Covisint Benefits

By Stan Gibson  |  Posted 2004-05-03 Print this article Print

That raises the topic of the Covisint online auto parts exchange. Can you quantify the benefits that Covisint has rendered to DaimlerChrysler?

Last year alone, we had close to 200 online bidding events. We saved anywhere from 15 to 20 percent of what we would have spent otherwise. More important was the time factor. You could have stuff wrapped up in a matter of days instead of months with the old processes. Last year, we doubled the online bidding that we did on Covisint.

Youre known for team building. Do you do team-building exercises?

We dont do things like Outward Bound. But we have a top IT leadership event for about 65 people. One year, well have it in Europe; the next year, in the States. Twice a year, in addition to that, we have what we call IIC—Innovation Integration Council. About 230 attend. The networking aspect is extremely important.

Are you implementing RFID [radio-frequency identification]?

We had a pilot last year on it. In a factory, you have paint booths and high temperatures, so you have to protect the tags. It costs about $20 to put a tag in a case. Plastic doesnt work because it wont withstand the heat. We think that, over time, when the cost comes down significantly and we can get a better case for the tags, it will have huge applications for the industry.

Are you using bar codes as a placeholder for RFID?

Exactly. Bar codes can communicate the information that the robotics technology needs. However, with Mercedes, if you get a special child seat option, it uses RFID. If theres an accident, it communicates so that the air-bag pressure is significantly less than what you would normally experience.

Are you satisfied with the level of cooperation among vendors, such as IBM, Sun Microsystems Inc. and Microsoft Corp.?

Yes. We actually have meetings with them two to four times per year. We use the Balanced Scorecard method to evaluate them. It focuses on customer satisfaction, quality, technology and our price points.

Lets talk outsourcing. How much outsourcing do you do?

Probably our biggest supplier today is T-Systems [International GmbH]. They do a whole host of things, including hosting mainframes and servers, but also our network in Germany and applications in the commercial vehicle group and in the marketing arena. We also have dealings with IBM, HP and Sun.

If we can use packaged software, were going to use it rather than create our own in-house version. To reduce customization, we have a rule that there can be no more than 15 percent changed for a piece of packaged software.

Have you looked at GM Corp.s approach to outsourcing?

Like GM, we operate globally. I wouldnt say their strategy is so different from ours. Their biggest supplier today is EDS [Electronic Data Systems Corp.]. Theyre as much involved in the different packages like IBM, SAP and PeopleSoft [Inc.] as we are. I am a real big believer that at the end of the day, if a supplier doesnt deliver, my customers are not screaming at the supplier, theyre screaming at me. If you dont put the proper controls in place, youre going to get what you deserve. GM CIO Ralph [Szygenda] did a good job on this. Before he came, pretty much everything was run by one company [EDS]. One of the first things that he did was to bring in some senior management to put a control on that. I think that was an important thing. We never gave away the keys to the kingdom.

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Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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