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Delivering on a Promise

FedEx uses Oracle solutions to provide the customer experience that it’s known for.

by Tara Swords

With its ubiquitous logo and ability to ship to almost any location around the globe, FedEx is one of the world’s most recognized brands. It’s also one of the world’s most admired brands, consistently placing near the top of “best of” lists from Fortune, Computerworld, InformationWeek, the Reputation Institute, and others.

That stellar reputation is no small feat. Each customer interaction represents an opportunity to get it right. That means FedEx staff must do more than just deliver packages on time; they must have the right information at the right time when customers contact FedEx. It means all customer interactions must be based on FedEx’ Purple Promise: “I will make every FedEx experience outstanding.”

To provide offshore customers with the kind of outstanding experience that would secure their business in the future, FedEx recently deployed Oracle Advanced Collections, a module of Oracle E-Business Suite 12, in international regions of FedEx. 

“The benefit of Oracle Advanced Collections is that we revolutionized our change management and improved our customer experience by redirecting how we communicate with our customers,” says Jay Cofield, vice president, global revenue planning and controls, at FedEx TechConnect, a subsidiary of FedEx Corporate Services. 

Multiple Customer Touchpoints

The strength of the FedEx brand is evidence of a commitment to customer service, which has helped the company stay at the head of the company’s highly competitive industry. The transportation, e-commerce, and business services market has grown in recent years, driven by global trade and growth in emerging economies such as Brazil, China, India, and Russia.

FedEx operates in more than 220 countries and territories, so managers must always think about setting the company’s services apart from other international and domestic shippers. Although the company has shipped some impressive packages in its time—giant pandas, humanitarian relief supplies, and artifacts from the Titanic—it takes only one late shipment or frustrating customer contact to disappoint a customer. That’s one reason FedEx leadership decided to choose Oracle for consolidating multiple accounts receivable systems into one single platform. Doing so strengthened the “one-and-done” customer strategy: customers can get all of their needs handled in a single interaction.

FedEx needed technology to overcome this challenge, so Cofield worked with his IT partner at FedEx Services, Anne Wulff, vice president, services revenue systems, and turned to Oracle and the company’s customer relationship management (CRM) application to integrate a common workflow and collections tool.

Costs Down, Customer Satisfaction Up

Many companies look for software that will allow plenty of customization. What was most important to FedEx decision-makers, however, was that their new software should not be customized. Instead, Cofield wanted a solution that was built around standard processes that the organization could adopt. For FedEx purposes, Oracle technology had the right combination of standards and flexibility.

“We wanted to keep this as pure to the product as we could,” says Jeffrey Thelen, managing director of global services planning and engineering at FedEx. “We did more modification of our internal business processes. Oracle was built around best practices, so we leveraged the out-of-the-box software and changed our business processes.”

In 2009, FedEx TechConnect led implementation and rollout of the first Oracle Advanced Collections 12 deployment in FedEx’s Canada revenue and customer service operations. Because Canada has similarities with the U.S. yet is also international—with a different currency and two languages—this was an ideal test run. It would throw the team just enough curve balls to prepare them for future implementations in more-complex geographies.

“There was a great relationship with Oracle to work with us as one of the first major implementers using Release 12,” Cofield says. “One of the biggest success factors that made it go smoothly was the teamwork between Oracle and FedEx.”

At the beginning of the implementation, the team decided to aim for a 15 percent reduction in operating and collection costs. Within one year of going live, they had hit that target—and more—with Canada.

“The other big measure is in days sales outstanding [DSO],” Thelen says. “We had a four-day improvement in DSO, so we were able to collect quicker and at a lower cost while maintaining our customer experience.”

Productivity went up. Bad debt came down, which can be attributed in part to the new, consistent standardized process. “There was some inconsistency before, and when you bring in an application like this with built-in controls, it forces consistency into the processes,” says Thelen.

A Gentler Approach

Customers proactively contacting FedEx benefit from line-level functionality in the Oracle Advanced Collections solution. For example, a customer might prefer to receive one monthly invoice listing all of the month’s separate shipments. But if the customer requests to be credited for one shipment on a multishipment invoice, customer-facing employees can use the line-level functionality to apply a payment across the other shipments.

“If you’re the customer, you don’t care that I have all of these issues to work through in my system,” Cofield says. “All you care about is that you get the level of customer experience you expect and that you get the issue you are calling about resolved in a timely fashion.”

