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UPS CIO on laying the foundations for tech to drive the company forwards

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CIO at UPS, Juan Perez, spoke to Hot Topics about how he's been preparing for technology to become an even more important feature of the business in the next few years.

Juan Perez, chief information and engineering officer at UPS, knows better than most what it takes to make the logistics specialist successful. He joined UPS as an intern in 1990, working his way to the top of the business through a series of increasingly senior appointments.

Perez became CIO in March 2016 and is now using his broad experience in information management to make the most of the company’s $1.1bn annual IT budget. He has held positions in almost all lines of business during nearly three decades with UPS. Across these roles, one theme has remained constant – the ever-increasing importance of digital systems and services.

“The business is now so dependent on technology across all activities,” says Perez. “This is one of the most exciting times to be part of the technology group at UPS because of all the new technologies the firm is driving forwards.”

As well as managing IT, Perez was given additional responsibility for engineering at UPS in April. The move coincided with the creation of an internal advanced technology group that is focused on developments in automation, autonomous vehicles and improvements to the package delivery network.

“We’re really excited about that group because I believe it’s going to help us to continue to accelerate the deployment of technology across UPS,” says Perez who, despite keeping one eye on future growth, already has a list of significant achievements during his 18-month stint as CIO.

He draws attention, first, to internal capability. Perez has continued to support the development of more than 5,000 IT professionals. “At the end of the day, these people are the core of the technology group at UPS and I feel fortunate to work with such talented people,” he says.

Second, Perez has created a renewed emphasis on innovation across the organisation. “IT today has to be a source of creativity for the rest of the business,” says Perez. “Long gone are the days when IT was just responsible for managing servers, networks and infrastructure. We still do that, of course, but IT is now truly an enabler of new ideas and capabilities.”

Perez says his third key achievement so far is the establishment of what he refers to as a “business intimate” IT department. This intimacy takes the form of a closer working relationship between technology professionals and their peers across the rest of the organisation.

Building a platform for future growth

What emerges from Perez’s first 18 months as CIO is an operational foundation for technology-enabled growth. He says changes to the IT operating model that have already been made will create benefits in years to come. His key priorities during the next 18 months are the components – such as security, reliability and architecture – that make agile and successful change an achievable objective.

“The modern business is fully dependent on IT,” says Perez. “There isn’t one business unit that can survive without operational systems for an extended period. We must continually improve the resiliency of our legacy IT and we must also implement the appropriate services to support redundancy in any new technologies we deploy.”

Perez says great work on operational IT will make it much easier for his organisation to deploy the best possible solutions for the challenges that internal and external customers face. “We’re making some heavy investments to make that aim a reality,” he says, suggesting UPS continues to develop technology across a broad range of business areas.

Perez points, for example, to Orion, which is the firm’s advanced fleet management system. Orion uses telematics and advanced algorithms to create optimal routes for delivery drivers. The IT team is now beginning the process of transferring the benefits of the US implementation of Orion to its various international bases.

The advanced technology group that Perez heads up will also play a crucial role in finding creative solutions to business challenges. He uses the phrase “autonomous everything” to describe any area where it might be possible for his company to use automation to boost worker and process efficiency.

UPS already commits significant funds to facility automation, particularly regarding package handling and routing. Perez says the firm will continue to invest in research that will support further developments in robotics. “We have the opportunity to make significant gains in that area,” he says.

Developing great solutions to business challenges

Big data will play a key role in the future-facing work of the IT department, the engineering team and the advanced technology group. UPS collects a huge amount of information daily. “We continue to invest in technologies that will help us to channel that data through the right systems to help our business units perform advanced analytics,” he says.

The firm, for example, recently launched the third iteration of its chat bot that uses artificial intelligence to help customers find rates and tracking information across a series of platforms, including Facebook and Amazon Echo. Perez says UPS is also working on a project that uses virtual reality to help train its drivers. The key to the successful launch of these data-led innovations is cross-department engagement collaboration.

“We want to be even more connected to the business,” he says, referring to long-term objectives. Perez believes a successful IT department delivers agile solutions to business challenges, both in terms of internal development and in relation to the sourcing of technology from trusted partners. Most of all, the IT organisation will be a place that helps its workers excel on behalf of the business and its customers.

“The future is really bright for UPS IT,” says Perez. “We have a committed group of leaders and we have incredible support from the rest of the business. My boss, UPS CEO David Abney, makes a point of stating the future of the company is based on the great IT solutions that we enable for our people and our customers. We have all the conditions to be successful.”