corporate plan - amazon web...
TRANSCRIPT
Corporate PlanCorporate Plan2020/21 – 2022/23
3
The South African Post Office (SOC) Ltd is referred to in the text of the document as the SA Post Office.
GENERAL INFORMATION
Registered name South African Post Office SOC (Limited)
Registration number 1991/005477/30
Registered office address 497 Sophie de Bruyn Street, Pretoria 0001
Postal address PO Box 10 000, Pretoria, 0001
Contact telephone number (012) 407 7000
Email address [email protected]
Website address www.postoffice.co.za
External auditors information Auditor-General of South Africa
Banker’s information Standard Bank South Africa
Company Secretary Mr Dawood Dada, (ACIS)
The SA Post Office GroupWe Serve You.
Prepared by:The SA Post Office Group Strategy
Designed in-house by:
Rachel-Mari Ackerman and Thea Clemons. The SA Post Office Group: Philatelic Services.
Notes
This document contains forward-looking statements regarding the outlook and targets of the SA Post Office Group and its subsidiaries. These statements are based on information available when this document was produced, or our expectations derived from projections or assumptions made at the time of producing this document.Please note that these forward-looking statements are subject to a broad range of risks and uncertainties, including changes in the economic conditions or business trends, and revisions to laws or regulations. As a result, the actual results may vary from such statements. Furthermore, if significant unforeseen external factors arise, the initiatives contemplated in this implementation plan will be adjusted accordingly and all stakeholders will be timeously informed in this regard.
4
FOREWORD BY CHAIRPERSON OF THE BOARDIn his meeting with the leadership of 20 key State Owned Entities (SOE’s) that included the SA Post Office on 06 June 2019, His Excellency President Cyril Ramaphosa emphasized the critical role that SOE’s play in meeting social needs and driving economic growth. The meeting also recognized that SOE’s have considerable resources and capabilities that, if better coordinated and managed, could have a far greater impact on economic growth.
It is against this background, the National Develop-ment Plan goals and the mandate of the Department of Communications and Digital Technologies (DCDT) that the SA Post Office has compiled its 2020/21 Corporate Plan which we are pleased to present.
The 2020/21 Corporate Plan has been compiled in line with, and in support of, the SA Post Office Vision 2030 that foresees the organization to be a trusted exchange channel of service delivery in South Africa respected for our relevance, reliability, reach and resilience. Thus, Vision 2030 directs the SA Post Office towards becoming a trusted brand in the market and this requires effective collaboration with
customers, communities, employees, suppliers and other stakeholders.
Amidst visibly stagnating global, and local economic growth conditions, the advent of technology and global surge in e-Commerce trade presents opportunities for the SA Post Office. The SA Post Office 2020/21 Corporate Plan positions the organization strategically to benefit from the advantages of the Fourth Industrial Revolution (4IR). South Africa will have access to 5G technology in the near future and emerging technology such as Blockchain which have significant accounting benefits which will change the face of financial services. The SA Post Office, being a licensed financial services provider, is well positioned to utilize these technologies.
Postbank SOC Ltd is operating as a subsidiary of the SA Post Office, however a separation from the SA Post Office Group of Companies is being envisaged, and therefore Postbank SOC Ltd is establishing its own structures, governance and operational models. A Postbank SOC Ltd Board was appointed in April 2017, and on 26 June 2017 the entity submitted a Section 16 Application for a banking license to the South African Reserve Bank (SARB) in compliance with the Banks Act to establish a bank.
With the oversight of the DCDT, and as gazetted by the Minister in line with the provisions of the Postbank Amendment Act 44 of 2013, Postbank is engaged in the process to transfer operations to Postbank SOC Ltd in the 2018/19 financial year.
The SA Post Office remains focused on its core purpose and defines its mission as serving the needs of citizens, business and government and all who deal with us, every day. In line with this, the following marked the highlights for the year to 31 March 2020:
• During October 2019, a new Board of Directors was appointed;
• Implementation and ongoing payment of Social
5
Grants with of over 8 million grant recipients paid monthly through the SA Post Office / Postbank, however the number recipients collecting grants through the SA Post Office network is not at anticipated levels;
• Over 1 million beneficiaries have been registered for the DTT project, which has been beset with delays due to low levels of registrations, expiry of the previously appointed installation companies together with delays with the appointment of localised installers. The new DTT delivery model has been approved by Cabinet during November 2019
• Payment of all long outstanding Creditors which has improved the availability of required stock, materials, vehicles etc.;
• Progress on the completion of the IT network upgrade, despite delays experienced with the appointed service provider, should gain traction over the next few months;
• Finalisation of a digital strategy which will set the direction for the digital journey of the organisation.
The immediate attention of the present Corporate Plan, which sits at the apex of focus areas, is ensuring that the emphasis of this strategic cycle is directing all efforts towards the financial sustainability of the SA Post Office and attaining profitability. There are seven focus areas aimed at resolving the SA Post Office’s profitability challenge as well as establishing the foundation for the implementation of Vision 2030:
• Financial sustainability;
• Optimised assets and infrastructure;
• Customers and communities first;
• Efficient systems and processes;
• Digital transformation;
• Culture of excellence; and
• Corporate governance.
It is envisaged that by 2030, the SA Post Office brand would have developed sufficient market equity to be regarded as a strategic component to Government’s national infrastructure, fulfilling social and economic development goals, particularly in under-serviced communities. Furthermore, the SA Post Office will be recognised for providing the nation an integrated platform which effectively facilitates the movement of money, information and goods.
Ms. Tshikani Colleen Makhubele Chairperson: The SA Post Office Group Board of Directors
6
OVERVIEW BY CHIEF EXECUTIVE OFFICERSince our inception more than 150 years ago, the SA Post Office’s primary business focus has been the provision of a universal, regular and affordable postal services to all citizens. With time, the SA Post Office now finds itself straddled between several sectors of the economy. Within the communications sector, it provides for the conveyance of physical letters – generally referred to as the reserved area - whilst in the logistics sector, the SA Post Office facilitates the movement of parcels. In addition, the SA Post Office is a licensed financial services provider and this is in addition to the financial services scope of Postbank SOC Ltd. Postbank SOC Ltd is presently operating as a subsidiary of the SA Post Office.
The SA Post Office FY2020/21 Corporate Plan shapes the priorities and direction of the organisation over the next financial year in line with the above-mentioned business developments impacting the organization, the National Development Plan priorities and the Mandate of Department of Communications and Digital Technologies as well as the SA Post Office Vision 2030 strategy.
Though the SA Post Office is currently not operating optimally, the organization remains focused on its core purpose and defines its mission as serving the needs of citizens, business and government and all who deal with us every day. We recognize
the opportunity to strengthen our market competitiveness by improving the integration of information, goods and money exchange platforms. This will require an enterprise-wide effort to resolve a number of operational issues as outlined in this FY2020/21 Corporate plan that includes the filling of critical vacancies, faster implementation of strategic initiatives geared at modernization and taking advantage of technology.
The SA Post Office’s modernisation strategy focuses on increasing customer value by optimising and modernising our five business segments. The primary goal of this strategy is to develop a seamless integration between the customer’s digital and physical activities. Fundamentally, the SA Post Office is working towards becoming a modern cyber-physical business.
• Financial;
• Digital Services;
• Logistics;
• Mail Delivery; and
• Government Front Office.
The modernisation of the SA Post Office will begin with the establishment of an integrated digital platform that shall improve the interconnectedness of the letter, financial and goods exchange platforms. Therefore, the SA Post Office will begin the process of launching a range of products and services – physical and digital – that meet the expectations and needs of all its customer segments.
While the modernisation strategy focuses on building the SA Post Office of the future, the objective of resolving the SA Post Office’s current financial challenges remains management’s foremost priority. All the SA Post Office stakeholders accept that failure to resolve this immediate and critical threat imperils the SA Post Office’s transition into the future.
It is a fact that certain operational challenges still need to be resolved and attendant to this is the relatively high employee numbers. We are looking at rationalising our staff to ensure that the level of productivity is commensurate with the staff
7
numbers. We are also looking at reskilling and upskilling employees to prepare for tasks related to digital processes and platforms.
The revenue generated by the payment of Social Grants has not matched the projected revenue targets. Currently negotiations are underway to reconsider the revenue / cost allocation between Postbank and the SA Post Office. The SA Post Office will continue to provide an uninterrupted and consistent cash payment service. The DTT project continues to perform poorly due to delays with the appointment of installers for the set-top boxes as well as the delay of the implementation of the Phase 2 voucher model.
The optimisation of staff to achieve fit-for-purpose ratios in critical areas of need and the assessment of the urban retail presence to present an optimal and viable operating model forms part of the 2020/21 Corporate Plan cycle. Therefore, during this strategic cycle, all efforts are directed towards resolving the SA Post Office’s sustainability challenge as a result of poor performing revenue numbers and at the same time, begin with its modernisation programme, especially in digitization.
The SA Post Office’s IT strategy centres around three areas: running, growing and transforming the organisation. This framework focuses on ensuring that the current IT infrastructure supports the daily requirements of the business, optimise the IT infrastructure to be more competitive and adopt innovative technologies to transition the business as needed.
During FY2020/21, the attainment of regulated targets and service level agreements inform all actions undertaken across the postal value chain. Strategic initiatives promoting operational efficiencies and the reduction of excessive costs will be prioritized and supported with adequate funding and resources. Resolution of challenges relating to tools of trade, mail automation, IT systems, security deficiencies and delivery is planned for FY2020/21.
eCommerce remains a focal area for the SA Post Office in this planning cycle, especially the delivery of parcels and other upstream opportunities in this market. However, the Courier, Express and Parcel sector (CEP) is a highly competitive environment comprising of a large number of operators in the sector. As this industry is a high volume, low profit sector, operational efficiency and innovative cost effective technologies are key success factors for business continuity.
To adequately service this demand, the SA Post Office is planning to maximize efficiencies, strengthening customer trust through flexible and convenient on-time delivery standards and delivery options. We also recognize that collaboration and partnership between transport technology suppliers, industry suppliers, courier operators and retailers is an increasing industry trend that we intend to take advantage of. Another developing trend the SA Post Office plans on pursuing from a partnerships’ perspective is related to pure digital retailers (eTailers) who are establishing their own physical delivery distribution networks as a means of improving the quality of service provided to their online customers.
The FY2020/21 Corporate Plan has been compiled in line with the spirit of our vision to become a trusted exchange channel of service delivery in South Africa respected for our relevance, reliability, reach and resilience.
Mr. Ivumile NongogoChief Executive Officer (Acting)
8
OFFICIAL SIGN-OFF
IT IS HEREBY CERTIFIED THAT THIS STRATEGIC PLAN:
• was developed by the management of the SA Post Office under the guidance of the SA Post Office Board, representing the Accounting Authority;
• takes into account all the relevant policies, legislation and other mandates for which the SA Post Office is responsible;
• accurately reflects the outcome oriented goals and objectives which the SA Post Office will endeavour to achieve over a three year period from FY2020/21 to FY2022/23.
IT IS HEREBY CERTIFIED THAT THIS ANNUAL PERFORMANCE PLAN:
• was developed by the management of the SA Post Office under the guidance of the SA Post Office Board, representing the Accounting Authority;
• was prepared in line with the current Strategic Plan of the SA Post Office;• accurately reflects the outcome oriented goals and objectives which the SA Post Office will endeavour to
achieve over a three year period from FY2020/21 to FY2022/23.
Mr. Ivumile Nongogo
Group Chief Executive Officer (Acting) Signature: _______________________
Date: 12 March 2020
Ms. Tshikani Colleen Makhubele
Chairperson of the Board of Directors Signature: _______________________
Date: 12 March 2020
9
TABLE OF CONTENTS
MANDATE, REGULATIONS AND LICENSE 12
VISION, MISSION AND VALUES 20
BUSINESS ENVIRONMENT 21Situational Analysis 23
Industry Trends 25
SA POST OFFICE GROUP STRATEGY 29Vision 2030 29
Implementing Vision 2030 32
STRATEGIC FOCUS AREAS 51
INSTITUTIONAL PERFORMANCE INFORMATION 58Measuring Impact – Key Performance Indicators 58
FINANCIAL PLAN 60
ORGANISATIONAL STRUCTURE 70
BOARD OF DIRECTORS AND SUB-COMMITTEES 71
DELEGATION OF AUTHORITY 74
MATERIALITY FRAMEWORK 75
STRATEGIC RISK PLAN 77
FRAUD PREVENTION PLAN 78
SUSTAINABILITY PLAN 79
ANNEXURES 81
10
FiguresFigure 1: The SA Post Office Group Value Proposition 21
Figure 2: The SA Post Office Market Positioning 22
Figure 3: PESTLE Analysis 23
Figure 4: The Post Office Parcel Volume Trends 25
Figure 5: The SA Post Office Group (excluding Postbank) Financial Performance 27
Figure 6: The SA Post Office 4R Principles 29
Figure 7: The SA Post Office Strategy 2020/21 - 2022/23 32
Figure 8: The SA Post Office Business Segments 34
Figure 9: The SA Post Office Digital Strategy 36
Figure 10: The SA Post Office Digital Transformation Themes 37
Figure 11: Digital Strategy Outcomes 38
Figure 12: Decade of Game Changers 38
Figure 13: The SA Post Office e-Commerce Strategy 39
Figure 14: The SA Post Office e-Commerce Ecosystem 40
Figure 15: The SA Post Office Group Impact Statement Map 51
Figure 16: The SA Post Office Group Structure 70
Figure 17: SA Post Group Materiality Framework 75
Figure 18: SA Post Office Group Strategic Planning & Implementation Framework 95
TablesTable 1: The SA Post Office alignment to NDP Priorities & Objectives 14
Table 2: The SA Post Office FY2020/21 SWOT analysis 28
Table 3: Key Focus Areas 52
Table 4: The SA Post Office income statement 63
Table 5: The SA Post Office Statement of financial position 64
Table 6: The SA Post Office Cashflow Statement 66
Table 7: Capital Investment Plan FY2020/21 67
Table 8: Capital Investment Programme 68
11
1
12
MANDATE, REGULATIONS AND LICENSEThe South African Post Office SOC Limited was established on 1 October 1991 as a public company in terms of the Companies Act, No. 61 of 1973. The State (Republic of South Africa), represented by the Minister of Communications and Digital Technologies, is the sole Shareholder.
Following the repealing amendment of the Companies Act No. 61 of 1973 and the enactment of the Companies Act No. 71 of 2008 (as amended), the SA Post Office is designated as a State-Owned company (SOC) as per the South African Post Office Limited Act No. 22 of 2011, as amended.
The SA Post Office is also a major state entity in terms of Schedule 2 of the PFMA, Act No. 1 of 1999 (as amended).
Regulation And Mandate
The Post Office is mandated to provide postal services in accordance with the Postal Services Act 124 of 1998. This Act provides for the regulation of postal services including its Universal Service Obligations (USO).
The license to operate as South Africa’s postal services provider was issued to the Post Office by the regulator in August 2001. This license is valid for 25 years and is reviewed every three years in terms of targets and performance.
The Post Office is afforded a legislated monopoly over reserved services and the Postal Services Act of 1998 charges the regulator, Independent Communications Authority of South Africa (ICASA), with protecting the provision of the universal service through the reserved postal services licensee, namely the Post Office.
Through the Post Office’s Universal Service Obligation (USO), a strategic priority for the Company is rolling out new addresses and branches in remote areas, in line with the government’s development programme for 2030. The Postal Services Act further appoints ICASA to monitor the SA Post Office against ‘anti-competitive’ behaviour.
Universal Service Obligation And Subsidy
The SA Post Office is mandated in terms of the Postal Services Act to provide a basic letter service as part of the provision of a universal postal service. The Regulator is tasked by Section 8(f) of the Act to ensure that the service is provided regardless of location, via a reliable service at reasonable price. The SA Post Office’s license spells out that the basic letter service entails the delivery of mail, whether to a street address or to a letter box. In terms of the provisions of both the SA Post Office’s license and the Act, the SA Post Office is obliged to deliver mail to every citizen, regardless of whether doing so is profitable or not (Section 2(f) of Postal Services Act). This section clearly articulates the SA Post Office’s non-commercial mandate, i.e. the requirement to provide a public service, on non-commercial terms, purely ‘in the public interest’ in the terminology of Section 2 of the Act.
In order to deliver on its mandate, the SA Post Office is required to provide the resources and infrastructure necessary to reliably provide the basic letter service. The SA Post Office has built an infrastructure base to enable the movement of mail items.
13
The SA Post Office has been allocated an amount of R2.1 billion over the medium term from 2019/20FY to fund the Public Service Mandate (USO).
Legislative And Governance Framework
The Post Office complies with the protocols and legislation governing SOCs and is guided by various postal, courier and financial regulations laid down by the regulatory bodies such as ICASA, the Financial Intelligence Centre (FIC) and the Financial Sector Conduct Authority (FSCA).
The Group is required to comply with, inter alia, the following:
• The Post Office Act No. 22 of 2011 (as amended);• Postbank Act No. 9 of 2010 (as amended);• Postal Services Act No. 124 of 1998;• Public Finance Management Act No.11 of 1999 (as amended);• Companies Act No. 71 of 2008 (as amended);• Relevant legislation applicable to the postal sector and to SOCs;• King IV Code on Good Corporate Governance; and• Other relevant local and international codes for the postal sector.
Other applicable South African legislation is included in the annexure section.
14
LINKS TO OTHER PLANS
NATIONAL DEVELOPMENT PLAN
The National Development Plan (NDP) has been accepted as the main guiding policy document of Government with the primary aim of charting a new path for the country. The NDP’s main aim is to change the life chances of millions of South Africans and seek to build a country where all citizens have the capabilities to grasp the ever-broadening opportunities available.
Postal Services, by their very nature, founding legislation and regulatory frameworks, have a fundamental role to enable development, economic activity, trade and social cohesion. The SA Post Office’s network is key to ensuring the inclusion of vulnerable and marginalised communities into services such as financial and government services. The SA Post Office must build its value proposition and commercial ethos around this unique positioning. The SA Post Office is well positioned to support attainment of specific elements of the National Development Plan. The diagram below indicates the different SA Post Office initiatives intended to support the NDP:
Table 1: The SA Post Office alignment to NDP Priorities & Objectives
National Development Plan Objectives The SA Post Office’s Role
Economy & Employment
Exports (measured by volume) should increase by 6% a year to 2030 with non-traditional exports growing by 10% a year.
• Enable entrepreneurs in rural areas to access domestic, regional and international markets
Public employment programmes should reach 2 million by 2030.
• Enhance the employment opportunities through various employment programmes.
Economic Infrastructure
Competitively priced and widely available broadband
• E-enablement in rural areas by provision of broadband hotspots for connectivity (Wi-Fi)
Social Protection
Create an effective social welfare system that delivers better results for vulnerable groups with the state playing a larger role than currently
• Administration and payment of social grants
• Facilitate savings and insurance services
Building a capable
A public service immersed in the development agenda but insulated from undue political interference
• Align SA post Office’s strategies to the developmental agenda and facilitation of economic activity and trade in rural areas
Developmental State
Clear governance structures and stable leadership to enable SOEs to achieve their developmental potential
• Critical positions within the SA Post Office will be populated to improve Governance and Oversight
15
National Development Plan Objectives The SA Post Office’s Role
South Africa in the Region & the World
Intra-regional trade in Southern Africa should increase from 7% of trade to 25% of trade by 2030.
• Active participation in the Universal Postal Union
• International cooperation with Postal Operators via Universal Postal Union
• Leveraging BRICS membership
• Increase cooperation with regional Postal Operators
• Enable trade and logistics solutions in the region and internationally
Improving Education, Training & Innovation
Between 80% - 90% of learners should complete 12 years of schooling and/or vocational education with at least 80% successfully passing the exit exam
• Affordable and efficient distribution of learning material
• Internet access to e-learning services and registration into universities utilising branch network
Health care for All
Everyone must have access to an equal standard of care, regardless their income level
• Logistic solutions for distribution of medicines and healthcare supplies into rural areas
In the long-term, the SA Post Office is positioned to become the face of Government services to citizens, through its proposition as a trusted platform for Government service delivery and providing access for citizens. Core to this proposition, is the vast physical delivery infrastructure and branch network touching all corners of South Africa. The provision of Government services will enable the SA Post Office to play a meaningful role in reducing the cost of providing these services to all South Africans.
