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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
FRIDAY, 14TH MARCH 1997
Present: Mr T K Todd (In the Chair)
Mr R Christou aaa ~
Mr J H Bennett
Mr A E Oppenheim I
Mr T Reynolds 1
Mr J White J
In attendance: Mr R F Scott (Secretary)
Apologies for absence were received from Sir Michael Butler,
Mr R Banks and Mr T Austin.
MINUTES OF PREVIOUS MEETING
The minutes of the meeting held on 30 January 1997
were approved as a correct record and signed by Mr
Todd.
97/11 MATTERS ARISING
97/4 g) - Mr Bennett had circulated a paper on Year
2000 issues and the Pathway solution had been
audited. He was now requesting conformance
certificates from the customer on his systems. An
internal discussion paper had been circulated
within Pathway on the Single European Currency and
the Pathway position was being fed into the overall
ICL Strategy on this matter. Mr Reynolds outlined
An Post’s progress on both these issues.
It was agreed that on the Single European Currency,
JH BENNETT Mr Bennett would discuss the issues for Pathway .in
more detail with Mr White, Mr Reynolds and Ms Sue
McLaren-Thomson, who was leading the ICL Centre of
Excellence on the topic.
97/12 MANAGING DIRECTOR’S REPORT
Mr Bennett presented (slide copies attached for
absent directors) and referred to his written
report which had been circulated. Points arising:-
a) Mr Bennett said that the significant achievement so
far this year was the agreement on a joint plan for
1997 with the customer, with the commercial
implications captured satisfactorily.
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b)> There would be a number of phases of "Release 1"
during the year, with Phase 1 (OBCS) at the end of
April, and Phase 2 (including OBCS and the Benefits
Payment system) at the end of June for 200 Post
Offices. EPOSS and APS, ie the final full release
of the solution, would be 8 September with national
roll-out in November. The bottom line target was
release of a full product set in 2200 Post Offices
(4500 counters) by the end of the year.
c) Release 2 was being designed and under development,
to go live at the end of January 1998. Only at
this stage would multiple benefit payment be
achieved, as all the activity within Release 1 was
Child Benefit. Mr Christou noted that under the
original plan, multiple benefit payments should
have been achieved during 1997 and that there had
been at least a twelve month slip, twenty-two
months for some benefits, as a result principally
of CAPS delays. Mr Todd asked that Mr Bennett look
JH BENNETT at the opportunities for additional POCL product
capability to be included in Release 2 and Release
3 at end April 1998.
d) It was noted that the delay was also impacting De
La Rue’s card production and GiroBank’s help desk
activity. Mr Oppenheim said that in 1998 there
would be a £10m reduction in ICL Pathway’s revenue
as a result of the CAPS slippage.
e) He expanded on the commercial position by saying
that we had been granted a seven month extension to
the contract to compensate for the slippage at the
front end of the contract and also the training
issue. However change control had not yet captured
the CAPS migration slippage. He had written to the
customer to ensure that it would go through change
control but expressed concern that securing
compensation would be difficult. Mr Todd expressed
general concern over the CAPS delays and whether we
could have confidence in the schedule the customer
could now sign up to was achievable. Reviews were
JH BENNETT taking place on the CAPS issue and Mr Bennett would
put together a paper setting out the Pathway view,
drawing attention to all the effects and
implications.
£) Part of the CAPS migration delay was down to data
cleansing: This was required to enable benefits to
be paid reliably since approximately 6% of the
data contained errors.
JH BENNETT g) Mr Bennett would review the roll out plans between
Christmas and the year end, in order to maximise
use of the “quiet period” after Christmas in the
Post Offices. co
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h) On testing and integration, progress was noted, but
too many changes affecting the solution, were still
taking place or being put forward. Steps were
being taken to put a price tag on all customer
originated change requests now that basic
Requirements were being met, and it was expected
some suggested changes would be dropped when the
customer saw all the implications.
i) It was noted that OBCS would start at the end of
April.
j) On User Awareness, programmes had been started with
subpostmasters, for the April Release and good
enthusiastic attendance was being achieved.
Surveys had taken place of 200 Post Offices so far
and a training programme for subpostmasters agreed.
Good progress had also been achieved on migration,
a big issue covering the procedure and content of
the office. Agreement in principle had been
reached that ITSA and EDS would establish a
contractual relationship, such that ICL Pathway
would contract with ITSA and not EDS.
k) Major releases had been received from Escher during
the last week after much effort by all sides.
