ICL Pathway
Bringing
Technology
to Post Office
Counters &
Benefit Payments
December 1997 ‘HUN
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Monthly
Progress
Report
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Managing Directors Summary Date: 14/01/98
Document Title: Pathway Monthly Report - December 1997
Associated Documents:
Reference Vers Date Title Source
[1] PM/PRO/0002 1.0 26/09/96 Pathway Programme - Project
“Planning, Reporting and Control
Approval Authorities:
Name Position Signature. ~ Date
J. H: Bennett : Managing Director
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SUISeULY
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Managing Directors Summary Date: 14/01/98
Managing Directors Summary
1. SUMMARY
e Live experience over the last few weeks of Release 1c has as
expected thrown up a list of operational, procedural and minor
software errors which require careful attention. The total list is
higher than expected.and the pressure now falls on customer
service to manage the operational introduction of the various fixes.
Some of these will require effort from the-4" line development
team and the balance here is to achieve a high service response to
the issues we find at the best dates possible but without undue
distraction from the development and test teams who are now
focusing on New Release 2. Overall Release 1c is providing us with
valuable learning experience which we can apply to subsequent
releases.
° — A successful SEP was held at Hedsor on the 15/16" December at
which the entire Post Office Counters Board attended together with
other senior managers. Excellent input came from Financial
Services, our Information Society team and from CITU, all of which
had the effect of:stimulating POCL to take a higher profile in the
wider business community. °
e A presentation on-ICL Pathway was given to senior directors in
Fujitsu, which concentrated on the need in early 1998 to pursue a
recovery plan for the business case, centred around a small number
of options.
° A paper has been submitted to the sponsors outlining-the key
options to re-establish the BA/POCL programme with the most
sensible centring around the extension of the contract in order that
the full benefits on the extensive infrastructure can be achieved.
The-response from ROCL will be more positive than that from DSS
though neither sponsor has yet briefed their respective ministérs for
a political view on this subject.
e POCL.have just announced the appointment of Dave Miller as
Horizon Programme Director reporting to the MD of POCL.and
joining the management board. Dave Miller is a strong internal
. candidate, very knowledgeable of the early days.of this
procurement, up to speed on the live operational -:management
issues and with a increasing view of the strategic direction of the
Post Office Counters business. We-shall mount a programme to
work extremely closely with Dave to see how we can integrate our
programme activity with the key roles he must perform from the
centre.
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e Considerable work has been done with Masons to audit our main
files and history on the programme and to enable them to take a
view on the strength of our position in the context of the replan.
Work on this continues but will be influenced by the response from
the two sponsors to our commercial proposals.
e There has been an increasing amount of press interest in the
Horizon programme, most of it negative, concerning programme
delays and quite critical of the relationship between DSS and
POCL. All the leaks seém to be government inspired and we are
often left speaking to the press on the grounds that neither BA or.
POCL will make any comment. Indeed both parties seem very keen
to pass the journalists on to us. Nevertheless we need to exercise
extreme care on these contacts and ensure we stick well within the
agreed press lines,
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2. PROGRESS
2.1 RELEASE 2 HIGH LEVEL PLAN
I Release 2 High Level Plan v2.005/12/97 met or 1
I ICounter Application Development
[Agent Development
——
I IHost Development
I een Test
en
II Regression Testing
: Pre DiT
oir
Technical 8 Securty Testing
‘lorena tena
IIMO Environment Reset
MOR #1
MO Environment Reset
MOR #2 I I ‘ac
IIMO Environment Reset i
MOT
{I Contingency
Data Centre Cinar Down &
Migration
Live Trial I
2)
Acceptance Rehersal & Trial ;
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2.2 PROGRESS - GENERAL
We now have responses from the PDA on the release contents
description [RCD] for New Release 2. From an unsifted list of
some 270 entries, we have 18 potential critical items. 6 of these
have now been resolved subject to confirmation and a further 6 are
well advanced. Sign off of NR2 remains targeted for the end of
January but this must be at risk on these final items.
NR2 system testing started on schedule on the 8" December and
progress is as expected. We now have all the source code from
Escher for the NR2 products and the product drops themselves
were delivered as expected in December. Building systems from
these product drops within test and integration is on schedule.
A management care visit programme has been completed from
1997 and published. This concentrates entirely on Release 1b
where the positive response was obtained for all aspects of service
engineering and help desk coverage. Areas of criticism centred on
the scheduling of training, the travel and the costs of attending such
sessions. Nevertheless the overall satisfaction was over 90%. This
programme will continue in 1998 where it will clearly focus on
Release 1c.
The risk management report for NR2 was completed and circulated
to Fujitsu on the 23 December. This highlights the confidence
level of the 5" October for release of NR2 at the 80%+ level.
Work on the Year 2000 conformance programme has moved ahead
with supplier reviews for both products and services with
monitoring being carried out through a risk register. We have
shared this material with POCL who have accepted our approach as
being compliant with their needs. Work is now continuing to
develop the joint testing programmes between ourselves, PDA,
POCL and BA to ensure NR2 as delivered is conformant.
Support wherever possible from across the units in Pathway has
been given to the International team on the Deutsche Post proposal.
They have been shortlisted and have now started technical
evaluation tests in Germany on our software approach.
Work continues on the Bill Pay initiative will considerable follow
up in terms of documentation. POCL clearly find it difficult to
make a decision in this area and we cannot rule out that a “do
nothing” position might not be the chosen course of action.
Customer education material to support Release 1c has made good
progress and all the range of collateral and is now available by the
Pathway fulfilment service.
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e Business Development team have spent time with the Welsh,
Scottish and shortly the Northern Ireland Postal Boards to present
and discuss the Horizon system. The role of these boards is.to
promote the Post Office both politically and in their own business
environment.
3. ISSUES
e Work on the task for acceptance has still to pick up speed mainly
because the key resources have yet again been diverted on to more
pressing work during December.
e There is a concern that the work needed to correct the software
quality issues with Release 1c might impact on the development
resources focused on NR2.
e There is considerable work still needed to complete the EPOSS
development and some of this is now running late. This will create
pressure on the milestone schedules which have yet to be
determined.
. Work has started to bottom out the task of migration from Release
1c to NR2 and until complete this area remains a key risk.
e _ There-remains at least six difficult gating items for a sign-off for the
RCD of NR2. Whereas most have potential solutions for work
arounds, a critical one concerning disc failure in single position
offices currently has no clear solution:or acceptable work around.
This is getting key attention.
e The Octobér. 5" date for software release of NR2 remain viable but
continues at high risk die to the amount of work outstanding. This
will remain the case throughout the development and test phase.
e — The concept of a lower technology solution for the smaller Post
Offices has been accepted by the sponsors and the task now is to
construct a credible development plan for Pathway Light which we
can share with the PDA. This will be quite a major piece of work.
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4. COSTS
4.1 TOTAL PROGRAMME COSTS
Total Programme Costs as at 31: December 97
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ICL Pathway
Managing Directors Summary
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4.2 TOTAL PROGRAMME CURRENT COSTS
£000
Total Programme Current Costs as at 31 December 97
80,000
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20,000
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4.3 TOTAL PROGRAMME CAPITAL COSTS
Total Programme Capital Costs'as at 31 December 97
129,00 — - -
rere
(Preven Budget (00 96
60.00
£000
40,00
¢ The forecast’costs for delivery the programme based upon the new
Release 2 time table will not be baselined until the plans are firm
towards the end of January.
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Programmes
Report.
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Systems Report Date: 14/01/98
Systems Report
1. MONTHLY SUMMARY
¢ The most significant milestone to be achieved during November was the
successful implementation of release:1c in 205 post office outlets.
However, in parallel with this and drifting into early December, the team
were working hard to establish the functional baseline and delivery
schedule for New Release 2.
. On December 8", the Sponsors agreed to a plan which included a software
release for NR2 on 5* October 1998, Live trials commencing in January
1999 and National.Roll-out in April 1999 even though there were still a
few items associated with the release contents to be resolved. It is
recognised by all parties that-failure to agree on these outstanding issues by
the end of January 1998 jeopardises the plan, The human and hardware
resource implications for ICL Pathway are now being factored into the
detailed internal plans and budgets.
