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The Strategic CIO by Philip Weinzimer

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335
16
How fedex leverageS
tecHnology StrategIcally
to Innovate value
e information about the package is as important as the package itself
1
Fred Smith
Founder and CEO of FedEx
FedEx is an innovative company. Leveraging technology to innovate
value is at the core of the company DNA. At a time when the mass
production era was winding down and the phrase consumerization of
technology was not even a sparkle in anyone’s thoughts, Fred Smith
had a vision of using airplanes to deliver packages in 24 hours. Today,
this 46 billion dollar company is revered for its innovative ideas.
OVERVIEW
is chapter describes the evolution of FedEx and its use of tech-
nology to innovate value. e chapter is structured as follows:
Brief history of FedEx
How Rob Carter, CIO, transformed IT, through a four-
stage transformation model, into a strategic organiza-
tion leveraging technology innovatively
How Ken Spangler, senior vice president of IT respon-
sible for FedEx Freight and FedEx Ground, leads the IT
group and his innovative use of technology that trans-
forms how freight moves through the delivery handling
process
How David Zanca, former senior vice president of
Customer Access Solutions, leverages technology to pro-
vide a superior service experience to FedEx customers
336
the strategiC Cio
Brief History of FedEx
Imagine sitting in the oces of Charles Lewis Lea, Jr., executive vice
president at New Court Securities Corporation in 1971, a private invest-
ment bank in New York, and listening in on a phone call with another
investment banker who talked about “an intriguing opportunity in
Memphis.” e discussion focused on a “28 year old, ex-marine captain,
a Vietnam veteran with a silver Star, a Yale graduate, who had started
with his own money a small-package airline with great potential.” (ibid)
e 28-year old was Fred Smith, founder of Federal Express, who at the
time needed investment capital to expand his business. Smith developed
the concept of a consistent and reliable service while attending Yale.
He came up with the name Federal Express based upon his desire to
get a contract transporting checks and other documents for the Federal
Reserve System. Smith wasn’t awarded the Federal Reserve contract,
but as a result of a follow-up meeting with Lea, and a series of research
studies, Smith received his funding. On Tuesday, April 17, 1973, a small
eet of 14 aircraft delivered 186 packages to 25 cities within the United
States. Getting to that point was no small feat. Today, the daily number
of packages is in the millions, and the aircraft eet is now comprised of
650 planes ying out to 375 airports around the world.
2
Ever since that day in 1973, Federal Express started delivering pack-
ages overnight, and that continues today with FedEx team members
delivering exceptional customer service. Fred Smith always believed that
the company had to develop a unique relationship with its employees if it
were to become and remain a leader in the express cargo transportation
industry. Smith was determined to make employees an integral part
of the decision-making process, due to his belief that when people are
placed rst they will provide the highest possible service, and prots will
follow.”
3
is is the foundation of what FedEx calls the People–Service
Prot (PSP) philosophy and was the foundation of the business.
How Doug Bonebrake, former IT manager of FedEx
Services, uses innovation, in its simplest form, to dramat-
ically improve the quality of IT-developed applications
What you should remember from this chapter: Summary
and key learnings

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