Covisint Matures, Faces Challenges

Covisint, the supply and collaboration exchange for the automotive industry, may be in for a rocky adolescence.

Covisint, the supply and collaboration exchange for the automotive industry, may be in for a rocky adolescence.

On Nov. 1, Covisint will deploy the latest version of its cornerstone product, Quote Manager. The multitiered application is designed to streamline the procurement process for automakers and dramatically reduce the amount of time needed to contract for, design and manufacture parts and supplies needed by the industry.

But for Quote Manager to work, and work well, tens of thousands of people in dozens of companies must be trained on the technology. Covisint said the training is going well and the application is easy to use. But Kevin Prouty, AMR Researchs automotive research director, said many auto suppliers are complaining. "They are saying that Covisint doesnt have the resources to handle all these training issues," Prouty said.

Complicating matters is the fact that Covisint (pronounced KOH-vi-sint) - founded in February 2000 by DaimlerChrysler, Ford Motor, General Motors, Nissan Renault, Commerce One and Oracle - is a very young company. Covisints new CEO, Kevin English, has been on the job since April. The company is still trying to finalize the platforms it will use. Last month, Covisint announced that it will stop using software from NexPrise in its Quote Manager product, and will instead use product collaboration software from MatrixOne.

Despite its youth, Covisint appears to be gaining traction. So far this year, the company has managed $130 billion in transactions. The lions share of that purchasing was done by GM, which bought some $96 billion worth of goods through Covisint.

While those numbers are impressive, Covisints long-term success clearly hinges on its ability to train both buyers and suppliers to use its various products. Add into the mix the need to coordinate training in six different languages, and the problem becomes even more difficult.

"Its definitely a challenge," said Dori Bennett, Covisints vice president of global deployment and customer service. Training buyers to use Quote Manager takes about eight hours, she said. Suppliers can be trained in as little as two hours. The company has not hired an outside e-learning firm to handle the training, nor has it set aside a special group of trainers. Instead, it is relying on personnel from different disciplines to fill in as trainers as demand warrants.

Covisint wont be able to provide face-to-face training, so it will rely heavily on its plan to train a small group of people from a given company, who will, in turn, train their co-workers. Bennett said this type of "viral" training will allow Covisint to quickly ramp up its base of users. In addition, she said, suppliers can train using a self-paced educational program on Covisints Web site.

AMRs Prouty isnt convinced that Covisints training program will work. Although he acknowledged that the company is gaining momentum, he said there is continued reluctance among many suppliers to adopt Covisints technologies. "Things are going to go terribly right or horribly, horribly wrong," he said.