Specifically, Government offerings include:
1. Improvement in the efficiency and effectiveness of delivering government services to citizens;
2. Being Government’s preferred Paymaster;
3. Positioning the SA Post Office branches as citizen-service desks for Government and leverage the SA Post Office branch network for service delivery and improvement of citizen access to services; and
4. Becoming the logistics partner of choice to Government.
The SA Post Office also subscribes to and contributes towards the government’s developmental state objectives.
16
DEPARTMENT OF COMMUNICATIONS AND DIGITAL TECHNOLOGIES
The mission of the Department of Communications and Digital Technologies (DCDT) is to create an enabling environment for the provision of inclusive communication services to all South Africans in a manner that promotes socio-economic development and investment through broadcasting, new media, print media and other new technologies, and to brand the country locally and internationally.
The Department’s strategic outcome-orientated goals are to enable the maximisation of investment in the Information and Communications Technology (ICT) sector and create new competitive business opportunities for the growth of the ICT industry for socio-economic development; ensure that ICT infrastructure is accessible, robust, reliable, affordable and secure to meet the needs of the country and its people; accelerate the socio-economic development of South Africans and facilitate the building of an inclusive information society through partnerships with business and civil society, and the three spheres of government; improve departmental performance and enhance the role of ICT State-Owned Enterprises (SOEs) as the delivery arms of government; and contribute to the global ICT agenda prioritising Africa’s development.
The National Development Plan considers ICT to be a critical enabler of economic development, mainly because enhanced communication and information flows improve productivity and efficiency. The Department of Communications and Digital Technologies will focus on the development of various aspects of ICT policy, increased broadband coverage, the migration from analogue to digital broadcasting (Broadcasting Digital Migration) for which the SA Post Office is currently the registration and distribution partner, and a new delivery model over the medium term.
Corporatisation of the Postbank
Postbank SOC Ltd appointed its board in April 2017, and on the 26 June 2017, submitted the Section 16 Application for a banking license to the South African Reserve Bank (SARB) in compliance with the Banks Act to establish a bank, within the given period of 12 months from the 2016/17 financial year. Since this submission, the Banks Act of 1990 amendments which allows for qualifying state-owned companies to apply for a banking license, was assented to by the State President on 25 May 2019.
With the support and oversight of the Department of Communications and Digital Technologies (DCDT), Postbank engaged in the process to transfer the operations to Postbank SOC Ltd in 2018/19 financial year. The transfer of the operations of the Postbank division to the Postbank SOC Ltd was gazetted by the Minister with an effective date of 1 April 2019, in line with the provisions of the Postbank Amendment Act 44 of 2013.
The finalisation of the Bank Controlling Company Structure is being addressed by the Minister of DCDT and the Minister of Finance. Currently, Postbank SOC Ltd is operating as a subsidiary of the SA Post Office, however a separation from the SA Post Office Group of Companies is being envisaged, and therefore Postbank SOC Ltd is establishing its structures, governance and operational models in line with this separation per discussions with the Department.
Outstanding actions include critical legislative amendments to the Postbank Act, formalisation of the Bank Controlling Company and the Section 43 application in order to finalise the banking license application.
Implementation of the National Integrated ICT Policy White Paper
The Department embarked on a comprehensive ICT policy review programme, with a view to developing a single integrated ICT Policy which resulted in the development of the National Integrated ICT Policy White Paper, outlining the policy framework for the transformation of South Africa into an inclusive and innovative digital and knowledge society.
17
The White Paper is considered a strategic instrument to implement what is envisioned by the National Development Plan and introduces a range of interventions aimed at ensuring all South Africans access the benefits of participating in the digital society. The development and ownership of the National Address Database is a key focus area for the SA Post Office.
Following Cabinet approval of the National Integrated ICT Policy White Paper in September 2016, the Department has prioritised the phased implementation of the White Paper over the medium term and will continue with drafting identified Bills stemming from the National Integrated ICT Policy White Paper.
Implementation of the National eStrategy
The National eStrategy, published by the DTPS in 2017, addresses the two aspects of creating the necessary knowledge base and skills for participation in the digital society. The National e-Strategy must also stimulate demand by stimulating sector growth and innovation by driving public and private ICT investment, especially in network upgrades and expansion (particularly in broadband) and development of local content and applications. This will enable the SA Post Office to be better positioned to prepare for and leverage from the Fourth Industrial Revolution (4IR).
Implementation of eCommerce
The Department has prioritised the development of the SA Post Office eCommerce platform focused on the eMall. The development of an eCommerce platform will contribute towards achieving the objectives of the development state agenda based on exploiting the already available logistical SA Post Office infrastructure. The SA Post Office eCommerce platform will also contribute towards making South Africa globally competitive and introducing new digital markets emerging from the SADC and the African continent.
Implementation of the National Broadcasting Digital Migration programme
The SA Post Office has been appointed as the registration and distribution partner for the Broadcasting Digital Migration Programme (BDM) currently in implementation.
The SA Post Office`s role as BDM partner includes the following services:
• The display and distribution of Set-Top Box marketing material at the SA Post Office online outlets;
• Process applications for the subsidised Set-Top boxes (STB’s) during the phase-in registration phase;
• The ordering, warehousing and distribution of STB equipment to the SA Post Office outlets;
• Process delivery of STB equipment in sequential distribution number order to qualifying applicants;
• Issue of installation voucher to qualifying applicant and notification to assigned installer to arrange for installation;
• Verification of Installation vouchers and processing of Installation pay-outs to Installers;
• The exchange / replacement of faulty / incomplete / incorrect Set-Top Box equipment (Reverse distribution process);
• Acceptance of the return of un-installed STB kits by the assigned STB Installers at the SA Post Office branches; and
• The insurance of STB kits up to installation level.
18
The initial planned rollout period for 5.2 million beneficiaries was for 3 Years, from 1 April 2015 to 31 March 2018 at 145,000 STBs per month or 5,800 per day. The live DTT pilot phase commenced in the SKA area on 1 October 2015. The registration phase was extended to all the remaining Provinces in a phased-in manner from 1 November 2015 to 1 August 2017. The STB Issue phase was activated in 7 of the 9 Provinces from 1 November 2015 to 20 March 2017. The only 2 Provinces where the STB Issue phase must still be activated is in the Western Cape and Gauteng Provinces. The DoC`s activation date for the rollout to these 2 Provinces via the new revised BDM Delivery model is currently awaited.
A total of 1 099 847 qualifying needy households have been registered nationally with a total of 549 405 registered STBs issued up to 30 November 2019.
The balance of qualifying households is to be registered and set-top kits to be issued, will be the SA Post Office`s priority focus in line with the DOC`s BDM Rollout Plan. The achievement of this objective will, however directly depend on the following critical success factors:
The reviewed BDM delivery model was approved by Cabinet during November 2019. This new BDM model entails the following from a distribution perspective:
• The completion of the registration and distribution of the 1 405 073 subsidized STB kits purchased by USAASA by the SA Post Office via the original BDM Delivery Model.
• The completion of the rollout to the remaining projected 3.5 million needy households via the planned DTT Voucher model, which will be implemented by the SA Post Office.
The SA Post Office remains fully committed to ensure the successful completion of the BDM project.
Broadband Roll-out
The Department will continue with the roll-out of broadband by following a rapid deployment policy to provide a simplified, streamlined and coordinated framework, supported by clear strategies and measures to accelerate the infrastructure deployment process as far as possible. Broadband has been recognised as a key enabler for economic development and all provinces are actively pursuing broadband plans/strategies, at different stages of implementation.
The SA Post Office can assist in bridging the digital divide by way of making its property infrastructure and branches available as Wi-Fi hotspots facilitating digital access and bringing the digital economy to communities.
19
1
20
VISION, MISSION AND VALUESThe Strategic Plan has been compiled in line with - and in support of the “SA Post Office 2030 Vision”, a strategic document developed by the SA Post Office Senior Management and ratified by the SA Post Office Board of Directors during the latter part of 2018. Refer to annexure B for further details of the SA Post Office’s Strategic Planning Process.
Vision 2030 directs the SA Post Office towards becoming a trusted brand in the market. Whilst many have had a strong affinity to the SA Post Office brand, the trust relationship has been eroded. However there remains a continued desire by most South Africans and Government to support the SA Post Office as it rebuilds its relevance. Only through collaboration with its customers, employees and stakeholders, will the SA Post Office be able to rebuild the trust relationship it previously enjoyed. This goal underpins the SA Post Office’s 2030 vision statement.
Vision
The Trusted Exchange Channel of Service Delivery in South Africa respected for our Relevance, Reliability, Reach and Resilience
Mission
A Reliable and Relevant Service Delivery Channel providing access to Government Services, Enabling Secure Digital and Physical Transactional Services to All
Values
21
BUSINESS ENVIRONMENT
The SA Post Office Group Value Proposition
The SA Post Office brand is one of the most recognised brands in South Africa. Adhering to the concept of a universal service obligation to all who reside in South African is central to SA Post Office’s mission. While the USO encompasses many different dimensions, it fundamentally ensures the provision of a trusted, affordable, universal service to the nation. The USO is an important obligation that differentiates the Postal Service and its brand from its competitors.
The SA Post Office customers associate the following attributes to the SA Post Office brand and market value proposition. Of the five value proposition attributes, customers place a significant emphasis on trust and therefore it is central to the SA Post Office’s customer value proposition. To this end, the SA Post Office continually works towards ensuring that all customer information and mail items are handled ethically, securely and delivered safely.
Attribute The SA Post Office is known for…
Convenience Easy access to simple and easy-to-use products and services.
Value Relevant products and services that fulfil customer needs and expectations
Trust Secure and safe handling of physical items and electronic data whilst maintaining customer privacy throughout the collection and delivery process
Reliability Reliable, consistent and speedy service
Reach
The availability of a point of presence network that is a convenient distance from home, work and social environments
Ensuring availability of postal network in rural and outlying areas
Figure 1: The SA Post Office Group Value Proposition
22
Market Positioning
Whilst not limited to, the SA Post Office finds itself positioned between several sectors of the economy. Within the communications sector, it provides for the conveyance of physical letters – generally referred to as the reserved area - whilst in the logistics sector, the SA Post Office facilitates the movement of parcels. Within these sectors, it serves the needs for both domestic and international clients.
The advertising sector also relies on the SA Post Office, particularly the direct marketing segment for the distribution of marketing materials, etc. Within the financial sector, the SA Post Office and Postbank work to ensure that lower income groups and minorities are empowered and able to participate financially in the South African economy. The SA Post Office Group fulfils the social mandates - Postal & Banking - by ensuring that citizens have access to government services in South Africa.
Figure 2: The SA Post Office Market Positioning
23
Figure 3: PESTLE Analysis
SITUATIONAL ANALYSIS
External Environment Analysis
South Africa’s real growth rate is low and historical data show that this rate has been slowing over the last decade. The following factors collectively contribute to the weak economic conditions facing South Africa currently.
1. Gross Domestic Product per capita is declining since 2015;2. Productivity growth is slow and might even be slowing down;3. Unemployment remains high (29.5%);4. Inequality continues.
South Africa’s growth objectives are further constrained by the considerable growth in government debt, increasing funding requirements from state-owned companies, under-performing revenue (tax) collection as well as the significantly large public-service wage bill. Collectively these factors place the South African economy in an unsustainable state. As a result, this macro-situation creates a challenging business environment for the SA Post Office in the near-to-medium term of this strategy cycle.
Political*includes legal analysis
• Corporatisation of Postbank
• Postal Act Policy Amendments
• National E-strategy Mandate
Economic
• Economic growth is weak and slowing down
• South African households have high debt levels, experience high unemployment levels and their disposable income is reduced due to increased inflation and taxes
• Rand/Dollar exchange rate is volatile and weak
• Government Tax collections have reduced
• Ecommerce market is growing
• Money Remittance market is growing
• Social grants are increasing at a rate of 2% per year
Social
• Urbanisation is increasing and 65% of South Africans live in urban areas.
• 30.4m live in poverty
• Youth unemployment is at 55.2% (Q1_2019)
• Unemployment is at 29.5%
24
Technology
• South Africa is the third most targeted country in the world for cyber-attacks
• 5G Cellular Technology will be available in South Africa within the next 2 – 4 years
• The use of Artificial Intelligence technology is increasing
• Blockchain is an emerging technology with significant financial accounting benefits
• Youth - mid-1990s to the early 2000s – expect workplaces to leverage technologies to support their work
• Cloud computing is increasing and many South African companies are adopting cloud based solutions over in-house data centres.
Environmental
• Transport sector is the most rapidly growing source of greenhouse gas emissions (GHG) in the country. (10.8%)
• Road transport responsible for is 91.2% of the transport sector’s share.
• The second largest source of CO2 emissions in the logistics industry is electricity consumption at warehouses and office spaces.
• Proposed environmental tyre levy, implemented through the Customs and Excise Act, of R2.30/kg payable all pneumatic tyres
The PESTLE assessment of the macro environment highlight a number of key trends which informs SA Post Office’s corporate strategy. Key among these are:
1. National Integrated ICT Policy White Paper and South Africa’s National e- Strategy propose an amendment to SA Post Office’s current mandate to include the universal provision of digital services related to e-postal, e-government and e-commerce to all communities nationally;
2. Environmental levies such as the carbon emission tax amongst others will place pressure on the SA Post Office’s operating costs;
3. The increasing exchange and inflation rates increase the acquisition costs of IT software and hardware devices as well the overall day-to-day operating cost, particularly transport costs, of the organisation;
4. The high urbanisation rate and high unemployment rate impacts revenue generation in rural and outlying areas;
5. Technology uptake is steadily increasing due to increasing access to the internet, smartphone devices and decreasing costs of broadband data.
Figure 3: PESTLE Analysis (Continued)
25
INDUSTRY TRENDS
The SA Post Office operates in highly competitive markets wherein most products and services are homogenous which enables customers, who are highly price sensitive, to easily switch service providers. Therefore competitors maintain a leading edge through effective pricing models, leverage innovative technologies and provide customized solutions.
Postal Sector
Within the postal sector, electronic substitution remains the most significant threat to physical mail. Encroachment into the reserved areas is to be addressed by enhancing the regulation of the reserved area. The increasing pressure to reduce operating costs is driving the trend of remailing whereby large mailers are using international mail streams which tends to be cheaper compared to the domestic channels. Operational efficiency is the highest priority of most postal operators to increase the profit margin. In this regard, mail automation, postal sorting and delivery optimisation and as well as the application of lean management principles, amongst other, drive profitability strategies of the industry. Globally, the cost to service the Universal Service Obligation remains a significant cost driver for Postal Operators.
Courier Sector
The Courier, Express and Parcel sector (CEP) sector is a highly competitive environment comprising of a large number of operators in the sector. As this industry is a high volume, low profit sector, operational efficiency and innovative technologies are key success factors for business continuity. The South African eCommerce market is in an emerging phase and is the primary driver for the growing demand for delivery services.
To adequately service this demand, operators are maximising efficiencies, strengthening customer trust through flexible and convenient on-time delivery standards and options are key focus areas for all operators in the industry. Collaboration and partnership between transport technology suppliers, industry suppliers, courier operators and retailers is an increasing industry trend. As a result, there is an increasing number of competitors including non-traditional operators such retailers within this sector. Another developing trend is related to pure digital retailers (eTailers) who are establishing their own physical delivery distribution networks as a means of improving the quality of service provided to their online customers.
Financial Sector
South Africa domestic and international remittance market is in the growth stage and includes both formal and informal payment service providers including banks, money transfer operators, retailers and mobile
Figure 4: The Post Office Parcel Volume Trends
26
wallets applications. The market growth is driven by increased domestic migration, rising government support for new competitors, declining fee charges and increased awareness towards digitalized remittance services. Key strategies employed by major competitors include the formation of an extensive network & improved reach, product & service innovation and optimised pricing models.
With regards to financial agency services (3rd Party Bill Payments), there is a high focus on the replacement of daily batch-based payments systems to real-time systems. These systems are designed to harness the needs of the emerging digital economy. A core focus of this market is the enablement of convenient and secure payment of services on multiple customer channels (Omni-channel) as well as across multiple channel partners (Strategic partnerships). Similar to the money remittance market, these payment networks extend across retailers, banking institutions, digital wallets and informal vendors.
The South African market is expected to adopt digitalization at a rapid pace over the next 5 years. The smart phone users in South Africa is projected to continue and consequently drive the adoption of mobile wallets, eWallets and other electronic modes of remittance/payment services. Government is liberalising policies and regulatory frameworks for the remittance/payment service provider with aim of improving the documentation, fee structure and business guidelines to drive higher digital financial platform usage.
INTERNAL ENVIRONMENT ANALYSIS
Business Performance
• During October 2019, a new Board of Directors was appointed;• Implementation and ongoing payment of Social Grants with of over 8 million grant recipients paid monthly
through the SA Post Office / Postbank, however the number recipients collecting grants through the SA Post Office network is not at anticipated levels;
• Over 1 million beneficiaries have been registered for the DTT project, which has been beset with delays due to low levels of registrations, expiry of the previously appointed installation companies together with delays with the appointment of localised installers. The new DTT delivery model has been approved by Cabinet during November 2019;
• Payment of all long outstanding Creditors which has improved the availability of required stock, materials, vehicles etc.;
• Improvement in the Mail Delivery standard from prior year due to improved availability of certain required tools of trade;
• Progress on the completion of the IT network upgrade, despite delays experienced with the appointed service provider and should gain traction over the next few months;
• Finalisation of a digital strategy which will set the direction for the digital journey of the organisation.
Financial Performance
Revenue increased year on year during 2019/20 financial year with the additional revenue stream provided by the payment of Social Grants, however, the majority of other revenue lines did not perform as projected. The payment of Social Grants contributes approximately 20% to the SA Post Office group revenue and is a key future revenue stream.
27
The revenue generated by the payment of Social Grants has not matched the projected revenue targets, largely attributable to a skewed revenue allocation methodology between Postbank and the SA Post Office. Currently negotiations are underway to reconsider the revenue / cost allocation between Postbank and the SA Post Office. The SA Post Office will continue to provide an uninterrupted and consistent cash payment service. DTT revenue performed poorly due to delays by USAASA with the appointment of installers for the set-top boxes as well as the delay of the implementation of the Phase 2 voucher model.
The high cost base continues to escalate and to this end various interventions have been implemented. During 2019/20 a Voluntary Severance Package (VSP) was implemented to address the burgeoning salary cost at approximately 58% of expenses. A strategic workforce plan has also been developed and implemented.
The commencement of the digital transformation of the SA Post Office is gaining traction with the finalization of the digital strategy supported by projects in various stages of implementation including the Network Upgrade Project, Enterprise Application Platform, Omni-Channel Platform and the eCommerce Platform, which will facilitate customer retention and generate new revenue lines and initiatives.
The SA Post Office Internal Assessment
Notwithstanding potential customers displaying a willingness to transact with the SA Post Office, they also have indicated that this is dependent on the SA Post Office improving its service delivery standards together
Figure 5: The SA Post Office Group (excluding Postbank) Financial Performance
28
with implementing modernised products and services inclusive of value-added and products into the market.
Although the SA Post Office is not currently operating optimally, there is an opportunity to strengthen its competitiveness by improving the integration of its information, goods and money exchange platforms. This will require an enterprise-wide effort to resolve its critical vacancies, speed up the implementation of strategic initiatives, upgrade or replace critical tools of trade and improve overall productivity standards.
There is also a strong commitment from government to turnaround the SA Post Office due to its strong presence in low-come and under-serviced communities throughout the country. This positions the SA Post Office as a critical entity to support government’s national development plan and its developmental state objectives.
