Business IT boosts Royal Mail profits

Royal Mail says new technology systems have played a major role in modernising operations and reviving its fortunes.

The organisation, which earlier this month posted record annual profits of £537m, says that recently-installed ebusiness, enterprise resource planning and business intelligence systems have helped turn daily losses of £1m into earnings of £2m.

Royal Mail now plans to build on the benefits that IT has delivered by introducing a new sales order processing system to streamline communications with key business customers.

'IT has had a very large contribution to the overall bottom line in many ways. It's been a major component of the change,' said Wendy Powney, Royal Mail's enterprise IT director.

'BlackBerry devices have helped to improve decision-making among our top executives, and we are looking at providing more services through our ebusiness web sites,' she said.

Crucial to the modernisation project has been the use of SAP financial and business intelligence software by 8,000 staff at 1,400 delivery offices.

The SAP system has helped to reduce the time and costs involved in processing the two million invoices that Royal Mail issues to 250,000 business customers each year.

The software, which replaced seven disparate IT systems, has also saved money by reducing inventory holdings, streamlining accounts payable processes, and shortening planning cycles, according to Powney.

'We have been able to align IT investment with business groups. It has been a huge transformation,' she said. 'Before, each part of the business was operating in an isolated way.

Now we can do our end-of-year accounts much more rapidly and we can improve invoicing.'

Royal Mail now plans to streamline communications with business customers by introducing an SAP interface to enable them to electronically communicate how much mail they will post and which services they want to buy.

'At the moment we have very paper-driven processes, and that can cause a lot of errors in the system,' said Powney.

SAP Consulting worked with Deloitte and Royal Mail IT partner Xansa to install the systems.

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