. ©. The POCL evaluation of the ICL Pathway proposal'to implement an early
version of ‘Bill Pay’ to compete with PayPoint continues, albeit very
slowly.
e The solution-for the ‘low volume outlets’ and those not served by ISDN is
being re-evaluated and a new proposal referred to as ‘Pathway Lite’ is
emerging. Although this does remove the need to develop a satellite
option, the full life cycle impact.is unclear at this stage.
2. PROGRESS
e The application product deliveries to enable system tést to commence 8"
December were achieved as planned. They included.end to énd OBCS and
APS, the BES counter and the EPOSS framework without cash accounting.
The final stages of development for BPS progressed satisfactorily and we
expect to have the end to end product available for system test 16"
January as planned. Work on defining-the outstanding development for
EPOSS did not advance at the pace expected. This is now the subject of a
detailed review.
. System test itself proceeded according to plan.and has provided the
anticipated feedback to product integration and design. In-addition,
significant steps towards implementing the joint’ business testing approach
have been made including the allocation of PDA/Sponsor staff to the team.
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3. CURRENT CRITICAL PROBLEM
° It is very important for the programme to establish a functional baseline for
New Release 2. This is now scheduled for the end of January 1998 and any
slippage could impact the final delivery date. There are currently 12 issues
outstanding.
e Considerable effort has been expended in identifying the hardware required
to support the NR2 plan. This includes the data centres, system and
integration test rigs and support rigs. The majority of this additional
equipment-must be purchased and installed within the next few weeks
otherwise serious delays will occur. This represents a considerable
challenge.
e A decision as to whether the ICL Pathway proposal for ‘Bill Pay’ is to be
implemented is urgently required. There is a danger that it will soon
become a diversion rather than an opportunity.
e The review of EPOSS to determine the gap between the product delivered
by Escher and that required by POCL has not progressed at the pace
expected. This is now subject to a detailed management review to identify
what recovery options are available.
4. ISSUES
° The migration from release 1c to NR2 is complex and requires very careful
and detailed planning and thorough testing. The document which describes
the strategy and approach is scheduled to be agreed with the sponsors by
the end of January 1998. We must ensure that we properly understand all
the implications on the programme as a whole. It is important that we
convert the 1c outlets to NR2 in October 1998 and prove the system even
though the ‘official’ live trial is not scheduled to commence until January
1999.
° The number of Bill Pay clients and services required to be supported since
the contract was awarded has increased significantly. Identifying all the
services and the work associated with the take-on is proving to be a
troublesome task.
e The PDA and Sponsors are turning their attention to the contents and
delivery dates for the future releases. Workshops are being arranged in
January to agree the way forward, but until then there is uncertainty
regarding contractual acceptance and the introduction of new products.
e The systems directorate is finding it increasingly difficult to support the
international activities. A proper well thought out resource strategy is
required if this is to continue on a sensible basis.
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e The increased size and complexity of the system has had a consequential
impact on the performance testing required. Additional activities and
resources have been identified and these need to be properly factored into
our detailed plans.
e The system does not currently handle nested customer sessions properly i.e.
starv/end of day, start/end of clerk session, start/end of EPOS, start/end of
benefit.encashment etc. This is-a well known problem in retail and point of
sale systems:and must be resolved for NR2.
¢ The current proposed approach to outlet implementation involves two
overlapping streams of activity. Site survey and preparation and equipment
installation. This is designed to allow a build up of prepared sites to mitigate
the risk of not achieving the roll-out beat rate. The earlier you start the first
stream, the greater the number of prepared:sites in the buffer for
installation. However, this desired situation must be balanced against the
up-front costs and the ‘drop-out’ rate of post offices. The approach must be
agreed with POCL within the next couple of weeks. .
° The.Audit design specification suggests that there are a number of areas
where additional development is required for NR2.:A detailed review has
been commissioned to determine whether the design is too sophisticated
and can be simplified.
° In keeping with most other elements of the Pathway solution, the Roll-out
Database has increased in functionality and.complexity. The development of
this product.has been the subject of close scrutiny. during the past few weeks
but early test restilts indicate that the latest version is of reasonable quality.
A full audit of the code and functionality is underway.
° The Host system which interfaces with the POCL TIP system is known as
TPS. Early performance test results indicate that further work is necessary if
we are to satisfy the throughput estimates.
« Reference-data is poorly defined in the contractual requirements but is
crucial for the proper control of changes to outlet/product data. POCL are
. only now realising its significance and we must be vigilant if we are to avoid
requirements creep.
« The true development life cycle implications of ‘Pathway Lite’ must be
identified at the earliest opportunity if we are'to properly integrate the
activities into the,overall plan.
5. COSTS
e — The systems directorate is in the process of baselining their budgets for
1998 and expect to complete this exercise early February.
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‘yIoday
jeDueuly pue ==
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Commercial & Financial Report
1. MONTHLY SUMMARY
e
After some weeks of positioning, we have now launched the sales
campaign to secure-revised contractual terms for this programme.
It is very important'to this end that visible service deficiencies.in 1c be
resolved on a time of the:essence basis.
The RCD for NR2 has made: progress but still needs to be signed off. We
must successfully resist having to include things which become critical path
items or which dilute our focus. One more push etc.
The top 50 A2As néeds to be accelerated to ensure no
contenv/development surprises.
All correspondence‘of a contractual or quasi-contractual nature including
policy or positioning on Requirements,,Security or Programmes should
from now on (for-the ‘foreseeable future) be:checked for contractual
conformance by either Warren or myself before being sent to the PDA.
Given the lack of planned roll out activity in 1998, we have a.duty to
mitigate our own costs and those of our subcontractors. That means
battening down the hatches and, in some cases, getting rid of people we
will not need for 12 months.
Masons have-concluded that we have a solid case.
In summary, we have gone on to the front foot.
2. PROGRESS
1c mostly going well
NR2 issues down to 12 (albeit one or two of them meaty)
Some important principles on assurance étc. methodologies resolved with
PDA .
We have got the message across (I think) to POCL and BA that ternis must
be changed
There is an emerging vision about social banking, government services to
the citizen ete. as a basis for an extended term
Masons believe we have a solid case in the event we have to. litigate
The Bill Pay initiative:shows some signs of gaining ground (but don’t hold
your breath)
-POCL Programme Director appointed
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2.1 EXTERNAL, WITH PDA
e CNT - Little activity or progress in December
e JCCB - Still no meetings
° Finance and Commercial Forum:
Some progress on second level issues and. housekeeping
We have kept the wheels turning and lines of
communication open
e Contract baselining and Acceptance process:
The primary focus remains NR2 definition via the SADD
and SFS, related controlled documents, and the RCD.
In addition, we need to complete those A2A documents
which are in our domain to do, with a clear focus on the
top 50 which could impact on design and development.
Unless we issue these, or can point to delay on the part of
PDA/customer which justifies our not having done so, we
will not be in a good position to claim time alleviation.
Design and Development should involve me as necessary.
CCNs are required in each case to introduce A2A resolving
definitions: the timing of their implementation should be
part-of the CCN.
We need to update Solutions via CCN to conform them to
the SADD etc. where they are now different. The Solution
takes precedence contractually over the SADD etc. even
when the Solution is wrong.
John Dicks has taken the lead on Acceptance - thank you
John.
The relationship between Acceptance (as defined in the
contract) and “Assurance” (which is not) has now been
largely resolved to our satisfaction, but we will need to
manage to the agreed position robustly to ensure no creep.
2.2 EXTERNAL, WITH SPONSORS
. We declared our contractual position formally on 19° December. In short,
we have said that to compensate us for the programme delays we require
either:
A 30% price increase, or
A 5% price increase plus a 5 year extension of term.
e Variations are possible, including delayed payments by BA.
e As things stand today, the programme is non-viable commercially.
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We have begun to-articulate the many positive reasons for extending the
* (exploit thé current'solution as a low risk migration platform, then leverage
the network infrastructure into social banking, new citizen centric services,
new client services, electronic post office, etc.) starting with the DTI last
week. The DTI arid Post-Office are now substantially on-side but the BA
probably riot.
