Why is iSoft sombre after Morecambe Bay success?

After four years of preparation and innumerable false starts, University Hospitals of Morecambe Bay NHS Trust has gone live with the first implementation of iSoft Lorenzo 1.9 in any complex hospital environment.

Even some of Lorenzo’s sceptics within Morecambe Bay were surprised at how well the go-live went.

But the system is still not completely stable, and other trusts that areconsidering Lorenzo will want to see if the initial enthusiasm afterthe go-live turns out to have been unjustified. 

The go-lives of the Cerner Millennium system at NuffieldOrthopaedic Centre, the RoyalFree, Hampstead and Barts and The London were greeted withenthusiasm which turned out to be misplaced.

CSC, which is theNPfIT local service provider in three-fifths of England, and iSoft, wereexpecting the successful go-live at Morecambe Bay to trigger amilestone payment from the Department of Health and NHS Connecting forHealth of tens of millions of pounds.

CSC was also expecting thego-live to make possible the signing of a memorandum of understandingsimilar to BT’s which would give CSC, in effect, a fresh start under theNPfIT. 

None of this is now certain, despite the go-live atMorecambe Bay. CSC cannot be paid until the system is signed off asacceptable. It could be months before that happens.

This may beone reason why iSoftrefers in its statement today to “delays in milestone payments”under the NPfIT contract between the Department of Health and CSC. Alsothere’s no certainty a new MoU with CSC will be signed.

This isbecause some in the Conservative Party are astonished at thegenerosity of the deal signed shortly before the general electionbetween BT and the Department of Health.

 If examined byindependent auditors the deal could raise questions of an abuse ofpublic money, though this wasn’t the fault of officials: they weregiving their political masters what they had asked for – a cut in theoverall cost of BT’s local service provider contract.

The cutcame at a big cost to taxpayers.  In return for shaving only about 10%off the contract price,  BT was allowed to install systems in only halfthe trusts it was originally contracted to deliver to, and even then todeliver about half the functionality.

In the light of the BTdeal, CSC might have expected something similar once it had reached theMorecambe Bay milestone. But CSC may find that the Conservatives havetaken a BT-style deal off the table.

For ministers want torenegotiate with suppliers to cut the costs of contracts (rather thansimply being seen to cut the costs) and to put buying decisions into thehands of trusts.

The outlook for CSC and iSoft, is therefore, notas rosy as it has been on the national programme: they may no longer be able to nest under thewell-fed and protective underbelly of the NPfIT.

As iSoft says: “As with any commercial negotiation, there is no certainty that revenueswill ultimately flow”.


iSoftshares fall 30% as outlook figures are revised – IT Projects Blog

MPquestions NHS CIO on BT, CSC, Lorenzo and Cerner – IT Projects Blog

iSofthit by political uncertainty – E-Health Insider