Lorenzo Software: National IT Programme in the NHS

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Table of Contents

National IT Programme
Review of project management methodologies and concepts
Report on Lorenzo and Lorenzo Bury Implementation
Project objectives
Major work packages
Project risk management
References

National IT Programme

Projects have become one of the dominant approaches of managing and accomplishing diverse activities across the private and public sectors. Despite their contribution in attaining the desired goal, projects are characterised by varying degrees of complexity. Kerzner and Belack (2010) cite uncertainty, complexity, and uniqueness, instability, and value conflict as the core characteristics of a project environment. Over the past few decades, governments and private entities have focused on improving their efficiency and effectiveness by implementing diverse changes in different projects (Kerzner 2009). Despite its commitment to improving service delivery, the success of the project is entirely based on the effectiveness with which project management methodologies and concepts are adopted. Andongndou (2009) asserts that most of the projects fail to attain the intended goals. Thus, they lead to an extensive waste of resources. A classic case of project failure entails the multibillion projects that are aimed at implementing Information Technology within the National Health Service in the UK. This report entails a critical review concerning the organisation of the National IT Programme by the NHS in the UK. The report is based on the methodologies and concepts that the NHS should have considered during the project delivery process.

Review of project management methodologies and concepts

The National IT Programme, which was launched by the UK government in 2008, experienced significant challenges that affected its delivery. A report that was released by the National Audit Office cited project delay as one of the issues that affected its delivery. According to Brewer and Dittman (2013), successful completion of a project is greatly dependent on the extent to which good project management practices, tools, and techniques are adopted. Charavat (2003) emphasises that projects that are being undertaken in the contemporary environment require effective integration and a high degree of innovativeness compared to the situation in the past decade. The need to adopt effective project methodologies have been necessitated by different drivers such as shortening project schedules, improving the quality of the project, enhancing stakeholder participation, reducing change, and trimming down project costs.

Kliem, Ludin, and Robertson (2009) are of the view that effective project management requires project managers to undertake six major functions, which include leading, defining the project’s goals, planning, controlling, and organising. Available literature cites diverse methodologies and concepts that project managers should consider. Some of the appropriate methodologies and concepts that NHS should have taken into consideration in implementing the IT programme are evaluated herein.

Project Management Body of Knowledge [PMBOK]

In the course of implementing the National IT Programme, project managers should have appreciated the importance of developing optimal knowledge on several project management areas. This move would have led to the development of a methodical approach in planning, executing, controlling, and closing of the project. To achieve this objective, project managers should have taken into account the concepts that are outlined by the PMBOK, which comprise the best project management practices. The effectiveness of PMBOK in enhancing project outcome arises from the fact that it comprises diverse management disciplines. Some of the project management knowledge areas related to the management of risk, cost, integration, procurement, quality, communication, human resource, time, and scope. The case study shows that challenges characterised the implementation of the National IT Programme by the NHS because of lack of adequate expertise on the project management knowledge areas.

Time management

The process of implementing the project was delayed for over two years. Because of the project delay, the scheme was expected to take four more years. The completion date was set at 2014-2015. Therefore, not all NHS Trusts in the UK would deploy the new care record systems as it was initially expected. This situation indicated the existence of poor project time management in the process of implementing the IT project.

The different Care Trusts in the UK in which the IT programme was intended to be launched did not comply with the set plan for uploading patients’ records into the IT system. Mukherjee (2006) cites time conflict as one of the major challenges that project managers face. Such conflicts arise from delays in initiating the various project tasks, hence affecting the attainment of the desired goal.

Developing expertise on time management can be attained by incorporating effective practices such as identifying critical paths, lags, and slack time. Additionally, to succeed in managing project time, project managers must ensure that the various project activities are optimally identified. The process of defining the project activities should be comprehensive. This requirement underscores the importance of designing an effective work breakdown structure [WBS]. The WBS ensures that the project is decomposed into small work packages. Other tools and techniques that the project manager should have considered in defining project activities in implementing the National IT project include developing templates, which include a standard activity list.

