General Electric’s Spin Machine – Company Business and Marketing
CEO Jack Welch boasts that the Internet could save the company $10 billion over two years. That’s bold rhetoric — but the reality is less impressive.
It’s an article of faith in the new economy: The nimblest and most forward-thinking old-line companies will use the Internet to transform their businesses and crush not just the arrogant newbies of the startup world, but slow-moving competitors as well.
No company represents the resurrection of the traditional economy more than General Electric. Founded in the late 1800s by a guy named Edison, it has managed to convince the world that it’s figured out how to use the Internet to reinvent itself. For some time now, GE has been telling anyone who will listen that e-business is helping it boost revenue and slash costs — on a scale measured in billions. GE is one of the few companies that has a public relations person expressly dedicated to promoting its e-business efforts. It has produced a slick CD-ROM called E-business @ GE in which the narrator intones: “This will completely change the way we do business.”
The disc features a parade of GE unit chiefs boasting about how much business they’re doing online. “In 1999, 30 percent of our orders came in via the Web,” says Marian Powell, senior vice president for e-business at GE Capital Fleet Services. “This year, we’ll have over 60 percent. That’s over a billion dollars in orders.”
One billion is an attention-getting number, and GE executives aren’t shy about using it when talk turns to their e-business initiatives. “In 1998, we did next to nothing in Internet orders,” Gerry Podesta, general manager of e-business for GE Plastics, says on the CD-ROM. “In 1999, $100 million. In the year 2000, we expect to exceed a billion dollars.” And Joe DeAngelo, COO and vice president of e-business for GE Appliances, says retailers and home builders are using his unit’s Web site to buy products “at a pace of $2.6 billion annually.”
And it’s not just sales. GE says it’s achieving huge savings by moving procurement and other internal tasks online. In the middle of 2000, legendary Chairman and CEO Jack Welch told analysts GE could cut as much as $10 billion in overhead costs over two years. “Every day we uncover hundreds of millions of dollars in efficiencies,” he recently told one newspaper.
Many companies are more reluctant to throw numbers around like this, saying it’s not possible to determine exactly what new sales or cost savings are attributable to e-business and what are the result of other factors. Not GE. The company is out to convince the world that it’s no longer a stodgy, slow-moving giant. On the surface, of course, this Fairfield, Conn.-based, $112 billion colossus is still an eclectic collection of assets that includes not just high-profile NBC, but business units that sell aircraft engines, medical systems, plastics, power turbines, construction supplies, home appliances, light bulbs, financial services and more. The hype, however, says the company is being transformed by e-business into an agile organization with the heart — and growth potential — of a startup. In his letter to shareholders in the company’s 1999 annual report, Welch described e-business as the “elixir” that “came along and changed the DNA of GE forever.” He said digitizing a company “puts a small-company soul into that big-company body.”
But here’s the rub: When carefully examined, it turns out that the company’s efforts to connect to buyers and suppliers via the Web has so far contributed little to the bottom line. GE’s e-business record does little to justify Welch’s serial boasting. The company offers scant evidence that it has boosted revenue by attracting new customers or by getting existing customers to spend more. For a company to cut costs by moving business processes online, it must eliminate — or redeploy — a significant number of employees. GE hasn’t. And for productivity gains to reach the bottom line, a company must show it’s using the Web to substantially cut overhead. GE hasn’t.
In short, to say that the Web alone transforms companies might be taking the digital revolution too far. Using the Internet is merely a step in a technological evolution that’s been going on in American business for two decades — the latest in a series of new methods of data-sharing, which include everything from bar codes to PCs, from enterprise resource planning to customer relationship management. These changes often can take years to accomplish, and they suit some businesses better than they do others. And in any case, the benefits of the Web often aren’t found in actual cost savings as much as in better and more convenient service for customers.
GE isn’t budging from its high-flying rhetoric about revolution, however. Though Welch declined to be interviewed for this story, company spokeswoman Pam Wickham responded via e-mail: “We are experiencing quantum change on a monthly, if not a daily basis.” She maintains that it’s a mistake to evaluate the company’s digitization on a “buy” or “sell” model based on growing revenues and cutting costs. That’s an “old dot-com” way of looking at it, she writes. Rather, GE is engaged in internal “make-side” activities and the productivity they engender. Senior VP and CIO Gary Reiner, who is spearheading the company-wide e-business effort, adds, “Make no doubt about it, we are not talking about incremental change. We’re talking total transformation.”
