A £175m IT platform for Co-Op Insurance that was subcontracted out by IBM to a third party was a "disaster" despite assurances it was an "out of the box" product, the insurer's CEO told London's High Court.
Moreover, IBM's promise to deliver an "out of the box" insurance platform to Co-Op Insurance was "pivotal" to the insurer picking Big Blue for the multi-million pound project in the first place, Mark Summerfield said in his witness statement for the trial between Co-Op Insurance and IBM.
"With the benefit of hindsight, it is obvious to me that we were sold a product that did not exist (a UK capable version of Insurer Suite) and contracted against milestones that were very unlikely to be met," wailed the chief exec, complete with 20/20 hindsight.
He also said that one of his direct reports described IBM's use of Agile as "embarrassing", saying "the [development] method which it had sold to us was 'unproven and unworkable'," as he quoted from an email.
Summerfield's witness statement, submitted as part of the trial which was heard earlier this year, was scathing of IBM. The Register obtained a copy of the statement earlier this month, along with other court papers.
In his written account of the events that triggered the lawsuit, Summerfield revealed that IBM won the competitive bid to build and maintain the Co-Op's new mission-critical insurance IT platform because it assured the insurer it had a white label UK insurance suite that could be customised and delivered within nine months, something Co-Op Insurance alleges was untrue.
Those promises, Summerfield said, were ambitious:
Crucially, IBM said it could deliver the new solution within 9 months, with all data to be migrated within 24 months in order to support decommissioning of the old system within 30 months. The fact that IBM said it had an existing out of the box core platform which could be used to deliver the solution within this timeframe was pivotal in CISGIL's decision to select IBM and it would not have done so without it.
The platform would have been the master piece of IT underpinning the entire company's business, complete with a consumer-facing frontend website. As reported previously, the project was so heavily delayed that Co-Op Insurance pulled the plug in 2017 in disgust, alleging that IBM couldn't even get the first release right by that point.
Naming the new platform Project Cobalt, Co-Op Insurance agreed to pay a total of £175m to IBM for it, consisting of £50m for the platform development and the rest for a decade of support. The Agile-based project was commissioned when plans to separate Co-Op Insurance from the main Co-Op group crystallised.
Only Indian outsourcer and IT biz Wipro undercut IBM's bid, Summerfield said – but Wipro "could only offer a bespoke product which we did not want."
Troubled from the start
As early as March 2015 (the project began in late 2014 ) IBM and its subcontractor 1insurer, known at the time as the Innovation Group (IG), had their "commitment to the programme" questioned by Co-Op Insurance, Summerfield wrote.
A senior IBMer, seeking to soothe the Co-Op's worries, told a committee meeting, as recounted by Summerfield, that IBM had "transitioned from using a traditional waterfall approach and it was seeking to deliver using an agile methodology (IG's preferred methodology), which he said was designed to produce outcomes in a short timeframe."
Summerfield also touted his awareness of the risks of overseeing big IT projects, saying at the same time that he required personal sign-off of major changes to the scope of Project Cobalt.
I know from my involvement in other IT projects how important it is to adhere to the supplier's standard software. The reason for this was threefold: (i) to avoid incurring costly changes to the software during implementation; (ii) because changes to the original software can be time-consuming and risk implementation deadlines; and (iii) to ensure the system stays on the upgrade path to avoid high service costs after implementation.
Summerfield also said in his witness statement that PA Consulting had expressed doubts to him about IBM's version of events when delays became apparent in late 2015. Chris Pickup, "who provided independent assurance on the Programme" for Co-Op Insurance, told Summerfield that a written report "suggested that IBM's obligations were all green (i.e. progressing as expected) whilst CISGIL's obligations were red." Despite this, an IBM verbal update delivered in a meeting straight afterwards suggested "that IBM's management / methodology was not working as intended."
IBM denies that it was at fault for the collapse of Project Cobalt and claimed that the Co-Op and its own subcontractors were far from blameless, with Co-Op Insurance having fired needless, scope-altering change requests at them – including big changes to the platform at a late stage in the project. Big Blue says the Co-Op also wrongly withheld a key payment, putting it in breach of contract.
Trial judge Mrs Justice O'Farrell is preparing her judgment, which The Register will report when it is handed down. ®