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Note: The railroad often finds off-the-shelf software and hardware is too expensive and isn't tuned to its needs.
In an era when most IT organizations look to buy off-the-shelf software, avoid doing custom coding, and allow the use of more mass-market consumer technology than they ever thought possible, Union Pacific CIO Lynden Tennison is an unapologetic believer in building rather than always buying the hardware, software, and systems that underpin its $20 billion railroad shipping business. And while it's at it, UP generates $35 million to $40 million in revenue a year selling or licensing some of those technology innovations to other companies, including rivals, creating a small profit center within its $300 million-a-year IT cost center.
UP, the nation's largest railroad company, operating west of Chicago and New Orleans, develops and builds much of its own IT partly out of necessity. The railroad shipping industry's specialized and often complex technology needs don't add up to a lucrative enough market to attract the...