When the judges started sorting through this year\u2019s Enterprise Value Awards entries, they were able to quickly pick the standouts?systems that changed organizationsand included demonstrable ROI. n Two other entries attracted the judges\u2019 attention?ESAB Welding & Cutting Products and General Motors North America. ESAB\u2019s efforts to build new online links with its customers and GM North America\u2019s Web portal both earned accolades for being industry leaders, although the judges felt it was too early to judge the ROI. n John Glaser, one of the judges and the CIO at Partners HealthCare, says both ESAB\u2019s and GM\u2019s projects were "well-conceived experiments" designed to reveal the Internet\u2019s potential impact on their core business. "They\u2019re learning very thoughtfully in a very well-managed fashion."Deals on Wheels GM\u2019s website drives qualified customers to dealershipsGeneral Motors North AmericaHeadquarters DetroitCore Business Automotive industryEmployees 388,000 worldwideYearly sales $176.6 billionURL www.gmbuypower.comEd Wiezorek wasn\u2019t planning to buy a new truck. His 2-year-old Dodge Dakota had only 50,000 miles on it. "I don\u2019t even think about a new truck until I\u2019ve put at least 100,000 miles on," says the program manager for Daleen Technology, an Atlanta-based e-business software maker. As a General Motors credit card holder, Wiezorek had heard of GMBuyPower.com, but he had not yet visited the site. Just for fun, he started poking around and found he could sort through the inventory of nearby GM dealers, configure a dream truck, check sticker prices and even request a best price by e-mail. That most people don\u2019t relish the car-buying experience is not a shock to auto dealers and manufacturers. To change the process, General Motors began to use the Internet four years ago. GM had two goals: to give potential car buyers more control over their shopping experience while educating themselves about the intricacies of how modern shoppers make purchases and use the Internet as part of their car-buying process."Traditional manufacturers had isolated themselves behind retailers, and we thought it was important to find a way to form direct relationships with our end consumers," says Dan McNicholl, GM\u2019s CIO. While developing this direct bond, GM had to be cautious of offending its dealers or making them feel like they were being trimmed out of the process in any way."We showed dealers how much they\u2019d be getting in terms of new systems with new capabilities and functionality and new customer leads, but they had to commit to the standards we required," says Ann Blakney. She is currently western director of Motors Holding (GM\u2019s dealer investment group), but she was the director responsible for the nationwide launch of GMBuyPower.com. "They had to accept a new way of selling, which included sending potential buyers an e-mail price quote. It was very dicey for a while," she says.Joining the BuyPower program wasn\u2019t mandatory for GM dealers, but because the system so clearly demonstrated the capability to deliver better leads, GM was able to overcome some of the early grumbling and sell them on the program. Today, 88 percent of GM\u2019s more than 6,700 U.S. dealerships participate in GMBuyPower.com.Build It and They Will Come\nThe GM buypower portal site provides customers the ability to find the exact vehicle of their choice at a nearby dealership within an online inventory of more than 1 million new cars and GM certified used vehicles. \nWhile customers are searching through all of this data, GM is closely measuring online behavior to better understand what results in a final sale. The site precisely measures dozens of actions, including time spent on each feature, how site visitors move through the site, what steps usually progress to sales quote requests and what features get the most single-hit traffic. GM has learned that visitors spend an average of 18 minutes on the site and that 83 percent of site users who click on more than one of the features contacted a dealer by e-mail or in person, generating more than 20,000 sales leads. Those BuyPower leads are a gold mine for sales. \nGM spent $8 million developing and launching the site. Function upgrades during 1999 and 2000 cost approximately $7 million, and the price tag for annual maintenance (including weekly site modifications and hardware\/software licenses and support) comes to $5 million.\nThe CIO Enterprise Value Awards judges were particularly impressed with GM\u2019s effort to use the Internet to begin changing a business seemingly entrenched in an offline way of doing business and to measure every detail it could along the way. "GM is pushing things forward in the auto industry," says Doug Barker, awards judge and the CIO and vice president at the Nature Conservancy. "The system is so well integrated with their business objectives that it will [eventually] demonstrate enterprise value." \nJohn Glaser, awards judge and CIO of Partners HealthCare, says GM\u2019s efforts show the desire to learn what the Internet will mean to their business. "This is a well-conceived program to learn what the role of the Internet is to what they do."