Posting profits

Aly El-Moselhi, chairman of the National Post Organisation (NPO) speaks to Niveen Wahish of how he plans to bring the 150-year-old institution into the 21st century

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In office for just over one year, El-Moselhi, 55, has been aggressive in his handling of the ageing NPO. Prior to this post, he had been senior advisor to the minister of communications and information technology and information infrastructure programmes manager. He approaches the reform of NPO with the mentality of the private sector from which he comes. Before he got into government, El-Moselhi had been managing director of Standard Data Egypt, one of the leading software companies in Egypt. El-Moselhi plans to overhaul the organisation which has been operating by roughly the same standards as in 1865 when it was first established.

This year the National Post Organisation took part at the Cairo ICT (exhibition for information and communication technology). It was the first time the organisation had ever seen the need to market itself, having practically enjoyed a lifetime monopoly. But marketing is part of the new strategy adopted by El-Moselhi to promote the role he envisions for the organisation, namely to make NPO the number one customer-oriented service organisation in the country delivering mail and financial services.

In his quest to upgrade the organisation El- Moselhi found that he was up against a multitude of challenges -- foremost among them the organisation's failure to grasp the need for modern information and communications technology, adjust to competition from multinational companies or meet customer needs rather than offering services and expecting customers to adapt.

With these challenges in mind, El-Moselhi went on to devise a multidimensional programme to enable him to tackle the development of three main areas: human resources, the physical network, and the automation of the organisation.

He says that developing human resources is essential to achieve the organisation's goals. "We need to develop our people," he said. "They were left behind without an introduction to new technologies."

To do this, he is training his 45,000-strong staff in batches through the skill development initiative developed by the Ministry of Communications and Information Technology (MCIT). This programme was co-designed by MCIT, and executed by the different universities, which makes it accessible to the NPO staff across the country.

He is approaching the development of the skills of the middle management again in cooperation with university professors specialising in management.

Internal training is also being provided by the NPO's training centres in each governorate, with the courses updated to include the element of CIT with hands-on, not just theoretical training.

Within the human resources dimension, El- Moselhi saw that it was important to develop staff who specialised in sales and marketing. "Being a government organisation, there was no awareness of marketing and sales," he said. A private sector training company was contracted to develop the needed staff. Forty-five individuals have been trained as the nucleus of this department.

Hand in hand with the development of human resources, El-Moselhi began reworking the physical network which currently consists of 3,600 offices across the country. A comprehensive study was carried out to find out the feasibility of each office. The study divided the offices into three tiers: the first tier is the profitable offices, the second is the ones breaking even. And the third is considered a must to secure the universal service obligation, but need thorough business development to minimise their losses.

A three-year plan was developed to face-lift all the offices. During the first year 500 offices will be revamped, 150 in the second year, and 1,200 in the third year. The remaining offices, which were found to be in very bad shape, will be dealt with immediately, "because they can't wait and we have to intervene and do something about them now".

In the meantime, new offices will be opening in areas where there is a shortage of NPO services. The location of the new offices will depend on the demography, customer distribution and distance to the next office. In revamping the old offices and in establishing new ones, NPO will be standardising the appearance of the external façade and the internal layout.

The second major part in the physical network is the letter box. All collection boxes will be renewed in three years. "We put standards for collection boxes and we tendered 1,500 boxes until now." First the letter boxes of Greater Cairo will be changed, then they will be taken to be renewed and deployed in other governorates.

Updating the organisation technologically was the third area to be tackled. Not only was connectivity between the different offices and the districts limited to a phone line, but amazingly some 1,700 offices did not even have that. During the past six months, those 1,700 offices have received phone lines for the first time. By mid- March the backbone of the network will be completed connecting 550 offices in 34 districts with the post office centre in Ramses and Ataba. The main data centre in the organisation's main building on Ramses Street was developed along with its main web presence and financial applications.

Deploying technology throughout the organisation will enable NPO to roll out the new services and enhance existing services. NPO's financial services will particularly benefit from modern technology. Some 52 offices will be equipped with ATM machines. NPO is now a member of Visa International. NPO/Visa prepaid cards, debit cards and a smart card can now be used to pay for any services within the postal network. "This will encourage the use of credit cards on a wider scale." NPO also has 12.2 million savings accounts with net savings of LE23 billion.

El-Moselhi is also working on building up cooperation between NPO and multinational operators. Currently a number of international mail delivery services operate in Egypt with the approval of NPO in the express mail area. He plans to boost cooperation with international companies to develop the market and increase business in the mail area. Electronic mail has affected the volume of mail worldwide. "In Egypt it is no different. It is decreasing by five per cent annually," he said. But NPO will not stand by idly. "Our aim is to deliver the service and the means to do that change with time. Whether it is on horseback, airplane or through the Internet, messages will be delivered," he said.

To adapt itself to the age of the Internet, each office will act as a community centre allowing people to use electronic mail. This will make up for some of the losses from the handling of traditional mail.

NPO also opened its first Hybrid mail centre. This technology combines computer-based data processing with the printing facility and automatic enveloping and stamping. This was opened last July in Sixth of October City under a shared revenue agreement with a private company. NPO is currently in the process of advertising the availability of this service to private businesses. "Adapting to technology is the only means to prevent the organisation losing business."

While working on these four fronts, El-Moselhi also hopes to boost the profitability of the company. Despite its shortcomings, the NPO has been a profit-making organisation. When El- Moselhi took over, the NPO had just recorded annual net profits of LE45 million. By the end of June 2003, net profits had increased to LE67 million.

Losses in the mail services area were offset by profits in the financial services area, explained El-Moselhi. "But the bottom line is that we are profitable. We re-invest our own profit. This is necessary to enhance our services."

"Once our services improve, this increases the volume of work and thus gross income. This year we are committed to LE100 million net profit despite all the expenses NPO is incurring in the rehabilitation process."

NPO's investment budget is LE70 million while its operational budget is LE700 million. It handles LE77 billion through its financial services and moves 400 million letters per year.

"We are trying to enhance the use of our resources -- our physical network and the capacity to deliver things from door to door," El-Moselhi said.

NPO has 5,000 postmen who roam the country twice a day. They do not just deliver the mail, but also collect bills, handle some of the online services of ministries such as the distribution of birth certificates and collecting fees. And they even deliver monthly pensions, a service that previously meant pensioners had to wait in long queues to cash their cheques.

NPO is also working to get its balance sheet in order, cooperating with the Ministry of Finance to develop the result-oriented budget by next year. This will be a budget which reflects where money is spent and what it was used for.

"The cost accounting will help us judge the business feasibility of the different services. According to which we can decide if we can break up the organisation into companies."

El-Moselhi does not believe anyone would be interested in buying the organisation. "If anyone wants to buy a set of offices, they are welcome." Rather than sell the organisation, he opts for partnering with the private sector to improve services and increase profits. Moreover, he is considering franchising NPO services and is meeting with the United Nations Development Programme experts to discuss the idea. "Once we develop our standards, we can do that," he said.