HP loses massive DWP contract
Fujitsu Services to pick up desktop deal
Exclusive HP has lost one of its largest outsourced IT contracts from the British government to rival Fujitsu Services.
The Department of Work and Pensions today confirmed to The Register it had appointed Fujitsu Services as the preferred bidder to take over its huge desktop contract from 31 August.
A DWP spokeswoman declined to reveal the value of the new contract, but it is part of a package of two worth £4.5bn.
An HP spokesman said the desktop contract was "less than 15 per cent" of that figure.
HP staff were told the news yesterday. It will come as a further blow to morale following pension cuts, a pay freeze and job losses since HP bought EDS in 2008. Unrest at the firm led to a vote for industrial action late last year.
It is understood that the DWP decision places HP jobs near Blackpool under threat. HP's spokesman said "all staff employed under the contract will be transferred" to the new contractor.
The loss of the core of its DWP business is very damaging for the firm's UK operations. Insiders said desktop services was the most prized of EDS' DWP contracts, ahead of hosting, application maintenance and service integration.
HP disputed that assessment, arguning that the desktop contract was represented only 10 per cent of its DWP business. The hosting contract has been renewed.
The decision to award desktop services to a rival is part of an ongoing restructure of DWP IT contracts, begun in mid-2008. DWP officials rejected an option to extend the current contract to 2015.
EDS' broad relationship with DWP has been the subject of frequent controversy, especially over the failed Child Support Agency system.
Fujitsu Services referred questions to the DWP. ®
Updated to reflect comment from HP.
Insourcing is the answer
All these providers are as bad as each other. Fujitsu wont be any better than HP. Insourcing is the way to go. Hiring external companies to look after your assets when they have no real interest in your organisations success is a mistake. The only people that really suffer from these outsourcing deals are the users stuck in the middle between their own organisation trying to squeeze their suppliers on price and the supplier doing as little as possible for as much money as possible. Fujitsu will have gone in with a extremely low price to get the contract and will then drown DWP with expensive change controls no doubt!
Have to agree
Having just finished a public sector project I couldn't agree with you more (have to be anon for this)
You get a design hammered out and agreed to. Great wheres the problem
Then for the next 2 years everyone and their dog in the public sector becomes an expert and insist on many many (usually unnecessary) changes. Thy say "WE OWN YOU BITCH!"
This continues until the original project bares no resemblance to the original project.
At some point a new public body is included in the project despite their requirements having absolutely relationship to the project.
The business managers sing "the customer knows best" after all if the project moves to another company after completion they will be transferring to the new company.
Eventually the project mutates into something fuzzy that cant carry out the original task with the customer insists is what they really want.
3 months before go live the customer is dragged kicking and screaming to the final testing stage (they don't like actually having to do anything, the staff want the old (or no) system and the customer don't want to pay their own staff for "playing" with then new system).
Oops the system doesn't fulfill the original spec and the whole damn thing is late.
The public sector is not fit to have a calculator never mind a shared laptop they really are the worst type of customer
It was inevitable. The greed and arrogance at 'HP Enterprise Services' is sickening. The DWP must have seen the risk and probably Fujitsu were cheaper. Also it probably helps civil servants justifying their jobs as the landscape just got more complicated.
There will be more redundancies at HP and the tuped Fujitsu staff because of this, but most want redundancy as they are fed up with the false promises.
Mark Hurd this is YOUR fault.
Public Sector Contracts
I've been involved on a number of public sector projects over the last 15 years for 3 different organisations. Some have gone very well, including my current project, and some didn't. However, there is certain things that connects them all (OK not all of them but more often than not) and that's getting the client to:
a) actually agree what the requirements are
b) not change their minds a long way into the project and still expect the same go-live date depsite the change requiring a fundamental change to the design(usually because a minister has announced it in parliament)
Now I've also worked on private sector when this sort of this happens but in the public sector, no-one is willing to take responsibility for anything. Again I'll contradict myself, I did work on a veru large project where the requirements were very well documented and "set in stone". That meant that even when the requirement didn't actually make sense no-ne was willing to accept that fact. What's more I've even had requirements that described the expected solution rather than the business requirement. Again, despite the client agreeing that was the case, they still wouldn't agree to a change. Jobsworth? Oh yes.
So sometimes it's not surprising that very large projects go tits-up as the client often hasn't the faintest idea what they really want and change their minds all the time. Not excusing the contractors, senior management just see the billing as "a good thing" rather than actually trying to manage the client.
I'm way down the food chain (so far in fact that I actually do the work) and am always happy to argue my case, both internally and with the client. I'm here to do a good job for the client and provide what they need, rather than what they ask for. But it isn't always easy ...
Thanks for that Daily Mail response
I've worked on quite a few large projects inside and outside of government and I'd say it was fairly rare to find a large one that comes in on time and budget.
There are a number of perennial problems that crop up time and time again.
- If the project runs long enough there may be a technology shift that makes the original solution obsolete, so you need to decide to either put the obsolete solution in or re-engineer. Obsolete solutions often need specially written and expensive support contracts, re-engineering can mean starting the project almost from scratch. For example, if you'd spent six years working on a solution based around using a Palm Pilot in the field would you go live with it in say three months time?
- Inside government owned projects there is often a lot of politics leading to whole departments not talking to each other. I remember a chap who didn't get on with the head of Data Processing (what would now be the IT dept) and so developed an entire service without once asking about supportability or existing standards. The entire project was scrapped within 8 months of going live.
- Customers often don't know what they really want until the project is well underway. Some changes can be swept under the carpet, but many cost money to implement; if you picked the wrong colour for a new car you could probably get it changed at no cost as long as you catch them early enough, but if you order a Mondeo and then ask for a Bentley just before you take delivery then you might find a change in both budget and timescales.
There are no simple solutions, there's too much politics in government circles and too much profiteering in private ones.
In addition to all of that, we have no concrete figures for non-government IT projects. I can't see someone like Starbucks releasing a report that says "We put in a new system, but it was 6 months late, cost twice as much as planned and still doesn't work", so there is nothing to measure against.
Looking at NAO press releases, they say that the NIRS2 contract provides good value for money and that the original contract failed to provide sufficient flexibility to allow for 1998 legislation changes and so had to be re-negotiated at additional cost.
For the CSA their conclusion was that the system was poorly specified, designed and implemented, but that the legislation was also unduly complex. So, I don't think all of the blame can be placed at EDS' door.