It was the largest public sector IT project the UK had ever attempted and one of the costliest.

With roughly £6 billion in contracts, the National Health Service (NHS) put plans in motion to launch its National Program for IT (NPfIT) in 2002. Behind it were some of the industry’s most illustrious players, including Accenture, Fujitsu, and CSC. Even Prime Minister Tony Blair was on hand to announce the project as it officially initiated. 

Yet, nine years later, the NHS IT system failure was national news. Marred by implementation issues, stakeholder opposition, and timeline delays, it was finally scrapped, but not before a massive fallout. Though it never launched, the project ultimately cost the British government (and taxpayers) more than £10 billion.

What happened and what can organizations learn moving forward? Here are the details and lessons learned. 

A Large Government Entity's Failed Implementation

Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.

Behind the NHS IT System Failure: What Happened?

To understand what happened with NPfIT, it’s important to go back to the beginning. 

The overall aim of the project was to modernize NHS’s approach to information technology. This included integrating several automated and digital systems, including:

  • Electronic patient records
  • Virtual “choose and book” services
  • Computerized patient referral systems
  • Computerized prescription systems

Though it officially kicked off in 2002, it wasn’t until 2003 that the NHS awarded contracts. Ten-year contracts were awarded to local service providers covering various regional clusters. 

For a few years, the project moved forward without major issues. However, the first red flag appeared in 2006, when Accenture withdrew from its assigned cluster. What followed were five years of contract terminations, negotiations, restructurings, and personnel changes. 

In 2011, the project finally came to an end. Though total costs neared £12.7 billion, the government admitted the project only generated around £2.6 billion in actual benefits. 

4 Lessons Learned from This Government IT Failure

Since this was a public sector project, there is much documentation on it. Let’s look at a few of the top issues and how your company can avoid similar pitfalls in an enterprise-wide IT implementation. 

1. Project Planning is Critical

Before diving headfirst into an IT project, it’s important to first plan the key details. This involves holding meetings and consultations with stakeholders to map out the timeline and address any initial concerns. 

With NPfIT, it appears that project managers rushed this step, eager to get the project rolling and reap its rewards. Too quickly, they were discussing policy changes, procurement strategies, and implementation steps, without stopping to make sure the foundation was set. 

As a result, the timeframe was hurried and off-schedule from the very beginning. Any preliminary work accomplished was inadequate, and processes were designed without user involvement.

In the rush, there was also a failure to test the systems, which could have alerted partners to core issues before they moved forward. 

2. Your IT Strategy Must Meet User Needs

As you’re determining your IT strategy, it’s imperative to align it with user needs.

In the case of NPfIT, leaders focused more on keeping costs low and ensuring local uptake than on prioritizing user satisfaction. As a result, they rolled out a centralized, cluster-based model which was overambitious and clumsy.

Before long, the project snowballed into uncontrollable proportions, which led to timeline extensions and management issues.

Ambitious IT projects of this scale are already vulnerable to risks, and without understanding user needs, these liabilities are amplified.

For instance, delays related to user acceptance issues can cause once-new technology to quickly become out-of-date.

3. Culture Change Should Come First

The setbacks associated with NPfIT could have derailed any effort. However, it was the company culture at NHS that was the linchpin. 

business readiness assessment could have identified that the NHS was not ready to embrace a change of this size due to cultural issues that led to a lack of:

  • Project leadership
  • Project direction
  • Project resources and budget
  • User training 
  • Privacy controls 
  • Project management skills

Not only were these elements missing from the project, but the NHS also failed to develop a contingency plan to follow if the project went south.

If the organizational culture had been more oriented to embrace change, then resources and budget could have been in place from the start. 

4. Stakeholder Engagement is Required

Stakeholders, including end-users, should be involved in an IT project from the very beginning.

As NPfIT began, feedback began coming in from key figures within the health system, including doctors and general practitioners. Early on, they expressed concern that the system didn’t meet accessibility or use requirements. They were also unclear on the actual outputs t it would deliver.

Considering that reports show many stakeholders were already wary of losing their individual system controls, the stage was set for change resistance and pushback throughout the project. 

An IT Project That Succeeds

Is this failure anecdote making you wonder if you’re prepared for ERP implementation success?

It might be worth second-guessing your approach because the stakes are high. The NHS IT system failure resulted in a cost that equaled nearly five times the benefit.

Our team of ERP consultants can help you develop an effective ERP project plan that includes the success factors that many organizations overlook. Contact us below to learn more. 

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