BBC Digital Media Initiative

The Digital Media Initiative was a transformation programme that involved developing new technology for BBC staff to create, share and manage video and audio content and programmes from their desktops. The BBC initially contracted Siemens to build the DMI system. However, the contract was terminated by mutual agreement with effect from July 2009 and the BBC brought the DMI in-house in September 2009. In February 2011, based on a National Audit Office report, we took evidence from the BBC on its progress with the in-house development of the Programme. Our April 2011 report reflected the assurances the BBC had given us about it being on track to complete the system in 2011 with no further delays. However, the BBC then failed to complete the DMI Programme and in May 2013 cancelled it at a cost to licence fee payers of £98.4 million.

The BBC was far too complacent about the DMI’s troubled history and the very high risks involved in taking it in-house. The DMI was 18 months behind schedule when the BBC took it in-house from Siemens. The BBC did not obtain independent technical assurance for the system design or ensure that the intended users were sufficiently engaged with the Programme. Poor governance meant that these important weaknesses went unchallenged, even when things started to go badly wrong. Given the gaps in the BBC’s in- house capability, it is in retrospect unclear to us why the BBC ever thought it could complete what Siemens had been unable to deliver. Recommendation: The BBC should ensure that governance and assurance arrangements match the scale, strategic importance and risk profile of its major programmes and projects.

No single individual had overall responsibility or accountability for delivering the DMI and achieving the benefits, or took ownership of problems when they arose. The BBC did not appoint a senior responsible owner with overall responsibility for the DMI. The BBC’s Chief Technology Officer was responsible for the DMI system but not for achieving the projected benefits across BBC divisions. There were different views amongst those responsible for developing the system and the intended users about the effectiveness of the technology and how engaged business areas were in the Programme. The absence of a senior responsible owner to take responsibility for resolving these different views led to a situation where the DMI Programme team spent years working on a system that did not meet users’ needs. Recommendation: Projects like the DMI need to be led by an experienced senior responsible owner who has the skills, authority and determination to achieve transformational change, and who sees the project through to successful implementation.

Neither the Executive Board nor the Trust knew enough about the DMI’s progress, which led to Parliament being misinformed. In February 2011, the then Director General told us that the DMI was “out in the business” and that “There are many programmes that are already being made with DMI”. In reality, the DMI had been used to make only one programme, called ‘Bang Goes the Theory’. While the then Director General assures us 6 that he gave a faithful and accurate account of his understanding of the project at that point in early 2011, he was mistaken and there was confusion within the BBC about what had actually been deployed and used. Recommendation: In its reporting on major projects, the BBC needs to use clear milestones that give the Executive and the Trust an unambiguous and accurate account of progress and any problems.

Despite the DMI’s importance, the BBC Executive applied insufficient scrutiny and reacted far too slowly to clear signals that the DMI was in trouble. When we examined the DMI’s progress in February 2011, the BBC planned to complete the system in July 2011 and told us that there would be no further delays. This assurance proved to be unfounded as the BBC missed the July deadline. Despite the repeated delays and the DMI’s worsening risk status during 2011, the Executive Board did not discuss the Programme’s future until May 2012. Some individual Executives were aware before then that there were problems but thought that they could resolve them and so did not escalate problems to the Board. The BBC’s project management office increased the DMI’s risk rating to red for the quarter ending December 2011 but this was not reported to the Executive Board until June 2012 or to the Trust until July 2012. The Executive Board then took a year to reach its decision to cancel the DMI, in May 2013. Recommendation: The BBC Executive should apply more rigorous and timely scrutiny to its major projects to limit potential losses that will ultimately fall on licence fee payers.

The BBC Trust failed to exercise sufficient oversight of the Executive Board’s delivery of the DMI, despite assuring us that it would. The BBC Trust told us in February 2011 that it would continue “worrying the heck” about the DMI until it was delivered but was satisfied that it had the capability to oversee and challenge the Executive. However, the Trust told us that in retrospect it had insufficient technical knowledge to interpret the information that it received about the DMI. The Trust was also slow to react. The Executive told the Trust in September 2011 that the DMI’s risk rating had increased to amber-red. The BBC’s project management office subsequently increased it to red for the period October to December

Licence fee payers paid nearly £100 million for a supposedly essential system but got virtually nothing in return. The BBC told us in February 2011 that the DMI was essential to the future of the BBC. However, the main output from the DMI is an archive catalogue and ordering system that is slower and more cumbersome than the 40 year-old system it was designed to replace. It has only 163 regular users and a running cost of £3 million a year, compared to £780,000 a year for the old system. The BBC is already developing plans 7 to replace it. The BBC told us that it still intends to digitalise its production process and, through its ‘end-to-end’ project, is considering how it will create an alternative to the DMI. Recommendation: The BBC Executive should report back to us on which of its original requirements for the DMI are still essential, how and when it will meet them, and at what cost.

