Introduction to Report
The undermentioned study trades with a NAO value-for-money study and reviews the models and constructs used. It begins with a short overview of the undertaking, which summarises general purposes and results of the undertaking.
The chief portion of this study deals with the four stages theoretical account of undertaking direction ( Maylor, 2003 ) , get downing with the define stage, which is followed by the design stage, the bringing stage and finally the development stage. In order to give this study a clear construction this theoretical account is applied and should give the reader an thought, how the undertaking was completed and what the major challenges were.A
First, the define stage describes the undertaking and organisational scheme and determines the ends. The 2nd phase, the design stage, is more concerned with the planning, appraisal and modeling of the resources needed and trades moreover with possible struggles and their declaration. Third, the bringing stage is the existent phase where the undertaking is carried out. Important points are the organisation and control of the daily activities in order to do certain that the undertakings is complete harmonizing as planned. The concluding stage ( the develop stage ) should measure the undertaking procedure and compares the undertaking the targeted aims with the existent results of the undertaking. In add-on to that, the ‘lessons learned ‘ are documented and a feedback session with major stakeholders will stop the undertaking lifecycle.A
The concluding portion of this study sums up the most of import points and the current state of affairs is presented in order to supply up-to day of the month recommendations on how the Royal Mail Ltd. should go on their efficiency plan, which is covered by the NAO value-for-money study.
Overview of NAO-Project
The Department for Business, Enterprise and Regulatory Reform approved in May 2007 the closing of 2,500 station offices, which were run by sub-postmasters. As a compensation for this loss, at least 500 outreach services ( nomadic mercantile establishments that offer limited services ) would be added to the bing 11,500 stationary mercantile establishments. The decrease of mercantile establishments is known as the “ Network Change Program ” which is portion of the larger program taking to turn Royal Mail Ltd. into a profitable concern by 2010-11. In order to accomplish this ambitious end, the authorities spends yearly ?150 million to back up both, the daily operations and the restructuring of the postal web. Besides betterments in the fiscal public presentations, the program aims to drive efficiencies to derive a sustainable gross watercourse. Including the governmental subsidy, the BERR financess up to ?1.7 billion ( over five old ages ) owing to the fact that the station offices have a particular both societal and economic function for the community in the UK ( delight see Define Phase for more information ) . As BERR is the chief stockholder in the Royal Mail Holdings plc the inadvertence of Royal Mail Ltd. Network Change Programme is carried out by BERR by looking after the chief three undertakings:
Ensure that the public investing in the Post Office Ltd. is moderately used
Ensure that there are non major disadvantages for Post Office Ltd. clients after the decrease of assorted mercantile establishments
Ensure that the restructured webs is able to get by with future demands A
To give the reader a simple overview over the of import factors ( inputs, restraints, mechanisms and end product of the undertaking ) , the ICOM-model ( Maylor, 2003 ) is applied to the Network Change Programme: A
Figure 1.1: The ICOM Model applied to the Network Change Programme ( based on: Maylor 2003 )
Main Part: Undertaking Detailss
Harmonizing to Gray et Al. ( 2002 ) and Maylor ( 2003 ) the Define ( or Definition ) Phase identifies the wide specifications of the undertaking and sets ends, aims and assigns major duties.
As it can be seen in the ICOM theoretical account, the station office web alteration aims are to cut down costs by shuting non-profitable mercantile establishments. Furthermore, it should increase the operations productiveness and the overall public presentation to finally bring forth gross, non losingss. Since 2000 ( NAO Report 2009 ) Post Office Ltd. has been doing losingss and is to a great extent subsided by the British authorities. Due to the hapless fiscal state of affairs and the fact that the traditional market of postal service is worsening ( permutation of letters by modern engineerings and in add-on increasing competition in this sector ) , the Post Office Ltd. has to increase the profitableness ( sooner by cost film editing ) of its operations in order to restrict the negative effects on the UK taxpayers.