THE SA POST OFFICE SWOT ANALYSIS
Opportunities
• Ecommerce market leading to increased demand for parcel delivery services
• Money remittance market is on a growth trajectory
• Social grants are increasing at a rate of 2% per year
• Strategic Partnerships and Collaboration is increasing
Threats
• Non-traditional competitors are entering the SA Post Office markets
• Market competitiveness is increasing due to digital technologies and industry restructuring
• Ease of customer switching due to homogenous product portfolio
• High urbanisation rate increases competitor concentration in metros and urban areas
Strengths
• A large number of customers remain motivated to utilise the SA Post Office products and services
• A vast physical network presence in rural and outlying areas
• Shareholder commitment & support towards modernising the organisation
• Pockets of high performing employees across the organisation
• One of the few South African organisations with existing platforms to support the domestic and international distribution of goods, money and information
• Well positioned to support government’s developmental state objectives
Weaknesses
• High operating costs due to labour-intensive business processes
• Weak product management and development capabilities
• Weak implementation ethos across the organisation
• High vacancy rate particularly critical skills
• Low levels of staff training and development programs
• Weak employer of choice proposition
• Aging infrastructure
• Aging workforce
• Productivity standards are low across the organisation due to and not limited to the chronic lack of tools of trade amongst other factors
Table 2: The SA Post Office FY2020/21 SWOT analysis
29
SA POST OFFICE GROUP STRATEGYThis corporate plan builds on actions undertaken during FY2019/20. As outlined in the FY2019/20 plan, the SA Post Office has embarked on an enterprise-wide modernization program – Vision 2030 - that is planned for completion by 2030.
VISION 2030
It is anticipated that by 2030, the SA Post Office brand would have developed sufficient market equity to be regarded as a strategic component to Government’s national infrastructure, fulfilling social and economic development goals, particularly in under-serviced communities. Furthermore, the SA Post Office will be recognised for providing the nation an integrated platform which effectively facilitates the movement of money, information and goods.
The SA Post Office continues to remain focused on its core purpose which is to connect society, business and government to each other. The SA Post Office’s purpose is to serve citizens, business and government and all who deal with them, every day. This is the mission of the SA Post Office and it is delivered by the SA Post Office employees proudly and intentionally.
Aligned to the UPU Integrated Index1 for Postal Development, the SA Post Office has embedded the principles of Relevance, Reliability, Reach and Resilience in mapping the way forward in terms of the “SA Post Office 2030 Vision”.
• Demand for full portfolio of postal services - mail, logistics,& financial services.
• Competitiveness in main markets
• Global postal connectedness at international level
• Internationalisation of postal services
• Quality of Service • Predictability - focus on
domestic & inbound• Postal Operational
efficiency
• Capacity to innovate
• Deliver integrated postal services
• Sustainable development targets
• Adaptability of business models
Figure 6: The SA Post Office 4R Principles
1 The SA Post Office attained a score of 33.34 in 2018 and will improve the score over the strategic cycle
30
PRIORITY INITIATIVES FOR FY2020/21
The context of the current environment informs the following primary strategic objectives set by the SA Post Office:
Reposition the SA Post Office as a Service and Delivery Platform to all levels of Government and ensure that the Future SA Post Office is Reliable, Relevant, Reachable and Sustainable.
The repositioning of the SA Post Office within the economy, requires the SA Post Office to transition into an integrated Services Solution provider. The journey towards this goal entails an improved integration of the organisation’s business capabilities as well as the optimisation thereof.
It is envisaged that the integrated platform will comprise of digital capabilities, which will facilitate transacting and payments as well as physical fulfilment infrastructure services, which include both storage and distribution. Fundamentally, the SA Post Office platform will enable the convergence of the digital and physical worlds.
The integrated platform will enable customers to use products and services individually or customise the product portfolio to suit their needs. A key priority of the SA Post Office integrated platform is to provide the South African SMME sector with a national infrastructure capability that would enable them to be more competitive as well as gain access to international markets.
Ultimately, the SA Post Office envisions itself as an organisation that successfully enables customers to transact via a multi-channel platform, process payments via a multi-method payment gateway, store goods in a warehousing network throughout South Africa and finally, enable the delivery of physical items through a national distribution network.
A primary role of SA Post Office is to provide disadvantaged and marginalized communities as well as vulnerable individuals opportunities to for greater participation in the economy. Thus a critical success factor to achieving the strategy is balancing the SA Post Office commercial objectives with its universal service obligation. In this regard, the SA Post Office will ensure that its products and services are affordable, easily accessible and reliably delivered throughout South Africa.
It is anticipated that the transition to an integrated service delivery platform as well as the delivery of it’s social mandates will reposition the SA Post Office as a strategic arm of government thereby ensuring the organisation’s relevance and ensure its financial sustainability over the long term.
There are a number of priority initiatives that will be implemented during the FY2020/21, namely:
1. Strategic Industry Partnerships
Strategic private partnerships is a key pillar to the SA Post Office Corporate Plan, particularly towards optimising the organisation’s under-utilised infrastructure to support our service delivery and revenue generation model.
The organisation is in the process of conducting a number of proof of concepts with the industry, in the following areas:
• Electronic Bill payment systems• Digital Post Box/Email Solutions• Warehousing and distribution of medication• Electronic Registered Mail and SMS• Financial Services and Insurance• Financial Remittance
31
It is anticipated that the engagement of key strategic partnerships will strengthen and diversify revenue lines, enabling the business as well as modernising the organisation.
• The SA Post Office partnership engagement framework is aligned to the processes and guidelines of the National Treasury procurement framework.
• The partnership criteria will be based on the following guidelines; - None of the projects will require any capex investments by SAPO - Revenue share models - Profit share models - Payment of infrastructure or services over a period longer than the Medium Term Expenditure Framework (MTEF)
• Currently, as part of our revenue growth strategy, the SA Post Office is exploring partnership opportunities in all areas of its current business and any areas of new business where SAPO has traditionally not participated.
• Since this is the implementation year, the benefits to be derived from these partnerships are conservative, but will increase over the medium term.
2. Ecommerce
• The Ecommerce project intends to launch the SAPO E-Mall, during quarter 1 of FY2020/21 • The initial phase of the Emall will be to on-board South African small businesses with the objective of
providing them wider access to international as well as domestics markets.• The Ecommerce initiative is expected to increase parcel revenues and drive volume growth for the SA
Post Office, particularly within the online retail market.• The SA Post Office is currently partnering with other postal operators on the continent to leverage off the
already developed ecommerce platforms.• The strategy will focus on strengthening the Ecommerce corridor envisaged by the African postal operator
group, of which South Africa will be the primary hub in southern Africa.• The Ecommerce initiative is currently in implementation and therefore the revenue forecasted is low at
R36m for this financial year but is expected to scale up from next year and continue to do so over the medium term.
3. Review of contracts
• With regards to cost optimisation and enabling the business, the SA Post Office will review all contracts to extract a higher value for the organisation, amongst other initiatives.
• The contract review is focused in the key areas of Group Technology, transport related costs, properties and Security related costs.
• The benefits to be derived from this exercise is projected at R50m for this year and increase over the medium term.
4. Upskilling and reskilling of the SA Post Office workforce
• The SA Post Office has completed a skills audit which has highlighted a deficit in the technology-related skills as the future requisite skills for digitisation.
• The modernisation initiatives will require the re-skilling of current employees who are affected. Also the SA Post Office will collaborate with other organs of state, including NEMISA to ensure the education and training responds to the demand and needs for e-skills within the SA Post Office
• At the same time, the SA Post Office will utilise the skills audit to determine the new skillsets required to manage and run the modern organisation.
• In this regard, the SA Post Office will either develop internal staff or recruit these skills from the market.
32
IMPLEMENTING VISION 2030
There are four key strategies that guides the implementation of Vision 2030:
Delivering the Postal Mandate
This strategy focuses on ensuring that the SA Post Office delivers on its social mandates as per legislated service level agreements in a cost-efficient manner.
Increasing the SA Post Office’s com-mercial market share
The SA Post Office operates in various commercial markets and will implement a range of initiatives that focus on increasing its market share as well as the revenue derived from its commercial activities.
Modernising the SA Post Office
The SA Post Office’s modernization strategy focuses increasing customer value by optimizing and modernising its five business segments. The primary goal of this strategy is to develop a seamless integration between the customer’s digital and physical activities. Fundamentally, the SA Post Office is working towards becoming a modern cyber-physical the SA Post Office’s modernization strategy focuses increasing customer value by optimizing its five business segments. The primary goal of this strategy is to develop a seamless integration between the customer’s digital and physical activities. Fundamentally, the SA Post Office is working towards becoming a modern cyber-physical business.
The modernization of the SA Post Office begins with the establishment of an integrated digital platform that improves the interconnectedness of its letter, financial and goods exchange platforms.
Thereafter, the SA Post Office will begin the process of launching a range of products and services – physical and digital – that meet the expectations and needs of all its customer segments.
Enabling the Business
While the modernization strategy focuses on building the SA Post Office of the future, the objective of resolving the SA Post Office’s current financial challenges remains management’s foremost priority. All the SA SA Post Office stakeholders accept that failure to resolve this immediate and critical threat, the SA Post Office’s transition into a modern Postal operator will be delayed.
These strategies are further expanded on below.
Figure 7: The SA Post Office Strategy 2020/21 - 2022/23
The Post-retirement medical aid liability is a critical area that will be reviewed to ensure that liability is reduced as well as the assets provide adequate cover for the liability in the interim period.
Telkom is embarking on the second sale of properties and the SA Post Office to ensure that all outstanding property ownership matters are resolved before this process is concluded by Telkom.
The following section discusses the four key strategies that will drive the attainment of Vision 2030. In addition, further detail regarding the initiatives planned for implementation during this strategic cycle is also discussed.
33
DELIVERING THE POSTAL MANDATE
The SA Post Office is tasked with the provision of a universal, regular and affordable postal service to all areas including rural areas and small towns inclusive of unprofitable area that prove to be unsustainable, commonly referred to as the universal service obligation (USO). Essentially the USO is interpreted as the affordable collection, processing and standard 3/5 day delivery of mail items, up to a maximum of 1kg, to all addresses – street, postbox and post offices - throughout South Africa. In addition, the SA Post Office is also required to provide a money remittance service inclusive of postal orders at all branches nationally.
During FY2020/21, the attainment of regulated targets and service level agreements inform all actions undertaken across the postal value chain. Strategic initiatives promoting operational efficiencies and the reduction of excessive costs will be prioritized and supported with adequate funding and resources. Though not limited to, challenges related to tools of trade, mail automation, IT systems, security deficiencies and delivery will be resolved during FY2020/21.
Key Programs
Hybrid mailHybrid mail solution capabilities will be enhanced and expanded nationally during the 2020/21 FY.
Track n Trace (IPS)
End-to-end tracking and functionality from a customer perspective will be optimised.
Business processes
Compliance to productivity standards will be improved across core business processes for scanning, sorting, distribution, branch and customer services.
Property refurbishment
A key number of sites (branches, mail centres, depots, corporate offices) will be refurbished during this strategic cycle.
Staff skills development program
Market factors will require staff to be reskilled and deployed to growth areas of the business. A skills development program for Operations will be developed.
Transport distribution network
The SA Post Office will revise its distribution network as a means of driving down costs as well as improving efficiency across its distribution network.
INCREASE THE SA POST OFFICE’S COMMERCIAL MARKET SHARE
Apart from the fulfilment of its government mandate, the SA Post Office also conducts business within the commercial sector. However the SA Post Office’s revenue from these commercial activities is lower than expected due to a low share of the market. It is accepted to resolve the SA Post Office’s weak revenue performance, increasing market share by improved organisational performance must be prioritised. Therefore during this strategic cycle emphasis will be placed on activities that enable the SA Post Office to stabilise and grow its market share from the current baseline, and this will apply to all lines of the SA Post Office’s commercial business with an emphasis digital transformation.
34
As indicated, achieving the objective of stabilising and growing market share requires a significant improvement of productivity standards across the organisation. Factors that negatively affect the SA Post Office’s customer experience must be resolved. Particular attention will be paid to resolving challenges related to parcel processing and delivery. IT systems and infrastructure that support various products and sales channels will also be addressed as a priority. Product management and development along with the associated capabilities will be strengthened during this financial year.
Key Programs
Hybrid mailThe SA Post Office will migrate customers to a digital mailing channel such as Hybrid mail, in addition, this service will be expanded to include additional digital delivery methods
Electronic Bill Payments
Real-time services will be made available to existing customers and those requiring real-time billing services
Set-top Box Roll-out
A number of initiatives are planned to speed up the roll-out of set-top boxes, leading to growth in revenue from the BDM project
On-time deliveryResolution of matters that constrain on-time deliveries, including mail violations, to its customers.
Digital ServicesThe prepaid value proposition (airtime, electricity, etc) will be reviewed and optimised as needed during this strategic cycle
SASSA Initiatives will be implemented to provide an improved service to grant beneficiaries
Government Services
Motor vehicles services will be expanded. The SA Post Office will also seek to expand its government offerings over the next three years
Figure 8: The SA Post Office Business Segments
35
ADDITIONAL REVENUE GROWTH INITIATIVESOver and above the revenue retention forecast, SAPO has also identified a number of initiatives that is expected to generate additional growth for the organisation. These are articulated in the table below:
Line of Business InitiativeProjected Revenue
Status
Postal Services• DOT – AARTO
(Increase in Hybridmail)R100m Concept Phase
Courier & Parcels
• Warehousing and Distribution of Medication
R87m Concept Phase
• Ecommerce (Parcel Distribution and Online transactions)
R36m Development/Piloting Phase
Financial Services
• Value Added Services (Pay A Bill, Prepaid, Fax & Photocopy, Sale of tickets, Financial insurance and remittances)
R52m Concept Phase
• MVL Transactions R48m Implementation
• DTT STB Subsidised Market Registration and Distribution for the DOC
R158m
Implementation
• DTT STB Retailing – Unsubsidised Market
Concept Phase
Digital Services• Digital Postbox/Email• Electronic Mail and SMS
R20m Concept Phase
Properties • Sale of non-core properties identified R200m Motivation for Approval
Transfer Pricing• Recovery of costs incurred pertaining to
transfer pricing to Postbank for the use of Post Office branches
R50m Daily Operational Activities
36
MODERNISING THE SA POST OFFICE
Economic conditions and the substitution effects of digital innovation are driving postal sector reforms and the development of postal business model globally. The SA Post Office, like its global counterparts, is also experiencing the impact of these global trends within it business environment. A current key trend in South Africa is the evolution of traditional market structures. This is due to technology blurring the boundaries of various markets, for example, financial and communications markets are merging with technology markets. This trend also introduces non-traditional competitors into the market, of which is currently the case with the SA Post Office, whereby its now competes with the retail and financial sectors.
It is on this basis that the SA Post Office has developed a strategy which responds to the challenges posed by digital technology, but at the same time also leverages off the benefits generated by digital innovations.
In this regard, Government has issued a motivation for the SA Post Office to amend its mandate to include the provision of digital services related to provide a range of services to the market. These services are grouped into three specific categories, namely, eGovernment, Ecommerce and ePostal.
Figure 9: The SA Post Office Digital Strategy
37
Within this context, the SA Post Office’s digital strategy ultimately transitions the organisation from its traditional state into a cyber-physical entity that caters to the physical and digital needs of its customers. This integrated digital strategy is segmented into 8 themes which focuses specifically on various areas of the organisation.
Figure 10: The SA Post Office Digital Transformation Themes
Theme 1Designing for Agility, Focusing on Impact
Theme 2Defining Talent
Theme 3Learning and Developing
for a Lifetime
Theme 4Deploying Talent, Mobilising Careers
Theme 5Embracing Modern Workspace
and Collaboration
Theme 6Valuing Sharing
and Security
Theme 7Prioritising Digital
Transformation
Theme 8Unleashing Automation,
Analytics, Algorithms and AI
Mission
Culture
Mission
Tech
no
log
y Peo
ple
38
The SA Post Office’s digital strategy is designed to derive a number of outcomes for the organisation. Legacy systems that drive the SA Post Office’s core revenue streams will be replaced with modern technologies. An omni-channel platform will also be implemented incrementally thereby enabling customers and employees to access the SA Post Office on any device from anywhere at any time. The SA Post Office workplace will be more digitally connected thereby enabling employees to work, interact with each other and customers more efficiently. The customer experience will be enhanced via advanced digital integration of the SA Post Office’s services and product portfolios.
The SA Post Office will also improve its integration abilities with key stakeholders such as government departments, governing institutions, industry experts and suppliers. This will enable the SA Post Office to be more agile and responsive in the markets where it operates.
The SA Post Office’s digital transformation requires a number of initiatives to be implemented over the next 5 years. Some primarily contributing to products and services while others focus on driving operational efficiencies throughout the organisation. For example, the SA Post Office will seek to enhance its digital capabilities within its financial services business while implementing technologies that improve its operations, particularly within the letter and parcel business segments.
Figure 12: Decade of Game Changers
Figure 11: Digital Strategy Outcomes
Self-servicekiosks
MIS
Automated Mail Processing
Lean
Counter of the Future
Diversified Products
Government Services
Route Optimisation
Digital Transformation
The Post Office Integration
Platform
Improved Track n Trace
Queue Management
Omni-channel
Big Data
Virtual Post Office
Agility
39
Figure 13: The SA Post Office e-Commerce Strategy
The SA Post Office Ecommerce Strategy
The Postal mandate is being revised to include the provision of digital services along with physical mail services. This digital mandate requires the SA Post Office to be a strategic platform through which citizens and businesses can access ICTs, including e-government, e-commerce, e-post, e-finance and general ICT services.
The SA Post Office’s ecommerce strategy is informed by the proposed digital mandate and is specifically designed to enable small, micro, medium enterprises (SMME) to effectively participate in South Africa’s developing digital economy. Furthermore, this ecommerce strategy is closely aligned to National Development Plan wherein it is stated that the NDP recognises that SMMEs and Cooperatives are important drivers of economic growth and job creation.
Within this context, the SA Post Office’s ecommerce strategy aims to enable SMME’s to access the SA Post Office’s competitive advantage of first and last mile access across South Africa.
This access resolves a number of challenges facing SMME’s currently, as described in the table below:
SMME Challenge The SA Post Office response
1. Difficult to establish a Sustainable Market Presence2. Small Customer Base
• Launch an e-Mall to enable SMME’s widen their market presence nationally and internationally.
3. Fragmented Infrastructure & Collaboration• Optimise the SA Post Office’s infrastructure to provide
customised warehousing and distribution services to the SMME sector
Drawing on these market factors and trends, the SA Post Office has designed its ecommerce strategy to leverage its physical infrastructure by developing an ecommerce intermediation platform that connects various customer segments to various business entities. The SA Post Office’s role within this platform is to provide the market and users platform management services in collaboration with strategic partnerships and industry experts.
Core Competence
Core Competence
Create an intermediation platform
LEVERAGE NETWORK
Market advantage:- first mile access- last mile deliveryto every citizen and business in South Africa. MANAGE PLATFORM
STIMULATE DIGITAL ECONOMY
Be an infrastructure intermediate that enables various groups of users to collaborate every day.eCommerce
Platform
Physical Distribution
ValueCreation
Consumers Producers
Partners Post Office
40
Fundamentally, the objective of the SA Post Office’s ecommerce strategy is to launch a digital marketplace that enhances South African SMME’s access to a wider customer market, reduce the constraint of capital investment on infrastructure expansion and increase their overall competitive advantage. The diagram below depicts the SA Post Office’s ecommerce digital ecosystem which will be implemented incrementally over the next five years.
