SE contracted with Fujitsu Services Ltd on 5 September 2005 to provide an e-HR system, using Oracle software providing 'best practice' solutions for better delivery of HR reporting responsibilities, including data integration and some self-service functionality. Within days of signing the contract SE sought, and Fujitsu agreed, a variation to the contract which changed the deliverables and brought forward the date of 'rollout' from November 2006 to May 2006. By December 2005 the risk status of the project delivering on time and budget was deemed 'Amber', by January 2006 it was assessed as 'Red'; in February the project moved into 'recovery' status. In May 2006, the project had been 'paused' pending consideration of this review: the outputs specified in the contract have not been delivered; however, a series of 82 HR business process maps had been produced, capable of configuration into e-HR software with minimum customisation. By June 2006 costs amounting to some £4.6 million of the originally approval £8.5 million (including moving to a new payroll provider) had been incurred.
A separately constituted HR transformation project, embracing major structural changes to HR — the establishment of Business Partners, the launch of a single entry point for the new HR Shared Service Centre and co-location of dispersed HR teams into one new location — was consequentially destabilised by the disruption in the e-HR project because the new HR operating model was not underpinned by the planned self-service facility for line managers or the improved level of management information that had been envisaged.
It was concluded that a 'number of individual factors combined over an extended period and in particular during the last 4 months of 2005 serve to explain the failure of the e-HR project to deliver on time'.
Governance
Governance arrangements fell short of best practice. Concerns were expressed on several occasions by external and Gateway reviewers and by the non-executive Programme Board members. These voices called for clarity and precision in the roles, responsibilities and accountabilities of key personnel. While governance was discussed frequently by all parties, proper, practical and convincing arrangements were not put in place in a timely fashion, with the consequence that there was not sufficiently adequate independent assessment of risk and oversight of progress. This was compounded by the Senior HR User assuming the responsibilities of Senior Responsible Owner. The departure of the established e-HR programme manager shortly after contract commencement and his replacement by two inexperienced successors within the next 3 months meant that project leadership was not sufficiently rigorous or effective.
Business Case
The business case against which the e-HR project was approved was prepared between November 2004 and February 2005. There were calls for it to be revised to reflect the final costs and scope of the contract and the relationship between e-HR and HR transformation. The assumed cost improvements arising from e-HR in terms of headcount reduction in the HR function had already largely been realised by the time the contract was signed. The e-HR business case was not adequately reviewed and updated at the time of contract signing and whilst a draft Project Initiation Document outlining at a high level the additional benefits assumed to arise from HR transformation was circulated to Programme Board members in August, there was no detailed, revised, comprehensive business plan setting out the various critical dependencies, which could be formally evaluated, considered and agreed by the Board. This was regrettable and contrary to best practice: it made it difficult for the Board to undertake its role of understanding and challenging assumptions, assessing risks and deliverability and ultimately of championing the overall programme.
Scope of the e-HR Contract and Revision to Timetable
Changes to scope and timetable were two significant factors contributing to non-delivery. In the run-up to signing the contract Fujitsu agreed to the senior user's request that it would be varied almost immediately to drop some elements and add others. There was at the time (and which remained some months later) confusion among the SE staff closely involved about precisely what has been properly, contractually authorised by way of change requests to the scope of the contract. In the original proposals, the timescale envisaged a start to contract in summer 2005 with Fujitsu's deliverables completed by July 2006 and rollout of service across SE by November 2006. The SE senior user brought the completion date forward to the end of May 2006. While there was discussion with HR team leaders and Fujitsu, no clear detailed plan showing milestones, interdependencies, resource input obligations and risks was prepared at the time, agreed with Fujitsu or shared with the Programme Board, staff and stakeholders. Fujitsu considered they had no option but to agree to the revised date and the local SE context was one which did not support informed, effective challenge to the senior user's estimation of what was possible. The reduction of 40% in the over-all contract period, with a consequence of shortened timescales for workshops to develop the operating model, for testing and for putting in place the major communication and training effort, was over-optimistic and allowed only 9 months to complete the work. This was shorter than the equivalent periods allowed by other government departments involving Fujitsu in e-HR solutions and did not allow sufficient time for contingencies and recovery in the event of significant problems arising with work on the critical path; nor was it realistically achievable given the level of cultural awareness in SE about the changes envisaged, the work which would have to have been put in train to secure staff readiness, and was risky given what was known then about staffing resources going forward (e.g., impending departure of the programme manager, live vacancies and the likely impact of the pay review).
Reporting Arrangements
Progress on the e-HR project was reported to the Programme Board and other bodies in different ways on a quarterly basis. However, the nature of such quarterly reporting meant that events were reported retrospectively and it was always possible to accurately ascertain the current status of a project operating within a tight timescale via this method of reporting. When the e-HR project was reported as being on target and within budget at the end of October 2005, concerns were already being raised within the project. There was no mandatory requirement for such concerns to have been brought to the attention of the Programme Board at this stage; rather, it was a matter of personal judgement about the extent to which problems needed to be shared with senior colleagues. Three Gateway reviews of the project were conducted in 2004 and early 2005. Whilst the findings of the Gateway reviews were made available to the Programme Board, a number of their specific recommendations were not translated into practical action.
Disharmonies
As we have noted previously, whilst it is not uncommon for tensions to arise within high-profile projects operating within tight deadlines, success is difficult to achieve without a common understanding of goals, a proper respect for team working and mutual trust between the individuals working on the project. The view articulated by many of those involved in the SE programme was that these aspects were not sufficiently present: the programme was lacking in effective, engaged leadership and characterised by poor working relations, both within SE representatives and between SE and the contractor, and low morale. There were problems at all levels, and at times within SE these included a lack of confidence in the project by Programme Board members and tensions between the programme manager and the senior user. More generally, while some staff were enthusiastically supportive of the SRO/senior user, others plainly found her leadership style difficult or felt unclear about the HR vision and project deliverability.
Communications
The lack of a clear, effective and timely communication effort to HR professional staff, line managers in SE and staff in SE and its related departments and agencies contributed to the failure to deliver. Fujitsu argued that the absence of clear understanding by stakeholders prejudiced the successful completion of the business process workshops and in turn meant that the e-HR software could not be configured in the tight timescale set. The major cultural change entailed by e-HR and HR transformation needs to have strong stakeholder engagement and line manager buy-in if staff are to make a success of it. To achieve this a transparent and consistent message must be planned and conveyed and a significant training effort needs to be planned and mounted. That was not done.
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