BBC 'took too long to realise DMI project was in trouble'

http://www.theguardian.com/media/2013/dec/18/bbc-dmi-project-pwc-report

Version 0 of 1.

The BBC should have identified that the Digital Media Initiative was set to fail as early as July 2011, almost two years before it was eventually shut down at a cost of almost £100m to licence fee payers, according to an internal report that found a failure of governance and management oversight were to blame.

On Wednesday the BBC Trust published the findings of a 54-page report by PwC into the failed technology project, designed to replace video tape libraries with a digital archive and editing system, which was axed in May to stop "throwing good money after bad".

The report, which cost the BBC £263,340 to produce, found no single issue or event caused DMI to fail. But PwC concluded that the BBC took too long to realise DMI was in serious trouble and likely to fail because of weaknesses in project management and reporting, a lack of focus on business change, together with piecemeal assurance arrangements.

BBC insiders were critical of the tone and scope of the report, arguing that the corporation has got off lightly for its £98.4m technical blunder.

"We are of the view that had appropriate governance, risk management and reporting arrangements been established from the outset, then the process of preparing a revised business case for DMI could have been commenced as early as July 2011," said PwC. "It took longer than we would have expected for the BBC to reach executive agreement on the future for DMI."

PwC concluded that the BBC might have picked up on the potential failure of DMI as early as July 2011 and said that by September of that year the catalogue of problems with the project meant it should have been apparent that "successful delivery was in doubt with major risks or issues apparent in a number of key areas".

The report said that the project lacked an executive steering board that could "effectively challenge the progress of DMI against agreed quality, time and cost metrics".

There was oversight from the corporation's director general finance committee, but the report found that it "did not have sufficient independent technical capabilities needed to challenge progress".

This was because John Linwood, the BBC's chief technology officer who ran DMI and remains suspended from his £287,000-a-year job, attended the committee to provide expertise.

According to sources, Linwood's legal team has been defending his position robustly, particularly due to his high-profile suspension.

It is not yet known if he will resolve the issue without recourse to a tribunal or if his legal team may seek any financial recompense.

The report said that those running the DMI project did not provide a clear picture for "effective decision-making" on its future direction.

"DMI did not provide clear and transparent reporting on progress against plan, cost to complete, or delivery of benefits to enable effective decision-making within the corporate governance structure," it said.

The report found that there were no "periodic reviews" of whether there was still a business case to continue with the DMI project.

"No review was undertaken into the cost of delivering DMI," the report says. "Had DMI provided an accurate forecast against plan, it should have been clear from delays in delivery, and changes to the risk profile, that the conditions requiring re-approval of the business case had been reached."

Some BBC insiders said they thought the internal inquiry should have been more robust. One said: "The BBC Trust set a very narrow set of questions that would always restrict the review and stop it asking the real questions. The report doesn't address if or why public accounts committee was misled. It relies on BBC information and narrative much of which is already queried."

PwC noted out the limited scope of its remit in the executive summary of the report.

"For the avoidance of doubt, this review has not assessed the programme delivery or any element of the technology delivery, business change activities, DMI technical solution, or the decision to write down the asset," it said.

PwC added that BBC management, led at the time BBC former director general Mark Thompson, was faced with a "backdrop of organisational strain" at the time of the project.

The DMI was undertaken at a "time of considerable change" within the BBC, as well as "against the backdrop of a portfolio of complex programmes including Project North, W1 and the Olympics".

"The failure of the DMI project came at an unacceptable cost to licence fee payers and PwC found serious weaknesses in the governance of the project," said Diane Coyle, vice-chairman of the BBC Trust.

Dominic Coles, the BBC's director of operations, said that the corporation has a high technical pedigree with projects such as the BBC iPlayer but had "got this one wrong".

"While the BBC has a strong history of delivering complex projects such as BBC iPlayer, the digital Olympics or major property moves, we got this one wrong which we regret," he said. "We know it is vital to spot problems early, which is why we have overhauled how these projects are run to ensure this doesn't happen again."

• To contact the MediaGuardian news desk email media@theguardian.com or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".

• To get the latest media news to your desktop or mobile, follow MediaGuardian on Twitter and Facebook.

Our editors' picks for the day's top news and commentary delivered to your inbox each morning.