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POB(00)Ist
POOO/1 to 11 POST OFFICE BOARD
Minutes of the meeting held at 148 Old Street
on 11 January 2000
Dr Neville Bain Chairman
John Roberts Chief Executive
Richard Close Group Finance Director
Jerry Cope Group Managing Director Strategy & Business
Development
Mike Kinski Non-Executive Member
John Lloyd Non-Executive Member
Rosemary Thorne Non-Executive Member
Jonathan Evans Secretary
Scott Childes Notes
Richard Dykes, Group Managing Director, Mails Services
Stuart Sweetman, Group Managing Director, Customer and Banking Services.
Kevin Williams, Group Managing Director, Distribution Services
Others attending: Robert Bishopp, Director Regulation, for POOO/6
Duncan Hine, Director Technology and Information
Systems, for POOO/7
Graham Cater, Director Group Personnel, for POO0/8
APOLOGIES Miles Templeman was unable to attend
MINUTES OF Pood
PREVIOUS MEETING .
The Board approved the minutes and separate record
of proceedings of its meeting of 30 November 1999.
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CHAIRMAN’S BUSINESS PQ00/03
(i) Alan Johnson MP, the Minister with responsibility for
The Post Office, was attending for the final thirty
minutes of the meeting. The Chairman intended to
raise the following issues with him:
¢ Postal Services Bill and timescale
+ Industrial relations and WAND
« Horizon and the PIU
CHIEF EXECUTIVE'S Pooo/04
REPORT POB(00)2
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Irrelevant
(xi) Counters, excluding Horizon, continued to perform well
and on current trends a full year profit of £32.5m was
possible.
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(xiii) Agreed that the following full year Group profit forecast
be released to DTI:
~ £340m (excluding Horizon)
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TECHNOLOGY & POOO/7
INFORMATION SYSTEMS
IN THE POST OFFICE
POB(00}4
) Across The Post Office the number of information
systems being deployed was considerable with
individual businesses developing their own systems
with little technical commonality. For example,
within the finance function nine separate systems
existed
(if) The majority of Post Office systems were:
- functional rather than process based applications;
- duplicated functionality across business applications;
- created many point solutions;
- reactive rather than proactive with regard to business
needs; and
- lacked global visibility to world class suppliers and
customers.
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(iil) The current situation meant it was costly for Business
Units to maintain and upgrade individual instances of
SAP, made exploitation of investment in the technical
infrastructure difficult and worked against the
integration of systems and exploitation of information.
{iv) The Post Office Enterprise Model was fundamental to
the development of The Post Office 1S Strategy,
providing as it did a blueprint for the integration of
information systems across The Post Office. An
essential element of the strategy was the delivery of
core back office functionality, such as finance and HR
systems, which when established would enable the
delivery of a wider set of business applications.
However, the ultimate requirement was to have a
system which provided customers with value,
performance and timeliness.
(vy) The strategy comprised of these design principles:
- 1S systems should be organisationally independent;
- processes should be harmonised;
- generic access channels should be developed for
customers, for use by all businesses (SPICE);
- industry standard software would be used wherever
possible;
- the overall architecture should reduce the complexity
of systems interfaces,
- information about key business entities to be
managed as a group wide asset; and
- operate a consistent information security policy.
noted further that
(vi) The Post Office used 50,000 computers and had one
of the biggest mainframes in the UK;
(vii) Outsourcing had previously been contemplated, but
was not considered appropriate. This mirrored the
approach of a number of major companies. Where
appropriate a number of relationships with external
suppliers, such as Fi, were being developed.
(viii) it was important that as The Post Office developed an
business strategy that it was compatible with that of it
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main IS strategy.
(x) Seeking work for third party customers was not
something The Post Office was looking to develop.
(x) Thanked Duncan Hine for his informative report and
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HORIZON PROGRAMME
POB(00)7x
(i) The rollout of Horizon was due to recommence on 24
January. A great deal of work had been undertaken to
rectify difficulties identified in three areas:
- system stability;
- accounting integrity; and
- the provision of support to offices
Although as yet uncertain, it was anticipated that these
issues would not prevent rollout recommencing.
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@ Financial performance was being monitored against the
revised budget.
(iii) Given that the programme was expected to
recommence rollout, it would be helpful for the Board to
understand what marketing opportunities were now
being considered.
Action
Stuart Sweetman The March Board to review the current status of
marketing for the programme, together with an update
of the financial position of the programme.
The next meeting was scheduled for 14 March 2000.
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