Parcelforce reveals crucial role of IT change in turning loss into profit

An IT-based streamlining program has helped Parcelforce turn around initial losses of GBP 193m to make a profit of GBP 18m over the past 27 months, Vanessa Leeson, managing director of the delivery company, told the spring meeting of the BCS Elite group.

Following its split from Royal Mail in 1992, Parcelforce embarked on a series of major IT changes to cut costs, improve the delivery rate and reduce its headcount. Leeson told the BCS IT directors group that simplification was key, with every aspect of the organization’s systems subject to rationalization. The network was downsized and the company reduced the total number of systems used from 47 to 21.

A key project was to increase the functionality in the handheld devices used by delivery staff and ensure that they were integrated with the company’s streamlined IT set-up. As part of this, the company introduced a policy for all handhelds, which run bespoke software, to be upgraded every three years.

The IT team also developed a strategy to use simpler systems and make the business more web-focused, said Leeson. It learnt from other organizations along the way, including the military with its “department in a box” mobile system and its satellite technology. This led to a web-enabled parcel tracking system, which lets Parcelforce check that a parcel has arrived at its destination via text messaging. “IT should never be the reason to lose or fail to win business,” said Leeson.

“Parcelforce’s IT team attends high-level meetings when discussing new business projects to ensure they are kept in the loop at all times.”She said success, in the short and long term, relied on having smart processes, a delivery culture, effective governance and good leadership. Leeson identified key lessons for a successful change program:

– Have clear, understandable goals
– Paint a compelling picture of the need to change to staff
– Do not duck bad news
– Create time and space to discuss how people feel
– Being cash poor is good for change
– Have clear priorities
– Balance change and high service and cost reduction
– Rolling talent injection – let everyone know why new people are