The Project Failure of NHS IT System - Case Study Example

THE PROJECT FAILURE OF NHS IT SYSTEM The most concentrated field in the business organizations and management literature is project management, and this field is considered as a key tool for the implementation of strategies. Project management approaches are employed in different organizations for the achievement of results that are desired. The projects are arranged through the broad system, and this broad system is defined by project management. Project management makes sure the completion of tasks and objectives within specified scope, cost and time. There are many developments related to project management and these developments have been made in order to enhance the capability of project and for the completion of task in a particular time, cost and scope. On the other hand, the concentration of prior project management strategies is only based on triangle factors (cost, time and scope); even the adaptability of these factors is more persisted by new strategies due to the necessities of non-constant dynamics (Bányai, n.d). In 2002, a National program was launched by United Kingdom in order to implement the information technology system in health services sector. The purpose of this implementation was the achievement of quality services for patients. Through this national program UK wanted to make sure the access of NHS community to summarized and detailed care records, and the community could get these detailed care records through interrelated information system. However, the project failed, and government lost £11.4 billion. Even, the cost of project rejection was predicted up to £6.4 billion, but it was far beyond predicted obstacles. The project had to face the delay of two years, and this delay occurred due to the suppliers’ worst management and technical matters (Syal, 2013). Project’s scope was clearly defined, but it was not arranged in expected manner; therefore, it had to be winded-up with great arguments of stakeholders (Leach, 2011). After proper analysis, it was identified that there was a requirement of the employment of adaptive project management strategies in health service sector of NHS IT. The continuous evaluation of constantly changing environmental factors is an important part of adaptive project management strategy. As compare to any other approach, this approach of project management is more practical for the operational, competitive and economic conditions. It is found that investment in long term planning and costing has failed due to the changing factors of cost and time. Therefore, managers must have to change project’s specifications accordingly. Managers for this reason prefer to pursue the adaptive project management approach. In this research, the suggestions have been discussed that should have been considered by the management for the success of NHS IT project, and the adaptive approach of the project management should also have been considered; because of the effectiveness of the approach. This approach incorporates the solutions for the non-constant environmental factors, and makes the execution of objectives successful. LITERATURE REVIEW A successful project management is different - to some extent – from the other areas of knowledge or activity. Attainment of goals is not the only purpose of the successful project management. However, a successful project management is about the achievement of desired objectives within specified scope, cost and time. In successful project management, it is considered that if the project is not delivering the desired results in the defined limitation, then it is an unproductive project. In another view, it is considered that in life cycle the position of the company derives the ability to properly come up with project management strategies. There is an existence of two types of companies: one type always tries to develop its position in order to meet-up with the non-constant environmental factors whereas, second type of companies always pay consideration towards the construction of future market. Strategies are shaped for the construction of future, and the forecasting of future challenges depends upon the ability of the company. In prior stages, development of positioning strategies was made for the future forecasting, and in second phase, strategies were prepared for the development of own market, and for the preparation of these strategies visionary approach was used. Moreover, the development of non-productive and productive strategies was made, and these developments were based on the risk dealing abilities of company as well as on the company’s proposed style of risk dealing. Furthermore, set of the non-productive strategies is formulated by the companies for maintaining and dealing with high risk factors. Organizations also formulate productive strategies and these strategies are completed for dealing with lower level of risk. The development of four strategies that is based on two dimensions is being presented below: STRATEGIES: (Banyai, n.d.) Achievement of reliability among positioning and construction strategies is an important task. The successful project management always attempts to formulate the strategies for unstable situations. Hence, the successful project manager has full control on bureaucracy, and has ability to get benefit from information technology systems, along with the ability to explain project from the beginning, take advices of stakeholders, and does not concentrate on limited solution, but always seeks for unlimited deliverable for each situation. It is necessary to mention that the kind of strategy being used. It can be either adaptive or traditional. Project management system must be able to meet the defined cost, time and scope and these three factors should be used