The National Audit Office has slammed the BBC over its failed Digital Media Initiative (DMI) project, saying the broadcaster was “too optimistic” and the BBC executive “did not have sufficient grip of the programme.”
The DMI was intended to link digital production tools with a central, digital archive for BBC staff to access throughout the production process. Originally the contract was awarded to Siemens in 2008, but was brought back in-house after the supplier failed to deliver the technology and began to hit large delays.
But the DMI was scrapped in May 2013 at a cost of almost £100m to licence fee payers.
The report said: “The BBC was too optimistic about its ability to implement DMI and achieve the benefits. It did not establish clear requirements for the system or obtain a thorough independent assessment of its technical design as a whole to see whether it was technically sound.
“Confusion about the content of technology releases and protracted problems with getting the system to work contributed to a growing gap between technology development and what system users expected.”
Failure to appoint a single senior responsible owner
The BBC’s decision to take the DMI in-house was “high-risk” according to the NAO. And the broadcaster failed to appoint a single senior responsible owner to take accountability of the entire project. The BBC also did not appear to appreciate the extent of the problems until a late stage.
Amyas Morse, head of the National Audit Office, said: "The BBC Executive did not have sufficient grip on its Digital Media Initiative programme. Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound.
"If the BBC had better governance and reporting for the programme, it would have recognised the difficulties much earlier than May 2012."
The report said that because the DMI split responsibilities across various divisions and failed to appoint a senior responsible owner, the differences between the expectations of those developing the DMI system and its intended users were not resolved.
“The BBC executive board noted when it closed the programme the need to ensure clear accountability for delivery in programmes like the DMI.”
Last week, the BBC confirmed that the former chief technology officer, John Linwood, was sacked because of the failure of the project. Linwood was suspended in May 2013 and a spokesperson from the BBC said at the time that it was because he was the sponsor of the DMI project.
The report refers back to the PwC report released last month, which found the project failed to provide clear and transparent reporting on progress against the plan, cost to complete or achieving benefits.
October 2006: Approval of £2.8m for initial mobilisation of DMI
March 2007: Approval of £6.6m for design of DMI
January 2008: BBC Trust approves £82m total budget
February 2008: Siemens wins £79m fixed price contract to design and deliver DMI by May 2009
September 2009: BBC and Siemens terminate contract from July 2009. BBC brings project in-house with target date of completion for February 2011.
June 2010: BBC Trust approves wider roll-out with revised budget of £133.6m
August 2010: Procurement delays push back DMI timetable by five months with final delivery date set at July 2011.
January 2011: NAO reports BBC has made good progress on straightforward parts of system, but faces challenge in the following stages.
February 2011: BBC tells Committee of Public Accounts it is on track to deliver DMI technology by summer 2011.
February 2012: The project managemtn office grades the status of DMI as ‘red’ and suggests termination or re-evaluation of the project.
May 2012: Executive board requests review of costs, benefits and timetable. Whistleblower contacts the BBC Trust saying NAO, PAC and the trust may have been misled about the DMI’s progress.
November 2012: Most work on DMI is stopped pending review
May 2013: Programme permanently stopped and CTO Linwood suspended
The NAO report found a six-month gap between serious deterioration in the risk rating at the end of 2011 and when it was reported to the executive board in June 2012, and the BBC Trust in July 2012.
Diane Coyle, vice chairman BBC Trust, said: "It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future.
"The NAO's findings, alongside PwC's recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system. This will ensure that serious problems can be spotted and addressed at an earlier stage."
Redeploying DMI components
The BBC intends to redeploy some of the successful standalone components from the DMI, but has written their value down to £0 in its 2012-13 financial statements as it had not yet determined their future use.
One component, which was partially completed, was the archive database. The archive database is a cataloguing-and-ordering system for content held on tape and other physical media in the BBC’s archives, which is used by 640 people per week, with 5,200 registered users.
The BBC believes it can reduce its annual running costs from £5.3m to £3m with new contracting arrangements. The broadcaster said it would switch off its legacy solution, which has annual running costs of £780,000, but had not done so by December 2013.
In a technical review for the BBC, Accenture reported that the archive database software was overly complex and the user-interface design was not aligned with business processes. While the BBC improved the database, it has said it does not intend to issue any further updates, despite user requests.
The BBC also bought a large data storage unit for the digital archive to allow files to be transferred around the BBC. The broadcaster has set up a project to asses how it can redeploy data storage units further in the future.
Other DMI components include a replacement music reporting system, which holds information about the use of music in broadcasts for copyright purposes. This solution was a very small element of the DMI project, which had only five users as of December 2013.