At UPS, Every IT Initiative is Strategic

At United Parcel Service Inc., strategy is part and parcel of every it initiative.

At United Parcel Service Inc., strategy is part and parcel of every it initiative, says David Barnes, the company's newly appointed cio. Barnes, who worked his way through the ups ranks—first as a part-time package loader, then in various finance, business operations and it positions—takes a forward-thinking approach to keeping his staff of more than 4,700 tech professionals on the strategy track.

CIO Insight: How does UPS develop its corporate IT strategy?

Barnes: I sit on the company's management committee, which is made up of its 12 senior managers. The committee decides the business direction and overall corporate strategy. When you look at our organizational structure, all the major initiatives come through the program project oversight committee—eight senior-level managers from across the enterprise sit on that board, and the CIO is the chairman. The PPOC oversees all enterprise-level strategic projects, such as our package flow initiative, which uses technology to optimize deliveries. Within IT is the IT governance committee, which includes more IT professionals as well as some business leaders. The IT governance committee, which is also chaired by the CIO, prioritizes IT resources based on projects set by the PPOC.

Go one level down in IT, and we have portfolio managers who manage the specific initiatives. They each have a corresponding partner from the business unit involved in the project, and they work side-by-side on strategy. Those teams propose projects to the PPOC and governance committees, which decide the ultimate strategy. Since the teams are the ones making the presentation, they champion the project and ensure the vision is disseminated.

How do you make sure projects stay on track?

First of all, you have to have time for the management. I wear two hats at UPS. One is that of a corporate vice president, which carries significant responsibilities. The other is that of CIO managing a staff of roughly 4,700. You can't do one at the expense of the other. The CIO has to be involved and that level of involvement has to be significant. There's no substitute. I have a number of portfolio managers. They are handpicked, senior-level UPS veterans, some from IT, some from the business side, with million-dollar budgets. We talk daily. We also review schedules and project direction once a month.

Does this approach alleviate tension between you and your direct reports?

I think there's always a bit of tension. There are always differences of opinion. But partnership is a very big word for us at UPS, and we practice good listening skills. Strategy has to come from both directions, and there isn't much room here for the safe player. You can't just be a "yes" person. We also concentrate on developing our people, and we focus on promotion as part of our culture. As part of that, we move people in and out of IT and business roles. To be successful, you have to have those two sets of skills. You can't just be a technologist saying you want a seat at the table when all you can talk about is application development.

This article was originally published on 02-05-2005
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