By defining the project activities, the project manager can define clear project deliverables. Moreover, project tasks should be sequenced. This process involves determining and documenting dependencies between the identified project activities. Activity sequencing is also imperative in determining the leads and lags in the process of the actual implementation of the project plan. Nejam (2013) asserts that activity sequencing can either be conducted manually or using project management software such as the Microsoft Project Server. A comprehensive assessment of the type and quantity of resources that are necessary to undertake the various project tasks should be identified.

Project cost

The process of reforming the national NHS by implementing a National IT project was expected to consume a substantial amount of financial resources. The preliminary cost of deploying the project was estimated to be £12.7billion. However, the project has continuously experienced a considerable increment in the cost of the operation. Since its inception, the cost of the project has increased by £678million, which represents 11% of the core contracts. One of the factors that have led to the augmentation in the cost of the project entails the purchase of the increased functionality. Changes of project suppliers have also contributed to the increment in the total cost of the project.

Furthermore, changes in the project have arisen from expansion in the project scope. A report by the National Audit Office shows that an additional £666million were utilised because of an increment in project scope. For example, the cost increased by an additional £245million, which originated from the incorporation of the Picture Archiving and Communications Systems into the project, which was not originally budgeted.

The above change in the cost of the project indicates poor management of project cost. Schwalbe (2006) cites cost as one of the major constraints that are encountered in managing projects. Moreover, Schwalbe (2006) asserts that projects can stall because of poor cost management. Thus, project managers must ensure that the projects are completed within the set budget. To improve the likelihood of completing the National IT Programme, NHS should have considered incorporating several project cost management techniques. First, NHS should have undertaken effective and extensive cost estimation by approximating the resources that were required to undertake a particular project task. Approximation aids in identifying the possible variations in the cost estimates. This goal was attained by incorporating diverse costing alternatives. The project manager could consider different cost estimates in the project cost management process. Some of the estimates included budgetary estimates, definitive estimates, and rough order of magnitude [ROM].

Budgetary estimation

This technique involves aggregating the estimated cost of the different project packages to establish the baseline to be used in assessing project performance. Schwalbe (2013) confirms that budgetary estimates are -10% and +25% accurate. This observation means that the actual cost of a particular project is usually 10% less or 25% higher than the budgetary estimate.

Rough order of magnitude

This technique entails establishing a rough estimate of the cost of the project. ROM is usually undertaken before the commencement of the project, for example, 3-4 years before the actual project commencement. However, the accuracy of this technique is relatively low. The actual cost of the project using this technique can be 50% less or 100% higher. The ROM technique is mainly adopted to make project selection decisions. Schwalbe (2013, p. 345) emphasises, ‘in IT project estimates. The accuracy range is often much wider because of the cost overruns that are associated with IT projects’.

Definitive estimates

This technique is characterised by a high degree of accuracy. Under this technique, the cost of the project is based on accurate estimates. In addition to the above techniques, the project manager should have considered incorporating diverse cost budgeting inputs such as the project cost statement, work breakdown structure, project schedule, and contracts in undertaking cost budgeting. The project scope statement would have enabled the project manager to develop a high degree of consciousness regarding project funding constraints that were imposed by the UK government on the National IT Programme. Conversely, the work breakdown configuration would have offered the scheme boss an insight into the association between various job deliverables and the requirements of a particular task. The project schedule would have formed the basis of comparing or aggregating the cost of the project with the calendar periods.

Project procurement management

Besides the above project knowledge management areas, the project manager who was charged with the responsibility of overseeing the implementation of the National IT Programme should have considered integrating effective procurement practices. The case cited the existence of contractual disputes as one of the major hindrances that affected the delivery of the project. Project procurement project constitutes a fundamental component in project management because it aids in ensuring effective contract administration. Furthermore, project procurement management aids in ensuring that project contracts that are being undertaken by external parties are effectively administered to increase the probability of attaining the desired project outcomes.

In its commitment to implement the National IT Programme, the UK National Health System incorporated different types of contracts. One of the contracts that the UK NHS adopted entails fixed-price or lump-sum contracts. Under the lump-sum contracts, the NHS paid its suppliers only after they had successfully delivered the desired project outcomes. Despite the adoption of this type of the lump-sum contract, the NHS occasionally delayed in transferring payment to suppliers. In some situations, delays in payments were exceeded for over 12 months after the successful deployment of the IT systems to the various NHS Trusts.

