Why so long to see the flaws in PFI?

At last, the government has seen sense and halted the use of Public Finance Initiative funding for future IT outsourcing...

At last, the government has seen sense and halted the use of Public Finance Initiative funding for future IT outsourcing contracts. The decision follows a string of high-profile PFI disasters at the Passport Agency, Child Support Agency and Lord Chancellor's Department, where Libra, the project to link IT systems in magistrates courts, failed.

PFI, the private funding of public investment, puts the onus on private companies to raise funds and deliver IT systems that support public services, and therefore transfers risk to the supplier. The theory is that suppliers do not begin to recoup costs or make profits until systems are delivered, when a regular service fee is levied.

How could such a funding system have been deemed appropriate for the delivery of mission-critical IT systems? The premise that you only pay for a service once it is delivered to your satisfaction assumes that the supplier is able, without your daily intervention, to go away and build a successful system. By resorting to PFI, the government lost control of the suppliers and key projects, making failure almost inevitable.

Jettisoning PFI is a good move, but the question remains: why did the government take so long to reach its conclusion? The answer is that Whitehall is still not good enough at learning from past IT failures: witness its recklessness in seeking to modernise the NHS by breaking down software into modules - each of which is bigger than anything attempted anywhere in the world. Avoiding PFI on IT contracts is one lesson the government has learned - but there are many more it hasn't.


Gartner alert shames software suppliers

Gartner is advocating that system administrators protect every laptop and, ideally, every PC on their networks with a personal firewall. It asserts that relying solely on the corporate firewall to safeguard your network against hackers will no longer suffice.

Users pay through the nose for licences, and every new licence must be combed for clauses that unduly favour the supplier. Given these facts, is it unreasonable of IT departments to expect secure, high-quality software that enables them to maintain systems without constant fear of compromise?

Suppliers should be ashamed that the fragility of their products has made Gartner's warning necessary - and they should redouble efforts to produce software robust enough to meet users' needs.
This was last published in July 2003

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