Inside Australia Post's IT transformation

Australia Post has spent the last year undergoing a company-wide transformation in order to propel the organisation into the digital era, under its Building Future Ready IT program.

The program, launched last year, underpins the organisation’s Future Ready strategy announced in 2010, and aims to digitise post and build a modern technology organisation.

It will run until the end of 2014 and is part of the $2 billion investment AusPost managing director Ahmed Fahour last year announced would go towards infrastructure, products and services in support of the digital economy.

It is made up of five work streams - building faster and more cost effective technology foundations; implementing a new customer-centric IT operating model; a new Digital Delivery Centre for the delivery of mobile and online products and services; IT leadership and training; and a new approach to information security, ‘Secure at Post’.

The program was the brainchild of CIO Andrew Walduck, who was brought into the organisation to lead the charge to a new digital approach. Walduck joined Post last year after two years as head of shared technology at Tabcorp.

The first workstream, building a series of new technology foundations, ranges from the deal with Telstra for a new IP-based network to provide parcel lockers, digital displays, self-service terminals and Post's Digital Mailbox service, to the current move into NextDC’s $130 million flagship M1 data centre in Melbourne. 

Lift and shift

The post office will move into a starting configuration of over 70 racks in a dedicated pod managed by NextDC’s OneDC data centre as a service (DCaaS) platform as of next month, and will complete the shift after August. 

Post CIO Andrew Walduck told iTnews the move would initially replace two current data centres with a Tier 3 centre.

“Because AusPost is on a big move to digitise its services, it’s got to be able to provide services 24 hours a day, 7 days a week, 365 days a year. And we need data centres that provide a better level of availability,” he said.

One of the centres to be replaced, the Business Continuity Centre in Melbourne’s Collins St, has been in place for 25 years. It is a major site running the organisation, Walduck said, out of the company’s total of five data centres.

“Everything runs out of the Collins site,” Walduck said.

“We have a core set of applications that underpin all of the revenue and turnover and products and services, our retail systems, our core ERP platform, a number of systems that underpin all of our mail products, and the platform that underpins our parcel products.”

The second data centre to be decommissioned, housed in the NSW Post headquarters in Sydney, is a throwback to a time when the organisation was state-based.

It houses the “handful” of applications that traditionally ran and were supported by the NSW base, including employee systems support as well as operational processing. 

Post also has two additional data centres in Melbourne and Sydney and another in Adelaide. The Adelaide facility has hosted cloud services running from an unnamed third party underpinning some of Post’s digital services.

The second Sydney facility is a failover site while the second Melbourne data centre is a primary production facility, which will be moved into M1 later. 

M1 will become Post’s primary production facility following the Collins St transition. 

The move to M1 will provide a further opportunity for Post to decommission and consolidate a number of applications, something the company has been doing for over a year. 

So far it has consolidated and decommissioned around 1500 applications down to 400. Walduck said the transition to M1 would be made much easier with less to move, resulting in a less-complicated ‘lift and shift’ approach. 

“When something has been in place in a data centre for 25 years, it’s not straightforward, but we’re certainly going through the plans we need to do this. We did a full DR test last year where we ran the whole corporation from Collins St.”

While some applications continue to be slimmed down, others go in. Post recently implemented Salesforce’s SalesCloud for its sales team to “better do their jobs”. 

“It was something where there was a series of different tools, they had a fragmented toolset, we tried to consolidate that into one place,” Walduck said.

“We have a very large SAP platform, it underpins our ERP. We also use the CRM components that provide a single view of customer, we use an amount of supply chain components, a large amount of our parcels business, product management component, we use it for talent management, career management, a lot of things in those are contract management.”

Read on for more on Post's major leadership restructure that is helping to drive the transformation...

A new generation of leaders

Staff and leadership play a big role in Post’s transformation program. Walduck has been upfront in his effort to recruit the best people for the business, which has resulted in some management departures.

“In leadership there has been a very deliberate change, because we needed to have people there who knew how to manage people.

“Some people have chosen to go. Of the 125 in leadership, about 50 percent of that has changed,” he said.

“We need to set a bar for leaders in IT at AusPost. We’ve looked to provide opportunities for people in the organisation and we’ve recruited new people as well. We identified some people who are great up and coming talent, and we give them the opportunity to have a new leadership role, and we give them training."

Secure at Post and meeting customer needs

Bringing the organisation into the digital era means Post can no longer have an “old world” approach to security - back of house operations with “guys sitting there monitoring and looking for problems”, Walduck said.

As a result, information security plays a big part in the transformation. Post chief information security office Troy Braban, also a former Tabcorp executive, is building out a security team to adopt a modern approach to security as a strategic asset.

“As we digitise our service we must ensure that information security is something that is well supported and is a core, integrated part of our business. It involves investment and change in the people, process and technology aspect of how you manage information security,” Walduck said.

“[We need to] make sure we’re able to build a bigger security awareness inside of AusPost, so people know what they need to be doing to protect IP, assets and act in a secure way. Plus we dramatically improve our ability to understand and block threats.”

Another element of the Building Future Ready IT program involves a Digital Delivery Centre- a method of offering online and mobile-based services using an “integrated and agile method’.

“[It] has a group of people who fundamentally deliver technology and business solutions in different ways, not the traditional type of IT organisation where you throw a set of requirements over the fence and in a few months something is returned. It’s a method where our staff all operate as part of integrated teams,” Walduck said.

“They work in an agile manner and build and deploy solutions in a faster timeframe and lower cost, and far more engaged. It's one of the ways in which we are trying to test and trial and push more innovation from our organisation.”

Both are tough initiatives to implement, as they involve going back and rebuilding the internal strategy and culture, building alignment across business units and teams, and again ensuring the right people in the right jobs. But it’s worth the effort, according to Walduck.

“As a result, it’s a big thing to do, but when you get it working, it’s fabulous in terms of what it can output.”

Read on for what's next for Post, including its push into the cloud...

What’s next?

AusPost will complete its move into M1 in the first quarter of its next financial year in August. After that, the organisation is planning a push into private and public cloud services. 

“That involves building new private cloud infrastructure into M1, and once that’s constructed we will then probably transition our existing VM platform across and on to that, and we’re evaluating what our plans will be,” Walduck.

The idea is to move to the type of utility model and pricing it provides for business units inside of Australia Post. 

“We have enterprise applications that serve every business unit, that run intranet, email, a number of parcel systems, a number of retail systems and it really spans between enterprise-wide applications and business units. And a big consumer of it are some of the digital-based services.”

Last year, Post general manager of telecommunications products and services Maha Krishnapillai said the company would offer fixed line broadband over the NBN and mobile services in the future, as part of a move to become a major part of the next stage of e-commerce. 

"Our goal is to build a sustainable communications business — sustainable being a keyword there — both physically and digitally, to leverage the online changes that are occurring with our physical footprint," he said at the time. 

Krishnapillai, a former Optus executive, was hired as part of a recruitment drive which fuelled speculation around Post’s ambitions in the mobile services market. It is expected to launch a mobile play that will enhance its Digital Mailbox service.

The face of Post’s digital transformation, Digital MailBox is a secure online mail channel between consumers and service providers.

It launched last October to a select group of launch partners and employees, and was pulled offline shortly after due to technical issues. It is expected to open its doors to consumers midway through this year.