InformationWeek: The Business Value of Technology

Rob Carter, FedEx

Even though more than half of its business remains U.S.-based, FedEx at its core is a global network company, serving more than 200 countries representing 95% of the world's output with its transportation and information services. "All of our growth is fueled by global trade and the global connectedness that our network provides," says executive VP and CIO Rob Carter.

As such, Carter's main focus -- "priority No. 1, 2, and 3" -- is to simplify and modernize the tech-driven processes across FedEx's global business. As the company has grown rapidly abroad through acquisitions, startup units, and new services, its underlying IT infrastructure, systems, and applications have become overly complex, he says. Sometimes highly localized or specialized services are needed. "But in a lot of places, consistency of processes and the systems that support them is a more efficient and cost-effective means to present FedEx to our customers," Carter says.

One example where consistency works is FedEx Clearance, "digital interconnect" technology the company developed with customs officials worldwide to curtail paperwork and expedite the movement of international shipments. Another place where FedEx is standardizing technology and best practices is at the physical hubs it uses to sort, scan, and load shipments. It opened a hub in Guangzhou in February to serve China's manufacturing industry and the rest of the Asia-Pacific region, and a hub's under construction in Cologne, Germany, that will serve Europe when it opens next year. Both are modeled on FedEx's state-of-the-art facility in Memphis, Tenn. One key feature is belts that move through six-sided tunnels at 400 feet per minute, scanning labels no matter where they're located on a package.

Carter happens to work for a CEO, FedEx founder Fred Smith, who fully understands the power of IT. FedEx, with revenue of $38 billion last fiscal year, spends more than $1 billion a year on IT, an amount Carter doesn't see any great need to increase, even if he could in this economic environment. "The incumbency on me is not to grow that budget but to make sure value is being created with that significant amount of money," Carter says. "It's not the CEO or the board or CFO breathing down my neck; it's typically me saying, 'Don't give me more money, but give me support for more governance or for streamlining business processes to reduce complexity.' "