FedEx Locks In Customers By Tying Shipping Data To Back-Office Apps

Every company wants to come up with that one compelling service that ties a customer closer to its business. Dell's buyer-activated computer configuration system is one example. FedEx's Web package tracking system was another. But that system kept a firm grip on customers only as long as FedEx's competitors couldn't duplicate it. Eventually they did, sending the company back to the drawing board.

FedEx came up with Ship Manager, an application on a small computer set up by FedEx at customer sites to help users weigh packages, calculate shipping charges, and print shipping labels.

But FedEx didn't stop there. The company is making it easy for customers to link their invoicing, billing, accounting, and inventory systems into FedEx Ship Manager. The company, ranked 25th on this year's InformationWeek 500, has deployed the FedEx Integration Assistant at customer sites over the last year and a half. It provides a wizard that reaches into the customer's back office, establishes automated connections to data sources, and exchanges data with FedEx Ship Manager.

FedEx users now can automatically upload names and addresses of where they're sending packages, instead of manually entering them in the Ship Manager database. Ship Manager will reach out to the customer's data sources each time it ships a package. Likewise, shipping charges calculated by Ship Manager and shipment identification numbers can be automatically entered into the customer's billing system, ERP, inventory, or warehouse operation system.

"We allow customers to drag and drop names from their address books into FedEx Ship Mana-ger," says FedEx CIO Robert Carter. The integration provided by the FedEx wizard "makes the customer relationship stickier, since a well-integrated customer is less likely to switch to a competitor."

FedEx Integration Assistant quizzes a representative at the customer site on what data sources he's using and automatically generates scripting language to create links between FedEx Ship Manager and the data sources. It can do so for common accounting, ERP, warehouse, shopping cart, and fulfillment applications. Any system that uses a relational database compliant with the Open Database Connectivity standard can be discovered and linked. The wizard also can connect to the popular small-business accounting package QuickBooks.

Cutting-Edge Shipping

Dan Sargent, a programmer and analyst with Simonds International, a cutting-blade manufacturer that ships about 100 packages a day, says FedEx's integration wizard helped him connect his package shipping system to his company's billing system, which determines how much each customer is charged for an order. In addition to the FedEx shipping charge, Simonds has its own shipping and handling charges. For example, customers that place a large enough order get free shipping.

Sargent says he couldn't rely only on the FedEx wizard to build the needed connections. FedEx technical support helped him figure out how it worked and wrote additional code needed to connect Ship Manager to Simonds' billing system. Before the wizard, FedEx customers had to hire FedEx's consulting services group for this type of help; consultants could spend two or more days writing integration links in Microsoft Visual Basic.

FedEx used to drop off Ship Manager software at many customer sites, "and then they were pretty much on their own" when it came to integrating it with other systems, says Larry Netter, FedEx's VP of technical services, who supervises 600 consultants. Now they can integrate Ship Manager on their own, use FedEx online or phone technical assistance, or contract for a short visit with FedEx consultants. Netter says his group now has more time to help smaller customers whom it couldn't afford to reach before.

For Simonds' Sargent, Integration Assistant lets him administer changes to ship- ping systems in five locations, using a telephone hook-up to download the same code to every location instead of physically programming each one. He can load a version of Ship Manager with the tailored connectivity additions, he says, and "they'll all work the same." Shipping can't get much simpler than that.