The alternative to:a new deal is termination, which means: we.sue them and
they sue us, a press bonanza, PFI fallout, a fight to the death. Masons are
confident we would-win damages for constructive termination. The point'‘is
that the baseline comparator is termination and not carry on as we are.
2.3 EXTERNAL, WITH SUPPLIERS
Holding our suppliers is‘becoming increasingly.costly and fraught for them
and our own people who have to deal with them. We must strike a balance
between saving-money and. keeping ‘core programme capability intact, On
the one hand, we must resist paying people simply to stand by and filling
warehouses with equipment we do not need for another year. On the other,
we cannot afford to throw away supplier goodwill or make life impossibly
difficult for our own staff.
We need to apply an honest assessment of the equipment we have selected.
The current PCs in particular are suspect. Component obsolescence
generally is now a risk. More work needed.
2.4 INTERNAL TO ICL PATHWAY
The NR2 baseline has progressed and the gaps are now much better
understood. There are however at least 12 issues on the RCD, any one of
which if not resolved would push out timescales. There are up to 50 A2As
which could do the same unless we can secure time alleviation.
1c pressures mean that design and 4" line development effort is:still being
consumed on yesterday’s release. The risk is a bow-wave of work which
will push NR2 out, and which in turn will ripple through to NR2 plus.
NR2 plus criticality is just around the corner. See below.
In parallel, we have to finalise-departmental, Budgets for this year which
reflect realistic activity plans.
3. CURRENT CRITICAL PROBLEM
Securing agreement to NR2 content we can live with, without having to put
more in.
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e Securing agreement to start roll out based on NR2: there is a suspicion that
BA/POCL wish to defer roll. out until NR2 Plus is ready to go (specifically,
Smart AP), which could explain the gap between April and July 1999. That
would be consistent with NR2 providing the confidence for BA/POCL to
commit to go ahead rather actually going ahead - in which case the gating
item for roll out will be NR2 Plus availability, not NR2. [That is not what
the Contract says, but as we are into renegotiation, we must be on the
lookout for this one....]
° BA/POCL agreeing to our revised contractual terms
e — Renegotiating with suppliers (to come)
4. ISSUES
° Pathway Business viability
e — BA’s will to make the programme work
e POCL’s strength to drive it
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5. COSTS
5.1 KEY DATA 1996 - 1998 (INCLUDING YEAR-END ACTUALS FOR
1997)
5.1.1 PROJECT COST ANALYSIS (£M)
1996 1997 1998
Actual [Budget I Nov97 I Actual I Budget
Feast
Revenue , 15.2 0.2 0.2I 0.6]
"Direct Cost of Sales 5 17.8 15.6 16.1 16.2
Gross Margin (Deficit) A (2.6) (15.4) (15.9) (15.6)
Opex:- Labour Related 6.3I 13.3 16:3 16.0] 20.8
ICL Subcontracts 47 3.6 12.3 12.2) 12.4
Other Subcontracts 11.0 5.3 10.2 9.6, 7.8
Depreciation 0.6 5.9 6.4 6.6 10.0]
Marketing 0.4I 5.0 0.7 0.4 15
Professional 0.9) 41 1.2 1.2 1.0
Other opex 1.0 28 3.0} 3.3) 3.4]
Gross Project Opex 24.9] 40.0 50.1 493 56.9]
Interest costs/(income) (0.1) SA 3.4 3.5) Wt
Costs before Capitalisations 248 477 68.9 687 B36
Declared PBT Losses 1 5.1 0.4 0.6) 1.0]
Capitalised into WIP during year 24.8I 42.6 68.5 68.1 82.6
Yr End Comment:
Overall costs were £0.2m lower than the November Forecast, but within that number, the costs
attributable to overseas bids - which are not capitalised - were higher than forecast.
5.1.2 HEADCOUNT (YEAR END)
Permanent 62 94 115 114 145
Non-Permanent 73 73 121 113 88
Yr End Comment:
Permanent headcount virtually in line with forecast, and Freelancer uptake in the final couple of
months of the year was lower than fore
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5.1.3 BALANCE SHEETS (£M)
Dec 96 December 1997 Dec 98
Actual Budget Nov97 Actual Budget
Feast
Net Fixed Assets 8.6 65.2 36.8 36.2 42.5
Project Work in Progress 24.8 67.4 93.3 92.9 175.9]
Other Working Capital (11.1) (8.1) (15.7) (19.8) (12.3)
22.3 124.5 114.4 109.3), 206.1
Share Capital 20.0} 20.0 20.0 20.0 20.0]
Retained Earnings + (8.1) (0.4)I (0.6) (1.4)
Group Pooled Borrowings 23 109.6 31.7 27.0 88:7
External Loans - - 63.1 62.9 98.8
22.3 124.5 114.4 109.3 206.1
Yr End Comment:
Borrowings and loans were £4.9m lower than forecast, due toa combination of the lower net
project costs and higher than forecast creditor/intercompany balances. This should largely
correct itself in January/February. We were successful in delaying payment for the new Numa
machine (£1.7m) beyond the year end.
5.2 ANALYSIS OF MAJOR ITEMS (£M)
5.2.1 REVENUE (£M)
1996 1997 1998
Actual Budget Nov97 Actual Budget
Feast
Transaction Charges + 15.2 0.1 0:1 0.3
Change Control Contributions/Sundries - 0.1 0.1 0.3
+ 15.2) 0.2 0.2 0.6
Previous Note:
Programme delays in 1997 virtually wipe out the budgeted transaction based revenues.
Yr End Comment:
No change control costs have yet been billed to BA/POCL. We have now started to invoice for
consumables (Receipts/ATPs)
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5.2.2 COST OF SALES (£M)
1996 1997 1998
Actual [ Budget I Nov97 I Actual I Budget
Feast
Sorbus System Maintenance, Help
Desks and System Management 4.6 3.7 3.7 44]
CFM Data Centre Management 5.0 6.7 6.9 6.8
Girobank Help Desks 1.0) 0.1 0.1 0.1
Energis Network Communications 3.2 1.2I 1.2] 1.5)
De La Rue Card Production 2.2 1.6 1.5I 0.4
Peritas Documentation 0.1 0.4 0.3 0.1
Royal Mail/POCL Card Distribution 2.0)
Girobank Fraud Management 0.5
Supplier Compensation Payments “19 2.4] 2.9)
Recoveries from Subcontractors (0.8)
+ 17.8 15.6 16.1 16.2
Previous Note:
The charging structure of Sorbus and CFM, with a high element of fixed cost recovery meant
that there were few savings to be had from the delayed start of rollout. Several subcontractors
are looking for compensation for the damage to their short-term profitability, leading to the need
for provisions for such payments in both the current year forecast and next year's budget.
Yr End Comment:
No major variance in charges received. The dividing line between Sorbus and CFM is
increasingly blurred. The main increase is in the amount charged to cost of sales for supplier
compensation as a result of the rollout delays. This includes a £2.0m accrual at the year-end,
which - along with extra provisions in next year's budget - will be needed for payments to
Girobank, WTL and continuing De La Rue payments.
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5.2.3 LABOUR RELATED COSTS (£M)
1996 1997 1998
Actual I Budget I Nov97 Actual I Budget
Feast
Permanents:
Gross Pay 13 2.8) 3.1 34 4.5
Bonuses 0.5 0.8 0.5 0.5) 0.5
Payroll costs/benefits 0.5 0.9) 1 1d 1.7
Sub-total; Permanent Staff 2.3) 4.5 4.7 47 6.7]
Freelancers
Freelancérs 3.6) 8.1 10.7) 10.4 13.2]
Travel & Subsistence 0.3 0.5 0.6 0.6) 0.7;
Recruitment & Relocation 0.1 0.1 0.2 0.2) 0.1
Training + 0.1 01 O.1 0.1
6.3 13.3 16.3 16.0] 20.8
Previous Note:
The growth in staffing levels in both 1996 and 1997 shows through in the following years, as the
full year cost impact hits. The need for more freelancers in 1997 than budgeted is the main
catise of the variance from budget this-year. Permanent staff costs in 1997 are only slightly higher
than budget, with delayed recruitment in many areas offset by the filling of unbudgeted positions
in areas such as international sales, customer service and programme management.
