As first revealed by E-Health Insider last week IBM and ATOS KPMG Consulting are to bid jointly as a Local Service Provider (LSP) for the NHS National IT Programme and associated contracts. This week their senior health executives tell us why they believe the alliance matters.

“It’s an extremely important move for us we’ve been looking at the market opportunity for a long, long time,” IBM Global Service’s director of NHS business Christian Noll told E-Health Insider. “We need IT skills, programme management and domain experience and that is what ATOS KPMG bring.”

IBM Global Services will act as prime contractor in the alliance, bringing its worldwide technology capabilities while ATOS KPMG Consulting will provide the specialist NHS expertise.

Mr Noll added, “We are treating this as one of the major projects and programmes within IBM globally. We are building up the capacity and skills that will be needed and already have teams in IBM Israel and Canada involved.”

Planning on how to deliver a new approach began in IBM over 18-months ago – six months before the National Programme was first publicly announced in March 2002. Mr Noll said that he had established his team looking at NHS IT in February 2002.

Mr Noll confirmed that the LSP partnership with ATOS KPMG Consulting would be exclusive and that IBM would be responding as a prime contractor to the National Programme’s tender (the closing date for responses to the initial OJEC contract notice was 13 March). However, IBM will continue to work as a technology provider to other firms involved in the National Programme.

Other specialist vendors and suppliers will be brought into an LSP consortia led by IBM as required. “We will be looking to bring other partners in and some will be application vendors,” added Mr Noll, who acknowledged the difficulties likely to be faced by smaller suppliers: “We will be making sure that there are sustainable business models for smaller suppliers.”

Hugh Blair, managing director of healthcare at ATOS KPMG Consulting told E-Health Insider, “From our perspective we needed to find a very strong technology business partner, we are very pleased to sign this agreement, “We regard this as an exclusive agreement with IBM.”

Both firms have a past history of involvement in NHS IT but withdrew from the market in the 1990s. In the case of ATOS KPMG this withdrawal was part of the deal that saw iSOFT spun out from KPMG as a management buy out in 1998.

Mr Blair explained: “When the KPMG partnership sold iSOFT part of the legal agreement was that KPMG would not participate for a fixed period in the development or implementation of systems in health.”

Mr Noll meanwhile added: “IBM did take a step back from the very fragmented health market. What has changed is the UK government’s determination to move forward a central programme. This is an attractive business model to us.”

He confirmed that as well as bidding to become an LSP, IBM intends to bid as a prime contractor for a number of parallel work streams arising from the National Programme. “ATOS KPMG will be involved in these as required,” explained Mr Noll. “Some, like the N3 replacement of NHSnet, have less of a health domain content.”

Both men stressed that the National IT Programme is about transformation and not simply automation. Mr Noll said this was where the real challenge would come from and where ATOS KPMG Consulting’s NHS experience counted: “The NHS is an environment that is non-stop, it’s critical that we understand how we can bring new technology into that environment.”

ATOS KPMG is currently working on a range of big NHS modernisation projects, including managing components of the Financial Shared Services project due to go live in Yorkshire and the South West in April and providing consultancy for the NHS ‘21st Century IT Support’ National Programme. “Most of our NHS work, though, is done within trusts and strategic health authorities on business and process improvement,” said Mr Blair.

IBM Global Services is the world’s largest information technology services provider, with professionals serving customers in 160 countries and annual revenue of more than $36 billion. ATOS KPMG Consulting Ltd is a wholly-owned subsidiary of ATOS Origin, an international business and technology integrator. The company has annual revenues of EUR 3.3 billion (approximately £2.3bn).