If Joe Harley were to quit as chief information officer
at the Department of Work and Pensions (DWP), an honest
advertisement for his replacement would make grim
reading.
"Looking for mission-impossible? This is the job for you. You
will be the IT head of the government s largest department with
responsibility for 128,000 PCs. You must deliver an IT-based
modernisation programme we have been promising to parliamentary
committees for more than 20 years.
"You will also ensure the smooth day-in, day-out running of some of
the nation s most critical systems that pay 100bn a year in
benefits to, among others, the incapacitated, poor, jobless and
elderly.
"At the same time you will ensure there are major changes to many
of these systems, almost weekly, to cope with policy amendments and
new regulations.
"This is the perk: you will have among your main set of tools the
worlds largest estate of Fujitsu VME-based mainframes that the
curator of any IT museum would be proud to display.
"And stimulating is not the word. You will need to transform
services while getting no more money for IT. The Gershon efficiency
agenda means our departments budget must be cut by գ1bn, 30,000
jobs must go by 2008, and then there is the Child Support Agency to
help sort out ..."
Despite being parachuted into this harsh landscape Harley smiled
more than one would have expected last week when speaking of the
"demanding challenges" confronting him. He was pleased that new
contractual arrangements were completed last week with EDS, the
supplier on which the DWP is most reliant.
The deal standardises about 150 separate contracts agreed by EDS
and the DWP after the two sides agreed an Accord framework deal in
1998 under the Private Finance Initiative. "We don't do PFI any
more," said a DWP official last week.
The 150 contracts remain but have been revised, the official word
for which is "realigned". Whereas the contracts had different
service levels and expiry dates over the next five years, there are
now standard conditions and extended expiry dates for some deals.
This means all the contracts expire in 2010. The DWP said the
realignment provides for "stiffer penalties for any service
failures or shortcomings".
The contractual changes will allow the DWP to cut its spend with
EDS from £700m this year to £520m a year between now and 2010, a
theoretical saving of £900m. In return the DWP has agreed to deals
which enable EDS to increase its previously stated estimates for
revenue from the DWP over the next five years by £800m. Also, EDS
has been promised an extra £180m for new work if its performance is
top notch.
It is unclear exactly how the figures are arrived at. But it is
evident that EDS will get business it was not assured of before,
and which indeed could have gone to other suppliers. And with a
hefty income that is all but guaranteed, EDS can risk investing
money in new technology which cuts its service invoices to the DWP
by offering standardised hardware, software, networks, hosting
arrangements, applications support and maintenance. It has also
agreed to improve the quality of service.
The Child Support Agency's £456m PFI deal with EDS was among the
realigned contracts. A backlog of thousands of cases at the CSA has
prompted ministers to blame poor technology for the problems.
However, earlier this year MPs reported that poor management and a
breakdown in communication with its IT contractors contributed to
the chaotic introduction of the new system at the CSA.
The new deal is a breakthrough for EDS which at one time looked
like being slowly marginalised by the DWP and it is an important
victory for Harley, who joined the department last summer. His
arrangement with EDS was prompted by the freeze on IT spend. With
about 90% of the IT budget outsourced 50% of it to EDS he had
looked to suppliers to cut their prices.
But the challenges for both sides remain. EDS' predominant
relationship is threatened by other DWP suppliers, particularly
Accenture.
And the tireless Harley, with everything else on his "to do" list,
will need to convince MPs that the latest IT-related modernisation
plans will be more effective than the previous ones.
The deal may be a sensible correction by Harley of a situation that
developed before his arrival. Neither side wanted the overhead of
administering 150 dissimilar deals.
But if this proliferation of contracts was kept from MPs by a lack
of transparency and accountability, then how many other government
departments and agencies are quietly labouring under such
unrestrained arrangements?
Perhaps Harley should offer his services to other parts of
government even if it means the DWP has to place an honest
advertisement for his replacement.