Yr End Comment:
Savings arise entirely on Freelancer costs, with all other areas on track.
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Previous Note:
Version: 1.0
Commercial & Financial Report Date: 14/01/98
5.2.4 ICL SUBCONTRACTS (£M)
1996 1997 1998
Actual [Budget I Nov97 I Actual I Budget
. Feast
Use of Individual ICL Consultants 1.6 13 3.3 2.8 5
Solutions Centre - Test & Integration 1.2 1.6 3.7] 3.5] 3.6
Incident Management 0.2 oA 0.1 04
Verification Centre Conifig'n'Services 01 0.5 0.6 0.6I 0.5
Security Consultancy/Development 03 0.1 0.9 0.9 07
Product Support 0.1 0.5
HPS/Software Technologies 1.8 21 0.5
Agent Development 0.3 _ 1.0) 1 0.7I
Internal IT Support . O41 0.1 0.3}
CAPS Access 0.2 0.1 0.3 0.4
Others 0.3 0.4
-Overseas Bid Costs 0.1 0.2 0.4
Contingency Accruals 0.8
47 3.6 12.3 12:2 12.4] :
This is the.area where most of the current year cost overruns have occurred, with the increased
project Complexities manifesting themselves in areas such as the use of Solutions Centre (for
development, testing and security consultancy), and heavy use of HPS/ISTL resources.
Individuals from ICL Enterprises:and Consultancy have also boosted:most departments’ resources
to a far greater extent’than was budgeted. Aggregate costs in this:area are.expected to remain
much the same in 1998.
Yr End Comment:
Very few surprises. The variances in "named contractors” and ISTL costs are offsetting, in that
several ISTL, resources were’ forecast on a named basis, but actuals have not.been-analysed to the
same level of detail.
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5.2.5 OTHER SUBCONTRACTS (£M)
1996 1997 1998
Actual Budget Nov97 Actual Budget
Feast
Escher: Management Fees 0.7 1.3) 13 1.3 1.2
Development Costs 3.4] 0.2 3.0} 2.9 0.6
An.Post: Consultancy 0.2) 0.1
Oracle: Development Costs 3.6 0.8 4.2 39) 3.0
Support 0.1 0.8 0.5 0.5] 1.5
Various: Initial-Go-Live Trial Costs 0.9 0.2)" 1.3 1.2
CFM: MIS Development Costs 1.0 1.0 0.5 0.3 0.7]
Rollout Database Develop't 0.1 0.1 01 0.1
Fraud Risk Consultancy 0.1 0.2I + 0.2 0.2] 0.3}
Others 0.3 0.5 0:5 o.6f I
Contingency Accrual/(Release) 0.6I 0.2 (1.4) (1.4) 0.4]
11.0 5.3 10.2 9.6I 7.8)"
Previous Note:
Project delays and complexities have !ed to.increased current year expenditure with both Escher
and Oracle, and:the extended IGL also ‘contributed to the higher cost levels.
Yr End Comment:
Oracle development resources tailed off slightly towards the year-end, and we resisted any
further billings from CFM: for their MIS work. This will obviously hic in early 1998.
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5.2.6 MARKETING COSTS (£M)
: 1996 1997 1998
Actual Budget Nov97 Actual Budget
Feast
Public Awareness, Programme 4.6 0.2 0.1 0.8
Agency Fees 0.3 0.3 0.3 0.3 0.3
Exhibitions/Client Development 0.1 ON 0.1 + 0.2)
Overseas Bid Costs 0.1 + 0.2)
0.4] 5.0] - 0.7 0.4 15]
Previous Note:
The main variable in marketing costs has'been the timing of the build up of the expenditure on
public awareness, This was budgeted to start in'earnest in 1997, but will now only be getting
started in the later months of 1998.
Yr End Comment:
Expenditure on the Public Awareness activities is still in its infancy, but with some underlying
expenditure to be billed by McCann Erickson very shortly for the initial spend on leaflets arid
tapes.
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5.2.7, PROFESSIONAL FEES (£M)
Contract Administration
Financing - Legal Fees
Financing - Arrangement Fees etc
Financing - Hambros Bank advice
Audit
Others
Business Interruption Consultancy
Insurance.
Contingency Accrual / (Release)
Previous Note:
1996 1997 1998
Actual Budget Nov97 Actual Budget
Feast
0.1 O01 0.1 0.1 0.1
0.6 0.4 0.2)
1.0) 0.3 0.4) 0.2)
1.0) 0.6 0.6
0.1 0.1 0.1 0.2)
0.1 08 0.2 0.3 0.1
0.1
0.5 0.1 0.1 0.1
0.6 {0.6) (0.6) 0.3
0.9) 4.1 1.2 1.2] 1.0)
Variations.,in the cost of setting up the project financing structure are the principal reasons for the
current year cost savings.
Yr End Comment:
No major variances.
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5.2.8 OTHER OPERATING COSTS (£M)
1996 1997 1998
Actual Budget Nov97 Actual Budget
Feast
Premises 0.7 1S 15 15 2.0) I
Communications 0.1 0.1 0.4 0.4] 0.3
Internal IT Costs 0.3 0.4I 0.4 0.5 03
Equipment Maintenance 0.7 0.5 0.5 07
Other : 0.1 0.1 0.2 0.4I 01
Recoveries from De La Rue / Girobank (0.2)
1.0 2.8 3.0] 33 3.4]
Previous Note:
The establishment of multiple Pathway sites, mainly to relive the pressures on FELO1, are the
main drivers behind the cost increases, Maintenance of the high levels of test and reference rigs :
accounts for ain increasing cost element, as kit moves out of warranty periods
Yr End Comment:
Main variance occirred on exchange variances, where the negative impact of the rate-fixing
taken up last year has hit home.
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Customer Requirements Report
1. SUMMARY
e The Customer Requirements team is now to focus to the maximum extent
possible on Contractual Acceptance.
2. PROGRESS
2.1 DETAILED PLAN ACTIVITIES
2.1.1 RELEASE 1
° Tony H has agreed with CAPS how their changes for Release 1c Reference
Data will be introduced, although the introduction of new benefit and post
offices'is outside their control. Tony has also put a’stop to back door
attempts to get Pathway to update DSS Reference Data for them.
e Live support workload for Release 1c is declining: We are trying to
understand why cards are being requested for non-automated offices,
probably the knife and fork state of the CAPS product. A CP was raised to
introduce reporting of failed ISDN connections: one office was offline
unnoticed for 10 days.
2.1.2 RELEASE 1 / NEW 2
° Countér Hardware Design Specification: All changes for a Version 4 have
been agreed with PDA and will be introduce via CP.
. The Post Office Closures document was updated.
e Although we have got the CAPS baseline now under change.control it is
not of itself preventing CAPS from preparing changes to it.
° The team has contributed to closing down the CAPS related NR2 issues
and matching off the ORACLE PAS/CMS work. To give you a flavour of
the issues: CAPS are unable to handle the notion of temporary post office
closure ending-in the post office reopening.
° Tony H and Dave H and reviewed at great length the PDA Business
Process Models for Nominated Post Office changes, Urgent Payments and
Urgent Cards, although usefully as the DSS staff who actually knew what
was happening in the Feeder Benefit Systems’ were available. PDA/DSS are
attempting this work far too late'to be of value.for New Release 2.
e Dave H produced replies to the redraft of CCN 117 in as many days as it
took months forthe PDA to produce it. We are now taking the line that
the work has been done so the CCN had better reflect that reality.
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2.1.3 RELEASE NEW 2/3
A SADD Version 5.0 was output, incorporating those changes agreed as
part of the New Release 2 Release Contents Description that will endure
into the Steady State. This completed the Customer Requirements PA
Tactical Action Plan commitments.
Summarised receipts for nursing home bulk transactions: DSS is working
up a requirement that this be handled by producing a final summary
receipt to which each individual receipt is cross referred - that is they still
want the individual receipts.
On-line enquiries: DSS has provided a simple requirement statement for
on-line enquiries.