GE, of course, is not alone in claiming that e-business is bringing tremendous benefits. Oracle has built an entire advertising campaign around the claim that it saved $1 billion using its own Internet-enabled software. Gisco does 80 percent of its business online, and says it saves more than $800 million annually by using the Web for everything from inventory control to recruiting. And IBM says it’s saving hundreds of millions of dollars each quarter by serving its customers and selling and buying online. Even old-line manufacturers such as Herman Miller, the office furniture maker based in Zeeland, Mich., talk about using the Internet to reinvent themselves.
Each of these companies offers some evidence of success. Oracle kept operating expenses fiat for fiscal year 2000 while boosting revenue by 15 percent. As a result, the company’s operating margins rose steadily each quarter. Cisco has used the Web to become a virtual company. Since it doesn’t make most of its products and sells mainly through the Web, it doesn’t have all the costs associated with factories, plant workers and a big sales force — the sort of expenses that drag down Lucent and Nortel. Accordingly, Cisco’s operating margins and sales per employee are well above those of its competitors.
IBM reduced its SG&A (selling, general and administrative) expenses to 24 percent of revenue from 26.8 percent when it launched its e-business efforts in January 1998. And Herman Miller boosted sales by reaching a new market over the Web: small businesses. The company expects to sell $134 million worth of goods online, or 7 percent of total sales, in fiscal year 2001, which ends May 31, and most of that is new business, the company says.
Through the third quarter of 2000, GE still hadn’t demonstrated any significant improvement in its financial results that can be directly attributed to e-business. GE isn’t even in the same class as Oracle and Cisco in using the Internet, but has been loudly trumpeting the benefits it “will” get.
Why, then, is GE spinning like this? It might be playing to investors, who could applaud high online sales and lower administrative costs and give GE’s stock a higher valuation. The company’s share price rode up along with the tech surge, then held firm when the techs fell back. But several leading analysts who cover the company on Wall Street said in late November they hadn’t factored GE’s claims of huge potential gains from e-business into their price targets for the stock.
Still, the company is beginning to win over Wall Street. During an annual meeting with sell-side analysts and top GE investors in December, Welch said he expected cost-savings associated with e-business to add 10 cents to the company’s earnings per share in 2001. Michael Regan, a financial analyst who follows GE for Credit Suisse First Boston, was at the meeting and says Welch’s comments give him confidence that the company can sustain its 16 percent normalized earnings growth. “They don’t throw out estimates of savings willy-nilly,” he says. “They would only talk about these savings if they had confidence that they could deliver.”
Whatever the impact on the stock market, the PR campaign has been a triumph. Magazines, newspapers and trade journals have been awed by GE’s e-business “transformation.” In July, Forbes named Jack Welch to its “E-Gang,” alongside such established e-businesses luminaries as Cisco’s John Chambers and Enron’s Jeff Skilling. Business Week e.biz named GE to its “Web Smart 50.” And Internet Week, a trade journal, declared GE “E-business of the Year.”
The story goes something like this. In late 1998, Jack Welch noticed GE employees shopping online. At home, his wife was buying gifts on the Web for the grandchildren. Suddenly, Welch “got” the Net. At an annual meeting of 500 of GE’s top executives in Boca Raton, Fla., in January 1999, Welch ordered everyone to come up with a strategy for moving their businesses online. The executives were to set up “Destroyourbusiness.com” teams. The aim: Reinvent each unit’s business before some upstart in a Silicon Valley garage did.
But the execs knew nothing about the Web. So Welch took an idea he’d heard about while visiting a subsidiary in Europe and made it a corporationwide mandate: Some 1,000 Web-savvy employees were assigned to mentor senior executives about the Internet. Even Welch got a mentor. Armed with the wisdom of people like Stuart, the red-haired slacker who tutors the old-line executive in the Ameritrade commercial, the remaking of GE was under way. The teams got beer parties and brightly colored offices, an attempt to create a proper dot-cam aura. Eventually, they discovered that there probably weren’t any Internet entrepreneurs hiding out in Silicon Valley devising ways to sell turbines or aircraft engines online. With that fear laid to rest, the teams were transformed into “Growyourbusiness.com” units. Later, they were disbanded altogether, and e-business was brought into the mainstream of GE’s operations.
