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The management at FedEx Custom Critical, a FedEx Corporation subsidiary
(formerly Roberts Express), was in the midst of grappling with questions
like these when CEO Bruce Simpson decided to use DPI's new e-Strategy
Process to enable his management team to chart a clear course through the
Internet maze. A veteran of DPI's Strategic Thinking Process, he was a
believer in the ability of these critical thinking tools to empower
managers to reason through complex questions and take ownership of the
conclusions.
e-Strategy. Where The Rubber Meets The Information Super Highway.
FedEx Custom Critical is by no means a babe in the woods when it comes to
sophisticated communications technology. A leader in the field of
"expedited delivery", it employs over 2000 trucks as well as air charter
services that provide time-sensitive delivery of cargo of any size and
weight, anywhere, guaranteed within fifteen minutes on pickup and delivery.
All this is made possible by a proprietary system of satellite
communications able to instantaneously locate any one of its trucks within
300 yards. Indeed, this communications capability was discovered to be the
Driving Force of its strategy when FedEx Custom Critical went through DPI's
Strategic Thinking Process a few years ago, as this Driving Force Statement
clearly shows:
"We provide dedicated transportation services that apply our superior,
integrated communication network and controlled delivery system. We
concentrate on customers with precise, time-critical needs in geographic
areas with an adequate infrastructure and a critical mass of manufacturers
and shippers. Our intent is to be the unsurpassed leader in measured
customer satisfaction."
Yet, as advanced as FedEx Custom Critical is technologically, it had not
yet developed a cohesive overall Internet Strategy for the enterprise.
Says Bruce Simpson of their Internet initiatives, "Our involvement had been
limited, sporadic. We talked about the ability to trace shipments through
the Internet. We asked customers themselves, in our monthly satisfaction
survey, to what extent they were using the Internet for connectivity with
their suppliers and carriers. So we had developed very specific
connectivity with customers, tracing shipments. But from the standpoint of
falling back from the trees and looking at the forest, we didn't have any
idea of how we wanted to integrate, for the long term, the Internet into
our Business Strategy, into the future of how we're going to grow and
differentiate the business."
Joe Greulich, Director of Technology concurs. "The way it had worked," he
says, "was that our Marketing people would prioritize Internet functions
but they had limited resources available to them. Our approach was very
customer-focused and it still is. We offered, for instance, brochureware
on the web. We also offered the ability to trace or map a shipment. But
as we go forward and offer more capabilities to our customers, we didn't
want to make our customers adapt to our system. We have a very structured
way of doing business. In fact it's one of our key strengths - our system
for pickups and deliveries and tracking them. But we want to adapt
ourselves to the way our customers do business, not the other way around.
In order to make sure this stayed a customer-focused system, we had to
either erase what we knew or just take a new approach. We realized that we
were going to have to step up the investment we were making in the Internet
and we needed a game plan."
A few months ago, the top forty people of FedEx Custom Critical's
management made a quantum jump forward in their thinking regarding
e-business. Using DPI's e-Strategy Process, the team embarked on the
creation of an Internet Strategy that fully supports their Business
Strategy and places their resources where they will have the greatest
benefit to their customers, truck drivers, and employees.
This e-Strategy Process is a codified set of steps that, first of all,
"demystifies" the Internet. To do this the Internet is broken down into
what DPI calls the ten
"e-nablers?", such as e-business networks, online communities, and
electronic hubs. These "drivers" represent the basic capabilities of the
Internet. DPI's e-nablers were developed to simplify the immense, amorphous
concept known as the Internet into distinct functions, each with specific
types of business applications.
Says Greulich of these e-nablers, "You could feel them, but you wouldn't
have been able to clearly identify them. And the fact that we could now
identify them, made the e-Strategy Process and the Internet very concrete
and real. So it was very, very helpful, particularly for the less
technical people in our organization. It wasn't a matter so much of
catching up as catching on."
During the e-Strategy Process the participants applied these e-nablers to a
detailed mapping of all the core information processes inside and outside
the company, determining where each e-nabler might affect the business
positively or negatively. From this analysis, the potential "Points of
Impact", where the Internet may have an effect on all of the various
processes, were determined. These Points of Impact represent specific
opportunities and threats to the company.
