NHS Computer vs the Ford Online Procurement System - Essay Example

? Project Management - the NHS Computer System v. the Ford Online Procurement System Table of contents Introduction 3 2. Project failure – characteristics and reasons 3 3. NHS Computer System 6 3.1 Overview of the project 6 3.2 Reasons that the project failed 7 3.3 Management of change in respect to project failure 8 4. Ford Online Procurement System 9 4.1 Overview of the project 9 4.2 Reasons that the project failed 9 4.3 Management of change in respect to project failure 10 5. Conclusion - How the failure of the above projects could support learning in regard to project failure? 10 References 12 1. Introduction The success of projects is depended on a series of criteria, all of which need to be met so that a project is completed on time and according to the standards set. In practice, the achievement of the above target is very difficult. Failures in projects are common phenomenon. Despite the efforts made by managers for the limitation of project failures, the problem is still extensive in regard to projects in all sectors. The causes of project failure are reviewed in this paper. Reference is made to two, major, IT projects: the NHS Computer System and the Ford Online Procurement System. Both these projects were well structured, so that risks are minimized. However, they were finally led to a failure, resulting to severe losses for the parties involved. Appropriate literature is also reviewed for identifying the causes of project failure. It seems that project failure is unavoidable when a project is not closely monitored and adequately supported. Also, under certain terms, project managers hold the responsibility for the failure of the project assigned to them. Under these terms, it can be noted that project failure is related to many, different, factors all of which need to be addressed in order for the success of a project to be secured. 2. Project failure – characteristics and reasons Different approaches have been used in the literature for explaining the project failure, as a daily problem in all scientific and industrial sectors. O’Carroll (2003) notes that many project managers tend to focus on planning for eliminating the case of a failure. The above strategy has been proved ineffective. It is explained that ‘two much planning can be a reason for project failure’ (O’Carroll 2003, p.175). Even the requirement for following strictly the deadlines of a project can be a reason for project failure (O’Carroll 2003, p.175). O’Carroll claims that when focusing heavily on the planning phase of the project, project managers do not deal with the failure of the project; instead, a plan should be developed in advance for setting the terms on which the management of the project’s failure will be based. From a different point of view, Wysocki (2011) states that the project failure can result because of unexpected changes on a project. The characteristics of these changes are not clearly presented. It is assumed that any alteration of the project’s initial terms, as included in its plan, is considered as a change of a project. The level at which change can threaten a project is difficult to be estimated in advance. It is assumed that the threat can be higher as the alteration from the project’s initial terms is increased. Holmes (2001) claimed that the causes of project failure can be many. For example, a project is expected to fail for one of the above reasons: when it is not adequately supported by the firm’s top management team, when its plan is not detailed, when the targets set are not feasible, when no provision exists for managing the risks involved and so on (Holmes 2001, p.16). In this way, preventing project failure can be challenging task, especially if the resources required are not available or if the time limits for the completion of the project are too tight, not allowing the identification of alternative practices for facing problems appearing during the development of the project. The ‘Japan Users’ Association of Information Systems (JUAS)’ (Ohara and Asada 2009, p.130) has published a report in regard to the common reasons of a project’s failure. According to the above report, a project has many chances to fail when one of the following terms exists: a) when the requirements of the project are not clearly described (Ohara and Asada 2009, p.130), b) when the resources used for the completion of the project are inadequate or inappropriate, as for example in the case of use of non-skilled staff for developing particular phases of a project (Ohara and Asada 2009, p.130). According to the above view, the project planner holds primarily the responsibility for the failure of the project; the project manager can be also considered as responsible for leading a project to failure when he fails in engaging appropriate staff in the development of the project. Such issue is highlighted in the study of Khosrowpour (1992). The above researcher notes that ‘the lack of knowledge of project management is the main cause of IS projects failures’ (Khosrowpour 1992, p.206). It is implied that highly experienced project managers are able to face all challenges related to a particular project, eliminating the chances for a failure. At the same time, Meredith and Mantel (2011) note that the chances for the failure of a project are high in the case ‘of a poor fit with the firm’s existing technological expertise and/or with its marketing channels’ (Meredith and Mantel 2011, p.559). In other words, a project is expected to fail when the staff involved is not appropriately skilled in terms of technology required or when the marketing practices of the organization are not aligned with the project’s needs in terms of promotion. However, the above views may be criticizes as to the following point: unexpected problems are expected to appear in all projects. The response of project managers to these problems cannot be estimated in advance. It is rather related to the conditions of each case. This means that the level at which even experienced project managers will be able to manage successfully a project cannot be standardized. There have been cases of critical projects that have been assigned to highly skilled and experienced project managers but failure has not been avoided; for example, the cases of NHS computer system failure and the Ford Online Procurement System failure, as presented below. Also, both the above projects have been adequately supported in terms of marketing. It seems that the experience of the project manager or the marketing schemes used for promoting a project are not decisive factors for the success of a project, an issue that is analyzed further in the section that follows. 