2.33 Proposals for new work vary considerably in scale and cost. Of almost 400 projects with an information technology content authorised by the Department since the start of the contract, 50 (around 13 per cent) accounted for some 95 per cent of the EDS development staff input. However, the increasing move towards integrating the Department's systems and the development of single software modules for common procedures, such as the handling of receipts and payments, which can be used in a number of systems supporting individual taxes, mean that proposals are becoming more complex, in the sense that dependencies between projects are increasing.
2.34 It would be impractical and unnecessary, as well as contrary to the aims of the outsourcing, for staff in the Department's Feasibility Appraisal Service to evaluate in detail the technical or financial aspects of every EDS proposal. Projects which are large or business-critical should always be considered for appraisal, however, as should those which are potentially innovative in terms of either the information technology solution or the business process. Potential cost should be a criterion, but not the sole one.
2.35 The staff responsible for examining projects rely on their judgement and experience, much of it gained with the Information Technology Office, to determine the scope and depth of an evaluation of an EDS proposal. We noted that the Information Technology Technical Consultancy, the operational research specialists and senior members of the Contract Management Team were involved with the evaluation of larger projects, such as the sample of twelve covered by our investigation.
2.36 A fundamental objective of the Department's information systems and information technology strategies is to avoid, as far as is practicable, becoming tied to EDS, or any other supplier - that is, to suffer "lock-in". For example, the Department has recognised that EDS has commercial relationships with suppliers which make certain products available at favourable rates which might not be available to the Department or to other potential service suppliers at the end of the contract. And work involving recent information technology developments, such as internet technology, presents greater risks of "lock-in" than more mature areas of information technology. One of the key responsibilities of the Information Technology Technical Consultancy is to evaluate the strategic implications of EDS proposals. In deciding which projects to refer to the Information Technology Technical Consultancy, the staff responsible for examining projects therefore need to be alert to the possibilities of "lock-in" and its implications for retendering the contract.
2.37 The effective use of resources is particularly critical in the case of the Information Technology Technical Consultancy, where the knowledge of its two experienced staff needs to be focused on projects involving strategic issues. But as new, less experienced staff are recruited to assess projects, they may be less able to make judgements about when they should seek the assistance of specialists, without formal criteria to guide them. Such guidance did not exist at the time of our study.
2.38 Although the Department had not included the risk of failing to seek expert advice in its formal risk management plan, it told us that it believed that its training and induction arrangements would address the risk. It also considered that it would be difficult to prepare anything other than general guidance in what was a fluid area.