Reducing Complexity in An Interconnected World A Conversation with FedEx CIO Rob Carter
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Interview Mike Cooke Reducing Complexity in An Interconnected World A Conversation with FedEx CIO Rob Carter
Contact Information
Beirut Frankfurt
Ramez Shehadi Stefan Stroh
Partner Partner
+961-1-336433 +49-69-97167-423
ramez.shehadi@booz.com stefan.stroh@booz.com
Canberra Olaf Acker
David Batrouney Principal
Principal +49-69-97167-453
+61-2-6279-1235 olaf.acker@booz.com
david.batrouney@booz.com
London
Chicago Louise Fletcher
Mike Cooke Partner
Partner +44-20-7393-3530
+1-312-578-4639 louise.fletcher@booz.com
mike.cooke@booz.com
New York
Kumar Krishnamurthy Jeffrey Tucker
Principal Partner
+1-312-578-4613 +1-212-551-6653
kumar.krishnamurthy jeffrey.tucker@booz.com
@booz.com
Washington, DC
Jordan Milner
Senior Associate
+1-703-902-7186
jordan.milner@booz.com
Booz & CompanyEXECUTIVE FedEx Corporation, the $38 billion package delivery company,
operates in a highly competitive business environment, where
SUMMARY
speed is, literally, of the essence. Yet speed isn’t just about
getting customers’ packages to their destinations quickly. Rob
Carter, FedEx’s longtime CIO, likes to quote FedEx Founder
and Chairman Fred Smith: “The information about the pack-
age is as important as the package itself.” Getting that informa-
tion to customers as fast as possible, by every means possible, is
critical to the company’s present and future success.
To that end, Carter is engaged in a major renewal of FedEx’s
technology architecture with the goal of reducing complexity
and increasing connectivity. Complexity is the enemy of speed:
It slows down the delivery of vital information to customers
wherever they are, and it hampers the speed at which new
information solutions can be brought to market. By reducing
the number of technology platforms, and the plethora of redun-
dant applications based on those different platforms, Carter
hopes to simplify the development of new information products
and give customers the consistent information they need.
At FedEx, reducing complexity involves completely rethink-
ing the company’s business processes to keep them aligned
with the new architecture. Carter’s team has taken the lead in
that effort, because it alone possesses the overall perspective
needed to understand the complete business process picture.
That approach might lead to friction at many companies, but
thanks to FedEx’s strong technology-oriented culture, Carter’s
business partners fully support his efforts.
Booz & Company 1INTRODUCTION quote his boss, Frederick W. Smith,
FedEx’s founder and chairman, who
said back in 1978, “The information
about the package is as important as
the package itself.” A 15-year veteran
of FedEx who became CIO in 2000,
Top executives have recited the cliché Carter lives and breathes that truth
hundreds of times: “We’re not a every day.
bank, or a store, or a widget maker.
We’re a technology company.” If Carter’s greatest challenge? Using
that claim is true of any company, IT to maintain FedEx’s competitive
it’s FedEx Corporation, the package advantage over its aggressive rivals.
delivery giant with sales of $38 billion To that end, he has undertaken
in 2008. Every business day, FedEx’s a major renewal of his firm’s
290,000-plus workforce handles technology architecture in hopes of
more than 8 million shipments to and reducing complexity and increasing
from 220 countries, with the help connectivity. His success so far is a
of close to 700 airplanes and more
than 80,000 vehicles. Despite the
tribute both to his hard work and
to the willingness of his business
Q&A
tremendous volume, customers can colleagues to support his efforts.
easily learn the whereabouts of every Mike Cooke, a partner in the Chicago
one of those packages. office of Booz & Company, recently
chatted with Carter in his Memphis
The monumental task of developing office about FedEx’s IT renewal Booz & Company: Since you
and maintaining the technology that program and how the company’s became CIO, FedEx has experienced
knits it all together falls to FedEx “information technology culture” tremendous growth, and revenues
CIO Robert B. Carter. Carter likes to has helped sustain that program. have almost doubled. How has
that growth affected the company’s
underlying technology?
