Established in the late 19th century, Egypt Post is currently undergoing massive changes. Fueled by advances in technology and a booming economy, the national postal carrier is updating its range of services and organizational structure, as well as expanding its physical footprint. Alaa Fahmy, the current chairman, is responsible for leading the way through this period of change, while also ensuring those all-important customers are kept satisfied.
Seated behind a large desk in his downtown office, Alaa Fahmy is surrounded by reminders of the long history of the National Post Organization, or Egypt Post as it is more commonly known these days. His office on the second floor of the Central Post Office building - a grand old structure in the colonial style - features aging mirrors, a high ceiling and an antique clock slowly ticking through the hours. From the wall gaze the photographs of past post office chairmen dating back to the 1960s, while across the corridor is the postal museum, charting the development of the organization since its founding in 1865.
Since his appointment as chairman of Egypt Post in February 2006, however, Fahmy has had his eyes very much on the future. He has leant his considerable energy to a massive program of expansion and diversification that has taken the postal service far beyond its traditional role of delivering letters and parcels.
As a quick glance at the Egypt Post website reveals, the organization now offers an abundance of services under four broad categories: postal, financial, governmental and societal. Customers can now pick up their pension, buy an airplane ticket and wire money to their nephews in Luxor.
The physical footprint of Egypt Post has been growing apace, with around 3,700 outlets currently operating, and a hundred or so added each year. In line with the expansion in business, profits are up - LE 200 million last year, compared to LE 120 million the previous year, according to Fahmy. And he says all of the cash is ploughed back into developing the business, which is still a public sector institution, despite its forays into commercial partnerships.
Such developments have been driven in part by the recent economic boom in Egypt, as well as by the rise in relevant technology and the examples set by a number of foreign postal services. But Fahmy's underlying vision of creating an "integrated service gate" is also inspired by a seemingly genuine spirit of public service, an attitude backed up by the technical know-how of a trained engineer.
"I am a communications engineer," says Fahmy. "My graduate and postgraduate studies were in communications and computers, and I have spent almost 30 years in this career. But the last few years I've spent in a services career, in this post... This is the implementation of communications and telecommunications at large."
In 2003, Fahmy was appointed head of the National Telecommunication Regulatory Authority (NRTA), where he was responsible for implementing communications law, reforming the market and introducing the third mobile operator. He says, "In my previous job [at the NRTA], I was judging between companies, and controlling the relations between the service providers and the state on one hand, and providing a good and high-quality service to people, on the other. It's not a direct relationship; it's a shallow relationship in a way. But doing business in Egypt Post is getting down to earth, contacting people and gaining first-hand information from them. I can develop new services every day, in a sense."
A particular favorite of the chairman is the delivery of pension payments to 3.2 million pensioners across the country. While a great many of Egypt Post's innovations are technology-led, this is one area where improvements have been made simply by listening to customers' needs.
As a case in point, Fahmy explains the importance of addressing the needs of the elderly. Egypt Post distributes almost LE 1.3 billion worth of pensions every month to people across the country. The postal service has increased the number of hours that pensioners can collect their monthly stipends in order to facilitate the process, he says.
To maximize service to pensioners, Egypt Post has also begun to deliver pension payments directly to people's homes when requested. But as Fahmy explains, sometimes the trip to the post office is the highlight of an elderly person's month. "Because, actually, people need to have contact," he says. "People need to get out of their homes. Some seniors told me: 'I don't need my pension in my home. Please give me an opportunity, at least once a month, to go out and visit the post office and walk around. Don't send me my money.' So to say that everything is electronic is a myth, in a way."
But new technologies have certainly allowed for innovative ways of reinventing old services. The traditional fund transfer voucher delivered through the physical postal system has now been supplemented with an electronic facility working through a national computer system with around 2,000 outlets at post offices.