3. NHS Computer System 3.1 Overview of the project The project related to the development of NHS Computer System was first introduced in 2002. The project aimed to support different sectors of NHS, by allowing the use of IT for executing tasks which are common in NHS, as for example ‘the sharing of medical information and the transfer of X-rays and prescriptions electronically’ (Martin 2011). Many of the project’s aspects, such as the sharing of patients’ personal and medical information, have been negatively criticized, being considered as a violation of patients’ rights. Through the years it was made clear that the implementation of the project would be quite difficult; for this reason, ‘regional initiatives were preferred’ (Martin 2011); in the context of these initiatives, GPs are able to choose the IT system they prefer for supporting their daily tasks (Martin 2011). It should be noted that the project was finally cancelled in 2011, i.e. about 9 years after its beginning (Martin 2011). At this point, concerns have been developed as to which is the responsibility of the Labour party that initiated the specific project (Martin 2011). Another critical issue related to this project is its cost: an amount of ?12.7 bn was spent on this project up to its cancellation, i.e. from the year 2002 up to 2011 (Martin 2011). According to the National Audit Office the actual cost of the project has been higher, since there are still costs that have not been taken into consideration when evaluating the project’s cost (Martin 2011). The causes of the project’s failure would be reviewed before developing an assumption in regard to the factors that led to the specific failure. 3.2 Reasons that the project failed Different views have been developed for explaining the failure of the above project. According to the Labour Party, the unwillingness of civil servants to support the particular project has been the key reason for its failure (Martin 2011). On the other hand, it has been proved that the staff of NHS has not been appropriately skilled for responding to the project’s needs (Martin 2011); still, it seems that the above problem is also related to the lack of training of these employees on the project’s requirements (Martin 2011). By their turn, the civil servants have claimed that the project was not sufficiently supported, meaning the lack of appropriate infrastructure but also the lack of training of the systems’ users (Martin 2011). Maughan (2010) noted that there are 6 key reasons for the failure of the particular project: a) Motives; it is explained that the project has been a top-down project, which commonly has many chances to fail (Maughan 2010). At the same time, the project was introduced just for enhancing the political power of the government and not for addressing the actual needs of NHS in terms of IT support. In this context, civil servants had to manage a system that was introduced by politicians who are unaware of the requirements and the characteristics of these projects (Maughan 2010); b) Lack of clear targets; the targets of any project need to be clearly described in its plan; otherwise, concerns can be developed in regard to the actual role of a project, a problem also appeared in the case under examination; c) the contractual part of the project was been developed rapidly without being followed by relevant activities; in this context, efforts have been made for developing contracts based on the new system without however dealing with the needs of the system, from its ‘beginning up to the completion of its implementation’ (Maughan 2010); d) significantly harsh contractual terms; e) extensive use of multisourcing, f) lack of accountability in regard to the project’s progress and its failure (Maughan 2010). 3.3 Management of change in respect to project failure The failure of the particular project led to the alteration of the government’s targets in regard to the increase of involvement of IS systems in healthcare services. Instead of targeting the implementation of a central IS system for managing data from all NHS hospitals, MPs promoted the following idea: IS systems in each NHS hospital would be chosen locally (Martin 2011). For this reason, NHS has released from the obligation to use a centralized system for managing medical information; rather GPs in each NHS hospital would use the IT system that best suits to their needs (Martin 2011). In this way, the costs of the project would be significantly decreased. In fact, the initial project for implementing a central NHS Computer System has been radically alternated (Campbell 2011); now, local IT systems would support the activities of NHS hospitals across UK. The management of change resulted from the failure of the particular project has been quite effective, in terms of the achievement of the target set, i.e. the involvement of IT systems for improving the quality of services in NHS hospitals. However, the cost of the project failure, meaning its initial targets, has been quite high, so that it would be quite difficult to characterize the specific project as successful, despite the effective management of failure, as explained above. 4. Ford Online Procurement System 4.1 Overview of the project Ford had decided to change its existing procurement system, introducing an online platform through which procurement would be developed quite rapidly. In this way, important time would be saved in handling orders and delivery the product to the customer (Hines 2004). The online Procurement System of Ford was named as Everest (Hines 2002), probably aiming to indicate its value, and was introduced in 2002 (Hines 2002). Two years of preparation had already taking place before that time, i.e. before the official beginning of the project (Hines 2004). The new procurement of Ford would be based on Oracle (Hines 2004). An important aspect of the system was the following: up to its full implementation, the new system allowed the use of the company’s old procurement system, so that delays in processing pending orders are avoided (Hines 2004). A deadline of one year was set for the completion of the project, meaning that the new system would have been fully implemented by 2003, a target that was not achieved (Hines 2004). In 2004, the firm announced the abandonment of the project and the return to the firm’s previous procurement systems, which were continuously