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ICL Pathway
Bringing Monthly
Technology Progress
to Post Office Report
Counters ‘CL
June 1999 [iil
FUJ00058183
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ICL Pathway Programme Monthly Report Ref: PA/REP/039
Version: 1.0
Date: 15/07/99
Document Title: ICL Pathway Monthly Report - June 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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ICL Pathway Monthly Progress Report
Contents:
SE Managing Director’s Summary
Development Report
Commercial & Financial Report
z4aE Customer Requirements Report
Customer Service Report
Quality & Risk Report
Business Development Report
Implementation Report
Organisation & Personnel Report
Post Office Client Report
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AJeurUIns
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ICL Pathway Managing Director's Monthly Report Ref: PA/REP/039
Version: 1.0
Date: 15/07/99
Managing Director’s Summary
PROGRAMME PROGRESS
e The decommissioning of the Benefit Payment Card Systems is now complete
and this activity went exactly to timetable and closed down as we
anticipated. In the final analysis we were able to show 100% reconciliation
for every single payment made using the Payment Card from the period of
first use of the service in September 1996, to the final payment at the end of
June 1999. The only outstanding tasks are ‘now to complete the accounting
period summaries, to hand-over archive data and to invoice DSS for our
work.
° Live Trial has continued with.all 299 Post Office's across some 750 counter
positions. The major issues arising are on weekly balancing and problems
related to printing and screen freezes. A huge amount of effort has gone in
from Pathway on all these topics over the last month, and the corrective
action plan has been implemented.
© The software-release LT2 was successfully implemented as planned during
the weekend 10-11" July, with go live across this.live trial estate taking
place on the 12" July. There were a number of issues surrounding software
distribution and these are being followed up actively within Pathway. Much
of this had little or no impact on the customer since we had. contingency
and fallback plans in place, which did allow the service to continue
uninterrupted. This software release, amongst other things, contains many
changes to improve weekly balancing and printing issues and. those will now
be tested for the first time on Wednesday 14" July and subsequent weeks.
e@ In addition to the 299 offices in Live Trial we will be adding a further new
24 Post Offices during week commencing 19" July. This group is there to
check that all the changes we have made concerning balancing, training,
documentation and printing have had the desired effect, and when
introduced to brand new counter staff it does allow them to deal with their
business processes without a repetition of the early difficulties. If following
careful assessment this is successful it will pave'the way to'remove the
critical high severity acceptance incidents.
© — The month has seen incremental improvement in many of our operational
procedures for the live estate and this does include Software Distribution,
Help Desk liaison (between Pathway and the one within POCL) and the
management of our sub-contract performance. These improvements are
essential over time and must continue throughout the life of the contract.
e@ — Pathway's internal plans for CSR+ have moved forward following the de-
scoping of KMS-allowed for by the removal of the BPC and therefore later
phasing of future functionality. Nevertheless, we now have a number of
critical POCL dependencies which they must sign off urgently. Without this
the schedule date remains at risk.
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© — Reviews of OBCS scaling have been completed, and an agreed way forward
is-scheduled for final agreement during July which will confirm our
capability to manage national load levels and our ability to.give POCL
confidence in this.
e Progress has been made in the 24-hour operational issue and by a revised
counter reload strategy we are moving closer to an acceptable resolution of
this with POCL.
CONTRACT CODIFICATION
@ Very good progress has been made by the Commercial and Legal team in
reaching the new Codified Contract which is scheduled for completion on
the 16" July. Important meetings have taken place to resolve the final
outstanding issues and this has been achieved to satisfaction of both parties
and without the need to call upon the legal expert.
© — The'new Codified Contract will have all the important Agreements to
Agréements incorporated and the vast majority of the outstanding CCN's
signed-off. Nevertheless, there remains a final piece of work to be done and
a number of CCN's to be cleared prior to the 16" July completion date.
Following this the new agreement needs approval by the Post Office Main
Board which meets on 19" July.
© — Work on critical sub-contract termination has moved forward with sound
progress being made with Girobank where a final resolution is in sight.
Similar progress with De La Rue.has yet to be obtained.
e Year-end accourits for ICL Pathway for 1998/99 are now ready for sign-off
and will be presented to the ICL Pathway Board on Tuesday 20" July.
ACCEPTANCE
« All the formal reviews with POCL.have now been completed and at this
point all our management focus is now directed to the Acceptance Incident
List (AI list). This has.now grown to over 300 entries, many of which are
low, quite a lot, which are closed but nevertheless the size increases day by
day as POCL.accelerate their activity in raising all incidents which they
consider important.
« We now have a customer provided hot list of all incidents at medium or
high and this currently stands at some 20 entries. A number of these really
cluster together and most come from Live. Trial experience and not
surprisingly relate to the balancing, training, printing, screen freeze, Help
Desk related issues. Nevertheless they all need to be addressed urgently and
the resources on this are now being focused and increased.
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. Considerable activity across Pathway has gone into AI.218 and Al 227 since
these are the training and printer incidents which have lead to substantial
changes in the software, large number of site visits, new training
programmes, new documentation, new Quick User Guides. With LT2 now
in the field we need to rapidly prove'that sufficient improvement is in place.
POCL have-convened an Acceptance Board to manage this activity and John
Dicks is the Pathway invited member.
° We have proposed a final resolution meeting on Acceptance for the 3“ week
in August to be attended by POCL staff, Pathway staff and if necessary the
technical expert to attempt to force through a single pass resolution of
Acceptance. Work in this area continues to grow and involve more and
more staff.
COST DOWN
° We have during the month closed down two development streams the first
relating to the Benefit Payment Card, the:second relating to Generic
Products. This:combined with reviews across the whole of Pathway have
lead to a planned-reduction of 68 posts to be effected by the end of 1999.
This will however require careful discipline and management controls to
ensure that there is no degradation from this task.
¢ Following the withdrawal of the Benefit Payment Card we have reviewed
our hardware capacity in the two Data Centres for host systems. Once this
teview has been confirmed through Change Control we will be able to
release a number of powerful Sequent processors and will determine how to
best dispose of these.
° On the manpower resources front processes have been put in place to cease
any further freelance recruitment into Pathway and to re-balance our
resource profile between freelance community and permanent staff where
this is sensible and meets our long term plans. Tighter control over all
recruitment will be central to manage'this and cope with the workload
pressures, which remain high.
° Manpower plans are being reviewed across all parts of Pathway and
particular care is being given to the units within the Development
Directorate. When completed this will allow the first stage of the budget
allocations to be managed and proper reconciliation between activity on the
ground and that predicted in the business model will have been achieved.
ISSUES
e Successful resolution of Live Trial issues through the further testing of the
new 24 Post Office installations.
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Version: 1.0
Date: 15/07/99
e Improvement in the speed and reliability of software distribution. Joint
work.is in hand between theiarchitectural view of the system capability and
live field experience and plans put in place to close the gap between the
two.
e — We need to resolye POCL issues concerriing the CSR+ specification and its
early sign-off to allow the schedule dates to be achieved.
¢ The Roll-out Database (RODB) support tool is a critical facility for the
implementation activity and will not be available for full use-until the end of
November 1999. Existing manual processes are needed to bridge the gap
until this facility is available.
e — Of the 19,000 Post Offices there remains a final group of between 80 and
100 where there is no land line network capability in place or likely to be.in
place. Resolution here moves us towards satellite communication for these
very small, low volume, low business offices. Nevertheless it in important
to maintain the national reach of the POCL network. Negotiations on this
are proving difficult.
e We have a long-standing issue concerning agreements to be reached on
lightweight mobiles for 250 offices where fixed equipment cannot be
provided.
e¢ We have been summoned to the DTI Trade and Industry Select’ Committee
to explain the position on the Horizon.Programme. This has required
written material and critical questions and answers to be provided which
will eventually find their way into the published report. This is likely then
to trigger off yet more Parliamentary reviews through the PAC and probably
the National Audit Office.
e We are determined to meet the cash payment points which follow
Acceptance (£68m) and successful Roll-out to the first 1,800 Post Offices
(£90m) which are vital payriient points in 1999 both for ICL/Fujitsu funding
and of course for the credibility of the new programme moving forward.
All staff are focused on the criticality of meeting these milestones.
. To date POCL have refused to enter into any discussions with us about new
business development plans and programmes and this is likely to be the
position until we are through Codification and Acceptance.
. Although we are now some six weeks into the new contract arrangements
POCL continue to remain negative and critical towards the programme and
have not yet got over their bitterness on the way they have been treated
within the public sector, for which unfortunately they continue to hold us
partially to blame. We have to work at this as we make progress with the
commercial, financial and programme matters in order to find a more
positive and long term relationship.
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Development
Report
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ICL Pathway Development Monthly Report Ref: PA/REP/039
Version: 1.0
Date: 15/07/99
Development Report
MONTHLY SUMMARY
° The three main streams of activity for the Development Directorate during
June were the support of the live trial (LT.1), the decommissioning of BPS
and the testing of the maintenance release (LT2) due to be operational 12"
July.
. The decommissioning of BPS has progressed extremely well and all parties
have acted in a professional manner. No major problems have been
encountered and the Benefits Agency has been impressed with the flexibility
of our.system and the quality and speed with which the work was carricd
out by ICL Pathway personnel.
