Presidential panel questions postal IT efforts

'We largely concluded that USPS was getting out of their area of expertise. Our sense was the Postal Service needs to get back to its core business of delivering mail.'

'Commission Co-Chairman Harry Pearce

The Postal Service should focus its resources more on technology that would make mail delivery smarter and less on initiatives that compete with industry, the President's Commission on the Postal Service has concluded in a new report.

The report, Embracing the Future: Making the Tough Choices to Preserve Universal Mail Service, released this month, said USPS should drop its e-commerce initiatives because the ventures have produced largely disappointing results and 'drained time and resources that could have been spent improving traditional postal services.'

President Bush created the commission in December through an executive order and asked it to recommend legislative and administrative postal reforms.

'We largely concluded that USPS was getting out of their area of expertise,' said Harry Pearce, co-chairman of the commission and chairman of Hughes Electronics Corp. of El Segundo, Calif. 'Our sense was the Postal Service needs to get back to its core business of delivering mail.'

Outsourcing, perhaps?

Its core business does not include managing IT or other high-cost functions, the commission said. The Postal Service should consider outsourcing its IT management along with other functions, such as real estate management and vehicle maintenance, the report concluded.

'This has been a trend in industry, and Postal Service executives must ask if these types of functions can be done better and at a lower cost by the private sector,' Pearce said. 'We are challenging USPS to make this assessment.'

The White House is studying the commission's findings, as is the Postal Service. The commission was made up of mostly industry executives, except for one postal union official and one academic.

'We will be reviewing the commission's recommendations and look forward to continuing to work with the administration and Congress as we evaluate the commission's proposals,' USPS spokesman Mark Saunders said.

Mark Amtower, a partner in consultant Amtower & Co. of Ashton, Md., who has followed government mailing policies for more than 18 years, said the report was thorough and on the mark, but there isn't much new in it.

'The Postal Service should be supplementing their core competencies instead of trying to understand the e-commerce initiatives trend,' Amtower said. 'USPS thought they needed new profit centers, but they never demonstrated any expertise in any of their
e-commerce ventures.'

E-commerce fizzle

In a March 2002 report, the General Accounting Office found the Postal Service lost $10.4 million in 2001 running its online payment services. And USPS brought in less than $1 million in revenue that year for all of its e-commerce initiatives after predicting it would earn $104 million in revenue.

The commission found most citizens have no idea that USPS provides e-commerce services, such as electronic bill payment, Internet tax services, money transfers, certified e-mail and online greeting cards. USPS should leave these services to the many companies that also offer them, the report said.

'We were strongly influenced by the GAO report,' Pearce said.

The commission said USPS should invest in smart-mail technologies, such as embedding data on postage stamps or letting consumers and businesses personalize stamps, instead of spending money on e-commerce systems.

'Intelligent mail can serve a far broader purpose, functioning as the foundation of a truly digital network that links postal facilities, vehicles and employees not only to each other, but also via the Internet to customers and to the individual mail pieces themselves,' the commission said.

It recommended that USPS consider working with the Homeland Security Department on a sender-identification technology for each piece of mail. This technology could include a smart bar code or stamp that contains sender, geographic origin and mail class identification.

'The Postal Service deserves credit for moving in the direction of smart technology, but they need to be more aggressive,' Pearce said. 'This is not pie-in-the-sky technology. It already exists. It would add value to the Postal Service's core competencies.'

To view an Adobe Portable Document Format version of the report, go to and enter 145 in the box.

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