Postal Service Seeks to Deliver Via IT

Postal Service Seeks to Deliver Via IT<@VM>Key Elements of the Information Platform

By Carloe Shifrin

The U.S. Postal Service has embarked on an ambitious $2 billion, multiyear program to harness data from automation equipment and its information technology infrastructure to better serve customers and improve its own operations.

Called the Information Platform, the program will link systems and update them as needed to allow the electronic exchange of real-time information between the Postal Service and its customers and across postal operations and facilities.

Many systems, including some new IT and infrastructure projects, will be part of the program, but it also will seek to incorporate information from the Postal Service's automated mail-sorting equipment.

Charles Bravo, Postal Service vice president, Information Platform, said the evolving program will generate up-to-date information that customers will use to make practical business decisions. The program also will give Postal Service managers timely tools to improve operational performance and reduce cost.

"The Platform will capture information about mail as it moves through the mail stream," Bravo said. "In the not-too-distant future, postal management will have more data about what, when, where and how much is coming their way ? before the mail enters their operation ? and be able to place the right amount of staff and equipment in the right place at the right time."

Bravo estimates that the Postal Service will invest $2 billion for the Information Platform over the next three to five years, but expects some core elements to be completed within two years.

The program, which was launched two years ago, also is a core component in the Postal Service's strategy to enter the electronic commerce world, connecting the physical hard-copy mail to electronic services, Bravo said.

Trying to harness the data generated by the Postal Service is an ambitious task. Overall, the Postal Service delivers more than 200 billion pieces of mail a year, including 46 percent of the world's card and letter mail volume, to more than 134 million delivery addresses. It serves 7 million customers a day at 38,000 postal retail outlets and picks up mail from more than 312,000 street collection boxes. Its annual revenue approaches $63 billion.

The Postal Service also is the unenviable position of getting no money from the federal government. Since 1970, its charter has been to break even or make a profit on its own, but it is still subject to congressional oversight.

Bravo said a number of planned infrastructure projects ? some under the initiative of other Postal Service departments ? will aid the development of the Information Platform. In January, the engineering division will seek approval from the Postal Service board of governors to install more robust integrated data servers for necessary linkage between systems.

Pending board approval, Information Platform will this spring begin to install high bandwith wiring, including fiber optics, in its plants to support more effective data capture and transfer, Bravo said.

Another project planned in cooperation with the engineering department would replace the 10-digit labels used on trays of mail with 24-digit labels to improve tracking of mail from mailers and between postal facilities. A communications system for mail carriers also is being considered.

The Information Platform acts as an integrator, Bravo said. "In many cases, not all, we're taking the lead in building technology, but we work with various organizations to build integrated products. One of my key roles is ... to make sure a lot of the pieces fit together."

The Postal Service has considerable procurement flexibility to complete the puzzle, including using original equipment suppliers for modifications and upgrades or existing contractors or vehicles. Bravo said some elements will be bid out, in some cases through limited competitions based on prequalification.

In the case of Postal One!, the Internet-based mail tracking program, the Postal Service has signed Compaq Computer Corp. of Houston, its largest supplier of desktop and associated processing equipment, under an indefinite delivery, indefinite quantity contract. Oracle Corp. of Redwood Shores, Calif., is working on the time and attendance portion of the platform, Bravo said.

For Information Platform components POIS, SAMS and DOIS ? mail monitoring programs ? Andersen Consulting has a "preferred portfolio partnering agreement" awarded in 1998. Under the contracting vehicle program, the Postal Service gave to Andersen and two other companies long-term agreements to provide enterprisewide IT solutions in specific portfolio areas.

As examples of how the Information Platform can benefit users, Bravo cites the Confirm and Delivery Confirmation programs.

The first, being tested on letter mail for 356 users, uses bar codes to transmit information about when individual mail pieces have been scanned by postal equipment. Businesses will know when their mail will be delivered and may then choose to increase staffing to handle anticipated telephone call volume or do some collateral advertising, Bravo said. They also can determine if a customer's check, inserted into the bar-coded envelope, is really in the mail, and avoid sending out second notices.

Through Delivery Confirmation, a fully operational program that uses bar codes scanned by handheld devices and transmitted to a product-tracking database, mailers get information on whether their mail was delivered. In fiscal 2000, the Postal Service sold this feature to customers who tracked 112 million pieces of mail.

Because the Postal Service anticipates overall savings from the programs, the Information Platform should provide a positive return on investment even if individual infrastructure pieces do not. For example, productivity increases demonstrated by the DOIS pilot indicated a return on investment of 37 percent, Bravo said.

Modifications and upgrades to the 15,000-plus pieces of automated mail processing equipment provided by Siemens Corp. of New York, Lockheed Martin Corp. of Bethesda, Md., and Rapistan Systems Corp. of Grand Rapids, Mich., also are expected to yield substantial usable information. The Postal Service needs help creating the necessary interfaces, and the Lockheed Martin unit has stepped up to the plate, winning contracts worth $2 billion since 1996 for systems integration of automated mail processing equipment.