As Joe Greulich sees it, "The e-Strategy Process itself drives you to think
about what information processes you have in place today, how your
functions relate to each other and to your suppliers and customers. That
exercise alone is a good thing to do. Then added to that is the e-effect,
or the impact that the Internet will have on those things. That was, for
us, a very educating thing to have happen. We have a better company-wide
understanding of all the information processes that are going on, and the
Points of Impact where the Internet can
infringe on them.
"If you were to do that piecemeal, which is the traditional way for
companies to go about this, it would take years to get that kind of
understanding communicated across the company. The bigger the company, the
longer it takes. We compressed a lot of communication through this Process."
Using the company's Business Strategy and Driving Force as a filter, the
Points of Impact were prioritized based on their relative benefit or threat
to the company. From that analysis, concepts for specific e-business
applications were developed to address these opportunities or threats.
Those with the top priority were then
analyzed to create a detailed list of "musts and wants", in the DPI
vocabulary, for each planned initiative. The
result is that FedEx Custom Critical now has a prioritized set of
e-projects each with a defined set of business requirements for the
hardware and software solution developers to follow. This is, in effect, a
unique blueprint of a new business model designed to leverage the Internet
as a strategic weapon to cause transactions to happen. More importantly,
the company's management designed this "blueprint", specifically to
strengthen the company's Driving Force and Business Strategy.
"The way we've looked at it is we're building a bridge from two sides of
the river," explains Greulich. "On one side of the river is our Business
Strategy - what we do to keep going. And on the other side we're now
building a bridge back from our Internet or e-Strategy. And the real
mission of execution is to make sure they meet in the middle so you can
drive across it. We think we've got everybody on the bridge. We knew we
had to merge the Strategy and the e-Strategy together", he says. "In order
to make that happen, that's a people thing, you've got to educate people.
What I've found is that acquiring technology can always be done. Applying
technology is really limited by how well people understand it, relate to it
and change with it. So you have to precede change with education. And
that's really what this e-Strategy Process did for us. It educated us and
guided us along on how to make these changes, and how to start taking steps
to making them happen. It was very clear to us that the e-Strategy and the
Business Strategy had to be linked. And we believe we've done that.
Instead of me trying to dream up what's down the road and what's possible,"
he says, "our managers are doing it and they're putting it into their
Business Plans. We're getting ready to launch the Business Plan for next
year incorporating the e-Strategy. Where the long-term strategy meets your
yearly budget, that's where the rubber meets the road. I've started to see
those linkages happen. This overall education of the management team and
commitment of the management team is the best result of the e-Strategy
Process."
Today FedEx Custom Critical has a solid foundation for its evolving
e-Strategy. From the CEO's chair, the most crucial aspect of that plan is
this linkage between FedEx Custom Critical's Business Strategy, Driving
Force and e-Strategy. Says Simpson, "I'm sitting here right now with a
list on my desk of the top two priorities together with the 'musts and
wants' and the measurements. We are in the process of determining the
steps in getting these things done - the time line, the costs. We now have
the means to determine what ongoing IT projects to shift resources from
because we're going to have to say, 'If this is the priority for the
company, we're going to have to take resources from one place and move them
to another.' We all understand that the Driving Force is the capability of
our information system, which we determined under DPI's tutelage three
years ago. Using that as a filter, we've been able to prioritize the list
that came out of the e-Strategy session, applying this new Internet
connectivity to our customers, our drivers, and our people. And it's a
beautiful combination because it has allowed us to take the information
system and broaden it beyond even our current comprehension. Through the
combination of DPI's Strategic Thinking Process and now the e-Strategy
Process we're able to exploit the Internet to enhance our Driving Force. I
love the idea that we can be linked to customers and offer them our service
better than ever before. That has a real, viable linkage and potential for us.
"I guess I've been persuaded that with the
dynamics and magnitude of the changes taking place, whether you're in
manufacturing or services, this is going to be the most powerful thing
that's happened in the business world in this century or the last one.
It's going to change everything about how we conduct our affairs with all
of our resources, customers and constituencies," Simpson concludes.
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