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Major Account Review
FUJ00174428
Account _
Name. Post Office
Account 3 -
I Manager: Stephen Long / Mike Deaton
Date of this I , on Date of last rd
review: 12” July 2011 BEE 23" July 2010
) . I Steve Clayton; Amanda Craib; James Davidson; Stephen Long; Andrew Mears; Gareth Pugh;
Attendees: "
) Duncan Tait; Ron Tuttle
Copies: Business Assurance; PSD Bid Reviews; Hazel Buckingham; Mike Deaton; Robert Devien; Peter
4 ss Jeram; Vince Kerr; Mark Phillips; David Roberts; LaToya Smith: Andy Startin
I Action No: I Action: Actionee: I Due Date:
Using the TCO business case as a means of persuasion in the POL
Info account is not particularly effective because each budget is separate
and spread across the organisation.
Info Deloitte is doing the POL/RMG separation.
Make sure Angeles Delgado (MD Spain) is aware of the proposed
Correos visit to POL.
1 POL has agreed in principle to host the visit. Due to take place SL Before visit
. before the Spanish holidays of August. Closed
Closed. Angeles is aware of the proposed visit to POL. She is also
hoping to accompany the customer for the visit to the UK.
DT is meeting Paula Vennells and Mike Young on 18™ August — the
fl agenda is the Ernst & Young audit. It was a key challenge for E&Y to
info , ban A
audit a shared service generally. We were really proactive in helping
them through this.
Info The account team is concerned that Accenture will move into POL
(they are already in RMG).
Info Working on TOR with Logica to ensure we are seen as a Value Add
service-provider.
Lesley thinks that Shadow will be procured in Q1 of FY 12/13. They
Info don’t have the money this year to initiate some of the early projects
they would need beforehand.
Info Security issues with use of IntelliQ (finds fraudulent behaviour). POL
” account team connected to HMRC Fraud & Error team.
Info TCV last year was £10.1m, not £14.1m as stated in slide 16.
Info Pin Pads contract will be fixed price.
£650k gap to achieve the £13m GM for this FY. This will be filled in
Info part by cost-savings, upsell, release of capacity in network and
reduced heads.
2. opin why the cost increase in the MTP but the revenue remains SL ASAP
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Major Account Review
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3.
Develop a plan to 22% without revenue decline. This is to be a pre -
Shadow plan.
SL
ASAP
Develop a bridge from last year to this year so that we can ensure that
we are comparing like for like. This could result in an increased profit
target.
SL
ASAP
Info
25% of our current Revenue is in the 4™ line support that we currently
provide for legacy applications. About 10 of the 14 Apps we support
could be said to fall into this area.
Info
Steve Boyle is focused right now on mitigating the risk of Mike Young
presenting a different view of Legacy Apps than ours to his
management.
Develop financial scenarios (TCV/Rew/Profit/commercial risk) that
could play out moving forward so that executive decisions over
ongoing investment can be made. This must be done as a priority so
that actions that may be necessary to avoid misalignment between FJ
and POL can be considered BEFORE Mike Young presents at the POL
Executive Board on 19th Jul 11. Present to DT on 14" July.
Teams briefed
SL
14/07/11
Investigate any impact that IAS 11 may have reference the above
scenarios.
Initial dialogue
SL
ASAP
Ensure that Danny re-qualifies the HP BB deal.
SL
ASAP
Ensure that HP&BB team are engaged with Capita post the acquisition
of Ventura.
Bid team aware
SL
ASAP
Ensure that TCV is NOT factored on SF DC, i.e. if its value is £80m, it
should say £80m in SFDC.
MD
ASAP
Mike Young mentioned to Duncan Tait at a recent hos pitality event that
he was ‘not sure where Post Office is going’ reference the HP&BB.
May be small talk but needs qualifying by bid team.
SL
ASAP
Set up meeting if possible between Brian Deveney at 10:30 tomorrow
morning.
