Smart Enterprise Magazine

Volume 7, Number 1, 2013

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Up Close Senior Transportation Analyst at Avondale Partners, a Nashville, Tenn.-based research and analysis firm. ���When people want to ship something, they say, ���I need to FedEx it.��� To get to that stage, you have to be maniacal about delivering service. Technology allows FedEx to both manage those millions of packages every day and give customers the visibility to see where their packages are at any time.��� Recently, FedEx got the attention of CIOs by doing something that might cause most IT managers a string of sleepless nights. Over the past two years, FedEx has been managing an ambitious and far-reaching modernization of its IT operations. Today the company is well on the way to completing the project, which involves rolling out a private cloud infrastructure that provides on-demand IT services across the enterprise. And despite the many technologies and areas of IT expertise required to pull off a project of this scope, it���s FedEx���s customer-focus, not its technical prowess, that company officers say is driving the effort. ���Customer service is part of FedEx���s DNA,��� says David Zanca, Senior VP of Customer Access and Revenue Systems at FedEx Services, a group that supports the company���s main business units with IT, sales, marketing, customer service and supply chain services. ���The customer has always been top-of-mind.��� photograph: Kim Kulish Cloud Payoff FedEx���s transformation to cloud computing also closes a chapter in the company���s 30-year strategy of building and assigning dedicated IT resources to each business system. Instead, applications now tap into processing power from a central pool of computing power. In turn, this is transforming how FedEx creates and supports future generations of customer-facing applications. The project will also have a significant effect on the FedEx developers responsible for creating new applications to meet customer demands. Programmers will be spared a great deal of the time and effort they had formerly devoted to specifying unique computing environments for individual applications. Instead, they���ll just tap into the private cloud for the necessary resources. That means more time for innovation and fewer hours spent on housekeeping. ���We won���t have to wait to provision equipment,��� Zanca explains. ���My internal cloud provider will have the resources available as we need them. We can concentrate on building outstanding core services for consumers. Ultimately, the end customer sees more functionality and more services coming to market as a result of these changes. We���re going to be able to innovate and go to market faster. And if we can appeal to customers, satisfy their needs and in the process deliver unique services, that becomes a competitive advantage for us.��� Zanca isn���t tipping his hand about specific new services on the horizon, but future innovations may focus on creating seamless customer experiences as clients interact with the company across its various sales and communications channels. Although customer experience has recently become a hot topic for some enterprises, it���s an established business strategy at FedEx. Zanca says the company has long followed the mantra, ���compete collectively, operate independently and manage collaboratively.��� So even though the company consists of separate operating units, he adds, ���we appear to our customer as one company.��� The transformation isn���t yet complete, but FedEx is already seeing important benefits. The experts on the implementation team helped the effort to eliminate repetitive interfaces, redundant data FedEx and duplicate resources that existed in the old infrastructure. For example, in some cases multiple systems stored duplicate customer records, which called into question the accuracy of individual files. Now, FedEx is implementing a common service that makes the information available across the enterprise and acts as a single authoritative source for key data. FedEx���s track record for IT innovation is also helping the bottom line. ���When you look at the number of packages moved per dollar of labor, labor costs haven���t changed that much in the last 18 months, but FedEx is enjoying a good two to three percent a year increase in productivity,��� Broughton of Avondale says. Roadblock Clearing Zanca is well aware of the challenges such an ambitious effort involves. ���When you undergo a transformation like this, the cultural changes may be the biggest considerations,��� he says. ���The toughest thing is making sure you get buy-in. And when you do get buy-in, you must drive the true value.��� FedEx at a Glance n Headquarters: Memphis, Tenn. n BUSINESS: Worldwide transportation, e-commerce and business services, including operations for express, ground, freight and air deliveries n REVENUE: (2012): $42.7 billion n Headquarters: Employees worldwide: 290,000 n VISITORS TO FEDEX.COM: 3 million a day, on average n B USINESS VOLUME: 9 million shipments a day, on average Data: FedEx Corp., 2013 Getting buy-in requires executives to understand that there���s a flip side to the advantages of freeing developers from defining dedicated computing resources for their applications. When developers relinquish control, they must trust the cloud team to supply a virtual environment that���s powerful and reliable enough to support the core business systems. Also, everyone in IT must look beyond his or her specific responsibilities to consider the impact of a virtual environment and common business services on all areas of the organization. ���We���re asking our folks to think more horizontally from an enterprise perspective,��� Zanca says, ���rather than just supporting one business function or operating company.��� The modernizations FedEx is now undertaking are part of a heritage that began more than 40 years ago. ���Change just keeps coming faster and faster,��� Zanca says. ���Even as we migrate our architectures today, we realize there���s always going to be another new architecture down the road. There will be a point where we will declare victory in what we���re working on today, and then we���ll move on to the next set of evolutionary changes.��� For FedEx, it���s another day, another 9 million packages. n Alan Joch is a business and technology writer who specializes in cloud computing, virtualization and enterprise applications. 2013 ��� Smart Enterprise 23

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