as the benchmark for success measurement. These factors should be from the foremost risk sources because this is required for the fact (Flyvbjerg, 2006). However, all activities through-out the project from the starting of the plan, associating plan, targets and delegations are based on different approaches that are based on the natural evaluation of system, and this order is described as follow: Project Management Approaches: (Banyai, n.d.) All resources are considered necessary for the completion of the project and these are characterized as the cost of project (The Whiteboard, 2012). The assessment of cost control, cost budget and cost estimation is required throughout the project and for the success of project assessment of these three levels (cost control cost, budget and cost estimation) is mandatory from the beginning to the end of the project. Cost estimation ensures the cost prediction. The estimation of cost is done to deliver the project’s requirements and these estimations are based on the prior performance of the project. Cost estimations can be done through detailed and conceptual estimation. Conceptual cost estimation, that is also known as parametric estimation, requires the project related historical data and statistical information. These estimations are not based on detailed examinations, but based on conceptual framework and presented at the beginning of the project. Detailed cost estimation is a process of different activities through which each item’s cost is calculated separately by the use of techniques and tools and these are requirements of cost estimation. Another, responsibility of managers is to perform cost budgeting; in order to elaborate the overall cost of the project. Cost budgeting is used as a parameter for the completion of project. (The Whiteboard, 2012) Tools that are utilized for the effective development of cost budget are as follows: Cost aggregation, Reserve analysis, Parametric estimation and Funding limit reconciliation. Now, the third and last stage that requires continuous evaluations is cost control. In project management cost control ensures the success of decisions that are taken in first two stages, and updating of these decisions for the effective risk management. Through controlling the factors, that are cause to create discrepancy in allocated cost; the cost control can be managed. For the cost controlling purpose, it is also necessary that all activities are determined that require responses, and it should be determined when cost exceeds its defined limit. For the allocation of time to each activity there must be a project manager that would be managing the time of the activity. Critical activities and those that have influence on other activities should be allocated and designed with great time consideration. Through the usage of numerous software, project time can be determined as the most likely time, delayed time, critical time and general or normal time for the project. Cost and time are interrelated and time is positively associated with cost, so if there is an increase in project’s duration then the cost will also increase automatically. It can be determined through the scope of project that what needs to be done, how will be done and why should be done (Hoel and Mason, 2012). The project manager should focus on ensuring that critical activities are completed within the time so that the overall project is not delayed. In addition, the explanation is far from that is explained, even similarities between organizational goals and project goals are defined in the scope of project. During important stages, critical aspects and activities are brought together in the scope of project that in result have an influence upon time and cost requirements. In the academic literature these three factors have already been explained in detail. On the other hand, managers understand the importance of these factors when they get fail to line-up the cost, time and scope of the project. There are many measures through which the result of the project can be determined, and stakeholders and risk management are two of these forms. The feedback of stakeholders protects the project from failure and project does not face the pressure of scope, time and cost, but if the acquired input is ignored then managers may face the difficulty in the effective management of these three factors. Causes that can turn a successful project into failure are: Error in designing Complexity of the project, Less knowledge of ground realities, Non-stable project scope, Use of out of order systems in contracting and procurement, Unprofessional conduct of stakeholders. Therefore, if there is any lack in these activities - that are performed to achieve the success of the project - the project will be unsuccessful ultimately and due to the same reason project would face delays and excessive cost (Bordat et al, 2004; Singh, 2009; Cerpa and Verner, 2009; and Keil and Montealegre, 2012). CASE ANALYSIS: Cost enhancement, legal actions, financial claims and delays are some factors that burdens the project and occurrence of these factors result in the failure of the project. In the case of NHS IT project, there were many problems that cause the project failure and derived from different views, and these perspectives are being mentioned below: (Maughan, 2013) As it has been mentioned in the figure presented above that there were many reasons because of which the project of NHS IT had failed. It is clear that the project was not discussed in detailed and was not explained effectively. Even, the vision was not defined clearly. Stakeholders that were responsible for playing their role did not play and contribute enough to ensure success of the project. For example it has been reported by the national accountability office in 2007; that