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ICL PATHWAY LIMITED -
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
HELD AT
ICL HOUSE, 1 HIGH STREET, PUTNEY, SW15 1SW
ON MONDAY, 25TH NOVEMBER 1996
Present: Six Michael Butler (Chairman) C 7 —
Mr T K Todd
Mr R Christou (from item 71)
Mr J H Bennett A I
Mr A Oppenheim . POH-1622D__}
Mr T Reynolds ee
Mr J White (from item 71 c))
In attendance: Mr R F Scott (Secretary)
Mr T Austin (from item 73)
Apologies for absence were received from Mr R Banks.
96/69 MINUTES OF PREVIOUS MEETING
The minutes of the meeting held on 2 September 1996
were approved as a correct record and signed by the
Chairman.
96/70 MATTERS ARISING
96/65 £) - Printers - Mr Bennett said that
following review there were no changes proposed to
the printer or stationery to be used in the Sub
Post Offices.
Since the last Board meeting, the 1996 Annual
General Meeting of the Company had been held and
the Statutory Accounts for 1995 filed with the
Registrar of Companies. Also, £20m in Ordinary
Shares had been issued.
96/71 MANAGING DIRECTOR’S REPORT
Mr Bennett reported and there were questions and
discussion. Points noted:
a) Mr Bennett would consider carefully the use of
jargon and technical terms in the reports in
future.
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Mr Bennett
Mr Todd
Mr Bennett
Mr Todd
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b)
c)
dq)
e)
f)
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Initial Go Live 2 had been successful on 21
October, although it took more effort than planned.
Mr Bennett confirmed he was likely to sign off the
drop down process at the end of the present week.
Pathway had been successful in resolving difficult
issues on the drop down before signature.
Mr Bennett and Mr Oppenheim explained the
circumstances whereby Pathway now wished to give
the prime contract for the network service to
Energis (although BT would have approximately 50%
of the work through its local lines). Previously
it had been intended that BT would be prime
contractor. Mr Bennett would write an up to date
brief on the situation for Mr Todd so that Mr Todd
could discuss the position with Sir Peter Bonfield,
explaining in particular why this decision had been
taken.
The Board noted with concern that CAPS performance
- namely the benefit rollout programme beyond child
benefit - had been frozen by the DSS. This could
delay the live trial date of April and possibly the
Go Live National Rollout date of July 1997, and
could have ramifications on Pathway revenues and
also some recrimination on causes which might
involve Pathway and ICL. Mr Austin subsequently
said in the meeting that CAPS delays had been an
underlying problem all along for the customer. Mr
Oppenheim said that although the impact on Pathway
revenues was of concern, certain levels were of
course guaranteed. It was noted that considerable
support from ICL High Performance Systems was being
given to the DSS on this and that the DSS was
having an audit performed on the situation. The
issue would be monitored very carefully.
On the possibility of international business, it
was noted that the Australian Post Office were
considering a Pathway type solution involving the
Riposte software. Mr Todd, Mr Reynolds and Mr
Murphy would consider this opportunity both for
itself and as a possible model for future co-
operation in selling the Pathway solution. Mr
Reynolds informed the Board that An Post was
setting up a separate subsidiary to handle
international opportunities.
The Board discussed the times that transactions
would take when the solution was in place in Post
Offices and noted not only the severe penalties but
the possible political and publicity issues if
transaction times were too long and delays occurred
at Post Offices. Mr Todd said that because of the
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Mr Bennett
g)
Mr Bennett
h)
Mr Bennett
Mr Bennett
96/72
a)
Mr Bennett
Mr Oppenheim
b)
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significance of transaction times, all changes
contemplated to the programme, contract etc in
future should be considered: first against the
effects on transaction times. Mr Bennett would
review all procedures and operations from this
point of view and ensure the organisation remain
vigilant on the issue.
Mr Bennett confirmed that ICL Pathway had signed
off on the security functional specification and
would prepare a briefing note for the Board on the
key security features being put in place for
release one in particular.
The Chairman raised the subject of the extent to
which HM opposition was briefed, in regard to the
possibility of a change of Government in 1997. Mr
Bennett would seek advice from Mr Hall of ICL and
prepare a suggested programme for the Chairman and
Mr Todd to see Labour Party Shadow Ministers. This
could be considered at the Board in January. The
January Board Meeting would also consider whether
the delays in CAPS should be escalated by Pathway
to the ministerial level.
