The £98.4m figure attributed to the failed Digital Media Initiative (DMI) may be a conservative estimate, and the BBC Trust has commissioned an external technical enquiry into the fiasco into how it happened, and how much it cost licence-fee payers.
The BBC confirmed that CTO John Linwood, who was paid £287,800 last year, has been suspended on full wages. “Technology controller” Peter Coles will take over as acting chief technology officer.
Coles will report to BBC operations director Dominic Coles.
BBC Director General Tony Hall said that DMI had "wasted a huge amount of Licence Fee payers’ money and I saw no reason to allow that to continue". Continuing DMI, wrote BBC Trustee Anthony Fry in a letter to Parliament's influential Public Accounts Committee, would be "throwing good money after bad".
"The industry has developed standardised off-the-shelf digital production tools that did not exist five years ago," explained Coles in a blog post. "The cost is so great because much of the software and hardware which has been developed would only have a value if the project was completed and we cannot continue to sanction any additional spending on this initiative."
In an internal email seen by The Register announcing the management change, Coles added:
"It’s important that we make sure that a project failure of this scale never happens again and I will continue to work with the TD&A Senior Management Group, together with and all our key stakeholders across the BBC through the Operations Board, to ensure that we have appropriate safeguards in place to avoid a similar situation in the future."
The BBC has an IT budget of £400m a year.
The DMI project has already been the subject of a critical National Audit Office report. The project began in 2004 and was then outsourced to Siemens - without an open procurement competition.
Siemens was subsequently acquired by Atos, which continues to work for the corporation under contract. In 2009 DMI was then "reinsourced", or brought back in house in other words.
In 2011 the government's National Audit Office reported that DMI was "not good value for money" and failed to deliver the promised £26m. The auditors added:
“The BBC did not revisit the investment case at this point or test delivery options, such as finding a new contractor…. It told us this was largely because of the time a full EU public procurement would take and the potential impact of further delay on other time-critical BBC projects.”
But here we are. One question the BBC Trust should explore is why it took so long to kill DMI. Parts of the system have gone live, but the costs continued to escalate.
One source familiar with the project told the The Register that DMI was regarded as the “next big thing”:
"All of these grandiose schemes fail to account for the diverse cultures/requirements, in their original concepts. Eventually they realise this and become massive and unwieldy as they try to stretch the concepts into operations which have their own traditions as to how to deliver."
The BBC can deliver IT projects competitively. Before content management systems really existed, it developed one at a fraction of the cost of comparable private sector systems. At other times, IT projects resemble an open-ended job creation scheme.
Linwood's future is unclear - but senior editorial staff who found themselves sidelined have been simply been reassigned to new jobs.