The NHS also integrated cost-reimbursements contracts. These contracts entailed a disbursement or compensation to the vendor for the real cost, in addition to another charge that usually represented the vendor’s revenue. Cost- reimbursement contracts are usually characterised by different incentives, which are aimed at motivating suppliers. The incentive clauses are based on the extent to which the suppliers attain or exceed predetermined project targets. Some of the common cost-reimbursement contracts include cost-plus-fixed-fee [CPFF], cost-plus- fee [CPF], and cost-plus-fixed-fee [CPFF]. Under the CPF, suppliers have reimbursed a certain percentage of undertaking the contract by a predetermined agreement. Conversely, Schwalbe (2006, p. 278) asserts, ‘the CPFF contract entails reimbursement of allowable costs for performing the contract work where the supplier receives a fixed fee payment that is calculated as a percentage of the estimated project costs’.

In its contract administration, NHS incorporated a clause referred to as ‘delay deductions’ in which the supplier incurred a certain deduction for missing key milestone deductions. By 31st March 2008, NHS had deducted £26.3million of which the department retained £ 9.5million while the rest was available to be earned by the suppliers. Pfeifer (2002) cites such deductions as an effective strategy in deterring contractors from failing to deliver project milestones.

Project human resource management

Success in delivering the target project outcome involves a collaborative effort between diverse stakeholders. Project stakeholders are both internal and external. Irrespective of their nature, the importance of developing and incorporating expertise about managing human resource during the project delivery process cannot be underestimated (Nigam 2005). Project managers have to ensure that internal and external stakeholders are optimally managed. Moreover, project roles and responsibilities should be effectively assigned to project team members depending on their experience.

The case showed that the process of implementing the new IT system in the countries NHS was adversely affected by poor human resource planning. The leadership of the project was largely undertaken by the NHS Chief Executive Officer, which indicated that it was centralised. Moreover, the future leadership of the project was unknown because it had been adversely affected by the turnover amongst the top leadership. Rehman, Mahmood, Salleh, and Amin (2011) assert that effective human resource planning is paramount in enhancing smooth project delivery. This goal could have been attained by ensuring optimal interaction between the various project roles and responsibilities.

Salvendy (2001) affirms that it is essential for project managers to develop a positive relationship with external and internal project stakeholders to enhance its delivery. Such a relationship can be nurtured by appreciating the stakeholders’ needs and expectations. Implementation of the National IT Programme was also adversely affected by the poor relationship between the NHS and the project’s subcontractors and suppliers. Thus, the project experienced the withdrawal of some suppliers such as Accenture in 2007, which hindered the project’s adherence to the set project timeframe. It should have identified the various tasks, their duration, cost, respective personnel, and objectives. Besides, it should have hired monitoring and evaluation services to keep every task on the check, as shown in the following Gantt chart.

Gantt Chart

Project communication

NHS should have nurtured effective formal and informal reporting relationships amongst the project team members. On the contrary, project communication was centralised in the NHS Connecting for Health’s National Programme Office as opposed to being an undertaking of the wider department. This situation limited openness amongst the project team members. Satzinger and Burd (2008) emphasise the importance of designing a project communication plan to ensure effective delivery of the scheduled project activities. Moreover, the communication plan enhances the degree of collaboration between project team members.

Successful implementation of a project depends on the degree to which the target clients/patients and internal stakeholders are involved in the project. Schwalbe (2006) cites communication as one of the fundamental aspects of enhancing successful project delivery. Lack of customer/client involvement might reduce the continued usage of the intended product, such as the Summary Care Record. Communication planning is imperative in guaranteeing that project stakeholders receive the required relevant project status in an appropriate mode. NHS ensured that patients were adequately involved in the project right from the initial stages. This goal was attained by communicating the objectives of the project to patients. Moreover, NHS succeeded in assuring patients’ security of their data, which increased the rate of participation in the project. The diagram below shows the communication network that the NHS could have been adopted to guarantee maximum and effective communication.