Figure 14: The SA Post Office e-Commerce Ecosystem
SAPO eCommerceDatacenter
SA
PO
Par
tner
Inte
rfac
eS
AP
O e
Co
mm
erce
Inte
rfac
e
SAPO e-Commerce User Community
SAPO Business Partners(Suppliers, Wholesalers,
Traders)
PuchasingPaymentsCustomer ServicesItem TrackingProfile Man-agementMarketing
Store managementPricingStock ManagementData AnalyticsSourcing Logistics
SAPO eCommerce Web Portal (eMall)
SAPO e-CommerceBack Office
PRODUCTSCATALOGUE SERVICES BACK OFFICE
• Sales/Marketing• Finance• Operations• IT• HR• SCM• Governance• Customer• Support• Management
User Control elements• Feature and capabilities• User data and contributions• Marketing and Advertising • User feedback (Rating, Rankings,• Reviews, Comments)
SAPO Control Elements• Participation Policy/Contracting• Standard operating procedures• Revenue Modes• Data Analytics• Logistics (Warehousing/ Distribution)• Customised Solutions
41
Modernisation Program
EcommerceThe SA Post Office will continue with the implementation of the e-Mall and develop its capabilities to adequately support the e-mall
Digital capabilities
A digital application platform is planned for implementation during this strategic cycle. This platform will enable the implementation of an omni-channel capability as well as the development of digital products and services
Digital SkillsBased on the SA Post Office’s modernisation goals, the SA Post Office will embark on programs to source the requisite skills needed to manage the SA Post Office’s digital capabilities
The SA Post Office Digital Blueprint
An Enterprise Digital Architecture will be produced by the 2nd quarter of FY2020/21. This blueprint will drive the SA Post Office’s transition to a modernised cyber-physical entity.
ENABLING THE BUSINESS
Achieving the SA Post Office’s revenue generation and market objectives, requires an organisation that is stable and functioning, therefore “the enabling the business strategy” is focused on initiatives that achieve these functional and stabilisation objectives.
There are number of initiatives identified that contribute to stabilising the organisation and are discussed in the various functional stategies below while the most critical initiatives are summaried in the table below:
Key Enabling Programs
Point of Sale
The point of sale upgrade will be prioritised during FY2020/21 and begins with the hardware upgrade and thereafter the POS software will be upgraded. The procurement delays are being resolved to ensure that the equipment procurement is concluded urgently. The finalisation of this long outstanding project will result in an improvement in the customer turnaround times.
Network upgrade
The network upgrade is planned for conclusion during the 1st quarter of FY2020/21. Reductions in telephony costs are expected to be realised from quarter 2 onwards, amongst other benefits.
Workforce program
An enterprise-wide workforce program will be developed and implemented during this strategic cycle. Key outcomes anticipated are the reskilling of staff, redeployment of staff, and acquisition of new skills amongst others.
Security upgrades
Various security upgrades such the installation of security cameras, alarm system and secure cash management devices will be rolled out over the next financial year.
Enterprise organisational structure
The organisational structure will be reviewed and redesigned to ensure that customer value is enhanced whilst operating more productively and efficiently.
SASSA
Intitiatives will be implimented to provide an improved service to grant beneficiaries. These initiatives include the integration of cash dispensers into IGPS, replacement of the point of sale hardware, CCTV cameras at branches, re-issue of cards and an integration platform.
42
Product management
The SA Post Office’s product portfolio will be re-evaluated and where required rationalised, including the establishment of a product management structure, new product development initiatives as well as the review of the cost and discounting models per revenue segment
Organisational Productivity
A major focus during FY2020/21 will be placed on improving the productivity standards across the organisation. Included in this program is the roll-out of performance management scorecard to all employees, increased adherence to delivery standards and overall enhancement of accountability.
Properties Maintenance and Refurbishment
All critical buildings will be prioritised for maintenance, upgrades and compliance improvements during this strategic cycle. Strategic partnerships are being explored for feasible options
Review and optimisation of contracts
The review of high value contracts, to ensure value for money on services received, is underway and where possible contracts will be renegotiated
Improve the efficiency of Supply Chain Management
Optimise the SCM structure and populate the critical vacancies to build capacity. Increase agility, reliability and efficiency with SCM through comprehensive business process remodelling. Implementation of the commodity driven strategic sourcing.
Culture change program
The transformation of the organisational culture and climate is critical to support the improvement in the overall staff morale. The implementation of the culture change program will have broader benefits in individual and organisational performance, ef-ficiency and contribute to improved customer centricity and service levels.
Group Strategy
The SA Post Office’s modernisation and turnaround objectives requires the organisation to review and restructure its business model and associated operating model. In this regard, the following initiates will be undertaken
Organisational Restructuring
The SA Post Office Management is currently evaluating an interim structure that will drive the business by revenue streams (Mailing business, Courier & Logistics, Vehicle transactional, International mail, Financial Services, Grant payment solutions, Digital solutions, E-Commerce and Properties). The purpose of the interim structure proposal is to:
• Drive revenue retention and growth• Provide strategic focus on key revenue outcomes• Allocate and assign dedicated responsibility and accountability • Ensure effective and efficient alignment of key deliverables.• Ensure a mandated shared services portfolio.• Align short and medium term turnaround plans with corporate strategy and functional plans.
The current organisational structure will be reviewed and redesigned to ensure that the SA Post Office is optimally structured to reflect the modern economy and is responsive to market and customers trends as well as operates in an efficient and cost effective manner.
43
Sales Strategy
The sales management team will focus on strengthening its salesforce capabilities, CRM/IT systems as well as optimising the sales structure to better serve the SA Post Office’s customers. Key priorities planned for this strategic cycle are:
• Complete the appointment of all key positions in the Sales structure• Finalise the implementation of the Salesforce model which encompasses the commission based salary
structure;• Prioritise training and development programs for staff;• Increase the Bid Office capabilities;• Implement OLAs (organisational level agreements) with all critical business and support units such as
Legal, Supply Chain Management, Finance, IT and Operations;• Improve the quality of its customer engagements through the implementation of a CRM tool;• Establishment of strategic partnerships including PPPs to develop revenue generation opportunities;• A renewed focus on marketing as an enabler for the sales efforts particularly growing existing product and
service revenue streams;• Positioning the SA Post Office as the delivery arm of Government for social services such as Social
Grants, financial products and other government services.
Operational Strategy
Operations is involved in the delivery of products and services in the following areas, money movement, movement of messages and movement of goods. Operations enables the availability of these products and services domestically and internationally. Therefore Operations can be regarded as the service delivery arm of the SA Post Office and is ultimately responsible for the fulfilment of the demand generated by the sales division.
Operations is working towards achieving higher delivery standards across the operations environment. The key priorities planned for this FY2020/21 are:
• Improve the delivery performance of all product lines – Mail, Parcels and Financial - offered by the SA Post Office
• Operating costs will reduced through improved productivity at high volumes sites, optimisation of delivery routes and increasing adherence to operating procedures.
A key outcome for FY2020/21 will be the reduction of mail violations across the organisation. The principle of zero tolerance will apply in this regard. The following initiatives are identified as key contributors to the operational strategy and therefore are prioritised for implementation this year.
• Retail Branch network upgrade• Route Optimisation• UPU Security Standards• Mail Hubs consolidation
Human Resource Strategy
HR has identified the following critical factors to enable the delivery of the corporate plan:
• The implementation of the SA Post Office’s workforce plan during the course of this year. This program is geared towards having the right mix of skills as well as preparing employees for the modern SA Post Office.
• The SA Post Office will focus on improving service delivery both externally and internally, in this regard,
44
HR will rollout an effective performance management policy, framework and applicable systems. As a priority, the SA Post Office’s performance management project aims to improve accountability across the organisation.
• Linked to the workforce program is the training and development of staff throughout the organisation. HR, in collaboration with each business unit, will develop appropriate training programs specific to needs of each business unit.
• HR will sustain its relationships with key stakeholders to ensure a stable business environment. Part of this work is the implementation of an employee satisfaction survey to determine the climate of the organisation.
• Reward, recognition and remuneration policies will be renewed and deployed during this strategic cycle.• The filling of critical vacancies is priority and will be fast-tracked during the financial year.
Enterprise Workforce Program
The workforce strategy for the SA Post Office HR aims to ensure that the SA Post Office has a capable, competent and agile performing workforce to take the SA Post Office to 2030, and who will embrace the 4IR to optimise the SA Post Office’s strategic intent.
Following are the key focus areas to achieve this:
• Climate and Culture change – “The SA Post Office Way” & “a place where the best people want to work”
- Leadership Journey - Stakeholder management - Stable work environment – Organised Labour - Stable workforce - Employee Engagement
• Strategic workforce plan implementation – “Capable people who delight our customers” & “Growing high performance”
- Organisation structures & Competency framework - Attraction and selection of best fit to position employees - Retention of talent - Learning and Growth - Performance - Reward and Recognition
• Governance and compliance - Policies and Procedures - Continuous alignment with Legislative changes & requirements
• HR efficiency - HR Automation - HR Operating Model
45
The SA Post Office Current Workforce – January 2020Le
vel
CO
O
EX
EC
GM
SN
R M
GR
MG
R/
SP
E-
CIA
LIS
T
C -
Lev
el
A/B
- L
evel
Gra
nd
To
tal
Non-Permanent 1 1 2 1 7 31 618 661
Permanent 0 6 26 82 251 3 122 12 859 16 346
Grand Total 1 7 28 83 258 3 153 13 477 17 007
Ratio 7 4 3 3 12 4
Workforce optimisation targets
The total staff reduction target over the strategic 3 year cycle is 3 349. The FY2018/19 staff cost is used as the baseline for the planned staff cost reduction over the planning period.
Year Staff Reduction Cost Saving Accumulated Savings
FY19/20 (Y1) 1467 R 320m
FY20/21 (Y2) 1461 R 318m R 638m
FY21/22 (Y3) 421 R 127m R 765m
Implementation Process
All organisations structures and numbers that have been reviewed will be approved. This step will ensure that all Business units and support functions can function optimally and achieve the SA Post Office strategic objectives. Phase 1 will begin when all approvals are in place as well as the consultations activities have been concluded.
• Phase 1: A managed Voluntary Severance Package (VSP) process will be applied. The process will be managed to ensure critical skills are not lost and budgeted cost is not exceeded, while positions that will not be needed is abolished and will not be filled again. Employees will be given the opportunity to apply for a VSP to ensure critical and scares skills are not lost.
• Phase 2: A Redeployment process will follow to fill up new structures. This will be supported by a re-skilling process as well as programmes to build future capacity e.g. graduate programmes, learnerships etc.
• Phase 3: This phase will seek to explore various alternatives that satisfy the requirements of all stakeholders. Selected options will be assessed and reviewed through a consultation process with government, labour and employees. It should be noted that the SA Post Office will endeavour to implement initiatives that protect the livelihoods of its employees as well as the company. This principle will remain in effect until such time that the company is unable to do so.
46
Supply Chain Strategy
The objective of this business unit is to ensure that goods and services are sourced timeously and at fair market prices. In addition, SCM aims to achieve long-term savings as well as ensure an effective and available supply chain management service is provided to the organisation. A fundamental principle objective that drives SCM’s activities is the elimination of irregular, fruitless and wasteful expenditure while improving service agility and efficiency within the business unit.
• Improve BBBEE level through increased preferential sourcing and establishment of supplier and enterprise incubator;
• Reduction of total cost ownership through the implementation of commodity driven strategic sourcing implementation of the 7Rs, integrated and realistic procurement planning and optimised warehouse management;
• Optimise the SCM structure followed by filling critical vacancies, skills development and employee recognition to increase staff morale, employee efficiency & satisfaction;
• Increase agility, reliability and efficiency within SCM through compressive business process modelling;• Optimised system utilisation for contracts management, increase system control and process enablement.
Corporate Affairs Strategy
Corporate Affairs is a liaison office for all internal and external stakeholders and plays an advisory role as well as takes a leadership role in planning and decision making by the organisation through the provision of the right information to the right people within the organisation and making knowledge available to key internal and external stakeholders.
Corporate Social Investment
The strategic aim of the CSI Unit is to have the SA Post Office recognised as a good corporate citizen and a positive contributor to the economy and the lives of all South Africans.
The SA Post Office Museum
Conserve and preserve the legacy and heritage of the SA Post Office to form part of the heritage sites of the country, by showing achievements over many years to local and international stakeholders and visitors.
Environmental Sustainability
• Ensure and coordinate the SA Post Office’s response to the relevant Sustainable Development Goals (Agenda 2030)
• Partake in debates, forums and partnerships to combat climate change as a good corporate citizen.
Philatelic Services
To ensure that the mandate according to the amended postal Act are carried out effectively and efficiently. The unit is responsible for the development of Stamps according clause 29A and 29B in Postal Act no.124 of 1998.
• Enhance business performance and development in future markets and account for profitability.• Engage senior executives from other entities regarding business partnerships and co-operation.
Communication Strategy
The Communications Business Unit has embarked on a project to relaunch the SA Post Office brand and
47
improve brand equity. Central to this is the positioning of the SA Post Office as a reliable, trustworthy and cost-effective service provider.
The most important tool for this is social media, where the business unit has already made significant strides in portraying the company as caring, responsive and effective to customers.
Public relations alone cannot turn the brand image around. For the brand to become synonymous with trustworthiness and reliability, it is essential that
• operations should work reliably and efficiently and • tools of trade, specifically the IT network and hardware, should be reliable.
Formal broadcast and print media are also used continuously to position leadership and keep the SA Post Office and its products top of mind for customers.
The following are the building blocks of the SA Post Office brand equity strategy that will be implemented in line with the corporate plan and vision and mission:
• Brand identity• Brand awareness (awareness of products and services)• Brand meaning (what the SA Post Office brand should be characterized by or known for)• Brand performance • Brand responses (what customers feel and think of the SA Post Office brand/how customers respond to
the brand)• Brand relationship (the level of identification customers have with the SA Post Office brand)• The SA Post Office communication plan and rebranding is based on the Corporate re-branding to align
to the mantra – We Serve You. This shall be achieved by effectively communicating with our clients and reaffirm our position as a trusted exchange of service delivery because we are Relevant, Reliable, have Reach and are Resilient. The 2030 vision is a journey that will be travelled with our customers and employees to embrace the fourth industrial revolution.
• The SA Post Office will use communication and marketing to improve its brand positioning, nurture media relations and fully utilise social media to engage, retain and inform customers.
Key Functional Areas
The Communications Plan relates to the following key functional areas:
• Brand positioning – reputational matters, how the SA Post Office is perceived by the external and internal;• Media Relations – facilitation of, and engagement with the media through writing and distributing news
releases, responding to media queries, media monitoring and analysis as well as offering strategic counsel to leadership/spokespersons;
• Public Relations – managing the SA Post Office’s website and social media presence (Twitter and Facebook), including monitoring what customers and stakeholders are saying about the organization, responding to inaccurate posts and routing customer queries to Customer Services for resolution. Copy
48
writing for brochures, newsletters and other printed materials for the general public;• Internal corporate communications – communications with employees, which includes the dissemination
of company news, producing employee newsletters as well as provide strategic counsel and support to Business Units on employee communication; and
• Crisis communication – playing an advisory role to leadership in dealing with an event threatening the organisation’s reputation or public safety as well as developing and implementing the associated crisis communication plan in collaboration with other BUs.
ePlatform Communication Program
• Proactively utilise media and corporate relations to publicise the launch of the SA Post Office eCommerce platform and position the SA Post Office as an organization embracing Resilience through innovation and adapting to market changes.
Customer Relations Program
• Utilise media and communication platforms to build bridges with customers.
Stakeholder Relations
• Position the organization as Relevant, Reliable, Resilient and incorporating the benefits of Reach (including financial services);
• Deploy government relations services to ensure that the SA Post Office is continually chosen as the preferred partner for the delivery of government services to the public;
• Utilise media platforms and sponsorship partnerships to create leadership engagement platforms that present opportunities to attract private sector investments partnerships;
• Encourage improved performance and a tangible corporate culture identity (‘the SA Post Office way’) through internal rebranding, purposeful dissemination of organisational information to bring about employee ambassadorship and;
• Facilitation of interest in opportunities to generate revenue by government and private sector.
Communications Support Programme
• Utilise internal communications platforms, employee engagement sessions, and technology short-message services such as WhatsApp to facilitate operational communication.
Security Strategy
The functions and responsibility of the Unit is nationally directed towards the effective standardization, co-ordination and management of the security and investigation activities in relation to the various operational Business Units and other support services within the Company and consists of:
• A Corporate Management (Business Unit aligned) Team and • Decentralized Regional Business Unit Teams accountable to the national SIS management structure.
There will be a concerted drive to develop and foster a climate within the SA Post Office where all employees strive for the ultimate eradication of fraud, corruption and theft as well as re-enforcing existing regulations aimed at preventing, reacting to and reducing the impact of fraud, corruption, theft, and misadministration where these dishonest acts subsist.
Security and Investigations will apart from fulfilling its obligations in terms of the Security and Investigation Policy, with regards to its own operational environment, support, assist and direct all Business Units to adhere
49
and enforce the Policy across their respective Business Units.
Critical aspects to be addressed by the Fraud Prevention Strategy will include:
• Management & personnel education: Creating awareness of the S&I Policy and maintaining the momentum regarding Code of Ethical Conduct and increase its crime awareness campaigns nationally
• Policy compliance: Supporting and guiding Business Units to review and update their policies and procedures and to ensure that BU’s enforce policies and procedures
• Internal detection control measures: Continuously monitor, evaluate and implement new effective detection and prevention control measures with regards to fraud, corruption, theft and mail related crime
• Security risk assessments: Continuous undertaking of security assessments throughout the business and monitoring the implementation of recommendations
• Crime Prevention Forums: Establishing Business Unit Crime Prevention Forums at regional level within all business units
The strategy will continue to focus upon the physical security of premises and business operations at post office outlets, agencies and pension pay-out points, as well as the current focus on products, systems and processes which are targeted by fraudsters. It will further require the deployment of a dedicated project management focus with an increased level of crime analysis, project evaluation and impact.
The SA Post Office Board 90 day Plan
A number of strategic deliverables were identified in the middle of Quarter 3 on 1 November 2019. Some of the deliverables are short-term, whereas others straddle across medium and long-term turnaround time-frames. In all of the streams, there are those activities that are urgent with medium to long term effect. The short-term initiatives are anticipated to be completed within 90 days and expected to be completed during the fourth quarter of FY2019/20.
These activities constitute the Board’s standard agenda items and progress thereof will be accounted for and reported on a regular basis. The work streams comprising of various business units have been established and report directly to various board members to ensure that expected benefits of these initiatives are realised timeously.
50
The BOD 90 day plan focuses on the physical security of premises and business operations at post office outlets, agencies and pension pay-out points. In addition it also focuses on products, systems and processes which are targeted by fraudsters. The deployment of a dedicated project management team is required and will be tasked with an increased level of crime analysis, project evaluation and impact.
The SA Post Office Board 90-Day Deliverables
Digital Platform Critical Vacancies
AG/Internal Audit and Risk Findings and procurement processes (whether enabling or disabling the SA Post Office)
Funding Required to turn around the SA Post Office
Clareinch SA Post Office Incident
Properties strategies Physical Infrastructure and security related is-sues
The SA Post Office /Postbank Black Sash issues
The following workstreams have been established consisting of the Board members and the Executives:
Board Workstreams
Physical infrastructure/ security issues
HR Work stream Properties strategies Revenue generation
SASSA IT/Governance/ Operations
Finance/ procurement/ Audit findings Postbank/ the SA Post
Office /Black SashInfrastructure upgrades
Communication /public image/complaints manage-ment/ site visits/ media/report
51
STRATEGIC FOCUS AREASThere are seven focus areas aimed at resolving the SA Post Office’s profitability challenge as well as establishing the foundation for the implementation of Vision 2030.
Figure 15: The SA Post Office Group Impact Statement Map
52
These impact statements are further expanded into focus areas and outcomes in the table below.
Table 3: Key Focus Areas
No FOCUS AREA OUTCOME
1 Financial SustainabilityTo be Financially Sustainable and achieve a positive net financial and cash position
2 Optimised Assets and Infrastructure• Improve Return on Assets• Achieve a positive return on assets
3 Customers and Communities First
• Continued service provision in underserviced communities (USO / Financial / SASSA)
• Improve customer experience at all points of presence
• Enhanced Brand Equity
4 Efficient Systems and Processes Improved service delivery to all customers
5 Digital Transformation• Improved Market Relevance through Digital
Transformation• Increase customer access to digital services
6 Culture of Excellence• Improved Organisational Performance• Have engaged and high performing employees
7 Corporate Governance• Strengthened Organisational Governance• Well entrenched and consistently applied Governance
principles in managing the organisation.
