Deutsche Post-DHL Abandoning IT System
Deutsche Post-DHL announced last week that it is going to write off $370 million in costs and will abandon the New Forwarding Environment (NFE) IT system it had been developing.
The company also warned investors it would likely see reduced profits this year as a result of the implementation issues with NFE that resulted in its forsaking the project.
DHL Global Forwarding had already announced in August it was halting the roll-out of the system at DGF’s units. At that time the company said that dumping the project was unlikely, a position it reversed in its more recent announcement.
The decision was prompted by the recognition of “the decreased likelihood that DHL Global Forwarding will be able to realize benefits from the New Forwarding Environment system in its current state,” according to a company statement.
“As we have said previously, 2015 is a year of transition,” added Frank Appel, CEO, Deutsche Post DHL Group. “Accordingly, we are taking all the measures we can to ensure that our business divisions are optimally positioned for success in the coming years. Our objective for a renewal of our forwarding business remains valid. We are now undertaking further measures to make this renewal business-centric.”
In the near-term, DHL Global Forwarding will pursue the business-centric IT renewal approach that best supports improvements in operating performance, such as enhancing shipment visibility through better capture, management and display of operational milestones, and reduction of paper work through greater use of a document management system which it already in use in its U.S. business. “The Group is still in discussion with vendors including the NFE implementation partner, and remains committed to allowing the NFE implementation partner the opportunity to fulfill its contractual obligations,” the company statement said.
Going forward, Deutsche Post DHL will weigh potential alternatives and will implement a step-by-step replacement and upgrade of its IT set-up. “This could rely on a flexible IT architecture, potentially enhancing and converging existing systems and also incorporating advanced off-the-shelf solutions that have been commercially proven within the freight forwarding sector,” the company said.
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