Royal Mail CIO Catherine Doran interview – First class delivery

“In the past, you may not have thought of pace when you thought of the Royal Mail, but in 2014 it was definitely about pace,” says its CIO Catherine Doran at her Thames-side headquarters. Despite a rotten cold, she is talking at pace and keen to reveal just how much change has been delivered at the Royal Mail, not only because of privatisation.

“In the 12 months prior to privatisation, we operated as if we had already floated. The timing was not our decision, it was a government push,” Doran says of the October 2013 public offering of a former state?controlled organisation.

“People have become a lot more aware of the external factors and think a great deal more about those. We are also a regulated industry for our day-to-day business, and there is a lot of thought about that,” she explains. Not all parts of the Royal Mail are regulated, but the universal service provider element of postal deliveries is, and enshrined until 2021. Regulator Ofcom ensures that the Royal Mail provides at least one delivery and collection a day, Monday to Saturday, a uniform tariff across the nation, free petitions and free deliveries to the blind.

“It’s very interesting if I think of the three-and-half years since I got here. The world has changed massively, as the level of competition in 2014 in the parcel delivery business really took off,” she says of a year that ended with CityLink going into administration.

“The launch of Amazon’s own delivery network has shrunk the addressable market. Parcels has a lot of players going after a small piece of the pie. For Royal Mail that means that we have done a lot things very fast in these 12 months to respond, and we have put a lot of time into our quality of service.

“You can’t break promises at Christmas,” Doran says of the huge impact 2014’s Black Friday had on the delivery business and the resulting impact on reputation it had on the UK’s distribution market.

Every day is Christmas

“Before joining I’d never thought about the impact of Christmas and the volumes. But we are thinking about Christmas 2015 now and in April we begin executing our plans,” she reveals.

“There was a 51% increase in scans, with deliveries up from 39- to 60 million. That doesn’t just happen and you don’t put those increases through your systems unless you think about it.

“I care because you end up not doing things and then you end up in the press,” she says of the high profile nature of the Royal Mail. For Christmas 2014, Royal Mail stood up 10 extra hubs and employed an extra 19,000 people just to deal with Christmas.

“By December 23 we are done, physically,” she says of the effort the organisation has to sustain.

“We had our problems in 2011 in my first year here with the website and I will never forget it, but we had a quiet 2012 but for a few problems. In 2013, we had a problem with tracked mail and SMS. So for 2014, we said that we are going to crack those and have a fault-free year,” Doran says with strict honesty.

“The task of barcoding and tracking this level of events means you have to track various points of events. So we have a programme of work, the Parcels Transformation, that has these transformations in it and how we automate parcels to the point of understanding the entry points to our network, and that has to be secured. This is where the PDA comes in,” Doran says of one of the wider group transformations she is leading, a new PDA device that will change a series of aspects to the Royal Mail business.

“We have to have systems to take all that and we are already scanning 80% of parcels at the doorstep. “It is a mark of how far the business has travelled in the past two-and-a-half years. For the past two years, the executive have backed us to hire people and run projects, so this year is payback.

“Delivery, delivery, delivery. At the beginning of every year, I say that and this year really is about delivery.”

The roll out of a new PDA estate is the culmination of the journey Doran has been on since joining. “We’ve done a lot of thinking about the device. It has to be heavy duty to work in all weathers, while battery life is also a major differentiator as it has to work from 6.30am to 4pm on a single charge. Our philosophy is how to use the device to communicate to our people and for them to communicate to us,” Doran has ambitions to offer training, processes such as leave booking and social tools on this device.

“It can be a personal assistant to every member of staff. When you start to think about what you can do, it starts to get very interesting. We have 76,000 devices out there, so it’s a big roll out of devices and chargers and a new interface, so that is quite a task. It is a major focus for 2015 to manage this transformation and doing it smoothly,” Doran says.

Catching the postman

“My contention after 12 months in the role was that the rot had started in the 1990s. We had a sub-scale IT function and we had to hire people and understand our estate. It reminded me of being at BT, where in 2003 there were fewer than a million broadband lines. Now look at how we are perpetually online,” Doran says of the disruption to the communications industry.

“Royal Mail is a 500-year-old business. For 470 years of its existence, it didn’t have to know about technology, and it didn’t see technology as a critical part of the business, but oh how things have changed,” she enthuses with great passion.

In 2014, Doran took the opportunity to completely reorganise the IT supplier matrix across the Royal Mail. “We have awarded a bunch of contracts and are now on the transition from those,” she explains. Atos operates the data centre, a framework contract sees CSC and Steria take a broader spread of application support, while BT won the contract to supply the telecoms. TCS and niche provider PocketMobile have been awarded the contract to develop the applications on the new PDA when it arrives in a postman’s hands.