Fig. 2: Communication Network Diagram

Report on Lorenzo and Lorenzo Bury Implementation

In its quest to improve operational service efficiency, the NHS in the UK undertook a National IT project that was aimed at implementing electronic management of patients’ documents. This goal was to be attained by implementing software known as Lorenzo. NHS Bury is one of the departments that undertook the implementation of the new software in 2009. NHS Bury focused on ensuring that the new software provided a positive experience to the user.

To succeed in implementing the new software, NHS Bury should have considered enhancing the health of the project. Rossberg (2014) emphasises that improving the health of a project is imperative in promoting the attainment of the desired project outcome. Organisations should consider different aspects to succeed in improving the health of the project. The project manager should have assessed whether the project could be delivered within the set timeframe, the extent to which the predetermined project goals had been attained, and whether the project could be delivered within the set budget. To improve the outcome of the new project, NHS Bury should have taken into account several aspects as highlighted herein.

Project management plan

The process of implementing the new National IT Programme by NHS Bury should have been based on a project management plan. Schwalbe (2013) contends that a project management plan ensures optimal integration and coordination of information across the diverse project management knowledge areas within an organisation. Therefore, the project management plan increases the level of project coordination, control, and execution. Furthermore, it also outlines the project communication mechanism and project assumptions amongst other project elements during the project delivery phase. The project plan also acts as the foundation upon which progress is evaluated. To implement the new IT technology successfully, NHS Bury should have incorporated the following elements in the project management plan.

Project organisation chart

NHS Bury should have developed a comprehensive organisational chart outlining the various stakeholders. The organisational chart would have established clear command systems and project tasks.

Process-related information

A document that clearly outlines the major processes to be undertaken in delivering the project should be outlined. In this case, NHS Bury should have developed a document outlining the systematic approach to be undertaken in upgrading the handling of patients’ documents.

Project objectives

The project manager who was charged with the responsibility of implementing the Lorenzo software at NHS Bury should have developed clear project objectives.

Project controls

The project manager should have appreciated the fact that projects are subject to change (Ghuman, 2010). Therefore, effective project control measures should have been integrated. One of the project control measures that should have been considered entails a periodic review of the project progress such as monthly. The reviews would have provided the project manager with an insight into the overall progress of the project. Thus, it would have been possible to make the necessary changes to the project.

To succeed in undertaking project control, NHS Bury should have considered integrating a configuration management system, which entailed an information system that was aimed at tracking the necessary changes that should have been undertaken on the project (Stonebumer, Goguen & Feringa 2002). The configuration management system would have improved the effectiveness of NHS Bury in undertaking administrative and technical surveillance of the project.

Project staffing

Human resource comprises a fundamental aspect of managing projects. Thus, project managers should ensure that the project comprises well-experienced project team members (Schwalbe 2006). NHS Bury’s success in implementing the Lorenzo software was entirely based on the commitment and expertise of the project stakeholders such as the team members. Subsequently, NHS Bury should have ensured that effective project staffing was undertaken. Considering the technical nature of the project, NHS Bury should have outsourced technical expertise from well- established software development companies. However, the external project participants [experts] should have worked in collaboration with employees from NHS Bury IT department. Ensuring such collaboration would have increased the rate of utilisation of the new software after its implementation (Eigenmann 2007).

Project funding

NHS Bury should have been informed of the fact that the implementation of the new software might be affected by the lack of adequate funds. Thus, the process of planning the project should have taken into account effective budgeting. To determine project funding, NHS Bury should have integrated different budgeting concepts such as summary budget, detailed budget, and other budget-related information. The summary budget would have determined the total estimate of implementing the project. In contrast, the detailed budget would have involved a comprehensive cost management plan detailing the fixed costs and recurring costs that were expected to be incurred during the project implementation phase. Conversely, the other budget-related information would have included a highlight of other financial aspects that were associated with the project (Westland 2007).

Major work packages

To enhance the likelihood of attaining the project goal, NHS Bury should have developed a clear definition of the major project deliverables. One of the major deliverables relates to a successful implementation of the Lorenzo software within the NHS Bury.