the resistance was created by the staff of NHS in the implementation process of the project. It is also encountered that the contract of Fajitsu was cancelled through the project. The claim was proposed by the NHS that Fajitsu Company is not able to serve the required products, but the company needed the extra requirements for proper implementation, and these requirements were expressed as “New Requirements” (NOA, 2011). These implementations were enough to question the clarity and accountability of the project’s contract deployment system. Risks in the completion of the project were unreliable and also resulted in the delays of the project. In 2007, the concern is showed by the suppliers that NHS did not prepare or have any plan related to the delivery system. Information that was provided through NHS as well as the suppliers of NHS could not be resolved. Although, NOA analyzed that the NHS requires a defined system for the purpose of information sharing and coordination. Due to all these reasons the projected and incurred amount was similar but still the number of systems that were defined in contract could not be supplied to NHS (NOA, 2011). Hence, by the passing time, the project was also not able to adopt the non-constant requirements. Requirement that occurred due to the lack of the adaptability was to compromise the core objective which was the availability of the information, and the set of unusual program’s specifications to the each patient of NHS. There was a requirement of the complete system - that was a part of flexible project management - for the construction of modern dimension. RESEARCH AND RECOMMENDATION Research has identified that there are many factors that have influence on project’s success, and these factors contribute to the project failure. Moreover, it has been highlighted that for the success of the project, the vision should be clear and it ought to be communicated to the stakeholders without any ambiguity. There is no ambiguity in understanding the importance of coordination, management and agility in the project through which the broader ranges and means are being covered. It is important to mention that projects either small or large both need proper concentration and the project manager should focus on the trio factors that are time, quality and cost. But, the failure of NHS IT can be observed clearly regarding these characteristics. Observation of such projects in which the wide range of stakeholders is involved and their aim is to modernize the industry should be done carefully. The complete input should have been obtained for NHS IT through the doctors and stakeholders because the project was designed for the development of the new dimension and doctors and stakeholders were going to get benefit from the project services. In 2006, as recommended by NAO (2011) for the quick completion of the project, the project must be updated according to the requirements of continuously changing environment. Therefore, quality of output should not be compromised; instead of the comprehensive adjustments should be made to resolve the milestones of suppliers. If it is said that NHS IT project’s initiators should had learnt some lessons from the failure of prior technological projects then it would not be wrong and would have benefited in completing the project (BBC, 2013b). PART 2 INTRODUCTION: Importance of project management in different business areas cannot be denied. Project management assures the completion of project in a specified time, cost and scope (Atkinson, 1999). Failure of many projects occurs because these are not furnished within given time, cost and scope, and these issues can be resolved by the help of project management. The failure of NHS IT project is discussed in order to elaborate the importance of these issues. Projects that are completed in given time, scope and quality are considered successful, and those project that lack behind the particular time, scope and quality are treated as failure. Except these three factors (time, scope and quality) budgeting is also considered very important if there is a project that exceeds from the given budget then such a project is considered as unsuccessful. Failure of many projects can be seen which occurs due to these reasons. Restrictions of these projects make them unable to meet the requirements (Cleland, and Gareis, 2006). The failure of NHS IT project is taken into consideration and therefore, in order to cope-up with the reasons of failure, a strategy is being proposed to manage the project in a better way. In this report causes of NHS IT project’s failure have been discussed and report presents the current state of the project, and some improvements have been proposed to manage the project appropriately if the project starts again. Project is separated or broken down into small chunks in order to meet the requirements of project and to manage the projects in a standardized manner. Through these smaller sections monitoring of the project can be done appropriately. This technique of project management is known as Work Breakdown Structure. This report also presents the project risks, assumptions of the project and dependencies. This report also uses different project management approaches to manage the project better and complete it within the time and cost. Report also presents the major responsibilities related to the project; and communication strategy for the project. Report also elaborates the project sponsors’ reviews and importance of their satisfaction as well as satisfaction of stakeholders. The purpose of the project is to revolutionize the healthcare industry and for the successful completion of the project there is a need of appropriate project management. Therefore, some change management strategies have been proposed that must