Doran’s story chimes with some of those CIO UK has heard from public sector organisations that had outsourced all their problems, believing that a major systems integrator would magic them away. Instead, technology is applied to outdated processes and flawed management practice. The end result is an organisation that is behind the curve and doesn’t have the skills to rethink and manage its way out of the problem. Doran therefore had to rebuild the IT team and the IT component of the Royal Mail. At the 2012 CIO Summit, she took the opportunity to ensure that London Olympics CIO Gerry Pennell sent his team in her direction when they wound down what’s been called the greatest games yet.

“I’m proud of this. We needed to grow. There were 119 in the team, now we are 500 – 120 of whom are contractors – and we will always have contractors as we a peaky business,” Doran reveals. “In February 2012, we got the go-ahead to grow the team and we were done by March 2014. But we were very thoughtful about how we went to the marketplace, as you need people that can communicate, manage contracts, work with third parties and deal with a lot of different personnel. We were looking for a seasoned group of people. I wanted people capable of responding to a massive challenge.

“I’m very pleased, we set ourselves a goal of gender diversity, but I won’t do a quota just to have someone who wears a skirt. The language of the advertisements for the recruitment meant that at the end of cycle we have 31% of the team is women. The average number of women in IT is about 14%, which is disgraceful as this job is not digging ditches.”

Royal Mail’s headquarters are located in the same building as Unilever’s, so it is perhaps prescient that two of the UK’s female CIOs work across the lobby from one another. (Jane Moran leads the IT team at the Anglo-Dutch multinational.)

Leading change

“I spend a lot of time with our partners and I have meetings with the senior people in every department every week, as you have to establish good lines of communications when the sun is shining. Then they can call if there is a problem rather than yell at you,” she says of her leadership style.

Doran is always clear that the Royal Mail faces a tough competitive environment, especially now that it is in the private sector. Some of the leadership have already used the national media to complain of the competition and being regulated. Doran’s remit, though, is to focus on how she and her new team can use technology to remain competitive. Royal Mail is considering opening enquiry offices on Sundays and carrying out Sunday deliveries within the M25 to meet the needs of the nation’s fast-inflating capital.

“We are doing a lot of trials and I’m always asking what else we can do,” she says. The daily postman call to your front door is, of course, the dominant image of the Royal Mail, but business-to-business is a critical market, and one where Doran’s team can really begin to drive the digital agenda and remain relevant or win back custom.

“They want electronic transactions, so we built a point solution for each and every customer in the past. Now, though, we have an API, so that all customers can interface with us quickly and easily,” Doran reveals of the simplification process that has been part of the transformation plan. The click-and-collect services with the Post Office – which remains a state-owned organisation – is integral to the business market too, Doran says, as well as the eBay and Amazon traders that increasingly form a major user base for the Royal Mail.

“We have redesigned the customer journey in the past year to make it simpler and we haven’t finished. We are doing a lot of work on customer journey flows and working towards three?click ordering across our services.

“For business-to-business customers that is important. We have a lot of interaction with large corporate, while historically the website was used by the consumer or the SME,” Doran says of how digital services are expected by all levels of user today.

“Mailmark is in its second phase, with an imminent launch that will provide our corporate customers with a bespoke reporting tool as we have that data. In mail and in parcels, it is all about the customer’s needs and do we fulfil them. The scale of the business means we have to think big because of the volumes we can handle.

“I think the difference that is very marked is the degree to which the customer and their needs has come to the fore. Historically, a company like Royal Mail, by being a monopoly meant that the customer was not at the front of its mind. Well those days have gone,” she says of the customer’s use of technology and the Royal Mail since privatisation.

Doran joined Royal Mail from Network Rail, a similar organisation in respect of its relationship to the government and as a national infrastructure provider and Doran clearly sees that experience has been beneficial to landing the changes she has during her time at Royal Mail.

“The government is not a sleeping partner. Network Rail sat in a nether land of private and public, but the impact of oversight from the Department for Transport was quite large.

“There are similarities between the Royal Mail, Network Rail and BT, so understanding the culture and environment you work in is important. But there is a big ethos around service and providing that service no matter what. It is like that at BT, with the field force, or at Network Rail, who are out there fixing the line when it disappears in bad weather. I find that sort of ethos energises me, the way the postman closes a porch door accidentally left open, it’s everything and it’s nothing.”