[From iSource Business, January 2001] William S. Schaefer is vice president of procurement services at IBM Global Services, based in Raleigh, N.C. In 1999, IBM recognized his accomplishments along with those of the entire e-procurement team by awarding them Lou Gerstner's annual Chairman's Award for putting e-business into action at IBM. Partricia Moser is director of global purchasing at EDS Canada, a division of the Plano, Texas-based EDS. She has been recognized for conducting the company's most successful online auction for contract services to date. Her busy speaking schedule at e-commerce conferences (four engagements in the last four months of 2000) speaks to her status in the e-procurement field. Both Moser and Schaefer, also listed among the e-procurement leaders on page 62 of this issue, are superstars in their organization.
Neither Schaefer nor Moser planned on a career in purchasing. Schaefer spent much of his nearly 20 years at IBM in manufacturing and settled on purchasing only in the mid-1990s as the legendary Gene Richter was re-engineering procurement at Big Blue. For her part, Moser holds two bachelor of sciences degrees (in chemistry and psychology) and a master's of business administration in marketing. Her career path began 15 years ago in international marketing for a biotech firm and led to purchasing through the operations side.
Today, Schaefer and Moser are earning recognition as leaders in the purchasing field both for their own forward thinking and for where they are taking purchasing at their organizations. Their respective journeys provide two alternative routes for purchasers that would seek not merely to follow in others' footsteps but to become e-procurement leaders in their own right.
The Purchaser as Engineer
Schaefer still sounds a bit like an engineer: "I have always been a person who enjoys creating new things, seeing a problem and going after it until we solve it," he says. In addition to having a penchant for problem-solving, Schaefer boasts a chess enthusiast's affinity for planning several moves ahead. Clearly, these qualities have helped him on his path to e-procurement leadership.
IBM hired Schaefer out of a graduate engineering degree program at Georgia Tech, and he later obtained an MBA from Duke University. His first positions at the company were in an organization that supported outsourced product development and outsourced product manufacturing for IBM. Despite this initial experience with procurement, Schaefer went on to spend most of his early career at IBM in various manufacturing roles, and IBM eventually appointed him to the Corporate Manufacturing Staff and later to run networking hardware manufacturing operating in Raleigh. "At that time," Schaefer says, "procurement was buried within the manufacturing organization at IBM and was not recognized for the value it could contribute to the company."
It was not until IBM began revolutionizing its own buying processes under then-Chief Procurement Officer Gene Richter in the mid-1990s that Schaefer began to be excited by the opportunities purchasing offered. Schaefer was a member of IBM's original procurement executive council, set up to re-engineer the company's purchasing processes and oversee the e-procurement implementation. During IBM's procurement transformation, the company focused on re-engineering the process of procurement and payables and then exhibiting them with the appropriate Web technology. One of these focus areas, for example, in indirect procurement was maximizing "buyerless" transactions that is, the percentage of time that an order could be handled in a completely electronic manner without intervention by a human buyer. After setting an initial objective of 80 percent buyerless transactions, the company eventually achieved greater than 90 percent. Schaefer also worked on the general procurement team responsible for ensuring end-user satisfaction with services provided resulting from the e-procurement changes. The team's efforts resulted in satisfaction levels exceeding 85 percent, as measured through usage patterns and periodic surveys.
Inspired by the opportunities he saw when the company's purchasing department moved "from the backroom into the boardroom," Schaefer went on to hold posts involving both direct and indirect procurement, including a position with responsibility for IBM's U.S. indirect procurement. In 1998, Schaefer moved to IBM Global Services, where he led a pioneer engagement providing procurement outsourcing for United Technologies Corporation. This project symbolized the transformation of procurement from an administrative function into a revenue-generating profit center.
