Analysts warn suppliers will not be able to meet IT tsar's deadlines

IT suppliers do not have the capacity to deliver the £2.3bn national IT programme for the health service within the ambitious...

IT suppliers do not have the capacity to deliver the £2.3bn national IT programme for the health service within the ambitious deadlines set by NHS IT chief Richard Granger, according to a major report on the public sector IT market, published this week.

The report from analyst firm Ovum Holway warned it could take longer than Granger expects to establish working consortia and sub-contractor relationships for the local service providers and national application providers that will run NHS IT.

"The fact that LSPs are likely to be new to the health sector, and the fact that the systems themselves are relatively untested, could also lead to delays," Ovum Holway said.

Granger has said LSPs will need capacity, capital and expertise. They are required to fund themselves through the bidding process and the construction of consortia, and they may also need to fund some form of private finance initiative approach.

This would mean deferring at least some of their revenues, said Ovum Holway. "One supplier told us that companies with a market capitalisation of less than £1.7bn would not even make it to the shortlist of LSP candidates," the report said.

The ability to manage large projects and the supply chain will also be important since LSPs are likely to work with two or three key strategic partners, which will share the investment and risk, and with two or more tiers of suppliers with varying degrees of exclusivity.

A spokesman for the NHS national IT programme said, " The success of any large-scale programme should be judged on the quality and experience of the team running it and its progress so far. The national programme for IT has already achieved key milestones and has a strong team totally committed to continuing to achieve the objectives set out for the programme."

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