The Post Office's internal consultancy and technical organisations will work with Deloitte Consulting and SAP to develop its next generation corporate infrastructure.
Roger Tabor, the Post Office's strategic information director, said: "The over-riding ambition of the Post Office is to become a complete distribution company with global reach, and SAP can help us to achieve this."
The £7bn organisation was restructured last year, and its multiple business units were streamlined to provide a unified corporate infrastructure.
Tabor said that before re-organisation the Post Office had four separate SAP financial systems installed by different business units. "We had to do a significant cut and paste job on our legacy systems to make the reorganisation work," he said. "Now we want Post Office-wide, reliable, integrated, standardised systems and processes as a solid base to build our e-business platform."
Tabor would not quantify the cost savings the implementation was expected to bring, but he was clear about the business benefits. "We'll get a slicker operation, a common look and feel for our systems and reliable, consistent data throughout the corporation."
The Post Office's decision was driven by the findings of PricewaterhouseCoopers' international benchmarking service, which Tabor said showed "we were some way short of the best".
The new platform will be SAP R/3 with some elements of the mySAP.com Internet package. The Post Office has decided against using SAP for customer relationship management.
In the first phase of the implementation, which will begin next spring, the existing finance and human resources systems in the Post Office will be pulled out and replaced.
The new corporate infrastructure will support all the Post Office's lines of business, creating a central shared system to eliminate duplication of records and information.
GartnerGroup research director Nigel Wood said, "The Post Office will gain considerable benefits from the adoption of a well integrated back-office business model."
Wood said it had become increasingly fashionable to dismiss enterprise resource planning (ERP) packages like SAP as irrelevant to e-business, or claim they were old technology and a millstone round the necks of business.
"The e-zealots say e-business is all about an organisation's external links," said Wood, "but ERP offers a reliable transactional backbone."
This was first published in September 2000