ICL Pathway
Bringing
Technology
to Post Office
Counters &
Benefit Payments
January 1999
Monthly
Progress
Report
Mh
POH- 3930
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ICL Pathway Programme Monthly Report Ref: PA/REP/034
. Version: 1.0
Date: 22/02/98
Document Title: Pathway Monthly Report - January 1999
Associated Documents:
Reference Vers Date Title Source
(1) PM/PRO/002 - 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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Managing Director’s Summary
sz Systems Report
==: Commercial & Financial Report
Ze Customer Requirements Report
Customer Service Report
Quality & Risk Report
ge Business Development Report
International Sales Report
Organisation & Personnel Report
Post Office Client Report
—)
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Managing
Director’s
Summary
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ICL Pathway Managing Director’s Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
Managing Director’s Summary
PROGRAMME PROGRESS
e The End to End final pass activities started on schedule on the 8" February
with full support from the sponsors, This includes both single benefit and
multi-benefit functionality since our product does not distinguish between
the two.
2 ~~ Model Office Test preparation has proceeded to plan with a target date to
start Model Office on schedule in week beginning 15‘ February. This MOT
will use the same code’set as End-to-End but will only check out single
benefit for child benefit claimants. This follows the decision by DSS to'split
their Model Office activities.
° We have issued a new version of the Known Problem Register (KPR).and
the:entries now have reduced somewhat to less than 100 due to work in
clearing the-issues over the last.few weeks. Within our security testing
activity there still remains a large number of security PinICL’s, and until
these are successfully cleared, there will be an impact-on the time we can
start the acceptance tests for.security.
. On acceptance we now have a way forward and all the Acceptance Test
Specifications with the exception of the one covering Benefit Encashment
Service (BES). On this one we have a boundary issue-between POCL and BA
covering their shared liabilities in the case of a major disaster with the
system. The position we maintain is consistent and clear, but this had'lead
to a legal impasse between the sponsors. We are escalating the
correspondence on this to force the issue on to the table.
e We are continuing to run acceptance trials and are getting a success rate
now at over 90%. This does require re-runs and regression tests to complete
the trials prior to raising a closure report and this work is now being
tackled.
e@ On acceptance we have also started the review cycle of acceptance and five
of these were completed during the last four weeks.
e All plans work towards a National Roll-out date for NR2 in August 1999.
Nevertheless there has, during the last two weeks, been a major
confrontation with the Benefits Agency who have abruptly and unilaterally
moved their multi-benefit Model Office plans by six months. Following
strong representation from ourselves and POCL some of it quite legal in
nature, DSS have become defensive and attempt to retreat on the issue.
Nevertheless the issue remains untidy, could lead to press leaks and needs
rapid and complete resolution. This will need to be watched extremely
carefully.
. Work is progressing to establish and test the software baseline that will be
used in Live Trial via Systems Test and BIT regression runs.
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ICL Pathway Managing Director’s Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
. Design of the sponsor business functionality of NR2+ is now well
advanced. However difficulties exist in getting the designs baselined due to
outstanding CAR’s and CCN’s.
NEGOTIATIONS WITH THE AUTHORITIES
. More discussions have now started with HM Treasury who remain
committed to find an acceptable way forward for all parties. This will lead
shortly to a further round of meetings with the responsible ministers. Our
formal proposal, submitted on the 18" December 1998, still remains on the
table as our last total position.
° Further details ofthese negotiations have been provided to the Investment
Strategy Committee (ISC) and to the ICL plc main board;
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jody
SUIDISAS
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ICL Pathway Systems Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
Systems Report
MONTHLY SUMMARY
e _. The two pre-proving test streams scheduled for 6"* and 18" January 1999
completed successfully and the Sponsors agreed to enter the formal model
office and end to end tésts in February as planned.
° The design and development teams continue to focus on incident analysis,
fault clearance and regression testing. Work has also begun on preparation
for the Live Trial due in.May 1999.
e The second usability trial is now scheduled to commence 22" February
1999 in Twickenham Regional Post Office. Two counter systems have been
built and tested and are planned to be installed 19" February. This exercise
will provide feedback from experienced POCL staff as opposed to the Sub-
postmasters who participated in the previous trial.
* The Benefits Agency unilaterally ceased work on the multi-benefit testing
activities. Although there has been correspondence between the two parties
at a senior level, the rig remains idle.
° Work on new release 2+ continues but the schedule is coming under
increased pressure as a result of the demands required to support NR2
model office, live trial and contractual-acceptance.
PROGRESS
e The two 6 day pre-proving testing streams completed without major
incident and the Sponsors:agreed to enter the formal E2ZE and MOT streams
scheduled for 8" and 15" February respectively.
e The design, development and testing teams continue to concentrate on
regression testing and fault clearance. The departtire of one or two key
individuals has created additional pressure for the remaining staff but they
have coped well. The main focus has been BIT. regression, Reference Data
proving, Migration proving-and stabilisation of the Live Trial baseline.
e Several potential changes to the design are being evaluated has a result of
operational difficulties e.g. parallel running of MiMan, installing MiEcco on
the training counter. Fallback options are also being considered in event
that the changes cannot be implemented in time or it is too risky to go
ahead with them at this stage.
¢ The’business application enhancements for NR2+ are progressing well but.a
number of additional infrastructure facilities are still being evaluated. For
example, a replacement reconciliation support system, an estate
management system to plan-and co-ordinate the opening and closure of post
office outlets.
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ICL Pathway Systems Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
¢ The Key Management System remains the critical path activity NR2+ but
the design and development work-of this very complex area is still on
schedule. Despite.a number of failed attempts to reduce the functionality,
we continue.to explore every avenue to mitigate the risk of missing the
delivery dates.
