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The BBC, £100 million of public money and digital disaster

Stuart Lauchlan Profile picture for user slauchlan December 17, 2013

Life was simpler once

The other day on Radio 4, a BBC interviewer doing a color piece on the Universal Credit debacle which has seen £40.1 million of IT work written off, asked incredulously if this sort of sum was typical in a big IT failure.

To which the response should have been: actually, Universal Credit pales in comparison to one major IT botched job that’s wasted over £100 million of taxpayers money. And that’s the BBC’s own abortive Digital Media Initiative (DMI) - or as it became known internally at the corporation - Don't Mention It!

When it began back in 2008, DMI was meant to provide a completely digital platform for BBC programming and archiving, ending the need to store video tape and allowing for clips and complete programmes to be uploaded, downloaded, edited or archived as necessary.

After the project was finally cancelled in May this year - following embarrassing revelations that DMI failed completely to support coverage of Baroness Thatcher’s funeral - the BBC commissioned PricewaterhouseCoopers to conduct an investigation into what had gone wrong at a cost of £250,000 and publish a report.

That report - which the BBC made available today - may not be regarded as money entirely well spent by some in the upper echelons of the UK state-funded broadcaster as PwC’s main conclusions are savagely critical of the BBC itself and its lax project management.

In February 2008, the BBC entered into an agreement with Siemens to deliver DMI. Following a series of delivery delays, the BBC and Siemens reached a mutual agreement to terminate the DMI contract in 2009.

In June 2010, the BBC presented a revised DMI Business Case to the Trust which was subsequently agreed, bringing the delivery of DMI under the control back in house at the BBC - and that’s where things really spiralled out of control.

PwC criticises the governance structure or lack thereof for the DMI:

The structure lacked an executive steering board (ESB) which could effectively challenge the progress of DMI against agreed quality, time and cost metrics. The DG Finance Committee undertook some elements of the role that an executive steering board would have – namely to ensure the practice of good financial governance by enforcing BBC Investment Policy and Guidelines.

However it is our view that the composition of the DG Finance Committee meant that whilst it was appropriately skilled to assess DMI from a financial cost and benefit perspective, it is not clear that they had the ability to challenge progress on the process improvement aspect of DMI.

The CTO attended the DG Finance Committee to provide technology expertise. However as the DMI Project Sponsor, this meant that the DG Finance Committee did not have sufficient independent technical capabilities needed to challenge progress on DMI from a technology perspective.

DMI did not provide clear and transparent reporting on progress against plan, cost to complete, or delivery of benefits to enable effective decision-making within the corporate governance structure. Whilst the overall status of DMI was known formally through the quarterly reporting provided by the BBC PMO, confidence amongst the BBC Executive that DMI would eventually deliver was not supported by evidence of detailed specific remediation plans.

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Simple, huh?

There was also too much focus on technology for technology’s sake and not on the transformational aspects of the initiative:

DMI sought to change and standardise working practices across all of the BBC based on implementing leading edge technology that the BBC needed to research and develop in conjunction with third parties. Delivery of a single set of processes and the required change in business operations were a pre-requisite of successful delivery of the benefits recognised in the 2010 Business Case.

DMI reporting focused on technology risks and issues rather than the ability of DMI to drive operational change to business practices in the BBC. This could have resulted in senior management taking a view that DMI would eventually deliver the anticipated benefits.

The BBC Executive’s view of progress could have been more clearly informed by taking into account reporting by projects dependent on DMI (such as North and Vision DQF) of the impacts on the business coming from delays in delivery.

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The consulting firm also describes DMI’s project reporting arrangements as not fit for purpose because:

DMI did not consistently follow the project reporting arrangements set out and agreed in the Business Case.

There was a lack of clear and transparent reporting around progress against plan, cost to complete, management of issues and risks, or delivery of the benefits.

Actions resulting from the reports were focused on the day-to-day issues faced by DMI and not the management and mitigation of risk.

Mea culpa

For its part, the BBC has accepted there are lessons to be learned. Dominic Coles, the BBC's Director of Operations, said:

"While the BBC has a strong history of delivering complex projects such as BBC iPlayer, the digital Olympics or major property moves, we got this one wrong which we regret. We know it is vital to spot problems early, which is why we have overhauled how these projects are run to ensure this doesn't happen again.

“Whilst the BBC clearly has a responsibility to keep ambitious technology projects under control, it is also our duty to bring innovation to the market. Of course, such technology projects always carry a risk of failure. Nevertheless, to deliver our strategy and bring value to the digital economy, the BBC will continue to innovate and develop new technologies.”


Lord Chris Patten
Hasn't helped much

This is far from the end of the story. There’s a National Audit Office (NAO) report on the debacle lurking in the wings awaiting publication early in the New Year that will without doubt be ferociously critical of the handling of DMI.

It’s also entirely possible that the Public Accounts Committee will want a crack at the public flagellation of senior BBC executives, most notably BBC Trust Chairman Lord Patten who’s done himself - and the BBC - no favours by rejecting a Freedom of Information request for a copy of a paper on DMI that had been referenced in publicly released executive board minutes in June 2011.

There are also a lot of still unanswered questions. It’s been suggested that senior managers at the BBC were warned as long ago as three years back that the project was out of control and in deep trouble, but took little or no action to intervene.

If this were a private sector broadcaster, such as the likes of NBS or CBS in the US or ITV or Sky in the UK, how much money the organization chose to tip down the pan on dodgy tech would be no-one’s business but their own and their shareholders.

But the BBC is paid for in the main by a mandatory ‘tax’ in the form of the licence fee. So this is public money that’s been wasted, the same sort of public money that BBC news broadcasters get hot under the collar about when it’s wasted by central government departments.

The BBC says it will learn lessons from this - which is pretty much what every government department says when they’ve just blown millions of pounds of other people’s money - but won’t be telling us what those lessons are until after the NAO report comes out.

That’s probably wise. The hurting isn’t over yet on this one.


Graphics: PwC

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