have been considered during the project management. Finally, closing of the project is also being discussed in the report. PRESENT SITUATION Even the project has been discarded two year back, but still an increase in cost can be observed clearly that occurs due to the failure of NHS IT project (BBC, 2013a). NHS IT project started in 2002; in order to transform the healthcare industry. The purpose of NHS IT project was to serve the healthcare industry with technological advancements which includes: the availability of electronic records and digital scanning to different hospitals through incorporated IT system. Although, failure occurred due to many reasons but the major was the pathetic and improper project management (Syal, 2013). For the completion of the project in specified and defined time, scope and quality and in order to achieve the objectives, there is a need of strategy that has been formed in this report. PURPOSE OF THE PROJECT The core objective of the project was to introduce the integrated IT system in numerous hospitals that could help the management of hospitals to resolve the different cases. Through this integrated IT system, one database is created by which all hospitals and healthcare firms can easily access the historical data and information of their patients. The project plan was to improve the quality of information in healthcare industry and the purpose was the reorganize the system that was used by England for the use of information. It is mentioned by MPs in the committee of public account that even though, the project could not achieve its objectives, but it could be completed successfully if it was correctly managed (Syal, 2013). BENEFITS OF THE PROJECT: The benefits of the project - if it was completed - are being mentioned below: Enhancing the capability of healthcare industry’s employees so they can provide the better information by using technology. Even they can resolve the cases by watching- out that how other healthcare firms and hospitals treated with the problem. Quality service could be improved through the technological usage. Digital scanning, electronic records and other sort of technology could be used on the different phases of healthcare sector in order to improve the service quality. Whole information that is required for the treatment of patient could be accesses by any healthcare firm and hospital all over the country through the integrated IT system. PLANNING OF DIFFERENT IMPORTANT STAGES Planning of the project is done in such a manner that the project is divided into small chunks so project manager can easily monitor each phase of the project and assess that either the project will be able to meet the deadline or it needs additional resources to complete within the deadline. For successful completion of the project; managers usually use the method of dividing the project into small tasks and chunks and this method is termed as Work Breakdown Structure (WBS). Therefore, the planning of different stages during the project is considered as important for keeping the project on track, and the purpose is to complete the project in defined time (Hamilton, 2004). If the project had been split into various milestones and method of WBS had been used, the NHS IT could have been put in to practice successfully. The segregation of project’s activities could be done through work breakdown structure and the project management would have been able to complete the project within the item. Various milestones that have been developed related to the project have been shown below: Important Stages of the project Categorize the areas of NHS IT project that need improvements. Communicate the important aspects of project and their importance with stakeholders. Plan preparation regarding the required technological changes. Inviting tenders. Choosing and short listing from received tenders. Deal confirmation. Identify the requirement of the equipment. Implementation of technology in diverse hospitals and healthcare organizations. Database creation. Inserting patient’s information from numerous healthcare organizations. Inserting employees’ information from numerous healthcare organizations. Combining information technology in the different sectors of healthcare organizations. Completing installation and assurance of integration of all healthcare firms. Offering education or training to doctors, employees and staff. Conveying the benefits. Winding-up the project. ASSUMPTIONS, RELIANCE AND UNCERTANITY Assumptions: In order to complete the project within defined time, cost and quality, numerous assumptions have been presented made throughout the project and these assumptions are: The core object of the project was the installation of integrated information technology system through which all healthcare organizations and hospitals can access the required information of patients. One suggestion that is proposed for the successful installation of IT system is the hiring of a firm that has specialization in IT. Once the integration of the system has been done successfully, the data should be inserted into database through the same specialized company. It has been proposed that the management of integration of IT database and software should be the responsibility of the hired specialized firm. Dependence: If the project had been divided into diverse stages using WBS then it could have been completed successfully. Therefore, by implementing the work break-down structure project successfully can be finished in the small duration of time. According to Hamilton (2004), if the work breakdown structure is used, then critical activities of the project could have been identified and then more resources could have been used on these critical tasks to complete the project within the deadline. The table below presents some important stages of project with project dependencies have been mentioned. Important Stages of the Project with Their Dependencies Task Important Stages of the Project Predecessor 1 Categorize the areas of NHS IT project that needs improvement 2 Communicate the important aspects of project and its importance with stakeholders. 