2.1.4 CARS
There was no CAR work done in December because of other priorities
principally Mason’s. The principal task remains to mark up those as yet
undelivered CARs which are the more urgent for New Release 2.
2.1.5 ACCEPTANCE
The team is now focusing to the maximum extent possible on Contractual
Acceptance.
All Acceptance Tests were increased in scope per last July’s CNT
agreement, with elements of Solutions,.Service Schedules and SADD
required to be added as new criteria. Every Test Specification has to be
substantially changed. On the plus side, new style Test Threads and High
Level Test Plans from T&I are much improved, making the mapping of
the criteria-to the tests easier.
A lengthy treatment of the placement and meaning of Service boundaries
was produced and a follow-up held with POCL. The issue is that if DSS
can force POCL to accept responsibility for the payment authorisations
that are sitting in TMS and BES then they have a unforeseen contingent
liability at any point of about £200M, which is beyond their powers.
There is-a follow up this month.
2.1.6 MASONS
All the team contributed to helping Masons identify sources of project
creep and delays.
John D spent about two weeks before Christmas going through CAR-
related “opportunities” and the associated audit trail.
All CAPS document histories, CRs/CPs/CCNs, were reviewed (and the
library record put right en passant). Tony H overhauled the document
produced by Masons in respect of CAPS controlled documents: many of
the dates quoted for documents are not recorded correctly in PCMS.
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. Dave C did a similar pass of the AP Smart and POCL Reference Data
history.
e , .Masons are'back.
2.1.7 NEW BUSINESS SUPPORT
. LFS: A customer meeting was held with POCL and some related parts of
EPOSS, into which LFS isto be integrated, were demonstrated. POCL
have identified that Secure Stock items should include non-value material
(e.g. MVL tax'discs). POCL have to formally respond to last issue of the
Business Requirements Definition (v13) (4/11/97). Discussion on the
operational schedule and hence agreement on SLAs are outstanding.
° Department of National Savings: This addition to the original contract
scope depends on the dates Pathway can offer for Releases after New
Release 2.
e .EFTPOS: Dave C conducted supplier ITT assessments and attended the.
first of three supplier visits at Comms XL. Checkline and Retail Logic
visits are week beginning 12/1. 7
° Household Budgeting: A paper to scope the demonstration is being
produced jointly with Design.. :
2.2 OTHER TEAM ACTIVITIES
2.2.1 INTERNATIONAL SALES BIDS
e -DPAG: Dave H created and sent to.the OSI team a 40-slide technical
presentation covering our proposal for presentation to customer on
Monday, defined work packages for service delivery and demonstrator
planning, and defined the requirement for an Archive Server: This latter
item might be in common with that needed for Horizon.
2.2.2 OTHER
° DCH attended the final Best-Practices Working Group. We hope to
introduce some Requirements Tracking & Management productivity tools
which are beginning to appear.
. The Pathway Lite document was revised. Work on this is now with
Architecture and Design.
3. CURRENT CRITICAL PROBLEMS
° None
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4. ISSUES
Contractual Acceptance: It is apparent the PDA that we have been unable
because of dependencies or too busy on other things to make progress with
Acceptance preparation. We have to focus on this now and this will mean
sacrificing many other strands. On the other hand, the number and
importance of the NR2 exclusions - many being down to the customers -
and the introduction of a NR2+ may cause the customer to seek deferral
of Acceptance activities when they see the relatively limited lifetime and
exposure of NR2.
In my view CAPS development has all the hallmarks of being out of
management control with baselines shifting this close to delivery.
The handling of CCNs is not showing any sign of improvement. PDA
Commercial are nickel and diming over quite old CCNs that CAPS
actually want or need - it’s all some sort of game. We have had no
response to my muscular demand for £108K, so the time has come to Star
Chamber out anything that is not to make NR2 work, wait.for their
Change Requests and tell them that trains have left the station.
5. COSTS
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Customer Service Report
1. MONTHLY SUMMARY
e December proved to be a difficult month for Customer Service during
which our reserves of-knowledge, resource and expertise were stretched.
. A number of hardware, software and procedural failures occurred at a.time
when resources were limited due to the holiday period but which, with
hindsight, might-have been avoided. A comprehensive review of what
transpired is underway and a full report identifying root causes and
resolution actions will be published before ‘the next Service. Management
Review on 21 January. .
¢ Ona positive note, the December experience was.a priceless learning
opportunity. It has sparked off many other trains of thought directed at
pre-emptive activities to monitor and test the system for unexpected events
and both our Customer Service staff and our suppliers are much more
aware of the need to be meticulously detailed in dealing with. problems.
2. PROGRESS
2.1 OPERATIONS
e Three serious issues in December
* Hardware failure in Correspondence Server-at 13:00 on
22/12/97. .
CFM failed.to carry out the agreed recovery process and as
a result the system was not fully operational until 09:30
the following day. 15 benefit encashments were performed
in fallback by the helpdesk. There were no payment stops
that were not implemented.
Payment files rejected on 1st and 4th January. These were
rejected by the system because they were more‘than 7 days
old - however the high level design allows for files as old as
365 days. The parameter setting was incorrect and 14
customers had to be paid manually.
CAPS failed to process exception files before closing down
for holiday period. As a result, several payments due on 29
December could not be paid until the following day.
e Each of the above issues is being thoroughly. investigated and our
conclusions will be presented to the Service Management Review forum
on 21 January.
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e The RED Alert on Tivoli is still in ‘monitor’ stage. The fix we received was
tested successfully and has been implemented but we are continuing to
operate the work around in parallel for a further 8 weeks. The PDA is
aware of progress and is. happy with our actions and they have agreed to
drop their requirement for a 4-weekly re-negotiation cycle. Three other
Tivoli clients in the US have experienced similar problems and so the fix
will be incorporated into a General Release due in mid January.
e The IGL card migration programme has been initiated - 1561 cards have
been issued.
° — The old (0645) Payment Card Help Line numbers for DSS, POCL.and
Welsh customers are now switched to a message advising of the new
(0845) numbers. The.old PCHL number for English customers will remain
in parallel use until the IGL cards are phased out.
e Some De La Rue quality-problems have been identified - e.g. PUNs not
properly personalised/enveloped, cards incorrectly packaged/addressed.
This has been.formally raised with DLR’s Bureau Manager, Dave Wilson,
and the results of their investigation will be reviewed at-the operational
service review on 15 January.
2.2 RELEASE MANAGEMENT
e Since the-start of Release 1¢ we have implemented 96 release notes covering
172 PinICLs.
e 76 software fixes, 19 software baseline changes and 1 change to reference
data have been made. There are a further 50 PinICLs in work-in-progress.
e —_ Of all of the fixes applied to Release 1c, 25 were applied during Model
Office testing, 71 have been applied since going live, more than 1 per day
with no indication of the rate diminishing.. This is a much higher volume
than had been expected and raises a number of concerns with respect to
product quality.
e — The quality of information accompanying new releases from development
varies widely and urgent work has begun to establish a benchmark for this
process. Oracle provides the best quality of information with new releases.
2.3 BUSINESS SUPPORT
e — The problem of-duplicate encashments continues to cause concern as the
frequency of incidents caused by post office staff failing to complete BES
transactions is rising. A design change which fixes this problem has been
received from Escher and is in the pipeline for operational testing.
. An Oracle software problem.has caused the weekly cash account reports to
be suspended. Until a fix has been. applied, cash account reports are being
produced daily by post masters and collated manually to produce the
weekly report.
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2.4 CUSTOMER SATISFACTION
Customer dissatisfaction with the operation of the receipt printers is a
significant issue. Horizon System Helpdesk has-noted this and. some two-
thirds of Sorbus engineer visits are now associated with printer: issues
(mostly advice and guidance not actual printer failures).
The Management Care Visit programme for 1997 (which covered services
provided at 1b) was completed. Overall the-sub-postmasters were 90%
satisfied with the services provided. Particularly positive areas were the
services provided by the Horizon System Engineers and the Horizon System
Helpdesk. The least positive area was Training and User Guides. There
were concerns that the training was not always local enough, the attendees
were out of pocket and the User Guides were little used while. the system
was so simple to use. A full.report will be distributed in January.
