Minutes of the meeting of the Board of ICL Pathway Limited
Company Secret
Held at 08.30 a.m. on Wednesday 23"! February 2000
At 26 Finsbury Square, London, EC2A 1SL
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Present:
In attendance:
Sir Michael Butler (Chairman)
Mr T K Todd
Mr J H Bennett
Mr R Christou
Mr T Escudier
Mr H Kurokawa
Mr A E Oppenheim
Mr M Stares
Mr RF Scott (Secretary)
Mr H Imanishi
Action by:
Secretary
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The Board
This was Sir Michael’s last meeting of the Board after five
years as Chairman. Mr Todd paid tribute to his skills and
support for ICL, the project and to him personally over
a difficult time, now over.
Mr Todd went on to say that Mr Christou would become
Chairman of the Board from the next meeting and the
Board formally agreed this. The Board noted
Sir Michael’s resignation.
Minutes of previous meeting
The Minutes of the meetings held on 15‘ September 1999
and 24" November 1999 (after one deletion) were
approved as a correct record and signed by the
Chairman.
Managing Director’s Report
Mike Stares delivered his first report to the Board,
updating his written report and there was discussion.
Points noted:
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is
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Mr Stares
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a)
b)
c)
d)
e)
ii)
Company Secret
He was pleased to be able to report good progress
against the business plan. Rollout of the Horizon
system into Post Offices had reached 300 post offices
in a single week. The 3,000 milestone should be
reached this week, 4,000 in March and 5,000 in April.
This remains a major challenge although there are
currently no major issues threatening this progress.
Post Office masters/sub post masters were adapting
well and Post Office Management attitudes were
improving.
The Pathway team was working with the ICL team for
PFI contracts on how to best use Pathway’s rollout
experience.
The CSR+ delivery plan was still achievable. Interim
release CI3 was in testing and issues over C14 (CSR+)
were sufficiently far into the future that they could
still be managed.
Customer Service was becoming more focussed as the
rollout progressed. Mr Stares referred to the statistics
collected to monitor progress and the next meeting
would have an explanation of these. A core set was
being placed on the project website and would
be attached to future Board reports. Helpdesk
performance had improved.
Several developments were covered in regard to new
business opportunities with the Post Office beyond
the existing Horizon project.
Mr Stares and team had met Mr D Miller and team to
improve relationships and to learn of and contribute
what we could, to the Post Offices’ future plans.
The Post Office have a project called ERA to attack
the overall network cost base. The objective is to take
out 20% of costs by changing their approach to
business. Until the meeting, the emphasis had been
on back end systems and Horizon/Pathway had not
been part of the scope for change. We have now been
brought into the project and the scope expanded.
Post Office Networks Unit (Dave Miller’s unit) see an
opportunity to use Horizon to encourage “up-selling”
by prompting clerks to offer related products (normal
practice in retail chains). We have agreed to some
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early joint work.
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Mr Stares
Mr Stares
Mr Stares
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iii) Develop the service offerings to their clients.
8)
A re-engineering plan will be shared with us early
next month.
The Post Office was attacking its network cost base
aiming at a 20% reduction (not through Horizon).
They wished to sell more over the Post Office
counters using Horizon. and were re-engineering
their whole approach to business. On these three
areas current indications are that there would now
be more co-operation and involvement of Pathway
although there is still a lot of bridge building to be
achieved.
The Post Office continued to work on its aspirations
for network banking and it seemed that the idea of a
“Social Bank” was re-emerging in Government,
perhaps as a result of the realisation that the private
sector banks would not wish to handle all the benefit
related work.
Basil Larkin (ex. Abbey National) is Managing
Director of Post Office Network Banking Unit and
Mr Stares would be meeting him next week..
Pathway was attempting to drive the issue forward in
such a way that Horizon is the delivery vehicle for the
Post Offices’ banking aspirations. Mr Todd said that
we must avoid giving the impression of “smugness” as
these banking developments came to resemble what
ICL Pathway had anticipated. Post office lack of
funds was however, likely to restrict the way forward.
Mr Todd and Mr Christou will discuss a meeting with
John Roberts of the Post Office. Also Mr Stares will
conduct a “charm offensive” with other Post Office
executives to improve relationships. Mr Todd said
ICL Pathway should not give up its comparative
advantage in ensuring that network banking was
delivered through Horizon. A total “end to end”
sales campaign will be needed. Also Mr Stares
and Mr Escudier will discuss the possibilities and
relationships. Mr Christou informed the Board that
ICL Pathway were currently trying to get Horizon
positioned as an integral part of any Post Office
solution regardless of the chosen supplier of other
parts of the solution.
