Fife Council Post Implementation Review of VoIP Project 2007/08

Transcription

1 Fife Council Post Implementation Review of VoIP Project 2007/08

2 Fife Council Post Implementation Review of VoIP Project 2007/08 1 Introduction Executive Summary Strategic Aims and Business Objectives Original Requirements Planning and Management Processes Timescales and Costs Benefits Realisation Action Plan...17 APPENDIX 1 VoIP Expenditure...22

3 1 Introduction 1.1 Summary The Accounts Commission for Scotland is a statutory independent body which through the audit process promotes the highest standards of financial stewardship and public accountability in Scottish local government and assists in achieving value for money. The Accounts Commission is also responsible for appointing external auditors within local government and for determining their terms of appointment. Scott-Moncrieff is the appointed auditor to Fife Council for the years 2006/07 to 2010/11. Audit Scotland is an independent statutory body that provides services to the Accounts Commission. Audit Scotland has prepared a Code of Audit Practice, which describes how external auditors should carry out their functions, and embodies the best professional practice to be adopted. The purpose of this report is to summarise the results of our post implementation review of the Voice over IP (VoIP) telephony project at the Authority. 1.2 Background Post Implementation Reviews (PIRs) are performed to ensure that the maximum possible benefit can be realised from implementation of new technology and that the Authority s staff can learn from past experiences to help provide the most cost-effective solutions in the future. During external audit s earlier review of the ICT governance structure and related ICT management and monitoring arrangements within the Authority, we identified concerns over the project management of the Voice over IP (VoIP) project. Although action was being taken at that time to address the issues identified, we agreed to re-visit this major project. The review was conducted in late 2007 during a period when the system was completing its roll out across the Authority. This allowed us to examine the project management of the final stages of the project and the arrangements being put in place to manage the realisation of the benefits which the new VoIP infrastructure is capable of delivering to the Authority s Services, its Stakeholders and the people of Fife. This review was conducted immediately following a review of the Management of the Letting of the VoIP Contracts conducted by the Authority s Internal Audit Team. The internal audit review examined the arrangements surrounding the letting of the contracts at the start of the project, whilst this review focused on the project management of the later stages of the project including its implementation across the Authority. We would advise Scott-Moncrieff Page 1

4 readers of this report to refer to both reports if they wish to obtain a full understanding of all of the issues which impacted the VoIP project. A summary of the internal audit report is set out below Summary of Report on the Management of the Letting of the VoIP Contracts Audit Services undertook a review of the systems followed for the Management of the Letting of the VoIP Contracts. Although there were some examples of good practice, such as trying to identify the best solution to replace the Council s telephony system by using the expertise of external consultants and giving tenderers freedom to use their knowledge to identify what would best meet the Council s requirements rather than being too restrictive, there were a number of areas identified where the process followed can only be described as poor. The main issues to emerge from the review were that the tendering process was started too late which left the Council with no option but to use the OGC scheme for procurement, which may have resulted in the exclusion of potential mainstream contractors; there was only limited involvement by Law and Administration, Finance & Asset Management and Procurement & Supplies; the Telephony Project Board did not take an active role in the awarding of the contracts until all but the last had been awarded; there were some breaches of the Scheme of Tender Procedures and a failure to keep the Policy & Resources Committee informed when officers did not follow the agreed approval routes; the administrative procedures surrounding the award of the contracts were unsatisfactory, decisions were taken which were not documented, meetings were held which were not formally minuted and signed acceptances of all the contracts were not obtained. The approach to both of these reviews was co-ordinated from the outset and both parties remained in regular contact during the audits to ensure the most efficient use of audit resources and minimise the impact on project staff. 1.3 Scope and Objectives Scope The review evaluated the deliverables arising from the implementation of the VoIP telephone and data communications systems and infrastructure within the Authority implemented during 2006 and The review sought to verify whether the project achieved the desired results and met the strategic outcomes predicted by the Authority. The review also considered the actual against planned costs and timescales from the business case and whether the desired business objectives were achieved. Scott-Moncrieff Page 2

