Information technology (IT) is vital to improving organizational efficiencies at all levels. The rapid change of the business environment requires organizations to adapt flexible IT strategies to meet both the business environment changes and the specific needs of the organizations. The logistics and management corporation, FedEx relies and depends upon information technology as a source of competitive advantage and a driver of change (Snyder 65; FedEx Corporation 2009). While IT initiatives offer strategic competitive advantage, the successful implementation however depends on the organizational responsiveness to change. Organizational success of the implementation of IT initiatives is highly correlated with the organizational flexible strategy. The technology of FedEx is based on wireless solutions, automated and improved supply chains, delivery systems and a network strategy applied to all departments. The current technology of FedEx covers such areas as transportation, communication, logistic and distribution.
In FedEx, IT initiatives constitute major change in organizations at all levels of operations. While flexibility in organizational response to change is measured by the speed of adapting to the change, some organizations fail to realize the core objectives behind IT implementations due to weak internal organizational processes. In transporatation, FedEx uses state-of-the-art software which helps to identify and calculate cargo’s origin, place of destination, time of delivery and price, price, etc. To fully utilize the competitive advantage of implementing successful IT strategy, an organization must align internal and external process with the change. Aligning organizational structure, culture, and human resource initiatives with IT is essential to derive full benefits of IT implementations (Carr 76). Wireless technology is applied to all communication processes and support personal communication among employees. The main types of technology which help FedEx to gain competitive advantage are transportation, communication, logistic and distribution. In logistics and distribution, fast delivery is achieved with the help of mobile computers and package tracking systems. In communication, FedEx uses VirtualOrder system, a wireless technology solution (Luftman 157). “”The Internet answered a lot of our prayers,” admits FedEx’s Michael Janes. “Ultimately, we don’t care if it’s your network or ours. We just want the network to be everywhere” (Lappin 2006).
For all departments in FedEx, IT strategy is essential to sustaining organizational strategic competitive advantage. This network strategy is called Cosmos. “At the core of FedEx’s central nervous system is a proprietary online network called Cosmos that tracks the status of every package flowing through the FedEx distribution network – from the instant the shipment is ordered until the moment it is delivered” (Lappin 2006). Building a responsive IT strategy ensures organizational longevity and alignment with the rapid changes in both the business environment and the nature of competition in the 21st century (Snyder 6). In FedEx, IT capabilities, including wireless solutions, automated and improved supply chains and delivery systems, create competitive advantage. In order to ensure organizational longevity, It is important for leadership and lower level management to use this study as a model to initiate such a change to improve organizational efficiency, performance, productivity, and core competencies (Snyder 33).
Logistic system is automated so this capability helps FedEx to achieve competitive advantage. FedEx relies on unique software, BusinessLink, FedEx Ship software and WWW. FedEx offers a unique model to initiate an IT strategy reflecting aligned change organizational wide. The logistics based software enabled “non-store retailers to sell on the web with lower-costs, greater product variety, and better customer service” (Lappin 2006). In addition, aligning IT implementation and internal organizational processes with the external market changes ensure core competencies reflect industry’s key success factors to sustain competitiveness. Wireless technology is essential to achieve strategic competitive advantage for organizations. Information technology offers organizations greater flexibility ability to communicate strategies and efficient knowledge management. The reliance technology has influenced FedEx to align their strategies with IT platforms (Olson 2003). “At the FedEx site, compulsive cybernauts track the status of their FedEx packages in real time without picking up the phone or tying up an expensive customer service operator who would otherwise have to provide the same information” (Lappin 2006).
