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iSoft Diary

16th July 2010

iSoft, the healthcare software group, was founded in 1994 within KPMG Management Consulting, and spun out of KPMG in 1997.

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It was hired by Accenture and Computer Sciences Corporation (CSC), the prime contractors on the NHS IT programme, to provide supply-chain software packages. It aims to supply Lorenzo electronic patient record software, the key patient software for three out of five regions of the NHS IT programme.

In 2005 iSoft won the Business of the Year award for north-west England. In January 2006 it admitted the rescheduling of a £6.2bn NHS IT contract would badly affect earnings. Further profits warnings followed and in June iSoft said it would change its accounting policies and restate profit and earnings from 2003, 2004 and 2005. This change in accounting policy wiped out £165m of historic profit.

We pick up the iSoft story in diary format:


iSoft annouce Lorenzo will be developed until 2012

16th July 2010

It has emerged that iSoft will continue to develop its Lorenzo electronic patient record software under the National Programme for IT (NPfIT) in the NHS until September 2012.

The announcement came to the Australian Stock Exchange, though iSoft has declined to comment what further releases will be delivered to the NHS, or whether trusts will face further delays.

The stock exchange statement said: “Following the delays with the roll-out of Lorenzo under its NPfIT contract, it is now expected that the development work on Lorenzo will continue until September 2012.”

The announcement follows uncertainty about how many releases of Lorenzo would be provided to trusts amid a climate of funding cuts within the NHS, most significantly the announcement by the previous government that £600m would be clawed back from NPfIT.

And more recently iSoft has cited political uncertainty in the UK for revising is full 2010 fiscal revenues down by about £17m leading to a fall in iSoft shares.

Isoft told the Australian Stock Market in June, that its revenue for fiscal 2010 was now in the range of £258m to £266m ($440 to $455) million, while EBITDA was likely to be in the range of £26m to £35m ($45m to $60m), compared the full fiscal 2010 outlook of 275m ($470m) and an EBITDA of £66m ($113m) announced in February.

Meanwhile, NHS chief executive Sir David Nicholson said at a briefing ahead of the white paper “Equity and excellence: Liberating the NHS” that within the next four weeks there would be clarifications of the future of NPfIT.

 

Former iSoft chairman denies charges

25th June 2010

Former IT boss has denied conspiracy to make misleading financial statements.

iSoft affected by political uncertainty

3rd June 2010

Software firm iSoft has revised its revenues down for the full 2010 fiscal year by as much as £17.6m, citing political uncertainty in the UK for its not being paid for anticipated milestones.

The downwards revision led to a 30% fall in iSoft shares to 39 Australian Cents at the close of trading on the Australian stock exchange. It comes as iSoft saw the latest version of its Lorenzo electronic patient record system go live at University Hospitals of Morecambe Bay NHS Trust as part of the National Programme for IT in the NHS.

 

iSoft's former financial controller banned

24th March 2010

The former financial controller at iSoft has been banned from his professional body for a minimum of eight years.

Ian Storey has also been told to pay costs of £20,000 to the Accountancy and Actuarial Discipline Board (AADB), which filed a complaint against him after an investigation into his conduct at iSoft Group Plc after iSoft announced it had uncovered accounting irregularities. Mr Storey’s exclusion from membership of the Institute of Chartered Accountants in England and Wales means he can no longer call himself a chartered accountant.

 

iSoft on track with Lorenzo at Morcambe

17th March 2010

Health IT firm iSoft has stressed it is on target to meet deadlines to implement Lorenzo across University Hospitals of Morecambe Bay NHS Trust.

E-Health Insider had reported that the local service provider Computer Sciences Corporation (CSC) and iSoft were set to miss the 31 March deadline for the go-live across the trust.

But the Australian health IT firm has issued a statement to the Australian Stock Exchange saying it was on target.

It said: “iSoft remains on track for the ‘go-live’ of Lorenzo Regional Healthcare Release 1.9 at Morecambe Bay in accordance with the agreed schedule, contrary to recent speculation in media reports.”

Following a limited go-live of Lorenzo at Morcambe Bay 15 months ago, the current implementation is the first in an acute trust of the version of Lorenzo that includes patient administration and some clinical functionality.

