Sunday, June 8, 2003 By Cliff Peale The Cincinnati Enquirer

After bombing in the stock market three years ago, the Internet revolution is alive and well in the nation's biggest companies.

Shareholders in dot-com companies lost billions. But the same strategies that drove that craze are now established programs inside companies including Procter & Gamble Co.

The strategies are helping P&G cut millions of dollars in costs. They're also shrinking production cycles and improving communication among thousands of employees. All of this benefits corporate profits - and yes, stock prices.

"I don't see how a company of this scale can survive without the Internet being at the core," said Robert Dixon, vice president for information technology and leader of the "Leverage the Internet" program within P&G.

Leverage the Internet has focused on the way P&G deals with consumers, suppliers and customers, and employees.

• From Pampers.com to beinggirl.com, consumers are using P&G's Web sites more. P&G's corporate site, www.pg.com, hosted 1.87 million users in April.

• Suppliers in remote areas, who were still faxing or mailing order slips to P&G, are tapping into an Internet portal that automates the process.

• Employees now access virtually all of their benefit and job-related information over an internal Web site.

Big companies around the Tristate and around the world are making similar discoveries. Some, including P&G and General Electric Co., have earned high marks for integrating those programs with their basic business.

Large companies long have used technology to cut costs. But they've discovered that they can complete more transactions faster by plugging the Internet into even the most mundane corporate functions.

Jack Cassidy, president of Cincinnati Bell Inc., said the telecommunications company does similar things. Virtually all purchasing is done through electronic auctions, buying everything from copiers to services.

With consumers, Bell now is offering electronic billing through all of its business, with about 10 percent of wireless consumers signing on. Clearly, Cassidy said, that's the wave of the future.

And with corporate customers, Bell is providing data solutions that allow companies to concentrate on their core business, which provides a double benefit, Cassidy said.

"The good news for us is we provide the pipe," he said. "We get efficiencies on one end, and we make money on the other."

Creating an Internet-friendly culture takes years, said Christine Overby, a senior analyst with Forrester Research in Cambridge, Mass.

"This is about quick hits, small wins, and the systematic communication of those throughout the entire system," she said.

'Value creation' Within P&G, Dixon is the voice of the Internet focus. Last summer, he got the seal of approval from chairman and chief executive A.G. Lafley, becoming the newest member of P&G's Global Leadership Council, the three dozen top executives who report to Lafley.

The 47-year-old Atlanta native is the second African-American on the CEO's top team at P&G. Trained as an engineer at Georgia Tech, he started at P&G's paper plant in Albany, Ga., but decided that he wanted to broaden outside P&G's network of plants and research hubs. He has managed information technology in P&G's baby-care unit since 1999.

Lafley's increased focus on using the Internet - "value creation" in Procter-speak - gave Dixon the organizational muscle he needed to nudge acceptance among employees around the world. He's done that by emphasizing that new technologies only matter if they get P&G more focused on consumers.

Milan Turk, director of global customer business development, said success for Leverage the Internet is measured not by new technologies, but by sales and profits.

"Everybody has a computer on their desk, and everybody who leaves the building has a laptop in their briefcase, but the point isn't to focus on the technology," Turk said. "It's all tied to business results."

Working without a defined budget, Dixon has identified people responsible for LTI in all of P&G's five major businesses and seven major geographies. He identified nine major goals last year, and is streamlining that to three goals now, isolating those that can be leveraged throughout P&G's 102,000 employees in nearly 80 countries.

Some tasks are easier than others. For example, P&G now does all of its "concept testing," or focus groups, over the Internet in the United States. Costs are 10 percent of what they once were, and the tests often are done in 24 hours, chief information officer Steve David said.

Dealing with consumers is a dicier proposition. Not all consumers want to use the Internet. Many just want to find their Tide on the store shelf, and that's that.

Other consumers, David said, feel "empowered" by the ability to opt into P&G's Web programs.

Much of P&G's Internet work is invisible to the consumer. Wall Street investors love it, because it cuts hundreds of millions of dollars in expenses.

The job, Dixon said, is far from done. When pushing the program to P&G managers in any part of the company, Dixon's role is half corporate executive and half cheerleader.

"It's just an intuitive feel, but let's push the envelope," Dixon urged a late April meeting on the E-procurement program at P&G's Winton Hill campus. "I think the pool (of savings) could potentially be much more than a couple of billion dollars."

'Now that's transformative' "The business can do what they've always done, but they do it in a better way, so they replace the fax machine with the portal," says David Heppenstall, P&G's associate director of global purchasing systems.