All that work seemed to pay off. GE Power Systems, a $10 billion unit based in Schenectady, N.Y., that sells power-generation equipment and parts, created a site where customers can order from an online catalog of replacement parts. They can also use the site to compare the performance of GE generators to that of others.
Similarly, GE Aircraft Engines, a $10.6 billion division based in Cincinnati, put its catalog of spare engine parts online. Customers can check pricing and availability in real time. Aircraft Engines has also developed Web sites where its biggest suppliers can go to schedule deliveries and handle billing.
GE Polymerland, the distribution arm of GE Plastics, a $6.9 billion unit based in Pittsfield, Mass., has a site where customers can use online tools known as wizards to decide what types of plastic or resin they need for a mobile phone case or auto part. Then, they can order the materials for injection molds online.
And GE Medical Systems has created diagnostic tools and a wizard that helps GE’s salespeople and customer technicians work together to set up magnetic resonance imaging equipment. The unit has also begun to offer software for tis equipment over the Web. Medical Systems CEO Jeffrey R. Immelt was recently named to succeed Welch as GE’s Chairman and CEO. (Welch, 65, had planned to retire early this year but agreed to stay on to stay on to manage GE’s acquisition of Honeywell International.) Immelt has already indicated that he’s committed to GE’s Web strategy.
These divisions are at the forefront of GE’s efforts, but the business practices and technologies they’ve developed are being adapted and implemented by other units. To be sure, GE deserves credit for moving faster than many other large companies to get wired. And its approach is sound. The company is trying to reduce costs and boost efficiencies by digitizing paper processes, while at the same time improving customer service and sharing more information with suppliers.
These endeavors are unlikely to make GE vastly more profitable, though, because the company isn’t using the Internet to reach new markets or create major new sources of revenue. And while the company should be able to save money by moving internal processes online, the massive cost reductions GE has been touting — which come from eliminating positions because customers and employees serve themselves — have proved elusive at other companies.
GE projects that its units will generate about $7 billion in online sales for 2000. If successful, GE will produce online revenue that’s more than double what Amazon.com is expected to post for 2000. That sounds impressive, given that GE’s been at this e-business thing for just two years. But what GE executives rarely point out is that very little of the online revenue represents new business. The company is simply moving existing customers to the Web.
“It’s not like we created a new market or a new channel,” concedes GE Plastics’ Podesta. “Most of the customers who were online were the same customers who were making orders by phone.”
Some customers may order more plastic resins or light bulbs from GE because it’s easier to purchase products online. Or they may order upgrades for turbines or aircraft engine parts suggested by GE based on the results from online diagnostic tools. Jean-Michel Ares, VP and CIO for GE Power Systems, says that through August his unit had received about $50 million in orders for power-generation parts and services that it wouldn’t have gotten if customers weren’t able to order online. That’s nothing to sneeze at, but it’s hardly earthshaking revenue for a $10 billion business.
CIO Reiner says GE doesn’t track how much new business is coming in online. He says it’s something the company will start evaluating in 2001. But for many of GE’s manufacturing units, the Web is unlikely to provide a huge boost in revenue. “Who’s going to buy from GE who doesn’t already buy from GE?” asks a Wall Street analyst who covers the company, but requests anonymity. “I’m not sure the Internet really brings much in incremental sales.” (GE Capital has a better shot at using the Web to sell more. See story, page 82.)
Aren’t there benefits to moving existing customers to the Web? If you believe consultants, software vendors and many business magazines, yes. The argument is that a company saves plenty because it doesn’t have to pay a platoon of operators to take orders by phone, and there are fewer errors because the information doesn’t have to be typed into the company’s own computer systems.
Sounds logical, but GE hasn’t reduced costs much by taking orders on the Web because it hasn’t moved enough business online to close call centers or even sharply reduce staff working the phones. Says David Overbeeke, former general manager of e-business for GE Aircraft Engines, who has moved to NBC: “We haven’t eliminated the parallel process, so we still have to have people to handle calls.”
It’s still early in the game, of course, and CIO Reiner sees huge savings down the road as GE customers order products and request information online rather than call the company. He points out that every time a customer goes online to get information about a GE appliance, it costs the company just 20 cents, compared to about $5 to answer a phone call. Since GE Appliances fields more than 20 million calls from customers each year, the implication is that GE Appliances alone could cut $96 million in overhead annually by getting customers to log on for information and customer service instead of picking up the phone.
