CSC diagnoses minor discomfort from NHS IT cutbacks

The NHS National Programme for IT (NPfIT) is being scaled back by Labour and may be axed completely if the Tories or the Liberal Democrats get their way. So what does that mean for suppliers to the programme? Not that much, according to CSC CEO Mike Laphen.

“I think we continue to make excellent progress on the NHS. It's getting more and more embedded into the NHS system, and I think that this is going to continue on in some reduced way,” says Laphen. “The [UK] government has publicly said that they would like to reduce the programme - the total programme not just our piece but all the vendors' piece  - as well as the internal spend by about £600 million pounds over the life of the programme. We are working with them on a portion of that.

“I think we are you would say it's a very constructive engagement and at the end of the day I think we are going to work something out that satisfies their needs as well as ours. So, and that's the way we born into this. So we recognise that they need some fiscal savings and they realise that we've made investments and commitments [to] buying at the start of this contract, so I think it's going to be a constructive outcome.”

Political rhetoric

Laphen also reckons that the forthcoming General Election may have further impact on the NHS programme's future and hints that some of the pledges made around the programme might not stand up to close scrutiny. “I would not overreact as to any expectations here. You got to put in the context that there is an election coming up,” he suggests “There is a lot of political rhetoric if you recall back to [the US] elections. I think you just got to keep all of that in perspective when you talk about it. So we're feeling confident about where we are. We are encouraged that we are on track with another critical milestone and I think we have an extremely good working relationship with the client.”

But for now, it's business as usual, he argues. “We continue to deliver and expand our production operations,” says Laphen. “In the third quarter, three additional trusts went live on the Lorenzo Release 1 bringing the total number of Lorenzo protection sites to seven with seven more in place. For a health care solution for the general practitioners, we now have over 1,100 systems in production operations supporting over 50,000 active users who provide care for over 15 million English citizens. Our next significant NHS event is the planned deployment of Lorenzo care management at Morgan Bay. This is scheduled to occur towards the end of our fourth quarter and we are currently on track.”

Overall, UK and EMEA business is looking up, he argues. “Within EMEA we are seeing a steady market in France and an improving market in United Kingdom and Nordics,” says Laphen. “Public sector demand is particularly strong in the UK and France,” he says.  “The outsourcing market including application appears strong than it has been for the last two years.  The growing concern regarding cyber security issues is also a significant opportunity for us. We are leveraging our considerable government expertise to assist commercial clients in the protection of their computing environments,  networks, data and applications.”

Obama's spending plans

In the US, the public sector is also offering sweet pickings as the Obama administration prepares its own IT spendig.  “We expect to see continued opportunity and success in the US federal market and an expanding presence in state and local markets. Led by our high growth initiatives we believe that the US public sector will continue to be a healthy productive market,” says Laphen.  “Our initial valuation of the newly released Obama budget renews our confidence that the breadth of our market footprint and our selected strategic focus areas should enable us to deliver continued growth as the administration's priority shifts spending profiles.

“The administration has described spending in terms of two categories, security and non-security spending. Security spending will increase about 5% to $719 billion, while non-security spending will decrease by about $5 billion or 1% to $441 billion. Our strong business base across all areas related to security will benefit as defence, intelligence and homeland security budgets remain intact or are increased.”

Outside of the security market, ICT providers have complained that agency budgets are expected to be frozen, but Laphen does not see this as a major issue. “We see opportunities for growth by targeting initiatives in those specific areas where funding is provided,” he explains. “To illustrate, the new massive budget realigned demand space slight budget elements and directs funding towards research and development rather than building vehicles. This is a positive for service providers rather than for hardware platform providers. Additionally, the science budget particularly for earth sciences has increased. We view climate change and the supporting science as the future growth area.

“Major IT consolidation programs do not seem to be affected in any major way. Other civil areas offering growth for potential for CSC include the whole range of health initiatives among others. The President's budget specifically included $79.4 billion for IT. E-projects in this portion of the budget include initiatives and Cloud Computing, cyber security, procurement transparency, performance management and data centre consolidation.  Within the new budget, our proposed terminations, savings and reductions affecting some 126 programmes. These targeted areas of spending decline look to have little to no impact on our business.”