Australia Post is a prime example of a traditional business that has been severely disrupted by digital technologies.

Now, after an expansive two-year rebuild of its IT operations, it is fast becoming a case study on how to tackle the challenges posed by disruption head-on.

In 2013 - when the IT rebuild began - Australia Post revealed in a fact sheet the extent to which digital technologies were reshaping its core businesses.

Letter volumes fell by a billion units between 2008 and 2013 as digital alternatives such as email became more popular, and people subsequently stopped going to Post's retail stores, the fact sheet stated.

However, parcel volumes were climbing between 8 and 10 percent a year, "entirely driven by online shopping". In fact, AusPost estimated 70 percent of all parcels it handled came out of some form of online transaction.

Critically, though, parcel growth was not going to save AusPost if it did not act: the company expected "the losses from its traditional letters business [to] overwhelm the profits made in its parcels and retail business by 2020", the fact sheet stated. The company was also concerned that dipping revenues would stunt its ability to invest and grow.

Enter 'Building Future Ready IT' - a two-year transformative program designed to secure the future of Australia Post in a digital world. The program began in 2012 and was completed over the Australia Day long weekend in 2015.

It consisted of five work streams - building faster and more cost effective technology foundations; implementing a new customer-centric IT operating model; a new Digital Delivery Centre for the delivery of mobile and online products and services; IT leadership and training; and a new approach to information security, 'Secure at Post'.

Some 63 individual projects made up those five work streams. Australia Post's general manager for service integration and operations Claire Bourke and her team looked primarily at the technology foundations stream.

"This was our technology transformation program to respond to the needs of our business, our customers and employees," Bourke told the Australian Data Centre Strategy Summit 2015 on the Gold Coast last week.

Bourke said the change agenda her team drove has "touched every part of our infrastructure and beyond".

She said while change was in Australia Post's DNA, the company needed to make a "step change" in its thinking on IT.

"We had to - we were being disrupted significantly and we had to move quickly," she said.

Transformation ingredients

The new IT foundations are significant.

"The first part of that was our enterprise compute program - providing [the business with] faster, cheaper access to highly available compute services," Bourke said.

The company consolidated a number of older data centres and computer rooms into two outsourced facilities - run by NextDC and Fujitsu - in Melbourne. The centres are connected with fibre and run in an active-active mode: that is, they share production workloads, rather than operate in a traditional primary-secondary fashion.

It's a major infrastructure change for Australia Post: the company's former national data centre - now decommissioned - in West Melbourne used to require an "outage in excess of 36 hours" every two years to perform maintenance.

"[This is] not acceptable in a digital business," Bourke said.

The company also transformed its network and mobile and telephony services used by its corporate offices and retail stores.

"We transformed this to provide the business with service choice and ensure that they could get the products and services that were fit-for-purpose for their business," Bourke said.

"We weren't dictating any longer what services they needed."

Another piece the company "re-imagined" was the desktop environment - "how we would deliver end user computing services as a key enabler for productivity and collaboration across the organisation".

It also performed an "enormous asset lifecycle refresh" of IT equipment, refreshed its IT storage and other key platforms, and built new foundations for information and analytics.

And finally, AusPost in-sourced and "uplifted" its IT service desk "to drive business satisfaction".

"We saw that as paramount for driving the right outcomes and supporting this level of change," Bourke said.

"We built out our service management capabilities to the point now where we've got a level of maturity and we're now focusing on service transparency and providing cost and showback to our business."

Head first into cloud

One of the major business changes that Australia Post plans to drive using its new technology foundations is increased use of cloud systems.

"We developed a cloud-first intent," Bourke said.

IT now offers a suite of internal tools called Cloud Aware that enables internal users to work out how to build new applications to run in the cloud, and what existing applications might also be suitable to run there.

The company has also achieved other returns on its investment: it can deploy infrastructure faster to support new business projects, and has reduced its carbon footprint by shutting down old facilities, retiring older IT equipment, and shifting to newer data centres with green credentials.

"The benefits are there," Bourke said. "This is just the start".