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Juan Perez, who became CIO of UPS in January 2016, has worked for the logistics specialist for 28 years. Although that stint demonstrates a remarkable level of service, he says it is far from unique.
UPS employs almost 440,000 people globally and operates in more than 220 countries and territories. Perez says the vast scale of the business means many people spend their entire working lives with the company.
“They get the opportunity to move around the business, to do multiple jobs in all kinds of areas of work across many different geographical locations,” he says. “People can gain experience and eventually have the chance to become effective managers. That’s a tradition in the company and we believe giving people the opportunity to rotate positions creates more rounded employees.”
Perez himself has benefited from that flexible approach. He has relocated seven times and worked in almost every line of business in the company, from logistics and distribution to freight forwarding and international.
“All those experiences, and certainly from a technology standpoint, make you more effective at being able to drive IT-enabled change for the business,” he says.
The key role for Perez as UPS CIO is to help the firm make the most of its $1.1bn annual IT budget. As well as managing IT, Perez was recently given additional responsibility for engineering. The move coincides with the creation of an advanced technology group at UPS, which focuses on automation and improvements to its package delivery network.
Perez will therefore certainly have a busy agenda as he continues to help UPS exploit data and technology.
Perez lists three key achievements during his first 18 months as UPS CIO. First, his work on internal capability and the continued development of the firm’s 5,000-plus IT professionals. Second, a new focus on innovation across the organisation, where IT is an enabler of new ideas and capabilities. And third, Perez points to the creation of what he calls a “business-intimate IT department”, where the aim has been to create a much closer working relationship between IT and the business.
Effective use of IT
Perez says his technology team must understand the importance of close, constant contact with the rest of the organisation, and points out that engagement can help foster growth through the effective use of IT. “There is still work that needs to be done, but I am really happy to see how our technology team continues to get closer to the rest of the business,” he says.
The CIO says his role in this process is crucial, suggesting that effective leadership is the key to IT organisations getting more connected and more collaborative with line-of-business units. “I see my role as a CIO as an enabler,” he says. “I have a responsibility to help the organisation do the things it needs to do to enable business growth.”
Perez says he must understand clearly how IT can help and he must push that message to the rest of his department. “It can take time to ensure that message is pushed across the team, so I communicate as regularly as possible with my IT leadership groups,” he says. “Such engagement can help the business to grow through the effective use of IT.”
Continued competitiveness relies on UPS being able to draw on a strong, in-house IT team, says Perez. He says internal training programmes are crucial, but adds that UPS also needs to find ways to recruit the best and brightest talent, both at entry level and at mid-career.
Perez says the firm takes a multi-pronged approach to recruitment. UPS runs an internship scheme and 200 people recently passed through its summer programme. These graduates created 15 outstanding project ideas, he says.
The company’s leadership team engaged with the interns and will draw on the pool of talent to help fill entry-level gaps. Perez and his peers recognise the important of continued career development as these new entrants become permanent employees.
“People want their merchandise quicker than ever before. They also want more visibility and flexibility. It is a complex series of problems and that creates a fascinating challenge”
Juan Perez, UPS
“We need to create a great value proposition for people who want to come and work for UPS,” he says. “Wages and benefits obviously matter, but I want to see the opportunities that come from working for us. UPS faces some of the most interesting and challenging logistics issues.”
“People want their merchandise quicker than ever before. They also want more visibility, with flexibility to change their deliveries. It is a complex series of problems and that creates a fascinating challenge for IT professionals. Solving those challenges now, and in the future, will require advanced technology – and that’s a great proposition to put to potential candidates.”
Skills development, of course, remains a work in progress in the digital age. Perez understands that continued automation raises fears among workers, especially those who feel their roles might be about to change or disappear altogether. The best answer, particularly for technology staff, is continued learning and development, he says.
“IT professionals must collectively continue to hone their skills,” he says. “The trend towards increasing automation won’t slow, especially as we must develop advanced capabilities for the rest of the business. Our people are very aware that they need to continue to improve their skillsets.”
Perez is confident that innovation will help UPS to work more efficiently, to grow and to create more work opportunities across the organisation. His key priorities over the next 18 months are the factors – such as reliability, architecture and security – that make agile and successful change an attainable goal.
“The IT, engineering and advanced technology group will work together to bring the benefits of those projects to the rest of the business,” says Perez, adding that automation, rather than replacing talent, will help boost productivity and create new opportunities.
More personal touch
“Our objective is not to eliminate jobs at UPS, but to create very different kinds of roles. These positions might well be more customer-facing. They are positions that will allow us to create a new focus internally and provide better service to our customers. We want to be in a position where we can actually use advanced technology to develop a more personal touch as a business.”
Significant progress is already being made. Perez points to Orion, the firm’s fleet management system, which uses telematics and advanced algorithms to create optimal routes for delivery drivers. The IT team is currently working on the third version of the technology and is starting to push the benefits of the US implementation of Orion across the global business.
Another key project, known as Network Planning Tools, will use big data to help UPS optimise its logistics network, says Perez. The system will use real-time insight, advanced analytics and machine learning to allow the firm’s workers to make smarter business decisions. Perez expects his team to begin rolling out the initiative in early 2018.
“We collect a huge amount of information across our business units,” he says. “The future for us is about taking advantage of all that data to make better decisions, to provide better information to our customers and to provide comprehensive visibility about everything that’s moving across our supply chain and network.”
The advanced technology group that Perez leads will also play a key role in finding creative solutions to business challenges. UPS recently unveiled the third version of its chatbot that uses artificial intelligence to help customers find rates and tracking information across a series of platforms, including Amazon Echo and Facebook. Perez says UPS is also concentrating on an initiative that uses virtual reality to help the firm train its drivers.
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Great concepts, it appears, can spring from almost every direction. “We just need to make sure that we remain open and that we listen to these ideas, even if some of the suggestions are not great,” says Perez. “The key to success is to find mechanisms to recognise the ideas and to not stop the creativity and innovation.”
Perez must therefore maintain a careful balance as UPS CIO. He must help the rest of the business exploit innovation to help the firm maintain its competitive advantage, but he cannot afford to ignore day-to-day concerns. This need for an effective balance is familiar to all IT leaders, he says.
“Modern CIOs face a range of challenges,” says Perez. “The technologies around us are advancing rapidly but, at the same time, we need to keep up and then make the right decisions regarding which systems and services will create the biggest value for the rest of the business.”
Despite his long history with the firm, Perez’s work as UPS’s head of technology and engineering is at an early stage. When he thinks about his long-term objectives, he hopes he can help the logistics specialist to continue to develop an intimate relationship between IT and the rest of the business.
“IT organisations in the past have tended to measure success in terms of things that are important to the technology department,” he says. “Eighteen months from now, success, for me, would be that we have proved that we have helped our company to grow and become more efficient through the technology we have deployed.
“Success, to me, means our IT department has become much more agile in terms of the solutions we are bringing to the business. I also expect us to be able to take advantage of some of the best technologies on the market to help us facilitate the development of solutions that are unique to UPS and that will help us differentiate ourselves from our competitors.”