5 Objectives The review evaluated, within the above scope, whether the project achieved its objectives and, furthermore, evaluated the effectiveness of the planning and management processes that supported the project. In particular, the review looked to ensure that: The objectives and strategic outcomes of the project have been met; The original requirements have been met; Management processes were in place and working effectively; There was sufficient monitoring of timescales and costs; and There was sufficient monitoring of benefits and that the expected benefits have been realised. The review also considered the lessons to be learned from the project and the way in which these are used to inform future projects. Scott-Moncrieff Page 3

6 2 Executive Summary The report summarises the findings from our Post Implementation Review of the VoIP project that was carried out by the Authority. Strategic Aims and Business Objectives As part of the review, we looked to determine that the VoIP project had enabled the Authority to meets its strategic aims and business objectives identified at the start of the project. We are satisfied that this is the case and that the installation of a new telephone system was in line with the strategic aims laid out by the Authority and, more over, nationally by the Customer First Programme. The business objectives, such as cost savings, value for money and business process improvement have been shown to have been met and will continue to do so over the coming years. Original Requirements The original requirement of the project was, at this stage, to have implemented a replacement telephone system with baseline functionality but which had the capability to evolve and grow in line with the needs of staff and customers. This has been provided and the Authority now has a modern system that has increased functionality that can be deployed at its discretion. The Telephony Management Group (TMG) has been formed whose remit includes investigating this other functionality and how it can be deployed in a way that fits with the needs and aims of the Authority. With regard to the detailed deliverables of the project, at the time of this review the Project Board was awaiting the submission of a report that would detail the actual deliverables against the expected deliverables. It is vital that this report is submitted to the Project Board for approval in order that any issues can be identified and resolved before closing the project and handing over to the TMG. Planning and Management Processes We were pleased to note that planning and management processes in place for the project improved greatly towards the end of 2006 through the re-structuring of the Project Board and as a result of additional resources being brought in to help bring focus to the various groups and facilitate administration. Since then the project has been well managed with best practice being adopted in terms of reporting and governance arrangements and with standard project management documents being maintained, such as a risk log and issue log. Scott-Moncrieff Page 4

7 The Telephony Project Co-ordination Group, which sat below the Project Board, was also a valuable resource to have. It was closer to the project than the Project Board with the various work-streams feeding into it and provided valuable input and assistance to the project. We learned that Procurement & Supplies only became actively involved in the VoIP project at the end of 2006 at the request of the Chair of the Project Board. Given the issues that have arisen with regard to contract delivery and negotiations that were required to be handled with BT in relation to contract extensions, in addition to the scale and complex nature of the project, it would have been beneficial for Procurement & Supplies staff to have been involved from the start of the project. Their knowledge and expertise in this area would have been useful earlier on and would have enabled IT Services to concentrate on the more technical aspects of the project. Similarly close involvement of Finance & Legal staff at key stages early in the project lifecycle would also have assisted. There are a number of outstanding issues with Equanet / Affiniti which have been subject to separate discussions to avoid disruption to the VoIP implementation. As was highlighted in the internal audit review, the Council have been unable to source signed acceptance of all of the contracts which were put in place. From our review of those issues that are unresolved it would appear that the absence of a common interpretation of the detailed terms of the contracts has been a contributory factor in the inability to have these issues resolved. Timescales and Costs We are satisfied that the timescales and cost element of the project have been monitored efficiently with the Project Board receiving regular updates on how the project was progressing and the costs that had been encountered. We did note, however, that the initial timescale for the project was optimistic with implementation scheduled to be completed within one year. Moreover, although the contract was actually awarded later than anticipated, the project completion date was not revised to reflect this. As such, in order to meet the original deadline, the project was re-scoped and sites prioritised for implementation. Although this approach worked for the Authority and was managed well, we would advise that for future projects, realistic timescales are applied to ensure that the project deliverables can be delivered within the agreed timescale. In addition, where possible, project milestone and completion dates should be revised in the event that issues and changes that have a major effect on the ability for these to be met, occur. Scott-Moncrieff Page 5