The percentage of returned service visit reply cards was 98% The
percentage of satisfied responses was 95%.
2.5 SYSTEM SUPPORT
The move of the SSC to BRAO1 will complete during January.
Diagnostic skills and overall knowledge of the systems continues to
improve.
In December, 213 PinICLs were raised. 103 PinICLs were closed by the SSC
and 74 transferred to Development for resolution. This must be seen as a-
serious distraction to the development teams who are focused on Release 2.
2.6 MANAGEMENT INFORMATION SERVICES
There have'’been some improvements in MIS and Data Warehouse but the
situation still remains disappointingly slow to be resolved. The lack of
reliable, accurate Management Information imposes a severe strain on staff
attempting to produce reports manually and generally frustrates our
colleagues in the-PDA who depend on this for Service Management.
Peter Robinson has published his latest (Variant 15) volumetric forecast for
Card and PUN production. A report received from the PDA suggests that
the model Peter uses‘is more sophisticated than.the model used by the PDA
and Sponsors and produces ‘more accurate results.
3. CURENT CRITICAL PROBLEMS
None
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4. ISSUE
© — Quality of output from Data Warehouse.
e — Ric software product quality impacting upon Release 2 development.
5. PERSONNEL
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6. SUMMARY IGL / 1B / 1C SERVICE REPORT -
DECEMBER 1997
6.1 BENEFIT PAYMENT ANALYSIS
6.1.1 PAYMENT / ENCASHMENT BREAKDOWN BY VALUE - DECEMBER 1997
Unencashed: Pmts Rée’d Stops & Encashments: I-Unencashments
BFF : Expities yo CF .
£42,485.35 I £280,222.35 £2,273.45 I £190,253.95 I £130,180.30
6.1.2 PAYMENT / ENCASHMENT BREAKDOWN BY VOLUME - DECEMBER 1997
Unencashed:-’
Stops & Encashments I Unencashments
B/F :
Expiries St. CIF
1416 85 6762 3067
6.1.3 PAYMENT / ENCASHMENT BREAKDOWN TO 31/12/97 - BY MONTH
Payments Received Stops & Expires Encashments Made
Month Number Value Number I.. Value Number Value .
96/09 Sept 30 £530.00 0 £0.00 19 £372.20
96/10 Oct 150 £3,048.30 4 £62.80 132 £2,634.00
96/11 Nov 630 £16,987.50 7 £123.40 550 £14,920.20
96/12 Dec 1769 £52,024.40 22 £423.60 1468 £43,241.60
97/01 Jan 2096 £62,726.60 21 £462.20 2161 £64,688.70
97/02 Feb 3675 £110,337.00 47I £1,198.30 2694 £81,525.30
97/03 Mar 3339 £102,626.30 56} £1,300.80 3599} £109,528.90
97/04 Apr 4530 £124,614.65 65 I £1,671.85 4497 I £124,587.95
97/05 May 3336I £103,320.95 31] £1,048.30} 3212I £96,697.85
97/06 Jun 3541 £109,839.45 26 £649.45 3560} £113,521.40
97/07 Jul 4282 £134,050.20 38} £1,158.70 3720 I £115,642.00
97/08 Aug 3514 £107,618.00 47I £1,144.45 3576 I £108,922.30
97/09 Sep 3469 £104,760.30 54} £1,019.50 4055 I £124,778.95
97/10 Oct 4161 £127,797.70 42 £887.50 3683 I £111,170.85
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Payments Received Stops & Expires Encashments Made
Month Number Value Number Value Number Value
97/11 Nov 3944 £118,586.85 60} £1,121.95 3604 I £111,877.85
97/12 Dec 10498 £280,222.35 85 I £2,279.45 6762 I £190,253.95
Total 52964 I £1,559,090.55 605 I £14,552.25 I 47292 I £1,414,364.0
0
6.1.4 PAYMENTS / ENCASHMENTS BREAKDOWN TO 31/12/97 - BY QUARTER
Payments Received Stops & Expires Encashments Made
Quarter Number Value Number Value Number * Value
96/3 30 £530.00 0 £0.00 19 £372.20
96/4 2549 £72,060.20 33 £609.80 2150 £60,795.80
97/1 9110 £275,689.90 124I £2,961.30 8454 £255,742.90
97/2 11407 £337,775.05 122I £3,369.60 11269 £334,807.20
97/3 11265 £346,428.50 139} £3,322.65I 11351 £349,343.25
97/4 18603 £526,606.90 187I £4282.90; 14049 £413,302.65
Total 52964 I £1,559,090.55 605 I £14,546.25 I 47292] £1,414,364.00
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6.1.5 PEAK ENCASHMENT DAYS TO 31/12/97
Date Day Number Value
97/03/24 MON 468 £14,645.80
97/04/07 MON 407 £10,719.50
97/04/14 MON 459 £13,255.20
97/04/28 MON 694 £19,739.50
97/05/19 MON 612 £20,907.00
97/07/21 MON 455 £15,710.30
97/08/18 MON 637 £19,262.50
97/10/14 TUE 513 £15,219.00
97/11/17 MON 476 £13,779.65
97/12/08 MON 465 £13,785.10
97/12/15 MON 610 £18,024.65
97/12/16 TUE 406 £10,861.20
97/12/22 MON 522 £14,801.95
97/12/23 TUE 751 £20,658.60
97/12/29 MON 674 £19,274.45
97/12/30 TUE 782 £18,839.30
Days 16
6.2 FOREIGN ENCASHMENT ANALYSIS
6.2.1 FOREIGN ENCASHMENTS BY TYPE
TO DECEMBER 1997
Type
Number
Foreign Encashments made at Post Offices
23
Foreign Encashments made by Payment
Card Helpline
53
Total
76
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96/10 Oct
96/11 Nov 8
96/12 Dec 14
97/01 Jan 16
97/02 Feb 34
97/03 Mar 54
97/04 Apr 62
97/05 May 55
97/06 Jun 132
97/07 Jul 80
97/08 Aug 66
97/09 Sep 68
97/10 Oct 50
97/11 Nov 17
97/12 Dec 23
Total I 683
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6.3 HORIZON SYSTEM HELPDESK CALL ANALYSIS
6.3.1 CALLS RECEIVED BY CATEGORY - DECEMBER 1997
[Dss IN/A PATHWAY {POCL [Total
A&G 8 228] 236
DE-INSTALLATION
DOCUMENTATION 1 4 5
ENVIRONMENT 3 i 14)
HARDWARE 1 8 73 82)
IMPLEMENTATION 2 17 19]
INAPPROPRIATE 1 1 30) 32
INETWORK 20 - 6 26
OPERATIONS 12 28 103] 143,
OTHER 8 8
SOFTWARE 1 53 41 95
Total 13 2 124 S21] 660
6.3.2 CALLS RECEIVED TO 31/12/97 - BY MONTH
Month Number
96/09 Sept 10
96/10 Oct 28
96/11 Nov 47
96/12 Dec 39
97/01 Jan 70
97/02 Feb 71
97/03 Mar 132
97/04 Apr 240
97/05 May 736
97/06 Jun 967
97/07 Jul 504
97/08 Aug 380
97/09 Sep 600
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Month Number
97/10 Oct 465
97/11 Nov 1024
97/12 Dec 660
Total 5973
6.3.3 CALLS RECEIVED TO 31/12/97 - BY QUARTER
Quarter I Number
96/3 10
96/4 114
97/1 273
97/2 1943
97/3 1484
97/4 2149
Total 5973
6.4 PAYMENT CARD HELPLINE CALL ANALYSIS
6.4.1 CALLS RECEIVED BY CATEGORY - DECEMBER 1997
BA ‘Cust/Eng Cust/Welsh POCL Total
CMS 20 337] 0 89 446
GENERAL 23 330} B) 138 496
PMS 26I 66 0I 43 135
Toral: 69 733; 5 270 1077]
6.4.2 CALLS RECEIVED TO 31/12/97
Month Number
97/11 Nov 437
97/12 Dec 1077
Total 1514
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6.4.3 CALLS RECEIVED TO 31/12/97 - BY QUARTER
Quarter Number
97/4 1514
Total 1514
6.5 OBCS TRANSACTION ANALYSIS
6.5.1 TRANSACTION VOLUMETRICS - DECEMBER 1997 (ALL TRANSACTIONS)
Total
Encash 364742
Issue 24339
Non-
Barcoded
Re-direct 238
Receive 27715
Total 27953
6.5.2 TRANSACTION VOLUMETRICS - DECEMBER 1997 (FOREIGN
TRANSACTIONS)
Total
Encash 17871
Issue /Receive 2220
Total 20091
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Quality & Risk Report
1. MONTHLY SUMMARY
. FRM progress. Investigation of fraud procedures are being developed, to
include reconciliation, FRM and Security Event Management.
