FUJITSU
FUJ00116552
FUJ00116552
Group Review Actions
UKR&RMG-ITE-46201
Non-competitive
Post Office
HNGxX re-baseline
lan Terblanche
lan Terblanche
£26.5m £825k (1.1%)
Private Sector Mike Stares
18" September 2008 30 July 2008
David Courtley; Kirsten Ellwood; Brian Harris; Phil Heath; Petri Imberg; Maz Kostuch; Lindsay
Mcgranaghan; David Roberts; Peter Rowley; Mike Stares; Mike Stratford; lan Terblanche;
Wendy Warham; Guy Wilkerson
Business Assurance; PBU Bid Reviews; Paul Davies; Julie Sadler
The purpose of this review is to seek approval of the re-baselined P&L and to
Info submit CCN to POL to be signed end September 2008.
HNG-x Programme Review - financials:
CAR (July 06) Update Review (Feb 08) CAR (July 08) This Review
Info Man Days 43,000 74,000 105,000 108,500
Revenue £51.2m £59.1 £75.3m £77.7m
Costs £40.2m £53.8m, £74.2m £76.7m
Margin £11.0m £ 5.3m £1.1m £825,000
GM% 21.5% 9.0% 1.5% 1.1%
Info Full life margin (including Managed Service) is now £158m vs. £121.6m that was
originally CAR'd. Gross margin has also increased from 24.1% to 27.9%.
, car i Before
1. PR to review cure periods and termination risk. PR submission
2 Include clause within CCN which will protect us in the eventuality of service cw Before
* breakdown during migration. submission
. . , ‘ Before
Seek commitment in volume of new business we will receive through the CCN. IT/IGW submission
The purpose of this review is to seek approval of the re-baselined P&L and to
submit CCN to POL.
HNG-x Programme Review - financials:
Info
CAR (July 06) Update Review (Feb 08) This Review
Man Days 43,000 74,000 105,000
Revenue £51.2m £59.1 £75.3m
Costs £40.2m £53.8m £74.2m
Margin £11.0m £ 5.3m £1.1m
GM% 21.5% 9.0% 1.5%
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FUJITSU Group Review Actions
The HNG-X programme has suffered a 12 month slippage which has had a major
impact on the project and lifetime P&L (£9.9m margin — worst case).
Info
Fujitsu have started negotiation with POL to allow the program to continue and
avoid dispute.
Since last review £4.3m contingency has been added and £1.5m of additional
contingency will be funded by the customer, bringing the total contingency to £5.8m.
This assumes we hit every milestone between now and March 09.
Re-examine risk and ensure they are weighted/factored sensibly. A plan must be in
place detailing: Now
1 - Who is owning each risk IT/MStratf
. - What is the risk ord
- How will it be managed Closed
- When will it be effective
MStratford to review with PD once this work has been completed.
Completed. Presented at re-CAR on 18/09/08
2. Review the number of man hours required and assess if this can be reduced. Mswattor NOW
The lifetime model presented at this review is not acceptable.
There is 7 years remaining on this programme. A reform needs to be put together
to get us back to £12m margin approved at CAR.
The reform programme must articulate profit improvement and give confidence that For next
3 the re-baselined numbers are correct. Mstratt review
" : 7 ord
This plan must detail:
- Owner of each reform item Closed
- How the owner will ensure it will happen
- Progress made to date
- Timeline detailing when savings will be achieved
Completed. Presented at re-CAR held 18/09/08.
Immediate focus is to get rid of any risk on this year's numbers. NOW
4. IT
Completed. Closed
BA to work with team to identify appropriate timings for further review to review new a AS ate
5. baseline costs which are underpinned by the reform programme. BA Pprop
Completed. Closed
Info Purpose of the review was to provide an update on the HNG-x Programme as well
as an account plan update.
HNG-x Programme Review - financials:
CAR Proposed Fcast to complete (74k days)
Info Revenue £51.2m £59.1m
Costs £40.2m £53.8m
Margin £11.0m £ 5.3m
GM% 21.5% 9.0%
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FUJITSU Group Review Actions
Number of man days have increased from original estimate of 43,000 upto 83,000.
Info We are 20 months late on the original contracted date. However, we are on track
with what the client expects ie we are still meeting the POL business case.
Check the contract terms around acceptance. Aim to lock down acceptance asap
before Ric's departure. NOW
4 IT
Closed - Due to the slip to 105k man day this was not achieved. Closed
Info Paul Holloway is working closely with Paul Tasker and team re off-shoring. POL
numbers have been included in the overall BOT numbers.
RMG — FY08/09 financials:
Budget Forecast
Revenue £120.3m £78.0m
Margin £23.8m £19.7m
Info OP Profit £19.4m £16.2m
TCV £30m £20m
Next year already looks challenging. The team looking to drive new business to
achieve the rev and gm numbers. They are looking at driving cost reductions to
achieve the profit target.
come I Approved - subject to completion of actions 1-3.
Piease confirm completion of actions to Business.Assurance@): GRO :
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