Project sources suggest a meaningful go-live will occur until later in the year.

The Morcambe Bay project is seen as critical for iSoft and CSC, which is involved in contract renegotiations with the Department of Health that include finding multi-million pound savings.

For iSoft, it is seen as a “critical contractual milestone” with financial implications.

The stock exchange statement added: “iSoft expects the milestone at Morecambe Bay to be met according to the timetable agreed between its partner Computer Sciences Corporation (CSC) and the NHS, and expects this achievement to trigger a cash payment to the company.”

Critics of the National Programme for IT in the NHS are also expected to be watching developments at Morcambe closely.

 

CSC will stop at Release 2 of Lorenzo

12th February 2010

Sources close to CSC have claimed that it will only provide two releases of Lorenzo, the electronic patient record system.

E-Health Insider reported that iSoft executive chairman and chief executive, Gary Cohen, told the audience at a conference that the third release was due to be delivered in 2010. However, the source told EHI that although the second release was also going ahead, it would not 'deliver modules in further releases that were meant to include inpatient prescribing, theatres, maternity, social care messaging and GP integration'.

 

iSoft goes global

4th February 2010

iSoft has signed a global strategic partnership deal with Picis to provide its high acuity systems to hospitals across the UK, Ireland, Scandinavia, Australia and New Zealand.

In the UK, iSoft will distribute, implement and provide support to customers under the National Programme for IT in the NHS and those using its legacy systems. Initially, iSoft will focus on providing anaesthesia and ICU systems but it will also provide Picis solutions for operating theatres, scheduling and case records. Demonstrations of the systems were given at Frimley Park Hospital NHS Foundation Trust and Torbay Hospital in South Devon.

 

Ex iSoft directors due in court

1st February 2010

Criminal proceedings are to start against four ex iSoft directors.

East Midlands defers Lorenzo until next year

1st February 2010

Two out of three Lorenzo deployments have been delayed until 2011 by NHS East Midlands.

Stockport takes up Lorenzo

11th January 2010

Stockport becomes the seventh iSoft Lorenzo site.

Former directors of iSoft face court

7th January 2010

The Financial Services Authority has confirmed it has started criminal proceedings against four former directors of iSoft Group Plc.

Patrick Cryne, Stephen Graham, Timothy Whiston and John Whelan – who have all left the company - have been summonsed to appear at City of Westminster Magistrates Court on January 29 to face proceedings relating to the offence of conspiracy to make misleading statements, contrary to section 397 (1)(a) and (2) of the Financial Services and Markets Act 2000 and section 1 of the Criminal Law Act 1977.

 

PACS product launched by iSoft

8th June 2009

iSoft launches its new picture archiving and communications-related image viewing software worldwide.

iSoft to develop own medication management

29th April 2009

iSoft has announced it is to develop its own medication management solution, which will be embedded within Lorenzo.

Pressure on NHS patient e-records

28th April 2009

The Financial Times has reported that Christine Connelly, the chief information officer for health, has set a seven month deadline for suppliers of the National Programme for IT in the NHS to show they have made progress in installing systems.

Ms Connelly is reported to have said the health service would "look at alternative approaches" if the deadline was not met.

She said the target involved suppliers CSC and iSoft getting their "most advanced" system in place at a large hospital by November and running efficiently by March 2010.

BT would also need to ensure a large hospital - most likely to be Kingston - had a Cerner system in place by March.

“The key thing we have communicated to our suppliers is significant progress by the end of November,” she said. If “there is a suggestion that everything is just going to slip and slip, that’s the point where we will draw the line” and “start to look at alternative approaches” she added.

Ms Connelly will give a keynote address to the Healthcare Computing conference in Harrogate on 28 April.

She said that in the South of England a competition would be organised to allow other suppliers to compete for contracts with CSC and BT.

The gap left by Fujitsu's exit from the programme almost a year ago means suppliers can submit proposals for the installation and running of the electronic record system in 30 trusts where projects have stalled.

 

 

iSoft signs southern contract

24th April 2009

Heatherwood and Wexham Park Hospitals becomes the first in the southern cluster to sign a contract with iSoft.

DH to tender for alternatives to iSoft

13th March 2009

NHS chief executive David Nicholson has revealed that the Department of Health is going to tender for alternatives to the iSoft Lorenzo and Cerner Millennium care record systems.