Rob Carter: Back in the day, provid-
ing information about the package
through the package tracking system
was so revolutionary that it kind of
dazzled our customers. But, frankly,
today those are just table stakes—
customers just expect that level of
information. As we’ve grown, both
organically and through acquisitions,
we’ve put together a family of systems
across our operating units around the
world that is increasingly difficult to
manage. The complexity that vexes us
today in being able to rapidly deliver
new solutions to the marketplace has
become a critical challenge, one that
I’m spending a lot of time on.
2 Booz & CompanyIt seems that many CIOs struggle To that end, what efforts are gies we’re using now are inherently
with complexity, given the inflexible, you taking to manage and reduce bad. All of them were implemented
outdated legacy environments they’re complexity? with good rationales. But at the end
saddled with. How did you approach of the day, you have to make tough
this problem? We have an initiative under way that’s choices about what you want to go
focused on simplifying our applica- forward with. So we’re very intention-
As they say, “God was able to create tion portfolio, rationalizing it so ally narrowing our platform choices
the world in six days, but he didn’t that there aren’t lots of redundancies and our application base.
have any legacy to deal with.” in our application set. We recently
completed a very detailed inventory We are finding that the more modern
Reducing complexity takes a lot of of all the applications we have around programming languages, the more
courage. You have to decide that it’s the globe, and determined which ones modern platforms, are very flexible
absolutely critical to create some sim- overlapped, performing similar func- about being able to be ported from
plicity and ease of execution. Reducing tions. Once we acquired that level of Linux to Unix to Microsoft for
complexity really matters not only in detailed information, we were able to implementation. But that only makes
terms of speed to market but also in put together a road map giving us a choosing the right platform even more
how you serve your customers, because clear line of sight to what we needed difficult. When you’ve added a lot
they end up feeling that complexity to do to simplify our application port- of redundant applications, through
too. They end up seeing the seams that folio. We’ve targeted some applica- acquisition or other ways, and you’re
exist from past acquisitions in ways tions for modification to make them trying to narrow that footprint,
that are uncomfortable to them. That’s better for the global enterprise, and probably the worst mistake you can
not what they expect from FedEx or others for elimination entirely. make is trying to get down to just one
what we expect from ourselves. “über-application,” and try to adapt
What we’re aiming for is consistency. that application to all the various
So far, I think we’ve done a very good One of the problems that we’re facing business processes that existed in the
job of hiding that complexity from in our renewal efforts is that we have old applications.
our customers. But as time goes on too many different choices from a
and complexity piles up, we need to platform standpoint and from an The most difficult part of the journey
reduce it so that it’s not obvious to architecture and application stand- is that we have to simplify our
customers at all. point. None of the platform technolo- business processes at the same time
“Reducing complexity really matters
not only in terms of speed to market
but also in how you serve your
customers, because they end up feeling
that complexity too.”
Booz & Company 3as we’re adopting fewer application the many different ways the company faster, we can be better, we can pre
platforms. But if we were to just pick performs the same process. She’s just sent a better customer experience at
one platform and one application happy with the way her own system the end of the day.”
and try to force them to manage all does it today. So some of the heaviest
the complexities that are inherent in lifting in our renewal efforts is hold- It really helps that FedEx has a
our business processes today, we’d be ing a mirror up to the entire company strong culture around IT. I consider
making a big mistake. and saying, “We do this particular one of my primary responsibilities
process eight different ways across the to keep that culture strong by making
I assume that rethinking your enterprise. That doesn’t add value to the business leaders here at FedEx
business processes is a huge part our customers, and it’s not strategic IT savvy. We do that in a number of
of the renewal effort. Who is leading to the way we do business. It just ways. We provide them with a lot
the business process change? adds costs and complexity. So we of IT support in their lives, in their
need to choose one way, and go do it homes, when they’re on the road,
IT is. We have to. In just about every that way.” We don’t just dictate a new when they’re in the office. We give
business I know, IT provides a very business process. We try to add value. them great tools like BlackBerrys
strong lens into the way the business that tie into their desktops at work,
works. IT didn’t sit back and dictate What other challenges have you faced which gives them access to their
how all our systems will work. in your IT renewal efforts? performance dashboards and
We basically worked with the busi- other information.
