Wednesday, March 26, 2008

Case: United Parcel Service

United Parcel Service

Human Resource Management

Prof. Sugiyama, Koichi

Group C

Akter, Md. Shahriar (2A6202)

Aunt Khine (2A6005)

Banares, Angelito Lambayan (2A6006)

Nishino, Kei (2A5024)

Pekaric, Benjamin (2A5025)

Pham, Thi Thuy Ha (2A5026)

May 21, 2007

Why to introduce IT function?

Business environment:

- Deregulations allowed new competitors coming in the industry

- Due to the development of IT, business environment has changed.


- Competitors are ahead in some technology innovations

- Competitors use technology to develop their competitiveness and create businesses that threat UPS’ business

- Competitors invest much more in developing in-house IT systems and applications

Inside UPS:

- UPS recognized that future competitiveness will be developed based on the development of IT systems and applications

- UPS should not outsource any part of its IT system because outsourcing has disadvantages:

Ø Outsourcing is costly

Ø UPS might lose managerial control

Ø Outside IT companies might not understand well UPS’ daily operations and therefore may not be able to create good solutions to meet UPS’ business requirement

Ø Outsourcers might not be able to provide satisfied services

Ø Outsourcing may create problems of communications between UPS and outsourcers

Ø There is a threat of losing confidentiality and secrecy of UPS business models to its competitors

Ø There is less flexibility in creating to changing business conditions

- In-house IT development is vital. It will address all these disadvantages and help UPS create competitiveness over its rivals.

- In-house recruitment does not help UPS to develop IT system quickly because in-house recruited employees do not have knowledge, skills and expertise in IT and they need education at schools.

- Outside hires with skills and expertise can work immediately on IT system development after joining UPS

- UPS can better compete on cost, time, reliability

- To facilitate internal and external communication, customer relation

How to introduce IT function?

Phase 1: Get consensus to the particular of IT function

- Top management should agree on introducing IT function and hiring outsiders for IT function

- Design hiring process, job description, salary, evaluation and compensation systems for outsides hires

- Top management communicates the introduction of IT function, hiring process, job description, salary, evaluation and compensation systems for outsides hires for IT function to all employees

Phase 2: Hiring IT employees and providing internal training

Hiring IT employees

Providing internal training about

- Hire IT experts as full-time employees

- Changes in business environment

- The potential change in UPS’ business model

- The needs to have outside hires to implement corporate assignments on IT development

- The important roles of IT services in developing the company’ business and gaining competitive advantages over competitors

- Roles and functions of IT service in the entire organization, its relationships with all currents business operations such as tracking

- How IT services help each employees perform better their jobs

- Prepare them to train outside newly recruited employees

Phase 3: Training new comers

- Develop a one-month orientation program for all new comers: 2 weeks as driver, 2 weeks on-job training at IC

- Regular 2-day monthly training to understand UPS’ business practices and operations until the 6th month

- Give new comers 1 year to adapt to UPS’s culture

Phase 4: Monitoring, controlling and evaluation

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