CURRENT CRITICAL PROBLEMS
e Software fixes not considered critical for MOT and technical infrastructure
changes not exercised in MOT are implemented in the Live Trial
Build/Baseline. This version is currently being regression tested in parallel
with E2E and MOT. There is a risk however, that the customers will insist
that this'version is:also subject to a MOT resulting in consequential slippage
to the roll-out schedule.
° Due the number of problems encountered with the Audit functionality in
the BIT Final Pass cycle, it was removed and rescheduled for the BIT
tegression test. Acceptance will be achieved via BIT and MOT. If we
encounter serious issues we may now have insufficient time to resolve them.
ISSUES
e Software problems which cannot be rectified in the time available continue
to be submitted to the sponsors for business impact evaluation. There is a
risk that the sponsors will insist that certain errors are rectified before
National Roll-Out, although this has not been the case to date.
¢ = We have still to prove the new message store replication mechanism when
PC’s are replaced in outlets. The current approach takes too long and is
unworkable.
e Although development has started on KMS, we are still seeking ways of
reducing the scope of the functionality to:reduce the risk of slipping the
delivery dates.
¢ The security requirements for the protection of the Siemans (formally L&G)
code are still not approved. Architectural changes are still being proposed at
this late stage and these must be resolved quickly if we are to maintain our
delivery dates.
. We have now identified a number of infrastructure performance upgrades
which are necessary to support all 20,000 outlets. They include the
introduction of VPN into the network and an upgrade of the Riposte
Message Server. Plans are currently being drawn up to describe how and
when these changes can be implemented.
. Now that the total Pathway system is built and will shortly be in full
operation, it has become apparent that there is a need for a Riposte
regression facility; i.e. a special environment which enables new versions of
Riposte to be properly regression tested.
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ICL Pathway Systems Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
The PSTN solution remains technically unproven until completion of the
Tivoli developments, even though we do not expect to modify the business
functionality.
° ICL Pathway believe that it should now assume responsibility for the BES
application developed for the counter by Escher, this will enable the
product to be completed for NR2+. The commercial negotiations are in
progress.
° Plan for the introduction of NUMA-Q are well advanced. However, care
must be taken to ensure that the NR2 roll-out is not impacted.
. The Systems Directorate organisation.needs to evolve to handle the
additional workload anticipated in the immediate future, particularly the
applications emerging from the Citizen Direct/Golden Cloud initiative.
COSTS
e The systems directorate is currently refining the 1999/2000 forecasts and a
series of regular financial reviews havé been scheduled throughout the year.
These are designed to enable management to monitor the detailed
expenditure on a monthly basis.
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+
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yIodayy]
jerueuly 2 _
[ep sJoMMUOr) ———=
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
Commercial & Financial Report
MONTHLY SUMMARY
The contract.restructuring remains to be agreed, either on the terms of the
draft MOU of 18" December or some other basis.
Pending such agreement, the outflow of funds continues at an increasing
rate on the presumption of a satisfactory outcome. In the absence of new
funding arrangements, Group is having to fund Pathway activities from the
corporate overdraft facility.
Management has bought into the need to.find new ways to reduce’costs.
The immediate problem is that, in the short term, the pressures to achieve
Acceptance and the required rate of roll out continue to drive demands up
not down. The challenge right now is to hold to the current net spend
forecast (after revenue récoveries) and at the same time hold to Programme
milestones: Cost Down measures will be required to achieve this.
The validation of the Business Model has been completed and Grant
Thornton aré finalising the report.
A meeting of the Joint Programmes and Commercial forum was held during
the past month. There appears to be a new and positive focus on the part of
Horizon on.closing down outstanding CCN and operational issues, with
some helpful organisational changes to bring this about.
The A2A activity has moved.forward, with a much tighter definition of
work required agreed and allocated across ICL Pathway staff. The target is
to submit:the majority of the CCNs by month end, numbering 80 in all.
Negotiations have continued with a number of suppliers.
The intention is to complete the streamlining of the forecast process before
the start of the new financial year.
PROGRESS
Start of E2E testing and Model Office Test
Continued smooth running of the R1cservice
A useful meeting of the Joint Programmes and Commercial forum
BUSINESS CASE
Nothing to report.
COMMERCIAL - CUSTOMER FACING
A meeting of the Joint Programmes and Commercial forum was held during
the past month. There appears to be a new and positive focus on the part
of Horizon on closing down outstanding CCN and operational issues.
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
° Keith Baines now reports directly to Dave Miller, and Liz Blackburn to
Keith. The linkage between Commercial and Programmes has improved as a
result. Keith and Bruce McNiven appear to be working together to solve
problems in the training, implementation and migration areas. That gives us
a good opportunity to resolve down a number of issues that have been
around for some time.
* The contract baseline of Baseline Version 8 plus CCN117 is, as we
understand it, effectively agreed as a starting point for restructuring the
contract.
e The A2A work has identified the need to raise 80 CCNs to enable us to firm
up the contract baseline. The majority involve changes to’Solutions rather
than Requirements. Requirements are typically written at.a high level and
call for A2As. The resolution of A2As is typically captured in documents
which need to be incorporated into the contract as Contract Controlled
Documents. Solutions need to be amended to point to the appropriate
CCD. We need to complete.this CCN drafting work by month end to
protect our contractual position.
COMMERCIAL - SUPPLIER FACING
° Supplier negotiations continue,with WTL and others to improve our
contractual safeguards, terms or operational processes, or to deal with the
many change requests which continue to affect suppliers.
e An increase in supplier contract activity is anticipated once the outcome of
the HMG review process becomes clear.
FINANCIAL CONTROLS
e — The first Budget/forecast review of the year was held with Systems,
Implementation, and Customer Services. The result was a strong indication
of continued upward pressure on both headcount.and costs in general. A
management judgement has been made that not all the costs identified by
the line directors as being necessary in 1999/00 will in fact be required.