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Mr Oppenheim
Mr Stares
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Finance Director's Report
Mr Oppenheim amplified his written report and there
was discussion. Points noted:
a)
b)
c)
d)
e)
He felt the focus of ICL Pathway was now definitely
moving towards future possibilities, as the project
continued to go well with acceptance behind us.
The business was looking stronger and although the
profits expected over the life of the contract were still
not as good a return as we needed, the a degree of
risk and of unallocated task were reducing
significantly. However risks could increase in the
near future as the demands on the system increased
significantly with the rollout.
Mr Oppenheim was confident that a good settlement
would shortly be reached with De La Rue.
Mr Todd had met PricewaterhouseCoopers, ICL and
ICL Pathway’s auditors. At present they still felt we
were taking into the accounts, too much revenue in
the early phases of the contract. (Mr Oppenheim
would be explaining the treatment of revenue to
PWC.) However PWC were comfortable over the
profit percentage taken.
On PC provision, the intention is to build out the full
programme using the existing 365PC: the issues are
determining the numbers required, and securing a
fair price. Mr Oppenheim outlined an approach to
eliminate the volume risk or need for contingency
stock by “trading” POCLs PC entitlement for a credit
note to be used for services. It was agreed that only
those components requiring a last time buy should be
provisioned now: we should not yet pay for these to
be assembled. We will also negotiate strongly with
Fujitsu-Siemens on PC prices.
Mr Todd also requested that we establish the future
technical strategy for PC upgrades. The project
should still be operating in fifteen years and we
needed to future-proof the on-going operation.
The trading of surplus requirements for credit notes
to use for services would be a means of allowing
POCL to go forward with new developments despite
the financial stringency at present. The approach was
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endorsed by the Board.
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Mr Stares
Mr Oppenheim
Mr Stares
Mr Stares
Mr Stares
Mr Stares
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Mr Todd also asked Mr Stares and Mr Oppenheim to
ensure that ICL Pathway was paid for all the
development work done for the Post Office.
Also that Mr Oppenheim should prepare a summary
of the risks, on the project, for the Board.
f) Mr Oppenheim was progressing use of timesheets in
ICL Pathway, linked to ICL’s propel initiative
including Oracle. We were likely to be one of the
first ICL businesses with this in place.
g) Mr Stares to prepare a report for Mr Todd on
difficulties ICL Pathway is having in finding staff via
A&TC with the right skills.
h) ICL Pathway will follow a tactical course of releasing
the Post Office from payment obligations on work not
required in order that the Post Office could use this
cash on future developments with ICL Pathway.
This would be a means of allowing them to go
forward with new developments despite the financial
stringency at present. Mr Christou added that we
were on a “knife edge” in relations with the Post
Office as a customer (having previously been worse)
and that the next six months will determine the
future course of business with them.
i) It was likely that eventually the Government will
recognise and praise the ICL Pathway contribution
through Horizon, but probably not until the whole
network was in place.
Quality of the System
Mr Kurokawa raised the possibility of logging issues
arising in the system against numbers of Post Offices
“rolled out” in order to track software problems and
“pinnacles” (of software bugs). This will be investigated,
along with further statistics on numbers of calls/help
desk activity.
Mr Todd said each Camelot CEO’s report included a page
of important metrics and Mr Stares will consider this.
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National Audit Office Report
Mr Bennett said this was circulating round Whitehall for
comment and he will seek ICL’s copies. It is still likely
the public accounts committee will discuss the NAO
Report. The Chairman felt the perception of ICL in
the Government’s various investigation _ processes,
had improved with the DTI report and should improve
further when the Public Accounts Committee examined
the issue.
Mr Bennett added that it appeared that CITU and the
Cabinet Office still had negative perception of the Post
Office and the Post Office should be advised to improve
their image with them in a “modern” way.
Date of Next Meeting
23 February
og May
(July replacement meeting under discussion)
29 November
(After the meeting finished there was a presentation to
Sir Michael of a small gift by Mr Naruto and Mr Todd.
Sir Michael remarked that a good team had been formed
at Pathway and which had, through great effort brought
the project to the favourable position it was now in.)
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