The Department of Posts (DoP) is planning to revamp pricing for all its products and services, to enable the department to price its offerings competitively in the current scenario and increase its customer base.
It plans to appoint a consultant to undertake this project and has invited Expression of Interest (EOI) from interested companies.
“In this era of fast developing information and communication technology, large-scale induction and assimilation of modern means of communications and reporting has become vital for sustenance and growth of the Department of Posts. It is felt necessary to revamp the present costing methodology adopted in the department,” the EOI document for the project, ‘Modernised Costing System’ said.
The new costing methodology will be based on actual consumption of resources and should reflect opportunity cost, besides considering various ways of allocating fixed cost so as to give optimum costing of products, the department said. It will also reflect the best costing practice used in case of joint pricing of products and that adopted by other postal administrations in the world.
The consultant will also be responsible to develop a system to collect data for traffic, revenue and expenditure with respect to each service and product separately. Besides, it will devise a costing system for segmented report for premium products, foreign mails, agency services (such as savings bank, cash certificates, pension and payments among others) and traditional services offered by the department.
The whole exercise will enable the department to analyse the cost and profitability of each service. The new costing method will then form a basis for management of pricing of products.
According to the plan, the DoP will pilot the new methodology in two-three segments for one to two years. The consultancy firm should be in the business of costing and pricing and have a global experience of at least 5 years, including having worked with other postal administrations and its annual turnover should not be less than Rs 50 crore in the last 3 years.