strategic directions for competitive postal financial services
TRANSCRIPT
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IBM Managed Business Process Services
2010 IBM Corporation
IBM Corporate Service Corps : Kenya Team 1, Sub Team 2
Final ReportStrategic directions for competitive postal financial services
IBM Corporate Services Corps Kenya 2 Subteam 1 Twiga
Eva Aaboe Jensen, John Fredette, Francesco Papetti, William M Ramsden
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2011 IBM Corporation
IBM CSC Team Kenya 2 Subteam 1 TwigaFebruary - March 2011
2
Agenda
Introduction
Summary of projectIssues
Recommendation
Our ApproachInterviews
Global best practices
Analysis & Recommendations
OrganizationMarketing
Partnerships
IT Infrastructure
Skills assessment and improvement
Action Plan
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Introducing the Team
JohnFredette
United States
of America
Marketing Manager Marketing, Go-to-market planning,Advertising and Media
Eva Aaboe
JensenDenmark
Manager, Payment
Systems,
Project Management, Payment services
Francesco
Papetti
Italy
Software Account
Manager
Software sales, Public Sector, Services,
Management
William
Ramsden
United States
of America
Financial Analyst WW Signings & Backlog Consolidation
and Measurements
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2011 IBM Corporation
IBM CSC Team Kenya 2 Subteam 1 TwigaFebruary - March 2011
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IBMs Corporate Service Corps
China
Egypt India
Nigeria
Ghana
Philippines
Romania
S. Africa
Tanzania
Turkey
Vietnam
Malaysia
Brazil
Indonesia
Sri
Lanka
Morocco
Kenya
Russia
Part of IBMs Corporate SocialResponsibility Program
Employee leadership developmentprogram
Launched July, 2008 Global IBM initiative designed to
provide government, smallbusiness, educational institutions,and non-profit organizations ingrowth markets with pro bonoconsulting work to help improvelocal conditions and foster jobcreation
+1000 IBM employees deployed
from 50 countries on 100 teams to18 countries since inception
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Agenda
Introduction
Summary of projectIssues
Recommendation
Our ApproachInterviews
Global best practices
Analysis & RecommendationsOrganization
Marketing
Partnerships
IT Infrastructure
Skills assessment and improvement
Action Plan
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Align the PCKorganization to new strategic business priorities
Establish executive level sales management
Update the brand perception to highlight innovation and new services
Build upon the reliability and trust characteristics
Maximize use of partnerships to reach strategic objectives
Financial institutions
Couriers
IT partners
Infuse young and energetic talentto the PCK organization
Maximize current and future IT Infrastructure
Use IT to communicate with all employees
Executive Summary: The Big Five Recommendations:
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What is at stake?
Change is happening in Kenya with or withoutPCK.
Citizens will have improved access to financial and
government services lives will be improved and
technology will play a key role. IfPCKdoes not embrace
change and become part of the newKenya, people will
turn elsewhere andPCKwill fail to be relevant.
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Agenda
Introduction
Summary of projectIssues
Recommendation
Our ApproachInterviews
Global best practices
Analysis & RecommendationsOrganization
Marketing
Partnerships
IT Infrastructure
Skills assessment and improvement
Action Plan
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Our approach
Our assessment is based on interviews and data gathering, realized
in February and March 2011:
Visits to the following Post Offices:
Nyeri
Karatina
Mweiga
Nairobi
Meetings with:
Head Postmaster of Nyeri Post office: Mr Mulundi
Central Region manager: Mr Gathura
Postmaster of Karatina Post office: Mr. Gakuba
Postmaster of Mweiga Post office: Mrs. Kagunyi
Deputy Managing Director ofG4S: Mr. John Muchira
Interviews:
75+ citizens, from Nyeri, Nairobi and surrounding areas
Discussions with PCK Management
Review and analysis of materials from PCK
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Quotes
The post office is slow
Make the post office just like in yourcountry
The Post office is old fashioned
I can rely on the staff at the
Post office
They are reliable forwhat they
do
They havent changed in many years
I trust my post office
The environment is notservice minded
I didnt know that they hadanything beyond mail services
I wish I could do more at thepost office
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Survey Results: Current use of Posta Kenya services
Customers are using traditional mail services, with limited use of financial and
other services. There was strong usage and positive sentiment about payment of utility bills at
branches
People appreciate the ability to do more at the branch locations.
When visiting the post office, what do you generally do? Sample size (N) = 50
44
38
12
30
16
7 6
31
0
510
15
20
25
30
35
40
45
Pick up
m il f m
x
tt Parcels
Buy
Stamps
Get Money
Orders
Use EMS EFT Funds
Transfer
Pay Utility
Bills
Services used
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Survey Results: Consumer awareness of current value-add offerings
Interviews show a generally high awareness of money order, bill payment
and EMS service offerings.
