FedEx moves accounts receivable system to Oracle Cloud
Migrating to Oracle Cloud Infrastructure helped FedEx lower costs, expand finance and revenue capabilities, and give IT teams more time for 'change-the-business' initiatives.
Moving at FedEx speed
FedEx CIO Rob Carter charted a broad, long-term technology strategy for his core team: minimize the company’s data center footprint through cloud-based solutions. From there, it’s up to seasoned leaders like Rajesh Singh, a 23-year FedEx veteran, to make that vision a reality.
As vice president of IT in charge of pricing and revenue systems, Singh’s team manages three large FedEx databases, part of an Oracle system that handles the billing and accounts receivable for the more than 15.5 million packages the company delivers each day. Moving this large workload to the cloud—more than 500 terabytes of production data alone—would go a long way toward the team’s goal of minimizing the on-premises data center footprint for FedEx.
“None of us had done anything like this before in the cloud, especially of this size and complexity,” Singh says.
And when FedEx picks a direction, it looks to get there fast. Working with Oracle, FedEx conducted two proofs of concept during seven weeks starting in June 2020. The project involved migrating Oracle E-Business Suite applications and all the related Oracle Databases and applications to Oracle Cloud Infrastructure (OCI). The project got the green light in August, and the FedEx and Oracle teams completed the migration in March 2021.
Moving this critical, cash-driving system to run on OCI has had many benefits for IT, Finance, and Revenue Operations. For IT teams, the benefits included lowering computing costs, providing flex capacity for peak-season surges, and giving FedEx IT teams more time to spend on “change-the-business” initiatives, instead of on system maintenance. For Finance and Revenue teams, they can now run collections strategies daily for all six global regions, instead of having to alternate U.S. and international account analyses every other day. And they have sped up the month-end and quarter-end close processes. “This process is critical as it feeds our financial reporting,” Singh says.
A high-stakes cloud migration
Even when a company has a clearly defined strategy for moving to the cloud, the decision of when to move any given workload often takes some trigger. In the case of FedEx, as it is for many companies, it was that the data center hardware running its Oracle E-Business Suite financial software was at end-of-life.
“We had to make the decision: Either replace the on-prem hardware or move the application to OCI,” Singh says.
The case for OCI proved compelling. The proofs of concept showed that running E-Business Suite using the unique capabilities of Oracle Exadata Cloud Service addressed three FedEx pain points.
First, OCI delivers cost savings compared with running these database-heavy workloads in FedEx data centers. Second, OCI provides FedEx performance and reliability improvements because of Oracle’s ability to optimize the amount of compute and database resources to align with the huge daily workloads as well as peak holiday shipping seasons. Third, FedEx expects OCI will enhance its disaster recovery and business continuity options, once the application is expanded to multiple OCI regions.
The stakes were high because Oracle E-Business Suite manages around 75% of accounts receivable for FedEx. The Oracle team working on this project got a taste of what it means to move at FedEx speed.
“We appreciate Oracle's collaboration on this project, bringing the needed resources to bear on any problem,” Singh says. “They were challenged by the pace and the diligence that the FedEx team brought to the table, and they responded with solutions to resolve them in a timely manner. The result was an efficient and successful migration despite the size and the scope of the effort.”
The FedEx team worked closely with Oracle Advanced Customer Services (ACS) in implementing this project, including leveraging managed applications and database services from ACS. Together they built a productive relationship that focused on project rewards, managed risks, and found solutions as needed.
Business and IT benefits
Since FedEx migrated its accounts receivables to OCI, the Revenue Operations team is seeing tangible benefits. In addition to being able to run daily collections analyses worldwide for the first time, they’re also seeing faster invoice and payment processing, and they’re getting double-digit percentage performance improvements for GUI-based applications, allowing the Revenue team to be more efficient.
For FedEx Accounting users, a major benefit of running the Oracle E-Business Suite application on OCI “has been the ability to run the month-end and quarter-end close processes more efficiently than ever before,” Singh says.
For the IT team, the move to OCI means FedEx technologists can spend less time on hardware support and maintenance, and more time on initiatives such as rolling out new customer-facing features and capabilities. Another benefit comes in the ability to quickly spin up and down OCI capacity, says Jitindra Mehra, IT director at FedEx Services. “During our peak season, we can add CPUs and memory without system outages,” Mehra says. “We are looking forward to that flexibility.”
Looking back on what the FedEx and Oracle teams accomplished, Singh takes satisfaction in the benefits the work is delivering. “I’m glad we made the decision to move the Oracle E-Business Suite instance to OCI,” he says. “It’s one of the best decisions I have been part of in my 23 years at FedEx.”