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UPS Has Big Plans For China And The World

The package-delivery service takes a long-term view of global expansion that makes heavy use of IT and is tailored to each country it enters.

In five to 10 years, UPS Inc. expects to be a worldwide purveyor of a range of transportation and transportation-related services. And the $1 billion a year the package-delivery company spends on IT is a big part of reaching that goal, CIO David Barnes said Monday at the InformationWeek Spring Conference.

Three principles have powered UPS's push into global markets such as China and India, Barnes said. The company focuses on integration rather than extraction with each international move. Successful companies don't "take incentives, such as tax breaks, and use resources and then leave when the going gets sour," he said. Instead, they work closely with communities and governments to create sustainable enterprises.

UPS's second principle is to localize its global operations in ways that adapt to and respect the communities into which it moves, Barnes said. For example, the company has tailored its Web site to support 22 languages. "This allows us to think globally but act locally," said Barnes.

While UPS saw a 45% growth in India last year, it's currently focused on expanding services in China, where it had even higher growth, and other parts of Asia, Barnes said. The company has had operations in China in a partnership arrangement since 1988 and, as of February, had wholly owned operations in five of the country's largest cities, Barnes said. The same handheld devices that drivers use throughout the United States and Europe have been deployed in select areas in China, and UPS has built a telecommunications infrastructure around major industrial centers in Shanghai and Beijing to support the handhelds. "We've limited the deployment to these areas, but we'll rapidly expand as the technology and the infrastructure grows in China," he said.

UPS is focused on expanding growth in China, where it has had a presence since 1988, says CIO David Barnes.

UPS is focused on expanding growth in China, where it has had a presence since 1988, says CIO David Barnes.

Photo by Sacha Lecca
One of the challenges UPS faces in China is dealing with the country's strong centralized government and regulatory restrictions, said Elizabeth Mathews, director of global E-commerce. Information privacy and protection of intellectual capital also are major IT challenges, she said.

UPS's third principle behind its global expansion is to build a culture of trust in the countries it enters. In China, that involves recruiting Chinese nationals studying at U.S. universities to learn the ins and outs of UPS's U.S. operations and then return to work in the company's China operations. The company also has a management-training program for Chinese nationals in Singapore. In addition, it's making substantial technology investments there, Barnes said. "We take a lot of pride in saying that business drives technology," he said. "We build a global network so our customers don't have to."

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