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FUJITSU SERVICES MANAGEMENT COMMITTEE
AUGUST 2005
MAJOR ACCOUNTS REPORT
NHS Programme Update
On June 25" a Memorandum of Understanding was signed with the NHS Connecting
for Health (CfH) and Cerner Corporation. This is a step in a formal process that will,
subject to contract, see Cerner as the software supplier for the NHS Care Records
Service in the Southern Cluster. The Programme Change Control Note (CCN) with CfH
will be signed by the end of August. A sub contract agreement with Cerner will also be
signed in the same timeframes.
In the months leading to the decision to change software suppliers an extensive
functional assessment of the Cerner solution was undertaken by the NHS Southern
Cluster Clinical Advisory group and the Fujitsu Clinical Domain group. A similar
technical assessment was also undertaken.
In an effort to meet the Trusts need to evaluate the Cerner solutions a series of
demonstrations were held during June and July. The positive and enthusiastic response
to these demonstrations by the Trusts can be seen as a strong endorsement of the
decision to change software suppliers.
A Detailed Implementation Plan (DIP) has been developed and approved by CfH for the
deployment of the Cerner solution throughout the Southern Cluster. The plan calls for
the deployment of 16 Trusts within this fiscal year, six of which will “go live” within this
fiscal year.
The first Picture Archive and Communication System (PACS) solution within the
Southern Cluster was implemented in May. In another milestone the first PACS
implementation complete with the Radiology Information System (RIS) went into
production in July. Orders for an additional 9 PACS systems have been received
including one from outside the Southern Cluster. A further 10 Trusts have been
engaged in discussions to proceed with the deployment of PACS.
Fujitsu has been asked to quote for the supply of PACS to the North East and Eastern
clusters in place of Accenture. A decision on the Eastern Cluster is expected during
August.
A concerted effort is underway to take the knowledge and experience gained in the
Care Records Service into new markets that are beyond the scope of the existing
Programme. Included in these initiatives are current bids for the Scotland NHS IT
Infrastructure Service as well as a NHS Help Desk.
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MoD DII(F)
Since the signing of the DII/F sub-contract by Fujitsu and EDS we have gone through a
3 month start up programme. All the milestones have been achieved during this
planning phase i.e. the Phase 1 move into Reading 24 (now known as Atlas House) has
been completed. The successful demonstration of the DII/F concept at CWID (Coalition
Warrior Interoperability Demonstration) in June was agreed with MOD as being a
complete success.
We now look forward over the summer months to be in a position to stand up the single
point of contact (SPOC) for MOD which will start to take on all the calls associated with
the DCSA contracts over the following 2 years. These achievements will be known as
SPOC 0. Two locations have been identified and are currently being configured to start
this service in October, one in Bracknell to be run by Fujitsu and the other one in
Tyneside at Colbalt 16, run by EDS. This will be the first milestone that proves to MOD
that we have the capabilities and techniques to take on their future services.
The Design and Integration teams are focused and are now located at Reading 24, as
mentioned above and producing our first DII/F releases. This is planned to go live on
the first site in January 2006. If the final 2 milestones mentioned above are achieved on
time we will have achieved all our deliverables in the first year of the contract.
Post Office
Financials
Q1 revenue and profit were £24.7M and £3.7M against budget of £25.9M and £4.0.
The shortfall was due to not achieving the expected HNG revenues. Given the delay in
HNG (see below), appropriate steps have been taken to reduce the cost base in the
short term.
Service
Current service remains very good. The service transformation plan continues to be
implemented and scorecards remain high.
Work in Progress
Time and materials development programmes continue:
1. $80 is in the final stages of testing. The key components are:
e Impact — the new Post Office financial accounting service that will replace the
cash account that has been in place in post offices for over one hundred years.
« Smartpost Track & Trace implementing improvements in the mails service
e +1 prompts — offering sales prompt screens to the counter clerks
Fujitsu remains on track for delivery within time and budget.