Generally low awareness of Electronic Funds Transfer and ZAP mobile
payment capabilities.
Were you aware that you could do the following at the post pffice? Sample size (N) = 50
33
29
12
41
7
0
5
10
1520
25
30
35
40
45
oney Orders F tility ill
ayment
ZA
Awarenessof urrent Offerings
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Focus Areas
Current state of Postal Corporation of Kenya
Global best practices
Organization
Marketing
Partnerships
IT infrastructure
Skills assessment and improvement
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Worldwide Due to continued decline in mail volumes, post offices
have provided add-on services like letter/package tracking, parcel
insurance and registered mail
UK - Offers tailored and targeted direct mail to 99.9% of UK residents
Focus Area: Global Best Practices
Traditional
Postal Services
Financial
Services
Italy Posta based accounts with credit card, online banking, ATM
(PostaMat) service. Utility and telco bills can be automatically charged
on the account and paid on regular basis. Access is multi-channel
(phone, web, email, post office)
Provide insurance products from the Health,
pension program, and Life Insurance.
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Global Best Practices
Additional Services
Brazil Guaranteed the circulation of a new exam, meeting
stringent requirements for security, confidentiality and quality of
service
Australia and others - Provide online and on-site stationary and
office supplies
Switzerland Citizen transportation through Posta Bus
Italy Platform for e-commerce solution
France Proximity services from delivery of medicines to
installation of equipment
Government
Services
Italy/Lebanon - Passports, birth and death certificates, land
registration documents, and tax collection
South Africa Motor vehicle license renewals
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Agenda
Introduction
Summary of projectIssues
Recommendation
Our ApproachInterviews
Global best practices
Analysis & RecommendationsOrganization
MarketingPartnerships
IT Infrastructure
Skills assessment and improvement
Action Plan
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Recommendation forOrganization & Structure
Appointsales executiveresponsible across business
units
Appointstrategic alliancesexecutive responsible for
retaining and growing new
partnerships
Appoint dedicatedbusinessdevelopmentexecutive
Implementprocesses forcollecting ideas and
recommendations from the field
and the business units
Continuous improvements ofthe organization
Make room in the organization
fornew talent
Align reporting metrics for
profit business
Ensure employee
accountabilityfor their ownresponsibilities and that of the
organization
recovery plans for missedtargets
Quick Wins Mid Term Long Term
Restructure PCKorganizationDivide into verticals and staff
functions
New vertical for sales
Establish business developmentwithin the organization
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Very strong awareness of the PCK brand
and local presence throughout Kenya
PCK viewed as reliable for what they do,
Some viewed as outdated
Low awareness and utility of financial
services and other value-add offerings
Focus Area: Marketing
Conclusions
Brand
Perception
and Customer
Awareness
Current
Marketing
Efforts
Competitive
Marketing and advertising led by PCK
corporate team some flexibility for local
offices
Tactics include branch posters, print ads,
billboards some digital and social
Some conflicting brand messages
Mobile banking represents both a huge
threat and opportunity for PCK
Strong presence of competitive
branding/advertising in local markets
Safaricom and M-Pesa are the clear
market leaders both in perception and
reality
Summary of Current Status Analysis
Need to address the out-of-date
perception of PCK in the marketplace
both from a branding and customer
experience perspective
Opportunity to leverage reliable brand
trait to promote other offerings
Need to focus marketing efforts on
value-added offerings
Opportunity to leverage partnerships for
additional marketing coverage
Need for consistent brand messages
across all tactics
Opportunity to maximize PCKs
greatest asset the local branches
using them as platforms for marketing.
PCK cannot compete with Safaricom
and M-Pesa for mindshare of mobile
payments but may be able to explore
other options
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Recommendations for Marketing
Explore expandedco-marketingefforts with existingpartners
ZAP
Posta Bank
Ensure marketing resourcesare aligned to value added
offerings
Updatedad campaignImplement new integratedmarketing campaign with
updated brand messages across
all tactics
Documentary video
showcasing PCKs newofferings and actual customerscan be very effective across
multiple mediums.Branches, TV, Web,
Events
Social media marketingIncreased use of social media
as an additional method ofreaching target audience
- Targeting the next generation
ofPCK constituents
Quick Wins Mid Term Long Term
Update local branches toimprove customer experience
Leverage partnerships tofacilitate branch enhancement
Implement updates to
marketing messages-Ensure consistency in brand
messages
-Focus messages on new era
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Limited growth for financial servicesopportunities as customers/businesses
have established relationships with private
banks
High customer awareness and good
relationship with World Bank and KPLC
Extremely low customer awareness of
Zap services.
