BBC tech delays cost millions in lost efficiencies

Project aimed at saving £18m to end up costing over £10m...
Written by Nick Heath, Contributor

Project aimed at saving £18m to end up costing over £10m...

A tech project supposed to save the BBC £18m will instead end up costing the corporation more than £10m, according to the public spending watchdog.

The National Audit Office report, The BBC's management of its Digital Media Initiative, found that the Digital Media Initiative (DMI), approved by the BBC Trust in 2008, suffered a 21-month delay.

The delay led to £26m of efficiencies not being achieved, and in July 2009, the BBC's contract with supplier Siemens was terminated by mutual agreement, leading to the BBC taking the project inhouse.

The DMI is a technology transformation project designed to allow BBC staff to create, develop, manage and share audio and video content and programming on desktop computers, and is intended to improve production efficiency across the BBC.

The NAO report's executive summary said: "The delay of 21 months and the £26m in programme benefits the BBC did not achieve in that period, and had to find elsewhere in the BBC, meant that the early stage of the programme was not good value for money."

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Delays to a BBC technology project ended up costing the corporation £26m in lost benefits
Image: BBC

The estimated net cost to the BBC of delivering and implementing the project up to March 2017 is £10.7m, compared with a 2008 cost projection that estimated the programme would generate a net benefit of £17.9m.

The NAO report stated that the BBC and Siemens had been unable to agree on the cause of the delays suffered by the project, and said the BBC's handling of the contract, and its decision to award it to its existing IT contractor Siemens without fresh competition, had hampered its ability to deal with the delays.

"The way in which the BBC appointed the contractor without a new competition and was then unable to intervene effectively in system development without undermining its transfer of financial risk to the contractor was not an effective way of approaching the delivery of a complex programme," the executive summary said.

Since taking the project inhouse the report said DMI users have been positive about the parts of the system that had been delivered so far.

However, the report's executive summary added: "There is still a considerable way to go in the development of a technically complex system which requires the integration of a number of interdependent elements without any time contingency.

"The success of the programme will depend on take-up by users across the BBC and elsewhere. It is therefore too early to conclude on the likely value for money of the programme."

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