"While there was a high-level options and risk analysis and commitment to a timeline, we found no evidence of a detailed appraisal of the investment, detailed implementation planning or any evidence that the funding being sought from health services would be actually available.

"The lack of a whole-of-program business case represents a key flaw in the planning for the program, as DHS had no baseline analysis or process to demonstrate that the program would be viable and that benefits would exceed costs and provide value for money.

"Due to this deficiency, a number of implementation issues that should have been forecast or analysed in a business case appear now to have manifested during the life of the program. In particular, implementation delays caused by procurement issues, technical complexity and lack of funding approval by agency boards have been experienced.

"For the same reason, health agencies and the state are now having difficulty committing to related ICT investment, such as enabling works, which are required to effectively implement clinical systems."

However OVUM public sector research director Dr Steve Hodgkinson says HealthSMART was a very complex program of work being carried out in a large and complex federation of health agencies. "While some issues were raised, as you would expect in a project of this scale and scope," he says, "they look to be manageable. . . and pretty much par for the course on projects like this."

"Clinical systems roll-outs, in particular, are tough, tough work in any context," he says.

And Hodgkinson defended the project team against the claim that it had failed to develop a business case, saying such claims were easy to make in retrospect.

"The project did have a business case, which was sound, but was developed in the climate of fairly-arms-length relationships between the department and the individual agencies," he says. "DHS has strengthened its ability to provide leadership and coordination of Victoria's health sector during the life of the project, so when you look in the rear vision mirror it would appear that a more holistic business case could have been put in place in 2002/3, but I doubt that this was the case."

"The Healthsmart project itself has done a lot to strengthen people's understanding of the benefits and value of acting more as an interconnected network of health agencies than as a loose group of independent entities. . . so people now look back and wonder why the business case wasn't more holistic. . . It's kind of like the Hawthorn-effect. The act of observing changes the subject being observed. In 2002/3 people struggled to see any value in a holistic view. . . now, having been through the journey, they are critical that the view taken then was not holistic enough! "

Hodginkson says the project is a tough one that will create a lot of value.

"Sure there are areas to be improved upon, and they will be in due course, so the AG should be thanked for doing his good work of bringing these to the surface, but let's not lose sight of the bigger picture. "This is a worthwhile project that will — in due course — deliver significant benefits for Victorians, and it is broadly tracking along OK for a project of this complexity."

"The AG's job is to find things to improve upon. . . (the report) should not be taken out of context and used as ammunition to beat up on public sector ICT projects," he says.