POL00031271
POL00031271
CEC(96)31
Automation Change Programme n (©
Organisation and Control Bes
dade Core
Purpose
1. This paper provides an update on the approach being taken to manage
the transformational programme based upon our planned investment in
automation, and the proposed organisational arrangements for monitoring
achievement of agreed programme targets.
Focus
Introduction
2. The planned investment in automation to which we are committed will
have considerable impact upon our business at all levels. As well as changing
our systems it has implications for our people, processes and organisational
structures. Hs success underpins our business plan and the key performance
targets set for the future. We have previously agreed that co-ordination of this
transformation programme requires a separate approach which builds upon our
experience of large scale change management, for example during the launch of
Customer First, a¢ well as the established disciplines of programme
management. The plans for this are described in summary below.
Plan
Organisation
3. Project management structures are already established for each of the
strands of the automation programme, with a CEC champion acting as sponsor
for each initiative. A summary of the component projects supporting the
automation programme is provided at appendix AW.
4. The job of automation co-ordinator, now filled by lan Gibbard, will address two
areas outside the remit of the individual automation projects je;
e change management, including
- clarifying the vision for automation
- alignment with other strategic initiatives
- communication planning and leadership support
- setting measurement frameworks
* programme management, including :
- co-ordinating cross-project plans and dependencies
- programme assurance and reporting
POLO00031271
POL00031271
CEC(96)31
External consultancy support to this work is also being recruited to provide
additional resource and further experience of large scale change management
through the use of new technology, Responses to the tender issued for this
purpose will be evaluated during September with an appointment planned for
early October 1996.
6. It is planned to reconstitute a steering group with responsibility for the
leadership of the programme. A copy of the draft purpose statement, already
supplied to CEC attendees with dates for future meetings, is reproduced at
appendix ‘B’ for information. The proposed steering group membership provides
for the attendance of process sponsors as change owners within the scope of
the automation programme. As the draft statement of purpose indicates, it will
also provide a focus for review of the automation strategy as input to CEC in this
area.
6. Co-ordination of policy issues and decision taking between the separate
steering group responsibilities of the PDA and those described in this paper will
be the responsibility of Paul Rich, supported by the formal change management
processes which are now being established.
Communication
7. Proposals for regularly communicating progress to CEC will be developed
as one of the early tasks of the steering group. Wider communication of the
automation programme, including its structure and objectives will be undertaken
as part of the change management activities now being planned.
Summary
8. CEC is invited to note the present organisational arrangements for the
automation programme and endorse the proposals to establish a steering group
with responsibility for leading this transformation.
Bob Peapie August 1996
CEC(96)31
POCL Automation Programme Appendix ‘A’
Scope
4. Automation of post offices
The project introduces a capability to pay state benefits to 19 million
recipients using card based technology at 20,000 post offices through
40,000 counter positions across the UK. The lifetime cost of the project is
valued at more than £1bilion.
The business objectives of the project are:
- fraud free benefit payment with lower end to end processing cost
- increased commercial opportunities arising from an automated delivery
capability
- enhanced benefits reconciliatiori and accounting practices
- improved customer service
The project is jointly managed by POCL and the Benefits Agency (BA)
with the Pathway consortium acting as prime contractor under a
Government Private Finance Initiative, and responsible for developing,
implementing and operating the automated system.
2. Transaction information Processing (TIP)
The project seeks to transform the existing, largely paper based, process
for proving and consolidating the weekly accounts produced by all post
offices. These accounts, together with a large volume of supporting
documentation, are used to support the settlement of funds between
POCL and its clients as well as providing a source of information about
the performance of the post office network.
The project will replace the existing mainframe based computer
environment and equip the business with the capability to validate and
process the automated streams of data available from the post office
automation programme. The cost of the project through to implementation
is estimated at £25 million. Its business objectives are:
- To reduce the cost of processing client transaction data, including the
amount of re-work due to errors.
