For executives occupying the ranks of Industrial Age companies, the booming Internet economy has up until very recently appeared to be a distant planet best left to the warlords of venture funding and to scrappy e-tailers.
Now, with all the collaborative juices they can muster, the titans of the Industrial Age are jointly gearing up to mount a New Economy crusade unlike any seen before. This past February, General Motors Corp. abruptly cast aside plans for its own on-line parts procurement site to collaborate with Ford Motor and DaimlerChrysler on a single auto part Internet exchange. The yet-unnamed electronic marketplace could quickly become the Net's largest business, according to auto industry pundits, helping the industrial sector finally seize the limelight from the likes of Amazon.com and the thousands of other consumer-driven dot-com businesses.
As a result, the Internet's ever-expanding glow is now illuminating the hallways of some of the Rust Belt's most gilded corporations, turning its buttoned-up executives into the latest generation of New Economy rock stars. Tony Scott of General Motors is just such an executive, who, after years of thoughtful career building (including a stint as a Price Waterhouse consultant), now stands at the edge of the Internet's vast pool of business-to-business possibilities.
More a place in time than a geography, Scott's position is one he may never have found had it not been for a call from a headhunter about a year ago. At the time, Scott was occupying an office at Bristol-Myers Squibb, from which he oversaw one of the largest and most successful global SAP projects ever implemented. A headhunter left a message about a certain "Fortune 1000 company" in need of a chief technology officer. The call paid off.
The B2B opportunity
Scott arrived at GM's Detroit offices last September — not a moment too soon. As the industrial sector sat on the sidelines of the second booming e-Christmas, General Motors was busy buying a stake in B2B software vendor Commerce One. In January, GM announced TradeXchange, in partnership with Commerce One; this February, it unwrapped a far larger joint enterprise with Ford and DaimlerChrysler.
"We believe the Web changes the whole game," says Scott, who foresees auctions as helping to drive productivity improvements across every aspect of GM's business, from design to supply chain logistics to consumer satisfaction. "What we'll be supplying is a much more easy-to-use forum for suppliers, where they can gain a better understanding of what our requirements are and a lot better perception of what our consumption is … and all that should benefit the consumer and GM shareholders," says Scott.
Given the fact that wherever GM seems to go, thousands follow, the automaker's maturing Web auction plans are likely to impact far more than its 30,000 parts suppliers. What's more, the plan's success will undoubtedly have a profound impact on not only the procurement of parts, but also services. It's an idea that would have been unimaginable three years ago: On top of the Net's relative immaturity, the complex nature of consulting services made auction sales unthinkable. But all that's begun to change, says Scott.
"I've seen the whole thing move to a much more transactional engagement model, where as a company we can now decide on a collection of services and put them together in a basket and say this is what we're interested in having, and we go out to the marketplace and let someone bid on it. … You can think of it as the e-Bay for consulting services and look-and-see who's got the expertise and technology resources available," says Scott.
While General Motors has yet to hold its first on-line auction for IT consulting services, the automaker's growing electronic ambitions are now poised to shake up the economic underpinnings of the consulting profession. No industry executive is better positioned to do the shaking than GM's CTO, Tony Scott. "GM is probably one of the ultimate end games when it comes to the consultant model," says Scott. "Relative to our size, our IT staff is quite small, and virtually everything we do is outsourced to various service providers — even most of the integration work we do is done by outside consulting organizations," explains Scott, while emphasizing the procurement challenge consulting services now poses to the automaker.
A consultant with technology roots
So, just who is GM's new CTO? Like that of many CTOs, Scott's career resembles a patchwork of industries and professions. The veteran consultant-turned-CTO first cut his teeth in the technology business while working for Sun Microsystems, Inc., where he helped develop a number of internal applications that the technology company later sold to corporate customers. Along the way, he studied law and obtained a license to practice in the state of California. "Based on my work at Sun, I had become involved with a lot intellectual property issues … and I saw there were all sorts of software issues that really weren't being dealt with from a legal perspective,"says Scott.
But before Scott could hang up a shingle, the consulting profession snatched him away. "I really enjoyed being a consultant, and it was not easy to get me to leave Price Waterhouse," confides Scott, who describes his three years as a PW managing director as one of the most rewarding periods of his career. "It was just the breadth of challenges consulting allows you to become engaged with. It requires you as an individual to draw upon a wide range of skills and work closely with people — some of whom you have never met before — and come up with a great solution to really challenging problems. There are just not a lot of businesses that offer these types of opportunities," he says. While at PW, Scott worked with such clients as The Walt Disney Co., Sears, Intel Corp., and of course Squibb, the company that ultimately lured him away from consulting when it enlisted him to oversee the global installation of its SAP solution.
"The original reason for going to Squibb was to build an infrastructure to support their global SAP project. At the time, Squibb had very little IT infrastructure. It was a mainframe environment almost completely — there were some local area networks, but that was it, and there were no global server applications or ERP, and it was a pretty high total-cost-of-ownership
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