"The automation programs were created because each one by itself did something to improve efficiency or reduce costs or both," said Sean Reineke, Lockheed Martin's vice president of postal programs.

With some intelligence applied, though, the equipment can provide valuable real-time information ? such as how many pieces of mail are being moved, its weight and dimensions and its origination and destination ? that the Postal Service can use to become more efficient and create new products, he said.

Reineke added that key to ensuring success in these programs is business process re-engineering at the Postal Service, so information can best take advantage of operations and systems.

Compaq was the top IT supplier to the Postal Service between 1996 and 2000, with $940.6 million in sales. NCR Government Systems was second with $316 million, and IBM Corp. was third with $300-million plus. NCR and IBM provide state-of-the-art electronic cash registers and point of service (POS One) terminals at post offices.

The Postal Service recently awarded NCR a three-year contract to create a data mart from the retail POS One terminals that gathers information to support enhanced decision making about customer service, product inventory and staffing.

WorldCom Inc. of Clinton, Miss., under contract to provide managed network operations and telecommunications services, is the fourth-largest Postal Service IT supplier, with $281 million in sales. Automation equipment was not included in the IT list.

One of the top 10 IT contractors, Litton-PRC Inc. of McLean, Va., provides technical support staffing and services to the Postal Service under the Information Systems Support Services program.

PRC has about 450 employees in 22 Postal Service locations who provide software support services and technical support in such areas as systems analysis, business process re-engineering, systems integration, local area networks and telecommunications.

Under the 4-year indefinite-delivery, indefinite-quantity contract, a postal manager submits a funding document outlining what technical skill is needed and for how long. That generates a delivery order with PRC as the contractor, said Harry Sober, the PRC program manager for the contract.

When PRC won the contract, it bid a certain rate for 12 labor categories in six different geographic areas so it wouldn't need to re-bid each request. Its value is up to $100 million. The contract, PRC's second, runs through 2001, and PRC expects to participate when it is recompeted.

"Our motto is 'We, too, deliver,' " Sober said. "We deliver the right person at the right time at the right rate."

Doug Chaus, program manager for the PRC's advanced business solutions group, said the contract philosophy stems from the Postal Service's determination that IT is not its core competency. Moving the mail is. That's why it wants to tap solutions and best practices from those whose core competency is IT.

Other PRC contracts with the Postal Service are under master ordering agreements that require firm fixed-price bids for specific solutions.

An example, Chaus said, is PostalEASE, a program that allows Postal Service employees to use technology such as interactive voice recognition and touch-tone telephones to select benefits. About 500,000 of the agency's 800,000 employees have enrolled using these types of systems.

The evolving system allows Postal Service human resource field representatives to do 'exception processing' through the Internet, but eventually all employees will use the Web for human resource functions.

In January, the Postal Service will roll out PostalEASE for the 100,000 workers with desktop computers; later, when the appropriate security is worked out, all employees will be able to access wide-ranging human resource service offerings from their home computers via the Internet.

Computer Sciences Corp. of El Segundo, Calif., one of the companies awarded a preferred portfolio partnering agreement in 1998, has contracts for payroll and personnel systems and other enabling technologies, and also oversees development and testing of activity reporting for the Postal Service self-service vending machines in malls, according to Lee Ann White, CSC's director of postal service systems.

Under the payroll portfolio agreement, CSC, as an independent systems integrator, can help the Postal Service figure out what it wants to do, analyze ways of doing it, determine what solution is in the marketplace and how to integrate it, and then implement the project. The potential value of the agreement is $198 million over nine years.

Teamed with Oracle and Johnston McLamb Case Solutions Inc. of Herndon, Va., CSC is a bidder for a new Information Business Systems Solutions 2 contract, scheduled to be awarded by the end of the year.

It's expected the Postal Service will give multiple awards to large companies and use the vehicle for task orders to implement solutions over the next couple of years in a variety of areas.

Another competition expected next year is the Automatic Parcel Processing System, a complex, next-generation sorter with a state-of-the-art recognition system to automate parcel handling in the same way the Postal Service has automated letter processing, according to a Lockheed Martin official.

Although the Postal Service uses large integrators extensively, it also seeks advanced solutions from a myriad of small- and medium-sized companies.

For instance, it has spent about $400,000 on products from Radware Inc. of Mahwah, N.J., which provides Internet traffic management solutions to keep government and industry Web sites continuously accessible.

Almost a year ago, Radware installed four Web Server Director for Distributed Sites in two Postal Service computer operation centers to direct traffic within the internal Post Office Management System, said Mike Long, Radware's vice president of marketing and technology.