° The Live Trial ‘Observation Period’ commenced 31* May and is due.to
cease 23" July. The software problems experienced to date are contained in
two areas; balancing/accounting and printing. Several fixes have been
applied to the live counters but it has proved difficult to establish how
successful these have been in addressing all the problems reported.
Considerable effort is being expended to improve this process.
e The LT2 software increment contains a number of ‘change requests’
suggested by ICL Pathway and approved by POCL which will simplify the
business processes involved in the weekly balancing activities. In addition, it
contains a number of modifications designed to address the ‘printing’
problems.and includes the fixes which address a large proportion of the
KPR entries.
e — Work continues on the development of the CSR+ release although we have
still not succeeded in securing an approved functional baseline. This has
been escalated to senior POCL management who have been left in no doubt
as to the implications.
¢ The moral and motivation within the team is not the best I have
encountered during the past three years. Following on from the initial shock
caused by the withdrawal of BPS, the staff are very uncertain as to their
future-and that of ICL Pathway. We will need to work very hard during the
next few months if we are not to experience a large exodus of key people.
PROGRESS
e The LT2 functional testing has been tested satisfactorily and specific
enhancements and fixes witnessed by POCL. The final BIT regression test
has been completed with no major incident and all the BPS
decommissioning work has be achieved successfully.
e A revised counter reload strategy appears to have overcome POCL’s
concerns surrounding outlets which operate on a 24-hour basis.
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° — The OBCS reviews have been completed and the results are now being
considered by management with a view to agreeing a way forward during
July. The impact of removing BPS on the host hardware configuration is
now fully comprehended. A paper recommending a new reduced
configuration has been published and is currently being evaluated
e The trials conducted in Boston to prove EMC fibre channel have been
successful’but the removal of BPS means that it is no longer necessary to
install this technology for the Host layer. It will remain for TMS and the
correspondence servers.
e All the development streams for CSR+ are on target to deliver in
accordance with the internal plans, providing POCL resolve the outstanding
issues in a timely manner. The-SPM CCN has now been approved and we
have received confirmation that Pisces will not be required in the CSR+
timeframe. A final review of the functionality in KMS has taken place and
we have succeeded in removing some functions which can be reintroduced
at a later date via the change process. This descoping has helped to ensure
successful delivery for CSR+:
COST DOWN
¢ The manpower resources required in the Benefits Agency and the Generic
Delivery Streams has now been reduced to the minimum to complete any
outstanding activities/commitments.
® Change Proposals are now in progress to reduce the hardware capacity in
the.Data Centres for the Host Systems, and to avoid the need for further
disc expansion.in the Warehouse, both resulting from the removal of BPS.
CURRENT CRITICAL PROBLEMS
e The problems experienced in the field with ‘printing’ during the live trial
are proving very difficult to resolve because there is insufficient evidence to
isolate the fault. Following a process of elimination, e.g. hardware, cables,
drivers, housekeeping, error routes etc., several changes/fixes have been
applied, but we cannot be 100% sure that the problems will not reoccur.
e POCL and the Horizon team expect the LT2 software increment scheduled
to he operational from 12" July to resolve many of the usability and
educational issues experienced in the live-trial. This will be further proven
by the inclusion of 25 new outlets in the trial, commencing 19" July. It will
be extremely difficult to maintain the current start date for National Roll-
out if this release does not satisfy their expectations.
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e — We still do not. have an approved functional baseline for AP Smart, AP
client migration and the.Logistics Feeder Service (LFS). All the outstanding
issues have been formally raised and documented with POCL who are
attempting to provide the data required within the next few days. If they are
unsuccessful, we will be forced to formally withdraw those products from
the CSR+ release. This would render the release virtually useless to POCL,
which would have serious delivery and contractual implications.
° One of the objectives of the new organisational structure for the
Development Directoraté was to bring the business and technical integration
testing carried out in Feltham and Bracknell respectively closer together. It
was recognised that the additional and diverse developments anticipated
would also have a significant impact on the accommodation requirements at
these two locations and a major review would be necessary. However, the
agreement reached on,24” May reduced the development activities to only
those associated with CSR+. We are now left with the residual issue that
the large test rigs are in Bracknell and the testers in Feltham but there is no
longer any rationale for reviewing the accommodation requirements for the
entire programme.
ISSUES
. The plan for introducing the functionality in CSR+ involved a series of
increments to the live system controlled'via the normal service management
and release authorisation processes. This approach was preferred to reduce
this risk of destabilising the system. POCL had not thought this through and
are uneasy with the implications on their interface testing. We must work
hard to agree-a joined up plan.
e The new organisational structure for the Development Directorate
implemented on 4" May is not entirely appropriate for the workload now
envisaged for ICL Pathway. Changes will need to be made so that the team
can operate in the most efficient manner.
e The architecture adopted for the Horizon system assumed a software
distribution capability which was both fast and reliable. The experience of
the live trial has demonstrated that further work is required before we
achieve this objective. Several reviews and workshops have been held and a
number of enhancements and fixes identified. We will be monitoring the
distribution of the LT2 increment very closely to ensure that the changes are
having the desired affect.
e The KMS product currently limits the outlet distribution population to circa
500 per week. This places an unacceptable constraint on the
implementation of CSR+, consequently design reviews are being held to
resolve the issue.
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e BT and Energis have indicated that there will be approximately 85 - 100
outlets with no land network connections possible. They are suggesting that
we should consider a satellite solution and this .is being evaluated.
Negotiations with POCL are expected to be very difficult.both during and
after the ‘codification’ period.
e We have not yet been able to find an acceptable working solution for the
light weight mobile configurations i.e, those required to be carried and
operated in a variety of remote locations every day, approximately 250 of
this type have been identified. This issue-is again being raised during the
‘codification’ period.
° POCL expect under the terms of the new agreement i.e. time and materials,
to closely monitor our resource consumption during the design and
development of any new product or service. Their expectations could put a
huge burden on the administration resources-within our Programme Office.
cosTs
e The Development Directorate has now succeeded in recasting the budget to
reflect the new organisational structure. The 1999/2000 forecasts will now
be based on this structure and will continue to be the subject of regular
financial reviews throughout the year. The manpower and hardware
resource savings which result from the removal of the benefit card.systern
and the termination of all speculative product development activities will be
reflected in future forecasts.
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Commercial &
Financial
Report
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ICL Pathway Commercial & Financial Monthly Report Ref: PA/REP/039
Version: 1,0
Date: 15/07/99
Commercial & Financial Report
MONTHLY SUMMARY
e — Codification has progressed well overall and the deadline of 16" July should
be met.
e All the issues identified last month have been resolved for the price of one
concession on ICL’s part to a value of approximately £3m. Most were
resolved at the working level, the rest as a package via first level escalation.
° One key issue has since been identified which must be resolved.
. Finalising the new contract demands the agreement of many outstanding
CCNs: many have now been signed off but with three days to go there are
still a dozen or more critical CCNs to be agreed including the Release
Contents Descriptions for both CSR and CSR+.
¢ Proposals to restructure the banking arrangements have been progressed
with ICL Treasury in parallel and are close to being launched to the banks.
The cash position will remain.éxtremely tight until the initial £68m and
£90m payments have been received. ‘
° Discussions are well advanced with Girobank on the BPC termination but
those with De La Rue have yet to get-underway.
° New Budgets will be set for all departments following a-series of reviews to
assess the impact on each of the cancellation of the BPC.
PROGRESS
. Codification has generally gone as well as could have been expected.
Escalation to Richard Christou/Stuart Sweetman on six issues (all of which
represented ‘gaps’ in the letter agreement) resulted in a satisfactory package
deal. Recourse to the expert was avoided. Subject to the resolution of one
critical issue the legal process should complete on time on 16" July. There is
a risk that agreement on all CCNs required to define the specification will
go beyond 16". If that happens, the fallback is that they be signed off before
month end and contract signature.
e All contractual issues which were having an impact on Acceptance have
been resolved.
° We will soon have a new contract which sets out clearly what we are
required to do in all respects. The.quality of contract documentation is
generally high. A2As will have been all but eliminated.
e Year end accounts are ready for sign off at the Pathway Board meeting next
week. This enables essential restructuring of the Financing arrangements to
be progressed.
° We are close to agreeing the termination arrangements with Girobank (but
not De.La Rue).
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Date: 15/07/99
KEY LEGAL ISSUES
ACCEPTANCE
* No need to redo Acceptance specs.
° No new or modified attributes, no new tests (other than chalk and talk for
OBCS scaling).
RELIANCE ON DSS REQUIREMENTS
° Minor amendments to POCL Requirements have been.
“WHAT ARE WE BUYING?’
e A Day One Asset Register is to be included in the contract, but without any
capacity undertakings or commitments to enhance the infrastructure.
° Information is being provided.to POCL to help them to assess the
‘headroom’ inherent in the infrastructure - but strictly on an extra
contractual basis.
RATE OF ROLL OUT
. Revised to 300 per week (from 334) with provision for-an extended ‘tail’ to
Roll Out under Operational Business Change, satisfying both programme
teams.
e — Roll Out milestones adjusted to trigger progress payments‘on the same dates
(no cash flow penalty for making the change).
