Australia Post cuts technology project hurdles and costs

In the last three years, Australia Post has managed to reduce the average cost of a technology project by AU$800,000.
Written by Aimee Chanthadavong, Contributor

Three years ago, the average cost of any technology project for Australia Post was AU$2 million, regardless of what was involved -- whether it was responding to customer demand, or fitting out all of its retail stores with Wi-Fi equipment -- according to Sam Chew, Australia Post head of differentiated delivery and portfolio.

Speaking at the Gartner Application Architecture, Development and Integration Summit 2015 earlier this week, Chew said prior to the company overhauling its processes, at any given time there were 150 project managers working on 200 projects. Regardless of how diverse the projects were, each had to go through seven phases, and 109 project artifacts.

"Each project had to go through one way of delivering projects, one way of funding them, and one way of managing and governing them," he said.

"All of those projects would go through the same logic, the same process, same approval, thinking, it'd take weeks, many times months."

Chew said due to the extensive process projects had to go though, it hindered on how fast the company could go to market with a new product.

For example, when the company was looking to launch its mobile app in anticipation of the launch of Apple's iOS 6, Chew said by the time the company had a business case ready for an app, it had already been four weeks after iOS 6 had been launched.

Fast forward three years to today, and now according to Chew, the average size of a technology project has reduced to AU$1.2 million. Additionally, there are only four investment lifecycles and 40 project artifacts.

Chew added Australia Post now has three ways of going about a project instead of one. The first model is using capacity funded investments to help manage a project by setting a budget and deadline.

The second model is taking a unified approach by forcing teams to synchrosie their approach for a single project. Chew said Australia Post opted to use this model when it was launching its digital mailbox, after the company realised there were 140 initial integration points that existed in the project between different teams within IT.

The third model Australia Post has adopted is a sequential approach where the scope of the project is often clear and steps are well communicated. Chew said the company chose to use this approach when the company decided to move its two datacentres into one.

"It was a massive change and massive investment; to get it wrong half way through or realise it spelled disaster, the impact was not something anyone would dream about, so that required coordination with vendors and stakeholders," he said.

Chew said the key to the changing the way Australia Post worked was by adopting leaner thinking and understanding that sometimes smaller meant more nimble.

"We realised practices of 2012 that we knew so well...no longer suits the new challenge we have. The diversity plus expectations of customers are changing, and we need new ways of responding to that. We know the one size fits all approach doesn't respond well to our investments," he said.

Last year, Australia Post was looking at cutting 900 jobs as part of the restructure of the organisation into two entities: its loss-making, government-mandated traditional mail and retail outlet company, and the fast-growing StarTrack parcel service delivery business.

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