DHL-Airborne Didn't Take The Easy Road To Post-Merger IT Integration
The companies had different business models, IT assets, and outsourcing strategies. The combined company was determined to take the best of each.
DHL's decision: Take the best of both, and make them work together. Easy to say, hard to do when talking about a round-the-clock operation that runs on real-time information and custom-built software systems. To top it off, DHL had been a big user of offshore outsourcing and planned to rely on that in the transition, while Airborne had less outsourcing experience.
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DHL completed its $1.05 billion acquisition of Airborne's ground operations in August 2003. Based in Belgium, DHL catered to international customers and handled 100,000 to 200,000 shipments a day. U.S.-based Airborne focused on the U.S. market and handled about 1.5 million shipments a day. Airborne's IT infrastructure was designed to handle high volumes, emphasizing system reliability and low processing costs. DHL focused on applications to manage the complexity of international shipping.
"That was the challenge--blend the legacy applications together to support the business going forward and provide a single face to our customers," says Rod Parker, head of DHL's transportation group within DHL IT Services. He came from Airborne and led integration of the application development operations and CRM systems.
Bare-bones interfaces were a start, Parker says
Outsourcing was another culture change. DHL has used India-based Infosys since the mid-'90s to develop and maintain its applications and planned the same for Airborne. Infosys software engineers scrutinized Airborne's 400-plus applications over six months in what the outsourcer calls "rapid knowledge transfer." Parker doesn't know how many Airborne layoffs resulted from moving work to Infosys.
DHL used a three-phase plan, based on a methodology from Infosys, to integrate the IT systems. The first focused on consolidating operations. For Parker's team, that meant connecting the companies' apps enough to keep the business running while starting to provide one face to customers. The team developed what Parker calls "bare-bones" interfaces between apps managing pickup and delivery, dispatch, and package movement and tracking.