No value for money in BBC's early management of digital media: NAO

MUMBAI: The BBC Trust has published an independent report commissioned from the National Audit Office (NAO) on the BBC‘s management of its Digital Media Initiative (DMI).

The NAO has concluded that the early stages of the Programme were not value for money, mainly as a result of a 21 month delay leading to ?26 million of benefits not being achieved in the period 2009-10 to 2010-11.

The DMI is a technology transformation project designed to allow BBC staff to develop, create, share and manage video and audio content and programming on their desktop. It is intended to improve production efficiency across the BBC. The estimated gross cost of delivery and implementation to the end of March 2017 is ?133.6 million.
The BBC appointed its existing IT contractor (Siemens) to develop the Programme. The contract with Siemens was terminated by mutual agreement in July 2009. The BBC then took responsibility for delivery of the project in-house and was able to offset its increased costs by a ?27.5 million financial arrangement agreed with Siemens. In-house delivery of the system has started well, and, while there is a considerable way to go before the Programme is complete, users have been positive about the elements delivered thus far.

Key points from the report and the Trust‘s response to them include:

1. The way in which the BBC appointed the contractor without a new competition and was then unable to intervene effectively in system development without undermining its transfer of financial risk to the contractor was not an effective way of approaching the delivery of a complex programme.

The Trust notes that the BBC awarded the DMI contract to Siemens under a technology framework agreement intended to provide efficiencies, in part by reducing procurement costs. The Trust agrees that the decision to award the contract to Siemens did not lead to the planned outcome and the first phase of the project did not proceed according to plan. The Trust notes, however, that the BBC reached a financial arrangement with Siemens which allowed the BBC to allocate ?27.5 million to meet the increased cost of completing the delayed Programme.

2. Although once problems came to light and it took the Programme technology development in-house, the BBC did not test whether that was the best option. It also did not test the value for money of this approach despite the Programme being in difficulty and behind schedule.

The Trust closely monitored the status of the project, and was satisfied that the BBC Finance Committee (which includes the BBC Director-General, the BBC Chief Financial Officer and the BBC Chief Operating Officer) made an appropriate decision as to how to continue the DMI - given that the financial cost to the BBC was not increasing and the aims of the project remained as previously stated. However, the proposal to increase the scope of the project was rightly fully assessed and brought before the Trust in May and June 2010.

3. The financial benefits of the Programme were initially overstated. The original cost-benefit estimate in January 2008 was a projected net benefit of ?17.9 million. The latest forecast is of a net cost to the BBC of ?38.2 million by March 2017, partly offset by a ?27.5 million financial package agreed with Siemens, leading to a final net cost of ?10.7 million. 
The Trust noted that the financial benefits case was revised in the 2010 case, and fully agrees with the NAO‘s recommendation that greater rigour should be applied than was evident in the 2008 business case. It is reassuring that the NAO noted significant improvements in the 2010 business case. However, the non-financial benefits of DMI are also significant, and the financial benefits of DMI, while important, are only part of the picture.
BBC Trustee with lead responsibility for value for money Anthony Fry said, "The DMI is a cutting edge project that will improve the way the BBC operates and transform the way it makes programmes and content. The Trust agrees with the NAO that the early phase of the project ran into significant difficulties, but the BBC reacted with speed and efficiency, and since bringing it in-house delivery is progressing as planned. Clearly there are lessons to be learnt and the Trust will continue to monitor progress against the action plan we‘ve asked the BBC Executive to produce."

NAO head Amyas Morse said, "The BBC‘s approach to the early stages of this Programme was disappointing and did not achieve value for money. However, since taking the Programme back in house, delivery of the system has progressed well, and users have responded positively. The real test of value for money of the Programme as a whole will be the take up by users across the BBC and elsewhere, and on this it is too early to conclude."

Latest Reads
India, China to propel APAC, beat CAS Europe market share

APAC is expected to overtake the market share of Europe in future due to an increasing demand for digital TV set-up boxes in countries such as China and India. North America and Europe dominated the global CAS market in 2015. APAC region is estimated to mark a growth rate of 12.0 per cent CAGR...

Technology Hardware Set-top Boxes
India lucrative market for 4K UHD STBs: Grand View Research

Here’s a view on the demand for 4K or ultra high definition (UHD) set-top boxes (STBs) in India.

Technology Hardware Set-top Boxes
Infor appoints Dass as south Asian subcontinent V-P

Infor, a leading provider of business applications specialized by industry and built for the cloud, has appointed Ashish Dass as the vice president and managing director for the south Asian subcontinent. Infor software helps eliminate the need for costly customization through embedded deep...

Technology Software Applications
Siti & DishTV opt for Conax conditional access

The Essel group has been using Conax’s tech for sometime now for its Siti Network (earlier known as Siti Cable). Now the group has extended that partnership for another product for both Siti Network and DTH operator Dish TV India. This time it is for the cardless set top boxes that the two are...

Technology Hardware Set-top Boxes
Imagine Communications extends functionality of Selenio One unified transcoding platform to OTT

MUMBAI: Imagine Communications, empowering the media and entertainment industry through transformative innovation, today introduced a high-density adaptive bitrate (ABR) transcoding product built on Selenio One™, the company’s software-defined linear transcoding platform. Selenio One is designed...

Technology Hardware Components
DJI Makes Your Smartphone Smarter with the New Osmo Mobile

DJI, the world leader in creative camera technology, Thursday launched the Osmo Mobile, an extension for smartphones that turns them into intelligent, precision camera systems.

Technology Hardware Components
Prime Focus Tech gets funding from PE firm Ambit Pragma

MUMBAI: Prime Focus Technologies (PFT) – the technology offshoot of media services company Prime Focus - informed the Bombay stock exchange today that it had received its first round of funding from growth capital private equity fund Ambit Pragma.

Technology Software Applications
Three new products developed by C-DOT launched on its Foundation Day

Communications Minister Manoj Sinha today expressed the hope that 100,000 Gram Panchayats (GPs) will be connected through Optical Fibre Cable (OFC) by March next to set up a network infrastructure to serve the rural masses.

Technology Hardware Distribution
Genpact and BITS partner to build talent in the field of analytics

Genpact (NYSE: G), a global leader in digitally-powered business process management and services, today announced a partnership with premier technical education university Birla Institute of Technology and Science (BITS) for offering training programs in the field of analytics.

Technology Software Middleware

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories