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Horizon Service Partnership
Proposal
of 12 September 2005
and
Associated Documents
Horizon Service Partnership Proposal of 12 September 2005
NOUR BN
and Associated Documents
Proposal
Assumptions v 3.0
High level plan
Price Spreadsheet
Slides frorn HNG ~ Plan X Proposed Direction presentation of 1/9/05
Assumptions Draft vy 2.93
D iew of Assumptions v 3.0 and Assurnptions 2.93
Establishing the HNG-X Requirements Baseline
Slides from presentation of proposal on 14/9/05
Various cost analysis and PO Hot Topics List
Comments on propo om Rory Sikin
Commients on propo om George Kent Srnith
Cornmenits surnmarised by Kevin Taliboy and John Wheeler
PQ Questions on the proposal (15/9/05)
Questions from Mike Hannon
Response to Questio: 1.1 (20/9/05)
F] Response to Addit: I Queries (29/9/05)
Response to additional question from Mike Hannon (3/1 1/05)
Points noted at meeting on 20/9/05
Spreadsheet with costs and margins
Spreadsheet with business change scenarios
Chart of fixed and variable prices (2011/12)
Spreadsheet wi 200 rural offices removed
ALM ord
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FUJITSU
THE POSSIBILITEES ARE TN FINSTE
Doing Our Bit to Help Make
the Big Things Happen
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Horizon Service I ]
Partner FUJITSU
I THE POSSIBILITIES SRE TNPEWITE
Table of contents
4. Executive Summary... wd
4.4 Introduction... 3
412 Services Partnership Overview .. 3
4.3 Summary of Benefits ~ Why Fujitsu’ é
2. The Working Together Approach 3
21 Overview.
22 Governance
23° Strive...
24 Commercial Innovation .
25 Service Management Engagement
28 Working & Succeeding Together ~ Next Steps 612
3. Service Delivery & Management 13
3.1 Service Management... 14
3.2 Managed Services -- Operational Services
3.3 Managed Services - Systems Integration Services
3.4 Counter Hardware Retention ..
3.5 Impact of Operational Service Changes.
3.6 Managed Service Options...
4. HNG-X: The Solution ARCHITECTURE
44° Change Drivers
42 Business Equivalence
43 Strategic Directions
44 Business Applications
45 — infrastructure..
48 Security Model .
47 Disaster Resilience.
48 Training.......
48 Testing ..
410 Migration.
5. implementation Plan
5.1 Introduction
$2 The Development Plan
$3 Rules of Engagement
8. commercial Summary...
6.1 Investment Summary
6.2 Additional Pricing Information
63 Commercial Flexibility/Variability .
64 Commercial Assumptions
Appendix A: Sense & Respond
#2006
Confidence and Subject to Contract © Fujitsu Services Limited, 2005.
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Spence Kevin To: keith.k.baine!
co: Lenton-Smith . Foley
12/09/2008 16:38 Subject: Fujitsi” Service Pariiiership Proposal - HNG-X
Keith, wea bp toe
tam pleased to enciose Fujitsu's Service Par . nenting
a new application and infrastructure architect ‘Post
Office’s feedback on previous work done on F slivers
a cost profile over time consistent with that sh
Whilst this proposal carries forward many of th a
solution with an overall lower cost profile, and:
significant increase or change in risk profile to i
I hope you find that this proposal provides an a:
contract.
The contents of this email are attached as a Zip
® Fuljitsu's proposal document;
® Spreadsheet containing pricing detail (tw www weer asia without VAT &
RPI ~ using POL's rates);
® Asummary delivery plan;
® Assumptions Log (key technical and commercial assurnptions underpinning Fujitsu’s offer}.
Please feel free to distribute these documents as appropriate within Post Office.
{ look forward to discussing the contents of this proposal with you in due course.
Kind regards,
Kevin
FUJITSU SERVICES
Forest Road, Feltham, Middx TW13 7EJ -
Web:
Fujitsu Services Limited, Registered in England no 96056, Registered Office 26,
Finsbury Square, London, EC2A 1SL
Service Partnership Proposal - Sept 2006
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Partnership 1
THE POSSIBELITIES ARE ENFINITE
1. EXECUTIVE SUMMARY
44 introduction
Fujitsu understands the business ch:
ges facing Post Office:
« redui
1g Operational cos,
° making costs variable with the size of the oranch network,
* being flexible and responsive to meet new business opportunities and
« delivering the service leveis to satisfy clients. postmasters and end customers
»° Post Office clients are examining new channels for service delivery
At the same time it needs to increase its organisational agility to respond to ever increasing demand for
profitable new products and services whilst balancing the social role it plays on behalf of Government
with the commercial reality of operating as a pic within Royal Mali Group.
information Technology has and will continue to play a pivotal role in how well Post Office responds to
these challenges. Fujitsu has worked alongside Post Office in the formation and execution of its IT
strategy now for over 10 years, and during the last 18 moriths has examined a range of options on how
Post Office's branch IT systems can best be architected and supported for the greatest benefit te Post
Office. This document sets out Fujitsu Service's considered proposal for a 10 year IT Services
Partnership Post Office: a partnership dedicated to delivering impeccable service quality and
system performance to Post Office branches, whilst reducing the overall cost of IT operations and
providing the flexibility and agility needed to ensure that {T systems and services continue to meet the
business need, whatever the size and nature of that need becomes.
Fujitsu welcomes the opportunity of presenting this proposal to Post Office and look forward to
continuing to play a major role in helping Post Office address the business challenges it faces.
1.2 Services Partnership Overview
Fujitsu's Services Partnership proposal builds upon the joint discussions which have taken place with
Post Office over the past 18 months concerning Horizon Next Generation, and ihe more recent
discussions on the specific current business challenges and priorities facing Post Office. These
discussions have confirmed Post Office’s key priorities for dramatically reducing operational IT cost,
and increasing the scope for cost variability in the future.
Fujitsu's Service Partnership proposal has the following objectives at its core:
* To dramatically reduce the cost of operating and supporting the Horizon branch IT system (at
the lowest investment cost to Post Office};
« Empower Post Office with increased technical and commerc
to adapt quickly to change at minimal cost and low risk;
ébility to allow the business
e To optimise the quality of service experienced by Post Office, their agents, clients and
customers of the IT systems underpinning Post Office’ branch network business;
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* Providing Post Office with the cost
the improved productivity from
ective opportunity to serve its customers, and achieve
The architecture of Post Office's existing Horizon system was conceived some 10 years age against
the then business requiremenis and as a consequence remains constrained by a number of design
limiations associated with the technology of that time. In addition, the high rate of Post Office business
change since, and the consequent enhancements made to Horizon, has conspired to create a complex
system demanding high levels of support.
Whereas the original design constraints of Horizon and the added system complexities are natural
products of time and place, many conspire te attract operational cost which can now be avoided
through the adoption of practical, proven modern alternatives
Under the proposed Service Partnership F
alt
of these lower cost
be implemented through
Hisu proposes to take edvantag:
riatives and release the associated cost savings to Post
d programme of changes (HNG-X), as summarised below:
\ Service A tie Infrasiructure emia;
y Optimisation PI Optimisation Improvement _/
Programme
Phase
Service Subtie changes to the existing range I Lower operating cost
Optimisation of services provided to Posi Office io I base.
release cost af negligible impa
Overview of changes made Benefits Released
I the business. E.g. extension of
I engineering SLT's from 8 hour fix to
; Next Business Day; use of lower cost
ADSL technology UP Stream, rather
than Date Stream) transfer of data
centres operations from A&L to
L Fujitsu
Lower application support
costs:
Re-architected counter ap}
centralising Post Office busine
and providing a simplified, more:
homogeneous application
envir ent more easily adapted to
future needs. The required
development will make use of off-
ore development.
date
Lowest infrastructure
SUpport costs
More flexible application.
Wrastructure on to new Horizon systern Lower operating cost i
Optimisation infrastructure including:, base:
I reconfiguration of data-centres from
dual-live to one resilient live, and one
DR/Test site, introduction of wireless:
network nology to increase
resilience of branch network
Greater use
commodity technology
ensures ongoing cost
effectiveness;
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Horizon Service
I POST
OFFICE I Partnership
Programme
Overview of changes made Benefits Released
Phase
communications. Increase branch network
resilience. I
Continuous New commercial and governance Continued cost I
improvement models optimisation to future I
implementation of a future technology husiness needs i
Adaptation to Post Offices’ business.
needs
Fujitsu propose that a Programme to implement the above changes (HNG-X) be commenced at the
earliest opportunity with a view to completing the migration to a new counter application by end March
2008. Thereafter a programme of continuous improvement will be pursued with Post Office under
Fujitsu's Service Management to realise further gains (the “Strive’).
Estimated charges for migrating to and operating the Service Partnership based on the HNG-X
architecture will reduce Post Office's current annual Horizon operating casts by >40%. This is
highlighted in the diagram below:
POL VIEW - COSTS (RP! AND VAT)
FS HNG Kline
Pronosal)
~~ FS HNG JULY 22
PROJECTION
me HNG
psec
Year06 Year9? Year 08 YearO8 Yeart@ Year? Yeor1Z Year13 Yeart4 Year 18
Sepiember 2065
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OFFICE
Horizon Service
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THE POSSIBILITIES ARE CRPIMETE
The graph of charges for HNG-X alse matches the projected cost curve Fujitsu presented to Post
Office in July 2005 and as h represents a considerable improvement over Fufitsu’s previous HNG
brnission in June 2005. This has been made possible due to a number of key changes in Fujitsu's.
Yon approach, as discussed with Post Office. This includes:
Change in Scope/Approach
Eal introduction of service and Earlier access to cost reduction.
Capital and roll out costs avoided, I
at the expense of higher support
casts.
(NB overall branch MTBF and
counter hour jlability improves.
compared with Horizon}
Avoidance nf counter equipment techry
refresh;
Reduced front-end requirements
lon and acceptance of the HNG-X and design effort (reduced cos’
development. Enhanced ability to “off-shore”
development activities
I Removal of the requirement for pre-paid Si Reduction in fixed costs under I
I from the Service Partnership from 2010 the contract post 2010. Future Si I
I onwards: services can be planned in onan I
I as required basis I
I Reduction in Fujitsu’s Systems Integration Reduced fixed cost of pre-paid S} /
rates; under the contract (NB i
associated level of effort not '
I reduced).
i
Other attributes of the proposed HNG-X solution compared to today include:
« Afaster, more cost effective and more flexible system to change and enhance to meet future
needs;
asier access to and abi
ve");
to intercep? emerging technologies and services (enabling the
e Flexibility in counter implementation types - Le. support for a variety of device form factors and
an operating system with potential to support anything from hand-held POS to fuil function
PCs;
e increased service reilability (longer branch MTBF) and system availability (counter hours) as
red with the future for current Horizon. Le. less incidents visible to Subpostmasters, and
greater serving time availability;
Under the Service Partnership, Fujitsu will engage Post Office in new ways of joint working. This will
include:
» Fujitsu optionally taking 2 lead role in managing service delivery across Post Office’s whole IT
enterprise (Le. not just Horizon elements);
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THE POSSUBILITIES £8 ERFENITE
* Closer inter-working with Post Office in service delivery, service management and continuous
service improvement,
* More efficient engagement in project/change implementation ~ minimising
overlans/duplications in current engagements, and releasing cost inside Post Office;
« Committed activites (under
efficiencies;
int governance) to stimulate innovation and drive increasing
The Service Partnership will be underpinned by a fresh commercial approach. This will reflect:
« Committed cost reductions over the life of the contract
oe Enabled through changes in IT systems architecture (including a redesigned counter
application)
o Underwritten productivity improvements from Fujitsu over the life of the contract.
« Options to tailor the services delivered to Post Office to meet individua! Post Office branch
segment needs.
© Supported by a pre-defined “pick-list” of service cost options.
« Commitment to a ‘strive’ through joint working with Post Office to deliver ever greater savings
and efficiency improvements over the life of the partnership:
© {ncentivised for both organisations through “Gain Share" commercial mechanisms
o Delivered through joint working
o Assured through market benchmarking
* New, simplified rates for Systems Integration and Project work including the introduction of off-
shore development services.
* Maximised charge variability under the contract to enable Post Office to match its IT spend
with business value and priorities
43 Summary of Benefits ~- Why Fujitsu?
In order to provide Post Office with the dramatic cost reductions it seeks and to maximise the potential
for further cost reductions over time Fujitsu has identified a number of changes it proposes to
implement under a new Services Partnership with Post Office. These changes are expected to
generate substantia! operational cost savings for Post Office over the 10 years term of the relationship,
and release a host of other benefits.
Fujitsu is uniquely qualified and positioned to heip Post Office realise the benefits offered in this
proposal. Technically we have the knowledge and expertise necessary to implement the required
changes. This coupled with our seasoned understanding of Post Office, its people and its business,
grounds our delivery approach with the practical insight and realism which will be necessary to deliver
the project successfully.
Fujitsu has proactively engaged with Post Office in HNG and HNG-X, understood the key business
challenges, and in particular the drive for operational cost savings. This proposal reflects Fujitsu's
commitment to Post Office, forgoing benefits which would otherwise accrue under Horizon, in
preference to building a longer term business relationship with Post Office.
These attributes provide solid foundations for the HNG-X project and the critical components to ensure
the success of the Service Partnership and therefore contribute to both Post Office and Fujitsu meeting
its business goals.
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Partnership
Post Office's requirements for an extended
is to proceed to contract.
Fujitsu trusts that this proposal fully addresses all of
Service Partnership and provides an acceptabie ba:
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OFFICE I
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tance FUJITSU
THE POSSIBILITIES ARE THRINETE
2. THE WORKING TOGETHER APPROACH
24 Overview
The relationship between Post Office and Fujitsu Services has developed and improved over time.
However, we continue to look for new and better ways to achieve:
« excellence of service
» speedy and accurate communications
*® avoid person-to-person marking
« reduce overall cost of operation far both organisations
This Service Partnership proposal is based on the following principles:
« enhanced commercial variability/flexibility
» transparency of pricing
* focus on business outcomes
« — innovation ~ both technical and commercial
This approach demands a need to re-focus our teams and effect a change in approach, top down, to
achieve the desired outcomes. To effect this change may demand the need for externai facilitation
from companies such as Sigma or PSL. or similar organisations who specialise in this field.
Fujitsu's base proposal for HNG-X assumes that existing contractual boundaries between Fujitsu and
Post Office, and Fujitsu and other Post Office suppliers are preserved. This is summarised in the
diagram below,
Strategy
~Business Strategy
fT Architecture
Management ‘
»Pontfolia Mgmt oy &
“Service Management oka
“Change Management sora .7
“Project Management YA I
+ Requirements Analysis: mitch,
*Design F hs anne of
~Design Assurance acs, eb
End to end testing Pe >
Foe, Lethe ng
Delivery .
“Application developraent
*Service Desk
+Engineeting
I Nebvorks
¥ .Other Services
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OFFICE Partnership
THE POSSIQILITIES ARE TREURITE
In this engagement made! Post @ cominues to take ownership in setting strategy and approving
overall IT architecture, whilst Fujlisu manages a full portfolio of “managed IT services” across the
whole IT solution lifecycle. In between, there is a large element of joint working between Fultsu and
Past Office, covering predominately the management and execution of change (/.¢. intercepting new
business requirements and introducing these into the jive IT environment).
2.2 Governance
The enhancements described below to the ways of working aver the original Horizon agreement are a
positive step forward and are expecied te realise a number of benefits for Post Office and Fujitsu.
Uniting all of these initiatives will be a parinership governance model to strengthen a mutually
successful relationship going forward. This governance mode! must reflect ali of the following:
* Executive level ~ an annual or twice yearly meeting at executive level that lakes a strategic
view on the progress of the relationship and the business model
* Strive and Innovation level ~ a small group of not more than three representatives each from
Post Office and Fujitsu whose brief is to examine new initiatives for cost reduction and value
add propositions over the short and medium term. Input will be taken from industry experts.
This group will also have selective and early access to Fujitsu's Research & Development
factiity in Tokyo.
« Commercial framework which also encompasses on-going management of the relationshio
and issue escalation and resolution
» Service Management encompassing continuous improvement.
2.3 Strive
An important component of the Service Partnership is its commitment to continuously seek
improvemenis to services and the cosis associated with their delivery. Post Office has defined this as
"Strive", or the initiatives required to bridge the gap between a today's views of what cost is expected
to be, and what may ultimately be possible through innovations in technology.
A defining aspect of “strive” is that it represents an undefined opportunity and therefore represents a
commitment under the Service Partnership to do our best.
This is characterised in the diagram below:
(NB where cost represents
Business Cost, not just iT
cosis)
Oost
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(OFFICE I Partnership
TNE POSSTELITIES ARE INFINITE
In arder to deliver the Strive, Fujitsu will implement the following within the Service Partnership:
Committed cost reductions to Posi Office. delivering savings, over and above what the charges are
currently expected to be Sy the
s Fujitsu's charges under the Service Partnership reflect cost savings generated from year on °
year productivity improvements of c5% which Fujitsu will need to realise. By 2015, this equates > 3
to 613% of Fujitsu's offered price. a ale
Assured value for money through requiar benchmarking ‘
ure y through reg arking och randy
» This will provide Post Office with the certainty that service charges wil! at least be as good as ewok
we
market norms
Gain share
» Amechanism to encourage innovation, and to deliver benefits through the early
adoption/interception of new technology.
24 Commercial Innovation
Fujitsu believes that there may be further opportunity to reduce costs by challenging the current
contractual boundaries.
Historically, major activity areas of joint working have attracted substantial resources from Post Office
and Fujitsu due to the high rate of business change being implemented. However, Post Office now
anticipates a lower rate of business change for the foreseeable future and as a consequence Fujitsu
believes that there may be an opportunity to liberate further cost efficiency improvements for Post
Office by retionalising these existing resources to the lower levels required to meet expected future
demands. At this stage, Fujitsu sees this as a future opportunity but certainly one worth discussing
between us as we aim to reduce paralielism between us.
Within our commercial solution we propose a gain share model that will ensure that both Post Office
and Fujitsu are motivated to work together to drive additional cost savings as early as possible by
sharing in the benefits that are realised.
Fujitsu is also interested in exploring with Post Office different commercial models to underpin any
Gain Share mechanisms. This offers the potential to move beyond the traditional “Time and Materials”
charging approach to projects. Such mechanisms could include:
* Shared investments - where Post Office and Fujitsu share the investment costs, and share the
associated gains (this could include options where Fujitsu provides resource at "cost’);
« Business value based pricing — where Fujitsu link the charges for a particular investment, to
the success of it to Post Office (e.g. transaction based pricing)
It is envisaged that different mechanisms will be employed for different opportunities reflecting the most
appropriate balance of shared risk and reward.
With such a fresh approach to engagernent, Fujitsu believes that it can significantly contribute to the
success of Post Office as we face the business challenges ahead together.
25 Service Management Engagement
Fujitsu is now proposing the following new initiatives to enhance how Post Office and Fujitsu work
together. The principles of this are:
For the development and programme del
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I OFFICE
fee]
vosson Sensi FUJITSU
Partnership
POSSERELITIES RHE [HFINITE
i
I
I
l
» Codocated requirements team during the initial design phase of the HNG-X development
(impact evidence proves that this leads to efficiency and speedier decisions)
s integ:
* itsu will act as Post Office’s preferred service and systems integrator (1st point of contact
for any new or changed iT sysiem requirement).
* fitsu will act in a more up-front role with Posi Office having earlier access to business
fegy and business initiatives
* € programme office to avoid non-essential cost
‘age joint investment in new initiatives Fujitsu proposes introducing risk/reward
models to jointly work on new opportunity development
For
Joport of HNG-X
° Cross fertilisation of Service Management skills fare Fujitsu to Pasi Office (ITIL clures,
root-cause diagnosis, etc} to support a change from incident management to service
management.
« Shared gain mechanism to reward both parties for generating any incremental cost savings
reailsed through service improvement/optimisation,
» Flexible pricing/service options to enable Past Office to individually customise the services and
associated SLAs delivered to spi ic Post Office branch segments (Le. the ability to tune
services to meet the specific affordability / business priorities of each of Post Office’s business
segments).
* ‘Transparency in purchase costs and “mark-ups" associated with bought-in (third party
services} where not commercially confi dential, such as Branch Networks Telecoms.
» Assurances over maintaining fair market pricing for “commodity” services.
a& Working & Succeeding Together ~ Next Steps
Fujitsu's Service Partnership proposal described throughoui the rest of this document embraces many
of the principles described above and kientifies how they will be implernented in practice. These are
expected to provide a firm basis for “walking the talk” of new ways of working under an extended
contract.
However, the opportunity remains to take the principles above and seek more innovative (radical)
implementations, offering the potential to realise even greater strategic engagement and efficiency
improvements under the contract. The Service Partnershi ) proposal should therefore be crafied se as
to enable the implementation of any such chang out cause for contractual re-negotiation. Ie. the
contract should be designed te anticipate an evolution of the Working Together model during its term,
and the implicit shift in contractual boundaries, roles and responsibilities.
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THE PESSEBILITIES ARE TNEINETE
3. SERVICE DELIVERY & MANAGEMENT
This section describes how Fujitsu aims to deliver the various elements of the Service Partnership, Ree Hee,
identifies what changes to existing services are being made (and the associated benefits released to ale
Post Office}. All proposed changes will be made as a result of the development and implementation of 6 Le
HNG-X; the new application and infrastructure archilecture. WAR (aukat
_—e sane ialeianiaahaleta cs mre”
The key themes underpinning the proposed approach to Service Management for Post Office are $ -
based around supporting the challenges that Post Office faces: iad.
Reduced operational costs Hof
«taking advantage of improvements in the manageability and serviceability of the new HNG-X wt
architecture to drive down costs — for instance in Engineering and Systems Management Vase
» flower network costs through the introduction of IP Stream (Home} service
« migration to Fujitsu Services Data Centres
* Improve (maximise) service quality
Provision of Best Pract
improvement
Bu
mame of COMiNUOUs
fice management disciplines, with a p
upon the existing close joint working with Post Office
¢ assist Post Office to maximise use of the HNG-X solution, that is being built upon the existing
counter hardware and a tried and trusted service framework
» work more closely with Post Office's [T partners to encourage innovation and te maximise
overall benefits to Post Office
An overview of the key highlights of the Service Partnership Approach, in relation to Service Delivery
and Service Management are as follows:
SERVICE HIGHLIGHTS
* 40% reduction in ongomy service costs, when compared to Rorizon
* Re
nt network provision to increase orline availability
+ Adoption of ungraded service delivery and management tools based on Fujitsu
rporate stan nd upgraded functionality of existing tools to exploit
changes in technical architecture, leading to reduced service interventi
+ Reduced number of calls and reported events ‘tom the estate leading to
greater counter up-time
* Greater ability to ances davices for proactive diagnostics, by extending the
capability of the remote System Management system, This will be
underpinned by the on-line paradigm, which will give greater visibility of
og that are experiencing faults
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34 Service Management
This section high!
its the Ser
se Management elements of the Service Partnership;
* what it wil be going forward.
* how it will be delivered,
* what benefits it will deliver for Post Office.
The principles of Service Management are to provide a cohesive service ‘wrap’ around the individual
service elements (Service Desk, Engineering, 3rd line support etc) and deliver the ongoing service and
continuously strive to improve the service quality,
sve fee.
gat
3 Service Management will be provided to Post Office by IT!L-aceredited Service Delivery Managers with
end to end ownership of a specific service, e.g. On Line Services, Data Delivery Services. This is then
underpinned by support functions providing insut Where approprials, eG” BUSINESS Continuity. This
. ofganisational structure facilitates the introduction of new services or extensions to existing services
quickly and searniessly into the Service Management function.
in addition, Fujitsu will provide the Horizon Service Desk (HSD) as a key component of the service.
The HSD will ensure that return te service actions are completed for all service-affecting incidents and
will have interfaces with the appronriate [TIL disciplines information sources and owners. ¢.g.
Configuration Management, Change Management, efc. (as per blueprint bela
POA Service Management Protons Blvencint x tneldens Management
Prations oeege Seis Lava
Peace
Socaperntc.
Sogn Capen Reteity Sense Cent
Naswagacsore deeper: Nsengaenen iangacnns
A major objective of the new service is tp reduce the number of calls and reported events that arise
from the estate, and resolve any incidents generated as early and cost effectively as practical within
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the defined processes. This will be a consequence of the move to a more robust application and
infrastructure inherent in the new architecture and an analysis of incidents currently logged to provide
nput to system management design. The service will use Fujitsu's award winning Sense & Respond
methodology (described in the Appendix A), to analyse calls and recommend means te drive out
unnecessary demand on the service.
The Fujitsu service management team will manage both internal Fujitsu and external Fujitsu suppliers
to provide a seamless service to Post Office with all parties being bound by contractual Service Level
Targets and obligations as appropriate.
Each Service Delivery function will own and review a Service Improvement Plan which will be
discussed at the relevant Post Office / Fujitsu Operational Review forum along with previous
performance against contract.
A monthly high level review, the Service Management Forum, will take place between Post Office and
Fujitsu to discuss, amongst additional items as required, the following:
« Recent performance against contract
« Service Improvemenis
2 Ri
to the delivered service
« New releases
3.2 Managed Services —- Operational Services
Under the Service Partnership a number of existing Horizon services have been changed. These
changes being driven as a result of Post Office's business needs, changes to the systems architecture,
and new Working Together requirements. This section aims identifies where changes have taken
place, with an explanation of the expected benefits.
The table below provides an overview of what has changed, and what hasn’h
OPERATIONAL SERVICES 1
WHATS CHANGED?
x
Mobile En: “
Data ¥
Networks o
stems Management y
Services
3 & 4! Line Supgort ¥
Counter HW Retention v
Reterance Date ®
Security ia
econetiation «
MManegemert Informalon ®
OBC y
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3.2.4 Gperational Changes
3.2.4.4 Service Desk
The help desk service is currently provided by a dedicated Fujitsu desk which utilises a customised
version of the Powerheip tool. The proposed service will migrate to a UK based shared desk, utilising
@ Fujitsu corporate toof set. The heip desk receives calls directly from end users and will interface to
service delivery units and suppliers electronically.
SLAs are proposed to be set at 80% response in 30 seconds with atlendant abandonrnent rates. Post
tion roll out up to 78% of calls are hardware related and as these
of calls to the help desk have a similar profile. Other calis have been reduced at the point of roll out
due to improvernents in the reliability of the application.
AS part of HNG-X,
provided. This wil be an option wi
down options. The use of this
he facility for the Post Master to electronically og and progress a fauit call will be
Ain the HNG-X menu structure anc present a simple form with drop
will enable Fujfisu to smooth the workload al the heip desk anti
give the Sub-Post Master an efficient way of raising an incident, and passing it through process to
completion. Fujitsu has assumed that option will be used for 10% of calls. It is Fujitsu's view that
this is achievable give the profile of the Post Office user base and no requirement of training beyond a
communication of the availability of the facility via a flyer and a reminder by help desk agents.
3.242 Mobile Engineering
Mobile engineering is currently delivered by Fujitsu to all 14,000 sites through out the UK (including
remote Highland and Islands}, Que to the complexity of local data residing on the counter PC the
service has been somewhat specialised. However with the proposed changes within the technical
architecture the opportunity to use technical couriers will be exploited as soon as possible.
The application roll out will enable the average engineer time on site to be reduced. The SLAs will be
based on a time to fix of 79% next business day with the other 21% split between 4 hours and 8 hours
for branch routers and VIP sites and extended times for remote sites requiring extended travel tines.
The out off time for the logging of next business day calls will be 17:30. This is a move from the current
SLTs of 4,8,10 hours and remote sites. The selected percentages have been chosen to match the
current requirements for critical equipment and branch outages.
The volume of calls is based on the MTBF of the equipment and a predicted increasing failure rate of
5% pa has been assumed. From contract signature te the application rollout the MTBF increase will be
aphet absorbed in the contract charges up to 120% of the beseline. The MTBF will be re-baselined after the
6... follout of the application. The increase after that is capped at 150% with the confract charge with any
Were © Firtier increase at Post Office risk.
sage AS part of the engineering service 4 ‘lazy’ roll out of the new router will take place as part of a the
» User on normal engineering visits over the two years before application rollout. A PC battery replacement has
pw aise been cosied in during 2010-2012 and a replacement flat screen for those beyond ecenomic repair
from 2008.
The requirement for PAT testing post 2008 has also been included.
3.2.4.3 Data Centre
Fujitsu provides a range of data centre services to support and manage the operation Unix and
Windows servers. All servers are currently hosted in two “live” data centres, currently located with
Alliance & Leicester. It is now proposed, thal as part of the HNG-X infrastructure changes, a new data
centre architecture will be implemented and operated frorn: within Fujitsu’s own Southern data centre
complexes,
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The new data centre server infrastructure will be built for the HNG-X~ application on newly purchased
equipment and the old equipment de-commissioned post migration. All systems and application
elements, as defined by the technical architecture will be supported frorm Fujitsu's Belfast IS delivery
unit.
The current data centre configuration is duai active sites with a hot fail over between them, and
separate test facilities. This configuration would prove unnecessarily expensive under to the HNG-X
architecture,
instead the new datacentre configuration will be a single live datacentre with a second hot fall over
datacentre which will also act as the test environment. This is a common configuration used within the os
retail market. This configuration will involve greater internal resilience within the live data centre (more hot
than current). In addition, to ensure that a 2 hourTal Over is stil BOSssible in the event of a banking hors ho
failure {and 24 hour for other services), live data will still be maintained at the second (DR) datacentre. Rete,”
Fujitsu's data centre service is responsible for ensuring data integrity and achieving. the availability of
the servers and the delivery of files to Post Office clients. Business continuity testing will also be
performed under this service and will be scheduled to take place during standard business hours
unless there is a requirement to disrupt the service. a a
Ri eadhey con
Fujitsu has assumed that the low rate of change with the application from 2010 reducing the fa ode ts
management and implementation of change in the data centres. net ae, wes
3.24.4 Networks Bype fibres:
Networks are currently undergoing a migration from ISDN fixed line to ADSL technologies provided by
Energis. The ADSL service is based on a 10:1 contention ratio.
itis now proposed that these services will be migrated over to a Fujitsu standard IP Stream ADSL °
service with 20:1 contention ration, with a further transfer to a 50:1 home based service after the
application roil out.
Due to the expected limits to ADSL coverage at this time 450 (but reducing over time} branches are
planned to remain on other fixed line technologies.
Awireless back up service will also be installed to provide network resilience. It is assumed that this
will have 100% coverage. The network service will integrate the management of this branch
infrastructure with the management of links between the data centres, Post Office client sites and
Fujitsu support locations including the development and test centre.
The networks service will rnanage all incidents referred to them by the help desk and proactively
monitor for faults.
3.24.5 Systems Management Services
The system management service is responsible for the proactive monitoring of the live service and
reacting to alerts raised by the Tivoli remotes systems management suite deployed. The current
number of alerts raised by the system is 50,000 p.m. and will reduce to 25,000 p.m. after the roll out.
Additionally the service performs the remote software distributions of both application changes and 2
reference data, at approximately 3 per week to all sites. Fujitsu has assumed tbat the rate of eB F
change with the application from 2010. ~
of Alay ved
3.2.1.6 Third and Fourth Line Support Can ef dh
he I
Third and fourth line support are account dedicated teams which provide problem investigation and
resolution for ap ion and infrastructure issues for the Horizon systems. The cost of the teams is
predicted te fall in line with the reduction in open problems under the new architecture. Fujitsu has
assumed a low rate of change with the application from 2010.
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32.1.7 Post Office Specific Services
There are an additional 5 services, specific to the Post Office solution, which have been changed
where necessary in fine with the changes in ihe application and seouriily Post Officeicy (Fulitsu hes.
assumed a iow rate of change fram 2010)
Reference Dala Service
This service provides timely, efficient and cost effective delivery of Operational Business Change to
post office courtters using Reference Data. No significant changes to this service as provided to Post
Office are planned for HNG-X. It is assumed that the current co-location of the Fujitsu and Post Office
reference data teams will continue and that once HNG-X has been implemented further synergies can
ed.
be achie
The Security Management Service provides a wide range of security-related activities that assist the
establishment and maintenance of an [5017799 compliant infrastructure, support legal and contractua’
abligations and mini and control abilities to Fujlisu Sey s and Post Office. The service
monitors operations and introduces specific protective security ¢ controls on a risk assessment basis to
maintain the integrity, availability and confidentiality of information used and produced by the various
Services and the support environment. in particular a prosecution support serviee is provided to Post
Office. The only significant change at HNG-X brought about by the revised architeciure is in relation io
cryptography,
Reconciliations Service
fon and incident management procedures required to investigate,
feant changes to the service
This service provides the reconciliati
report and resolve financial reconciliation and business incidents. Ne sig!
as provided to Past Office are planned for HNG-X.
Me
ent Information Service
The primary airn of the Management Information Service is to deliver performance reporting and
management information relating to the Services provided to Post Office. This inchudes the delivery
of the monthly Service Review Book, the delivery of management information in relation to Network
Banking transaction data and the delivery of management information in response to Miscellaneous.
Data Query Requests. No significant changes to the service as provided to Post Office are planned for
HNG-X. However, it is believed that there is the potential to re-evaluate this service.
Operational 8 ranch) Service
ss Chang:
Acting upon specific requests from Post Office this ser effects the necessary hardware and
software changes required in the opening, closing and relocating of Branches. Going forward the
service has been priced to provide a basi i @ the annual closure profil
provided by Post Office and as documented in ihe Commercial Assumptions Log’ Servi
level would be invoked via Change Control and resources will be increased on an as required basis.
“8. 248 Summary of Benefits from Operational Service Changes
Commerciaiia Subject to Contract © Fujtsu Servings Limited, 2005
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*
The use of Fujitsu's own data centres to provide improved cost and far
Asingie ive data re with @ secondary hot swap DRAest data centre
@ adoption of an grated shared service desk approach to integrete the help desk and
nd and third line support fu provide better management controls
with no loca! data storage at the branch to provide
es management
Hlent network provision to increase availability
Move to lower cost branch network using ‘horne’ ADSL technology
Asoption of upgraded ser t
standards, and upgrade functonality ¢
leading to reduced service interven
Lower predicted service desk call valumes derived frorn the above and improved appicatior
resilience derived from the new application archit @ and development.
Use of technical couriers for anginesring serwice with associated lower lagistics cost
Resources matche: @ low rate of change in est
ate and appkcation post 2010 / j
3.3 Managed Services ~ Systems Integration Services
Fujitsu also provides a range of System Integration services for Post Office which provide the following
facilities.
3.3.1 Si Support
This service covers a wide range of activities required to maintain a minimum Si Programme and 4th
Line technical support capability. In particular functions such as:
e
»
«
Change Management
Planning
Configuration Management
Document Management
4th Line Support (as described under 3.2 above)
Maintenance and support of test environments (far live support activities)
Specialist 3rd party technical product support
Overall SI team management
The cost of these activities has been estimated to reduce over time due to the reduction in open
problems remaining under the HNG-X architecture and the expected low rate of change of the
application from 2010.
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it has been assumed that any requirement to extend the capacity of these services to accommodate
higher rates of change generated from any future system requirements will be the subject of additional
funding from F Office as a result of the associated business case(s)
3.3.2 Pre-Paid System Integration Services.
in the past Fujitsu has maintained a dedicated Core Si function targeted at supportiry
of change fo the Horizon system. This has been funded through an annual pre-paid i
from Post Office with assurances from Fujitsu over resource utillsation agains! anticipated volumes of
work. The advantages of using Pre-Paid in this way to Post Office have been:
ne introduction
* Guaranteed availability of resource to meet planned project delivery needs (across the solution
lifecycle);
* High levels of responsiveness to change requesis and feasibility requests (typically impacts
are provided within a target 3 weeks}:
* High leveis of staff utilisation by managing in/out the resources funded from pre-paid fo align
with Post Office’s requirements:
« Leveraging synergies with the SI Support function to optimise the best overall mix of skills,
availability and utilisation for Post Offi
* Retention and exploitation of Post Office specific business knowledge within the SI function.
Under the Service Partnership, Fujitsu proposes to continue ip provide a dedicated Core S! team,
funded under Pre-Paid up until March 2010. This team will have responsibility for
* implementing planned changes to existing Horizon (S90):
* Supporting the development and implementation of HNG-X:
*® Lead on defining and delivering subsequent HNG-X enhancements up until March 2010.
Beyond April 2010, the contractual requirement for pre-paid is removed’, providing Post Office with a
commensurate reduction in charges within the Service Pariners'
Fujitsu's proposal also intracuces new rates for calling-off pre-paid resource (effective ist Jan 2006),
which provides for the same level of resource (as offered under HNG) but at an overall lower cost.
(These new rates will also replace the discount structures previously offered against the usage of
Additional Si resource).
From April 2010 any incremental resource requirements to support new business needs or other forms
of system enhancement will be subject to planning and funding on a case by case basis. This wil make
use of Fujitsu's internal service resourcing model where project resources can be drawn down from a
central, coripany-wide resource pool as and when required.
This deliver madel provides for the maximum possible level of skill flexibility and overall company
delivery efficiency. However for Past Office this may come at the expense of: availability (longer lead
times will apply than would be case under pre-paid); responsiveness (as no dedicated team will be
maintained, impacting change requests and/or feasibility requests, will becorne “mini projects” in
themselves ard subject to resourcing lead times), and efficiency (as teams will be built demand”,
project costs will attract jearning/ramp-up costs, and are unlikely to achieve the same levels of staff
ullisation as has been the case under Horizon.
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There are clearly pros and cons of using a dedicated team funded under pre-paid or resourcing
projects from the centre of Fujitsu on demand. The optimum balance will ultimately be informed by the
actual rate of change, which in Post Office has historically been very high.
ff, as is currently expected, the rate of change in Post Office becornes tow, then the argument for pre-
paid is removed, and the more efficient option will be (as proposed} to resource projects on demand.
Under the proposed Service Partnership, Fujitsu will work with Post Office to plan the most appropriate
approach to resourcing and funding future Si requirements. This may include agreeing with Post Office
the re-introduction of contracted pre-paid resource if actual future business demands reveal this as a
more economic option.
3.4 Counter Hardware Retention
The proposal for HNG-X (see section 4) is based on the retention of the existing Horizon caunter
hardware. This is a departure from the previous HNG proposais. This section describes the drivers for
that decision, the basis for acceptability of the approach and the risk and mitigation of adopting it as a
way forward. in addition, any actions which have been identified for specific Horizon equipment are
detailed.
3.4.1 Drivers for decision
The avoidance of increased capital costs, including unnecessary purchases
in Hine with Post Office's expressed position on the affordability of any HNG-X solution, and the
restrictions placed on any business case, Fujitsu have recognised that the retention of the existing
equipment will remove the need for a large outlay on new capital equipment at the start of the project.
This will additionally rernove the risk of purchasing equipment for branches which are not included in
Post Offices strategic pians and/or the network post 2008.
Moving to the Retail model of ‘Sweat the Assets’
The retail sector, in Fujitsu's experience, generally looks to ‘Sweat the Asset’ for as long as possible
without comprising the ability to deliver the services that their customers demand. The adoption of this
approach would broadly fit with Post Office’s recognition of its pasition as a retail organisation.
The avoidance of increased rol! out costs move the need for a pilot of the reall out
Part of the rationale behind the retail approach when compared to a standard corporate desk top
refresh model, is the geographically disparate estate that must be refreshed and the large aitendant
costs per device that are required to achieve a mass roll out. The retail approach avoids those costs.
The requirement to test the roll out within the pilot is also removed, enabling the pilot to be shortened,
as the ability to organise and deliver the physical aspects of the project deployment is not required.
The risk that the pilot rollout processes and planning will not be scalable from a controlled pilot to the
full estate is also removed.
A desire for a smoother price curve
Through the HNG negotiation period, Post Office expressed 2 desire for a different shape of price
curve from that which was presented. Retaining the Horizon equipment has contributed to Fujitsu's.
ability to present in this proposal, a curve which matched that which Post Office found acceptable.
Fujitsu have recognised that Post Office’s business case model does not enable recognition of the 2
financial impact of service quality, and therefore Post Office is unabie to offset capital investment I ®
against increased productivity or availability of counter equipment.
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A prime basis for the decision fo retain the e:
present, the equiprnent is enabling Post Offi
to deliver their desired transaction volurnes within acceptabi
ing equiprient is its current performance in the field. At
with support from the engineering service from Fujitsu,
time scales.
y io support New Morizan to 2015 &
finned by Fuliisu Logi
Looking to the future, Fujitsu has made extensive enquiries to both the equipment suppiter and
fs and to its own organisation, as to the supportability of the equipment to the proposed new
contract end of 2015. The responses to those questions have been posifive with the exceptions
covered against specific equipment later in this docurnent. Whilst this is not a guarantee that a major
unforeseen failure will not occur, # provides an acceptable risk agains! cost, given the risks and
mitigation outlined bel
ion is supported by Fujlisu’s experience within the hospitality sector, where we are
supporting PCs based on 486 technology. However, both the application and ine customer provide the
flexibility to upgraxie ff the unit becames beyond economic repair.
Current f
Current plabie
ailure rates are deemed acnep
Whilst Fujitsu is prepared to support the equipment, it has recognised that the failure rates will increase
over the contract period. This has been estimated at 5% degradation per year. It is for Post Office to
confirm whether this will continue to provide an acceptable level of service to its end users. Fujitsu
have absorbed the risk of this degradation to service up to 50% from the roll out of the application.
in order to offer this extended support at an acceptable risk level, it is assumed that the HNG-X
application will be enable failures to be resolved by the use of equivalent equipment rather than is
current environment where only exact replecements are guaranteed. This will also require Post Office,
a8 discussed and tentatively agreed, to allow a mixed estate to be installed. The key consideration of
the selection of the replacement equipment will be that the user will not perceive any issue with its use.
advok de ee}, This relaxation of exact replacernent may have toe extend io the equipment aestheti colour.
Wann panei ot en
BN oe et,
oe
A421 Risks and Mitigations
Hardware beyond repair, or unavailabilit
To mitigate the risk of equiprnent becoming beyond economic repair, or spares parts becoming
unavailable for repair, Fujitsu will, as is current practice, retain equipment fram branch closures for
spares. The level of retained equipment will be monitored with Post Office to ensure that excess
quantities are not maintained beyond the anticipated demand. This couk! arise due to equipment
.7 , becoming avsilable as a result of major closure programs or the withdrawal of equipment from service.
ak fot I Fujitsu will also iook to make good spares by cannibalising failed units, if this proves economic. Any
!
decisions to scrap equipment wil be subject to agreement with Post Office.
As an alternative, when the spares become unavailable, given that the prerequisites salisfied by the
HNG-X aoplication are met, Fujitsu will revlace the failing unit with a different but equivalent
supportable model. This will be achieved via seeding the spares loop or by proactive replacement of
selected branches, with the replaced equipment used for spares.
Failure rate becomes 4
in the event that the failure rate of a piece of equipment becomes unacceptable te the Post Office
business users, the HNG-X environment will enable Post Office and Fujitsu to address the ousiness
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needs in more flexibie and cost effective ways than under Horizon. Specifically by analysing the true.
nature of the failures, using Sense and Respond, Fujitsu will be able to recommend prioritise
replacement programs of partial and appropriate refresh, which can be sustained by a Post Office
business cases, rather than mass roll outs to the whole estate.
MTBF degradation faster than predicted
There is a risk that the Fujitsu icipated increase in failure rate is greater than the annual 5% inbuilt 7, St = Be
into the price. This risk up to 50% is at Fujitsu risk. Above 50% Post Office have the choice of seat
instigating replacement programs either complete or partial or if the failure rate is still acceptable to the
business funding additional engineering cails
50%oton
343 Equipment Specific Actions
Below are the specific actions which have been included within the proposal, to mitigate identified risks
in fine with the principles outlined above.
PC
Fujitsu predict that the PC BIOS battery will require replacement before the cortract end in 2015.
Fujitsu have included in its price a proactive battery replacement project with the work undertaken
during normal engineering visits in the period 2011/2012.
Touch Screen
The currently instalied LCD screen has a number of components which are now obsolete therefore
screens which fail due to thase components will be un-repairable. Fujitsu have included the cost of
replacing those units with new devices within its price. Screens which fail for other reasons will be
repaired and return to service via the spares loop. This process will create a mixed estate.
Luggabdles
The current luggabies will be beyond economic repair post 2010. The HNG-X application will enabie
Fujitsu to deploy replacement laptop based devices in the event of failure and future requirements.
Counter Printer
As a large proportion of expected engineering visits are generated by failures of the existing Ithaca
counter printer Fujitsu has proposed as @ separate option te replace the printer with a more reliable
alternative. Any decision to make the associated investment in the alternative printer is understood to if 3
be the subject of a separate Post Office business case, taking into account the acceptability of the
current printer failure rate going forward (and the associated branch/counter disruption), the capital
cost of replacement, and the related support cost savings, and the new advantages to Post Office
business which a new printer may attract.
3.8 impact of Operational Service Changes
The overall service impact of the changes detailed above is positive when considered against
comparable measures from continuing the existing Horizon service. This is achieved despite the
worsening MTBF of the counter equipment which impacts both environments.
The operational service benefits from the increased reliability of the HNG-X application and the shorter
time to resolve software related incidents on the counter, together with the improved reliability
delivered by the resilient network and the central service elements of the critical banking service. This
combines with a reduction in the number of faults reported on the counter PC and moving the single
point of failure of the branch gateway from a multi functional PC to a specialised router, providing
increased benefits to Post Office.
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The following graphs compare the expected service characteristics of the two environments. They are
based on a common set of variables to provide fair like for ‘ike comparison. (NB The 2005 metric
approximates to the current reported performance of the Horizon environment). Key parameters used
include:
Bak * The Horizon environment assumes the dual live data centres, no r Kand current
Sins 3 counter equipment and operating systern with an annual 5% M
ns ook q « The HNG-X environment assumes one live and one OR/test data centres, wireless back-up
network, current counter equipment with an annual 5% MTBF reduction past the roll out of an
upgraded operating system and HNG-X application;
» Both environments have been modelled using engine:
to fix for 2008 and 11 hours from roll-out based o:
described elsewhere in the proposal.
« The definition of qutage has been taken from the HNG CD 4.1 and 15% of covered hours have
been defined as critical. All metrics are for core hours.
ing SLTs af an average of 8 hours call
@ percentage of next business day
mtn ety
Counter Hour Availa
This graph highlights
expected higher availability of
HNG-X as compared te current
Horizon. A key point to note is
that although availability
declines in both environments.
availabilily under HNG-X is not
expected to degrade below
existing levels experience with
current Horizon.
er eo SH ew
(CSARea ar Sa ea ae Sar a Saat
count are Dow
pe sour poe BL pond mouths
Courler Hour Downtime
This graph quantifies the
expected average counter
down-lime associated with
both environments.
me MP Raw
cara
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‘eave 8 Sa» Hore Branch MTBF
This graph highlights the
marginal improvements in
branch MTBF which HNG-X
will deliver. This suggests that
the frequency of breaks
experienced by Post Masters
under HNG-X is likely to be
similar to that experience
under Horizon. However when
counter hour availability is
taken into account, return to
: i service is likely to be
nor ene . ia perceived as faster. Much of
(CHa bas ae Severn) this can be attributed to THe”
back-up network, ere
Wn Nc da batt vy nthork ean nid ee Jody es veel oy
peaueey bong EO fr oe Crest.
3.6 Managed Service Options
3.6.1 Overview
The preceding sections describe the base services which are offered (and costed} with Fujitsu's
Service Partnership proposal. However Fujitsu recognises that a “one-size-fits-all" approach te service
delivery (and SLTs) may no longer be appropriate to Post Office’s business. As a consequence Fujitsu
is pleased to introduce under the Service Partnership a facility for Post Office to “customise” the nature
and level of services delivered across the various “branch segments’ within Post Office’s business.
The current range of customisable service options is described in the section below. NB this list of
options is expected to evoive over the term of the Service Partnership.
3.6.2 Principles
In order for both Post Office and Fujitsu to achieve maximum benefit from the range of options
available, the following operating principles will apply:
* Fufitsu will manage and operate for Post Office a range of services which can be uniquely
tuned to meet the specific needs of up to five different categories of Post Office branch, or
Branch Segments.
* Branch Segments can be defined by Post Office and can be varied over the term of the
relationship. (Exarnple segments could be Post Office’s existing classification of Branches as
VIP, Diamond, Platinum and Gold).
« Certain Fujitsu delivered services must be common to ail Branch Segments (i.e. the same.
service levels will apply to all). This is to ensure that most optimum cost profile for the specific
service is achieved (i.e. wherever differentiating the service levels between Branch Segments,
would cause overall costs to increase).
* Certain Fujitsu delivered services can be tailored (delivery scope and SLAs) individually by
segment but the number of service variants supported across all Branch Segments will be
limited to ensure that overall costs to Post Office do not increase (typically 2-3 options will be
available).
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ibility provided through the above mechanisms :s intended to empower Post Office to
balance the cost of service provided with the business value associated with each Branch
Segment. The underlying assumption however is that overa
remai
3.6.3
Service Type
Uniform Services
(Le. Only one
occurrence of the
service can apply
across all Brench
Segments}
i total ch;
as presented in Fujitsu’s proposal,
Service Options Proposed
Service Element
Service Desk
Service Options Available
e Extended management
of incident through
addition of Incident
Management teems
e Thros delivery options
available (On-shore, Of-
shore - India, Off-shore, I
South Africa}
» Varied commitment to
electronic call loggin
ges for the services will
Commercial impact
etd
communication and
enhanced incident
resolution across
branches ~ minimise
downtime
« Reduced cost of
owner and
operation of helpdesk
facility
« Lower cost per call
Data Centre
Singie live data centre
resilience
» Real time (current optien
Resilience
* Reversion to the existing
Dual-Live Data Centre
model
*« Lower capital and
operating cost
* Decrease in
availability tc counter
and client
« Greater return to
service time after
failure
»
Greater operationai
service and capital
cost
» Minor decrease in risk
of data centre
unavailabilit
Remote Management 2 NA e
Service Management » NA *
3° Line Support o NA A
4" Line Support oe NIA bd
Test Environment
Test Environment for future
business needs.
e Retained ( cur
option select
* No Test environment
retained
* Ability to preduce
maintenance releases
for service pack and
bug fixes
« Opportunity to test
business change
requirements
* Higher operational
cost
Core Network
o NA
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Service Type Service Element Service Options Available Commercial Impact
Customisable
Services
(i.e. services which can
be tailored to meet the
specific needs of each
Branch Segment,
subject to the maximum
quantities identified}.
Branch Engineering
Customisable SLAs for:
« Last counter/branch
« All other counters by
branch
Peripherals
SLA options inciude:
* Hours of Cover (8X5,
8X6,12X6)
« Response time (4 hr, 8
hr, Next Business Day,
Return to Base (i.e. self
support)), or no SLA
{reasonable
endeavours).
« Segmentation
SLA takes account of
business criticality of
equipment
High SLAs cost only
‘on single points of
failure
impact on counter
availability
Modifies service cost
Changes user
perception
Can be matched to
business needs
Link to segmentation
Appropriate SLA for
the business
requirement
Periodic review and
ability to change
Service vs. cost
correct for the type of
branch
Ability to offset
service cost between
segments
Greater compiexit
Branch Data Network
The Following options
available:
¢ With wireless resilience
* Without wireless
resilience
« ADSL options (e.g. IP.
Stream Home and
Business)
« sion ADSL (e.g. ISDN or
PSTN),
impacts branch
availability
Appropriate price
performance for the
branch
Select branch
availability required
Flexibility to change
periodically
Exploitation of new
technology or market
price structure
3.6.4 Service Options - Management of Third Party Suppliers
in order te maxi
to extend it servi
ise the benefits of Fujitsu's Service Partnership, Fujitsu are pleased to optionally offer
S to include the management of Post Office’s other third party suppliers. This would
provide a single point of contact sitting within the Service Management function, to facilitate the swift
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resolution of cross domain inckdents and problems not normally reported to Fujitsu, which may affect
the end to end processing of transactions. In doing so, incidents and problems will be logged centrally
by arty one or more of the Service Partners, and managed tc completion in accordance with the ITIL
incident and problem management framework, with all Service Partners open to the sharing of
knowledge and provision of resource to enable this te happen.
Currently, Post Office's Third Party suppliers expected to be included within this inifiative are:
e Fujtsu
e LINK
* Merchant Acquirer (currently Streamline)
* Prism Alllarice
* EDS
« Alliance & Leicester
* Any other third party or financial institution which may be introduced in the future by Post
Office.
3.6.4.4 Principles for the Management of Third Party Suppliers
When transferring the management of Post Office's third parties to Fujitsu, a number of
principles/guidelines will need to be applied in order to make this way of working efficient, cost-
effective, and productive, giving a real and tangible benefit to Post Office's business. Currently
identified principles, recommended for implementation by this paper, are as follows:
« Fufitsu and other Post Office third parties will be able to respond in the correct manner to
ensure incident and problem management is effected in accordance wilh the ITIL framework
* Fujitsu and other Post Office third parties will be able to determine in which area the service is
affected and provide the correct diagnosis and return to service actions where appropriate
» Single point of co-ordinated information on progress and plans for resolution
« The third party management service will identify trends in incidents that are indicative of a
problem and notify or escalate to Post Office as appropriate via the Fujitsu Service
Management function.
384.2 Benefits of Managing Post Office’s Third Parties
The anticipated benefit of the third party management service is that it will provide a technical and IT
sei management understanding of the impact of Incklents and problems, with management and
communication consistent and professional aligned to ITM best practice resulting in cross domain
incidents and problems managed consistently and seamlessly across organisational boundaries.
The actual benefit that Past Office will realise, ir: terms of Service provision and resource utilisation, will
depend upon the extent of empowerment and involvement Post Office would wish te grant Fujitsu in
providing this function
In order to realise further benefits from the third party management service, there a number of
additional options for consideration by Posi Office:
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Options Benefits to Post Office
Central control of all h ents and
management of the call logging function
within Fujitsu leading to:
® Resource savings within the Network
Fujitsu te provide incident management Support function
system (call logging)
« Tighter call management alongside
standard incident management within
the Horizon Service Desk leading to
quicker return to service
End to end Service Management provided by
Fujitsu as prime supplier, leading to:
« Resource savings within Network
Support
Post Office suppiiers within the Service * Service Partnership Post Office
Partnership (as opposed to Post Office suppliers managed by Fujitsu in line
chenis, e.g. Alllance & Leicester) to be with Fujitsu internal / external
managed directly by Fujitsu on behalf of Post suppliers.
I Office
i » Fujitsu standards and expertise, ie.
IT Service Management, ITIL,
Suppiier Management applied to the
end to end solution as it interacts
with the Horizon Service
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4, HNG-X: THE SOLUTION ARCHITECTURE
This section outlines the architecture of the proposed solution (HNG-X). Thi
jue understanding that Fujitsu has of current Horizon, both as a complex
platform for Post Office business. in addition, the proposal reflects the ne’
Office for operational practices more aligned with the wider retail industry.
roposal reflects the
system and a critical
rents from Post
‘The proposed architecture ouilds upon the preparatory work
Office during the past eighteen months.
intly performed by Fujitsu and Post
44 Change Drivers
The main driver for the definition of the solution architecture has been cost reduction.
The business capabilities currently delivered by Horizon are 3 Post Of and changes to
such capabilities would impact Post Office business. Still, the same capabilities can be delivered by
systems with different cost profiles.
i
The solution proposed is instrumental to the reduction in the complexity of
hence, to the reduction of related cosis for Post Office.
aintenance and support;
a2 Business Equivalence
The concept of Business Equivalence is central to the transition from Horizon to HNG-X.
The impact currently expected on the Business Capabilities of Post Office is mainly in terms of the
User interface on the Counter. Similar (and where required/feasibie identical) operational models
be used, but the look and fee! will be differe:
The changes will adhere to high standards for ergonomics and usability, and will enable long-lasting
benefits for Past Office. The change will be visible to the users and appropriate processes are required
to prepare and support the transition.
Opportunities for pracess-level change will also be available. Such opportunities wil! be explored as
part of the requirement gathering phase of the programme,
43 Strategic Directions
The proposed direction for the salution is to build flexibility
solution itself.
towards ilkely business change within the
Por example, the counter application is engineered as a delivery pot
products and services (AP-ADC like}. Central applications are en:
for a variety of business
ecred as service units (APOP-ike).
, Exceptional change is supported wherever there is no impact on cost. However, the suggestion is that
it is more cost effective for Post Office to address specific changes when they are actually required,
rather than to prepare for a variety of possibilities that may never manifest themselves.
For example, the solution includes technologies such as Oracle and the interstage J2EE plaiform that
can be reused as the backbone for future service implementations.
The overarching approach is te leverage existing capabilities in the estate, both in the short term and
as an ongoing capability of the resulting solution
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44 Business Applications
Detailed analysis conducted by Fujitsu highlights the fact thal the architecture of the current
applications introduces considerable manageability and serviceability complexity for the overall
solution, which in turn result in service costs.
The proposed solution includes a new set of applications. The new applications reproduce the
business functions of the current applications. Nevertheless, the underlying architecture addresses the
manageability and serviceability issues of Horizon.
A distinctive feature of the proposed solution is the centralisation of transactional data.
44,4 Counter Components
While transactional data is moved to the centre, the business logic is maintained at the counters. The
choice is in line with the strategic direction to leverage capabilities of the current estate, namely the
counter hardware. In addition, the choice enabies the containment of network traffic.
The application components on the counter will be developed using Java technology. The proposed 9
engineering methodology is based on the SOA model (service-oriented architecture), specifically Mitung. 5
enhanced with patterns from the Fujitsu TORE retail. framework.
the User interface will be based on a refinement of the style guidelines jointly developed by Fujitsu fea, (Lang
and Post Office. The working assumption is that the style sheet definitions will be defined as part of the a
requirement gathering phase of the programme. Whe, Cotas
4.4.1.1 AP-ADC Facility
The propased solution includes the AP-ADC capabilities currently available to Post Office. Possible
changes and optimisations in terms of internal data formats will be explored as part of the requirement
gathering phase of the programme.
442 Data Centre Components
Some of the application components in the data centre will be newly developed; other components will
be derived from the reengineering of existing applications. Specific choices will be made on an
individual basis and confirmed after a more detailed analysis.
As an example, current indications are that legacy applications such as TPS, APS, LFS, ORS, and
TES will remain substantially unchanged. Similarly, online interface such as ETU and Banking
Streamline will need partial reengineering to support new data sources.
New capabilities will be developed for the centralised handling of transactional data, audit, and
reporting. In addition, new capabilities will be developed to support centrally deployed services. Likely
technology choices include Oracle and interstage platforms.
44.2.4 Cent interfaces 4
Nee
The working assumption is that no change will be required to the interfaces to Past Office clienis, ta Ghee
Possible optimisations will be explored as part of the requirernent gathering phase of the programme. thas
44.2.2 APOP Facility oe A
al bag
The proposed solution includes the APOP capabilities currently available to Post Office. Possible he ffoed
optimisations will be explored as part of the requirement gathering phase of the programme.
.3 Reference Data
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The existing interface from the Post Office reference data system (RDS) can remain unchanged and
deliver Type A data to both Horizon and HNG-X counters. The replacement Postal Services reference
data in HNG-X will be different from Horizon. The two systems will require parallel supply of reference
data during the rnigration perior. Possible optimisations of other reference data will be explored as part
of the requirement gathering phase of the programme.
4s Infrastructure
The infrastructure iayer of the proposed solution will enable the operation of ail business applications to
the service levels required by Post Office.
ve with U ic direction of the solution, infrastructure choices are based on a sei of cos
effectiveness criteria. in terms of capital and operation costs over the lifetime of the tion. Reuse of
Horizon infrastructure components is considered from a similar perspective.
454 Counters
Based on current analysis and projections produced by Fujitsu, the current counter estate can
effectively support counter applications to 2015. The proposal is therefore to reuse existing counter
base hardware to 2015. An exception can be made for mobile counters for which early replacement is
envisaged, as explained in section 3.2.2.7
An operating system, migration is included from current NT to a more modern operating systern
{candidal ed include Windows XP, Windows XP derivatives and Linux}, The timing
and choices for the migration will be aligned with most beneficial oulcome to Post Office.
45.2 Network
The proposed solution for the network infrastructure and services include backup capabilities and a
more cost-effective ADSL model. The current landline connection for the branches will be augmented
with a wireless connection. The dual capability will be enabled by the introduction of a router device
attached to the branch LAN.
Based on Fujitsu analysis, itis also possible for a considerable number of branches to move fo a
higher contention ratio (from 1:10 to 1:20 and 1:80) for the ADSL link without substantially degrading
performance.
45.3 Oata Centre
The proposed solution ervisages a move from A&L to Fujitsu date centre facilities
The transition will enable a more integrated approach to system operation. In particular, fhe move
underpins the combined model proposed for Test and OR.
454 Enterprise Management
The proposed solution is based on a number of potential optimizations related to the management of
OBC processes (for example, more direct access for Post Office to support systems). Improvement
options will be explored as part of the requirement gathering phese of the programme.
St
48 Security Model
The security model proposed in the sol
Relail/Financial Services industries.
compliant with legal and commercial requ
nis based on established best practices for the
best knowledge of F: he proposed sofution is fully
ments that Be fice must currently meet. Still, a
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complete review of current compliance requirements will form part of the requirernent gathering phase
of the programme.
Differences from the Horizon solution jocluce (1) the replacement of transport-leve! security (i.e. VPN)
with appli i-level security and (2) the (Bduction in disk-level encryption for the counter.
\ >
heb aie ®
47 Disaster Resilience “
The proposed solution for Disaster Resilience is based on two individually resilient data centres.
Under normal circumstances, one of the two data centres (DC-A} is active and sustains the full
computational load for the entire estate. DC-A is locally resilient. Hence, failures of individual
components can be contained by failover mechanism to other components within DC-A.
The second data centre (DC-B) has the same capabilities of DC-A, but under normal circumstances it
is used only for testing purposes. In the case of a disaster actually occurring, specific failover
procedures would ensure that the computational load for the estate is migrated to and handled by DC-
B.
The failover time for the various services hosted in the data centres will be compliant with the
requirements currently specified by Post Office.
As an insight into the envisaged implementation of the solution, the data storage facilities (EMC arrays)
of DC-A and DO-B are constantly synchronised (using SRDF technology). Similarly, selected
components of DC-B are constantly ready for rapid failover from DC-A (namely for transaction
settiement and Banking services).
48 Training
The proposed solution includes training facilities for Counter Training Offices (CTOs).
At Rae brace
The proposed facilities will enable end users to familiarise themselves with the User Interface of the
system as wel! as with the operational logic of selected processes and procedures.
The training facilities will focus on the functional capabilities of the system. As such, non-functional
aspects such as responsiveness may not be representative of the actual system
The solution assumes that the interaction with the training facilities will be script-driven and that it will
occur in controtied environment.
4g Testing
in order to minimise capital and operational costs, the proposed solution envisages Post Office and
Fujitsu sharing the passive data centre (DC-8) for testing purposes. >
itis anticipated that this environment will support all agreed phases of testing subject to negotiated
planning and scheduling constraints.
4.10 Migration
The migration from Horizon the HNG-X
é visible both at a business and technical level.
4.40.1 Business Perspective
From a business perspective, the main migration step considered in the solution relates to the training
of end users. Fujitsu will endeavour to develop the training components of the solution as early as
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possible in the development cycle. In addition, alpha and beta versions of the system will be made
available to Post Office to enable parallel sirearns of work,
Time dependencies from Post Office will be defined during the requirements gathering phase of the
programme.
410.2 Technical Perspective
The rnigration will involve a number of discrete steps, including
* Data centre move,
* Router introduction,
* Change of the ADSL service class,
« Counter applications introduction,
e Oper change.
From a technical perspective, tools and procedures will be developed to support a timely and effective
transition from Horizon to HNG-X. Post Office engagement will be essential throughout the process.
ating system
Main areas of impact for Post Office include:
Reference Data: some refei
Client interfaces: additional par
Streamline)
4.10.3 Data Perspective
The integrity of all types of data will be a key priorty during the migration phase.
Opportunities to improve speed and cost of migration have been identified in terms of a limited set of
operational data not being migrated or being migrated in aggregate format. Ail information wouid still
be available if required; only the retrieval process may require additional steps.
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5. IMPLEMENTATION PLAN
5.4 Introduction
Fujitsu Services are proposing to implement HNG-X as a multi-phase programme whereby cost
reductions are realised within the optimum time frame by deploying subsets of the infrastructure
upgrades prior to migrating the application software components that will achieve the overall benefit
realisation for the programme.
With this approach in mind Fujitsu intends to:
« Transfer the current Horizon daia centre equipment to Fujitsu managed premises in order to
leverage the benefits of operating within such an environment.
e Install routers in the branches in such a way that exploits the scheduled visits of the mobile
engineering work force and avoids the cost of a dedicated rollout exercise.
* Deploy an [P-Stream based network to support the current Horizon application environment
thus achieving some of the benefits of this technology prior to the deployment of HNG-X
software.
Fujitsu Services are propasing to re-engineer significant parts of the application software architecture
that supports the Horizon business solution, including the underlying infrastructure, in order to reduce
the cost of ownership going forward. The prime and overriding focus of this programme from @ Post
Office perspective is to achieve a cost reduced but equivalent solution that enables Post Office to
continue te deliver all of its business capabilities, to trade its entire product portfolio and to meet all of
its stakeholder service commitments. Additionally the HNG-X implementation programme must ensure
that the manner by which this is achieved does not restrict Fujitsu Services in using the most cost
effective development approach or solution architecture, and also adopts an engagement process with
Post Office thal minimises the risk of downstream solution changes due to functional omissions or
misinterpretations.
In order to achieve the programmes objectives, Fujitsu Services will exploit:
« Improved development methodologies where these increase team productivity
* Re-use of technology both from within the Horizon programme and the wider Fujitsu family
« Appropriate use of off-shore development capability working as an integral part of the
development programme
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8.2 The Development Plan
The HNG-X plan has been created assuming delivery within the timescales proposed under the HNG
Nominal plan, providing Post Office with operational savings in ine with the HNG pian. This has been
achieved by cornpensating for the lost time on HNG by ulllising the window originally scheduled under
HNG for coil out of new counter hardware, which is no longer proposed.
“) The HNG-X programme pian, subject to agreement with Posi Office Ltd, icipates that funded activity
fl commence during October 2005 in order to confirm the detailed requirements processes and te”
© design activities to begin: to ‘Support the challenging infrastructure change programme. it is
expected that this work would progress in parallel to detailed commercial neg! egotiations.
. An additional Contingent plan, as tabled under HNG, is not proposed by Fulitsu Services for HNG-X,
as contingency has been created within the plan
In recognition of Post Office's request for early cost reductions, Fujitsu Services propose migrating the
Horizon Daia Ceritres te Fujitsu Services Data Centres over a Bank Holiday weekend during 2006. The
plan schedules this for August 2006, but this would be dependant upon early approval to cornmence
work and this may need re-scheduling to Christmas 2006 or Easter 2007.
itis proposed to introduce a new Router, during service visits to Post Office branches, prior to
La migrating counters to HNG-X. Implementation will involve migrating of the Network Connection from
> 2 ati the Horizon Gateway PCs to the Router as part of Horizon. The new router will make management of
a Y network issues easier as # will be possible to separate the gateway PC (and VPN while an Horizon)
oe issues from network issues. When the new application is deployed fhe gateway PO ne longer acis as a
router thus allowing bespoke software and drivers to be retired.
$.2.4 Phase 1: Requirements
One of the critical success factors in achieving the goals of the programme is the establishment of @
formal HNG-X Requirements Saseline in a time / cost controlled manner that will act as the basis for
the subsequent HNG-X programme. The requirements shase is represented in the plan above as two.
distinct areas of activity the first being “Business Requirements” which captures the application
alatiributes to be delivered by HNG-X aid Ihe Second “System Requirements” which records
Hana jrements and further develops these for interpretation in fechnolagy and/or
service delivery terms.
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itis proposed that the HNG-X Requiremenis Baseline will comprise a representation of all of the
business processes and interfaces supported by Horizon at an agreed baseline (Release S90}
together with a definition of the revised User Interface and statement of all non-functional
requirements. Acceptance Criteria must be specified as part of the development of this baseline and
traced / aligned’to specific requirement models or stalemenis within the Baseline:
The functional baseline will be expressed in the form of UML models comprising:
» Use Case descriptions including Main and Alternate flows describing the Post Office
elementary business processes that are to be supported on the HNG-X System (e.g. Remit
Stock in, Perform On-line Banking Withdrawal, Add Financial in-pay to basket etc.}. These
descriptions will describe the required interactions between the ‘Actors’ (e.g. Clerk, Client
System, Post Office System) and the ‘System’ in a solution neutral fashion
* AClass or Domain model describing the business objects that are associated with the Use
Cases (e.g. Customer Session, Bank Card, Settlement Item etc.).
« Asset of Activity or Interaction diagrams to describe the logical workflow for any complex or
prescribed User / Systern behaviours.
» Various supporting artefacts may also be produced where these are necessary to provide a full
definition of the Use Cases including any associated Business Rules and a Glossary for all
commonly used terms.
Wherever possible this functional definition should seek to use references to existing Harizon
documentation rather than restating already agreed specifications. This will be particularly true of
interfaces that describe external client boundaries (e.g. Application interfaces Specifications) and other
Client or Post Office specified business rules, data or specifications (e.g. Banking mapping rules,
Report layouts, Transaction and error response codes etc.).
itis proposed that, subject to agreement with Post Office, the process for defining and agreeing the
HNG-X User interface will re-use much of the established HNG material and method. A focused
definition stage is required that will result in the completion of these activities and the production of an
agreed HNG-X User Interface Style Guide. The timing of this stage must be such that the review and
design activities can be time and cost constrained and with an approvai process and milestone that
does not delay the dependant application design activities.
9 & a!
Ail non-functional requirements will be newly stated and either: .- dus, Ganda Maeda +
e Predominantly aligned to the relevant Use Case where they relate lo specific process or
functional constraints / qualities - (e.g. security constraints for Banking, reliability of Branch
Administration process).
« Described as a set of overarching Post Office requirements that will be used to scope and
constrain the HNG-X solution and service design. It should be noted that Fujitsu Services have
made a number of simplifying assumptions that will affect the nature of the Post Office nan-
functional requirements, and these are described in outline in the working paper "Establishing
the HNG-X Reguirements Baseline” submitted to Post Office Ltd on the 9” September 2005.
The HNG-X Solution Architecture will retain (retained capabilities) some of the current Horizon
components (e.g. various back end data-stores / process and Client interfaces). The Requirements
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model will recognise these retained ‘Actors’ early in the analysis process and identify the boundary
conditions between the new and retgined componeris.
itis expected that the business processes / requirements for these retained components will only
require minimal new definition / documentation in the HNG-X Requirements Model.
Additionally Fujitsu Services believes that there would be time and resaurce savings by excluding any
such retained functionality from the scope of the HNG-X Acceptance Strategy, with the emphasis an
Fulisu Services managed and defined ‘boundary’ condition testing comparable to the existing Horizon
style of regression testing for the unchanged functionality.
In order to maintain the principle of equivalence during the Requirements Specification stage, the
development of the HNG-X Requirements Mode! will be governed by a set of ‘Business Equivalence
Guidelines’ that will provide an overall framework for the scope and capabilities that are required ta be
specified. These guidelines are only intended to provide part of the scope definition of this stage of the
programme and would ceese to have significance once the HNG-X Requirements Mode! has been
approved. A draft of these guidelines is included in the working paper “Establishing the HNG-X_
Requirements Baseline” submitted to Post Office Lid on the 9" September 2005,
5.2.2 Phase 2: Architecture, Design & Development
Fujitsu sroposes to leverage the deveiooment experience resident within existing development tearns.
and offshore Fujitsu Development Centres to deliver the architecture, design and development of
HNG-X. The approach will harness iterative methodologies to achieve productivity gains and it should
be noted that the nature of offshore development requires that there is a more formal and st
degree of separation between the ‘Requirements’ and ‘Solution’ stages. This dees net mean
‘solationist approach will be adopted — when it becomes necessary for su Services to seek
clarifications, ciscuss design neutral choices or discuss optimisation opportunities then the ability to
engage with Post Office’s business and operational expertise will be welcomed.
Fujitsu imends to achieve an appropriate blend of onshore and offshore design and development
operations whereby offshore staff will work, where required, onshore to ensure the delivery of an
integrated solution. The architecture team responsible for the solution, in the process of generating the
development estimates, have conducted an analysis of each of the components supporting the
architecture to determine which elements can appropriately be developed offshore. This has led te a
significant allocation of work to be developed in this way, contributing to cost reductions associated
with the programme.
nport of the delivered elements past go-live will be similarly analysed to identify how the
best supported in the most effective manner.
On going
solution can
82.3 Phase 3: Acceptance & Testing
in order to reduce the in vestment ip testing hardware and the oagoing associated maintenance costs,
ing environment that will be shared
: is will require careful planning
ion by ail parties to ensure that the planned dates are achieved but itis an optimised
xat has been proven by the Impact Programme during the introduction of Post Office FS.
approach
The hardware and licensed software intended for use in both of the HNG-X data centres will be
available, prior to Live migration, for testing HNG-X.
Prior to Live migration, the hardware in DC-A will be configured and validated in preparation for its
migration to the Active Live Data Centre.
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Prior to Live migration, the Hardware in DC-B will be configured and validated to ensure the DR
capability is ready for operation.
Post HNG-X Live migration, the Hardware in DC-B can be utilised for validating new business, with the
constraint of ensuring 4th Line support validation and DR capability is maintained. It is assumed that
there is a low rate of change with the application from 2010 and that this facility may no longer be
required.
itis proposed that End-to-End testing is performed as part of other planned testing streams within DC-
Aand DC-B and not as a discrete activity.
Any new business testing post HNG-X Live migration would be impacted if an issue were to be
experienced in DC-A that requires fail-over to DC-B. Any testing would require restart from the jast
available backup position once DC-A was re-established
On the understanding that there will now be a formal HNG-X Requirements baseline, Fujitsu Services We te
proposes that, subject to agreement with Post Office, the most cost effective Acceptance Strategy is le
one that recognises the change of emphasis from textual staternent based representation of Post I cooked
Office requirements to one that for the most part comprises a set of UML models. o rh
‘This approach rust clearly protect Post Office’s commercial and operational obligations but must be oe j 8 Ge
such that it does not adversely affect the cost reduced focus of the HNG-X programme. Shek bla
itis assumed that Post Office will wish to conduct a series of Acceptance Stages throughout the HNG-
X programme and that explicit Acceptance Criteria will therefore be required against which to verify the
HNG-X Solution. oo
An alternative approach for the functional aspects of HNG-X could be based on an agreed set of rn wield
guicome-based tests that are run through both Horizon and HNG-X as the basis of Verifying business f~ud byt
éguivalence. oe * ARAL
Nelo a é
On the basis that criteria are required, Post Office may wish therefore to continue the HNG process of wes wee
developing Acceptance Criteria from the various Horizon information sources and to initially use this Be al
material to support the development of the HNG-X Use Cases. It should then be feasible for the yaebe
majority of these Acceptance Criteria to be forrnally associated with the requirements model (e.g. Use ed
Cases for functional criteria, Workflow models for Branch process / constraints criteria, the Style Guide
& scenarios for Ul qualities). {tis assumed that any existing non-functional criteria will be used to
support the definition of the HNG-X non-functional requirements and associated criteria,
The overall aim of this process is develop an HNG-X Acceptance Criteria baseline that is wholly
aligned with the HNG-X Requirements Model.
it may be necessary for some of these Acceptance Criteria to be ‘levelled’ to the same extent as the
scope and detail within the Use Case ~ i.e. they should be aggregated and revised to reflect the
business process / solution neutrai level of specification rather than (in some cases) the more detailed
solution based view contained in the original Horizon material. !t should be an overall objective to
ensure that the text of the Acceptance Criteria relates as closely as possible to the processes, objects
and rules that will form the Requirements Model to minimise the need for later interpretation and to
allow the HNG-X Test Strategy (for functional testing) to be focused on verifying the Use Cases, rather
than having to take special consideration of HNG-X Acceptance Criteria.
This process of rationalisation and alignment would be part of the responsibility of the joint
Requirements team, but with final approval on the nature and scope of the acceptance criteria being
with Post Office.
It is intended that the HNG-X Solution Architecture will re-use certain established and stable solution
components of the current Horizon architecture. In particular it is proposed that the majority of the
Horizon Host capabilities and associated external interfaces will remain unchanged with limited
rationalisation of certain data-stores to reduce operating costs.
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THE POSSIBILITIES ARE INFI RITE
This re-use approach should be capable of being reflected in the degree of analysis and definition
required in the HNG-X Requirements baseline and in the associated acceptance criteria and testing
approach. The scape of the current Use Case survey includes all Post Office business capabilities
wrespective of any component re-use in the emerging HNG-X solution. Once this overall solution
architecture has been approved it is proposed thal the retained Horizon capabilities should be included
in the HNG-X Requirements Model as ‘internal System Actors’ rather than as Use Cases where the
emphasis will be on defining their boundary characteristics rather than formally specifying the business
requirements and processes that they support.
References to the relevant documentation (initially to the ‘ent material plus any planned changes to
support HNG-X) should be suff nt to support the HNG-X baseline definition.
Excluding these
shoul also reds
atained capabilities from the more detailed stages of the HNG-X Ba: e definition
@ or remave the need for the specification of corresponding Acceptance Criteria ~ gt
‘onal capabilities. Fujitsu Services expect that agreement can be reached with Post
ce as ‘the final Business “Assurance takes place, Fujitsu
inue to o suppor Post Office with the & echni ical management of this phase ane the monitoring of
the oulsomes.
&2.8 Phase §: Application Migration
Upan completion of the pilot phase, it is proposed by Fujitsu that the application will be deployed,
initially, on the current counter operating system (NT4} thus enabling associated benefits to realised as
soon as possible. A three-month migration window is currently present in the DRAFT plan out itis
recognised that the deployment of these changes is dependent on the ability of the business to support
the rate of change. Branch Trading is due to be deployed imminently and it is believed that this phase
of the Impact Programme will yi tors of the rate of change thal the business can
support.
Following the completion of counter application deployment, it is proposed by Fulitsu that the counter
operating system would be upgraded to a more recent software platform. itis recognised that this
could be overlapped with the counter application deployment but it is felt that there is no real gain to be
achieved in return for the associated complexity and risk.
§3 Rules of Engagement
The following section highlights the roles and responsibilities expected of both Fujitsu Services and
Post Office, to ensure efficient and error free delivery of the changes proposed.
§.3.4 Programme Management
Fujitsu proposes that the criticality of the HNG-X Programme justifies the establishme:
management structure in line with previous successful major programmes (Network Banking and
Impact) where there is established senior management sponsorship within both organisations and
greed escalation routes to support effective delivery.
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THE POSSTGILITIES ARE TRFINITE
§,3.2 Requirements capture
Fujitsu proposes that the task of capturing and recording business requirements should be jointly
shared by Post Office and Fujitsu working in a tightly integrated, co-located team that leverages the
knowledge and capabilities of both organisations — with the analytical and Horizon application
knowledge of Fujitsu Services able to complement the Post Office business and operational
knowledge.
itis proposed that the joint team is established with the common objective of delivering the HNG-X
Requirements Model within an agreed time / cost budget to support parallel Solution Design and High
Level Design activities.
An agreed method of working will be necessary to ensure that this activity does not escalate beyond its
allocated time / cost buciget and to ensure that the scope and level of detail is constrained to that
sufficient to express the business requirement and not any detail of solution realisation,
In particular it will important to recognise thai the packaging of the deliverables from this stage should
ideally be a complete representation of the functional / Ul and non functional requirements for each
group’ or ‘classification’ of business function, together with the associated Acceptance Criteria. The
emphasis of the assurance activities should predominately be focussed on ensuring the full, complete
and acceptable coverage and definition of the business and procedural capabilities / requirements
rather than on the manner by which the HNG-X solution design and build is to be realised.
ae
Fujitsu Services will have the responsibility to enhance the business requirements baseline with the I] & £ ‘ f
system and technology specific specifications leading into the solution design and build phase. 7m q +
den! .
5.3.3 Selution Design ,
Design of the solution will remain the sole responsibility of Fujitsu Services but it is expected that Post ik
Office will maintain a continued awareness and understanding of the solution as it evolves, not for see
approval purposes, but io support infernal Communication and business awareness within Post Office
in preparation Tor the successful deployment of the solution. {
5.3.4 Development i
During the development phase of the HNG-X Programme, Fujitsu expects the continued support of
Post Office in the resolution and clarification of issues arising during these activities.
§.3.5 Acceptance and Testing I
Fujitsu proposes that Post Office will:
« Provide acceptance approval with respect to how tests will map onto the validation of
Acceptance Criteria.
e« Review, as appropriate, the testing outputs.
» Co-ordinate Post Office clients and suppliers who are involved in End-to-End testing.
§.3.6 Pilot
Post Office and Fujitsu Services will jointly manage the implementation and monitoring of the HNG-X
pilot activities.
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TRE PRSSURILITIES BRE FRFIRETE
6 COMMERCIAL SUMMARY
This section presents Fujitsu’s estimated charges and associated commercial assumptions
underpinning the proposed Service Parership.
61 investment Summary
An estimate of Fujitsu’s charges during the 10 year term of the Service Partnership is summarised in
the graph and table below. For convenience, overlaid on the graph are comparisens with Fufitsy’s
previous estimate for HNG (June 2005) and the alternative “cost curve projection” presented to Post
Office in July 2005.
PUNTSU SERVICES PRICING:
140,200,000
108.000.000
2 68,000,000
68220020
2O.800,000
Total Charges (Excl. VAT and RPI}
06
Year
EMs YO? YOe Yoo Ye Yt Y42 YS via YES TOTAL
Operational Services 65.3 8h2 82.6 38.3 333 827 322 32 8 308 4024
SI Services aS 2A 194 448 5 72 cal 69 &8 85 4274
Cantal 38 134 26 83 64 ay a7 Or OT ar 2g
Olen. 6 ot nd
Total 105.7 938 138 53 48.2 408 408 388 382 S77 386.0
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THE POSSIBILITIES ARE ENFIRITE
Wvek on WO RPE TC VAT eck WS atten LA?
Total Charges {Inel. VAT {irrecoverable} and RP} ~
Eis ¥08 Yor 08 yoo Ye vit ¥42 Yd Ya 18 TOTAL
Operalional Services 77.9 674 84S 497 439 43.8 43.2 427 43.0 44
Si Services 27 30.9 B37 14g 148 95 98 $5 38 94
Capita 47 18.9 32 03 95 4 10 10 10 40
thers 8 a2
Total 426.4 i144 943 85.0 483 835 837 83.2 554 53.8
From the graph above it can be seen that Fujitsu’s Service Partnership proposal using HNG Plan X
offers incremental savings over Fujitsu's June HNG proposal, and correlates very highly with the
alternative projection presented to Post Office in July.
A spreadsheet containing a break down of Fujitsu’s revised estimates for the 10 year term of the
Service Partnership has been provided separately to this document
6.2 Additional Pricing Information
6.2.1 Managed Service Options
Section 3 of this proposal identifies the opportunity to vary the form and associated service levels of
the managed services delivered within the Service Partnership. Under the final contract, Fujitsu will
provide a facility to allow Post Office to understand the various cost profiles associated with different
service combinations. This is expected to assist Posi Office in customizing the nature of service
delivered to different Post Office branch segments, based on the business value and importance of
each segments.
62.2 Financial impact of Counter Printer Replacement
Fujitsu's proposal has assumed that Post Office’s existing Branch Counter equipment will be supported
through te 2015. However, Post Office has expressed an interest in understanding the financial impact
of replacing the existing Ithaca counter printer with a suitable alternative. This is already the subject of
@ separate proposal to Post Office (May 2005). The following tabie confirms what variance to Fujitsu’s
charges would arise through replacing the Ithaca printer on a “fit on fail” basis from March 2007
‘Total Variance to Charges (Exel. VAT & RPA) mee EY elle Col, ihc Rang fay, §
Ms) yoo I yor [Iyos [yog [yi fyi fyi fyis fyi [vis I roman
Capital 35 O85
Operational Services 42 [44 [aa fas 14 4 wap I ee
Totat 83 AA 44 rad Ad Ld Ad ona 02
Total Variance to Charges (Incl. VAT & RPI)
(Ms) yos I yor [vos [yog [yi fyi jy [yi fyi [vis I rota.
Capital 10.9 10.9
Operational Services: “45 a4 A ot “Ab can +48 18 7
Total O58 “1.4 +14 “18 4S AS 4S AS 8
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THE POSSERILITEES ARE TRPINITE
NB Th oduction of the proposed replacement counter printer will aiso have a positive impact on
Branch MTBF and Counter Hour availability. Fujlisu will be pleased to share the associated service
characteristics stat aS approp!
62.3 Revised SI Man Day Roles and Rates
Fujitsu is pleased to introduce a new set of rates assoc
activities. different sets of rates are now available covering * hored” delivery (via Fulitsu’s
Indian operation), “Near Shore” (Le. off-shared resource, alongside F urce in the: UK), and
“on-shore” (resources as currently provided). It is expected that different combinations of * shoring”
options will be possible for any future Sf work.
ted wih delivering Systems integration
Rate per Rate per Rate per
Personnel Role working day working day working day
On Shore Near Shore Otishore
Systems Engineer £462 £ABS £1GS
Senior System Engineer £560 £452 RVB
Lead Systern Engineer £659 £486 £194
Consultant, Unit Leader E774 £570
Senior Consultant, Manager £952 - -
Senior Manager, Principal £4448 . .
Specialist
NB The above rates are based on the following assumptions:
¢ Rates are effective from the 1° of January, 2008.
* Asingle set of rates are presented fully discounted (1.6. no further discount is available for
Additional SI).
« Only “On-Shore’ rates are applicable to Pre-Paid
* Allrates are applicable to Additional Si spend
* Rates reflect a 37 hour working week, delivered between the hours of 8.00am and 18.00pm
(local time) Monday to / io Friday inclusive, excluding UK public holidays (previous rates were
based on a 40 hour week)
* Charges subject tc annual RPI increase fas S ap
ptember 2008
‘Commerciat-in-Confidence and Subject to Contract © Fujitsy Services Limited, 2006
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THE POSSIBILITIES ARE TRFIMITE
6.2.4 Funding Options
Fujitsu understands that Pest Office currently faces constraints over cash availability and has
previously sought to understand potential funding options available from Fujitsu, The proposed
architecture solution, HNG-X, underpinning this Service Partnership proposal now attracts significantly
fess up-front investment than that required for the previous HNG proposal and therefore provides an
opportunity for the required investment to be funded from within Post Office's existing forecast of
revenue expenditure.
Fujitsu is however still pleased to offer Post Office a funded option for delivering the required HNG-X
changes. The following diagram provides an indication of how the expenditure for the Service
Partnership could be profiled if a funded solution was implemented.
HNG "X" . FUNDING OPTION
Mutions
Year0é Year0? Year08 Year69 Year10 Yeart1 Yeari2 Yeari3 Yeart4 Year 15
This graph is pravided for information only, and remains subject to confirmation of Post Office’s specific
funding needs (amounts, term, deliverables, etc).
6.3 Commercial Flexibility/Variability
Fujitsu's charges for the Service Partnership presented above reflect Post Office's projections on
numbers of Post Office branches, counters and transaction volumes over the 10 year period. However
Fujitsu recognises that the uncertainty facing Post Office's business today may result in significant
variances in the size of the branch network and the volume and type of transactions carried.
Fujitsu can confirm that the HNG-X architecture proposed under the Service Partnership creates the
flexibility to reduce the underlying operational service and infrastructure cost base of the contract by up
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VRE PULSISTLITEES ARE ERFiNttE
to 60%, following migration te HNG-X. i.e. if Post Office's business was to contract te only one counter,
in only one branch, handling only one transaction of a single product type. costs io deliver required
services would reduce by 60% of those stated above.
This is of course a theoretical expectation of “lowest cost” as future Post Office business scenarias are
unlikely to be so drastic. Therefore to assist Post Office in understanding the more fi
flexibility/variability of the cost base underpinning the Service Partnership the fol
three example
scenarios have been used te generate revised estimates of the te charges,
Prive Flesibitity variabitity a ae a ac a cs hc re
Elis foxcinding VAT & RP}
eanare t % rs
any op Cnty
4006 fewer Branches, 4000 A
Homer courters, 100% FTA eth
ranea 8
Reso 384 aoe I 299 I ees I cee I nae
fScenare® ~
Bon
jee
lee
eas I eee I sas I sre I see 4248
Scanaries ~
BA blo
[7000 fewer Branches, 8790 al
towne counters, 50% wansaction rel
heclumes, all sordioes
Reduction i Opening Chars, £48 149 2.86. 86 $22 886 ese I -<ase
Hacioding Nen-rescvenabie VAT
and BPA yoo I yor I yes ve I ve ys I yora,
Scenaric 4 ex ASE 228.53
Scenaria 2 799 Seo] eat
Scenario 3 BH B44 38. ARS
Fujitsu's commercial proposal assumes that any operaticnai cost savings realised through reductions
in Post Office's actual needs (i.e. numbers of counters, branches, transactions, etc), will be re-invested
into the Service Partnership to fund other activities, However, in the event that no suitable new
business requirements are available, Fulitsu will release back to Pos! Office (rough the mechanism of
rediiced charges) savings as defined in the table below:
Share of Charge
Reductions Returned —-YO6
to POL
I No incremental
business
£1M pa of inoremen
80% 80%
I
O%, D0% 80%
services business: 100% I 100% I 160%
£5M pa of incremental ys 7 so
services Business: 100% I 100% I 100%
£10M pa of
I incremental services i! i O% KY 20% b 3% I 100% I 160% I
I
I business
in the above tabie, incremental business is defined as
contracted to Fufits:
eplember
Commercial
d Subject to Contract © Fujitsu Services Limited,
POL00090439
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Horizon Service
Partnership
FUJITSU
FRE POSSIBILITIES AME TRFINITE
6.4 Commercial Assumptions
Enclosed with this document is a full set of assumptions (Assumptions Lag v3.0) which underpin the
estimates provided in this document.
e The estimates provided in this proposal are contingent upon Post Office agreeing to the
following additional terms:
* Agreement to progress to contract an the basis of the revised estimates with the target for
agreeing contract principles of no later than 31st October 2005.
* Restoration of the exclusivity arrangement reflected in the HNG Heads of Agreement with ?
immediate effect. — .
Fujitsu reserves the right to revise or withdraw its estimates and offer for the Service Partnership in the
event that any of the above conditions are not met.
Commercial-in-Coafidence and Subject to Contract © Fujitsu Services Limited, 2005
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THE POSSERSLITIES ARE EREENITE
APPENDIX A: SENSE & RESPOND
Sense and Respond is an approach to harness the continually evolving operational environment with
the ability to respond ly to changing customer needs as shown in the diagram below. IT moves
from being reactive to being proactive.
what oration p deny
“Sip,
ra)
hy ov Yeo
ee
“pp
Ro Feeen
Py Ot
'OHP — inenyate
The resultant benefits delivered can include:
* A reduction in the number of waste calls providing options on the deployment of resources and
sost related benefits
» The opportunity to deliver more first time fixes hence improving the overall level of service
* The opportunity to identify trends across a number of different customers and take action as a
result
Sense and Respond is an approach to harness the continually evolving operational environment with
the ability to respond rapidly to changing customer needs. The focus is to respond with methods rather
than set processes.
While technologies and processes are enablers for efficient Service Desk service delivery, the agents
at Ist and 2nd line foous on the effectiveness of the Service Desk. The responsibility for whether a
service is deemed to be good or not lies with the Service Desk staff.
implementing the ‘Sense and Respond’ programme within Fujitsu has enabled the creation of an
environment whereby the staff at the front end of the operation has influence over the development
and improvement of the operation.
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THE POSSIBILITIES ARE INFINITE
Skilled staff and method
Value IN”
Customer Environment wi Multi-Media
Value q Service environment
ser information. I Gptimised
Brodie improscaneat. a processes
anid service dativery
Waste ‘OUT?
As a thought leader, Fujitsu is at the forefront of customer support thinking in many areas, including
‘Sense and Respond’, systems development, and service design. Many examples of Fujitsu's
experience in this field are available, including the following:
4. The London Schoo! of Economics has just begun a study of Fujitsu's customer support
operations, commissioned by the UK Government Department of Trade & Industry (DTI). The
DTI will publish the results of this report as benchmark for customers to measure and evaluate
customer support services f
2. Following detailed discussions, Gartner are currently modifying their definition and thinking il “ g >
around customer support Service Desks in line with that championed by Fi a TS
3. Fujitsu Operations Managers regularly contribute fo industry magazines on subjects from CRM
to tool sets and Management Methodologies
Fujitsu's managers are often asked to participate in Industry Awards and working committees.
‘Sense and Respond’ techniques have been introduced to consumer Service Desks. Through the
introduction of ‘Sense and Respond’ end-to-end capability measures, (measuring the service from start
te finish, even when that service is provided by third parties) findings indicate the method enables
front-line staff to identify different groups of customers and their issues.
reation of an
iuence over the
iis Help Desk
implementing the ‘Sense and Respond’ programme within Fujitsu has en:
environment whereby the staff at the front end of the operation ha:
development and improvement of the operation. The benefits to Fu
interactive Management Method are:
4. Aservice and process framework which ensures rapid implementation
2. Commitment to reducing service demands and waste
3. Lower cali volumes and improved customer satisfaction
ct to Contract © Fujitsu Services Limited, 2005
OFFICE
POL00090439
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THE CRESUBTLITIES ARE INFEMITE
4.
Supporting new busines:
4
6.
Higher service desk staff retenti
demand
rates with flexible resourcing to meet variations in service
with the ability to meet growing service damand quickly and flexibly:
improved user production and satisfaction
Reduced support costs
The flexi
lity to quickly implement leading edge technologies to gain competitive advantage
Understanding of true customer focus
improvement of uptime will
system tools exploited on behalf of the customer
Service levels improved and costs optimized.
Services Limited, 2006
POL00090439
POL00090439
oe)
FUJITSU
THE PG@SSEBILITIES ARE INFINITE
OFFICE
Doing Our Bit to Help Make
the Big Things Happen
nercial-in-Coafidence and Subject to Contract © Fujitsu Services Limited, 2605, Version2.93 (dratt)
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TRE PESSIRLLITIES ARE TRFIRETE
Horizon Service Partnership
Assumptions v3.0
“Introduction
This document sets out the assumptions that support Fulltsu’s proposal for a Service Parinership.
ee rr—“‘#NOOCNCOCOC;C;CCCCNCNC:C:C;C;dsiésrésdsCCNC:CiésCNCOC’CN#C#COCOCNC:é;wéséCiwzszéséSN®sSCrséC#é=«zrs“C CCC
4. General Assumptions
a4 Eulitsu’s charges de not reflect:
4.4.4 Any “Additional SI’ from April 2006 onwards. Any such spend has been assured to be
subject to separate business case justification by Post Office.
4.4.2 Moneys currently retained by Post Office relating io NBX but expected te be invoiced and
paid in 2005/6.
1.4.3 VAT and RPI increases. However for comparison purpose
Fujiisu's charges are also
presented to include RPI at 2.00% per annurn post 2005/06 and irrecoverable VAT at
15.225% (which may need further clarification by POL).
1.4.4.4 in respect of Capital tems, RPI increases for 2004/05 are not applicable ta the HNG-X
estimates for Data Centre harclware procurement, but is applicable to Software and other
Hardware items.
42 FS assumes that Acceptance of the Application software will be against agreed pre-defined
acceptance criteria. From these, Fujitsu Services will develop tests and agree with Post Office
that the successful completion of these tests demonstrates that the system meets the
acceptance criteria
13 Pricing assumes that Network Services will be contracted te Fujitsu Services for the full contract
jerm.
14 No support for ihe current Hub & Spoke pilots in the live estate has been provided for in HNG-X.
it has been assumed that these sites will fail within the support structure of the Core & Outreach
programme, and therefore subject to additional charges funded through a separale business
case
18 Post Office accents that there is a knowmn risk that the existing Pin Pad may not be suitable for
use after 2010. Any costs associated with implementing an alternative solution will be additional
to Fujitsu's estimates and sublect to separate charges.
48 Fujitsu’s proposal for HNG-X is based! on the assumption that Fujitsu will operate one active data
centre and one DR data centre. Prior to these data centres being migrated to HNG-X, ihe HNG-
Rage. 2.08.34,
42 September 2508 (version 2.99 draft}
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Fujdsu Services Lavited
2005
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Assumptions v3.0.
THE POSSIBILITIES ARE IHFIMITE
X hardware will be utilised for HNG-X testing. Post the data centre migration, the DR data centre
can be uiflised for new business testing. Any major data centre failure will invoke the hardware
for DR and freeze any current testing schedule.
V7 Fujitsu's S! estimates are based on the assumption that a requirements capture and acceptance
criteria definition process (Business Equivalence) similar to that described by Fujitsu in the
document (Reference (TBA)) will be agreed by Post Office.
18 Fujitsu’s estimates are oased on the assumption that a significant number of the components for
the solution will be designed, developed and tested offshore prior to integration activities in the
UK,
19 Si Prepaid has been included up to 2009/10 only. No additional implementation or operating
charges in respect of any SI develapment carried out under prepaid Si in 2008/9 and 2009/10
have been assured.
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Assumptions v3.0 THE PRSSTBILITIES ARE TBFINDTE
I 2. Systems integration Charges
24 The Infrastructure and Application Develaprnent Charges are on the basis that Fujitsu Services
retains IPR (defined as Fujitsu Services’ Software in the Agreerm
22 HNG-X SI Development charges have been priced at the revised man day rates set out in the
Proposal, and it has been assumed that the following levels of Prepaid Si will be utilised for the
Development charges:
© §=200506 £1.28M
« 2006/07 £6.34M \ ok
» 2007/08 £5.05M
i
4
wd
N& alihough the al values for Prepaid have reduced, the associated FTE rer
previously proposed under HNG
timates include:
2.3.1 An estimate of EM) of "Additional SI” during 2005/06 in consideration of work required to
implement S90 and S80 (aver and above thet funded from pre-pay) ~ based on th
understood scape at 18th April 2005, Branch Network Resilience and NBX retention fees
2.3.2 The Proposal includes development of S90 functionality within HNG-X. This is based on the
understood scope as at 4 September 2008.
24 Development charges include work performed on HNG during 2004/08 and 2005/06 and re-used
within HNG-X,
25 Kis assu!
me that an SLT will be provided for counter hour availability in Core hours, under
pine
by SLTs for heip desk response times and the engineering call te fix.. This will be agreed
during commercial negotiations. The counter hours availability SLT will exclude any incidents
due to faults will the IP Stream network technology where the call to fix will be on a reasonabie
endeavours basis
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THE POSSIBLLEITIES ARE CN FINITE
I
Horizon Service Partnership I
Assumptions v3.0 I
I 3. Operational Service Charges I
3.4 Pricing assumes that ADSL coverage is 86.7% for the year 2005/06, 96% in 2006/7 rising to
99% by 2014/15.
32 An agreed profile of “Force Majeure” and other branch closures (i.e. ever decreasing quantity of
Post Office branches and associated Horizon counter positions) as reflected in the table below
The proposal assumes that the OBC Service only covers these closures, and any additional
OBC services will be dealt with through Change Control.
Volumes as at March each year:
Se 200516 Y2008/7 Y2007/8 Y200G9 20090 Y2010/11 201112 Y201213 Y2nisi4 y2014is
55 13,055 12.855 12.855 12,455
Branches I 14,285 I 14,055 I 13.855 I 13,554 I 13,455
Counters I 35,301 I 35,002 I 34,752 I 34,501 I 34,254 S14 33,651 33,354 33,054 32,751
Bia
fro
el
33 HNG-X Pricing assumes POL and POA Reference Data teams co-located (ie. no change to the
current arrangement)
3.4 Pricing is based on a shared Service Desk effective from April 2006, excluding IMT and CMT
services, which are optional services. it has been assumed that calls will reduce to 11,000 per
menth from live branches once HNG-X counter migration is completed. Existing commercial
terms are preserved which allow for Service Level relief if the volume of 13,000 cails per month
is exceeded, or if additionai calls above 11,000 per month are attributable to Post Office action
or inaction or are deemed to be inappropriate or unreasonable. NB For the avoidance of doubt it
should be noted that Help Desk cail volurnes include any calls jogged via telephone and/or via
the proposed electronic multimedia call logging solution
35 itis assumed that 10% of calls will be logged via multimedia post counter migration.
36 Audit retrieval framework is the same as now (as described in CCN 1135).
37 Operational and support costs for S90 functionality have been assumed in the Fujitsu Charges.
38 impact of printing of Postal Orders has not been factored into MTBF c: lations for printers.
39 Costings assume that both the Video Benchmarking and Transaction Time-based benchmarking
mechanisms are in place although Video Benchmarking will be retained only until the end of
rollout of HNG “X, after which it will be withdrawn,
3.18 POL will implement changes in reference data processes and systems to support operational
savings in FS.
itis assumed that the objectives described in the first column of the tabie in Annex B of
Page 5.0f 14
12 September
Commereialin:
‘Confidence and Subject to Contract © Fujitsu Services Limited, 2005
3.43
348
POL00090439
POL00090439
2
FUJITSU
TEES ARE TRPERITE
Horizon Service Partnership _
Assumptions v3.0
i
I THE PaSSiBit:
L.
Schedule 12 (improvement of reference data processes} shall have been implemented. ff not,
the financial impact as described in Schedule 10 shall apply.
Wireless data network is deoinyed as secondary network in all branches together with the
equipment to support it {although some branches rnay not io receive the wireless data
network for the chosen supplier it is more cost effective to roll it out to all branches) which will be
installed as part af en existing engineer:
ing visit, prior to HNG-X counter migration. Where a
wireless data network is not available no other secondary network has been included in the
price. The exact coverage will be determined during rollout but is expected to exceed 95% of
branches.
The secondary network is designed to cater for failures of the primary network at individual
nmohes and nol for a intal failure of the pririary network at all Branches and therefore
assurned to be only handle 20% of the total transaction workload,
Break fix service is delivered as now, with the exceptions that Fujitsu Services reserve the right
to use Technical Couriers for this service and Fujitsu have assumed calls will be resolved as
follows: 6.5% 4hour
14% Bhour
79% Next Day
0.5% Reasonabie endeavours (Remote Sites)
Monday ~ Friday 0800 to 1830
itis assumed that the principle remains where a Technology Refresh or a revised service plan,
which may include charging for additional calls, applies when MTBF exceeds 120% of base-line
for equipment in use prior to roll-out and 150% of re-baseline for counter migration. All existing
equipment will be re-base-lined at HNG-X counter migration.
it is assumed that a mixed estaie of counter equipment (even within a branch) is acceptable fo
Posi Office, This may be needed if current equipment cannot be repaired economically or spares
become unavailable, e.g. spares for the Bar Code Reader are expected to become unavailable
post 2010 and a new model would be provided in flew.
itis assumed that ro cost is required for updating spares with new software builds following
counter migration.
it is assumed that in the event of a ‘catastrophic’ (immediate and fong term service threatening)
failure beyond the foreseen MTBF failure rate of an element of the counter equipment that Post
Office will authorise and fund a replacement or withdraw the requirement for the device.
itis assumed that no seri
be maintained.
itis assumed that returned
ation of spares movements and individual equipment locations will
its may be “cannibalised” to extend the economic life of spares.
Page 6.0.34.
12 September
Commerciatin-
on 2.93 (drafty
onfidence and Subject to Contract © Fujitsu Services Limited, 2005
POST
OFFICE I
POL00090439
POL00090439
©
Horizon Service Partnership FUJITSU
Assumptions v3. I THE POSSTBLLITIES ARE ERFISITE
bern
3.20 {tis assumed that equipment frorn Branch closures will be retained for spares unless scrapped
by mutual agreement.
3.21 Costs for a further replacement of the CMOS baitery in the PC are included.
3.22 Itis assumed that POL will migrate all existing FTMS clients to EDG, prior to Pilot.
3.23 thas been assumed that frorn 1 April 2007 that 85% of the ADSL Branches (less than 4
counters) are moved to a lower priced, IP Stream Home (50:1 contention ratio) ADSL service,
with 18% of the ADSL Branches moved to IP Stream Office (20:1 contention ratio) ADSL
service, and the remaining Branches on ISDN and fixed links (450 reducing)
3.24 Following counter migration, it has been assumed that all ADSL Branches (97% of the Branch
estate} will move to the lower priced IP Stream Home service.
3.25 Data centre Business Continuity and OR testing will be performed during normal weekday,
working hours, except full Data Centre fail-over test, and no testing enviranments will be
available during such exercises.
3.26 Costs assume that any existing Optima LCD screens which are deemed by Fujitsu to be beyond
economic repair after March 2008 will be replaced by an equivalent screen on failure.
Page. Z.0f14
12 September 2008 (version 2.92 (
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FUJITSU
THE POSSIBELITIES ARE IRPFERETE
Horizon Service Partnership
Assumptions v3.6
4, Training Capabilities I
44 it is assumed that 100 business processes (product sales, back office functions) will be captured
in the core training model available only at CTOs. Fulitsu has defined business processes as.
being business flows, and not individual business flow types Exarnples would include:
« Sell a stamp and settle for cash
e Complete a banking withdrawal (including simulated Pin Pad interaction) and settie with
cash
« Pay 3 bills (including bar code scar simulation} and pay with @ cheque
* Remit in two cash pouches containing £10,000 each
42 No upgrades to this training module are included in the pricing. It has been assumed that such
cosis will be provided for in the charges associated with future developments that require
43 implementing Software upgrades for the CTO hardware will be carried out under simiar
provision to that of current Horizon.
aa iL is sot envisaged that the tre
ning ©:
ilifies will be deployebie to the active branch counters
but this could be considered at additional cost.
08 (version 2.93 drat)
fenoe and Subject to Contract © Fujdsu Services Limited, 2008
POL00090439
POL00090439
[)
FUJITSU
TRE POSSIBILITIES SRE EMPERITE
Horizon Service Partnership I
Assumptions v3.0 I
I
§, Technology Refresh
1.2
4.24
422
13
14
15
16
1?
Page. 9.of
12 September 2005 (version
Commiercial-in-Confidence and
Ail existing counter hardware will be retained with the following exceptions:
Due to obsolescence issues, Fulitsu will begin to replace the existing Optima LCD screen on
failure with an alternative monitor from 2008;
The number of luggables will be held at the current level. Any units that are beyond economic
repair will be replaced by new technology. Any requirements for luggables above the current
level will be subject to Change Control and will be implemented using new technology.
Fujitsu's charges assume that Microsoft XP will be supported to 2015.
The cost model assumes no more than 13,821 network end-poinis for branches.
Costs for consumables are not included.
Horizon End of Day will be moved to a consistent 19:00 before migrations start.
The migration tooling, casting and the migration timetable assume that no specific business
accounting actions (e.g. stock unit rollover, branch liability process) are required as part of the
migration of a branch to HNG-X. The sub-Postmaster will be expected to confirm that the
Horizon counter closing position and HNG-X counter opening position are the same, through a
process to be agreed with Past Office.
OD: ‘crafty
Subject to Contract © Fuilisu Services Limited, 2005
POL00090439
POL00090439
[oe]
FUJITSU
THRE POSSIBILITIES ARE TNPERITE
Post
Horizon Service Partnership
Assumptions v3.0
§, Planned Outline Timetable
64 Fujitsu Data Centre migration occurring O3 2006/07 from Allience & Leicester \
sites fo Fujitsu's Southern Data Centres (SDCO1 and SCD02). Over the migration weekend,
which will be a Bank Holiday weekend, there will be reciuoed resilience tp the onfine Horizon
Services during this period. Over the migration period online services and DR capability will be
nen
affected. No new OBC operations wil be scheduled around this time and, precediin
migration perind, the POLFS service will not be available while it is migrated over a weekend.
82 iP Stream implemented April 2007
63 3 menth Application Pilot October 2007,
64 3 month counter migrati
65 NT to XP Operating System rollout, 6 months starting April 2008
ta
ring January 2008,
J
Conmnerciai-in-Confidence and Subject te Contract © Fujitsu Services Limited, 2005.
POL00090439
POL00090439
oe)
FUJITSU
TRE POSSIBLLITIES ARE PHEINITE
Horizon Service Partnership
Assumptions v3.0
General
FA itis assumed that the requirements statements will define to a sufficient level, the functionality
that must be supported in the new application, and the new application will be developed and
accepted against these requirements.
7.2 Limited ongoing change Is expected after the implernentation of HNG-X. Once the new
application has been rolled out, there will be minimal new application change per year. itis
assumed that the rate of change is low enough to handie on a single shared test
Architecture
73 HNG-X will be based on a centralised data model, whereby all transaction data is held centrally.
This includes a dependency on an always availabie network, such that "no network = no branch
trading". It is assumed that no facilities for offline trading will be provided.
74 itis assumed that the data centres with the new application will run in an Active/DR mode, with
the DR data centre being used for testing. The active data centre in its own right is fully resilient.
itis assumed that any business continuity testing is done during the week to reduce costs. This
implies that there are one or two weeks per year where testing does not need te take place.
75 itis assumed that the services that must be available within two hours of a disaster are:
@, ability to settle transactions.
b. critical online services (namely banking and debit cards).
Bate Centre Migration
76 Horizon data centres (Wigan, Bootle) will be moved to Fujitsu data centres. it is assumed that
during the migration period, Post Office will accept, no DR capability for critical services and aiso
no DR capability for non critical services for a longer period of time following the main migration.
There will also be no online services to branches during non core hours over the weekend.
77 {tis acceptable to have no new OBC operations scheduled in the main week of Data Centre
rnigration.
78 Post Office are responsible for ensuring that Link and Card account agree to move connections /
configurations (including test connections for HNG-X testing) to the new data centres.
Network
79 A new router will be rolled aut to mobile and fixed sites on Horizon prior to the new HNG-X
counter application, however, whilst in Horizon made, the gateway PC still acts as a gateway for
the slave counters.
740 Once the router is rolled out, existing backup technology (ISDN, HSCSD on demand) is no
longer required.
Page tet 34. ons
12 September 2005 (version 2.93 (draft)
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I OFFICE
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THE PESSTRELETEES ARE EWFINETE
POST
Horizon Service Partnership
Assumptions v3.0
Counter
744
FAS
Page 12. of 14.
42 Sepiember
Com
Quantum as a service will be an ordine transaction, The Siemeris security components will be
centralised (simiar to PAF). Quaritum will make use of the existing omer side} Hypercom
counter PIN Pad as its’ Smart Card Reader, and will not {as currently) use the Clerk side Smart
Card reader. Past Office will need to obtain agraament from Siemer: the revised securiy
mode! and obtain updated specifications of the interfaces as part of the requirements phase.
Any limitations on the applications capabilities supporied that were already agreed for HNG weil
also be acceptable for HNG-X. Th
documented in the HNG CD, and for completeness some items that have already been dropped
cludes some aspecis that were proposed but not
or are proposed to be dropped on Horizon. Details listed below:
¢ Session transfer will not be supported.
* Session suspend will not be supported.
e The Water Card product will be excluded before the start of migration to HNG-X.
» The SPM Smart card product has already been dropped from Horizon and will not be
supported by HNG-X.
« The OBCS product has already been dropped fram Horizon and will not be supperted by
HNG-X.
* Training mode has already been dropped from Horizon and will net be supported by
HNG-X.
*« LPS advice notes functionality shall be removed from Horizon and will nol be supported
by HNG-X.
* The (currently unused) signature variants of Banking transactions will not be supported
by HNG-X
* There shall be no Clerk copy of APS receipts.
« A number of other receipt and reporting simpHfications will be made. /Details fo be
agreed with Past Office).
« Any other enhancements over existing capability listed in the HNG CD will nol
supported unless explicitly stated and agreed. (For example, remote access by audit
enhancements to memo view message text attributes},
Bubbie heip will not be supported. An alternative context sensitive help mechanism will be
implemented provided a cost efficient alternative solution can be identified during the design
phi
The icon design service will not be continued far HNG-X. There will be a fixed, limited set of
icons agreed during the UI design phase, which can be re-used as appropriate on desktop
buttons in the HNG-X user interface. in particular, there will no longer be product specific
bespoke icons.
itis assumed that there is no HNG-X equivaient to the Horizon Inbound Data File Delivery SLT
due to the new application architecture, therefore the counter will not need to record reference
data delivery metrics.
POL00090439
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OFFICE I
FUJITSU
TRE POSSEBILITIES ARE ERFINITE
Horizon Service Partnership
Assumptions v3.6
Central Database
7.46 Asingle branch database will be provided to support both transaction capture and branch
reporting. There are some performance constraints that need to be addressed by reducing the
reporting load on this database:
» The rate of report requests must be reduced through the removal of unnecessary reports
and the consolidation of Stock Unit and Branch Daily/Weekly cut-off reports. {Details to
be agreed with Post Office].
* Confirmation messages for online transactions will only be harvested in batch mode at
end of day. This means that the TES will not receive C2 messages in near real tire, and
Streamline payment file(s) will only be produced overnight.
Branch Migration
7.47 All counters within a branch will migrate fromm Horizon to HNG-X at the same time. it is assumed
that the migration will not require any on site presence by Fujitsu staff.
7.18 Itis assumed that the migration process can contain steps that are performed manually by the
h over from Horizon to HNG-X. [Needs
further detailed design and discussion with Post Office.}
Post Office manager prior to and/or to cause the swi
7.19 Reports are needed to show that the Branch accounting and stock position is maintained over
the migration step. It is assumed that any exceptions highlighted will be corrected by manual
adjustments on the HNG-X system later. (The assumption is that through both testing and pilot,
such exceptions will be minimal).
7.20 There are certain categories of data that will not be migrated from Horizon to HNG-X. Exampies
are passwords, read / unread status of messages and planned orders. [Details to be agreed with
Post Office]
7.24 it will nat be possible to reverse the migration from Horizon to HNG-X once trading has begun at
a migrated branch. (For the duration of the pilot only, reversion to Horizon will be by hardware
swap out will and will require manual adjustment to the branch accounts for any transactions
made on the HNG-X system. Any transactions performed on the HNG-X system will not be
visible on the Horizon system).
7.22 The Horizon and HNG-X date will not be distinguished in the reconciliation and accounting
positions.
7.23 Buring the migration period there will be additional paralle! interfaces to some of the externa!
Online Clients (Le. E-Pay and Streamline).
Security
7.24 Wis assumed that a full set of security requirements will be provided by Post Office at the
business jevel that enables Fujitsu to build a system using technologies compatible with a retail
environment using standard compliant capabilities.
7.25 Prior to the start of branch migration, digital signature checking of authorisation responses for
Banking will be disabled in the Horizon counters. Post migration, all digital signatures checking
Page 12.08 14
12 September 2005 (version 2.93 (dra‘t)
Commercialin-Confidence and Subject te Contract © Fujitsu Services Limited, 2005
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FUJITSU
THE POSSURELITIES ARE EMFIRITE
Horizon Service Partnership
Assumptions v3.0
I
i
I
I
I
I
i
I
i
iL
will be remaved from the Banking Authorisation agents (already disabled for PIN based
transaction requests). As a result, the PIN pad may be necessary for deposit transactions.
External interfaces
7.26 itis assumed that there will be no changes to any of the application interfaces to external
Clients, including POL RDS, however, see also assurnption above on connectivity during the
branch migration period.
Page. 14 of 14.
12 September 20%
fersion 2.93 (raf
S Fujitsu Services Limited, 2008
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POL00090439
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fies —
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PRICING MODEL - FUJITSU PRICING BASIS
TOTAL OPERATIONAL SERVICE CHARGES.
SYSTEMS INTEGRATION
Application and infrastructure Development
‘Ongoing SI Support
‘Ongoing SI available for Prepay
SI Additional
IMPLEMENTATION
Capital costs for Counter and Data Centres
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
PRICING MODEL - INCLUDING VAT AND RPI
TOTAL OPERATIONAL SERVICE CHARGES
SYSTEMS INTEGRATION
Application and infrastructure Development
‘Ongoing SI Support
‘Ongoing SI available for Prepay
SL Additional
IMPLEMENTATION
Capital costs for Counter and Dala Centres
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
GRO
Y06 YO? Y08
yoo Y10 Ytt
Sha OS 383 827
432404 ba
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54 00 00 009 09 00
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10
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10
53.2
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16.9
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265
00 I 84
07 238
10.0
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37.7 565.0
Y15 TOTAL
434 5176
208
94 1014
32.7
00 I 84
40 296
19
24
83.8 722.3
POL00090439
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foe]
Post Office Account FUJITSU
4s September 2005 THE POSSEHELITIES ARE TR FINITE
Horizon Next Generation - Plan X
Proposed Direction
© Fujitsu Services 2008
Agenda for today
«
Summary of the main drivers
The Solution Roadmap
Revised Service Offerings
Technology refresh considerations
Discussion and agree next steps
© Fujitsu Services 2005
- Liam
- Giacomo
- Dave B.
- Tim K.
HNG-K Architecture Roadmap
Version 1.0. 30 August 2005
oO
FUJITSU
POL00090439
POL00090439
POL00090439
POL00090439
Objectives for Today
* To discuss with Post Office the revised approach to
achieving the appropriate cost curve for the
business over the next ten years
* To agree base assumptions going forward to
proposal
* To agree next steps including presentation of the
proposal
© Fujitsu Services 2005 RNG-X Architecture Roadmap Version 1.0, 30 August 2005
i
FUJITSU
Objectives for the overall Solution
a
*
Reduce Operational Costs
* Improve manageability of Business Applications
« Improve serviceability of Business Applications
+ Reduce complexity for Mobile Engineering
+ Reduce costs for Network
* Leverage Fujitsu Data Centres
Minimise Capital Expenditures
* Leverage existing Counter hardware and software
« Reduce capital expenditure (Test/DR)
No change to Business Outcomes and Processes
« Seamless transition for PO Clients
* Only look & feel change for counter clerks
Application approach assumes co-located joint teams to capture requirements
© Fujitsu Services
HNG-X Architecture Roadmap
Version 1.0, 30 August 2005
oo
FUJITSU
POL00090439
POL00090439
POL00090439
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2.
Post Office Account FU] ITSU
4% September 2005 THRE POSSEBILITIES ARE FRFINITE
Giacomo Piccinelli
© Fujitsu Services 2008
POL00090439
POL00090439
Service Costs for the Current Applications
« Upsides of the Current Application I
« Look & feel familiar to clerks
* Reflects current business processes and procedures
+ Downsides of the Current Application
* Yearly software maintenance fees
* Data distribution causes high Engineering costs:
« 80% lon tion
I ers required for data recovery
Data dsrutn induces complexity in Data Centres:
* Dual Live data centres
me on site for data m
°
‘ Date reconciliation
« Communication model induces high costs for Network and Network management.
« Software instability still causes up to 24000 calls per year
* Complex software upgrades in branches
* Tail mar fey tribution
« Complex / expensive testing facilities
* Replicate
nires
HNG-X Architecture re Roadmap Version 1.0, 30 August 2008
FUJITSU
© Fujitsu Ser
POL00090439
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Pivotal role of New Applications
« A set of New Applications is required that preserve the business capabilities
offered by the current application, but at the same time improve the ability to
manage and service the overall Business Solution
* The Application Architecture is based on:
* Centralised Data
* Message-level Security
* Service-oriented modularisation of software components
* High-performance middleware and database technology (Interstage/Oracle)
* Established standards (Java and Web Services)
* Ability to cope with business change (e.g. AP-ADC)
* The new applications will be portable across platforms, and can provide the
foundation for a future thin-client architecture
© Fujitsu Services 2005 HNG-X Architecture Roadmap
POL00090439
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Overall Solution Architecture
The overall Solution Architecture includes:
* A resilient Network for all branches (ADSL + Mobile)
* Disaster Resilience and Test capabilities:
* One locally-resilient data centre for Live
* One copy of the live data centre to provide DR and Test capabilities
* Shared Help desk facility with electronic call logging
© Fujtsu Services 200% HING-X Architecture Roadmap Version 1.0, 30 August 2005
FUJITSU
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Leverage of Counter HW/SW
« The New Applications leverage the current Counter Hardware
* The decision to refresh counter hardware can be made dependant upon:
* MTBF profile
* Availability of spare parts (e.g. from other branches)
« Future business requirements
* The New Applications can leverage the current Operating System
* The New Applications can be ported to a variety of Operating Systems (e.g.
Windows XP and Linux)
* Main risk to consider is the Vendor roadmap for support
* The New Applications can rollout new hardware via
* ‘fit on fail’
« Greatest benefit priority
* Support mixed estate
6 Fujitsu Services 2005 eee — HNG-X Architecture Roadmap Version 1 6, 30 Au ust 2005
fe
FUJITSU
POL00090439
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FUJITSU
THE FPOSSIBELITIES ARE ERFIRIEE
Post Office Account
4* September 2005
Dave Baldwin
POL00090439
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Service Architecture
* Service Management
* Horizon Systems * Service Overview
Helpdesk « Volumes
* Systems Management * Dependencies
Centre and Third Line
(SSC) * Enhancements
* Data Centre Operations
¢ Engineering Support
* Network Service
* Specific Services
HNG-X Architecture Roadmap Version 1.0, 30 August 2005
FUJITSU
POL00090439
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Service Management
« Seamless dovetail of operational services
* ITIL conformant process
* Service Support (Incident, Problem, Change, Configuration and
Release Management)
* Service Delivery (Availability, Capacity, Service Level and
Financial Management)
» Focussed to specific Post Office services
¢ Volumetrics
* No of Services
+ Types of technology
* Resilience
* Suppliers
* Governance
* Release schedules
© Fujitsu Services 2005
POL00090439
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Service Management
* Service Management Core Functions
¢ Directorate
¢ Service Introduction
¢ Service Delivery
* Horizon Service Desk and SMC (1°! and 2° line)
« On Line Services
* Data Delivery
« Branch Issues
« Engineering services
* Service Support
* Business Continuity
« Data centre services
« Network Services
* SSC (3 line)
* Focus on business impact — ie counter hours impacted
© Fujitsu Services 2005 Version 1.0, 30 August
FUJITSU
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Horizons Systems Helpdesk
+ UK Based Shared Service
+ Matched peaks
+ From 2007 Calls per month
* Service Level: 80% in 30 sec
« Fujitsu Standard Toolsets 46000
44000
+ Volumes 12000
* 10% Multimedia Logging and update ie00
. € 8000
chasing on line (application dependent) — ¢oc0
+ Rise due to hardware volumes 4000
« New router splits comms from PC 2008
ae © Bh BS BO XK wh wm a
+ New application 31 March 2008 FL EFF SF LD
i a a er a a a a a
* Service Options
+ Greater multimedia percentage
+ UK Dedicated desk
« India off shore option
« IMT/CMT option
© Fujitsu Services 2008 HNG-X Architecture: Roadmap : 7 Version 1.0, 30. Aagest 2005
FUJITSU
Systems Management Centre (SMC)
* SMC
* Tivoli retained as the system management toolset
* Increase in alert filtration
* Reduction in tail management
* ‘Always on’ application
¢ Tighter link to help desk via incident management
« Tighter link to third line via problem management
* Reduced events from new application
« Overall reduction from 50,000 to 25,000 alerts per week
* SSC
¢ Move to the left
« Problems from 650 to 350 per month
* Share skills with 4" line / development
© Fujitsu Services 2005 HNG-X Architecture Roadmap
FUJITSU
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Version 1.0, 30 August 2005
Data Centre Operations
. boy to Fujitsu data centres (SDC01 &
+ Wigan/Bootle to Fujitsu Data centres
* Plumb SDC01 and SDC02 and
new EMC disc arrays
* Test servers create Wigan clone
* Bootle move achieved over August
2006 bank holiday (window to
August 2007)
» Assume reduced resilience to
online Horizon services on that
Saturday, Sunday and Monday
» Transfer Wigan data to SDC02
* Build SDC01 with Bootle servers
» 24 hours contingency (Bank
Holiday Monday)
® Fujtsu Services 2005
* Create HNG-X datacentres by June
2006
* 1 live plus 1 test/DR (retail model)
« 2 hour banking failover, 24 hour for
other service
* Live data in both live and DR
* BC and DR testing in working hours
* Except full test
* Lower rate of change post 2010
* Reduced operational cost
» Reduced test rigs
HING-X Archites
POL00090439
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Engineering Support
* Full incident management, * Baseline MTBF at end of roll out
engineering, logistics and repair. 5% MTBF degradation per
* Service metrics annum
¢ 7% 4hour * MTBF +50% risk with Fujitsu
* 14% 8hour
° 79% Next Day « Supportability - see later
« Monday — Friday 0800 to 1830 = + New application 36 -> 20 mins
* SLT 95% achievement on site
* From April 2006
« Enhancements
* Post Master swap out /
return for repair
* Service level segmentation
© Fujitsu Services 2005 HNG-X Architecture Roadmap:
FUJITSU
Engineering Service Levels
POL00090439
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44 hours B 8 hours C 18:30 nextday Remote next day
Single Counter Branch
» Counter PC §.36% 0.16%
~ Pin pad 1.90% 0.08%
- Bar code reader 0.28%
- Keyboard 0.91%
~ Courter printer 4.27% 0.14%
itor 4.41% 0.04%
- Back office printer 3.02%
~ Router 0.32% 0.02%
§,69% 7.29% 4.24% 0.43% 417, 61%
A 4 hours B & hours C 18:30 nextday Remote next day
Multi Counter Branch (2 x counters)
~ ‘Last’ Counter PC 3.28% 6.10%
- Counter PC 0.89%
- First pinpad 3.14%
- Subsequent pinpad 0.08%
- First Bar code reader 0.83%
~ Subsequent Bar code reader 0.02%
- First keyboard 2.23%
- Subsequent keyboard 0.04%
~ First Counter printer 9.33%
- Susbequent Counter printer 0.14% 0.02%
~ First Monitor 231%
~ Subsequent Monitor 0.04%
~ Back office printer 3.30%
- Router 0.32% 0.02%
0.38% 3.44% 22.09% 8.16% 26.05%
© Fujitsu Services 2006
on 1.9, 30 August 20%
Pe
FUJITSU
Engineering Service Levels
A4 hours B 8 hours C 18:30 nextday Remote next day
Multi Counter Branch (>2 x counters)
~ ‘Last Counter PC 2.89%
~ Counter PC 4.86%
- First pinpad 8.32%
- Next pinpad if 50% left active 0.16%
- Next pinpad if less than50% left active 0.08%
- First Bar code reader 2.61%
- Next Bar code reader if 50% left active 0.04%
- Next Bar code reader if less than 50% left active 0.02%
- First keyboard 6.62%
~ Next keyboard if 50% left active 0.12%
- Next keyboard if less than 50% left active 0.06%
- First Counter printer 20.40%
- Next Counter printer if 50% left active 0.40%
- Next Counter printer if less than 50% left active 0.20%
- First Monitor 5.77%
~ Next Monitor if 50% left active 0.08%
- Next Monitor if less than 50% left active 0.04%
- Back office printer 3.30%
~ Router 0.34%
0.43% 3.22% 52.69%
[Total Visits 6.50% 13.95% 78.99% 0.57%
jitsu Services 2008
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¢ Average impact 3.3 hours additional
¢ Counter availability impact 0.17%
¢ 4.6 counter hours per counter per annum
600
500
A400
360
200
100
0
© Fujitsu Services 2008
00:00 - 00:5)
02:00 - 02:5!
& 2 2
= & & oS a =
S S 3S = > =
g 2 2 g 2 2
z sS & o oi ¥
oS S o = = =
ee Monday ~~ Tuesday
xo Thursday — -e-- Friday
HNG-X Architecture Roadmap
cor fox Bord oO
eS 8 x of
& 8 8 8
a oO vod N
= = x ON
Wednesday.
tome Saturday
Version 1.6, 20 Aug
Foe
FUJITSU
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Energis Data Stream
Network More Difficult / { IP Stream Office
to monitor and react to
failures (e.g. BAS).
Commodity Service
Levels
Higher Contention / IP Stream Home #1
Ratio may increase
variability in counter
response times.
Reduce Network I
Bandwidth required with IP Stream Home #2
new application _sstneeenertneeineneneneneterenemeecenene
ADSL and PSTN line
provided by same supplier
© Fujitsu Services 2005 HNG-X Architecture Roadmap Version 1 i Aug
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Network Service
®
IP Stream Home 50:1 for 85% (less than 4 counters)
* Application network usage dependant
* Remainder IP Stream 20:1, ISDN and fixed links (450 reducing).
Backup Resilience
* All branches of Orange mobile connectivity
* 94% branch network coverage
Branch router aids diagnosis and recovery
e
«
Added value
* Integration of disparate sources
« Branch, Data centre, client, wireless backup
¢ Single counter availability SLT
* Single incident management & escalation point
« Integrated with overall service
Options for segmentation
°
© Fultsu Services 2005 HNG-X Architecture Roadmap Version 1.6, 30 August 2005
&
FUJITSU
P Stream
Element
Datastream
IPStream
Transaction Time
End to End transaction time 1 second
Expected no more than 20% deviation, will be
needed to be proven through pilot
Single Points of Failure
BT Master line box; BT line; BT DSLAM; BT
VP/VC; BT ATM Switch; BT SDH mux;
Energis SDH mux; Energis ATM switch;
Energis BAS.
BT Master line box; BT line; BT DSLAM; BT
VPIVC; BT ATM switch; BT BAS
BT Central
Not applicable.
On failure sites would reconnect over the
alternate BT Central.
Site Distribution
Post offices are distributed across 19 BAS at
POPs. There has been no incident of a POP,
failure since service inception.
‘Post offices are expected to be distributed
across over 100 BAS at 9 POPs. The exact
number of BAS is unavailable.
Sites Impacted on
Average is 740 per incident
BAS Failure
Based on 4,000 sites, a maximum of 120 sites}
Network Management
Energis NMC have visibility of all network
elements within its infrastructure down to
Virtual Path/virtual Circuit level.
Visibility down to the STM-1
delivery link interfaces (BT LTSs), plus test
capabilities outlined below.
Network Node Manager (NN
Fujitsu are currently able to poll post office
counters and ping each BAS.
There will be an IP connection to the post offic
counter allowing NNM to poll it. BT confirms
that Fujitsu will NOT be able to Ping the BT
BAS.
o
Reconnection Time
Following a BAS failure post offices take
between 5-10 minutes to reconnect to the
Energis service depending on router loading.
Experience of [PStream indicates that
reconnection will be up to 15 minutes based o:
a heavily loaded BT BAS.
© Fujitsu Services 2005
HNG-X Architecture Roadmap
POL00090439
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P Stream
Element
Datastream
iPStream
Test Capability
Energis is currently uses the Woosh One Shot
Test fo interrogate the physical, ADSL and IP.
layers of the service,
In addition to the One Shot Test the following
will be available:
ADSL IP Check will check that a post office
counter is switched on and logged in. The
Radius Log Analyser checks logs for successful
failed logon attempts.
Repair Target Time
Standard Care = Working hours support and
40 clock hours clear
Enhanced Care = 24x7 support, 3 hour
response and 20 clock hours clear.
Same as Datastream.
Service Availability
99.6% average site availability.
Same as Datastrearm.
incident Management
Reported via Powerheip. A daily conference
call is heid between Energis and Fujitsu to
identify priorities and escalations.
Same as Datastream.
Major Incident Communication
Fujitsu aims to provide pro-active
communication of a major service failure in its
infrastructure within 15 minutes during normal
working hours.
‘The same is true of IPStream however more
key services elements are managed by BT
where there is no commitment available.
Management Reporting
A summary of major incidents, fault reasons
and performance against SLA are reported in
ihe monthly report. A major incident report is
provided by close of the next working day or
within 24 hours if possible.
The monthly report will analyse Remote
Connect [PStream in the same way as a
separate service. Major incident reports will be
available for the iPStream service but the level
of detail regarding BT service elemenis is
expected to be limited.
Version 1.0, 30 August 2005
cad
FUJITSU
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Specific Services
« OBC
« Base capability
* Volume driven
* Security
¢ Reduced in line with architecture
* Continued prosecution support service
* Reference Data
« As current service
¢ Reconciliation
« As current service
« Management Information
* As current service
* Potential to re-evaluate
© Fujitsu Services 2005 HNNG-X Architecture Roadmap Version 1.0, 30
Post Office Account
1" September 2005
Tim Kitchen
Ee)
FUJITSU
THE PRSSEBILETEES ARE
LR FERITE
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Counter Hardware Retention
¢ Drivers
* Basis
* Risks & Mitigation
* Product Specifics
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© Fujitsu Services 2006
HING-X Architecture Roadmap
Version 1.0, 30 August 2005
FUJITSU
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Drivers for decision
« Avoid capital costs
« Including unnecessary purchases
* Retail model of ‘Sweat the Assets’
* Avoid roll out costs
* Remove need for pilot of roll out
* Remove roll out scalability risks
¢ Smooth price curve
© Fujlisu Services 2005 HNG-X Architecture Roadmap Version 1.0, 30 August 2005
FUJITSU
Basis for decision
* Currently working
* Ability to support to 2015
« Confirmed by Fujitsu Logistics
* Fujitsu Experience
¢ 386 and 486 still supported
¢ Current failure rates acceptable
* Application supports mix estate
* POL willing to have mixed estate
* Change in aesthetics ?
© Fujitsu Services 2005 HNG-X Architecture Roadmap
Version 1.0, 30 August 2005
&
FUJITSU
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Risks and Mitigations
« Beyond economic repair ¢ or r spares unavailable
* Retain equipment from closures for spares
* Replace on fail with different model
* Top up for spares loop
* Application dependant
* Failure rate becomes unacceptable — quality of service
* Prioritise replacement program
° Analysis failures
¢ Partial and appropriate refresh
« Business case
« MTBF degradation faster than predicted
¢ Up to 50% at Fujitsu risk
° Above 50% e excess 5 call onarge to POL
‘Yersion 1.0, 30 August 2005
FUJITSU
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Product Specifics
* PC
« Battery replacement included for 2011/2012
°
Touch Screen
¢ Spares unavailable 2008
* Costs included for replace on fail in spares loop
* Luggables
* Beyond economic repair 2010
* Replace with laptop and XP
* As required by rural strategy
Counter Printer
« Failure rate unacceptable ?
* Separate business case
Barcode Reader
« Spares unavailable post 2010
* Replace on fail with new
© Fujitsu Services 2005 HNG-X Architecture Roadmap
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oO
FUJITSU
THE POSSIBILITIES ARE INFINITE
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Fe)
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TRE POSSIBILITIES ARE THFIRITE
H N G ey”?
Commercial Assumptions
nos v 2.93
POST
\ OFFICE
Commercial-in-Canfiience and Subject to Contract © Fujitsu Services Limited, 2005 Version2.93 (draft)
PRICING MODEL - FUJITSU PRICING BASIS
HNG-X DECEMBER 2005
TOTAL OPERATIONAL SERVICE CHARGES
SYSTEMS INTEGRATION
Appication and infrastructure Development
Ongoing SI Suppert
Ongoing Si available for Prepay
SI Additional
IMPLEMENTATION
Capital costs for Counter and Data Centres
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
Fujitsu Services
Y 06
64,6
0.8
10,7
54
04
10.0
1.6
100.3
YO? Yos
S79 62.9
57 8.2
88 B87
6.3 5.0
0.0 00
10.1 3.8
O41
88.9 78,7
Confidential
Y¥ 0g
46.0
12
10.0
4.0
0.0
64
67.3
¥410
34.4
6.9
0.0
04
45.6
Yat
33.2
7.2
0.0
07
41.4
Y 12
32.2
TA
0.0
O7
40.0
¥ 18
31.2
6a
0.0
0.7
38.9
¥ 14
34.3
6.7
0.0
07
38.7
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Y15 TOTAL
306 414.3
15.9
6.8 73.8
26.7
0.0 54
07 24.0
10.0
AT
37.9 5774
21 December 2008
HNG-X December 2005 (revised programme plan}
(All these costs exclude the 2005/6 supplementary payment and schedule 10/7.1 impiernentation payments that are common to all cases and were excluded from the
business case.)
¥ 06
£m Without inflation, excluding VAT
One Off Costs
Subject to Inflation O8
Fixed Price 0.4
Recurring costs. 82.6
Total 83.4
RPI Factor 403.8%
£m after inflation, excluding VAT
One Off Costs
Subject to Inflation O8
Fixed Price 0.4
Recurring costs 86.5
Total 86.3
irrecoverable VAT Rate 15.225%
£m after inflation, including VAT
One Off Costs
Subject to inflation OB
Fixed Price 0.4
Recurring costs 85.5
Total 86.3
Fujitsu Services
Yo?
72
86
73.0
68.8
105.6%
76
86
774
93.2
78
86
FA
93.2
¥ 08
a4
2.9
68.7
187
107.7%
98
28
718
84.5
9.8
2.9
71.8
84.5
Y 0g
54
19
60.0
67.3
109.8%
6.0
65.9
73.7
6.0
19
66.9
37
Confidential
¥19
0.0
04
45.2
456
112.0%
0.0
04
60.7
B14
0.0
04
50.7
54.4
YeAt
0.0
07
40.3
444
114.3%
0.0
0.7
46.4
46.8
0.0
0.7
46.4
46.5
VAz
0.0
07
39.3
40.0
116.6%
00
O7
46.8
46.5
0.0
46.
46.5
Y13
0.0
0.7
38.2
38.9
118.9%
ie)
7
45.4
46.4
0.0
OF
45.4
46.4
¥14
0.0
0.7
36.0
38.7
121.3%
9
07
46.1
46.8
0.0
OF
46.5
48.8
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¥ 15 TOTAL
a0
O7
37.2
37.8 860.3
123.7%
0.0
a7
46.0
46.7 621.8
0.0
07
46.0
46.7 $21.8
24 December 2005,
HNG-X DEC 05.xis
RPI and VAT version)
POL00090439
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re}
Horizon Next Generation FU] ITSU
Commercial Assumptions
Log v2.93
fool
OFFICE I
THE POSSHBELITIES ARE TN FINITE
i
Introduction
This document sets out the assumptions that support Fujitsu’s commercial proposal for HNG “X”
a “x” : : ION KB suggested
irrecoverable VAT rate should not be included and that POL will advise pest 2004/6 inflation
factor ~ previously 2%. Needs further clarification]
1434 In respect of Capital items, RPI increases for 2004/05 are not applicable to the HNG "X"
estimates for Data Centre hardware procurement, but is applicable to Software and other
Hardware items.
1.2 HNG *X" SSRI SUNGERRERCRIBIINS Application SiMAnaNINRRUAIa RGRaH I
13
14
DORSSeN eae, and therefore subject to additional charges funded through a separate
business case.
ed, 2005
16
V7?
418
419
F POST » Horizon Next Generation
4 OFFICE Commercial Assumptions
Log v2.93
I
2
FUJITSU
THE POSSIBILITIES ARE INFINETE
Fujitsu’s proposal for HNG “X” is based on the assumption that Fujitsu will operate one active
data centre and one DR data centre. Prior to these data centres being migrated to HNG °X”, the
HNG °X” hardware will be utilised for HNG “X" testing. Post the data centre migration, the BR
POL00090439
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data centre car be utilised for new business testing. Any major data centre failure will invoke the
hardware for DR and freeze any current testing schedule.
Fulitsu’s S! estimates are based on the assumption that a requirernents capture and acceptance
criteria definition process (Business Equivalence} similar to that described by Fujitsu in the
document (Reference (tha) jwill be agreed by Post Office.
Fuptsu’s estimates are based on the assumption that a significant number of the components for
the solution will be designed, developed and tested offshore prior to integration activities in the
UK.
Si Prepaid has been included up to 2009/10 only. No additiona! implementation or operating
charges in respect of any S! development carried out under prepaid Si in 2008/9 and 2009/10
have been assumed.
(version 2.93 (dratt}
ct to Contract © Fujitsu Services Limited, 2005
Wwe yet hy
lek
Lar
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Horizon Next Generation
Commercial Assumptions
Lag v2.93
P POs)
OFFICE
re)
FUJITSU
THE POSSIBLLITIES ARE IRFINETE
24 Shik
lax»
22 HNG “X" S} Development charges have been priced at the revi ised man day 2 fates set out in I in the ned &
Proposal, and it has been assumed that the following levels of Prepaid Si will be utilised for the Leet
“Bevelopment charges: tl My ae
2005/06 £1.28M
2008/07 £6.34M
2007/08 £5,05M
n.b. although the annual values for Prepaid has reduced, the associated FTE remains as
previously proposed under HNG.
23 Fujitsu S! estimates include:
SOARING! (£1) of ANE
2.3.2 The Proposai includes development GF
NERENEERIIA! 4 September 2005
24 Develooment charges include work performed on HNG di
within HNG “x”
Wg 2004/05
id 2005/06 and re-used
raft)
Fujitsu Services Limited, 2008
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Horizon Next Generation
Commercial Assurniptions
Log v2.93
L OFFICE I
{POE BNE NES SAN Bee R IRS Hina RRR sS tebe tet) the table below
The proposal assumes that the OBC Service only covers these closures. and any additiona! I Cob
OBC services will be dealt with through Change Cantral.. \ Feet,
Volumes as at March each year: .
Caen mere I veeee I vomene I vain I vere I vans I vane I vaoans
Brarehes I 1426 I sacs I taass I t3e4 I 19455 I sa2s5 I goss I ses I tzess I tase
Couns 350 I 3a rez I ascot I 34261} sog51 I s3e5i I sags) I 30st I 32761
34 Pricing is based on a shared Service Desk effective from April 2006, excluding IMT and CMT
services, which are optional services. it has been assumed that calls will reduce to 11,000 per
menth from live branches once HNG “X” counter migration is completed. BESS eemieeeia)
. dear ty
3.5 itis assured that 10% of calls will be logged via multimedia post counter migration. of Cy 2
:
POL00090439
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©
FUJITSU
3 ¥2.93 1 TRE PRSSISILITIES ARE CHPENITE
3.44
3.12
3.13
347
3.18
3.19
3.20
3.24
SRNR SCS SE SITE TE Sr COSC SNCROI UNE SIURERHENES) which will be
installed as part of an existing engineering visit, prior to HNG "X’ counter migration. WRBEES
Hees.
The secondary network is designed to cater for failures of the primary network at individual
Branches and not for a total failure of the primary network at all Branches and therefore
assumed to be only handle 20% of the total transaction workload,
: f d calls willbe resolved as
follows: 6.5% 4hour
14% 8hour
79% Next Day
0.5% Reasonable endeavours (Remote Sites)
Monday ~- Friday 0800 to 1830
it is assumed that the principle remains where a Technology Refresh or a revised service pian, He,
which may include charging for additionai calls, applies when MTBF exceeds 120% of baseline [I © “Mwy
for equipment in use prior to roll-out and 150% of re-baseline for counter migration. All existing i °
equipment will be re-base-lined at HNG “X* counter migration,
itis assumed that a mixed estate of counter equipment (even within a branch) is acceptable to
Post Office, This may be needed if current equipment cannot be repaired economically or spares
become unavailable, e.g. spares for the Bar Code Reader are expected to become unavailable
post 2010 and a new mode! would be provided in lieu.
ftis assumed that no cost is required for updating spares with new software builds following I I Whey,
Rik?
ftis assumed that no serialisation of spares movements and individual equipment locations will \I Wan
be maintained. 3 Rey
counter migration.
oaese
itis assumed that returned units may be “cannibaiised” to extend the economic life of spares. woe
t
ftis assumed that equipment from Branch closures will be retained for spares unless scrapped t
Liat ick 22
by mutual agreement. ~~ Cr Pangbieatnn 2F
Costs for a further replacement of the CMOS batte:
POL WHERIGO BINGHISHNG F
in the PC are included. Sagres
WG, prior to Pilot ret, web
tember 2068 (version 2.88 (drat)
eject to Contract © Fujitsu Services Limited, 2005
3.23
3.24
3.25
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Horizon Next Generation
Commercial Assumptions
Log v2.93
2
FUJITSU
THE POSSIBILITIES SRE IN FIRITE
thas been assumed that from 1 April 2007 that 85% of the ADSL Branches {less than 4
counters) are moved to a lower priced, IP Stream Home (50:1 contention ratio) ADSL service,
with 15% of the ADSL Branches moved to IP Stream Office (20:1 contention ratio} ADSL
service, and the remaining Branches on ISDN and fixed links (450 reducing)
Following counter migration, it has been assumed that all ADSL Branches (97% of the Branch
estate} will move to the lower priced IP Stream Home service.
DRA Business Continuity and BR sorte df ARER
WORMS ANE except full Data Centre fail-over test, and no testing environments will be
avaliable during such exercises,
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Horizon Next Generation I F Uj ITSU
Commercial Assumptions
F POSTS
OFFICE 4
Log v2.93
THE POSSIBILETIES ARE TREFIRITE
2 impiementingI
enOCRRROME — ys 7
44 itis not envisaged that the training capabilities will be deployable to the active branch counters
but this could be considered at additional cost. ~
~
pollo foes ?
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ii
Horizon Next Generation FU] I TSU
Commercial Assumptions
Log v2.93 THE POSSIBILITIES ARE INFINITE
5. Technology Refresh I
5.4 All existing counter hardware will be retained with the following exceptions:
5.44
int 2008;
5.1.2 The number of luggables will be held at the current level. Any units that are beyond economic 4) caf, eats
repair will be replaced by new technology. Any requirements for juggabies above the current & Lo oded.
level will be subject to Change Control and will be implemented using new technology. I ~ Sok
Caw
§.2 Palise S charges assumes that Microsoft XP will be supported to 2015. fre te. Rey & xt 3 ;
>
53 CE Getcome duke
5.4
Levene ok Cutie
jibes (Ses
i Aeoak .
Pa BING «x. The sub-Postmaster will be expected to confirm that the
Horizon counter closing position and HNG “xX” counter opening position are the sarne, through 2
process to be agreed with Post Office.
jitsu Services Limited, 2005
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. oo
Horizon Next Generation F UJ ITSU
Commercial Assumptions
Log v2.93 THE POSSIBILITIES ARE PNFINITE
_ 6. Planned Outline Timetabie
64 Fujitsu Data Centre migration occurring Q3 2006/07 from Alliance & Leicester Wigan and Bootle
sites to Fujitsu's Southern Data Centres (SDCO1 and SCD02). Over the migration weekend,
which will be a Bank Holiday weekend, there will be reduced resilience to the online Horizon
Services during this period. Over the migration period online services and DR capability will be
affected. No new OBC operations will be scheduled around this time and, preceding the main
migration period, the POLFS service will not be available while it is migrated over a weekend.
62 IP Stream implemented April 2007,
63 3 month Application Pilot October 2007
64 3 month counter migration starting January 2008
65 NT to XP Operating System rollout, 6 months starting April 2008
eptember
iversion 2.93 (draft)
and Subject to Contract € u Services Limit
POL00090439
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FUJITSU
THE POSSEBELITIES ARE INFINITE
Horizon Next Generation
Commercial As! iptions
Log v2.93
I
t
I
wersion 2
Commerciai-in-Confidence and Subject to Contract © Fujitsu Services Limited, 2005
POL00090439
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foe]
FUJITSU
THE POSSIBILITIES ARE INFINITE
HN-G-“X” Horizon Service
Partnership
Commercial
Legv293v3.0
Doing Our Bit to Help Make
the Big Things Happen
Commerciat-in-Confidence and Subject to Contract © Fujitsu Services Limited, 2605 Version2 93 (draft)
POL00090439
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cto FUJITSU
Partnership
PES ABE TR FIRETE
Introduction
This document sets out the assumptions that support Fujitsu's «
proposal for WING 2g
Service Parnershi
Ea
I 4, General Assumptions
dditional S!” from April 2006 onwards. Any such spend has bear assumed to be
subject to separate business case justification by Post Office.
1.4.2 Moneys currer
paid in 2005/6.
1.4.3 VAT and RPI mcreases. However for comparison purposes F
retained by Post Office relating to NBX but expected to be invoiced and
tsu's charges ere also
ans imecoverabie VAT al 15.225% (which may need further clarification! by P:
Add b4-3-4-In respect of Capital tems, RPI increases for 2004/05 are not applicable to the
rdware procurement, but is applicable to Software
HNG-:-X: estimates for Data Centre hi
and other Hardware items.
42 HNG-OCFS assumeassumes that Acceptance of the Application software will be agains! agreed
pre-defined acceptance criteria. From these, Fujitsu Services will develop tests and agree with
Post Office that the successful completion of these tesis demonstrates that the system meets
the acceptance criteria
wg Pricing assumes that Network Services will be contracted to Fulltsu Services for the full contract
term.
14 No support for the current Hub & Spoke pilots in the live estate has been provided for in HNG--
X. Ithas been assurned that these sites will fall within the support structure of the Core &
1 2.83 (sralt}
jence and Gubject to Contract © Fujitsu Services Limited, 2005
POL00090439
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oo
FUJITSU
THE PESSIHILITIES AME INFINETE
Assumptions
Outreach programme, and therefore subject io additional charges funded through a separate
business case.
18 Post Office accepts that there is a known risk that the existing Pin Pad may not be suitable for
use after 2010. Any costs associated with implementing an alternative solution will be additional
to Fujitsu’s estimates and subject to separate charges.
16 Fujitsu's proposal for HNG--X" is based on the assumption that Fujitsu will operate one active
data centre and one DR data centre. Prior to these data centres being migrated to HNG-"=X", the
HNG--X® hardware will be utilised for HNG-.X° testing. Post the data centre migration, the DR.
data centre can be utilised for new business testing. Any major data centre failure will invoke the
hardware for OR and freeze any current testing schedule.
V7? Fulitsu’s SI estimates are based on the assumption that a requirements capture and acceptance
criteria definition process (Business Equivalence) similar to that described by Fujitsu in the
be agreed by Post Office howe wt track My wt
document (Reference (iba BA)) »
18 Fulitsu’s estimates are based on the assumption that asg icant number of the components for RAL,
the solution will be designed, developed and tested offshore prior to integration activities in the fe)
UK
19 SI Prepaid nas been included up to 2009/10 only. No additional implementation or operating
charges in respect of any Si development carried out under prepaid Si in 2008/9 and 2009/10
have been assumed,
Commerciabin-Confidence and Subject to Contract © Fujitsu Services Limited, 2005
POL00090439
POL00090439
: [ona
Heng Not FUJITSU
Partnership
THE PRSSHEBELITIER ARE DRFIRETE
& Systems integration Charges
24 The infrastructure and Application Development Charges are on the basis that Fujitsu Services I I
retains IPR (defined as Fujitsu Services’ Software in the Agreement) .
22 HNG-“-X: Si Development charges have been priced at the revised mani day rates set out in the
Proposal, and it has been assumed that the following laveis of Prepaid Si will be utilised for the
Development charges
* 2905406 £4.28M
«
* 2007/08 £5.05
#.6.NB although the annual values for Prepaid hashaye reduced, the associated FTE remains as
previously proposed under HNG.
23 isu Si estimates include:
2.3.4 An estirnate of [EM] of "Additional SI" during 2005/06 in consideration of work required ta
implement S80 and S80 (ever and above that funded from pre-pay} ~ [aased on the
understood scope ai 15th April 2005, Branch Network Resilience and NBX retention fees
2.3.2 The Proposal includes development of S80 functionality within HNG--X-. This is based on the
understood scope as at 4 September 2008.
004/05 6 and re-used
24 Development charges include work performed on HNG durin:
in HNGSX _
itis.assume that.an SLT will be provided for counter hour avellability in Core hours, under
pinned. by. SLTs for help desk response times and the engineering call to fix... his. will be agreed
during. commercial negotiations,. The counter hours availabilty SLT wil exclude any incidents
Page 4.of 18.
43 September 2005
‘dence and Subject to Contract © Fujitsu Services Limited, 2005
POL00090439
POL00090439
re)
FUJITSU
THE POSSIBILITIES AME ENFINETE
F POS
OFFICE I
3. Operational Service Charges /
34 Pricing assumes that ADSL coverage is 86.7% for the year 2005/06, 96% in 2006/7 rising to
98% by 2014/15.
3.2 An agreed profile of "Force Majeure” and other branch closures (i.e. ever decreasing quantity of
Post Office branches and associated Horizon counter positions) as reflected in the table below
The proposal assumes that the OBC Service only cavers these closures, and any additional Cort
Ol i ealt with throug? Control. laseente ?
2005 «= Y2008/ «= Y2007/ « Y2008/ «-Y2000/1 «= Y2010 = Y20111Y20N2it Yantai ¥2014i4
6 7 8 ) o 1 2 3 4 3
8s
Cou
I ier I 35,301 I 35,002 I 34,752 I 34,501 34,251 33,951 33,654 33,354 33,051 32,784
8
33 HNG-=-X° Pricing assumes POL and POA Reference Data teams co-located (i.e. no change to
the current arrangement)
a4 Pricing is based on a shared Service Desk effective from April 2006, excluding IMT and CMT
services, which are optional services. [thas been assumed that calls will reduce to 11,000 ger .
month from live branches once HNG-°-X" counter migration is completed. Existing commercial = SS “ny
Than
terms are preserved which allow for Service Level relief if the volume of 13,000 calls per month gy ye
v
is exceeded, or #f additional calls above 11,000 per month are attributable to Post Office action TL oud
or inaction or are deemed to be inappropriate or unreasonable, NB For the avoidance of doubt it = aA
of Ef.
ot Of
the proposed electronic multimedia call logging solution t a }
35 itis assurned that 10% of calls will be logged via multimedia past caunter migration :
should be noted that Help Desk call volumes include any calls logged via telephone andor via
3.6 Audit retrieval framework is the same as now (as described in CCN 1135).
7 Operational and support costs for S90 functionality have been assurned in the Fujitsu Charges.
38 impact of printing of Postal Orders has not been factored into MTBF calculations for printers.
Pags.§.0f 16
13 September 2005
Commercial-in-Cont
sion 2.93 (raft)
\c# and Subject to Contract © Fujitsu Services Limited, 2005
POL00090439
POL00090439
Horizon Next
GenenationServiog
Partnership
Eo
FUJITSU
THE PHSSIFILITIES ARE ERFEMETE
POST
OFFICE I
39 Costings assume that both the Video Benchmarking and Transaction Time-based ber:
ed only until the end of
marking
mechanisms are in place although Video Benchmarking will be ret
rollout of HNG "X, after which it will be withdrawn.
3.10 POL will implement changes in reference dat
gs in FS.
it is assumed that the objectives described in the first column of the table in Annex B of
ta processes and sysiems to support operational
gayi
Schedule 12 (improvement of reference data processes) shall have been implemented. ff not,
the financial irapact as described in Schedule 10 shall apply.
3.11 Wireless data network is deployed as secondary network to all branches together with the
bie to receive the wireless data
equipment to support it (although some branches may not
network for the chosen supplier itis more cost effective to roll it out to all branches) which will be
installed as part of an existing engineering visit, prior to HNG“2C counter migration. Where a
wireless data network is not availabi
no other secondary network has been included in the
price. The exact coverage will be determined during rollout but is expected to exceed 95% of
branches.
3.12 The secondary network is designed to cater for failures of the primary network at individual
Branches and not for a total failure of the primary network ei all Branches and therefore
assumed to be only handie 20% of the total transaction workload,
3.13 Break fix service is delivered as now, with the exceptions that Fujitsu Services reserve the right
to use Technical Couriers for this service and Fulltsu have assumed calls will be resolved as
follows: 6.5% 4hour
414% Shour
79% Next Day
0.5% Reasonable endeavours (Remote S
Monday ~ Friday 0800 to 1830
3.44 itis assumed that the principle remains where a Technology Refresh or a revised service plan, } Have ) ‘
which may include charging for additional calls, applies when MTBF exceeds 120% of base-line “ ‘tis
for equipment in use prior to roll-out and 150% of re-baseline for counter migration. All existing ie poe en the
equipment will be re-base-lined al HNG-.X- counter migration sso), ay
3.45 tis assumed that a mixed sstale of counter equipment {even within a branch) is acceptable io
Post Office, This may be needed if current equipment cannot be repaired economically or spares
ailable, e.g. spares for the Bar Code Reader are expected to become unavailable
post 2010 and a new model would be provided in Heu.
3.16 itis assurned that no cost is required for updating spares with new software builds following t he:
counter migration I ate
Page 6.of 15.
4 eenber 2005 (ver
contract © Fujitsu Services Limited, 2608
POL00090439
POL00090439
Fe)
FUJITSU
THE POSSIBILITIES ARE TNEIMITE
3.47 [Us assumed that in the event of 2. ‘catastrophic: (immediate ang long term service threatening)
failure beyond the foreseen MTBE fallure.rale, of ao. element.of the. counter equipment thal Post
Office will authorise and fund a. replacement or withdraw the requirement for the device.
3.38 42Itis assumed that no serialisation of spares movements and individua! equipment locations lls
i
will be maintained.
she Yoo)
3.12 2.38.ltis assumed that returned units may be “cannibalised” to extend the economic life of went h
spares. Mehl yh
3,22 $49tis assumed that equipment from Branch closures will be retained for spares unless & bash,
scrapped by mutual agreement. —~ coke She ven? (ote ‘
3.21 %26-Costs for a further replacement of the CMOS battely in the PC are included. Pogues
3.22 22%1tis assumed that POL will migrate al! existing FTMS clients to EDG, prior to Pilot.
3.23 #221thas been assumed that from 1 April 2007 that 85% of the ADSL Branches (less than 4
counters) are moved to a lower priced, IP Stream Home (50:1 contention ratio) ADSL service,
with 15% of the ADSL Branches moved to IP Stream Office (20:1 contention ratio) ADSL
service, and the remaining Branches on ISDN and fixed links (450 reducing)
3.24 &25-Following counter migration, it has been assumed that ali ADSL Branches (97% of the
Branch estate) will move to the lower priced IP Stream Home service.
3,25 ¢.24-Data centre Business Continuity and DR testing will be performed during normal weekday,
working hours, except full Data Centre fail-over test, and no testing environments will be
available during such exercises.
3.26 28-Costs assume that any existing Optima LCD screens which are deemed by Fulltsu to be
beyond economic repair after March 2008 will be replaced by an equivalent screen on failure.
Page 7.0f18
eptember 2008 (version 2.98 (erat)
Commerciai-in-Confidence and Subject to Contract © Fujitsu Services Limited, 2005,
POL00090439
POL00090439
co
Horizon Ben oe FU] TSU
Partnership ARE GMFIMITE
back office functions) will be captured pra,
has defined business processes 2
amples would include:
© Sella slamp and settle for cash
* Complete a banking withdrawal (including simulated Pin Pad interaction) and settle with
cash
« Pay 3 bills (including bar code sean simula’
* Remitin two cash pouches containing £10,
ind pay with a cheque
60 each
42 No upgrades {o this training module are included in the pricing. it has been assumed that such
costs wil be provided for in the charges associated with future developrnents that require
training.
43 lraplementing Software upgrades for the CTO hardware will be carried out under similar >
provision to that of current Horizon, - “vot notedk bept che ant, bow & daver “
44 itis not envisaged that the training capabilities will be deployable to the active branch counters
but this could be considered et acidiionai cast NS
polly kt
Page &
42 September 2008 (version 2.93 tae
Comener Confidence ang Subject ts Contract © F:
Services Limited,
POL00090439
POL00090439
oats FUJITSU
Partnership
ramorciat Assumptions
“POST
OFFICE I
TRE POSSIBILITIES ARE INFINITE
§. Technology Refresh
12 5-4-All existing counter hardware will be retained with the following exceptions:
5.4.4-Due to obsolescence issues, Fujitsu will begin to replace the existing Optima LCD
screen on failure with an alternative monitor from 2008;
1.22 §4.2-The number of luggabies wil be held al the current level. Any units that are beyond
pp yee
economic repair will be replaced by new technology. Any requirements for luggables above b cece ia
TA OARA A.
the current level will be subject to Change Control and will be implemented using new fan.
technology.
§.2-Fujitsu’s charges aesumesagsume that Microsoft XP will be supported to 2015. ~~ clay Try prt f
8.3-The cost model assumes no more than 13,821 network end-points for branches. ak. ey Sui WY
&4-Costs for consumables are not included. / xP
&.5-Horizon End of Day will be moved to a consistent 19:00 before migrations start. nt Lan ¥
ng, costing and the migration timetable assume that no specific business SF esti
accounting actions (e.g. stock unit rollover, branch liability process) are required as part of the 2
migration of a branch to HNG-=-X°. The sub-Postmaster will be expected to confirm that the “
Horizon counter closing position and HNG--X° counter opening position are the same, through a
process to be agreed with Post Office.
Page 9.0f 16
13 September 2005 {version 2.93 (craft)
Commercial-in-Confidence ang Subject to Contract © Fujitsu Services Li
POL00090439
POL00090439
fo)
ES, conerationservice FUJITSU
OFFICE Parinershie VRE POSSEBILITIES ARE CRFERITE
Coramerciat Assumptions
I 6. Planned Outline Timetable
1 o
to Fujitsu's Southern Data Centres (SDCO1 and SGD02). Over the
will be a Bank Holiday weekend, there wil be reduced resilience to the online Horizon
Services during this period. Over the migration period online services and OR capability will be
affected. No new OBC operations will be scheduled around this time and, preceding the main
migration period, the POLFS service will not be ated over e weekend.
6.2 IP Stream imp!
3 month Application Pilot October 2007
ented April 2007
64 3 month counter migration starting January 2008
65 NT to XP Operating System rollout, 6 months starting April 2008
act to Contract ©
Commercial-in-Confidence and Subj ut Services Limited, 2005
POL00090439
POL00090439
2
FUJITSU
THE POSSIBILITIES ARE TRFINITE
POS.
OFFICE I Partners
Commereiat Assumptions
General
74 Is assumed. that the requirements statements will define to a sufficient level. the functionality } whe a
thal. must be supported in the new application, and the new application will be developed and I I nee
accented.against these requirements. Ket fen!
TZ Limited ongoing change is expected 2 ie. implementation.0 Of HNG-X, Once the new
application has.been rolled ee she i nge.pet.year..ILis aank dees
fest rig. aay ta?
wl be based on @ centralised date model, whereby all transaction data is held centrally,
lable network, such that."no network = no branch
the. DR data centre being.u used for testing. The active. data centre. in. ils own right is fully resil
ILis. assumed thal any. business. continuity testing Js. dane. during the week to re
implies thal. there.are, ene. 28, wa Weeks.ner, veut. whet Stina, does nol nee
25
will accept, no. DR capability for critical services and.aiso He og
Jenger. of ime \¢ following the main migration, ase
There wil aise be no online services to branches during non core hours. over the weekend. ¢ aged
ZZ Itis.acceptable to. have.no.new. OBC. operations. scheduled. in.ihe. main, week of Data, Centre
migration. Irony lak 7 uek nee in
7 Post Office are res)
ret! 2: for ensuring that Link and Card account agree to. move connections / BK seled,
s.(including Jest. connections for. LING-X testing) to. he new.dala centres. ~~ yi4 2. le if 5 2
29 A.new.router will be rolled out to mobile and fixed sites on Horizon prior to the new HNG-X
counter application, no .awhiist in Horizon mode, the gateway PC still acts asa gateway for
the slave «
a chger Het Anton yet a yt he sesh pardoned
?
S ofa ak SOU Chg ack be} bag Ataetoyonet
10 Contract © Fujitsu Services Limited, 2008 Vv rable. 4 .
POL00090439
POL00090439
Horizon Next
GenerationService
Partnership
oe]
FUJITSU
TRE POSSIBILITIES ARE TRPIRET
side) I Hypercom
athe Clerk side Smart
ZAg
~~; “tay ES coupe bai?
S¢ sie ol be supported,
* The Water Card produc uded before the start of migration lo, HNG:x.
¢ The. SPM Smart card product nas already be dropped from. Horizon and. will not.be
supported by.
*® The OBCS product has already.
* Training. mode. nas already been dropped from. Horizon. end will nol pe supporied. by
not.be supported by
Qpped from Horizon and.
» LES advice notes functionality shall be rernoved from. Horizon and will not be suppor
The {currently unusec) signature variants of Banking Iransactions will not be supporied
by. HING:X.
* There Shale 0 1G ee Of APS receipts
‘
senhancemects..aver..sxisling. gapabily.
exolicitly stated and aoreed (For. sramale, remole access by auditors,
enha: fenunle jo.memo view message text aliributes).
7.44 ‘The icon design service will not be continued far HNG-X.. There. will be a fixed, limited setof 1 wane 2 oa
icons agreed dur ng the Ul desicn phese, which can be. re-used as appropriate on deskton I on “Sg
nolonoenperrotucteneciic I) ce 4
aku
Gree A,
10. HNG-X eguivalent to the Horizon Inbound Data File Delivery SLT
architecture, therefore the counter will nol need to record reference
Lis assis ned hat there.
dus to the new applicatic
data.delivernmetics, > SN nad a Sencu Cra @ A & Mile Key in
f!
Page,.12.01.15 ob
hole (La coh *.
13 September 2006 (version 2.93 (drat
K MRO fe
Commercial-in-Confidence and Subjec'
Contract © Fujfisu Services Limited.
POL00090439
POL00090439
GEES, cenerstonService FUJITSU
OFFICE I Partnership
Cammercal-Assumptions ns
Central Database
ingle branch database will. be. Srevises on Ae, san both jransaction. capture and drench
THE POSSEBILITIES ARE (RFIMITE
receive C2, messages in. near realtime, and {I be danuih
ced, avermight. Sarg,
robe fl. as
viheks
ane lafieas
* Genliemalian, Messanes for.onling. fansactions. will, only. be. harvested. in. batch.mode. at I) a, vet
. :
guch.exceptions will be minimal).
7.28 There are certain categories of data that s
ate.passwords, £
Rost Officel ~ Condi ae opr Gom ,
7.21, — Ik.will. pot be possible to reverse. the migration from. Horizon to HNG-X once trading has begun at
amigrated branch,
swap. out will and w
made.on the HNG-X s'
visible on the Horizon. syst mn),
7.22 The.Hor
7.24 — \Lis.assumed thal. full set of security requirements. wil be provided by Post Office at the
iness level thal enables Fullisu.to bulld a system using technologies compatible with a retail
envirgnment using standard compliant capabilities.
Prior to the start of branch migration, digital signature checking of authorisation responses for I .
F
abled inthe Horizon counters. Post migration, aii digital signatures checking
Page.13.0f 16. co
13 September 2005 (version 2.63 (craft)
Comrmerciai-in-Confidence and Subject to Contract @ Fujitsu Services Limited, 2005.
POL00090439
POL00090439
fo)
FUJITSU
THE POSSIBELETIES ARE EM FIMITE
Horizon Next
GenerationSendce
Partnership
Commercial Assumptions:
I POST
OFFICE
2008 (version 2.83 (draft}
Confidence and Subjeci
Contract © Fujitsu Services Lined, 2005.
Baseline
Establishing the HNG-X Requirements FUJITSU
1. Introduction
Fujitsu Services and Post Office are currently engaged in discussions aimed at
establishing the basis for a revised HNG-X programme. The prime and overriding
focus of this programme from a Post Office perspective is to achieve a cast reduced
but equivalent solution that enables Post Office to continue to deliver all of its
business capabilities, to trade its entire product portfolio and to meet all of its
stakeholder service commitments. In addition the HNG-X programme must ensure
that the manner by which this is achieved does not restrict Fujitsu Services in using
the most cost effective development approach or solution architecture, and also
adopts an engagement process with Post Office that minimises the risk of
downstream solution changes due to functional omissions or misinterpretations.
One of the critical success factors in achieving these goals is the establishment of a
formal HNG-X Requirements Baseline in a time / cost controlled manner that will act
as the basis for the subsequent HNG-X programme.
This paper provides an outline description of the process that it is anticipated Post
Office and Fujitsu Services will follow to produce and approve this baseline. It is
provided to Post Office for joint discussion in order that the respective roles,
responsibilities and resource commitments can be assessed as well as the
implications for assurance and approval.
This paper summarises: -
The scope of the HNG-X Requirements Baseline
The process for Use Case development
The implications for Acceptance and Testing
Quiline Business Equivalence guidelines
eene
2. HNG-X Requirements Baseline
itis proposed that the HNG-X Requirements Baseline will comprise a representation
of ali of the business processes and interfaces supported by Horizon at an agreed
baseline (expected to be at Release S90) together with a definition of the revised
User Interface and statement of all non-functional requirements. Acceptance Criteria
must be specified as part the development of this baseline and traced / aligned to
specific requirement models or statements within the baseline.
2.1 Functional baseline
The functional baseline will be expressed in the form of UML models com
ising: -
« Use Case descriptions including Main and Alternate flows describing the Post
Office elementary business processes that are to be supported on the HNG-X
System (e.g. Remit Stock In, Perform On-line Banking Withdrawal, Add
Financial in-pay to basket etc.). These descriptions will describe the required
interactions between the ‘Actors’ (e.g. Clerk, Client System, Post Office
System) and the ‘System’ in a solution neutral fashion.
Printed on: 1
Document Clas: Page: 1 of 14
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E: ablishing the HNG-X Requirements I FUJITSU
POL00090439
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* A Class or Domain model deseribing the business objects that are associated
with the Use Cases (6.g. Customer Session, Bank Card, Settlement item
etc.).
» A-set of Activity or Interaction diagrams to describe the
any cornplex or prescribed User / System behaviours.
logical workflow for
e Various supporting artifacts may also be produced where these are
necessary to provide a full definition of the Use Cases including any
associated Business Rules and a Glossary for all commorily used terms.
Wherever possibie this functional definition should seek to use references to existing
Horizon documentation rather than restating already agreed specifications. This will
be particularly true of interfaces that describe extemal client boundaries (e.g.
Application Interfaces Specifications) and other Client or Post Office specified
business rules, data or specifications (e.g. Banking mapping rules, Report layouts,
Transaction and error response codes eic.).
This will also apply but to a lesser extent to user / system dialogues providing that the
documentation reference can be supported with an accepted interpretation of the
rraterial thai isolates the logical workflow from the current implementation and screen
representation,
2.2 User interface
‘The process for defining and agreeing the HNG-X User Interface is expected to re-
use much of the HNG material and methad. A focused definition stage is required
that will result in the completion of these activities and the production of an agreed
HNG-X User interlace Style Guide. The timing of this stage must be such that the
review and design activities can be time & cost constrained and with an approval
process and milestone that does not delay the dependant application design
activities.
The HNG-X User Interface definition stage will -
Be based on the HNG Design Brief
Continue the ‘clean room’ design methodology
Complete the remaining User Interface constructs
Complete the identifi tion and 5} sation all major User Interaction types
and sequences j » Static form. This will include any new UI constructs needed
8 Services,
* Produce and gain agreement to the HNG-X Style Guide
ee ee
2.3 Non-Funetional requirements
All non-functional requirements will be newly stated and either -
« Predormina: y aligned to the rel
it ee Case where they relate to specific
process or ful nal constraints / qui ~ (6g. security constraints for
Banking, reliability of Branch Adminis fon process).
» Described as a set of overarching POL requirernents which will be used te
scope and constrain the HNG-X solution and service design.
Document Classifi Page: 2 of 14
Establishing the HNG-X Requirements Fujirsu
Baseline FUJITSU SERVICES:
POL00090439
POL00090439
I
e It should be noted that Fujitsu Services have made a number of simplifying
assumptions that will affect the nature of the POL non-functional
requirements. These will be fully described but in summary cover: -
o All previous HNG functional exclusions are carried forward (e.g. Removal
of Watercard, no support for Session Transfer or Session Suspend,
removal of signature variants of banking transactions etc.
© All previous HNG technical assumptions are carried forward (e.g. reduced
security and cryptographic model).
ec Acentralised data model will be employed.
o Branch trading will be reliant on network availability
o Network characteristics will not support any future thin client architecture
Future rate of change of POL Business applications / services will bs low.
co Asingle Branch Database will be used to support transaction capture and
reporting
ec ADSL IP Stream Home will be used for a proportion of the estate (1,2 & 3
counter branches).
oc The application migration will continue to use the existing Branch
infrastructure running NT4. Following cornpletion a separate programme
will address the migration to XP.
oc The migrated data centre architecture will operate in an Active / DR mode,
using the DR capability for testing as required.
°
itis expected that the starting point for the HNG-X non functional requirements will
be the equivalent statements in the HNG Conceptual Design, recognising the extent
of joint discussion and agreement that had previously been reached. Further
dialogue will be welcomed to agree any necessary revisions to these statements in
light of the revised HNG-X service and solution architecture.
24 Retained Capabilities
The HNG-X Solution Architecture will retain some of the current Horizon components
(e.g. various back end data-stores / process and Client interfaces). The
Requirements model will recognise these retained ‘Actors’ early in the analysis
process and identify the boundary conditions between the new and retained
components.
It is expected that the business processes / requirement for these retained
components will only require minimal new definition / documentation in the HNG-X
Requirements Model.
in addition Fujitsu Services believe there would be time and resource savings by
excluding any such retained functionality from the scope of the HNG-X Acceptance
Strategy, with the emphasis on Fujitsu Services managed and defined ‘boundary’
condition testing comparable to the existing Horizon style of regression testing for the
unchanged functionality.
25 Equivalence Guidelines
In order to maintain the principle of equivalence during the Requirements
Specification stage, the development of the HNG-X Requirements Model will be
governed by a set of ‘Business Equivalent Guidelines’ which will provide an overall
framework for the scope and capabilities that are required to be specified. These
guidelines are only intended to provide part of the scope definition of this stage of the
programme and would cease to have significance once the HNG-X Requirements
Printed on : 13/09/2005 Document Classification ~ Page: 3 of 14
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Establishing the HNG-X Requirements
Baseline
“FUsirsu I
FUUTSU SERY I
ES
ces
Mode! has been approved. A draft of these guidelines is provided at the end of this
paper.
2.6 HNG-X Requirements Baseline ~ overall context
The following diagram filustrates the HNG-X baseline components and the primary
source material that will be used in their production.
e The functional baseline will be driven from the Use Case Survey, which
will be assured using POL / FS domain knowledge and other supporting
material including the HNG Functional Classification and a summarised
assessment of the draft HNG Acceptance Criteria.
e The HNG-X Style Guide will be developed from existing HNG collateral
e The HNG Non functional requirements are derived from an agreed set of
ravisions to the existing HNG material.
e Acceptance Criteria for all of the above are required, derived where
possible fro existing HNG analysis but recognising the different forms of the
Requirements bas @ components.
* Domain Knowiedge "Y
& PO
HNG-X Solution
Architecture
Nese
ad
Defined by
I Outlh
Lu Supports p- * Deta’
Roiainad Anpication
Companents
f ;
nted in
Documentation
Baseline
HNG-X Requirements Baseline
Functional Req
Mode!
« Use Cases ——
e Dornain &
e Logical Workflow fas reqd.}
HNG-X User Interface Styie
Guide
HNG-X Non-Functional
~ infont
ia Requirements iT fons
ICCOSE
2 PORTS a
Document Classification 4obi4
POL00090439
POL00090439
Baseline
Establishing the HNG-X Requirements FUJITSU I
Printed on: 13/09/2008 ———~—S~S*S*~S*«~=S cum ent Classification ——Ct=<C*~S«~ age SOF TL
POL00090439
POL00090439
Establishing the HNG-X Requirements yyy -
Baseline FUJITSU
3. Engagement and Assurance
Fujlisu Services believe that the development of the HNG-X Requirements Model
can be best achieved by leveraging the knowledge and capabilities of both
organisations ~ with the analytical and Horizon application knowledge of Fujitsu
Services able to complement the Post Office business and operational knowledge.
It is proposed thai a joint team is established with the common incentive and goal of
delivering the HNG-X Requirements Mode! within an agreed time / cost budget.
An agreed mathod of working will be necessary to ensure that this activity does not
escalate beyond its allocated time / cost budget and to ensure that the scope and
level of detail is constrained to that sufficient to express the business requirement
and not any detail of solution realisation.
In particular it will important to recognise that the packaging of the deliverables from
this stage should ideally be a compiete representation of the functional / UI and non
functional requireme: for each ‘group’ or ‘classification’ of business function,
together with th nceptance Criteria. The emphasis of the assurance
activities should predominately be focussed on ensuring the full, complete and
acceptable coverage and definition of the business and procedural capabilities /
requirements rather than on the manner by which the HNG-X solution design and
build is fo be realised.
Fulltsu Services will work jointly with Post Office during this stage after which Fujitsu
Services will have the responsibility to enhance the business requirements baseline
with the system and technology specific specifications and the management of the
solution design and build stage.
e)
FUjiTSsU
The nature of offshore Ru
development requires that there is a
al and stricter degree
1 between the Requirements &
e c ‘Solution’ / Acceptance Criteria
fs does not
mean that an isolationist approach
will be When it
becomes nec for Fujitsu
Services io seek cl
sign neutral
ation oppc
fo engage with
business and
expertise will be
Soltion Desiga
and Bultd
operational
welcomed.
Printed on : 19/09/2005
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Baseline FUJITSU SERVICES
4. Use Case development
The functional element of the HNG-X Requirements Baseline will be developed using
UML to support the intended OOB development method and JAVA based counter
application environment.
Starting with the baselined Use case Survey, each class of Use cases will be
progressed through the following stages: -
e identify and describe
o {An initial Use Case Survey has already been prepared by Fujitsu
Services comprising approx 180 UCs. )
« Outlined
o Such that the main business process / transaction flow is described
and the other expected (or Alternate) flows are identified
e Detailed
ce Such that all aspects of the main and alternate flows are described
together with the associated business rules. Any non-functional
requirements that can be related to the use case will be identified and
‘traced’ to facilitate later overall design assurance. Domain Model
development will also commence at this stage.
The progression of a use case through these stages must operate to a fixed review /
ravision timetable which will require direct or planned access to suitably empowered
and knowledgeable personnel who can verify the individual Use Cases. It is
expected that progressive draft approval for each Use Case {and its associated
material) will be provided by Post Office concluding with an overall approval process
once the Requirements Model is complete.
It is expected that some new Use Cases will be identified during this stage, and that
some revisions may be required as the overall Use Case set is structured to ensure
the correct relationship between primary and sub-ordinate UCs. This may require a
degree of ‘business’ level approval (for completely new UCs) but it is hoped that the
majority of this work can be managed within the local governance processes of this
stage.
Any revisions to a Use Case that are required following its initial approval should be
locally managed within the joint team (albeit under an agreed HNG-X programme
governance structure) with further revisions being managed on a formal exceptions I Cat?
basis, and potentially under Change Control if approval deadlines have been I
achieved.
An important part of this phase is the process by which Post Office and Fujitsu
Services can be assured of the accuracy and completeness of the Use Cases.
Fujitsu Services have identified an initial documentation set and will work with Post
Office to identify a core documentation set for each Business Capability / Support
Facility that will act as one of the key sources of information from which the analysis
and development of the Use Cases will be based. This inforrnation will be supported
by knowledge of existing Horizon capabilities and access to various domain experts
in either organisation as required,
In addition it may be also beneficial to utilise the draft Post Office HNG Acceptance
Criteria as a valuable source of information that can be used to guide and assure the
Printed on : 13/09/2005 Document Classification Page: 7 of 14
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Establishing the HNG-X Requirements I ry
Baseline
content of individual Use Cases. This would enable Post Office to be confident that
relevant functional capabilities contained in these oriteria statements are represented
within the HNGL requirements baseline.
The following diagram ilustrates the progression and deliverables for Use Case
development. An example set of detailed Use Cases have been provided to Hustrate
the style and level detaii that will be required.
Use Case HNG S ce I
Development Stage wees ooey
¥
_ HING-X Use
a cr Hdentified Case Survey
foaselined)
g if
s
a Business Ciasses
2 9. Trade Products / Manage Cash / Branch Admin}
z ¥ ¥
& I.
3 sain Flow I] Main vow) ) » Specify Business
& aa cae
g wane Flow Minin Fow ir identity / Ups
= I Alt Flow aN Flow Donwun model
Produce
supporting
workflow models
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Establishing the HNG-X Requirements FUJITSU /
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The following diagram illustrates the staged development and review / approval
process that this stage will require to be established. Post Office will need to
consider the nature and formality of these processes particularly the nature, extent
and purpose of engagement with POL business representatives. Within a
challenging and cost/resource constrained stage it will be important to employ an
appropriate form of review and assurance process.
Supporting HNG-X Use
Material Case Survey Resources
e Actors (baselined) Dedicated I Accessible
* Template
» Use Case Guidelines Retained FS om
* Business Equivalence Be $s Ch
Guidelines sips saasses Roguire
* Doc" Baseline '
° =
« Horizon
Glossary I
re re a
Project
oO —> Local Governance
Review * Resource
. afiocation
includes: - * Monitoring
* Business Rules * Exception
* — Workliow Modet Handling
«Definitions * Eto,
as required
‘Business’
Approval
5. HNG-X Acceptance and Testing
On the basis that there will now be a formal HNG-X Requirements baseline, Fujitsu
Services would like to agree with Post Office the most cost effective Acceptance
Strategy that recognises the change of emphasis from textual statement based
representation of Post Office requirernents to one that for the most part comprises a
set of UML models.
This approach must clearly protect Post Office’s commercial and operational
obligations but must be such that it does not adversely affect the cost reduced focus
of the HNG-X programme.
ft is assumed that Post Office will wish to conduct a series of aptance Stages
throughout the HNG-X programme and that explicit Acceptance Criteria will therefore
be required against which to verify the HNG-X Solution.
An alternative approach for the functional aspects of HNG-X could be based on an
agreed set of outcome based tests that are run through both Horizon and HNG-X as
the basis of verifying business equivalence.
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Establishing the HNG-X Requirements qj
Baseline FUJITSU
I FUTSU SERVICES
On the basis that criteria are required, Post Office may wish therefore to continue the
HNG process of developing Acceptance Criteria frorn the various Horizon information
sources and to initially use this material to support the development of the HNG-X
Use Cases. ft should then be feasibie for the majority of these Acceptance Criteria to
be formally associated with the requirements mode! (e.g. Use Cases for functional
criteria, Workflow models for Branch process / constraints criteria, the Style Guide &
scenarios for Ul qualities), It is assumed that any existing non- functional criteria will
be used to support the definition of the HNG-X non functional requirements and
associated criteria.
The overall airn of this process is develop an HNG-X Acceptance Criteria baseline
that is wholly aligned with the HNG-X Requirements Model.
ft may be necessary for some of these Acceptance Criteria to be ‘levelled’ to the
same extent as the scope and detalii within the Use Case ~ Le. they should be
aggregated and revised to reflect the business process / solution neutral level of
specification rather than {in some cases) the more detailed solution based view
contained in the original Horizon material. tt should be an overall objective to ensure
that the text of the Acceptance Criteria relates as closely as possible to the
processes, objects and rules that will form the Requirernents Model to minimise the
need for later interpretation and to allow the HNG-X Test Strategy (for functional
testing) to be focused on verifying the Use Cases, rather than having to take special
consideration of HNG-X Acceptance Criteria.
This process of rationalisation and alignment would be part of the responsibility of the
joint Requirements team, but with final approval on the nature and scope of the
acceptance criteria being with Post Office,
5.1 Acceptance testing of retained components
It is intended that the HNG-X Solution Architecture will re-use certain established and
stable solution components of the current Horizon architecture. in particular it is
proposed that the majority of the Horizon Hast capabtilities and associated external
interfaces will remain unchanged with limited rationalisation of certain data-stores to
reduce operating costs.
This re-use approach should be capable of being reflected In the degree of analysis
and definition required in the HNG-X Requirements baseline and in the associated
acceptance criteria and testing approach. The scope of the current Use Case survey
es all POL busin: capablliti ‘@ of any component re-use in the
his overall sol @ has been approved
i Horizon capabt chided in the HNG-X
Requireme: del as ‘Interna ro Actors Cases where the
emphasis wil be on defining their boundary characteristics rather than formally
specifying the business requirements and processes that they support.
to the relevant documentati
nges to support HNG-X
to the current material plus any
ficient to support the HNG-x
Excluding these retained capabilities from the more detailed stages of the HNG-X
Baseline definition should also reduce or remove the need for the specification of
Page: 10 of
14
Establishing the HNG-X Requirements
Baseline FUjiTsU
FURTSU SERVICES:
corresponding Acceptance Criteria ~ at least for any functional capabilities. Fujitsu
Services expect that agreement can be reached with Posi Office on a testing
approach for these retained components comparable to the suite of regression tests
used to verify unchanged capabilities on current Horizon.
5.2 Converged Testing Stage
As noted earlier and subject to separate discussions, Fujitsu Services believe there
are cost reduction opportunities to be gained through converging the FS functional
and SV&I test stages with the POL E2E test stages. This approach is expected to
yield a reduced requirement for rig infrastructure, rig rebuilds and testing scenarios
and associated resources.
6. Guidelines for Business Equivalence
These guidelines have been adapted from the draft HNG Functional Equivalence
rules and are intended to provide a framework that will support the development of
the HNG-X Requirements model. They provide a set of principles that will direct the
definition of the underlying Use Cases and other elements of the requirements model
and seek to reinforce the position that the HNG-X solution will support all of the Post
Office business processes in an equivalent but not necessarily identical fashion to
the current Horizon solution.
These guidelines will only operate during the Requirements Definition stage and will
be superseded by the HNG-X Requirements Model once this has been approved and
baselined.
HNG-X Requirements Baseline - Scope
» The scope of the HNG-X Requirements Baseline will be limited to the
specification of the business processes, associated data, User interface and non
functional features that are required to support the Business Capabilities and
Support Facilities summarised in the current drait HNG Schedule 18. These are
identified below together with their nearest equivalent Horizon Service.
e (At this stage) no additional or changed business processes (or their associated
functional or operational characteristics) will be included in the HNG-X
Requirements Model unless: -
o Any of the simplifications proposed by Fujitsu Services are accepted by
Post Office
co Explicit requirement statements or exclusion statements are provided in
by Post Office (in the HNG-X Conceptual Design or other equivalent
formal documentation).
eo Changes are introduced and agreed via Change Control Procedures
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iho’
yarion.
de Feb
Mk fa
wok?
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Establishing the HNG-X Requirements
Baseline FUJITS
Ful
HNGL Requirements Model ~ definition guidelines
» The broad intention is that the HNG-X Requirements Mode! will define the Post
Office business processes in a manner that achieves the same business
outcomes to Post Office and their Clients and achieves the same operational
effect within a Branch. The level of definition will be guided by the need to ensure
that: -
o The financial outcome resulting from the operation of a specific
Transaction for the Customer, Post Office, any affected Cllent(s}, and any
other Post Office Supplier{s) is identical to the equivalent transaction
carried out on Horizon.
The Products that can be traded within a Branch are the same as those
defined in Post Office Reference Data as at the agreed Horizon Baseline
°
o The Business Rules associated with any Product wansacted as part of a
Business Capability are applied in the same manner as those used with
the equivalent Horizon transaction, Business Rules that are currently
defined within Post Office Reference Data, Fujitsu Services code, other
forms of Reference Data, Client supplied data / Information exchanges
and other sources defined within the Baseline Horizon Ap;
Definitions will be specified as part of the HNG-X Requirements Model.
°
The Customer / Clerk interactions that relate to the workflow associated
with a particular Use Case and delivered via the HNG-X User interface
enable:
» the same data fo be captured using the same forma? and
validation criteria;
» the same initiating Tokens or events to be used:
* comparable information displays and capture methods via the
counter terminal;
* an equivalent set of tasks to be performed following the same
PP togical workflow.
o The Outputs resulting frorn the completion of a Transaction are equivalent
E have the same operational ef Un terrns of form and occurre as
ose resulting from the associated Horizon transaction. However it
should be noted that some optimisation of Branch processes (including
Branch Reporting} may be Introduced subject to Post Office agreement.
o Where relevant the HNG-X Requirements Model will rnake reference to
the relevant sections of the appropriate Contract Controlled Document to
Printed on : 13/ Document Classification Page: 12 of
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a
Establishing the HNG-X Requirements
Baseline
specify the form of the Outputs and any necessary interpretations. These
are expected to comprise:
* Any information exchange or generated data file which includes
interactions with hosted systems (e.g. PAF, SAP-FS) and external
systems (e.g. LINK, DVLA). These must be specified to conform
to the appropriate Application Information Specification. Note:
Such specifications will only apply to externally measurable /
contractually recognised interfaces.
= Any printed item (e.g. Report, Branch Receipt, other forms of
Branch produced collateral). This will be specified to conform to
the relevant layout specification as defined in the relevant Contract
Controlled Document, subject to any agreed modifications
introduced as a result of HNGL.
=» Any data produced or captured by HNG-X that can be accessed or
retrieved by / provided to Post Office. This will be limited to those
formally agreed services and retrieval mechanisms, provided that
the meaning of the data and / or the associated Post Office
processes has not changed as a result of the introduction of HNG-
X. At this stage any informal or occasional requests for
information by Post Office are expected to be excluded from the
scope of the HNG-X Requirements Model subject to discussion to
determine the nature and formality of such requests and the
underlying data sources that would be required.
© The outcome of any aspect of Branch trading or operation results in the
same state of financial integrity and ability to audit as exists on Horizon.
The HNG-X Requirements model will recognise any agreed simplifications
to the reconciliation process and/or the associated reports.
The use and interpretation of Post Office Reference Data (in terms of its
data definitions and its use to invoke functionality) will remain the sarne.
Any data items or Reference Data capabilities currently unused on
Horizon will remain unused or suppressed as part of HNG-X.
°
» Users must be able to perceive and perform the functions provided via the
changed User Interface such that they can perform the same user tasks in the
same or in a comparable manner. Therefore the agreed process descriptions for
the HNG-X Business Capabilities may not wholly reproduce all aspects of the
current Horizon Counter Dialogue definitions or other Horizon screen content
specifications where agreed to be different.
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Establishing the HNG-X Requirerne
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nis I FUJITSU
PUNITSY SERVICES
s The following table identifies the equivalent Horizon Service for each HNG-X
Business Capability / Support Facility: The scope of each item remains as
described in the draft HNG Schedule 18.
and
LNBS / NBX
CAPS using AP-AD
(Electronic Top Up Tet
_ Bureau de Change Bureau
Si
gu
ifs
EPOSS
Transaction Management TMS (part), TES
APS. TMS (part) __
Reference Data Management Aj
UBAF BAF Facility __ :
(Message Handling Message Broadcast
Audit -
ed on: 13/09/2005 Document Classification : “Page: 14 of
Post Office Presentation
14" September 2005
“Boing Our Bit to Help Make the Big Things
Happen” a
Eigine tence 8
Purpose of today’s presentation
* Confirm scope and approach to Services Partnership
(based on HNG-X architecture)
« No surprises
+ Confirm commercial proposition
» Aligns with projection provided in July
» Achieves what we set out to achieve
+ Clarify any outstanding key points
» Agree next steps
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» Dramatically reduce IT operational costs
« Enhanced ways of joint working
+ Commitment to the Strive’
* Alternative commercial macels
+ Maintain current service levels
+» Understand impact of prop
_
i changes
+ Greater operational and commercial variability/flexibility
« Service delivery (customisation)
I + Charges
FUliTsu
Dramatically Reducing
Operational Costs
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Reducing Operational Costs
+ HNG answered the right question (at the time)
» Post Office requirements have changed
» Unaffordable (especially level of up-front
avestment}
+ Too many “nice to haves”
* HNG-X (back to basics)
+ New design focus on only changes which
remove costs
+ Delivering “Business Equivalence
+ Adopt a more retail centric approach ~ “sweat
the asset"
Corwnercial ie eg
POL VIEW COSTS (RPL AND VAT)
:
Commercial in Corte rulirse
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PO, VIEW. COBTS (RPLANE YAR?
GR Ae aga Se Ra aa
Weare Yona? anes Yonral Yours Yaest Yours ease Youre ones
Cornmereial Contsence
OL MEW. COSTE [RPT AND YATE
ets Se 2006 tuner 68 Saskaty ce
ure Pane? arse YaarGe Yarse Yay Yenrse Yee? wine Sart
ruffisu
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MRA "FUNDING OPTION,
Cornered ie Confidence
Bo
FUNTSE
What's behind the numbers
* Plus:
» Reduced SI raies (lower cost of pre-paid)
* Use of pre-paid to deliver HNG-X development in 2005/6 to
2007/8
+ Off-shore development
* Pre-paid removed from April 2010
+ Year on year productivity improvements (Strive}
SPSS Rae ie Crea ‘Comenertial ia Contcence
rulinsu
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Strive & Servi arinership
Operational Charges (POL. View)
EMs
rulfrsy
Strive & Service Partnership
Operational Charges (POL View)
tg Base Charges
Olfered ©
I
eis
10
o
i PS PM PO wD OF 2 oh OS
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Strive & Service Partnership
Operational Charges (POL View)
90
—Ms
Strive
I
I
I
@ Base Charges
@ Offered Charges
0 Strive Objective
rulisu
D
elivering the Strive
Benchmarking
+ Ensures that Post Office costs are at least market competitive.
Gain Share
+ incentives te encourage innovation through shared rewards.
+ Will deliver competitive advantage.
Commercial flexibility
+ Contract designed to accornmod
+ Reduce need for contract re-negotiati
id term
Joint working with Post Office
+ Opti e way we work logether to achieve the most productive outcomes
usiness operational costs & risks
sis & risks oo
Raper saneas 0h Sane aDhe Sun tw a
Commersiat in £
figerce
Fujitsu
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» Design fer si
implified engagement between Post Office and Fujitsu
+ Minimising end-user trai cost for HNG-X
+ Wrap as part of Fulltsu’s managed service
» Extended Fujitsu's role in management of other POL 3” Parties
+ Live service delivery
* Projects
+ Counter printer replacement
* Tech-refresh of other counter equipment
ther service optimisation
» Earlier migration to new ADSL services
» Off-shore delivery
» Reduced SLTs
Coneeneccial in Confidence
HNG-X Flexibility & Variability
HNG-X Fixed Variable Price
BRANCH FIXED
8%
ty driven by:
BRANCH
VARIABLE:
Ba%
ge See" ge ae” Sa Bs Se
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HNG-X - Impact on fixed costs over time
2 Variable
i Fixed
Today HNG-X Less 7,000
~~" Siaiasimces SEE Sates eh Bava Pawns nine 7 ~
Commersiat Confisenca
rujfrsu
Service Options
* Proposal assumes a standard service for all Post Cffice
branches and central services
* Proposal offers potential to tailor the services and
associated SLTs to specific needs of individual branch
segments
» Facility to model the commercial impact of different
service combinations will be provided under the contract
SSS Sanne! a -
Fujfsu
Comerciat in Confidenae
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Working Together
* Governance structure
SU's services are aligned with the right &
4
acoountabé
sses (across whole solution ji
PURTSO
Fuyirsu
se cevguetionier ger cerseee
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410
HNG-X Architecture
+ Current Horizon architecture drives considerable levels of
fixed costoverhead
Service Costs for t
I + Upsidae of ie Cunsat Apptzation
I < Rttte nen Ran sneer ernens
I
I
I
i
I
I
1
+ ow
tf i ur Apa
i
L
i
i
+ HNG-X architecture will address these cost drivers whilst
maintaining “Business Equivalence’ and service levels
‘Sih Se 08" abr "ance Batts ep
Comtiereial ix Contdenoe:
rulirsy
HNG-X Components
“Si Si Sei ss” ce Mane Ps
NB HNG-X still preserves many of the
attributes associated with HNG
pulse
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4
HNG-X investment Considerations (1)
* Technology Curve — is there something better
around the corner?
» Almost certainly, but what and when?
+ HNG-X will make it easier fo intercept and integrate with new
technologies and methods than is possible with current
Horizon
HNG-X Investment Considerations (2)
* Post Office business strategy ~ what if tomorrow's
requirements are different from today’s?
« HNG-X offers greater choice to Post Office over how Post
Office execute its branch sex
» Service Partnership will place Fujitsu in a better position to
help Post Office optimise its overall IT spend, whatever the
business strategy becomes.
(SR Sena Sao SN” Ea Se Sa Covamercia in Govasonce
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HNG-X Investment Considerations (3)
Timing ~ why act now?
» Realise benefits at the earliest opportunity
« Get most value from existing fixed costs (Post Office staff,
pre-paid, etc)
‘Sif Bete” ats 38a Posh etal
“lmipact analysis”
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43,
Summary of changes proposed
+ Helpdesk
+ Shared helpdesk environment
+ Intraduction of multimedia cail logging
* Networks
° Change in ADSL technology
» Engineering
+ Introduction of next-day service SLT
* Continued support of existing branch equipment
» Data Cenire
* Migration from A&L to Fujitsu data centres
» Change from live-live config to live-DR&Test
No change from previous presentation
‘vga ae a” Gagan RS Sanaa Secs comuneis n Soni .
fommrercin Conenee, py neay
Service Impact Comparison
~- ieline ‘ost Office's CD v
Common Variables
Gore Hours Yaar Cankea! 2.888 haves
Percertage Ot How 18%
MTBF a6 por B%
inne fo For 2008 & hoes 44 hoor
Percentage banking § On fine 100% No of help desk calls requiring reboot pa.
HNG-X
Back up network
Reduced engineer caite on PS
Single Live data conte with Resiience
Shorter reboot time
Broadly equivatent to Fujitsu’s HNG response to CD 1.1 Service Level Targets
PY Sica Setena 398) wn eo 2 Canadian Cocilionee .
rufltsy
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Forecast Reduction in Counter Hours Down-lime
‘Zaunter Hours Downtime
per sotnor po GE saci (Omens)
eer eer
ae ee eT
‘Sati a a ere SR i ah a an)
cn a ne a sibs
~ ~ ‘Somrenercial in Contkiance
15
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Branch MTBF
race TEE aoe eae
aaa Sa aaa 1 a ina ae aaea aa
SHRUERR i UCoeaars ace a “pyrenarciat i Conteris
Impact of replacement counter printer
‘Conners in Confidence
Fujitsu
16
FUliTsu
Se Sn
A
‘Coremerciat in Cont
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17
Key Programme Milestones
+ Kick-Off October 2005 looking at Requirements Process,
infrastructure Design,Planning & Resourcing.
* Business Requirements Baseline in June 2008.
+ Horizon Data Centres migrate in August 2006.
» Router “Lazy” deployment during 2007
* IP Stream “Live” in March 2007.
+ Application Design, Development & Test January 2006 to
September 2007.
* Application Pilot ~ Q3 2007/8.
+ Application Migration — Q4 2007/8 (followed by operating
system upgrade).
Corder? eailirsu
Assumptions
+ Project work commences 1 October (u:
+ Contract in piace by 1° Jan 2006.
ngagement approach:
+ Robust Programme Management structure established.
« Business Equivalence, details te be agreed.
+ duini Requiremenis Team, leveraging domain knowledge.
« Design/Develspment involvement to identify change early.
« Joint Testing Approach to drive down costs.
» Harness Fujitsu's off-shore/near-shore capabil!
commercial cover).
» Data Can nodel (Active/DR) is acceptable,
» Migration can be achieved without Branch visits.
eullrsy
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18
Next Steps
Comtimescia in Configenne
rujiTs
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19
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foe)
FUJITSU
THE POSSIBILITIES ARE INFINITE
20
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Analysis of savings returned to PO in HNG-X for smailer network size and transaction volumes
Amount of Incremental Business
Yoo Yio Yu ¥I2 aR ¥14 Y15 Total Saving Total Ops none Limpa €5mpa £10m pa
Seenaric 1 3.64 3.08 3.03 2.98 2.89 2.85 2.82 21.29 230.00 9.92 14.72 17,63 21.29
Scenario 2 7.26 6.15 6.04 5.95 §.76 5.69 §.63 42.48 230.00 19.79 29.38 35.18 42.48
Scenario 3 B49 FAG 7.06 6.96 6.73 6.85 659 49.67 230,00 23.14 34.35 44.414 49.67
Percentage of saving returned to PO
Scenario 4 46.6% 69.1% 82.8% 100.0%
Scenario 2 46.6% 89.2% 82.8% — 100.0%
Scenario 3 46.6% 69.2% 82.8% 100.0%
Percentage reduction on Ops Chargs
4.3% 84% 77% 8.3%
B.6% 12.8% 15.3% 18.5%
10.1% 14.9% 17.9% 21.6%
Arsount of
incremental
Business
none 10% 30% 40% 60% 80% 100%
£im pa 20% 60% 80% 100% 100% 100%
£5m pa 80% 80% 100% 100% 100% 100%
£10m pa 100% 100% 100% 100% 100% 100% 100%
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(Cowrent Grades Rate par Rais’ por Hour! “Por hour™ I Por hour” [Proposed Grades ate par working day i@ par hour [BavingilCosi} relative to full rato [Saving/lGost ralative to 20% dist [SavingliGosi) reladve 19 27.8% dice
working day 20% discount] 27.5% disc ‘Gi Ghore Near Shore! Offshore IOn ShareI Near I Offshore] On Shore [Near Shore] Offshore I On Shore [Near Shore] Offahore I On Shore [Near Shore] Offshore
‘Seitvare Eagar BE aT BE Tl Swen ige ee ees Be a Re 3 ae Fad
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POST OFFICE CONFIDENTIAL - COMMERCIAL
HNG-X Proposal Hot Topics
Ways of Working proposed is the opposite of what PO asked for.
Principles of transparency, joint tearm incentivisation etc. are not implemented in the presentation
of the costs & commercials.
Management of other suppliers by Fujitsu — acceptable to PO in context of a Si partnership, but this
is an outsource and implies greater loss of direct control,
Fujitsu used to run the Technical Service Desk and we took it away from them because they were
not VFM and did not provide the required service. What has changed to make us give it back?
Development methodology — risk/cost/decision making
Offshoring ~ who takes the risk that it is feasible and delivers the expected savings? If T&M
contract, it seems to be PO risk. — is offshoring to be used for support, and what savings have been
attributed to this?
E2E testing capability
Acceptance process — is it close enough to requirernents, will it ensure fitness for purpose?
Feasibility of 3 month roll-out — business change capacity — what are costs if longer?
Training for roll-out (no training solution in branches)
Counter availability figures look suspect, based on what we have seen of the detail ~seem to be
effects that have been omitted fram Fujitsu's analysis
Risk/cost/service impact of keeping existing hardware
MTBF ~ proposed 120% cap on cost risk taken by Fujitsu before roll-out of new app is worse than
current contractual position and would result in an immediate price increase over the proposal
(subject to confirmation of what they mean by “baseline’)
Luggables and their replacement — timing & implications for Rural b.a.u. and Rural programme
Future change ~ low rate of change assumed ~ what is basis for cost if more? — is reference data
hange also restricted? — OBC only includes closures; refurbishments and relocations would cost
more.
Charges are “estimated” — when will they be committed and on what basis?
Which savings depend on which changes (app and new infrastructure architecture)?
Need clarification of which ‘options’ are included in the price.
Strive ~ description seems to include the reductions already in the pricing (5% p.a. productivity =
13% of offered orice by end of contract). - What are assumed obligations on PO to help Fujitsu
deliver the strive? - We would expect to be below market norm prices (if this means 50%ile) not at
them?
Price
ability is low eee es
After 2010, operating c harges have increased relative to.even though there are reductions in
Services and Service Levels and improved use of telecomms discussed over the past 2-3 weeks.
Fujitsu want to own IPR ~ PO still paying full cost of development.
Timescale for Oct 31 agreement is ct
What are Fujitsu intending to do in Oct-Dec 2005 — all activities with specific content seer to start
in January.
Is the extension of exclusivity acceptable to PO?
POST OFFICE CONFIDENTIAL - COMMERCIAL
COMPARISON : JUNE minus SEPTEMBER
Cost Reduction / (increase)
£m excluding VAT and without inflation
TOTAL OPERATIONAL SERVICE CHARGES
Services Infrastructure Set-up Charges
SYSTEMS INTEGRATION
Application Development
Ongoing S! Support
Ongoing S! available for Prepay
SI Additional
IMPLEMENTATION
Capital costs for Counter and Data Centres
implementation charges
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
¥ 06
24
4.0
23
0.0
0.0
0.0
17.0
yor
18
37
0.0
0.0
24
¥ 08
49
13
“4.2
20
ag
0.0
Y 09
7.0
0.0
0.0
0.0
0.0
0.0
9.4
¥ 10
3.8
0.0
0.0
0.0
0.0
0.0
5.6
0.0
0.0
0.0
0.0
63
¥ 12
0.4
0.0
0.0
8
0.8
0.0
0.0
0.0
3.8
0.0
0.0
37
¥ 14
AS
0.0
0.0
AS
47
0.0
0.0
0.0
0.0
4.0
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Y415 TOTAL
O4 42.3
0.0 3.0
0.0 12.8
0.3 79
47 27.0
0.0 6.0
0.0 26.9
0.0 413
0.0 8.0
0.0 0.0
4.0 107.3
SEPTEMBER PROPOSAL £m excluding VAT and without inflation
PRICING MODEL - FUJITSU PRICING BASIS
TOTAL OPERATIONAL SERVICE CHARGES
SYSTEMS INTEGRATION
Application and Infrastructure Development
Ongoing Si Support
Ongoing Si available for Prepay
SI Additional
IMPLEMENTATION
Capital costs for Counter and Data Centres
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
¥ 06
65.3
41.3
ats
TA
5.4
3.9
10.0
16
105.7
YO7
85.2
10.4
a9
6.3
0.0
13.4
0.4
93.8
¥ 08
$2.0
5.4
BE
6.0
0.0
26
736
Y¥ 09
39.3
78
4.0
0.0
0.3
51.3
¥ 10
33.3
75
4.0
0.0
04
45.2
32.7
12
0.0
07
¥ 42
32.2
ree
0.0
07
40.0
¥ 13
H2
6.9
0.0
0.7
v14
30.8
6.8
0.0
OF
38.2
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YAS TOTAL
30.5 402.4
16.9
68 78.3
26.5
0.0 64
07 23.8
40.0
1a
37.7 = $65.0
JUNE PROPOSAL £m excluding VAT and without inflation
PRICING MODEL
TOTAL OPERATIONAL SERVICE CHARGES
Services Infrastructure Set-up Charges
SYSTEMS INTEGRATION
Application Development
Ongoing S! Support
Ongoing Si available for Prepay
81 Additional
IMPLEMENTATION
Capital costs for Counter and Data Centres
implernentation charges
AVAILABILITY FEE AND CREDITS
IMPLEMENTATION FEES (Sch 10)
TOTAL
Y¥ 06
62.9
4.0
13.2
424
5.4
6.2
10.0
16
122.7
¥ OF
56.7
37
12.2
10.1
0.0
5.8
04
96.2
¥ 08
43
42
10.7
0.0
345
413
124.8
¥ 09
48.3
94
0.0
03
60.7
Y 10
36.8
8.8
0.0
04
50.7
¥441
32.0
9.5
0.0
O7
46.9
Y12
HB
65
0.0
07
¥ 13
30.6
6.5
00
O7
42.5
¥i4
30.5
6.4
0.0
07
42.3
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¥18 TOTAL
301 4146
9.0
28.7
6.3 86.2
47 63.5
0.0 54
07 60.8
4413
10.0
V7
447 672.3
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Year
50.0
Implementation
45.0
40.0
35.0 -
30.0
25.0
20.0 -
15.0
10.0
5.0 -
0.0
10
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70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Operational Services Comparise>————------- saa
_~ June Operational Services
_~® Sept Operational Services
4
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Year
40.0
35.0
30.0
25.0 -
20.0
15.0
10.0
5.0
0.0
System Integartion
June I
Sept I
10
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Rory Sitkin To: Keith K Baines!
14/09/2008 08:47 Subject Re: Latest Fujitsu Proposal)
Keith
} have had a look at Fujitsu's proposal document, especially the paris you suggested.
2.2 Governance. it seems to me that the idea of an equally balanced ‘srnall group’ to examine
initiatives is fine, but would run into problems #f it were deadlocked. In practice, one faction (POL?)
would have to have a casting vate. This would be true even if it were merely recommending an idea to
another board; should initiative X be sent upwards for consideration or not?
Lastly, the statement "Service Management encompassing continuous improvement", seems rather
opaque to me.
2.3 Strive. [think this could prove tricky to draft, as the opportunities that are the sublect
of the strive are undefined, or even unknown at the moment. At best, the drafting would have to be
rather vague, which could store up trouble for the future.
The tems headed ‘Assures value for money ...” and 'Gain share’, though reasonably familiar in
management terms, are difficult to pin down sufficiently to draft. It can be done, but requires a good
deal of negotiating te pin down precisely which kind of gain share model (or models) are available, and
when, and how value for money is assured. Perhaps this is an over-ernphasis. However, most of the
cost gains ride on this kind of wording, so it will require a great deal of attention.
2.5 Service Management Engagement. I note that Fujitsu is again proposing that it should act as a
single Systems Integrator, with management responsibility for all of the parts/ services, whether
supplied by them or not. I haven't found anything about putting parts of the work out to third parties,
but perhaps I'm missing something.
3.3.1 SI Support Much of the cost savings seem to depend on a low rate of change of the
application after 2010, Is that fair?
3.4.2. Basis for decision. POL fs apparently required to underwrite Fujitsu's suggestion that the
risk?
Running a mixed estate creates drafting probiems in terms of remedies, as we have alreacly found with
the earlier discussions with FS.
6. Commercial Summary. don’t have anything particularly to say about this section, at this level
of detail,
Kind Regards, Rory.
Keith K Baines
Kelth K Baines To: Rory Si#kint”
IAHOBIZOOE 18AS
Subiect: Latest Fujlisu Proposal
Rory,
copied Fujitsu's latest offering to you earlier this afternoon.
Could you have a look at sections 2 (Governance) and 6 (Commercia') of the main proposal document
ihe viewpoint of how easy/difficull it would be to contract on the proposed basis, and any big
to be dealt , big risks to be mitigated, if we were to do so.
, Vd like your initial reactions by late morning on Wednesday since Fujitsu are presenting to us
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on Weds. om.
(PS - feel free to review and commenit on any other parts of the document.)
Keith
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george kent-smith To: Clive Read GRO I
13/09/2005 15:13 ee:
Subject: HNG - X proposal
Clive,
Commenis below.
General! observation there is no financial cost associated with any of the proposed work elements.
Additionally there are no specific savings associated with iniatives.
Data Centres - All new kit? No reuse of existing kit? Ownership? Who selects and on what basis?
Criteria and requirements? Design?
No mention of DMZ rationilisation opportunities. Firewalls or AV not mentioned,
DR recovery and invocation needs to be detailed.
Assumptions
25 IPStrearn has a SLT why not quote it Vs best endeavours.
3.11 tied in with 7.10 With router and wireless rnodem multiple setworks can be supported
3.12 20% of what?
5.13 Who's risk?
7.10 Wireless back up replaces BNR at retirement time?
Regards.
George Keni-Smith
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Bevericy
; Summary of Non
HNG-X proposal
John asked me to drop round a summary of the Non Commercial Key points from initial review of
HNG-X proposal:
From the comments received to date and yesterday's conference cail here are key areas of concern;
*
« Acceptance process is unclear - we need to know what the process will be and what impact that
has on POL.
@ Black Box Issue - Lack of involvement from POL into the Design and Development of HNG-X. -
Involvement around Des & Dev is around areas of issues (etc) where FUS get to decide that we
shouid be involved. Strategic architecture / technology decisions need to be owned by POL
® Larger footprint for Interstage runs counter to Gariner advice recommendation
@ Move from Web Service to J2EE architecture increases proprietary loc! and overheads. Likely
to add to maintenance and development costs over time
® No formal commitments on availability as stated within HNG CD, not clear what commitments
would be made on Centrai Infrastructure ( requirement was for 4 year MTBF )
@ Linkage to external IT commodity prices is limited (¢ 13% over life / by end of contract???)
® There are more radical architecture models (eliminating Fujitsu middie ter over time} which are
tactily relected.
@ Architecture (expands black box issue } - POL get to see architecture but not to approve (quote
unquote from text)
® Business Equivalence - POL need to full ly understand the paper presented by FS.
Criticality of getting requirements ri ime - feeds into Black Box issue
Availability predictions - Appear to be good, but we need to understand the dala
supporting these predictions. We need to see the model FS are using.
@ No visibility of Field Engineering breakelown or Network costs or profile of these over life of
contract
@ No explicit assumptions to underpin availability curves
@ Concerns around Governance proposal - Single Programme Office?
@ POL need to be happy with the assertion made in the proposal that it is based upon a reduction in
the amount of change. - prising conditiona! on this
® Cost comparison is not like for like with HNG. ¢.g. Training (Steve Page is compiling a list and will
issue by COB today}
e Thin Client ruled out at any time ‘or proposed Network infrastructure’ - contradicts last week's
statements
Regards,
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John Wheeler Keith
I Clive
Mike A
Jan
18/09/2005 10:12,
Beverley
oo
Subject: Quick summary of last night
Pis see as below which I put together to update the team. (Includes a summary of the questions we
posed at the end).
Rgds
John Wheeler
Horizon NG Programme Support
Mobile :
Desk number :
John Wheeler
16/09/2005 10:09
Subject: Quid ary of last night / any more comments or questions on
the proposal?
The session last night with Fujitsu focused on a number of areas where PO sought additional clarity
(.e broad agenda}:
nN Ways of working
2. Transparency on the numbers (financial and service / MTBFs)
3. What the Strive proposal actually means.
4, How we go forward
On this latter point, we have agreed to get FS 2 oreliminary set of questions by funchtime today, with
follow-ups to follow when we can. FS will work on the questions (and work with us) over the course of
next week ip get clarity by the time Ric returns from holiday (w/c 26/09).
Therefore - pls let me and Kevin and Debbie have any more “high priority’ questions this
morning by 11:00.
1. On Ways of Working, there was a heated deb.
but broadly the FS commercial team seemed to
recognise this could be a show-stopper, and are softening away from the Black Box approach. Dave
has a meeting wiih FS tomorrow to continue discussions - we will need to ensure Design
ownership/ways of working is on the agenda as well as contractual ways of working
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2. On Transparency of numbers - no real detail at the meeting bul FS have confirmed they will work
openty with us and provide their detailed calculations and assumptions. This will enabie us to contires
the financials (which on face value inok good) and the Counter availability graphs which again look
good but which we don’t understand how they got there! We will work together fo understand which
elements of the proposed architecture cirive which cost savings
3. Strive was clarified : some is already included in the proposal (e underwritten by FS), but there is an
additional unspecified amount to push for... they will give us some indication of what this assumed
level is (but will not contract for i.
4, Over the next week we will +
+ provide set of questions to FS {and more importantly hold set of discuss:
~ work on agreed ways of working
~ estimate POL costs
~ first stab at quantifying risk contingencies
+ get ready for talking to Ric
Later - we need to work out “wi
ion as required)
due diligence activities to be led by Mike
Summary of questions / reponses / broad discussions is as below (the spe
repeated in the question set for FS this moming).
ific questions will be
4 FS - Provide expected mix of offshore / onshore development
2 FS - Confirm how pre-paid has been treated on comparison graph under 6.1
3 FS - Why is S! support higher than before (expected to be because of re-balancing of
activities}
4 FS- Why is the high level architecture proposed the most appropriate to achieve our savings
(we have been given a fait accompli} - FS happy to take us through the architectural rationale and
“journey to the proposal (await retum of Glacorne on Monday)
5 FS ~ What is the likely size of the addit f strive
8 Joint - joint review of the variability of pricing with network size - FS's interpretation is raore
bullish than ours
7 FS - Which elements of the proposed architecture drive which cost savings
8 FS -Wh @ differences from whal we were getting before under the BAFO (app and
servi Note that Bill Reynolds said they were planning to do a check against lhe HNG compliance
matrix next week,
2 Joint - JOINT WORKING/ BLACK BOXING - Not FS’s intention to keep us out - but reaffirmed
that if they have to take accountability for SLAs, they need to own the design. For further
conversation, but at least FS recognise it as a major concern for us.
10 doint - Counter availabilty / MTBFs - FS will work with us to allow us to drill into numbers.
One key concem is the impact on outlyin: gle counter offices, particularly giver: negative p:
recently
cn PLAN assumptions - Assumption made to start pregramme in Oct 2005,
Requires Nn Boceptance prot gn. planning and g
i2 PLAN assumption - Look to ecurements Baseline complete in June 2008
18 FS - When the "
Assumption 7.10}
14 POL - Funding - FS seeking funding frorn Octoker. POL to review options
router i
failed, do we lose existing resilience (specific question around
Pis get back to me with any questions
Thanks
John Wheeler
Horizon NG Programme Support
Mobile { RO
Desk number :I GRO i
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John Wheeler To: bill reynold:
18/09/2008 14:54 0: Beverley
Read
Wells
Subject: Initial set of quest
ns on HNG-X proposal.
Colin / Bill (for forwarding as appropriate}
I atlach our initial set of questions on the HNG-X proposal. Once we have had time to collate other
views, I will forward any additions or changes to this list.
For completeness I have included the questions raised last night at the start of the docurnent, and
outlined the key areas for further detailed working together (notably Ways of Working and detailed
analysis of service-affecting data).
Some of these are super-sets of the detailed questions which follow, and I have included a
cross-reference where appropriate (nb this may not be compietely accurate in the timescales).
f appreciate answers to these questions will come back at different rates, so can I suggest you give me
acall once you have digested them with a view on how you wish to proceed.
Best regards
John Wheeler
Horizon NG P.
Mobile {
Desk number + GRO i
rogrammme Support
Questions on HNGX proposal ver 1.4
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DISCUSSED 4" SEPTEMBER
QX-001 Presentation 14/09 I Please provide expe n shore / nearshore development ;
QX-002 Presentation 14/09 ___ Confirm how pre-paid has been treated on comparison graph under 6.1
QX-003 Presentation 14/09 Why is SI support higher than previous proposal after 2012 (see sp
under gx-072 below) sn I I
QX-004 Presentation 14/09 I FS to walk POL through the architectural rationale and “journey” to the proposed IS Group
architecture, This will help to explain why it is the most appropriate architecture for POL —
(POL are concerned that we have been presented with a fait accompil). Specific ]
QX-005 Presentation 14/09
QX-008 Presentation 14/09 nal strive (not committed).
QX-007 Presentation 14/08 Joint discussions to be undertaken on the variability of pricing with network size - FS’s S Group
. AL “cme interpretation is more bullish than POL’s .
QX-008 Presentation 14/09 I What are the differences from the proposed solution under the June proposal? Note IS Group
that a check is planned next week against the HNG compliance matrix which will help to_I
_.. provide this ata detailed level :
QX-009 Presentation 14/09 I Ways of working — and concern around “black-boxing” of design. It is not FS's intention I» S Group
for POL to have no influence on design — but FS affirmed that if they are to take
accountability for SLAs, FS need to own the detailed design. The detail of the overall
ways of working are for further discussion, including programme governance. (Initial
meeting on Fri 16 Sep). _
QX-010 Presentation 14/09 I Counter availability / MTBFs - FS will work with POL to drill into detailed data and S Group
assumptions so that POL can be reassured over impacts. This will include specific
concems around availability at outlying / single counter offices (which may differ
significantly frorn the average figures).
Questions on HNGX proposal ver 3.doc Page 1 of 11
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‘Inthe table, what is the
QX-013
_contrasted with “lower applica
ce of lowest infrastructure support costs” as.
support costs” and “lower operating cost base”?
Commerci
ech an
sub-bullet under “Service Partnership.."/” Committed cost reductions over the fife
of the contract”
"Underwritten productivity improvements from FS over fife of the contract" - stated
& detalied where? Warranted?
Comm
In the diagram, is there any significance to the order of the items listed under
“Management” ~ Le. are the ones near the top meant fo have more POL involvement
the ones at the bottom more FS involvement?
Programm
eteam
‘Vin'the diagram and the following text — are the committed cost reductions included in
the prices in the commercial section and spreadsh
Axo
QXore
in the diagram ind the following text ~ have FS a f the likely amount of further
savings that may be possible ~ the diagram suggests that the additional opportunity is
fess than that already committed; is this intended? Please explain what is meant by
‘NB cost represents Business Cost not just T costs”,
benchmarking ~ what is the definition of “market norms”?
nthe committed cost red
OX-021
n~ which cost areas benefit from the 5% pa efficiency comm
Qx-018 25 in what circumstances wouid bought in services be cormmercially confidential so as to. I Comrn ~
prevent transparency? Does this apply to any of the existing supply contracts that
i Fujitsu intends to carry forward into the new service?
_ OX-019 3 Which of the proposed changes result from the new application and which from the Prog/Gom I QX-005
Questions on HNGX proposal ver 3.doc Page 2of 11
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personnel?
I QX-022
3.21.2
Please confirm that th @ to which the 120% limit would apply is a new baseline
as at signature of the new contract, rather than the existing 2002 baseline..
Comm
QX-010
_OX-023
3.2.1.2
How is_better service availability /better MBTFs achieved on same kit?
Service
_QX-010
QX-024
3.2.1.2
The increasing failure rate is quoted as 5%. The most recent figures from PO Ltd work
the figure out to be 9%. Why the difference?
QX-025
3.21.2
FS to clarify what the line “. From contract signature to the application ro! out the
MTBF increase will be absorbed in the contract charges up to 120% of the
baseline” means.
Is this worked out on a percentage being reduced yearly from the baseline agreed in
2004?
Service
Service
QX-010
QX-026
3.2.1.2
FS to clarify what the line “The MTBF will be re-baselined after the rollout of the
application. The increase after that is capped at 150% with the contract charge
with any further increase at Post Office risk” means. Is this 150% from original
baseline or re-baseline?
Service
:
QX-010
(3.21.2
What are the Engineering Service charges for any call outs over and above MTBF
baselines?
Service
ave absorbed the risk of this degradation to service up to 50% from the
_ roll out of the application, How does this relate to comment in 3.2.1.2 and 150%
comment on MTBFs. Comment above:
Service
QX-029
What happens if time to fix rates fall outside 79%/21% split. Eg Will we have to pay
extra for more urgent 4 hour fixes
Service
QX-010
QX-030
3.2.1.2
What is the impact that online call logging, and tech couriers has on the costs?
QX-031
3.2.1.2
Tech/DA
QX-010
lf Fujitsu are planning to visit every branch to replace PC battery can we utilise this
visit for installation of any equipment we may have (eg counter refresh).?
Service
OX-010
QX-032
3.2.1.2
Installation of a router device will require modifications to existing LAN and Gateway. If
this is done during working hours as intimated then the branch will be off line and
there will be some disruption around Gateway position. A guesstimate of install time
{and down time) would be 1 hour. The assumption are that the modifications are plug
and play and the Gateway will need a reboot, What are the expected install times and
Service
Questions ori HNGX proposal ver 3.doc Page 3 of 11
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"Please provi je
data centre.
FS need to clarify what the flick back impact would be on ary testing. Also how
frequently -would ‘wobbles’ in main data centre cause a sudden halt of any test
activity?
higher?
‘FS has assumed that the low rate of change with the ap:
phrase appears under several sections e.g. Data Centre, Systems Management
Services, Third and Fourth line support, SI Support ete indicating reduction in
cost/resource ~ what is this based on and does this apply to changes made in
reference data (including “AP/ADC” type changes?
What is deemed ‘low’ and what are the implications of the rate of change being
ton from 2070..." ~ this
All areas
What Is the “Fujitsu standard” IP Stream ASL service? Is this equivalent to any
generally recog:
3.2.1.4 of the proposal states that assumed coverage for the wireless backup service
Fun over PSTNASDN?
mption 3.11 states ft is expected to exceed 95%. Which ist?
in dropping the contention rates given I that Horizon was architecte
Ref data may change more though as more ADC products hit the frontline ~ what will
_be the impact of {his?.
Tech/DA
“Penultimate para on page, “funding on a case se by case bas’
“Comm
OBC ~ "does the us use of inge control for OBC work other than the anticipate level of
force majeur closures mean that each job other than these would have to be
individually costed and would now need to be done via change control? What are the
S is and associated costs?
What framework for
charging would be applicable?
Service +
Comm
Comm
I Does the 50% rek
MTBF degradation is mentioned, What are the costs of additionai engineering calis.
Questions on HNGX proposal ver 3.doc
reshold for all pieces of equipment or individual items. Do __
Service
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have mass failure before then? If we do who owns the risk? Are there any monitoring
plans in place to assess failures to see if we are approaching problems now?
QX-044 m.
start of only 5% perannum? oe
QX-045 S424 3.5 Branch MTBF Graph Three — With MTBFs deteriorating how can MTBF improve due I Service QX-010
to perception. MTBF is about equipment breaking and being fixed and this will get
worse.
QX-046 3.4.2.1 Fujitsu mention analysing failures by using “sense and respond”. The description of Service QX-010
the strategy is understood at Appendix A. Can Fujitsu providence evidence of
L i _ implementation and Real benefits in this new approach
QX-047 (3.43 Any new equipment will have to be agreed with Post Office Ltd and go through all Service QX-010
existing authorisation processes eg Health and Safety Testing, EMC testing if
—— ss __ Jequired, Ergonomic Testing (Please comment)
QX-048 3-4:3-6.2.2 The proposal has Operational Services Savings for Ithaca over 8 years as £8.8M over I Service QX-010
I 8 years. The Counter Printer proposal has £12.6M over 10 years. Why the difference
. when average yearly costs are £1.1 in proposal .
Qx-049 3.5 I First bullet point - does this mean that the costs for the 2000 ISDN backup lines and Comm
_the 500 GSM phones have been excluded? .
QX-050 3.5 I Please provide supporting information for the 3 charts. / Service + I
oo oe . on Comm
QX-051 3.5 _ is there any supporting data that predicts that the hard disks last until 2015? (Tech/DA_ I Q __l
QX-052 3.6 Please provide pricing for each proposed option [Programm
QX-053 44d The Ul not defined —What are the impacts? Tech I _
QX-054 4.44 Please explain what is meant by “specifically enhanced with patterns from the Fujitsu I Comm I
GlobalSTORE retail framework?
QX-055 What is the relationship of the style sheet definitions to the Use Cases? Comm
QX-056 How will clients be impacted by migration? Programm.
QX-057 How is the PC Bios battery calculation estimated. Can Fujitsu guarantee that we won't Service QX-010
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includes Mails/Post !
which this will apply?
Comm
I what basis -- i.e, which costs will be fixed price, which TAM, what constraints (such as
_ soft cap} wil apply to the T&M?
QX-060 Tech/DA
—— office? —o
QX-061 u en envisage that ihe trade-olfs between business capabilities and Comm
ss naged at the detailed level? en
QX-062 Comm OX-001
QX063 sg OOO
OX-064 Accept Comm +
managed, Programm .
_ Does the need to restate all non-fu rements include service levels’? Comm
“What tasks are planned between now and Jan 2006? Programm _
Who decides when itis “necessary” for FS to seek clarifications. Are FSp prepared to Comm
take the risk of re-work being needed because necessary ch
obtained? ue
Programm
Programm
. TechiDA_
_ The charges are “estimated”. When will Ai isu be able to cammit to costs, and on Comm
Please contirm the accuracy of the compa: the June costs (al
ed),
Please provide transparency of Operational Services and elements that make up the _
_fotals.
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Service
QX-070
e Gori?
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The proposai has Capita! Costs for new printer in Year8 as £9.5M. The Counter
Printer proposal has £9.3M spend in 2006. As hardware prices generally tend to fall
would this cost not reduce?
“I Please explain how the branch hardware estate would be managed to remove “rogue”
devices and so manage the MTBF downwards, in the absence of this
_QX-075 6.2.2 _ Do we have a list of the retained components? . _I Service
QX-076 6.2.3 _ Please provide the mapping from current grades to the new grades. Comm
_ QX-077 8.2.3 Please explain the basis of cost indexation for staff originating outside the UK? (We comm
i assume that this means the country in which the staff are currently based, not their
country of birth.)
QX-078 6.2.3 Please confirm the comparison of discounted and undiscounted rates (attached). Comm
“HNG-X Comparison
of day rates v2.xis"
QX-079 6.3 Please confirm our calculation of the effect of the cost variability. (attached) Comm
“Analysis of savings
returned to PO In BN
What basis is envisaged for deciding whether or not suitable new business Comm
__ requirements are available? — .
Would development costs count towards the incremental business? Comm
Please provide details of Gartner's modification of their definition around customer Comm
support Service Desks.
Does “test" here mean "Acceptance Method"? Comm
When would Fujitsu expect to invoice for this re-used work? Comm
Please explain the relationship between the 11,000 and 13,000 call number limits. Comm
What is the basis of this assumption, and who bears the risk of it proving wrong? Comm
Comm
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: "Would distribution of the training software builds be by CD?
I Please explain how this assumption I relates to the proposed use of UML models as the
I Please explain how ing the “migration period” and the “longer period of time” are
expected to be,
_Are there any other Clients to which thi
Does this mean that the facilities being provided by the BNR p project (ISBN backup Comm
I lines and GSM mobiles) would no longer be available/applicable to branches that had
hag a router installed? mi
Js the bulleted list exhaustive? _ Comm L
“What budget has Fujitsu allowed for the development of the alternative to bubble Comm
ED? smn a i _
Would Pulltsu expect to have to meat a service level target for deployment: of Comm
eference data received from PO at the data centre?
I Refto “at the same time” - what does this mean? Same hour/day/other period of Comm
_duration of migration (TBD)?
_Does this statement apply at branch I level or at global level or both? Comm an
_Are there any other Clients to which 1 this applies? Comm
“How does this reconcile with need to have different reference data for Post Comm
_ Services than currently for Mails?
QX-101
C._ ADDITION:
ADDED 19" SEPTEMBER
OXI
' Please provide a detailed description of whai has changed and what remains against
I the current Operational Services and which of the existing Service levels will be
lists a ‘Counter HW Retention’ service what is this?
QX-103
If Posi Olfice choose to in w A
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unter printers, how will the I Ge
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jobile Engineering Service be calculat
corresponding Savings on
QX-104 3.2.1.2 if Post Office wish to accept the risk of Hardware degradation, can FS provide a _ Comm I
service cost for this please? i i
QX-105 3.2.1.2 Can FS please provide their assumptions on how they propose to conduct PAT _ Comm
I testing. Is this going to be carried out during norma! working hours, if yes what is the
I Impact on the counter?
QX-106 3.2.1.4 in the event of large scale ADSL failures how many Counters will the wireless network Tech/DA
— sustain and what will the transaction rate be?
QX-107 3.2.1.7 There is limited mention of Postal Services reference data. This is a sizable chunk of I Tech/DA
the reference data population, so will this be implemented as per the CD? If not, has it
been costed in to HNG-X?
D. ADDITIONAL SECURITY QUESTIONS ADDED 23 SEPTEMBER
QX-108 46 — How does the proposed application level security model work? In particular: POL
Security
@ How does it interact with services that might be supplied by InterStage?
ai) How does it manage the transmission security supplied by VPNs?
(ii) What standards will it comply with?
tiv) How will this work at the Data Centres?
counter POL
terminats will not allow XP to be run. With the proposal of the removal of Branch Security
firewall structure in the HNG proposal, it was originally proposed to rely on the
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hem, The proposed
dual XP firewalls on Counter terminals to protect
terminal retention strategy would put Branch equipment protection at risk. How do
— ovum Fujitsu Services plan to address this ris' . — _.
OX-110 46 POL need Fujitsu Services to supply det f the function of the end to end POL I
security model at all levels. In particular: Security I
G) How do Fujitsu Services plan to provide equivalent transmission security to the
HNG model of IPSec VPNs?
Gil} How does the proposed model fit the Royal Mail Group design criteria of a
centralised data model with deperimeterised, on-demand security?
(it How will the proposed model comply with 1SO017799?
i data be protected at Data Centres? What is the proposed security
re architecture (firewall/DMZ, network topology etc.}? What level of
I security will it provide?
: v) How will the propased model su
ort peripheral third-party developed Web-
hug atory in view of fact that model for
_HNG was going to be migrated from store- and forward to centralised data storage,
How do FS plan to implement this and what benefit will it give POL? We cannot
a accept any reduction in disk encryption standards at the Data Centre, :
OX-112 4.6 “To the best knowledge of Fujitsu, the proposed solution is fully compliant with POL
legal and commercial requirements that Post Office must currently meet.” This Security
: refers to a retail based system, but is net an acceptable statement as it does not
give POL confidence that FS are aware of all the standards they must comply with. ©
I Which requirernents are Fujitsu planning to comply with? How does FS plan to be
I compliant with them? All such compliance requirements must be discussed with
I _ nee _..POL/RMG from the outset of development (see Cormment 1). a
I OX-113 4.6 Does the retail based security model referred to in this paragraph propose to POL
I I support, and comply with, the appropriate Financial trading standards e.g. PCI? If I Security
250, Which ones and ew?)
“POL”
Security
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Mike J Hannon To: Keith K Bain
10/2005 13> ce:
18/08/2008 13:46 Subject: Proposal Questions
Keith
Below is the short list of questions sent to John.
¥ve highlighted those I think are relevant to your Commercial meeting, with Colin, in blue.
Any problems give me a shout.
Mike ;
oe Forwarded by Mike J Hannon‘, Gn 18/09/2005 13:44
Mike J Hannon To: JOHN WHEE led... :
18/09/2008 13:02 oe:
* Subject: Proposal Questions
John
Some additional questions for FS. I don’t think these questions have previously been covered but
please take out those you think have.
@ 32 Please provide a detalied description of what has changed and what remains against
the current Operational Services and which of the existing Service levels will be retained.
6 32 Table at 3.2 lists a ‘Counter HW Retention’ service what is this?
@ 3.24 FS Have stated in a number of the section in 3.2 a ‘iow rate of Change’ has been
assumed, how has this impacted the Operational Service Charge? There seems to be no.
sh i
@ 32.4.2 Hf Post Office choose fo introduce new hardware i.e. cqunter p
corresponding savings on Mobile Engineering Service be calculated?
2 if Post Office wish to accept the risk of Hardware degradation, can FS provide a
service cost for this please?
e $273 Can FS please provide their assumptions on how they propose to conduct PAT
testing. Is this going to be carried out during normal working hours, if yes what is the impact on the
counter?
@ 321,7 Can FS provide clarification of what the mean by ’Fujitsu has assumed a low rate of
change from 2010’? If change is at a highest rate than ‘low’ what is the impact against each of the
Services?
Regards
Mike
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THE POSSIBILITIES ABE CHFERITE
; ry A rn
FJ &
5 E 0 o0p0Sa
-
esponse to Cla ation Questia
POST
OFFICE
Doing Our Bit to Help Make
the Big Things Happen
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THE POSSTBILITEES ARE TRPIRITE
. OFFICE I
TABLE OF CONTENTS
1 Questions Arising from the Presentation
2 Questions Specific to the Proposal
3 Questions Specific to the Assumptions
4 Additional Questions Added 19° September...
ce and Subject to Contract © Fujitsu Services Limited, 2005
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1
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vice I FUJITSU
Response to Clarification
Questions
THE POSSIBILITIES ARE ENFIMITE
4 QUESTIONS ARISING PROM THE PRESENTATION
OQX-04 Please provide expected/pianned mix of offshore, onshore, and near-shore
The development programme for HNG-X is split approximately 55% on the application
and 45% on infrastructure. It is currently envisaged that the infrastructure activities will
be delivered in the UK due fo the proximity with data centre and network service
providers, 33% (19% of the overall effort) of the application work will be delivered by
offshore staff of which 69% will be working genuinely offshore.
OX-02 Contin how pre-paid has been treated on comparison graph under 6.1
The July Proposal line includes prepaid for the full life: all other lines include prepaid for
the first 5 years end not years 2011 to 20158 inclusive Prepaid-included.
OX-03 Why is S! support higher than previous proposal alter 2612 (see spreadsheet
provided under QX-72 below)?
The Si Support element of the HNG °X" pricing is correct ~ and fakes account of the
shape of the overall commercial package offered to Post Office This-questionis-te-be
sespondedio-atelaierdate
QX-04 This reflects re-pricing within the overall proposition. FS to walk POL through the
archilectural 1
explain why the most appropriate architecture for POL (POL are concerned that
we have been presented with a fait accompli). Specific queries concern movement
fo J@EE and larger footprint for interstage.
The meeting to walk through the architecture and fo address outstanding architectural
issues has been set-up for Tuesday 20" September.
OX-05 Which elements of the proposed architecture drive which cost savings?
The architecture is proposed as a complete package. Details of cost drivers will be
discussed during the services and price transparency workshops, currently scheduled
for the week commencing 19" September.
23 Septersher
28 Seoiersbies
and Subject to Contract © Fujitsu Services Limited, 2005
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Response to Clarification
Questions
2
FUJITSU
THE POSSIBILITIES ARE (HFERETE
AX-O6 What is the likely size and composition of ihe additional str?
at committed)?
: Savings refiects in Fujitsu's presentation of 14 Sept 06 are
SSIONS sie be und
SMOKE BUIRS:
Whilst POL’s view is an arithmetic interpretation, the FS view is that the factored
reinvesiment should be viewed in terms of probability, Le. what is the probability that
new business requirements will not materialise? Fujitsu's view is that sufficient
incremental business will be generated in joint working with POL, in order to qualify for a
100% return of cost savings. This may be generated through new business
requirements or other IT orojects targeted at reducing business cost to POL.
This topic is planned to be discussed further during the joint meeting on 20” Septernber.
QR-DE What are ihe differences from
thet a check is planned agai
pravide this al a detailed jev
posal? Note
Main differences include:
~ TesOR Model
- Deta-driven Counter Applications
~ More use of SOA models
~ Lightweight use of SOA technology
- Reuse of backend Databases
- New Security rodet
Note: HNG-X builds on HNG and the leverage will emerge from the review of the
compliance matrix
Fujitsu has started work on updating the HNG compliance matrix with a view fram the
HNG-X perspective. It is hoped that this will be available during the w/c 19° Sepiember.
rise. 2008
Confidence and Subject to Cor
Commereat: © Fujitsu Service
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Response to Clarification
FUJITSU
THE POSSEBELITIES ARE THFIRETE
OX-09 Ways of working - concern around “black-boxing” of design. It is not FS's intention
for POL to have no infivence on design ~ but FS affirmed that if they are to fake
accountability for SLAs, FS need to own ihe detailed design. The detail of the overali
ways of working are for further discussion, including programme governance. {Initial
meeting on Fri 16 Sep).
An architectural meeting is planned to take place on 20° September, between Fujitsu
and Clive Read of POL, to discuss this topic further.
Overall ‘Ways of Working’ is the subject of continuing discussions between Fujitsu and
Dave Smith/lan O'Driscoll of POL, with the next meeting planned to take place on 20”
September.
OX-10 Counter availability/MTBF - FS will work with POL te drilj into detailed data and
assumplions so ihat POL can be reassured over impacts. This will include specifie
concerns around availability at oullying / single counter offices (which may dilfer
significantly from the average Hyures).
Meeting to discuss this issue is planned to take place between Fujitsu and POL on 21°
September.
Commerzial-in-Confidence and Subject to Contrect © Fujitsu Services Linvted, 2008
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ny 2
oe Horizon Service Partnership
post \ sevice Pe FUJITSU
Response to Claric THE POSSEBJLETIES ARE ENFIMITE
Questions
2 QUESTIONS SPECIFIC TO THE PROPOSAL
Section 7.2
oat infrastructure
There fs no distinction between the terms ‘Lowest’ and ‘lower’ in this context. However,
Fujitsu will strive to achieve the lowest possible costs with regard to infrastructure
support.
QX 12 Section 1.2 ip?)
2nd sub-bi
8 from
warranted?
contract”... where are these statadédetailed, and are the
The Operating and S! Support costs reflect Fujitsu taking a level of risk on productivity
improvements in the costs, to deliver the service at the prices shown.
nder
volvement
fo the ord
near the fop meant io have m
n more FS involvement?
No implied significance in the order used. The list is also not intended to be exhaustive,
and merely presented to illustrate the types of activities which waould/are being delivered
between Post Office and Fujitsu.
OX-14 Section 2.3
in the disora:
ihe pr.
The diagram identifies a line plotted as “Offered Charges”. This corresponds to the
charges detailed in Fufitsu’s proposal Commercial Section and attached spreadsheet.
As a consequence this line includes the effect of target productivity improvements
Fujitsu will need to realise over time. However, for the avoidance of doubt the charges to
Post Office will be based on the “Offered Charges’ line, whether the target Productivity
Savings are realised or not.
fence and Subject to Contract © Fujitu Services Limited, 2005
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TRE PRSSISILITIES ARE INFIWETE
]
Horizon Service Partnership
Proposal
Response to Clarification
Questions
is less than that already c
milled: is ihis intended? Please explain what is meant
cost represents B: *
ess Cost nat just iT cos
The diagram presented in the proposal was used to illustrate the principle of Strive, and
its relationship to Fujitsu’s charges, and productivity saving targets. Beyond this, the
diagram holds no other purpose, as it was not based on any actual or forecast cost data.
An alternative representation of this diagram was presented to Post Office at a meeting
on 14° September. This used the actual pricing data underpinning Fujitsu’s proposal
{Le. Offered Charges and Target productivity savings).
The adjacent comment which mentions “business cost” is intended to clarify that Fujitsu
would expect any Strive initiatives to be focused on reducing costs as a whole to Post
Office's business, and not just IT costs (or even just Fujitsu’s element). Measuring
success purely on the basis of reduced IT cosis can prove to be a false economy as
often hidden, indirect cost can arise elsewhere in business operations (see Gartner's
work on “The Hidden Cost of Computing’).
It is also well documented in the industry that in order to save money, you may need to
invest money. This may lead to IT costs increasing in the short term, in order to liberate
greater operational (business cost) savings elsewhere.
Fujitsu propose to work with Post Office to achieve the optimum balance of reducing IT
costs (on a like for like basis over time), whilst ensuring that business costs as a whole
are also reduced.
OX-16 Section 2.3
in benchmarking - what is the definition of “market norms’?
A definition of “market norms’ for the purpose of any Benchmarking provision under the
new contract will be agreed with Post Office. However the principle of its execution will
be to provide Post Office with the ability to realise a cost for specific services from
Fujitsu at a similar price to which Post Office could reasonably expect to achieve directly
elsewhere (based on comparable scope, quality, etc).
OX-17 Section 2.3
io the committed cost reduction ~ which cost areas benelil Irom the 5% pa efficiency
improvement?
The benefits of this efficiency improvement can be found right across the ongoing
charges.
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Response to Clarification ceturies
Questions THE PUSRIBELITIES ABE ERFERITE
oes would ba
2 Does
lorward into
86 as
ting supply conte:
g supply cont
s that
he pew service?
Commercial confidentiality will play a role where third party contracis prevent disclosure.
This currently applies to the contracts with Energis Communications and Hypercom.
QX-19 — Seatio
Ww proposed changes resuil from the new application and whi
new infrastructure architecture?
The new aoplication is a pre-requisite of the new infrastructure architecture. The
application allows Fujitsu to achieve lower service cost, and the support of the revised
architecture provides further opportunities for cast savings.
Details of cost drivers will be discussed during the services and price transparency work
shops, to be held in the week of Septernber 19°.
QX-20
2 supporting data behind the prediction of 10% on line
P gel? Whal are the rewards for beatir
logging? What
it?
The 10% prediction is based on Fulitsu’s experience across a number of heipdesks in
which it has implernented this technology, including its own internal helpdesk. The
tendericy is for the more technical organisations to over-achieve this prediction due to
the willingness of the users to accept technology over human interfaces. For an
organisation with a user population like the Post Office, 10% is achievable if the facility
saves time or enables the user to be more efficient than going through the process of
raising a call via a telephone. This is especially true of progress chasing calis.
Fujiteu will seek to make additional charges if Post Office do not commit to the principle
of electronic call logging.
Hf Post Office is prepared to commit to a higher level of electronic call logging than 20%,
Fujitsu would consider its charging structure. The percentage can be varied during the
term of the contract as the user population changes and gains experience. However this
must be a forward commitment, as opposed to being subject to a retrospective review. if
more than 10% is to be achieved, this will require a proactive training program rather
than a simple publication of the facility and word of mouth recommendation.
£2. eRiemes
RE
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THE POSSIBILITIES SRE TWFIRETE
Horizon Service Partnership
Proposal
Response to Clarification
Questions
—
OxX-21 Section 3.2.1.4
Do the costs include the cost of migrating io a new helpdesk e.g. training of new
personnel?
Yes. Fujitsu would look to retain the helpdesk staff after the transfer.
Ox-22 Section 3.2.7.2
Please confirm that the baseline to which the 120% limit would apply is a new
baseline as at signature of the new contract, rather than the exisling 2002 baseline.
Yes
OX-23 Section 3.2.7.2
How is better service avaiability / better MTFs achieved on the same ki?
The service availability is a product of the central and branch outages and failures.
There is an improvement for HNG-X in the availability of the central services, the
network and the application in the counter. This gives an improvement over the same
time period for Horizon.
OX-24 = Section 2.2.1.2
The increasing failure rate is quoted %, The most recent figures from PO Lid
work the figure oui to be 9%. Why the difference?
The 5% figure is a more reasonable, jong term sustainable figure. This number has
been validated with Fujitsu technology and engineering experts and its equipment
repairers and suppliers. Within the overall term of the contract, the 5% will vary but
Fujitsu believe that it will average at 5% over the contract until 2015. Fujitsu has taken
the risk of the degradation into its proposal to provide Fujitsu with the motivation to,
where possible, manage the calls below this prediction.
OX-25 — Section 3.2.7.2
FS to clarify what the line “From contract signature fo the application rollout the
MTBF increase will be absorbed in the contract charges up fo 120% of the baseline”
means? is this worked out on a percentage being reduced yearly from the baseline
agreed ins 2004?
Fujitsu will bear the risk of up to 120% degradation of the MTBFs from the baseline at
contract signature, until the application is rolled out.
The rate of degradation is assumed to be 5% per annum,
and Subject to Contract © Fulitsu Services Limited, 2005
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Response to Clarification
o
FUJITSU
THE PHSSERTLETIES ARE GRFERETE
sf or that is capped at 150% with the contract
ea Pogt Office isk” means. is this 150% from orig
The statement should read “The MTBF will be re-baselined after the rollout of the
application. The decrease after thai is capped at 150% with the contract charge with
any further decreases at Post Office risk”. The 150% is from the re-baselined position.
OX-27
Engineering Service charges lor any call outs over and above MTBF
baselines
These will be ai Fulltsu’s price per call clus repair charge at
time. Based on HNG “X" steady state. in today's terms Fulits.
£180 per call (ex e OL VAT and REDABG
of this degradation io service up to 80% trom the roi
out of the ape ication. How does t ihis relate to comment in 3.2.4.2 and 150%
comment or MTBFs. Comment above
The 50% ts the reduction in the MTBF contained with the 150% degradation.
QX-29 — Seation 3.6
What happens # 8
exita for more urg
me to fix rates fail outsicie 79%/21% split. Eg. will we
ent € hour fixes
Fujitsu believes the proposed split is reasonable, and will be achieved through the use
of default call severities. The risk of greater numbers of calls in any severity is Fujitsu's,
given the default call ime is taken. Any departure from these will be a result of changing
the defaults, which will lead to chargeable activity to POL.
Section 2.2.4
What is the impact ihat online call lagging. and tech couriers has on the costs?
This is a complete package. Details of cost drives will be discussed during the services
and price transparency work shops
Commercial -in-Confidence and Subject to Contract © Fujitsu Servings Limited. 2005
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I Proposal i
Response to Clarification THE POSSEBILITIES ARE INFINITE
Questions
QX31 Section :
Uf Pujisu are planning to visit every branch to replace PC ballery can we ulilise this
visit for installation of any equipment we may have (eg counter refresh)?
No, The battery replacements will take place during normai engineering visits and not as
(part of) a scheduled roll out.
OX-32 Seetion 3.2.1.2
installation of a rouier device will require modifications to existing LAN and Gateway.
Hf this is done during working hours as intimated then the branch will be off line and
there will be some disruption around Gateway position. A guesstimate of install time
(and down lime} would be ft hour. The assumption is that the modifications are iG
and piay’ and the Gateway wil! need a reboot. What are the expecied install times
and down-times?
The router will be installed during a normal engineering visit. Therefore it is likely that
the Post Master will already be experiencing system problems, and may require an
additional reboot. Fujitsu therefore expect the incremental impact of installing the router
to be negligible.
QX-33 Section 3.2.1.3
Please provi
data centre.
details of fhe “greater infernal resilience” being provided in the live
The current resilience model relies on the existence of the second live data centre. In
the model proposed the first line of resilience will be within the live data centre. The
second data cenire will only be invoked in the event of a complete (and in specific
cases, partial) loss of the live data centre.
This subject is expected to be covered as part of the workshop planned for 21"
September.
QX-34 Section 3.2.1.3
FS need to clarify what the Hick back impact would be on any testing. Also how
frequently -would ‘wobbies’ in main data centre cause a sudden halt of any test
activity?
Fujitsu would expect the occurrence of fail over fo the DR site to be very rare, given the
use of local resilience in the live data centre, as discussed above. In the event of fail
over to DR, the flick back time associated with the recovering the test environment will
be dependant upon the stage at which the interrupted testing cycie had been at.
NB. Fujitsu would expect that ‘Wobbles’ such as that experienced on 20" December
2004, would be managed with the resilience within the main data centre.
nber
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THE PUSRIRELITIES ARE TRPIRETE
Syeoe Ma agement
uns reduction if
The statement does not apply to change implemented via AP/ADC,
The low rate of change has been assumed based on comments from POL senior
rmenagement and would only cover maintenance changes due to bug fixes and service
pack releases from the software and hardware manufactures. All changes due to
incremental business requirements are excluded and would be subject fo separate
business cases and project spend.
QOX-36
oon 3.2.4.4
Whal is ihe “Fujitsu
wIP Stream ASL sens
tandard?
His equivalent lo any
The Fujftsu standard IP strearn ADSL service uses commercially available IP stream
links, purchased from BT Wholesale, and is supplied to a number of Fujitsu's customers.
This is different to the current Datastream ADSL service supplied by Energis.
‘ates that assumed coverage for the wireies: aes wp service is 100%, Ass
3.17 states # is expecied to exceed 98%. Which is ft?
Fulitsu are proposing to roll out the router with wireless connectivity to all branches,
giving the capability to 100% of branches.
QKk38 Section 3.2.1.4
Why the delay in dropping the contention rates given thai Hori
nun over PSTNASON?
zon was archiecied io
Fujitsu dees not recommend the use of IP Stream Home to support larger Post Office
branches whilst running the current application. Once rolled out, the new application will
make this a practical aption for all Post Office branches.
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/ Questions { THE POSSIBILITIES ARE ERFERTTE
l
QX-39 Section 3.2.1.6
Ref data may change more though as more ADC products hit the frontline ~ what will
be the impact of this?
Fujitsu does not currently believe that this would present a significant problem.
QX-40 Section 3.2.4.5
is fhe last senience incomplete?
Yes. The last sentence should read) “Fujitsu has assured a low rate of change with the application
from 2010"
OX-41 Section 2.2.4.7
OBC ~ does the use of change contro! for OBC work ofher than the anticipate level
of force majeur closures meen that each job other than these would have to be
individually costed and would now need to be done via change control? What are the
impacts of ihis and associated cosis?
Yes, although standard jobs would be priced from a catalogue. The intention is for
Fujitsu not to maintain a level of resource which is not commensurate with the volume of
change which Post Office will require. If a large number of OBC activities can be
forecast by Past Office under the contract, Fujitsu will flex the level of resource
accordingly. OBC charges are to be confirmed.
OX-42 Section 3.3
Penultimate paragraph on page, “funding on a case by case basis” - What
framework for charging would be applicable?
Charging for any such resource will be subject to the published rates in force at that
time. The underpinning commercial mechanism is expected to be equivalent to that
currently in force for calling-off Additional S!. Consideration will however need to be
given for providing Fujitsu with reasonable notice in order that resources can be
appropriately scheduled in and out.
QX-43 Section 3.4.2.4
MTBF degradation is mentioned. What are the costs of additional engineering calls.
Does the 50% relate to a threshold for all pieces of equipment or individual items. Do
we just pay for dems over 50% or all tems once one or ail pieces go over 0%
The 50% relates to a threshold for individual items of equipment.
The payment will be for the number of calls over the 50% limit for each piece of
equipment within each month.
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6 and 50%
the start of only 5% per
Fujitsu has taken the risk of a 50% degradation of MTBF which is anticipated to be
reached at a rate of 5% per annum. If the rate of degradation is greater, then Fujitsu
bears the risk, up fo an aggregate of 50%.
OX-48
fon BB
Branch MTBF Graph Three ~ With MTBF s deteriorating how can MTBF improve di:
fo perception. MTBF is abou ing and being fixed and this will get
worse.
The statement refers to the nature of the failures that will be experienced or ‘how i will
feel’ to the sub-pastmaster. The HNG-X service will reduce the number of incidents
which are caused by software and network which are often seen as unacceptable by
users in comparison to genuine hardware break which are understandable. The removai
of those failures does improve the counter availability which the user will perceive as
increased reliability and the removal of many network related calls will reduce the
number of extended cali durations.
4A& Section 2.4.2.7
“sense and respond’.
Ss stones bs
& Rees ong rel rec ined report calls for Almor Ch Che
overall system user satisfaction by 2 20%,
led ie a 5
improvement in internal
proviges I Ce. ne oppart OOY.
such as. the NBSC). fealising additional benefit io Post Office’s business. Fuiitsy woul
ty fo have further discussions regarding this subject with Post
Configence and Subject to ©:
@ Fujiten Servic
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Questions i
QX-47 — Section 3.4.3
Any new equipment wil have to be agreed with Post Office Lid and go through all
existing authorisation processes eg Health and Safety Testing. EMC testing if
required, Ergonomic Testing (Please comment}
Agreed. However Fujitsu would recommend that the test process be reviewed in light of
past experiences, io ensure that it is not above and beyond that which is deemed
necessary for Post Office to operate in a competitive commercial environment.
OX-48 Section 6.2.2
The proposai has Oper: i Services Savings for ithaca over 8 years as £8.8M
over 8 years. The Cou Pri oposal has £12.64 over 10 years. Why ihe
difference when average vearly cosis are £7.14 in proposal
The assumed engineering support mode! used in Fujitsu’s original Counter Printer
proposal, and that now reflected in the Service Partnership proposal are different (i.e.
use of next day engineering cover, treatment of excess call charges, and thresholds,
etc). The Counter Printer proposal also involved a different roll-out strategy to that new
envisaged.
For purposes of clarity, all commercial information presented in Fujitsu’s Counter Printer
proposal should be disregarded as no longer valid or applicable.
OX-49 Section 3.8
First bullet point ~ does ihis mean that the costs for the 2000 ISDN backup lines and
the S00 GSM phones have been excluded?
Yes, items excluded.
OX-50 Seotion 3.6
Please provide supporting information lor the 3 charts.
This topic is a subject of discussion at the meeting planned for 21" September.
OX-81 Section 2.5
is there any supporting data that predicts that the hard disks iast unt# 2015?
See response to QX-24. Hard disks which fail will be replaced as a maintenance call.
QX-52 Section 2.6
Please provide pricing for each proposed option
Details will be provided once agreement to the deal in principle has been established.
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‘ ode
Questions
Ox-53 Section 4.4.4
The U! nat delined ~Whal are the impacts?
The UI will be based on the results of joint work previously done with Post Office.
The impact will be mainly on look and feel. Processes and flows will be preserved
whenever there are dependencies on processes and services. Changes may (but not
necessarily will) occur to flows that don’t impact remaining processes and services.
Fujitsu will bring usability and ergonomics expertise to ensure that use js intuitive and
operational speed maintained.
OX54 — Section 4.4.4
Pigase explain whe
GlobalSTORE retail
On top of general SOA best practices, the architecture and design of the counter
applications will reuse architecture and design models used by technology cornponents
of GlobalSTORE.
QX-S5 — Section 4.4.7
What is the relationshie of the siyle sheel de
initions to ihe Use Cases?
The use case will contain information on UI requirements of specific processes and
procedures,
The level of granularity will depend on the specifics of a use case. For example, a set
of style sheets can be combined into a pattern and the use case can simply specify the
pattern. In other cases, specific style sheets can be associated with individual steps of
the processes captured by the use case.
Fujitsu’s proposal assumes that all existing FTMS clients will be migrated to EDG prior
fo pilot. In line with previously stated requirements, Fujitsu is planning to develop a
seamless migration process which combined with unchanged agreed client application
interfaces should minimise client disruption. Fujitsu does envisage some scheduled
interruptions in service during the perieds of cutover to HNG-X. Other related impacts
have beer identified within the assurnptions log.
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OX-87 — Section 3.4.3
How is the PC Gios battery calculation estimated? Can Fujiisu guarantee that we
won't have mass failure before ihen? if we do who owns the risk? Are there any
monitoring plans in place to a ¢ failures to see if we are approaching problems
now?
The prediction is based on the predicted manufactures MTBF for the battery, and
backed up by Fufitsu’s current experience of the recent battery replacement programme.
Fujitsu cannot guarantee that a mass failure will not occur but will proactively monitor
the battery performance via analysis of incidents to ensure that the replacement
program is appropriately timed.
on 4.8
nat basis have Fujlisu made their ‘best knowledge” assessment?
This assessment is based on Horizon documentation.
QX-58 Section 4.10.2
“SOIT ference data may need fo be produce: Hiple formats” ~ this
presumably includes Mails/Posial Services reference data. is there any oiher
reference data to which this will apply?
At this stage Mails/Postal Services is the main item identified that will have an impact on
the work required fo Post Office.
More opportunities for optimisation may emerge during the design stage, in which case
Fujitsu will be glad to discuss with Post Office the various options for migration support.
OX-60 Section 4.70.3
How will dala be migrated on the terminalis? What is the anticipated impact on the
office?
in the current outline plan, ail counters within a branch will migrate from Horizon to
HNG-X al the sare time ~ typically overnight.
Migration will be initiated by Post Office staff in the branches, without any on site
presence by Fujitsu staff.
The migration process can contain steps that are performed manually by the Post Office
manager to cause the switch over from Horizon to HNG.
Before and After reports must be available to show that the Post Office accounting and
stock position is maintained over the migration step.
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Respor THE POSSIBILITIES ABE TNEINITE
A detailed plan will be jointly developed with Post Office as part of the design stage for
HNG-X.
This is a governance issue. Fujitsu envisages that this would be managed by/during the
requirements capture phase and the stage progression into design. Fujitsu does not
currently believe that POL will be expected to make significant trade offs (if any) but
there may arise cases where improved processes are required to be implemented.
ion page ~ “appropriate” ~ pie.
6 clarify,
During the task breakdown/estimating phase [ was assessed by the
architecture/design team which cornponents/component areas could be “packaged” up
for offshore development. in general this was related to how clearly the task could be
defined and what level of dependency existed with other components being developed
or procured in the UK.
As discussed briefly at the presentation, Fujitsu has added contingency af the
individual task level dependent on the complexity of the task being assessed such that
the risk profile satisfies Fujitsu’s corporate business process.
QX-64
Fujitsu would expect the existing approach of Acceptance Gateways to remain with
entry / exif thresholds in terms of the number and type of acceptance incidents. An
Acceptance Manager role on both sides would monifor and manage this progression.
Some of the Acceptance Methods may need revision e.g. we may not have the
concept of FS Test and POL (E2E) Test, but rather ‘Functional Test’ and ‘Integration
Test or similar. This mainly depends on how we allocate responsibilities and
resources to the various test stages.
Fullfsu believe that POL will want to keep the Acceptance Method of ‘Design
Walkthrough’ as their way of exercising some control / involvement in the solution
space. This is probably most relevant for the non-functional requirements but will
require Fujitsu to consider what FS formal deliverables from the solution space will be.
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Qx-65 = Section 8.2.4
Does the need to restate aii non-functional requirements include service leveis?
Yes, but Fujitsu anticipates significant re-use from previously stated requirements.
OX-66 Fujitsu will provide during the workshop and the contractual negotiations the detail of
the service levels under pinning this offer Section 8.2.1
What tasks are planned between now and Jan 2006?
As discussed briefly at last week's presentation, Fujitsu believes that the following
would be carried out between now and January 2006:
1. Start design activities for the infrastructure updates, specifically the Horizon
data centre move and the deployment of branch routers and IP Stream.
2. Finalise and agree the requirements and acceptance processes and their
implications on the overall lifecycle model,
Progress planning to the detailed level so that resourcing for the development and
implementation phase can be identified and committed.
OX-67 — Section 5.2.2
Who decides when itis ‘necessary’ lor FS to seek
take isk of re-work being needed because ne
obtained?
jarifications? Are FS prepared io
essary clarifications were not
Fujitsu believes that this is really a governance issue that will be addressed by the
establishment of appropriate Programme and Design forums to review and decide
upon such subjects. With the correct joint controls in place it is expected that the risk of
re-work being required is minimal. This will be developed during the Lifecycle/'Ways of
Working” workshop on the 22" September.
QX-68 Section 5.2.2
What system documentation will be provided io support fulure developments.
Fujitsu intends that the design and development stages will be fully supported by
documentation in line with good industry practice to enable the ongoing support and
enhancement of the system. This documentation will follow a highly structured
approach and will be shared with Post Office.
OX-68 Section 8.2.3
Whal is ihe limescale/Dependency on agreeing Acceplance Criteria?
In terms of timescale we would need to agree the HNG-X Acceptance Strategy before
contract and then have all Acceptance related material produced co-incident with the
conclusion of the Requirements Specification Stage, currently planned for the end of
June 2006.
iit SERIENDEE
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THE PRSSIBILITIES ARE TEFERITE
Qx-70 Section 6.2.5
Would bath App & OS upgrade be soft delivered?
Yes
Section 6
mit fo casts, and on
what basis ~ ie. which costs will b
a8 Soff cap) wil apply io the T&M?
unlikely to. > vary. unless there are
i delave to the programme di
NB. The proposed charges are dependant on key programme milestones being
¢ FS-ie-able-to-commait to-these prices-on ihe. basis that at assumptions
Qx-72 Section 6.4
Please contirn
osts (atached),
This appears to be correct
QX-73 Section 6.4
Please provide tre
fotals.
parenay of Operational Services and elements that make up the
This is a complete package. Details of cost drivers will be discussed during the services
and price transparency work shops on Tuesday 20" September
ragsital Costs for new printer in Ye.
posal Has £9.3M spend im 2006. As hardwa:
would this cost not reduce?
Pas £9. 5M. The Counter
For purposes of clarity, all commercial information presented in Fujitsu’s Counter Printer
proposal should be disregarded as ne longer valid or applicable,
“Confidence and Subject
itu Services Limited, 2605
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‘Current Grades I Wate per I aie per [Per hour I Ber hour TProgoaed Grades I” Rate pee working Bay Bate per hour to full” BavinghGasts telaiive to 865)” SavingiCost relative to 2.5%
working I bour I 20% I BYB% _ dise ise
day acount} aise ‘Gr Bhore] tear” Y Giishore Gn Shore] Near” I Gtishore ‘Giishiore [Gn Shovel Near GitshoreIGn Shore! Wear” Gfisiiore
Shore, Shore. Shore.
‘Seitware SES ERS EET I BeaAT Systeme engines: I F482 I ea3e EGS EAT Thon ge ME i rN
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Prefect BRAS ERS RS TPES BS Ta SE Seinen Speen es a a ST) RK $
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Senior ETERS PERT ETSNOE Senior Manager eres a “
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NB - For somparigont is impo
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tions:
QX-75 Section 6.2.2
Do we have a list of the retained components?
ae,
FUJITSU
THE POSS(QILITIES ARE IRFIMITE
ip
The retained components are the ones in the counter today, with the exception of the
flat screen monitor, which is to be replaced.
OX-76 — Seetion 6.2.3
Please provide the mapping from current grades to ihe new grades,
alt
O:\Rates\HNG KB
Spreadsheet.xis
Fo-be-covered-at the-mesting between Fuilisu-and ROL-on-20" September.
QX-77 — Section 6.2.3
Please explain ihe basis of cost indexation for staff originating outside the UK? (We
assume that this means the couniry in which the staff members are currenily based,
not their country of birth}
Yes, place of work
QX-78 — Section 6.2.3
Please confirm the comparison of discounted and undiscounted rates.
Tok Lie. ting-belween-Fujisu and POLon- 204 ber-Please see
Qx-79 Section 6.3
Please confirm our calculation of the effect of the cost variability.
This topic is fo be covered as part of the pricing meeting with POL on 20" September.
QX-80 Section 6.3
What basis is envisaged for deciding whether or not suitable new business
requiremenis are available?
The use of the term “suitable” in this context may be erroneous. Fujitsu would expect
most if not all Post Office’s incremental IT service requirements to be “suitable”, subject
Page 21 of
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Questions
only to Fujitsu's own good business pclicy in force at the time (Le. acceptable
commerciais (price, risk, terms), and match with our core competencies/skills (.e. our
to deliver).
OX-84 — Section 6.2
id development cost
Yes, subject to the committed revenues being incremental, and recurring in more than
one financial year (.6. min of two years revenue).
of around customer
To be provided at a later date.
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3 QUESTIONS SPECIFIC TO THE ASSUMPTIONS
OX-83 Assumption 1.2
Does “test” here mean "Acceptance Method"?
Yes
OX-84 Assumption 2.4
When would Fujitsu expect to inve
for this re-used work?
Q3 2008/6
OX-85 Assumption 3.4
Please explain the relationship between the 11,000 and 13,000 cail number iimits.
Please could POL clarify this question?
OX-86 Assumption 3.18
What is the basis of this assumption, and whe bears the risk of proving wrong?
The current architecture requires frequent rebuliding of the PC within the spares loop, to
ensure that they are configured with the latest version of the application configuration for
gateway, slave etc. In the new architecture those PCs will be loaded with a single basic
image which will be updated automatically when the spare is used. This removes the
need for the upgrades. This assumption is at Fujitsu's risk unless POL requirements
mandate a change.
OX-87 Assumption 3.18
Please explain haw the branch hardware estate would be managed fo remove
“rogue” devices and so manage the MTBF downwards, in the absence of this
detailed configuration management data.
Fujitsu will record the serial number of any equipment at the point of repair only. This will
enable multiple failures on single pieces of equipment to be identified and ‘rogue’ units
to be removed from the spares loop.
QX-88 Assumption 4.2
Would distribution of the training software builds be by CD?
No.
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i Questions
The current approach utilises the deployment of upgraded hard disks to CTOs to be
installed in standard counter configurations but an allernative approach could be
considered,
Please expiain how
the basis for acce
use of UML mo
n relates lo the propos
posal,
Acceptance criteria will be specified at the same level of detail as the requirements. The
main assurnption is therefore in terms of consistency.
For example, if a specific flow is explicitly mentioned in the use case then the
acceptance process should require the validation of the process. If only process
oulcomes are specified in the use case, validation should be defined accordingly.
ORD
3 Assumption 7.2
But what are ihe financial consequences (for PO) # this statement nel rue?
¢
At this time, Fujitsu believes that a single, shared test rig environment will be sufficient.
However if a larger fest environment is required, then costs for establishing, operating
and supporting iC will arise. This will be subject to formal proposal from Fufitsu and
agreement by Post Office at that time. It is expected that any such incremental cost will
be the subject to Post Office’s normal business case approvals.
Please expiain how long ite “migration period” and the “longer period of time” are
expected to be.
Current design assumption is Bank Holiday weekend for the “migration period” and a
further week as the “longer period of time “for non critical services. Final timescales
subject to detailed migration planning design work.
>
Ox
nO
Assumption 7.7
Are there any other Clients to which this would apply?
We believe that this comment actually relates to 7.8 rather than 7.7?
LINK and CAPO are currently the only Clients who are responsible for connections into
our data centre?
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dines and GSM mobiles) would no longer be available/appiicable fo branches that
had had a router instalfed?
The backup capabilities that BNR provides will be superseded by introduction of the
Router. It is assumed the ISDN charges cease in 06/07
OQX-G4 Assumption 7.12
is the bulleted list exhaustive?
This is the complete list based on current design knowledge. Further optimisation
potential may emerge at design stage, and Fujitsu will discuss opportunities with Post
Office as/if they emerge.
OX-95 Assumption 7.13
What budget has Fujitsu allowed for the development of the alternative io bubble
help?
Fulitsu has assumed that an equivalent saoability would be provided and expects the
detailed approach to be defined based on the output of the requirement phase of the
programme
The granularity of the costing model used for the proposal does not support costing of
oross-apolication features such as the help facility This. SHom-is-ie- oS a a
alsterdate
QX-96 Assumption 7.18
Would Fujitsu expect to have fo meet a service level target for deployment of
reference data received from PO at the data centre?
The deployment of reference data within the data centre would continue to be subject to
CS/PRD/058, but note that this is not an SLT.
OX-87 Assumption 7.17
Ref io “af ihe same time” - what does this mean? Same hour/day/other period of
duration of migration (TBD)?
itis implicitly assumed that this will be similar to all software upgrades and that the
actual software update will take place overnight — similar to a major Horizon release
update.
fe Sansone
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Questions ]
7.22
aterent apply al &
This assumption is that there is no requirement for HNG-X transactions to be
distinguished in either reports or accounting data. This assumption is primarily aimed at
the global level. At branch level it is already assumed that transaction based reports will
need fo carry through transparently (see also 7.19),
OX-99 7.23
other Clients to which this applies?
