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Over and Out February 23, 2014

Posted by Audit Monkey in The Joy & Pain of Internal Audit, The State of the British Nation.
Tags: , , ,

This is going to be a slightly unusual post as I’m going to comment on an IT related matter, which isn’t my usual fare. This is likely to be the way forward in 2014 as the only items that tend to interest the CEO, the Board and the customers alike is when the ‘computer says no’ or the Regulator comes a knocking. As my readers know, I hate regulation with a passion, so IT audit is the way forward. I digress.

‘The Times’ ran a story in mid January 2014 that the British army tried to introduce an online recruitment system, known as Recruitment Partnering Project, in conjunction with Capita at a cost of £1.3 billion. Although Capita weren’t the system developers, those in the know will realise that mentioning ‘Capita’, ‘IT’ and a ‘public sector’ body in the same sentence is a recipe for disaster. Needless to say, the project hasn’t been delivered and a further £50m will be spent trying to make it work.

So why has it been a bigger bog up since intervention in Afghanistan? Blame has been attributed to the wrong provider being selected to build the system and poor project management. One of the more amusing aspects is Capita is being paid £440m over ten years to run the recruitment administration but although the system isn’t in place. The article comments that as the recruitment programme is not operational, there is no financial penalty payable by Capita. Then again, there wouldn’t be, as it isn’t Capita’s fault the go-live date was missed. Also, the Army let go their ‘points of contact’ for their relationship with Capita as presumably, they anticipated it would be all ok and no project delays.

I’m not going to rattle on about the need for proper project management but proper contract management. When I worked for a certain firm, the Board decided they were going to introduce a new financial product to give them ‘competitive advantage’. Programmers were engaged (our good friends from the Indian sub-continent) and they beavered away. Unfortunately, given the complexity of the product, and the time it was taking to crank out the code (even though the right programmers had been hired!), the Board decided to pull the plug. Unfortunately, someone, somewhere, had signed a support contract with a third-party provider. The wise-ones will see what’s coming. There was no exit clause in contract, so the firm was obliged to cough up over £1m per annum for ‘x’ number of years for services that did not have to be rendered!

The rub was this. Our bonus was based on how well the firm performed as well as our own performance. Surely any personal appraisal and performance pay loses its relevance if there is some burk literally wasting millions of pounds of the firm’s money as they didn’t get the contract reviewed by a decent lawyer, and second, assumed that everything was going to fall into place and continue ad infinitum. So next time you have an appraisal, don’t take it personally as someone, somewhere has already ensured the bonus pot has been considerably reduced.


1. ITauditSecurity - February 25, 2014

’bout time you saw the light: “IT audit is the way forward”

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