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Federal Express Corporation

We can look at our financial projections for the year and tell the Board of Directors exactly where direct management control contributed to the bottom line.

When a customer "must have" parts to keep a vital production line running, emergency generators to restore power after a storm, or a priceless art work that needs special handling, FedEx Custom Critical is there to provide exclusive-use, time-specific shipping throughout the United States, Canada, and Europe. An independently operated subsidiary of $20 billion FedEx Corporation, Ohio-based FedEx Custom Critical services tens of thousands of customers annually, and manages a fresh slate of do-or-die delivery challenges every day.

At the very center of the whirlwind, the FedEx Custom Critical finance department wields its Cognos applications to maintain budgets and rolling forecasts, and to provide ad-hoc analysis of sales forecasts with cool precision. Before adopting Cognos, however, FedEx Custom Critical finance relied on Microsoft® Excel spreadsheets, a very costly solution which required numerous worker-hours to manage, presented serious version control problems, and added very little value for forecasting or analysis. The spreadsheet approach also burdened the finance team with limited visibility, a challenges in reconciling data, and difficulty developing long-range plans.

"We didn't have a tool that was collaborative," says Keith Cline, FedEx Custom Critical manager of financial planning and analysis. "It just didn't exist in that Excel environment. A big challenge for us was budget and forecast accuracy. It was very difficult, because we had all of these varying degrees of detailed support and collaboration that went into the spreadsheets. So--at the end of the day--it was hard for us to feel confident in the numbers we had."

AN ENTERPRISE POINT OF VIEW

It was quite clear that FedEx Custom Critical needed to rethink financial performance management from an enterprise planning perspective. According to Cline, FedEx Custom Critical identified a number of business objectives to achieve with a new planning solution:

• Simplify and shorten budget and forecast cycles
• Increase budget and forecast accuracy
• Improve collaborative process
• Increase visibility, awareness, and accountability with management to make planning more than just a finance department exercise
• Interact and communicate with PeopleSoft financial system
• Develop a rolling forecast
• Link long-range planning with ad hoc analysis, budget, and forecasts for a more integrated approach

SHOPPING FOR SOLUTIONS

Once business objectives were agreed upon, FedEx Custom Critical began looking for an enterprise planning system that could help meet those objectives. To help evaluate planning solutions, Cline and the finance team prepared a set of selection criteria:

• Flexibility and usability
• Rapid time-to-value
• Minimal end-user training
• Finance department maintained (little or no IT support required)
• Ease of integration with existing systems (i.e. Oracle database, PeopleSoft Financials)
• Powerful analytical capabilities (a heavily weighted criterion)

FedEx Custom Critical evaluated solution proposals from Cognos, Comshare, Hyperion, and PeopleSoft. After rigorous initial screening, the competitive field was reduced to two: Cognos Enterprise Planning and Comshare MPC. In a head-to-head capability test, Cognos and Comshare were asked to model typical FedEx Custom Critical scenarios using their solutions. According to Cline, the Cognos solution offered two very workable alternatives: either a user-friendly assortment of built-in planning functions or a series of "point-and-click" steps that FedEx Custom Critical personnel could follow quite easily.

Comshare MPC, on the other hand, required Cline and his team to write program code to deal with the test problems they had outlined. Cognos emerged the clear winner. "I'm not an IT person. I don't want to write SQL code," explained Cline. "It [Comshare MPC] didn't seem like a viable solution to me. Cognos gave us an easy-to-use tool that even non-technical users could master." According to Cline, a real Cognos plus was the set of robust analytical tools that would facilitate development of forecasting models that enabled users to enter key drivers and generate a forecast at the same detail level as the general ledger.

ENTERPRISE PLANNING PAYS OFF

According to Cline, Cognos reduced the time spent on forecasting from two days per week to just two hours per week. And the annual budget cycle, which historically gobbled up 16 weeks, shrunk to only four weeks. Cline was quick to note increased forecast accuracy and deeper visibility into corporate performance as well.

"Cognos has helped our financial planning and analysis team evolve their roles in the organization," said Cline. "They've gone from being information gatherers--number crunchers--to strategic business partners." Leveraging their Cognos Enterprise Planning solution, the FedEx Custom Critical finance team can now offer real insight and guidance regarding the company's business strategy and operation plans. "Cognos has leveled the playing field between the budget, forecast, ad hoc analysis, and actuals that go through our general ledger," added Cline. "We have been able to structure different parts of our Cognos model to capture cost savings initiatives and discretionary cost control, quantifying that increase in productivity. We can look at our financial projections for the year and tell the board of directors exactly where direct management control contributed to the bottom line."

From spreadsheets to enterprise business planning, and from planning pain to planning productivity, FedEx Custom Critical has reaped such benefit in the finance group that the company plans to expand its Cognos Enterprise Planning implementation by linking to payroll and human resources systems.

ABOUT FEDEX CUSTOM CRITICAL

The premier provider of expedited time-critical shipping, Ohio-based FedEx Custom Critical is an independently operated subsidiary of $20 billion FedEx Corporation, the global leader in transportation, e-commerce, and supply chain management services. FedEx Custom Critical comprises several divisions: Surface Expedite, for nonstop, door-to-door transport of critical shipments; White Glove Services®, for shipments that require special care in handling; and CharterAir®, which offers an array of expedited air solutions to meet critical customer delivery schedules. FedEx Custom Critical services thousands of customers who manufacture durable goods in market segments such as the automotive industry that require special shipping-product expertise.