In today’s information environment, more people are turning to the internet for their forwarding and messaging. As emails grow, and the purpose of sending faxes through emails, it is a question if the United States Postal Services is going obsolete. The once profitable billion dollar a year company has been losing billions since the mid-2000. In an effort to save the postal service, they have been streamlining layoffs to compensate for their losses, closing down post offices, and Congress even passed that the Postal Services should cut Saturday deliveries.
No matter, the Postal Service is losing money, but there needs to be a solution in order to save the business that services millions of people throughout the United States, and employees millions of individuals. As the project manager, identifying the key aspects that can help save the Postal Service for the future is the responsibility for this essay. The recommended plan of action to make postal service profitable is to allow for internet access for rural citizens. Rural areas are one of the most forgotten in internet access and cell phone receptions. By allowing rural post offices and areas to get a pay-as-you-go service, millions will be able to access the internet that would potentially bring in substantial money for the Postal Service. This project plan will include recommendations for a solution, along with an action plan in place to will help the U.S Postal Service to be profitable again.
Statement of Problem
The problem outlined would be in making the U.S Postal Service a profitable business for the longevity in the future. The Postal Service is continually losing billions of dollars a year, with countermeasures to close out post offices, and lay off thousands of workers, it has helped a little, but the Postal Service needs to think of more innovative ideas in order to save the service. As the project manager, the goals of this project plan are to highlight a possible solution to the continual loss of business and money.
The problems lie in the U.S Postal Service not moving fast enough to get with the times of the moving technology. The internet has transformed the way that which people send information around the world. Not having to depend on going to the local postal office is a convenient matter for most Americans. Bills, advertisements, and greetings have moved towards the internet with the addition of more storage and data being allowed to send from free email accounts, the Postal Service is continuing to lose money, in only the matter of packages being sent due to the high volume of people online shopping. Congress is another root of the problem as, the U.S Postal Service holds a monopoly on all non-emergency mail, in doing so, the government has control over the regulation of the services. One of the major money sucking problems is that benefits that Congress passed for the future retirees. “The costliest problem for the U.S.P.S. is the Congressional mandate that it pre-fund healthcare for future retirees to the tune of around $5.5 billion annually.” (Sanburn, 2013) Also cutting the services from 6 a day to 5 day can save the postal services billions, however, Congress will not allow for the reduction which could potentially save the Postal service $ 2 billion a year. Due to this they have had to cut hours, workforce, offices, and other services.
The problems are divided into two categories, the short-term and the long-term problems. The short term problems are competition from FedEx, UPS, and other packaging companies that deliver packages and mails across the country. However, the main two companies do source their packages to the Postal Services sometimes at the end of their journey to save them money. Short term problems also include the problems of cutting down on workforce and offices, which works as a twofold method in saving money, but losing money also. The problems that are faced as the project manager include, getting corporation from Congress in order to corporate with the proposed changes for the Postal Service. Other short-term problems include, increasing postage, and other services that could potentially lead to driving away customers.
Long-term problems include the continual effects of losing money due to the information being transferred online. Other problems are that Postal Services have not been able to adapt to digital communication, and the usage of online mailboxes. Stated earlier, the long-term problem of Congress acting as a roadblock will continue to hurt the business in the long run as they pass money draining initiatives that cost the Postal Services billions in revenue and funds. The Long-term problems of streamlining operations as a result the company loses employees, and revenue. Decreased usage in periodicals, greetings, and billing have hurt the company. This trend will continue because of the convenience of using free services online will attract more customers. The long-term problems will eventually keep the company losing billions until they bankrupt or close for good.
The decision of the project manager in serving in the best interest of the U.S Postal Service is to recommend an action plan that will help get the Postal Service out of the black and become a profitable service again. In order for the U.S Postal Service to become profitable is to first begin to adapt to the digital communication age, and reach out to customers that most industries have forgotten in order to boost revenue and services.