8 Benefits Realisation From our discussions and review of documentation, we are satisfied that both the expected benefits and additional benefits of the project were closely monitored and reported to the Project Board. In addition to having implemented a modern telephone system with increased functionality and gaining the benefits that this brings, the Authority has made significant cost savings by installing the new system and will continue to do so. The managed service that is now in place enables the Authority to make saving in relation to additions, changes and moves associated with the telephone system and the people using it, whereas previously, it was charged separately for each of these requests. Other benefits have been achieved by the Authority as a result of the VoIP project. Business continuity plans have been revised and put to the test by the various services; this was a requirement of the transition process. There have been improvements made to the Authority s infrastructure as well as the creation of an improved telephony information base. Furthermore, given the scale and complexity of the project and because it crossed numerous services within the Authority, a knowledgeable team has now been formed. It is hoped that this team will have a key role to play in the ongoing delivery of the business benefits and help inform similar projects in the future. As previously stated, the TMG will have a key role to play in ensuring that the new system continues to develop and evolve and that the benefits to be gained are realised by the Authority where possible. Installation Update The installed VoIP system is now well progressed. A financial summary of capital and revenue expenditure has been provided at Appendix 1. The system is in use across 317 sites throughout the Council serving approximately 8,700 users, with 7,900 phones installed. In addition, the volume of fax machines in use has been substantially reduced from 411 (as captured in the data survey) to 198. This is the first phase of a larger project and the next stages, to be taken forward by the Telephony Management Group (TMG), aim to extend the uses and functionality of the VoIP infrastructure, including features such as voic . It is essential that a formal business transformation process is in place to ensure that maximum business benefit is obtained from the deployment of additional functionality. Scott-Moncrieff Page 6

9 Action Plan This report includes an action plan which contains specific recommendations. The officers responsible for implementation and implementation dates. The Authority should assess these recommendations for their wider implications before deciding appropriate action. Following agreement of the report a copy will be sent to the Controller of Audit. Each finding has been allocated a priority rating from 1 to 3. This should assist senior management in assessing the significance of the issues raised and prioritising the action required to address them. The rating structure can be summarised as follows: Priority 1 Priority 2 Priority 3 High risk, material observations requiring immediate action. Medium risk, significant observations requiring reasonably urgent action. Low risk, minor observations which require action to improve the efficiency, effectiveness or economy of operations or which otherwise require to be brought to the attention of senior management. The following table indicates the number of issues raised in this report under each of the priority headings. Total Priority 1 Priority 2 Priority It should be noted that the weaknesses identified in this report are only those which have come to our attention during the course of our normal audit work. The audit cannot be expected to detect all errors, weaknesses or opportunities for improvements in management arrangements that may exist. This report has been prepared for the sole use of Fife Council, the Controller of Audit and the Accounts Commission. We do not undertake responsibilities to officers, members or directors in their individual capabilities or to third parties. In the event that, following a request which Fife Council has received under the Freedom of Information (Scotland) Act 2002, it is required to disclose any information contained in this report, it will notify and consult with Scott-Moncrieff prior to disclosing such information. Fife Council shall apply any relevant exemptions which may exist under the Act to this report. If following consultation with Scott-Moncrieff information within this report is disclosed, Fife Council shall ensure that any disclaimer which Scott-Moncrieff has included or may subsequently include in relation to the information is reproduced in full. We would like to thank all staff from the Authority who have been involved in our work for their cooperation during our audit visit. Scott-Moncrieff Page 7

10 3 Strategic Aims and Business Objectives 3.1 Strategic Aims We were pleased to note that the VoIP project has been carried out in line with the strategic aims of the Authority, as well as the aims of the Customer First programme. The Customer First Programme sets out a common strategic framework for local authorities in Scotland for delivery of consistent, tangible and measurable improvements to public services. The Business Case for the VoIP project highlights the main objectives of the strategic direction for the Authority, these being: To transform itself into an organisation that is regarded by customers as a modern organisation responsive to their need; To demonstrate continuous improvement across services; To promote innovation and improvement by sharing resources, knowledge and learning across the organisation as well as its partners; and To be recognised as a good place to work by existing and prospective employees. The Business Case also states that investment in technology and Information and Communication Technology in particular is seen as a key enabler in meeting these objectives. It is clear from our review that the replacement of the Featurenet telephone system, through the VoIP project, has enabled the Authority to meet its strategic aims and objectives as well as those specified within the Customer First Programme and that these were recognised as key drivers for the project. 3.2 Business Objectives The main objectives of the VoIP project were as follows: To replace the existing telephony system with a modern, up to date system, with the potential to integrate new functionality as requirements evolve; To implement a system which is value for money; To realise cost savings through the implementation of the new system; To improve efficiency of communications; and To support business process improvement. Scott-Moncrieff Page 8

