Australia Post slashes consulting and IT contractor spending

Australia Post has paused and ceased a number of large programs as the government-owned corporation seeks to cut costs as part of its Covid-19 response plan. 

As part of its mission to offer “great sender and receiver experiences” to all our stakeholders – customers, partners, community and shareholders – Australia Post is in the middle of large rebuilding operation. The company is among others pivoting parts of its business, tapping into new revenue streams such as parcel delivery, and digitising its back office to cater to today’s customer needs.

This massive change agenda is supported by dozens of consulting firms that provide expertise in topics including strategy, sales & marketing, operations, finance and IT, as well as IT contractors that support the building and roll-out of new systems and applications.

Currently, Australia Post is working with Boston Consulting Group on an independent strategic review of its strategy and business model, while a few years ago, the corporation tapped consultants from PwC to take its organisation and financials under scrutiny. 

Meanwhile, the company at any point in time has more than 300 IT contractors working on its exhaustive digital transformation agenda. Analysis of documents provided to senate reveals that Australia Post last year spent $65 million on IT contractors, with its total bill for external IT consultants amounting to over $500 million in the past six years.

A large part of consultants have now been forced to leave the postal company, confirmed a spokesperson. “In light of current conditions and the uncertainty brought about due to Covid-19, Australia Post has paused or stopped a number of programs.”

The decision was taken by the last month, with the measures to last until “the economic uncertainty comes to an end”. According to sources close to the matter, the decision has impacted a “large number” of the postal corporation’s external workforce.

The news comes shortly after a number of other large organisations announced they have been forced to slash their consulting spend, which typically is regard as discretionary costs for non-strategic work. These include National Australia Bank, Qantas and Rio Tinto. 

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.