As a consequence of the old grounds, Post Office Ltd. decided to cut down the web costs by shuting down approximately 2,500 station offices which where run by sub-postmasters. The closings are necessary but entail assorted negative effects for the undertaking ‘s stakeholders ( see Design Phase ) . For the intent of supplying a socially acceptable solution, certain restrictions ( these undertaking restraints are besides called “ lower limit or numerical entree standards ” ) apply to the closings to conserve the societal and economic benefits of the local station office to the general society. There should be a just balance of closings both in rural and urban countries. Furthermore, the sub-postmasters who are affected should have a sensible compensation to cover their most immediate losingss. In order to contract down the negative impacts on society, it must be executable for 99 % of the UK citizens to be within three stat mis, and 90 % within one stat mi to the nearest station office mercantile establishment ( including nomadic mercantile establishments ) .
In decision the undertaking is chiefly concerned with cut downing the operation ‘s cost ( and hence increase productiveness and profitableness ) but paying attending to the assorted restraints as the station offices play an of import function both in rural and urban countries of the UK.
The design stage addresses the general planning and modeling of options, the budget and the agenda. Furthermore, the available resources are analysed and allocated and possible struggles theoretical account development, get bying with major stakeholders. The general program consisted of the undermentioned stairss:
Analysis of non-profitable mercantile establishments
Check model of minimal entree standards if closing is executable
Development of country programs for closings in concurrence with interested parties, including Postwatch
Closing and if applicable constitution of a outreach mercantile establishment
Businesss need to apportion capital resources to their most promising undertakings. Therefore the web alteration programme is intended to salvage around ?45 million a twelvemonth from 2011 onwards and has cost ?161 million to implement, prior to the programme the station office had a web of around 14,000 offices and in the fiscal twelvemonth 2005-2006 it lost ?130 million.
The sanctioned budget for the Network alteration programme is listed below:
Amount ( ? )
Budgeted Compensation for Sub-Postmasters
Average compensation payment to be made per sub-postmaster
Table 2.2: Approved Budget for the Network Change Programme ( NAO Report 2009 )
The sum to be paid to the sub-postmasters was derived by spliting the figure of post-offices to be shut down by the sanctioned sum to be paid out.
The sanctioned agenda was from May 2007 to November 2008. It had a life rhythm of 18 months. However, the undertaking suffered from a series of jobs that led to a hold. It was expected that the new bringing day of the month was in summer 2009, running six months tardily.
The Network Change programme had a precedency relationship of finish-to-start: the start of the replacement activity is dependent on the completion of the predecessor activity ( PMBOK Guide 2004 ) . The activities had compulsory dependences. Please see the Gantt chart for farther illustration ( see Appendix ) .
The undertaking had many stakeholders, which were protecting one involvement or the other. In order to guarantee that the undertaking was executed successfully, there was a demand to pull up a proper communicating program that will provide for the demands of the stakeholders as they arise.
The Power/Interest Matrix is used below to group the stakeholders as it speaks to their degree of involvement and the power of influence they can exert on the undertaking ( Johnson & A ; Scholes 2008 ) :
Degree of Interest
Power to Influence
Table 2.3: The Power / Interest Matrix ( Johnson and Scholes 2008 )
Grouping of Stakeholders
( A )
Keep Informed ( B )
( C )
( D )
Deloitte ( Consultants )
Postwatch ( Succeeded by Consumer Focus )
BERR ( Principal Shareholder )
Department of Works and Pension
Post Comm ( Independent Regulator )
MP ( Members of British Parliament )
Table 2.4: Group of stakeholder on the footing of the Power / Interest Matrix
Dispute Resolution Process
In order to guarantee a seamless flow of the undertaking, Post Office Ltd. searched through historical information to pull out lessons learnt on past undertakings. This is to vouch that a difference declaration procedure was put in topographic point to turn to and decide issues as they arise. The undermentioned chart shows the intended procedure how the escalation procedure is handled:
Figure 2.2: The Escalation Process ( NAO Report 2009 )
The bringing stage is portion of the undertaking life rhythm where the administration aims to accomplish the set marks and aims.