The BBC failed to share important evidence about the DMI with us and the National Audit Office, which contributed to our false impression of the DMI’s progress. The National Audit Office (NAO) recommended in its January 2011 report that the BBC complete an independent technical assessment of the DMI. The BBC told the NAO that it had already commissioned such an assessment. The assessment was carried out by Accenture and was in fact submitted in draft to the BBC in December 2010. The Accenture assessment stated that the elements of the DMI examined were not robust enough for programme-making and that significant remedial work was required. The BBC did not share the draft findings with the NAO prior to publication of the NAO report or inform us of its findings during our hearing in February 2011. Recommendation: We expect the BBC to be completely transparent in its dealings with us and the NAO and inform us of any potentially significant evidence or facts in a timely way. 8 1 The BBC’s management of the Digital Media Initiative (DMI)

Despite growing problems and repeated delays, the BBC’s Executive Board did not hold a detailed discussion on the DMI and its future until May 2012.17 Some individual members of the Board had been aware of the problems before then but not reported them.18 The BBC’s Chief Operating Officer told us that she first became concerned in July 2011 and was aware that by November 2011 those delays had created acute problems for teams relocating to the BBC’s new Salford site.19 The Chief Financial Officer knew in February 2012 that the BBC’s project management office had increased the DMI’s risk rating from amber-red to red for the quarter October to December 2011. She told us that the finance committee had discussed with DMI project directors whether the Programme should continue. However, she did not report this to the Board as she believed that she could get the DMI back on track by putting it into ‘remediation’. An extended delay in reporting meant that the BBC Executive Board did not know until June 2012 that the DMI’s risk rating had increased to red. 20

The former chair of the BBC Trust finance committee told us in February 2011 that he was going to spend every committee meeting “worrying the heck” about the DMI. He also assured us that the Trust had sufficient information to monitor the DMI’s progress.21 The BBC Trust received a report from the BBC in September 2011 that the DMI’s risk status had increased to amber-red. However, the former Chair of the BBC Trust finance committee told us that the Trust did not have sufficient technical knowledge to assess the information it received. From January to July 2012, the BBC Trust did not receive or require an update from the BBC about the DMI’s status and had been unaware that the BBC’s project management office had increased the risk rating to red for the period October to December 2011. The BBC Trust acknowledged that it should have taken action sooner. 22 17 C&AG’s Memorandum, para’s 2.10, 2.11 18 Q 142 19 Q 124 20 Qq 130, 142–144, 175–178 21 Q 128; Committee of Public Accounts, Twenty-ninth report of Session 2010–12, Qq 96, 97 22 Qq 125, 142–144, 164, 174 11 2 What the DMI delivered and what next for the BBC

The BBC cancelled the DMI in May 2013 at a cost to licence fee payers of £98.4 million.23 The BBC wrote off the entire value of DMI assets as it considered that the parts of the system it was using would not have lasting economic value to the BBC and would need replacing or improvement. 24

The DMI did create an ‘archive database’—a cataloguing and ordering system, which BBC staff can use to search and order completed television programmes and related material held on tape and other physical media in the BBC’s archives.25 The BBC designed this database to replace a 40-year-old archive catalogue and ordering system called ‘Infax’. The BBC told us that the new database has 3,000 registered users and 163 regular users. It has annual running costs of £3 million compared to £780,000 for the old system. The BBC told us that the archive database is ‘clunky’, difficult to use and takes around ten times longer to use than Infax.26

The BBC decided not to use the second main component of the DMI—‘production tools’. The BBC designed these tools to enable staff to share and organise digital content and carry out basic editing on their desktops. The BBC’s former Chief Technology Officer considered that production tools could have gone live in October 2012. However, by that stage the intended users had concluded that they did not want them owing to the ‘unclear business direction’.27

The third main DMI component was the digital archive, which the BBC had intended to use to store finished television programmes and other material in a virtual online warehouse instead of on tapes. The BBC planned to integrate the digital archive with the archive database cataloguing system and production tools. The DMI team had written the code for the digital archive but never tested it and the business decided to suspend further work on it.28

The BBC told us that it still plans to digitalise its production processes through a successor project, called ‘end-to-end’. The BBC assured us that by dividing the project into separate parts, each with its own business plan, and overhauling its management of major projects it would avoid a repeat of the DMI. Changes to its management of major projects include appointing single responsible owners to all major projects and increasing the frequency of reporting on them to the Executive Board from quarterly to monthly. The 23 C&AG’s Memorandum, paras 5, 1.2, 2.2 24 Qq 185, 187 25 C&AG’s Memorandum, paras 4 and 3.7 26 Qq 186–190, 215 27 Qq 31, 55, 68; C&AG’s Memorandum, para 2.13 28 Qq 68, 73–74, 216; C&AG’s Memorandum, para 4, figure 11 12 BBC also intends to report more regularly to the BBC Trust and inform it sooner when projects go into special measures or receive a red risk rating.29

The NAO recommended in its January 2011 report that the BBC should complete an independent technical assessment of the DMI. The BBC told the NAO that it had already commissioned such an assessment. The BBC had in fact already received a draft of this assessment from Accenture in December 2010. However, the BBC did not show the assessment to the NAO before the NAO’s report was published. The BBC only sent Accenture’s technical assessment at working level to the NAO the evening before our February 2011 hearing on the DMI. Accenture reported that the elements of the DMI infrastructure it had examined were not robust enough for producing television content and that significant remedial work was required.30

The BBC did not bring the existence of Accenture’s technical assessment or its conclusions to our attention during our February 2011 hearing or before we published our report in April 2011. When we reported in 2011—that the BBC had made good progress in delivering the DMI and was on track to deliver the completed technology by summer 2011—we were therefore unaware of the significant issues affecting the DMI that Accenture had identified.31 The BBC’s Director of Operations gave us his personal commitment that in future the BBC would always give the NAO the documents pertinent to its inquiries. 32 29 Qq 199, 203 30 Qq, 135, 141, 153–155, 212–213; C&AG’s Memorandum, para 2.6 31 Qq 141; Committee of Public Accounts, Twenty-ninth report of Session 2010–12, para 7 32 Qq 212 13