Federal Express (Fed Ex), founded in 1971, handles an average of 3 million packa
ID: 3830512 • Letter: F
Question
Federal Express (Fed Ex), founded in 1971, handles an average of 3 million package-tracking requests every day (http://about.fedex.designcdt.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 website rather than the call center saves an estimated $1.87. Federal Express has reported the customers 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 website 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, Federal Express still spends almost $326 million per year on its call center in order to reduce customers’ frustration when the website is down or when customers have difficulty using it. The company uses customer relationship management software called Clarify in its call centers to make customers service representatives’ jobs easier and more efficient and to speed up response time.
Answer the following questions:
Is technology by itself enough to ensure high-quality customer service?
What are Federal Express’s estimated annual savings from using information technology?
What are a couple of examples of information technologies used by Federal Express?
Explanation / Answer
Technology plays a vital role in providing customers quality service but technology itself not enough to ensure it. Service centers are necessary in providing customers useful information when there is need of emegency. Proper planning has to be required in implementing the software that has been opted for the business scenario. For example FEDEX implementing CRM software owned by clarify. All the end users are not aware of the software and has to be trained by the FEDEX employees to utilize the software. For this customer care center has to be placed. Not only the technology but good communication to the users satisfy their needs thereby ensuring high quality service.
They have reduced their investment on call centers drastically from 1.36 billion$ to 21.6 millon$ which saves them 1.15billion $. Apart from this it also save nearly 57 million dollars from its call center. Implementing CRM software costs them quite a bit when compared to the manual intervention,using CRM software hugely reduces cost maintenance. Due to the present market conditions and considering its 3 million package requests on daily basis anually FEDEX saving more than 3billion $ by using Informatiob Technology.
FEDEX ship manager and COSMOS are two computer based applications used by FEDEX to provide their custoners in time updates regarding their packages.
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