Michelin Sees Long Road to B2B Adoption

Tire maker favors small-step approach

Michelin North America Inc.'s e-commerce division has decided that rolling out a uniform business-to-business portal is too big a job to do all at once and that it will require significant customer involvement to do it right.

Tom Hall, manager of e-business development at the Greenville, S.C., tire manufacturer, said that every time a Michelin department is added to the business-to-business network, it will create an IT project in which a different database and technical architecture must be assimilated.

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Wheeling Out a Portal

1996 Michelin North America launches a B2B portal targeting its smaller corporate customers

Dec. 2000 More than 550 companies are active users of the portal

May 2001 Michelin opens a revamped portal to its other business units, focusing first on adding trucking fleet customers

April 2002 Projected time for all current users to migrate to the newer offering

"This is not the kind of thing where you throw a switch and everything works," Hall said. "Every [Michelin] customer group has their own way of doing business. The biggest mistake I have seen in this whole world of electronic commerce is we get the cart and the horse turned around, picking technology and then looking for ways to use it."

In 1996, Michelin launched a business-to-business Web portal for its independent dealership customers. At the end of last year, more than 550 dealerships were connected and using the site to check technical data, turn in claims and purchase products through a Java connector to Michelin's IBM mainframe, which runs Computer Associates International Inc.'s CA-IDMS database.

Now the challenge is to expand the offering to its national dealers, government accounts and automakers, many of which are using Michelin's electronic data interchange system. With six customer channels selling products from 17 manufacturing plants in the U.S., Canada and Mexico, Michelin's first step has been to design a system that can add one element at a time to the network.

"We've decided we have to build a solid base from which we can go in any direction," Hall said. "You don't know what your customers are going to want down the road, so you have to maintain flexibility."

Entigo Corp. in Vienna, Va., has been involved in the project since the 1995 start of Michelin's Bib Net, named after the company's famous rotund mascot, Bibendum. At first, Entigo had to build a proprietary application server to move the information that came through Bib Net, but Michelin now has a BEA WebLogic application server, allowing Entigo to focus on the connector build-out.

Ken Emory, director of professional services at Entigo, said the work will require Java and Open Database Connectivity interfaces, Java Message Service communications and a fair number of custom adapters.

"This is a real challenge in terms of tying together different systems," Emory said. "If it's out there, Michelin's got it."

Hall said the problem is compounded by complexity on the customer side. "Before we start building too much, we'll pull a group of key users together and target business processes we can work on," he said.

Hall said those users will play a key role in helping Michelin decide what sorts of XML-based trading documents it will create. One of the first documents deployed puts a catalog into customers' online procurement systems so they can take advantage of the technology they already have installed.

Perhaps the biggest issue, though, will be security. Bib Net users must have a virtual private network installed to perform transactions through the portal. "If we were going to run a hotel the way we run a tire company, we'd strip-search you at the door," Hall said.

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The Unified Portal = The Endless Project

Old-line companies are at a competitive disadvantage to younger ones when it comes to building unified business-to-business portals, often putting pressure on IT managers in traditional firms to move more quickly than prudently.

Companies like Du Pont Co. in Wilmington, Del., are only now rolling out unified Web offerings for their different business units, which are replete with different legacy systems. "Don't take for granted how much sits behind that common look and feel," said Lisa Boothe, global e-business leader at Du Pont. "Our integration issues are as big as our company."

Yet, the portal work done at Du Pont, Michelin North America and other long-established companies is often likened to that of trailblazers such as Cisco Systems Inc. and Intel Corp., which have automated most of their customer relationships through a single Web gateway.

"But you can't use those guys as your benchmark if you're an older company," said Karen Peterson, an analyst at Gartner Inc. in Stamford, Conn. "They didn't have the same legacy system issues as the auto manufacturers. Also, Cisco spent a lot of money on this."

Andrew Warzecha, an analyst at Stamford-based Meta Group Inc., warned IT managers that business-to-business portals can be an endless IT project.

"The licensing costs for the software are minimal, between 5% and 15% of the total cost," he said. "But the initial integration and ongoing service are about 60% to 80% of the total cost of ownership."

Most large companies will need custom adapters to Cobol applications running on mainframes, and those adapters will need tweaking whenever changes need to be made to the network feeding the portal, noted Warzecha.

"I don't think it will ever get to the point where it's a shrink-wrap offering" he said.

Both Peterson and Warzecha said that departments need to be added carefully to such portal offerings, with an eye toward the inevitable IT maintenance issues they will create. "There's so many potential points of failure that you can't afford to leave it alone and assume everything will be fine," Peterson said.

Warzecha said he expects most companies will have a unified portal in place by 2004. But with more than 100 vendors offering products, he cautioned users to select those that integrate well into the services being offered through application servers, which sit in the middle of these portal networks.

While he expects application server vendors such as BEA Systems Inc., IBM and Microsoft Corp. to eventually dominate the portal market, Warzecha warned that "they're about two or three generations behind the best- of-breed vendors at this time."

- Michael Meehan

Copyright © 2001 IDG Communications, Inc.

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