Australia Post flourishing in E-environment

In the late 1990s, many IT gurus eagerly consigned Australia Post to the dustbin. A warhorse of the old economy, the government-owned monopoly couldn't possibly compete with e-mail, electronic fulfilment and private high-tech mailing houses. Or so went the gurus' mantra.

Within a few years its core business would wither and die; outlets would shut down and the gleaming, paperless world of private electronic delivery would stand supreme.

Far from imploding, Australia Post, which was incorporated in 1989, has flourished as a direct result of the opportunities presented by the Internet.

In the past 12 years, Australia Post has increased its pre-tax profits six-fold, with the

2000-2001 annual report showing a record net profit of $274.5 million compared with $259.5 million previously. That was achieved while maintaining a 10-year domestic stamp price freeze, at 45 cents, and absorbing GST costs. In 1990, its proportion of wages to revenue was 67 per cent. It is now 44 per cent.

The emergence of e-mail hardly dented Australia Post's core duty – the dispatch of parcels and letters. On the contrary, the arrival of the Internet has created many more opportunities than it has shut down, and Australia Post's new Web-based services have more than compensated for the negligible decline in snail mail.

Managing director Graeme John said recently that Australia Post now relies on its core mailing service, over which it retains a government-decreed monopoly, for just 15 per cent of its annual profits.

"The whole wave of technology, which was supposed to be obliterating postal services, has created opportunities for us," John says.

Indeed, Australia Post offers a swathe of new services to prop up its revenues. Customers can now order travellers' cheques online, purchase mobile phone useage electronically, pay bills online and track parcel deliveries via the Internet through

Australia Post.

In six months, Australia Post has introduced trial schemes for business banking, regional

financial services and electronic procurement.

While the queues at the front counter may be the same, the evidence suggests that Australia Post has quietly become one of the standard-bearers of e-commerce and electronic business in Australia.

It has earned this accolade, says Shane Morris, group manager, business planning and

development, who also leads Australia Post's e-commerce strategy, "by doing things gradually. Our view is that e-commerce is just an integral part of our total business".

It's easier said than done. Australia Post is bent on harnessing the communicative power of the Internet with the personal touch of the branch office. In so doing it has transformed itself, the company argues, into a modern, high-tech service as advanced as any in the world.

"Only Finland has a more advanced postal service than us, I think. We're certainly in the front rank in terms of technology," Morris says.

Morris' mission is to bring the postal service right to your home computer screen. He is determined to make Australia Post "a natural player behind the delivery of the products of

e-commerce".

It is building the systems to supply the warehousing, tracking, delivery and storage needs of e-commerce, a seamless factory-to-home dispatch service.

Australia Post's website – www.auspost.com.au – offers an ever-growing smorgasbord. The most recent innovations, launched last October-November, are still under trial.

This includes the online parcel tracking service and electronic bill payments. Australia Post has been able to pay bills electronically "for many years before it was called e-commerce," Morris says. But late last year, 3000 branches were linked via the Web to any approved payee in Australia. In 2000-2001, Australia Post lifted its share of the over-the-counter bill paying market to 48 per cent, up 4 per cent, making it by far the largest processor of domestic and business bills.

In another trial launched at the end of 2001, 250 outlets are offering customers an Amex travellers' cheque ordering facility. The service, soon to be extended to 3000 branches,

allows customers to order the cheques and pick them up the next day at their local post

office.

"This is a good example of our strategy of gluing together physical outlets with our e-commerce capacity," Morris says.

Australia Post has also just teamed up with Optus to offer a cardless mobile re-charge service where extra time can be instantly logged on at the local post office. The new facility will soon be extended to Telstra phones and eventually all mobile networks in Australia. "Our aim is to totally replace recharge cards for mobile phones," Morris says.

And there are the online business solutions. A new service, Post eDeliver, is a technical platform that facilitates the flow of data between merchants' websites and Australia Post's back-end systems, removing the need for data entry and providing the ability to track the progress of the order. It provides warehousing, inventory management, pick, pack, dispatch and delivery, assisting companies to minimise investment costs while raising revenue. As soon as a customer's order details are accepted, data flows continually through to Post's warehouse management and delivery systems.

While the organisation may be going strongly into e-business, Australia Post isn't following the banks' lead into a branchless future. Ironically, its huge branch network is seen as a strength.

In fact, if anything, Australia Post has usurped the role of the bank branch, particularly in

regional areas. Already, 113 rural outlets are offering online business banking, in conjunction with the NAB and Commonwealth, a service to be extended to all post office branches by the end of the year.

Meanwhile, it hopes to provide electronic procurement services, following its purchase of corProcure in January.

This is Australia's only functioning business-to-business electronic market, a website on which suppliers of various commercial products tender for new business. The initiative of 14 giant companies, corProcure was supposed to grow into a vast online exchange. Suppliers of everything from paper clips and print cartridges to hotel rooms and travel insurance, were meant to outbid each other for contracts with Australia's largest companies.

It didn't work. Rival exchanges, costs, uncertainty and the tech wreck, ruined its chances of success.

For now, corProcure serves only the supply needs of its parent. In time, it will be

rolled out as a general procurement site.