KPMG-led review could see posties transferred to German IT giant
after general election
Consignia, formerly the Post Office, is considering contracting out
part of the Royal Mail in a radical step, which could see delivery
staff being employed by the German IT services supplier
Siemens.
The outsourcing proposals are aimed at helping Consignia to beat
off competition in its core letters business. Since March new
entrants have been able to apply for licences to compete with
Consignia.
No announcement on the proposals will be made before the general
election but Consignia is considering making a statement soon
afterwards.
It is conducting a review of internal operations, which does not
rule out contracting out of business processes and staff, possibly
including postal workers.
As Consignia's award-winning supplier of Royal Mail automation, and
having already won the government's biggest contract in business
process outsourcing, Siemens is said to be a front-runner in any
bid for the work.
In 1999, Siemens took over almost the whole of the operations and
4,000 staff, mostly non-IT specialists, at National Savings, a
Consignia business partner.
Computer Weekly has learned that Siemens has been in talks with
Consignia over future Royal Mail operations. And it has emerged
that, towards the end of last year, a senior Consignia official
visited Siemens operations in Ireland, where the supplier has a
business relationship with An Post, Ireland's national postal
service provider.
It is also understood that the supplier has selected one of its
most senior executives, Tony Rawlinson, business development
manager for Siemens Business Services, to lead any bid.
Other suppliers have been approached informally by Consignia to
assess how an invitation to tender for outsourcing would be
received.
The outsourcing proposals are part of a strategic look at
Consignia's competitiveness by management consultantcy KPMG. In an
unpublicised contract, KPMG was brought in by the Royal Mail
service delivery business unit last September to help conduct the
performance review which runs until August.
Specifically included in the review is a look at a "range of
sourcing activities, including different internal organisational
models and sourcing".
If part of the Royal Mail's operations is contracted out, there is
no guarantee that Siemens will win the business. Under European
tendering rules, a range of suppliers will have the opportunity to
compete for a contract.
Consignia may seek to minimise any possibility of industrial action
following outsourcing by initially contracting out work at a new
mail centre due to be built at Bromley by Bow in East London. This
could include postal workers. "Nothing would change as far as the
public is concerned," said a senior executive working on the
review, "except that the postman's uniform may bear a Siemens
logo".
Outsourcing a key business process would set a precedent for
Consignia but it would also conform to Labour's promise not to
introduce "wholesale privatisation".
KPMG senior executive George Houpis declined to comment, except to
say "investment in new technology will continue to be significant
for Consignia but maximum benefits in terms of efficiency
improvement will only be realised if they are accompanied by
process re-engineering and changes in working practices".
Alistair Appleton, head of communications and marketing for Siemens
Business Services pointed out that his company is not currently a
supplier to the Royal Mail.
"As is standard practice, all discussions that Siemens has with any
organisation about business opportunities are subject to
confidentiality agreements. The company is therefore not in a
position to comment," he said
In a statement Consignia said, "Consignia ... is facing increasing
competition in the mail business. We are constantly looking at ways
to improve our performance. We are considering a range of options
to meet the commercial challenges. We can't confirm what those
options are, as they are commercially sensitive.
"As we have not made a final decision, we are not in a position to
say which option or range of options we will go for or what impact,
if any, it will have on staffing."
Tony Collins
tony.collins@rbi.co.uk
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