Schaefer is modest about his own role in IBM's e-procurement achievements. He cites the key role of top executive sponsorship for any change in management processes as significant as e-procurement. He says candidly that he continues to admire Gene Richter, since retired from IBM, for his leadership in bringing IBM through this transformation. At the same time, as he ticks off what he views as IBM's other success factors, Schaefer touches upon the very same, personal qualities that have influenced his career: a focus on re-engineering that requires a devotion to problem solving; a willingness to engage suppliers and internal users early on in the transformation process, reflecting Schaefer's own openness to new ideas and emphasis on teamwork; and the need to start with a strategy and then pick the technology that meets your objective, hearkening back to his affinity for the planning that his chess-playing hobby demands.
Looking to the future, Schaefer believes procurement professionals must be prepared to identify where they can add value in an organization and to take the initiative in implementing technology. "There will be continued focus on true value-add in procurement, and true expertise," he says. "The day of the procurement generalist is drawing to a close."
Not that Schaefer is looking back with any sense of nostalgia. On the contrary, his enthusiasm for the ongoing e-procurement revolution is evident: "If you can't be excited about the dynamic changes that are happening right now and still await us, you better check your pulse!"
The Purchaser as Change Manager
Patricia Moser doesn't want to hear about boxes. "I ask people not only to stretch their thinking beyond the box but to try to think the box isn't even there," she says when discussing her approach to envisioning and managing change.
Change has been a consistent theme throughout Moser's career. The first big change came when she moved from marketing into operations at the biotech firm where she came to work 15 years ago after receiving her M.B.A. in marketing. She was drawn to the operations side by the varying demands her work in production planning and inventory control placed upon her. "Operations was an extremely interesting area to be in [because] you have to utilize each of your talents: you have to know about marketing, you have to know about finance and you have to know about the operations."
Moser moved into procurement in her next position as materials manager for a distribution company in the laboratory services sector. Her experience implementing various process improvements at the company helped shape her change-management philosophy: "If somebody says to me, 'Well, we've always done it this way,' it usually is a pretty clear indication that ... things need to be changed."
Further innovations followed in her positions in materials management for two hospitals where she focused on outsourcing, stockless inventory and other process changes, and at Pillsbury, where she helped streamline several supply chain processes. In her current position, at EDS Canada, Moser has led an initiative to have the company's suppliers make their catalogs available through EDS' intranet, allowing end-users to order directly from suppliers without intervention by purchasing. Moser also spearheaded EDS Canada's use of an online auction for outsourced temporary labor services, the company's most successful such auction to date, according to Peter P. Quigney, vice president of global purchasing at the U.S.-based parent company, EDS. "She has substantially advanced the evolution of e-commerce from a simple media to an advertise-and-transact retail business," says Tom Shoup, president and COO of Thinkpath.com. "The process, which placed every participant's pricing in full view, eliminated the pressure of getting only 'one shot' at the pricing and enabled market pressures to truly calibrate the best possible pricing for EDS."
The success of the auction goes beyond the cost savings, Moser says, because it demonstrated that services can be commoditized and bid out in an online auction. Before the auction, Moser had spoken with purchasers at other companies and had been struck by the resistance to the idea of using the auctions for anything other than traditional commodities. "In reality, you can make anything a commodity if you do it appropriately and structure your RFP appropriately up front," she says. "So don't make the assumption that you can't do it. Figure out a methodology by which you can make it work."
That, Moser says, is thinking as if the box were not even there, focusing not on how to reach an objective but on the obstacles people tend to put in the way of change. "Never assume certain things will not lend themselves to the New Economy or Digital Economy," she advises.
"Patricia's bold confidence in the Internet's power is challenging suppliers to evolve with her, or prepare for extinction," Shoup says.
Other "secrets" to her success: "Continually be investigating and ensuring you are being effective within your organization and developing and working with others to pull yourself out to the leading edge." Further, be prepared to move quickly to implement new e-procurement tools because, with technologies evolving so rapidly, those who wait too long will find that the tools they are considering have become obsolete by the time they make a decision. And on the other hand, make sure the new processes you are implementing are truly better than the old ways: "It has to be positive change change that makes sense," Moser says. "Don't go with the latest fad. Try to map your business plans together with your e-business strategy. Don't try to deal with them separately."
