FedEx’s CIO talks about recession cleanups, a challenging customer base, and the promise of active RFID and sensor technologies.
How have you had to reprioritize IT projects because of budget considerations in this economy? While it’s certainly tighter than average this year, that by no means implies that we’re not investing. We’ve got a reasonable project plan for the year that does reflect the restrained spending, but at the same time, you have to make investments.
In hard times, it takes the most courage to invest and stay current. We also get the ability to clean up some things, frankly. When there’s a lot of pullback in investing, sometimes it’s a good time to go in and target areas that you’ve needed to get to but haven’t.
What are you cleaning up now? We’re making a lot of infrastructure investments. The data center and network infrastructure build-out is where a lot of our focus is right now.
What new projects made the cut for the next 12 months? The focus tends to be around international, ease of use and customs clearance. We’re making a lot of investments in the customer service [and interactive voice response] platforms around the world [and] in our mobile infrastructure. With FedEx Mobile, we’ve seen more than 500% growth year over year. We continue to invest in that.
What technologies did you deploy to develop that? We use Adobe Flex and AIR on the front end. We can run AIR applications, which are browserless applications that pull information from the Internet. Flex allowed us to rapidly build graphical interfaces that are animated. You get very clear depictions of what’s going on.
On the back end, we have the same high-performance back end that we’ve had for some time. During a typical morning of package delivery and package movement, we’re probably posting about 3,000 transactions per second. At the same time, we’re handling 1,000 inquiries per second against that same database.
What are your biggest technology limitations or issues? The one that vexes us the most are the least common denominator technologies that our customers have. Some customers run on very old desktop machines with a dial-up connection. A big part of the challenge for us is making sure we offer low-bandwidth capabilities that match the needs of a customer’s site and at the same time provide a rich, high-performance experience for people with new technologies, new handheld devices and broadband capabilities. It’s running that gamut that’s the most challenging limiter. We don’t just get to move along the current edge of technology; we have to make sure we move along the tailing edge as well, or we will alienate a lot of customers.
What emerging technologies do you find most promising for your organization and why? The next generation of sensors and active RFID devices is going to really revolutionize the Internet and what is possible.
The connected Web has changed the way the world works and has been incredibly powerful. We’re getting ready to shift to a new world where sensors are capable of being online and part of that connected space.
We’re working hard on things like embedding sensors in critical shipments that give us visibility to temperature, vibration and all those kinds of things. We’re piloting that with some of our high-value customers today.
That’s just one example of how high-performance, actively communicating sensors will work their way onto the Web and provide dynamic status and location information that will automate transactions in all kinds of businesses.
How will sensor technology change your business? Passive RFID tags and bar codes require some sort of interrogation, whether it’s a scanner for a bar code or a reader for RFID. When that event isn’t occurring, you don’t have dynamic, active information about that shipment. With a smart package, you can set all kinds of alerts. Let’s say you’re shipping packages for biotech that have temperature requirements, and the sensor is alert at all times. If a threshold has been crossed, either too hot or too cold, it can send an alert without being anywhere near a scanner.
You can have a very high-value shipment that’s moving inconspicuously through the network with a light sensor in it. Once that package arrives at its destination, it’s fine if light [hits the sensor]. But if light [had hit the sensor] prior to that event, it means that the package had been opened. That’s worth sending an alert about for high-value shipments.
As these sensors go mainstream, you can think of all kinds of applications. If you want to know the location of a high-value shipment, the ability of GPS to tell you exactly where it is, at a given point in time, is revolutionary. We have a very controlled system that will tell you at all times where something is when it’s in our control, but the ability to locate things on the spur of the moment is a powerful tool.
If you could rip out any legacy IT infrastructure technology and replace it with the state of the art, what would you scrap? There aren’t inherently bad technologies, even when you look out in the legacy world. If there were a wand I could wave, I would try to eliminate complexity. The challenge we face isn’t one technology being bad versus others being good, it’s about the composite complexity that’s been created with generation after generation of technology.
In addition to your day job at FedEx, you’re also on several boards of directors. Why? Our chairman encourages participation on relevant boards that help us as a management team come together with insight into key markets.
The retail sector is a very large cohort of the FedEx customer base. In the years I’ve been a part of the [Saks Fifth Avenue] board, I’ve learned a tremendous amount of how retail works and what’s important. It makes the things we do to specifically support customers involved in that class of commerce very relevant.
If there is one thing IT professionals need to do to become more valuable, it’s to round out their perspectives and be able to provide valuable business insight. One of the great ways to do that is to be involved on boards.
Boards are more and more looking for [IT] expertise. All companies struggle with the best ways to deploy technologies and strive to have board members who are fairly steeped in that world.
