Instructions: Read the case study and answer the question in the Thinking about the Case at the end of the case study reading. Submit your answers on a word document and upload them to the site. FedEx is an organization that never sleeps. The foundation of its business is fast, and every minute counts. Each business day, the companys more than 300,000 team members handle an average of 9 million packages, using over 663 aircraft and 90,000 motorized vehicles. During the holiday season, its operations experience significantly increased package volumes and high customer expectations. The company, which generated $37 billion in revenue in 2012, serves more than 220 countries and territories. Customers use FedEx because they want reliable delivery in a compressed timeframe. When anything disrupts the timely and safe delivery of those packages, FedExs customer service reps are likely to receive a call from a customer. Prompt, efficient customer service is extremely important for staying in this highly competitive global shipping industry, let alone doing so with a satisfactory profit. Incoming telephone calls at the FedEx customer service centers are answered by FedEx reps. Sitting in front of computer monitors in a cluster of cubicles with headsets on, these agents barely have time to stretch their limbs. A caller complains that her package hasnt arrived, which is a common complaint. Another asks if he can change his pickup time. A third caller is confused about the signature: is he supposed to sign for the delivery or will the package just be dropped at his doorstep? The reps are confident and friendly. They welcome any question or complaint even if they have heard it a thousand times before. The words I am sorry are uttered often. They are careful not to give the customers a feeling of being rushed, but try to resolve complaints quickly. Time is money. Several years ago FedEx installed software that reps at the call centers can use to provide faster service. Many of the callers are already registered in the companys database. One of the most frequent requests is to send a FedEx worker to pick up a package. Using the software, a rep can handle such a request in 20 seconds. All she needs to do is enter a name, which leads to a zip code, which in turn leads to a tracking number. That number uniquely identifies the package. Some complaints are more complex. For example, a FedEx driver misunderstood a note a caller had left for him and therefore misdelivered a package. A complaint like that takes no more than 10 minutes to resolve. An experienced and efficient rep can handle about 10 callers in 45 minutes. Ideally, though, nobody would call. If FedEx had its way, at least six of the ten callers would use their computers to go to FedExs website and solve their problem by themselvesbecause about 60 percent of FedExs clients have a computer connected to the Internet. Like other companies, FedEx tries to save labor by directing callers to its website. Yet, many people prefer to use the phone and talk to a human helper. Every time a customer decides to use the companys website instead of telephoning, the company saves up to $1.87. Efforts to divert callers to the site have been fruitful. In 2005, FedEx call centers received 470,000 calls per day, 83,000 fewer than in 2000. This difference in calls translates into a saving of $57.56 million per year. The companys website handles an average of 60 million requests to track packages per month. Operating the website does cost money. Each of these requests costs FedEx 3 cents, amounting to $21.6 million per year. However, if all these requests were made by phone, the cost would exceed $1.36 billion per year. As it is impossible to divert all callers to the website, the company must maintain call centers. The annual cost of these call centers is $326 million. This cost might decrease over the years, as more and more customers use the website, but there will probably always be call centers, because FedEx does not want to lose frustrated customers. In 2000, management purchased customer relationship management software called Clarify. A new policy was established: systems and customer service experts are equally responsible for the call centers. Using PCs, reps can pull up historical data on customers whenever customers call. Customer records that are immediately available to reps include shipping histories, preferences, and images of the paper bills. Customers are happier now than they were just a few years ago. So are the reps. Turnover of service reps has decreased 20 percent. Interestingly, customers are not interested in friendliness, but in quick and accurate information. FedEx constantly follows customer reactions to different help styles. Managers discovered that when reps time is not limited, they tend to speak with customers beyond the time required to solve the problem. Customers perceive them as too talkative, and they get a bad impression of FedEx. Thus, reps are encouraged to get off the phone as soon as the problem is resolved rather than try to be nice. The web has clearly transformed customer service. However, mobile computing now allows the customer to carry the company with them. While FedEx has a website version for smartphones, a fully optimized mobile version was released in late 2010. Mobile-based websites generate a fraction of the traffic realized by traditional websites. However, FedEx experienced steady growth in the mobile-based products. The increasing adoption of the new technology forced an examination of the new product. They believed that a more robust product was needed to support FedExs operations. Ultimately, FedEx developed a product that offered a broader functionality using smartphone technology on popular devices such as Apple iPhones and Android phones. FedEx plans to track the use of the apps and the mobile site against any cost savings realized through reduced calls placed to their call centers. The availability of quality, fast customer service continues to be realized by integrating information technology with the latest mobile technologies. FedEx, like many business organizations, continues to improve through innovative technology initiatives. Sources: FedEx. (2012). About FedEx. Retrieved 13 September, 2012, from http://about.van.fedex.com/ ; Gage, D. (2005). Personal Touch ; Fedex already saves big bucks by steering inquiries to its web site. So how can it justify spending $326 million a year on call-center reps? Baseline, 1(39), 54-54 ; Gordon, R. (2010). FedEx mobile strategy aims for customer loyalty. www.dmnews.com/fedex-mobile-strategy-aims-for-customer-loyalty/article/181706/ Thinking about the Case What is CRM in general? Give examples of different CRM applications. Enumerate and explain the various ways in which the CRM applications discussed here to save costs or help in other ways. Which metrics would you use to measure before and after performance regarding the information technologies implemented in this case? Consider cost, service quality, cycle time, and any other performance factor and provide a specific metric (i.e., ratio, product, or absolute value). What are the challenges of implementing mobile technology? Are the savings similar to web-based systems? As an executive for FedEx or a similar company, what else would you implement using mobile computing and the Internet?