USPS centralizing its network

The U.S. Postal Service says it will save $200 million over the next five years by substantially simplifying its internal computer network.

With 130,000 users in 28,000 locations, the USPS network is the third largest in the world, surpassed in size only by retailer Wal-Mart Stores Inc. and the Defense Department, postal officials say.

But plans call for extensive centralization and simplification.

The network today has 13,000 servers at 11,000 sites, but when the overhaul is complete, there will be 1,500 servers at about 500 locations, according to two Postal Service officials, Bob Otto and Larry Wills.

Of today's 85 help desks, 84 will be shut down, leaving just one, said Otto, the Postal Service's vice president for information technology. Aside from saving money, the cut will eliminate the problem of getting 85 different opinions on how to fix a problem, he said.

And in place of 270 software packages now in use throughout the Postal Service, there will be just 60.

"We're migrating away from client/server architecture to Web-based," said Wills, who is overseeing the network overhaul. The Postal Service can achieve substantial savings by reducing the number of network components that reside "out in the field" and moving functions to a few central locations, he said.

The new infrastructure has been named the Advanced Computing Environment, or ACE.

Savings also are anticipated from replacing outdated workstations with much simpler ones, Otto said.

Today's desktop computers loaded with programs are to be replaced with simpler terminals using programs that reside in a central server and are accessed over the Postal Service network, Otto said.

These new terminals will be essentially "self-installing," he said. Postal employees will plug them in, hook up to the network, and software automatically will complete the installation, a development designed to dramatically cut support costs.

Similar savings are anticipated when computers break. "We're moving to almost disposable workstations," Otto said. Because computer costs have declined significantly in recent years, it can cost more to send a repair technician to a remote Postal Service location to fix a malfunctioning computer than it costs to ship a replacement terminal. In the future, broken computers may be scrapped more often than repaired, he said.

And with plans for fewer servers at fewer sites, the Postal Service has been able to renegotiate maintenance and service contracts, in some cases by more than 30 percent, Otto and Wills said.

Otto and Wills said the ACE program goal of "replacing the entire infrastructure" while saving $200 million is remarkable for a government agency, and it's even unusual for a business. The program requires no new funding and instead uses annual operating funds, a Postal spokesman said.

But even $200 million in savings over five years — an average of $40 million a year — will do little to help the Postal Service, which is expected to lose $1.5 billion this year after losing about $1.7 billion last year.

"It's pocket change," said Charles Guy, former director of the Postal Service's Office of Economics and Strategic Planning. But the computer system upgrades "could be very valuable" if they improve the Postal Service's ability to use data to make better management decisions, he said.

Data collected by automated operating systems such as its automated sorting equipment could be valuable for improving USPS productivity, he said.