New CIO to provide strategic leadership for the company’s future IT agenda and the agility to bring innovations to customers faster.
Canada Post is transforming its IT model to better serve the changing needs of Canadians and businesses and lead in the rapidly evolving parcel delivery market.
The postal service has entered into an agreement to transition Innovapost – its IT shared-service provider – to Deloitte Canada.
With ecommerce expected to double in Canada over the next decade, powerful IT is essential for the retail economy and for Canada Post.
The changes are pitched as helping Canada Post better deliver the digitally enabled products and services Canadians need – while ensuring the postal service continues to be a vital economic link for the entire country.
“This is the start of an exciting journey to transform Canada Post’s IT model so that we can better meet the demands of our customers, particularly in the competitive parcel market,” said Doug Ettinger, President and CEO, Canada Post. “This change not only enhances our strategic focus, it also ensures we have the world-class expertise in place to deliver results for Canadians.”
Located in Ottawa, Innovapost has been an important partner for the Canada Post Group of Companies.
Following a detailed examination, it was determined the current shared-service model was not providing the speed and agility needed for Canada Post to compete in the future.
The sale and agreements with Deloitte Canada follow a comprehensive, multi-stage bidder selection process.
The intention is to provide Canada Post with the world-class IT support and expertise it says is needed to deliver more for Canadians and Canadian businesses.
Thes transformational transaction is expected to close in the coming months, subject to customary closing conditions.
The Canada Post Group of Companies’ operations are funded by revenue generated by the sale of its products and services, not taxpayer dollars.
“We welcome the opportunity to provide Canada Post with strategic support to serve the changing needs of their customers and Canadians more broadly today and to make available the latest technologies needed to build an inclusive and resilient digital future,” said Anthony Viel, CEO, Deloitte Canada.
“The Innovapost team will complement our team to inspire innovation, collaboration with organizations to evolve their business, economic growth and productivity. Collectively, we will chart an accelerated path enabling Canada Post to remain competitive and grow in today’s disruptive technology landscape.”
A new CIO organization
As part of the transition, Canada Post will retain from Innovapost the expertise needed in-house to provide strategic leadership for the company’s IT agenda and the agility to bring innovations to customers faster.
Franco Chirichella, President and CEO of Innovapost, will become Canada Post’s new Chief Information Officer, leading a team of former Innovapost leaders who will also transition to Canada Post in the new organization or other roles supporting the Corporation’s IT transformation.
Establishing a new strategic partnership
As part of the agreement, Deloitte will deliver and support Canada Post’s day-to-day IT operational services.
The majority of the organization’s employees will be integrated with Deloitte to provide for a seamless experience for Canadians and businesses.
Going forward, Deloitte Canada will provide IT services to Canada Post and its Group of Companies. This collaboration brings together an effective mix of talent, technology and business capabilities to achieve desired outcomes and continued growth in highly competitive markets.
Over the last two years, Canada Post has been executing a comprehensive transformation plan, focused on the rapidly evolving postal needs of the country.
The plan positions the company for growth in Canada’s ecommerce market while delivering on its core mandate of providing reliable delivery of mail, packages and parcels to every Canadian address.
In September 2023, the Corporation opened the Albert Jackson Processing Center, doubling its parcel capacity in the Greater Toronto Area and improving service across the country.
The leading edge $470-million, zero-carbon facility in Toronto’s Scarborough district can process one million packages a day at full capacity – making it Canada’s new ecommerce hub.
“The Albert Jackson Processing Center is much more than a building – it is a generational investment in the future of our country,” said Ettinger.
“This facility will drive our network nationwide and help support the Canadian economy for decades to come. It will solidify Canada Post as our country’s ecommerce delivery leader.”
The transformation comes as Canada Post confirmed a $290-million loss before tax in third quarter of 2023.
Increased competition in parcel market continuing to negatively affect revenue – with parcels representing roughly half of Canada Post’s revenue.
Transaction Mail volumes and revenue continued to decline, but Direct Marketing volumes and revenue increased in the third quarter
For the first three quarters of 2023, Canada Post’s revenue fell by $154 million, or 3.5% compared to the same period of the prior year.
In the third quarter, Transaction Mail revenue fell by $43 million (7.7%) as volumes declined by 40 million pieces, or 7.5 % compared to the same period a year earlier.
For the first three quarters of 2023, revenue declined by $83 million, or 5.0% while volumes also fell by 5.0 per cent or 78 million pieces, compared to the same period of 2022.
This was largely the result of a continued shift toward digital channels on the part of consumers and mailers.
In January 2024 Canada Post confirmed an intention to sell third-party logistics provider SCI Group – one of Canada Post Group’s strongest performers – to Montréal-based Metro Supply Chain.
“SCI has been a strong performer for the Canada Post Group of Companies over the years.
“This move will help focus our efforts on continuing to lead in the rapidly growing ecommerce market,” said Ettinger.
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