European Commission blocks scrutiny of wasteful €500m IT spend

The European Commission has blocked the publication of proposals to tackle waste in its €500m IT budget. But the Commission has made startling revelations about the state of its IT, including the admission that more than half its IT costs go unaccounted.

European Commission lawyers have blocked the publication of proposals to tackle extraordinary levels of waste in its €500m IT budget.

But the Commission has made startling revelations about the state of its IT, including the admission that more than half its IT costs go unaccounted. It also admitted to having 2,498 different business systems performing just 15 different business functions, building on revelations about wasted European Commission (EC) IT spending first made in Computer Weekly in March.

The EC hopes to eradicate the waste with a radically revised IT strategy not dissimilar to that being pursued by the UK government, a draft version of which has been released to Computer Weekly.

But more than a year since initial proposals were put before president José Manuel Barroso, the Commission is still working out how to consolidate its systems and bring runaway IT support costs under control, pondering whether it should upgrade 36,000 PCs with €50m of Microsoft software, and how to eradicate conflicts of interest over the allocation of its €500m budget.

Other unsettled decisions include how to overcome organisational obstacles blocking an ambitious plan to harmonise working procedures across all 54 European institutions before proceeding with plans for a cost-cutting European cloud. Its open source software strategy, which may also depend on the EU's ability to collaborate, still remains undecided.


Lobbying pressure

Catherine Day, secretary general of the European Commission, said in a letter to Computer Weekly it would not release draft proposals, because "no final decisions have been taken on these specific issues."

The Commission's directors-general have had options on the table since 7 October 2010, but they have still not committed to eradicate the huge levels of waste in IT expenditure. Day said the deliberations must remain secret until the EC has made its decisions.

"Disclosure of these parts could lead to external interferences which would be highly detrimental to the decision-making process of the Commission, on a subject which has significant security and budgetary implications," she said.

The last significant review of EC IT policy, which led in December to the revision of the European Interoperability Framework, was subject to intense lobbying from the software industry and was finally delivered two years late with critics saying that its principles had been compromised by powerful business interests.

The European Interoperability Framework (EIF) was one component of a strategy led by Commission vice-president Maroš Šefčovič for a Europe-wide public cloud in which IT systems could be shared and wasteful duplication of spending eliminated. Šefčovič directed a consolidation and standardisation strategy.

Šefčovič has backing for his proposal for a European CIO and has, with presidential support, already established a series of inter-institutional governance boards. But just how little progress has really been made was unknown until the release to Computer Weekly of recommendations published by the report of Šefčovič's Task Force on IT.


Runaway IT costs

The Commission suppressed publication of the report. Under the report's instruction it conducted closed-door deliberations over a decision to upgrade to Microsoft Windows 7 software without an open competition for the €50m of public money allocated. Though the Commission has since secured a licensing deal with Microsoft, it is yet to decide whether to actually see the Windows 7 upgrade through.

The EC released the document to Computer Weekly after an appeal for disclosure went all the way to the top of its civil service. But it insisted on redacting the report's core proposals, exposing extensive areas where it has still not reached a conclusion over the future of its €500m IT budget.

Among those topics is the question of what to do about its runaway IT costs.

"In looking at the cost of IT projects, too often the development costs only are highlighted, whereas on average these only account for less than half the total cost," said the report.

"It is essential to properly assess the budgetary impact of a project... a realistic estimate of maintenance and support over the lifetime of the system must be factored in," it said.


Conflict of interests

The report also warned of a danger of a conflict of interests in Digit, the IT arm of the European civil service that handles the allocation of the €500m budget. The problem is that Digit acts as both "technology and service provider" and "advisor and broker". Again the Commission obstructed publication of recommendations on which directors-general have yet to act.

Šefčovič's plan relied on establishing common practices across Europe's entire administrative and legislative organisation, an ambitious initiative similar to that proposed for the UK public sector. Once people work the same way, it should be easier to incorporate them as a level of a commoditised software stack, plugged into the cloud.

Powerful, top-down pressure would be necessary to see the changes through and even then its aspirations did not realistically stretch beyond the imposition of standard business processes and systems within the Commission to those 53 other institutions with whom it is envisaged it may collaborate more closely.

"Without a clear corporate decision, the inertia inherent in a diverse organisation like the Commission will prevail and economies of scale not realised," said the report. "Diversity is nice but it has its price."

The Commission also faced a dichotomy over its use of external consultants. It has seen its fair share of IT project failures and its estate has grown to an unsustainable degree with, for example, 450 different policy lifecycle systems in use in 33 different directorates.

The report concluded after a survey of heads of all 33 directorates that a lack of sufficiently trained staff had created a bottleneck for its IT projects. Some directorates contracted out for their systems but they still could not do this adequately unless they had staff with the requisite project management skills.

With recommendations for a policy on open source software also obscured, the report revealed little about the Commission's position. "There is a growing need to constantly examine the pros and cons of adopting such new software in the Commission so that the most appropriate solution is found," it said.

Overview of EC Information Systems
Business Process Category Number of information systems* Number of directorates used by (of 33)
Policy Lifecycle 450 23
Legislation Lifecycle 47 6
Co-ordination 75 14
Programme Management 119 13
Grant Management 119 6
Communication and Dissemination 422 36
Strategic Planning 59 10
Financial Management 188 27
Procurement 76 13
Document Management 163 27
Asset Management 55 9
Audit 91 13
Human Resources 228 23
IT 397 37
Unknown 9 7
TOTAL 2,496 264
*Some systems perform more than one function
Source: Digit

Read more on IT risk management