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10/30/2008
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GE Will Use SaaS To Manage 500,000 Suppliers

The electronic firm's partnership with Aravo's Web-based software service is the latest example of how even the largest of companies are getting comfortable with SaaS.

GE is using a small software-as-a-service company for an online repository of information on 500,000 global suppliers. It's an example of how even the very largest of companies are getting more comfortable with having their critical business data managed in a SaaS environment.

GE, with revenues last year of $172.7 billion, made Aravo Solution's supplier-information management service available to employees in mid-October. It's available in six languages to any of GE's 300,000 employees worldwide involved in the supply procurement process, including workers that order office supplies, managers that negotiate large commodity purchases, and legal staffers that ensure suppliers are in compliance with local laws and taxes. Features, functions, and information access vary depending on user roles.

The system is expected to bring GE "significant cost savings, while improving data accuracy, compliance and productivity," said GE CIO Gary Reiner in a statement issued Wednesday. GE established a data repository of supplier information more than 10 years ago, but it wasn't built for widespread access via the Web. The Aravo service will be used across GE, including GE Capital, NBC Universal, and numerous companies it runs in such areas as appliances, aviation, energy, and healthcare.

GE chose the small San Francisco company's software service because the application's features fit what it needed in a supplier information repository, and because it lets suppliers update their own information over the Web, said Thomas Hattier, an operations manager in GE's Corporate Initiatives Group, in an interview. That includes updating account contact information and completing online forms to prove that a supplier has complied with local laws. Aravo uses computer-hosting company Rackspace to run its system.

While the deal could be viewed as a win for cloud computing, GE didn't select Aravo out of a new great appreciation for the trend, Hattier said, adding that "cloud computing is getting cloudier" because of all the IT vendor hype.

"We certainly are large enough to host and mange Web-based solutions ourselves. We don't need to go outside to do that," he said.

But GE did appreciate that Aravo was fast to implement -- seven months from start to finish -- a function of its being a service rather than an onsite software deployment. The bulk of the work was transferring supplier information from GE's legacy repository into Aravo.

GE is working with Aravo to integrate the supplier information repository with its own requisition workflow processes, which are run by onsite software. Some but not all of the work is done: "We'll be doing workflow integration through the rest of year into a variety of different places," Hattier said.

Some suppliers still need to update their information in the system, he added. And while GE has found a handful of suppliers out of 100 countries that resist a Web-based approach to updating and validating their information, most are embracing it.

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