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FUJITSU
Fujitsu Services
Customer Satisfaction Interview
Programme — 2008
Report of an interview
conducted independently with:
Dave Smith, Head of Change and IS
Post Office Limited
80 Old Street
London EC1V 9NN
Interview Date
5" November 2008
Prepared by:
Angel Corner House
D[R I C BINS ONING
MUO AND OME
If you have any questions concerning this report, please do
not hesitate to contact:
FUJ00126073
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Contents
1. Introduction
Research Methodology.
Report Structure ....
Management Summary ...
Scores Overview
Executive Summary/Key themes
Customer Relationship Requirements..
Company Background...
Questions & Scores ....
Detailed Summary.
Improvements in the last 12 months .
Areas of Excellence or Strengths ...
Areas for Improvement or Customer Concern.........
Disappointments in the last 12 months ....
Customer Expectations for the next 12 months
Customer Perceptions of Fujitsu Services
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1. INTRODUCTION
Research Methodology
The report is based on a face-to-face discussion with Dave Smith conducted on behalf of Fujitsu
Services by Doug Komiliades, an Associate Research Consultant retained by ORC International.
The interview lasted forty-five minutes and was digitally recorded with the respondent’s consent.
Fujitsu Services would like to thank Mr Smith for affording us his time and for the insights he
has provided.
Report Structure
This report provides a detailed summary of key discussion points from the interview
incorporating the respondents’ evaluation of Fujitsu Services’ performance in a number of
specific service areas and perceptions of the business relationship as a whole.
The document includes a number of satisfaction ratings for key service attributes and a summary
of specific customer requirements, which will form the basis of an action plan to be formulated
by the Fujitsu Services’ Account Manager and the client in the thirty days that follow the
publication of this report.
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2. MANAGEMENT SUMMARY
Scores Overview
7 8 9 7 8 6 9-10 Declined
(Definitely) Answer
Worse Same Same Worse(9) Worse(9) n/a. Worse (7) Wa n/a
(8.5)
*Previous ratings from CSIP conducted in Dec 2006
1. Totally Dissat 6. Slightly Satisfied
2. Extremely Dissatisfied 7. Satisfied
3. Very Dissatisfied 8. Very Satisfied
4. Dissatisfied 9. Extremely Satisfied
5. Slightly Dissatisfied 10. Delighted
Executive Summary/Key themes
This CSIP review was highly coloured by the experiences of the respondent in working with
Fujitsu Services on a major technical refresh programme, Horizon Online. Contrary to Post
Office Limited’s (POL) expectations of Fujitsu Services, which was based on its excellent
previous track record in project management, this has been a very difficult engagement on both
sides and POL’s confidence and trust in Fujitsu Services has been knocked quite badly.
Things are being turned round now on this project but trust has yet to be fully re-established to
its previous level. Given the opportunity to raise one key issue with the CEO of Fujitsu Services,
Mr Smith would request him to cement in place a capability going forward that ensures that POL
will enjoy the same level of confidence in Fujitsu Services’ project and programme management
that it had before Horizon Online.
Customer Relationship Requirements
Rank Customer Requirement
1 Re-establish client confidence in project management
2 Continue to work to re-build the trust in the relationship
3 Deliver Horizon Online
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3. COMPANY BACKGROUND
Post Office Limited (POL) is the retail arm within Royal Mail Group (RMG) and in addition to
its long established role in the provision of mailing and government services to the general
public and businesses it now offers a full range of financial services as well as third party
telephony and broadband through its large retail network of some 14,000 offices.
Fujitsu manages the Horizon System, which is core to the management of POL’s retail business.
Customers cannot be served in Post Office branches without staff being able to access the
Horizon System. It is far from a standard EPOS system in terms of its complexity and the
amount of continuous change that it is subject to, according to Mr Smith. Over the years
numerous developments have occurred around the base service infrastructure that was originally
installed. A technical refresh of the system is now in process, with the original Horizon system
being replaced by Horizon Online (also referred to as HNG-X).
