The way in which the BBC outsourced and then “reinsourced” its ongoing project to digitise its archive was poorly managed, a review by the National Audit Office.

Although the Digital Media Initiative is now delivering results, the NAO found that inadequate supplier management and project governance had severely impact the project’s value for money.

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In 2004, the BBC appointed its primary IT services supplier Siemens to undertake the Digital Media Initiative without allowing any other suppliers to bid for the contract, the NAO report found.

“The BBC did not run an open procurement competition before awarding to Siemens the contract to deliver the [DMI],” it says. “As a result, the BBC did not have as strong assurance on price, quality and capacity to deliver as a new and specific competition may have provided.”

By 2009, the DMI had fallen 21 months behind schedule, and the contract with Siemens was terminated in a “no-fault” settlement. One reason for this, the NAO found, was that “the BBC did not have an up-to-date assessment of its contractor’s capacity and capability to deliver the [DMI].”

The BBC then decided to take the DMI back in house. The BBC’s chief technology officer John Linwood later told Information Age the DMI should be managed internally because it would significantly change employee’s working practices. “A high change program is probably something you want to ‘insource’,” he said.

According to the NOA report, “the BBC did not revisit the investment case at this point or test delivery options, such as finding a new contractor…. It told us this was largely because of the time a full EU public procurement would take and the potential impact of further delay on other time-critical BBC projects.”

The NOA did not criticise the BBC’s decision to insource the DMI itself. It said that “the BBC’s in-house delivery of the system has started well” and that “the technology solution for the [initiative] has so far proven to be valid”.

However, it did question the BBC’s ability to complete the project as planned, as there are still some complex integration challenges to be addressed. “The complex stages [of the project] to follow will be a severe test of its approach,” the NAO report says.
 

The early part of the DMI project was “not good value for money” the NAO found. As well as being 21 months behind schedule, the project also failed to deliver £26 million in expected benefits.

But it added that it was “too early to conclude” whether or not the DMI will deliver value for money in the long run.