in use while developing the new system, as explained above. The cost of the project’s failure has not been announced, probably for not harming the trust of shareholders to the organization (Gonsalves 2004) 4.2 Reasons that the project failed It has been proved that the failure of the particular project has been related to a particular factor: the lack of adequate support from suppliers; indeed, as noted by the firm’s managers, the suppliers of Ford have not been able to fully understand the needs of Everest; as a result, the project was not adequately supported by its users, a fact that led to its failure (Hines 2004). No other causes have been presented as related to the failure of this project, probably since such announcement would reveal operational weaknesses of the organization. It can be assumed that the final cost of the project has been significantly increased, compared to the initial estimations (Gonsalves 2004), and that the firm’s staff would perform better with the previous procurement system. Moreover, it has not been clear whether the system based on ‘Oracle’s e-commerce software’ (Hines 2004) was able to respond to the needs of the organization, at least at the same level as Ford’s existing system, the Ford Supplier Network. 4.3 Management of change in respect to project failure In regard to the above project, the management of change resulted from the project has been rather easy, especially since the Online Procurement System was not fully implemented, but it was used supplementary to the firm’s Supplier Network system. In this context, there was no need for the organization to proceed to extensive changes in regard to the management of orders. As noted by Gonsalves (2004) the termination of the project did not have any particular impact on Ford’s operations; the company would continue its operations with the previous procurement system, the Ford Supplier Network, which has been proved quite effective. 5. Conclusion – How the failure of the above projects could support learning in regard to project failure? Both of the above projects can support learning in regard to project failure. At a first level, the projects have been developed in different sectors: the NHS Computer System project has been a project aiming to improve the performance of healthcare services provided by NHS, an organization of the public sector. Ford’s project focused on the improvement of the firm’s performance through the use of online systems in procurement. The key lesson from these projects’ failure is that project failure can appear in both the private and the public sector; the potential high accountability in the public sector, which has not been clear in the case of the NHS project though, cannot be a factor eliminating the case of failure. On the other hand, the availability of high funds and appropriate infrastructure for the implementation of projects cannot delay or prohibit the appearance of problems while developing a particular project, as fact which has been particularly clear in the case of Ford. According to the above, both projects could lead to the following assumption: the key issue when managing a particular project is not to emphasize on one of its phases, but rather to describe in detail its terms in its plan and monitor closely the development of each of the project’s phases. Also, the targets set, especially in regard to projects that are of high cost, such as the IT projects, need to be feasible, otherwise the chances for project failure are many (Fortune and Peters 2005). At the same time, the failure of the above projects has revealed a critical characteristic of IT projects: these projects are quite difficult in terms of their planning since their progress cannot be estimated in advance, being depended on the performance not only of the individuals involved in the project but also of IT systems (software and hardware) the successful performance of which is quite difficult to be predicted in advance (Yourdon 2002). This means that when having to handle IT projects, managers should be aware of the increased chance for failures, a problem that can be addressed by incorporating a strategy for effective failure management in the project’s plan (Brandon 2006). References Brandon, D. (2006) Project Management for Modern Information Systems. Harrisburg: Idea Group Inc (IGI). Campbell, D. (2011) “NHS told to abandon delayed IT project.” September 22, 2011. The Guardian. Available at http://www.guardian.co.uk/society/2011/sep/22/nhs-it-project-abandoned [Accessed at 14 April 2012] Fortune, J., and Peters, G. (2005) Information Systems: Achieving Success By Avoiding Failure. Hoboken: John Wiley & Sons. Gonsalves, A. (2004) “Ford Drops Oracle-based Purchasing System. Automaker says it will revert back to its own custom-built system.” August 18, 2004. Information Week. Available at http://www.informationweek.com/news/29107138 [Accessed at 14 April 2012] Hines, M. (2004) “Ford scraps Oracle-based procurement system.” August 18, 2004. CNet News. Available at http://news.cnet.com/Ford-scraps-Oracle-based-procurement-system/2100-1012_3-5315058.html [Accessed at 14 April 2012] Holmes, A. (2001) Failsafe Is Project Delivery. Aldershot: Gower Publishing. Khosrowpour, M. (1992) Emerging Information Technologies for Competitive Advantage and Economic Development: Proceedings of 1992 Information Resources Management Association International Conference. Harrisburg: Idea Group Inc (IGI). Martin, D. (2011) “?12bn NHS computer system is scrapped... and it's all YOUR money that Labour poured down the drain.” September 22, 1011. Daily Mail. Available at http://www.dailymail.co.uk/news/article-2040259/NHS-IT-project-failure-Labours-12bn-scheme-scrapped.html [Accessed at 14 April 2012] Maughan, A. (2010) “Six reasons why the NHS National Programme for IT failed.” September 2010. Computer Weekly. Available at http://www.computerweekly.com/opinion/Six-reasons-why-the-NHS-National-Programme-for-IT-failed [Accessed at 14 April 2012] Meredith, J., and Mantel, S. (2011) Project Management: A Managerial Approach. Hoboken: John Wiley & Sons. O’Carroll, P. (2003) Public Health Informatics and Information Systems. New York: Springer. Ohara, S., and Asada, T. (2009) Japanese Project Management: KPM - Innovation, Development and Improvement. Singapore: World Scientific. Wysocki, R. (2011) Effective Project Management: Traditional, Agile, Extreme. Hoboken: John Wiley & Sons. Yourdon, E. (2002) Managing High-Intensity Internet Projects. Upper Saddle River: Prentice Hall Professional. Read More