Achieving the combined result of contained costs on the one hand and work
output-on the other will be a major challenge for management. The risk is
that timescales will slip unless the additional resources are brought.to bear
quickly.
e A new monthly forecasting timetable, with two management review points,
has been put into place. Early indications are that this will significantly help
focus management attention on the key cost issues. Work continues on
improving other aspects of the forecasting processes.
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
° One Change Request was raised in the month to bring about Cost Down in
an operational area (optimising the mix of registered post versus recorded
delivery). However, this will show little real benefit until 2000 (when card
roll out begins in earnest) and will require some-additional work in 1999.
The change is needed to achieve the cost profile already assumed in the
Business Case.
. Refinement of the strategy for the third-data centre for standby purposes
has reduced future operational costs slightly, but again there is no reduction
in the short term.
. Review of KMS with the objective of reducing development costs ‘and risk
are likely to confirm the current approach: KMS7is the largest single
component of NR2+ work, and is required for APS as much as for BPS.
° Review of new business development delivery as between the UK and
International has identified an opportunity for synergy which should
improve effectiveness and reduce costs, but not by much.
e The best opportunity for Cost Down in 1999 is robustness in our defence of
contract baselines and in charging, for changes to those baselines under
change control. This is only now becoming a realistic possibility as the
baseline documents are brought into the contract under AZA CCN. A2A
CCNs represent our best chance of securing net cost reductions in 1999.
CURRENT CRITICAL PROBLEMS
e Still dealing with.the volume of A2As.
e Still not having a firm decision on the Main contract.
ISSUES
° The continuing cash drain without any agreement with HMG: in January,
this-was £18m.
e The poor state of the Business Case.
e The continued upward pressure on costs and continued BA attempts to
delay multibenefits in particular and the programme in general, both of
which can only make the Business Case worse.
° No identified Cost Down opportunities for 1999.
° Funding requirements.
COSTS
e As stated above, the cost picture is not good.
° The Controller’s report follows.
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Ref: PA/REP/O34
Version: 1.0
Date: _ 22/02/98
ICL Pathway Commercial & Finan
JANUARY ACTUALS 1999
KEY NUMBERS (£000’S)
January 1999 Temonths
Variance va to Jan 99
Actual Forecast Actual
Revenue 48 18 1,087
Project Costs before Capitatisations 9.272 1,439 113,025
Dectared PBT Losses 100 123 1,396
CastvBalance Sheet Business Operating Cash Flow (18,488)} 4,780 (127,308)
Project WIP 208,382 1,316
Net Fixed Assets 44,842 4,391
Total Borowings 247,261 1,780
Tanuary 1699
Variance ve.
Headcount: Actual Forecast
Permanent 200 3
Non-Permanent (ITs and Temporaries) 10 2
(Momo): Freelancers procured through ICL IT Contractor Services 184 i)
‘Comments:
There were favourable variances in virtually all key areas.
Project costs were £1.4m lower than forecast. with a mixture of ing diferences and over accruals in previous months. Intemational Sates costs were well down
(on forecast, due to delayed recruitment
Headcount was very close to forecast, athough the use of freetancérs in he systems area continues at above forecast levels,
Borrowings were favourable to forecast because due mainly to longer than forecast eredtt terms taken from suppliers.
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
JANUARY ACTUALS 1999
PROJECT COST ANALYSIS (£000’S)
anwary 7595 months
T Variance vs. to Jan 99
Actual Forocast ‘Aetial
Revenue 48 8 1.067
Oweet Cost of Sates 1750 135 I arse
Gross Margin (Deficit) Trio} 153 109
Opéx= I Labour - Own Stat . 670 49 9212
Travel & Sunsistence 46 15 872
Freelancers 1.529 478 zor}.
{Ct Suncontracis 1165 386 17248
Other Subcontracts 971 103 9228
Depreciation 1373 2 14.086,
Marketing 32 2 579
Professional 409 151 26
Otner opex 438 74 4570
{Gross Project Opex 327 7302 TIE
Interest costs 4.355 ca] 13,49
Costs before Capitalisations . sa 4,439 113,025,
Declared POT Losses 105 1 135
Captad ne WP eur yor I
Comments:
Revenue was sighily ahead of forecast due to invoicing of change control costs to POCL.
Dwect cost of sales were below forecast, due mainly to tower than forecast costs from Outsourcing. In ope, the largest individual variance was on (reetancer cos,
whore previous accruals covering the Christmas and New Year period proved 10 be higher than necessary. ICL Subcontract casts also came in below forecast, wh
Solution Centre support of Tél and Product Support costs trom Outsourcing beng the main areas of favourable vanance.
Lower Escher costs were responsible ‘or the gain on ather Sudconiracts, but his if expected to reverse next rionth as development miestones are achieved.
‘Simdary, the favourable vanance on protessional fees is merely one of timing, with certain costs associated with additional inancing not having been incurred a yet
Dectared losses were less than hail the level forecast, with recruitment in that area being shelvéd for the moment. pending bid news on several overseas projects,
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
JANUARY ACTUALS 1999
HEADCOUNT
PERMANENT HEADCOUNT
Systems
trnplementation
Customer Service
Intemational Sales
All other departments
Totals - Pormanent Staff
NON-PERMANENT HEADCOUNT
Industrial Trainees
Temporary Stalt
Industrial Tralnoes and Temporary Statt
Froolancors sourced through ICL. IT Contractor Sarvic:
Systems
implementation
Customer Service
International Sales
Allother departments
Totals « Highor Skilis Froclancors
Totals - Non-Permanent Statt
Grand Tole - UK PFI Project
Grand Total - Intemational Sales
GRAND TOTALS.
