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From:
Sent:
To:
Ce:
Kenneth Garvey
Subject: Uji u - legally privileged
Ben,
A couple of other points arising from Al’s email:
- I don’t think Al’s right when he says “no one came forward last time” we tried to procure a new front office
system in c.2014, Jacqueline — did you work on that procurement? My recollection is IBM at least bid for the
work, with FJ pulling out on the basis that they didn’t believe anyone else could meet our published
specifications (which ultimately proved correct, thereby emboldening FJ as Al has characterised).
One thing that has become clear through FJ’s support of the GLO is that they are supporting Horizon with a
team of long-standing employees, many of whom are nearing (and some have already passed) retirement
age, i.e. it is not only Horizon’s technology which is ageing. This to me begs the question of what FJ are doing
to ensure they have the personnel to support the system even if we were to go forward with it.
- Interms of “knowing how core Horizon really works”, I think FJ own (or have at least asserted ownership)
over the IP in the system, which may have contributed to the inability to replace FJ back in c.2014, and could
complicate any move to a totally new supplier.
Ken - do you have any insight on this?
I hope this is helpful. Please let me know if you require further.
Rod
From: Ben Foat
Sent: 05 November 2019 14:42
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To: Kenneth Garvey
Rodric Williams <_
Ce: Sherrill Taggart <_
Subject: FW: Fujistu di
Importance: High
Apologies but an urgent request for CEO and CFO.
Ken — any comments on the IT contract point. It would be helpful to re-summarise succiently the contractual position
and any strategic issues you see
Jacqueline — any issues with the procurement approach below .
Apologies but could you each look at this today and come back to me COB today.
Ben Foat
Group General Counsel
Ground Floor
20 Finsbury Street
LONDON
EC2Y 9AQ
Mobile
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From: Alisdair Cameron
Sent: 05 November 2019 13:23
Ben,
Welcome your advice on this note, which is intended as a prep note for Nick’s meeting on
Thursday — as it’s only 30 minutes I thought some ground clearing and context might be
helpful. However, these are legally complex areas and I appreciate I may not understand
them properly.
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Thanks Al
Context (debatable)
Fj broadly think we are an opportunity to be monetised aggressively and occasionally patted
on the head with slightly lower costs. They believe we have neither the capability nor the will
to really exit on either Horizon or Telco — last time they walked away from Horizon, we tried
to replace them and failed.
All other things ebing equal, which they are not, they are not the supplier we would choose
now for our front office systems because their new tech and digital skills are lagging.
Our current contract to 2023 guarantees them a level of income although we have some
flexibility around what they do for it — provided they agree and price competitively within the
PCR rules.
Their performance over the GLO has been truly awful - they told us that they didn’t have
remote access when they did, they told us they couldn’t recover historical KELs when they
could and their witness performance was terrible. This could make them less keen to stay
engaged (but they are probably quite thick skinned) or create brand issues with retaining
them.
Decisions and choices
1. Telco. I don’t have any data or influence over the Telco RFP but if we follow the
context above they will likely games play around the process in the belief that we will
back off. If we don’t back off or we decide to sell anyway, then one way or another we
do exit them.
2. Playing out the H contract to 2023 seems, on the face of it, a potentially horrendous
decision for the reasons below — so are we in fact bluffing?
- We don’t know how core H really works
- We don’t have a plan to get off it
- We would have to pay double costs to create the new before we can reduce the
commitment on the old — which is entirely unaffordable
So is there in fact a set of IT requirements (on the cloud and out of Belfast, joining up
the digital and store IT journeys, giving us access to more and better data, having a
future for the core H back end etc) that we want to deliver? And are they actually the
best people to deliver it? Should we in fact sign a new 10 year agreement with a
reducing cost base which delivers these changes and retain them? If we are going to
have this conversation with them, surely the sooner the better — the nearer we get to
2023, the more obvious the bluff? (I know procurement is difficult but we could publish
the decision and invite challenge — no one came forward last time and if they did we
would get more competition on price).
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My sense is that we fail to have honest and open conversations and don’t really understand
where they are game-playing. We think of them as separate beasts and they have a joined up
view of us. We do not understand the conversation and perspectives between UK and Japan.
Questions
Do we (exactly who and when) need to go to Japan and have an open meeting about the
future to see if we can break out of the current set of impasses? If it was Nick and in
November, would that shake them into a new conversation — are the Japanese actually more
interested in strategic relationship vs short term money? Should we wait for clarity on Telco?
Or do we at least need to re-start the relationship build even before we know the questions?
How do we get clarity on the future of H?
Thanks Al
Al Cameron
Chief Financial Officer
20 Finsbury Street
London
EC2Y 9AQ
GRO