The Internet is also making it easier for customers, particularly small and midsize businesses, to access shipping information that makes UPS more than just a provider of transport services--and gives the company an opportunity to serve a broader base of customers, he says.

(Kelly's views on UPS's Internet strategy were articulated in written answers to questions posed for this Transformation report. Kelly responded in this fashion because UPS was in the midst of a quiet period leading up to its initial public stock offering.)

"We recognized a long time ago that the information regarding the shipment--the information about the goods, about the customer, about what's in the merchandise that's being transported--is really as important as the transportation itself," Kelly says, echoing the sentiments of several of his corner-office peers in the industry.

"How we use that information--position that information to provide additional services for our customers--is the reason we have a very strong commitment to the Internet," he says.

The Internet is an equalizer for customers--a low-cost, ubiquitous, simple means for them to access UPS information. "The Internet provides a great opportunity for us to reach customers electronically, perhaps our small and midsize customer base that doesn't have the same options and opportunities as large customers to choose a different electronic method to transact business," he says.

This opportunity is sufficiently important to UPS that Internet strategy is the purview of its top executives, he says, while the IT organization fills the vital role of developing applications and implementing the technology.

"Everything we're doing electronically, everything we're doing regarding electronic commerce, and everything we're doing regarding the Internet gets the attention of the senior management group," he says. "It is a major part of our responsibility."

The Internet is so important to UPS's strategy that the company is more liberal in rationalizing Internet investments than it is with other investments.

Loosened reins notwithstanding, the company does indeed closely track Internet projects to make corrections in mid-course when necessary, which Kelly says is vital to maintaining a competitive edge.

go on to the next story, "Postal Service Blends Old With New."