Reorganisation & New Product Launch

Situation

As the mail market was in continuous decline, the Royal Mail Group decided to set up an innovation subsidiary to generate alternative sources of income. The subsidiary was launched in 2007 and grew rapidly by delivering large mail opening and scanning outsourcing contracts to major UK organisations. However, after a few years of operation, the contracts profitability was low and did not generate enough profit to enable investments in new digital initiatives. Aleron was commissioned to review the performance and support the reshaping of the organisation.

Our approach

We reviewed the financial and operational performance of all areas of the business to identify efficiency and growth opportunities. Our recommendations included drastic reductions in discretionary spend, a re-organisation of the sales team, the implementation of a new workforce model and structure, and the improvement of the existing contracts performance through rationalisation of activities and negotiation with suppliers. The plan was approved by the management team and we supported the execution of it. Once the activities well under way, we helped the organisation define a new strategy and growth plan for the business. This included the development of new services, a new pricing model and the introduction of a robust performance management process.

Our impact

We helped generate over £15m of EBIT improvement and create an efficient and scalable organisation capable of delivering the growth ambition. We also supported the development of a new digital letterbox and other digital services. In 2013 the Royal Mail Group was privatised, and the assets of the subsidiary integrated in the group.