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shaping tomorrow with you
Post Office Account
Governance Review
2"4 August 2013
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Background FUJITSU
= As part of the CSIP process, the account management team has identified the need to:
® Improve business engagement/governance at the Executive and Management levels;
®@ Understand the tensions on either side as the relationship between Fujitsu and the Post
Office changes with the implementation of the Towers model;
m Where necessary, reconfirm scope, purpose and the inputs/outputs of relevant meetings;
® Ensure discipline and focus is maintained in BAU during the transition phase covering:
¢ Performance (Run);
e Change;
¢ Improvement;
¢ Innovation.
= Target date for closure is August 2013 and should include Structure, Plan and Membership
etc.
@ In parallel, discussions across the Senior Management team between Fujitsu and the Post
Office (LS, NW, RB) had identified the need to look at this topic in more depth to ensure it
was operating correctly.
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Approach FUJITSU
= To move this forward, a baseline of the existing approach to governing the account via existing
contractual and non-contractual frameworks is proposed, assessing performance based on
objective input from key stakeholders covering:
= Effectiveness
¢ Are the right decisions being made using the right content at the right time?
= Efficiency
e Input versus output.
= Potential
¢ The possibility to make a major difference in the future.
@ A working group is planned consisting of:
= Richard Bryant, Haydn Jones, Neil Wilkinson, Gavin Bell, Mark Arnold.
a All parties recognise the importance of this work given:
= Volume and importance of change across the account;
= The critical nature of services delivered by Fujitsu;
= The evolution of the supply chain in the context of the Towers model, and the importance of
ensuring performance of Run and Change does not slip.
m Where sensible, recommendations will be made based on reference to best practice seen within
other accounts.
@ Initial recommendations for broader, subsequent phases of work to be provided by end August.
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Baseline Assessment FUJITSU
m We have a Governance Framework (Schedule A2) to enable effective an efficient working
relationship between Post Office and Fujitsu.
@ Established on 31/08/06: Agreed version as at date of signature of CCN 1200
@ Latest update on 21/02/12: Moving all schedules to V8.0 in accordance with
CCN1294d
m= The existing Governance Framework describes our management system and supports joint
decision making in the context of our:
®& Systems Integration Partnership and Executive Relationships
& Service Management Relationships
= Commercial Relationships
= Demand Planning and Programme and Release Relationships
® Section 2.1 states that decisions shall be taken by the Post Office Subject Lead and the
Fujitsu Services Subject Lead for each relevant Relationships via the following
mechanisms:
®@ Systems Integration Partnership and Executive Relationship;
® Service Management Relationship;
= Commercial Relationship;
® Demand Planning Board;
®& Programme/Release Relationship.
@ Each relationship has a series of Boards to support the components of that relationshipsyes ony
Baseline Analysis
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Relationship
Meeting
(Title)
Terms of Reference
(Schedule A2 v8)
Status
Effectiveness
(H/MIL)
Efficiency
(H/MIL)
Potential
(H/MIL)
1) Systems
Integration
Partnership
and Executive
Relationship
Exec
Steering
Board
Quarterly
The weekly FJ / PoL
Meetings have provided a
__ forum to cover these
issues I
«Monitoring the overall success of the
relationship, including resolution of
any Disputes escalated for Executive
Review under the Dispute Resolution
Procedure.
«Approval of new initiatives (HNG-X
and non-HNG-X).
Overseeing management by the
Commercial Relationship of matters
arising in respect of Market Testing
under Schedule D6.
«Monitoring the performance of Fujitsu
Services' obligations in connection
with this Agreement for the purposes
of determining matters relevant to
Fujitsu Services' appointment as
Preferred Systems Integrator and
disclosing the results of such
monitoring to Fujitsu Services in
accordance with Schedule A1.
*Gain Share and Strive monitoring,
including agreement of baselines.
Active
Active
TBA
As
reqd.
As
reqd.
H
M
H
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Baseline Analysis FUJITSU
Relationship I Meeting Terms of Reference Status I Effectiveness Efficiency I Potential
(H/MI/L) (H/M/L) (H/M/L)
1) Systems Exec *Strategic direction and use of SIP As
Integration Steering resource — (a) agreeing the quantity reqd.
