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According to the National Audit Office (NAO), the body which scrutinises public spending on behalf of the UK Parliament, the BBC Executive was too optimistic and did not have a sufficient grip on its Digital Media Initiative (DMI) programme, nor did it commission a thorough independent assessment to see whether the project was technically sound.
The DMI was a major technology-enabled transformation programme that was designed to allow BBC staff and partners to develop, create, share and manage video and audio content and programming on their desktops. It required the development of a fully-integrated digital production and archiving system. It also needed a significant cultural change to standardise practices across television production in some of the BBC’s main divisions that produce factual and current affairs programmes.
In May 2013, the BBC cancelled the initiative, after concluding that most of the £125.9 million it had spent on the DMI had been wasted. Subsequently, the NAO undertook a high-level review and has now published a Memorandum which summarises the BBC’s aims for the DMI; what went wrong; where the money the BBC spent on the DMI went; and what the BBC got in return.
“We are grateful to the NAO for carrying out this report, which reinforces the conclusions of the PwC review commissioned by the Trust,” said Diane Coyle, Vice Chairman BBC Trust. “It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future. The NAO’s findings, alongside PwC’s recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system. This will ensure that serious problems can be spotted and addressed at an earlier stage.”
According to Amyas Morse, head of the National Audit Office, the BBC Executive did not have sufficient grip on its DMI programme. “Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound. If the BBC had better governance and reporting for the programme, it would have recognised the difficulties much earlier than May 2012,” he added.
The NAO report concludes that problems with getting the system to work contributed to a growing gap between technology development and what users expected. The executive did not have a sufficient grip of the programme and did not appear to appreciate the extent of the problems until a late stage.
The findings from the report include:
When the BBC took over responsibility for developing the DMI technology from Siemens in July 2009 it had little time left to meet critical internal deadlines.
The BBC did not establish clear requirements or obtain a thorough independent assessment of its technical design to see whether the DMI was technically sound.
The BBC completed the most straightforward of its new technology releases for the DMI but these proved not to be a reliable indicator of progress.
Technical problems and releases not meeting user expectations contributed to repeated extensions to the timetable for completing the system, eroding user confidence and undermining the business case.
The governance arrangements for the DMI were inadequate for its scale, complexity and risk. The BBC did not appoint a senior responsible owner to act as a single point of accountability and align all elements of the DMI. Reporting arrangements were not fit for purpose.
The BBC did not adequately address issues identified by external reviewers during the course of the programme. For example, it was aware that business requirements for the DMI were not adequately defined.
The BBC estimates that it spent £125.9 million on the DMI. The BBC offset £27.5 million of spending on the DMI against transfers of assets, cash and service credits that formed part of its financial settlement with Siemens. This left a net cost of £98.4 million. The BBC cancelled the DMI without examining the technical feasibility or cost of completing it.
The BBC wrote off the value of assets created by the programme, but is exploring how it can develop or redeploy parts of the system to support its future archiving and production needs.