CEO Frank Appel speaking at the Annual General Meeting 2016 in Frankfurt\/Main. Photo by:\u00a0Deutsche Post DHL\/Bernd Georg
\nNo one ever said it would be easy. But few people thought it would be so hard.
\nDHL Global Forwarding, Freight, the logistics arm of Deutsche Post DHL, had finally determined that it was going to get rid of \u201cLogis,\u201d its legacy IT system that dated back as far as 30 years, patched together from the IT systems of several companies that had been acquired long ago.
\nChampioned by Roger Crook, former CEO of DHL Global Forwarding (DHL-GF), a new system was billed as a key milestone in DHL\u2019s modernization plan, called Strategy 2020. Plans for the new SAP-based enterprise software system, which would cover the length and breadth of the world\u2019s largest forwarding operation, began as early as 2011. DHL even had a forward-thinking name chosen for the system: the \u201cNew Forwarding Environment,\u201d or NFE, which was supposed to bring order to DHL\u2019s globe-spanning operations, attract more business and add transparency to the process.
\nLess than four years and nearly US$1 billion later, the new system was scrapped. Kaput. DHL\u2019s experience offers a cautionary I.T. tale for the air cargo industry, at large.
\nPhased-in rollout began in New Zealand in 2013, and the first signs of trouble came in 2014. By April 2015, the rollout was halted \u201ctemporarily\u201d and Crook stepped down as division CEO. Saying the system just needed some extra tweaks, Deutsche Post DHL said it planned to rescue NFE, but in October 2015, CEO Frank Appel told investors that NFE would be dismantled and removed to make way for a new system \u2013 what kind, he did not elaborate. The company took a one-time hit of \u20ac345 million for pulling the plug in the third quarter of 2015.
\nSo what happened? For now, DHL-GF won\u2019t say. Air Cargo\u00a0World asked DHL repeatedly for an interview on the subject, but spokespersons for the company said they preferred not to comment until a new IT system is announced later this year. Most other forwarders and IT experts contacted by ACW also declined to comment on the underlying causes, although a Stifel analysis predicted DHL-GF will \u201creturn to a more normal operating structure and use a mix of systems rather than rely solely on SAP.\u201d
\nHowever, Ryan Petersen, CEO of U.S.-based forwarding and customs brokerage firm Flexport, said he has an idea about where DHL-GF went off the rails. After speaking with an un-named senior executive from DHL, he said the largest problem was improper change management. \u201cTrying to get tens of thousands of people who are used to running in one direction to suddenly switch and run the other way \u2013 it\u2019s a very difficult thing,\u201d Petersen said.
\n\u201cThey haven\u2019t really said why the system was cancelled,\u201d said Chuck Schubert, president of logistics IT provider CSA Software, based in Livonia, Mich. \u201cBut it\u2019s a common affliction in customized software deployment that happens more than people want to let on. One thing I can say is that designing software is an art, if not a science. It takes a lot of courage to pull the plug.\u201d
\nPetersen said he does not envy DHL\u2019s predicament. \u201cI try not to criticize too harshly. I give them all the credit in the world for even trying something this ambitious,\u201d he said. Rather that pointing fingers, Petersen suggested this should be a time to analyze the mistakes, share them with other forwarders and learn from the experience.
\nIn describing the sheer effort involved in DHL-GF\u2019s attempt, Petersen compared the NFE project with Elon Musk\u2019s launching of the SpaceX rocket program \u2013 but with a twist. \u201cNow imagine if Elon had to build that same rocket, only it had already taken off,\u201d Petersen said. \u201cIt\u2019s already flying and then you hear, \u2018Well, we were going to the Moon, but now we\u2019re going to Mars.\u2019\u201d
\nSee sidebar on Panalpina’s SAP rollout
\nSource: aircargoworld<\/p>\n","protected":false},"excerpt":{"rendered":"
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