Partnership Board and type of SIP resource to be
and Executive provided by Fujitsu Services and (b)
Relationship Quarterly I approving the programmes and
(Cont.d) initiatives to which the SIP resource or
any Fujitsu Services SIP Team
Members shall be applied in order to
best achieve the Joint Objectives set
out in Recitals E(d) to (g) (inclusive).
*Agreeing the sharing of any benefits I As
accruing from a cost saving initiative reqd.
or future development work in
accordance with the principles of
Schedule D3 relating to the SIP and
overseeing the management,
operation and delivery of the SIP
under Schedule B1.2.
+ Reviewing and managing TBD
The weekly FJ / Pol opportunities for the Preferred
Meetings have provided a I Systems Integrator and the SIP;
forum to cover these I maintaining a list of such opportunities
i}
issues” in a Working Document.
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Baseline Analysi ir
aseline alysis FUJITSU
Relationship I Meeting Terms of Reference Status I Effectiveness Efficiency Potential
(H/MIL) (H/MIL) (H/MI/L)
1) Systems Exec *Post Office benefits realisation TBD
Integration Steering monitoring.
Partnership Board Assisting with the aim of achieving the I TBD
and Executive Joint Objective set out in recital E(g),
Relationship Quarterly I including co-ordinating visits from time
(Cont.d) to time by agreed members of Post
aa Peg EU ase I once Saf to any Futsu Services
Meetings have provided a — ss teu ‘Service. as fo oh a °
forum to cover these technical expertise an
: issues 'cal expertise.
Board to Board Exec to Exec to: Quarterly Not Active
(non contracted) POL & FUJ Strategy although
Synergies, Opportunities for agreed and
collaboration held twice
Weekly Exec Meeting TOR: Weekly Being Held
(non contracted) Focus/escalation point for
TSS/R&R & Towers —
Programme Board
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Baseline Analysi ir
aselineé Analysis FUJITSU
Relationship Meeting Terms of Reference Status I Effectiveness I Efficiency I Potential
(H/MIL) (H/MIL) (H/MIL)
2) Service Service & 1.) Ensuring continuous improvement in the
Management I Commercial service management environment through G M M H
Relationship Review (S&CR) I pro-active management.
) 2.) Reviewing Operational Services
; : : : performance, including against agreed
This forum is supported bya Service Levels and agreeing remedies G M H M
total of 8 monthly ORF’s_— payable (if any) in accordance with the
(Operational Reviews) which ;el\evant terms of this Agreement.
are held with POL relating to
each of the specific services. 3. ) Reviewing network performance. G H H H
The relevant SDM attends along
_ with their counterpart from 4.)Reviewing operational reliability of
POL. Infrastructure, tracking MTBF rates and
considering/recommending remedial courses A M M M
The output from each ORF into of action (e.g. full or partial technological
the S&CR is a one page refresh or Service Level relief).
summary that is fed into the
C&SR with risks/issues flagged 5 )Resolving operational issues including, G 4 M 4
_as well as key achievements put not limited to, those arising from non-
from the month. — conformance to agreed Service Levels.
Most operational issues and )Reviewing future change plans to ensure
RiCeee eNews take place at the live environment is prepared for A M M M
the working level with just — Operational Services.
escalation and anomalies __
Feported into the C&SR tobe — 7 Capacity management in relation to A M M M
discussed as ‘Hot Topics’ ~— Service Management Services.
within the agenda of the review.
8.)Monitoring Operational Business Change
processes. A M H M
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Baseline Analysi ir
aseline Analysis FUJITSU
Relationship I Meeting Terms of Reference Status I Effectiveness Efficiency Potential
(HIMIL) (H/M/L) (H/M/L)
3) Commercial I TBD «Management and administration of TBD M M
Relationship the Agreement.
re rer *Agreeing amendments to the TBD H M
The Commercial Agreement subject to the Change
relationship has been Control Procedure.
strong for many years. *Overseeing the ordering, invoicing
eae) . and payment process in Schedule D2.