However, there was a serious issue, perhaps the
biggest facing ICL Pathway, of scaleability of the
Escher software. It seemed to Mr Bennett and Mr
Oppenheim that it was unlikely that Escher itself
could modify the RIPOSTE software sufficiently
quickly and comprehensively to deal with the
scalability issue and a contingency plan had been
put in place whereby Pathway itself would do this
work, with the help of specific inputs from Escher.
Mr Oppenheim assured the Board this would have not
major implications for operations in the Post
T AUSTIN Offices. It was agreed that Mr Austin would give a
presentation on scalability, for the next meeting
of the Board.
1) Amongst updates Mr Bennett gave, it was noted that
there was a way forward for Service Management and
JH BENNETT Mr Muchow would report on this to the next Board
meeting. A Suppliers Round Table had been
established and Risk Management reporting improved.
ICL Pathway began the year with some £80m worth of
risk and if the mitigation actions as currently
defined were pursued we could reduce this to £27m
by the end of the year. Aggressive action on the
risks would continue. I
'GR
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m) On the lower priority of opportunities for the
solution with other Postal Authorities, it was
noted that Escher had contracted with the
Australian Post Office. Mr Todd said that the
previous discussions on an ICL Pathway/An Post/
Escher agreement on the way forward internationally
would continue and he was particularly concerned
not to become involved in any international sales
without such an agreement in place.
n) Mr Bennett said that ICL Pathway had been given
good publicity through the announcement of the ICL
results on 12 March and Mr Todd outlined these to
the Board including ICL’s successful moves to
become exclusively a Systems and Services provider
with, now, no manufacturing facilities. Profit at
present was around 1% on revenue of £2.4bn and Mr
Todd was aiming for a 5% return at least.
o) Mr Bennett’s list of challenges were noted, to
include the scalability issue, for the future.
Pp) Mr White enquired on the position on Post Office
Counter space, discussed at the last meeting. This
was still a significant, if basic, issue. Several
thousand Post Offices were affected and ICL Pathway
was drawing up a list of what was needed, graded by
expense of alterations etc.
JH BENNETT On this and other existing issues, Mr Bennett would
tabulate these with a timescale to resolution and a
note of who in ICL Pathway was responsible for
resolving them.
97/13 FINANCE DIRECTORS REPORT
Mr Oppenheim reported on matters covered in his
written report, not mentioned so far under the
Managing Directors’ report. Points noted:-
a) The question of advance payments to ICL Pathway had
been raised at the last meeting, particularly in
the light of programme delays and Mr Oppenheim said
that such payments seemed particularly unlikely
now, since the Post Office (Royal Mail) had missed
its profit budget. Mr Todd asked that work
intensify in ICL Pathway on an agreed procedure
with the customer to obtain payment for changes
going through the Change control process, ie
outwith the normal transactions income of the
AE OPPENHEIM company. Mr Oppenheim confirmed that this was now
being done as routine, at the full rates set out in
the contract.
b) Regarding suppliers it was noted that as a result
of change control and following the CAPS delays,
all supplier plans would be rebased to align with
AE OPPENHEIM the replan. Mr Oppenheim would report to the next
meeting on this and other progress with suppliers.
GRO
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c) Mr Todd said that it was intended to complete the
project finance arrangements with Fujitsu by the
end of June.
d) Mr Todd asked that in future Mr Bennett and Mr
JH BENNETT/ Oppenheim prepare for the Board, a review of
AE OPPENHEIM progress "critical drivers" or significant actions
needed, with the consequent effect on all elements
of the business case. For example, there might be
50 significant matters vital for ICL Pathway
success and also with significant commercial
implications on the business case. The Board had
to be appraised at each meeting of progress on
these, timescales and risks and opportunities both
upside and downside.
97/14 RELATIONS WITH THE CUSTOMER
Mr Bennett referred to the "away day" meeting of
the PDA and ICL Pathway management to try to
understand each other better. Some progress had
been made although there was a long way to go. In
contrast, relations with POCL were much better. In
due course the control of the contract between ICL
Pathway and the customer could move from the PDA to
POCL. In the meantime, amongst other continuing
reviews with the customer, there would be an
examination of the customer service level
agreements to be put in place and a joint activity
to address "Acceptance".
97/15 DATES OF NEXT MEETINGS
The following were again confirmed for 1997:-
Wednesday, 7 May
Wednesday, 9 July
Monday, 29 September
Thursday, 13 November
All would be held at ICL Putney, 14th floor, room
1401/2 and commence at 10am.
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