1 3 Preparation of plan regarding the required technological changes 1,2 4 Encouraging and inviting tenders 3 5 Choosing and short listing from received tenders 4 5 Deal confirmation 5 7 Identify the requirement of the equipments 2.3 8 Implementation of technology in diverse hospital and healthcare organizations 6.7 9 Inserting patient information in numerous healthcare organizations 3.8 10 Database creation 9 11 Inserting employees information in numerous healthcare organizations 10 12 Completion of integrated information technology systems in different sectors of healthcare organizations should be done. 11 13 Installation completion and assurance of integration of all healthcare firms 12 14 Offering education or training to doctors, employees and staff 13 15 Conveying the benefits 14 16 Winding-up the project 15 Risks and Uncertainty: The successful completion of the project can be damage due to the uncertain factors and risks involved in the project. For the successful completion of the project’s objectives there is a need of assessment of uncertain and risky factors that can hurt the project’s objectives. In order to complete the project successfully, managers should investigate uncertainty and risks that exist in the project and then some essential steps should be taken to cope up from these risks (Lewis, 2006). Some project related risks are as follow: May the project demand extra investment and if it cannot attain its objective in defined cost. Therefore, it is significant to analyze that how much the project is important and what benefits can be delivered after completion. If the project does not attain its objectives in defined time then the cost of the project will increase ultimately, and management has to pay more salaries that have been estimated. The other risk is the management of the quality, if the project is not completed with the defined quality then it will not deliver its benefits and in the case of quality failure management will not be able to get any benefit from its investment. If healthcare firms do not provide the quality services or the health care industry is not able to provide services in return it will damage the quality of service that will be provided to the patients through project. Inappropriate knowledge of the new technology and lack of understanding of the usage of new IT system will also hurt the service quality of the project. There are many things associated with the new technology due to which the time and cost of the project can be increase. MANAGEMENT APPROACH The project management approach is considered important for the successful completion of project. This approach plays a critical role in the project completion and used by the management. Project management approach that is associated with NHS IT project is described as follow: Introduction In the introduction stage the scope of the project, objective of the project, goals and the nature of the project, project requirements, and outcomes of the project are explained, and through the assessment of these detailed explanations managers can analyze the accomplishment and the development of the project more appropriately. Planning During the stage of planning cost, time, quality and other resources that were needed for the project completion were discussed. The cost that was anticipated for the NHS project was £6.4 billion, the expected time duration of the completion of the project is 8 years. Implementation: During the stage of implementation project will be started and divided into various stages through the implementation of work break-down structure. Because by dividing the project into different small stages, the progress and the success of the project can be evaluated and determined appropriately, which is not possible without dividing these milestones. Monitoring and control Monitoring and controlling are necessary aspects for the success of any project. Therefore, for the completion of project in defined cost, time and scope there is a need of close monitoring and some steps should be taken in order to control the project. For the successful completion of the project, it will be separated into small chunks through the work break-down approach and then the project will be measured closely. There will be constant communication between the project manager and the hired IT firm. For the assurance of the objective’s achievement, constant monitoring and controlling will be the responsibility of the project manager and he will watch-over the each activity throughout the project. Conclusion After the completion of the project, benefits can be served to the healthcare firms and hospitals. Hiring of the new staff will be done after the implementation of new IT system so the staff can be acknowledged with the technological usage. MAJOR RESPONSIBILITIES Major responsibilities will be assigned to the project manager. Further, in order to make the project successful and for the observation that all objectives and aims of the project have been achieved the involvement of the department of NHS IT will be there throughout the project. For the improvement of the service quality of health care sector different people will be hired from NHS and these people would be recruited with the hired group. COMMUNICATION AND REPORTING OF THE PROJECT The importance of reporting and communication cannot be avoided or neglected. Through proper communication the importance and reasons of project, implementation can be explained to those who