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POL00460594
SPM Briefing
May 2024
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POL00460594
Business Context
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POL00460594
What is Horizon?
POL's core trading platform that processes ca.7m transactions daily and £66bn of value annually.
Built in the late 1990s and still operated by Fujitsu, it allows Branches to serve customers, it provides
Branch accounting and cash management functionality, it acts as the foundation for most other back-
office processes, and it serves as the communication tool between POL and its network
Original version of the terminal Upgraded version of the terminal
On-screen interface
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Post Office Products Overview
Mails and parcels (43% of income)
*Sending letters or returning parcels,
is as important ever, particularly
with the rapid rise of online shopping.
“We're continuing to adapt to evolving
‘customer needs e.g, launching ‘Click &
Collect’ services across out network
with new partner carriers like DPD and
‘Amazon.
Cash and banking (28% of income)
“Through our Banking
Framework agreement, customers of
major banks and building societies can
use Post Office to withdraw cash,
deposit cash and cheques, and
obtain balances — making us an
essential alternative to high street
Bill Payments (3% of income)
“We provide bill payment
services across all Post Office
branches and Payzone outlets, with a
‘combined offering of 24,000 outlets
across the UK — covering everything
from utilities through to transport
and ticketing. This is a key footfall
driver.
Transaction Financial Services (7%
of income)
“We offer a variety of Travel Money
& Money Transfer products to
our customers
Government services (3% of
income)
“Accessing benefits, Passports,
DVLA services, UK Visas and
Immigration residency permits
..And many more services to
make everyday life easier - From
building a digital identity online with
our EasyID app, to affordable travel
insurance or foreign currency and
other financial products such as
savings, loans and insurance.
banks ‘What’ we need to deliver for Postmasters
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Post Office Network Overview
Branch Format Ee Typical Loc: ‘Typical Size
Main 3,259 High St, rural, urban and Suburban Large
Local 4,188 I Rural, urban and suburban ‘Small & medium
Directly Managed Branch 113 I City centre, large town centres Large
Traditional 4,772 I Rural ‘Small & medium
Outreach 1,824 I Remote rural Very small
Drop & Collect 616 I Mixed but mainly urban ‘Small, Mails only
Total I 11,772 I (11,186 exe D&C which do not use Horizon)
Deprived Ur
ban Populati
‘on within 4
mile
Rural Popu
lation withi
f
Government
Access Criter
ia>>
Total Populati
on within 3
miles
Total Popul
ation within
4 mile
Urban Popul
ation within
tmile 3 miles
Target 99% 90% 99% 95% 95%
Postcode Districts
less than 95%
Population within 6 miles
+ Branch numbers exclude BFPOs (c.20 overseas) which do operate the same IT system, and Banking Hubs
‘Where’ we need to deliver for Postmasters
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The Scope of Horizon and NBIT
‘Transaction processing and At any time, Branch cash management
customer service averages £342m across the branch
‘Around 170 products & services network. All cash & stock Is owned by
‘supported by around 400 stock items POL and not the Postmaster.
Communications, training and
Enterprise integration e.g. client
help
settlements
11,200 branches nationwide
with >50,000 users
rong 2", 80,000 bits of kit
including 25,000 counters
to complete .
transactions
7 million each day
totalling
£66 billion every year
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SPM Background
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The Case For Change
Horizon has been in place for over three decades and it has not kept pace with technology or POL's
business needs. Main challenges:
Postmaster Core processes are outdated and cause inefficiency / friction / errors in Branch operations. Modernising is
Impact mostly impossible as processes are embedded deep in Horizon's architecture
Commercial Modifying existing products or adding new ones takes considerable time and is costly (e.g. PUDO). This
Impact severely impairs POL's ability to develop and launch new commercial partnerships.
DECC R US Horizon is ‘one-size-fits-all meaning format innovation or integration with Strategic Partners is not possible (e.g
Teen teri aa Drop & Collect, the first version of NBIT, would not have been possible with Horizon)
un’ and Very costly to run (ca. £45m p.a. in FY24/25, likely approaching ca.£65m-£70m in FY27/28) and change, given itis a
TETREMCS HEE dated system and the dependence on Fuljtsu. NBIT is expected to be less costly to run
End of Lift Datacentre infrastructure in Belfast is past its end of Ife and will consume significant investment to keep operating until
ahr ‘we can exit from Horizon. In-branch hardware is also at end of life and needs replacement
Currently only Fujitsu can operate Horizon and they have been actively seeking to exit, with their Board blocking
temporary extensions. Alternative operating structures are higher cost and higher risk
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Programme
Vision
Replace Horizon
with a robust,
resilient and fit-for-
purpose platform that...