. Risk. Management. A Fujitsu Risk report was completed, considering the
high level risks to the programme plan for NR2.
e System Security. NR2 security issues, in particular AP Signing, PCHL
authentication continue to absorb effort. Work continues to define technical
access control requirements.
* — Quality. An analysis of R1c migration equipment:failures has been
completed, highlighting software, procedural problems.as well as hardware
issues.
e Audit. We conducted the first ‘audit investigation’, which raised operational
issues which are being followed up. Considerable effort has gone into the
review of audit design and consideration of data storage requirements.
Internally, I have a:concern that the Audit design.is late, which may impact
implementation for NR2..
e Year 2000 Conformance. Reviews of all suppliers continues, including
product and service suppliers and is being monitored via a risk register.
POCL are now satisfied at a working level with Pathway’s approach to
compliance and have communicated this to senior POCL management. Joint
Liaison meetings with PDA, POCL and DSS are now beginning to consider
testing approaches.
2. PROGRESS
2.1 FRAUD RISK MANAGEMENT
2.1.1 RELEASE 1¢
. The FRM PCs in Bootle and Terminal House PCs are now installed. It has
still not been possible to produce accurate reports to the PDA because:
The transaction date is masked within the Business:Objects
Universe.
The migration of IGL data to the R1c warehouse did not
carry the correct benefit code.
Fixes for these. are known and will be delivered to the during the week
commencing 5/1/98.
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° Investigation of Reconciliation Fraud Procedure. A meeting between FRM,
Security and Reconciliation has been held to resolve the major issues, and
the process is now being progressed within the Reconciliation team.
2.1.2 RELEASE 2
¢ A significant problem has been identified in that EVP can be asked more
than once per customer session. It is linked to the inability of the Pathway
solution to identify Customer sessions, EPOSS sessions and BES sessions.
This is partly due to the system not being physically linked to the cash
drawer. Further investigation of this problem is scheduled for January.
2.2 RISK MANAGEMENT
e The Fujitsu Risk-report was despatched on 23 December 97. A sensitivity
analysis of the High Level Plan has indicated a 87% confidence interval of
meeting a target date of 5/10/98 for start of Live Trial. This is the latest
acceptable date.to the Customer for start before Christmas. Therefore,
should ICL Pathway fail to meet this, the next viable date is in January
1999. This would introduce a delay of 14 weeks with an estimated impact
on the Business Plan PBT of £28mn. The risks that are considered to have
the most significant impact have been identified. Quantification and
mitigation actions will be placed during January.
2.3 SYSTEM SECURITY
e PDA have agreed to sign off vn3 of the SFS with a caveat for operational
sites. PDA have produced a review of vn1.3 of the ACP.
° Significant effort to provide SFS and ACP document histories for Mason’s
Solicitors.
2.3.1 RELEASE 1C
° Key material for the protection of links for the SSC relocation to Bracknell
and the protection of Oracle and Sequent support links have been
implemented.
° The ‘Tivoli Red Alert’ has been successfully managed with extensive fault-
free testing of the modified adapter.
e Meetings have taken place with Alliance & Leicester security staff to gain
experience of security approaches and procedures eg DPA subject access
requests, event management.
2.3.2 RELEASE 2
° Progress has been made with specifying the R2 requirements for a secure
Sequent platform and SecurID tokens.
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. The TSC design for Key Management at R2 is under review, and will be
published during January 1998.
e A design to enable ‘crude’ digital signing of Automated Payments was
agreed internally as a potential solution for Release 2. However it still
requires considerable-development and therefore poses significant risks to
programme timescales. Position with PDA remains that it will not be
provided for NR2.
° An acceptable means of authenticating the Payment Card Help Line (PCHL)
staff to Post Offices continues to exercise much effort. Chris Sundt has
visited the BT Network Security Investigations Group in an attempt to
identify COTS products which will provide the authentication required
without impacting transaction timings or related $LA’s at the PCHL. These,
arid the better quantification of the threats are being considered.
2.4 QUALITY
e ~~ ARIc migration DQA report has been drafted and circulated for comment.
Actions to be agreed with actionees and summarised in an Improvement
Plan.
. Evaluation-questionnaires have been received from 3 prospective suppliers
of EFTPOS software. None has ISO registration or equivalent-although all
work within the APACS environment and claim to have documented
processes. Feedback has been input'to the selection review.
e Issue escalation. CS have found that the. 3", or subsequent, PUN issued for a
particular card will not activate the card. The system appears.not to be
updated with details from PUNs beyond: the second. A work around has
been.agreed, and temporary action implemented to limit the size of the
potential problem, pending availability of a modification / solution.
. Ric migration equipment failures. Analysis hasbeen completed and a report
circulated. Traceability has been hampered by differences in the numbers of
+ failures reported by different systems and by inadequate identification of
equipment returned for diagnosis. Failures were categorised as software
problems, procedural problems (including Exel installation and diagnostic
activities which contribute to equipment judged to be NFF) and R1b
hardware problems, as well as (relatively few) R1c equipment failures:
° 1997 Packaging Recycling / Reclaim Returns. Corporate Environmental
Affairs advise that Pathway should contribute to the overall ICL report and
input is required by mid February 1998. This has. been kicked off with
Implementation.
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2.5 PROCESS MANAGEMENT
e A follow up review of Process definition within Implementation has been-
conducted; to set the standard for documenting Roll Out processes:
Implementation have published a Quality Plan summarising the approach
to be followed; this is being reviewed.
2.6 AUDIT
e The audit workstations at Wigan datacentre were tested and found to be
improperly configured. This was compounded when attempts to use the
workstations at FELO1 failed - again the PCs were found to be incorrectly
configured. This is being tackled by CFM.
e Investigative support. The audit system for Ric was used for the first time in
anger to provide information and analysis for the investigation of suspicious
events at the ‘Bath Road’ Post Office (subsequently found to be an ISDN
line problem which was undetected for some time). This has raised the issue
of the role that Audit function plays which will be better defined.
. Considerable effort has gone into reviewing and considering the Audit
design and approaches. There is considerable concern at the lateness of the
design (for Audit and Data storage), and potential impact on the programme
timescale or acceptability of NR2.
¢ The.requirement for data as detail for Audit trails is being developed. The
approach that is being considered is to regularly audit and prove the-correct
operation of the system and use consolidated data for in depth audit. This
will minimise the requirement for data storage. The approach will be
discussed with BA and POCL, to gain agreement to the principles.
2.7 YEAR 2000 CONFORMANCE
e Product suppliers. Issues remain with FJ and the hardware inventory, BMC
and Sequent dates. Monitoring of progress against stated plans for
conformance should be the responsibility of staff with the relevant product
responsibility - there is still an issue identifying these staff.
e Service Providers. The forecast date for the delivery of the CFM compliance
plan has slipped to mid January 1998. Compliance statements have been
received from all major external suppliers with the exception of D2D.
e Testing. Planned tests do not fully exercise the erid to end system, in
particular the network infrastructure. This is being purstied.
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e Internal IT. A survey of the desk top PCs is underway by CS to establish
what software is installed. The Oracle Financial System is not Year 2000
compliant at its currént version. CFM have proposed to upgrade to the
later/compliant version; however the package is seen to be too complex for
Pathway’s business needs. It is recommended that the decision date for the
replacement be brought forward from Q2/98 to end Q1/98, to allow
1998/1999 Year end processing on the new version.
