A comment by market researcher Ovum on the background to Fujitsu’s decision to withdraw from contract “re-set” negotiations on the NHS’s National Programme for IT [NPfIT], is informed.
It’s written by Tola Sargeant who leads Ovum’s relationship with NHS Connecting for Health, providing market intelligence and supplier liaison services to the organisation.
Tola Sargeant says:
“… News that Fujitsu Services’ Local Service Provider contract is to be terminated now will have come as a shock to many. There were reports about a month ago that NHS Connecting for Health was on the brink of replacing Fujitsu in the south, but the contract negotiations between the two parties seemed to have been making real progress over the last few weeks.
“We suspect the NHS had two main concerns during the contract reset process – first, affordability, and second, confidence in Fujitsu to deliver a product that was fit for purpose within a reasonable timescale. In the end, the latter may well have been the biggest sticking point given the new power that the local NHS CIOs have under the NPfIT Local Ownership Programme (NLOP)…
…”the fact remains that, in terms of patient administration systems in the south, very little has been delivered. The contract needs to be re-let. And no supplier is going to take over from Fujitsu without doing its best to ensure that the contract will be profitable. This may mean that in the long run the NHS ends up paying a higher price than it would have done had it managed to come to an agreement with Fujitsu.
“For the National Programme as a whole, this is yet more unwelcome news. It will inevitably put another major dent in public confidence in the programme and it is hard to see how it will not lead to further delays… The other burning issue is who will take the contract over from Fujitsu.
“Of the two remaining Local Service Providers, BT, the LSP for London which is also deploying Cerner’s software, would be the obvious candidate (and is currently the ‘favourite’).
“However, BT has its hands rather full enough already with the London deployment and we’d urge NHS Connecting for Health to think twice before handing it the south as well.
“Instead, NHS Connecting for Health may choose to use its new Additional Supply Capability and Capacity (ASCC) framework agreement for the procurement. ASCC was born as a result of Accenture’s sudden departure from the National Programme and is designed to make it easier for NHS CFH to replace a key supplier in a situation like this.
“That would put the likes of Capgemini, EDS, LogicaCMG, McKesson and Siemens IT Solutions and Services in the frame alongside BT and CSC. The question is, do any of them really want the job?”
Significant risk of Fujitsu’s quitting the NPfIT [posted 22 January 2008]