Improves the efficiency and usability
of Horizon processes wherever
possible;
Better meets the needs of
Postmasters and strategic partners;
Has a lower cost to operate;
Is cheaper, quicker and easier to
change;
Provides the platform that will
enable Post Office's future
retail transformation.
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Scope
Principles
$
+.
All products sold and serviced on Horizon will be replicated on
NBIT to avoid impact to Postmaster remuneration.
The product scope baseline is 1 April 2024 — Horizon
changes after this date will be considered as a Change Request.
Products offered to customers at the counter (NBIT) or on
a separate mobile platform.
& 5
3 Where delivery costs of products outweigh their economic value,
¥ these will be reviewed by the GE.
Development sequence of products based on live
branch transaction volumes and the % complete of
development.
© _NBIT will be rolled out to POL’s entire branch network.
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What Are Our Key Delivery Principles
Designed with Postmasters, for Postmasters: Postmaster-facing products will
be designed and tested with Postmasters, drawing on the extensive feedback
already provided
Incremental development: incremental technology development and rollout as
opposed to “Big Bang”
Dual run for Post Office, one system for Postmasters: The new system will
run live in parallel with Horizon for a short period of time to de-risk the transition.
Business continuity and minimal disruption to Postmasters : SPMP will ensure
a smooth transition during migration away from Horizon. It will aim to migrate a
branch with minimal disruption to ongoing business activity with access to training
before and during migration.
®O0@
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I
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Strategic Platform Modernisation Programme POAP - May ‘24
SP key os Milestone Pe Rotou/Decom § =>
iRRELEVANT.
Oo Senet aaa)
a
Peart omg
ee ——E———— >
Ponscebenomen Cosi
ee
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a
J ss I Technology Programmatic
hallenges We Have Recently Faced
‘The POHIT inquiry and enhenced reputational exposure relied fo s Horizon replacement system means a higher assurance threshold compared to
previous estimates
‘Surrounding POL Governance and Change Processes have been challenging to navigate
Conceptual Mismatch of Waterfall thinking and Methodology (Above) and Agile Tech Delivery (Below)
‘and Tooling Maturity y he use of dala and intetigence for Ml and reporting
Release 2 was significantly more challenging to deploy than orignaly anticipated, this had an impact cn the confidence of the programme and the business.
slokeholders
‘+ Scale of observed defects — historically we had not been as good at ‘building’ as we needed fo be tithe original timeline
+ Previously unknown functionality thal needs tobe rebull without requirements and business knowledge inside he organisation
‘Tech Delivery Platform (SDLC and CUICD) has historically been sub-optimal in @ numberof ereas. This has contibuted tothe quay of engineering iesues
experienced in Release 2 and also constrains the programme's ably fo buld and deploy in he agile manner required for high velosy/high quality systems
evelopment
31 Party Dependency and Enablement — Even in the curent slate ofthe system development (PUDO & Mails only scope / capably) its highly
interconnected integrated with 3° Party Commercial Pariner Sysioms. The current example being the Royal Mail Group (RM). Live Testing, Integration
‘and detect resolution is highly dependent on integrated system pariners, some of whom are not contigured forthe maturity and agliy required o Keep pace
withthe requests of he programme, This likely to persist in terms of scale as we progress lo deploying banking framework scope and sysiems
[Assurance A signicent body of work has had lobe undertaken fo build an “Assurance Universe’ tha is configured and fi-fr-purpoee fo provide corect
{and sufficient oversight of @ programme ofthis complexity, scale and specifiy. This has been achieved, bul now needs o be implemented
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Current Status
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What Does NBIT Hardware Look Like?
NBIT kit supplied to all Postmasters includes: s
*POS Touchscreen Terminal
+Range of options for installation set up — pole mounted/plate
mounted
“Thermal Receipt Printer
*Small, lightweight can be pole mounted or free-standing
“Thermal Blank Label Printer
*Can be pole mounted or free-standing
*Thermal Monarch's Head Label Printer
*Can be pole mounted or free-standing
+Handheld/stand mounted scanner
*Standard QWERTY keyboard & mouse
+XAC AT150 — Payzone and hosts our D&C* app
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Wave 1 Capabilities by Ownership Area
The below graphic shows the fotol number of capabiies forthe Wave 1 268 8 8
Milestone, Inclusive of tose requied for us to enoble Ontne Banking & deploy
NBIT into & Non-DMB. Total For Online Fora Non-
DMB
1
copctites ] Ea
Pay it eae Capabilities
zm :
— a va
Ea pee I Ea i 7 es a
reeves “ ine “
i i Branch Platform
(Commnorste products Lai sh ad Management Operal
Total = 41 Total = 23
Pay In
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What types of Testing do we do on NBIT?