11 We were pleased to note that the project has enabled the Authority to fulfil these business objectives. The Featurenet system has been replaced with a new system with the capability to deploy additional functionality as the needs of staff and customers grow and evolve. Additionally, the new system has provided value for money and, moreover, will provide cost savings through improvements to maintenance and support and reduced hardware. Business processes will continue to improve through the implementation of the new system as the system evolves and processes are revised to improve efficiency and develop new ways of working with the new system. Scott-Moncrieff Page 9

12 4 Original Requirements The original requirements for the new telephone system were gathered by Atkins, a firm of specialist advisors commissioned by the Authority to develop the requirements specification. This was achieved via a series of workshops and interviews with representatives from all areas of the Authority, as well as associated organisations such as the Fire Service and the Police. A questionnaire was also distributed in order to capture the requirements of any new system and to determine which of these were mandatory and which were desirable. This information then helped to form the Invitation to Tender (ITT). 4.1 Implementation From our discussions and from reviewing the original requirements and the Business Case, it is clear that although a number of mandatory and desirable requirements were identified, the key requirement of the project was to replace the dated Featurenet telephone system with a more modern phone system that would enable the Authority to meet the evolving needs of its staff and customers. The requirement, therefore, was to implement the new system across all identified sites with standard functionality deployed but with additional, more advanced functionality available to the Authority. To this end the original requirements of the new system have been met; a new telephone system with basic, standard functions deployed for use by Authority staff, for e.g. call transfer, with additional functionality, such as voic , available and tested, and capable of being deployed if and when necessary. Therefore, although not all functionality associated with the system and specified by the Authority has been deployed at this time, it exists and an enabling platform has been provided for it. In essence, this was the remit of this phase of the project (implementation), with the role of developing the system further to be handed over to the Telephony Management Group (TMG) who will be responsible for helping the Authority to drive the transformation forward. At the time of our review, there were however, a few small sites where the new system has still to be implemented and this is scheduled to take place in January Actual Deliverable Against Expected We were also informed that a report detailing the expected deliverables against the actual deliverables was in the process of being created. This was requested by the Project Board at its meeting in October It is essential that the contents of this report are reviewed to ensure that there have been no oversights with regard to deliverables/sites before the Project Board have their final meeting (currently scheduled for March 2008). This will enable the project to be signed off as completed in line with the requirements and handed over to the TMG. Scott-Moncrieff Page 10

13 5 Planning and Management Processes It is clear that when the VoIP project commenced, the governance in place was not sufficient for a project of its size and complexity. Although a Telephony Project Board had been formed, it had not met regularly, documentation was incomplete and a lot of discussions and decisions were verbal and not formally recorded. Meetings were not structured as well as they could have been, both at Project Team level and Project Board level and there was ambiguity regarding what information should go to the Project Board for discussion, decision making and approval and what could be dealt with by the Project Team. 5.1 Project Governance and Management However, in June 2006 it was recognised that the project needed to be re-focused and the Project Board was re-visited and subsequently re-structured. It was at this stage that the Head of Finance and Asset Management joined the Project Board and in August 2006, took over as Chair. The Partnerships Manager was then asked by the Chair to join the project with the purpose of bringing focus to the Project Board and Project Team meetings and to help improve the administration and quality of the project documentation. Furthermore, in November 2006, a Programme Director was appointed; a role that was fulfilled by the Authority s IT Customer Services Manager. The Programme Director ensured that the different work-streams involved in the project worked together and not in isolation. There were a number of work-streams; Implementation, Business, Finance and Communications. One of the challenges was to ensure that the project was not seen as solely a technical project but one which had business involvement too. The Programme Director, therefore, acted as a conduit between the business and the technical aspects of the project. We were pleased to note that these changes were of great benefit to the project with the project subsequently being managed and governed in line with best practice. This included regular formal reports being presented to the Project Board, with regular Project Board meetings taking place on a monthly basis, although this has now reduced to once every two to three months as the project comes to a close. In addition, project management documentation, such as risk log, issues log and team meeting notes were maintained. Lessons learned have also been recorded as part of the project, with some already being used to inform other projects within the Authority Scott-Moncrieff Page 11