Commercial did attend the I «overseeing the carrying out of Work I TBD M M
Service eer aban Orders.
Review (SCR) each — *Review}
this meeting was feltto be I Conditions for Work Orders"
too operational fo (BP/STD/003).
Commercial involvement. «Agreeing Commercial Terms in TBD H M
; _____I relation to Work Orders.
Currently there is @ I .Reviewing performance of and, where I TBD H H
weekly Commercial call I necessary, improvements to the
which reviews and tracks I Change Control Procedure.
_ Progress and actions on I .\anagement reviews of Open Book, I TBD M NotIreally that relevant
all Commercial matters’ I Gain Share and Market Testing.
__and there are separate +First level escalation for Disputes TBD M M
forums for many ofthese I about the interpretation of this
matters. There should Agreement, about invoice amounts or
__ also a monthly terms, and about other matters
Commercial review =I referred to the Commercial
meeting which should be Relationship.
an escalation forum but I .\ionitoring, reviewing and reporting of I TBD H Not really that relevant
this rarely takes place
due to issues being:
resolved as part of BAU.
events and progress and issue
resolution in respect of Market Testing
under Schedule D6.
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Baseline Analysis FUJITSU
Relationship Meeting Terms of Reference Status I Effectiveness I Efficiency I Potential
(H/MIL) (H/MIL) (H/MIL)
4) Programme/Release I Programme I «Delivery of programmes + Medium + Medium * High
Relationship Release and Releases to time and (main focus on
Board(s) budget. IT delivery)
*Managing and resourcing * Medium * Medium I + High
Work Packages which
relate to major
development programmes.
«Managing contingency + Medium * Medium I + High
budgets approved in Work (not generally
Orders including, where visible)
appropriate, delegating
authority to appropriate
managers.
«Directing the holding of * Medium + Medium I + High
meetings of the ‘Joint (part of plans/
Release Authorisation milestones)
Board’.
*Review and resolution of + Medium + Medium « High
operational issues arising (generally
in design, development and resolved at
testing; and working level)
*Review progress and + Medium * Medium * High
performance against plan.
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Baseline Analysis FUJITSU
Relationship Meeting Terms of Reference Status I Effectiveness I Efficiency I Potential
(H/MIL) (H/M/L) (H/M/L)
4) Programme/Release I Acceptance *To agree the Acceptance * High + High * High
Relationship Boards status of the relevant (joint Services / I (mature
(for each Release and provide a Project aligned I processes
Release) recommendation to the with planning) & team)
ance Roarde. II ‘Joint Release
Authorisation Board’.
Acceptance *Consider and resolve Not aware of
Dispute Acceptance disputes any specific
Board arising under Schedule I meetings —
B6.3. issues resolved
*Consider and resolve at working level
Acceptance disputes between joint
arising under Schedule services &
B1.1. project teams
Joint Release I Agree the criteria and * High + High * High
Authorisation I processes by which (joint Services / I (mature
Board Releases will be Project aligned I processes
authorised for release into with planning) & team)
field trial or live operation
and carry out readiness
reviews of stakeholders
accordingly.
