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The U.S. Postal Service expects to ship 20 billion packages and letters this holiday season. Behind that massive workload is an equally massive VPN that is at the forefront of telecom industry trends, including dual sourcing and long-term contracting.
USPS has one of the largest networks in the world, connecting 38,000 locations nationwide and supporting 335,000 users. It spends around $180 million per year on its network infrastructure.
USPS overhauled its data and voice networks in 2006. The independent federal agency renegotiated and expanded its primary data network contract, while using a secondary contract to upgrade 3,000 sites. The outsourced network is being upgraded to support T-1 and above connections at all of its sites.
``In the last year, we upgraded almost everything, got additional services and saved $22 million,’’ says Robert Otto, CTO of USPS. ``For the next three years, we have achieved $73 million in cost avoidance because of the contracts [awarded this year]. I’m not only increasing my capabilities, but I’m avoiding additional costs.’’
For USPS, the network is critical for processing, delivering and managing mail movement. So much of the organization's operations are automated that if a post office were to lose its network connectivity, it would have to switch over to an old-fashioned manual process for handling mail and retail transactions.
``The network is either your strength or your weakness,’’ Otto says. ``It’s really key in our organization because we want to move to self-service to allow employees and customers to do almost everything for themselves. If you don’t have a robust network, you have a problem.’’
USPS was an early advocate of network outsourcing, awarding a contract to MCI to handle its WAN infrastructure in 1997. The contract, dubbed MNS, for Managed Network Services, worked well for USPS until MCI’s parent company WorldCom hit the financial skids in 2002.
| 5 penny-pinching tips Robert Otto, CTO of the U.S. Postal Service, has the reputation of being a penny pincher when it comes to negotiating contracts with vendors. Otto offers the following tips for driving down costs on network contracts: |
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That’s when Otto decided that it was too risky for USPS to stick with MCI -- now Verizon Business – as its only network service provider.
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Comments (2)
'Tis the season for the U.S. Postal Service network to deliverBy Anonymous on December 26, 2006, 4:45 pmWhat Bob does not mention is the fact that he is killing local tech support. Do you know what it is like to have 3000 users over a large geographical are and have...
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Looks like BobOt's publicBy enuf is enuf on December 28, 2006, 10:11 amLooks like BobOt's public relations rep (paid for by the Postal Service by the way) is hard art work again. I'm so sick of this man.
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