He said the tender was being carried out as insurance because the National Programme for IT in the NHS is now at a “critical phase”. Speaking at a Health Committee hearing into the Operating Framework for 2009/10, he said both the iSoft and Cerner products needed to come good in the next few months.

 

Order comms go live for Leicester

6th November 2008

Leicester is planning to go live at the end of this month with its order communications systems.

Podiatrists at South Birmingham get Lorenzo

9th September 2008

Podiatrists at South Birmingham have become the first in the country to receive iSoft's Lorenzo.

iSoft's iPM glitch sees clinics overbooked

28th July 2008

Problems with a new iSoft iPM patient administration system leaves clinics overbooked.

iSoft deal extended

4th July 2008

NHS Supply Chain has extended its contract with iSoft to host its e-commerce and logistics applications.

The original 10-year partnership, which began with NHS Supply Chain predecessor organisation NHS Logistics and before iSoft was taken over by IBA Health, will now run until 2010. Under the deal, iSoft will continue to provide NHS Supply Chain with a fully hosted managed service and a dual data centre operation with the warehouse management and distribution applications developed and supported by IBA subsidiary iB Solutions under a separate contract.

 

Lorenzo release 1 further delays

13th June 2008

E-Health Insider has learned iSoft's Lorenzo release 1 is likely to be further delayed.

iSoft completes upgrade

10th June 2008

iSoft has completed an upgrade of Welsh lab systems as part of a £1m contract.

iSoft real-time speech recognition

21st January 2008

iSoft’s integration with Philips SpeechMagic technology now offers real-time speech recognition.

iSoft appointed national supplier

16th October 2007

GP Systems of Choice initiative sees iSoft sign up and become the sixth service provider.

iSoft add reporting tool

26th September 2007

iSoft's i.Laboratory systems now have detailed management and pathology reports.

IBA ups bidding war for iSoft

24th August 2007

The bidding war for iSoft has intensified after the Australian company IBA Health re-entered the race to secure the deal.

It has increased its offer to £166m, which tops a rival offer from the German company CompuGroup. IBA had tabled a £140m all share offer earlier this year but that was bettered in July by a £160m all cash offer from CompuGroup, which was backed by the iSoft Board. Compugroup's approach came after an earlier all-share offer from IBA. iSoft say it will consider the revised IBA offer.

 

Hospital iSoft system crash

14th August 2007

A hospital in Northern Ireland was unable to make bookings for two days after hardware and software problems with its iSoft patient administration system (PAS).

The system at the Altnagelvin hospital in Londonderry, could not access the appointments database to make bookings, though staff were still able to access patient records. The hospital said the fault had an impact on the booking of patients for future outpatient appointments, but had no effect on those patients attending for inpatient and outpatient treatment on the affected days.

IBA Health outbid for iSoft

14th August 2007

Australia's IBA Health seems to have given up hope of purchasing iSoft after being outbid.

IBA takeover of iSoft approved

9th July 2007

iSoft shareholders vote to approve £142m takeover offer from IBA.

Ex-Torex chair iSoft witness

22nd June 2007

iSoft investigation to take a new turn as former chairman of Torex is called as a witness.

iSoft and CSC settle dispute

19th June 2007

The row between iSoft and Computer Sciences Corporation - partner firms in the NHS £12bn IT programme - has been resolved.

The development now allows the bid for the UK software house from IBA of Australia to go ahead. iSoft said it would drop legal proceedings against CSC, while CSC said it would no longer seek to block the bid for iSoft.

Shares rose 7.5% in Isoft and its chairman John Weston said: “Our relationship with CSC has clearly been tested in recent weeks, however, this agreement underpins our good working relationship which we look forward to continuing?.

iSoft purchase approved by CSC

18th June 2007

CSC has approved IBA's purchase of iSoft.

Warning to iSoft and CSC

8th June 2007

The government body Connecting for Health has warned two companies at the heart of the NHS’s £12bn IT programme that it will step in if they cannot reach agreement.