Project risk management

NHS Bury should have been cognizant of the existence of risks that could affect the implementation of Lorenzo. Project risks arise from internal and external project environments (Schwalbe 2006). The major external environments relate to technological, economic, political, and social dimensions, while the internal environment relates to project sponsors, the project team, and project users. To succeed in dealing with risks, the project manager should have integrated optimal project risk management practices, which entailed risk management planning, risk identification, risk analysis, monitoring, and control.

Risk management planning

Harrington and McNellis (2006, p. 11) assert, ‘planning of risk management process is important in ensuring that the level, type, and visibility of risk management are commensurate with the risk and importance of the project to the organisation’. Therefore, NHS Bury should have undertaken extensive risk management planning to improve the project outcome. Through risk management planning, NHS Bury would have developed a comprehensive understanding of the most effective approach to adopt in managing any possible risk. However, NHS Bury should have undertaken risk management planning during the initial project-planning phase.

To succeed in risk management planning, NHS Bury should have taken into account several risk management planning inputs. First, an evaluation of enterprise environmental factors should have been conducted to understand the degree of risk tolerance amongst the various stakeholders who were involved in the project delivery process. Secondly, the project manager should have evaluated the risk management approaches, risk definition, and the roles and responsibilities as defined by NHS (Chapman, Ward & Ward 2003).

NHS Bury should have also considered integrating effective tools and techniques in the risk management planning process. One of the techniques that the organisation should have taken into account entails organising planning meetings involving different project stakeholders such as the project manager, project sponsors, project owners, and project team members. Such meetings would have culminated in the development of basic plans for managing risks by evaluating the scheduled activities and the risk cost elements (Durkovic & Rakovic 2009). By considering the risk cost element, NHS Bury would have been in a position to integrate the identified risk elements in the project schedule and budget. Moreover, Brewer and Dittman (2013) affirm that the risk- planning meeting would also have involved defining risk responsibilities.

The risk management planning process could have led to the development of a risk management plan. Kendrick (2003, p. 55) asserts, ‘the plan describes how risk management will be structured and performed on the project, thus making it a subset of the project management plan’. The risk management plan outlines a risk methodology, which comprises the risk management tools and approaches.

The risk management plan also details the roles and responsibilities of the various members who are involved in the risk management team. Furthermore, the plan also entails a clear definition of the various risk categories by designing a risk breakdown structure [RBS], which presents a hierarchical approach of the various risk levels (Bartlett 2004). In the course of implementing the new national IT project, NHS Bury should have taken into account the following risk categories.

During the scope management process, NHS Bury should have considered undertaking scope verification. Therefore, it would have sought formal acceptance of the formulated project scope and deliverables from the project stakeholders. Scope verification would have improved the likelihood of NHS Bury successfully attaining the project deliverables.

Fig. 1: Risk Management Plan

Heldman (2011) asserts that information technology projects are characterised by diverse technical risks. NHS Bury should have considered evaluating risk arising from diverse technical complexities. First, the implementation of the new software involved a completely new technology, which meant that NHS Bury had not yet proven the technology. Therefore, the likelihood of NHS experiencing complexities in the course of utilising the new software was relatively high. Furthermore, NHS Bury should have assessed any possible project management risks. Some of the aspects that the organisation should have considered relate to risks originating from poor resource planning, improper scheduling, and adoption of ineffective project methodologies. Conversely, NHS Bury should have assessed the existing organisational risk. Heldman (2011) asserts that organisational risks mainly arise from resource conflicts, for example, due to concurrent execution of diverse project activities. However, the organisation might not have had adequate resources to undertake the project tasks.

The final category of risk that NHS Bury should have considered entails external risk. Vargas (2007) asserts that external risks emanate from different sources such as new laws and regulations, change in project ownership, and labour issues. The case study showed that the implementation of the National IT Programme was delayed because of a change in project stakeholders such as suppliers. To minimise the adverse effects of such risks, NHS Bury should have engaged in an extensive evaluation of the external risks by collaborating with diverse external stakeholders in the Information Technology sector. This move would have provided the HR manager with insight regarding the risk, hence improving the effectiveness with which precautionary measures could have been undertaken.

