Fujitsu:How a Japanese organization have become a part of the Post Office scandal

Japanese organization Fujitsu is on the coronary heart of the Post Office’s ITscandal. More than seven hundred Post Office department managers had been convicted while faultyaccounting software program made it appearance as aleven though cash had long gone lacking from theirsites. That software program, named Horizon, were advanced through Fujitsu.


As the general public inquiry into thescandal maintains, Fujitsu’s prison representatives will make their openingstatements on Friday. So how did a Japanese corporation, usually recognized to Britsas a maker of laptops, emerge as embroiled in one of the maximum widespreadmiscarriages of justice in UK prison history?

It can be hard to accept as true with, however in Fujitsu’s domestic market,hardly ever anybody has heard of the Horizon scandal.

“Horizon? What’s Horizon?” changed into the response of aformer corporation president in Tokyo while the BBC requested him approximately it.

This is someone who labored on the organization for almost 4 decades.

The cutting-edge president, Takahito Tokita, has grew to become down ourmore than one interview requests, even if I requested for a written remark he maydesire to make to the sufferers whose lives had been grew to become upside down.

The Horizon scandal noticed a few sub-postmasters try to plugmassive shortfalls with their personal cash, after IT mistakes made it seem likeheaps of kilos had been lacking. Some even remortgaged their homes.

Hundreds ended up with crook convictions for fake accountingand theft, and a few went to prison. Many had been financially ruined and havedefined being refrained from through their communities. Some have on account that died.

The declaration in Japan has again and again been that that is a matterthat its UK subsidiary is handling.

Toapprehend Fujitsu’s position, let’s pass lower back to its takeover of the British organizationInternational Computers Limited (ICL) – which advanced the Horizon software program -withinside the 1990s.

·        Post Office and Fujitsu to faceinquiry questions

·        Why had been masses ofsub-postmasters prosecuted?

The dating among ICL and Fujitsu is going lower back decades, andthe methods wherein each function are pretty similar.

In the Seventies, the Japanese authorities changed into looking to counter thedominance of America’s IBM, and furnished 57bn yen of monetary assist to 3massive generation alliances, certainly considered one among which changed into Fujitsu.

In the United Kingdom, the Wilson authorities changed into doing simply that through formingICL.

With the would possibly of the authorities in the back of them, Japanese corporationswent on a purchasing spree withinside the 1980s, advocated through the beneficial exchangerate.

That is while ICL changed into having monetary problems at domestic. It heldnumerous UK authorities contracts because the authorities had a coverage that everypc over a positive length changed into sold from the corporation. But the organization changed intosuffering to hold up with its worldwide competitors, and through 1981 it hadlost £18.7m,

Fujitsu and ICL had been a really perfect match. The takeover allowedFujitsu to have an oversized presence withinside the UK as ICL’s robust ties to theauthorities regularly intended that it changed into the best bidder for authorities contracts.

Previous issues

Even after the Horizon scandal, its merchandise are deeplyentrenched withinside the authorities’s IT infrastructure. To a few MPs’ fury, thecorporation changed into nevertheless triumphing new authorities contracts as these days as thisSeptember and it’s far the 1/3 largest IT dealer to the United Kingdom authorities, in keeping with the procurement analysts Tussell.

Since 2013, the United Kingdom authorities has provided Fujitsu contractsreally well worth greater than £3.7bn, including:

·        £1bn with HMRC

·        £572m with the Ministry of Defence

·        £487m with the Home Office

And this is in spite of Horizon now no longer being the firstFujitsu-advanced software program that has created issues for the United Kingdom authorities.

In 1999, the organization gained a £184m agreement to increase Libra – asoftware program intended to standardise case control transactions throughout greater than 300magistrates’ courts.

In the end, it value almost 3 instances greater than expected, andthe National Audit Office (NAO) concluded that it changed into now no longer capable of produce evenprimary monetary information.

Horizon changed into mounted on the Post Office across the equal time.But its flaws had been already recognized through then as it could not fulfil thenecessities of its unique mission, an automatic device for advantages paymentsintroduced in 1994.

