Rob Carter, FedEx, delivers keynote at TBMC16
Rob Carter, EVP and CIO at FedEx, opened the 2016 TBM Council Conference with an inspiring keynote address about seeking the edge in your business. Winding his way through the evolution of trade, networks, and commerce around the world—from the Silk Road of China to the advent of railroads and their tycoons, to the boats, airlines, and digital delivery systems we use today—Carter used history and the evolution of FedEx to emphasize why he believes the edge is where value is created.
As FedEx’s networks have grown exponentially over the past 40+ years (today, the company connects 220 countries and 98% of the world’s GDP), Carter and his team have seen the time vs. cost complexity technology slope growing steeper and steeper for the business. He knows old paths aren’t sustainable and aren’t serving the business well. Laughing, Carter recalled pitching this idea of a new technology "edge" to business partners. “We said, 'Guess what? We’re going to go build some new stuff and it’s going to slow us down. How does that sound? And it’s going to cost a couple million bucks, and it might take us several years to do it.' They were so in.”
Tough pitches aside, his team has reimagined the way this very complicated business, a complex family of operating companies with unique needs, core networks, infrastructure, security, and applications, can deliver capabilities more efficiently and effectively. Using what he calls “functional de-duplication,” Carter looks at things like "Address", an enterprise foundational service using 237 different applications to manage addresses. To reduce redundancies, he's built a new foundational service that represents one global access point for the corporation. Today, the core service takes in 15 million updates a week, and businesses are able to tap in to get the authoritative address for a customer. Customer preferences around those addresses have been consolidated, as have rate, route, and identity. All of these things have been set up to tackle functional de-duplication of service.
Tapping in to deliver value
“Tapping in” was a key theme of the keynote. Carter pointed to Uber, Waze, and Airbnb as disruptive concepts that model new world functionality. “So many of our companies and our legacy systems have these massive vertical silos of functionality, where we thought we had to build the whole thing and the application. The reality is that the world is becoming a ‘tap into’ world. We’re tapping into everything we need to deliver value. Some of these things are going to come from inside our companies and some will come from outside.” The mechanism for delivering value today is more about delivering the right services at the right time and doing it in a way that delivers value. Carter isn’t as worried about the legacy estate. He advises, “Stand up new and let the business orchestrate those services horizontally, enable infrastructure and platform services both inside and outside of the enterprise with cloud services, and do it in a unique way.”
Carter views information applied to the world around us as the new frontier.
The tycoons of our era aren’t building big capital estates. They’re finding unique ways to apply information to the world around us. Opportunity is created by an ever increasing capability to have information that applies to the physical world create enormous value. It’s been our whole value proposition all along: the information about the package is as important as the package itself. The information about the asset is as important as the asset itself.Rob CarterEVP and CIO, FedEx
This unique world emerging around us allows us to apply information to underutilized or undervalued assets. Carter used an example of a legacy system in FedEx’ airline business to demonstrate how technology business management (TBM) provides some of this information. Aircraft mechanics were working on enormous planes, referencing a legacy system that was tied back to an engineering shed. They had a piece of paper in hand that would tell them which job to do and when they were stopped or stuck, they had to climb down, get into a golf cart, and head into the engineering shack to talk with an engineer.
The system was expensive: as stated in a recent interview with CIO magazine, TBM numbers revealed a cost of more than $10 million a year. “With TBM, we had real accountability. So we got really busy with next generation mobile and tablet-enabled capability that has completely changed the way these guys work.” The new tablet system is loaded with much of the information mechanics need to be efficient, including documentation, videos, and apps like Skype for Business that enable more efficient communications. “The new system only costs about $2 million and it’s about a thousand times better than the old one,” Carter said. “We used that money we were discovering in TBM to drive us to that next set of capabilities.”
TBM really works
As FedEx gains momentum creating new services and solutions for the business, TBM provides a powerful set of capabilities. Carter is on a 10-year journey, but he can already prove that TBM really works. “It works at the infrastructure level, at the platform level, at the business level. TBM is something that really gives us a lot of power in talking to the business about doing things in a different way.” As his initiatives evolve, Carter's team is committed to continually seeking the edge to deliver amazing value to the organization and its customers.
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For more on how FedEx shaved millions from it's IT costs, read CIO's feature story.