ness and said, “We want to provide Probably the most difficult thing
you automated processes and auto- we’ve done to date is getting our Because our business partners and the
mated capabilities.” But now at the business partners to understand the people we work with day in and day
macro level, when you sit back and importance of reducing complex- out get it. How IT works is not a mys-
look at all the systems and how they ity and how doing so will allow us tery to them. I never say things in our
work and how they are interfaced to lower IT costs as well as improve strategic management meetings like
to provide broad, enterprise capabili- speed to market. They, too, can feel “You guys don’t need to worry about
ties, you’ve got this marvelous lens the pain of a bloated IT infrastruc- the IT stuff—we’ll go take care of
that shows you all those different ture. It’s been really important to that.” I think CIOs and IT profession-
business processes. us to point out those examples and als make a big mistake in making IT
make clear that it can be better than some mysterious, behind-the-curtain
An employee who’s living in only one this. We tell them, “If we spend the thing. I like putting our IT issues right
of those business processes doesn’t time and the money to invest to out in front and letting the business
see all the complexity around her, all simplify our IT portfolio, we can be help deal with them, because every
“I like putting our IT issues right out
in front and letting the business help
deal with them, because every
business decision drives an IT event.”
4 Booz & Companybusiness decision drives an IT event. Absolutely. There are 3 billion con-
So we have to be partners in being nections to the Internet today around
able to move the business forward. the globe, creating a degree of con-
nectedness in so many different ways
The idea of an information that never existed in the past. That
technology culture is compelling. connectedness allows you to simplify
What advice would you offer other business processes, to get answers to
CIOs to help them create an IT questions, and all of this information
culture at their companies? is available at our fingertips A great
deal of our technology takes advan-
First of all, you need a CEO who tage of this next generation of tools.
really gets it, who gives you a seat
at the table and regularly presents But what we’re seeing is that we’ve got
IT as a strategic and sustainable waves of people—people who have
competitive advantage, not just an literally grown up digital—coming
order-taking function or a line item in into our business, not just in IT but
the budget. In my case, that was the in every other department, who think
easiest job I had, because Fred Smith, about problems from an information About the Author
our chairman and CEO, gets it, and technology standpoint. They expect
Mike Cooke is a partner
he’s driven it for a very long time, these tools to be there. That’s true not
with Booz & Company in
both as part of making our business just about the people we recruit and Chicago. He leads the firm’s
work better and as part of making it who operate within the four walls of IT transformation service
more responsive to our customers. FedEx. It’s also true about every one offering, with a focus on
of our customers. They’re becoming automotive, transportation,
We run this business with a great increasingly information savvy. and industrial products
deal of information. Every one of our companies.
senior executives can look at their So a lot of the technologies we’re
desktops or their BlackBerrys and adopting involve presenting
get up-to-date information about information to people the way
how the business did yesterday. Not they want it—whether it’s on their
last week or last month or last year. handheld devices, through text
Information is integrated not just into messages, or through Twitter, for that
our decision-making processes; it’s matter. That’s the connected world
integrated into our lives. Letting our that’s emerging. How do people
executives be information-rich both in choose to get the information they
the way they operate and in the way want? How does that integrate with
they live—that’s about as good an our back-end infrastructures?
education as you can give them.
And we can be our own worst
IT is probably closest to all the new enemies. There’s always the risk
technologies that are coming out, of saying, “Well, you know, this
and probably understands them best. is the way we’ve always done it.”
Does IT play the leadership role in Sometimes the world will show you
assessing and implementing new quicker ways to get there than what
technologies? your own internal team might be
willing to tell you about.
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