POLO00090009
POL00090009
Consulting
Group
123 Buckingham Palace Road
loneah/pjc/eah1597 London SWIW 9SR
1% October, 1998
Mr David Miller
General Manager Horizon Implementation Programme Group Head
Post Office Counters Limited Computers and Telecommunications
King Edward Building Diet ener.
King Edward Street E-mail: Peter.Copy
London EC1A 1AA
PRIVATE
RESTRICTED - COMMERCIAL
dancer OM ane
We have been having some private thoughts about how the parties might break out from
the potential impasse on acceptance. These thoughts have only been pursued at the
‘framework’ level and I thought you might like sight of the paper, because it seems it is only
the HPO that might be able to use it right now. Pleased to discuss, pursue with you or your
team or whatever.
P J Copping
Member of the Management Group-PA
PA Consulting Services Ltd
Registered No: 414220 England
POL00090009
POL00090009
Mr David Miller 2 19/10/98
‘ eah1597
Acceptance testing: a framework for developing a new paradigm.
Problem definition.
Sponsors and Pathway have agreed to de-risk the programme by decoupling card roll-out
from NR2 and to base NRO on child benefit and EPOSS only until NR2+ is available, when
multi-benefit roll-out starts. This new sequence raises a legitimate question whether an
alternative acceptance process can be designed that protects the commercial objectives of
the parties and which at the same time reflects the status of the revised programme at
completion of MOT and, at completion of Live Trial. Additionally, the acceptance process for
any requirement to be delivered during NRO (eg. EVP) would need to be included in any
new approach.
Complication.
Acceptance relies not only on having acceptance specifications approved but also on the
parties' agreement on testing criteria and, the consequences of acceptance. At present,
whilst the parties have agreed to accelerate the process leading to agreement of test
specifications, they have not found it possible to agree either the criteria for acceptance or
the consequences of acceptance at the key programme milestones noted above. As PA
understands it, there is a gap between sponsors and Pathway over the meaning of
acceptance at completion of MOT and, at completion of Live Trial. Without agreement on
what acceptance is and means at these key points it seems inevitable that acceptance
might never be achieved.
A new framework for acceptance is needed.
Given the difficulties in resolving these issues based on the present approach it seems to
PA that a new paradigm for acceptance is needed.
pucd In a standard 'supply' arrangement for software development, industry norms would tend to
Gnd sa {suggest that at completion of the testing of software functionality, payments to the
fronosa'e + contractor would amount typically to 70 to 80% of the contract value. Payment of the
. cok balance would require the customer to be satisfied that the software is fit for purpose from a
(ts ishas business perspective. Any rework found necessary in this latter process is at the
contractors expense, unless such rework is needed to satisfy a revised or additional
business requirement (i.e. a change request).
Taking this rough analogy into the BA/POCL situation, the MOT process is essentially about
discovering whether the Pathway software provides the functionality specified in the
requirements. The balance of probability, given the effort that has been put into specifying
what Pathway is to deliver for MOT, is that the software will work and that to accept it
conditionally and proceed with Live Trial, even with some remaining hangouts, could be a
sensible and pragmatic proposition. In Live Trial the attention is on whether that
functionality meets the business need; i.e. are the services that are specified supported
and, do they fit the business process? It seems reasonable to forecast that the Live Trial
will identify some areas of rework; so any functional hangouts from MOT could be swept up
in that process, so that full acceptance would follow at completion of Live Trial.
So acceptance at MOT stage could be based on criteria designed to test the functionality of
the software and, acceptance at Live Trial stage could be based on criteria designed to test
that the services required are provided and fit the business requirement.
POL00090009
POL00090009
Mr David Miller 3 19/10/98
eahi597
The question then is how to deal with Pathway's commercial desire for sponsors'
termination rights to be removed as early as possible in the acceptance process in order to
have the assurance that in continuing to invest in developing outstanding functionality they
will not be destroying value and, the inevitable desire of sponsors to hold onto termination
rights until such time as they are satisfied their requirements have been fully met and, that
additional development work yet to be tested is actually creating value.
It seems to us that a commercial solution could be devised based on a combination of
conditional acceptance at completion of MOT and a change to the remuneration
arrangements for Pathway following commencement of NRO, where Pathway only receive
a proportion of the revenues that would otherwise flow if there are rework items still
outstanding from both testing processes. Simply put, sponsors would give up termination
rights on acceptance following MOT in exchange for the option of being able to have more
punitive SLA's following the start of NRO, should the system fail to meet acceptance criteria
in Live Trial. Similar arrangements could be put in place for future releases of
functionality/services.
Next steps.
Best approach could well be for PA to continue to support the HPO, working with sponsors
and Pathway to facilitate a practical solution within this framework. This is a not
insubstantial task which will require several weeks if not months to complete, but which if
resolved in the context of a new commercial agreement, will take a major show-stopper off
the agenda.