53
FOCUS AREA 1 FINANCIAL SUSTAINABILITY
OUTCOME To be Financially Sustainable and achieve a positive net financial and cash position
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Average creditors payment of 30 days (Finance, account payable)
2. Average Debtors collection days of 30 (Finance, collection)
3. All initiatives in the strategy fully funded and funding reserved per project (CIMC chaired by CFO)
4. Increase market share by 4% year on year over the MTEF period.
5. Establish digital capability to social mandate through (E-commerce, Integrate Government services)
6. Reduce cost to income ratio
7. Ensure value for money on contracted services and goods
8. Improve profitability, liquidity and solvency
FOCUS AREA 2 OPTIMISED ASSETS AND INFRASTRUCTURE
OUTCOME• Improve Return on Assets
• Achieve a positive return on assets
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Rollout of the maintenance program to identified key sites. (To be identified – the SA Post Office key-points, Main hubs, branches, JIMC, etc.)
2. 100% Rollout of multi-functional devices and tools of trade at branches and maintained at 100% functionality level.
3. Safeguarding of heritage assets - Postal Museum
4. Cleanliness of points of presence
5. Maintain an optimised address management database
6. Develop partnership framework
7. Disposal of non-core properties
8. Maximise return on rental property (leased out)
54
FOCUS AREA 3 CUSTOMERS AND COMMUNITIES FIRST
OUTCOME
• Continued service provision in under-serviced communities (USO / Financial / SASSA)
• Improve customer experience at all points of presence
• Enhanced Brand Equity
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Specialised customer services training for frontline and call centre staff
2. Annual independent customer satisfaction survey to assess improved quality of customer service experience
3. An integrated Customer Relationship Management system and policy
4. Align the CVP to customer requirements
5. Ensure community access to technology (e.g. Wifi hotspots)
6. Community outreach programs
7. Maintain USO footprint – 529 branches
8. Provide tools of trade
FOCUS AREA 4 EFFICIENT SYSTEMS AND PROCESSES
OUTCOME Improved service delivery to all customers
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Tools of trade to be available including clothing (corporate and protective), computer hardware and peripherals, material handling equipment, saleable stock items, stationery.
2. Route optimisation (distribution management - logistics)
3. IT Network monitoring and optimisation
4. Distribution network optimisation (physical points of presence)
5. Continuous staff training
6. Filling of critical vacancies
7. Optimize the security program to comply with UPU S58/59 standard at branches and key sites.
8. Increase mail sorted on machines
55
FOCUS AREA 5 DIGITAL TRANSFORMATION
OUTCOME• Improved Market Relevance through Digital Transformation
• Increase customer access to digital services
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Implement eCommerce platform
2. Source strategic partnerships to implement Digital Strategy
3. Develop Big Data capability
4. Develop capacity for Research and Development
FOCUS AREA 6 CULTURE OF EXCELLENCE
OUTCOME• Improved Organisational Performance
• Have engaged and high performing employees
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Effective reward and recognition (Performance Management Framework – Reward, Recognition and Consequences)
2. Annual independent employee satisfaction survey to asses improved quality of employee loyalty / commitment
3. SAQA Accreditation of TrainPost Modules
4. Develop organisational workforce plan
5. Implement organisational change programme
6. Implement talent management programme
7. Provide continuous learning programmes
56
FOCUS AREA 7 CORPORATE GOVERNANCE
OUTCOME
• Strengthened Organisational Governance
• Well entrenched and consistently applied Governance principles in managing the organisation
Prioritised Actions(Outputs and Activities – What must we deliver or do to achieve the outcome?)
What must we do?
1. Actively work to closing and mitigating all material Internal Audit and Auditor General issues in a timely and sustainable manner
2. Adherence to the procurement policies of the SA Post Office
3. Implement and maintain the ethics awareness programme across all sectors of the SA Post Office organisation
4. Effective consequence management for financial misconduct transgressions in a consistent and timely manner without discrimination
5. Training on governance principles
6. Compliance to governance principles
57
1
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
58
INS
TIT
UT
ION
AL
PE
RFO
RM
AN
CE
INFO
RM
AT
ION
ME
AS
UR
ING
IMPA
CT
– K
EY
PE
RFO
RM
AN
CE
IND
ICA
TO
RS
No
Key
Per
form
ance
Ind
icat
or
Bas
elin
e20
20/2
1 Q
uar
terl
y Ta
rget
An
nu
al T
arg
et
2018
/19
2019
/20
Fore
cast
Q1
Q2
Q3
Q4
2020
/21
2021
/22
2022
/23
Str
ateg
ic O
utc
om
e 1:
Fin
anci
al S
ust
ain
abili
ty
1,1
Att
ain
base
line
reve
nue
targ
et98
%95
%98
%98
%98
%98
%98
%99
%10
0%
1,2
Att
ain
grow
th in
itita
ive
reve
nue
targ
et0%
0%98
%98
%98
%98
%98
%99
%10
0%
1,3
Impr
ove
Pro
fitab
ility
(Ret
urn
on A
sset
s)-1
9%-3
1%-2
4%-1
7%-1
1%-4
%-4
%9%
8%
1,4
Red
uce
Sta
ff C
osts
/Rev
enue
Rat
io93
%89
%85
%80
%76
%71
%71
%63
%64
%
1,5
Impr
ove
Pro
fitab
ility
(Red
uce
Cos
t to
In
com
e R
atio
)13
8%12
8%12
2%11
6%11
0%10
3%10
3%94
%94
%
1,6
Impr
ove
Liqu
idity
(Cas
h ex
pens
e co
ver)
n/a
n/a
1,00
1,00
1,00
1,00
1,00
2,00
3,00
Str
ateg
ic O
utc
om
e 2:
Op
tim
ised
Ass
ets
and
Infr
astr
uct
ure
2,1
Impl
emen
t se
curit
y up
grad
es a
nd in
stal
l eq
uipm
ent
item
s at
SA
Pos
t O
ffice
br
anch
es a
nd M
ail C
entr
es
-37
384
015
7383
333
435
60-
-
2,2
Impr
ove
the
infr
astr
uctu
re t
hrou
gh
rest
orat
ion
and
refu
rbis
hmen
ts f
or t
he
list
of id
entifi
ed p
rope
rtie
s -
-75
7611
311
437
975
975
9
Str
ateg
ic O
utc
om
e 3:
Cu
sto
mer
an
d C
om
mu
nit
ies
Firs
t
3,1
Res
olut
ion
of c
usto
mer
com
plai
nts
reco
rded
at
the
call
cent
re w
ithin
14
days
51%
82%
100
%10
0%
100%
10
0%
100%
100%
100%
3,2
Impr
ove
cust
omer
sat
isfa
ctio
n le
vel
--
--
Con
duct
S
urve
y
Det
erm
ine
Sat
isfa
ctio
n le
vel
60%
75%
85%
3,3
Incr
ease
the
rea
ch in
to o
ur c
omm
uniti
es
thro
ugh
Cor
pora
te S
ocia
l Inv
estm
ent
prog
ram
mes
n/a
n/a
11
11
4 pr
ogra
mm
es6
pro-
gram
mes
8 pr
o-gr
amm
es
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
59
Ref
er t
o t
he
An
nex
ure
A f
or
det
aile
d d
escr
ipti
on
s o
f th
e K
PI’s
ind
icat
ed in
th
e ta
ble
s ab
ove
.
No
Key
Per
form
ance
Ind
icat
or
Bas
elin
e20
20/2
1 Q
uar
terl
y Ta
rget
An
nu
al T
arg
et
2018
/19
2019
/20
Q1
Q2
Q3
Q4
2020
/21
2021
/22
2022
/23
Str
ateg
ic O
utc
om
e 4:
Effi
cien
t S
yste
ms
& P
roce
sses
4,1
Ach
ieve
the
reg
ulat
ed M
ail D
eliv
ery
stan
dard
76
%86
%92
%
92%
92
%
92%
92
%92
%92
%
4,2
Mai
ntai
n sy
stem
upt
ime
at o
nlin
e S
A P
ost
Offi
ce b
ranc
hes
n/a
n/a
98%
98
%
98%
98
%
98%
98%
98%
Str
ateg
ic O
utc
om
e 5:
Dig
ital
Tra
nsf
orm
atio
n
5,1
Ent
erpr
ise
App
licat
ion
Pla
tfor
m Im
plem
ente
dn/
an/
a25
%50
%75
%10
0%10
0%-
-
5,2
eCom
mer
ce P
latf
orm
Impl
emen
ted
n/a
n/a
25%
50%
75%
100%
100%
--
Str
ateg
ic O
utc
om
e 6:
Cu
ltu
re o
f E
xcel
len
ce
6,1
Impr
ove
Em
ploy
ee s
atis
fact
ion
n/a
42%
--
Con
duct
S
urve
y
Det
erm
ine
Sat
isfa
ctio
n le
vel
55%
65%
75%
Str
ateg
ic O
utc
om
e 7:
Co
rpo
rate
Go
vern
ance
7,1
Aud
it O
pini
on
Qua
lified
Aud
it no
t co
mpl
eted
-
Impl
emen
t tr
acki
ng
proc
ess
to m
onito
r re
solu
tion
of A
G fi
nd-
ings
50%
reso
lu-
tion
of
cate
gory
A
Aud
it fin
d-in
gs
100%
re
solu
tion
of c
ateg
ory
A A
udit
findi
ngs
Unq
uali-
fied
Aud
it O
pini
on f
or
2020
/21
Unq
uali-
fied
Aud
it O
pini
on f
or
2021
/22
Unq
uali-
fied
Aud
it O
pini
on f
or
2022
/23
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
60
1FINANCIAL PLAN
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
61
1
SA POST OFFICE FINANCIAL PLAN 2020/21 TO 2022/23
THE SA POST OFFICE: INCOME STATEMENT
Budgetary assumptions for revenue:
• ICASA has approved a 7,7% increase for postal services (reserved area) - Standard letter increase by 35c from R4.55 to R4.90 (including VAT).
• 5,5% increase for the unreserved markets.
• DTT project revenue of R158 million for 2020/2021 FY and R141 million for 2021/2022 FY is included in the budget. This is based on funds already received from the DTPS and awaiting the roll-out of the DTT Set-top box kits. Through partnerships, revenue will be also be generated directly from citizens, not included in the subsidy, through purchasing the devices from the SA Post Office.
• SASSA transaction fees generated from the disbursements of social grants to the beneficiaries are as reflected below and included in the budget as part of the financial services revenue.
- 2020/2021 FY - R805 million - 2021/2022 FY - R845 million - 2022/2023 FY - R888 million
• The SA Post Office has developed revenue initiatives which will yield revenue during the course of the financial year. The drivers includes revenue the retention strategy and subsequent growth thereof. The SA Post Office is engaging in partnerships to grow the current revenue streams by undertaking the following initiatives:
- Entering into partnerships with lessees on the basis that they are exempt from rental payments for a period covering the lease allowance amount that would be incurred. This will improve the rental revenue base in the MTEF period.
- Increasing the number of post office branches offering the motor vehicle licensing services. The increment on this revenue is expected to yield R48 million in the current financial year.
- Increase in revenue by R100 million due to expansion of the AARTO infringements’ notices delivery services. The roll-out is to be expanded over the areas currently covered.
- R50 million increment in the recovery of costs incurred pertaining to transfer pricing to Postbank for the use of Post Office branches,
• Through review of the revenue streams, the following have also been identified:
- Implementation of e-commerce which will have a direct impact on the number of parcels couriered through items purchased on our e-commerce platform; The increment in revenue is expected to be R36 million,
- R200 million from sale of properties that were approved for disposal, - Entering into partnerships to generate R52 million from delivering value added services in our branches.
This will range from prepaid revenue, sale of tickets, pay a bill transaction amongst others. The services covered in the partnership is to exclude services already offered.
- Enter into a partnership with a service provider on the distribution and warehousing of medical supplies. Currently the post office is providing pick up points and the other services, distribution and warehousing is provided by another company. The partnership is for the post office to expand its scope and participate in the distribution and warehousing of the supplies. This will yield additional R87 million on revenue.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
62
• In total, the new revenue initiatives will yield R573 million and included as follows in the budget:
- R36 million for e-commerce included under postal and courier services; - R200 million included as part of the property revenue, and - Digital revenue includes R20 million for digital post boxes and electronic mail.
• MTEF allocations to fund the public service mandate (includes VAT)
- 2020/2021 FY - R492 million - 2021/2022 FY - R523 million - 2022/2023 FY - R543 million
Budgetary Assumptions:
Inflation projections
• 2020/2021 FY - 5.1 %• 2021/2022 FY - 5.0 %• 022/2023 FY - 4.8 %
Staff optimization benefits
• Staff voluntary severance packages approved in the 2019/2020 FY will result in lower staff cost for the 2020/2021 FY and further cost reductions of R300 million has been included in the budgets for the 2021/2022 FY. This reduction is made possible by the severance packages that were paid in the 2019/20 FY relieving the payroll bill as of 1st April 2020 with the cost associated with the employees that have left.
• As a result of the severance payments planned prior to the end of the 2019/20 FY, the base cost (2019/20 FY) became higher.
• Some of the part time employees were also absorbed and this results in curbing the over-time payments previously made to them.
• Due to excess staff within the organization, overtime and night duty allowances are also managed to further realize cost reductions and have already been adjusted for in the budgeted amount.
Security costs have been reduced by R286 million due to lower contractual obligations and cost optimization due to the investments that will be made in improving the security infrastructure.
The above revenue and expense initiatives are crucial to ensure that the Post Office financial position is improved over the medium term with the net loss of R177 million projected for the 2020/2021 FY.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
63
The SA Post Office (R’000)
Actuals 2018/19
Forecast 2019/20
Budget 2020/2021
Budget 2021/2022
Budget 2022/2023
Revenue 3 911 065 4 511 591 5 306 501 5 852 572 6 123 269
Postal Services revenue 2 715 307 2 873 307 3 161 945 3 396 167 3 629 852
Courier & Parcels revenue 147 767 109 977 239 771 259 569 281 737
Financial Services revenue 567 724 1 222 773 1 468 931 1 558 163 1 492 006
Interest revenue 93 269 102 496 38 761 86 583 55 124
Digital revenue 4 342 225 20 000 363 000 463 000
Property revenue 176 657 127 757 298 223 96 568 106 013
Sundry revenue 205 999 75 055 78 870 92 521 95 537
Expenses 5 913 901 6 570 934 6 131 706 6 137 750 6 439 774
Staff expenses 3 643 339 4 017 298 3 774 314 3 685 833 3 912 796
Transport expenses 293 140 332 599 295 148 316 305 339 856
Property expenses 540 667 583 929 600 244 652 215 689 558
IT expenses 224 136 228 678 330 289 367 910 372 415
Security services expenses 419 237 805 071 519 045 485 229 454 724
Interest expenses 102 576 23 244 - - -
Bank charges 97 905 133 799 104 509 133 264 139 910
Material and services 63 397 64 494 108 436 90 912 99 763
International charges 69 389 58 911 70 975 76 305 82 064
Marketing 2 151 2 250 21 559 21 601 30 626
Depreciation 114 919 134 994 114 910 122 620 128 538
Cost of insurance 56 503 66 830 59 403 59 965 59 776
Travel expenses 20 502 16 067 22 333 22 703 24 273
Audit fees 24 816 17 894 28 697 29 419 29 244
Sundry expense 241 224 84 876 81 844 73 469 76 231
Operating (loss) / profit (2 002 836) (2 059 343) (825 205) (285 178) (316 506)
Subsidy 21 799 413 032 427 900 454 745 471 757
Transfer pricing 365 136 197 653 220 162 230 899 243 286
Net profit / (loss) before tax (1 615 901) (1 448 658) (177 143) 400 466 398 537
Taxation - - - - -
Net profit / (loss) after tax (1 615 901) (1 448 658) (177 143) 400 466 398 537
Table 4: The SA Post Office income statement
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
64
STATEMENT OF FINANCIAL POSITION AND CASH FLOW
The salient points:
• Investment in capital projects to improve the infrastructure increases the property, plant and equipment.• However, the funding mechanism for the capex projects requires attention and incorporation of cost-
sharing models with the new lessees.• The post-retirement medical aid liability remains under-funded, further compounded by the moderate
growth in the assets which is lower than the growth of the liability. • The Department has provided funding of R1,6 billion over the MTEF period to fund the public service
mandate. This is included in the budget line item subsidy of R428 million for the 2020/21 financial year.
The SA Post Office (excluding Postbank) (R’000)
20192020
(Forecast)2021
(Budget)2022
(Budget)2023
(Budget)
Assets
Non-Current,assets
Property, plant and equipment 2 145 300 1 915 565 2 004 156 2 116 981 2 323 282
Investment properties 195 493 195 493 195 493 195 493 195 493
Heritage assets 46 247 46 247 46 247 46 247 46 247
Intangible assets 80 560 96 530 121 835 132 001 135 563
Other financial assets 892 498 954 973 1 021 821 1 093 348 1 169 883
Operating lease asset 5 817 5 177 4 608 4 101 3 650
Retirement benefit asset 38 756 41 469 44 372 47 478 50 801
3 404 671 3 255 454 3 438 531 3 635 649 3 924 920
Current assets
Inventories 49 381 59 948 70 742 74 986 79 486
Trade and non trade receivables 1 557 765 338 741 386 252 427 723 452 315
Other financial assets 367 364 367 364 367 364 367 364 367 364
Operating lease asset 522 465 413 368 328
Prepayments 969 - - - -
Cash and cash equivalents 2 908 730 700 788 123 953 199 326 455 513
4 884 731 1 467 305 948 724 1 069 767 1 355 006
Total Assets 8 289 402 4 722 759 4 387 255 4 705 416 5 279 925
Table 5: The SA Post Office Statement of financial position
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
65
The SA Post Office (excluding Postbank) (R’000)
20192020
(Forecast)2021
(Budget)2022
(Budget)2023
(Budget)
Equity and Liabilities
Equity
Share capital 7 785 116 7 785 116 7 785 116 7 785 116 7 785 116
Reserves 1 568 340 1 568 340 1 568 340 1 568 340 1 568 340
Accumulated loss (7 665 485) (9 231 059) (9 408 202) (9 007 736) (8 609 199)
1 687 971 122 397 (54 746) 345 720 744 257
Liabilities
Non-Current Liabilities
Other financial liabilities 275 014 - - - -
Operating lease liability 40 344 - - - -
Retirement benefit obligation 1 231 665 1 325 272 1 425 992 1 532 942 1 644 846
SAPO intercompany loan 137 784 137 784 137 784 137 784 137 784
Provisions 290 485 284 675 278 982 273 402 267 934
1 975 292 1 747 731 1 842 758 1 944 128 2 050 564
Current liabilities
Trade and other payables 1 351 167 1 418 725 1 461 287 1 505 126 1 550 279
Other financial liabilities 167 967 341 394 150 000 - -
Operating lease liability 2 843 - - - -
Retirement benefit obligation 173 117 186 274 200 431 215 463 231 192
Deferred income 173 139 180 065 187 267 194 758 202 548
SAPO intercompany trading account 1 579 914 95 000 90 250 85 738 81 451
Provisions 261 743 256 492 251 346 246 303 241 361
Deposits from the public - - - - -
Third parties funds collected 532 265 149 682 158 662 168 182 178 273
Government grant 383 984 225 000 100 000 - -
4 626 139 2 852 631 2 599 243 2 415 569 2 485 104
Total Equity and Liabilities 8 289 402 4 722 759 4 387 255 4 705 416 5 279 925
Table 5: The SA Post Office Statement of financial position
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
66
The SA Post Office (excluding Postbank) (R’000)
20192020
(Forecast)2021
(Budget)2022
(Budget)2023
(Budget)
Cash flows from operating activities (3,368,015) (1,759,598) (382,315) 301,298 580,935
Cash flows from investing activities (134,099) (65,760) (203,501) (235,444) (334,839)
Cash flows from financing activities 3,181,079 (382,584) 8,981 9,520 10,091
Total cash movement for the year (321,035) (2,207,942) (576,835) 75,373 256,187
Cash at the beginning of the year 3,229,765 2,908,730 700,788 123,953 199,326
2,908,730 700,788 123,953 199,326 455,513
Table 6: The SA Post Office Cashflow Statement
BORROWINGS
There are no borrowing considered for the financial year under review. The operations will be funded from the revenue initiatives already approved by the Board which are under implementation.
