Shared IT costs DoT £81 million

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The Department of Transport is on course to lose £81 million instead of saving £57 million as first estimated due to poor implementation of a shared IT system.

The National Audit Office (NAO) said the problems were due to changes in initial cost estimates, inadequate contract management and poor initial implementation. It has contributed to a situation where the programme will cost over £120 million, with savings of only £40 million.

The Department's original plans were to build on existing processes and IT systems to develop shared services. It used an existing contract with IBM and rollout was set for last month.

In practice, the Department did not agree on common business processes and initial estimates were much too optimistic. It was also said that supplier relations were poor and the system was poorly tested, leading to instability.

"It is disappointing to see a programme which aimed to improve the efficiency and effectiveness of a department leaving it on current projections some £80 million worse off," said Tim Burr, head of the NAO.

"Departments need to be realistic about the challenges of implementing shared services and to manage suppliers effectively," he added.

Since April 2007, the Department was trying to resolve problems with IT system stability and performance of the 'Shared Services Centre'.

Burr said: "Over the past year the Department has made efforts to improve the performance of the Shared Services Programme and it cannot afford to fail."

So far the Driving Standards Agency, Driver and Licensing Agency and the central Department were using the shared services. The Maritime and Coastguard Agency planned to use it later on this year.

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