He's on a conference call from England in late April, and Dixon is participating from his Winton Hill conference room.

"Then we say, 'You can do it better.' "

The subject is the supplier portal, started by P&G two years ago to replace paper transaction forms.

There are a "few thousand" suppliers using the portal now, but Heppenstall thinks that will multiply 3 to 5 times in the next few years.

Dixon wants to tap into P&G's existing service centers in Manila, Costa Rica and Newcastle, England to manage the growth and give suppliers all of the options they need. That could present a problem, because many of the functions at those centers are about to be outsourced after P&G signed a 10-year, $3 billion information-technology services contract with a unit of Hewlett-Packard Co.

"It'll be tough to get their attention in the next six weeks," Heppenstall says.

"Get some time with me in the next several weeks," Dixon replies. He says he'll talk to Global Business Services officer Filippo Passerini. "We need to play in this space and have the service ready to go sometime next fiscal year."

Next Dixon turns to Latin America, where the portal is not as widely used. But as a mid-sized player, it's "changed some of the rules," says Jose Ignacio Sordo, director of information technology for P&G in the Latin American market development group based in Caracas, Venezuela.

"They've been doing things one way, and technology is not one of their core functions," Sordo says of some of the smaller Latin American suppliers. "People sometimes are afraid. They say, 'If I don't do it, will you get rid of me?' ... Let's build reliability, something that works short-term."

People skills Much of Dixon's work is not hard-core programming, but nudging people to drive changes through P&G's sometimes rigid corporate culture.

That skill took center stage when Dixon met with a group seeking to implement electronic procurement for P&G employees buying everything from computer repairs to professional services to office supplies. The baby and family care unit, which makes Pampers, Bounty and Charmin, has led the way. On office supplies alone, they're saving up to $2 million a year globally.

Until now, businesses have bought what they needed, then gone to accounts payable, a process dubbed "renegade spending." There were not enough discounts on large-volume buys, said Pat McCurnin, section manager in Global Business Services.

Employees are starting to take to the program, McCurnin says.

"If you think about Amazon.com as the gold standard, we're not there yet," Dixon says.

"Actually," McCurnin responds, "we're closer than you think."

E-mail cpeale@enquirer.com

<a href=www.newsday.com>NewsDay.com

Maracaibo, Venezuela - Six months after Venezuela's President Hugo Chavez turned back nationwide strikes and protests against his rule, his opponents are organizing a new effort to oust him - this time via the ballot box. This country of 25 million people has seen some of Latin America's nastiest politics in recent years as Chavez's leftist policies and pugnacious style have helped divide the country between those who love him and those who would love to see him gone. Starting in December, Chavez's opponents held a nine-week strike that shut down oil exports and the economy, but failed to dislodge Chavez from power. Last year, a coup by military and business leaders ousted Chavez for two days in April before collapsing. Those crises, and periodic street clashes between supporters of the two sides, have raised worries that this country, one of the United States' top four oil suppliers, could slide into civil war. Last month, the Organization of American States, backed by former U.S. President Jimmy Carter, guided the government and opposition into signing an agreement to fight for power according to the constitution. That allows the opposition to petition for a referendum on a president's mandate after the halfway point of his term, which for Chavez will be Aug. 19. Thus, the opposition, which appeared dispirited after the failure to oust Chavez last winter, is finding new energy. "All of our efforts are for the referendum," said Nerio Romero, regional secretary in Maracaibo for Democratic Action, one of the country's two traditionally dominant parties. Still, the May 29 accord does not guarantee that a referendum will be held, or that Venezuelan politics will be made more polite. The accord is "encouraging," said Michael Shifter, a senior analyst with a Washington-based think tank, the Inter-American Dialogue. Still, "a lot of things need to be worked out," he said. "Will the opposition be unified? Will there be enough international pressure? Will Chavez work in good faith?" Under the accord, the opposition will have to present 2.5 million petition signatures to force a referendum, and the government is barred from altering the ground rules for such a vote. The government and opposition are arguing over the appointment of a National Electoral Commission, which would set the date and the rules for a referendum. The legislature, where Chavez supporters hold a slim majority, has nominated two Chavez backers and two opponents to the five-member commission, but is deadlocked over the crucial final seat. The opposition accuses the government of trying to pack the supreme court and to render the legislature a rubber stamp. On Wednesday, legislators threw papers, shoved and screamed at each other in the National Assembly over government plans to change its operating rules to eliminate some quorum requirements. Venezuela was for generations one of Latin America's stablest democracies, but one in which the vast majority of people live in miserable poverty alongside the wealth of a tiny elite. Chavez, a former paratrooper who attempted a coup in 1992, won a landslide vote six years later with his promise to reduce inequalities with a populist revolution. In office, Chavez has alienated many with incendiary rhetoric and authoritarian tendencies. The opposition coalition - including unions, business groups and media companies - says Chavez has alienated foreign investors and seeks to impose a Cuban-style communism. Chavez denies this. "It looks like [the opposition] is beginning to accept that to get rid of me they'll have to work hard in the streets and follow the constitution," said Chavez, after the OAS-brokered agreement was reached. The new round of Venezuela's political battle will be fought amid the shambles of a weakened economy. The gross domestic product fell 8 percent last year - and 29 percent in this year's first quarter as a result of the December-to-February strike. Unemployment is around 25 percent and the currency, the bolivar, has plunged, sharply escalated the price of imports and thus the cost of living. "There's no money," lamented Franyi Rivas, 28, who sells women's clothing from a stand in a Maracaibo street market. He estimated that his sales have dropped 80 percent from a year ago. Rivas blamed the economy's troubles on the anti-Chavez opposition "for not letting the government work." Chavez consolidated his grip on many national institutions after the coup and strike, firing dissidents and replacing them with his loyalists. But his popularity has stayed low - at 36 percent, according to a prominent polling firm, Datanalisis. "If the opposition motivates the people to vote, they'll beat Chavez," said Luis Vicente Leon, Datanalisis' director. "The [opposition] advantage exists, but it isn't much." Leon said he expects Chavez to use legal mechanisms to delay any referendum and to promote abstention to undermine any vote that is held. Even if Chavez's mandate were revoked in a referendum, the Constitution does not bar him from running in the elections to follow. So unless the fractured opposition manages to rally around a single candidate, Chavez could win re-election with a plurality of the vote.

