1 Case for change – HCM Enhancements Qualifications Verification SAPO Corporate Strategic Plan...

1

Case for change – HCM Enhancements•Qualifications Verification

SAPO Corporate Strategic Plan

NCOP - Select Committee

27 May 2015

Additional Notes Pack

SAPO Performance Measures

2

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16

Annual Target Annual Target Annual Target Quarter 1 Quarter 2 Quarter 3 Quarter 4

Revenue

CostNet income

Capex

OpexSubsidy

Competitive and Market shareConduct a

market analysis

Implement strategies


N/A N/A N/AConduct a

market analysis

Profitable ProfitabilityConduct a

market analysis



N/A N/A N/AConduct a

market analysis

Create a commercially viable business from

the unreserved markets

Develop the financial model




Financial requirements of the reserved market


Implement model

Implement model




Strategic Goal 1: Implement the Strategic Turnaround Plan to achieve a sustainable organisation

Strategic Objective Key Performance AreasKey Performance

Indicator

Deliver sustainable developmental obligations funded from reserved market

Financial performance of the reserved market


Implement model

Implement model


A01


3

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Mail delivery standards

92% 92% 92% 92% 92% 92% 92%

Retail queue waiting times

7 minutes 7 minutes 7 minutes 7 minutes 7 minutes 7 minutes 7 minutes

People

(Mail processing)

Transport

Develop and implement efficiency

ratios

Implement efficiency

ratios


ratios

Develop efficiency

ratios


ratios


ratios


ratios

Property

(Retail revenue per square metre)

Time to fill vacancies 90 days 90 days 90 days 90 days 90 days 90 days 90 days

Contracts in place 100% 100% 100% 100% 100% 100% 100%

% of organisational scorecard target achieved

90% 95% 95% 90% 90% 90% 90%

Achieve operational efficiency and effectiveness

10%

Performance management

R791 per square metre

Achieve Leadership stability that ensures continuity and accountability

Vacancies% staff turnover 10% 5% 5% 3% 5% 7%







Service standards

Productivity

1800 standard letters per hour per person









Indicator

A02


4

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16

Annual Target Annual Target Annual Target Quarter 1 Quarter 2 Quarter 3 Quarter 4Lost hours due to industrial action

0 0 0 0 0 0 0

Compliance to labour agreements

100% 100% 100% 100% 100% 100% 100%

Time to conclude agreements

90 days 60 days 45 days 90 days 90 days 90 days 90 days

Customer segment

Revenue R6.733bn R8.365bn R 8.86 To be aligned To be aligned To be aligned R6.733bn

Expenses R6.857bn R6.448bn R6.561bn To be aligned To be aligned To be aligned R6.857bn

Net loss / net profitNet loss (R102m)

Net Profit R1.298bn

Net Profit R1.540bn

Net loss (R102m)

Debtors daysDebtors days outstanding of

20 days

Debtors days outstanding of

15 days


15 days


45 days


30 days


25 days


20 days

ProfitabilityAchieve financial

sustainability

Develop Develop ImplementDevelop and implement

modelChannels

To be aligned

Achieve labour stability and improve labour relations

Effective Labour forums

ProductDevelop and implement

modelImplement Implement



Indicator

A03


5

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Stock daysImplement efficiency

ratios


ratios


ratios

Develop efficiency ratios


ratios


ratios

Implement efficiency ratios

Stock turnoverImplement efficiency

ratios


ratios


ratios

Develop efficiency ratios


ratios


ratios

Implement efficiency ratios

Solvency <1Total assets to exceed

total liabilities

Total assets to exceed

total liabilities<1 <1 <1 <1

Liquidity

Current assets / current liabilities

Gearing ratios (Debt /equity)

-143% 932% 93% N/A N/A N/A -143%

Balance sheet (SAPO Group excluding

Postbank)

Achieve financial sustainability

Profitability

Creditors days

outstanding of 60 days

Creditors days


01:01 01:01 01:01 <1 <1 <1 01:01

Creditors days

Creditors days


Creditors days


Creditors days


Creditors days


Creditors days




Indicator

A04


6

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Improve the customer experience to achieve customer loyalty

CustomersCustomer satisfaction

Customer satisfaction index

40% 50% 60% N/A N/A 40%

Strategic Goal 2: Create a customer centric organisation to restore customer confidence

Strategic ObjectiveKey

Performance Areas

Key Performance

Indicator

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Implementation of cabinet memo

