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Post Office signs £16m Fujitsu Horizon hosting extension after cloud migration fails

Horizon is proving hard to kill off...

See also a November 2023 update of this story here with a further £36m extension...

The Post Office is extending a data centre hosting agreement with Fujitsu for the bitterly controversial Horizon Online IT system at the cost of £16.5 million after failing to achieve a planned cloud migration, it has admitted.

The Post Office said April 6 the “program to transfer the services to a new cloud provider created fundamental technical challenges that POL [Post Office Limited] could not economically and technically overcome.”

It added: “The business has taken the decision to pivot back to the Fujitsu provided Horizon Data Centres until the successful transfer of services out of Horizon and into its replacement NBIT (‘New Branch IT’).”

Post Office CEO Nick Read in April 2022 had welcomed government funding of £185 million for investment "which we will principally draw on to transform our branch IT" and said that "by the end of the financial year, we intend to complete the migration from our Belfast data centres to cloud based technology..."

(The Post Office in early 2022 sketched out plans to migrate to AWS and roll out a new IT system incrementally across its 11,600+ branches. In July 2022 it awarded Accenture a £27 million contract for "provision of resources to support the delivery of application development/delivery work for Post Office's Strategic Platform Modernisation Programme (SPMP)" and separately contracted the consultancy for UX work on the system.)

Post Office Horizon extension: No joy on March 2023 hopes

Breaking the news in a contract award notice on April 6, the Post Office said the “Data Centre Operations and Central Network Services have… been extended for an additional period of 1 year from the 1st April 2023.”

“Provision of all Services [for its 1999 Horizon agreement with Fujitsu] were extended in 2021 with the Data Centre Operations and Central Network Services expected to be terminated upon the successful move to the cloud, or to expire naturally on 31st March 2023, whichever occurred earlier” it said in the extension notice.

But the “fundamental technical challenges” have forced the £16 million extension it said.

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The original Fujitsu Post Office contract was "Europe's largest non-military IT contract" when originally signed in 1996 and offered 170 services via a system "capable" of handling 3,500 transactions per second.

The Post Office awarded Fujitsu a £42.5 million Horizon extension in 2021, describing it as a “highly complex, legacy platform, written in outdated versions of software languages” and having an “inflexible monolithic architecture that makes technology change difficult” – but making a series of amendments to its services agreement with Fujitsu, which reflected an anticipation that the Post Office could shift to cloud by 2023.

Those included that “in line with the development and modernisation of the HNG-X [Horizon] system, on-premises hosting and data centre operations services and central network services will not be extended and will expire on 31 March 2023 (to be replaced by a separately procured cloud hosting solution)” and “Post Office's obligation to purchase the services of a standing team of IT developers will also expire on 31 March 2023.”

Horizon IT scandal

The Horizon software system has been at the heart of what has been described as “the biggest miscarriage of justice in British history” – it recorded incorrect figures, contained scores of bugs and defects, and was responsible for recording significant financial shortfalls in hundreds of Post Office branches; shortfalls that saw the Post Office, acting as a private prosecutor, wrongly try hundreds of sub-post masters for theft and false accounting offences.

Many sub-post masters went to prison. Many became bankrupt. One committed suicide. As many as 900 sub-post masters were prosecuted. In 2021 the Court of Appeal quashed the convictions [pdf] of 39 sub-post masters and found that their prosecutions were an abuse of process, holding that the prosecution of sub-post masters by Post Office Limited between 2003 and 2013 was an abuse of process and an “affront to justice”.

The court’s Lord Justice Holroyde, Mr Justice Picken and Mrs Justice Farbey DBE found in an April 2021 judgement that “throughout the relevant period there were significant problems with Horizon…

"POL knew there were serious issues about the reliability of Horizon. It had a clear duty to investigate all reasonable lines of enquiry, to consider disclosure and to make disclosure to the appellants of anything which might reasonably be considered to undermine its case. Yet it does not appear that POL adequately considered or made relevant disclosure of problems with or concerns about Horizon in any of the cases at any point during that period. On the contrary, it consistently asserted that Horizon was robust and reliable…”

Neil Hudgell, who represented 29 of the former sub-postmasters, said the Post Office "has been found to have been an organisation that not only turned a blind eye to the failings in its hugely expensive IT system, but positively promoted a culture of cover-up and subterfuge in the pursuit of reputation and profit. They readily accepted that loss of life, liberty and sanity for many ordinary people as a price worth paying in that pursuit.”

Fujitsu Horizon migration: Platform still throws up bugs

The Post Office in July 2022 awarded Accenture a £27 million contract for "provision of resources to support the delivery of application development/delivery work for Post Office's Strategic Platform Modernisation Programme (SPMP)" and also separately contracted the consultancy for UX work on the Horizon replacement.

It is building the latter in parrallel to the existing IT system and in a 2022 annual report said it secure "clear understanding and Board approval for the roadmap, major milestones, overall business case and overall programme cost to incrementally stand-up a core IT platform that eventually allows for the retirement of Horizon over the next 3-5 years"; unfortunately, as the most recent contract shows, the legacy system continues to be a significant drain on its resources and tough to migrate.

Earlier regular blogs from the Post Office's own IT team on the programme appear to have dried up in 2021 meanwhile, but do suggest that Post Office IT teams continue to have to firefight with the Fujitsu platform, with one October 2021 blog (ostensibly a success story) showcasing how Post Office IT staff still have to resolve system errors and have produced 981 test scripts to help understand user journeys and "make improvements based on actual day to day issues Postmasters face when using Horizon."

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