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2. $90 continues on track for delivery in January 2006 with most developments
complete and now in testing. S90 comprises the following:
Credit/Debit Card acceptance for Bureau transactions
Postal Order automation
AP outpayments
Several S80 overspill changes
VV VV
Horizon Next Generation (HNG)
HNG discussions have taken a new direction, principally because of new constraints
within the overall Royal Mail business. A change of ownership direction is being
signalled by Alan Leighton, Chairman that may involve some kind of employee shared
ownership. This will involve more significant investment in Post Office than Royal Mail
are prepared to make at this present time. Our original HNG proposal was based on up
front investments in technology refresh and application re-write.
We are now working up an alternative proposition that will aim to leverage the counter
assets and only take on tech. refresh when absolutely necessary. Our revised proposal
will still aim to re-write the counter application but do so in a way that challenges current
business process within Post Office. This outline proposition has already gained support
from Ric Francis, Operations Director and will result in a formal proposition in early
September.
HMRC ISA (ex HMCE)
The HMCE Account is on track to meet all business targets for this year and HMCE
have continued to be a reference customer for a number of Fujitsu Services
opportunities.
The activities to upgrade the whole network are on schedule to complete at the end of
this year. We have continued to delay the XP roll out at the request of HMCE, but have
now started re planning with an expect start date of September 2005 with, initially, an
NT build on the desktop.
The confidential roll out has now started across the estate and this is going well.
Phases two and three of the CASE system are also well in hand.
HMRC have issued their strategic requirements as a result of the merger of Inland
Revenue and HMCE. There still remain some gaps in the requirements but we have
agreed to proceed with our response on the basis of agreed assumptions. We continue
to experience some delay in making major decisions whilst the two Departments decide
on their organisation and approach to IT.
The Department have decided to proceed with financial benchmarking even though
there still remain some issues between us. We are expecting the outcome of their work
at the end of July.
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HMRC continue to review their preferred way forward for IT services provision following
Government agreement to bring together the Inland Revenue and HMCE into HM
Revenue and Customs. They have decided to progress merging the HMCE contract
with the Aspire contract and we have agreed an MOU to cover this approach. We have
been working with Capgemini to agree a revised workshare within the extended
ASPIRE contract. We are due to provide a proposal to HRMC during August in line with
the principles set out in the MOU.
The Lorry Road User Charge (LRUC) opportunity has been stopped by the UK
Government whilst they decide on the future policy for general road user charging.
HMRC ASPIRE (ex Inland Revenue)
The operational service continues to be successful with service levels maintained /
improved on those previously being delivered prior to transfer. We continue to have
some operational issues whereby the processes we have inherited are not ideal for
achieving impeccable service; these areas are being investigated as we identify them.
There have been a number of politically sensitive projects successfully deployed onto
the estate over recent weeks.
We are currently forecasting that we will meet the financial targets for this year. The
volume of Change Requests has reduced as the previous backlog is cleared.
The relationship with Capgemini continues to be very good and we are working well as
a joint team providing the integrated proposal to HMRC. The agreed new workshare
principles are now being adopted for all new HMRC services.
A revised Data Centre Strategy has been accepted by HMRC and we are now
proceeding with preparation work at SDC02.
We have completed negotiations for Fujitsu to establish a new Print Centre in
Warrington to take over production of NTC Flatpack & Giro from EDS. The P2 colour
printing programme remains on hold by Inland Revenue due to a shortage of funds.
Libra
The Customer Score Card for the final Quarter of 2004/5 was 9.2. This was an
excellent result with all of our Customers reporting as ‘Very Satisfied’.
Joint working between the DCA, Accenture and STL is our Customer's main priority.
We have made a major contribution in support of this priority by providing the Extended
Help Desk Incident Management Service (EIM) and by being the key member of the
Joint Operational Change Advisory Board (OCAB). The Joint Service Management
Board (JSMB) in which Fujitsu also plays a vital role manages governance of the joint
services. In addition there is on-going work on integrating Disaster Recovery processes
across the 3 suppliers.
