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Thanks to USPS IT innovation, 'the check's in the mail' won't cut it

The U.S. Postal Service and IT innovation doesn’t strike me as a natural pairing. But after listening to CIO Ross Philo, a Brit who was named to the post in 2008 after a long career in the oil and energy business, perhaps it’s time to re-examine old assumptions. He spoke about the agency’s efforts to make the leap from print to the digital age at Forrester Research’s recent CIO Forum in Washington, D.C.

In many ways, the Postal Service qualifies right now as a leader in technology. For example, it has a fleet of alternative-fuel vehicles that’s the largest in the world, although it has a long way to go to convert its hundreds of thousands of vehicles. is the third largest e-commerce site in the U.S. A decade ago, the 35,000 letters the USPS sorted per hour would have taken 70 people. With bar code technology, two people manage an automated postal sorter that sequences letters into the order of the houses on the carrier’s route. That’s progress.

The USPS handles 60% of all passport applications, including the proofing and data collection required to capture identity. That’s opening up opportunities for the agency to provide identity management and trust services as the world moves into the digital age. In fact (and unbeknownst to me), the majority of mail services can be done online, including printing and paying for an address label for my packages and calling a carrier to pick them up the next day. That is an example of IT innovation (albeit ineffective marketing). In addition to having a post office in every home, Philo is working on putting a post office in our hands, by providing similar technology for our smartphones.

It is in its use of intelligent mail bar codes, however, that the Postal Service strives to better serve the national business accounts that account for 80% of its income, Philo said. The new bar code replaces the series of bar codes issued over the past couple of decades, and provides mailers visibility from the time the mail is sent to when it’s delivered.

“That visibility will deliver value and innovation to companies in terms of knowing with assurance that the package that they sent was delivered. They will have complete visibility into how efficient the mail actually is,” Philo said. Postal customers will be able to take advantage of tracking to do multichannel marketing: following up the delivery of an L.L. Bean catalog, for instance, with a phone call directing the recipient to check page 42 for an item of interest. Moreover, the deadbeat response that the bill was lost in the mail or that the check is in the mail — well, that excuse will no longer work, Philo joked.

Of course, the intelligent mail bar code delivers what the public already takes for granted from such carriers as FedEx and UPS, Philo conceded. “The difference is they may be tracking tens of millions of packages; the United States Postal Service is talking about billions of pieces we need to track with the intelligent bar code.” On that scale, you can’t change the mail overnight.

For all his encouraging news about IT innovation, Philo, with typical British understatement, hinted at the many barriers to innovation, IT or otherwise, that are part and parcel, so to speak, of a federal agency with 600,000 employees and a huge customer base. “Every time we make changes to our systems, it also impacts every large mailer out there in the United States. Every time, we do a new software release that introduces new capabilities, collaboration with our customer base is critical,” he said. Then there is the numbing fact that the USPS is losing $7 billion a year on $70 billion in revenue. And the bargaining unit agreements to deal with. And the static nature of civil jobs. And the fact that quite a few of the changes the USPS hopes to make in its mail service will require legislation (ugh).

But Philo knows that his outfit “can’t just tinker.” “We have to do the big bets. The last thing we want in this trend from print to digital, is for us to have a Kodak moment.”

We’ll see.

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