Tuesday, April 11, 2006

The NHS IT Backlash Begins

It was only a matter of time before the NHS Direct General of IT, Richard Granger's, approach to vendor procurement and management resulted in a severe backlash. Richard Granger is notorius for taking a no nonsense (read "thou shalt...") approach to managing suppliers. The NHS's National Programme for IT (NPfIT) has serious delivery problems documented elsewhere. What interests me is how this is affecting the whole IT sector, for whom the Healthcare sector should be an exciting space in which to add immense amounts of value, and who were falling over each other to win apparently lucrative contracts.

Recently the chain of consequences began in earnest with Accenture (with major delivery responsibilities to the NHS) announcing losses of nearly half a billion pounds on the programme. To put that into perspective, Accenture's partners will not receive a bonus this year- an unprecedented state of affairs. The share price is down around 15%. As the blame unravelled, things became even worse for their business partner on the programme, iSoft, with their share price in freefall. At one point this week, the company once worth £1bn was valued at only £300m.

All of this is unsustainable for the IT sector and this morning I woke up to the news that in an open letter to Computing Weekly Magazine, 20 computer scientists have called on MPs to carry out an independent review of the £6.2bn programme. The Department of Health remains resolute that the Healthcare IT delivery is robust and resiliant. Meanwhile, the cracks are growing on the other side of their contracts.

Watch this space.

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