iSoft chairman, John Weston, has revealed he reached the lowest point in his tenure at the healthcare software company when apparent accounting irregularities came to light.
In an interview with the Financial Times, Weston recalls his personal nadir in the iSoft saga. In July 2006 he was just six weeks into the job when newly-appointed auditors, Deloitte, discovered what appeared to be accounting irregularities in previous years’ figures.
He jokes with the FT that he will not be joining companies that have just appointed a new finance director, a new set of auditors and a new chairman of audit all at the same time.
Weston reveals that in early board meetings he chaired there were some tensions between executives and non-executives over Lorenzo, the software being developed for the National Programme for IT. In particular, he recalls: “I had some uneasy feelings about the lack of information available about the cost to complete development”.
He quickly learned that delays in the development of iSoft’s Lorenzo system covering three regions of England’s NHS were at the heart of the problems.
“There tended to be a view in the company that the main reasons for the delays were external ones and I gradually formed the view that was only part of the story,” says Weston. “There were also issues internally.”
He also reveals that by spring 2006 iSoft and Accenture [then local service provider for two of the NHS regions to be served by Lorenzo] were only communicating via lawyers – a situation he tells the FT he found “extraordinary”.
He ascribes iSoft’s survival to two factors. “Firstly, this visionary product Lorenzo. I’ve never seen a product that before it existed generated so much enthusiasm in the marketplace.” Also, he says: “We were saved by the banks – I think, because we didn’t have any assets. Therefore, if there was any chance of management pulling this through, it was worth backing it.”
Weston became acting chief executive after boardroom departures and steered the company through to its eventual sale to Australian software vendor, IBA Health. He will step down this Friday when iSoft is due to exit the London stock market.
Link
The factors that sealed the fate of Isoft
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