January 1899
Variance va.
Actual Forecast
a 2
50 )
55 f
4 .
50 5
200, z
Tanuary 1099
Varlance va,
Actual Forecast
10 -
2
1 Zz
142 ony
4 ol
7 .
9 9
2 2
184 a)
184 7
3a ca)
13 9
334 4
Comments:
‘Overall neadcount tevels were close 10 forecast.
with’'some overruns in implementation coused by
early recruitment in the rollout support areas,
Continuing high usage of freetancers in systems
departments was offse! by [ack of new recruiment
Into international Sales.
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/034
Version: 1.0
Dare: 22/02/98
CASH FLOW (£000’S)
Tanuary 1608 13 months
Variance va toJan 99
Inflowsl{Outflows) Actual Forocast Actual
Net Project Cosis - capitalised into WIP 9372] 1216 + (11629
Project cosis taken siraGh to P 8 L {300} 123 (1.388
Depreciation 1373 1] Prats
Movement in ther Working Capital tems 6270) 1950) 6731)
Fixed Asset Additions 6319) 1432 23.385]
Business Operating Cash Outflow (18 488)] 1.780 (127 305)I
Opening et Borrowings T3ET7S BSE
Closing Net Borrowangs 247.261 1.70 217.261
BALANCE SHEETS (£000’S)
January 1999 - (Total Pathway)
Actual Forecast Comments:
Net Faxed Assets 44,842 46,233I The lower project costs helped to drive the
Project Wark in Progress 204,382 205.698 I favourable variances in borrowings at the end i
Other Working Capital (13,948) (14,997) ‘of the month. ~
Totals 235.276 236,934 This was assisted by lower than forecast fixed
asset additions. partly offset by tho resultant
‘Share Capital 20,000 20,000 adverse working capital position.
Retained Eamings (1.988) (2,107)
Net borrowings were £1.8m better than forecast,
Group Pooled Borrowings 44,141 33,041 with the borrowings mix again impacted by the lack
External Loans 173,120 186,000 of any new drawdown of funds from the £200m
Tota! Borrowings 217,261 219,041 Asset Co facility,
Totals 255.276 FEET]
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== Customer
—~
== Requirements
Report
TN
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ICL Pathway Customer Requirements Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
Customer Requirements Report
MONTHLY SUMMARY
° There are‘now 21 approved Acceptance Specifications. The principal issue is
the fact that POCL will neither approve the BES specification on legal
advice nor formally state their reason for not doing so. A further, stronger
letter has been sent to force the issue into the open. Progress is being made
on Acceptance Trials closure reports as testing concludes and a start has
been on the Reviews part of Acceptance.
DETAILED PLAN ACTIVITIES
NEW RELEASE 2
e The Known Problem Register (KPR) (declared problems which should not
prevent Acceptance provided there are few medium severity entries) has
reduced a little to 92 active problems. A new version of the KPR, 2.04, was
issued corresponding to the MOT level of software.
e Authorities’ comments on the PAS and.CMS Service Level schedules were
reviewed with Peter Robinson (in response to CCN 259a). The on-line
dialogues section of the PAS Service Level schedule, relating to composite
transactions and temporary token functions, was reworked to assist CS.
° The BES, PCDF and PCHL PPDs are currently under formal review. The
principal outstanding issue relates to timing of cash handover and its
relationship with BES finish and EPOSS settle-functions.
° The Security Forum concentrated on PinlCLs and is about to change its
focus to the Live Trial PinICL work in progress.
RELEASE NEW 2+
° Tony H has produced a 100-page document setting out all BPS
requirements for NR2+ driven by Customer Requirements.
. A paper on Requirements for Card and Temporary token impounding was
completed to provide guidance to Design for NR2+ work. Clarifications for
several new NR2+ items were sent to AT&C and Design.
e The DSS Processes (CAPS) review meetings continued in a constructive
fashion. The POCL Joint End to End Design Working Party weekly
meetings continued: the action here is to constrain the work to activities
useful to Pathway.
CARS
° The outstanding CARs (Contracting Authorities’ Responsibilities) for LFS
were formally notified to POCL who were already late with their delivery.
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ICL Pathway Customer Requirements Monthly Report V Ref: PA/REP/O34
ersion: (1.0
Date: 22/02/98
A2AS
e We participated substantially in the reviews of A2As (agreements in
principle to be converted into agreements in practice).
CCNS / CRS / CPS
e CCN 117: This is reportedly approved by DSS, possibly by POCL also.
e CCNs were completed and issued for CRBO05 (single signature) and
removal of clerk id and a minor rework on CCN317a / CP1428 (card
reissue after impound via online dialogue completed and circulated.
e A CCN is in preparation to cover amendments to Foreign Encashment
counting rules. This will meet Authorities required treatment of multiple
encashment situations and also enable Pathway to come into full
conformance.
° We have suspended work on CR.29 (final accounts) and rejected CR 32,
(changes to cash account) until POCL articulates the changes properly.
ACCEPTANCE SPECIFICATIONS
e The Reference Data specification achieved approval.
e The BES specification is the problem area with POCL unwilling to approve
it on legal advice. A further, more strongly worded, letter has been sent to
force the issue out into the open where suitable actions can be developed.
© POCL Infrastructure - A way forward has been found on the two issues
remaining. POCL will settle for the documents originally listed in the
Solution being available in the Live Trial period and the preparation of
these documents is-:now in hand. They are also ready to agree to formalising
a capability to acknowledge transfers across TMS, which will clear the
TMS/OPS boundary issue.
