CASE STUDY 1-1 USING INFORMATION TECHNOLOGIES AT FEDERAL EXPRESS
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Federal Express (FedEx), founded in 1971, handles an average of 3 million package-tracking requests every day (http://about.van.fedex.com/). To stay ahead in a highly competitive industry, the company focuses on customer service by maintaining a comprehensive Web site, FedEx.com, where it assists customers and reduces costs. For example, every request for information that is handled at the Web site rather than by the call center saves an estimated $1.87. Federal Express has reported that customer calls have decreased by 83,000 per day since 2000, which saves the company $57.56 million per year. And because each package-tracking request costs Federal Express 3 cents, costs have been reduced from more than $1.36 billion per year to $21.6 million per year by customers using the Web site instead of the call center.
Another technology that improves customer service is Ship Manager, an application installed on customersâ€™ sites so users can weigh packages, determine shipping charges, and print shipping labels. Customers can also link their invoicing, billing, accounting, and inventory systems to Ship Manager.
However, Federal Express still spends almost $326 million per year on its call center in order to reduce customersâ€™ frustration when the Web site is down or when customers have difficulty using it. The company uses customer relationship management software called Clarify in its call centers to make customer service representativesâ€™ jobs easier and more efficient and to speed up response time.
1. Is technology by itself enough to ensure high-quality customer service?
2. What are Federal Expressâ€™s estimated annual savings from using information technology?
3. What are a couple of examples of information technologies used by Federal Express?