“It’s a major, major activity. It’s absolutely central to our business’ five year plan in terms
of bottom-line benefit. It’s the biggest game in town. We have done deals with other parties
off the back of the change that this makes to our cost base. It is very significant,
strategically, for business.”
Mr Smith describes himself as being responsible for the introduction of change to and the
strategic direction of Post Office Limited’s (POL) Horizon counter network.
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4. QUESTIONS & SCORES
o Overall how satisfied are you with the performance of Fujitsu Services during the past 12 months?
Satisfied (7)
o How satisfied are you on the extent to which Fujitsu Services Understands your Business? Very
Satisfied (8)
o How satisfied were you with Fujitsu Services’ performance in terms of Project Management? Very
Dissatisfied (3)
o How satisfied are you with the overall quality of the day to day Service provided by Fujitsu Services?
Extremely Satisfied (9)
o How satisfied are you with Fujitsu Services in terms of how well they manage their Relationship
with you? Satisfied (7)
© Value can mean end to end business value, or perceived financial value — we would like you to
answer this question however it best applies to your relationship. Overall, how satisfied are you with
the Value Fujitsu Services provides to your business? Very Satisfied (8)
o Innovation is the successful introduction of new ideas. How satisfied are you with the extent to
which Fujitsu Services provides innovation that adds value to your business? Slightly Satisfied (6)
co The likelihood that you would provide a Reference for Fujitsu Services today would be? Definitely
(9-10)
© The likelihood that you would Renew your business with Fujitsu Services is? Answer Declined’
1 Mr Smith said that he could not answer this question because as things stand the renewal of this
contract in 2015 would be subject to public procurement rules that would require a competitive tender,
and he could not predict the outcome of such a process at this point in time.
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5. DETAILED SUMMARY
Progress in the last 12 months
In Mr Smith’s last CSIP interview, conducted almost two years ago, he had given an overall
satisfaction rating for Fujitsu Services’ performance in the previous 12 months of 8.5, indicating
that he was somewhere between ‘very’ and ‘extremely’ satisfied at that time.
Now, two years later, his overall satisfaction with Fujitsu Services is lower (7) because it is no
exaggeration to say that his confidence in its Project Management capability has been severely
undermined during this period.
The business justification for the major, mission-critical, Horizon Online technical refresh
project had largely been underpinned by his previous excellent experience of Fujitsu in this area
and his confidence that it would be able to deliver. However, for reasons that still are not fully
apparent to him, Fujitsu Services “lost control” of this project about 12-15 months ago.
Mr Smith wishes to emphasise, however, that these difficulties have been recognised and are
being suitably addressed by Fujitsu Services. His ratings are a reflection of the review period
throughout, and would be higher in some areas of the project and of the relationship at this point
in time than they would have been a year ago. So, in that sense, there has been some significant
recent progress. He would hope that given a continuation of that trend his ratings will be able to
reflect this more fully in his next CSIP review.
Areas of Excellence or Strengths
In what has been a very challenging period for the relationship, Fujitsu Services has
distinguished itself in its response to the problem in terms of its openness and honesty when
investigating it and in terms of how it has managed the situation commercially. It has also
continued to deliver an excellent level of day to day service.
Open & Honest Discussion of Issues
“They’ve been very open. We’ve been able to see all the facts as we got into this difficult
period. Rather than battening down the hatches, they opened the doors. That’s really quite
refreshing, in some respects.”
Commercial Management
“They absolutely understood our business case. They absolutely aligned themselves with that
business case, understanding that our success is their success and they have stepped up to the
plate in terms of commercial realities and between us we have reached a position that enables
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us to sustain the business case. It says an awful lot for the relationship that we’ve been able
to do that.”
As a result, despite the problems with Horizon Online, the business case for it still exists and Mr
Smith say that Fujitsu Services deserves credit for dealing with the implications of the situation
well.
Ongoing Managed Service — Mr Smith describes the existing service as being “remarkably
stable”, hence his satisfaction rating for this metric of 9 out of 10. Despite the difficulties
experienced on the project side, he says that he has never lost confidence with the quality of
people that Fujitsu Services deploys ‘on the ground’.
