Royal Mail Group Delivers Increased Efficiencies in Financial Operations with SAP

The UK’s national postal service deploys SAP solutions to improve financial operations

LondonSAP AG (NYSE: SAP) today announced that Royal Mail Group, incorporating Post Office®, Royal Mail and Parcelforce Worldwide, is in the final stages of implementing SAP software to improve financial operations. Replacing a complex arrangement of legacy systems, Royal Mail has selected SAP Financials and Business Intelligence solutions to improve efficiency across its financial operations – an integral part of a massive modernisation programme incorporating a number of initiatives to restore profitability and improve its customer service across the Group. Working closely with SAP Consulting, implementation partner Deloitte and Royal Mail’s IT service provider, Xansa (LSE:XAN) as part of the Computer Sciences Corporation (NYSE: CSC) led Prism Alliance, Royal Mail has deployed the SAP for Service Providers industry solution set to around 8000 employees across its organisation, including 1400 delivery offices in the UK.

Postal Service providers like Royal Mail have hundreds of thousands of customers, and a wide range of products and services, which lead to long and complicated revenue cycles. Royal Mail delivers 83 million items to 27 million addresses each day; it has over 250,000 business accounts and processes in excess of two million invoices per year. The organisation chose SAP as its standard software package for financials across its entire business because it understood the potential in such solutions to create an efficient business platform with a product it could trust and be confident would be around for the long term.

In improving financial operations with SAP, Royal Mail has already achieved operational savings by reducing inventory holdings, shortening the planning cycle and streamlining its accounts payable processes. It is anticipated that further improvements to customer service and additional cost savings will also be seen across the individual businesses as the platform is exploited.

The implementation of mySAP ERP Financials and the SAP Business Intelligence reporting engines to collect data from local sorting offices has enabled Royal Mail to receive consistent and timely company-wide data, providing head office with uniform, accurate information on the organisation’s operational performance allowing for strategic decision making.

By streamlining billing and supply chain processes, Royal Mail has reduced the cost of processing financial transactions. Royal Mail processes two million invoices per year and the computation of these is a complex and time consuming process. Providing a subscription based system with SAP where customers pay in advance will reduce time and money spent on transactions considerably – a significant number of Royal Mail’s customers have now transferred to this method of payment.

“A large customer base, a wide range of products and services and antiquated systems forced us to assess how we could do things smarter and more effectively. SAP solutions have transformed our financial operations,” said Wendy Powney, Royal Mail’s Enterprise IT Director. “This programme has enabled us to save money, get a clearer picture of how our various business segments are performing and build a flexible platform for future growth.,” added Lee Harris, Royal Mail’s Programme Manager.

Detailed planning and clear objectives have been essential in ensuring a smooth implementation, which has been regarded as extremely successful. A comprehensive training programme was established combining online and classroom based training for all users. A ‘user community’ was established with experts who could immediately identify potential issues during implementation and the project was audited annually to review performance.

“Royal Mail identified its financial operations as an area for improvement and greater efficiency,” said David Langford, SAP UK. “. We are delighted to support them as they restructure to build for an efficient and profitable organization that offers the best service possible to its customers.”