The ERP Journey at Canada Post Corporation

1. The ERP Journey at Canada Post Corporation November 27th, 2006 Bruno Berube

2. Canada Post Profile C$6.3B organization 66.5K employees 14M points of call 1M businesses 10B mail pieces annually 22 processing plants 24K points of access 6K vehicles

3. Revenue by Segment

4. Revenue by Market

5. Value Proposition Why Canada Post undertook the most significant change in it’s history.

6. Strategic Priorities

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

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

9. 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 Technology infrastructure is outdated and complex.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.

10. Solution 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

11. Transformation Priorities

12. Scope Complexity, scope, degree of integration of the initiative.

13. Legacy Application Map This is a map of our pre – Y2K legacy systems. Key messages: Many, many customized applications (best of breed and custom developed), developed overtime around new product launches and around silo departments and processes. The Y2K system analysis was an eye-opener: legacy systems were numerous, fragmented and overly customized. Clearly what was needed was a long-term solution. With time not on its side, however, the company chose to make the Y2K transition, and then turn its attention to an ERP implementation. Nonetheless, the exercise delivered executive buy-in to the concept of business transformation – a complete overhaul of organizational structure, processes and technology platform.  This is a map of our pre – Y2K legacy systems. Key messages: Many, many customized applications (best of breed and custom developed), developed overtime around new product launches and around silo departments and processes. The Y2K system analysis was an eye-opener: legacy systems were numerous, fragmented and overly customized. Clearly what was needed was a long-term solution. With time not on its side, however, the company chose to make the Y2K transition, and then turn its attention to an ERP implementation. Nonetheless, the exercise delivered executive buy-in to the concept of business transformation – a complete overhaul of organizational structure, processes and technology platform.  

14. Integration Applications Scope: Business Transformation is the largest change initiative in Canada Post’s history. Implementation has involved a two-year journey of process design, deployment and system stabilization, and on-going support with a team of Canada Post employees. Process re-design incorporated four major process areas: Order to Cash, Procurement and Sourcing management, Human Resources management, and Financial management (Figure 2).   From the outset, and in recognition of lessons learned through the Y2K conversion, Canada Post sought an integrated systems solution, rather than a series of best-of-breed solutions – recognizing that its mess of legacy systems had originated (with the best of intentions in years past) as best-of-breed decisions. The business case identified 67 legacy systems to be replaced; once design was under way, more opportunities (including many non-production, local solutions) became apparent. When complete, at least 83 legacy systems will have been replaced. Scope: Business Transformation is the largest change initiative in Canada Post’s history. Implementation has involved a two-year journey of process design, deployment and system stabilization, and on-going support with a team of Canada Post employees. Process re-design incorporated four major process areas: Order to Cash, Procurement and Sourcing management, Human Resources management, and Financial management (Figure 2).   From the outset, and in recognition of lessons learned through the Y2K conversion, Canada Post sought an integrated systems solution, rather than a series of best-of-breed solutions – recognizing that its mess of legacy systems had originated (with the best of intentions in years past) as best-of-breed decisions. The business case identified 67 legacy systems to be replaced; once design was under way, more opportunities (including many non-production, local solutions) became apparent. When complete, at least 83 legacy systems will have been replaced.

15. Our Journey

16. Our Journey

17. Outcomes What has been achieved?

18. Methodology / Approach Disciplined successful, repeatable process. Complete documentation of requirements, issues and decisions. Utilized a 3-phased approach to business transformation using SAP that sets out tasks, deliverables and job aids for process, change management and Technology. Utilized a 3-phased approach to business transformation using SAP that sets out tasks, deliverables and job aids for process, change management and Technology.

19. Business Design Principles

20. The Re-engineering Process

21. 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

22. Cumulative Investment in BT

23. Corporate Results

24. ROI Report, May 2002 Message is: Benefits tracking towards full realization Timing is delayedMessage is: Benefits tracking towards full realization Timing is delayed

25. CRM Excellence Award The mySAP CRM implementation strongly supports the way Canada Post wants to operate as a company, emphasizing operating efficiencies while not losing sight of customer needs. Canada Post was proud to have this approach validated when the organization was selected for the prestigious 2002 Gartner Award of Excellence in Customer Relationship Management. The mySAP CRM implementation strongly supports the way Canada Post wants to operate as a company, emphasizing operating efficiencies while not losing sight of customer needs. Canada Post was proud to have this approach validated when the organization was selected for the prestigious 2002 Gartner Award of Excellence in Customer Relationship Management.

26. Lessons Learned Learning from those who have gone before us, and sharing with those who will follow.

27. 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. Lessons Learned The team led by Cal Hart, vice-president, Business Transformation, is now widely sought to share their knowledge of large-scale technology integration with public- and private sector organizations, including other postal administrations from around the globe.   Key learnings include the importance of: An integrated process-based system with a customer-focused core Passionate executive leadership – Cal Hart, Vice President of Business Transformation, manages a team of 400 people and reports directly to the President and CEO, André Ouellet. Weekly executive steering committees have been essential to maintaining executive focus and driving the change throughout the business. Extensive change-management and preparation of employees for process-change as well as technology change: “communicate, communicate, communicate” Building in adequate time for integration and stress testing. Engaging end users in the testing and training. Maintain a good relationship with process stakeholders through regularly scheduled meetings; identify and resolve issues together. Fully integrating any ‘add-on’ technology projects (such as telephony), and defining a joint stress-testing strategy.Lessons Learned The team led by Cal Hart, vice-president, Business Transformation, is now widely sought to share their knowledge of large-scale technology integration with public- and private sector organizations, including other postal administrations from around the globe.   Key learnings include the importance of: An integrated process-based system with a customer-focused core Passionate executive leadership – Cal Hart, Vice President of Business Transformation, manages a team of 400 people and reports directly to the President and CEO, André Ouellet. Weekly executive steering committees have been essential to maintaining executive focus and driving the change throughout the business. Extensive change-management and preparation of employees for process-change as well as technology change: “communicate, communicate, communicate” Building in adequate time for integration and stress testing. Engaging end users in the testing and training. Maintain a good relationship with process stakeholders through regularly scheduled meetings; identify and resolve issues together. Fully integrating any ‘add-on’ technology projects (such as telephony), and defining a joint stress-testing strategy.

28. Lessons Learned - Transitioning Ownership The likelihood of project success improves with a structured and comprehensive change management approach.

29. Next Steps Continuous Improvements Business Model

30. Next Steps This is a list of barriers that impact sales /and or customers., and the ways that the BT/ERP project will improve them.This is a list of barriers that impact sales /and or customers., and the ways that the BT/ERP project will improve them.

31. Next Steps This is a list of barriers that impact sales /and or customers., and the ways that the BT/ERP project will improve them.This is a list of barriers that impact sales /and or customers., and the ways that the BT/ERP project will improve them.

32. SAP Lifecycle Overview

33. 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