Fujitsu pulls out of NHS IT

In what is undoubtedly a major setback to the NHS IT project, Fujitsu has terminated its £896m NHS IT LSP contract in the South of England. This is the second LSP contractor to withdraw; Accenture withdrew in 2006. This leaves just BT (London) and CSC (North, Midlands & East) left in the project. Of course there have been other casualities - not least iSoft. Fujitsu's withdrawal has repercussions for Cerner too - as Fujitsu used their software in the South after dumping IDX.

At a conference in November 2005, Richard Granger (who then headed the NHS IT Project) famously likened the project to a sled being pulled by huskies, in order to warn slow vendors that they would be "chopped up and fed to the other dogs". The problem with this approach is what happens when you run out of huskies. BT is reportedly prepared to take on Fujitsu's responsibilities. That would be a much smoother transition (than to CSC) as BT use the same Cerner software as Fujitsu. I've never quite got to the bottom of how much the NHS IT project has already cost BT to date.

I have backed the tough stance that Granger had taken on the project. It was the only major public sector IT project I know where failure and delay financially hurt the supplier only. The NHS IT project is still significantly underspent. But an underspent IT project that fails the user is a total waste of everybody's time and money. I also know that the very best projects I myself have run are where BOTH the supplier and purchaser think they have got a good and fair deal. I find a pragmatic approach to these things is always the best. Pragmatism seems to have been in short supply in the NHS IT project.

Finally, where does this leave Fujitsu who could well lose £300m? Where does it leave its UK CEO, David Courtley? Topics I am sure I will return to in the days and weeks to come.