DISPUTED REQUIREMENTS
e None remaining
HOW TO TREAT POCL REQUIREMENTS NOT IN CSR+
° This issue, thought to have been dealt with, has .re-emerged as an issue late
in the process.
e The CSR+ RCD identifies clearly all such exclusions and actually improves
on POCL’s position under the letter agreement (whilst providing clarity for
us) but POCL do not yet accept our interpretation of that agreement. They
had hoped to argue the inclusion of further features into CSR+ following
the loss of letter agreement precedence over Requirements in the new
contract. They argue that the CSR+ definition in the letter agreement was
not declared as exhaustive. We argue that only those.features which are
listed as specified additions to CSR are committed: all other features are
held over to later releases and are subject to T&M charges to be agreed.
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CONFORMANCE OF CCDS
° It is agreed that only those which relate directly to CSR must be re-done
now.
. That includes PPDs, training material, and reports and receipts (some of
these are proving difficult to close off quickly on both sides and remain_a
tisk to Acceptance).
CCNS AND A2AS YET TO BE AGREED
. There has been.a dramatic increase in the rate of clearance.
° All A2As have been converted into CCNs, although many still remain to be
approved by POCL.
e Approximately a dozen have been identified as critical for the codified
agreement: progress on these is being monitored on a daily basis jointly by
Pathway and POCL Commercial Heads.
° They include:the RCDs, PPDs, Release Policy document and Reports and
Receipts.
OTHER ISSUES ARISING LATER IN THE PROCESS (‘GAPS’ IN THE
LETTER AGREEMENT)
. Number of counter terminals: we argued 38,750 limit, POCL argued
40,250 based on two conflicting provisions in the old agreement: agreed
39,750 but with added clarity in our favour-as to other limits. (The 1000
terminals equate to the £3m cost increment). ,
« Transfer payment during term of the agreement under termination for
default: a reasonable pro rating formula has been agreed which greatly
reduces our risk.
e The previous cap on termination payment under termination for
convenience has been removed.
« — The severability.clause has been restricted (not doing so-would have left a
tisk of third party interference resulting in a right of POCL to terminate the
contract).
° We have agreed an extension of the FJ company guarantee to fully protect
POCL’s interests in the Pathway assets owned by Assetco. (to cover the
funding Consent Agreement): this corrects an omission on the part of POCL
and should be viewed as part of the overall package
° We have agreed ‘clarifications’ which assist POCL in their accounting but
which cost us nothing.
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Commercial & Financial Monthly Report Ref: PA/REP/039
Version: 1.0
Date: 15/07/99
BUSINESS CASE
RISKS
The underlying business plan remains a £50m loss with the objective of
getting back to break even through a combination of ‘cost down’ and
“‘revenue-up’.
The compromise deal results in an immediate £3m gap (task).
Immediate ‘cost down’ actions have been taken but more are planned to
achieve the reduced cost levels in the business plan. An amount of
restructuring will be required. This will involve close review of operational
and the roles of certain subcontractors on the one hand and of development
plans and resourcing on the other.
“Revenue up’ depends on a much better relationship being established with
POGL. As of now, they are bitter about the new contract. They feel it has
been forced on them, and hold us partly to blame (although we remind
them that we have just taken a £180m write down and lost the upside
opportunity of smart cards).
New departmental Budgets which match the business plan will follow
shortly after the current round of JHB reviews.
The 1999/01 profit target is £15m.
Banking arrangements remain to be restructured satisfactorily: bridging
finance from Fujitsu may be required to provide the short term cash
required pre Acceptance and possibly pre the first £90m progress payment.
Stringent cash controls are in place. The subcontractor termination
negotiations have taken account of the need to defer cash payments
There are still issues on codification to close down before.the 16". In
addition to the issue on CSR+ specification (above), a further issue could
yet arise if POCL argues that POCL delays to Roll Out should be subject to
the general cap on liability.
The specification of CSR has still to be agreed in the detail required for
Acceptance (critical CCN list).
POCL attitudes towards us, currently negative.
Performance of LT2: screen freezes and printing in particular - risk of delay
to Acceptance.
A Fujitsu bridging loan and/or standby facilities may yet be required over
and above the DKB/ BOTM facilities.
ISSUES
The. codification exercise will really not be completed until.after the Post
Office Board mectings next week, and confirmation that they will sign.
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° Outstanding CCNs, although now far fewer in number, remain a risk to
Acceptance.
° Restructuring of Pathway’s Financing arrangements has yet to be resolved:
this remains a difficult area to deal with to the satisfaction of al! parties and
within the constraints of the Consent Agreement.
° Pathway’s ability to respond positively to the need to_significantly downsize
its:operations and development activities in the face of continuing POCL
resentment and lack of new business goals.
COSTS
© The cost and cash picture in the month was again generally favourable when
measured both against the old Budget and more demanding new business
plan targets.
e The Controller’s report follows.
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KEY NUMBERS (£000’S)
Wont one TS Tom Apne TS
Vonance vs Varance
acual__I Forecast acual__I Forecast
Trading/Project Costs: Revenue 1,027 (18) 1.084 (120)}
Project Costs betore Capiatsalions 9.178 2.020 23.97 2912
Deciared PBT Losses st 28 301 (2
cash Business Operaing Cash Flow ee] esa) 26.341) (678
End ot ane aS
Variance ve
Actual I Forecast
Balance Shoot Project WIP 106 505 708
Net Fixed Assets 40,564 692
Total Boromngs 268,793 (78
Headcount Permanent 220 4“
Non-Permanent (ITs and Temporanes) 12 7
(Memo): Freelancers procucedinrough ICL IT Contracor Services ae 5
‘Summary:
Meaningtul variance ar
Piojec! cost levels’ were a lotal of £2 lower than forecast, witha large pat ofthat fovgprobe varonge being dug fo ether thesia lating away
of eos supporting Benet Payment Card ‘ctv oie charging of costs agains! she provisions $1 up in the
Reported manpower levels for permanent were again lower than forecast, but full use is being made of resources avaiable through A&TC.
Borrowing levels were sightly worse than forecast, due to the 8m Government cost contribution sill being outstanding
rch accouris.
ysis is again thwarted by the current disconnects between the forecast assumptions and the actual contractual situation,
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JUNE ACTUALS 1999
PROJECT COST ANALYSIS (£000’S)
Month of Sune 125 Tum. Apa Jone 1995
Vanance vs. Variance vs
Acwal__I Forecast Actual Forecast
Revenue 1027 (19) 1.984
Direct Cost of Sales 1.794 497 382
Gross Margin (Oetic) ar) 273 I 15.058)
Opex:- Labour - Ovm Staff 996 39 2,840 “139
Travel & Subsistence ™ 2 185 5
Freelancers 2.398 6 6.500 «02
ICL, Subcontracts ss7a 307 3.798 1310
Otner Subcontract 249 170 923 35
Depreciation 1224 au 3eid 1.178
Marketing a) Eo 82 367
Professional 295, 76 762 119
‘ther apex 388 4 (2.783) (1.824)
Gross Project Opex SAE) THs TS Taz
Interest costs 1213 Ey 4.195 20
Costs belore Capiialisitions EX] 2020 PERE ExT
Declared PBT Losses, a 2 3 ita)
Capilaksed into WIP 9.124 1.982 22.89% 2924
Comments:
Revenue was close to forecast, in spite of the tack of any PFI \ransaction-based revenues from the live ial. Higher than expected invoeing in respect
(of site preparations and agreed contract amendments amos filed the voi.
Cost of sales wore lower than forecast
the provision established at year-end.
Ine main cause being tha forecast compensalion paymenis to subcontractors which are now charged against
The savings in Opex were virtually all relaled 1o the sharp scale-down of work retated fo the Berieils Payments element of our system. This led to
tower costs from Dubln-based A&TC and savings in both inlemal and extemal support costs. The lower depreciation costs were mainly due to the
accelerated provisions taken in March. Marketing cos! savings were a'so due fo the absence of Benefit Payment related pubic awareness costs
‘and professional costs undershet forecast due to Ine fact thal fees relating to addiional financing have nal yet been incurred,
No ace-ual has yel been made for the panial cawback of Gosts trom
‘OSS relating lo the effort involved in transitioning away trom the Benefit Card.
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JUNE ACTUALS 1999
HEADCOUNT
Eng of Jone 1585
Pormanont Headcount Vanance ve
rctual I Forecast
Devetopment / Programmes 6 11} The apparent tower than
Implementation 65 2I forecast levels of permanent
Customer Service 59 42] employees needs to be viewed
Aether departments (UK Prefect) 38 13} inconjunctn wih he foct that
Total UK Project Rr 38] over 40 ABTC stall are curently
Intemational Sales 1 3] on assignments witin Patrway.
Totals Permanent Statt we ca
Many of those assignees have
Endordane TOES deen brought In 0 cost-
Non-Permanent Headcount Variance =] effecive alteriaive fo ine need
Actuat__I Forecast _I 10 90 outside forthe skits
curently cequired.