. Ray Jaggers (POCL Year 2000 compliance) has written at our request to
Paul Rich advising that POCL have sufficient visibility of Pathway’s plans, in
conjunction with joint end-to-end test initiatives, that this is no longer a
major issue.
3. CURRENT CRITICAL PROBLEMS
. None
4. ISSUES
. The Risk Management process is still not- functioning as required and a
review is required in January to ensure all NR2 and R3 activities can be
completed. :
° The audit design, and by association Security Event Management, for NR2
is late. This is causing concern about the extent of the implementation for
NR2.
° Acceptance of NR2 security exclusions in particular AP Signing and
definition of an acceptable solution to the authentication of Help Desks in
fallback continue to be issues.
5. COSTS
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1. SUMMARY
e A quiet month overall as the team caught up on untaken annual leave - well
deserved.
e BillPay is still grinding along. A. meeting post Christmas with Paul Harris,
Head of Financial Inpayments highlighted a number of outstanding issues,
namely end-to-end _.reconciliation and MIS. He also:explained the financial
difference between the two solutions, BillPay and APT. We have had to
remind Paul that our proposal was based on the system.that existed, not the
full Release 2 version. My current thoughts are that POCL will not:make
any decision for either BillPay or APT! .
.@ The.Client position is still flaky: Stuart Sweetman is about.to send out a
‘letter to all Clients explaining the:current position on dates for the
programme. Clients are generally still very supportive but find it impossible’
to commit while the uncertainty persists.
e Significant time and effort is now being spent on Social Banking and good
work is being undertaken with Bert Bertoloni in scoping the opportunity
and identifying potential ways forward. The principal aim is to put a set of
arguments together to convince Ministers of the potential of the Horizon
programme. This work is now encompassing direct client contact with the
utilities and BA.
° POCL’s CEC (counters executive committee) plus 11 other POCL senior
management attended an SEP at Hedsor on'15/16" December. This was a
very successful event albeit the proof will be in the actions taken as a result.
Claire. Le Fevre, CITU was joined on the speakers side by Chris Yapp and
Jacques de Cock, All of these input sessions were stimulating and well
received and might-have even shocked POCL with some of the current
views on happenings in their related business world. I am proposing that we
may offer another event for the Post Office.
° Government.direct (from a post office perspective) continues to make little
progress. As was demonstrated at the SEP Post Office are not on the inside
track and are not making the running., This may still be an opportunity for
ICL but it needs to be evaluated carefully.
© Customer Education is making some progress. It will move from the PDA to
CAPS but CAPS are showing some reluctance to picking it up. Also it has
become very obvious that BA do not want POCL to have any involvement
in Customer Education. However, POCL have a different view. The only
issue for us is'with both sponsors.involved the approval route is longer but
that-has to be built into. the plan. It‘is still our‘aim:to have thée-overall
customer-education strategy signed off by. mid February.
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Not much progress on the commercial issues around Implementation but a
meeting with Mena Rego and Bruce McNiven on 15" Jan. will help to move
these issues forward.
There has been a varying amount of press interest over the past month. BA
and POCL seem ever so keen to pass the contacts in our direction. We need
to exercise extreme care with the press and ensure we stick to the agreed
lines,
2. PROGRESS
2.1 BUSINESS DEVELOPMENT
BillPay continues to absorb a lot of time. Tony Lavery submitted another
batch of documents 'on Christmas Eve. An internal review has taken place to
ensure that WE CAN DELIVER if POCL give the green light. While some
concerns do still exist 1 am assured that as long as POCL understand the
scope of our offer and more importantly what we are not offering then
there is no reason why the BillPay solution will.not work effectively and
deliver the business benefit.
Brian Hauxwell is continuing his work on defining the generic banking
product. I am expecting to sce a draft spec. in the coming week.
Other BRDs are still counted as WIP. No major movement on any of them
and none was expected.
2.2 CUSTOMER EDUCATION
A lot of expended time in handling the press activities. In the absence of any
activity on the sponsors part, it falls to us. This activity may continue for
some time. In the light of the article in Government Computing, it is vital
that we notstick our-necks out. We will resort to ‘no comment if needs be.
Release 1C sites are mow bringing new card customers onto the system. All
Customer Education activities have worked well and all collateral is
available via the fulfilment service.
2.3 CUSTOMER RELATIONS
Presentations and discussions on the Horizon system have now taken place
with the Welsh and Scottish Postal Boards. A similar session tales place with
the Northern Ireland Board on the 13" January. The Boards comprise the
Regional directors of POCL, Royal Mail and Parcelforce plus-a non-exec
Chairman. Their’role is to monitor the Post Office business on a Regional
basis and promote Post Office either politically or in'the business
environment.
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° Martin Johnston is continuing full time on sorting out the Agreements to
Agree.
3. CURRENT CRITICAL PROBLEMS
4. ISSUES
‘5. COSTS:
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3.
4.
International Sales Report
SUMMARY
PROGRESS
CURRENT CRITICAL PROBLEMS
ISSUE
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Organisation and Personnel
1. MONTHLY SUMMARY
A very busy month with some key activities and initiatives being managed,
This has combined with positioning the furiction to operate without a
Personnel Operations Manager in the short term
2. PROGRESS
Graham Chatten.has joined as Programmes Office Manager. Graham was
identified through a search campaign and we have been particularly
fortunate that he is ‘able to-start within days of appointment. This has
enabled a high quality handover from Barrie Vaughan
The approach to renewal of freelancer contracts has dominated work during
the month and this.is now agreed with appropriate line management. This
represents:some difficult work which will stretch throughout the first
quarter and close management is essential to success
The managing performance framework is now live and is being cascaded
throughout the organisation. Effort has been focused on keeping this
approach both simple and effective
Flexible benefits become available to all staff during 1998 and a
communication process and method of making personal choices in benefit
mix is now being rolled.out
The ICL Pathway bonus has been communicated to all permanent staff
3. CURRENT CRITICAL PROBLEMS
Melanie Lyng, Personnel Operations Manager, left ICL Pathway at the end
of the month. Despite her extended notice, it is very disappointing-that we
do.not currently have:any replacement identified. Both internal advertising
- and requests for interim support from other parts of ICL Group have not
generated candidates. Authorisation from Group Personnel to resource
externally has just been achieved and an advertisement will appear in the
Personnel Media first thing in January. One way or another, interim cover
is required for at least the first quarter and, without it, limited service is
certain.
4. ISSUES
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The Post Office -.Client Director’s
1. MONTHLY SUMMARY
Following the completion of the input for the.second MDs workshop 8
Dec.in follow up to the PA Audit Report, the major activities have béen-in
preparing for the POCL SEP; and completing the Call Centres Proposal.
2. PROGRESS
2.1 PATHWAY
Following discussions with Basil Shall, there is now an opportunity to _re-
open involvement with the Post Office government.direct pilot
“genesis.direct”. We have also reviewed the Microsoft work on iFORMS
involving Inland Revenue, Contributions Agency and HMCE. In both
cases further ICL involvement needs careful qualification.
2.2 CALL CENTRES
The Customer Contact Centres ITT turned out to be closer to an RFI,
leading to uncertainty whether they have already selected preferred
partners. The ICL team, put together from Call Centre’ technical and bid
skills in ICL Ireland and in Kainos, together with staff borrowed from ICL
Enterprises, delivered a comprehensive proposal on time; incorporating
specialist telephony hardware from Lucent technologies and specialist
software from IBM Callpath and Graham Technologies. We have
positioned ICL as the systems integrator and prime contractor, based on a
track record of'building similar systems.for Telecom Eireann, Lombard.&
Ulster division of NatWest and ScottishPower.
2.3 OTHER ACTIVITIES
The One Stop Shop Desktop bid, which false-started earlier in 1997, was
re-advertised in the European Journal. This opportunity has been tracked
by Mark Newall, Tplc account-manager for the. Post Office, who is leading
the response. Tplc are shortlisted (one of five) with reference visit by the
evaluation.committee to Warrington Feb 9".
A new Journal ad has appeared for supply of architecture and tools for
Desktop service management. CFM-have appointed Paul Arnold as
salesman to progiess this one.
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