VA Cans $500 Million Financial System Overhaul – Financial Transactions - The Business That Keeps Feeding Itself
Posted Jul 13 2010 1:22pm
A couple weeks ago the White House was going to begin looking at “risky” IT projects and the VA was first up on the list and here’s the results. I have often said both in the government and especially in the private sector of business that we have a “glut” of analysis and financial software and systems that cost everybody a lot of money and many of these services and companies could stand to be consolidated. As an example when processing a claim, you may have 2, 3 or even 4 3rd parties taking a cut of that revenue, based on the analysis service provided.
We certainly need auditing but not at the current expense levels we are seeing with software opportunities arising to claim yet one more piece of the pie. This is huge throughout healthcare and they sell everyone on the fact that it will help save money, when it fact it does not, it just creates profits for a piece of the pie.
Transactional analysis in healthcare certainly needs an overhaul as we all pay big time.
Ultimately this system builds on itself with more software being created to find out where duplicate efforts are and why some vendors are being paid for an automated service that could easily be combined with another function and/or company too, so it’s an analysis process that keeps on feeding itself without proper and due planning. All someone needs to hear is that it will save money and those perhaps not high in IT/data area jump all over it.
This has gone on for years and publicly traded companies on Wall Street have had a hay day, as they are the kings of algorithmic transactions and the money rolls in. BD
The Department of Veterans Affairs is scaling back plans to upgrade its core financial management system, eliminating the two most costly components of a project that was budgeted at nearly $500 million.
VA CIO Roger Baker and federal CIO Vivek Kundra disclosed the reversal in a July 13 conference call with InformationWeek Government and other media. The move comes two weeks after the White House, in an effort to review and identify potentially troubled projects, ordered a temporary stop to financial system upgrades at more than two dozen government agencies.
The changes represent a major downsizing to the VA's multi-year Financial and Logistics Technology Enterprise (FLITE) program, which Baker estimated to be worth $400 million to $500 million. In particular, the VA is putting the brakes on FLITE's Integrated Financial Accounting System and Financial Reporting Data Warehouse. The agency will proceed with implementation of its Strategic Asset Management System, which Baker described as a "small piece" of the FLITE program.
The Office of Management and Budget on June 28 announced three steps aimed at identifying and reining in troubled IT projects. They include a review by federal CIO Kundra of Uncle Sam's "highest risk" IT projects; a moratorium on new contracts for financial management systems, pending review; and development of recommendations to address "root causes" of persistent problems that hamper federal IT performance.