- To develop a capability to support an automated customer interface
(via the BA/POCL project)
- To generate added value opportunities through improved MIS
POL00031271
POL00031271
POL00031271
POL00031271
CEC(96)31
The project is undergoing a requirements planning phase with support
from SEMA Group as the appointed suppliers.
3. Distribution Systems
The project addresses the logistics and inventory management of the
cash, foreign currency and other value items that are the essential ‘stock
in trade’ of the post office network. At present this core process is
supported by a variety of computerised and paper based systems
operated through business owned warehouses (or cash centres).
The project will introduce industry best practice through the re-
engineering of the existing processes around a world class software
package as well as providing the basis for a rationalisation of the existing
distribution infrastructure.
The cost of the project through to implementation has been estimated at
£16 million. its business objectives are:
- to re-align the the business process to best industry standards
- to enable the centralisation of the management of stocka and cash as a
means of reducing holding costs
~ to reduce operational costs and staffing leveis
- to support Post Office group strategy in this area
The project is approved to proceed through a pilot stage and a support
from third party suppliers is presently being sought.
4. Finance Systems
A project to replace the outdated business accounting processes is also
currently underway. This project initially contained three strands:
4. the introduction of the SAP (R3) software as the basis for financial
reporting - successfully achieved in 1995
2. the development of a local management information database for
regional reporting - successfully achieved in Q1 1996
3. the introduction of activity based costing using a proprietary software
solution - presently being implemented
It is apparent, following a review of the IS strategy, that a reconfiguration
of the SAP financials will deliver a more effective interface to the new
projects now being developed. This reconfiguration will aiso seek to
maximise the benefits to be gained from use of SAP software in other
cEC(96)31
business processes, including distribution. The scope and scale of the
work is presently being addressed.
§, Reference Data
This project has been established to ensure that the business has clear
ownership and definition of the data that is to be managed through the
use of automation. Initially it will ensure that processes are iA place to
maintain a single, consistent source of ‘standing data’ around the key
elements of the company data model. In this way itis intended that
interfaces between the different automated processes will be more
effective and company information will be capable of being routed and
accessed across process and functional boundaries.
The project will deliver a mechanism for storing and maintaining key data
about product, network and client. it will introduce systems for interfacing
this data to the other elements of the automation programme. The cost of
the project is agsessed at £1 million.
Timescales
The projects are designed as far as practical to avoid inter- dependence.
As a result of the scale of the programn:e it is necessary to plan foro
relatively lengthy migration period in which both the ‘old states’ and the
‘new states’ can co-exist. Nevertheless the projects alt conform to @ single
1S strategy, the benefits of which depend upon a full implementationof all
projects. In support of this ambition, all of the system components depend
upon @ single definition of key business data and therefore upon the
Reference Data Project.
Broad timescales and milestones are as shown (finance project to be
defined):
Automation of post offices TIP
operational trials - Q3 1996 requirements ~ Q2 1996
roll-out commence - Qi 1997 prototype -Q3 1996
roll-out complete ~- 4999 rescaling -G1 1997
Distribution systems Reference data
prototype -Q2 1997 Complete development - Q4 4996
complete pilot ~Q4 1997 Go-live - Qi 1997
Roll-out ~ 4998
POL00031271
POL00031271
POL00031271
POL00031271
AUTOMATION TRANSFORMATION STEERING GROUP:
TEAM PURPOSE
PURPOSE
TO PROVIDE LEADERSHIP AND DIRECTION TO THE
TRANSFORMATIONAL PROGRAMME, AND SHARED OWNERSHIP OF
THE BUSINESS VISION WHICH IT SUPPORTS. THE STEERING GROUP IS
RESPONSIBLE FOR MONITORING AND REVIEWING OVERALL
PROGRESS TOWARDS THE SUCCESSFUL COMPLETION OF THE
AUTOMATION PROGRAMME AND ACHIEVEMENT OF THE
STRATEGIC TARGETS WHICH HAVE BEEN SET.
