Royal Mail seeks suppliers for £750m IT transformation plan

31 Jul 2009 View Comments
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Royal Mail wants to establish a plan for its business and technology transformation

Royal Mail is looking for suppliers to help its business and technology transformation under deals that could be worth up to £750m.

According to a contract notice issued by the firm, the plan is to establish a framework for the provision of business and technology transformation and execution services.

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Suppliers are required under three separate agreements – expected to last for five years – which will include systems design, build and implementation, as well as the support and hosting of the postal service’s software applications.

Modernisation has become the watchword at Royal Mail. Earlier this year, postal service minister Pat McFadden admitted the company faced the choice to “modernise or decline”, as business volumes drop due to the shift from traditional mail to email and text messaging.

“Given Royal Mail’s falling revenues and limited profits over the next few years, and pensions fund deficit, clearly Royal Mail will not be able to fund this investment alone,” said McFadden.

“Additional capital will be required and this could be hundreds of millions of pounds, in addition to the funding we have already provided. And as well as capital, there is a need to transform Royal Mail to preserve the universal service which is at the heart of our postal system.”

The modernisation aim was also highlighted by the firm’s chief information officer Robin Dargue, when Computing reported on the £1.2bn IT-led transformation in April last year.

“I am always wary of someone who is neither frightened nor scarred. So I would say that I am frightened and bring with me scars to undertake what is a colossal challenge,” Dargue said at the time.

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