° Service Boundaries - the 24" specification. The main review document,
Boundary Performance Methodology was issued for Horizon comment. The
actual boundary performance measurement capability does not have to
available until the end of the Operational Trial period. A CP has been raised
to for boundary performance information at NR2+ (and ‘also to meet the
needs of CSS for improved metrics).
ACCEPTANCE TRIALS
. BES - The Final. Pass for BES was 80 % successful, 10% unsuccessful and
10% not proven. The Acceptance Trial closure report was started and will
be completed when the MOT BIT rerun concludes; a significant
improvement in the success rate is expected.
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ICL Pathway Customer Requirements Monthly Report Ref: PA/REP/034
Version: 1.0
Date: 22/02/98
° PAS/CMS, DSS Interface - T&1 produced a very good test report following
BIT and the rerun phase of Final Pass is expected to take the success rate
over 90% by around mid February. A further pass on the Live Trial baseline
should complete mid March and enable this hurdle to be cleared.
° OBCS - The closure report was updated to reflect final PINICL closure.
° APS - No response to Closure report.
* Security - There is still some way to go to complete che Technical &
Security testing. The Security PinICLs improved with 13 Medium and 64
Low outstanding. There are 46 tests deferred into Live Trial for the Rollout
Database awaiting the secure platform. MiECCO accounts for a further 26
deferred tests and there are 150 tests to repeat. The third party tests are
progressing well but too late for the closure report.
° Service Levels (Performance) - A complete review of the testing activities
and timetable for completion of the tranches of work needed for Acceptance
was held. This area is now progressing better.
° Systems Management testing should complete in good order with its final
report on 8/2/99. Technical Integrity and Networking will.achieve a similar
date although will have some tests outstanding.
¢ The rerun stage.of the EPOSS final pass, on which the closure report can be
based, is about to-start.
ACCEPTANCE REVIEWS
e Five Acceptance Review plans were completed and the Customer Education
Acceptance Review itself is planned for mid February.
. For BES the vital document is the BES PPD, which is likely to be the pacing
item.
e The considerable documentation needed for the Security reviews is in good
shape, albeit a few still in early draft.
NEW BUSINESS SUPPORT
e APS - The requirements.for Simple Payment Module were agreed and
included within R2+. The:final documents from Siemens are not yet
delivered and our charges not committed. The APS Client Connection
Service Description was completed, priced and issued. Design has requested
a'statement of all the APS R2+ requirements - in preparation. Dave C is
helping CS agree the scope of the Token verification Service, and Design in
agreeing the scope of the R2+ APS Reports.
e TIP - The Disaster Recovery Interface Service proposal was produced,
priced and issued in response to CR R33.
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Date: 22/02/98
OTHER TEAM ACTIVITIES
e Dave H chaired the Workflow Management Coalition Technical Committee
January meeting.
e Dave H presented a paper for Pathway on the use of workflow as an
integration tool at the IBC banking conference on the Integration of IT and
Business Strategies in the Front, Middle & Back Office.
CURRENT CRITICAL PROBLEMS
e The issue in approving the BES Acceptance Specification will become a
major problem within two months if not dealt with.
ISSUES
¢ — The PinICLs still to clear in both Bracknell and Feltham are constraining the
progress that can be made on the Acceptance Trials closure reports.
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SALGS =
JOWIOJSN™) ===?
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ICL Pathway Customer Service Monthly Report Ref: PA/REP/O34
Version: 1.0
Date: 22/02/98
Customer Service Report
MONTHLY SUMMARY
° Counter service was good despite a power failure at'STEO9 that interrupted
service at the Horizon Systems Helpdesk. OSD handled the situation well
and the customer felt little impact.
e No new updates were made to the'live system with all our efforts going into
preparation for MOT and Live Trial with particular emphasis on getting
processes and procedures finalised and agreed.
RELEASE 1C VITAL STATISTICS
. Installed base: 204 Post Offices, 334 counters
Number.of Cards issued 47,506
Number of Active Cards.in use 37,115
Total number of BES Counter Transactions 920,348
BES Counter Transactions in month 79,328
Total value of Benefit Payments received £29.2m
Value of Benefit Payments received in month £2.4m
Total value of Benefit Encashments made £28.0m
Value of Benefit Encashments in month £2.5m
Total number of OBCS Transactions 6.8m
Total number of books impounded 18,288
-PROGRESS
OPERATIONS
e The development of operational procedures continues to make good
progress.
. 1 am concerned that the Horizon security team is questioning the world-
wide support strategy operated by Cisco, Sequent and Oracle. It would be
much more expensive to arrange local 24-hour support for the data-centre
infrastructure. Martin Riddell is liasing with Barry Procter to resolve the
problem.
. Reference Data is now in much better shape in readiness for NR2. The
processes:seem to be running quite smoothly with daily update files being
received and applied.
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e Version 0.6 of the Business Continuity Framework has been published for
comment. We have conceded that some testing of this should take place
during Live Trial but we are resisting Horizon’s demand to witness a full
disaster fail-over demonstration.
BUSINESS SUPPORT
e The overall incident rate has fallen back from 0.04% in December to 0.03%
in January with 27 incidents being logged against 79k payments.
° There were 14 incomplete transactions of which 6 were caused by a new
fault which is being investigated. There were no SLA non-conformances and
the.BES stream continues to be fully reconciled.
e — The format of CboS/TIP reporting has been agreed and the BSU will be
testing the full reconciliation processes.during E2E cycle 3 beginning on 15"
February.
e To enhance the overall support process on reconciliation incidents,
secondments are being exchanged with the Horizon Systems Helpdesk:
BA & POCL SERVICES
° January was a good month for service overall except for a short break in
HSH service due to a general power failure in the Stevenage area.
e — The-BA order book bar-code defects are still not resolved and POCL have
been slow to communicate with the outlets. A new process to mitigate the
problem has been agreed but Postmasters-are clearly annoyed and
frustrated.