DIVIDEND POLICY
The company’s dividend policy is to consider an interim and a final dividend in respect of each financial year. Depending on the need to retain funds for expansion or operating purposes, the board of directors may pass a resolution for the payment of dividends, subject to the provisions of the SA Post Office Memorandum of Incorporation (MOI). There are no dividends contemplated in this corporate plan.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
67
CAPEX INVESTMENT PROGRAMME
The critical projects identified for implementation FY2020/21 are indicated in the table below. The partnership opportunities will be explored to off-set funding deficits to implement critical projects.
No ProjectBusiness
Unit
CAPEX Budget 2021FY - R’000
2019/2020 Projection
Q1 Q2 Q3 Q4Total
Budget
1 Forklifts Operations 22,309 - - - - -
2 Courier Solution Operations 23,000 - 22,000 - 45,000
3Branch hardware replacement (POS)
Operations - 60,000 - - 60,000
4 Hybrid Mail Printers Operations - 30,000 - - 30,000
5Security Infrastructure Upgrade Phase 1 & 2
Governance 14,723 - 142,000 - - 142,000
6“Property - Maintenance backlog including 3 smart post offices”
Operations 5,480 50,000 50,000 50,000 50,000 200,000
7 E-Commerce Operations - 5,000 26,500 31,500
8 Small Capex 28,405 -
9 Branch manager Computers Operations - - 5,000 5,000 5,000 15,000
10Customer interaction Centre Hardware
Operations 257 6,000 - - - 6,000
71 174 84 000 313 500 77 000 55 000 529 500
Table 7: Capital Investment Plan FY2020/21
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
68
No ProjectBusiness
Unit
CAPEX - R’000
2020/2021 Budget
2021/2022 Budget
2022/2023 Budget
Total Budget
1 Courier Solution Operations 45,000 0 0 45,000
2 Branch hardware replacement (POS) Operations 60,000 40,000 40,000 140,000
3 Hybrid Mail Printers Operations 30,000 40,000 40,000 110,000
4Security Infrastructure Upgrade Phase 1 & 2
Operations 142,000 0 0142,000
5Property - Maintenance backlog including 3 smart post offices
Operations 200,000 250,000 300,000750,000
6 E-Commerce Governance 31,500 16,000 0 47,500
7Branch manager and Admin Computers
Operations 15,000 15,000 18,00048,000
8Customer interaction Centre Hard-ware
Operations 6,000 2,000 08,000
9 POS Software System & Servers Operations 0 20,000 0 20,000
10 Enterprise Monitoring Tool IT 0 5,000 5,000 10,000
11 Trust Centre Rejuvenation IT 0 15,000 17,300 32,300
12eGovernment and enhanced ser-vices
IT 0 5,000 5,00010,000
13 IT Service Management Suite IT 0 3,500 3,500 7,000
529,500 411,500 428,800 1,369,800
Table 8: Capital Investment Programme
1SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
69
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
70
ORGANISATIONAL STRUCTUREThe SA Post Office operates in terms of a Group holding structure, with the SA Post Office as the Group holding company, with two operating subsidiaries and several property companies. The subsidiary companies have their own boards comprising the SA Post Office non-executive directors, executive directors and the holding company executives who are appointed in a non-executive capacity to the subsidiary boards. The managing director of the subsidiary company acts as the executive director of the subsidiary.
The relationship between the subsidiary companies and the SA Post Office, as the shareholder, is governed by the individual shareholders’ compacts between the holding company and the subsidiary. The shareholder compact, as well as spelling out the roles and responsibilities of the parties, outlines the performance targets to be met by the subsidiary in terms of the overall annual Corporate Plan for the Group.
Figure 16: The SA Post Office Group Structure
The SA Post Office Group comprises the following companies: The Postbank (SOC) Ltd; The Document Exchange (Pty) Ltd (DOCEX); The Courier Freight Group (Pty) Ltd (CFG); five property companies: The SA Post Office Properties Companies (Pty’s) Ltd: Bloemfontein; Cape Town; East Rand; Port Elizabeth and Rossburgh.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
71
BOARD OF DIRECTORS AND SUB-COMMITTEES
Board of Directors
The Board of Directors is the Accounting Authority for the SA Post Office and consists of not more than 10 non-executive members and three executive members which are the following; the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the Chief Operations Officer (COO).
The statutory committees of the Board are: the Audit Committee; Human Resource Committee and Transformation Committee; Remuneration and Performance Committee, Social and Ethics Committee. The Board may establish committees to assist it in its work and the following committees have been established in this regard: the IT Governance Committee, the Strategic Turnaround Committee (STP), the Postbank Committee; the Risk Committee and the Stamp Advisory Committee.
Audit Committee
The SA Post Office Audit was established in terms of section 51(1)(a)(ii) of the Public Finance Management Act No 1 of 1999 (PFMA) as amended and relevant Treasury Regulations, and in accordance with the SA Post Office Memorandum of Incorporation. As a major public entity in terms of Schedule 2 of the PFMA, SA Post Office is required to establish an Audit Committee. The Audit Committee is responsible for, evaluating the Group’s financial statements which will be provided to Parliament and other stakeholders, the systems of internal control which management and the Board have established, the audit processes, the risk management framework and assessing the Group’s financial performance against its Corporate Plan. Representatives of external and internal audit have direct access to the Chairperson of the Committee.
Risk Committee
A stand-alone Risk Committee was established in order to provide sufficient time and reporting of risk management. The committee also monitors, evaluates and advises the Board on the adequacy of risk management processes and strategies within the Group and recommends the approval of risk policies to the Board. It further reviews significant risks facing the company and reports these to the Board. The scope of the Committee extends across the Group to include the subsidiary companies whose products and processes expose the Group to Credit Risk, Liquidity Risk, Market Risk, Balance Sheet Risk and Operational Risk within the legislative and regulatory framework that governs the SA Post Office Group. Representatives of Group Risk Management, Internal Audit, the Security and Investigations division and all core Business Units attend all meetings of the Committee.
Remuneration and Performance Committee
The Remuneration and Performance Committee was established in accordance with the SA Post Office Act, section 14(2)(a)(i). The committee reviews all aspects relating to remuneration and performance within the SA Post Office Group.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
72
Human Resource and Transformation Committee
The Human Resource and Transformation Committee was established in accordance with the SA Post Office Act, section 14(2)(a)(ii). The committee monitors compliance with relevant labour and employment legislative matters and recommends approval of significant human resources related policies to the Board. This committee’s mandate includes transformation matters.
Postbank Transition Committee
The Postbank Transition Committee was established to provide oversight over the transitional matters between the SA Post Office and the Postbank. The transitional matters include the completion of cooperation agreements and service level agreements, transfer of assets and other contractual matters. It is envisaged that this committee will cease to exist once the transition is complete.
IT Governance and Procurement Committee
The Committee is responsible for overseeing on behalf of the Board, the execution of IT-related decisions as well as procurement submissions within the delegation of the Board across the Group. The committee reports to the Board and is responsible for the governance of IT across the Group, which includes monitoring and reviewing IT policies and practices to ensure that the required IT support is provided and that IT is positioned as a key enabler for business. The Group CEO, the CIO and relevant representatives from management attend meetings of the committee. The committee meets at least four times a year.
Procurement submissions which emanate from the Bid Adjudication Committee and with the Board approved threshold are reviewed and considered by the Committee for recommendation to the SA Post Office Board for approval.
Stamp Advisory Committee
This is an advisory committee which has been established to advise the Minister of Communications and Digital Technologies on the South African annual stamp issue program and related issues. The Committee is made up of three SA Post Office Board members, specialists in philately and a representative from Department of Arts and Culture. The committee meets four times a year and on an ad-hoc basis if required.
Strategic Turnaround Committee (STP)
In general the STP Committee is responsible to the Board for overseeing the overall strategic turnaround activities. The Committee is further responsible to exercise oversight on initiatives implemented in order to address revenue generation initiatives identified from time to time.
Members are appointed by the Board and comprise of at least three non-executive members of the Board.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
73
Social and Ethics Committee
The Social and Ethics Committee (“the Committee”) is constituted as a statutory committee of the Board under section 72(4) of the Companies Act (read together with Regulation 43 of the Companies Regulations).
The role of the Committee is, having regard to any relevant legislation, other legal requirements or standards of best practice, to monitor the following activities:
• Social and economic development, including the Company’s’ standing in terms of the goal and purposes of:
• The Organisation of Economic Co-operation and Development (OECD) recommendations regarding corruption;
• The Employment Equity Act (EEA); and• The Board Based Black Economic Empowerment Act (BBBEE).
The SA Post Office is and is seen to be a good corporate citizen by the promotion of equality, prevention of unfair discrimination and reduction of corruption; and contribution to development of the communities in which its activities are predominantly conducted or within which its products or services are predominately marketed.
Government Service Delivery and Corporate Contracts Committee
This Committee was established to provide focused oversight over government service delivery and major corporate contracts as part of the SA Post Office Corporate Plan, and to consider opportunities for expansion of services and contracts to government.
Docex Board
The Document and Exchange Group (DOCEX) is an operating subsidiary company of the SA Post Office. DOCEX has its own Board of Directors which is accountable to the SA Post Office Group which is the sole Shareholder. The company provides a secure and expeditious delivery of documents, letters and parcels or postal articles within the country. The Board of Directors of DOCEX comprises of non-executive directors appointed by the SA Post Office Group Board including independent non-executive directors with expertise in the courier and freight industry.
Property Companies Committee
This Committee was established to provide focused oversight over the SA Post Office Property portfolio and to consider opportunities to maximise utilisation and revenue from the SA Post Office Property Portfolio.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
74
DELEGATION OF AUTHORITYThe SA Post Office Board as the accounting authority, has unfettered powers to direct and control the business of the company and may delegate the day to day management to the executive management, but at all times retain full and effective control over the direction and performance.
Although the Board’s ultimate accountability is to lead and manage the Group, some of the responsibilities are delegated to Executive Management. In this regard, to manage the business affairs of the SA Post Office Group, the delegated responsibilities are managed through established governance structures at Board and Executive Committee level. The Board has delegated certain of its powers to management but has retained some powers to itself to control the management and strategic direction of the SA Post Office.
The Board may, in instances of crises within the company, revoke any powers granted to management in order to stabilise the organisation. The Board may also revoke any powers conferred to any official in line with the role of the Board as the Accounting Authority.
The SA Post Office Board has developed a clear definition of the levels of materiality and significance in order to determine the scope of delegation of authority and to ensure that the Board reserves specific powers and authority to itself. The delegated authority from the Board in writing, is reviewed and regulated on a regular basis.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
75
MA
TE
RIA
LIT
Y F
RA
ME
WO
RK
Fram
ewor
k of
acc
epta
ble
leve
ls o
f m
ater
ialit
y an
d si
gnifi
canc
e fo
r th
e pu
rpos
e of
the
int
erpr
etat
ion
of a
nd c
ompl
ianc
e w
ith t
he P
ublic
Fin
ance
M
anag
emen
t A
ct, N
o 1
of 1
999,
as
appr
oved
by
the
Boa
rd a
nd a
pplic
able
fro
m t
he 2
017/
18 fi
nanc
ial y
ear.
Fig
ure
17:
SA
Po
st G
rou
p M
ater
ialit
y Fr
amew
ork
Pro
po
sed
Fra
mew
ork
Res
ult
ing
Fig
ure
s fo
r 20
19/2
0U
nd
erly
ing
Pri
nci
ple
s
Sec
tio
n 5
5 M
ater
ial D
iscl
osu
re, i
n t
he
2019
/20
An
nu
al R
epo
rt:
• Lo
sses
due
to
crim
inal
con
duct
Qu
anti
tati
ve:
Cap
ital
exp
end
itu
re:
10%
of
the
capi
tal e
xpen
ditu
re b
udge
t lin
e ite
m
Oth
er e
xpen
dit
ure
:
10%
of
the
rela
ted
oper
atin
g ex
pend
iture
bu
dget
line
item
,
1% o
f S
taff
Exp
ense
s
5% o
f Tr
ansp
ort
Cos
ts
(Dep
endi
ng
on t
he r
elat
ed
budg
et li
ne it
em)
Cal
cula
ted
at
an a
vera
ge o
f R
30 m
illio
n
• S
ectio
n 55
, as
iden
tified
, will
eva
luat
e ea
ch lo
ss
due
to c
rimin
al c
ondu
ct, i
rreg
ular
exp
endi
ture
or
fru
itles
s an
d w
aste
ful e
xpen
ditu
re, i
n co
ntex
t of
the
exp
ense
cat
egor
y to
whi
ch it
rel
ates
to
dete
rmin
e w
heth
er it
qua
lifies
for
dis
clos
ure
in
the
Ann
ual R
epor
t as
req
uire
d.
• Th
e to
tal v
alue
of
any
iden
tified
fru
itles
s or
w
aste
ful e
xpen
ditu
re w
ill a
lso
be r
epor
ted
as
wel
l as
case
s du
e to
crim
inal
con
duct
• In
line
with
goo
d bu
sine
ss p
ract
ice,
as
wel
l as
the
requ
irem
ents
of
the
Act
, the
SA
Pos
t O
ffice
is
com
mitt
ed t
o th
e pr
even
tion,
det
ectio
n of
an
d ta
king
app
ropr
iate
act
ion
on a
ll irr
egul
ar
expe
nditu
re, f
ruitl
ess
and
was
tefu
l exp
endi
ture
, lo
sses
res
ultin
g fr
om c
rimin
al c
ondu
ct a
nd
expe
nditu
re n
ot c
ompl
ying
with
the
ope
ratio
nal
polic
ies
of t
he S
A P
ost
Offi
ce (S
ec 5
1(1)
(b)(i
i)).
To t
his
end
the
SA
Pos
t O
ffice
’s s
yste
ms
and
proc
esse
s ar
e de
sign
ed a
nd c
ontin
ually
re
view
ed t
o en
sure
the
pre
vent
ion
and
dete
ctio
n of
all
such
exp
endi
ture
, irr
espe
ctiv
e of
th
e si
ze t
here
of.
• Ir
regu
lar
expe
nditu
reN
o m
ater
ialit
y. A
ll to
be
disc
lose
dA
ll to
be
disc
lose
d irr
espe
ctiv
e of
am
ount
s in
volv
ed•
Frui
tless
and
w
aste
ful e
xpen
ditu
reN
o m
ater
ialit
y. A
ll to
be
disc
lose
d
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
76
Pro
po
sed
Fra
mew
ork
Res
ult
ing
Fig
ure
s fo
r 20
19/2
0U
nd
erly
ing
Pri
nci
ple
s
Sig
nifi
can
t fo
r S
ecti
on
54
– In
form
atio
n a
nd
ap
pro
val b
y th
e M
inis
ter
of
“qu
alif
yin
g t
ran
sact
ion
s”, i
.e.:
• pa
rtic
ipat
ion
in a
sig
nific
ant
part
ners
hip,
tru
st,
unin
corp
orat
ed jo
int
vent
ure
or s
imila
r ar
rang
emen
t;
• ac
quis
ition
or
disp
osal
of
a si
gnifi
cant
sh
areh
oldi
ng in
a
com
pany
;
• ac
quis
ition
or
disp
osal
of
a si
gnifi
cant
ass
et;
• co
mm
ence
men
t or
ces
satio
n of
a
sign
ifica
nt b
usin
ess
activ
ity; a
nd
• a
sign
ifica
nt c
hang
e in
the
nat
ure
or
exte
nt o
f its
inte
rest
in
a s
igni
fican
t pa
rtne
rshi
p, t
rust
, un
inco
rpor
ated
join
t ve
ntur
e or
sim
ilar
arra
ngem
ent.
Qu
anti
tati
ve:
Qua
lifyi
ng t
rans
actio
ns b
ased
on
the
guid
elin
e:
1% -
2% o
f th
e va
lue
of t
otal
ass
ets;
0.5%
- 1%
of
tota
l rev
enue
; or
2% -
5% o
f pr
ofit
afte
r ta
x.
Qu
alit
ativ
e:
A q
ualif
ying
tra
nsac
tion
may
als
o be
con
side
red
sign
ifica
nt b
ased
on
cons
ider
atio
ns o
ther
tha
n fin
anci
al w
hen,
in t
he o
pini
on o
f th
e B
oard
, it
is
cons
ider
ed t
o be
sig
nific
ant
for
the
appl
icat
ion
of s
ectio
n 54
.
The
deci
sion
on
whi
ch n
on-fi
nanc
ial i
ssue
s m
ay b
e co
nsid
ered
at
any
time
requ
ires
care
ful
judg
men
t at
a s
trat
egic
leve
l, an
d th
eref
ore
rest
s w
ith t
he B
oard
as
a re
pres
enta
tive
body
of
the
shar
ehol
der.
R 1
20 m
illio
n
Det
erm
inat
ion
of q
ualit
ativ
e si
gnifi
canc
e is
con
side
red
base
d on
P
ract
ice
Not
e 4
of 2
009/
10.
• Th
e P
FMA
is n
ot in
tend
ed t
o af
fect
the
au
tono
my
of t
he o
rgan
isat
ion,
but
its
stat
ed
obje
ctiv
es a
re t
o en
sure
tra
nspa
renc
y,
acco
unta
bilit
y an
d so
und
man
agem
ent
of
reve
nue,
exp
endi
ture
, ass
ets
and
liabi
litie
s of
the
inst
itutio
ns t
o w
hich
the
Act
app
lies.
Th
eref
ore,
the
legi
slat
ure
coul
d no
t ha
ve
inte
nded
for
the
pub
lic e
ntiti
es t
o re
port
and
se
ek a
ppro
val o
n m
atte
rs o
f a
daily
bas
is;
• Th
e bu
sine
ss o
f th
e S
A P
ost
Offi
ce is
co
nduc
ted
with
in t
he f
ram
ewor
k of
the
m
anda
te, o
bjec
ts a
nd p
ower
s co
ntai
ned
in t
he
SA
Pos
t O
ffice
Act
, as
wel
l as
the
busi
ness
and
fin
anci
al d
irect
ion
set
out
in t
he c
orpo
rate
pla
n;
• Th
e S
A P
ost
Offi
ce a
lso
has
defin
ed
acco
unta
bilit
y an
d ap
prov
al s
truc
ture
s fr
om t
he
Boa
rd, a
s th
e sh
areh
olde
r re
pres
enta
tive,
to
the
CE
O a
nd m
anag
emen
t in
a f
orm
of
a G
ener
ic
Dec
isio
n Fr
amew
ork
• Th
e re
spon
sibi
lity
for
the
day-
to-d
ay
man
agem
ent
of t
he S
A P
ost
Offi
ce v
ests
in
line
man
agem
ent
thro
ugh
a cl
early
defi
ned
orga
nisa
tiona
l str
uctu
re a
nd t
hrou
gh f
orm
ally
de
lega
ted
auth
oriti
es in
line
with
the
Gen
eric
D
ecis
ion
Fram
ewor
k re
view
ed a
nnua
lly
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
77
ST
RA
TE
GIC
RIS
K P
LAN
Th
e S
A P
ost
Offi
ce S
trat
egic
Ris
k R
egis
ter
for
2019
/20
No
Ris
k Id
enti
fica
tio
nIn
her
ent
Ris
k“P
erce
ived
R
isk
Co
ntr
ol E
ffec
-ti
ven
ess”
Res
idu
al R
isk
Iden
tify
Des
crip
tio
n
1P
eopl
e R
isk
The
skill
s pr
ofile
of
the
orga
nisa
tion
mis
alig
ned
with
the
ski
lls s
et r
equi
red
to a
chie
ve t
he V
isio
nV
ery
Hig
hP
oo
rV
ery
Hig
h
2In
effe
ctiv
e st
akeh
olde
r m
anag
emen
tTh
e ke
y st
akeh
olde
rs b
eing
Gov
ernm
ent,
sta
ff a
nd U
nion
s do
n’t
buy
in t
o th
e Vi
sion
and
con
sequ
ently
del
ay in
itiat
ives
nee
ded
to a
chie
ve t
he V
isio
nV
ery
Hig
hS
atis
fact
ory
Ver
y H
igh
3C
lient
Val
ue P
ropo
si-
tion
“Pro
ject
ed g
row
th d
oes
not
mat
eria
lize
due
to t
he a
bsen
ce o
f a
cust
omer
va
lue
prop
ositi
on t
hat
diff
eren
tiate
s th
e S
A P
ost
Offi
ce f
rom
its
mai
n co
m-
petit
ors
and
prov
ides
eno
ugh
trac
tion
for
grow
th.”