Partnerships with some, but not all banks
Focus Area: Partnerships
Conclusions
Current
Partnerships
Potential
Partnerships
Competitive
Pressures
Decision by Kenya Power and Light to
transfer to Easypay system will affect
current partnership and revenue stream
Summary of Current Status Analysis
Opportunity for more promotion of ZAPoffering as lower cost option to M-Pesa
Potential to expand World Bank and
KPLC relationships
Opportunity to expand financial services
and strengthen customer relationships
through Posta Bank, while partnering with
regional banks
Potential reengagement of Safaricom to
drive competitiveness in mobile banking.
Great Citizen/Market demand for
governmental service offerings
Potential to partner with other
courier/mail services to deliver integrated
services more efficiently
Need to maintain Utility Payment service
while new entrants try and gain market
share.
Lack of a sustainable/profitable
relationship with the mobile market leader
Safaricom.
Limited governmental services offered
through PCK
Low postal involvement in
e-government expansion of Pasha shops.
Limited partnerships with other
courier/parcel providers
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Recommendations for Partnership
Revisit discussions with
Safaricom on market-leading M-Pesa Services
OfferDirect marketingservices
Based on PO box datacollection
Protectexisting relationship tomaintain current business
KPLC
World bank
Zap
ExpandGovernmental servicesto offer processing of certification
applications
Report
Emergency
Fault
Complaint
Register
Birth
Land
Company
Pay
Fees
Taxes
Fines
Receive
Certificates ID cards
License
passports
Quick Wins Mid Term Long Term
Buildfinancial services throughPosta Bank and future banking
partnerships
Partner with Governmental
institutions to offer efficientsubmissions and delivery of
certification applications
Partner with 3rd party to provide
CybercafeOffice andstationary suppliesboth on-line and through offices
Office services such asprinting, binding, fax
Online shop
Partner with couriers to
increase delivery speed and
lower cost
Optimization of use of network
Courier delivery to PO
Secure mail
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HW, SW, Applications supporting:
HR
Procurement
General Ledger
Intranet
Focus Area: IT Infrastructure
Conclusions
Current ICT
supporting
internal
services
Current ICT
supporting
e ternal
services
ICT
enhancements
HW, SW, Applications supporting:EFT
Money Orders
Internet
Track & Trace
Cash accounts
DB for Post boxes
Mobile payments
380 automated POs out of 700
T&T limited to Nairobi for international
shipments
Missing direct connections to banks
E-mail not widely spread across PCK
Lack of credit card payments
Summary of Current Status Analysis
Need for ERP system to support all
internal processes on one platform
Need for Disaster Recovery and
Business Continuity systems
Need for basic ICT skills
Opportunity to build a DB with citizeninformation and connect it with Gov
entities
Opportunity for Direct Mail business
using Post boxes info
Opportunity for adding services
leveraging on to fiber optics links
Need ZAP service extended to all POs
Need for extend use of e-mail to each
PCK employee
Need for a connection to banks
Need for extension PO automation to
all offices and get them connected
Opportunity to enable T&T across the
country
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Recommendation for ICT
E-mailfor all employees alreadyconnected to HQ
ReinstallPCs in the localPostoffices for the citizens to use
Enhancement of the existing
database for post boxregistration
Credit card terminalfor Majorcities (Nairobi and Mombassa)
Investigate possibilities for
outsourcingPCK internal IT
Or use cloud computing services
ERPsystem to consolidateprocurement, HR, legder, assest
management ect
Track and trace system for all
mayor cities within the regions of
Kenya with plans to expand to
districts
GPS system to enable door-to-
door delivery
Disaster recovery and businesscontinuitity
Quick Wins Mid Term Long Term
Internet access for allPostoffices
dependent on roll out of fiberoptics and availability of
electricity
Switch to connect to banks via
Posta Bankdependent on stakeholderapprovals
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Traditional teller transaction based
Business development is up to personal
initiatives at local POs
Focus Area: Skills assessment and improvement
Conclusions
Customer
Services
ICT Skills
Skills for the
new era
Basic skills to run PCK applications are
in place
Poor ICT general culture
Organizational structure is not aligned to
business priorities
Sales people in business units are in a
low organization level and siloed
Business Development department not
fully established
Summary of Current Status Analysis
Need for service-oriented mindset
Need for branch employees to be more
engaging and proactive in
communicating and selling new offerings
Need for sales coaching and education
Opportunity to enable e-learning
education
Opportunity to sell ICT skills
Need for sales management at a high
level
Need for a Business Development org
to address new opportunities
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Recommendation for Skills and e pertise
Communicate to all employeesthat PCK is changing and youhave to be prepared for thatchange
ICT training for employees
Use of e-mailUse of internet
On the job learning making ITa natural part of the daily job.
