DWP-led £2.5bn shared services scheme taps consultants to ‘reduce bias and support realistic business case’

Synergy programme, which features Home Office, Defra and MoJ, signs deal with firm specialised in helping customers defy a landscape in which ‘mega projects fail 70% of the time’

A multibillion-pound project to bring together four of government’s largest departments on a shared services platform has brought in specialist consultants to help “reduce bias and support the development of a realistic business case”.

The government’s ongoing work to implement shared services includes five ‘clusters’ of departments, the biggest of which is the Synergy group of delivery-focused agencies, including the Department for Work and Pensions, Home Office, Ministry of Justice, and Department for Environment, Food and Rural Affairs.

The Synergy programme – which currently has projected costs of £2.5bn over an eight-year delivery timeframe – will ultimately deploy infrastructure and services to a cumulative total of 250,000 civil servants.

Last month DWP – which serves as the cluster’s lead department – entered into a seven-week £70,000 contract with specialist consultancy Oxford Global Projects.

The firm will support the “creation of a reference class forecast (RCF)… [which] will provide the Synergy Programme with an outside view on the likely outcome of the programme, based on actual outcomes of similar projects”, according to the newly published contract award notice.

The notice adds that the RCF approach is recommended by both the Infrastructure and Projects Authority – which oversees government’s portfolio of major projects – and the Green Book appraisal guidance issued by HM Treasury.

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“It can reduce bias and support the development of a realistic business case to underpin major investment decisions,” it says.

Tender documents submitted by Oxford Global Projects, and included in the text of the contract, reveal that the reference class from which forecasts can be made is likely to be comprised of about 30 comparable projects.

For each of these, consultants from the supplier “will interview key stakeholders to better understand the key components and project characteristics [which] will allow us to produce RCFs that closely resemble the Synergy project, both in terms of output, but also in terms of delivery and risk environment”.

The projects included in the analysis will include other government schemes, including those that have numerous stakeholders and large number of end users. The Synergy programme will be compared to counterparts at the equivalent point of their planning and delivery – including analysis of costs, timelines, key challenges, and intended benefits.

Projections made via the RCF process will then be compared with the “inside-view forecast” from officials leading work on Synergy.

This comparison is intended to deliver recommendations for “the appropriate levels of cost and schedule contingencies” that should be built into project plans, as well as how to appropriately adjust for “optimism bias”.

Such adjustments are in line with the instructions of the Treasury, whose guidance warns departments that “project appraisers have the tendency to be over optimistic [and] explicit adjustments should therefore be made to the estimates of a project’s costs, benefits and duration”.

At the end of this process, the shared services project will be provided with a full report of the findings, alongside “high-level reflections and recommendations for the Synergy leadership team to consider as part of the analysis”.

“The OGP team will also be available to present to the Synergy project board and attend and provide input in meetings with Treasury, IPA or Cabinet Office,” the contract says.

Over the coming years, Synergy and the four other clusters defined by the shared services programme will each standardise on single back-office software platform to share functions such as HR and financing software. Earlier this year Synergy went to market seeking two firms – a software vendor and a systems integrator – to bid for long-term contracts expected to be collectively worth more than £1bn.

Sam Trendall

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