• on May 12th, 2014 in Ideas Worth Exploring | 1 comment

    Maybe you’ve seen the television commercial with a clueless couple sending their household items up in a hot air balloon to be stored “in the cloud.” It’s funny, but also holds more than a grain of truth. Many of us don’t fully understand the cloud. So we might not realize its promise or potential hazards.

    Cloud computing uses remote Internet servers to manage, store, and process data or content. If you use Facebook or Shutterfly, you are using cloud computing. These kinds of cloud computing applications are attractive because they help users free up computer space, keep better track of their photos or music, or organize their files.

    Businesses and federal agencies are also relying more on cloud computing because it reduces costs and increases efficiency of services. You just turn on the application as you need it, or “on demand.” Some people have compared cloud computing to a utility, such as an energy company. All you do is plug in and you are ready to go. The energy company handles the details of generating electricity at the power plant and the customer just turns on the switch and uses it.

    But cloud computing also comes with risks of data leaks and loss of public trust. This is especially vexing for government agencies, which have turned to the cloud to help them do more with less. The Council of Inspectors General on Integrity and Efficiency (CIGIE) has attempted to guide federal agencies in their cloud computing contracts with a memorandum that included areas of information accessibility, data security, and privacy concerns, among others. The U.S. Postal Service recently updated its handbook, Cloud Security, and established information on security policies and requirements to protect its information in a cloud computing environment.

    Recently we audited 13 Postal Service cloud computing contracts and found the contracts did not address information accessibility and data security for network access and server locations. Why? Because these contracts were established under the Postal Service’s older handbook and did not have the stronger controls of its newer Cloud Security handbook. They would have benefited from the Cloud Security guidelines on information accessibility and data security gaps, our report noted.

    If not implemented correctly, cloud computing runs potential security risks, such as the loss of customer information, and could hurt the Postal Service’s reputation as a trusted agency, which in turn would harm its brand. Yet cloud computing can streamline processes, reduce spending on technology infrastructure, and improve flexibility, among other benefits. The key will be employing the right security controls.

    Share your thoughts on cloud computing and what role the Postal Service might play. Do you have privacy or security concerns in maintaining information in the cloud? 

  • on Mar 3rd, 2014 in Ideas Worth Exploring | 4 comments

    Canada Post shares a number of similarities with the U.S. Postal Service, including its founding by Benjamin Franklin in 1753 when both Canada and the 13 colonies were under British rule. Both posts are self-supporting, meaning they pay for their operations through the sale of postage and services. And Canada Post, like the Postal Service, has suffered volume losses the past few years.

    Here’s where things get different, though. Canada Post has adopted a radical plan to restore its financial health, featuring bold initiatives that might seem too politically difficult in the United States. Canada Post’s five-point plan is intended to streamline operations, cut costs, and return the corporation to fiscal self-sufficiency by 2019.

    The plan features:

    1. Ending to-the-door residential delivery over 5 years. Two-thirds of Canadian residents already are without to-the-door delivery, so, while it is a major change, perhaps it is not as disruptive as it would be in other countries.
    2. Upping the price of postage. Bought in bulk, stamps that now cost 63 cents (CAD) will be 83 cents. Bought singly, the same stamps will cost $1. The increase still needs approval from the regulator.
    3. Streamlining via franchise post offices. Franchise post offices are more convenient for customers and less costly to operate. There’s a moratorium, however, on closing existing rural post offices given their popularity among customers.
    4. Increasing efficiency. Consolidation and technology improvements, including faster sorting equipment and more fuel-efficient vehicles, should improve operations. No resulting changes are expected in the corporation’s fairly relaxed 2- to 4-day delivery standard for letter service, yet parcel delivery is expected to improve.
    5. Reducing labor costs. Along with the service cuts, Canada Post said it would eliminate 8,000 jobs, mostly through attrition.

    Canada’s plan has met with criticism from opposition political leaders, labor unions, and some citizens. But Canada Post defends the plan saying without major operational changes it will lose $1 billion a year starting in 2020. It also faces a $6.5 billion pension fund shortfall.

    What could the United States learn from the Canada Post plan? Are some of these initiatives worth trying in the United States? Or are they not the right approach for the U.S.? What cost-cutting and revenue-generating ideas should the Postal Service focus on? 

  • on Jan 29th, 2014 in Ideas Worth Exploring | 11 comments

    Could the U.S. Postal Service help the nearly 70 million Americans who are cut off in some way from the mainstream financial system? We’re talking about people who, because they lack ready or full access to normal banking services, paid $89 billion in fees and interest to alternative financial service outlets such as payday lenders and check cashers in 2012 alone. They are the financially underserved – also known as the underbanked or unbanked – and many of them are one unexpected expense away from bankruptcy or homelessness.

    According to our recently released white paper, Providing Non-Bank Financial Services for the Underserved, not only can the Postal Service help the financially underserved, but it is also well-suited to the task. For starters, the Postal Service network extends to every community across the country. And while the Postal Service already offers money orders and international money transfers, the paper identifies a suite of additional services and products the Postal Service could develop, mainly through partnerships with banks:

    • Payment services
    • Reloadable prepaid cards
    • Options for mobile transactions
    • Access to small loans

    By offering these kinds of services, the Postal Service could help bring financial stability to millions of Americans. It could also generate income: Even if only 10 percent of the money paid in interest and fees were instead spent on less-expensive Postal Service alternatives, the Postal Service would realize $8.9 billion in new revenue.

    Moreover, when you consider that 59 percent of post offices are located in ZIP Codes that have only one bank or none at all, and that surveys repeatedly demonstrate the public’s unmatched trust in the Postal Service, developing non-bank financial services would not only meet a market need, but also fulfill a public purpose.

    What do you think? What types of non-bank financial services could the Postal Service provide to help address the needs of the underserved? 

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