Industria! Tralneos and Temporary Staff @ 7
International sales actives
Freolancors (sourced through have been pared back tothe
ICLIT Contractor Services) minimum requires to supo0n
Development / Progcommes 183 1] existing comvraiments
impiementation 8 (4)
Cusiomer Service 5 1
All other deparments 4 fa)
Total - UK Project Tot al
Intemational Sales ' 5
Totals -Highor Skills Freelancers 262 7
Totals -Non-Permanont Statt Ta z
Grund Tol « UK PF! Project 7 7
Grand Total -Iniematonat Sales 2 8
GRAND TOTALS mA 3s
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JUNE ACTUALS 1999
CASH FLOW (£000’S)
Inflows/(Outfiows)
Net Project Costs - capitalised info WIP
Picject costs laken straight oP & L
Depreciation
Movement in other Working Capital Items.
Fixed Asset Additions
Business Operating Cash Outflow
Opening Net Borowings
Closing Net Borrowings
BALANCE-SHEETS (£000’S)
Comments:
Variances against forecast nave been restated to lake
‘account o1 the late adjustinenis to tne March accounts
‘Borrowings al the end of the month - sil the key indicator «
were some £0.6m worse than forecast, The forecast
fhad assumed that the HM Treasury coninbulion 10 costs
{£8m maximum) would have been received in June. iis
‘receipt is now likely to be ted into the finalisation of the
new contract eodificaton.
‘Apan from ths stem, we generally held back on payments
15 far as operationally possible, and the lower general
levels of current and capital expenditure almost {uly made
Lp for the lack of the govemmert receipt of funds,
Wonth of June 1985 Cum Apa June 1955
Variance vs Variance vs
Actual Forecast Actual Forecast
6.128) 1,992 (22.826) 2,924
ai} 28 (301) 12]
4,224 at) 3614 8.376)
19 (8,724 (3.872)I (4.172
(1,709) 1475 (7.086)I 1858
(EET) Tea3) ecECE) G78)
759,148 Zoe 232452
268,783 (578) 268.193 (578)
End ot jane 1993
Real Forecast
Taqjustoay
Nel Fixed Assets, 40,564 41,286
Project Work in Progress. 106,286 109.810
Other Working Capitat (41,134) (45,306)
Tota's OEE 105,750
Share Capital 20,000 20,000
Retained Eamings (182.477)] (182,485)
Group Pooled Borrowings: 20,673 20,095,
tetemat loans 75,000 75,000
Extemal Loans 173,120 173,120
Tola! Borrowings 268,793 268.215
Totals 106 516 105,750
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Requirements
Report
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Version: 1.0
Date: _ 15/07/99
Customer Requirements Report
MONTHLY SUMMARY
° All formal approvals for Acceptance Trials are now complete. Al!
Acceptance Review Meetings have been held. CCNs for all key documents
have been raised. The Acceptance Incident processes have been streamlined.
Excellent progress has been made on the two key balancing incidents. The
total Acceptance Incident count has risen to 304.
DETAILED PLAN ACTIVITIES
RELEASE CSR
e¢ Tony H and Dave H completed activities to effect the withdrawal of DSS,
including.getting the final CCN approved.
. Tony H completed actions required to facilitate the new contract,
comprising the revision of Requirements, Solutions, Service.Definition and
Contracting Authority Responsibilities:Schedules.
e — John D output the Known Problem Register (KPR) to document the
completion of CSR BIT Regression. There were just three regressed items.
° Support has been provided to produce the Release Contents Description
(RCD) for CSR.
RELEASE CSR+
e There are issues to solve within POCL concerning the use of Reference Data
by Logistics Feeder Service.
e APS Client Migration has become a difficult area. POCL are unwilling to
sign off the Client Migration Strategy unless we also agree to support the
Clients’ many legacy interfaces, a.strategy that will take too long and
produce a weak operational system.
e Dave C has produced the “vanilla” APS Client Specification.
e — Similar support was provided to produce the CSR+ RCD.
CCNS / CRS / CPS
e The eight Cash Account CCNs have been approved by Horizon. CCNs were
“forced out” for the key documents for new contract signing and
Acceptance: Style Guide, Reports & Receipts, Processes & Procedures
Documents (PPDs). The CCN (483) associated with the latter was
immediately rejected by Horizon for unacceptable reasons but was
reinstated after a muscular exchange.
. Pathway had received a further 147 comments on the Reports & Reccipts
document on 24 and 25/6 but nevertheless lodged the CCN on 7" July.
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. Unwarranted, and sometimes unreported, delays were being experienced
because Horizon Change Control’s equipment could not handle large or
demanding documents. A suitable specification PC is being provided to
Horizon so that we can be sure they can receive these documents.
ACCEPTANCE SPECIFICATIONS
. No activity. We now have formal confirmation that these specifications will
not be reworked.
ACCEPTANCE TRIALS
e Formal agreements to the seven areas were lodged by Horizon by the due
date of 25" June. A further, unexpected, agreement for Security was lodged
on 1” July.
ACCEPTANCE REVIEWS
e The last Acceptance Review Meeting (APS Segment 5) was held on 30/6,
formally speaking this segment of the plan was one week late. In several
cases, although the ARM has been held, there are review actions with both
POCL and Pathway to progress.
e — It is important to understand that all such outstanding actions will be
converted to Acceptance Incidents by mid-July. Management focus thereafter
will be solely on the AI list.
ACCEPTANCE INCIDENTS
© The modus operandi of AI handling has been changed, because the delays in
paper-based and sequential systems were causing actions and reports to be
undertaken on out-of-date statuses. POCL are providing drops of the Al
database tables very frequently, possibly daily during the height of the AI
season. The Pathway ATMs are. responding via-e-mail to both the POCL
ATMs and Acceptance Central. Improved standards of response have been
agreed. In addition items more properly handled via maintenance processés
are being filtered out.
e At the time of writing there are 304 entries on the AI database.
e The KPR was reissued to show the LT2 dispositions accounting for the first
164. In the event there were only 18 entries left for CSR+ resolution. Of
the 140 post KPR items those listed below are the most important.
However, there are two remarkable groups: philosophical issues - could we
roll out APS without EPOSS, the boundary of TMS; and those really aimed
at seeking access to the HSHD records by the back door.
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. 218: Balancing / training. All eight of the modifications to simplify and
shorten balancing procedures have been successfully included in the LT2
build and associated ‘tests witnessed. The corresponding managers’ training
course material has been revised and was successfully “dry-run” during the
week of 5" July. The materials for Counter Procedures and the Quick
Reference Guides have been prepared.and the PPD revision produced in
readiness. Horizon has notified Pathway that it may refer the assigned
severity of AI218 to the Expert. We will reissue the Acceptance Incident
Analysis in a very favourable manner comprehending all the progress made,
if Horizon take this step, as it will be important to win a first arbitration to
discourage Horizon from further referrals.
° Besides 218 there are several overlapping Training Acceptance Incidents,
even though the training work has gone very well. We'may be seeing the
side effects of personal issues within POCL.
e 227: Balancing / printing. Three circumstances have been identified that
contribute to the printing problems and are in course of rework: cancelling
during printing; switching the printer off and on during printing; and
(incorrectly, currently) omitting the office report causing long delays in
printing the cash account. In addition printers from reporting outlets have
been replaced and brought under test. A large number of printing-related
PinICLs have been fixed at LT2 and this area should now be much more
stable. There are several overlapping printing incidents-also.
. Horizon has raised as Medium an AI concerning the new meaning acquired
by an old invoicing information Requirement. The new contract requires
Pathway to provide transaction volume information summarised to;allow
reconciliation of any disputed volumes‘and to document various invoicing
adjustments. Dave H produced a specification for this information, which is
not in fact required for some 18 months. A resolution meeting was held on
9" July to.agree the principles for:invoicing data provision; on the basis of
revised specification documents (invoice layout & supporting reconciliation
data) it should be possible to agree downgrading of the Al, even though
some work in the Data Warehouse will be required (CSR+).
. There are some 25 Als raised in the POCL Infrastructure area including a
difficult one on 24-hour working and a philosophical one on the position of
the TMS/OPS boundary.
. The PAS and OBCS areas do not contain any difficult issues.
. Security currently has no open incidents, although the Horizon Acceptance
Test Manager has been changed to one who will try to make a mark. There
are 11 PinICLs, two requiring early clearance.
° Service Levels (Performance) has only the new issue of the performance of
QOBCS at the full workload level now that BES has gone. The customer is
making a lot of this and we have notified him that the fundamental
performance measurements that were done will be the basis of modelling
the changed workload and that the action will be taken.forward through
John Hunt. There are also two medium PinICLs in course of clearance.
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The TIP project has been told to raise a number-of operational items as
Acceptance Incidents. These are difficult to handle as they need to be cross-
referenced to Help Desks calls. We are getting suitable references from our
Help Desk staff where possible and also pressing to get these kind of Als
removed as inappropriate to Acceptance.
This is part of a Horizon campaign to gain access to the Pathway Help Desk
information and the associated know-how. POCL has also written directly
seeking access to the PinICLs raised by Pathway’s Horizon Systems Help
Desk with a view to raising some of these as Als. Pathway has committed to
provide Horizon with on-line access to the Problem Management Database,
in accordance with Requirement 914. This database records those items that
are significant to the service definition and design as distinct from ordinary
maintenance traffic.
EPOSS is principally dependent on approval of the Reports & Receipts
specification, which has just been issued for CCN, and AI 227, q.v., and 211
(Receipts not Equal to Payments) being cleared in LT2.
Reference Data is currently OK.
