Post Office scandal's latest £600m development shows firms need to understand IT contract risks: Ben Moorhouse

Going back to the origins of the deal, few companies would have been able to pitch for it at the time, as it was such a colossal contract.

Thanks to David Cameron and the G-Cloud back in 2010, enabling smaller companies to pitch for larger contracts, this kind of situation is less like to happen now.

However, it fundamentally comes down to the integrity and values of a company.

Any company’s priority should be their terms of engagement in the event of something going wrong.

The failure of appropriate governance in this case is staggering and has had massive implications for the reputation of both the Post Office and Fujitsu, but also companies not involved.

Despite being separate to the Post Office, Royal Mail was regularly tarred with the same brush, when they have nothing to do with the scandal.

It appears to have been a cover-up of dramatic proportions, and one whilst challenged by the Post Office, Fujitsu was clearly aware of but has taken little to no accountability for.

With the growth of AI, this belief in IT that the system couldn’t possibly be wrong is one of great concern.

Whereas IT used to be there to support business processes, these days it runs business processes, and therefore needs to be accountable.

Contracts should also be based on much more than this, they need to reflect the values of the company, and support customers not exploit them. The problem should have been recognised and dealt with immediately, which brings us to human IT, it should not be just about systems and software, because all of this has real life implications on people. Integrity should be key throughout, regardless of the scale of an error.

Many companies who outsourced their systems and cloud abroad are now feeling the same pain, as repatriation comes at a price, and a price very few can afford. What initially felt like a better deal, was not given long term consideration, and the Post Office scandal is a classic example of this.

No IT company will give rights to the IP of their software, it is their right and how they operate but having a relationship with your provider that you can count on should errors need flagging is also key. Fujitsu’s assurances that the system was functioning correctly was taken at face value by the Post Office, but at what cost? With roughly 700 private prosecutions as a result of the error, and whilst the convictions have now been overturned, it took intervention from Private Eye and a TV documentary to finally gain justice.

Choosing an IT provider should not be based solely on cost, but reputation, reliability and integrity. The ability to build a great long-term partnership, and not one you become trapped into sticking with, as you can’t afford to leave it. Sadly this case was not.

Ben Moorhouse is head of sales at Claritas Solutions