Organisational structure

Hamilton (2008) affirms that the organisational structure comprises one of the most important aspects of the failure or success of projects. Thus, NHS Bury should not have underestimated the importance of integrating an optimal organisational structure. NHS Bury should have considered diverse categories of organisational structures. However, to implement Lorenzo successfully, NHS Bury should have considered integrating a projectised organisational structure. Heldman (2011) asserts that the projectised organisational structure specifically focuses on the project. Karkukly (2012) further affirms that such an organisational structure ensures that adopting a projectised organisational arrangement in managing projects leads to the development of a high degree of loyalty amongst project stakeholders to the project (Charavat 2003). Adopting a projectised project structure provides the project managers with a high degree of authority in the process of implementing the project. Additionally, a direct reporting relationship is developed between the project manager and the organisation’s CEO.

Under this structure, reporting amongst the supporting organisational functions such as finance and human resource management is undertaken to the project manager. Thus, the project manager develops a greater understanding of the project progress, which increases the degree of control during the delivery process. Heldman and Cram (2006) accentuate that under the projectised organisational structure, the project manager has a high degree of autonomy in making decisions regarding the project. Furthermore, the project team members are extensively involved in the project. The devotion fosters their commitment to executing the project tasks. The chart below illustrates a sample projectised organisational chart that NHS Bury should have considered in implementing the new IT system in its healthcare delivery.

Fig. 2: Projectised Organisational Chart

Project scope statement

Snyder (2009) emphasises strategies such as defining and managing the scope of a particular project, which determine the overall project success. However, the nature of scope planning varies depending on the status of the project that is being undertaken. Thorough, formal, and time-intensive scoping activities should be undertaken to ensure successful delivery of complex projects such as the implementation of a new IT system. Thus, NHS Bury should have designed a project scope statement to improve the project outcome. By developing the scope statement, NHS Bury would have ensured that only the necessary project work was undertaken. Subsequently, the project manager would have limited undertaking tasks that were not valuable to the project. Hence, a high degree of project control would have been attained (Snyder, 2010). Several activities would have been undertaken to make the centre functional. However, this situation would have depended on the efficiency with which the various activities would be executed. Thus, the project manager would have adopted project schedule to implement the activities effectively. One of the tools that would have been adopted includes the Gantt chart. The chart below illustrates the various activities would have been undertaken and their expected duration.

Fig. 3 Gantt Chart

To improve the effectiveness in scope management, NHS Bury should have considered several elements. Heldman and Heldman (2007) cite several key components that should have been integrated with the project scope. First, a clear project goal should have been outlined to ensure that all project stakeholders understood and developed a high level of focus in attaining the goal. Furthermore, project managers must convert stakeholders’ wants, expectations, and needs into clear project requirements.

The scope management process should have also involved the formulation of a project scope statement outlining the major project deliverables and activities that were required to attain the deliverables. One of the core deliverables that NHS Bury should have taken into account entailed successful appreciation of the new IT system by healthcare providers. Moreover, project assumptions should have been clearly defined. Some of the assumptions that NHS Bury should have considered in its quest to implement the new national IT system entailed complete adoption and maintenance of the IT system by healthcare providers. The process of scope definition should have also entailed outlining the project constraints.

Kemp (2005) asserts that project constraints limit the options that are available to project team members. Some of the project constraints that NHS Bury should have outlined entail the timeframe within which the implementation of the Lorenzo software should have been done together with the budgetary limitations. Defining the project constraints should also have involved outlining the scheduled milestones. Moreover, defining project constraints should have also entailed defining the contractual provisions.

Project scope planning should have also involved developing a work breakdown structure, which entailed a hierarchical decomposition of the various project tasks that were to be undertaken by the project team members. By developing a WBS, the project manager at NHS Bury would have been in a position to break the entire project into small components, which would have been assigned to specific project team members. Such subdivisions would have improved the likelihood of successfully achieving the project outcome because the project team members would have developed a clear understanding of the project team members. Harrison and Lock (2004) assert that the work packages arising from the WBS improve project cost estimation, monitoring, and control.

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