UPS puts IT in driver's seat

When a global company with an annual IT spend of $US 1 billion talks about its corporate strategy, market players sit up and listen.

This is particularly true when the company can successfully claim its IT strategy has set it apart and been the over-riding differentiator in tough times.

Speaking to Computerworld at the launch of its Web-based Signature Tracking service in Australia, United Parcel Service (UPS) marketing vice president for the Asia Pacific, Matthew McGee, said the company is about "information systems" not just trucks and delivery.

"We are a services company and our success is in our supply chain management capabilities and extending new IT tools to our customers," he said.

UPS certainly has the infrastructure to extend IT capabilities to customers housing the largest DB2 database in the world, 15 mainframes and 4000 technology employees.

Spreading the success of the UPS supply chain model, McGee is in Australia implementing online tools for customers.

Even if it means pushing customers "kicking and screaming" to provide e-commerce solutions, McGee said it is certainly worthwhile and UPS freely provides software as part of the company's "value proposition".

"For large customers who don't want to make a significant IT investment we will even provide the hardware; Australia is certainly primed for these tools," he said.

"We go into the organisation to understand its business processes, because technology is not effective without the right processes in place; good technology and bad processes are a recipe for disaster."

UPS Signature Tracking promises to streamline supply chain management processes by shortening billing cycles through the use of digital proof of delivery in real time.

While McGee admits UPS is not number one in the local market, where it competes against the likes of FedEx, DHL and TNT, he said the Australian market shows big promise.

"Australia is holding up in this downturn and is driving our regional strategy along with China," he said.

IT will remain a critical differentiator in the UPS strategy, including the development of technology hubs here and in the Philippines.

McGee said the company has used its large IT infrastructure to develop solutions for its customers in-house and made a clear business decision 10 years ago not to outsource.

"We have kept our IT in-house to maintain competitive advantage; we didn't want to outsource our strategy and be beholden to someone else, it has proven to be the right move."