“Horizon changed into offloaded to the Post Office to try and salvagesome thing from the failed scheme,” says IT journalist Tony Collins who hasprotected the enterprise for many years.

·        ‘Why am I nevertheless preventing toclean my name?’

·        Post Office scandal ruinedlives, inquiry hears

Then, there has been an NHS lawsuit. Fujitsu changed into certainly considered one among 4corporations tasked with digitising the NHS in 2004.

But after repeated delays and failure to supply the promisedproduct, the NHS terminated its agreement with Fujitsu in 2008. The Japanesecorporation sued and gained the case in 2014, which value the United Kingdom authorities £700m.

Some accept as true with the authorities can be reluctant to have interaction inany other lengthy and doubtlessly pricey prison battle.

Inaddition, Mr Collins says the authorities is not in a hurry to cast off Fujitsudue to the fact “it’s far an fundamental IT dealer”.

“Its mainframes were used for many years at HM Revenueand Customs and the biggest branch of all, the Department for Work andPensions, were quite reliant on Fujitsu equipment,” he says.

The authorities has showed that Fujitsu is not on a fewauthorized dealer lists, however stays a strategic dealer and might nevertheless competefor and win authorities contracts.

Troubles at domestic


Fujitsu’s software program isn’t with out controversy at domestic.

In 2002, Fujitsu and different tech corporations got here beneathneath hearthplace for system faults on the ATMs of certainly considered one amongthe country’s important banks, Mizuho, with issues neverthelessbeing pronounced as these days as ultimate year.

Fujitsu changed into additionally blamed in 2005 for a $300m buying and selling loss while itssoftware program, mounted on the Tokyo Stock Exchange (TSE), changed into not able to cancel anwrong order. The TSE and the securities organization worried foughta decade-lengthy prison battle, with the courtroom docket in the end ruling in 2015 thatFujitsu as a software program developer wasn’t legally liable, and that the TSE mustpay the securities organization.

Fujitsu’s critics blamethe enterprise’s commercial enterprise model.

“They do not like tohave a software program engineer as a full-time employee,” says Satoshi Nakajima,who labored at Japan’s telecoms massive NTT earlier than turning into one of thefoundational individuals of Microsoft.

In a rustic wherecorporations have historically practised the lifelong employment device, theydecide upon now no longer to rent engineers for person initiatives and allow them to pass as they dowithinside the US.

That approach hiringfull-time software program engineers – who increase code – will become high-priced once they areamong initiatives. Instead, they outsource to more than one layers of externalcompanies.

But the ones companies regularlycan not come up with the money for to rent pinnacle engineers – like Fujitsu can – and this exercise hasbeen blamed for the fine in their merchandise. Vendors additionally generally tend to recognition beston unmarried elements of a mission, and regularly can not be held responsible formission failures.

As a graduate of theprestigious Tokyo University, 31-year-antique Junpei Ikegami joined Fujitsu in 2015as a device engineer – who’s chargeable for constructing and keeping pcnetworks – due to the fact he thought “it changed into at the leading edge of the latestgeneration”.

“But as soon as I joined,I realised that the structures they use are historical and they are nevertheless looking topreserve the antique structures,” he says.

Mr Ikegami felt hecould not develop so left Fujitsu to sign up for a start-up.

But in spite of a few insects andscandals, Fujitsu maintains to play a main position withinside the public and privatesectors.

“Their uniquegain is the connection with the authorities,” says Mr Nakajima,regarding the corporation’s ties because the Seventies however additionally the way it nevertheless wins bigauthorities contacts.

“That’s why theynevertheless exist. Without that, they are now no longer aggressive at all. If that is a reallyopen loose market, then they need to were removed 10 to twenty yearsago.”

But amid developing callsfor governments to encompass smaller, greater agile corporations over establishedgiants, authorities attitudes can be changing.

When I requested thecountry’s former virtual minister, Karen Makishima, who will win contracts inJapan’s push to digitalise its economy, she again and again emphasized the developingposition start-ups will play.

As Fujitsu comes beneathneaththe highlight withinside the UK, it stays to be visible if their British subsidiary toowill lose the choice of the authorities it as soon as enjoyed.

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