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Baseline Analysis FUJITSU
Relationship Meeting Terms of Reference I Status Effectiveness I Efficiency Potential
(H/M/L) (H/M/L) (H/M/L)
4) Programme/Release I Demand «Communication of + Medium + Medium * High
Relationship Planning service development (mixed quality (needs clear
(Cont.d) Board plans — Post Office of view of PO view of PO
and Fujitsu Services plans) strategy)
Agree high level * Medium * Medium * High
planning (good level of
assumptions for understanding
future developments but limited
of services control)
-Joint planning to + Medium + Medium * High
manage the
allocation of pre-paid
or pre-committed
resources and any
progressive
commitment to
incremental resource
above that level
including:
-Agreement of the * High *. High * High
Inner and Outer Core (good handle
Team, (including any & joint
subsequent understanding
replacements of key people/
required) roles)
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Baseline Analysi i
aselineé Analysis FUJITSU
Relationship Meeting Terms of Reference I Status Effectiveness I Efficiency Potential
(H/M/L) (H/M/L) (H/MIL)
4) Programme/Release I Demand -Agreement of the * High * High * High
Relationship Planning Standing Team, (good handle
(Cont.d) Board (including any & joint
subsequent understanding
replacements of key people/
required) roles)
In accordance with + Low + Low + Low
Annex 3 to Schedule (not currently
A2 initiate, monitor addressed in
and ensure progress this forum — I
on development of believe this is
service definitions part of the
and terms and Commercial /
conditions for Service
additions to the Board)
contracted services
«Recommend + Low + Low
additions to + Low
contracted services, (as above
including introduction seems to
of the Inner Core, relate to
Outer Core and Commercial
Standing Team, (that Board)
will then be formally
introduced by CCN)
“Oversight of * Medium * Medium
agreeing Work + Medium
Packages (as above
planning) —
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Additional Obligations FUJITSU
m™ At least once in every calendar year, the members of each
Relationship shall discuss and review whether the frequency
with which their Relationship meetings are held should be
altered.
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Summary Findings FUJITSU
™ Broadly speaking, with the exception of the Executive level, the
Governance framework has been operating as expected.
m@ At the Executive level, the higher level, Board to Board meetings have not
been taking place. These sessions have morphed into weekly Bid Review
sessions for D level attendees on both sides. The demands of the bid
commercials have necessitated this, however, as the Towers model begins
come together, we should shift towards, more regularised, higher level,
strategic sessions. These could cover:
™ Good News
@ Bid — Update (inc. MVNO)
m@ Run
lm Change (inc. HPBB)
= AOB
These sessions would include data from the relevant forum.
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. (co)
A typical Run vs. Change Governance Model FUJITSU
Change and Growth Run
BUSINESS LINE z s IT EXECUTIVE
EXECUTIVE BOARD
I SUPPLIER
RELATIONSHIP BOARD
Operational Governance I - ‘k te-end dat
; «Framework agreements end dates:
PORTFOLIO + ” “—
PROGRAMME BOARD I IT SERVICES
ASSURANCE
COMPLIANCE +
SECURITY
ARCHITECTURE +System / software end of life
I CHANGE APPROVAL I SenrodeNcE
BOARD REVIEW GROUP
i +Helpdesk calls and trends
INNOVATION GROUP I i -System up timedown time
Capacity metrics
Security metrics
+Financials
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Next Steps FUJITSU
™ Move the Weekly FJ/PoL meeting, to fortnightly, with the ambition of shifting
towards monthly timing - whilst not a contracted governance forum, given
the evolution of the Towers framework, stakeholders on all sides need to
understand and balance status across three areas:
@ Run
l Change / Grow
@ Bid
Materials will be presented on each of these topics, as well as other agenda
items as appropriate.
m™ Reinstate the Quarterly Executive level meetings, as per the contract.
m= We also need to understand how we engage the broader stakeholder
community.
= Draft terms of reference and diarise meetings for the next 12 months.
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Key Stakeholders — who faces off to who?
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Sue Barton Susan Crichton
Strategy Director Legal & Complinace
Director
Neil Ennis
Network
Transformation
Fay Healey
HR Director
Steve Tuppen
Towers / SISD
Nick Kennett Paul Brown Chris Day Kevin Gilliand
Financial Services Marketing & Finance Network Director
Director Commercial Director Director
Brian Deveney
t Head of Managed
Jonathan Hill Kevin Seller Services & Sourcing
Financial Head of
Services Government
Rod Ismay
Head of P&BA
Sarah Munro Jeremy
Travel Woodrow
Telephony
Charles
Colqhune
Paul Brown
Head of Mails Treasury
Stephen Hirst
- Head of Finance
Stuart Fox Mills
Marketing
Peter Goodman
Separation
Sue Huggins advisor
General Manager
Andy Garner
Service management
Roger Gale —
Sales Blake Griffin
CTO
Dave Hulbert
Head of Service
Delivery
Michael Brown
Programmes
FUJITSU CONFIDENTIAL
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Appendix — Materials Provided To Date FUJITSU
™ Section A
@ IT Governance and Best Practice
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What is Governance? FUJITSU
™ Some common definitions of governance across all
industries
& ‘IT governance primarily deals with connections between business focus and IT management. The goal of clear
governance is to assure the investment in IT generates business value and mitigates the risks that are associated
with IT projects’.