In addition, FedEx agents now take a more individualized approach to customers with outstanding invoices. First, the system sends an automated reminder letter about the outstanding amount. Then, after analyzing pay patterns, FedEx determines the proper time to send a second automated reminder so it doesn’t risk a negative customer experience.

“It works much better,” Cofield says. “Inbound calls from our customers have a higher likelihood of success when a customer is ready to discuss settlement of their invoice. If we’re outbound calling, the chances of connecting with a customer who wants to speak to you about paying their invoice is not as likely.”

And when customers do call in, reps from anywhere in the world will have access to the same information, thanks to the integration of Oracle solutions with FedEx’s CRM system.

Redesigned with Customers in Mind

Redesigning processes around the customer’s wishes might sound like an obviously smart choice, but it’s the choice that far more companies need to make, says Joe Pine, a customer experience expert and founder of the consulting firm Strategic Horizons.

“When you look at processes from an internal perspective, you will optimize around efficiencies because that’s how you’re measured,” Pine says. “But customers care about how things flow in a way that makes sense to them. Your customers can tell how well you’re organized internally by what they see and the things that don’t fit.”

Now, where Oracle Advanced Collections is live, FedEx is more aligned with customers’ wishes. So far, that includes Canada, the Asia Pacific region, and several locations in Europe and Latin America. As Cofield and his team are learning, the software can adjust depending on a country’s unique needs.

“With Oracle, many of the business rules are configurable by our business teams,” Cofield says. “This gives our countries and regions flexibility. They can make modifications to collection strategies to be even more effective in their particular country.”

A Tool That Makes Employees Happy

A side benefit of the Oracle implementation is the users’ enthusiasm for the system. “In fact,” Cofield says, “the managers in the regions tell us the Oracle product is helping them to recruit employees. People in the work force want to work on the latest software.” Cofield got a feel for this demand during a recent trip to India, where employees in operations relayed to him how excited they were to be getting an Oracle solution.

“If you go to work for FedEx, which is in the top 10 of Fortune’s World’s Most Admired Companies to work for, you don’t want to work on an aging mainframe system that’s written in COBOL—the Gen X and Y workers just don’t know how to respond to that,” Cofield says. “Some of our success in this enormous and comprehensive rollout is inspired by our employees wanting to adopt and learn the Oracle product and the global standardized processes that we have put in place.”

Thelen agrees, underscoring how the automated workflows in the software help FedEx employees boost their performance. “Oracle Advanced Collections gives them what work items are most important and prioritizes their work for them,” he says. “It provides common information across the shipping of the package and anything that could affect that shipment or invoice, so they have all the information at their fingertips to help the customer.”

Finally, the system helps FedEx leaders make better decisions about their business and the future.

“If we are in Asia and we are getting a metric on cash applications applied by hour at some particular rate, and it’s significantly different somewhere else in the world, management can use that to determine that maybe there’s something about the process that needs to be shared with other offshore regions,” Cofield says.

“I believe the quality that our customers expect from FedEx has been strengthened,” Cofield says. “We are now focusing our resources and energies on the right things.”

Tara Swords is a freelance writer based in Chicago, Illinois.

 
 
Snapshot FedEx
    • Location: Memphis, Tennessee
    • Industry: Transportation, e-commerce, and business services
    • Team members: 290,000
    • Revenue: US$39.3 billion in FY 2011
    • Oracle products: Oracle E-Business Suite, including Oracle Advanced Collections
Snapshot Jay Cofield
  • Vice President, Global Revenue Planning and Controls, FedEx TechConnect
  • Length of tenure: 25 years
  • Education: “Efficiency is doing things right; effectiveness is doing the right things.” —Peter F. Drucker
Moving Forward

FedEx management has invested heavily in the call center but is increasingly emphasizing the online touchpoint. In fact, another project involved the integration of Oracle Advanced Collections 12 with billing at fedex.com. Jay Cofield, vice president, global revenue planning and controls, at FedEx TechConnect, a subsidiary of FedEx Corporate Services, says customers are demanding this type of self-service.

“This allows our customers to have an electronic, end-to-end paperless revenue transaction, which makes it even more of an improved customer experience. The customer has the ability to navigate through our Web applications, to query online, and to receive quick turnaround responses,” Cofield says. “That is our future.”

 

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