are involved in project completion. Project had to face failure due to many reasons from which one was the lack of communication. Project stakeholders were not communicated with reasons and at the time of project termination, there was lack of communication with stakeholders. Therefore, for successful project completion the plan should be communicated and report should be formulated properly. At the beginning of the project, the project requirements should be communicated to the stakeholders, and stakeholders should be informed with the progress of the project. These steps will improve the satisfaction level of stakeholders. ASSESSMENT OF PROJECT’S SPONSORS The project is essential for the service quality improvement in healthcare sector and in order to precede the project there is a requirement of a handsome amount that can be achieved from stakeholders. For the success of the project, satisfaction and suggestions of the stakeholders are important at the time of project formation and implementation and cannot be avoided. MANAGEMENT OF TRANSFORMATION Through the proper management of transformation; project can be completed effectively. Healthcare sector has a great influence on economy and the transformation of this sector can have huge impact on economy. A change management plays an important role in organizational success, and if the transformation is not implemented properly project has to face failure. PROJECT’S CLOSURE After the successful completion of the project, the project will be closed, and the training material will be provided to the staff and with this provided material technology can be used in better ways. The delivery of the training material will be done at all levels of the organization. In addition, the benefits of the projects will be delivered in this time duration and after the delivery of these deliverables the project document will be created in order to close the project. Statement of Scope (Version XX) Title: NHS IT System Date: Prepared By: Project’s Explanation: NHS IT system was introduced in 2002; the aim of this project was the implementation the IT system in the industry of healthcare. Dependency on manual procedure can be avoided through this system, and in the case of successful completion record of patients’ health related problems and treatments can be accessed by all healthcare organizations and hospitals. The estimated cost of the project was £6.4 billion and the completion of the project was expected in 2010 (NAO, 2011). Project has been abandoned but still cause of money loosing that is being achieved from taxes (Syal, 2013). The failure occurred due to mismanagement of the project (Maughan, 2013). Hence, in the fundamental report, comprehensive strategy has been analyzed in order to collect the desired project benefits (Syal, 2013). Characteristics of the Project: 1. The objective of the project was the availability of medical history and detailed care records of patients to the hospital community and physicians. 2. The delivery of patient’s records and medical history to the healthcare organizations through the integrated IT system. Benefits of Project Management: Lesson-learned reports, scope statement, final project report, team contract, cost baseline, charter, schedules, business case, work break-down structure, presentation of final project, status reports, and other documents that are necessary for project management. Criterion of project success: The success of the project depends upon the attainment of characteristics that have been mentioned in above section and the achievement of these characteristics should be in defined time frame, scope and cost. The project’s success also depends upon the timely achievement of milestones. REFERENCES Atkinson, R. (1999), “Project management: cost, time and quality, two best guesses and a phenomenon, it is time to accept other success criteria”. International Journal of Project Management, vol.17, no. 6, pp. 337–42. Bányai, E. (n.d.), “Project management strategy by business approach.” Available from http://apportal.ey1.dedicated.nines.nl/wp-content/uploads/2010/07/Project-management-strategy-by-business-approach.pdf [Accessed 17th February, 2013] BBC. (2013a). NHS IT system one of worst fiascos ever, say MPs. Available from http://www.bbc.co.uk/news/uk-politics-24130684 [Accessed 17th February, 2013] BBC. (2013b). Costs of failed NHS IT project continue to rise. Available from http://www.bbc.co.uk/news/health-24140967 [Accessed 17th February, 2013] Bordat, C. et al., (2004). An analysis of cost overrun and time delay of INDOT projects. Joint Transport Research Program. 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The Register, Available from http://www.theregister.co.uk/2011/09/22/nhs_it_fail/ [Accessed 17th February, 2013] Lewis, R. (2006). Project Management. McGraw-Hill Professional: London. Maughan, A. (2013). Six reasons why the NHS National Programme for IT failed. Computer Weekly, Available from http://www.computerweekly.com/opinion/Six-reasons-why-the-NHS-National-Programme-for-IT-failed [Accessed 17th February, 2013] NAO. (2011). The National Programme for IT in the NHS: an update on the delivery of detailed care records systems. Available from http://www.nao.org.uk/wp-content/uploads/2011/05/1012888.pdf [Accessed 17th February, 2013] Singh, R. (2009). Delay and cost overrun in infrastructure projects: an enquiry intoextent causes and remedies. Delhi. Syal, R. (2013). Abandoned NHS IT system has cost £10bn so far. The Guardian, Available from http://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn [Accessed 17th February, 2013] The Whiteboard. (2012). The Practical Project: Cost Management. Available from http://newhiteboard.com/2012/01/18/the-practical-project-cost-management/ [Accessed 17th February, 2013] Read More