End-to-End is expected to yield three incidents all concerned with seeking
open access to Pathway design documents. We have provided access to
some under Non-Disclosure and extracts of others, which we expect the
Expert will see as reasonable if'it gets that far.
At the time of writing the final.tally of incidents from Reconciliation and
Schedule C3 were not-received, but the.former area is expected to prove
difficult.
ACCEPTANCE BOARD
John D was invited to the Horizon committee who will “decide” on
Acceptance. (In fact no decision is entailed - it either occurs or does not.)
We have indicated that we would expect to resolve Mediums by the year-
end, but that we will take each such case on its merits.
We have proposed that we provision a resolution meeting for the third
week of August at which the Expert and POCL and ICL representatives can
be on hand to complete all stages of arbitration in a single pass, thus
telescoping a possible four-week process into four hours.
NEW BUSINESS.
No activity.
OTHER TEAM ACTIVITIES
Dave H attended the seminar with Professor Nigel Harding to take forward
the use of workflow as the unifying technology for health and social service
EC-funded projects in the North East. There is as prospect of a European
Centre of Workflow Excellence involving ICL and Microsoft.
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. Dave H has established the DOORS requirements management facility and
has started populating it from the new contract. The tool is powerful but
overlaps with PVCS and Microsoft Office.
° Dave H chaired the Workflow standards meeting and presented to the Black
Forest multinationals.group (which includes the UK Post Office).
° Replies to questions from the HMG Trade & Industry Parliamentary
Committee were provided covering the high rate of change of DSS
Requirements changes, the long delays in defining DSS business rules and
the rejection by DSS of smart card technology.
e John C is back part time - welcome back.
CURRENT CRITICAL PROBLEMS
. None.
ISSUES
e We now have “just” to maintain constant downward pressure-on the
Acceptance Incident workload, heading off any Mediums and Highs where
possible.
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1.0
Date: _ 15/07/99
Customer Service Report
MONTHLY SUMMARY
e From Pathway’s perspective, CSR (LT1) has continued to perform reliably.
POCL’s perception is dominated by continuing end-user problems with
stock balancing and cash account production on Wednesdays. Although
many software fixes have been applied to LT1, there remain several
outstanding that will not be implemented until LT2. The majority of
problems relate to:
1. Payments not equal to Receipts
2. Printing/printer performance
3. Effectiveness of Training
e All of these issues are receiving maximum attention and a Task Force
approach has been adopted with the SSC / OTT teams soak testing printers
recovered from the field and destructively testing the printing procedures.
e The operational problems with Tivoli systems management and software
disttibution are improving and the backlog of fixes has been eliminated.
LT2 software packages have now been downloaded to all 753 counters in
readiness for the upgrade that takes place on 10"/11" July.
° Customer satisfaction of the cash account processes each Wednesday
remains depressed but is expected to improve post LT2. Analysis of calls to
the HSH continues to indicate a steady improvement in end-user
competence in executing the cash account.
e The Benefit Payment Service was withdrawn according to plan with no
outstanding issues.
e The Wigan Data Centre was successfully implemented in 12"/13" June.
VITAL STATISTICS
. Installed base: 299 Post Offices, 753 counters
° Number of Cards issued 51,485
. Number of Active Cards in use 25,451
. Total number of BES Counter Transactions 1,304,752
e BES Counter Transactions in month 44,328
. Value of Benefit Payments in month £1.6m
¢ — Total value of Benefit Encashments made £40.9m
e Total number of OBCS Transactions to date 9.4m
° Total number of OBCS transactions in June 1.1m
* Total number‘of books:impounded to date 22,816
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e — Total number of EPOSS transactions to date 2.7m
e Total value of EPOSS transactions to date £109m
e Total number of EPOSS transactions in June 1.9m
e Total value of EPOSS transactions in June £80m
° Total number of APS transactions to date 329,805
e Total value of APS transactions to date £9.2m
° Total number of APS transactions in June 246,801
° Total value of APS transactions in June £6.7m
PROGRESS
OPERATIONS
° June was a reasonably trouble free month marred only by an OSD NT
technician moving on the time within the host system. A review of OSD’s
operational procedures has been initiated.
° The second data centre was integrated successfully within the live service
and the operational testing of failover carried out. Early indications are that
we have an operationally viable facility with some work still to be done to
improve the speed and efficiency with which failover and recovery is carried
out.
e The reference data procedures are documented and are working well with
the fast-track passport change demonstrating the team’s capabilities:
e The software release backlog has now been cleared with excellent progress
on the LT2 Release note. However we remain concerned for both the
operational procedures of the SMC and their software distribution
performance.
. Good progress on CS Operations Manual.
e The Business Continuity Framework document is now with POCL for
comment. It is very frustrating that they continue to raise new observations
in spite of having said previously there were no further observations. This is
now a CCD so all changes‘now have to be formally submitted under change
control.
BUSINESS SUPPORT
e All payments were successfully stopped and reconciled in PAS prior to the
de-commissioning of BPS. We have thus maintained a 100% record in
reconciling all BPS payments.
. The initial problems with the APS reports have been resolved, and the
reports are now being produced according to specification.
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Analysis continues of weekly cash account related calls to HSH. These are
being closely monitored.
Representatives'from CS are assisting POCL Service Management in
phoning Post Office outlets on a weekly basis to obtain feedback on how
PMs view various aspects of the cash account balancing process using the
Horizon system. The main issue identified so far, appears to be the
perceived unreliability-and slowness of the back office printer during cash
account balancing.
SYSTEM SUPPORT
During June there has been some relief from the intense workload pressure
that followed the Data Centre Migration weekend. The PinICL stack is
under control and the level of overnight and week-end call-out by OSD has
reduced.
SSC staff took part in the successful BPS closedown activities - e.g.
monitoring data on stops and outstanding payments.
Testing of NR2 fixes continued to run at a high rate during June with 31
fixes being tested:
For much of the month.the Operational Test Team has been heavily —~ -
involved in preparation and running of LT1 to LT2 test activities - this has
involved some members in significant overtime (including week-end
working). -
It is intended to include an increasing tevel of call-related metrics in these
monthly reports. The initial set of information, covering the month of June, =
is as follows:
e Total Calls raised through SSC 410
e¢ — Total Calls closed through SSC 498
e Total Calls closed by-SSC as
KnownError/Duplicate Call/No Fault in Product 158
« Total Calls passed to Development 112
* Total Calls closed by Development as
KnownError/Duplicate Call/No Fault in Product 24
INFRASTRUCTURE SERVICES
There has been a continuous reduction of cash account calls into the HSH
as postmasters become more familiar with the operation and processes
surrounding the weekly balance. The dependence upon the POCL/Peritas
expert domain has reduced and we have removed this function from the
HSH. Expert help is now operating on a telephone stand by basis.
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e SLA targets such as abandoned calls, telephone answering times and call
duration continues to be the main focus of attention. The poor performance
seen in the early life of NR2 has seen a steady improvement on Wednesday
and Thursday as the postmasters grow in knowledge and confidence.
However similar improvements have not been seen over the rest of the
week.
e — The introduction of structured scripts and closed questioning techniques has
been well received by the HSH staff and early indications show that this also
reduces telephone time when taking Cash Account calls.
e The present performance of HSH gives cause for concern in 3 areas:
e Achievement of Service Levels.
° Management Intervention.
e — Openness when dealing with ICL Pathway Service Management.
e Dave Fletcher is working with the supplier to establish a recovery plan.
CURRENT CRITICAL PROBLEMS
° None.
ISSUES
e — OSD Service Improvement Plan for SMC.
e Need for an enduring solution to Cash Account-processing problems.
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Date: 15/07/99
Quality & Risk Report
MONTHLY SUMMARY
° Acceptance - Audit acceptance is now complete, with no Als; Security and
Policies and Standards are progressing, so far with no Als.
e Also considerable activity this month in revising documents to reflect the
contract changes (Audit, Security and Y2k).
° Risk Management - A risk management tool-is being introduced into
Development. The Programme Risk review has identified as major risks the
development and agreement of the plan for CSR+ and quality of RFI sites
and readiness for the start of NRO.
° Security - CSR services have been introduced to ensure adequate
management controls.
e Processes - Work is underway to revise Development Lifecycle and Release
Management processes and ensure that they are followed.
e Y2k compliance’- Issues are now around Implementation support systems
and contingency planning.
PROGRESS
RISK MANAGEMENT
° Development Risks - A risk management tool has been identified, Predict!
Risk Management System, supplied by Risk Decisions. It consists of two
elements, Predict! Controller the risks database and Predict! Analyser which
provides the statistical function. It will also interface with the planning tool
AMS Real Time (Schedule Publisher) and therefore have potential to be the
ICL standard. A six month trial in 2 delivery units and a B&TC unit has
been agreed and will start in August.
. Programme Risk Register, June - Overall, risk has decreased since the last
review, as a result of implementing Live Trial and the contract change.
¢ Acceptance - The major risk is now that of the weekly office balancing
issues and potential reaction of the customer to further issues.
° CSR+ - Major issues now are the completion and agreement of a full
plan, migration from CSR and final implementation of the
Development organisation.
. Implementation risks have increased. The major issues are now the
quality of RFI sites which is being investigated and overall readiness
for start of National Roll Out.
