IBM NZ carries cost of troubled health cloud platform project

IBM NZ carries cost of troubled health cloud platform project

No District Health Boards have yet deployed to Big Blue's platform.

One of the curiosities of the monitoring reports was that the NIP section always carried the statement “forecast expenditures are not available” in contrast to most of the other project which carried expenditure amounts to date and overall budgets.

It now appears that was because IBM was carrying the cost of development – effectively taking on the risk of project non-delivery – while aiming to recoup those costs through usage charges when the DHBs came on board.

It is not known how much IBM has spent on the project.

The NIP contract was announced in February 2015 to increase security, reliability and service levels and reduce the risk of critical outages as had already struck several DHBs

“IBM’s cloud-based IT infrastructure services will be the foundation for the National Infrastructure Platform (NIP),” a media release at the time said.

“The programme will transition DHBs from their current 40 data centres of varying size, age, quality and adherence to standards, to two IBM-managed world-class data centres with higher security classifications – one in Auckland, the other in Christchurch.”

The variation in the contract to allow Revera and Datacom to also provide those services means up to six data centres may now be in use.

Furthermore, the release stated that IBM was selected because of its deep expertise in the healthcare sector, as well as its credentials when it comes to building and managing world-class enterprise grade cloud infrastructure solutions.

“Public sector agencies are adopting IBM’s Government IaaS offering to create cost savings and provide new, enhanced services to their communities, suppliers and staff,” said Rob Lee, then managing director of IBM New Zealand.

“We have assembled a best-of-breed team of global and local partners to deliver on this project, including Computer Concepts Ltd, Racemi and FX Networks.”

NIP as then scoped was to provide financial benefits of $23.9 million total cost of ownership over 10 years across all DHBs.

The transition to NIP was to start from mid-2015 and was expected to take three years.

The NIP is not the only troubled national health IT project. Another, the $65 million National Oracle Solution, was “still receiving management attention” last month, according to NZ Health Partnerships.

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