InformationWeek 500 logistics and transportation companies aren't big spenders. The sector, which is comprised of a broad range of companies including airlines, all types of freight carriers, and even a waste disposal firm, has an average IT budget of just $51 million, well below the $243 million average for the entire InformationWeek 500. Spending also is at the low end, with 1.8% of logistics and transport companies' revenue going to IT compared with 2.9% for all industries.
Making business processes more efficient tops the list of innovation plans for 55% of the InformationWeek 500 CIOs at these companies. For Old Dominion Freight Line, a nationwide transport company with a fleet of 5,500 trucks, that's meant overhauling its claims management system to move from a paper-based process to a completely electronic one. Ninety-nine percent of claims are now processed automatically or handled during the initial customer call.
The new system also lets Old Dominion feed claims data into its SAP Business Intelligence platform, so it can take a closer look at customers' claims histories and find ways to fix systemic problems, says VP of IT Ken Erdner. For example, one customer shipped from five or six locations, but only one of them had high claims. "We went to that shipping location and worked with them on packaging, and we did some things on our end, Erdner says. "We kept that customer."
The industry also is keen on improving Web operations and customer experiences. Web technologies they're adopting include software as a service (70%) and external collaboration tools such as wikis, blogs, and social networking (64%), both slightly lower adoption rates than for the InformationWeek 500 overall. Sixty-one percent of these companies are using hosted collaborative applications, higher than the overall 55%.
|Industry Snapshot: Logistics and Transportation|