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SYSTEM SECURITY
CSR
ACP, SFS, Security Policy, Code of Practice, PACE and Security
Management Procedures have been reviewed and redrafted in light of
contractual changes.
Acceptance - Support continues; the remaining AI was closed.
The ICL Pathway Data Protection Act registration and purposes have been
reviewed in light of contractual changes. Modifications aré required to the
Subject Access Request process.
User and role changes have also been identified.
Work continues to ensure correct and consistent installation and
maintenance of anti-virus software in the live estate
The Tivoli security event viewer has been enabled on the Security Event
Management client and the active monitoring of events and checking of
archives has begun.
Discussions with POCL have restarted to determine a revised One-Shot
Password process. Despite agreement between ICL Pathway and POCL
Security staff, POCL Regional Network Managers have rejected the process.
The process was due to go live on 1° July but'was withdrawn by POCL at
the last minute.
Automation of the SecurID and ACE Server monitoring and report
generation has begun.
QUALITY
Policies & Standards Acceptance Test
° Acceptance Test Plan reviewed against the revised Solutions Schedule.
° Segments 1 & 4 Reviews completed.
e Further information gathering to clarify points of difficulty ongoing.
. Weekly progress reviews with Horizon ATM supported
. 34 of 54 Criteria have now been accepted.
° No Acceptance Incidents raised to date
Cirencester DQA Report has been circulated to actionees for comment ‘and
action proposals.
An audit of WTplc is in progress in response to problems reported from the
Preparation of the 103 sites added to the Live Trial estate, and a draft
report has been circulated. A need to assess the performance of current sub-
contractors Romec and Hyder has been identified.
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e Disaster Recovery Plans - Work is now coming to a head, with the finalising
of flowcharts and action lists. Work is underway to clarify and implement
changes to the organisation in the Business recovery Plans.
. The 1999 Q1 Packaging Return has been submitted.
AUDIT
e Acceptance - All Acceptance trials and reviews have been completed, with
no Acceptance Incidents. A letter has been sent by the Horizon test manager
to Horizon to recommend acceptance of the Audit solution.
e The ATFS and Horizon System Audit Manual have been updated to reflect
contract changes and comments raised in review.
. Internal audits:
° Change Management Audit is complete and a corrective action plan
agreed.
° Implementation Audit; hiccuped due'to lack of availability of
Implementation staff, but is now targeted to report end July.
° Process Development:
° Development Lifecycle - Facilitation of changes to this process is
underway as a result of changes in the Development organisation.
° Release Management - Work has been started to modify and propose a
process that was originally developed 2 years ago and-not
implemented.
YEAR 2000 CONFORMANCE
e The Y2k Business Continuity PID has been updated to reflect the contract
changes. Progress is as follows:
° CS - on track.
° CM - dual site servers up and running but plan/process needs to be
defined.
° Development and Implementation- no significant progress.
. Internal issues
° Implementation rely upon a number of systems including RODB,
ROHD and Activity Tracking Data Base. The latter is specified to use
non compliant product versions and has not been rigorously tested.
. DSS/POCL Contingency Planning.
e Discussions with POCL on the plans for testing of POCL outlets and
the live service on 1/1/2000 continue. (Subject to a Change Request).
° DSS have stated that they are establishing a contingency site for ESNS
host based at Swindon. (Subject to a Change Request).
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¢ Plans for outlet opening and operation are being discussed. The headlines
are:
¢ Crown offices will be closed Friday 31% Dec 1999 through Monday
Jan 3 2000.
e = POCL expect that 6000 outlets will be open on 28" December 1999.
e — POCL approach is to “health check” the live service early on 1/1/2000
and then determine if they should invoke their contingency plan.
. DSS will close their on-line systems at 16.00 on 30" December
followed by consequential batch processing. Live service will re-start
4/1/2000 though there will be-some testing of the systems over the
weekend.
ISSUES
. Still a considerable volume of changes to accommodate as a result of the
contract change.
e _ Understanding the impact of the system changes effect following the
cancellation of card based payment on the system and any Y2K
vulnerabilities.
. Managing BA and POCL expectations of systems stability during Q4 1999
and Q1 2000 in the context of the SIP plan and CSR+ target dates.
° Ensuring the overall business continuity plan for Pathway provides adequate
mitigation against the risks and that Y2K specifics are delta’d.on top.
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Business Development Report
MONTHLY SUMMARY
e — This month’s main focus has been on leading a team to sort out the
balancing issues faced by the sub-postmasters in the Live Trial. This is
critical, as Acceptance-and National Rollout are dependent on an
improvement in the live offices. Two visits to a number of live offices in
both POCL regions have significantly helped this task. Progress is being
made:
° The Pathway recommended changes to the balancing process have
now been implemented in the LT2 build.
° Changes have been made to the managers training event. A dry run
takes place 5/6" July.
° A task force is now in place to identify and solve printing issues.
° Software mods. have been made to sort out ‘payments = receipts’.
° Recommendations for further improvements have been made to
POCL. The biggest worry is that the recommendations are one way.
POCL have not yet put a process in place to collect feedback from the
live offices. This in turn is causing frustration as the live offices are
putting forward suggestions without any feedback. We are proposing-a
proper forum for this.
. Amended Quick Reference Guides have been issued to the live offices.
e A list of printing ‘do’s and don’ts’ is being drawn up for early issue to
the live offices.
° The frustrations with some of the system issues in the live environment are
felt just as strongly in the POCL regions as they are by the actual sub-
postmasters. The real bottleneck is with the centre. We must keep up
pressure for change and faster response to the live operation.
° Overall, the important message from the outlets is one of support for the
system. They like the system see it as vital for the future BUT can the
balancing ‘issues please get sorted.
BUSINESS DEVELOPMENT
¢ — Twelve individual sales campaigns have been identified to deliver revenue
over and above the new contract.
° We continue to encounter resistance from POCL staff to start any dialogues
until after the contract has been codified. We need to agree rules of
engagement for POCL staff. They are paranoid about us charging for even
coming to meetings. This needs to be sorted quickly between POCL and
ICL Pathway. This is probably not a bad starting point as previously
Pathway was seen to be liable to pay for everything.
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CUSTOMER EDUCATION & COMMUNICATIONS
EXTERNAL COMMUNICATIONS
° Media communication.on a reactive basis has fallen off as hoped. It is a
matter of priority that we start proactive communications now.
e We must also ensure that because of the change to the contract, this does
not diminish our contractual.responsibilities on external and internal
comms. Approval must still be sought for documents relating to Horizon
both from POCL and. from ICL Pathway.
INTERNAL COMMS
¢ In ICL Pathway has taken a priority - the recent changes and ICL
announcements have it would seem, demotivated some.
° A new ICL Pathway profile has been prepared.
° We have reserved a 2-page spread in the July/Aug edition of the ICL
magazine, to give an update on ICL Pathway since the Treasury Review was
announced.
e A good news article on the 300 post offices will appear in MSMS the ICL
monthly, electronic newsletter.
° The last edition of Brief EnCounters was sent out w/c 14" June as a one-off
special based around the changes within ICL Pathway. The next edition is
due in the middle of July.
e _A Supplier update newsletter is planned
e@ — All communication supplier contracts have been cancelled.
INTERNATIONAL
. Peter Atkinson has moved into Linkwise as part of the ‘cost down’
programme. Given the change of focus that I have put in place to
concentrate on current Riposte users for high value consultancy
opportunities, it became unnecessary to have Peter in place.
e We are in discussions with ICL South Africa to formalise the approach to
the Namibian Post contract. ICL SA is now the owner of the contract.
Pathway resource is being allocated to them at cost to ensure the-success of
the product deliverable to the customer.
e — Deutchse Post have invited us to hold a workshop with them 19°/20" July
to formulate some specific work packages where we can help. This is
positive news and can lead to some good consultancy revenue.
e The contract with CTT in Portugal has still not been signed. There is still a
small chance of ICL getting back in the frame but it is not something that
any Pathway effort is being expended on.
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. Discussions continue with Escher to get an exclusive teaming agreement in
place for sub-Saharan Africa.
PROGRESS
BBC RE-ENGINEERING
. Initial scope of re-engineering has been identified. A meeting is booked with
Paul Harris of POCL for 30" July to confirm that the scope maps onto his
strategy. Once this has been confirmed we will create a formal proposal for
POCL.
DVLA RE-ENGINEERING & MOT INTEGRATION
¢ Initial scope-of re-engineering has been identified. We need to do more
work to understand the scope of MOT integration. A meeting is booked
with Terry Benson of POCL for 28" July to confirm that re-engineering
scope maps onto his strategy, and to brainstorm the scope of MOT
integration. Once this has been completed, we will create 2 formal
proposals for POCL.
EFTPOS (CREDIT/DEBIT CARDS)
° The Front End Functional Requirements section from the POCL Statement
of Requirement has been issued for review by POCL.
e A meeting is being sought with POCL to agree charging mechanism for
future ICL Pathway effort. We need to agree a clear break point between
creating an end to end proposal, and designing the service (the latter is
chargeable under the new contract).
EURO CURRENCY UPGRADE
° At some point, it is likely that POCL will need to update the counter system
to except the Euro in addition to sterling. Work is underway to identify ata
high level the technical options available and a rough scale of costs. Once
this has been completed we will approach POCL to agree a way forward
leading to a formal proposal-from ICL.
