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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, 2ND SEPTEMBER JUb¥ 1996 es
Present: Sir Michael Butler (Chairman). -
Mr T K Todd
Mr R Christou
Mr J H Bennett
Mr A Oppenheim : Pi
Mr T Reynolds See
In attendance: Mr R F Scott (Secretary)
Mr T Austin
Apologies for absence were received from Mr R Banks and
Mr J White.
96/63 MINUTES OF LAST MEETING
The minutes of the meeting held on 30th July 1996
were approved as a correct record and signed by the
Chairman.
96/64 DRAFT STATUTORY REPORTS AND ACCOUNTS
The Board reviewed the draft. Mr Oppenheim would
check the taxation implications of the wording
relating to commencement of business in the Report
of the Directors. It was noted that a note similar
to other ICL subsidiaries, concerning Directors’
interests (pointing out that although the Directors
had no interests in the shares of the Company,
several had interests in the capital of ICL PLC)
would probably be added before the accounts were
signed.
It was agreed that Mr Todd and Mr Oppenheim would
then on behalf of the Board approve the accounts
and authorise signature on the balance sheet by any
one Director, would approve the Director’s report
and authorise signature of it by the Company
Secretary, then approve that the Company Secretary
arrange the Company’s Annual General Meeting at a
convenient date following signature by the Auditors
of their report.
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96/64 MANAGING DIRECTOR'S REPORT
Mr Bennett supplemented his written report and
there was a discussion with the following points
noted:
a) The operational trial had begun today, a
significant milestone which, if not met, would have
brought penalties.
b) Mr Bennett would circulate the Board a draft of the
Mr Bennett Company's communications plan and it was agreed
that although some briefings would take place (for
example of the local press in Stroud) regarding the
"limited go live", at present we would play down
the publicity aspects of Pathway’s activities until
: the national rollout next year. Nevertheless, the
Mr Bennett Chairman said we should be prepared for all
eventualities.
c) On relationships it was noted that the core
negotiating team (CNT) had been revived. This
involved Messrs Oppenheim, Spencer, Morley and
others as necessary from Pathway and Ms Kelsey and
others from the customer. Mr Bennett and Mr Andrew
Stott were holding weekly meetings and these were
going well.
There would be a business development meeting with
POCL towards the end of September and prior to that
Mr Bennett would ensure Pathway’s information on
Mr Bennett ICL Retail’s activities was up to date on matters
such as loyalty systems.
d) The ways in which we might be able to ensure POCL
took more responsibility for the solution was
discussed and Mr Bennett would consider these. The
Mr Bennett Board also discussed the way strategic DSS
activities would affect the solution and Pathway’s
business, for example a computerised register of
deaths. It was agreed that the large scale project
the DSS was announcing to completely re-engineer
its activities was quite likely to include such a
register amongst many ramifications and Mr Todd
said that other functions in ICL were and would
remain abreast of these developments.
e) Mr Bennett said further work was required on sub
contracts including Girobank where a discussion
with Mr Banks was about to be held. On BT,
discussions were taking place whether Energis would
be used as a sub contractor to BT or not and
following Board discussion it was agreed that we
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would carefully consider the terms of the BT
Mr Bennett contract to ensure we were able to take advantage
of any reducing telecommunications prices in
future.
Mr Bennett drew attention to the increased pressure
on Pathway resources and the fast pace of
recruitment. He concluded by reporting that he had
presented on Pathway and the solution to Fujitsu in
Tokyo where a keen interest and a willingness to
help and learn from Pathway’s experience, was
expressed. Mr Todd said feedback from Tokyo had
been very favourable and he congratulated Mr
Bennett and Mr Hollingsworth on their efforts.
96/65 PROGRAMME UPDATE
Mr Austin gave an oral update and there was a
discussion, points noted:
a) Mr Austin said that since the last meeting of the
Board, where there had been some pessimism on
meeting the initial go live date (IGL) of 23rd
September, matters had improved significantly and
he was now optimistic of success with the
tremendous amount of work which Pathway had to do
within the next three weeks to achieve the
milestone. The customer’s agreement to combined
Pathway/customer testing had been secured for the
IGL and this was a significant achievement.
b) Although IGL involved only 1500 individual benefit
recipients covered by ten post offices in Stroud,
each with two counter positions involved,
nevertheless IGL; a full end to end service, was
the foundation for Release 1 and the full solution.
c) On the basis of achieving combined customer/Pathway
testing on IGL, Mr Austin hoped to achieve common
testing for Release 1.
d) Mr Austin emphasised the complexity of Release 1
and the fast pace at which the programme was
moving. Inevitably, there were considerable
pressures on resources and skills and on the
individuals concerned many of whom were working
through the weekend and constantly on call. He had
been talking to ICL High Performance Systems over
skills, particularly architectural skills, which
they could bring to help Pathway although HPS staff
would need reskilling and training.