"The social dimension is very important," says Fahmy. "So when we're pricing services, we look at the social dimension very carefully. For example, for a small fund transfer by this new system there is no fee, while for a larger one there is. Imagine that in the first month we had a volume of almost LE 10 million, and by the end of the year customers had transferred LE 2.8 billion across this network."
Egypt Post, under Fahmy's leadership, is also undergoing a major expansion of financial services offered to post office customers. It has been offering savings accounts since 1901, but has recently ventured into investment accounts that allow customers to play the bourse with a minimum investment of LE 100. The new investment accounts are managed by EFG-Hermes, which is in turn supervised by Egypt Post. As well as providing a chance for those with more modest means to engage in speculation, they also give Egypt Post a means of tapping money they might otherwise not see.
Fahmy is also excited about the new range of payment methods available, driven largely by new technologies. Reaching into his desk drawer he pulls out a number of cash cards offered by Egypt Post, ranging from the straightforward debit card with a Visa sign, to the smart card that carries your account on a chip and the prepaid card that can be loaded with cash.
Egypt Post's cooperation with EFG-Hermes on their investment accounts demonstrates a new willingness to form partnerships with companies in other sectors. Another key example of this approach is the agreement with airlines in the Star Alliance group, which includes EgyptAir, to sell air tickets across post office counters. Incompatibilities with the computer system used by EgyptAir initially delayed the ticketing venture, but by mid-September it was finally under way.
With all the talk of high-tech solutions and cross-sector fertilization, not to mention the spread of Internet use and mobile phones, it would be easy to assume that the postal function of Egypt Post is now on the back burner. But while letter-writing between family and friends is certainly in decline, Egypt Post has taken advantage of the buzzing business atmosphere to tap new sources of postal revenue. Key among these is the mass of direct mail marketing materials delivered for third parties.
"Look at the economy in Egypt now," says Fahmy. "For the last three years it's shown 7-percent straight growth. This brings business to Egypt Post because a lot of documents... have been transferred and distributed between and within organizations. When you talk about [direct mail] correspondence between one person and the next, yes, it's almost dead. Now you have e-mail, SMS, MMS and mobile phone [communication]. So there are a lot of technologies that have been introduced over the last 10 years that have already killed person-to-person mail. But look at business-to-business, government-to-citizens, government-to-business and business-to-government. These areas are all booming.
"Look at the banking sector, for example. There is a lot of mail now, going back and forth between all these organizations and their clients, as well as the various financial institutions."
A major concern for those doing business in Egypt has long been the security of the parcel service. With valuable items from CDs to legal contracts traveling through the post, the tendency for packages to be occasionally tampered with, delayed or lost is an issue Egypt Post has taken seriously.
The main thrust in the campaign to improve security has been the development of new premium-rate parcel services that ensure additional security procedures, as well as insurance for any items lost or damaged. The Net Courier service, for example, provides registered delivery to 212 countries in partnership with the international parcel service FedEx.
Also oiling the wheels of commerce is the arrival of secure electronic document transfer. Of particular use to businesses exchanging documents such as contracts or tax and customs forms, such systems allow the speedy dispatch of documents that can be verified by a third party, in this case Egypt Post. Once received, the documents can be printed and the appropriate stamp or signature applied.
Electronic document transfer makes use of Egypt Post's local e-mail service, Misr Mail, as well as new electronic signature recognition technology. So keen is the postal service to promote such services that it held seminars on the use of electronic signatures at the recent Cairo International Exhibition for Communications and Information Technology.
The document transfer service has been put to good use by the customs authorities at the ports of Alexandria, Damietta and Ain Sokhna, says Fahmy.
As head of Egypt Post, it falls to Fahmy to encourage not only innovation, but also a framework in which it can flourish. He identifies three areas in which the organization must develop: infrastructure, people and technology.
He explains that Egypt Post now has a unified digital network that connects to 2,600 outlets, along with two network operations centers, one in Ramses and the other in Smart Village. Almost all of the financial services are now on the network, he says, with some 90 ATM machines across the country.