Causes of the Problem
The U.S Postal Service began during the 18th century at the request of Benjamin Franklin becoming the first postmaster. Since then the Postal Service has employed over half a million people, and the one of the largest employers of civilians in the United States. The company, if considered a private industry would rank 28th in the world, it has seen billion dollar profits until 2008. The biggest reason and the biggest problem was due to the mandate passed by Congress that forced the U.S Postal Service to put $5 billion dollars in a pre-funded healthcare payment for future retirees in 2006. The Postal Accountability and Enhancement Act (PAEA) require that the Postal Service have to pay healthcare benefits for retirees and future retirees for 75 years for each person that receives benefits in a 10 year span. Since then, the company has defaulted on two billion dollar payments due to the inaction of the Congress. “Overall, the postal service expected a $15 billion deficit for last year, and a projected shortfall of $238 billion over the next 10 years.” (USA Today, 2012)
Since the U.S Postal Service is a monopoly authorized by the government, the government has direct control over regulation. Congress mandates laws that in efforts harm the Postal Service instead of doing any good, one of problems including cutting services from 6-a-day to 5-a-day services that would eliminate Saturday deliveries. This could potentially save the Postal Service over $2 billion a year. However, Congress prohibited that move, and while passed in the Senate, the House is stalling on the legislation. “The Postal Service has to petition the Postal Regulatory Commission, and sometimes Congress, whenever it wants to make a substantial change to its business model.” (Palmer, 2013)
Other problems include the use of the internet as a means of sending information, greetings, and billing. The decline in periodicals has cost the Postal Service over $200 million dollars annually. Email and fax services online have saved people time and money in sending information through the post office. Technology has played a major role in bridging the gap between the Post Office and other methods in sending and receiving information. These problems are only continued with competition such as FedEx and UPS taking advantage of the Postal Service monopolistic approaches that allow customers to track packages, mail, and parcels to their destinations in a timely matter. These problems are threatening the future of the business, which have led to their smallest number of workforce in decades, including their vehicles, post offices, and a reduction in services.
In order to provide strategies for the problem, the project manager will use the Triple Constraints Theory, were managers break down constraints into, time, cost, and quality/scope. (Duggal, 2010). When accessing the constraints used for time a thorough process of planning, training, implementation, and integration are necessary. For the process of the project, pre-planning that will use a traditional management approach will consists of breaking down the project in sequential groups and progress tasks. The Benefits Management Method Model is used in order to solve problems that will be able to reduce risks and gauge a better understanding of the scope and project goals. In using this approach, the project manager will be able to apply a cost/benefit analysis that is used in combination of an economic model for the completion of the alternative solutions.
The problems that are persistent are that Congress is making the changing of the Post Service to move into the black a problem as the cost/benefits of moving to a 5-a-day service would have a substantial impact on the business. According to the report, cutting services including, streamlining services and employees creates billions in revenue. In order to be profitable by 2015, the Postal Service needs to lay of 220,000 more employees. (Konrad, 2011) The U.S Postal Service faces stiff competition from FedEx and UPS in order to regain some customers that they lost they can work together in order to deliver services to customer in rural areas since UPS handles more than 15 million daily packages. (Konrad, 2011) According to TIME the U.S Postal Service projected over $14 Billion in losses and if the Government does not act they will lose over $20 billion in 2016. (TIME, 2012) These problems are caused by the need for government approval in restructuring the business, and making the needed changes help the Postal Service for the future. The assumptions are that Congress will step in due to political and public pressure, due to the obvious need for the Postal Service to remain in business as not every mail can be sent online including confidential letters or packages.
Decision Criteria and Alternative Solutions
In order to provide solutions for the Postal Service the Postal Service needs to be able to modify its services in order to catch up with its competition, and enable customer access that are usually overlooked. A modification of services include another service delivery format that will reduce costs and increase profits. Allow for a reduction in post offices, workforce, and mail handling services. However, the Postal service should not cut more of their margin than they need as the cutting of a lot of branches can have a negative impact on their profits and business.