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Mr Austin confirmed that work on the end to end
basic functionality of the solution was back on
plan after the indication of delay in Mr Bennett’s
report issued last week. However, there were
features such as the security functionality which
had not yet been integrated into Release 1. Mr
Christou asked whether such functions were subject
to change control ie where extra payments or agreed
delays would be produced by the change control
system. Mr Oppenheim replied that we did not have
an agreed release strategy so there was no base-
line to base a change control claim on and that
achieving such a base-line represented a major
challenge for the next month. Mr Oppenheim was
concerned that there might be higher expectations
in the customer for the performance and features of
Release 1, than was actually the case.
e) Mr Austin confirmed the critical dates on Release 1
included 31 December/2 January: when the model
office project would begin. This would last for 3
months until the end of March, followed by a live
trial at 200 Post Offices. We had managed to
compress model office and testing times effectively
bringing the model office work forward to October
and gaining some breathing space.
f) In reply to Mr Reynolds, it was noted that EPOS
testing would begin end October. Mr Reynolds
raised another point, ie that there seemed to be
some pressure on POCL from the Federation of Sub
Postmasters on provision of the printer, and
stationery to print receipts etc in Post Offices
when benefit payments were made. After discussion
it was agreed Mr Bennett would ensure this topic
Mr Bennett was reviewed most carefully since any lengthening
of the time taken to process benefits at the
counter could reduce Pathway’s ambitions to achieve
very high volumes and consequent revenue and
profit. The Chairman added we appeared to have a
common interest with Mr Sweetman and POCL on this
and Mr Bennett would brief the Chairman for his
Mr Bennett forthcoming lunch with Mr Sweetman.
96/66 FINANCE DIRECTOR’S REPORT
Mr Oppenheim referred to elements of his written
report and there was a discussion. Points noted:
a) He emphasised that contractual negotiations were
taking place in the light of a desire to enable the
testing process to go ahead. He referred to the
contract changes contemplated, some of which were
going through the "change control" process. Mr
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Christou and Mr Todd asked that he review the
Mr Oppenheim pricing on extra costs to be charged to the
customer to ensure that full Pathway costs and ICL
overheads were met; with some profit. Mr Oppenheim
Mr Oppenheim would talk to the CHOTS team for advice on elements
of this approach.
b) From the separate report produced by Mr Wingrove,
it was noted that Pathway expected to spend in
1996, £1.2m more than previously forecast. This
however could be explained by additional work on
the IGL and the extra recruitment activity,
including the cost of salaries etc, which Mr Austin
was having to undertake to meet the project
milestones.
c) Mr Oppenheim would prepare a full review of the
Mr Oppenheim business case for the next Board meeting, in the
light of the increased costs reported, and he would
explain how through other cost reductions and
increased revenue opportunities, he hoped to make
up ground.
96/67 BANK FINANCING UPDATE
There was a brief discussion on the complex
negotiations and plans for bank financing of the
Company and the project. Full proposals had not
yet been developed. It was noted that for the time
being ICL continued to finance the Company and the
project was not being impacted as the financing
negotiations with the banks became more protracted.
Mr Todd said that ICL was itself reviewing its
capacity to fund Pathway and its ability to fund
other major projects. The results of this review
would be borne in mind in regard to the bank
financing priorities.
96/68 DATES OF NEXT MEETINGS
The date of next meeting would be Monday, 25th
November 1996 at 9.00am in Putney. The following
meeting would be held on. Thursday, 23rd January
1997, again in Putney.
Mr Bennett would bear in mind that he could ask the
Chairman to convene an emergency meeting at any
time if necessary, between the pre-arranged dates
and in the meantime he would circulate his ‘diary
Mr Bennett note’ briefings on progress with the project, to
the Board.
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