Areas for Improvement or Customer Concern
The key area in which Mr Smith would like to see his confidence in Fujitsu Services’ capability
being re-established is project management. He also mentions innovation as an area that he
would expect stronger performance from an organisation like Fujitsu Services.
Project Management — Mr Smith’s rating of 3 out of 10 compares with his previous CSIP score
of 9 for project management.
“Right now, they have a big job to do in terms of rebuilding my confidence in their project
and programme management skills."
This is, he acknowledges, beginning to turn round but:
“In terms of confidence, they have taken us to a place where no supplier would want to take
its customer.”
Fujitsu Services was not able to deliver a credible plan for the project, Mr Smith explained,
either for the customer or for the people within its own organisation who were charged with
delivering the project. A series of project leaders, close to double figures, have been put in place
since the outset of the project.
Prior to Horizon Online, POL had enjoyed a period of “great success” on projects with Fujitsu
Services giving Mr Smith absolute confidence in its project management capability.
Mr Smith’s loss of confidence during Horizon Online was fuelled by repeated instances of
Fujitsu Services seeking to deny that there were problems with the project before such
acknowledgement was forthcoming from them.
“All the facts are saying that this is where the project is and they’ve denied it and they’ve
denied it and they’ve denied it. Then, all of a sudden they’ve turned around and said
a”
‘actually, you’re right
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Mr Smith described that in January 2008, he met with Ian Terblanche, then the Account
Director, and Mike Stratford, Programme Director. He was concerned that the number of
working days allocated to the project at that time (100,000) looked high according to Fujitsu’s
reporting system but was told “categorically” that the system was showing the wrong number
and in reality it was much lower. Several days later he was informed that, actually, this was the
correct number.
This was not the only such incident:
“I could spend a lot of today talking, with different orders of magnitude, about lots of
conversations on that basis. Where the facts on the paper said one thing, they were in denial
and subsequently came back and said, ‘yes you’re right’.”
Problems with the project had first started to emerge in the autumn of 2006. Although things
have far improved now from where they have been, there has been a great deal of effort
expended by Mr Smith and his team in micro-managing Fujitsu Services. He was hoping at that
time that a position of trust had been established with Fujitsu in terms of believing what it was
claiming about the progress of the project. Instead, POL has had to dig to test the veracity of
what is being said and Mr Smith feels that Fujitsu Services has pulled POL in completely the
opposite direction as a consequence of this.
Even now, although things are more positive, the vestiges of such behaviour are still apparent to
him and the damage caused to trust by this episode will take a long time to fully re-build, he
says.
Innovation — Mr Smith is now only slightly satisfied (6) with Fujitsu Services in terms of the
successful introduction of new ideas, or innovation that it has demonstrated. Mr Smith said that
in previous CSIP reviews he had given credit to Fujitsu Services’ for ‘thinking outside the box’
(his last CSIP score for this attribute was 7, for example). However, it is two years since he last
commented on this topic and given the amount of investment that Fujitsu Services has put into
establishing itself as a global player, he feels that he ought to have been seeing more innovation
from his supplier during this period than he has.
Disappointments in the last 12 months
Slippages and Difficulties around Horizon Online — Mr Smith suggests that it could be argued
that Horizon Online is currently some 18 months behind its original schedule. Although the end
date remains September 2009, the original plan allowed for 12 months rollout and 6 months pilot
and now only 3 months will be devoted to each. Also, the original plan included a two-part roll-
out to include an upgrade to the operating system, which has now been postponed.
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As indicated elsewhere in this report, the experiences with Fujitsu Services on the Horizon
Online project have caused tension and a loss of trust in the relationship, requiring much
expenditure of effort by POL in the governance of the project and in managing Fujitsu Services.
Customer Expectations for the next 12 months
Key Business Requirements — Mr Smith feels that he is now seeing what could be the
foundations of Fujitsu Services re-building its reputation for project delivery.
Fujitsu Services should ensure that in the movement from the major project phase to a period of
more regular change management that the capability it has now established remains intact.
Mr Smith also wants to ensure that the amount of governance that is required to ensure that
Fujitsu delivers reduces. This requires a re-building of client confidence in parallel with
completion of the Horizon Online project.
