3.19 It is clear that the risks of late delivery of CAPS were not well managed prior to the replan of the whole CAPS and Payment Card programme in February 1997. A new project director took up post in mid 1996, around the time that the Payment Card contract was awarded to Pathway. He found that the project had not been appropriately resourced. The Department also commissioned a review by consultants Ernst and Young which in December 1996 reported:
■ a lack of project management expertise at the right level within the CAPS senior management team;
■ a focus on short term objectives to support the initial go-live, at the expense of developing a set of plans and designs for the programme as a whole; and
■ doubts over the strength of financial projections and cost control.
3.20 Ernst and Young made recommendations for improved management and planning which the Department implemented to reduce the risk of subsequent slippage on CAPS. While CAPS along with the other two parties, had contributed to delays in the project up to the project replan in February 1997, thereafter the Department successfully released software and data from CAPS in time for the equivalent releases of Payment Card software by Pathway. We found no evidence that from then onwards the releases of CAPS software had delayed the implementation of the Payment Card.
3.21 Besides sustaining progress on the CAPS project, the Department had to co-ordinate it effectively with the Payment Card. The CAPS project management structures and risk management processes were separate from those for the Payment Card. An alternative arrangement would have been to create a common programme management tier to oversee the Card Project, CAPS, and related activities in Post Office Counters Ltd. This would have ensured that due weight was given to interdependencies between constituent projects. But the project was only one part of Post Office Counters' wider transformation programme and similarly CAPS had a wider remit for the Department than just supporting the Card. So a single management structure was not thought feasible in this case due to the commercial sensitivities of the two purchasers.
3.22 Though the Department and Post Office Counters Ltd did not set up an overarching programme structure, the Department managed the risks of inadequate co-ordination between CAPS and the joint Delivery Authority by establishing close links at board and management team level. Key Departmental staff attended meetings for both projects. Pathway were not directly involved in CAPS board meetings and had no direct, formal access to CAPS staff until late in the programme when the joint Delivery Authority was wound up. Pathway told us that in the absence of a common programme management tier, and of direct formal interaction with CAPS, they had found it impossible to ensure dovetailing of the two programmes at the detailed level or to avoid surprises during the phased releases of software. The Department pointed out that plans were continually shared with Pathway.