As far as the management of the Postal Service and the proposed plan of action, the practicing of planning, leading, staffing, and organization is crucial in completing the overall mission of the project. The main goal of the Postal Service is to provide Americans with universal postal service at an affordable price. The main focuses of the company is to deliver mail, efficiently and effectively in time/cost method. The Postal Service will serve their purpose and remain profitable by looking towards alternative solutions in order for them to deliver on their goals. One of their first solutions is to deregulate from the government. This may be a costly or timely matter however, deregulation is one their best options. The government will relinquish control allowing for the local branches to make key decisions on operations and the restructuring of the Postal Service. Without government oversight, they are able to charge more for packaging which will bring in more profits as the packaging is increase due in part to the surge in online shopping. However, competitors will not accept deregulation of the Postal Service without them first giving up some monopolies. “Competitors, however, will not accept deregulation of the Postal Service as long as it holds its monopoly on first-class mail. (The USPS holds a second monopoly on access to mailboxes, which it would also have to give up.)” (Palmer, 2013) Also rural communities would have to pay more for services such as packaging due to their geographical area.
Although this alternative would be great for the Postal Service as they would be in charge of all key decisions including the regulation of retirement benefits which would save over $10 billion annually for the business. (USA Today, 2012) Also a part of this solution is the availability of allowing for 5-a-day services, where Saturday services will be eliminate. According to the USPS, “Moving to a six-day package delivery, five-day mail delivery schedule is one of the fundamental changes that will help USPS compete more effectively in the marketplace and better respond to changing customer needs.” (USPS, 2013) However, it could potentially turn some customers away who depend on mail delivery on Saturdays.
Another alternative solution outlined in the case is providing those rural communities with internet access. Rural communities depend on the post office to buy stamps, and to send letters and packaging since they do not have internet access. “Some of America’s poorest communities – many of them with spotty broadband Internet coverage – stand to suffer most if the struggling agency moves ahead with plans to shutter thousands of post offices later this year, a Reuters analysis found.” (Podkul, Stephenson, 2012) The problems lie in the bigger context of the digital divide found in the United States that leads to millions not having adequate to any internet access. Although the Postal Office has lost millions in customers and billions in revenue for mail being source to the internet, there are millions that can benefit from the solution proposed of the USPS providing services for the rural communities. In communities where newspaper, regular wired phones, and U.S. Post Service serve as their only means of communication besides information on the television, providing internet access at an affordable rate or in pay-as-you-go services can increase profits substantially.
“A pilot program proposed by experts on rural telecommunications would support expanded broadband adoption in rural areas and provide the foundation for enhanced postal services.” (USPSOIG, 2013) This plan will work conjointly with telecom providers in providing a solution to the USPS problems and the access problems of rural communities. This service could also add, schools, businesses, and government entities in the rural communities that would return a profitable margin for the USPS. Other pros outlined include, “Reduce the Postal Service’s physical footprint while maintaining or even improving universal service, provide a secure platform and test bed for digitally enhanced postal services that would help to modernize the Postal Service, and support the broader national objectives of boosting demand, availability, and utilization n of broadband.”(USPSOIG, 2013) The cons however is finding the right price that people are willing to pay. Effectively making sure that they services provided have the same speed, durability, and scalability as they would offer in more populated cites.
Potential implementation requires information from Telecom Providers and data collected from rural communities. The Initiation Phase is the first step in planning process that includes the tasks and milestone of developing the business case. In this project, the business case deploying the alternative solutions; deregulating the Postal Service and providing affordable telecom services to rural communities. The alternative solutions benefit the USPS as each helps the Postal Service become profitable for the future.
In order to evaluate the estimated times and costs a feasibility study may be done. This will help to examine the estimated reasonable costs, achievable resolutions, and acceptable risks where an outline of issues that can be avoided. In setting a project for an alternative solution implementation, much importance is placed on the planning and implementing stages. The project manager should use the top-down approach that enables a group consensus on decisions, calculations, project leaders’ salaries, and scheduled resources.