HOUSEHOLD BUDGETING
e — This product was designed to work in conjunction with the Benefit Payment
card. In the absence of the BP card, we are currently investigating the
feasibility of linking in to OBCS transactions. Meeting booked with Paul
Harris of POCL for 30" July to confirm his interest-and support for this
product. Once this has been confirmed, and if the feasibility study is
positive, we will create a formal proposal for POCL.
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MAILS APPLICATION
e Initial scope of product has been identified at a high level for UK mail
services only. Currently unclear of where responsibility resides within the
Post Office for progressing this opportunity. Not being progressed -
internally until we establish a contact within the Post Office who will take
responsibility for developing the ideas and scope'with us.
MULTI-CHANNEL
e The Post Office is very unclear about how they will use and pay for a full
multi-channel service. We need to identify whom in Post Office (P.O.) has
responsibility for this area, and then help them understand the opportunity
and the threats to their business if they do not move:in this direction. Key
tasks for us are to create a small demonstrator to bring the concept to life,
and to work with the P.O. to help create a business case. This opportunity
will eventually be progressed as an ITT by the P.O. and on that basis we will
need to undertake significant pre-sales if we are to ensure we win this
business.
NATIONAL SAVINGS RE-ENGINEERING
° Based on the extensive joint work completed in 1997, we have a good idea
of how we can add value, however we are experiencing severe difficulty in
getting the Post Office to engage with us in any way on this opportunity -
see Current Critical Problems. We will keep pushing, and will look to
ensure they are provided with rules of engagement a.s.a.p.
NETWORK BANKING
-° Given the importance of Network Bank to their strategic future, their
reluctance to engage is a worry. A meeting took place with Linda Hanratty,
Director Network Bank with a stated aim that further discussions would be
dependent on the signing of the contract and agreement to ‘rules of
engagement’. However they have appointed a new Managing Director for
Network Banking, Basil Larkins (ex-Abbey National), which should help
provide some direction.
e We have sent the Post Office a briefing document detailing where we can
help them deliver Network Banking, and work is progressing internally to
create a winning proposal for delivery of Network Banking services at the
counter.
° In addition, the P.O. is investigatirig the potential for the creation of a
network of ATMs as part of the Network Banking strategy. We are working
with ICL Financial Services to qualify and progress this opportunity.
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ON-LINE MANUALS
e We have engaged with the Post Office to identify the scope of this
opportunity and to help them. build a business case. There is no senior
sponsor for this opportunity within the P.O. at this time.and this will need
to be addressed. However, prior to seeking a sponsor we will try to work
with our current contacts to create a proposal and business case to be
progressed within P.O.
PRECISION RETAILING
. Due to the current position of the Post Office we will restrict our offer at
this stage to a simple basket analysis tool linked into on-screen prompts.
Our key activities are to find a senior sponsor within the P.O., and to
engage with ICL Retail to identify a suitable proposal.
OBCS
° I believe there is a major opportunity to enhance OBCS. There are several
areas from bar-coding of foils to. enhanced fraud prevention ideas that now
need to be formulated into a sales proposal to POCL for them to take in
turn to the Benefits Agency.
CURRENT CRITICAL PROBLEMS “
e The Head Office staff in the Rost Office need to be given rules of
engagement for working with ICL on new opportunities. This needs to be
put in place a.s.a.p. We are progressing this with Dave Miller and Dave
Smith of the Post Office.
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Monthly Report Version: 1.0
y p Date: 15/07/99
Implementation Report
MONTHLY SUMMARY
e All Implementation programme milestones were achieved during the
reporting period and, despite the additional activity required for the
evaluation of new outlets to clear the balancing acceptance incident, the
project remains ready to commence national Rollout in August this year.
There is one risk to the start of national Rollout, described fully in Current
Critical Problems below, relating to incomplete preparations by our supplier
Workplace Technologies. However, it is believed this risk is being
successfully managed such that the threat.is minimised through the
agreement of an action plan of corrective and preventative measures which
is already underway.
° Up to 25 new outlets will have the horizon system installed during July and
National Rollout installations will commence fully in August. The national
Rollout programme for awareness, training, ISDN installation and
scheduling is already well underway with the first eight weeks of rollout
being released for scheduling.
PROGRESS
° Recruitment against the agreed Implementation headcount profile has
progressed and is on track to achieve the resource levels necessary to
support National Rollout. Current team size is 88 staff with 17 permanent
vacancies outstanding although recruitment for these positions is at an
advanced stage.
e The infrastructure rollout programme, designed to ensure outlets are ready
for installation, continues to make progress. Improvements have been
observed in the number of outlets that are reaching RFI status each week,
following the management actions reported last month. Levels are still
running below target although further incréases are expected.
Improvements in the modification process have already delivered increases
of up to 15 outlets per week at the modification stage and this will, in time,
lead to more outlets completing RFI each week. A further increase of 15
outlets per week is anticipated from week commencing 19" July when the
second stage takes effect. Up to 283 outlets previously suspended from the
infrastructure programme due to modification costs being greater than
financial limits have now been released. for scheduling. Of these 48 will re-
enter the programme in the weeks commencing 12" and 19" July. This will
continue at a rate of 25 outlets re-entering the programme each week.
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e Priorities for the Implementation team this month have focussed on
assessing the readiness of the project to commence National Rollout and the
need to-install and train up’to 25 new outlets for the evaluation of system
and training improvements. During the month agreement with POCL has
been reached on a revised profile for National Rollout, addressing customer
concerns relating to the maximum planned installation rate.
¢ During Live Trial, POCL have expressed significant concern over the
Horizon system balancing capability, training in cash account balancing and
the ability of the Horizon Systems Help Desk (HSHD) to address outlet
manager concerns over balancing. POCL are convinced that the planned
300 a week maximum installation rate for rollout cannot be sustained
without significantly reducing the concerns over balancing. Pathway have
therefore agreed to a POCL proposal to evaluate the effectiveness of system,
training and procedural improvements, all relating to balancing, in 25 new
outlet installations. A plan’ to undertake this additional work has been
agreed, with effort being made to minimise the impact and risk to the
preparations for National Rollout. Training for these outlets will take place
in the week commencing .12" July and all installation will be completed in
the week commencing 19" July. Evaluation of the effectiveness of the
changes and the ability of the HSHD to support outlets will then be
measured against agreed success criteria during the remainder of July and
August. Successful demonstration of the effectiveness of these improvements
will be the final element required for National Rollout release authorisation
in August 99. The National Rollout programme will then commence in
earnest in late August. Dry runs of the revised training course have indicated
initial customer satisfaction with the changes made to the counter managers
training course and the-installation of the new 25 outlets are currently on
schedule.
° Preparations for National Rollout continue to make good progress, despite
the need to introduce the unplanned evaluation installations described
above. Training course improvements for all courses are on schedule,
revisions to migration tools and procedures are nearing completion and
supplier preparations have been reviewed and are considered to making
adequate progress. POCL have agreed to start scheduling the first 8 weeks
of National Rollout with a fortnightly review to release future weeks into
the programme. Outlet notifications, training and installation schedules for
these early weeks have rollout are now well underway. There are no known
issues that currently pose a threat to the commencement of National
Rollout installations.
« Supplier negotiations have made.good progress during the reporting period
with agreement being reached with POCL relating to the HFSO In Office
Data Migration service. ICL Training Services are the only Implementation
Supplier with significant-outstanding contract re-negotiations to be
concluded. Meetings to progress this are planned for the week commencing
19" July 99.
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Imptementation
Monthly Report
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Version: 1.0
Date: 15/07/99
(For week ending 9" July 99)
IMPLEMENTATION WEEKLY STATISTICS
Note: In the next reporting period the installation programme will begin
making progress and statistics to measure this progress will be available.
The format below shows how achievements will be reported.
INFRASTRUCTURE PROGRAMME
Activity I This Week Cumulative
RGM letters issued 326 15,644
MIB events held 9 324
MIB attendees 318 15,054
Site surveys undertaken 297 12,381
Site re-surveys required 137 4,730
‘Site re-surveys undertaken 88 4,316
Site modifications done 100 2,685
Site preparations done 247 5,861
Sites RFI 247 ~ 5,861
INSTALLATION PROGRAMME
Activity This Week Cumulative
Outlets Committed 400 ! 1,250
‘User Awareness Events Held 4 5
UAE Attendees (Outlets) TBC TBC
ISDN Lines installed 0 ~OI
Training Events Held 0 0
Trained Users 0 0I
Sites Installed 0 0
Sites Migrated 0 0
Live NR2 offices 0 299
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CURRENT CRITICAL PROBLEMS
e Satisfactory progress has been achieved on the two critical problems
identified last month. With the co-operation of Workplace Technologies,
issues raised in the 16 inspection sites have been cleared to the customer’s
satisfaction and acceptable reassurances over Pathway’s ability to prevent
reoccurrence have been provided. Agreement has also been reached on a
revised rollout profile, addressing customer concerns over the rollout peak
installation rate.
e There are currently a large number of outlets where preparation activity is
incomplete or the status of outlets declared Ready For Installation (RFI) is
in doubt. Responsibility for this rests with the supplier responsible for
surveys and preparations, Workplace Technologies (WT). This matter has
been brought to the urgent attention of the Managing Director of WT and
an action plan of corrective and preventative measures has been put in
place. Weekly reviews of progress against this action plan have highlighted
weaknesses in WT processes-and sub-contractor management. This has been
recognised by WT and they have implemented immediate process changes,
corrective action and the addition of extra staff in key areas to achieve quick
resolution of the issue and to remove the cause of the problems. It is
anticipated that a significant improvement on this: matter will be achieved
within 4 weeks. In the meantime WT corrective action has been prioritised
on those outlets which enter the installation rollout programme first to
ensure there is no knock on effects to the installation schedule.