CSC and iSoft received the warning that Connecting for Health will take over development of iSoft’s software if the two companies cannot reach agreement on iSoft’s future. That has resulted in iSoft announcing that it is now engaged in discussions with CSC in relation to the commercial arrangements under which CSC could take a greater role in the management of iSoft’s work on the national programme.

iSoft proceedings against CSC

4th June 2007

iSoft announce it will be launching legal proceedings against Computer Sciences Corporation.

Legal action over CSC veto?

1st June 2007

On 1 June, IBA Health and iSoft made an announcement to say they were thinking about legal action concerning Computer Science Corporation’s (CSC) attempt to stop IBA’s purchase of iSoft.

iSoft, a company providing healthcare software, wants to sell to IBA. According to a ‘step-in’ clause in the company's NHS contracts, CSC have the right to "a veto on any deal."
CSC asserted its right at the end of May and said it was acting “in the best interests of the National Programme for IT.?

iSoft takeover hits problems

29th May 2007

iSoft's £140m takeover by IBA Health faces problems as main contractor CSC refuses consent.

Ipswich glitch with iSoft order

17th May 2007

Ipswich Hospital NHS Trust is experiencing persistent problems with its computer system.
Reports indicated it has difficulties getting its new Computer Sciences Corporation (CSC)-provided iSoft iPM patient administration system and iCM clinical software to communicate.


The trust went live with the new system recently but sources indicate that the problems resulted in clinical messages becoming extremely slow and in some instances handled manually. Ipswich is the first site to get the iCM clinical ordering system under the £12bn NHS IT programme.

 

iSoft sale agreed

16th May 2007

A major Australian health information firm has agreed to buy UK’s iSoft Group for about £140m, plus debt.

It is understood that under the deal IBA Health Ltd will finance the repayment of iSoft's existing bank facilities, which are repayable upon a change of control, and the ongoing capital requirements of the enlarged group, by raising £84m.

The sale has been recommended by the iSoft board and if it goes ahead it will see IBA become the main supplier of clinical software to the £12bn NHS National Programme for IT.

The enlarged group will provide information technology systems to 13,000 hospitals and health clinics across Australasia and Europe. IBA say that will put it in a good position for further growth.

IBA executive chairman Gary Cohen said: “The merger of two leading healthcare IT companies will create one of the largest providers of health It solutions in the regions from Europe through to Australasia.?

The company says that the arrangement unites two experienced management teams with skills that will complement one another in the healthcare IT market.

IBA will become a key player in among US and European health IT software companies and it is expected that 80% of revenues will come from the UK.

Following the deal, Mr Cohen will retain his position in the enlarged group while John Weston, currently chairman and acting CEO of iSoft will join the board of the enlarged group as deputy chairman.

Shares in iSoft fell 85% last year following delays in delivering key software in the NHS IT project.

 

Kumar leaves iSoft

8th May 2007

Change continues to dominate the landscape at iSoft as the company’s chief technology officer, Ravi Kumar, has announced he is to leave the organisation and his board position. iSoft says it does not intend to appoint a replacement for the time being adding, “Since the company will be focused on product delivery for the next two years, the post of chief technology officer will not be replaced at the present time.? Kumar was a member of the original team that created iSoft from a management buy-out from KPMG in 1998. In a statement the company said that his departure was mutual and cordial.

iSoft in takeover talks

1st May 2007

iSoft has announced it is in discussions with several parties with regard to "acquiring iSoft or taking a significant stake in the company."

The ailing IT company is licensed to provide new software systems to 60% of NHS Trusts in England but as encountered many problems over the course of its contract.  Delivery of its Lorenzo software is over four years behind schedule leaving the company with major financial problems.  However, several interested parties are said to be in discussions with company executives who say they expect to be able to make an announcement soon.

 

Ipswich first for iSoft iCM

24th April 2007

Ipswich Hospital NHS Trust has become the first trust to receive an iSoft iCM clinical system under the National Programme for IT (NPfIT).

The system went live at the weekend as local service provider Computer Sciences Corporation (CSC) deployed the iPM patient administration system (PAS).  CSC then went on to install an iPM PAS at Northampton General Hospital NHS Trust in the same weekend – a first for the service provider.  CSC has now delivered PAS systems to 18 hospitals in the North-west and West Midlands, East and North-Eastern regions it covers as part of its NHS

In a joint statement CSC and Ipswich Hospital NHS Trust described the switch over as a ‘major undertaking’ involving 16.8m individual patient records being transferred and over 1,900 staff being trained to operate the new software.  Installation of the new clinical system was further complicated by a new electronic patient administration system going live at the same time.