14 5.2 Telephony Project Co-ordination Group A Telephony Project Co-ordination Group (TPCG) sat below the Project Board. It consisted of key people, some of whom were also on the Project Board and met on a weekly basis. This group was closer to the project than the Project Board, with the various work-streams feeding into it. This group was also involved in reviewing any risks that had been raised and determining whether they should be added to the project risk log. 5.3 Procurement The procurement process for the VoIP project was carried out by the Authority s IT Services in consultation with Atkins Telecoms. It had previously been agreed that IT Services, under the power delegated to Heads of Service to award service contracts, would manage the procurement. Once this approach had been determined, Procurement & Supplies had no further involvement in the project until December 2006, when the new Chair of the Project Board asked the department to become involved. Since then, Procurement & Supplies has played an active role by leading on negotiations relating to contract extensions, contract delivery and providing advice as and when necessary. We learned that Procurement & Supplies led on the original Featurenet contract and knew that there was the potential to extend that contract for two years in one year blocks. However, it was able to negotiate for the right to be able to extend in blocks of three months. This gave the Authority flexibility and meant that it didn t have to continue to pay for sites that had been disconnected and had the new replacement system installed. Although Procurement & Supplies became involved in the project at the end of 2006, it would have been beneficial for the project for the department to have been involved at the outset of the tendering process. Given the scale and complex nature of the VoIP project, Procurement & Supplies staff s knowledge and expertise in this area, as demonstrated above, would have been useful and allowed IT Services to concentrate on the more technical aspects of the project. Similarly close involvement of Finance & Legal staff at key stages early in the project lifecycle would also have assisted. We noted that there are a number of outstanding issues with Equanet / Affiniti which have been subject to separate discussions to avoid disruption to the VoIP implementation. The recent internal audit review of the management of the letting of VoIP contracts highlighted the absence of formal signed acceptance of all the contracts that were put in place. It would appear from review of the issues subject to separate discussion that the absence of a common interpretation of the detailed terms of the contract has been a contributory factor in the inability to have these issues resolved. Scott-Moncrieff Page 12

15 6 Timescales and Costs 6.1 Timescales The VoIP contract was originally due to be awarded in April 2006 and implementation was anticipated to take a year with a completion date of April This timescale was optimistic given the number of sites involved and the complexity of the work to be carried out. However, the contractor was confident that they would be able to complete the job within the given time and the Authority was eager to have the new system implemented in order to avoid unnecessary extensions to the existing Featurenet contract. However, we learned that, although the contract was awarded later than anticipated, the project end-date was not revised to take this into consideration; the end date remained April This led to re-scoping of the project to prioritise the sites in order to ensure that the biggest sites were dealt with first, meaning that the cost of extending the Featurenet contract could be significantly reduced. Although this was a well-thought out process which led to a lot of re-planning of the project and served the Authority well given the circumstances, it is vital that projects are not consistently squeezed into unrealistic timescales if they are to be given any chance of meeting milestone and completion deadlines. If this practice is adopted, it can lead to a reduction in quality and standards. 6.2 Budget and Cost Monitoring We were pleased to note that the budget and costs related to the VoIP project were managed and monitored comprehensively and effectively. A budget tracker, developed in Microsoft Excel, was used by the Project Manager to monitor and control actual spend relating to the VoIP project. This was a comprehensive document and included information on change control costs, electrical costs and cabinet upgrade costs, as well as a spend profile which provided details of each of the project elements, such as contractor costs, bandwidth costs and contingency costs. In addition to this, the Project Accountant, with whom the Project Manager met regularly (at least twice a month), maintained a budget monitor. This also included commitments and projections and was presented to the Project Board at its monthly meetings. A summary of the financial position also formed part of the progress report that was submitted to the Project Board. An example of how this was presented within the progress report is shown below (extract from report to Project Board meeting on 31 st October 2007): Scott-Moncrieff Page 13