Quick Wins Mid Term Long Term
Explore internship offeringsTo bring in the new ICT skillsTeach employees the use ofICT
Employee self assessment
Manager evaluation ofemployees on all levels
Carrierdevelopment plans foremployeesICT skills
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Agenda
IntroductionSummary of project
Issues
Recommendation
Our ApproachInterviewsGlobal best practices
Analysis & RecommendationsOrganization
MarketingPartnerships
IT Infrastructure
Skills assessment and improvement
Action Plan
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Asante sana!
We would like to thankPCK
management and employees for all theirhelp and support in this project.
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Backup slides
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Background and Scope of Work
What
The Postal Corporation of
Kenya (PCK) is one of the
largest organizations in the
country, with a nation-wide
infrastructure of over 500
outlets and 380 post offices.
One of the overall strategic
objectives for PCK is to
facilitate better and efficient
delivery of financial services
to all citizens, especially
those in the rural areas
where PCK has acompetitive advantage with
a widest physical reach.
Legislation requires PCK to
provide Universal Service
Obligation
WhyWith declining market share
on the core business of mail,
it is imperative for the PCK to
explore opportunities to
diversify business and
maximize the utilization of the
nationwide reach to offerfinancial services to grow
revenue.
HowReview current state
Look at best practices around
the world
Evaluate current financial
services as offered by PCKagainst best international best
practice, implications of the
vision 2030 and opportunities for
e-commerce
Propose a framework to support
a fast growing financial services
sector and to improve keybusiness processes.
Explore other opportunities for
growth
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Interview Findings
Value added services currently provided by PCK:Mail delivery
Payment of world bank money
Utility bills
School fees
Electronic funds transfer
Expedited mail service (EMS)
Government services payment of salaries foremployees of the government
Current PCK Service Limitations:
Delivery of mail to mail boxes because houses are
unnumbered
No payment with credit cards only cash
Largest payment method M-Pesa is not offered at PCKNo same day delivery
Competition stealing profitable business:
Matatus carrying both letters and parcels
Services like M-Pesa and Easypay allow fast and
efficient transfer of cash
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Current State Analysis
The global postal environment continues to
change dramatically and postal corporations
must adapt to rapid economic and social
changes.
Technology, deregulation, and globalization
have increased competition and altered the
postal landscape.
The new technology driven information
society has brought a host of new ways to
communicate and do business, such as
e-mail and e-commerce.
Global postal corporations are weighing
entry into the financial services arena as a
tactic for diversifying their revenues.
PCK is the official universal service provider
for Kenya and must provide the "consistent
supply of basic quality postal services.
Current services provided by PCK include
delivery of letters, parcels, EMS, money
orders, third-party payments and agency
services and EFT services.
EFT represents important opportunity, yet
competitive landscape presents challenges
Core parcel business also suffering due to
licensed and unlicensed competition
Global Market Situation Kenya/ PCK
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SWOT analysis for Postal Cooperation of Kenya
Strengths
Extensive geografical network
Well known and good reputation
Affiliation to UPU: a specialized organ of the UN which opens the
corporation to global network
Experienced and commited workforce
Long historical postal experience expanding over 100 years
Buildings and cars are available as courier or alternate uses
Opportunities
Growth potential for parcels and express courier business
worldwide
New business potential through utilization of technological
advancements
Public Private partnership
Increased activities in the capital market operations
Highly skilled populace
Kenyan population in the diaspora for enhanced financial services
Utilize the existing relationship between government and
government agencies
E-government
New offerings in existing buildings
Weakness
Inadequate IT infrastructure
Lack of Universal Services Obligation funding leading to high
operational costs
Historical high financial pension liability
Many layers of management; lack of stragegic aliiance focus
Older facilities and overall image
Limited financial services currently offered no CC payment
Large corperation with complex structure; tied to govt oversight
Failure to partner with M-pesa
Failure to quickly respond to competitive pressures
Threats
Liberalization and deregulation leading to market infiltration and
price reduction
Licensing framework that has brought on board many players
Increasing commercial banks network
Declining mail services
Mobile Billpay gaining momentum, and PCK is not positioned to
maximise opportunity
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Frequency and use of post office services
3
32
9 6
0
5
10
15
20
25
30
35
Very Rarely/Ne er 1-2 imes er th 4 imes er th
( eekly)
re tha 4 imes
er th
req e cy f is its t st ffice
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