RSS feedsThe replacement of Accenture with CSC in the £6bn National Programme for NHS IT (NPfIT) reflects more on the supplier than the programme, but raises questions about continuous delays.
Accenture has pulled out of contracts, worth a total of £2bn, to deliver upgraded hospital systems for two of the five areas into which NPfIT is divided.
CSC, which is already responsible for the North West and West Midlands (NWWM) region, will take over from Accenture in January 2007.
Accenture’s NHS deals have been dogged by problems. Despite delivery of a large number of GP systems in its East and North East regions, the firm has only delivered two of the major hospital systems on which the programme relies and which represent the most lucrative area for prime contractors.
The financial implications for Accenture are not new. In April it set aside $450m (£240m) of profits against future losses on its NHS contracts.
The firm denies it has failed the NHS, and claims it makes more sense for a single company to manage iSoft, the second-tier software provider for both its two regions and that of CSC.
‘This solution is better for the programme in terms of concentrating management focus, particularly for iSoft, in the hands of one supplier,’ said Accenture’s European government business managing director Liz Astell.
CSC says the switch will not add to delivery delays.
‘We will be using the same approach we have used successfully in the NWWM region to ensure that no momentum is lost and that we accelerate the pace rather than slow it,’ said CSC European president Guy Hains.
Supplier issues have affected all levels of the programme. All five areas are behind schedule, iSoft has well-publicised financial problems, and the second-tier supplier has been switched in both London and the South. But Accenture has performed particularly badly, say analysts.
‘A number of suppliers were ready to step into the deals so the situation says more about Accenture’s approach to the contracts than about the programme,’ said Ovum analyst Tola Sargeant.
NHS insiders say significant questions remain unanswered.
‘The question is how the Accenture situation was allowed to go on so long, whether CSC is any better at project management, and whether its resources are now stretched too thin,’ said one senior NHS IT director.
Under the new agreement Accenture will continue to roll out electronic X-ray systems and will retain £110m of the £173m it has been paid for systems delivered.
NHS IT director general Richard Granger says it was not worth pursuing Accenture for more significant penalties.
‘Dysfunctional and protracted litigation would be damaging to patients,’ he said.
Industry insiders say the actual cost to Accenture will dwarf the £63m to be repaid.
‘They will have sunk hundreds of millions of pounds into the programme that are now unrecoverable,’ said a senior source.
Accenture and the NHS in 30 seconds
* Accenture's two major NHS contracts for the North East and East regions of the National IT Programme have been taken on by rival supplier CSC
* Of the £173m it has been paid so far, Accenture will retain £110m. CSC's deals are worth the £1965m remaining on Accenture's original deals
* The two suppliers have been working together for a number of months to effect a smooth transition and full handover will be completed in January 2007
* In the two new regions CSC will continue to use the iSoft hospital administration package contracted to Accenture
* NHS IT director general Richard Granger said the changes proved the contracts were working. 'If you look at the procurement documents from 2003 you see such risks predicted and these transactions are a manifestation of actively managing risks of this type,' he said.
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