Development of Area Plan
An country program was developed by the Post Office Ltd. for closings and other operational alterations. The administration considered several factors for developing the country program like the handiness of conveyance, local demographics, and so forth. There was a Memorandum of Understanding, which was signed by Post Office Ltd. and Postwatch for the program development.
The country program for the closings was developed with the aid of GIS ( Geographical Information System ) and some of the concern informations. Each proposed closing was visited by both the Post Office Ltd. , and the Post Watch before the audience procedure.
The public audience lasted for six hebdomads and it created jobs for some of the local clients. The clients felt that sufficient importance was non give to the audience procedure. As a consequence of the audience procedure about 92 closings were withdrawn.
During the initial class of the programme there was unequal communicating to the stakeholders about the closings, which afterwards were improved. Post office was slow in reacting the remarks as they used a legalistic attack to communications.
The Network Change Programme was to be completed by the terminal of 2008, but was non able to achieve it. It was chiefly due to the hold in set uping the outreaches services.
About 2,383 closings were made and 433 outreaches services were established by the terminal of March 2009.
The mercantile establishments were reduced to 11,953 by March 2009 and were anticipating an unplanned closing in the coming old ages.
BERR was made Post office to committee an independent audit in order to corroborate that the web subsidy do non transcend the net cost which is incurred by the Post office in supplying the services of general involvements.
Definition of MoU
How were the closings been done? Problems?
Constitution of nomadic mercantile establishments
When a undertaking is completed, it is necessary to mensurate whether the undertaking is a “ success ” or non. The following inquiry will be: what does undertaking success really intend?
One of the most common attacks to project success has been to see a undertaking successful when it has met its clip and budget ends ( Freeman et al. 1999 ) . However, mensurating a undertaking success by merely utilizing clip and budget steps deemed deficient and may take to a wholly incorrect decision. Some undertakings may number as successful, for case, a undertaking that met clip and budget restraints but did non run into client demands and demands ( Atkinson 1992 ) .
To mensurate the success of this peculiar undertaking, we adopt the theoretical account developed by Shenhar et Al. ( 2001 ) that success of a undertaking can be approached through four different dimensions, which are efficiency, client impact and satisfaction, business/direct success and future potency.
Efficiency is related to how successful the undertaking manages its limited resources ( budget and clip ) to run into its ends ( Shenhar 2001 ) . As normally defined, on this dimension, undertaking success is when a undertaking meets its ends within the budgeted cost and planned agenda ( Shenhar 2001 ) .
Project Target vs. Outcomes
Status at the terminal of March 2009
Cost Of Programme
Compensation paid to sub-postmasters ( 1 )
Branchs closed under the programme
up to 2,500
Outreach services established
Table 2.5: Undertaking Targets vs. Outcomes ( influenced by: NAO Report 2009 )
( 1 ) The ‘Compensation paid to sub-postmasters ‘ figures include both compensation paid and sums committed to payment.
Cost wise, as at the terminal of March 2009, the existent cost incurred was 89 % from the budget. Meanwhile, at the same clip period, the figure of subdivisions closed was making 95 % of its mark and the outreach services established was making 87 % compared to the mark. Conclusively, costs have been lower than expected, although benefits to day of the month hold besides been lower.
Having the above figures, this undertaking has been expeditiously managed. However, proper cost commanding shall ever be in topographic point to guarantee that the undertaking will be expeditiously carried out until the closing of the undertaking.
The continuance of the undertaking was ab initio 18 months, get downing in May 2007 and shall be completed on by November 2008. As at March 2009 the programme was still active, mostly because of holds in set uping outreach services, which had delayed the closing of offices that these services were due to replace.
This hold in making the mark was due to dialogues over hosted and spouse outreach mercantile establishments taking longer than expected.
Customer Impact / Satisfaction
This dimension relates to how the undertaking addresses and meets the client demands and demands ( Shenhar 2001 ) .
As a undertaking within public service administration, the result of the undertaking will straight impact the local community as its client. This dimension will capture the feedbacks from the client. Several concerns were raised as responses to this undertaking:
Fact: The audience period was set for six-week period.
