Recommendation 1

The Department should continue to seek to minimise the number of developments which are inconsistent with its information technology strategy and, where departures are necessary, the decision should be made consciously, and for justifiable reasons.

Recommendation 2

In view of the strategy's importance in securing value for money, the Department should continue to keep it under review and amend it, as necessary, in response to developments in information technology and changes in its medium- and long-term vision of its business.

Recommendation 3

The Department should make a formal assessment in its partnership risk management plan of the issues associated with working in closer partnership with EDS in the rapid development of applications and take steps to mitigate any material risks identified.

Recommendation 4

The Department needs to continue to manage the risks associated with joint working to ensure that it retains sufficient independence to assess projects objectively and to avoid becoming locked in to the partnership with EDS to an extent which would restrict options at the conclusion of the contract in 2004.

Recommendation 5

The Department should consider developing guidance setting out the main risks to be addressed during evaluation of EDS proposals and when to call for expert advice.

Recommendation 6

The Department should consider commissioning independent reviews of selected projects, for example, by its Internal Audit Office to assess whether projects with a value below £250,000, which are approved by the Feasibility Appraisal Service, have been fully and accurately specified and assessed and to confirm that business cases put before the senior approval bodies are soundly based.

Recommendation 7

In view of the significant growth in workload, the Department should keep its in-house project management skills base under review to minimise the risk of over-dependence on bought-in resources.

Recommendation 8

To minimise the risk of nugatory expenditure, the Department should ensure that its guidance provides project managers with sufficient information about the contract pricing mechanism and the impact of changes in requirements. In particular, managers should understand how changes in EDS productivity and in the volume and timing of resource requirements may affect costs.

Recommendation 9

Key performance criteria should always be established before the Department accepts delivery of a product from EDS, and the development of such criteria should be monitored actively under the Department's risk management plan.

Recommendation 10

The Department should systematically analyse and document the skill sets required for all activities that support the management of the contract, including the award of new work, and the relationship with EDS. These analyses should then be used for monitoring the relevance of individuals' personal development plans and for the development of training programmes.

Recommendation 11

We recommend that the Department reviews the role of its Information Technology Technical Consultancy Unit. If some redefinition is required, the impact of this on staff numbers and skills should be quantified, and any gaps addressed.

Recommendation 12

The Department should review its policy for the rotation of staff in the Business and Management Services Division and consider how to address the factors which are inhibiting staff rotation. The objective should be to achieve an exchange of staff with other parts of the Department so that the Division is regularly refreshed and detailed knowledge about the operation of the partnership is spread more widely within the Department.

Recommendation 13

The Department should continue to use benchmarking as a key tool for assessing the value for money of its partnership with EDS. It should consider how it could collect, analyse and present the information in such a way that it can be used in the evaluation of proposals for new work as well as for assessing the value for money of existing activities. It should also consider extending the benchmarking to include direct comparisons of EDS efficiencies and costs in operating and maintaining information systems.

Recommendation 14

In view of the difficulty in obtaining benchmarking data, the Department should explore the scope for using commercial organisations or benchmarking clubs to gather this information and concentrate its own resources on specifying the areas where external comparisons are needed and on interpreting the results.

Recommendation 15

The Department should establish a protocol with EDS on the provision and use of data for benchmarking in order to clarify the part EDS is prepared to play in benchmarking exercises. The protocol should specify what information EDS is prepared to offer the Department and what it is prepared to supply to others, either directly or through the Department.

Recommendation 16

The Department should only use formal external competitions to test the market when it, and EDS, if it is contractually entitled to provide the service, are genuinely prepared to see the service being tested awarded to the bidder offering the best value for money.