Even though most traditional business intelligence implementations are in various states of fruition, there's plenty of talk about how businesses now need to spread BI to the ends of the organization. In his keynote address at our recent BI Forum in Phoenix, FedEx CIO Rob Carter demonstrated why his corporation finds it critically important to do both. FedEx, which posted FY04 revenues of $24.7 billion, will spend more than $1 billion on technology this year. Much of that will go to improving worker productivity and reducing cost, though Carter will tell you this is not the most important contribution to his company's successful use of information.
"The first thing we attempt to do with technology is improve customer satisfaction because that is how we gain competitive advantage," Carter says. "It is absolutely critical to us that our customers are able to get the information they need and that we use information tools to make FedEx easier to do business with." Some of this is self-evident. The one thing FedEx does a lot is pick up packages and put them down somewhere else. But with 663 planes taking off or landing every 45 seconds, information availability at many levels is a must.
"BI used to be the world of reporting and the data warehouse was about what happened," Carter says. "The next phase was to analyze why something happened. The next thing was to predict and plan for what will happen. Some of the new things I think real time data planning is providing are operationalizing information, basically taking very current information and using it to drive active decision support."
At FedEx, decision support starts with the customer. Carter's first mission is to improve customer productivity by building technology directly into external working processes. For example, FedEx builds technology into the SAP, PeopleSoft or core fulfillment platforms at customer sites. FedEx also recently launched a .NET Web service that embeds itself in the Microsoft Office platform, where dropdown menus open up the world of FedEx and Kinkos within working processes managed in Excel or Outlook. The success of this effort is also self-evident: Fedex is enjoying 20,000 downloads of the .NET software each week. For FedEx, self-service reduces the cost of customer requests for information from dollars to about two cents per interaction, (which accounts for the total cost of FedEx.com).
Customers have dictated their preference for online self-service, but equally important are points of intersection between FedEx employees and customers. Here, the sales force is empowered with PDA applications and tablet devices that allow reps to not only make presentations, but answer questions. "It's good for the customer to have an account representative who's well-appraised of their business," Carter says. "We can drive all kinds of innovation to the sales execs, dashboards that help them highlight information about opportunities and risks they might have. We might notify them about a volume drop-off, really we try to give them signals every day."
We mentioned that Carter also has a traditional appreciation of data. Though customer satisfaction comes first, a BI backbone is required to address highly fragmented resources. Known mostly for its Express service, FedEx is also Kinkos, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Services et cetera. The company is a big Teradata shop with 286 billion records loaded and 300 million records arriving each day. "It's an intense environment that is becoming more real time, much more current information that is broadly available not only to analysts and marketing, but to customer service," Carter says.
Financial information is a classic BI environment that has been broken down to package level profitability at FedEx. Carter drives this up to find how profitable New York is versus Shanghai or Anchorage, and uses the information to see how the company can make each more profitable, perhaps through bundling or dynamic pricing models. This kind of front line reporting goes straight back to the corporate level. "Any cost accounting system has to understand how much it costs for a courier to drive a mile, what it costs to go from Toledo to Memphis," Carter says. "You have to address the same touch points you are measuring."
Customer-facing applications, data warehouses and BI empower pretty much everything that gets done at FedEx, from financials to pilot certification to constant safety certifications. "It's not just decision support and business intelligence and KPIs coming out the back, it's right in the core of our production systems," Carter says. "I really think there has to be a bridge between the two things, you can't just do one and have the potential for success you need."
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