Dive Brief:
- Rapid growth driven by a string of acquisitions up to 2009 led FedEx to operate more than 2,600 distinct applications for its technology needs, tempering the value of the technology, CIO reported last week.
- In just one instance, the company saved more than $8 million annually by bringing its inventory management system to the cloud, thereby allowing the company's aircraft mechanics to record inspections real-time.
- FedEx's technology overhaul focused on building a service-oriented architecture, wherein application components tie various distinct services together and replace legacy systems.
Dive Insight:
FedEx's example shows the value of integrated systems by exposing the various costs and inefficiencies of operating thousands of distinct interfaces. Corporate technology overhauls are not easy, but can drive significant value throughout the supply chain.
Already, many software as a service (SaaS) providers offer integrated solutions that include WMS, CRM and ERP interfaces with various optional APIs. As in the case of FedEx's plane workers, the real-time data collection capabilities can help reduce risk and save time.
While new is not always better, keeping the status quo — likely in the form of numerous spreadsheets and custom system hacks — can yield an overly complex system wherein IT focuses on building or fixing hacks rather than designing solutions and identifying needs.
In addition, the consistent updates released by SaaS providers allow for fewer IT overhauls in the long-run. However, it should be noted that all-inclusive systems may not fit a company's needs. Service-oriented architectures could help drive all three, but not every company is as large or diverse as FedEx.
When looking to renovate or improve technology, companies should consider specific benefits and prioritize reducing costs, time spent and the prevalence of human error.