Ver
y H
igh
Sat
isfa
cto
ryH
igh
4
Ser
vice
Del
iver
yP
oor
serv
ice
deliv
ery
to c
usto
mer
s re
sulti
ng f
rom
an
agei
ng p
hysi
cal
infr
astr
uctu
re, o
bsol
ete
and
unde
rper
form
ing
syst
ems,
ski
lls g
aps
and
a co
mpl
ianc
e cu
lture
tha
t is
not
sup
port
ive
of t
he f
utur
e di
rect
ion
of t
he
SA
Pos
t O
ffice
Ver
y H
igh
Po
or
Hig
h
5S
yste
ms
failu
reB
usin
ess
disr
uptio
n du
e to
sys
tem
, net
wor
k an
d/or
IT h
ardw
are
failu
re
resu
lting
in in
abili
ty t
o de
liver
pro
duct
s an
d se
rvic
es t
o cu
stom
ers
Ver
y H
igh
Po
or
Hig
h
6S
usta
inab
ility
“Unr
ealis
ed r
even
ues
com
bine
d w
ith a
n un
sust
aina
bly
high
cos
t ba
se a
nd
lack
of
reve
nue
stre
am d
iver
sific
atio
n th
reat
en t
he s
usta
inab
ility
of
the
orga
niza
tion.
”V
ery
Hig
hP
oo
rH
igh
7In
effe
ctiv
e st
rate
gic
part
ners
hips
Est
ablis
hmen
t of
wro
ng p
artn
ersh
ips
coul
d di
vert
org
aniz
atio
nal r
esou
rces
an
d fo
cus
away
fro
m d
eliv
erin
g on
initi
ativ
es n
eces
sary
to
achi
eve
the
Hig
hS
atis
fact
ory
Med
ium
8C
hang
e R
isk
“Ini
tiativ
es im
plem
ente
d to
exe
cute
the
Cor
pora
te p
lan
take
long
er o
r co
st
sign
ifica
ntly
mor
e to
impl
emen
t re
sulti
ng in
unc
ompe
titiv
e pr
icin
g,
unsu
stai
nabl
y hi
gh c
ost
base
and
/or
lost
mar
ket
shar
e”H
igh
Go
od
Med
ium
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
78
In the previous years, risks identified were mainly considered residually high to extreme. This was indicative of an assessed inadequate control environment against the said risks. This implied that the achievement of the 2017 to 2019 strategies, which were primarily aimed at stabilising the organisation required additional effort in order to overcome the exposures identified.
The assessment also identified response strategies embedded in the previous year’s corporate plan to address such exposure areas. Extreme and High risk exposures that are still of concern are: Impaired brand value due to poor customer experience, Competition, Operational inefficiencies, Ageing and decayed infrastructure, Human Capital Risk and USO and other non-commercial initiatives. These are still reflected and brought forward into the current year’s risk register.
While there was anticipated improvement, it was not anticipated that the exposures would be significantly reduced or entirely eliminated. This was mainly due to the acknowledged critical dependencies, (top most being funding and implementation time line), to the actualisation of the mitigation strategies. Mitigations of which unmet would have compromised the achievement of the corporate plan.
FRAUD PREVENTION PLANThe SA Post Office has taken a zero tolerance approach towards crime and directly supports the National Crime Prevention Strategy (1995) of the South African Government and is deployed in close co-operation and partnership with other policing and intelligence agencies. The SA Post Office works with all roll players in the market to deliver the service. The changing operational environment requires an agile crime prevention plan that encompasses employees, physical, cyber, clients and systems.
Effective communication and adherence to policy and procedures combined with Crime intelligence is a critical tool to detect and prevent criminal activities by individuals and syndicate elements that continually vary their initiatives and modus operandi in targeting specific products/assets.
National Fraud Prevention Plan
The SA Post Office Group’s Fraud Prevention Plan (NFPP) is aligned in accordance to Par.14 of the National Treasury Practice Note 4 of 2009/2010 issued in terms of Section 52 of the Public Finance Management Act as well that of King IV principles.
The National Fraud Prevention Plan (NFPP) of the SA Post Office is not only limited to compliance to the Public Finance Management Act (PFMA) and the Treasury Regulation 29.1.1., but encompasses all other Legislation, Common Law as well as Internal Policies and Procedures directed at the prevention and detection of fraud and dishonesty.
In doing business, the SA Post Office expects all its employees and organisations that are in any way associated with it to be honest and fair in their dealings with and on behalf of the organisation, its clients and customers.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
79
The following Governance Structures are in place
• Board Sub-Committees: Social and Ethics Committee and Audit and Risk Committee;• The SA Post Office Executive Committee (EXCO); and• The SA Post Office Financial Misconduct Committee (FMC)
The SA Post Office is serious about crime prevention and is embarking on multiple projects that shall detect and prevent fraudulent and criminal activities.
The SA Post Office is also committed to improve its Branch physical security infrastructure, enhance its operating systems thereby minimizing manual manipulation of systems as well as enhanced compliance and enforcement of control measures.
SUSTAINABILITY PLANThe Sustainable Development vision of the SA Post Office is to be recognized amongst the leading companies and SOEs in sustainable development through addressing challenges faced by the planet and mankind fostering the shared value proposition.
The SA Post Office aims to reduce its carbon footprint from every parcel, letter, freight, financial transaction, every square metre of our mail centres. The goal is to reduce 20% of carbon emission by 2030 from 2019 baseline in all scopes of emission (directly and indirectly).
Environmental Strategic Pillar
• Protect the environment • Minimise our impact on the environment • Utilise our non-renewable resources in a sustainable way • Pursue sustainable management best practices • Participates in the national debate surrounding sustainable development • Environmental sustainability performance continuous improvement
Key Performance Areas: Five (5) Sustainable Goals
• Goal 8: Improve health and safety and learning and development • Goal 9: Improve resource efficiency • Goal 11: Improve air quality and encourage circular economy • Goal 12: Improve sustainable procurement • Goal 13: Respond to climate change
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
80
1
Key Projects
1. Smart metering solutions installations a. Audit Phase will be completed for 56 Buildings in the Second quarter of 2020 b. Phase 2 Of the Project will be in Buildings that are difficult to get data from
2. Solar PV business case a. Business Case will be Submitted in the 1st quarter of 2020 financial year
3. Tree planting for arbour month a. 500 Trees will be planted in 2020 b. Collaboration with DAFF (Dept. of Agriculture, Forestry and Fisheries)
4. Prevent pollution: Waste management a. One awareness training on Waste management will be issued per quarter in 2020
5. Water consumption reduction and management a. Report on technologies to utilize grey water will be released in quarter 2 of 2020
6. Environmental Awareness training a. Four environmental awareness training programmes will be conducted.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
81SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
81
1A
NN
EX
UR
ES
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
82
Annexure A - KPI Technical Indicator Descriptions
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.1
Improve Profitability – Return on Assets
Short definition
Key Performance Indicator Description
Return on Assets indicates profitability relative to total assets and indicates how efficiently assets are applied used to generate earnings.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable Source/collection
of data
Management accounts reports.
Data sourced from FinSAP.
Method of calculation
Return on Assets is calculated by dividing net income by total assets, expressed as a percentage
Data limitationsNegative net income
Type of indicator Outcome Calculation type Non-Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
All Group Executives
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.2
Achieve growth initiative revenue target
Short definition
Key Performance Indicator Description
The SA Post Office to achieve the growth initiative revenue target. This will create a stable customer base to grow and diversify revenues.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable Source/collection
of data
Management accounts reports.
Data sourced from FinSAP.
Method of calculation
Budget (R’) vs Actuals (R’) Data limitations
N/a
Type of indicator Outcome Calculation type Cumulative
Reporting cycle Annual/Quarterly New Indicator No
Desired Performance
Achieve target Indicator responsibility
GE Sales / GM Properties / MD Docex
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
83
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.3
Reduce Staff Revenue Ratio Short definition
Key Performance Indicator Description
Return on Assets indicates profitability relative to total assets and indicates how efficiently assets are applied to generate earnings.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable Source/collection
of data
Management accounts reports.
Data sourced from FinSAP.
Method of calculation
Staff Revenue Ratio is calculated by dividing Staff Expenses (net of staff optimisation benefits) by total revenue generated, expressed as a percentage
Data limitations
N/a
Type of indicator Outcome Calculation type Non-Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
All Group Executives
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.4
Improve Profitability - Reduce Cost to Income ratio
Short definition
Key Performance Indicator Description
Liquidity refers to the SA Post Office’s ability to use its current assets to meet its current or short-term liabilities.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable
Source/collection of data
Management accounts reports.
Data sourced from FinSAP
Method of calculation
Cost to income ratio is calculated by dividing total cost (total expenses + non-operating cost items) divided by total income (total revenue + non-operating income items), expressed as a percentage
Data limitations
N/a
Type of indicator Outcome Calculation type Non-Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
All Group Executives
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
84
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.5
Improve Solvency – Debt ratioShort definition
Key Performance Indicator Description
Profitability measures the ability to provide products and services at a profit whilst cost to income ratio indicates what percentage of revenue generated is consumed by cost incurred.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable
Source/collection of data
Management accounts reports.
Data sourced from FinSAP
Method of calculation
Debt ratio is calculated by dividing total liabilities by total assets, expressed as percentage.
Data limitationsN/a
Type of indicator Outcome Calculation type Non-Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
All Group Executives
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
Strategic Outcome
Financial Sustainability GoalTo be Financially Sustainable and achieve a positive net financial and cash position
Key Performance Indicator 1.6
Improve Liquidity – Current Ratio
Short definition
Key Performance Indicator Description
The current ratio is a liquidity ratio that measures the ability to pay short-term obligations or those due within one year.
Purpose/
importance
To ensure that the SA Post Office becomes financially sustainable
Source/collection of data
Management accounts reports.
Data sourced from FinSAP
Method of calculation
Current ratio is calculated by dividing the current assets by the current liabilities, expressed as a number
Data limitationsN/a
Type of indicator Outcome Calculation type Non-Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
All Group Executives
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
85
Strategic Outcome
Optimised Assets and Infrastructure
GoalAchieve a positive return on assets
Key Performance Indicator 2.1
Implement security upgrades and install equipment at post office branches and Mail Centres
Short definition
Key Performance Indicator Description
Installation of security upgrades at post office branches and Mail Centres. 3,580 Security devices / equipment to be installed
Purpose/
Importance
To improve security in post office branches and Mail Centres, ensuring employee and customer security, whilst minimising financial losses to the SA Post Office
Source/collection of data
Security and Investigation reports
Method of calculation
Reports provided by Security and Investigation
Data limitations N/a
Type of indicator Outcome Calculation type Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
GE Corporate Governance
Responsible Manager
GM Security and Investigation Reporting Manager
SM Security and Investigation
Strategic Outcome
Optimised Assets and Infrastructure
GoalAchieve a positive return on assets
Key Performance Indicator 2.2
Improve the infrastructure through restoration and refurbishments
Short definition
Key Performance Indicator Description
Improve the current state of the property infrastructure to the identified properties that require restoration and refurbishment.
Purpose/
importance
Ensure that the identified list of properties is improved through restoration and refurbishment, improving the working environment for employees and provide a welcoming environment for customers to transact.
Source/collection of data
Reports provided by the Properties division
Method of calculation
Number of properties on the identified list refurbished.
Data limitations Manual capturing
Type of indicator Output Calculation type Cumulative
Reporting cycle Annual/Quarterly New Indicator No
Desired Performance
Achieve target Indicator responsibility
GM Properties
Responsible Manager
SM Properties Reporting Manager
Manager Properties
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
86
Strategic Outcome
Customer and Communities First
Goal
Continued service provision in underserviced communities (USO/ Financial / SASSA), Improve customer experience at all point of presence, Enhanced Brand Equity
Key Performance Indicator 3.1
Resolution of customer com-plaints recorded at the call centre within 14 working days
Short definition
Key Performance Indicator Descrip-tion
Customer complaints must be re-solved within 14 working days from date of receipt of complaint
Purpose/
importance
Efficient service and increased value to customers resulting in retention of customers
Source/collection of data
Remedy system
Method of calcula-tion
Number of complaints resolved within 14 working days divided by total number of complaints received expressed as a percent-age. Day 1 = Date upon which the complaint is received and recorded.
Data limitations
Data capturing errors due to manual element.
The cut-off point per quarter is the last day of the month on which the quarter ends and complaints received during this last month may not have had sufficient resolution time resulting in a possible over/un-der statement of performance.
Type of indicator Outcome Calculation type Non -cumulative
Reporting cycle Annual/Quarterly New Indicator No
Desired Perfor-mance
Higher than targeted performance Indicator respon-sibility
GE Sales
Responsible Man-ager
GM Products & Services Reporting Man-ager
SM Call Centre
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
87
Strategic Outcome
Customer and Communities First
Goal
Continued service provision in underserviced communities (USO / Financial / SASSA), Improve customer experience at all point of presence, Enhanced Brand Equity
Key Performance Indicator 3.2
Improve Customer satisfaction level
Short definition
Key Performance Indicator Description
Conduct a customer satisfaction survey to determine the customer experience and identify areas for improvement by undertaking a Customer satisfaction survey
Purpose/ importance
To understand and improve the customer experience and satisfaction level
Source/collection of data
Customer satisfaction survey Strategy section at Head Office
Method of calculation
The actual achievement of a range of inputs activities to produce the desired output – Customer Satisfaction Survey Report
Data limitations
Lack of customer participation
Type of indicator Output Calculation type N/a
Reporting cycle Annual New Indicator No
Desired Performance
Higher than targeted performance Indicator responsibility
GE Strategy
Responsible Manager
GM Strategic Planning Reporting Manager
SM Strategy
Strategic Outcome
Customer and Communities First Goal
Continued service provision in underserviced communities (USO / Financial / SASSA), Improve customer experience at all point of presence, Enhanced Brand Equity
Key Performance Indicator 3.3
Increase the reach into our communities
Short definition
Key Performance Indicator Description
Number of Corporate Social Investment (CSI) Programmes implemented in communities
Purpose/
importance
The SA Post Office supports the development agenda of the SA government and wishes to improve the the social, environmental and economic well-being of the community and society within which it operates
Source/collection of data
Corporate Affairs section at Head Office
Method of calculation
Number of CSI programmes implemented
Data limitationsN/a
Type of indicator Output Calculation type Cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve targeted performance Indicator responsibility
GE Corporate Affairs
Responsible Manager
GM Corporate Affairs Reporting Manager
SM Corporate Affairs
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
88
Strategic Outcome
Efficient Systems and Processes GoalImproved service delivery to all customers
Key Performance Indicator 4.1
Achieve the mail delivery standard to comply with regulatory requirements of 92%.
Short definition
Key Performance Indicator Description
The SA Post Office must achieve a minimum of 92% mail delivery standard to process and deliver customer items as per the Corporate Plan. This will comply with Regulatory requirements of 92%.
Purpose/
importance
To improve the delivery performance
Source/collection of data
Data is sourced nationally, from Depots and post offices through a manual process at branches and Depot level in accordance with an SOP. Data, in the format of completed and approved sample sheets are forwarded for capturing to Regional Centre of Excellence (Regional Offices). Verified and captured on the Testpost Database.
Method of calculation
Formula: Conforming items / Sample size x 100. The formula is calculated monthly.
The quarterly performance reporting uses the performance for the last month of the quarter for quarterly performance reporting. Annual performance reporting uses the performance of last month of the financial year for annual performance reporting.
*Conforming items - Items that arrived within standard at the office of destination according to the delivery model
Data limitations
Sampling and capturing errors due to manual processing
Type of indicator Outcome Calculation type Cumulative
Reporting cycle Annual/Quarterly New Indicator No
Desired Performance
Higher than targeted performance Indicator responsibility
Group COO
Responsible Manager
GM COE Reporting Manager
SM Operations
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
89
Strategic Objective
Efficient Systems and Processes GoalImproved service delivery to all customers
Key Performance Indicator 4.2
Maintain system uptime at online Post Office branches
Short definition
Key Performance Indicator Description
The SA Post Office systems must be available at least 98% of the time for customers to transact
Purpose/
importance
To ensure that the systems uptime requirements are met.
Source/collection of data
Group Technology
Method of calculation
Reports provided by Group Technology
Reports provided by the service provider
Data limitations
N/a
Type of indicator Outcome Calculation type Non - cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Higher than targeted performance Indicator responsibility
CIO:IT
Responsible Manager
GM:IT Reporting Manager
SM:IT
Strategic Outcome
Digital transformation Goal
Improved Market Relevance through Digital Transformation, increase customer access to digital services
Key Performance Indicator 5.1
Implemented an Enterprise Application Platform
Short definition
Key Performance Indicator Description
The SA Post Office must have a functional integrated platform to improve business processes, improve efficiency and improve integration with customers
Purpose/
importance
To reduce the number or licences and application consolidation
Source/collection of data
Project Management Reports
Method of calculation
The actual achievement of a range of inputs to produce the desired output
Data limitationsChallenges with implementation partner and procurement processes
Type of indicator Output Calculation type Non-cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
CIO:IT
Responsible Manager
GM: IT Reporting Manager
SM:IT
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
90
Strategic Outcome
Digital transformation Goal
Improved Market Relevance through Digital Transformation, increase customer access to digital services
Key Performance Indicator 5.2
Implemented an eCommerce Platform
Short definition
Key Performance Indicator Description
The SA Post Office must have a functional integrated eCommerce platform to provide greater access to online shopping customers and delivery of items purchased online
Purpose/
importance
To diversify revenue streams and provide access to SMMEs to an online market
Source/collection of data
Project Management Reports
Method of calculation
The actual achievement of a range of inputs to produce the desired output
Data limitationsChallenges with implementation partner and procurement processes
Type of indicator Output Calculation type Non-cumulative
Reporting cycle Annual/Quarterly New Indicator Yes
Desired Performance
Achieve target Indicator responsibility
CIO:IT
Responsible Manager
GM: IT Reporting Manager
SM:IT
Strategic Outcome
Culture of Excellence GoalImproved Organisational Performance, have engaged and high performing employees
Key Performance Indicator 6.1
Improve Employee satisfaction Short definition
Key Performance Indicator Description
Understand key matters that work and/or needs to be changed for an improved organisational climate, by undertaking an employee satisfaction survey
Purpose/ importance
Annual survey of employee satisfaction (organisational climate) so as to enable SA Post Office to address the most important matters that impact on employees and also to enable the evaluation of the impact/success of actions/initiatives implemented
Source/collection of data
Employee satisfaction survey HR section at Head Office
Method of calculation
The actual achievement of a range of inputs activities to produce the desired output - Employee Satisfaction Survey Report
Data limitations
Lack of Employee participation could have an impact on the reliability of the information
Type of indicator Output Calculation type Non-cumulative
Reporting cycle Annual New Indicator No
Desired Performance
Higher than targeted performance Indicator responsibility
GE HR
Responsible Manager
SM HRReporting Manager
Manager HR
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
91
Strategic Outcome
Corporate Governance Goal
Strengthened Organisational Governance, entrenched and consistently applied Governance principles in managing the organisation
Key Performance Indicator 7.1
Achieve an Unqualified Audit Opinion Short definition
Key Performance Indicator Description
To achieve an overall unqualified audit opinion for the 2020/2021 financial year based on the independent audit work carried out by the Auditor General of South Africa.