Recommended Solution, Implementation, and Justification
In estimating the resources the budget including the costs of deregulation, and providing telecom service, which include activities such as engineering the telecom infrastructures that would benefit from a cloud or green communications alternative. Direct costs are low due to no direct materials, equipment, and the cost of labor is directed towards the engineering and software development departments. The time, cost, and quality goals are essential in setting up realistic costs that require research, consultation, and company consensus. In estimating costs for the project, direct project overhead needs to be factored in due to the needs of the employees and administrative overhead costs for administrative staff. In all the estimated costs and time using the top-down approach a sizable budget due to the agreement set with Telecom providers, and the cooperation of the Government.
When configuring the budget, a strategy must be implanted that factors in estimations of tangible and intangible, monetary, and benefits costs. Budgeting includes direct costs, overhead costs, general, and administrative costs. As well as costs for internet and software integration, and legal costs for deregulation. The initial steps include outlining the timeline for planning and reporting the budget. The leads in the project will report to the project manager on suggestions on the predicted costs. The proposed budget will identify each amount for the phases of the project. The total costs will be calculate, as the schedule will reflect the estimated spending costs of the project. In carrying out the alternative solutions for the Postal Service, team members will use resources allocation using limited assumptions that don’t allow for much change once the project begins. In order to control the budget, a security fund will be set in place to catch uncalculated expenses, and checks with project manager and stakeholders in order to respect their interests and keep the projects within schedule and budget.
Other management approaches includes using the (WBS) Work Breakdown Structure that will be used commonly in setting up tiered phases, where key milestones in integration, implementation, deregulations, and others will be marked in tasks in order to be completed. Once each tasked earmarked in a sequential order, on the (WBS) is accomplished, project managers will be able to move on to the next milestone. Included in the WBS is a detailed project schedule for staff, resource allocation, budget strategy, and a detailed project report used for project managers. In order to keep the project on tasks, in budget, and on schedule in order for the Postal Service to continue to serve the public the Critical Path Method (CPM) is used to keep record of the chain events that link the start and finish of the project, that will include the different time constraints that will help project managers use the correct approach in working on different projects at the same times. CPM is essentially used in identifying the risks that are included in the risk plan that outlines the planned steps to be taken to guarantee the tasks and goals of the project will be completed. CPM is also useful in highlighting the different techniques used to control the risks, constraints, and completion of each task. According to OFM, “risks need to be continuously assessed throughout the project as the nature, probability, and impact of risks change by phase and activity.”(OFM, 2012) The risks associated with the project include both USPS, Government, and Telecom providers not being able to work together as one unit. This risks can cause negative consequences that will affect customer relations as well. In addition to adding problems that might be anticipated. Risks that could affect the software, the dissatisfaction of customers and stakeholders (telecom providers), internet execution speed, project not delivered on desired date, and other potential risks that could interrupt the flow of productivity and business enterprises. In analyzing the potential risks, the severity of the risks are all high for the success of the project plan. Each risks impacts the businesses that could harm the business development, loss of customers, and revenue flow. The use of risk reporting matrix is essential in evaluating the likelihood and consequences of each risks.
