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Case Study 1-1 Using Information Technologies at Federal Express Finance Technology in Society Application Reflective Thinking Global

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. FedEx 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 FedEx 3 cents, costs have been reduced from more than $1.36 billion 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 customers' 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, FedEx still spends almost $326 million per year on its call center to reduce customers 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 representativesjobs easier and more efficient and to speed up response time.

1. 1. Is technology by itself enough to ensure high-quality customer service? 2. What are FedEx's estimated annual savings from using information technology? 3. What are two examples of information technologies used by FedEx? How might these technologies help FedEx maintain a competitive advantage?