Major Mail Users Network Luncheon

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Major Mail Users Network Luncheon

• Tuesday 4 March 2008

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Bringing Reality Back to the Mailing House
Industry - A short history - Todays
industry - Where to next?
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Some history
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The industry in the 1990s
Growth, growth, growth
Average annual growth rate for mail was 4.4
(200607 growth was 1). Business growth across
key industries Telcos, Utilities,
Government. Privatisations and IPOs
NRMA, CBA, GIO. Significant growth matched with
new technology and capex.
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A good industry

• World leading skill and innovation.
• But quality was acceptable.
• Large move to outsourcing.
• Distributed processing commenced with full DRP
  capabilities.
• By the mid 1990s
• Zero defect mail
• Laser better quality and speed
• Highlight colour
• New formatting software

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New century, new landscape
The rise of the Procurement Officer and Strategic
Outsourcing. Contact had been with the Managing
Director, CFO, CIO, Marketing Manager now
dealing with the procurement gatekeepers. Focus
shift from value add to price. Introduction
of SLAs/penalties. Aust Post imposes DPID with
Post the only winner.
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Other key changes were taking place

• EBPP electronic, email, internet.
• The industry started to go public
• HPA listed in December 2000
• Salmat listed in December 2002
• QM listed in November 2005
• Increased visibility and scrutiny.
• Public company costs.
• High demand for growth from shareholders.

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Needed new growth

• Diversification
• Moving further into data capture etc
• Enhancing the document lifecycle
• Value adding
• Innovation
• Meanwhile
• Prices kept falling
• Costs kept increasing
• Contracts were tougher
• Salmats BPO profits started falling
• Rationalisation commences due to poor investment
  returns.

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Todays industry
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Clients demanding more

• Worlds Best Practice
• 100 accuracy
• Colour
• 24 hour SLAs
• Disaster recovery
• Compliance
• Penalties
• Extensive reporting
• Workshops
• Free IT
• Free DPID
• Solutions

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Outsource the risk
Stock management Equipment and staffing
issues Statutory/legal requirements Costs Techn
ology challenges Penalties The buck stops here
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resulting in the Australian industry providing

• The best innovation in the world.
• The toughest SLAs.
• The lowest prices in the world.
• Inevitably leading to industry stress
• Permail one of the original Big 4
• HPA better returns elsewhere
• Salmat purchasing HPA
• QM and Computershare
• SEMA?
• GEON?

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Salmats challenge
million
02/03 03/04
04/05 05/06
06/07
Salmat BPO division results 2003-2007
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Industry rationalisation Salmat buys HPA
Question of survival. Costs still increasing
training, suppliers, innovation, electricity,
people. Need to provide returns for
shareholders. Will it lead to price
increases? Australia Post seeking 5 cent (10)
increase for standard letters.
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Where to next?
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The next five years

• Further consolidation
• Offshoring.
• Demise of the traditional small offset printers.
• EDI all business to business documents will
  move electronically.
• Colour TRM, multi-channel.
• EBPP generational.
• All-encompassing solutions, focussing on
  data/workflow.
• The industry needs to reinvest with significant
  capex requirements, i.e. refreshing.

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What will the mailing industry look like?
Two large players. Many boutique
providers. Looking like Salmat and
Computershare. Snaps and Kwik Kopys. Offset
printers.
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What will happen to Post?
Privatisation? IPO? The definition of a
letter Stay as is? Cant and wont. Competitor?
The green issue.
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Salmat of the future One Stop Shop
e Salmat
Kromatag B2B
Client
Colour/TRM
Electronic documents

• Call centres
• Marketing
• Returns hard and soft
• Analysis of returns
• Fulfilment

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Thank you