Don’t count on it. GE Appliances says it has cut costs, but won’t say whether it has reduced staff in its call centers, citing competitive issues. GE Capital Fleet Services, which handles 60 percent of vehicle orders online, says it has not reduced its call-center staff. Other companies report similar experiences. IBM sold $14.6 billion worth of goods online through the third quarter of 2000 — double what GE will for the entire year — and handled more than 66 million customer self-service transactions via IBM.com. An IBM representative says the head count in the call centers has remained flat. Even UPS, which handles more than 3 million requests per day for package tracking information online, hasn’t substantially reduced the size of its call centers. Staffers are simply given new tasks to handle to improve customer service, which bolsters customer loyalty and helps companies avoid losing business.
Some say true savings won’t come until a company gets a critical mass of business from the Web. Andrew Whinston, director of the Center for Research in Electronic Commerce at the University of Texas, recently surveyed 1,200 companies in the U.S. and Europe and found that they begin to see financial benefits when they do at least 40 percent of their business online. About 5.6 percent of GE’s total sales for 2000 were achieved online. It may be several years before it has moved enough sales to the Web to begin reaping a profit.
There’s also a chance that providing sales and customer service online will actually increase costs, for GE and other companies. To understand why, consider the case of banks. As ATMs gained widespread acceptance in the late 1970s, banks said the machines would save them a ton of money. The argument might sound familiar: Processing an ATM transaction costs a fraction of what it costs for a teller to serve the customer. (Today’s estimates are 27 cents for an ATM transaction versus up to $3 for a transaction handled by a teller.)
But self-service technology hardly turned the banks into growth stocks or dramatically reshaped the competitive landscape. Banking costs have gone up. Even with the proliferation of ATMs and telephone and online banking, the number of bank tellers in the United States went up slightly from 554,550 in 1990 to 556,230 in 1998, the last year for which the U.S. Bureau of Labor Statistics has figures on the profession. There are more bank branches now than ever before, and the new technologies require their own support staff. So although banks have had to make this investment to remain competitive and improve customer service, they haven’t always saved money: In many cases they’ve merely caused consumers to perform more transactions, grabbing $40 in pocket money from the machine whenever they need it.
Even without cutting staff, GE should be able to show an increase in productivity. At least, it should be able to sell more goods and services without adding more staff at its call centers. And customer service will continue to improve. But any savings that come from improvements in productivity are likely to be passed on to customers. Why? Because many of GE’s competitors are quietly doing the same things GE is doing.
Pratt & Whitney, an East Hartford, Conn., subsidiary of United Technologies, is using the same technology providers as GE Aircraft Engines: Burlington, Mass.-based Enigma for its illustrated parts catalog and Rockville, Md.-based Space-Works for order tracking and management. “It’s not like anyone has a sustainable advantage’ says David Brantner, Pratt’s director of e-business. “We’re not going to crush each other in this space using the Internet. Market share isn’t going to drop because you’re four months behind.” So rather than e-business representing a competitive advantage, it’s become the cost of remaining competitive.
Then there’s the matter of overhead. GE’s bold claims about cutting as much as $10 billion in selling, general and administrative expenses over the next two years seems extraordinary. To put it in perspective, IBM saved a total of $9 billion between 1993 and 1998 through an aggressive “reengineering” program launched by Chairman and CEO Lou Gerstner when he took over at Big Blue. Some of the 36,000 jobs eliminated in 1993 were attributed to that effort.
So far, there’s no evidence that e-business is dramatically changing GE’s cost structure. GE’s SG&A expenses were 23.6 percent of sales for the first nine months of 2000, down 0.7 percent from the same period in 1999. CIO Reiner said last November that the company was still in the early phases of some of its efforts and added: “We’re now targeting $10 billion over 18 months.” Last month, Welch seemed to scale back the bold claims. He told journalists that in 2001 GE would save about $1.6 billion by moving travel, accounting and other processes online, and by holding online reverse auctions, in which suppliers bid down the price of goods to win contracts. GE’s communications office now calls the $10 billion figure a “total opportunity” rather than a goal tied to a specific time frame.
Reiner says moving procurement online cuts the cost of processing transactions from $50 to $100 per purchase to $5 per transaction because employees spend less time pushing paper around. But while per-transaction costs can be a measure of efficiency, they don’t necessarily affect profitability. If you cut the cost of processing an order from $50 to $5, but employees do 10 times as many transactions because it’s so convenient, the cost to the company is the same. (There may be savings associated with lower inventory and fewer unauthorized purchases, but those have nothing to do with transaction costs.)