& ‘The use of institutions, structures of authority and even collaboration to allocate resources and coordinate or
control activities’.
= ‘Provide a decision making framework that is logical, robust and repeatable to govern an organization’s capital
investments. In this way, an organization will have a structured approach to conducting both its business as usual
activities and its business change, or project, activities’.
m ‘As a process, governance may operate in an organization of any size: from a single human being to all of
humanity; and it may function for any purpose, good or evil, for profit or not. A reasonable or rational purpose of
governance might aim to assure, (sometimes on behalf of others) that an organization produces a worthwhile
pattern of good results while avoiding an undesirable pattern of bad circumstances’.
m™ Fujitsu UK & Ireland definition of governance
™ Governance for Fujitsu is the management of the Company in line with the BMS. Compliance is effectively the
management of the BMS and Assurance is how we evidence that the Company is being managed in accordance
with the BMS. These definitions (or some worded very similarly) will go onto Wikipedia.
= Good Governance is effective and cost efficient, whereby the desired outcomes were achieved as proved by
Assurance.
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IT Governance and Change FUJITSU
@ Some general principles
@ Allows the organisation to balance Run with a Change or Growth agenda
@ A structured way of taking defined risks to drive the business
® Objective is right time, right cost, right technology
™ Assuming Run is in good shape, change or growth can be accelerated
@ Apply the test
® Can the organisation respond to critical changes in the business model?
@ Changing any kind of governance is not easy
& Small demonstrable steps are required, focused on changing the governance
model to support the business
m= Change or growth investment can be used to track impact on Run cost, all of
which needs to be underpinned by a cost model set against revenues
@ It will take 18 months to two years for an effective governance model to emerge
™ Establishing the framework needs persistence and sponsorship and must be
supported by a team of analysts to drive the narrative and set pieces to gain
traction
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A typical Run vs. Change Governance Model FUJITSU
Change and Growth Run
EXECUTIVE BOARD
I SUPPLIER
RELATIONSHIP BOARD
Operational Governance I
: +Framework agreements end dates
PORTFOLIO + ” “—
PROGRAMME BOARD i IT SERVICES
ASSURANCE
COMPLIANCE +
SECURITY
ARCHITECTURE «System / software end of life
I SERVICES AND
SoA Sapp At I PERFORMANCE
i REVIEW GROUP
Helpdesk calls and trends
INNOVATION GROUP I
+System up time/down time
Capacity metrics
Security metrics
+Financials
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Linking the Towers Model to Internal Governance fujitsu
Indicative
Business Objectives: Cost Out, Growth, Separation
< Change and Growth > ~ Run 5
EXECUTIVE BOARD >
A a SUPPLIER
“0 07 RELATIONSHIP BOARD
v ra Operational Governance
. / Frameworkagreemertsenddates
PORTFOLIO + 7 j : Z
PROGRAMME BOARD I —~ I i
I ' *«
I H ASSURANCE
i COMPLIANCE +
SECURITY
I “system sofware end ote
Order of I I
Complexity : SERVICESAND
CHANGEAPPROVAL I I peRrORMaNeR
BOARD ; REVIEW GROUP
Supplier Boards Relationship Status
d Us Intégration
¢ I I I JS Va Solutions
Products
<
¢ Consulting,
ha pe
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IT Governance and Change FUJITSU
=& Ina multi-supplier scenario, planning, sequencing, communications and complexity reduction
are vital to controlling the programme of work
@ Areas to look at
@ A Governance Review
¢ Decision making boards
¢ Decision making cascade up and down the organisation, as well as externally
& What works what doesn’t
° Driving change
¢ Fostering growth
e Managing risk
® Strategic supplier board
® Cross supplier innovation forum
m The scale of opportunity
® Leveraging an integrated supply base to drive growth and innovation
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Terms of Reference (1/2) FUjITSU
™ The role of the group is to bring together the business leadership and
supplier community directly to support the Post Office’s growth agenda.
m= Given the complexity of the transformation agenda; having a direct
connection with the technology and business stakeholders is a key part of
driving change.
