IBM has marketed Watson as a multidisciplinary artificial intelligence that can tackle a range of information problems, but has long touted medicine as one of the key areas it will help disrupt. Those plans have hit a $62 million setback: MD Anderson, one of IBM's highlighted clients which tried to use Watson to help eradicate cancer, has shelved their partnership and is looking for competitive bids, after what an audit described as "unusual payments" that went around the normal project financing path and key partnership deadlines were missed.
As Forbes reported, things just continued to go off the rails:
MD Anderson changed the software it uses for managing electronic medical records, switching to a system made by Epic Systems of Madison, Wis. It has blamed this new system for a $405 million drop in its net income. According to the audit report, the Watson product doesn’t work with the new Epic System, and must be revamped in order to be re-tested. The information in the MD-Anderson/Watson product is also now out of date.
In September, IBM stopped supporting the product, according the audit, which was produced last November. The Cancer Letter and The Houston Chronicle reported on the audit last week. Forbes obtained a copy of a request-for-proposals confirming that MD Anderson is actively looking for a company to take on IBM’s role. In a statement, MD Anderson said that it was not excluding companies that had previously worked with it from job, implying that it might choose to go with IBM to reboot the project.
It wouldn't be fair to put all of the blame at IBM or even Watson's feet: It sounds like the proposal had a lot of moving parts, including a $21.2 million contract with PricewaterhouseCoopers to come up with the business plan. But it's definitely a setback for a partnership that was highlighted as a key success story back in 2013.