CSC and Lorenzo's Oil Slick

My thanks to the Grauniad for a heart-warming tale of Computer Sciences Corporation (CSC) admitting that it might have to write down a cool £1bn as a result of the ongoing epic saga of failure that is its Lorenzo software for the NHS.

To be scrupulously fair to CSC, Lorenzo was originally developed by iSoft, whom CSC acquired in August 2011 (after the FSA had given a well-deserved kicking to four directors of iSoft whose accounting practices turned out to be somewhat more murky than is considered proper). By my reading of the many threads in the story, Lorenzo was a key element in CSC's delivery which it had subcontracted to iSoft; once the latter was holed below the waterline, CSC's only real option was to acquire iSoft and hope to make the damn thing work well enough to at least approach the project milestones.

In another warm and fuzzy development, CSC itself is being sued by the Ontario Teachers' Pension Plan due to alleged concealment of the disasterous financial results of its participation in the NHS National Programme for IT.

The Guardian notes a whistleblower's mail to the CSC CEO:

"The project is on a death march where almost as many defects are being introduced as are being fixed."
For those of you who have not read Ed Yourdon's Death March, you really should. In essence, once a project is on a death march, the chance of completing it is essentially zero unless a) you can hold your engineers' families hostage or b) you have a near-infinite amount of money to hose at the problem. Looks like CSC has neither of those options.

If CSC writes down 40% of its market value, that really screws the pooch for all its management and senior engineers who no doubt have a very substantial equity and/or equity options holding. Then the OTTP's legal action drags the share value down further - if not curtains for CSC, it's certainly the end of the world as they know it.

This situation of a Government IT supplier actually getting its come-uppance is tragically rare, but I intend to enjoy it while it lasts.

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