FedEx Reinvents Services Procurement

Automating service procurement is part of FedEx Corp.'s vision of "reinventing procurement practices and making them 100% electronic," says Zondra Brown, manager of business systems support. Temporary and contract technical services procurement at FedEx Express, a FedEx operating company, is fully automated, up from about 25%, since it deployed Elance Inc.'s Elance 3 procurement-management app in August. By month's end, it will use the software for offshore projects' services, too. Its invoicing process is moving from seven steps -- about four of them manual -- to a three-step, automated process. "That alone will help us get our ROI within the first year," Brown says. Pricing for Elance 3 is based on a company's spending.

Further benefits will derive from being able to forecast spending, control costs, and ensure that what FedEx is being charged reflects its contracts with strategic suppliers. Elance is integrated into FedEx's central procurement portal, built on Ariba Inc. software. Still, Brown says that change management, including user acceptance testing and training tools for employees, is critical to ensure that workers adapt to new processes.