CUSTOMER SATISFACTION
e The excellent performance of OSD field engineers has been presented at the
SW Engineers’ team meeting and a similar presentation will be made in
February to NE Engineers.
° Customer satisfaction remains high although the return rate of Service Visit
Reply Cards has fallen to 75%. This is understandable as customer
expectations of good service are continuously reinforced. Before National
Rollout we must be careful to establish more realistic.and sustainable
expectations of service performance.
SYSTEM SUPPORT
° Actions to address underlying concerns with SMC performance have been
identified and staff secondments are being arranged to aid skills transfer.
CURRENT CRITICAL PROBLEMS
° None
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ISSUES
° None
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Version: 1.0
Date: 22/02/98
Quality & Risk Report
MONTHLY SUMMARY
. FRM - Sign off of CCN243 is still being pursued. Gaps in the reporting of
failed EVP have been identified; fix planned for Live Trial. Discussions re
provision of (added revenue) FRM services to POCL and DNS have started.
° Risk Management - The significant activity in Implementation continues.
The Risk Register has been updated, highlighted major issues with
scheduling impact on card rollout, configuration time, migration time,
HFSO startegy arid implementation, Reference Data mapping, static data.
Issues with the end to end process.are also being identified.
° System Security - NR2 processes are being implemented. Penetration testing
is being agreed for Live Trial timescales. Bootle security concerns (raised by
Horizon) are being strongly defended.
° Quality - Policies & Standards; documentation reviews are underway for
completeness. Counter component issues (flat panel display and printer)
have been investigated.
° Audit- Acceptance Test reviews; a schedule of document.reviews and site
visits has been produced for agreement in February. The 1999 audit plan
has been published and kicked off. There is still a critical issue with the
provision of the Audit solution for BIT testing and MOT.
° Year 2000 Conformance - Gaps in testing have been identified and
discussed with Systems. Contingency plans are largely incremental on
operational ones and reviews have been conducted to identify Y2k gaps.
PROGRESS
FRAUD RISK MANAGEMENT
GENERAL
. POCL Security - Discussions were held about the provision of fraud
services; they are to provide us with TOR for a paid study.
° Dept.National Savings:- A presentation was given to their fraud senior
managers; they are interested in obtaining fraud related data as part of the
complete service.
° Requirements for Counter Penetration testing and the Fraud Intelligence
Database are being defined.
RELEASE 1C
. One.repudiation has been reported by BA; all relevant details have been
forwarded.
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NEW RELEASE 2
° FRM Design document has.been reviewed; minor changes have been
incorporated.
° The FRM terminals are beset with build problems, and testing of reports
could not be started.
e¢ — NR2 EVP reporting. Failed’ EVP transactions are not passed from the
counter to the warehouse. This affects PCHL, PCDF and Change of NPO
transactions. A solution is being sought for Live Trial.
NEW RELEASE 2+
° EVP - The CCN 243 saga continues. 2 more issues were raised by Horizon
and resolved, still leaving POCL to accept card reader failure. The reporting
requirements for NR2+ have been defined.
RISK MANAGEMENT
. NRO Risk Register, January. Major risks that have been identified include:
. Scheduling issues and impact on card rollout (RFI level lower than
required for card rollout within BA district)
. Excessive configuration time, migration time (largely ECCO offices)
° HFSO; strategy agreement, resourcing and turnover plans, agreement
of guides
° Reference Data mapping inaccurate
. Static data inaccurate.in Implementation
e Gathering data from POCL, and to a lesser extent Pathway is still proving to
be difficult.
¢ — Attempts at modelling the end to end NRO processes have revealed that
there is no process map. There is a very high risk of gaps in the processes;
workarounds not being incorporated.
SYSTEM SECURITY
RELEASE 1C
° Physical security concerns raised as a’result of the-series of site visits during
Q4 of 1998 are being progressed. The-major issue remains Bootle and we
have formally responded to the recommendations in the Horizon site
report. Our position remains that the likelihood of a denial of service attack
is very low and the existing site controls are adequate for the risk.
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NEW RELEASE 2
e¢ The HLTP for technical penetration testing has been distributed and the
provision of appropriate rigs and resources are being discussed.
e A requirements document has been produced. for Oracle, Sequent, Cisco
and EMC to provide “follow the sun” technical support from outside the
UK and thereby give Foreign Nationals visibility of HMG ‘RESTRICTED’
data. This will be presented to Horizon and CESG for approval.
° POCL are identifying improved processes:to support.the verification of
callers for One Shot Passwords at the Horizon System Helpdesk. When
agreed, these processes will be reflected in the HSH and Access Control &
User Authentication PPD’s.
e A letter of approval for access to NSI records by ICL-Pathway and other ICL
staff has been received from BA Security Group.
e The SecurID administration workstation is in use during current MOT
‘blitz’ testing and SecurID tokens are being physically allocated by QRM.
QUALITY
° Disaster Recovery Planning continues. Most inputs are now with SMH and
plans are being reviewed.
° Equipment quality issues have been investigated. There are concerns
regarding the new PC reliability and the quality of the McPerson.FPD and
their ability to maintain on-time deliveries.
. Policies & Standards Acceptance test. Reviews of the availability,
completeness and suitability of documentation are underway.
AUDIT
e The Audit plan for 1999 has been published; a resume of Audit in 1998 has
been circulated.
° Customer Services audit report has been completed and distributed; major
concerns are around the operation of SSC.
° NR2 Process Improvement Programme. The corrective action plan has been
reviewed and all actions except one have been closed, not totally
satisfactorily. They will be revisited during the R2+ audits.
e Verification Centre Audit - Corrective actions have been agreed with TVC
and Implementation.