GE says it has redeployed some purchasing staff, but a representative refused to say how many. The company claims that it closely tracks transaction costs but, oddly, the spokesperson says it doesn’t track how much it has cut cost by redeploying staff.
Bill Eisele, an analyst with the Hurwitz Group, a consulting company, has interviewed more than 100 companies that have introduced e-procurement software and services and found few that have reduced or redeployed staff. Most simply give people new tasks, such as searching for new suppliers. That may or may not reduce costs down the road.
GE is fond of pointing to its Global eXchange Services unit, which runs reverse auctions for the company. In November, a spokesman for GE said it would buy about $6 billion worth of goods and services in 2000 through such auctions, saving an average of 13 percent, or $780 million. But this month, the company revised that figure downward, to 8 percent. These numbers don’t include the cost of running the auctions, either. GXS has seven full-time staff working on auctions and employees at divisions running the auctions have to find suppliers and work with them to structure bids so they can be compared easily. Then the suppliers need to be evaluated: Just because they won the auction doesn’t mean they can deliver quality goods. “There are costs involved,” says GE Appliances’ Joe DeAngelo. “If you were to save 12 percent in the auction, you might net 8 or 9 percent savings.” A GE representative said these costs are “business confidential,” but did add that they were “negligible,” or less than 1 percent.
Also, much of the savings GE is boasting about comes from better purchasing practices, not e-business. For example, GE Aircraft Engines told Business Week that it reduced the types of goggles it bought from 250 to eight and saved 50 percent on the price of each. In this case, the savings came from common-sense management — and the volume discount — not from the wonders of the Internet. And since GE did some rationalization long before the Web came around, those kinds of gains will be the exception, not the rule. While GE certainly is purchasing goods for less money than it did before the auctions, the real savings attributable to the Internet aren’t as extensive as it claims.
It’s useful to look at other big manufacturing companies to get a sense of what the potential savings really are. IBM has been a leader in using the Web to slash costs. Through the third quarter of 2000, the company bought $27.7 billion worth of goods and services electronically. It says it saved $247 million in procurement costs, mainly by using the Web to aggregate demand for components across its product lines, and by sending technical drawings to suppliers electronically, instead of by courier.
IBM says it also saved $312 million in travel, lodging and classroom expenses through the third quarter by moving about 36 percent of employee education to the Web. About 90 percent of IBM’s U.S. employees who enrolled for health benefits in 2000 did so via the company’s intranet, which will result in another $1 million in savings on printing and mailing costs. But the company is a long way from cutting the multiple billions of dollars a year GE cites so frequently.
GE says it saved $40 million in travel expenses in three months after instituting an online travel approval process. GE Capital Fleet Services says it saved about $5 million a year by delivering reports and invoices electronically, instead of by mail. And other units point to savings here and there. But analysts say it will likely take a company the size of GE five years to completely move to electronic systems.
GE is just beginning to focus on using the Web to share information with suppliers. Doing that will help companies save plenty by reducing inventory and cutting the time it takes to build and deliver products — and receive payment for them. A recent report by AMR Research, a Boston-based consulting firm, suggests that manufacturers could improve operating margins by as much as 10 percent if they execute flawlessly. But Kevin O’Marah, research director of supply chain strategies and author of the report, says it will take 10 years to realize that improvement.
GE has certainly been a leader among big, old-line manufacturers in implementing Web technologies. But it hasn’t actually made many bold moves, which is one reason it has had few embarrassing setbacks (aside from the always-chronicled travails of NBC, whose NBCi venture has been troubled). Connecting to its customers and suppliers via the Web should improve productivity and position the company for future growth. The work is akin to the massive bureaucracy-cutting Welch did in the 1980s, when he slashed GE’S head count by 100,000. Or the other corporationwide initiatives Welch has launched — globalization, a focus on services and the vaunted Six Sigma quality control methodology, which paved the way for the success the company is enjoying today.
But moving internal processes online and creating Web sites where customers can place orders and suppliers can check account information doesn’t radically transform a business. It doesn’t alter the fact that sales of aircraft engines, turbines and even home appliances are subject to cyclical demand. And it doesn’t create the much-ballyhooed firstmover advantage. Given the amount of time it will take GE to completely digitize its businesses, competitors will have plenty of opportunity to catch up.