SL
Now
Duncan Tait requires a deal update on HP&BB. This could best be
done by providing visibility of the pre -Divisional BAR work that will be
conducted prior to the Divisional BAR (not yet scheduled). Bring this to
DT at next week’s Regional Opportunity Update.
SL
22/07/11
Info
DT is prepared to retreat from Shadow Proposition if there is no sign of
a deal this year.
Action No:
Actions from previous review 23" July 2011:
Actionee:
Due Date:
Info
A new CTO (AA) and Sales Director (CM) have now joined the Account
Team.
Info
Project Updates: Approximately 50% of the HNG-X counters have now
been rolled out. The POLSAP and AEI projects are being delivered to
time and budget and we have received positive feedback from POL.
Info
Current press coverage regarding claims being brought to POL from
Sub Postmaster’s is Horizon related, not HNG-X.
Info
The team is on track to achieve its full year numbers but this is
dependent on closing 2 new business opportunities and settling POLs
compensation claim within the budgeted allowance.
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Info
The “journey financials” (Slide 7) include the previous Account
Director's aspirations that did not materialise. These figures will be re-
worked based on the current strategy.
Info
A BAR for the Branch Engineering Consolidation opportun ity is
expected in the next 4-6 weeks. The cost model and due diligence will
likely be completed in the next 3-4 weeks.
Info
POL has proposed a claim of £5.8m (down from £8m), which we
believe is unreasonably high. Negotiation of this is dependent on th e
BEC due diligence and costing being completed. Also, POL has not
produced evidence of reasonable mitigation and has asked us for help
on another of their programmes that is over-running.
Info
The team are working on consolidating the servers in the NI data
centre, which is likely to take another 6-8 months to complete.
Info
It is likely that POL may want something non -proprietary in terms of
IPR for their longer term technology solution, which contrasts with their
existing solution that is very tailored and complex. This complexity is
driven by the demands of POL’s customers (i.e. DVLA, DWP), which is
reducing as people are doing more online (i.e. TV Licensing).
Info
The team has been speaking with POL about their technology strategy
and are working on a “shadow proposition” that would involve exclusive
fe-negotiations with them ahead of this contract expiring in 2015.
Info
PA Consulting is advising POL regarding the 20 -25% headcount
reduction they want to achieve. We are looking into helping via
potentially taking on the heads on selling them back to POL.
Speak with Liam Foley fsee-/Account Director) regarding the_
challenges IBM have had in delivering POS systems to i
Complete
AA
As required
Closed
Speak with Jim Stockley (RPG) to better understand the POS products
that Fujitsu delivers globally.
Complete
As required
Closed
Update on actions from review held on 23 February 2009
Accenture have approached us to discuss a partnership between
Accenture and FS for the Managed Service and Hosting opportunity.
The team were advised to contact Rosemary O’Mahoney to discuss
this partnership further.
Please advise RG on the individuals we will be meeting with in
Accenture.
Superseded. Action no longer relevant.
AH
ASAP.
Closed
Ensure RMG relationship plan is in place with actions on how we are
going to improve our relationships and when this will happen.
Superseded. New account team in place and relationships are
being built.
AH
ASAP
Closed
Info
The System Management Centre is now live in the GDC India. This
has been a great success with no impact to the custom er’s service.
The team offered to help other accounts in their offshoring activity if
required.
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Consider the impact of the company re-organisation on our offshoring
Info
ti pt ti d GSIP tT ‘h.
Purpose of the review was to provide an update on the HNG -x
Programme as well as an account plan update.
activity and ensure that it stays on track. As
3. Pp SE eee Lomains 1h contac AHMWW I appropriate
Completed. Offshore action was completed and to target. No Closed
further offshore is planned.
HNGX programme delivery is forecast to complete by November 2009.
Info More formal governance has been put in place around the financials
and programme to ensure this does not slip further in the Christmas
peak period.
MK to review SAP project plan.
MS requested that he would like to review the weekly delive rables of
this project so he assess if it is on track.
4 MK ASAP
GM Closed
Completed. SAP project has been delivered and is live.
CCN for HNGX needs to be re-written to reflect November 2009
completion date.