f”A
F
01 Testing in Engineering Squads
Detects may manifest from errors in code ina spectic component or issues wth component integration during very early development. Our
Engineering Squads test their code as they develop it (Unt Testing") and our Quality Engineers in each Squad execute early functional
and non-functional testing on the area of the NBIT solution they are bulding
02 Release Functional Testing
‘Once our Squads have completed development and testing oftheir components and the solution i uly integrated, our End-to End and
Business Verification test teams execute functional testing of NBIT. Our teams are made up of skiled Testing professionals and
experienced BSC and Branch Reconciliation staf. Testing is conducted both on simulators and real NBIT branch hardware. Testing,
encompasses customer and colleague business scenario testing as well as end-to-end POL Finance and Reconciliation testing
03 Release Non-Functional Testing
(Our Release Non-Functonal Test team also conduct testing ofthe fully integrated solution. Their testing is focused on things like Performance
Testing — how responsive the solution is for colleagues and customers, Operational Acceptance Testing — how the solution can be operated,
monitored and maintained once lve, and Security Testing fo make sure the solution meets POL's securty standards
04 User Acceptance Testing
In User Acceptance Testing, the NBIT programme works with Branch Managers and Postmasters from the wider POL business
to test that the soltion meets requirements and that they can delver on thelr responsiblties to thelr customers and the business using the
solution
05 Live Testing in a Controlled Environment
Despite thorough testing and qualty assurance measures, some defects may go undetected unl the software is used in eal-world scenario.
Curteams carry out a scope of Live Testing (onthe ive network but notin branch) once the software fs deployed to production to make sure
key business process and integrations to our third-party partners work as expected
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Delivery Roadmap
IRRELEVANT
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Branch roll-out Wave Plan
E2E service
readiness testing
Wave 1 Wave 2
+ Will be carried out on 50
Locals that don't offer
Travel Money On
Demand or Government
Services.
Completes migration
for the remaining Locals
that don't offer Travel
Money On Demand or
Government Services.
Migrates all other
Locals and a majority
of Local Plus and
Legacy branches.
Peak mails period is
entered into during
Wave 2, therefore top
mails Local Plus and
Legacy branches are
not scheduled until
Wave 3,
Asmall numberof >
Locals are top malis I
branches and will
therefore be scheduled I
at the beginning of
Wave 2 prior to
mails peak.
Wave 3
Migrates all core
branches and their
associated outreach
services along with the
remaining Local Plus
and Legacy branches
Mains and DMBs will
begin to migrate towards
the end of wave3, these
are predominantly top
bureau branches to
ensure that they avoid
the peak travel period
during Wave 4.
Wave 4
Will migrate branches
with SSKs, Bank Hubs
and the remaining DMBs
and Mains branches.
None of these will be
top bureau branches as
peak travel period takes
place during Wave 4.
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Branch roll-out Wave Plan as of April 24
‘Tineline . IRRELEVANT. i
* ployment ready I O°" capacity capacity capacity capacity a
3 asawek I 2-600 dey 60 a day 60 0 day 60 0 aay Sa
4 50 2,150 3,300 2,400 2,640 108
FA branches 50 3,200 4,500 6,900 9,540
EM ay 0 weeks ” 10 n 10 ° 5
ave-ength 23 22 23 22 2 7
A
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Migration activities
f Cast-and” stock “path clearing activities complete ~ policy/approach for
discrepancies tha
Pre Day0 branch readiness Training assesenent passed
Renediation activities complete
Cash and Stock count complete
No further transactions on Horizon
Immediately prior to cut over
if
‘Deployment team bring the pre staged, configured and patched MBIT Kit with,
at branch ‘then
Access to the branch is gained in line with the pre-arranged local deployment
Deployment team arri’
yO
1a
Ratried out according to the Dayo" installation’ strategy, which specifies the;
terminal switch out sequence
Horizon is removed and NBiT
aaa Qpnortunity..to.xoll back to. Horizon.in.the.event.of installation. issues.
Cash dxaner. steatinn,. eats aehup,. maival-anput of sharing cash. and absck.
system stat fron final Horizon count
as pais Check cash and stock count matches final Horizon count, NBIT initialised with
Confirmation that devices are Devices are registered in the Device Managenent System
operational First time log on to all devices complete
“Pu/BM provides sign off to confirm successful deplaynent of NBiT and readiness,
to move into Hypercare
CEST EEE A renediation action plan to be jointly agreed if minor issues require «
“seen
F Retail Operations Centre wpaate MOM and branen 19 moved into nypercare
Retail Operations Centre informed — ~ on site support provided on day0 until Fostnaster/Branch Manager is
contoxtable
Feedback on deployment sent into the ROC for continuous learning throu;
Customer survey complet
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Rm me mm mo >
2 em mm >
Good morning and thank you all for joining us.
