The Post Office’s decision to use a commercial off-the-shelf electronic point of sale (Epos) system to replace its problematic Horizon software sees the organisation perform a U-turn after 30 years.
Last week’s announcement that the Post Office is looking for an off-the-shelf Epos system, through a £169m contract, reveals a huge error of judgement in 1996.
Back then, when the project to automate branches was signed off, non-technical Post Office executives rejected calls for an off-the-shelf Epos system to be used – a decision that led to the development and deployment of the Horizon system, which is at the centre of the Post Office scandal.
Make or buy
After British tech company ICL – which was later taken over by Fujitsu – had been chosen as the supplier, a key decision was still to be made about the Epos software: would the Post Office use an established, tried-and-tested package already in the market, or would it build from scratch?
The “make versus buy battle”, as former Post Office executive Rupert Lloyd Thomas described it, went on from March to September 1996. Lloyd Thomas was part of a team pushing for an off-the-shelf package, but they were overruled, and the Post Office opted for a bespoke system that used middleware from Escher, known as Riposte.
Lloyd Thomas spent nearly 30 years at the Post Office, and in his final year, he was involved in choosing a supplier to provide an Epos system to automate branches. “The main issue was, were we going to use some packaged software that had been used elsewhere, or were we going to write one from scratch?”
He said the Post Office had a successful track record in implementing commercial software after its decision to move to SAP financial software. “I fought the good fight when they wanted to replace the ledgers and won by getting SAP implemented. It had a lot of advantages,” he said.
Lloyd Thomas wanted the same approach for the Epos system. “I sat in meeting after meeting, saying, ‘No bespoke, no bespoke, just leave it alone’, because once you start kludging it, you can’t rely on software upgrades coming from the supplier.”
ICL owned a retail system called GlobalStore, which was an option being pushed by Lloyd Thomas and others. “You want to rely on software upgrades from the supplier and install them cleanly. If you kludge the system, you won’t be able to do it,” he said.
The bespoke Horizon system, from Fujitsu, was rolled out in 2000 in a project to automate branch accounting. But subpostmasters using it immediately began experiencing unexplained accounting shortfalls, which they were blamed and punished for. In what is now known as the Post Office Horizon scandal, hundreds were prosecuted, with many jailed and thousands suffering major financial losses through no fault of their own.
Fourth time lucky?
The Post Office’s latest plan to replace Horizon is not its first, but public pressure means it must be its last.
In 2015, the Post Office attempted to transform its IT through a multi-supplier landscape, with IBM taking on the job of replacing Horizon.
By then, Horizon had already been identified as a problem, although the Post Office did not admit this until it was forced to in the High Court years later.
But Post Office directors went crawling back to Fujitsu when the IBM project got complex and ended up paying off the US IT giant, at a cost of millions of pounds, for the work it had completed.
More recently, the Post Office attempted to replace Horizon through its New Branch IT (NBIT) project, which planned to use in-house written software.
But in May last year, the project – which was late, over budget and lacking quality – was labelled as currently unachievable by government auditors.
By October, a source said the Post Office was set to U-turn on the plan and either switch to an off-the-shelf system from a supplier or bring Horizon in-house. Part of the Post Office’s latest plan to move to an off-the-shelf system includes taking ownership of the Horizon system in the interim.
The Post Office’s current leadership sided with the off-the-shelf option in its decision to drop the in-house NBIT software. During his appearance at the Post Office scandal public inquiry in October 2024, Post Office chairman Nigel Railton said the company’s decision to build the NBIT system in-house was one of two reasons the project was “set up to fail”.
Railton told the inquiry: “One was the decision ‘to get off Horizon’, which is different to building a system for the future, and the second was the decision to build in-house.” Echoing Lloyd Thomas, he said there are many “horror stories” of people trying to build systems in-house, adding: “I think, based on my experience, that this was always set up to fail in the first place.”
The Post Office scandal was first exposed by Computer Weekly in 2009, revealing the stories of seven subpostmasters and the problems they suffered due to Horizon accounting software, which led to the most widespread miscarriage of justice in British history (see below timeline of Computer Weekly articles about the scandal since 2009).
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