Ultimately, being an e-procurement leader means embracing the inevitability of change while maintaining a clear vision of where your organization is headed. And it is a matter of choice. IBM's Schaefer and Moser of EDS remain on the forefront of e-procurement because that is where they want to be. "I have always looked for the leading edge," says Moser. "If you're not sitting on the leading edge, you're taking up too much room."
Neither Schaefer nor Moser planned on a career in purchasing. Schaefer spent much of his nearly 20 years at IBM in manufacturing and settled on purchasing only in the mid-1990s as the legendary Gene Richter was re-engineering procurement at Big Blue. For her part, Moser holds two bachelor of sciences degrees (in chemistry and psychology) and a master's of business administration in marketing. Her career path began 15 years ago in international marketing for a biotech firm and led to purchasing through the operations side.
Today, Schaefer and Moser are earning recognition as leaders in the purchasing field both for their own forward thinking and for where they are taking purchasing at their organizations. Their respective journeys provide two alternative routes for purchasers that would seek not merely to follow in others' footsteps but to become e-procurement leaders in their own right.
The Purchaser as Engineer
Schaefer still sounds a bit like an engineer: "I have always been a person who enjoys creating new things, seeing a problem and going after it until we solve it," he says. In addition to having a penchant for problem-solving, Schaefer boasts a chess enthusiast's affinity for planning several moves ahead. Clearly, these qualities have helped him on his path to e-procurement leadership.
IBM hired Schaefer out of a graduate engineering degree program at Georgia Tech, and he later obtained an MBA from Duke University. His first positions at the company were in an organization that supported outsourced product development and outsourced product manufacturing for IBM. Despite this initial experience with procurement, Schaefer went on to spend most of his early career at IBM in various manufacturing roles, and IBM eventually appointed him to the Corporate Manufacturing Staff and later to run networking hardware manufacturing operating in Raleigh. "At that time," Schaefer says, "procurement was buried within the manufacturing organization at IBM and was not recognized for the value it could contribute to the company."
It was not until IBM began revolutionizing its own buying processes under then-Chief Procurement Officer Gene Richter in the mid-1990s that Schaefer began to be excited by the opportunities purchasing offered. Schaefer was a member of IBM's original procurement executive council, set up to re-engineer the company's purchasing processes and oversee the e-procurement implementation. During IBM's procurement transformation, the company focused on re-engineering the process of procurement and payables and then exhibiting them with the appropriate Web technology. One of these focus areas, for example, in indirect procurement was maximizing "buyerless" transactions that is, the percentage of time that an order could be handled in a completely electronic manner without intervention by a human buyer. After setting an initial objective of 80 percent buyerless transactions, the company eventually achieved greater than 90 percent. Schaefer also worked on the general procurement team responsible for ensuring end-user satisfaction with services provided resulting from the e-procurement changes. The team's efforts resulted in satisfaction levels exceeding 85 percent, as measured through usage patterns and periodic surveys.
Inspired by the opportunities he saw when the company's purchasing department moved "from the backroom into the boardroom," Schaefer went on to hold posts involving both direct and indirect procurement, including a position with responsibility for IBM's U.S. indirect procurement. In 1998, Schaefer moved to IBM Global Services, where he led a pioneer engagement providing procurement outsourcing for United Technologies Corporation. This project symbolized the transformation of procurement from an administrative function into a revenue-generating profit center.
Schaefer is modest about his own role in IBM's e-procurement achievements. He cites the key role of top executive sponsorship for any change in management processes as significant as e-procurement. He says candidly that he continues to admire Gene Richter, since retired from IBM, for his leadership in bringing IBM through this transformation. At the same time, as he ticks off what he views as IBM's other success factors, Schaefer touches upon the very same, personal qualities that have influenced his career: a focus on re-engineering that requires a devotion to problem solving; a willingness to engage suppliers and internal users early on in the transformation process, reflecting Schaefer's own openness to new ideas and emphasis on teamwork; and the need to start with a strategy and then pick the technology that meets your objective, hearkening back to his affinity for the planning that his chess-playing hobby demands.
