BBC Lacked Proper Grip On Its Digital Media Initiative Programme – NAO

A report from the National Audit Office (NAO) has revealed that the BBC was severely lacking in the implementation of its failed Digital Media Initiative (DMI) programme, which ended up costing its licence payers £98.4 million at the end of its six-year lifetime.

In a memo sent to the BBC Trust by the NAO, the true cost of the project, which was cancelled in May 2013, and its shortcomings are laid out following a four-week investigation by the group, which has concluded that the BBC was ‘too optimistic’ in its ability to implement such a major programme.

The NAO inquiry followed a request from the BBC in May 2013 to investigate if any of the money spent on the DMI had been misspent, as the corporation felt that ‘most’ of the £125.9 million expended ‘had been wasted’.

Insufficient grip

“The BBC Executive did not have sufficient grip on its Digital Media Initiative programme,” said Amyas Morse, head of the National Audit Office. “Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound. If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012.”

Earlier this week, the BBC confirmed that it had sacked its former CTO, John Linwood (pictured below), following the cancellation of the project. The DMI was cancelled by the corporation’s new director general Tony Hall after a month into the job, saying that to continue the project would be a waste of licence fee payers’ money.

“I have serious concerns about how we managed this project and the review that has been set up is designed to find out what went wrong and what lessons can be learned,” Hall said at the time of the cancellation.

The DMI was set up to allow BBC staff to create a fully integrated digital production and archiving system to help staff to develop, create, share and manage video and audio content and programming on their desktops. Originally given a budget of £133.6 million, the project began in April 2007, and at its peak involved the work of 184 BBC staff and contractors. Electrical firm Siemens was hired to carry out the project, but the contract was cancelled in July 2009, with the BBC taking sole responsibility from September that year. The report states that this left the BBC little time left to meet critical internal deadlines.

The NAO report also states that the governance arrangements for the DMI were inadequate for a project of its size, complexity, and possible risk, as the BBC did not appoint a senior figure who would be the single point of accountability and oversee the project. Those who were in charge did not appear to the NAO to have a sufficient grip of the programme and did not appear to appreciate the extent of its problems until it was too late.

“We are grateful to the NAO for carrying out this report, which reinforces the conclusions of the PwC review commissioned by the Trust,” Diane Coyle, Vice Chairman BBC Trust, said of the NAO findings. “It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future. The NAO’s findings, alongside PwC’s recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system.  This will ensure that serious problems can be spotted and addressed at an earlier stage.”

The BBC was able to write off the value of assets created by the DMI programme, but is still exploring how it could develop or redeploy parts of the system to support its future archiving and production needs.

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