How to Transform an Antiquated Postal Service Into a Profitable Business Center

The Egypt National Post Organization was providing a necessary service but not making money. Digitization has raised employee engagement and made it profitable.

When Essam El Saghir was appointed CEO and chairman of Egypt National Post Organization in 2016, everything was still being done manually. On his first day, he decided to visit a local post office to see how things worked.

El Saghir recounts how people came to the counter and the employee sitting behind it would lean over to register every letter with a stamp that was attached to a short string around his neck — a repetitive motion that happened countless times per day.

When asked why he didn’t have a longer string to enable him to do the stamping from a more comfortable upright position without having to lean over every letter, the employee explained that was how he had been doing his job for 15 years.

“I knew right then my first task would be to automate everything,” El Saghir recounts with a chuckle. While automation is his area of expertise, he admits feeling a bit daunted. With no financial aid from government, he needed to show that the postal service could turn a profit.

To motivate people to change behaviors that have been entrenched for decades, giving profit to the people is common sense.

Proving His Worth

“We decided that 10 percent of profits would go to the employees of a branch generating revenue,” he says. “Employees were going out on the street to get people to come into the post office.”

In three months, the company increased revenue by E£258 million. Next, El Saghir and his team introduced the idea of cost savings. Again, 10 percent of savings went to the employees of the branch making it happen. “Suddenly, people were turning off lights, saving paper, and turning off their computers at night,” he recalls. After three months, the company saved E£165 million.

With profits made and money saved, El Saghir and his team embarked on the next phase, a massive digital transformation to transform the post from a traditional service provider into a counter-less, paperless, multi-service center providing citizen and financial services.

In any post office branch customers can now pay bills, buy train tickets, and take care of almost any citizen transaction, such as renewing a driver’s license or getting a birth certificate. And since the introduction of a mobile app and kiosks at petrol and train stations, customers can do it all while filling up their car or waiting for the train.

Elite Branch of Egypt National Post
Egypt Post elite branch (Photo via Egypt National Post Organization)

With the help of SAP, Egypt National Post Organization is now introducing a comprehensive e-identity solution so people can access all services from any device.

“We’re enabling undocumented refugees to get their UNICEF aid via eye scan identification,” El Saghir says proudly. “Older people no longer need to struggle with reading or filling out forms. We just need their fingerprint to authorize transactions.”

Today, Egypt’s national postal service has 55,000 employees and more than 23 million customers. It is also the country’s largest financial services institution, with approximately 4,000 branches. It operates in the most remote rural areas, bringing sorely needed financial services to the 84 percent of Egypt’s population of 100 million who are still unbanked.

The Best Is Yet to Come at Egypt National Post

With the groundwork completed, El Saghir can now focus on truly revolutionary changes. His next project is to create a marketplace, built on an SAP platform, where small and micro-sized business can place their products free of charge.

It makes total sense to leverage Egypt’s unique location at the crossroads of Europe, the Middle East, and Africa.

“We want to enable our customers to trade locally or internationally through our new ecommerce services,” he says. “We’re offering them new ways to do business across the world using their Egypt Post debit cards.”

Doing business in the region requires innovative solutions. A real problem is the cost of shipping; it’s more expensive to ship a product than to produce it, and many African nations do not have the right infrastructure for online commerce or parcel delivery. El Saghir’s solution is a hub in the U.S. where 12 nations can consolidate all their parcels into one container, collectively paying for one box only. The container arrives to the second hub in Egypt, where parcels are sorted and shipped to the respective destinations around Africa.

For El Saghir, who was fascinated by details and processes as a child and spent most of his early career outside of Egypt, the key to success is motivating people to join the journey.

He ponders out loud as he pulls up some photos on his mobile phone: “I was shocked by the lack of motivation, but was I really surprised?” Before Egypt National Post Organization started its transformation endeavor, people were sorting mail in rundown buildings, broken furniture filled the offices and waiting rooms, and there were hardly any chances for raises or promotions.

“You can’t force people to change,” he concludes. “You can only offer them incentives.”

Follow me on Twitter: @magyarj

This article first appeared on the SAP News Center.