Monday, 25 May 2009

NHS IT Does it again - ie fails

Some interesting and terrible developments this past week or so in the world of UK NHS IT.
The Interesting: The CEO of CSC Europe - a title which is more ceremonial than real as CSC is split into non-cooperating regions (or warring fiefdoms as insiders call it) in Europe - has stated that Lorenzo is only two years late. Which it might be now, but that is when compared with the last agreed delivery. Based on the original bids it is at least 4 years late. Not bad eh!
The Terrible: the reported loss of ten of thousands (or is it millions?) of personal health records is a big worry. It was reported here in this blog last year that NHS IT security is not fit for purpose. We have also written about this to journalists on the Daily Telegraph and Times, and Andrew Lansley - Shadow Heath Minister, and the Chair of Parliament's IT Select Committee - none of whom have replied. So I guess they are happy for the status quo to continue.
That notwithstanding anyone who says the security of NHS IT, let alone the system itself is fit for purpose, is either a fool or a liar. The suppliers of this solution and the government and its agents, inlcuding Percy Grainger, have all said it is secure and I will leave it to the reader to decide which of the above they are. Meanwhile GPs are down loading records they have no right to see, and then losing them. It has been reported that there are now over 140 security breaches across a system that has not even been implemented fully.
As mentioned before NHS itself is not fit for purpose. In the time it takes you to read this another victim will be killed in an NHS hospital. These deaths are the biggest unpublicised or championed scandal in the UK today. Where is the champion to fix NHS and save more lives?
Meanwhle the IT system has be stopped right now before more people are either killed or blackmailed or have their identities stolen.
On the subject of killing someone, Computer Weekly reports that in the US that a noted business IT guru Joseph Bugajski, was almost killed by a hospital relying on a system similar to NHS IT that was riddled with misuse and faults. Read about it here. http://www.computerweekly.com/blogs/tony_collins/2009/05/senior-analyst-nearly-killed-b.html
Note that Tony Collins of Computer Weekly, is a hero for standing up to the establishment and those who have tried to silence him because he is uncovering this unsavoury mess. Like the Daily Telegraph in its scoop with MP Expenses he is doing a public service.

CSC Results

It is good to read that CSC has reported 'strong results' for the last quarter, showing a growth year on year. However, what has been overlooked in any reports I have seen is;
1. All businesses except US Dept of Defence showed a revenue decline in Q4 Fy09 compared to Q4 Fy08.
2. There was a tax credit of $36m in Q4 Fy09 compared with a tax charge of $10m in Q4 FY08...making a $45m "swing" in EPS compared to pre-tax profits.
3. CSC has spent large sums on share buy back schemes that do not appear to have improved the share price. What was the motivation behind this expensive blunder?
Isn't it strange how these points have not been picked up by the market analysts?

On the subject of analysts; perhaps they ought to measure the value of IT Services companies on more than just current results. What really matters to the continuing success of any IT Ser is the ability to sign repeat contracts and grow business via pipeline of properly qualified and quantified opportunities. Rather like oil companies they have to have new supplies of business in several stages of development from discovery through to production. If I remember rightly several years ago Shell was lambasted for getting its oil reserves book wrong even though its current results were good.
IT Ser also have 'reserves' that need quantifying in order to measure the future value of the business. The smart analysts working for firms like Citigroup, Stifel Nicolaus, Jefferies & Co, Prudential, UBS, and Credit Suisse, who are all publishing comments and recommendations on IT servcies companies should perhaps look at how this might be accomplished.

Wednesday, 20 May 2009

BT and Global Services - Again, and again, and again

So BT have now reported a massive loss due to the complete shambles at Global Services. As in previous blogs I continue to maintain that BT will continue to be dragged down by GS. BT cannot and will never be able to manage the IT Services business as part of a telco for reasons previoulsy stated. Poor old Mr Livingston the new boss is lumbered. He's a decent enough type, but this is all outside his and his new team's experience. Watch for more losses in next quarter and more 'I didn't realise that....' type statements.
By the way, there's a thundering silence from NHS IT management who must be worried that one of the last two surviving contractors is in deep dooh dooh. Where do they go next for suppliers?

All Telcos that are trying IT Services are finding out their limits. Check out France and Orange Systems. It's the same story there. Contracts bid at rdiculous prices, delivery late, costs not managed, accounting systems inadequate, management systems inadequate, then more losses, bonuses paid out to the management and sales teams, tougher management brought in to fix it. But too late. Plus ca change..............