16 Capital Expenditure Original business Projected Costs Variance over / case 2006/ /13 (underspend) m m m Capital Costs (0.060) Additional funding from services Revised Capital costs (0.060) Revenue Expenditure Revenue Running Costs (0.054) Additional funding from services Revised Revenue costs (0.054) Total Project Costs (0.115) At the time of the review, the project remained under budget and was projected to remain so once the project had been completed and the replacement system implemented at the few remaining sites in January Scott-Moncrieff Page 14

17 7 Benefits Realisation 7.1 Monitoring of Benefits The benefits from the VoIP project were closely monitored throughout the project and reported to the Project Board at each meeting. The benefits, both those which were identified at the start of the project and those which materialised over time, were closely monitored and feedback provided regarding what this meant to the Authority, whether it be in terms of cost savings or environmental savings, as in the reduction in the number of fax machines or whether it benefited another project or strategy. 7.2 Benefits Achieved One of the key benefits expected to be achieved by the VoIP project was that the Authority would have a new, modern telephone system that would deliver greater functionality that could be deployed as the needs of the Authority and its customers evolved. This has been achieved through the implementation of the new VoIP system. Cost Savings Cost savings was another key benefit identified by the Authority through the implementation of the new telephone system. This has been achieved via a number of means, including: A reduction in the number of handsets; A reduction in the number of fax machines (also brought environmental benefits); A managed service contract to deal with moves, additions and changes to the telephony system, where previously, via the Featurenet contract, the Authority was charged for of these individually. Revision of Business Continuity Plans As part of the transition process of the project, services had to revise their business continuity plans to ensure that they could continue to carry out their functions and provide services. Business continuity plans, therefore, have been recently reviewed and put to the test as part of the project. Infrastructure Improvements There were major upgrades to the Authority s infrastructure core, e.g. switches were replaced and cabinets secured in line with health and safety. The Wide Area Network (WAN) is now more resilient and reliable. Scott-Moncrieff Page 15

18 Improved Telephony Information Base The Authority now also has a better information base in relation to its telephony. Previously, the information that came from BT was inaccurate in terms of where phone lines were going, billing addresses etc. The VoIP project has enabled this information to be reviewed and updated. Creation of Knowledgeable Team It has also been identified that, through the VoIP project, the Authority has built a knowledgeable team consisting of representatives from across the Authority, who have been involved in the different work-streams. It is foreseen that this team will have a key role to play in the ongoing delivery of the business benefits and help inform future projects of a similar scale. Key Lessons Learned Key lessons have been learned throughout the delivery of the new system and have already been fed back into other major project areas. Customer Contact Strategy The delivery of the Customer Contact Strategy has also been enhanced, including the promotion of the Useful Guide to Council Services and standardisation of the council identity in all material leaving the Authority. 7.3 Telephony Management Group The Telephony Management Group (TMG) has been formed with the remit of taking the system forward to deliver business improvement. This will enable the Authority to continue to realise the full business benefits that can be gained from the new system. The TMG will look at the benefits to be gained from deploying the various functionality that is available as part of the new system. This will also include investigations into whether it is suitable to deploy a particular piece of functionality, e.g. voic , what circumstances it should be permitted and development of the business processes that will need to be put in place to support it. Scott-Moncrieff Page 16

19 8 Action Plan Our action plan details the key weaknesses and opportunities for improvement that we have identified during this review. To assist the Authority in assessing the significance of the issues raised and prioritising the action required to address them, the recommendations have been rated. The rating structure is summarised as follows: The priority rating is intended to assist the Board in assessing the significance of the issues raised and in prioritising the action required to address them. The rating structure is summarised as follows: Priority 1 High risk, material observations requiring immediate action; Priority 2 Medium risk, significant observations requiring reasonably urgent action; Priority 3 Low risk, minor observations which require action to improve the efficiency, effectiveness on economy of operations or which otherwise require to be brought to the attention of senior management. It should be noted that the weaknesses identified in this report are only those that have come to our attention during the course of our normal audit work. The audit cannot be expected to detect all errors, weaknesses or opportunities for improvements in management arrangements that may exist. Scott-Moncrieff Page 17