30% of Government

business

40% of Government

business

55% of Government

business

10% of Government

business

20% of Government

business

25% of Government

business

30% of Government

businessNumber of accounts

Develop and implement

Implement ImplementDevelop and implement

Implement Implement Implement

Revenue from Government

Develop and implement

Implement ImplementDevelop and implement

Implement Implement Implement

Strategic Goal 3: Position SAPO as a key service partner that delivers government services

Strategic Objective

Key Performance

Areas

Key Performance

Indicator

Grow to levels of 50 - 55% of SAPO revenue per annum

Government business

A05


7

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


5% 5% 5% 5%

10% 20% 30% 50%

Increase access of financial services to the unbanked

Provide banking services

Growth the Postbank depositors

5% 5% 105%

Strategic Goal 4: Corporatisation of Postbank and increase access to financial services,

Strategic ObjectiveKey Performance

Areas

Key Performance

Indicator

Facilitate the corporatization of Postbank

Bank registration

Obtain section 16 approval to register a bank

50% 75% 100%

A06


8

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Reduce electricity consumption

Reduce electricity

consumption by 3% over prior year

Reduce electricity


Reduce electricity


Reduce electricity


Reduce electricity


Reduce electricity


Reduce electricity


Reduce total carbon emissions

Reduce 2.5% of total

emissions from prior year













Elimination of Irregular expenditure

Reduction of 100%

Reduction of 100%

Reduction of 100%

Reduction of 50%

Reduction of 75%

Reduction of 100%

Reduction of 100%

Minimise fruitless and wasteful expenditure

Reduction of 100%

Reduction of 100%

Reduction of 100%

Reduction of 50%

Reduction of 75%

Reduction of 100%

Reduction of 100%

Legal complianceAdherence to

PFMA

N/A N/A N/AEstablish the ethics office

Sustainability targets

Environmental sustainability

Strategic Goal 5: Ensure good corporate citizenship and corporate governance

Strategic Objective

Key Performance Areas

Key Performance Indicator

Ethical Leadership

Improving the ethical environment of the organisation

Effective ethics office

Establish the ethics office

Effective monitoring

and reporting

Effective monitoring

and reporting

A07


9

2015/16 2016/17 2017/18 2015/16 2015/16 2015/16 2015/16


Risk management

Implementation of the Risk Mitigation Plan to support the STP

100% 100% 100% 100% 100% 100% 100%

Internal control environment

Operational audit issues to be resolved in a timely and effective manner to maintain a sustainable control and governance framework

zero operational

audit issues outstanding

longer than 90 days

zero operational


longer than 60 days

zero operational


longer than 30 days

0 > 120 days 0 > 100 days 0 > 90 days 0 > 90 days

Stakeholder satisfaction survey

Develop and Implement

survey80% 90% N/A N/A N/A

Develop and Implement

surveyTimely submissions of statutory reporting requirements

100% 100% 100% 100% 100% 100% 100%

Strategic Goal 5: Ensure good corporate citizenship and corporate governance

Strategic Objective

Key Performance Areas

Key Performance Indicator

Effective risk and governance

Effective stakeholder management

Stakeholder relations

A08

STP Business Case Detail – Revenue uplift

10

Initiative 2015/16 2016/17 2017/18Revenue Uplift

Capture additional government business - Logistics 352 518 807 932 856 408

Capture additional government business - Retail 287 166 658 154 697 643

Retail hostpot & ICT hub - Mail 90 000 190 800 202 248

Mobile virtual network operator 67 500 159 000 168 540

Capture additional government business - Mail 46 250 106 000 112 360

Cross-sell to large customers - Logistics 40 375 90 100 95 506

Capture additional government business - Postbank 31 913 73 140 77 528

Protect DOCEX revenue/Digital lodgement 24 000 63 600 67 416

Revenue collection - Telkom masts 16 800 17 808 18 876

Retail hostpot & ICT hub - Retail 14 000 29 680 31 461

Eliminate price discounts 13 413 30 740 32 584

New mailing business for online mall 5 750 12 190 12 921

Cross-sell to large customers - Retail 4 750 10 600 11 236

Digital certificates 4 625 10 600 11 236

Revenue from non-traditional customers 4 050 12 720 13 483

Reduce reliance on gov 3rd party payments 3 875 10 600 11 236 R 1 006m R 2 283m R 2 420m

