Details of the confidential review, carried out by Accenture Ltd and Computer Sciences Corp, appeared in the British press. The report concluded that there is no well defined scope and therefore no believable plan for releases of iSoft’s Lorenzo software, and added that iSoft’s estimated release dates for new versions of Lorenzo must be viewed as ‘indicative’ at best and are likely to be highly optimistic.
The Lorenzo system allows clinicians and hospital administrators to manage patient lists, record clinical data and distribute that data to other care providers. The software also enables test results to be displayed in a number of formats, using text and graphics, and offers access to electronic prescribing services.
As part of the NHS project, iSoft is contracted to provide software, including Lorenzo, to three of the five regional ‘clusters’, two of which are managed by Accenture, with the third run by CSC. The company’s work on the program has been beset by delays and, earlier this year, it was publicly blamed by Accenture for holding up progress and creating additional costs.
The Accenture and CSC review of iSoft’s performance, which was carried out five months ago, breaks the project down into 39 parts and assigns each a color grading to represent its status. Areas of the project classified as ‘red’ require immediate work, ‘amber’ denotes a potential risk, while ‘green’ indicates there are no problems. The report labels 13 of the 39 sections red, 21 amber and just five green.
Among the areas classified as red were clinical safety and iSoft’s ability to estimate how long the development process would take. The report found that iSoft’s program planning was based on unrealistic assumptions that drive unachievable plans that ultimately fail to deliver on time.
Delays to the NHS project have been a major contributing factor in the collapse of iSoft’s share price this year. In January 2006, iSoft shares were trading at just under 400 pence on the London stock exchange. In less than eight months, the company’s value has fallen to less than 50 pence per share.
However, iSoft’s performance has also been affected by reports of accounting irregularities. The company is due to announce its annual results, having previously delayed publication twice to enable an investigation into problems affecting revenue recognition following.
iSoft CEO Tim Whiston stepped down two months ago, expressing concern that his position at the company may represent a source of negative speculation and comment. Earlier in August, iSoft suspended two members of staff, including commercial director Steve Graham, after an independent probe found evidence of irregularities in the company’s accounts for 2004 and 2005.
