Thomas Friedman - The World is Flat

Airborne “made their online computerized tracking and tracing system available to all its partners, so there was a unified language and set of quality standards for how everyone in the Airborne alliance would deliver and track and trace packages,” explained Ghandour. With his company headquartered in Amman, Jordan, Ghandour tapped into the Airborne system by leasing a data line that was connected from Amman all the way to Airborne's big mainframe computer in its headquarters in Seattle. Through dumb terminals back in the Middle East, Aramex tracked and traced its packages using Airborne's back room. Aramex, in fact, was the earliest adopter of the Airborne system. Once Ghandour's Jordanian employees got up to speed on it, Airborne hired them to go around the world to install systems and train the other alliance partners. So these Jordanians, all of whom spoke English, went off to places like Sweden and the Far East and taught the Airborne methods of tracking and tracing. Eventually, Airborne bought 9 percent of Aramex to cement the relationship.

The arrangement worked well for everyone, and Aramex came to dominate the parcel delivery market in the Arab world, so well that in 1997, Ghandour decided to take the company public on Broadway, also known as the Nasdaq. Aramex continued to grow into a nearly $200-million-a-year company, with thirty-two hundred employees-and without any big government contracts. Its business was built for and with the private sector, highly unusual in the Arab world. Because of the dotcom boom, which deflected interest from brick-and-mortar companies like Aramex, and then the dot-com bust, which knocked out the Nasdaq, Aramex's stock price never really took off. Thinking that the market simply did not appreciate its value, Ghandour, along with a private equity firm from Dubai, bought the company back from its shareholders in early 2002.

Unbeknownst to Ghandour, this move coincided with the flattening of the world. He suddenly discovered that he not only could do new things, but he had to do new things he had never imagined doing before. He first felt the world going flat in 2003, when Airborne got bought out by DHL. Airborne announced that as of January 1, 2004, its tracking and tracing system would no longer be available to its former alliance partners. See you later. Good luck on your own.

While the flattening of the world enabled Airborne, the big guy, to get flatter, it allowed Ghandour, the little guy, to step up and replace it. “The minute Airborne announced that it was being bought and dissolving the alliance,” said Ghandour, “I called a meeting in London of all the major partners in the group, and the first thing we did was found a new alliance.” But Ghandour also came with a proposal: “I told them that Aramex was developing the software in Jordan to replace the Airborne tracking and tracing system, and I promised everyone there that our system would be up and running before Airborne switched theirs off.”

Ghandour in effect told them that the mouse would replace the elephant. Not only would his relatively small company provide the same backroom support out of Amman that Airborne had provided out of Seattle with its big mainframe, but he would also find more global partners to fill in the holes in the alliance left by Airborne's departure. To do this, he told the prospective partners that he would hire Jordanian professionals to manage all the alliance's back-office needs at a fraction of the cost they were paying to have it all done from Europe or America. “I am not the largest company in the group,” said Ghandour, who is now in his mid-forties and still full of energy, “but I took leadership. My German partners were a $1.2 billion company, but they could not react as fast.”

How could he move so quickly? The triple convergence.

First of all, a young generation of Jordanian software and industrial engineers had just come of age and walked out onto the level playing field. They found that all the collaborative tools they needed to act big were as available to them as to Airbome's employees in Seattle. It was just a question of having the energy and imagination to adopt these tools and put them to good use.

“The key for us/' said Ghandour, ”was to come up with the technology and immediately replace the Airborne technology, because without online, real-time tracking and tracing, you can't compete with the big boys. With our own software engineers, we produced a Web-based tracking and tracing and shipment management system.“

Managing the back room for all the alliance partners through the Internet was actually much more efficient than plugging everyone into Airbome's mainframe back in Seattle, which was very centralized and had already been struggling to adapt to the new Web architecture. With the Web, said Ghandour, every employee in every alliance company could access the Aramex tracking and tracing system through smart PC terminals or handheld devices, using the Internet and wireless. A couple of months after making his proposal in London, Ghandour brought all the would-be partners together in Amman to show them the proprietary system that Aramex was developing and to meet some of his Jordanian software professionals and industrial engineers. (Some of the programming was being done in-house at Aramex and some was outsourced. Outsourcing meant Aramex too could tap the best brains.) The partners liked it, and thus the Global Distribution Alliance was born-with Aramex providing the back room from the backwater of Amman, where Lawrence of Arabia once prowled, replacing Airborne, which was located just down the highway from Microsoft and Bill Gates.

Another reason Ghandour could replace Airborne so quickly, he explained, was that he was not stuck with any “legacy” system that he had to adapt. “I could go right to the Internet and use the latest technologies,” he said. “The Web enabled me to act big and replicate a massive technology that the big guys had invested millions in, at a fraction of the cost... From a cost perspective, for me as a small guy, it was ideal... I knew the world was flat. All my preaching to our employees as the CEO was that we can compete, we can have a niche, the rules of the game are changing, you don't need to be a giant, you can find a niche, and technology will enable us to compete with the big boys.”

When January 2004 rolled around and Airborne began switching off its system, Aramex was up and running for a seamless handoff. And because Aramex was able to run its new system off an Internet platform, with software designed primarily by lower-cost Jordanian programmers, installation of the new system took place virtually, without Aramex having to send its engineers to train any of the alliance partners. Each partner company could build its own client base over the Internet through the Aramex system, do its own tracking and tracing, and be part of the new virtual global air freight network.

“So now we are managing this global network, with forty alliance partners, and we cover every geographic area in the world,” said Ghandour. “We saved so much money... With our Web-based system all you needed was a browser and a password to get into the Aramex network, and suddenly you're inside a global shipment management system.” Aramex trained many of the employees of the other alliance companies how to use its system by using various online channels, including voice over the Internet, online chatting, and other virtual training tools available on Aramex's intranet-making the training incredibly cheap.

Like UPS, Aramex has quickly moved into insourcing. Arab and foreign banks in the Middle East have outsourced the delivery of their credit cards to Aramex; mobile phone companies are using Aramex delivery men to collect bills on their behalf, with the delivery men just scanning the customer's credit card and then issuing a receipt. (Aramex may be high-tech, but it has not shrunk from using donkeys to cross military roadblocks to deliver packages in the West Bank when Israeli-Palestinian clashes have closed roads.)