Looking to the future, Schaefer believes procurement professionals must be prepared to identify where they can add value in an organization and to take the initiative in implementing technology. "There will be continued focus on true value-add in procurement, and true expertise," he says. "The day of the procurement generalist is drawing to a close."
Not that Schaefer is looking back with any sense of nostalgia. On the contrary, his enthusiasm for the ongoing e-procurement revolution is evident: "If you can't be excited about the dynamic changes that are happening right now and still await us, you better check your pulse!"
The Purchaser as Change Manager
Patricia Moser doesn't want to hear about boxes. "I ask people not only to stretch their thinking beyond the box but to try to think the box isn't even there," she says when discussing her approach to envisioning and managing change.
Change has been a consistent theme throughout Moser's career. The first big change came when she moved from marketing into operations at the biotech firm where she came to work 15 years ago after receiving her M.B.A. in marketing. She was drawn to the operations side by the varying demands her work in production planning and inventory control placed upon her. "Operations was an extremely interesting area to be in [because] you have to utilize each of your talents: you have to know about marketing, you have to know about finance and you have to know about the operations."
Moser moved into procurement in her next position as materials manager for a distribution company in the laboratory services sector. Her experience implementing various process improvements at the company helped shape her change-management philosophy: "If somebody says to me, 'Well, we've always done it this way,' it usually is a pretty clear indication that ... things need to be changed."
Further innovations followed in her positions in materials management for two hospitals where she focused on outsourcing, stockless inventory and other process changes, and at Pillsbury, where she helped streamline several supply chain processes. In her current position, at EDS Canada, Moser has led an initiative to have the company's suppliers make their catalogs available through EDS' intranet, allowing end-users to order directly from suppliers without intervention by purchasing. Moser also spearheaded EDS Canada's use of an online auction for outsourced temporary labor services, the company's most successful such auction to date, according to Peter P. Quigney, vice president of global purchasing at the U.S.-based parent company, EDS. "She has substantially advanced the evolution of e-commerce from a simple media to an advertise-and-transact retail business," says Tom Shoup, president and COO of Thinkpath.com. "The process, which placed every participant's pricing in full view, eliminated the pressure of getting only 'one shot' at the pricing and enabled market pressures to truly calibrate the best possible pricing for EDS."
The success of the auction goes beyond the cost savings, Moser says, because it demonstrated that services can be commoditized and bid out in an online auction. Before the auction, Moser had spoken with purchasers at other companies and had been struck by the resistance to the idea of using the auctions for anything other than traditional commodities. "In reality, you can make anything a commodity if you do it appropriately and structure your RFP appropriately up front," she says. "So don't make the assumption that you can't do it. Figure out a methodology by which you can make it work."
That, Moser says, is thinking as if the box were not even there, focusing not on how to reach an objective but on the obstacles people tend to put in the way of change. "Never assume certain things will not lend themselves to the New Economy or Digital Economy," she advises.
"Patricia's bold confidence in the Internet's power is challenging suppliers to evolve with her, or prepare for extinction," Shoup says.
Other "secrets" to her success: "Continually be investigating and ensuring you are being effective within your organization and developing and working with others to pull yourself out to the leading edge." Further, be prepared to move quickly to implement new e-procurement tools because, with technologies evolving so rapidly, those who wait too long will find that the tools they are considering have become obsolete by the time they make a decision. And on the other hand, make sure the new processes you are implementing are truly better than the old ways: "It has to be positive change change that makes sense," Moser says. "Don't go with the latest fad. Try to map your business plans together with your e-business strategy. Don't try to deal with them separately."
Ultimately, being an e-procurement leader means embracing the inevitability of change while maintaining a clear vision of where your organization is headed. And it is a matter of choice. IBM's Schaefer and Moser of EDS remain on the forefront of e-procurement because that is where they want to be. "I have always looked for the leading edge," says Moser. "If you're not sitting on the leading edge, you're taking up too much room."
Companies in this article
Related