The six-week audience period was felt to be excessively short by some of the stakeholders, some formed the feeling that the audience procedure was non being taken earnestly and that the closing determinations were a “ fait accompli ” . The handling of some of the early station office closings at the local degree besides suffered from hapless communications ; subsequent alterations were made to better the procedure.
Fact: “ Partner ” outreaches are unable to accept postal packages weighing more than 2 kilograms as they believe comparatively few clients will be affected by the inability of some outreach services to manage packages weighing more than 2 kilogram.
This, nevertheless, will intend considerable incommodiousness for those who need to direct big bundles, and could hold an impact on local concerns.
Fact: There is no warrant that there will non be farther closings after the Network Change Programme as a consequence of single postmasters ‘ and postmistresses ‘ determinations.
This will perchance impact the future ‘coverage ‘ of the station service, which will impact the community.
This dimension once more is slightly straightforward, which is measured chiefly in term of: how the undertaking is contributing/creating short-run, realized, commercial success of the undertaking. Fiscal steps are used in this dimension.
Refer to the above, it is noted that the undertaking has contributed about ?19 million economy, as terminal of March 2009. This economy was coming from reduced wage to sub-postmasters, cyberspace of lost net income border from decreased gross revenues.
The 4th dimension addresses the issue of fixing the organisational and technological substructure for the hereafter ( Shenhar 2001 ) . Some fiscal steps, related with possible future fiscal benefit, will be in taken into history in this dimension.
On this web alteration programme proposal, it is noted that this undertaking will lend ?44 million salvaging per twelvemonth once it is completed ( NAO Report 2009 ) :
( ? million )
Fixed sub-postmaster wage
Savingss in wage to sub-postmasters of offices that have been closed
Lost part to gain from gross revenues
Caused by a decrease in income associated with fewer offices
Other ( cardinal ) nest eggs
Allotment of efficiency nest eggs to post office subdivision closings
Table 2.6: ? ? ? ( NAO Report 2009 )
However Post Office Ltd does non individually monitor cardinal efficiency nest eggs or decreased hard currency retention costs attributable to the Programme as distinct from other enterprises.
As of March 2009, the Network Change plan has spent within the budget, albeit some projects were non yet wholly carried out. On fiscal point of view, the undertaking was besides proof its part to the future corporate profitableness.
However, some findings are noted in relation to the consequence of the plan to their client. The deficiency of clip in public audience phase and possible jobs with station office capableness and coverage in the hereafter are some major issues.A
Having these facts, It is imperative for BERR and Post office to guarantee that cost decrease enterprise carried out on this undertaking will non impact their public A duty in functioning the communities.
Current state of affairs
UK confronting largest Post Office work stoppage in years.A The Communication Workers Union has accused Royal Mail of cutting the wage and occupations of postal workers without understanding, while besides cut downing services.
hypertext transfer protocol: //news.parliament.uk/2009/11/report-looks-at-post-office-programme/
Due to the fact that the Network Change Programme was a success, we recommend the undermentioned stairss to be taken by the Royal Mail Ltd. :[ 1 ]
In order to accomplish the planned marks in the short-run ( increased profitableness by increased public presentation at changeless quality ) Royal Mail Ltd. should perpetrate itself to a strategic partnership with an administration, which is in the same market. This cooperation would hold good to cut down costs by using synergy effects. This attack seems to be suited to guarantee that Post Office Ltd. decreases its dependences from the UK authorities ( finally the British revenue enhancement remunerator ) , but in order to go competitory in the long-run, the administration should construct up some internal capablenesss to go more efficient and more significantly, independent.
In order to make so, Post Office Ltd. should diversify its concern by come ining other, turning markets like the logistics industry. There are two illustrations in other states that show that this passage is possible. Former public postal administrations were privatised into listed multi-national endeavors such as the TNT ( Dutch station office equivalent ) and Deutsche Post DHL ( German station office equivalent ) . TNT is more concerned with express services whereas Deutsche Post DHL is more specialized in contract logistics. These two illustrations demonstrate that a former public administration can go successful and competitory by diversifying their concern.