A09

STP Business Case Detail – Cost Reduction

11

Initiative 2015/16 2016/17 2017/18Cost Reduction

Workforce rightsizing 517 563 675 220 715 733

Align sorting capacity with volumes 97 500 212 000 224 720

Eliminate late night shifts 78 280 87 344 92 585

Reduced rates and reduced TOC 64 750 148 400 157 304

Postbank IT outsourcing 64 425 91 054 96 517

Reduce manual sorting 55 000 106 000 112 360

MVNO 52 500 74 200 78 652

Unified Oracle database license 51 000 54 060 57 304

Reduce rental exposure 44 550 87 450 160 113

Optimise network 22 200 50 880 53 933

Relocate the JIMC property 16 983 21 624 22 921

Ensure last mile performance 9 900 31 800 33 708

Reduce call centre costs 9 065 20 776 22 023

Parking of vehicles 2 914 6 678 7 079

Terminate excess FMLs 1 850 4 240 4 494

Terminate casuals 13 13 R1 088 m R 1 671m R 1 839m

A10

SAPO current structure

12

O peration sInfrastructureO ptim izationF in S ervice s

Retail

M ai P rocessin gM ail DeliveryT ranspor tP PD

M ailB usines s

S ale sO peration sCom m ercia lP rocess + M onitorin g

Logistic s(Inc l D ocex +

S peed S erv ices )

CO OB us. T ransform atio nB us./P roduct Dev.P ortfolio M g tCF OS avings O peration sChief R isk O ffice rC IOA uditCustom er Care

P ostban k

S ecurity +Investigation s

P ropertie s

T rust Centre

E -B usines s S ale s

C O O

M gt A ccountin gT reasuryF in A ccountin gRetirem en tF in Co ntrolle r

F inanc e

S trat S ourcin gLogistic sP rocurem ent X 2

S upply ChainM anagem en t

C h ie f F in a n c ia lO ffice r

Lega l

R isk M anagem en t(inc ludin g C om pliance )

L e ga l +R e g u la to ry A ffa irs

P ublic A ffairsInc l In ternationa l+ G ovt R elation s

Com m unication sInc luding C S I

M arketin g

C o rpo ra teA ffa irs

S trategy(inc luding P ro jects )

S tra te g y +R e p orting

O n Hold

C h ie f C om m e rc ia lO ffice r

E RO peration s

H u m an R e so u rces In te rn a l A u d it

S ol D esig nA rchitectureIT SecurityS ervice DeliveryP roc + Infra - S A PO

C h ie f In fo rm a tionO ffice r

C o m p a nyS e c re ta ry

G roup C hief Executive O fficerSA PO ST O FFIC E

Blue – FilledRed - Vacant

A11

PROPOSED POSITIONS TO BE REDUCED

13

BUSINESS AREAEmployee Numbers Potential Saving

OPERATIONS

Mail Operations - Reduction aligned to productivity and efficiency analysis 2650 325 655 971

Transport reduction aligned to transport optimisation 236 25 736 109

International Mail – reduction in ops. staff only 34 4 666 635

CFG – volume and efficiency aligned reduction 339 49 788 696

Speed Services – volume and efficiency aligned reduction 131 20 333 541

Closing of 8 Mail Processing Hubs 191 22 018 572

Closing of 652 Retail Branches over 5 years 1000 134 427 250

CORPORATE SUPPORT FUNCTIONS 160 51 231 510

- Supply Chain Management reduced by 8,3 % included above

IT – Outsource IT Support function 201 69 322 185

REGIONAL SUPPORT FUNCTIONS aligned to operational structure 96 24 307 864

SALES & CUSTOMER SERVICES 36 9 857 108

TOTAL 5065 R728 223 385

A12

COST TO FILL CRITICAL ROLES

14

BUSINESS AREA Cost

Executive positions

Chief Commercial Officer 1 800 000

Chief Technology officer 1 800 000

GE Legal and Regulatory 1 500 000

GE Strategy and Reporting 1 500 000

Regulatory Compliance positions

Senior Manager 756 530

Manager (2 Positions) 1 015 076

Compliance Analyst (3 positions) 750 450

Total R9 122 056

Net effect of changes

Reduction in staff numbers R728 223 385

Filling of critical vacancies -R9 122 056

Net saving R719 101 329

A13

End End End End

15

Date post:	21-Dec-2015
Category:	Documents
Upload:	fay-garrison
View:	214 times
Download:	0 times

1 Case for change – HCM Enhancements Qualifications Verification SAPO Corporate Strategic Plan...

Documents