° Audit Trail Specifications - OBCS one has been distributed, APS was
completed early February and BPS work has started.
. NR2+ audit requirements have been defined.
e The content of the ‘non-IT’ element of Records has been agreed internally.
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© — Audit Acceptance Review Schedule has been produced and discussed with
BA and POCL.
YEAR 2000 CONFORMANCE
© BIT Y2k testing; final pass continues well with.only a few faults raised.
° A number of test coverage gaps have been uncovered.
° ICL Year 2000 Business Continuity. The needs for this are largely
incremental on normal operational disaster recovery plans. These have been
reviewed and gaps identified.
° 3™ party issues continue to be monitored and changes.impacted. There are
issues with NT4, SQL-Server v6.5, and TrueTime. The introduction of
previously unidentified products to system builds is a concern.
CURRENT CRITICAL PROBLEMS
e —_ Acceptance of audit during testing will not complete until the end of BIT
Regression 2, due to run in parallel with MOT. If it fails again, it will
directly impact the decision to Go Live. The delivery of the componentry is
causing concern.
. Implementation; no end to-end process map exists; the processes are not
complete and workarounds being developed and not incorporated.
ISSUES
e New PC reliability.
° Y2K test coverage gaps.
° Roll out vulnerability to Y2K problems.
° Ensuring Y2K readiness of external support organisations.
. Business critical systems continue to be run on platforms not recognised in
the TED or TEI and not subject to proper verification and configuration
control. -
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Development
Report
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Version: 1.0
Date: 22/02/98
Business Development Report
MONTHLY SUMMARY
BUSINESS DEVELOPMENT
~ NETWORK BANK
° A new release of the architecture document is ready for internal release. No
discussion yet taking place with POCL: No appointment-has been made to
the Director, Network Bank position. A way forward paper has been
submitted to the New Business Board and commitment given for applying
more resource to move Network Bank forward. This is important if we are
to intercept POCL at the earliest opportunity.
EFTPOS
. POCL now appear ready to re-engage and a meeting is arranged for end
February to move forward.
POCL INTERNET
. Supported by Electronic Business Systems, a bid has been submitted for
POCL’s Internet site. We have been shortlisted and a follow up presentation
has been given.
PARTNERSHIP
eT have now had discussions with two groups regarding how we best move
partnership forward. The.next move following on-going discussions will be
a meeting with some of the ICL Pathway directors.
POCL MISSION & VISION
¢ — POCL’s new mission and vision has been announced internally through a
series of events over the past two weeks, This announces the long term
approach to focussing on four areas of business: Wholesale cash market,
Network bank, Mails‘and Distribution and Government gateway. Jonathan
Evans has agreed to present to our management team on 15" Feb.
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Date: 22/02/98
CUSTOMER EDUCATION & COMMUNICATIONS:
COMMUNICATIONS
e¢ A useful. meeting has taken place with Rob Durrant, POCL Director of
Communications to plan the way forward post Treasury review. This
meeting agreed three main points of communication: the announcement
itself, a later announcement on the new Partnership and a further
Opportunity at start of National Roll-out.
CUSTOMER EDUCATION
e — CAPS have now asked us to look at a re-plan of the customer education
campaign based on a‘new benefit rollout strategy. We need to look at.this in
the round and not react to yet another CAPS ‘move to the right’.
INTERNATIONAL
. International activities have now moved under the Business Development
directorate. This should enable more ‘sales’ focus on this activity and more
importantly a joined up approach to systems development and an overall
more efficient use of resource.
¢ — Continued negotiation goes on with Portugal where a decision is expected
in Q1. Siemens are the only competitor.
° Unisys. have won Hungary. Given that ICL Pathway recommended a ‘no
bid’ against the requirements, budget and timescales, this is not a bad result.
We shall now monitor the progress of Unisys.
PROGRESS
e LFS (Logistics Feeder Service) now progressing through design. We await
some contracting authorities responsibilities but good progress is being
made.
¢ — POCL have re-engaged to discuss the scales product in EPOSS prior to the
Royal Mail account team visiting Feltham to discuss re-engineering.
° International have now defined a core product set for counter automation.
The immediate challenge is to ensure that this core product set matches the
future direction of the UK and that any product development is useable
across both the UK and the international domains. A number of very useful
meetings have taken place to ensure this joined up approach.
° Marketing suite: A new demonstrator has now been delivered which
integrates NR2, EFTPOS, household budgetting and housing benefit. Escher
are here week of 15" Feb. to agree a plan to instal all Escher demonstration
software in our demo centre. Seventeen events have taken place this month
in the marketing suite.
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° We have now de-risked the customer education programme such that there
is no major spend prior to achievement of critical milestones, e.g. RAB.
. Good progress on Acceptance where a formal review is scheduled for the
Operational Trial phase.
° Press: Little direct ICL Pathway interest. Andersens have been taking the
flak this month with the NIRS project continuing to go awry.
° Meétings have now taken place with ICL Government to ensure.a joined up
approach to marketing communications.
* ~~ CRITICAL PROBLEMS
. Simply. put, the re-start’of open and honest discussions with POCL across all
areas would be a major move forward.
° The inability to firmly plan the customer education campaign is a real
headache. It means continued nugatory work against an ever changing
baseline.
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Date: 22/02/98
International Sales Report
MONTHLY SUMMARY
. No submission this month
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& Personnel
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nthiy Report Version: 1.0
Monthly Rep Date: 22/02/98
Organisation & Personnel Report
MONTHLY SUMMARY
¢ Jane Carter joined ICL Pathway, bringing the Personnel department back up
to strength. Following an induction programme she quickly became
involved in the activitiés of the department. Recruitment activity increased
and there was some;increase in the number of potential candidates looking
to change jobs following the décline in candidate availability before
Christmas. Other key activities in January were connected with Performance
+ and Professional Communities.