Having built the hardware, Egypt Post is now in the process of developing updated software applications in partnership with German software company SAP. The German company was chosen based on its track record in providing the key business applications for Canada Post, the UK's Royal Mail, DHL and the US Postal Service.
In a development well suited to a modernizing institution, Egypt Post will be moving its headquarters from the historical surroundings of Ataba Square to the modern setting of Smart Village, home to an increasing number of high-tech companies and financial institutions. The current site will essentially become a museum.
"The money market will be over in Smart Village, as will the stock exchange. So we'll be in the heart of business," he says.
With all the changes taking place, Fahmy identifies human resources as the critical link in the chain.
"This is very important, very important," he says. "Twenty thousand staff have been trained over the last two years. The focus has been on soft skills such as finance, computers, languages and marketing. Actually, we have gained a lot out of this training, especially the younger staff members. They absorb very quickly, and they apply very quickly and very efficiently. For the older ones, of course, it's difficult to absorb new information."
Coordinating the elements of infrastructure, training and technology - or "info-structure" as he calls it - requires a great deal of effort. Fahmy says that he has a host of new developments pending, but they must wait until the proper foundations have been laid.
"As a matter of fact, I have here in my desk a lot of new services - around 15," he says. "Some of them are what I would call 'heavy-weight' services. One of them, for example, is providing financial services in euros, sterling and dollars, so that customers can bank their savings in foreign currencies. People in rural areas are particularly in need of such a service, as are those who work in tourism."
Fahmy identifies change management as a key part of his role as chairman. But while he gives the impression of being a motivating force, he says that decentralizing Egypt Post's operations has been an essential stage in the organization's evolution since he joined.
"We have had a full restructuring of the organizational chart. Back in 2006, I had only one vice president. Now I have eight. We have 34 managerial zones spread across the country, so I delegate all the operation decisions to the managers of these zones. They carry out the same basic functions, but their responsibilities are geographically distributed. It's zone management."
The effect of decentralization, he continues, is often to provoke resistance from his staff, and in some cases an initial decline in standards. However, he argues that given time the message gets through, and once local managers begin to take responsibility they become an asset.
"When you first start to implement decentralization in an organization, you may find that there is some bad practice for a while, or you may get negative feedback from various quarters, and your business may even slow down. But this is just during the start-up period. Be patient," he says. "Not everybody understands what decentralization means at first. Those people under your control, they have to understand that they are the ones who should have the authority to make a decision, not the chairman here in Cairo. This phenomenon took me six months to get past."
Surveying the achievements of Fahmy since his appointment, it might be easy to assume that his predecessors had been less than energetic in their visions. However, he describes Ali Moselhi, the previous chairman of Egypt Post, as a keen modernizer.
"Actually, I was a bit luckier than [him], because when I came back in 2006 the market was ready for open business and ready to boom," he says. "I started with the booming of the market, which meant I could expand in all sorts of directions in a very short time."
Talking to Alaa Fahmy, it is clear that he enjoys his work. Indeed, despite the hectic nature of his role, he still finds energy to act as chairman of the Maadi Club, a position that he says combines his twin passions of business and public service.
He is under no illusions as to the effort that will be required if he is to see his vision at Egypt Post through to completion, if such a notion is possible in this changeable industry. Implementing internal reforms across the board and responding to technological innovations, while finding ways to work with new commercial players, will necessitate a certain amount of juggling.
In a sense, though, this somewhat hectic environment is Fahmy's element. The engineer in him thrives on exploring new applications for technology as his public service ethic prompts him to tailor services to customers' needs. All the while, the businessman in him keeps a keen eye on the bottom line.
Seated behind his desk, Fahmy exudes a calm confidence, and one can't help feeling that those past chairmen watching from the wall must be doing so with a certain amount of approval.
By David Stanford
© Business Monthly 2008