@ The group will then:
® Act as a point of escalation and provide guidance
® Shape strategy (take strategy)
= Resolve contention, in particular managing the tension between ‘Run’ and ‘Growth’
initiatives.
™ Understand the business context.
® Support and drive change.
™ It is the most senior open forum, which will evolve into the primary
technology leadership group in the context of the towers procurement.
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Terms of Reference (2/2) FUJITSU
™ Success will be measured by:
™ Visible reduction in opex directly attributable to initiatives or changes within the
supply footprint.
Tangible growth initiatives directly linked to work of a technology partner.
™ On a monthly basis the group will meet to discuss the following topics:
a...
a...
m Attendees:
m= Membership
a...
i
@ The group will be chaired by:
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Appendix — Materials Provided To Date FUJITSU
Section B
® Fujitsu Operating Model
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New Fujitsu operating model FUJITSU
@ Our operating model within UK & Ireland is realigning to address the growing
trend towards more selective sourcing of IT
® clear ‘service lines’ based on what our customers increasingly want to buy
@ This provides more direct access to the full Fujitsu portfolio and capability
® from products, networks and end user services though to business consulting and
applications
® delivered as specific solutions or combined into complete managed services
@ We are also strengthening our customer-facing teams to focus on:
® understanding and supporting your strategic objectives
® delivering great service
@ In the process we are aligning more closely with other Fujitsu regional
operations, helping us deliver service on a truly global basis
® Exploiting Fujitsu’s global capability, including global cloud solutions and delivery
centres
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Previous model — Fujitsu in UK & Ireland FUJITSU
ay
Japanese
Originated
Companies
Market Facing
(fN
Service Lines
combined into
one overall
cost centre .
Republic of
Ireland
Core Services Offerings
capability
remote from
customers.
Sy
Finance Human Commercial . :
& Strategy & Legal Business Operations
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New Model — Fujitsu in UK & Ireland FUJITSU
iota ! Bane i : Japanese
oo 7 en GRO Has GRO Originated
Sector \ i Sector : i Companies
Regina Moran HMRC Defence & Helen Lamb Richard Andy Stevenson Michael Keegan
Republic (Account National Business & Bull Hosting, Technology
of Ireland _Feports Security Application End User Networks & Product Group
into Public (Account Services Services Security ;
Sector) epars SILOS) poleieeinanntinarnty Leste EMT
into Public
Sector)
Steve Clayton’ i Ella Bennett! i Ravi Robert
Pinence :GRO, fuman ' G : : i Business
& Strategy jf I Resources; i rae ce f Operations ' se rvices
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Understanding the Service Lines FUJITSU
Business & Application Services Wide range of business consulting
and cloud, managed and
information-based application
services
End User Services Service desk and engineering
services capability
Hosting & Network Services Extensive range of data centre and
network services
Technology Products Group Market-leading range of servers,
storage systems and devices
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Fujitsu key roles - Post Office Account FUJITSU
# Fujitsu Client Managing Director / Executive
@ Understanding and supporting your objectives - tactical and strategic,
business and IT
= Constructing new propositions to help address your needs and reduce your
risks
& Defining and managing our respective expectations
& Fujitsu Delivery Executive
& Aligned primarily to Business and Applications Service Line
& Also working across the Fujitsu Service Lines as required on your behalf
® Delivering consistent, predictable, excellent service
A team dedicated to supporting you at a strategic and operational level.
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Key points FUJITSU
™ Supporting the general trend towards selective sourcing of IT
™ Providing easy access to full range of Fujitsu capability
™ Enabling us to deliver service on a global basis
= Creating stronger teams dedicated to supporting your
strategy and delivering great service
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