OUTPUTS
A VISION PRODUCED WHICH COMMUNICATES TO EVERYONE THE
CHANGE TO BE UNDERTAKEN THROUGH THE PLANNED
INVESTMENT IN AUTOMATION
AN AGREED PLAN PRODUCED FOR CLARIFYING AND
COMMUNICATING THE VISION FOR AUTOMATION
TOP MANAGEMENT COMMITMENT TO THE PROGRAMME
OBTAINED
TARGETS SET FOR THE CHANGE PROGRAMME, WHICH LINK TO
BUSINESS MISSION, OBJECTIVES AND RESULTS
MILESTONES AND CRITICAL SUCCESS FACTOR IDENTIFIED FOR
THE TRANSFORMATION, BASED UPON THE INDIVIDUAL STRANDS
OF THE AUTOMATION PROGRAMME
PRIORITIES FOR INDIVIDUAL CHANGE PROGRAMMES DECIDED
BLOCKAGES TO CHANGE IDENTIFIED AND RESOLVED
MEASURES OF PROGRESS AGAINST PROGRAMME TARGETS, PLANS
AND RESOURCE SCHEDULES REVIEWED
PROPOSALS FOR ALIGNING THE AUTOMATION PROGRAMME
WITH RETAIL, HR AND OTHER STRATEGIES DEVELOPED
PROGRAMME RISKS IDENTIFIED AND COUNTER-MEASURES
DEVELOPED
AUTOMATION STRATEGY DECISION REVIEWED (FEEDBACK LOOP)
PROGRAMME CONTRIBUTORS RECOGNISED
POL00031271
POL00031271
INPUTS
e PROGRAMME MANAGEMENT REPORTS, PLANS AND RISKS
REVIEWS
¢ REPORTS AND PROJECT PROGRESS STATEMENTS FROM PROCESS
SPONSORS
* MAJOR PROGRAMME CHANGE PROPOSALS (HAVING A DEFINED
LEVEL OF INPUT UPON BUSINESS TARGETS)
¢ OPINION SURVEYS OF PROGRAMME STAKEHOLDERS AND
RELATED SATISFACTION MEASURES
¢ GROUP TRANSFORMATION PROGRAMMES AND STRATEGIES
CUSTOMERS
@ COUNTERS EXECUTIVE COMMITTEE (PRIMARY)
¢ PROCESS SPONSORS/ PROCESS OWNERS
* PROJECT CONTROLLERS
e GROUP
MEASUREMENT
AGREED OUTPUTS DELIVERED TO TIME (BASED ON PROGRAMME
DEVELOPMENT STRATEGY PRODUCED FOR CEC ENDORSEMENT).
STYLE
¢ PRINCIPLES OF EFFECTIVE MEETINGS
* AGENDA AND PAPERS ISSUED A WEEK BEFORE THE MEETING
* PROCESS SPONSORS TO ‘OWN’ PROPOSALS WITHIN THEIR OWN
AREAS OF ACCOUNTABILITY
« VISIBLE ACTION POINTS AND MINUTES PRODUCED WITHIN 3
WORKING DAYS
POL00031271
POL00031271
POL00031271
POL00031271_
BOB PEAPLE
-
DAVID TAYLOR y Che wt carr’
ROGER TABOR
JONATHAN EVANS yun Cahes Hy WE
PAUL RICH ~
IAN GIBBARD
WENDY POWNEY
PETER TURGOOSE (as required)
EXTERNAL CONSULTANT
( Cen
SUBSTITUTES
BOB - DAVID (ae
DAVID - BOB/LESLEY LAWSON ard ia
ROGER - DAVID SMITH 1 “ye ms .
JONATHAN - CHESTER WALLACE
PAUL - MENA REGO
IAN - WENDY
WENDY - IAN
MEETING FREQUENCY
MONTHLY (or as circurnstances require)