A CSC spokesperson said that the change-over at Ipswich had gone well and that staff had responded favourably adding, “The system provides staff with access to an electronic patient record for every patient they treat and supports staff in treating patients quickly and effectively, as it accurately tracks patients within the trust.?

Staff at Northampton have had less success and teething problems have caused early problems with their new system.  The Northampton iPM system is currently failing to update legacy records.

 

iSoft sued by New Zealand's i-Health

10th April 2007

iSoft are being sued for breach of a 2004 sale agreement.

iSoft co-founder removed

29th March 2007

The co-founder of ailing healthcare IT company iSoft has been removed from his place on the board.

Steve Graham had already been suspended from his position as commercial director last summer after investigations into accounting abnormalities.  In a statement the company said it would not be immediately replacing Mr Graham and that he would not be receiving any compensation. 

Shares in the company have recently plummeted from £4 to just 35.75p.

 


New suppliers sought for NPfIT

8th March 2007

The NHS has taken steps to open up the market for software suppliers for its £6.2bn IT programme.

The move threatens the original plan to provide an integrated IT system across the health service using centrally bought software.

Now the government is drawing up a list of accredited alternative suppliers in response to the delays and disillusioned hospital trusts who have begun to look for alternatives. The system should have been in place by 2004.

EuroKing, Clinisys, Ascribe and System C have already won contracts with several trusts.

This marks a change in direction for the National Programme for IT (NPfIT), which had relied on iSoft and Cerner to provide much of its new services.

Delays have been caused after hospitals experienced problems adapting Cerner's basic patient administration system (PAS) to the UK, while setbacks in iSoft's development means trusts are using repackaged older products as a temporary measure.

Alternative suppliers will have to make their systems compatible with the NPfIT.

The government said the search for alternative suppliers was a contingency against further problems.

Doubts raised on potential iSoft sale

15th February 2007

The potential £200m sale of iSoft may be in jeopardy.

Potential purchase of iSoft nearing end

24th January 2007

Troubled software supplier, iSoft, is in talks with three final-stage bidders.

iSoft faces an uncertain future

2nd January 2007

iSoft, the healthcare software group, faces a bleak new year as the company tackles an uncertain financial future.

The group, which was founded in 1994 within KPMG Management Consulting, provides supply-chain software packages. It aims to supply Lorenzo electronic patient record software, the key patient software to three out of five regions of the NHS IT programme. However, changes in accounting policies and the rescheduling of a £6.2bn NHS IT contract have badly affected the company’s profits.

John Weston, iSoft’s chairman and acting chief executive now has to reassure the company’s financial backers that iSoft remains a good prospect. The banks were reassured by the fact that costs were cut in the first half of last year faster than management expected, but they remain reluctant to commit to funding beyond November 2007.

The company also needs to attract new customers which will prove difficult in the light of well publicised problems. The prospects for iSoft's involvement in the National Health Service's information technology programme have improved by linking with Computer Sciences Corporation, but new customers remain cautious.

A black month for iSoft

30th June 2006

Manchester based Health IT software firm iSoft is licking its wounds after a month which saw its Chief Executive depart following a massive drop in the company’s share value.  June also saw the firm sell off its Swiss operations and announce 150 UK redundancies. 

Shares in the beleaguered company have tumbled by 86% over the past year leading to an announcement that it expects full-year revenue and profit to be significantly lower than expected due to a ‘change in accounting policy’.

The resulting restatement of accounts will mean the elimination of £165m of historic revenue previously recognised over the past three years, which the company says will now be seen in future years. The firm has also announced that it will make 150 of its UK staff redundant by the end of the year as part of a cost cutting drive to slash operating costs by £25m. A 90 day staff consultation began on 15 May and the company is also looking at disposing of other assets.

