The ERP Journey at Canada Post Corporation

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The ERP Journey at Canada Post Corporation

• November 27th, 2006
• Bruno Berube

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Canada Post Profile

• C6.3B organization
• 66.5K employees
• 14M points of call
• 1M businesses

• 10B mail pieces annually
• 22 processing plants
• 24K points of access
• 6K vehicles

Canada Post
Innovapost
Purolator
Intelcom Courrier
Progistix
www.epost.ca
Canada Post International
Assured Logistics
Border Free
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Revenue by Segment
Canada Post Group of Companies
Postal Services 5.165 Billion
Overnight Courier 1.079 Billion
Other 213 Million
Logistics 124 Million
Source 2003 Annual Report Does not include
intersegment elimination of 237M
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Revenue by Market
From anywhere to anyone
Operating Revenues by Market
Advertising
14
Physical
Communications
Distribution
57
18
Publications
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Other 6
Fiscal 2003 Source Annual Report
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Value Proposition

• Why Canada Post undertook the most significant
  change in its history.

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Strategic Priorities
Canada Post will be a world leader in providing
innovative physical and electronic delivery
solutions, creating value for our customers,
employees and all Canadians
Defend Current Business
Grow Competitive Business
Achieve Operational Excellence
Make Our Employees a Competitive Advantage
Enhance Corporate Equity

• Rationalize our network
• Replace volume erosion

• Reduce non-operating costs
• Enhance Commercial Sales capability
• Improve information flow

• Develop e-commerce capability
• Leverage Retail network
• Develop Canada Post International Business
• Grow Distribution business
• Make business customer-responsive

• Energize Human Resources
• Develop flexible relationships with unions

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Postal Challenges

• Declining volumes / adapt to e-commerce
• Changing customer expectations
• Increased competition
• Changing employee demographics
• Deregulation
• Shareholders expectation of profits

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Business Imperative
Canada Post must improve customer satisfaction,
employee satisfaction and be able to consistently
achieve our financial goals. We must realize our
vision

• Canada Post will be a world leader in providing
  innovative physical and electronic delivery
  solutions, creating value for our customers,
  employees and all Canadians.

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Business Issues

• Billing satisfaction is low.
• Customer management capabilities are low.
• Technology infrastructure is outdated and
  complex.
• Change is costly and takes too much time.
• Not focused on process, span of control is narrow.

Employees cannot work effectively in generating
customer value when business processes are
inadequate, not integrated and poorly enabled
with technology.
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Solution
The Business Transformation initiative focused
on addressing the business issues from both a
technical and business process perspective.

• Develop standardized and integrated processes,
  enabled by state of the art technology that
  integrates our employees, business processes and
  technology, while enhancing customer value
• Move from transactional work to problem solving
  and solution development
• Change the work and the culture of the
  organization

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Transformation Priorities
The Business Transformation initiative set out to
focus significant change effort on how people
work, the processes they follow and the
technology they use.
People
Process
Invest in our people with training, new tools,
and coaching.
Re-engineer our processes to be end-to-end,
integrated and efficient.
Technology
Adopt a philosophy of using off the shelf
software with minimal customization.
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Scope

• Complexity, scope, degree of integration of the
  initiative.

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Legacy Application Map
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Integration Applications
eProcurement
Finance
SupplyChainManagement

• Event Management Track and Trace
• eSignature
• Inline cubing

Core R/3
BW
Human Resources
CustomerRelationshipManagement

• Shipping tools
• Online stores
• Telephony

EmployeeSelf Serve
Order to Cash
Postage Meters

• Time and leave

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Our Journey
Launch Shipping tools
Feb. 2002
Business case development
Dec 1999
Launch Business warehouse
April 2002
Developmentbegins
June 2000
Upgrades CRM and eProcurement
Feb. 2003
Launch canadapost.ca
June 2001
Launch Inline cubing
May 2003
Launch O2C eBP
July 2001
Launch Event Manager
Oct. 2003
Launch CRM
Sept. 2001
Launch Payroll and Employee Self Service
Jan. 2004
Launch HR, Finance, Sourcing
Jan. 2002
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Our Journey
Upgrade - BW
Q1 2007
Upgrades - EM
June 2006
Upgrade CRM
Q1 2008
Upgrade R/3, EPB, Portal
Q3 - 2007
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Outcomes

• What has been achieved?

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Methodology / Approach
Canada Post applied the Method R3 methodology,
powered by ASAP for each and every release of
functionality.

• Disciplined successful, repeatable process.
• Complete documentation of requirements, issues
  and decisions.