Today we wanted to get you all together to show you how we have responded to your feedback and looked at how we can
improve the way we work together as ONE TEAM
We are all working on what is one of the biggest technology transformation projects in the UK right now
So, it is vital that we have all the building blocks in place to give us the best foundations to build from as we head towards
rollout of the new system
But why make changes now?
Well, we have listened and responded to your feedback from the Excel Away days and we have used this to reshape how we
work.
We are doing this now as it is the right time, the right time for us to simplify our work so we can increase the quality and the
speed of the good work we are doing and put ourselves in the best position to succeed.
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NBIT Hypercare - Calls and
Incidents
Hypercare
ox Performance ~ delay moving through balancing screens and cash
Ladder ~ Inoident raised ~ Resolved via patch release
patch release
So Bost Mail Ttem
Cannot use *-" in address — Wot supported in R2.1 ~ on backlog
to fix
+ Postcode not recognized ~ Incident raised ~ No issue found ~
Being monitored
“Identical itens” prepopulating with previous data ~ Working as
‘Tracked 48 Return OR Code not recognized ~ Barcode Prefix not
jpported of NBET ~ Resolved vis pate releas
i
sSIganeical stems”
ppalating with previous data ~ a5 per
«AEIGEect display of products on pick soreen - Incident raised
= No custoner/E0L/RMG detrinent possible ~ Known Error created
= te be fixed in later release
White Screen moving from Front Office to Back Office - Incident
ip Tesues - FAD Code not configured
Unable to accept cash from CVi
No Mails products available
Receipts show "undefined" as addrese,
* tetdent eatsed - resue Ege TH moe
* known Evtor raised for
R2,1 ~ Advice provided to branches.
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Governance, Risks
and Finances
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Horizon Replacement Costs
(© es sttetnn core
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SPMP Costs by Category
‘ropand Collect
Patform
Product Journey Tech Delvery
Product Journey Design
'NBIT Branch Management
INBIT integration
BIT Enterprise App.
IBMT seehitecture
“Tech Team Management
Identity and Access Management
Data & Reporting
¢ Total
Hardware:
Desloyment and Connectivity
‘Training Panning and Content Development
Network Preaaredness
IRRELEVANT
Deployment Total
Business Change Management
Postmaster Engagement and Communications
Service and Support
Assurance and Testing
Procurement & Sourcing
SPMP Programme + BTU Resources
VAT & SPO Levy
(Other Corts Total
WP otal remaining Development costs -
fm) rota camtning Programe conte fi
Bm rota
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Governance Model
Decsaions
sion off #BhnieallI Design
Authority
Business Design
authority
Programme Pillar Working Groups
Business
Assurance Enablenen I 70"
t
Delivery
Business
Engagement
& Readiness
Program
Support
Steering Comittee ~ Fortnightly, GE sub Comittee (deputy ceo,
(CFO, CRO), SEM Programe Director, strategy Director, HR
‘SPM Program Board - Fortnightly, (alternate cadence with 6B
STEERCO), SPM Programme Director, SEM LT, PMO, Finance,
Procurenent, HR, Legal and Commercial. WS Leads adhoc 48 required.
Workstream Meetings - Nookly
Zweerty —peview 12 Lm
feadence lan Decision progranme Inform P08
Enablers
Procureme 5 ance
at
Legal aR
conmercia
1
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Our Assurance Universe
We have now agreed a broad
range of risks which need to be
assessed as part of our
delivery
This assurance will be
delivered through a combination
on internal and external
expertise
We are currently assessing our
risk appetite for:
* Our 1* pilot in an independent
branch
* The start of our first wave of
branch cutovers
* Our full deployment
Pillars
Governance
Software Delivery
Security
Business Support
‘Transaction Integrity
Retail
Legal & Regulatory Compliance
(tu/Speak up
Data
culture
Finance Integrity
Procurement
Contract Management
Gating & Business
Inquiry Thematic
‘Common issue Judgement
Total
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[> Assurance Workstream Summary Plan
Jan 23° Feb 23° Mar 23 Apr 23 May 23 Jun 23 Jul 23 Aug 23 Sep 23 oct 23. Nov23
Dee 23
A empiione yp 1 crow Aeacanen trator
“Sucks Ba ceopiiance cori sance
SS
1 nee ee x...
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a re
*
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NBIT Demo