The OCAB is now fully operational, having tested the processes around all change
types. The OCAB meets weekly to assess all changes that affect the end-to-end
Service.
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These joint activities have fully supported the release of the DCA’s new application.
Phase 1 of the Live Trial Release (LTR) began on 9" May. This was a very successful
exercise proving the application’s functionality, including printing, across our
infrastructure.
The Technology refresh of 12,000 workstations was completed ahead of schedule at
the end of May and the printer refresh is on target to complete in mid August. The
users are reporting that they are delighted with all of their new kit.
Phase 2 of the LTR begins on 1 August. This will further reinforce our ability to
support the application. Roll out of the application to pilot sites starts in October in the
Warwickshire Area. Migration planning is well underway which is fully supported by the
Fujitsu Area Service Manager.
During the period there have been a number of new Services provided to the Customer
including access to the Police National Computer. In addition work is on-going to
introduce a new working practice model incorporating joined up third party access into
the North Liverpool Criminal Justice Centre.
Account revenues to June 05 are £2.5m above Q1 budget and on track to exceed base
target. Profit is £1.3m above Q1 budget and again, on track to exceed base target. An
increase in additional services work has brought in the majority of the revenue increase
(and associated profit) seen, particularly in the area of joined up services resulting from
the new HMCS structure. Additional profit derives from a combination of productivity
savings, a higher proportion of additional services work attracting a higher margin %
and some risk provision releases. TCV for the year to June 05 is £4.3m against a base
target of £12.5m. Cash is healthier this year with the successful completion of the Tech
Refresh rollout and is on track to reach target. We are actively making changes to
improve the turnaround time from project completion to invoicing which will improve the
cash position further.
Home Office
We are pursuing a major reform programme for the Home Office account to revitalise
the relationship as the contract reaches its mid-point. This programme includes
improvements in project and service delivery and a close link to the “reputation”
initiative that is running across Fujitsu Services. Coupled with these customer-
orientated changes, we have also driven an internal reform programme that has
markedly improved the profitability of the business, reversing the impact of
benchmarking in the previous Financial Year.
The principal project activity has centred on further improvements to the
Correspondence Tracking System (CTS) that is used at senior levels and which
required considerable focus to overcome the effects of faults in software provided by
Metastorm and Meridio. We were given strong support by these companies, and
performance of CTS has improved markedly in the past quarter. We have also made
good progress on the technology refresh programme and on contributing to a large
scale document management project that is being led by Capgemini.
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Looking to the future, the Home Office has challenged us to engage with them on a
discussion of our services and pricing with the goal of ensuring that all our services are
aligned with business needs. We intend to use this as an opportunity to position
ourselves strongly against ATOS Origin in the Immigration and Nationalisation
Directorate (IND). A team is now in place building options to present to the Home
Office.
Also in IND, development of the Warnings Index (watch list) has taken on a special
importance in view of recent terrorist activity in London, and we are working closely with
the client to see how this important service could be enhanced and expanded in
advance of the development of the e-borders programme.
DTI Elgar
The DTI account has come through a difficult period brought about by changes of key
contacts within the Department and the disappointing performance of the Joint
Infrastructure project last year. We have, however, undertaken a root and branch
reform of the account and have raised project and service delivery standards to high
levels while, at the same time, improving the account's profitability.
The principle activities in the last few months have centred on the technology refresh
and the consolidation of DTI’s office space into two buildings. These projects have
gone extremely well, and the building consolidation played a key role in enabling the
Department to meet demanding efficiency targets.
The focus for the team now is to continue our own efficiency gains as we strive to retain
profitability at a time when the client is reducing IT spend considerably. A new
Permanent Secretary has been identified to head the Department, but he will not take
up his post until January 2006, and we do not expect the Department to launch any
major investment programmes during the intervening period.
David Courtley
August 2005
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