Chief Of The Year: FedEx CIO Rob Carter

FedEx CIO Rob Carter delivers speed, flexibility, efficiency

Larry Greenemeier, Contributor

December 3, 2005

4 Min Read

Technical proficiency has served Carter well at FedEx, which has built its business as much on the information generated by handling packages as on their actual movement. "Rob's blended a lot of very advanced thinking about networks, server technologies, and the management of software development to make our systems more comprehensive, easier to modify, and less rigid," Smith says. "This was a great source of frustration in the past. You'd say you need to change the pricing structure, and you would hear that it would take three years."

Carter has the business chops, too. In addition to the CIO and executive VP titles, he's co-CEO of FedEx Services, which provides sales, marketing, and technology support to the rest of FedEx. "I know how IT projects and funding and prioritization have been done in the past," Smith says, "and Rob has changed that." Under Carter's leadership, FedEx's no-nonsense CEO says, the company has made "tremendous progress getting things out faster and less expensively."

A willingness to embrace new technology and take risks was apparent as far back as when Carter joined the company in 1993 as director of IT. At the time, he played an instrumental role in migrating the company's customer-service operations from a centralized mainframe environment to distributed Unix, says Belinda Watkins, VP of network computing for FedEx Services, who met Carter back then when she was a technical adviser in the international network engineering department. "What I saw at that time was a person really eager to and comfortable with taking the lead on something that was visionary," she says. "Rob's maintained that throughout his career at FedEx."

Concrete Improvements
As FedEx winds down the 6x6 initiative, company officials can point to cost efficiency, speed to market, and highly automated customer service through as among their accomplishments. FedEx's flagship express-shipping business has grown--up 18% to $19.5 billion in fiscal 2005--since the company kicked off 6x6 two years earlier. That business keeps expanding: Three months ago, FedEx launched overnight service between India and China.

Because FedEx's operations are essentially integrated with those of its customers, any positive results of those efforts should ripple through to customers, too. "Clearly, I want him to succeed because if he succeeds, it's good for General Motors," says the automaker's CIO and group VP, Ralph Szygenda.

Szygenda views Carter not unlike a departmental CIO or process manager for a division within GM, which relies on FedEx as a key component of its parts-distribution supply chain. "The automotive industry has the most sophisticated supply chain in the world," Szygenda says. "We run a just-in-time operation around the world. If documents and parts don't show up, that could affect General Motors significantly. We're spending hundreds of millions of dollars paying for FedEx services, and we wouldn't be doing that if I didn't think they had good capabilities or a good CIO behind their processes."

FedEx officials admit that every 6x6 objective hasn't been an undiluted success. Although Carter originally envisioned a plan in which IT resources could be shared companywide, it proved untenable to get business units to give up their IT staffers to other units, even temporarily. "We began to realize that it was difficult to tell a business unit that they didn't have control over their resources," says Sherry Aaholm, senior VP of FedEx IT Express Solutions, which is part of FedEx Services. "It's complicated because if you move people, you have to adjust costs. This isn't out of the question, but as the realities have become more clear, 6x6 has had to make adjustments."

And Carter's team has had to adjust to business developments that were never part of the original plan, such as the $2.4 billion acquisition of Kinko's in February 2004. FedEx introduced its ground and express shipping capabilities to more than 1,300 FedEx Kinko's locations within two months. "We quickly adopted the 6x6 framework to what we were doing," says Laurie Zeitlin, senior VP and CIO with FedEx Kinko's.

Carter gained Zeitlin's respect for his willingness to let the FedEx Kinko's team continue to build an order-to-pay system that was in the works before the acquisition, even as Kinko's moved its data-center operations and financial systems over to FedEx. Completed last month, the order-to-pay software lets FedEx Kinko's cashiers take and verify orders at the front counter, then push them into the production-management system. Customers are given precise pricing information at the time of their orders and have the ability to check order status online. The order-to-pay software also includes a customer-data repository, price-management capabilities, credit-card processing, and time-and-attendance applications. "Rob trusts that we know when to ask for help and when to involve him," Zeitlin says.

As any experienced businessperson knows, an expression of trust like that often breeds trust in return. So it's not surprising that some of that sentiment is flowing back Carter's way. "He's improved time to market and efficiency to such an extent that we're much leaner and quicker as a company," CEO Smith says. "Doggone it, he went out and did it."

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