1.  INTRODUCTION

  1.1  NCR Corporation participates in the $514 billion Information Technology (IT) industry. In October 1993, NCR announced its strategy to compete in the $201 billion Customer Information Solutions (CIS) niche of the IT marketplace by providing "Customer Focused Solutions". We define these as "information technology systems that create, capture, store, access/retrieve, update, and analyse customer information files, as well as the software, hardware, networks, and support and professional services used in the implementation, maintenance, upgrading, and enhancement of these systems." These systems enable our customers to get, move, and use information about their customers and prospective customers in their key business decisions. Customer information includes data about the characteristics, buying patterns, preferences, and requirements of our customers' prospects and customers.

  1.2  Financial Systems Group (FSG) focuses on making financial services institutions more competitive by building a stronger relationship between the institutions and their customers.

  1.3  Accordingly, FSG's longer term strategy is to transform itself from an organisation that is product-led with ATM's and item processing equipment to a solutions and applications-led proposition and ultimately to a full service provider.

1.4  FSG's Relationship to NCR Corporation

  FSG's products and services account for approximately 13 per cent of NCR's total sales.

  1.5  FSG's Charter is to:

—  Develop and market transaction intensive financial services systems and products;

—  Lead NCR's effort in providing total solutions to the Financial Services Industry by leveraging all of NCR's computer products, professional services and support services;

—  Position FSG as "Creating the Markets of Tomorrow" through thought leadership, business understanding, innovation and technology leadership and partnering with customers and strategic alliance partners.

  1.6  Our vision is to be a valued and compelling long-term partner of major Financial Services institutions around the world, improving the profits and competitive advantage of these institutions by helping them better understand and serve customers.

  1.7  FSG has recently organised around four groupings; Self-Service Solutions, Payment Solutions, Consumer Delivery Solutions and Consumer Management Solutions. The key product lines we manufacture include:

—  Self-Service Terminal (SST), NCR is the world leader in the shipment and installation of Self-Service Terminals;

—  Image and Payment Systems;

—  Consumer Delivery Solutions (CDS); and

—  Data Warehousing Solutions (DWS).

1.8  Identifying Our Target Markets

  FSG participates in the $69 billion Financial Information Technology (IT) market that accounts for 13 per cent of the Total IT market. The Financial IT market is segmented as; Securities (16 per cent), Insurance (25 per cent), Retail Banking (25 per cent) and Other Banking (30 per cent).

  1.9  Our primary market focus is dominated by large financial services institutions throughout the world. Consumer (Retail) Banking products and services, the primary market, is projected to grow from $9.4 billion in 1996 to $17.2 billion in 1999. The forecast is that this growth will be primarily driven by the Consumer Delivery Solutions segment. Data Warehousing Solutions is the second largest growth area, increasing from $3.1 billion in 1996 to $4.1 billion in 1999.

  1.10  In support of our vision, the following key programs support the FSG Business Programs Model:

—  Automated Teller Machines;

—  Non Cash and New Business Transactions;

—  The Automated Branch;

—  Integrated Channel Manager;

—  Item Processing;

—  Payment Systems;

—  Consumer Delivery;

—  Relationship Management Solutions.

  1.11  The opportunity for these replicable offerings exist for our current and emerging markets and we can increase our return on investments by more fully utilising partners and new channels.

  1.12  To fulfil our indirect marketing strategy, we target Channel Partners to sell NCR products and services to non-target NCR customers, both inside and outside our targeted industry segments.

  1.13  NCR FSG has two main development sites, one based in Dundee Scotland and the second in Waterloo Canada along with numerous field based development sites around the world. In addition to the development sites focused on work directly applicable to the financial industry the world-wide development sites for NCR's computer (California, USA) and retail (Atlanta, USA) businesses also supply expertise as applicable.

2.  SUMMARY

  2.1  In respect to the specific area's of interest expressed by the committee NCR Financial Solutions Group Ltd has some relevant input into two, which are Intellectual Property Rights and The Role of the EPSRC. We have however provided an outline as to our advanced development processes as this may give useful insight into how large technology development organisations work.

  2.2  In the area of intellectual property and patents NCR as a whole is very aware of the importance of good patent coverage for its innovation. All developments are reviewed in detail prior to public disclosure to ensure that all new intellectual property is adequately covered. Most patents are filed in all major area's of the world. NCR also runs an employee recognition scheme to encourage as many people as possible to submit idea's for filing.

  2.3  Within the UK operations FSG is involved with a small number of projects that attract EPSRC funding. The primary academic organisation that FSG is working with is The University of Dundee through the NCR Advanced Mechatronics Research Centre based within that institution.

3.  NCR FSG ADVANCED DEVELOPMENT PROCESS

  3.1  In order to ensure that optimum efficiency in Advanced Development spending all activities are controlled by a Divisional body known as the Technology Advisory Board.

  3.2  The following defines the process steps, inputs and outputs for the activities to be conducted by the FSG Advanced Technology Advisory Board.

  3.3  The Board's focus is to advise on:

Setting of FSG's Advanced Technology Strategy

Distribution of the Advanced Technology funding among the strategically significant areas

Evaluation of Advanced Technology Project Proposals

Review and Guidance of Advanced Technology Projects on a Regular basis.

  Proposed projects have to go through a Selection Process.

  3.4  This process takes as its primary input a Project Proposal which can originate from a number of sources collectively known as the Project Proposer. The project proposer is most likely but not exclusively to be from one of the following sources:

FSG Advanced Technology Team

FSG BSG Engineering Group

FSG Marketing Group

Academic Institution—Directed Call

Academic Institution—Fee Submission

NCR Customer via Knowledge Lab

NCR Customer via CFT

Knowledge Lab Research Associate

FSG Advanced Technology Group.

  3.5  The project proposal is submitted to a central administration location for recording and distribution to the Technical Review Group (TRG). The Technical Review Group is made up of the Senior Consultants in the Advanced Technology Group and the CTO of the Advanced Technology Group. The Technical Review Group will be responsible for evaluating all proposals (initial and detailed) on their technical content, feasibility and costing. Any proposals that are rejected by the TRG can be submitted to the Advisory Board directly by the proposer, but extra information will be required to indicate why the TRG's decision was not correct. Only proposals that have been reviewed by the TRG will be accepted by the Advisory Board for review.

  3.6  The Advisory Board will be Chaired by the CTO, Advanced Technology Group with its members being drawn from the Senior Management in the Technology and Marketing areas of the Financial Solutions Group.

  The Board has three top level processes:

1.  Definition Of Technology Strategy

2.  Project Selection

3.  Project Review.

  3.7  The board will meet quarterly to review the current AT Strategy, new project proposals and the status of currently running projects. These meetings will be lead by a competent facilitator. All relevant comments and decisions will be recorded and stored in the project archive.

4 November 1998