Purpose/
importance
Contribute to an overall improved and sustainable Internal Control, risk management and governance environment.
Source/collection of data
Audit opinion issued at the end of the audit process by the Auditor General.
Method of calculation
The overall result as contained in the MR (Management Report) of the AG (Auditor General). The report is a culmination of conclusions made by the AG following a list of audit procedures executed.
Data limitations
Lack of responses by management to requests for information (RFI) or request for management comments on audit findings raised from AG.
Type of indicator Outcome Calculation type Non - cumulative
Reporting cycle Annual New Indicator No
Desired Performance
Achieve target Indicator responsibility
CFO
Responsible Manager
GM Financial Accounting Reporting Manager
SM Financial Accounting
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
92
Corporate Plan FY20/21 – FY22/23 Development Schedule
Group Strategy, along with the SA Post Office Board, executives, management teams and, key stakeholders collaborated on the development of the Corporate plan for FY2020/21 – FY2022/23. Collectively, the Corporate Plan was reviewed, approved and submitted as per the PFMA Strategic Planning guidelines and schedules.
A number of engagements were held during the development phase of the plan and are listed in the table below:
Engagement Type Group Venue Date
Presentation to the SA Post Office Management
The SA Post Office Management
The SA Post Office: Big NCC
10 September 2019
Presentation to the SA Post Office Regional Management
The SA Post Office Management
The SA Post Office: Big NCC
18 September 2019
SCM Functional Strategy
SCM Management SCM: Silverton 30 September 2019
IT Functional Strategy IT Management IT Boardroom 14 October 2019
HR Functional Strategy IT Management COO Boardroom 15 October 2019
Sales Functional Strategy Sales Management & Regions
NCC 16 October 2019
Corporate Strategy Planning
The SA Post Office Executives
Centurion 18 October 2019
23 October 2019
Corporate Strategy Planning
The SA Post Office BOD & Executives
Organised Labour
Centurion 21 November 2019
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
93
Annexure B - Strategic Planning and Implementation
Corporate Plan FY20/21 – FY22/23 Development Schedule
Group Strategy, along with the SA Post Office Board, executives, management teams and, key stakeholders collaborated on the development of the corporate plan for FY2020/21 – FY2022/23. Collectively, the Corporate Plan was reviewed, approved and submitted as per the PFMA Strategic Planning guidelines and schedules.
The SA Post Office Executive team had two planning workshops during October and November 2019 to review and develop this strategy. The SA Post Office Board also had a combined strategy workshop with the SA Post Office Executive team during November 2019.
The SA Post Office Strategic Planning Process
The SA Post Office Strategic Plan informs the various programs, projects, operational plans and key initiatives that will move the organisation towards its strategic goals. These plans are underpinned by critical success factors supported by the applicable key performance indicators ensuring that effective monitoring and evaluation mechanisms are available to determine whether the various programs, projects, operational plans and key initiatives actions are moving the organisation towards its envisaged goals.
The various stages of the strategic planning process can be summarised into distinct activities:
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
94
Analysis
Focuses on performing an internal and external situational analysis, the external analysis focuses on assessing the SA Post Office’s external operating environment, identifying opportunities and threats. The internal situational analysis considers the strengths and weaknesses of the SA Post Office. An analysis of the task environment, the industry within which the SA Post Office finds itself in, is also conducted.
Formulation
Strategy formulation considers the most appropriate course of action to attain the stated vision the SA Post Office has set. It will determine strategic objectives and strategic choices to be made. Goals are developed and Key Performance Indicators (KPIs) to track and monitor progress. The KPIs are to be supported by initiatives and functional plans.
The strategy will also be risk assessed in order to determine early indicators and impediments to successful implementation thereof.
Implementation
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. The Strategic Plan will be supported by implementation plans together with key initiatives at a functional level. This will include the resources and funding required to execute. The key milestones to be achieved within indicative timeframes.
Monitoring Performance
Key to monitoring performance and evaluating progress on the implementation of the strategy is the communication of the strategy throughout the SA Post Office, establishing a schedule for progress reviews, reviewing the implementation plan(s) and adjusting and amending where required.
• The translation of the strategy into functional and implementation plans and deliverables which are cascaded into the performance contracts of management. Frequent reviews and mitigations to meet the performance objectives.
• A Strategic Plan Review Forum (SPRF) will be established to review progress on implementation of the Strategic Plan.
• A Capital Investment and Monitoring Committee (CIMC), a sub-committee of the SA Post Office Executive Committee has been established and meets monthly. - The CIMC is supported by a Capital Investment Framework, approved by the SA Post Office Board of
Directors during October 2018. - The purpose of the Capital Investment Framework (CIF) is to bridge the gap between the Corporate
Strategy and implementation by Business Units. This is to be achieved using the Strategic Plan as the basis on which Business Unit base their functional and implementation plans, thus ensuring integration through a shared platform.
• The Business Performance Committee (BPC), a sub-committee of the SA Post Office Executive Committee, has been established and meets on a monthly basis, Chaired by the Chief Operating Officer with representation from the various Business Units at the level of Group Executives, General Managers and Senior Managers. Regional Performance Committees (RPCs) will be established.
Progress reviews will be held to monitor performance and evaluate progress, which will identify impediments and ensure timely resolution.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
95
The SA Post Office Strategy Implementation Framework
The SA Post Office’s Strategic Development and Implementation Framework comprises of six domains and is designed to answer six strategic questions:
Figure 18: SA Post Office Group Strategic Planning & Implementation Framework
1. Who is the SA Post Office?2. What is the context in which the SA Post Office operates?3. What direction is the SA Post Office heading towards?4. What needs to be created?5. How will it be built?6. How will the SA Post Office operate?
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
96
The Domains of the Framework
A. The Ideation Domain focuses on reaffirming the organization’s purpose (Mission Statement), how it wants the brand to be perceived by its customers and employees (Organisational Culture) and sets the strategic trajectory of the SA Post Office for the future (Vision).
B. The Nature Domain concentrates on the organisation’s culture, value systems and behaviours. Another key aspect of this domain is to ensure that the organisation is optimally structured to attain its operational excellence objectives.
C. The Vision Domain determines the organisation’s goals and translates them into specific desired results. Thereafter key performance indicators to measure progress towards the desired results are defined.
D. The Engagement Domain translates all input from the various domains in a set of actions designed to achieve its purpose and goals. These actions are further translated into strategy aligned, prioritized sets of programs and projects that are adequately resourced and funded.
E. The PMO domain focuses on rationalizing multiple interdependent projects into programs whereas projects are defined as temporary endeavours with specific deliverables, schedules and resources.
F. The Transition Domain relates to the program and project handover to operations to continue the delivery of ongoing value to the customer.
The Monitoring Domain – Various committee structures, such as the Business Performance Committee and Capital Investment Management Committee, monitor and track the implementation of the strategy as well as assure the achievement of business performance and benefits as defined in the Corporate Strategic Plan. In addition, the consultations with labour and other key stakeholders are considered throughout the planning and implementation cycle of the corporate strategy.
The SA Post Office Program and Project Methodology
To ensure optimum investment decisions, all the SA Post Office capital investment programs and projects are undertaken through a structured process that:
• Identifies the benefits to be achieved• Uses qualitative and quantitative methodologies to select the portfolio of projects that are most likely to
achieve those results • Expedites the planning and financing of those projects • Manages their execution through simple project management, governance and risk management tools • Provides continuous measurement of progress
The methodology applies five steps to acquire programs and projects:
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
97
Step 1 – Identify capital requirements through the planning process
• All the SA Post Office investment proposals must clearly demonstrate alignment to pre-determined goals, identify potential inter-relationships between different projects and what are the high-level costs of different projects.
• These proposals must be incorporated into a business case which is often triggered when an individual identifies the need to solve a problem, improve a process, or implement a new service. It defines what the project will attempt to achieve based on appropriate business justification.
Step 2 – Select capital projects based on portfolio optimization
In this stage, the identified priorities are built into a decision framework to analyse the feasibility of specific projects. Measuring individual projects and their benefits across the portfolio on an apples-to-apples basis will allow the SA Post Office to select a portfolio of projects that optimizes those benefits while considering any resource constraints and inter-dependencies that may exist. The management of the portfolio links program and project management.
Step 3 – Plan capital projects with clear guidance and realistic expectations
During the planning stage, the specific planning around individual projects takes place and decisions are finalized with respect to private finance participation, bidding processes and monitoring. The SA Post Office Project Management Policy must be followed for implementation of projects. The project management methodology used by the SA Post Office is PMBoK.
Step 4 – Execute capital projects within scope, budget and time
• Projects are generally undertaken because they are part of the plans to advance organizations to new levels of performance and to ‘operationalize’ business strategies. Projects are however constrained by conflicting demands and competing priorities within the project environment. The triple constraint is a critical project management concept that originates from the basis for undertaking a project and provides direction for framing the project.
• The cause and effect of new or changing triple constraint requirements need to be constantly negotiated during all phases of a project. Trade-offs need to be considered and priorities need to be managed in order to realize strategic decisions.
Step 5 – Measure performance throughout the capital project lifecycle
• To achieve the benefits initially established for the program and for any project, it is essential to identify measures of the expected benefits and monitor the projects and programs against those measures, including financial, technical, economic, environmental and social metrics. These factors form the performance measures that must be predetermined and measurable to monitor the performance of the project.
• The detailed project plan and key milestones are also used to effectively monitor the performance of projects. The business case that has been approved for the project will contain details of the performance measures since it is the plan of what has to be done by when and how.
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
98
Annexure C - SA Post Office Group Product Portfolio
Line of Business Product and service
Letter Mail
Bulk mail (Ordinary letter mail statements; Invoices; accounts)
Direct Mail (addressed and unaddressed)
Registered letters
Postage included envelopes
Distribution of parcels (e.g. research docs; valuable items such as credit cards and legal docs)
Box & Private Bag rentals
Promotional Mail & Advertising Mail
Product: Magazine Mail
Product: Infomail
Secure and Safe Mail
Hybrid Mail
Mailroom services
Messenger Service
Franking Mail
Postage stamps & philately items
Commemorative stamps and envelopes
e-Registered Mail
Geo-mapping services
Non-banking Financial Services
Pay a bill (payments to Corporates)
Payment of Social Grants
Motor Vehicle Licence Renewals
Prepaid airtime
Lottery
Money transfers
Government bonds
Corporate share issues
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
99
Line of Business Product and service
Business solutions
Mobile Based Solutions – Bulk & Premium Rated SMS Notifications & USSD Applications
Internet Based Solutions – Electronic Bill Presentment & Payments Solution. Web Based Online Payments Solutions
Personal Certificate Class 1, 2, 3 and 4
SSL Certificate
Certificate Authorities
Registration Authorities
Software Customisation
PKI Training
Secure Fax
Fax and Photocopier
Courier
Overnight Express to doors
Overnight Express to counters
Counter to Door
Door to Counter
Economy Service
Home Deliveries
Brokerage – drive-aways
Same day delivery
Saturday delivery
After hour service
International service
Door to Door
Point to Point
Warehousing
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
100
Annexure D - List of Major Related Legislation
No Legislation impacting the SA Post Office
1 Administrative Adjudication of Road Traffic Offences Act, No. 46 of 1998
2 Banks Act, No. 94 of 1990
3 Basic Conditions of Employment Act,75 of 1997
4 Broad Based Black Economic Empowerment Act, No. 53 of 2003
5 Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993
6 Customs and Excise Act, No. 91 of 1964
7 Criminal Procedure Act, 51 of 1977
8 Consumer Protection Act, No. 68 of 2008
9 Drugs and Drug Trafficking Act, No. 140 of 1992
10 Electronic Communications Act ,36 of 2005
11 Electronic Communications and Transactions Act, No. 25 of 2002
12 Employment Equity Act, No. 55 of 1998
13 Financial Advisory and Intermediary Services Act, No. 37 of 2002
14 Financial Intelligence Centre Act, No. 38 of 2001
15 Income Tax Act, No. 28 of 1997
16 Labour Relations Act, No. 66 of 1995
17 National Environmental Management - Air Quality Act, No. 39 of 2004
18 National Energy Act, No. 34 2008
19 National Environmental Management - Waste Act 59 of 2008
20 National Payment System Act, No. 78 of 1998
21 Occupational Health and Safety Act, No. 85 of 1993
22 Preferential Procurement Policy Framework Act, No. 5 of 2000
23 Prevention and Combating of Corrupt Activities Act, No. 12 of 2004
24 Prevention of Organised Crime Act, No. 121 of 1998
25 Promotion of Access to Information Act, No. 2 of 2000 - Public Bodies
26 Protected Disclosures Act, No. 26 of 2000
27 SA Post Office License (ICASA)
28 Protection of Constitutional Democracy Against Terrorist and Related Activities Act, No. 33 of 2004
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
101
No Legislation impacting the SA Post Office
29Regulation of Interception of Communications and Provision of Communication-related information Act, No. 70 of 2002
30 Short-Term Insurance Act, No. 53 of 1998
31 Skills Development Act, No. 97 of 1998
32 Skills Development Levies Act, No. 9 of 1999
33 Trade Marks Act, No. 194 of 1993
34 Trade Metrology Act, No. 77 of 1973
35 Unemployment Insurance Contributions Act, No. 4 of 2002
36 Value-Added Tax Act, No. 89 of 1991
37 Long-Term Insurance Act, No. 52 of 1998
38 Copyright Act, No. 98 of 1978
39 Constitution of the Republic of South Africa, No. 108 of 1996
40 South African Post Office SOC Limited Amendment Bill
41 Protection of Personal Information Act
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
102
Annexure E - List of Strategic Initiatives
No Business Unit Initiative Name Key Focus Areas
1 HR Implement Staff Optimisation Program Culture of excellence
2 IT POS System upgrade Efficient systems and processes
3 IT SAP upgrade Efficient systems and processes
4 IT Trust Centre enhancement Efficient systems and processes
5 IT Data Centre Revamp Optimised assets and infrastructure
6 IT Wi-Fi hotspots in rural areas Customers and communities first
7 IT Cloud Managed Service and IaaS Efficient systems and processes
8 IT Mobile money (eMali) / Money Transfer Digital transformation
8 Operations Branch hardware replacement Efficient systems and processes
10 Operations Courier Solution and System Efficient systems and processes
11 Operations Branch Security Phase 2 Optimised assets and infrastructure
12 Operations UPU Hub in Africa Efficient systems and processes
13 Operations National Address Database Efficient systems and processes
14 Operations Rollout of Multifunctional Devices Financial sustainability
15 Operations Consolidation of Operations Network Optimised assets and infrastructure
16 Operations Drone technology Digital transformation
17 Properties Building Refurbishment and maintenance Optimised assets and infrastructure
18 Properties Disposal of non-core properties Optimised assets and infrastructure
19Properties Engage in public -private partnerships to
leverage asset baseOptimised assets and infrastructure
20 Properties Counter of the Future Optimised assets and infrastructure
21Sales Customer Relationship Management (CRM)
Platform and PolicyCustomers and communities first
22 Sales DTT Project (BDM Program) Financial sustainability
23 Sales SASSA Social Grant Payments Financial sustainability
24 Sales e Commerce (e Mall) Financial sustainability
25 Sales Virtual Post Office Digital transformation
26 Strategy Big Data Analytics Digital transformation
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
103
Annexure F - List of Abbreviations
Abbreviation Description Abbreviation Description
AARTOAdministrative Adjudication of Road Traffic Offences
ISO International Standard Organization
ABCActivity Based Costing ISQM Independent Service Quality
Measurement
ACL Access Control Lists IT Information Technology
ALCOAsset and Liability Committee JIMC Johannesburg International Mail
Centre
AML Anti-Money Laundering KPI Key Performance Indicator
APM Automated Postal Machine MIS Management Information Systems
APP Application MOI Memorandum of Incorporation
ASGISA Accelerated Shared Growth Initiative for South Africa
MOU Memorandum of Understanding
ATM Automatic Teller Machine MRP Material Resource Planning
BBBEE Broad Based Black Economic Empowerment
MTEF Medium Term Expenditure Forecast
BCM Business Continuity Management NCIS National Crime Information System
BDM Broadcasting Digital Migration NDP National Development Plan
BODBoard of Directors NFPP The SA Post Office National Fraud
Prevention Plan
BPR Business Process Review NGO Non-Governmental Organisation
BRICSBrazil Russia India Russia China South Africa
NPC National Planning Committee
BU Business Unit OHS/OHSA Occupational Health and Safety Act
CAPEX Capital Expenditure OLA Organisation Level Agreement
CCMACouncil for Conciliation, Mediation and Arbitration
PAPU Pan African Postal Union
CCPAConference of Commonwealth Postal Administration
PASA Payment Association of South Africa
CCTV Closed Circuit Television PFMA Public Finance Management Act
CEO Chief Executive Officer PIT Public Internet Kiosks
CFG Courier Freight Group PKI Public Key Infrastructure
CFO Chief Financial Officer PMP Project Management Portfolio
CIF Capital Investment Framework POS Point of Sale
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
104
Abbreviation Description Abbreviation Description
CIMCCapital Investment and Monitoring Committee
PPP Public-Private Partnership
CIO Chief Information Officer PRMA Post-Retirement Medical Aid
CMMSComputerised Maintenance Management System
PVPhotovoltaics
COD Cash on Delivery QA Quality assurance
COO Chief Operations Officer RFP Request for Proposal
CPI Consumer Price Index RFQ Request for Quotation
CRM Customer Relationship Management ROI Return on Investment
CSI Corporate Social Investment RPA Retail Postal Agencies
CWU Communications Workers Union SAAS South African Auditing Standards
DMCDirect Mail Centre
SADCSouthern African Developing Countries
DOA Delegation of Authority SAGS South African Government Services
DOCEX Document Exchange Pty Ltd
SAPSystems Applications and Products in Data Processing
DR Disaster Recovery SAPO South African Post Office
DRPDisaster Recovery Plan
SAPOASouthern African Postal Operators Association
DTPSDepartment of Telecommunications and Postal Services
SAPSSouth African Police Services
DTT Digital Terrestrial Television SARB South African Reserve Bank
EE Employee Equity SARS South African Revenue Services
ER Employee Relations SASSA South African Social Security Agency
ERM Enterprise Resource Management SCM Supply Chain Management
ERP Enterprise Resource Planning SLA Service Level Agreement
EVExtended Validation Certificate
SMME Small, Medium and Micro Enterprises
EXCO Executive Committee SMS Short Message Service
FAIS Financial Advisory and Intermediary Act
SOEState Owned Enterprise
FICA Financial Information Consumer Act SPRF Strategic Plan Review Forum
FPL Full Party Logistics SSC Speed Services Couriers
FPP Fraud Prevention Plan STB Set Top Box
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
105
Abbreviation Description Abbreviation Description
FSB Financial Services Board SU Support Unit
FY Financial Year TCO Total Cost of Ownership
GDP Gross Domestic Product UIF Unemployment Insurance Fund
GE Group Executive UPS Uninterrupted Power Supply
GIS Geographical Information System UPU Universal Postal Union
GM General Manager USO Universal Service Obligation
GRVGoods Received from Vendors
USSDUnstructured Supplementary Service Data
HCM Human Capital Management VOIP Voice Over Internet Protocol
HTTPS Hyper Text Transfer Protocol Secure
WASPWireless Application Service Provider
IBC Internet Business Counters WEF World Economic Forum
ICASA The Independent Communications Authority of South Africa
WIFIWireless Fidelity
ICT Information and Communications Technologies
WREWeb Riposte system
IFRSInternational Financial Reporting Standards
4IRFourth Industrial Revolution
SA Post Office Corporate Plan 2020/2021–2022/2023We serve you
106
NOTES:
497 Sophie de Bruyn Street Pretoria 0001
PO Box 10 000Pretoria
0001
Customer contact centre: 0860 111 502
www.postoffice.co.za
Designed in-house by: Rachel-Mari Ackermann and Thea Clemons
South African Post Office: Philatelic Services