FINANCE DIRECTOR’S REPORT
Mr Oppenheim reported and there were questions and
discussion. Points noted:
Mr Oppenheim reported good progress with the
previously outstanding number of 38 change control
notices and 15 key issues, with the customer. As
Mr Bennett reported previously much of this work
had taken place within the context of the
negotiations of completion of the drop down
process. Mr Oppenheim confirmed that negotiations
within the Core Negotiation Team (CNT) were
proceeding satisfactorily. Mr Todd said that it
was very important that Mr Bennett and Mr Oppenheim
carefully consider the contractual significance if
a CAPS delay did delay national rollout and the
commercial effect this would have.
Apart from the discussion on Energis, Mr Oppenheim
and Mr Bennett referred to two other sub contract
issues. On EDS, it was agreed we would take
particular care to ensure that the DSS was involved
with EDS and Pathway in a tripartite agreement
concerning passing over of DSS information.
Secondly, Mr Bennett said that Fujitsu Australia
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Limited (FAL) have underestimated the work involved
in the keyboard they were making for Pathway and
frequent reviews involving Mr Pyle of ICL were
taking place to resolve the issue.
c) Mr Oppenheim said that, as shown in the forecast/
budget comparison in the paper, Pathway was likely
to spend £3.7m more during the year than expected.
Against this, with the help of Mr Christou and Mr
Pyle, significant savings on purchasing costs had
been made.
Mr Todd requested that the original business case,
Mr Bennett together with any additional costs and the
Mr Oppenheim purchasing improvements be brought back to the next
Board meeting for Review.
96/73 PROGRAMME UPDATE
Mr Bennett gave a programme update, supplemented by
Mr Austin when he joined the meeting. Points
noted:
a) Mr Bennett and Mr Austin explained that Release 0.7
of the solution was being put in place in time for
the Live Trial from April 1997 and they explained
the levels of functionality this release, then
Release 0.8, then Release 1.0 itself, would
contain.
b) The Chairman asked the extent to which Pathway and
the customer organisations were working as a team
and Mr Austin replied that this was patchy although
there were some encouraging areas. It was noted
that Mr Graham, PDA Programme Director was treating
POCL, BA, and Pathway as three suppliers which was
‘helping create a common approach.
Mr Austin said that so far on the programme, work
on EPOSS for POCL was in better shape than the
benefit encashment arrangements for BA. In
particular on EPOSS, the joint testing environment
was proceeding well.
ec) Mr Todd enquired whether Mr Austin had adequate
resources and skills available and Mr Austin said
generally this was the case although he would like
more help from ICL’s Windows NT Centre of.
Mr Todd Excellence. Mr Todd would follow this up.
On ICL Peritas, where the customer had expressed
some dissatisfaction, it was noted that Peritas,
Pathway and the customer seemed to be in agreement
on a wider approach, involving helping the Post
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Office staff within their whole environment not
enly narrowly educating them on the solution.
However, Mr Todd said it was important that if
Peritas was doing more than originally required,
then it should charge for it. Mr Bennett would
Mr Bennett look into this.
96/74 BANK FINANCING UPDATE
Mr Todd said that Fujitsu were investigating a
project finance alternative sponsored by them, for
Pathway (which would probably involve bank finance
arranged by Fujitsu).
Mr Oppenheim said that his view was that the
customer would continue to insist that in the
remote eventually that none of Pathway, ICL nor
Fujitsu could complete the solution, he the
customer would want complete control and complete
flexibility with, for example, a new provider. The
customer was not willing to accept restrictions on
what it could do because the interests of the banks
had to be considered. The Chairman added he felt
the situation was not as sharply defined as this
and that the interests of the customer and the
banks could be brought nearer together if
necessary. Mr Todd said he would bear this in
mind.
96/75 VISIT FROM MR YAMAMOTO
Mr Todd said Mr Yamamoto, Chairman of Fujitsu was
visiting the UK next week on Fujitsu business and
that Mr Todd was arranging for him to see Messrs
Lilley, Jack and Lang.
Mr Todd added that he had met the Chancellor of the
Exchequer, who seemed well informed about Pathway
and the project and we should wait to see with
interest if there was any reference to PFI in the
budget.
96/76 UK PASSPORTS
Mr White said De La Rue was bidding for the UK
Government contract involving collection of data
for passports. Mr Bennett confirmed that Mr Liam
Foley of Pathway had been in discussion with POCL
regarding the extent to which the Pathway/POCL
infrastructure could be used for gathering data on
Passport applications. However, Pathway was not
separately bidding for this contract.
‘GRO.
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96/77 DATE OF NEXT MEETING
Please note the meeting scheduled for Thursday, 23
January 1997 has been cancelled. A new date for
this meeting will be fixed in the near future, plus
meeting dates for the rest of 1997.
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