Australia Post's future IT estate to rely on 13 "platform ecosystems"

Australia Post is working towards a target state architecture comprising 13 “platform ecosystems”, in what would represent a dramatic simplification and modernisation of its technology estate.

Speaking on the iTnews Podcast, Executive General Manager of Enterprise Services - what Australia Post calls its IT function - Michael McNamara said the target state architecture has the endorsement both of the Board and of an independent third-party that assessed it.

Simplifying Australia Post’s platform ecosystem and deepening use of the capabilities within its 13 core platforms will allow the business to retire legacy applications and streamline workflows that currently depend on other systems.

The pursuit of the target state architecture is already underway as part of the Post26 strategy and transformation, which began back in mid-2022.

McNamara said it would take at least one more strategy to get to the pinnacle of the 13 platform ecosystems.

“With something as ambitious as this, it probably needs two cycles of strategy,” McNamara said.

“People say it takes three years but we know better - we've been around long enough [to know that] the business priorities and things change over time, and things just take longer.

“So with probably two cycles of strategy, I think we'll get to our target state architecture, and in the meantime, we continue to land new capabilities.”

Having just 13 platform ecosystems running all its applications and workflows would be a considerable feat, given the postal service began Post26 with “over 700 different systems” in production.

“I call them systems very loosely,” McNamara said.

“Some are big platforms like [SAP] ECC6.0 and others are workflows. 

“Over the course of the four years and the execution of this [Post26] strategy, we've managed to get that down to about 400 from 700.”

McNamara said that Australia Post had been targeting 370 systems left by the end of Post26 rather than 400.

The gap is the result of additional “shadow” IT systems, applications and workflows being discovered over the four years, which are now also candidates for modernisation.

“What's happened is as we've gotten the trust of our business colleagues, they've started to volunteer a lot of their shadow IT capability, and that's a wonderful thing, but the number's gone back up again because now we've discovered all these new applications that the business has volunteered and said, "Look, since you're doing such a good job over here, could you come and help us with some of these other things?" McNamara said.

“I just see that as a really positive step in the relationship between technology and the business, and it just means that we've got a trusted relationship now. 

“Having said that, we do need to address them.”

The intent to run all applications and workflows on selected platforms mirrors simplification and consolidation efforts elsewhere, which has seen Australia Post reduce the number of tier one partners it works with.

The postal service is currently going through a similar consolidation for its tier two partners, which tend to be smaller and more specialised services providers.

“We have largely completed the tier one panel now, and we're halfway through creating a tier two panel,” McNamara said.

“We've got to get that number of suppliers down.”

The Enterprise Services structure

McNamara - who was highly commended in the government technology leader of the year category at this year’s iTnews Benchmark Awards - joined Australia Post in mid-2023, a year into the implementation of the Post26 strategy.

He was previously the inaugural CEO of Digital Victoria and Group CIO of Services Australia, as well as an architecture leader within ANZ Banking Group.

Under McNamara, Australia Post’s IT function itself was restructured to become Enterprise Services, “We moved to an operating model that directly faced into the business with some core shared services [and] enabling capabilities,” McNamara said.

“We've shaped the operating model of Enterprise Services in a way such that it's a domain model that we run. We have general managers that face directly into the business, and they're effectively mini CIOs in their own right. 

“Then, we've got core capabilities that sit beneath that” IT service management, cyber security, those enterprise assets that you would expect to see.”

Each domain is run as a kind of “centre of excellence”, with staff virtually assigned to each.

“What we've done is we've created centres of excellence where we can,” McNamara said.

“It doesn't necessarily mean that we move the people [into separate physical spaces], but we have a centre of excellence for engineering, for architecture, for service management, and so on.

“They're aligned to global best practices, and we've hired folks who are the best at what they do in these spaces, and they bring a level of maturity with them. 

“All of the engineers, for example, in the engineering practice, line up around those standards.”

Data science is another important domain, spearheading Australia Post’s ability to be more data-driven and - like other large enterprises - to embrace more artificial intelligence in operations.

McNamara said that the Enterprise Services leadership team, along with general managers and ‘heads of’, had been selected for character traits that denoted them as “big thinkers” and able to patiently guide their respective domains through a large-scale transformation to a successful outcome.

“Modernisation required a different set of skills within technology: some real big thinkers, folks who really had the patience to stick with things,” McNamara said.

“There's ebbs and flows in technology transformations, so making sure that they would stay the course and that they had the skills and experience to stay calm under pressure, is largely what it's about.

“We really focused our recruitment on bringing that strategic thinking to our business colleagues, bringing in different ways of working, and setting up some structures and foundations in place that would allow our businesses to get change through the [technology] shop significantly quicker.”