Reseller relationship streamlines PC buying
By Susan Avery -- Purchasing, 2/11/1999
As purchasing manager for Nielsen Media Research in Dunedin, Fla., Tim Russell manages relationships with computer resellers that help to streamline the buying process at the television-ratings company.It is through these long-term relationships (and those the resellers have in turn with such computer OEMs as Compaq Computer, IBM, and Sun Microsystems) that Russell ensures that his internal customers are using computer equipment which best meets the company's rigorous requirements.
Of Nielsen Media's 3,000 employees at four U.S. locations (its operation center in Dunedin; headquarters in New York; Schaumberg, Ill.; and Shelton, Conn.), those who are Russell's internal customers have responsibility for developing hardware and software that collects and interprets the country's TV ratings.
The ratings Nielsen TV generates from this viewing provide television programmers and commercial advertisers an estimate of audience size and composition. Nielsen Media customers use the audience research information to buy and sell television time as well as to make program decisions, accounting for some $40 billion in national and local advertising spending annually.
Nielsen Media Research was founded as part of A.C. Nielsen Co. in 1923 by Arthur C. Nielsen, Sr., to track radio listening habits. In 1984, Nielsen Media became part of the Dun & Bradstreet organization. When D&B split in 1996, Nielsen Media was incorporated and became a wholly owned subsidiary of Cognizant Corp., with which it merged in 1998. Nielsen Media is now an independent, publicly traded company with $350 million in annual sales.
Russell joined the company in 1977 as a senior lab technician before being named director of engineering purchasing. (Engineering purchasing manages agreements with contract manufacturers, ensuring suppliers deliver electronic components just-in-time to Nielsen Media.) When the company merged its engineering purchasing function with its facilities purchasing operation, Russell became purchasing manager.
As purchasing manager, Russell is responsible for all of the company's buying activity in the U.S. and Canada. This includes technical capital purchases (desktop and notebook personal computers), servers, printers, software, copiers, facsimiles, software, telephone communication equipment, furniture, and vehicles for facilities.
On computer-related capital purchases Nielsen Media spends approximately $22 million annually. Russell reports to the director of finance and has four full-time buyers reporting to him.
Increasing dependence on purchasing
Staying abreast of the latest changes in technology is among the biggest challenges Russell faces. "Our technology support group--based at each of the company's four offices in the U.S.--is becoming more reliant on purchasing as the operation continues to deliver," he says.
Another issue purchasing addresses is availability. "It seems that as soon as a computer OEM introduces new technology, it becomes obsolete--sometimes before it's even available," says Russell. "It can be a nightmare keeping up."
To meet these challenges, purchasing meets with representatives of Nielsen's technology support group weekly. "Purchasing needs to be aware of new developments in-house," says Russell, who regularly receives through the department such information as advance notice of new hires and their requirements for technology purchases.
The technology support group has representatives on a cross-functional team that includes purchasing, finance, IT, and Media Tech Services. This team is responsible for testing equipment, evaluating and approving changes, and evaluating equipment for compatibility with the company's local area network. This team meets monthly with computer OEMs.
Because technology changes so rapidly, Russell maintains a close relationship with such computer OEMs as Compaq, Sun, and IBM through a relationship with one of the company's computer resellers, CompuCom Systems, Dallas.
Russell values his company's relationship with computer resellers particularly for suppliers' knowledge of Nielsen Media's business and its employees. "A good supplier doesn't question what the end user needs," he says, "but helps purchasing buy the product that fills these requirements at the best value."
Not only does CompuCom have a representative onsite at Nielsen Media to assist Russell with some of his operation's buying responsibilities, the supplier also maintains a presence onsite at Compaq's headquarters in Houston to assist with computer configuration activities. (The reseller does this for many of its corporate customers.)
Purchasing at Nielson Media has always been involved in the technology buy to some degree, says Russell. "Our involvement grew, however, beginning in 1995 by attending technology meetings with the company's various divisions to communicate standards and discuss problems." Purchasing has a representative on the company's technology standards board.
In selecting suppliers for technology purchases and measuring their performance, Russell draws on the company's long-term relationships with Dun & Bradstreet, A.C. Nielsen, and the Gartner Group. Using an informal rating process, a team of representatives from these companies meets quarterly to report on performance of the resellers they use.
"If there are problems, we bring in potential new suppliers," says Russell. Nielsen Media selects technology suppliers based primarily on their performance capabilities. "Suppliers have to do what they say they are going to do--regarding service and delivery. They also have to prove that they know our business and provide us with continuing support."
Buying becomes paperless
For the technology buy, Russell helped to develop an intranet-based requisitioning system, which he is implementing by division, beginning with the company's largest in Dunedin. Enterprise Processing System, as the new system is called, now is up running at most of Nielsen Media's sites in the U.S.
The system gives Nielsen Media employees who have Web access the capability to order items through the intranet. The online catalog, which is maintained by purchasing, contains standard items employees typically purchase with latest contract pricing.
By clicking on catalog items, requisitioners may view current pricing, indicate quantity required, reason for the order, and appropriate budget code.
After filling his or her "shopping cart," the requisitioner goes through a "check-out line" which ensures that the electronic form contains all information necessary to fill the order. In turn, the order is automatically routed for management approval. At that point, it is transmitted to the purchasing operation.
Purchasing verifies the supplier against Nielsen Media's database or selects one for the purchase, then places the order. In some cases, the order is electronically transmitted to the supplier. Otherwise, purchasing generates a PO, faxing it or calling it in to the supplier. For capital equipment, a PO is still needed for auditing purposes, says Russell. Nielsen Media contracts out its accounts-payable function to a third party.
Because Nielsen Media maintains a good relationship with its resellers, these suppliers will stock standard items ensuring delivery, in some cases within 72 hours.
Looking to further streamline the process, Russell plans to enhance EPS so that each step--from requisition to PO generation--is entirely paperless. "Once order information is verified," he says, "the order can be faxed online." Eventually, even reconciliation will be done electronically.
While it's still to early to determine benefits of using the new system, Russell says that one obvious one is a reduction in cycle time. Others include such "soft dollar savings" as reduction in paper and buyers' time spent on processing activities, as well as a streamlining of steps. Before developing the catalog, the process to purchase technology-related capital purchases was entirely paper-based.
"It's a well-oiled machine," says Russell of his operation now. "We have in place good processes." For non-capital equipment purchasing (less than $1,500) he has implemented a corporate purchasing-card program for requisitioners with authority to order these items. With the card, they may order such items as office supplies, computer supplies, and paper.
For office supplies, Russell has negotiated an agreement with Staples National Advantage. Under this agreement, 150 departments may place orders for supplies via facsimile. Staples, in turn, directly bills Nielsen's accounts-payable department.
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