20 8.1 Action Plan Original Requirements Issue Weakness and Risk Recommendation and Rating Management Comments Responsible Officer Date Requirements Review It is essential that the report detailing the actual requirements against the expected requirements is provided to the Board and that We recommend that the Authority ensures that the actual v expected document is provided and reviewed before agreeing to close the project Report presented to the Project Board meeting on 12 February Executive Director, Finance and Resources February 2008 this is thoroughly reviewed to and hand over to the TMG. ensure that there have been no omissions or oversights. Priority 3 There is a risk that the project will be closed and handed over to the TMG without all requirements being satisfied. This could then lead to issues being identified later on, which could hinder the business transformation process. Scott-Moncrieff Page 18

21 8.2 Action Plan Planning and Management Processes Issue Weakness and Risk Recommendation and Management Comments Responsible Date Rating Officer Procurement & Supplies Involvement For future large scale, complex projects, Procurement & Supplies should be involved throughout. This is essential if procurement processes and contract management issues are to be dealt with effectively. There is a risk for future projects that procurement and contract - related issues may arise that could have been avoided. We recommend that the Authority ensures that processes are put in place to ensure that Procurement & Supplies is sufficiently involved in any future large scale projects. We would advise that Procurement & Supplies, as the purchasing specialists, should lead future major procurements. Calling on Legal, Finance and other services to assist as appropriate. As part of work currently being progressed in relation to reviewing aspects of the Council's procurement processes guidance will be issued in relation to the role of Procurement, in particular ensuring its involvement in key projects/programmes. The most recent major project is, Print08, (output strategy) where both Procurement and Finance are members of the Project Board developing the specification and tender. Legal, whilst not permanent members of the Project Board, have also been heavily involved. The Procurement and Supplies Manager is currently undertaking of series of presentations with Service management teams on the role of procurement and reiterating the need to have an early involvement. The recently approved Procurement Strategy emphasises the importance of the role of procurement throughout the life Executive Director, Finance and Resources Procurement and Supplies Manager March 2008 Ongoing Priority 2 cycle of a contract, i.e. from inception through to post contract evaluation. Scott-Moncrieff Page 19

22 Issue Weakness and Risk Recommendation and Management Comments Responsible Date Rating Officer Resolution of Outstanding Issues with Supplier There are a number of issues related to the project and contract that have been subject to separate As previously highlighted in the internal audit review of the management of the letting of VoIP contracts, it Services will be reminded of the need to retain appropriate copies of all relevant documentation and guidance will be issued with the revised Scheme of tender procedures. Executive Director Finance and Resources April 2008 discussion to avoid any is recommended that delays to the rollout of the Management obtain signed VoIP implementation. It acceptance of all would appear from review contracts. of the issues subject to separate discussion that the absence of a common interpretation of the detailed terms of the contract has been a contributory factor in the inability to have these issues resolved. Signed acceptances strengthen the Authority s negotiating stance when seeking to ensure that all issues under discussion with suppliers are satisfactorily and timeously resolved. There is a risk that issues may not be resolved timeously and to the Council s benefit due to the Priority 2 absence of an agreed interpretation of the final contract. Scott-Moncrieff Page 20

23 8.3 Action Plan Timescales and Costs Issue Weakness and Risk Recommendation and Rating Management Comments Responsible Officer Date Timescales It is essential that for future projects, timescales are realistic and, in the event of changes and issues, the completion date of the project altered to reflect this. There is a risk for future projects that, if timescales are unrealistic and not changed to reflect major changes to the project, quality may be affected and corners cut to meet timescales. We recommend that the Authority ensures that processes are put in place to ensure that when an issue or change has a major effect on milestone and completion dates, these dates are revised and approved as necessary. Priority 2 A standard methodology has been developed and implemented to ensure projects are effectively scoped, planned, resourced and monitored. The method provides a framework for managers and those approving projects to make more informed decisions and be informed of any changes that may effect the Executive Director, Performance & Organisational Support January 2008 outcome or timescales of the project. Scott-Moncrieff Page 21

