it reckons starting with just four suppliers was a mistake, for instance. ‘The NOA predicted back in 2006 that it would be a safer option to split the programme into a series of small bites rather than a few large ones,’ it I-told-you-so-d today. It’s also suggesting that the original deals were pushed through far too quickly, meaning there wasn’t enough consultation with end-users and the contracts were unfit for purpose – forcing the NHS to try and move the goalposts later on. ‘Nailing suppliers to the wall will invariably end in tears,’ as it rightly points out.

On the other hand, we don’t blame the government for trying to crack down on it suppliers. It’s been seen as a soft touch for a long time, and some of these companies probably saw this whole exercise as an easy way to get their hands on a juicy fat contract. And since it’s our money that’s being spent, we’re glad it’s demanding some proper bang for its buck.

We don't envy anyone tasked with organising this logistical nightmare. But it seems like all parties ignored the first rule of outsourcing: get the original contract right. And inevitably, it'll be us taxpayers who end up footing the bill...

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