'Management errors' led to failure of £17m government housing agency system

A catalogue of management and technical errors led to the "potentially damaging failure" of a £17m project to modernise the IT systems at the government's housing agency, documents obtained by Computer Weekly reveal.

A catalogue of management and technical errors led to the "potentially damaging failure" of a £17m project to modernise the IT systems at the government's housing agency, documents obtained by Computer Weekly reveal.

The report, based on a 10-month investigation by external consultants, analyses the performance a flagship IT project, which aimed to transform the workings of the Housing Corporation by replacing legacy IT systems with a modern Citrix-based IT system.

The Housing Corporation, which invested £1.9bn in building affordable homes last year, released the report last week following an 18-month battle with Computer Weekly under the Freedom of Information Act.

Chief executive Jon Rouse commissioned Methods Consulting in May 2005 to investigate the troubled project, which at one point consumed a quarter of his management time.

" We fully accept the report findings and its recommendations. The purpose of the review was to find out what went wrong and to identify lessons of the future," said the Association's chief executive, Peter Marsh, in a statement last week.

The ASP project, which started in 1999, aimed to give housing associations direct access to its IT system and to deliver desktop applications to its 450 staff through a Citrix thin client infrastructure.

But the project failed to meet its deadlines, failed to deliver to cost, and damaged the moral of the Corporation's staff and the organisation's reputation, the independent investigation by Methods Consulting concluded.

The report draws detailed lessons on the project's failings and makes recommendations for the conduct of future IT projects, which will be widely applicable to other public and private sector IT projects.

The investigators point the finger at a culture of weak management, a lack of openness combined with the corporation's lack of technical and procurement expertise.

It allowed poor staff relations, particularly in its IT department, to "develop into a mutually distrustful environment in which the executive appeared to have little control."

The project team lacked managers with strategic IT understanding, procurement strategy, and contract management skills.

Decisions went unrecorded, and minutes of meetings were poor at all levels. User needs were not properly defined, and governance and management resources were overstretched.

"Important detail was frequently overlooked and decision-makers were often presented with substantial documentation and little time to review it. Strategic procurement mistakes were made at strategy, final award and implementation stages," it said.

"There was no systematic assessment of risks, no evidence of implementation or resource planning, and unrealistic expectations were raised of an early timetable for implementation,"

Although the procurement route followed a well thought through procedure, the procurement team missed warning signs a key stages in the process, leading to the contract being awarded to an inexperienced supplier the report concludes.

Time pressures led managers to pay insufficient attention to detail in the preparing the contract schedules, and mistakes were made in agreeing the service code of practice. The corporation did not consult its legal advisors in the early stage of the contract, and failed to manage it until the relationship was in substantial difficulties.

Although the corporation's external advisor, KPMG, endorsed using Citrix as a general, industry-standard tool, it not specifically endorse the ASP project. The outcome was, however, presented within the Corporation as an endorsement of the ASP strategy.

The project suffered from repeated difficulties during pilots, including service failures and poor performance levels, but, the report concludes, neither the Corporation nor its supplier, Elonex, now in liquidation, appeared to have understood Citrix sufficiently to find solutions, said the consultants.

Executives at the Housing Corporation were unable to sufficiently understand the technical issues involved in the project, and presented a view of the project to the Corporation board that "unintentionally underestimated the emerging problems."

The chief executive of the Housing Corporation terminated the contract with Elonex in December 2005, on the grounds of material breach of contract, the report reveals. It passed responsibility for the ASP server to Elonex subcontractor, Netstore.

The Housing Corporation has taken steps to turn around its IT strategy, the report concludes. An independent Office of Government Commerce review of its current IT work concluded that it was well managed and that lessons have been learned from past experience, the Corporation said.

Findings of the investigation

- The Corporation lacked the expertise to manage the project. As a result managers relied too heavily on technical advice from a single freelance IT consultant, despite warnings that this posed a risk.

- The business case was "inconsistent" and "incomplete". It contained misleading assumptions and contradictory data.

- Business users had little input in the design of the system, which suffered from technical problems and did not meet their needs.

- Managers did not challenge the technical solution, despite reservations from independent advisors.

- Executives gave repeated but mistaken assurances that the project was under control, despite difficulties in the pilots

Time Line: Computer Weekly's FOIA Battle

September 2006

Computer Weekly applies to the Housing Corporation for a copy of the Methods Consulting Report.

October 2006

Housing Corporation grants itself an extension beyond the statutory deadline to review Computer Weekly's request.

November 2006

The Housing Corporation refuses to release the Methods Consulting Report, arguing that publication would prejudice its commercial interests. It claimed that disclosure of the report would prejudice the effective conduct of the government's Gateway Review Process. The report, it argued contained personal details that were exempt from disclosure, and that publication could expose it to claims of breach of confidence.

The Corporation agrees, however, to disclose 55 items of correspondence relating to the report.

January 2007

Computer Weekly asks the Housing Corporation to review its decision to withhold the Methods Consulting Report.

Computer Weekly lodges a complaint with the information commissioner.

February 2008

The Housing Corporation reconsiders its objections and publishes the report in full with only minor redactions.

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