ISSUES
° A significant number of suspended outlets still require resolution and-re-
scheduling into the infrastructure programme. Additional scheduling
resource has been recruited in order to facilitate this and suspended outlets
are now being released for scheduling. It-is anticipated that progress will
improve on this issue gathering pace over the-next two months.
e Software enhancements and bug fixes to the Rollout Database tool suite,
although underway, will not be complete until the end of November ’99.
Priorities in the Development directorate will prevent an earlier completion
date. Consequently, it will be necessary to make use of manual
communication and data transfer mechanisms until such time as the work is
complete. The lack of full RODB functionality presents a risk to the
National Rollout process although the risk is minimised by the use of
manual processes that have already been proven and the fact that National
Rollout does not hit peak rates until after RODB.development is completed.
A number of our suppliers have expressed their concern in this area. An
additional project manager has been assigned to manage Implementation
issues relating to the RODB.
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° Little progress is currently being made for outlets where there are
difficulties providing a workable solution. These include outlets requiring
portable systems, trolley solutions and outlets where ISDN capability is
unavailable. Efforts are underway on each of these issues to identify a
solution but this will require more effort to prevent them becoming critical
items in the future.
e There is a concern at the level of outstanding call resolutions at the Rollout
helpdesk which rose for the first time last week. Additional resource being
introduced to the IP teams should help to close these items down and the
trends will be monitored over the coming weeks to track progress.
° Rationalisation of regional management within POCL impacts the
Implementation team accommodation requirements in the field and will
necessitate the provision of accommodation for the Pathway regional teams
and additional IT support. This is being progressed with Site facilities.
COSTS
e Agreement on the revised rollout profile with POCL has been achieved in
line with the codification of the Heads of Agreement. This will however
attract a financial impact from our suppliers that will need to be consumed
within the Implementation budget. Aggressive cost management is
underway to minimise this impact.
e The evaluation of 25 additional offices in July 99 to clear an acceptance
incident around the subject of outlet cash account balancing, will attract a
financial impact relating to the unplanned need to install and migrate sites
during July. This is currently being: assessed.
° The ICL Training Services contract is the only remaining:supplier contract
requiring significant re-negotiation to bring it in line with current
requirements. Negotiations on this will attract a financial impact that will
require strong management to minimise costs. This exercise will begin
during July.
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& Personnel
Report
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Version: 1.0
Monthly Report Date: 15/07/99
Organisation & Personnel Report
MONTHLY SUMMARY
. Recruitment activity was concentrated on satisfying the recruitment needs of
Implementation in preparation for National Roll-Out. There was also
significant activity with regard to the redeployment of staff and the release
of Freelancers as part of thé “cost down” process.
PROGRESS
° Appointments in June:
External Recruits
Transfers
A&TC
Linkwise
Freelance
Temporary
NOUS H OW
Total: 1
° Known joiners:
External Recruits
Transfers
A&TC
Linkwise
Freelance
Total: 1
meooron
. Offers outstanding:
External Recruits 2
PROGRESS
¢ Joiners in June were significantly down on the average run rate of previous
months. Some Freelancers were taken on although this will now stop as a
consequence of the decision to fill vacancies only with ICL employees.
° A number of actions were put in place to support the cost down process:-
1. The recruitment of Freelancers was stopped. Any recruitment has to
be.via A&TC and only if they cannot find.a suitable person would
external, permanent recruitment be considered.
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2. Managers have to identify freelancers withi 6 weeks of the end of
~ their contract and submit a Recruitment Authorisation Form to the
Personnel Department. This must be accompanied by a detailed role
specification. This will allow A&TC the best opportunity to
recommend suitable candidates to replace the freelancer. A reasonable
handover period will be allowed, though this must be as short as
possible while still ensuring the work is effectively carried out.
3. All.requests to recruit have to be ultimately authorised by the
Managing Director. Managers should make comprehensive efforts to
carry out the work within existing resources before requesting
additional people.
° Progress on cost.down is as follows: A significant proportion of active
vacancies have been withdrawn. The significant area of continuing
recruitment is in Implementation. 12 freelancers were released in June. 8
members of.ICL Pathway staff were redeployed. 2 filled vacant positions in
Customer Service, 1 filled a vacant position in Implementation, 2 replaced
Freelancers in Development, 2 moved into Acceptance to provide short
term support in this area and 1 transferred into A&TC.
© 14 new positions were approved in Implementation in preparation for Roll-
Out. 13 offers were made in June (8 offers for positions approved in April
1999 and 5 offers for positions approved in June 1999). In total there are
17 vacant positions in Implementation and recruitment activity will be
focussed on this area until they are filled. A&TC have been key in
resourcing Implementations requirements.
e The implementation of the salary review was.delayed until July, as a result
of an ICL wide initiative. In. general people understood the requirement for
this action and there were no obvious repercussions.
° The format of the 1999/00 bonus-schemes was agreed and employees will
be informed early in July. There will be significant work involved to ensure
all staff have-logged objectives by the end of July and to ensure they
understand the principles of the scheme.
. Members of the Project Management Professional Community were
encouraged to complete their assessment forms. By the end of the month,
however, only 3 had been completed.
e Work took place to satisfy business demands for space at ICL Pathway sites.
The most significant issues are at FELO1, BRAQ1 and accommodating
Implementation employees in regional locations.
CURRENT CRITICAL PROBLEMS
e The focus on Cost Down initiatives involves a significant investment by all
managers within ICL Pathway. The new procedures must be enthusiastically
adhered to in order to allow the-necessary cost saving to be achieved.
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an
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Client
Report
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Monthly R Versio 1.0
thly Report Date: 15/07/99
The Post Office - Client Director’s Report
MONTHLY SUMMARY
° ICL's first joint bid with Post Office: SSL's Call Centre Bureau capability has
been included in the ICL response‘to CCTA Framework procurement for a
wide range of telecommunications services for the public sector.
° MC have been given a second yellow card by IT Services for poor service in
.desktops supply.
MODERN GOVERNMENT
e Internal work. progresses on establishing local/regional government
requirements for card-based services which could utilise Post Offices - this
work will be taken up with Customer Management Business Unit CMBU as
soon as they allow a meeting. Engagement has in fact already started via the
CCTA GTC Government Telecommunications Framework Contract:bid.
CMBU's (formerly SSL's) callcentres capability is in ICL's response for
Bureau Services, in which Post Office would act as a subcontractor to ICL.
1999 BUSINESS
° Business figures not available this month.
CURRENT CONTRACTS
TECHNICAL RESOURCES SUPPLY/ ICL ONSITE CONTRACT
e OSD have now appointed two on-site staff at Chesterfield to manage.this
contract, although the transfer of contract ownership from CE to OSD is
still being negotiated. The work packages element (“ICL Onsite”) will be
managed by Caroline Simcock.
ONE STOP SHOP
e June revenue at £2m, ahead of forecast. However poor service has led to
MC being given a second yellow card by PO. One more and the contract is
terminated.
NEW BIDS
SERVICE MANAGEMENT TOOLS
¢ Following selection of shortlisted suppliers ICL, IBM, DMR and completion
of reference visits, PO have invited ICL to negotiate a contract.
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SPICE
e “Securing the Post Office’s Integrated Commercial Environment”: a broad
ranging invitation covering Customer Contact, Customer Relationship
Management'and data warehousing. The RFI response was submitted 11"
June. ITT will be issued to selected suppliers 2" August. This requirement
has appeared very early for ICL’s embryonic CRM capability and we are
reviewing how best to progress, assuming we-achieve the ITT list.
REMOTE ACCESS
¢ No bid - specific requirements not in ICL portfolio.
LAN NETWORKS
¢ Supply, service and maintenance of components for 2,000 LANs, mainly
around CISCO equipment. Following some anxiety a bid was delivered by
MC at the last minute.
HELP DESKS
° Having been alerted by PO IT Services that an OJEC ad was imminent, we
arranged for the OSD specialists to meet the IT Services Help Desk
Manager Glen Bladon and his procurement PM. The ad is now in the
Journal and OSD are assembling the first response.
ACCOUNT DEVELOPMENT
e A series of new contacts have been established with PORG and latterly
ParcelForce. PORG are leading PO's smartcard thinking, will be procuring a
PO-wide campus card system, and are leading research into PO-wide
internet/ebusiness. ParcelForce have specific interest in exploiting their top
customers Extranet for other commercial purposes. PORG and Group IS/IT
are also following up interests in establishing how the Pathway
infrastructure can be exploited alongside PO's,own infrastructure.
COST DOWN
. No change.
COMMERCIAL IN CONFIDENCE Page 45 of 45