New Zealand Post: Offshore Shared Services Centre
New Zealand Post (NZ Post) has been an integral part of New Zealand communities for over 170 years. Today New Zealand Post Group consists of a range of businesses providing postal, logistics, distribution and banking services. The Group employs over 8,000 people and has annual revenue in excess of NZD$1.6 billion.
As the traditional role of postal services continues to change, NZ Post sought to reduce overhead costs. By deploying Converga’s Business Services solution, NZ Post wanted to test the transition approach and associated benefits of setting up an alternative delivery centre in Manila, Philippines.
NZ Post had set up an in-house Shared Services model delivering payroll, accounts payable, accounts receivable and purchasing support to the wider Group, its customers and suppliers. While the key driver of the exercise was to reduce costs and seek additional talent, NZ Post also saw it as an opportunity to seek labour flexibility and ability to increase operational capacity without increasing operational costs.
Prior to transition kick off, Converga worked closely with NZ Post and the onshore team to document all relevant processes and training materials; enabling the Converga team to clearly understand the tasks performed and to identify areas for improvement. Converga then helped transition the work to the Shared Services Centre in Manila. Training was delivered by onshore subject matter experts (SMEs) to the offshore team. During transition, the offshore team began delivery of procedures in the production environment under the guidance of the SMEs with ongoing support from the onshore team.
The solution has resulted in operational cost savings of between NZD$500,000 – $1 million for FY2016. NZ Post has also enjoyed other indirect benefits including visibility of processes and productivity improvements as a result of documenting and understanding processes prior to transition. Indirect benefits include:
- Improvement in response time to payroll ‘customers’
- Volume of unallocated funds reduced
- Reduction in the number of debtor days.
Further benefits will be realised once all processes have stabilised and the team reaches their optimal processing quality and speed, this is expected to be within 12 months.
Download case study: New Zealand Post – Offshore Shared Services Centre