Shifting many of its business processes to the Internet could position GE for a dramatic transformation into a true e-business down the road. But the company’s recent offer to buy Honeywell International, a big manufacturer of industrial and aviation equipment, for some $45 billion suggests it’s not thinking along these lines. E-business transformation is about unloading assets and making money from information and brand. Cisco has almost no manufacturing facilities. And Enron, the Houston-based energy wholesaler, deals with virtual inventory and has no trucks or planes for shipping the commodities it trades.
The purchase of Honeywell is a conventional old-economy play: It will enhance GE’s position within the aviation industry, and after spending money to integrate the two companies, GE should be able to boost profits by eliminating redundancies. But the acquisition makes GE bigger, more capital-intensive and more dependent on economic and industry cycles.
E-business isn’t a magical elixir that makes the slow fast and the old young. It’s a communications method that lets companies share information more effectively with customers and suppliers. A handful of companies such as Cisco and Enron have figured out innovative ways to use the Web to transform their businesses. GE isn’t there yet — and despite its chairman’s tendency to hype its Internet strategy, he knows it has a long way to go. “Against our competitive playing field, we’re ahead of the game,” Welch said in one interview last year. “Against an absolute standard, we’re behind the game.” This time, he’s not exaggerating.
GE’s Capital Idea
In one corner of General Electric, Jack Welch’s rhetoric could prove more than a mere boast.
It’s probably no surprise that General Electric’s not going to sell a whole lot more lightbulbs or gas turbines because it’s got a Web strategy. But GE Capital, the company’s $46.6 billion financial arm, may benefit from e-business much more than the manufacturing side. That’s because GE Capital deals with reams of data and is less tied to physical assets.
GE Capital has 28 units that provide financial services to businesses and consumers. Customers have had to go to separate units for separate products, such as insurance and credit cards. But the Web gives the company a convenient and cost-effective way to package products for specific customer segments.
Last February, GE Capital launched GE Financial Network for consumers, an attempt at a financial portal where GE Capital can sell its consumer products, which include auto insurance and mutual funds. GEFN is partnering with other companies to provide online banking and brokerage services.
GE only recently began promoting the site, but Eric J. Rajendra, a partner and global head of e-financial services at management consulting company A.T. Kearney, says GEFN may be able to outflank competitors by leveraging GE’s broad reach.
To do that, however, it will have to encourage salespeople in GE Appliances and other divisions to drive people to GEFN, and different units will have to coordinate promotions. GE Appliances could, for example, inform consumers buying a refrigerator about a special deal on a home improvement loan available through GEFN. “The challenge is big,” Rajendra says, “but they’re sitting on a huge franchise.”
GE Capital also launched a site for companies with less than $20 million in revenue. Small Business Solutions brings together many of GE Capital’s services, such as loans, leasing, credit cards, health insurance, fleet leasing and management. Businesses can apply for credit cards online, but in most cases, leads are passed to GE Capital sales reps.
James Calver, head of Small Business Solutions, says the site has generated leads worth nearly $1 billion, which was converted into about $30 million in business. Most of this is new business, he says, though it’s not clear that someone who signed up for a loan online wouldn’t have called if the Web site didn’t exist. Partnership arrangements with sites such as Allbusiness.com — partly owned by NBCi — and Trade Out.com could boost revenues.
GE Capital’s units are becoming more productive and delivering better customer service by using the Web. GE Capital Fleet Services, a $1.6 billion unit that leases cars and trucks to businesses, has been at the forefront of this effort. Contracts are still negotiated by salespeople, but about 60 percent of all new vehicles will be ordered online this year.
While that hasn’t reduced the size of the company’s call center, it has reduced the time it takes to fulfill an order. GE Capital Fleet Services has linked its Web site to its back-office system, so when a customer wants a vehicle, inventory can be checked in near real time. Fleet Services has also put a reporting application on its Web site that lets fleet managers see how they can run their businesses more effectively. And Fleet Services now sends invoices and reports electronically, saving about $5 million a year in printing and postage costs.
Will all this make Fleet Services more profitable? Probably not, because its competitors are doing the same things. Says Marian Powell, senior VP for e-business at Fleet Services: “Our competitors are definitely getting Web-enabled. We see ourselves neck and neck. It’s a very healthy competitive environment.”
COPYRIGHT 2001 Standard Media International
COPYRIGHT 2001 Gale Group