The second thing is that OEMs have run thousands of auctions with the suppliers. Some suppliers have won business through them, and some have lost business. So when you talk about Covisint, there is a little bit of a bad taste because people think of auctions, and they think of the way the car companies have used them to drive cost out of their materials. And then there’s just an attitude of, We’ll wait and see. Is this thing really going to be real? Are the car guys really going to demand that we connect up so we can do business faster and better?


What’s your plan for dealing with each of those issues?
We’ve brought people onto the Covisint board from [big suppliers like] Delphi, Intier, Johnson Controls, Lear and Magna International. We’re spending more time with the CEOs of the supplier community. We know these people, and we’re opening doors because of the historical relationships we have. Once people get a chance to really see our products, they’re very interested; they’re positive.

The other thing that we’re doing is trying to create industry standard products. In this industry, every car company has a different set of rules and regulations for every business process that they do. One of the products that we successfully made an industry standard in North America is what we call our Advanced Quality Planning product [see "Covisint’s IT Toolbox," Page 64]. Part of the feedback that we got from the supply community is that if [the Big Three] can commonize, they can take some cost out of all the business processes and systems. We’ve got products that respond to the suppliers’ needs in common so that they don’t have to have different systems for their reporting to each car company.


One road to standardization would be the adoption of these technologies inside the Big Three. Yet there seem to be parallel efforts going on inside the Big Three and Covisint to build similar technology platforms.
Some of this technology was decided on before Covisint. For example, we’ve got a great product called Quote Manager. It’s a Covisint product, but it had a tremendous design influence from GM. On the other hand, before Covisint started designing its own products in-house, Ford developed its own quote manager. Similar to that, General Motors has got the best supplier communication portal in the world, called GM Supply Power, and yet Covisint is doing portals and Ford, DaimlerChrysler and others are using the Covisint portal. But certainly if somebody’s got a product equal to ours, we wouldn’t expect them to use [our product], especially if they developed theirs years before Covisint was an operating company.


If you’re saying that it’s not necessary for everybody to be using the same software, how then do you get that standardization across the industry?
There are ways of having tie-ins to various legacy systems. For example, General Motors goes into Covisint through its Supply Power portal, and when GM connects up with its suppliers using the auction product it’s the same for all the suppliers, be it if they go through a Covisint portal or a General Motors Supply Power portal. So the idea is, we’re developing software, and if someone already has [similar software], we’re trying to put a product in there to connect up to the suppliers and the existing system at the car or truck company.


I’ve heard that Covisint’s revenue is primarily from the reverse auctions, which is a technology that is fairly easy to duplicate. What technology is Covisint going to offer that really differentiates it and gives suppliers and the Big Three value that you can’t get anywhere else?
If you think about our competition that just does auctions, the thing that we offer is not just the auction?we offer the connectivity to their major customers. That’s what we’re trying to drive for.


What is the killer app for Covisint, either now or in the future?
Well, I’ll tell you this. You’ll see the product coming, but I don’t think I want to go public with it and tell everybody else what we’re doing. Our portfolio process is not stagnant.


You were the head of GM’s purchasing for years. In that role you demanded price cuts from suppliers, and you had a reputation for being a hard-nosed guy. Why should suppliers trust you in this new role?
If you really talk to people I did business with, I think you’ll find out that people did trust me. I think I helped a lot of suppliers survive. I think my reputation was for being tough but fair, and when I gave my word it was delivered. I think they are going to do business with us because of that reputation. [The car companies] are putting a lot of faith in the fact that this company can do what it is intended to do, and I think that’s a strong message to the supply community.


It’s said that no one cares about a company as deeply as the founder does. You called Ford and DaimlerChrysler and said, Let’s do this together instead of separately. Are you going to let this fail?
No. I addressed every person in [Covisint] the first day and said, I haven’t had a career of failures. I’m proud of that. I have a very strong work ethic. I think I understand the vision of this company, and I intend to win with this company. No matter what it takes, we’re going to win. I think the value proposition is there, so we will win.


What would be your advice to other industries starting or in the midst of building their public exchanges?
We spent a lot of time developing products from the voice of the car manufacturer and didn’t spend enough time getting input from the suppliers. I think you’ve got to understand who your customer base is, and you need strong input relative to what products you are going to provide them, and have a tracking mechanism to make sure that the techies don’t deviate from that voice of the customer. I think if you do that, you’ll be successful.