South African Post Office Group: Transforming Financial Systems

With a desire to transform operational efficiency in several core areas, South African Post Office Group chose Accenture to revitalize its existing systems, improve overall financial health and help the company on its journey to high performance.

Established as a public company in 1991, the South African Post Office consists of three separate business units—Mail, Logistics and Financial Services (including Postbank)—with a fourth area called Retail Channel Network to support the three business units. Responsible for their own planning and implementation of information and financial management services, these units were prone to disparate practices and limited consistency in the presentation and communication of information.

Recognizing the need to standardize and upgrade its technology capabilities, the South African Post Office hoped to reduce the time and cost of maintaining multiple systems and eliminate the duplication of effort between the four business units. What is more, the company hoped to achieve greater flexibility and, more crucially, transform its operational capabilities by improving its ability to make decisions on financial and risk management matters.

In short, the South African Post Office’s maxim to its customers—“We deliver, whatever it takes”—was about to prove itself, internally as well as externally.

The South African Post Office chose Accenture because of Accenture’s deep experience in retail, mail and banking industries as well as our market-leading expertise in developing, deploying and managing SAP and other leading enterprise resource planning solutions.

“We wanted to work with a company that not only understood our industry but also could manage the technology and people aspects of this complex integration. Accenture helped us achieve our goals on time and within budget.”—Marietjie Lancaster, Group Executive, Strategy, South African Post Office

Previously engaged on supply chain and customer relationship management strategy projects with the postal agency, Accenture was selected following a competitive tender to improve the South African Post Office’s performance and operational efficiency in several core areas, notably finance, human resources, mail operations, sourcing and real estate asset management functions.

As Accenture research has shown, high performance businesses use IT as an enabler to capture value. During 2007, Accenture successfully developed a common SAP solution that created a standardized technology platform for the South African Post Office and its Courier Freight Group subsidiary to centralize control and improve the overall consistency of processes and operations between the two organizations. The implementation involved replacing the postal company’s core enterprise resource planning systems—at that time, SAP versions 4.5 and 4.7—with SAP ERP 2005 to improve their siloed operations. Accenture works with 20 of the leading global posts and serves more than 96 of the Fortune Global 100 and most of the world’s largest posts. While more than 50 percent of the world’s mail is processed by Accenture developed systems, Accenture has a proven track record helping clients negotiate the change management process that inevitably results from the successful implementation of a wide-ranging and complex solution. What is more, Accenture is the No. 1 provider of SAP services and solutions worldwide with a range of innovative joint solutions with SAP, forged over a 30-year history of collaboration, and excellence in client delivery.

Accenture research among postal entities and global express players in 2009 shows that postal agencies that diversify and focus on profitability and growth are those who outperform their peers and operate as a high-performance business. Such versatility requires skills and the ability to scale fast as these organizations move away from offering traditional mail services. From the earliest stages of the project, Accenture drew on the talents of up to 80 dedicated SAP and/or postal industry experts including professionals with project management skills around data conversion and complex solution architecture. Accenture’s deep skills in estimating and contracting were invaluable in enabling a planning process that ensured up-front buy in from all stakeholders and entailed a commitment of approximately 25,000 person days.

Rather than upgrade its original SAP system, the South African Post Office chose to implement a new system in order to eradicate existing problems. It was an approach that called for key business processes to be reengineered and improved prior to the deployment of the new system implementation.

Led by Accenture, the deployment team opted for a single-phase approach to avoid the cost and disruption of installing core functionality over different phases. In addition, the implementation process was scheduled for the pre-holiday period, one of the busiest operational periods for any post office, which meant that delays were not an option. SAP ERP 2005 functionality was successfully implemented in a single phase.

SAP NetWeaver Business Intelligence, a component of SAP’s NetWeaver integration platform that empowers users through flexible reporting functionality, was implemented in a second phase two months later.

By the end of 2007, the Accenture team had integrated eight SAP modules and implemented 300 reports, interfaces, conversions, extensions, forms and workflows. Approximately 20 million data records were successfully converted from three source legacy systems. In addition, Accenture held 28 courses across South Africa during which more than 1,500 end users were trained on the system.

What is more, the bold approach to change within South African Post Office, coupled with Accenture’s keen implementation skills, was recognized by the Center for Public Service Innovation (which is tasked with encouraging the development of innovative, sustainable and responsive models for improved service delivery) when it was given the center’s “Innovative Enhancements of Internal Systems with Government” award in December 2008.

Removing organizational silos has meant the postal agency’s business units now communicate and collaborate as a single cohesive enterprise. “The results of the project exceeded our expectations,” said Lancaster. “The Accenture team has helped us not only improve our financial reporting but also implement a system that has had a profound and entirely positive impact, directly and indirectly, right across the business.”

Since the launch of the new system, the South African Post Office has recorded measurable improvements in its performance and quality of service delivery across all core business areas, ranging from financial and management accounting to procurement, supply chain management, sales and distribution, human resources and property management.

Vendors and debtors are paid without delay, monthly financial statements are distributed in a timely manner and, more importantly, creditors pay the South African Post Office on time, making a substantial difference to the postal agency’s overall financial health. In a climate of growing economic volatility and with the accent on revenue generation, the South African Post Office is confident that the new financial system will help transform its business operation and support the development and delivery of high quality, cost-effective products and services that are the hallmark of a modern, postal organization focused on high performance.