With Brunswick for two years, Bob Sell has 20 years experience in IT, engineering and finance–all at manufacturing companies. Prior to his current post, he was CIO with the Coors Brewing Co. Now, he co-leads Brunswick’s purchasing council and has responsibility for the company’s e-business initiatives.
“Bob has really done a lot to bring leveraged purchasing of IT to the forefront,” says Nancy Keenan, corporate purchasing manager. Keenan works with Sell on Brunswick’s purchasing council and has played a vital role in consolidating non-traditional services purchasing at the company, namely corporate travel.
Based in Lake Forest, Ill., Brunswick is made up of six distinct units, each of which operates autonomously. These units include: Mercury Marine Division, Fond du Lac, Wis.; Sea Ray Group, Knoxville, Tenn.; U.S. Marine Division, Arlington, Wash.; Outdoor Recreation Group, Tulsa, Okla.; Indoor Recreation Group, Lake Forest, Ill.; and Life Fitness Group, Franklin Park, Ill.
Sell recognizes that the leverage of a $4 billion company like Brunswick is significant. The company’s total annual IT budget is $150 million. (It invests up to $50 million annually in new equipment, while maintaining existing environment and infrastructure.) “We are leveraging technology to be successful,” he says. “Purchasing is key to that success. The two functions help to impose discipline across the organization.”
Integrating the two provides great opportunities for Brunswick, especially in e-business, says Sell, who views dramatic change in technology over the past five years as impetus for growing purchasing involvement in the IT buy.
“Traditionally, the IT buy had been mainly hardware,” says Sell. “And hardware’s price has gone down significantly. Then we started buying software (ERP systems) and services to ensure that it all worked together. Good sourcing strategies have become critical. Used to be, we would select IBM and not go wrong. The number of suppliers that a company can do business with has increased ten-fold and requires a major shift in thinking about procurement. Selecting the right supplier and the right product can make a significant difference in the success of a company.”
Because of these changes, IT and purchasing now are converging. “At Brunswick, our relationship is improving,” says Sell. “We are moving toward a partnership.”
When Sell first came on board at Brunswick, this wasn’t the case. “We were on a diverging path. Purchasing was focused on buying the products that go into the boats we manufacture. IT and other disciplines were doing their own buying.”
Now, IT recognizes the value that purchasing brings to the table. “Our forte is not supplier management or contact management,” says Sell. “We implement the technology that helps drive business results.”
And, at the same time, purchasing is starting to understand that there are opportunities beyond sourcing products that go directly into the manufacture of boats. “In the past, purchasing people tended to shy away from the IT process and were not entirely comfortable with some of the jargon,” says Sell. Each discipline is starting to recognize the value of each other.
“With a good vision, a good strategy, people want to make this work,” says Sell. “Purchasing understands the contribution IT can make and works with us to meet the company’s goals.”
Sell points to the success of the recent telecom initiative. For all the Brunswick divisions, a cross-functional team put together an agreement with two major carriers, AT&T and MCI.
Together, representatives from purchasing and IT from each of the companies sat down and jointly defined requirements, pulled together information on current contracts, and developed an RFP (request for proposal). “As a result, we expect significant cost savings and service improvements.”
For software, a team is working on implementing the Oracle ERP system. “People are starting to come together to make it happen.”
Within Brunswick, IT’s role is to identify the need for an item or service. IT also develops plans for implementing technology that aligns with the company’s overall business strategy.
The item or service being purchased determines IT’s interaction with purchasing. For commodity-type technology items–PCs, printers–purchasing develops relationships with suppliers. For IT purchases considered not routine, IT notifies purchasing as it is developing strategy.
For these purchases, Sell’s goal is to make purchasing part of IT planning. “Purchasing will be aware of what’s coming up. They will participate in forming strategies. Our roles will evolve and become more seamless.”
Still, Sell says that there was not anything wrong with the way the company was buying before the two functions started working together. “We in IT were spending more time on procurement and not doing a bad job, but we were not leveraging our buys. Now, however, there are greater opportunities. IT can focus on our internal customers. They know we are leveraging technology to move forward.”
Sell had put in place a team to develop the new buying process, implementing best practices of the GartnerGroup. These practices helped to define roles of each of the functions on the team. “We got positive feedback from each division, with the lead being the Mercury Group. The groups that have seen most progress are those with vision, strategies, philosophy that embrace the process.”
For the purchase of routine items such as PCs, Brunswick has a contract in place with three suppliers–Compaq, Dell and Gateway. Purchasing and IT worked together throughout the negotiation process. Once the arrangement is in place, internal customers order PCs against the agreement consistent with architecture and contract terms.
For purchases considered not routine, Brunswick puts in place multifunction teams called TAG, for technology acquisition group. Still in its infancy, the TAG team was successful in developing the telecom arrangement.
Teams select suppliers based on a balance between price, service, responsiveness, available resources, documentation and training. “Making the decision is a very complex process. There is no real good roadmap to choosing technology suppliers.”
As Sell sees it, IT is a critical component in the supplier-selection decision. “If purchasing selected a supplier without consulting IT, there would not be ownership from IT.”
For its part, purchasing monitors the health of the company, its viability and track record at delivering on commitments. “We’d like to get to the point where purchasing does more quality reviews,” says Sell. Other functions are getting involved, particularly legal and finance. Legal reviews the contract. Used to be that purchasing would do the contract, then legal would review it. “Now, legal uses a standard template. We redefine the process to reduce the time they are involved.” Finance plays a role in lease versus buy decisions, determining the ROI, and justifying the purchase of technology items. IT/purchasing always takes the lead.
Reactions from within the company on the efforts of the IT/purchasing teams have been mostly positive. “Internal customers have been very satisfied with our helping to speed up the process and doing more to leverage purchasing,” says Sell. “There’s been a growing realization that this is a team of experts making the decisions. There’s been no rebelling. With the process, each division is accountable and autonomous at the same time and gains benefits from synergy across the organization.”
In fact, the IT and purchasing teams are getting attention from leadership within the company, says Sell. “Together we are looked at as an example of synergy occurring within the divisions.”
From suppliers, reaction was mixed at first. Technology and telecom suppliers are not used to doing business with Brunswick as a company, says Sell. “They are not used to us using multifunction teams that represent our divisions. Yet, they are responding rapidly. They are finding that we are easier to do business with. Before they may have been doing business with one division, now they may be dealing with four or five. It’s an opportunity for them to increase their business.