\nEd\u2019s New TruckWiezorek ended up buying a new truck, of course?a 2000 Chevy S-10. "I\u2019d always bought basic trucks: four-cylinder, manual transmission, no power anything. The S-10 is a V6 automatic with cruise control, power windows and locks, the works, but with trade-in and rebates from my GM card it came to just $3 more per month," he says.New ConnectionsESAB Welding AND Cutting Products (a division of Charter)North american Headquarters AtlantaCore Business Cutting and welding equipmentWorldwide Employees 7,800 Yearly sales $1.25 billionURL www.esab.comMelody Wargo remembers all too clearly how she used to spend her days: tracking orders she had placed with suppliers. Her work life changed the day one of those suppliers, ESAB Cutting and Welding, implemented a new online ordering and tracking system to better connect with its customers. As a regional purchasing agent at Danbury, Conn.-based Praxair, one of the largest industrial gas and welding equipment distributors in North and South America, Wargo placed orders with equipment makers by phone, fax and EDI, and then spent hours tracking order status. "It could take a whole day to get an order in and confirmed," she says. Welcome to the old economy.ESAB Cutting and Welding, one of Praxair\u2019s primary suppliers, was a central figure in this old economy. The 96-year-old company (now a division of London-based Charter) is the world\u2019s largest manufacturer and supplier of welding and cutting equipment. The Atlanta-based company is its industry\u2019s global market leader, with the most patents for technological advances and yearly revenues reaching $1.25 billion. Still, ESAB faced big trouble in the late 1990s because of the way the welding manufacturing industry works. Dramatic industry consolidation reduced the number of distributors from 2,000 in 1995 to approximately 600 today. With the number of potential customers falling, competition became fiercer than ever and every lost client held the possibility of fiscal disaster for the suppliers."We were facing an environment that was changing and dangerous," says Ray Hoglund, CEO of ESAB. "In order to survive and be a market leader, we had to excel in either cost leadership, innovation or service. In a mature market, hyperefficiency in logistics is one of the few competitive weapons.""Our distributors were also concerned that we had plans to use the Internet to cut them out of the sales process," says Dick Powell, an ESAB senior vice president. "So we had to show them how our plans were to provide better and stronger links between us and them, the distributors themselves, rather than trying to go around them."ESAB set out to provide its distributor customers with a new level of customer service through a suite of e-commerce capabilities. The centerpiece of ESAB\u2019s efforts is an extranet portal called ESABonline, which lets customers look up product and pricing information, place orders, check order status and track shipments online. ESAB\u2019s goal in spending approximately $1.3 million on hardware, software, development and maintenance wasn\u2019t just to make its sales force happy or spread the gospel of the Internet, but to strengthen ties with customers and add more value to those relationships than its competitors. The investment is beginning to pay off, says Mark Shepherd, ESAB\u2019s director of IT and electronic commerce. "We\u2019ve seen our e-business customers buy 10 percent more annually, which is particularly beneficial since they now cost the least to serve. "Our distributors are beginning to understand the whole equation of doing business with us compared with our competitors. They\u2019re seeing that it\u2019s no longer just a matter of cheap product costs but the overall cost of doing business that matters."ESAB also estimates it has reduced its inventory by 21 percent since customers can better predict what they need using ESABonline. In addition, the company has been able to trim its customer service staff by 30 percent since 1997 and redeploy these workers within the company.The CIO Enterprise Value Awards judges were impressed with ESAB\u2019s efforts to carry the welding industry into both the computer age and the Internet age. "They\u2019ve caught the buzz around the Internet and are asking, \u2019What does this mean for us?\u2019" says John Glaser, awards judge and CIO at Partners HealthCare System. "They have gone out and learned about it and how it can be applied to their business in a thoughtful way."Their attitude was: Let\u2019s go learn, let\u2019s put something up and see how the Internet might change us. They didn\u2019t bet the farm on it because it\u2019s not clear that would be the right thing to do. It\u2019s a well-conceived experiment to understand the role of the Internet in their business," Glaser added.For ESAB customer Wargo at Praxair, the ESABonline system has changed her life. "I use the system to check deliveries, open orders and see when back orders will approximately ship," she says. "I\u2019m certainly more partial and more loyal to [ESAB\u2019s] product line now because it\u2019s so easy to work with them. As far as I\u2019m concerned it\u2019s fantastic, and I\u2019m thrilled at how it has transformed my day."Welcome to the new economy.