5 In. progress —This-has-be perseded-by a furth Th cw ASAP
7 il-be-a- CCN _but for the combined _slips_tnitial draft une Closed
Superseded. A new baseline has been negotiated and signed by
both parties.
LY/AH to have off-line conversation re data centre optimisation. ASAP
6 Completed. LY provided contact details for both HMRC data LY/AH Closed
Info
HNG-x Programme Review - financials:
CAR Proposed Feast to complete (74k days)
Revenue £51.2m £59.1m
Costs £40.2m £53.8m
Margin £11.0m £ 5.3m
GM% 21.5% 9.0%
Info
Number of man days have increased from original estimate of 43,000
upto 83,000. 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.
Completed. Due to the slip to 105k man day this was not
achieved.
NOW
Closed
Info
Paul Holloway is working closely with Paul Tasker and team re off-
shoring. POL numbers have been includ ed in the overall BOT
numbers.
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Info
RMG — FY08/09 financials:
Budget
£120.3m
Forecast
£78.0m
£19.7m
£16.2m
£20m
Revenue
Margin £23.8m
OP Profit £19.4m
TCV £30m
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.
Update on actions from review held on 31/1/07 —
Project Sphere — has ‘gone away’ for now. From a customer
perspective, there was no real sponsorship outside of finance. There
is another session due in February between Steven Pownall, Liam
Foley and FD within PO. Keep it on the radar as a potential
opportunity.
Completed. Sphere has been closed down - risk of tax avoidance
and not supported by key sponsor in POL
DB
As
appropriate
Closed
HNG-x development — costs are on track. Current forecast is 01/04/08
into pilot. The level 2 plan indicated release authorization in January
(for pre-pilot). However, the detailed level 3 plan says March. Re-
iterating the level 3 plan to bring it back to January. No slips to
intermediate milestones anticipated either.
Superseded.
MW
As
Appropriate
Closed
Info
We need the HNG-x contract to be signed in order that we can
recognize it in the order book. PO have committed to deliver the letter
to us by 28" February 2007. In the meantime, no work is at risk; it is
all recoverable.
Info
The plan to go off-shore with Zensar has not worked. We are now
utilizing off-shore resources (10 heads) from India (Zensar) but they
are working in the UK.
Digital Media Network (DMN) - we have had delivery delays by BT
Openreach and Samsung. Renegotiated the contract in terms of
timescales and penalties. Look at extracting money from both BT and
Samsung.
Completed - Meetings took place with both BT and Samsung.
Samsung refused to accept any 'blame' and FS had no
contractual comeback. BT equally delivered poorly but there was
no contractual claim
DB
As
appropriate
Closed
Arrange for DC to visit Adam Crozier.
Completed. We are pursuing RMG via newly appointed CIO. Clive
Bailey met in late Jan. We will arrange appointment at more senior
levels when appropriate. Richard Christou met MD of POL, Alan
Cook on the 6" February.
DB
ASAP.
Closed
David Burden (CIO) has recently been in Redmond. Need to take
advantage (more quickly) and use the relationship with Mircrosoft.
Completed.
DB
As
Appropriate
Closed
There is an opportunity to scale down the dedicated re source on the
account from 95 to 78 once HNG-x has been rolled out. The 78 heads
will also cover DMN.
Completed. HNGX update will be a part of the review next week.
HNGX not due to be delivered until November 2009 .However we
have 85 heads on the account.
DB
As
Appropriate
Closed
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Look at taking service management to Northern Ireland. On the plan
for Q2 but when will it be done ? Time required for cut over and As
7. parallel running which is required to build up the confidence. DB Appropriate
Completed. This has been overtaken by offshore activity and will Closed
be discussed at the next review.
8. Discuss the Prism contract (primed by CSC) with Anne Stokes. DB ASAP.
. Completed. Closed
‘I Update on actions from review held 7 March 2006
Info All actions closed from this review
Info
Actions completed or superseded by this review.
Please direct any queries or updates to Business.Assurance'
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