FedEx’s Global Finance Transformation: A Drive to Digital Innovation

FedEx launched its global digital finance transformation for 220 countries and territories with a series of discussions about processes with employees in regions around the world to gain and maintain buy-in at all levels of the organization. Leading a global finance digital transformation at FedEx started with conversations with employees to understand how business processes and agility could be improved in a new cloud environment, says Vice President of Business Transformation Chris Wood.

Source: FedEx’s Global Finance Transformation: A Drive to Digital Innovation

The implementation of Oracle’s cloud-based enterprise resource planning (ERP) and analytics worldwide continues, as do training and communications that are changing attitudes about work, careers, and company culture across regions. Here, Wood discusses the company’s ongoing transformation and explains how he and others have overcome the obstacles that can get in the way of success.

What led to the global digital and finance transformation programs you lead at FedEx, and what inspired such a major undertaking?

Wood: The business had critical needs: to integrate FedEx’s recent acquisitions and realize synergies of post-acquisitions quickly, and to innovate digitally in the finance business areas. We knew we had to move away from the existing multiple on-premise systems to an integrated cloud platform. We decided the time was right to move FedEx financial systems globally to Oracle Cloud.

We were asked to put together a strategy, which we communicated to the board of directors. The board understood the need to do what we had planned and the risks involved, including the risk of doing nothing.

The vision and ambition for this global digital transformation came mainly from our 20 years of experience addressing similar issues, with hundreds of projects ranging from general ledgers to back office global transformations, but none at this scale and level of complexity. Those experiences, and the need to innovate digitally, led me to understand that large-scale transformation should be about continuous adaptation and evolution; if you don’t evolve and adapt the new digital technologies provided by the cloud in a continuous manner, your systems and processes become outdated and create a drag on the business. We believe that technology for the sake of technology is meaningless, but technology as an enabler of business innovation is a very powerful thing.

How do you view transformation in general, and where did you start FedEx’s transformation journey?

Transformation to me is the creation of a culture of continuous adaptation and evolution. It’s about adapting to be able to solve the next major business problem rather than trying to achieve a poorly defined goal to completely transform an organization with a specific endpoint in mind. In a transformation, you are constantly remaking processes, systems, and skills to adopt new ways of doing things that provide greater value to the company. That mindset is especially important today with the fast pace of technology changes and their impact on the business and on human work. Transformation requires a more formal and disciplined approach to innovation and change, and I see it as a competitive edge for any large company to be able to digest, understand, leverage, and assimilate those changes.

The first step in the FedEx transformation wasn’t designing or deploying technology but rather taking time upfront to establish the foundation for continuous innovation and analyze the business changes needed for the processes that a movement to the cloud would impact. Our teams led intense, detailed conversations with the business globally about data and processes, with contributors throughout all levels of the organization—including officers, management, and staff—to understand how processes and data varied across functions and regions. From those discussions, we built a common set of global business protocols and then added a governance and innovation framework. That set of conversations helped us build the foundation that could be adapted and localized for each region within the cloud environment.

At this point, we have committed to cloud ERP and analytics globally and have completed the Europe, Asia, and Middle East international deployments. The Americas rollout is expected to be completed within one to two years, but the digital foundation and cloud capability is already operating in most regions we serve.

[wsj-responsive-pullquote html=”Technology for the sake of technology is meaningless, but technology as an enabler of business innovation is a very powerful thing.” tagline=”Chris Wood, vice president of business transformation, FedEx” smallhead=”” newsletter=”” placement=”Inline”]

What are some benefits of FedEx’s move to the cloud?

The FedEx Global Finance teams now have more digitally enabled processes, insights, and workforces. With the cloud foundation in place globally, we are building next-generation capabilities for data and advanced analytics; we are leveraging robotic process automation to reduce the hours required for repetitive work and embracing AI as it becomes more prevalent. Although many companies have been working on that for years, the size and scope of FedEx—we have more than half a million team members and operate in more than 220 countries—have made it difficult to reach that level of efficiency in the past. As an example of things to come, when we have fully deployed certain modules, all FedEx team members will have automated travel and expense reporting, which can be done via texting or, in some cases, through voice commands with a virtual assistant. We were not able to reach that level of automation on a global scale before.

Perhaps the biggest advantage we see is the resulting culture to continuously consume, evolve, and adapt innovations delivered by the cloud platform. On a quarterly basis, our teams evaluate new digital technologies and apply them to solve for existing and new business innovations. With the new cloud foundation, we can avoid falling behind on the technology curve. That was a chief risk we were facing from a strategic perspective at the start of this transformation.

How does finance fit into this new cloud environment?

Nearly all areas of finance at FedEx—including accounting, treasury, procurement, accounts payables, internal audit, tax, and FP&A—are now standardizing with digital solutions.

Given that you sit in finance, how do you interact with the CIO and the IT function?

While my team and I are part of the finance organization, we partner with IT and the business, which is integral to the success of this transformation. My team understands both business and technology. We work with IT to evaluate which technologies are coming to the forefront and how best to leverage them for the business, and we develop plans jointly. We bring business and technology together and provide project discipline and strong governance, which is the essential third core element needed for successful transformations.

Transformations often require a change in culture. What has your team done to help FedEx’s culture adapt to the transformation?

The magnitude of the changes we’ve asked of our people is substantial. Moving from multiple legacy systems to innovate digitally using the cloud has changed how the finance and operations teams function in many ways. We replaced low-level manual activities to which employees had grown accustomed. They needed to accept change, embrace it, and lean into the next set of changes. And it’s important that they view the transformation as positive for their careers and the organization. The biggest step has been to adopt a culture of change and create a habit of continuous change, such as asking what skills might need to be enhanced in order to leverage new technologies. We then encourage and assist our workforce to update their skills to allow them to more effectively leverage the new system functionality. As part of this culture, we want employees to take responsibility for their own development.

We’ve deployed a communication strategy to maintain buy-in at all levels of the organization, and we have devoted a significant portion of the budget to change management. Senior executives have spoken about the importance of innovation and the changes by video, and we’ve discussed the new processes in written communications, town halls, and forums, and have provided extensive training. Essentially, we want to have as many communication touch points with employees as possible. And we meet regularly with leadership groups and the board of directors to communicate the status of projects and other updates.

It also has been important to deliver high-quality go-lives on time and on budget through all our interim milestones. The discipline has helped build executives’ confidence in the transformation journey and provided our teams an opportunity to showcase the value of continuous innovation.

—by John Labate, Deloitte Services LP, editor, Deloitte Insights in The Wall Street Journal

Related Content

• 6 Key Trends Transforming the Tax Function
• Built-to-Evolve Data Can Help Transform Finance
• Northwell Health Leverages Digital for Finance Innovation