Andersen Consulting, the giant management and technology consulting partnership, is hoping to promote a massive financial database package to government and major financial institutions worldwide after a 100m pounds development project in the UK. However the scheme has brought the organization endless bad publicity which culminated yesterday in red-faced Andersen executives facing tough questioning from members of the House of Commons Public Accounts Committee. Andersen won a 134m pound contract in 1995 to provide a uniquely complex system to provide one of the largest IT systems in Europe that would run the heart of the UK’s welfare state. A total of 34 international companies had pitched for the deal but the reason Andersen emerged triumphant is that it found a way to undercut competitors by as much as 100m pounds. Andersen offered to develop the system for nothing provided the UK government allowed it to retain the intellectual property rights to sell the technology on to other customers. It was an offer that no government faced with hard- pressed public finances could refuse. Andersen was faced with a massive project, due for completion in February 1997. The National Insurance Recording System maintains details of over 65 million accounts with a further million added each year. It records payments from the entire UK workforce and records benefits to millions of claimants. Andersen quickly realized it could not meet the original deadline and agreed a new timetable with the government to phase the system in between February 1997 and April 1998. That again proved too optimistic and the basic work of migrating four billion items of data from old mainframes to a Sybase database on Hewlett-Packard hardware was not completed until July 1998. The final stage is now scheduled to be completed by the end of March this year, though a report to Members of Parliament by the National Audit Office expresses serious doubts as to whether the system will be fully operational by then. The report also points to vast ongoing problems in the functionality of the system. Where there was agreement that it was not performing to specification, the number of problems raised have consistently outstripped Andersen Consulting’s capacity to analyze problems and produce acceptable fixes, says the report. Pessimists suggest that it may take as long as two years to finally sort out the problems. Whether in view of the torrent of bad publicity, Arthur Andersen will end up with technologies that it will be able to sell to governments and major banks in the rest of the world remains to be seen. It has already been forced to pay 3.7m pounds to the government in penalties for the delays to the system and further payments may soon be demanded. On top of this, Andersen has lost revenues because of the delays and its development costs have escalated vastly in excess of its original forecast.