Placed in the local area network, the devices monitor Internet traffic to direct users to the best server to balance the loads. The Postal Service has since added numerous other Radware devices, which cost between $10,000 and $35,000, and bought the company's firewall product.

New York-based Information Builders Inc., another Postal Service IT vendor, recently developed a compliance and anti-money laundering system to help the Postal Service comply with the data entry, analysis and reporting requirements of the Bank Secrecy Act.

Information Builders uses its S/390 FOCUS application development and reporting environment to track money order purchase trends, funds transfers and stored value cards that might indicate money-laundering operations.

Postal employees can enter information about transfers or purchases flagged by the system into a database that can be analyzed by law enforcement personnel, said Larry Reagan, director of the federal systems group at Information Builders' Arlington, Va.-based consulting division.

Data can be screened using 500 different parameters, such as money type or post office. Using money type, for instance, the purchase of 20 money orders at $699 each would be suspicious because there is a $700 limit on money orders.

Using Focus, records of more than 600,000 suspicious money orders have been stored in a database in a Postal Service IBM S/390 mainframe since December 1999. Although postal employees now fill out paper forms to send to a processing center for data entry, an automated system is planned.

Information Builders also is on the team that built the Dinero Seguro program that enables residents of certain states to go to the post office to wire money to Mexican residents. Developed in conjunction with a Mexican bank, the program guarantees a 15-minute delivery of funds to Mexico.

A U.S. resident gives a postal clerk the money to be wired, plus a fee. The clerk gives the customer a personal identification number and a 3-minute phone card with which to call the recipient in Mexico with a PIN number to get the money.

BMC Software Inc. of Houston, one of the world's largest independent software vendors, provides the Postal Service with its Patrol software to monitor and manage Windows NT, Sun Microsystems and Unix-based servers and Oracle databases. BMC also provides Mainview, which manages the Postal Service's IBM OS/390 mainframe operating system.

"Patrol is a big part of their central monitoring facility," said Craig Harper, BMC Software's manager of civilian programs. "Patrol is the basis for their gaining insight into what's going on in the server and database."

Implemented on more than 1,000 servers on various platforms, Patrol helps reduce support costs and increase server availability to enable 24-hour-a-day e-commerce, Harper said.

Cost pressures, increasing competition and a shrinking revenue base, are among the elements driving many of the Postal Service technology efforts.

While rising fuel prices and employee costs have added considerably to its expenditures this year, its revenue growth is substantially lower than forecast.

Many of its costs are not volume variable, but the overall volume of revenue-generating mail is shrinking as bills, payments and even advertising is diverted to electronic transmission.By Carole Shifrin

The Postal Service's $2 billion Information Platform program will consist of many key elements.

  • PostalOne! will provide large volume mailers with electronic mailing documentation and Internet access to information about the status of their mail as it flows through postal processing and delivery operations. The real-time information it generates also will allow the Postal Service to improve its resource management and reduce paperwork.

    The first phase, information-sharing with selected large mailers, was implemented last summer; the next phase, integrating electronic transportation management and payment processing, will begin in a few months.

  • Processing Operations Information System is intended to give Postal Service managers accurate, immediate counts of mail within plants so they can apply appropriate staffing and equipment resources to workloads. A pilot is taking place in Milwaukee, and others, with some changes, are planned. National rollout is not expected before late 2001.

  • Surface Air Management System (SAMS) will determine whether mail will be sent by air or ground. Because the assignment engine will be tied into real-time airline schedules, it will be able to assign mail to specific flights, changing the routing in the event of delays or cancellations.

    The basic version is to be deployed in fiscal year 2001, with future upgrades planned to support improved mail assignment, performance management, carrier payment and tracking. SAMS replaces a mid-1980s Fortran-based Air Contract Data Collection System.

  • Delivery Operations Information System initially will use "end of run" data from automation equipment to provide delivery supervisors with usable information to adjust the daily workload of individual carriers to provide better balance, more timely and consistent customer delivery and improved labor-management relations.

    A pilot was conducted last year at 318 sites, and national roll-out, to be completed by March 2003, was approved in August. Delivery Operations Information System will be deployed in the mid-Atlantic, capital metro and western areas of the country by next fall.

  • Time and Attendance Collection System, already installed at 20 sites, is a Web-based system used primarily for payroll purposes, but also will provide supervisors with real-time data for monitoring labor hours and employee availability at the local level. Approval for national roll-out will be sought in January.

  • Activity Based Costing is designed to identify costs associated with specific postal operation activities to enable managers to benchmark, measure process improvements and make informed decisions about product pricing, profitability and resource utilization.

    Two pilots have been completed, and the Postal Service expects to make changes in preparation for a national approach, to be finalized sometime next year.

  • WEB.EIS (Executive Information Service), the Postal Service's internal data integration system, will be enhanced to provide increased functionality and access to the databases being developed by the Information Platform. The public's access to information and mail tracking would be through the Postal Service Web site (

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