Management and Finances

FedEx Shaved Millions off IT Costs. Could You?

By Clint Boulton

IT is often viewed by executives as a cost center, so every IT leader would like to know how to trim costs without sacrificing quality. FedEx is doing just that, saving hundreds of millions of dollars by eliminating redundant applications and legacy technologies, being savvy with analytics, and aligning with a service-oriented culture.

Clint Boulton writes, “FedEx has saved hundreds of millions of dollars by eliminating costly redundant and legacy technologies, using cloud analytics software to compare the cost and value of IT to the business. For CIO Rob Carter, the path to pare technical debt was paved with some painful discoveries.

“The journey began in 2009, when Carter realized the shipping giant’s application portfolio had ballooned to more than 2,600 applications, the result of organic growth and acquisitions across the company’s express, ground, freight and office units. Carter showed business colleagues the equivalent of a hurricane tracking chart depicting the applications, which included more than 14,000 custom interfaces and served as a painful demonstration of IT’s spiraling cost and complexity.

“‘We’re trying to weave business value into this mess but we simply can’t do it this way,’ says Carter, who described the meeting in a keynote speech at the Technology Business Management conference in San Diego earlier this month.

“FedEx adoption of IT harkens to co-founder and CEO Fred Smith, who was among the first corporate leaders to realize that technology was essential for running the business. The company created the first automated package shipping system for PCs and in the mid-1990s was one of the first businesses to enable business-to-business transactions on its website. More recently, it created SenseAware, an early commercial internet of things implementation used to track packages.”

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