Delays by iSoft in delivering its next generation Lorenzo clinical software to the NHS National Programme for IT (NPfIT) have had a significant impact on the firm's fortunes. Confidence in the company waned after being named by partner Accenture as contributing to the delays in the project which is now thought to be running at least 2 years late.  Lorenzo, which was due to be available for NHS implementation in 2004-2005, is now not expected to be up and running for significant numbers of NHS deployments until 2008-2009.

Departing CEO Tim Whiston cited the ‘negative speculation his role represented’ as the reason for his resignation which will take place with immediate effect.  He is thought to be in line for a severance package of approximately £500,000.  His acting replacement, John Weston, described iSoft as ‘creative and innovative’ saying, “We have a clear set of challenges ahead, but with the necessary determination, we will get through them."

 

A bad quarter for iSoft

31st March 2006

10042006_isoftstandQ.jpgShares in iSoft have fallen to their lowest level in more than three years.

The problems began when the shares plummeted on news that profits would be hit by delays to its NHS roll-out programme. In a trading statement the company said at the time "...it is now clear that delivery of iSOFT application solutions to NHS Trusts will occur, in general, later than previously expected by the company. iSOFT anticipates that the overall revenue opportunity over the whole life of the programme remains broadly in line with its initial expectations."

iSoft predicted that its profits would be some £55m lower than expected because of delays to the NHS Connecting for Health programme. However, despite the company's reassurance that the rest of its business was not affected, iSoft shares initially crashed by 42% from more than £3.50 to under £2.00. In the days that followed the share price fell further to a low of £1.62.

NHS Connecting for Health were quick to issue a statement following the iSoft share price collapse, claiming that the programme as a whole was "within budget, ahead of schedule in some areas and broadly on track in others." However, it admitted "some local service provider system deployment activity is being re-scheduled. It is because suppliers and their subcontractors, including iSoft, have taken longer than anticipated to deliver effective software solutions..."  In the context of a ten year programme the impact of the rescheduling was not considered significant and CfH were quick to point out that around 900 sites already have iSoft solutions installed which are being used by more than 25,000 users.

The share price dutifully began a steady climb - but that was not the end of the bad news. In the closing days of the last month, leading CfH supplier Accenture "blamed the Manchester-based healthcare software company for costly delays to the NHS IT upgrade programme," reported the FT. Though this was not news, the fact that Accenture identified iSoft as a primary cause of delays deepened concerns about iSoft's reputation and the possibility of litigation. The shares, which had climbed to around 180p fell back to 146p. They have now lost over 70% of their value since August 2005.

 

iSoft shares collapse

1st March 2006

09032006_isoftstand.jpgShares in Health IT solutions provider iSoft plummeted at the end of January on news that profits would be hit by delays to its NHS roll-out programme.

In a trading statement the company says "...it is now clear that delivery of iSOFT application solutions to NHS Trusts will occur, in general, later than previously expected by the company. iSOFT anticipates that the overall revenue opportunity over the whole life of the programme remains broadly in line with its initial expectations."

iSoft predicted that its profits would be some £55m lower than expected because of delays to the NHS Connecting for Health programme. However, despite the company's reassurance that the rest of its business was not affected, iSoft shares initially crashed by 42% from more than £3.50 to under £2.00. In the days that followed the share price fell further to a low of £1.62.

NHS Connecting for Health were quick to issue a statement following the iSoft share price collapse:

"The National Programme for IT, delivered by NHS Connecting for Health, is within budget, ahead of schedule in some areas and broadly on track in others. The programme now has 180,000 registered users across England, has delivered new systems to thousands of locations and is benefiting millions of patients.

Some local service provider system deployment activity is being re-scheduled. It is because suppliers and their subcontractors, including iSoft, have taken longer than anticipated to deliver effective software solutions that interface with national applications such as the Spine and Choose and Book.

In the context of a ten year programme the impact of the rescheduling is not significant and we can report that in the Eastern, North East and North West & West Midlands clusters – where iSoft solutions are being deployed – some 900 sites have had iSoft solutions installed, which are being used by more than 25,000 users.

Suppliers do not get paid until they deliver - which demonstrates the strength of the contracts and the way they protect the public purse. Completion risk lies with suppliers. We continue to look to our prime contractors who are responsible for managing their software suppliers’ performance."

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Article Information

Title: iSoft shares collapse
Author: Laura E
Article Id: 113
Date Added: 1st Mar 2006

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