South African Post Office: Negotiating the challenges of the Digital Age

The need to remain competitive and efficient has never been more acute for the South African Post Office, as competition from the private sector intensifies, amid a back drop of strike action and lost business.

Part of the challenge is to keep up to date with the latest technological advancements and in December 2013, it was announced that South African Post Office had invested in Escher Group’s RiposteTrEx platform to deliver its eRegistered mail solution following a rigorous tender process. The South African Post Office will, through this platform, provide eRegistered mail services to the country’s more than 51 million citizens.

Escher’s solution, RiposteTrEx is a secure, scalable high performing platform for “digital correspondence”. The RiposteTrEx platform heralds a new phase in the evolution of secure e-services and digital communication.

Pauline Kenna, Director of Digital Services at Escher Group commented at the time:
“We at Escher have focused a lot of time and investment into understanding the rapidly changing communications landscape, and how citizens are looking to be connected in a secure and accessible manner. The whole Escher team is looking forward to delivering RiposteTrEx to the South African Post Office”.
The technology will allow South African Post users including, citizens, Government, Business and SME’s to send e-Registered and confidential mail to secure digital mailboxes, or as registered hybrid letters.

Jhb-international-mail-centre93Such investment is evidence that the state-owned South African Post Office remains resourceful and innovative as it faces up to its challenges – a quality that has seen the organisation roll with the punches throughout the turbulence of the 20th Century.

Of course the history of mail delivery in South Africa dates back many centuries; in Colonial Times mail regularly travelled back and forth to England. In 1953 the first South African stamp, the Cape Triangular stamp, was commissioned and 7 years later the first post boxes were erected in the Cape. The construction of railway lines facilitated the expansion of postal services during the 1860s and by 1875 the Post Office had also diversified its range of services to include savings.

In 1932 the first overseas air-mail service was introduced and in 1940 the Post Office began to offer parcel insurance. By 1967 the organisation had introduced the first mail-sorting machine in Pretoria – which came to fruition following a study started in the Johannesburg office in 1963 to compare the cost of manual and automatic sorting of mail. The mail-sorting machine was commissioned in 1968, and that was also the year when the office was made financially independent.

The Savings aspect of the Post Office was further strengthened when in 1974 it took full responsibility for the Post Office Savings Bank and the National Savings Certificates. This service had previously been run by the Treasury on an agency basis. The computerisation of the Post Office Savings Bank was completed later that same year.
Banking continued to play an important role in the development of the Post Office and in 1982 the business launched Telebank on a trial basis. Today of course, the organisation is responsible for Postbank, which allows customers to withdraw funds from any ATM run by a South African bank.

By 1991 the nation’s postal service was operated by a newly formed company: the South African Post Office Limited. Since that time, we have seen the growth of electronic communications and in 2002, embracing this technology, South African President Thabo Mbeki electronically signed the Electronic Communication and Transaction Act into law. This was the first Act in the world to be signed into law by an electronic signature. The signing was enabled using the Post Office authentication service. The Act defines the Post Office as the “preferred authentication service provider” of identification procedures necessary for the issuing of advanced electronic signatures.

So there is plenty of precedence for the Post Office to not only adapt to changing circumstances, but to positively take benefit from it. That point was emphasized in the South African Post Office’s 2013 Annual Report, in which Dr Hlamalani Manzini, Acting Chairperson wrote:

“Globally, traditional postal services have, for a long time, experienced negative growth largely due to plummeting revenues. Underpinning this trend has been the fact that technology, as a key business driver, has introduced a plethora of substitute products that have exponentially increased the service offering for the customer.

SAPO Annual Report“At no point in history have customers been faced with so many choices – competitive times usually breed innovation and this generally spells good news for customers.
“Customer needs and expectations are ever-evolving with immense demands for secure and convenient electronic services. Ensuring that the SA Post Office remains relevant in a modern-day South Africa will require the organisation to ‘tap into’ this trend and integrate technology and innovation into an improved postal service that guarantees efficiency.
“Charged with the responsibility of improving the interoperability of postal networks; providing technical knowledge and expertise; promoting innovative products and services, and fostering the postal sector’s sustainable development, the Universal Postal Union presented a study in 2011 which revealed that postal services still ‘modestly contribute to overall revenues, 70 per cent of posts worldwide consider them strategically important for the future’.

In line with this trend, the South African market has also changed fundamentally, with shrinking mail volumes impacting our revenue as a group. This impact results from factors such as cost containment by our major customers, changing competition landscape, regulatory landscape and ever-increasing customer sophistication.

“The SA Post Office has a full appreciation of the changes of our macro- and micro-environments and has sought different responses to leverage its competitive edge. Our initiatives aim to ensure profitability, while we simultaneously seek to constantly meet our government mandate of providing an economic opportunity to the people of South Africa. With this in mind, we recently launched our strategic business plan to help us navigate the competitive ‘waters’ with a view primarily to providing relevant customer solutions. Intrinsically, the plan aims to enhance our value proposition by improving our internal efficiencies, while ensuring that we keep abreast of our ever-changing external environment.

“Diversification forms the centrepiece for our strategy, with e-business being our core focal area. The Board of directors and the executive team remain focused on finding key synergies that will catapult the business to new growth heights,” she concluded.