Friday, 23 January 2009

BT deep losses illustrate NHS IT problems

Yesterday’s announcement by BT that it will take a £340M one-off charge against large projects being undertaken in its Global Services Division is rumoured not to reflect the full depth of its problems on its NHS contracts.

BT’s Chief Exec Ian Livingston yesterday confirmed that the charge only relates to 15 of the largest 17 contracts in BT Global Services – as I understand it, the last two are NHS projects, where Ian has indicated further substantial provisions might be required – and possibly “many hundreds of millions of pounds”.

Update - it would appear that only one of the two remaining projects relate to the NHS - which I find surprising, unless BT has lumped more than one of its NHS contracts together.

Regular readers will know my view on these NHS contracts so I won’t repeat it here, but where now for the main contractors that entered into these disastrous projects? Will the Government (NHS) bail them out?

Some of my colleagues believe that BT should be penalised, along with the other remaining suppliers, for being so foolish to enter into contracts which everyone recognised were fatally flawed. IT professionals saw this – but the businessmen carried on bidding – now those responsible have moved on – and the companies are left with major headaches.

Personally, I think that Government has a moral responsibility to help these suppliers out – the procurement was fatally flawed – with large, existing suppliers to the NHS knowing that if they didn’t bid against the flawed requirements and harsh contract terms they would be writing off that market for the next decade. I wouldn’t suggest writing a blank cheque – but introducing new, realistic targets, and recognising significant changes in requirements, would start to help.

But in practice, I believe that the suppliers only need to hobble along for another 18-24 months (possibly less) on these projects before the existing contracts are terminated, and a professional approach is adopted for the procurement of systems that reflect health professionals true needs, against realistic budgets and achievable timescales for implementation....

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