FedEx’s Innovation Machine

At FedEx, big ideas can come from anywhere.

The company’s innovative culture emanates directly from founder and CEO Fred Smith, who has always put innovation—and, consequently, the IT function—at the center of the firm’s agenda. The Memphis, Tenn., shipping giant promotes a culture aimed at continuing to innovate how it ships, tracks and manages packages, as well as how it interacts with customers and partners.

Leading that charge today is CIO Rob Carter. He views his role in much the same way that many IT leaders do, but few actually have the direct relationship with top business executives that Carter has. CIOs, in his view, should be full-blown members of the executive team. Sure, a lot of the CIO’s role comes down to increasing operational efficiency and boosting productivity, but that’s not how Carter—or his business associates at FedEx—see his job.

“We have a different view,” he says. “We obviously believe productivity is important and we work on a lot of productivity applications, but we put our primary emphasis on taking care of customers, profitably growing the business, and creatively generating new channels that help customers integrate with FedEx and use it more effectively in their businesses.” To do so, Carter and his IT department are constantly looking to create new applications and tools.

That attitude is shared by David Zanca, FedEx’s senior vice president of e-commerce technologies and Carter’s go-to guy for Internet and emerging technology developments. Zanca focuses on everything from FedEx.com, the company’s main Internet hub, to Web services that let customers integrate with FedEx software.

Lately, Zanca’s team has zeroed in on the explosion of social networking and mobility to dictate where FedEx makes it digital moves. The company invested in building a service-oriented architecture and Web services years ago and is now using those investments as back-ends for new customer-facing methods of communication.

A recent example came about when some of the company’s front-line workers figured out how to give customers an easier way to interact with FedEx. As Zanca recounts it, a team of technical advisers—who work hands-on with customers to identify opportunities to boost efficiency and hear concerns—pitched the idea of coupling existing back-end Web services with the Microsoft Outlook e-mail client, which customers could use at their desktops to set up and track a shipment or request a pickup.

At first glance, the idea had promise, but it had to be run through the innovation machine. So Zanca and his team of developers, technologists and business strategists looked at what it would take to implement this, in terms of staff hours, resources, investment, etc.