Assumpti
Based on the current design thinking for HNG-x, these fwo Clients ( E-Pay and
Streamiine) are the only Client interfaces subject to this assumotion.
QX-100 Assumption 7.26
How does this reconcile with the need fo have different relere:
Services than currently for Mails?
ce data lor Posi
This assumption refers to the electronic interfaces between Horizon and external
systems. The Mails date is supplied by other means and is not covered by the RDS
application interface specification.
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0 ions TRE POSSIBILITIES ARE INFINITE
4 ADDITIONAL QUESTIONS ADDED 19" SEPTEMBER
QX-101 Section 3.2
Please provide a detailed description of what has changed and what remains against
the current Operational Services and which of the existing Service levels will be
retained,
Sublect of clarification meeting on 2ist Sepiember, SLAs will be addressed b
comments on the compatibility matrix this questien-is-te-berespendedte-atetaterdate
QK-102 Section 3.2
Table at 3.2 lists a ‘Counter HW Retention’ service what is this?
This refers to the retention of the counter equipment within the Engineering service and
is nota service in its own right Thie- questions Speaiedio-ota-later-dat
QX-103 Section 3.2.1.2
if Post Office choose io introduce new hardware Le. counter printers. how will ihe
corresponding savings on Mobile Engineering Service be calculated?
Fulitsu would take account of the impact of the revised MTBF and cost of spares and
repair that the new equipment would attract to generate an engineering cost which
would be reflected ina revised Branch service charge his-question-ic-t-be-responded
to-et-alater-date
QX-104 Section 3.2.7.2
if Posi Office wish to accept the risk of Hardware degradation, can FS provide a
service cost for this please?
As discussed in previous submissions Fulltsy is best olaced to manage this risk and
therefore would be unabie fo provide the required service quality, especially in the
situation of the retained equipment.this-@: Sp 4o-at-a-inter-daie
QXx-108 Section 3.2.1.2
Can FS please provide their assumptions on how they propose to conduct PAT
testing. Is this going to be carried out during normal working hours, if yes what is the
impact on the counter?
This wil be carried out as in the last programme. this-question-s-te-be-responded-ie-ata
jeterdate /
i
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Questions
QX 106 Section 3.2.7.4
in the event o!
nelwork susta
ie ADSL failures how many Counters will ihe wireless
ction rale be?
large $e
The wireless back up network is designed to m of the current forecast
transaction load. in the event of large scale failure the invecation of the wireless network
will have an impact on the transaction rate: it will not compromise the integrity of any I
transactions. The back up network has b: esigned to alleviate the many smal
network culeges that occur, and not the wlages This-questionisie
bo responded teal aiaterdate
¥ fare large scale ¢
OX-107 Section 3.2.1.7
There is ianited mention of Postal Service
ihe relerence data population, so «
# been costed in to HNG-X?
This sizable chunk of
a8 per the CD? if not, has
reference dala
The effort for the realisation of capabi g
Postal Services has been included in HNG-x.
The actual implemeniation mogel outlined in the CD may be subject to review at design
silage.
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THE POSSIBILITIES ARE EMFINITE
61616 Oo
ponse to Adaitional Querie
Doing Our Bit to Help Make
the Big Things Happen
ows Limited, 2005
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Horizon Service Partnership FU] ITSU
Proposal
Response to Clarification THE POSSIBILITIES ARE ENFENTTE
Questions
TABLE OF CONTENTS
+ Questions Arising from Fujitsu Response to Post Office’s Original Questions ~ 20th
September...
2 Additional Questions Arising from AssumptionLog V3.0...
3 Other General Questions...
4 Supplementary Questions from Post Office (No 2)
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Response to Clarification THE POSSUBLLITLES ARE INFINITE
Questions
4 QUESTIONS ARISING FROM FUJITSU RESPONSE TO POST
OFFICE’S ORIGINAL QUESTIONS ~ 20TH SEPTEMBER
Oot Post Office QX-28
Fujitsu's proposal text and answer to this question is inconsistent or unclear.
Post Office wish to have a definitive statement of what 50% degradation of
MTBF means in practice (does if mean that there will be twice as many calls
generated as ihere are now (Le. 200% of calls), or is # 150% as the text
suggests.
The following is intended to provide a definitive statement of the basis of Fujitsu's offer.
The proposed mechanism for measuring MTBF degradation is the same as that used under the
existing Horizon contract. I.e. where percentage degradation is defined as the % reduction in
the MTBF of a particular type of equiprnent at a point in time compared with an original
baseline.
e.g. For a device with an original MTBF of 1.5 years, the number of failures per annum would
be 0.67. Degradation in MTBF of 50% would reduce the MTBF to 0.75, with the corresponding
number incidents per annum becorning 1,33.
On this basis it can be seen that a 50% degradation in MTBF equates to a 100% increase in
number of faults.
Fujitsu's Service Partnership proposal to Post Office provides for all engineering costs
associated with supporting Post Office's branch equipment, subject to the following caps:
« 20% degradation in MTBF from contract signature to HNG-X migration
* §0% degradation in MTBF from HNG-X migration.
Degradation above these caps will give rise to excess engineering call charges (NB for the
avoidance of doubt, any such charges will be triggered on exceeding the degradation cap for
each individual type of device supported). At this time, Fujitsu does not expect any of Post
Office's branch equipment to exceed these caps before April 2015.
O62 Post Office OX-29
What charges will apply if the split of 79/21 is exceedad?
Additional charges will apply in the event of the distribution of categorised incidents exceeding
those shown in the table below:
incident Category Distribution
At 65%
8hr 14.0%
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CFFICE Response to Clarification
THE POSSISLLITIES ARE CRFEMITE
stions
{ Remote 05% I
Fulitsu has previously shared with Post Office the rationale behind the above distribution limits.
This rationale confirmed that, based on current service experience, the proposed limits on
distribution of incidents will be readily achieved in practice at negligible business impact to Post
Office.
However, in the unlikely event that actual incident categorisation exceeds the distribution limits,
additional charges will apply as set out in the table below.
8hr £22.00
Oo busines: wif be
smove equipment! due ig branch changes mey be
Under HNG-X, Fujitsu do not currently expect OBC charges fo increase over current published
rates. In practice, some of the existing services may become redundant or it may be become
possible for certain tasks fo be performed by Post Office. This may lead to an overall net
reduction in cost of delivering OBC work.
At this time the HNG-X design is not sufficiently developed in the OBC area to provide a
definitive statement on costs or service changes. However, Fujitsu has provided below an
example of how the approach fo OBC may vary against current practice. This information is
provided for guidance only at this time, and may be subject to change,
The potential changes to each of the OBC services as currently defined in the “OBC catalogue”
{Fujitsu Services/Post Office Ltd Operational Business Change ~ Branch Interface Agreement
~ CS/IFS/003) are as set out below.
* OBCOOt1 ~ Planned Closure - no significant change. Ramec already perform the
on-site work.
* OBC002 — Planned Short Notice Closure - no significant change. Romec already
perform the on-site work.
* OBCO03 ~ Unplanned Urgent Closure - Fujitsu Engineers currently perform the
on-site work, However as no transaction data will be held at the counter under
02. November.
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HNG-X, there may be an opportunity to transfer responsibility for performing such
work back to Post Office.
» OBCO004 ~ Counter decrease - Currently Fujitsu perform the on-site work for the
“decrease from 2 counters to 1" service. As this special service will not be
required (as there is no Gateway/Slave differentiation in HNG X), then all counter
decreases will be standard service which Romec currently do. The time on site
should reduce.
* OBCO05 ~ Counter increase - The “increase from 1 counter to 2" service will no
longer be required (see reason as for OBC004), therefore all counter increases
will be standard service. The time on site should reduce. Currently Fujitsu do the
onsite work. The HNG design is not sufficiently developed to determine whether
the on site work aspect can change.
» OBC006 - Opening - The time on site should reduce. Currently Fujitsu perform
the onsite work. The HNG design is not sufficiently developed to determine
whether this aspect can change.
* O©BC007 ~ Reopening - The time on site should reduce. Currently Fujitsu do the
onsite work. The HNG design is not sufficiently developed to determine whether
this aspect can change.
e OBC008 — Simple Refurbishment - No significant change. Romec already do the
on-site hardware work.
» OBCO009 ~ Complex Refurbishment - Where such refurbishments involve counter
increases, then comment as for OBCO005. Where such refurbishments involve
counter decreases, then comment as for OBC004. There should be a reduction in
lead times.
» OBC010 ~ Simple Relocation - Romec already do the on-site hardware work.
There should be a reduction in lead times
e OBCO11 ~ Complex Relacation - Where such relocations involve counter
increases, then comment as for OBCO05. Where such relocations involve counter
decreases, then comment as for OBC004. There should be a reduction in lead
times.
e OBC012 — Exchange of CRT with Flat Screen - Currently undertaken by Fujitsu
engineer. Responsibility could move to Post Office.
2 OBC013 - Ad Hoc Change - this service covers requests not included in the other
services. Probably no change.
« OBCO18 - Conversion on site - Required when it is just a FAD code change. Itis
expected that prior to HNG X this service will no longer be required by Post
Office.
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HE POSSURILETIES SBE TREERETE
* OBCO22 ~ CPU Relocations - No significant change. Romec already do the on-
site work
e OBC023 ~ Exchange of Fixed to Mobile Kit (and vice versa) - Currently Fujitsu do
the onsite work. The HNG design is not sufficiently developed to determine
whether this aspect can change.
From the above it can be seen that there ere a few areas where Post Office could have greater
responsibility for delivering OBC tasks, although it is not immediately obvious that there are any
services which would require no involvement from Fujitsu as work will stil need to be done
with dala centres, comms connections. etc.
in any event, where branch changes were fo be undertaken by Post Office it would still be
necessary to ensure that Fulltsi: is advised prior to and following such activity taking place. Any
damage caused during such Posi Office activities would be Post Office's responsibility and not
Fujitsu's.
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Omice ee
Response to Clarification THE POSSIBILITIES ARE EMFIRITE
Questions
2 ADDITIONAL QUESTIONS ARISING FROM ASSUMPTIONLOG
V3.0
QOT Post Office wish to include in their business case the benefil associated with
improved development productivity under HNG-X, Under HNG this was
expected to be 30%. This appears to be ihe case under HNG-X as pre-pay is
still 30% lower than under Horizon {in fact is even lower than this due to the
effect of new Si raies). FJ io confirm whether they believe 30% improvement is
still achievable.
improved development productivity will be an outcome from the HNG-X development and HNG
sized reductions have been assured in the amendment to pre-paid allowance. However, this
was no longer a primary driver under HNG-X and the design/developmentitest approach has
been revised to deliver HNG-X and not based on delivering large ongoing developmenis.
Fujitsu cannot confirm a 30% improvement, but can confirm that a level of improvement can be
expected.
Q02 Can FJ clarify if the 20% transaction capacity of the wireless back-up network is
an improvement on HNG (thought te be only 10%)?
The quoted figure of 20% is incorrect. The actual capacity for the proposed wireless back-up
network is 10% of transactions (as per the original HNG design}.
O03 Assumptions 3.2.3 & 3.2.4
Can FJ confirm that the slatemenis made are correct, and clarify whether these
are date or event driven changes
Assumption 3.23 is dependant on the contract signature to achieve the date specified.
Assumption 3.24 is dependant on the timing of the new application roll out.
O08 What scaie of incremental cost would arise of the training solution for CTOs was
based on 200 business processes, rather than 100?
Fujitsu has not yet established, within the estimating process, the level of granularity that
enables the cost of the CTO deliverable to be established in isolation from the total solution.
Fujitsu is able to confirm that the provision of 200 processes is linearly associated with the
provision of 100.
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. Horizon Service Partnership FUJITSU
OFFICE . Proposal
OFFIC Response to Clarification THE POSSIBILITIES ARE CREEWITE
Questions
3 OTHER GENERAL QUESTIONS
Oot Why
HNG
& ihe operating charge for HNG-X, higher than that under the original
Fulitsu’s last HNG proposal (June 2005) included provided for the replacernent of mast existing
counter equipment, including the counter printer. The recent Service Partnership proposal does.
not include the replacement of this equipment, and therefore reflects higher engineering
support costs and service desk activity associated with supporting older, and more unreliable
equipment. This accounts for the increase in operational charges under HNG-X, but also the
substantial reduction in capital and roll out charges.
O02 S90 baseline is understood, but can Fujlisu provide @ more precise stafement?
The estimates for S90 were prepared against a baseline position at the 1“ August 2005.
Approved changes since that date have not been factored into the costs and these include CRs
533, 491V3, 560, 547 and 572. These will be progressed during the design stage and, subject
to generating a cost neutral position, will be included in the release at no cosi to Post Office.
‘The operational services to be provided by Fujitsu will include the ability, for Post Office, to test
Reference Data prior fo release into the live environment.
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Response to Clarification
Questions
THE POSSIBILITIES ARE INFINITE
4 SUPPLEMENTARY QUESTIONS FROM POST OFFICE (NO 2)
The following provides answers to the supplementary questions formally submitted by Post Office on XX
September 2005. These questions are repeated below and follow Post Office’s own numbering
convention.
QX-168 How does the proposed application level security mode! work? In particular:
a. How does it inferact with services that might be supplied by InterStage?
b, How does it manage the transmission security supplied by VPNs?
c, Whai standards will it comply with?
o. How will this work at the Data Centres?
Are there any CESG-approved application level security packages?
This level of detail will be provided at the “design assurance” stage of the lifecycle following the
completion of detailed design activities. It is not Fujitsu’s current intent to utilise any packages
in the provision of this solution.
QX-108 Post Office security are concerned ihat ihe retention of 486-architecture counter
terminals will not allow XP to be run. With the proposal of the removal of Branch firewall
Structure in the HNG proposal, ¢ was originally proposed to rely on the individual XP
firewalls on Counter terminals to protect them. The proposed terminal retention strategy
would put Branch equipment protection al risk. How do Fujitsu Services pian to address
this risk?
The current counter architecture is not 486 based ~ the processors are 400MHz Pentium Hl.
The chosen O/S solution for the branches will include a firewall solution and this Is included
within the estimated pricing.
OX-110 Post Office need Fujitsu Services to supply details of the function of the end to
end security model al ali levels. In particular:
() How do Fujitsu Services pian to provide equivalent transmission security to the HNG
model of IPSec VPNs?
(i) How does the proposed model fil the Royai Mail Group design criteria of a centralised
data model with deperimeterised, on-demand security?
fi) How will the proposed model comply wilh (8017789?
(i) How will data be protected af Daia Centres? Whai is ihe proposed securily
infrastructure architecture (firewail/DMZ, network topology eic.)? What level of security
will 8 provide?
{v) How will the proposed model support peripheral third-party developed Web-based
solutions?
(i) The security model proposed supports the concept of information integrity (but not
necessarily confidentiality) in line with best practice in the retail and financial
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Response to Clarification THE POSSIBILITIES ARE THFINITE
Questions
services sectors, Security features in line with current Horizon practice could be
provided at additional cost. Note that is has been proposed to exclude an IPSec
VPN from the branch network as no such facilities are in place on Post Office’s
own ATM network. As the risk and consequences of a confidentiaily breach on
the ATM network is similar to that under HNG-X and Post Office must have
undertaken a risk assessment on the ATM network if has been assumed by
Fujitsu that this is therefore acceptable for HNG-X.
3) Please clarify your concerns with respect fo the RMG design criteria. Fujitsu
believes that the solution offered provides a model that presents appropriate
“parameterisation’ at bath the branch and data centre level.
Gi) Fujitsu believes that the solution offered is fully compliant with ISO 17799 and
does not understand the nature of the query.
(iv) Fujitsu belleves that the architecture notes provide to Clive Read & John Wheeler
on the 23rd September addresses this enquiry.
wy) The current propased model does not support peripheral third-party developed
web-based solutions as this is a Release 2+ requirement that is nof addressed
within the cost reduction constraints of HNG-X.
OX-144 Reduction of disk levei e
fo be nugr
Fujitsu does not understand the nature of the question with respect to data encryption within
the branches and would seek to discuss this further with Post Office.
Disk encryption within the Horizon data centre is used fo ensure that sensitive material is not
compromised in the event of a hardware replacement (e.g. hard disk replacement by an
engineer}. Any sensitive material on disks within servers that is currently encrypted in Horizon
will continue to be encrypted in HNG-X. Any sensitive material within the EMC arrays will
continue to be held in clear and existing procedures to ensure that any disks are securely
cleansed if they are replaced will continue.
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OFFICE sean
Response to Clarification TRE POSS{STLITIES ARE TNFIMITE
Questions
é of Fujitsu, ihe proposed solution is fully compliant with
fegal and commercial requirements that Post Office must currently mee.” This refers to a
relail based system, bul is nol an acceptable siaterneni as # does not give Post Office
contidence that FS are aware of all the siandards they must compiy with. Which
requirements are Fujitsu ning to comply with? How dees FS pian to be compliant
with them? All such com requiremenis must be discussed with Post Office/RMG
from the outset of development (see Comment 1).
OX-142 “To the best knowl
Fujitsu, in its recent proposal, referred to a security model that supported best practices within
both the retail and financial services markets as opposed to a security model taken from the
retail sector.
@ Fujitsu wishes to understand which standards Post Office needs the solution to
comply with. In particular, are there any requirements not already set out in either
the current Horizon contract or the HNG CD that need to be complied with.
i Fujitsu has provided Post Office with detailed architectural notes that describe the
security model in more detail. Fujitsu would be pleased to discuss these further
with Post Office as required.
Fujitsu is in the process of updating the compliance matrix for HNG so that Post Office can
assess the baseline movement to HNG-X. It is anticipated that the update of this matrix will
address a number of outstanding queries within Post Office.
ased security model refered to in Gus paragraph prog
noial trading standards PCI? IF so.
OX-143 Does the retail
support, and i
Please see responses to question QX-112.
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GRO }
Smith Colin
, Baldwin Dave.
ce. mike. pannort_. nes
<Colin.Lenton-Smittt
<Dave Baldwint,
keith. K.bained™
Subject: Re: Fuji s
John,
fn respor
provid
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to Mike’s question below,
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Mike Hi 2 need further c fion
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onal Questic
th
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John Wheeler
22/09/2005 10:10
Subject:
Ai, I have attempted to capture the main discussion points and actions arising fram Tuesday's
meeting. Please gel back to me if you have any queries or I have misinterpreted anything.
Many thanks
John Wheeler
Horizon NG Programme Support
Mobi 7
Desk number 4
GRO. }
1. Rejection of Thin Client solution
Fujitsu chose not to proceed with a thin client architecture based on an assessment that the currently
limited network ca; y and the extended lifespan of existing kit outweighed advantages of lower
servicing costs, This was calculated al broad level, but the case appears to be cle:
POL will need to be able to justify this assessment internally and externally, and need to understand in
more detail what factors were considered and what assumptions were made. - Action FS to provide
{high priority).
Side question : One justification for retaining loce! processing is to fit with the current view on typical
retail models - however are these modeis now beginning to move on?
2. COTS solution versus bespoke
Fujitsu assessed the fevel of compliance of leading COTS solutions, but none has more than circa
50% fit, of which the “out-of-the-box” to "configurable" split is approx 20% to 30%. Once licence costs
and costs of speciaiis taken into account, this approach quickly becomes a
normrunner. Fujitsu also considered building on POL's existing use of SAP, but again ruled this out
because of lack of fit and cost of customisation.
Again, POL need to understand the assumptions and high level calculations used by Fujitsu in coming
to these conclusions. - Action FS to provide (mediurn priority}
3 Complexity of architecture
Horizon’s current architecture is complicated by the Ripeste product and in particular the
Correspondence Server. The proposed architecture appears to replicate much of the current
complexity, with @ number of layers / agents between the counter and back-end application. What
options were considered for sirnplifying this, end why were they relected? - Action FS to provide
{medium priority) - but see aiso item 5 below.
4 Use of Giobalstore concepts, and footprint of interstage
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are using a number of concepis from the Globaistore product set, but nol the actual proc
Gor example the approach to the use of XML adaptors comes from Giobaisto The proposed fe
interstage fs broadly the same as previously, and Fuiltsu are currently assessing the most appropriate
toviseis and use of these toolsets. POL noted that we need to understand the thinking here here
will need fo be a feedback foop from FS tooling back to POL requ ent products. This will be
progressed as part of discussions on “ways of working’
§ HNG-X Architecture document Qvorking docurnent}
Fujitsu will provide POL a copy of the internal (non-formal) architectural design documen: This
will help enormous understanding what is proposed (and will underpin Hems 3 and 4 above). -
Action FS to provide (highest priority) - by end of week:-23rd Sep.
6. Other items
6.4 Dave Johns confirmed that the XP r f wil iplemented remotely.
6.2 was confirmed the 2 hr reco: ent (as well as banking)
6.3 Dave Johns is working on updating ¢
This will be Invaluable in understands
Sep. (See also 7.2 below}
Steve Page has a list of questions o:
d by 6. 3 above, bul Steve will sen
x against HNG CD Version 2.
liver, Action FS - target 28
what functional
list for compl
is being provided. This will probably
ness, Action POL.
7 Next
TA position to prioritise further
architectur oil meeting early next week, bul in
the interi 8 as required.
ani to discuss "prodlem areas" in rore
ng will be di
vanaing of issues before progressing/priori
but will wait unt
items
73 Any further meetings will be set up through John Wr
sing individual
eler and Bil Reynolds,
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‘Security Management £ Total cost 068 (0.88 0.46 0.45, 0.43, 0.42 0.80
arab tet oss Oss 035 038 033 oe
Process ime! HeadSouy “leon amon moe age fri
fred cost ozo” “ono ozo cz ozo” “ozo” “azo
Overtoad aiocaion «34 Bate sa Lr re
Mra on ot nim san feos tee aoo% =o moO
Morin on veable Bin ose ton te oom hom oom
erg on fac Bim sae ion isos = anon doe oom
TOTAL OPERATIONAL (otal cost 45.51 4561 26.34 26.04 24.96 267 24.33
SSYQFEMS INTEGRATION
1 Develooment ——_Intatastucture
ppteaton ce 1mm sat 00 o.00 00 000 cco oan
‘Fim
eb wee wth
Cncoing $1 Suppod Th Teta Cost tos 18301789 ser se sar saga.
YVarabie cost ooo 000 B08 00 800 deo = Gado
Tat Suppor envionne: 1905 1830-17896 a7 a7 sss eT rT
rr cet tos ago re) oar Ser sa Sa S33 Sar
Overheas atocaton se BoM BO 73% re tex ery ane are
Margi on oll Bes me ome 0% BHO HOM a
IMPLEMENTATION
Inpletenaon charge Toll Cost ooo ogo 00 00 o.00 eco = 00000
Vanabl ost doo ono 800 oo ooo 00 bt TS
Hosa count cost cco 000-0000 200 000 00 oo = 000m
Feed cont doo oak) coo 00 ooo coo fan
Overhess aecaton «Saha BBM TIP fem bah ah toa
Mrgnon ol doe Gos © 2h0% =o, toe = oom kame
Magi on vaable oom oe meow tomcat, ny ary aT
Margi on foe Go ous pea =o doe = ome hah
Coptaleosts ——_Totacost am maz aes o38 ozo 070 oer oss
enon costs in Re fu oa 038 O70 O70 te Oss
omer fouls 3501S 34s user gar. «oat saa. sas 38248
Fred cos a a 000 0.00 00 00 000
Over head atocation
Morgh on tot 50% 50% 50K 80% som 50% Pt rT re
Morgan vad Som bom Bom box eon foe Bonk
Marg on fed Soe Son bom Son eon Sox Sok Sk
Total Ovetoad alocston 2413388888 2st ze ams 2278288,
Overhead sloceton es iss ts ies tes ite te igs 8s
isk tse gosta ose $00 iM hook otk
FUJITSU SERVICES - CONFIDENTIAL,
COST MODEL
OPERATIONAL SERVICES
Help Desk Service Total cost
Vatable costs
NOTES Cals pa
Response SLA
Coll aistibulion
Fixed
Overhead alccation
Margin on tote:
Maxgin on variate
Margin on thed
pects
Enginoer Service (UK Total cost
Variable cost
Number of counters
A
NOTES
NOTES
% call requiing spare
NOTES Pred cos!
Over head allocation
Margin on total
Margin on variable
Margin on fixed
pace
OBC - Branch Charge Toto cost
Veriable
Calls per year
Response SLA
Process tee
Ped cost
Over head allocation
Margin on totet
Margin on voriabie
Margin on thea
prong
Data Centre Operatt Totel cost
Variable cost
No of transactions
Avail
Network Senice
Number of sites
No Avaiebiity
ADSL coverage
Bondwictn G/oytes per
NOTES Fred cost
yer head alocotion
Margin on total
Systems Manegomie!
Variable cost
Events received por m
Response SLA
Fours ofcover
Fixed cost
Over head alloca
Maigin on total
Maigin on variable
Margin on ted
preng
uct Support Serv ToFal cost
Variable cost
Fixed cost
Margin on total
Margin on variable
Margin on fhed
prc
Reference Data Mar Total cost
Votiable cost
Quantity of change
Response SLA
08 vow Yoo v0
2a 193178 1.29
232183 ; 119
176310 181475 181,688, 127,884
Process ime/ Headcount
Fred cost
Over head allocation
Margin on tote!
ecg
Thitd Line Software 8 Totat cost
Voroible cost
Open Calls per month,
ch
Fxed cost
Over head allocation
Margin on total
0.10 0.10
55% 15%
31.0% 6%
37.0% 28.6%
37.0% 288%
278 130
0.00 008
78 8.26
932 788
34,668 34,261
: ial : 178 18a
85.6% 85% © —BT.O% 87.0% 87.0%
223 0a2 0A 042 oz
3.0% 5.6% = 8.8% 13% 75%
10.0% 12.0% 15.0% 15.0% 15.0%
10.0% 12 15.0% 18.0% 18.0%
100% 120% «= 15.0% «= 18.0% 18.0%
000 990 G00 000 0.00
03904088 oat ont
0.00 9008.00 0.00 9.00
on
90.0%
30.0%
30.0%
218
0.00
485
232
‘regoremsria reguronene regurame's rurale roqureman
, 267 232
13%
30.0%
30.0%
; 30.0%
oat we ae
s2s7 11.98 678
86989358 485
1453414368 14,149 13,918
90.64% 99.66% 98.77% 89.80%.
5.58% 96.80% 97.39% 97.58%
19312 13,312 6,556 6,556
3 Boo 3.48 232
34% 55% BT 78%
Bt% 11% 110% 11.0%
331% 100% =O 11.0%
140% 180% 14.0%
maar 1098 z
3458.55 253
299 © 3.03 2.00
49.250 48,250 31,000
052 52 082
55% 5B 73%
35.0% 25.0% 35.0%
35.0% 25.0% 35.0%
35.0% 25.0% 35.0%
a7 sae
3.20 278
9.00 8.00
232 249
0.82 ont
2.93 3.20
3.4% 58%
4.2% 10.0%
18.28% 10.0%
142% r
Le
054 o49
9.00 0.00
oss ose 049 oat
3.8% 5.5% 73% 15%
20.0% 28.0% © 198.0% = B.1% 98.6%
sr 07 07 ov 099
177480 1.49 1.95 1.08
140426 tt 0.96 oes
600 600 600 350 350
pense mcnss eas ar aasneis
osr 037,87 037
34% 5% BN 73%
BM 3% 2.0% 18.0%
POL00090439
POL00090439
ven v2 yas via ys
1.19 144 1.08 1.08 1.02
1.09 i ose 092
131200 184,408 137,738 141,119 144,172
rsinstees ain dteae “SON nSOe8e In Ouro In tee
uvetiordby een oy peek canestondsy cent tandey cunt ondey cnet sondsy
pe oe oe se a
0.10 0.10 0.10 0.10 0.10
26% aa% 938% 102% 9.8%
33.8% 35.8 39.2% 399% 41.6%
38.6% ¥ r
93.8% ‘
wr
09
Bat
34,052
1.98
36.9%
oz
85%
15.0%
18.0%
18.0%
0.00
00
0.00
229
Mivercanens” —Pycrourcer”” persunen”* “peccunen * "poccsment
26
0.38 036 0.36 0.38
038 0.36 0.38 0.36
8.8% 8.8% 10.2% 9.8%
10.0% 10.0% 10.0% 10.0%
10.0% 10.0% 10.0% 10.0%
10.0% 10.0% 10.0% 10.0%
a 04 240
033 ose ost ¥
9.00 0.00 0.00 2.00
34 983 02 ot 029
6% 9.4% 98% 10.2% 9.8%
46.0% 6.2% 46.8% 470% = «47.8%
oa 08 080 050 08
4.02 1.00 0.98 0.90 os2
86 6s 087 054 045
350 350 350 350 350
ais eres Mera ansehen
i 108 108 kes nes
037 oar 0.37 oar 937
8.6% 94% 3.3% 10.2% 9.8%
10.0% 40.0% 10.0% 15.0% 10.0%
POL00090439
POL00090439
Momagement inform Tota! cost 0.38 0.48 048 028 0.28 oz 0.27 026 018 0.18
Vatabi os tm, oan, omg, ban tan Sag ong an
. ee
wed con Se
Sverscxotoccion Sa fae Sakae ae Bak Sa Sk Ht sie
ognonios fem teak tok ok ok aw
senico Vanogsmen oatcos ta gs" 68 tus 408 to a2” ons
arab ow ie as oe bas Hr
er rr
Comply of cutomestammnem tereme terme Sgram® Sema" SSS geen" ies Geer
Iannone Sa Sas See ee II I ee me eee
resto oa “oe outa “ou “oe” “oes” “lt
Sicrncaactocaion Sim Sine a ee ee nT
tagoriota "em dam nm hot Rok ae ok tame se
peconcaton Sanat com 022 oat oa om ast 9 ag ose ose”
Wabi ont 0380 a eC
sree om oat at ox ast mateo
a a ne ar cd
Stagmeniota "fog dam on ee ee nT
Ps we ce a a a
Security Managemer Total cost 0.89 0.90 047 046 O43 az oo
Pe cot oe ae oe Oa a
cme joss wae Rass See Ree
Process ie Hoax Teor San Seam‘ Ser See Soe
ssoasos om “ot om" ate oe” “om “a0
yet head alocaon Sm Se tm ae teak ae
fart See Sas foe: took no I ox dow
argh on valcie oe Soe ‘ome tba mo moe mon
fron on be se to ioe ean im ioe
TOTAL OPERATIONAL total cost 4851 4293 27.03 24.96 24.67 24.33
SYSTEMS INTEGRATION
ee
naan 9 sure nist Cost tos terms sor smu say saat
Verobie cos van Gan Ua Bo rr a CC
Toll supoctenvtorr a ee rT sa a7
wi cos im ies Ske Ray a it
Svar nea tocaton Se See tm Tie bm ae
wargnon to me 8 fakes Bene
bemenranon
Inlet chet Cot 009 092097
Vat oe a a
lcocouitccs! 0928p om aa oo oman
posses oa oan om oo om Ba Bao
Srerhetaiccaton Sa oe fase ost toa ae
Moraon ta oon 20k don oe do: aes
Magnenvarcve Ome em oon ts a
Hargh one Sox bie oe oo: Bae do ae ee
Coniaeoss ——Tetoot om me at momo ameter
Sable costs Ete a
s5bts 460 str ohare oezes okey agts SRM atts seat
00 a
50% a ee ee ee
ioe or rs So Be Sok Ee
tog ones son oe Soke Soe fox Soe Sow
Tete ovemmodolocot 24 aa8 sma amt am am ae
Gremeadeioosten as tas Yess tas ie ie iS
ra dso tm tae ie te te
POL00090439
POL00090439
2011/2012 Business change scenarios for operational cost
‘Title HNG "K" rural - 6000 branches 60% business 1 branch {counter Scenario 20 Sept Ric Francis Ric Francis Ric Francis
and resulting 08 Scenario 1 Scenario 2 Scenario 3
transaction volumes.
Input Service Key variables
8 Change in aunty 13,687 -6,000 -6,000 -13,686 -7,000 -4,000 -7,000 -7,000
Shange in number ot 33,843 -7,000 -7,000 -33,842 -12,000 ~4,000 -8,790 “8.790
Change in % of transactions 0% 0% ~50% -99.99704518% — -50.00% 0% 0% 50%
Change :f number of services 23 8 “1 9 Q 0 o 9
Volumes used Granch number of site 13,687 7,687 7.887 4 6,687 9,687 6,687 6,687
number of counters: 33,843 26.843 26,843 4 21,843 29,843 28,053 25,053,
lav counters per site} 247 3 3 1 3 3 4 4
Central % of transactions 0.00% 8.00% 50.00% ~106.00% 58.00% 9.00% 0.00% 50.00%
aumber of services 23 23 12 23 23 23 23 23
Results Branch £ 4.607) zg £ 337 € 2,250,849 £ 2,250,949 2 2,260,949
Branch # 13,834,825 £ £ 409 £ B929,165 £ 18,244,375 £10,241,375
Fixed £ 1,801,706 © £ 1801798 € 1801,796 © 1801798 £ 1.801,706 £ 1,805,798 f 1,801,706
Central 3,017,052 £ 2.011388 € 1,005,744 £ AON e F 3.017.052 £ 2,011,368
g 4,404 £ § 3 £ 1,104,677 4,104,877 1,104,877 £ 1,104,677
£ 4,283,117 € z AZB3 117 f 4.28817 £ AZB3IN7 FZ AQWBAIF £ 4,283,117
Smic Fixed: £ 3,545,002 £ £ 3,546,092 © 3,545,092 & 3.846.092 £ 3,845,092 £ 3,545,092 £ 3,5: 92
Total £32,193,616 27,312,404 £ 25,778,306 £ VU7S1,978 £ 23,926,162 £ 29,212,000 £ 26,244,087 £26,238,373
Total Branch £20,243,679 € 18,362,467 £ 15,362,467 £ 1,802,842 £ 12,981,908 £ 17,262,063 £ 14,294,120 £ 14,294,120
Total Central & $404,845 £ BAGG, 845 f 6,870,838 © 6,393,537 £ 7,309,161 £ 8,404,845 £ 8,404,845 £ 7,399,161
Total SMIC £ 3,845,092 £ £ 3,545,092 £ 3,545,092 © 3,545,092 £ 3845,082 © 3,545,092 € 3,545,092
% of total saved 20% 84% 28% 8% 18% 22%
VPA 170 £ 8.267 454 2981816 & 5,949,558 £ 6,865,243
£ 706 £ £ 1,801,786 £ 1801,7968 £ 1,801,796 © 4,801 £ 1,801,796
LGAs BIS L £ 748 £ 14,180,113 & 15.ABO,2 £ 12,492,324 € 12,492,924
CENTRAL VARIABLE RK 4,121,729 F g 2,110,420 £ 9,118,045 2 4,121,729 £ As21,7e9 L 116.045
CENTRAL FIXED £ A217 £ g S 4,283,117 © $283,117 £ 4,283,117 & 4.283117 © 4,283,117
SMC £ 092 £ zg 546,092 & 3,545,002 £ 3,646,092 £ $,545,092 © 3,546,082 £2 3,545,092
£35,000,000
£30,000.060
£26,000,000
£20,000,000
£16,000,000
Operational Service price
PD
16,000.060
£5,000,000
£0
Fixed Variable Price Scenarios - 2011/12
POL00090439
POL00090439
HNG "X"
rural - 6000 80% business 1 branch 1 counter Scenario 20 Sept
branches and resulting 05
transaction
volumes.
Scenario
BTotal WTotal Branch CTotal Central OTotal SMIC I
Ric Francis
Seenario 1
Ric Francis
Scenario 2
Services SMIC rural marginal costing xis
Tite
Marginal cost {price}
Branon
number of sites
vs of trangar
sumer ¢
Branch Variable Sites
Branch Variable counters
Fixed
Central Variable Tranactions
Variable Service
ixed
Smic Fixed
Total
Total Branch
Total Central
Tatal SMIC
of fotal saved
BRANCH FIXED
BRANCH VARIABLE
CENTRAL VARIABLE
CE
SMIC
RPI
VAT
AL. FIXED
15.29%
a5/06
5,000
5,000
1.00%
04,989,341
-£3,049,586
£36,075
as
-£ 8,068,800
“88,032,728
£36,078
£
© .
o£ 8,032,728
£36,078
a
403.50%
TOTAL MARGINAL COST (INCLUDING VAT AND AP!) -¢ 9,822,683
607
“£:9,256,244
-£ 2,850,659
no
FS
”
8. 5,847,457
-£ 8,806,903
“2 40.454
£ .
g .
-£ 6,806,903
Rh 40,454
YO5.57%
8 7112,902
O78
“€.2,729,915
2 2,530,382
2 42,253
°
£ 8,206,550
25,256,307
@ 42,283
£ .
© .
25,284,307
“8 42,253
£ .
£
107,88%
26,871,784
98/08
£2131
-£1,995,092
£25,489
$4,201,926
4,176,463
2 2,483
Fa .
Fa .
“4,176,483
2 26,463
£
£
109.84%
£5,317,849
oad
8,000
5,000
4.00%
°
£1,914,096
21,976,274
8
“£9,911,024
£.3,890,370
£20,054
© .
s .
29,880,370
£20,654
£ .
£ .
112.03%
“£2 5,048,685
t0Tt
"5,000
5,000
4.00%
21,782,827
22,081,315
£26,842
“83,794,184
83,773,842
£20,842
© .
© .
ES,773,042
“£20,942
© .
£
414. 27%
-£ 4,895,815
4g
6,000
“6,000
“1.00%
1,683,078
-£ 2,043,942
£ 2b,tt4
cy
£3,797, 134
-£3,727,020
£20,114
£ .
“8,727,020,
2 2044
mort
16.96%
£5,092,540
1213
-5,000
5,600
1.00%
1,625,827
-£ 2,039,937
£19,069
£
ee
-€ 9,681,034
2 2,662,884
3,662,864
£19,089
-£ 8,043,074
POL00090439
POL00090439
aaa
$,000
6,000
“1.00%
-£4,848,802
“£ 2,048,404
“f 19,045
“£9,616,341
“29,587,296
£19,085
£ .
3,597,296
49,085
ob os
12.27%
“£ 5,059,099
5,000
5,000
4.00%
-£ 1,985,001
-£.2,072.573
£18,922
© .
£9,576,497
“£3,557,575,
£18,992
© .
“83,557,575
£ $9,922
mat
423.69%
“© 5,097,974