“We need to secure the right capability going forward to restore that confidence. We need to
get back working together to rebuild that trust and make sure that we get the balance right
between ourselves. And we need to execute now on this project.”
Improving Relationship_Management — Mr Smith feels that Fujitsu Services’ Strategic
Programme Director, Mike Stratford has now ‘grown into the job’ and that his counterpart on the
POL side, Mr Smith’s colleague, Mark Burley, now have a good understanding between them.
There had been a concern that some of the people reporting to Mr Stratford were not sufficiently
proactive in proposing solutions to problems as opposed to merely identifying and highlighting
them. More recent appointees have a much more proactive approach, he says. However, he still
feels that he still has not received a satisfactory explanation of what went wrong from Fujitsu
Services on the Horizon Online project and that it would be useful to understand this so that both
parties can ensure that the experience is not repeated in the future.
“When things have gone wrong, having a good solid understanding of why is a pretty good
place to start in terms of preventing it happening again.”
Mr Smith’s key contact throughout most of this period was Ian Terblanche, who was the Fujitsu
Services’ Account Director and who has now been superseded by Andy Hall.
He says that Mr Terblanche should be credited for stepping up to the commercial challenges and
for the amount of work he put in both with POL and internally, within Fujitsu, to deliver a
commercial resolution. There were times, however, under his directorship, when the regularity
and quality of contact was not as good as it may have been with meetings often being cancelled.
Although Mr Smith could always reach him, the previous Account Director would sometimes
not be able to attend a face to face meeting for several weeks. Mr Smith says that he always
gave him the benefit of the doubt that this was because he was preoccupied in sorting out
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Fujitsu’s issues on the Horizon Online project. But, this explains why he cannot give a higher
rating than 7 (satisfied) for relationship management.
Although it is early days in the Account Director role for Mr Hall, Mr Smith is confident that he
understands the requirement for more regular contact between the key individuals on both sides
of the account and that he also has the will to re-build the relationship to the high point it had
reached prior to Horizon Online.
Customer Perceptions of Fujitsu Services
Market Position — Mr Smith regards Fujitsu Services as being capable of being on ‘the top table’
in terms of the providers of managed IT services, although in the light of talking to his
colleagues and the experiences around Horizon Online, he does not consider that it is quite yet
in the top echelon. He has worked with Fujitsu Services for over ten years and he regularly
undertakes site visits. The journey that POL and Fujitsu Services have undertaken together over
this period tells a very good story, although there have been episodes from time to time when
things have gone less well ... when, for example, the two organisations have not seen eye to eye,
commercially. However, one of the characteristics of the relationship is that it has always
emerged stronger coming out of such challenging events.
“That’s what we’ve done in the past and that is why the relationship has been so long-
standing.”
Ease of Doing Business — Mr Smith suggests that both organisations have made life difficult for
themselves by the amount of legal encumbrances that they have tended to surround themselves
in. Certainly, in the early days of the relationship, there was a constant process of referral to the
contract before committing to do anything but that has now softened and things are somewhat
easier than they were.
The commercial outcome is usually satisfactory but he sometimes wonders on both sides
whether things couldn’t be made easier.
Proactivity — Fujitsu Services was highly proactive in bringing forward the proposition that
became Horizon Online, according to Mr Smith. It has, however, needed prompting in other
areas. POL’s business is changing rapidly and the relationship with Fujitsu Services is based on
the counter solution, whereas the business is becoming increasingly multi-channel. He does not
think that Fujitsu Services is as proactive as it might have been in recognising that it will not
always be the strongest player for all applications. He would very much like to see Fujitsu
recognise that third parties may offer better solutions than its own in some areas.
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Key attributes — Mr Smith was asked to select attributes that he would most associate with
Fujitsu Services. The table below illustrates the attributes he could have chosen and the six he
agreed to select and could not narrow down further:
Reliable x Easy to do business
In-Tune Quality conscious x
Flexible x Innovative
Straight talking Conscientious
Professional x Pro active
Trustworthy x Creative
Tenacious
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