Company secret
ICL PATHWAY LIMITED
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
HELD AT
HEATHROW HILTON HOTEL, TERMINAL 4
ON
15 AUGUST 2000
Present:
Mr R Christou (Chairman)
Mr M P Stares (Managing Director)
Mr J H Bennett
Mr T Escudier
Mr H Kurokawa
Mr AE Oppenheim
In attendance: Mrs A Steele (Secretary to the meeting)
Mr H Hirata
Mr N Akikusa (from item 4)
Mr Y Hirose (from item 4)
Action by
1
Mr Stares
MINUTES
The minutes of the meeting held on 9'" May 2000 were approved as a
correct record of the meeting.
MATTERS ARISING
Headcoi quirements for testing
Mr Stares had held discussions with Ian Hardacre and Clive Fenton and a
way forward had been agreed. Efforts were being made to target people
(include freelances) effectively at other large projects. Mr Stares would
report further on the success of this at the next meeting.
Electronic Business Development
Mr Boswell had met some of the Post Office management, but he had not
yet met Mr Sweetman. This would be reconsidered after the meeting in
the autumn between Mr Christou, Mr Stares and Mr Sweetman, possibly
at the Future Focus facility in Reading.
MANAGING DIRECTOR’S REPORT
Pathway/pathwaymins15 Aug00 1
FUJ00003693
FUJ00003693
FUJ00003693
FUJ00003693
Company secret
Mr Stares introduced his report, updating the written paper circulated and
there was discussion. Points noted:
a) Good progress was being made against plan. The company was on
schedule against budget and the full year forecast and outlook were in
good shape.
b) The CSR+ was a significant issue. This was an upgrade to the central
system which would impact the whole of the 10,000+ live estate.
Time scales were tight and any failure would impact both publicity
and service level agreements. Although the system had passed
internal tests and Post Office tests, a decision had been taken to delay
migration by three weeks in order to clear a small number of key
issues and to rerun full end to end testing. If this timetable was
achieved then full migration should be possible by Christmas. Feed
back from the Post Office, although initially disappointed, was
positive. The impact of delay was discussed. Mr Stares reassured the
board that this was not symptomatic of a more serious problem.
c) Rollout is on track with over 10,500 post offices migrated, over 30,000
staff trained and in excess of 310 implementations being achieved a
week.
d) Weekly service performance is still a key issue and recent Help Desk
problems shook confidence briefly but this now seems to be back on
track. The key service performance metrics charts, which are now
produced on a weekly basis, were noted and it was agreed that volume
figures should be shown where possible to add perspective. The
business plan allowed for approximately 2 calls per outlet per month,
CSR+ would inevitably cause an increase in call rates but it is planned
that call rates will subsequently be driven down to business plan.
e) The PIU report has been issued. ICL was working with the Post Office
(which John Roberts was driving personally) on their response.
f) Slow progress was being made on new business e-commerce projects.
Network banking was being developed. A demonstration would be
run later this month. Further work would be done on the end to end
design, priming work for next year. However the Post Office business
plan for banking seemed to be fragmentary, and they were relying
more on government leverage than winning banking friends. It might
be better for the Post Office to manage this risk through one IT
supplier and this should be a discussion point for the forthcoming
Sweetman/Christou/Stares meeting.
ERA was another new business opportunity. The challenge was to
convince the Post Office to spend significant amounts on improving
process, with potential long term savings, when they were currently
strategically focused on Parcel Force and logistics.
Although the ghosts of the past had not been exorcised, generally new
business opportunities were presenting themselves.
Pathway/pathwaymins15 Aug00 2
6
Company secret
g) The National Audit Report had been issued. Mr Oppenheim and Mr
Foley had worked very hard on ensuring that this was as good as could
have been expected and the release timing should ensure a low profile.
Mr Christou complimented the team on the work they had done on
this.
h) In summary Mr Stares felt that the ongoing business was in reasonable
shape and currently inline with this years business plan. He expected
ahead of steam from October on new business initiatives, with firmer
commitments before the end of the financial year on Network Banking
in particular. However, it must be recognised that the business plan
demands £64 million of new business revenue and that this is an
extremely challenging objective.
FINANCE REPORT
Mr Oppenheim introduced his report, updating the written paper
circulated and there was a discussion. Points noted:
a) Financial performance continued to be better than plan. Faster than
planned roll out has had a beneficial impact on revenue and cash costs
have been held below plan month on month. Cash flow has also been
improved by careful control of working capital.
b) The auditors have declared themselves satisfied with the project
accounting treatment (specifically revenue accrual and margin
recognition) for the financial year ended 31 March 2000.
c) Good progress is being made towards cost down. Reducing the cost
base remains a challenge and one of the biggest management tasks
(outside of delivery). Plans were being worked on with OSD and
Large Projects to underpin rationalisation of certain activities.
d) The business plan still shows a £15 million overall project loss at
Group level, but if the risk profile can be improved the project will
become closer to breakeven. Mr Christou felt that this would not be
achievable until CSR+ had been smoothly rolled out. Task, risk and
new business all needed to be carefully balanced.
Mr Christou complimented the team on their achievements to date.
Although there was still a long way to go, at present the issues appear to
be well organised and under control. Mr Akikusa added his compliments
to the team.
DIRECTORATE
It was noted that Mr Todd had resigned as a director of the company with
effect from 28" July 2000.
ANY OTHER BUSINESS
R 2005
Mr Bennett asked what plans were being drawn up for the re-bid in 2005
and how any new business won would affect that. Mr Stares confirmed
that this was a key consideration, particularly with ERA and that ICL
would wish to start to promote contract renewal as soon as possible.
Pathway/pathwaymins15 Aug00 3
FUJ00003693
FUJ00003693
FUJ00003693
FUJ00003693
Company secret
Feedback from David Miller suggested that he recognised that this issue
would need to be confronted prior to 2005. Mr Christou is planning to
meet Mr Roberts later this year and this should be on the agenda to “test
the water”.
National Lottery
It was noted that Mr Bennett was ICL’s representative on the Camelot
board. If Camelot were successful in the re-bid, the Post Office would
become joint shareholders in Camelot.
7 DATE OF NEXT MEETING
The next meeting will take place prior to the next ISC meeting, date to be
Secretary confirmed. The Secretary will circulate the details.
Pathway/pathwaymins15Aug00 4