Global companies have their own special challenges when it comes to developing applications.
One of the biggest is finding the optimum approach to development: what should be done centrally, what should be handed over to the regional operating units and, among the most difficult, how should the regions work together to co-develop applications that meet regional needs?
Like many global companies, Federal Express has been grappling with these issues for a number of years, and in recent times has made significant strides in the area of co-development among its regional operating units.
This article looks at Fedex’s ongoing efforts to improve the co-development process.
Fedex’s Evolving IT Environment
Fedex has long been know for its IT prowess. Its Internet-based shipping application, for example, received kudos for being one of the first practical applications available over the Net. Over time, however, Fedex’s IT environment – especially in support of its customers – has grown increasingly complex. Many solutions have been tailored for individual customers. And with the acquisition of other companies, entirely different solutions have been introduced.
With many different customer solutions to support, Fedex is now focussed on rationalizing and standardizing its customer applications.
“There’s a considerable effort worldwide right now to bring all these solutions together,” said Nancy Reynolds, CIO of Federal Express Canada Ltd. “We want to create a platform that is fairly standard, but will allow customers to do things like tailor reports the way they like to see them.”
A key to the initiative is the creation of one background engine to run the software that’s required for a number of the company’s products worldwide. Each region or operating company will be responsible for what the front end of those products looks like to their customers.
Work on the global initiative has been going on for some time, but the really big focus has come in the last year.
“The objective is to have things converted by next summer,” said Reynolds. “The base work is now complete and over the next 15 months or so there’ll be a big push to fill the feature gaps, ensuring that one product or one suite of products will fit all of our customers’ needs.”
Once everything in place, the next task will be to bring a consistent look and feel to Fedex products worldwide – probably based to some extent on the look and feel of Internet applications.
“We’ve done some market testing with Canadian customers, and what we’ve found is that they prefer the Internet kind of look and feel, because they are more used to it,” said Reynolds.
Recognizing that today’s occasional shipper may be tomorrow’s mid-sized customer, the company also wants to create a similar look and feel for products used by different-sized customers – something it hasn’t yet been able to offer.
Fedex is putting a great deal of emphasis on “look and feel”, so significant progress can be expected over the next couple of years. As much as possible, things will look the same from one region to the next, but because of local differences they will never be identical.
“It’s more important that our Internet sites looks similar than it is to have a particular aspect of a customer’s application in Taipei look similar to one in a customer’s application in Toronto,” said Reynolds.
And as far as getting a consistent Internet look goes, the vision is nearing reality. “Right now our Web site is being overhauled in the U.S.,” said Sarah Tattersall, Communications Specialist with Federal Express Canada Ltd. “So if you’re on the Fedex site in Asia it should look pretty similar to the site in Canada and the site in the U.S.”
It Started In Toronto
As with many other global companies, Fedex has many IT development issues that arise out of the disparity in size between central operations and regional operating units.
“A lot of Fedex’s development is done centrally, but our U.S. operations are so massive that sometimes IT solutions are built to industrial strength – they’re very large and don’t fit a region like Canada or Europe,” noted Nancy Reynolds, VP Information and Technology and CIO, ITD, of Federal Express Canada Ltd.
It was clear to the CIOs of Fedex’s four regional operating units (Canada, Europe/Africa/Middle East, Asia/Pacific, and Latin America) that something had to be done to address regional issues. Perhaps the most important early steps along that road were taken three years ago in Toronto, at a meeting which brought together the CIOs and key development people from the four regions, with minimal participation from U.S. head office.
Recalling the origins of the meeting, Reynolds reflected, “It was one of those things that we talked about a number of times – how are we going to help each other? We’ve all got needs, we’ve all got some of the same frustrations – what are the things we need to do? So we decided to get the knowledgeable people together to make recommendations on what things could be done to collaborate.”
The Toronto meeting went better and faster than expected because people were on the same wavelength. The meeting lasted three days. On the first day everyone gathered together and talked about the different opportunities that could be realized through closer cooperation. The final two days, those opportunities were then looked at in groups, identifying what things specifically needed to be done, and when they could be accomplished. Everyone agreed to set some development standards, keep things open, and move forward with the co-development initiative.
Following the Toronto meeting, the technical people kept the ball rolling through worldwide communications via conference calls and the Internet, working on specific issues that would move the initiative forward and set the standards. The regional CIOs also kept in constant contact, reviewing progress through frequent phone calls and by physically getting together two or three times a year. Noted Reynolds, “There’s a lot you can do on conference calls, but for good idea generation you really need to be face to face. So we do a lot of updates and presentations.”
As a result of all this work, ongoing initiatives are now in place to promote better collaboration, including the establishment of processes for co-development, starting with documentation.
Building International Linkages
According to Linda Brigance, VP ITD, Asia/Pacific Region, the building of strong relationships between regional and international workgroups were critical success factors for effective global collaboration.
“We also realized the importance of sending teams to each other’s work locations, because it helps them to develop a consistent global understanding of processes,” she said. “In addition to increasing employee effectiveness, this type of workgroup exchange allows for multi-national interaction, and often helps to reduce or eliminate misunderstandings because of cultural or language differences.”