Industry Skills and Best Practices
Assessment and Planning
Design and Configuration
Deployment
Certified SAP Training, Tools and Techniques
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Business Design Principles
Canada Post empowered the business process
re-engineering design teams to challenge every
business requirement.

• Customer and value driven design approach.
• Use as much standard ERP functionality as
  possible.
• Integration
• Upgradeability
• Stability

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The Re-engineering Process
Every process must add value for the customer,
the employee, or the corporation otherwise, why
do it at all?

• Customer focused
• Process driven
• Competency based
• Self serve
• Measurement and accountability
• Ensure payment for services
• Systems simplification

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Benefits Realized To Date

• 12,000 commercial customers ordering online
• 16,000 commercials customers using Electronic
  Shipping Tools
• 9,700 commercial customers using Manage My
  Accounts online
• 86 of customer inquiries resolved on first point
  of contact
• 46 of customers answered with self-serve IVR
  (used to be 8)
• 1,700 retail outlets ordering inventory online

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Cumulative Investment in BT
500
450
400
350
Millions
300
250
200
150
100
2000
2001
2002
2003
Fiscal Year
Source Annual Report
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Corporate Results
Note 2001 was a 9 month fiscal year. For this
presentation a 12 month equivalent value is used.
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ROI Report, May 2002
CRM approach validated inROI analysis by Hill/
Holliday endorsed by Peppers Rogers
Group (26 ROI - 10 years)
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CRM Excellence Award
illustrate that technology can only be a
powerful enabling force if enterprises are
willing to reshape business processes, behaviors
and incentives to support CRM business
transformation.The accomplishments of Canada
Post demonstrate that enterprises that
successfully evolve to orchestrate and co-create
experiences with their customers reap great
benefits. C. Marcus, Gartner research
director, CRM Strategy and Marketing Gartner
Press Release March 22, 2002

• Vision
• Strategy
• Customer experience
• Organization
• Metrics
• Processes
• Information
• Technology

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Lessons Learned

• Learning from those who have gone before us, and
  sharing with those who will follow.

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Lessons Learned

• An integrated process-based system with a
  customer-focused core.
• Passionate executive leadership.
• Extensive change management and preparation of
  employees.
• Time for integration and stress testing.
• Engaging end users.
• Relationship with process stakeholders.
• Fully integrating any add-on technology.

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Lessons Learned - Transitioning Ownership

• The likelihood of project success improves with a
  structured and comprehensive change management
  approach.

Transfer Knowledge
Transfer Responsibility
Transfer Vision


Moderate Low Low Low Underperform
High High Moderate Moderate As Expected
High High High High Exceeded
Success Compliance Early Stabilization Continuous
Improvement ROI Performance
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Next Steps

• Continuous Improvements Business Model

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Next Steps
Continuous Improvement Business Model
People

• People Managers / HR Professionals
• Employee Self Serve (ESS)
• Manager Self Serve (MSS)
• New tools to perform jobs (SAP)

Process

• Process Owners / Process Managers
• Process Maturity Model
• Six Sigma and Lean techniques for improvement
• Key Performance Indicators
• Key Control Indicators

Technology

• SAP Centre of Excellence / Innovapost
• Continuous Improvements
• SAP Best Practices
• Renewal and Lifecycle

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Next Steps
Canada Post has delivered a new modern
information infrastructure over the past 36
months, while maintaining profitability.

• Canada Post is
• Doing more e-business for commercial customers.
• Realizing a lower total-cost-of-ownership.
• Finding significant value creation opportunities.
• Learning to leverage the process based
  organization.

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SAP Lifecycle Overview
Financial Management
R/3 V4.5
R/3 V4.6c
SAP ERP
Sourcing Management
Retail Service Centre
Order to Cash
Human Resources
Employee Self Serve
Payroll
mySAP CRM
CRM 5.0
CRM,
Contact Case Management
mySAP EBP
EBP 3. X
eProcurement (Catalogue)
mySAP BW
BW 3.X
Operational, management KPI reporting
Balanced Scorecard
eLearning LSO200
eLearning Knowledge Mgt
mySAP SCEM
SCM 4.0
eSignature, Event Mgr
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Why we chose SAP

• Canada Post choose SAP based on functional,
  technical and commercial criteria.
• SAP provides Canada Post with a flexible,
  integrated, e-business and collaborative platform
  to enable enterprise wide Business
  Transformation.
• Other vendors had pieces of what we needed, but
  no one vendor had the range of functionality and
  integration that SAP could provide

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