DHL and UPS are competitors of FedEx, DHL and UPS sell the same services as FedEx within the delivery industry. In contrast to FedEx, UPS has larger market share and is considered the biggest delivery company in the world. DHL specializes in express mail services and express logistics. Both of these companies do not have well supported Internet resources relying on traditional intranet communication between divisions. Competitive advantages of FedEx is based on engineering technologies which tend to be more centralized than those with non-routine technologies, but more flexibly structured than those with routine technologies (Snyder 5). Wireless technologies help FedEx to improve its delivery system and respond effectively to needs and wants of potential customers. Wireless technology and network structure of the departments support FedEx everyday operations and competitive advantage over other companies in this industry (Laudon and Laudon 87). These examples indicate that for FedEx, IT has provided significant improvements and opportunities for the company, its employees, and the clients (Laudon and Laudon 43).
Other competitors of FedEx can be identified as small private service companies: United States Postal Service, Deutsche Post AG, Deutsche Bahn Aktiengesellschaft, Société Nationale des Chemins de Fer Français, East Japan Railway Company, Japan Post Holdings Co., Ltd. The main weakness of these companies is that they cannot invest in information systems and have to rely on pen and pencil system. The managers perceived that any structural changes caused by IT implementation in public agencies have little impact on organizational performance (measured as improved ease of communication and improved technical decision making) (Snyder 81). However, the managers tended to regard IT adoption as having a direct positive impact on improving technical decision making (as opposed to an impact on decision making by way of influences on structure). County government managers may have different responses to developments in IT than state and federal managers, the lack of perceived structural effects of IT is striking (FedEx Corporation (FDX) Yahoo! Finance 2009).
Competitive advantage becomes possible because wireless ttechnology offers the opportunity to better manage and efficiently use information across all organizational levels. Another important strategic advantage businesses realize from IT implementations is extending the Knowledge Management (KM) from the stationary work place to flexible and responsive process (Olson 2003). The utilization of IT enhances both employees’ performance especially in the decision making and customer satisfaction through means of quality and superior services. IT solutions applied to all departments and processes within the organization are primary strategic uses of information technology. Information technology is the gateway for log-term business success as it links the customers and suppliers to the overall strategy of the organization. On way organizations optimize their structure is by applying IT initiatives to improve and strengthen competencies allowing organizational learning, improving quality, and managing customers’ relationship. The most realizable gain from It implementation is that it enables organizational strategy flexibility. Organizations are able to apply reengineering processes to their structure to reflect a shift in the overall strategy responding to market and industry changes (Wheelen and Hunger 65).
In sum, the focus of the FedEx IT development is on the organizational success and effectiveness through the utilization of the human knowledge and expertise improvements. This focus entails the proper distribution of the human capital based on expertise, qualifications, and educational background positioning the right person at the right place and innovative solutions available for modern organziations. For FedEx, IT is a potential source of competitive advantage as the IT development playing a role in strategy implementation; it is an essential element of the infrastructure that supports the value creation process and a potential strategic power for the organization (Snyder 54). The purpose of the evaluation is crucial to making sound decisions because it provides input and feedback needed to ensure the IT development strategies are aligned with the organizational mission. The evaluation process must target clear objectives of the IT development such as; training, technology, values, culture, leadership development, and mission. The development of organization’s human capital starts with the leadership. Leaders who influence change and recognize the role of their followers to change are ones who are most influential as they emphasize the gain for the organization over their personal gain. To fully utilize the competitive opportunity in wireless technology, FedEx aligns structure, culture, mission, goals, and objectives based on the market’s specific needs with their current technology initiatives.
Carr, N. G. Does IT Matter? Information Technology and the Corrosion of Competitive Advantage. Harvard Business School Press; 2004.
FedEx Corporation. 2009.
FedEx Corporation (FDX) Yahoo! Finance. 2009.
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Lappin, Todd. “The Airline of the Internet.” Wired Magazine. 2006.
Luftman, Jerry N. “Do You Need an IT Strategy.” Competing in the Information Age. New York: Oxford University Press. 1996. P. 157.
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Snyder, L. Fluency with Information Technology: Skills, Concepts, and Capabilities (3rd Edition). Addison Wesley; 3 edition, 2007.
Wheelen, Th L., Hunger, J. D. Strategic Management and Business Policy. Prentice Hall 19th Edition, 2005.