Brigance added that with global collaboration, Fedex can build virtual community environments that create trust and information assurance, streamline resources, and provide instant information accessibility.
Collaborating On ECRM
In terms of collaboration of the international units, the most significant strides to date have been made in the area of customer relationship management.
Fedex’s U.S. operations decided to take a best-of-breed approach to ECRM, choosing different packages for such things as customer service, sales, and marketing, and integrating them in the background. Because U.S. operations are so big, this approach makes sense. But when it comes to the regions, the resources and the knowledge simply aren’t available to mix and match packages. Realizing this, the international regions decided to take a different approach.
“We decided to go with one package and implement all the functions – sales, marketing, customer service – because we felt that the real synergies in CRM come from seeing the customer from all sides, and it would be easier to do this by implementing one package and developing what we needed to go along with it,” said Reynolds.
The regions decided to go with Clarify from Amdocs, a package with strong customer service components which the U.S. operations of Fedex had selected for the customer service portion of its ECRM solutions.
Clarify wasn’t the perfect solution for the regions in every area, but its strong customer service aspects were attractive, and the sales components of the package were judged to be fairly good as well. Although the marketing tools weren’t as robust as desired, this was something that could be remedied. Because the package had a lot of strengths and would require less time and effort to integrate, it was decided to go with Clarify and develop the needed components going forward.
Building The Data Mart
While the European region is working on the sales piece of the ECRM project, and Asia is working on telesales, it has fallen to Canada to tackle the challenging marketing piece of the implementation.
In order to enhance marketing functionality, Fedex’s own data mart will be integrated with Clarify. As well, Canada is responsible for developing business intelligence tools to better utilize the data.
“The data model is being put together at this point and we are about to kick off the real development of the data mart,” said Reynolds. “We’ll be collecting all of the information about many aspects of the customer, starting with sales and customer-history type information. Over time we’ll add in other pieces of information, like what our customers’ preferences are for customs clearance. Once we’ve gathered all this information we’ll then be able to use business intelligence tools to better understand our customers’ needs.”
The biggest challenge for the Fedex Canada team is in getting the right data for the data mart, and doing it in a timely fashion. The company as a whole has a great many sources of data, and it’s the Canadian IT team’s responsibility to find out which pieces of data everyone relies on most – a demanding and time-consuming job.
Ultimately, the data mart will bring all the information about Fedex’s customers together in one spot. Explained Reynolds, “We’ll be able to get the whole view of the customer and any interactions we’ve had recently. So when a sales person visits a customer, she can see, for example, that in the last two days the client has called in about customer-service issues. So she’ll be prepared to address those things.”
In addition, the data mart will enable Fedex to gain a more in-depth understanding of customer shipping patterns, enabling it to start developing products specifically for certain customers.
Taking It To The Next Level
On the ECRM project, each region had a different priority, so development was tackled in the fashion described above. On future projects, however, if two regions find that their priorities are the same, then they will be able to help each other with development and code together faster.
Reynolds anticipates that eventually the company will be able to do more code-sharing around the world. Fedex has had small successes in that area, some of it involving code-development collaboration with the core IT group in the U.S.
“At one point Canada and Asia collaborated on a U.S. project, working towards including some of the features that international wanted to get in,” said Reynolds. “During the night Asia would work on certain problems and during the day, U.S. and Canada would work on them. I’d say that was the highest level collaboration we’ve ever done.”
She acknowledges, however, that Fedex is not yet at the maturity level to greatly expand this type of capability. But the vision is in place.
According to Sherry Aaholm, Senior Vice President, ITD, the company is eyeing global collaboration as a means of achieving a stronger global product with reduced development cost, increased speed to market, and lower-cost support.
“The focus is to develop a common core code base to use globally that allows for regional customization, which is necessary to address local country needs,” she said. “The common core is a combination of shared code developed by resources in the U.S. and Asia.”
Leverage With Head Office
Co-operation among the IT groups of Fedex’s international operating units has many advantages, not the least of which is the added leverage it provides when dealing with the U.S.
“It certainly does help,” said Reynolds. “If the four regions agree on something, it holds more weight. It’s better for the U.S. too because they’re discussing it with one group rather than each region having completely different needs.”
To this point, Fedex has no formal benchmarks for collaboration, but Reynolds expects that this year the company will put in place some measurements as to progress.
“For example, Sherry [Aaholm] has challenged all of the groups to reduce maintenance expenses by a certain percentage,” said Reynolds. “What that translates into is fewer products and more standards because we can get global agreements.”
Having now had three years experience working on co-development at Fedex, Nancy Reynolds has some advice to share.
You can’t have a collaboration project just to collaborate – you’ve got to have an end. At Fedex we’ve got some projects that are common to all of the international operating units, and we have some collaboration objectives that we’ve tagged along with those projects.
It’s good to get together to talk about things but you also have to have some specific tasks and follow them up. Pick a small project first that is under all of your control and set some objectives around that project.
You really have to stick at it, ensure that standards are being followed, and ensure that you’re making progress. Over time it becomes ingrained, and eventually you’ll be able to take it to the next level.
David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is managing editor of CIO Canada.