Australia Post 'unnecessarily complex' and not 'customer-centric'

28 April 2020 Consultancy.com.au

Australia Post is according to a report by management consultants from PwC “unnecessarily complex” and not “customer-centric”.

The confidential report by the consulting firm looked into the state of Australia Post’s organisation, and found that the company is facing important areas of improvement in how it deals with its customers and how it runs its own operations.

“Business customers are not being adequately served and find Australia Post hard to do business with,” states the report which was commissioned by the company's executive management team. “This has resulted in missed opportunities as customers are not accessing the full range of products and services, and their customer experience is poor,” it further reads.

With a workforce of over 80,000, Australia Post is one of the country’s largest employers, but its organisation is “unnecessarily complex”, in particular due to a large management layer combined with overlapping responsibilities and unclear reporting.Australia Post 'unnecessarily complex' and not 'customer-centric'The consultants also outlined how Australia Post is struggling financially. “Without significant transformation, Australia Post faces a loss of $426 million by 2021.”

Much of the pressure stems from the sliding revenue of its letters business. In 2019, just over 2 billion letters were sent, down 45 per cent since 2008. Meanwhile, the costs made to run the post office network have not been reduced in line with this fall, and as a result the post office network according to PwC loses $130 million each year.

Indeed, in Australia Post’s 2020 half year results press conference, CEO and Managing Director Christine Holgate said, “…the costs to operate the letter business continue to rise, as our people are still required to deliver to every home or business every day, process and collect the mail, whilst letter volumes and revenues fall.”

As a remedy, the consultants suggested slashing letter deliveries to just once a week and replacing full-service post offices with “automated kiosks”. The firm also said big money could be saved by increasing the delivery time for regular letters by three days. However, “the customer impact from such a change would be dramatic”, and therefore it was labeled as a future option for change and not recommended at this time.

Outdated findings?

The report was delivered back in 2018 but obtained by The Sydney Morning Herald just last month, and therefore it is not clear to what extent the main findings still are applicable today.

A spokesperson of Australia Post said that the conclusions of the two-year-old document are now “comprehensively outdated”, and pointed at the large numbers of IT and customer experience transformations which have since been initiated or delivered.

Last year, the Government announced that it has hired Boston Consulting Group to conduct an independent strategic review of Australia Post spanning its strategy, business model and organisation.

According to an analysis by Deloitte, Australia Post is a key enabler of economic inclusivity in the country, supporting 10,800 jobs in rural and remote areas.


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