24 APPENDIX 1 VoIP Expenditure The following table has been extracted from project management documents and shows the financial position as at December 07, at the end of period 10. This is intended for information purposes only and should not be considered as an official report of the projects financial position. This information is readily available from the Project Board. Fife Council IT Services VOIP Telephony Project Spent / Key Original Projected Committed C = Capital Expenditure Estimate Spend to Date R = Revenue Expenditure VOIP Telephony Project (GK501) Affiniti Contract Equipment C 3,882, ,881, ,837, Equipment not required (line 7) C (525,000.00) Additional Costs - Equipment C 328, , Additional Costs - Equipment - Interface Cards C Additional Costs - Switches C 69, , , Additional Costs to Contract C Sub-Total (Equipment) 3,426, ,525, ,482, Consultancy C 146, , Project Management C 1,197, , , Install & Commissioning C 578, , Maintenance and Support Setup C 275, , Training C 17, , year Annual Support - Implementation Phase C 620, , year Annual Support - Post-Implementation R 2,886, ,124, , Subtotal (Affiniti IPT) 7,509, ,462, ,776, Other Equipment Phone Upgrade C Headsets C 10, , Subtotal , , Cabling Patch Cabling C 254, , , Cat 5 Points C Fibre Cabling - Cabinets C Subtotal 254, , , ACD Costs ACD System C 167, , ACD System Support R 59, ACD System Increase in Managed Service - Contact Centre C 95, , Scott-Moncrieff Page 22

25 Fife Council IT Services VOIP Telephony Project Spent / Key Original Projected Committed C = Capital Expenditure Estimate Spend to Date R = Revenue Expenditure ACD System Increase in Managed Service - Contact Centre R 30, Subtotal , , Implementation Costs LAN/WAN Refresh Costs - Agency C Implementation Costs C 20, , Transportation of Equipment C 37, , Administrative Support C 29, , Administration Costs R 9, , Subtotal , , Publicity/Marketing R 78, , , Technical Training Upgrade R 200, , , VOIP Telephony Project 8,041, ,256, ,224, VOIP Bandwith Contract (GK503) Bandwith Upgrade C 1,611, , , WAN Rental C 159, , , WAN Rental R 729, , VOIP Bandwith Contract 2,499, ,417, , VOIP PSTN Contract (GK504) Purchase and Install IVR C 179, , DDI Numbers C 4, , DDI Rental C 4, , DDI Rental R 15, Divert C 5, , ISDN Installation C 80, , , ISDN Rental C 408, , , ISDN Rental R 853, PSTN Installation C 21, , PSTN Rental C 43, , PSTN Rental R 3,067, , PSTN Call Costs (5 year) R 3,184, ,182, Redcare Alarms C 45, , Additional PSTN Systems C 180, Featurenet PRI C 56, VOIP PSTN Contract 6,795, ,954, , Scott-Moncrieff Page 23

26 Fife Council IT Services VOIP Telephony Project Spent / Key Original Projected Committed C = Capital Expenditure Estimate Spend to Date R = Revenue Expenditure VOIP Version 5 Upgrade (GK511) Version 5 Upgrade C 50, , VOIP Version 5 Upgrade 50, , Contingency C 339, Contingency R Contingency 339, Total VOIP Project 17,724, ,678, ,214, Current Featurenet Costs R 3,850, ,167, ,158, Current PSTN Costs R 3,530, ,183, Current Telephone Costs 3,850, ,697, ,341, Total Costs 21,574, ,375, ,556, Projected Spend Profile Capital 7,580, ,392, ,617, Revenue 13,994, ,982, ,938, ,574, ,375, ,556, Spend Profile agreed at P & R - 13th April 2006 Capital 7,511, ,511, Capital 69, , Revenue 13,916, ,916, Revenue /2007 Underspend 78, , ,574, ,574, Variance Capital 0.00 (187,146.11) Revenue 0.00 (11,519.01) 0.00 (198,665.12) 0.00 Scott-Moncrieff Page 24

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