Royal Mail has reskilled half its IT department and retooled its 10-year outsourcing deal with supplier CSC to get a stronger focus on software development.

Central to the postal service’s £1.2bn change agenda is the rollout of a Siemens-supplied automatic mail sorting system scheduled to go live at its mail centres and delivery offices in September.

The platform is the backbone of Royal Mail’s service overhaul, which will be followed by a number of customer-focused initiatives such as minute-by-minute parcel and letter-tracking, and projects aimed at internal optimisation, such as telemetry and scheduling of staff, trucks and aircraft.

To support the demand prompted by the service overhaul and the legacy systems yet to be replaced, chief information officer Robin Dargue launched a business capability review which shed almost half the 300-strong permanent IT workforce but created about 100 new core IT roles.

“The goal is transform to survive ­ - it is that stark,” he said. “After establishing what we needed to do with technology, I asked myself whether we had the right mix of skills and capability to undertake this transformation.

“During the review, it emerged we needed roles we did not have ­ because we had never done anything this large ­ such as software architects, programme managers, security experts and business analysts.

“We identified some people to retrain and they are moving forward. Others perhaps were not up for it, so their career choices had to lie elsewhere. But if the core material is there, I will invest in the right talent.”

Royal Mail is five years into its 10-year outsourcing contract with CSC, which was reviewed late last year in relation to “monies Royal Mail wanted to pay for extra services and some services that were no longer required”.

Earlier this year, Computing revealed Royal Mail was tendering for up to £40m-worth of consultancy contracts to support its outsourcing deal with CSC. The move was triggered by “simpler consultancy framework agreements”, expected to reduce project timelines.

“We will see more activity around application development and CSC knows that,” said Dargue. “I like to have competition to ensure we have a range of great capability and partners. It is just sensible, and there is a lot to be done.”