PROGRESS
° Recruitment of permanent employees was as follows:
Permanent appointments in January 9
Currently under offer Ss
Appointments YTD 9
_- Current.requirements ~ - -.60.. —--——- + -~ —
° The level of registered permanent vacancies increased from 31 at the end of
December to 60 at the end of January. Of these 49 are currently authorised
and the remaining 11 are in the process of authorisation. This increase was
mainly concentrated in Implementation, Test and Integration; International
(subject to closing specific contracts), Customer Service and Systems Design.
Recruitment action has been initiated for all vacancies, with offers subject to
authorisation as appropriate.
e The recruitment plan for Q1 and Q2 was agreed with Hays Recruitment. It
is made. up of a mixture of recruitment advertising, targeted mailshots, open
evenings and recruitment fairs.
* The first VISIT recruitment fair of the year was held in January at the Café
Royal and there was a good presence by managers from ICL Pathway.
Members of the Personnel Department, International, Test and Integration,
Development and Customer Service attended and a number of potential
recruits were invited for interview.
e — The numbers of Industrial Trainees required for the coming year was agreed
with managers and recruitment for the 1999/2000 intake will commence in
February.
° Meetings now take place every two weeks with the A&TC resourcing unit
to help ensure that ICL Pathway increases the numbers of people employed
from this source. A continuing problem in some areas is CV's not being
turned around quickly enough by recruiting managers, with the result that
potential recruits are placed else where in the company.
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yiner Date: 22/02/98
e Managers were briefed on the necessary actions involved in the
implementation of Professional Communities. Each manager was provided
with the appropriate role profile for'their employees along with supporting
explanatory material which is also available to employees. Discussions with
employees will take place.in February and March, where possible as part of
the appraisal processes.
e — Appraisals and objective reviews are now underway and to help ensure this
is 100% completed each member of the Management Team is provided
with a status report on a weekly basis which shows which of their employees
has currently got a logged appraisal, objectives and personal learning plan.
e A format and timetable for Organisation and Management. Reviews. was
agreed and issued. Reviews will take place with each department throughout
February and March.
e Arrangements were made to ensure that all temporary resource not
provided through ITCS is sourced through Adeco. Alfred Marks. This is in
line with the new company wide arrangements and will lead to substantial
cost savings. ICL Pathway is compliant with the new arrangements.
CURRENT CRITICAL PROBLEMS
° None
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M ly Report Version: 1.0
lonthly Rep Date: 22/02/98
The Post Office - Client Director’s Report
MONTHLY SUMMARY
e The responses to:CITU’s draft consultation papers on.the White Paper for
Modern Govt have been submitted.
° Other new-and large PO procurements are emerging at a pace which is
severely stretching our ability to respond.
MODERN GOVERNMENT
. Following the presentations in December to David Cooke, Director of
CITU, followed up in Jan with Mark Gladwyn and Jeremy Crump, deputy
directors - apparently well received, confirmed subsequently. by G. Hall.
° Responses submitted to CITU consultation papers on the proposed White
Paper.
° The CCTA “TCAT” Telecommunications Catalogue national procurement
has been advertised, Central Europe Div have picked this up. It may prove
to be a significant channel for sales of Internet products and services across
local government. We need to track this as a possible
collaborator/competitor to a national Modern Govt service, delivered
Pathway.
1998 BUSINESS
¢ The 1998 final revenue figures show £21.6m total ICL revenue in 1998
compared to £648k revenue in 1997: breakdown as follows
Division 1998 Revenue 1997 Revenue
HPS 46k
MC 20,097k
Pathway 816k
Services 99k 25k
System Services 665k 623k
TOTAL 21,676k 648k
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ynepo - Date: 22/02/98.
CURRENT CONTRACTS
TECHNICAL RESOURCES SUPPLY CONTRACT
° Having booked orders for over £500k'in 1998, this-contract has been
extended from initial bodyshop supply of technical skills to small-to-
medium work packages, of which there are-an estimated 400 outstanding.
Although slow to start in Post Office owing to administrative problems, this
should deliver around:£4m in 1999.
ONE STOP SHOP
e¢ The ICL MC contract for supply of'desktop PCs and infrastructure has been
extended to include Fujitsu PCs as well as Compaq and orders have been
taken in January for £500k of FJ machines. The new FJ “Biblo” sub-
notebook has been received very favourably by PO-in technical evaluation.
NEW BIDS
IWIM
e The formal debrief from PO outlined the key reason for ICL’s failure to win
the contract as being non-compliance to the technical requirement. A&¢CTC
staff including the TDA were at the debrief.
SERVICE MANAGEMENT
e The response to RFI and presentation were well received and ICL is
shortlisted. ITT expected February.
SPICE
e The PO initiative “Supporting Post Office in a Commercial Environment”
has finally emerged as a broad ranging invitation covering Customer
Contact, Client Relationship Marketing and data warehousing. This is
identified as a strategic ICL target market but there is as yet-no single
owning Business Unit. The plan is to achieve longlist and use the ITT to
catalyse the ICL offerings. This plan may not work.
POCL INTERNET
e Achieved shortlist and presented 4" Feb — now awaiting guidance from
POCL on their next steps.
KIOSKS
° Activity in PO suggests.a procurement is imiminent, possibly for up to 6,000
units.
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CHANGE MANAGEMENT
e The work lead by Steve Cowburn in Royal Mail in establishing the PACE
methodology for change management is being positioned as a licensed
service offer 'to Royal Mail Consulting, fronted by ICL. If this flies it will
involve ICL consultants in every major Change project across RM (and
possibly PO).
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