Project Management Methodology
Upon completing the Postal Service project, the methodology chosen is a Value-Driven Project Management that includes the shift of relying on the costs, times constraints, the budget, or other factors to be valued as a success. This project will rather rely on business values that the Postal Service will achieve. In this project success of the project is measured by the response from customers and stakeholders that include the Telecom provider stakeholders, in the valuation of the financial value, and customer-related value gains. The contingency plan that is able to cover the risks reported in the risk reporting matrix. In ensuring customer satisfaction a quality assurance personnel will be responsible for ensuring user friendliness, the internet services are easy to understand, and without any glitches. In order for implementation of these alternative solutions to be delivered on time and within budget, the project manager, Telecom subsidiary, USPS head manager, government liaison, and the engineering team will meet for weekly meetings to update on status, and provide specifics that they remain on schedule. To make sure that employees, the government, and the stakeholders from the Telecom providers will work together in understanding the business goals, and potential benefits must be the primary of the U.S Postal Service. In order to have control over the project, a control strategy will be implementing in guaranteeing that the members of the project team, the companies, and the stakeholders communicate to prevent failures. “The purpose of project control strategy is to evaluate and analyze the project situation, generation of forecasts, and definition of actions to be implemented in the whole project process.”(PPM, 2011)
The project manager has the responsibility of overseeing all the roles of project presentation including, planning, execution of the budget, project, and closure. However, the project manager will work in coordination with other key members of the project team and other members of Congress, and Telecom providers that will include a mixture of software architects, assurance managers, directors, legal teams, contracts managers, and acceptors in order to implement the alternative solutions in making the Postal Service a profitable business. For the solution to deregulate the Postal Service, the project team will consists of legal advisers, members of Congress, project directors, and members of competing delivery services in order to work out agreements for the future. The alternative solution used in providing rural customers with internet access will include, IT directors, telecom provider managers, system architect, and specialists used in building the telecom infrastructure. The project team support specialists will stay on the project throughout the duration working on both companies software integration. A Senior Application Specialist and Cloud Network Specialist working conjointly with the selected Telecom Provider will be the department’s project manager coordinator responsible for success of internet access and for building the IT infrastructure of the rural communities. These approaches and methodologies are useful in helping the Postal Service be profitable presently and in the future. The implementation of the alternative solutions proposed will be essential in aiding the Postal Services to try new methods in providing services to the millions of customers that depend on the services of the United States Postal Service.
“A Possible Pilot Collaboration between Rural Telecom Providers and the Postal Service.” (2013). USPSOIG. Retrieved from https://www.uspsoig.gov/foia_files/rarc-ib-13-001.pdf
Duggal, Jack S. (2011). Next Level Up: How Do You Measure Project Success? Rethinking the Triple Constraint. PMI. Retrieved from http://www.pmi.org/Knowledge-Center/Next-Level-Up-How-Do-You-Measure-Project-Success.aspx
Larson, Erik. Gary, Clifford. (2010). Project Management: The Managerial Process, 5/e. McGraw Hill.
Maylor, H (2010) Project Management. Great Britain. Prentice Hall
OCIO. Project Management Framework. (2011). OFM. Retrieved from http://www.ofm.wa.gov/ocio/pmframework/initiation/precharter/riskanalysis.asp
Palmer, Brian. (2013). “Why Doesn’t the Postal Service Make Money?” Slate. Retrieved from http://www.slate.com/articles/business/explainer/2013/02/post_office_ending_sunday_delivery_why_can_t_the_u_s_postal_service_make.html
Podkul, Cezary, Stephenson, Emily. (2012). “Special Report: Towns go dark with post office closings.” Reuters. Retrieved from http://www.reuters.com/article/2012/02/14/us-usa-usps-idUSTRE81D0M620120214
“Postal Service defaults on $5.6B retiree pre-payment.” (2012). USA Today. Retrieved from http://www.usatoday.com/story/ondeadline/2012/10/01/postal-service-default-retiree-health-benefits/1606815/
Professional Project Management Education. (2011). PPM. Retrieved from http://professionalprojectmanagement.blogspot.com/2011_02_01_archive.html
Reilly, M., Minnick, C., & Baack, D. (2011). The Five Functions of Effective Management. San Diego, CA, Bridgepoint Education. Retrieved from https://content.ashford.edu/books/AUMGT330.11.1
Saee, John. (2009). International Project Management: Strategy and Organizational Design. Oxford Business & Economics Conference Program. Retrieved from http://gcbe.us/2009_OBEC/data/John%20Saee.doc.
Sanburn, Josh. (2013). “The Post Office’s Biggest Problem Isn’t Saturday Delivery — It’s Congress.” TIME. Retrieved from http://business.time.com/2013/04/12/the-post-offices-biggest-problem-isnt-saturday-delivery-its-congress/#ixzz2W8yz4iPH
“USPS”. (2013) USPS. Retrieved from http://about.usps.com/news/electronic-press-kits/five-day-delivery/welcome.htm