Red alert over IBM's build of the NZ National Infrastructure Platform

The NZ Treasury has put IBM's contract to build the National Infrastructure Platform (NIP) for the 20 district health boards on high alert, with the project currently in a “rest phase” due to the service not being ready for deployment and the parties still to decide whether there is a viable way forward for the program.

Citing the “non-performance of the vendor” as a reason for putting an amber-red delivery confidence assessment on the project, the Treasury's major projects performance report (MPPR) for July, released this week, warns that successful delivery of the project requires urgent action and that the delay may have a flow-on effect on the $65 million National Oracle Solution (NOS), which is due to begin its roll-out to the DHBs early next year.

IBM was awarded the contract to build the NIP as an infrastructure-as-a-service offering in February 2015, with the majority of the DHBs signing contracts to migrate their core applications and systems from their existing data centres to two IBM-managed data centres with higher security classifications in Auckland and Christchurch.

The NIP was supposed to provide better security, reliability and service levels and reduce the risk of critical outages. The IaaS model was also set to allow DHBs to purchase their IT infrastructure on demand, allowing them to only pay for what they need.

The deal was brokered by Health Benefits Limited (HBL), a Crown company which itself was dissolved in June last year and its role taken over by a new organisation called NZ Health Partnerships (NZHP), owned and controlled by the DHBs, last July.

HBL announced at the time of the contract signing that 15 of the 20 DHBs had conditionally approved the business case and the first four – Northland, Auckland, Counties Manukau and Waitemata – had signed contracts to use the platform.

NIP was expected to provide financial benefits of $23.9 million over 10 years and the DHBs were scheduled to start migrating from their current 40 data centres to the two IBM-managed data centres from July 2015.

However, the Treasury has now revealed that NZ Health Partnerships, on behalf of its 20 DHB shareholders, has twice made the decision to delay the launch of the NIP.

This was due to two technical assessments of IBM’s solution, the first led by NZ Health Partnerships in March 2016 with the assistance of DHB chief information officers and other subject matter experts, and the second conducted by the government CIO (GCIO) in May.

As a result, the project has now been put on the amber/red alert, which states that successful delivery of the project requires urgent action to address major risks or issues in a number of key areas. “Changes to budget, schedule, scope or benefits may be necessary if the project is to be delivered successfully,” the MPPR says.

In the report, the Ministry of Health is quoted as saying that the “monitoring delivery confidence assessment is Amber/Red due to the non-performance of the vendor”.

The Treasury reports that the program is currently in a 'rest' phase with a 'Stage Gate' being held this month to decide whether there is a viable way forward for the program. NZHP has been working closely with IBM and hopes to have agreement by the end of this week on a way forward, the Treasury reports.

It also says that interim IT infrastructure arrangements are in place at DHBs to mitigate operating risk, but warns that the issues encountered may have an adverse effect on the implementation of the NOS project.

The NOS is described as a common suite of integrated applications that are used to manage and report on core DHB activities including financial management accounting, supply chain management and business intelligence.

Built on Oracle's enterprise resource planning (ERP) software, the NOS is 90 per cent complete and will also be offered on an infrastructure as a service (IaaS) contract, but this one with Datacom.

The Treasury warns that with the issues encountered by NZ Health Partnerships in relation to the National Infrastructure Program, “timely delivery of the information as a service for NOS may be challenging as the first wave of DHBs to transition onto NOS is scheduled for the beginning of 2017.”

The Treasury has also put the National Bowel Screening Program on amber/red, despite the government having allocated $39.3 million to it in this year's budget and Health Minister Jonathan Coleman boasting late last month that the project was “on track” with Cabinet having approved the business case.

Dr Coleman also said additional funding had been set aside in contingency to enable the IT support for the screening program.

The Treasury says the program has improved from red to amber/red because the Ministry is consulting with DHBs about delivery dates and their ability to absorb additional costs. However, the Treasury says it remains concerned that the program roll-out schedule appears difficult to achieve.

Last May, the National Health IT Board, which was also recently disbanded, signed up to have its national programs hosted on IBM's government cloud offering including the National Health Index database.

Posted in New Zealand eHealth

Tags: IBM, Health Partnerships NZ, National Infrastructure Platform, Datacom

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