Posted on Sun, Jun. 08, 2003 TIMOTHY L. O'BRIEN New York Times

Attention, shoppers: Iraqi oil is for sale.

On Thursday, exactly two weeks after the U.N. Security Council lifted 13 years of economic sanctions against Iraq and gave the United States a firm grip on one of the world's most bounteous oil spigots, Baghdad put 10 million barrels of crude up for bid.

Although Baghdad is still mired in crime and no weapons of mass destruction have surfaced in Iraq, Washington is helping market Iraqi oil with all due haste. A former Shell Oil executive heads a panel supervising Iraq's oil fields and crude will now be sold directly to refiners, thus eliminating a middleman role once dominated by Russian oil traders. French refiners also once enjoyed a healthy foothold in Iraq before their government wound up on the wrong side of the U.N. war debate, giving a leg up to enthusiastic U.S. and British refiners, which couldn't deal directly with Iraq during the sanctions era.

Call it a coup de petrole.

And since Iraq has the world's second-largest pool of known oil reserves, the Bush administration's handling of the money that flows from those fields is certain to ripple far beyond Iraq's borders -- particularly because some two-thirds of Iraq's estimated oil bounty remains untapped.

Although Iraq's oil industry is being overhauled in a way that creates welcome opportunities for Fortune 500 oil giants, U.S. authorities promise that oil riches will be spent on Iraqi reconstruction and humanitarian aid. Even so, Iraqis and others Middle Eastern countries remain wary about possible U.S. shenanigans with Iraqi oil and are watching sales to see whether the United States waged a war of liberation or a war of occupation.

"People in the region and beyond have a great suspicion of U.S. intentions; and with the U.S. and the U.K. in control of the second-biggest pot of oil in the Gulf region those suspicions will be reinforced," said Judith Kipper, co-director of the Middle East Studies Program at the Center for Strategic and International Studies. "I think they're unfounded suspicions because the U.S. won't play games with Iraqi oil."

"But since the U.S. and Britain have been busy trying to get U.N. sanctions against Iraq lifted, and haven't been perceived as being as busy restoring public services in Iraq, the perception that this is about oil is reinforced," Kipper added. "And in the Middle East, perception is everything."

Iraq's oil numbers are humbling. The country has 112.5 billion barrels of known reserves, second to Saudi Arabia's 262 billion. The United States, Mexico, and Canada combined have only 64 billion barrels, and that supply is aging. Venezuela (78 billion barrels), Africa in its entirety (77 billion barrels), Russia (65 billion barrels, including the Caspian), and the Asia-Pacific region (44 billion barrels) are comparative half-pints.

Other Middle Eastern oil titans like Iran, Kuwait and the United Arab Emirates have oil reserves in the 90-billion- to 98-billion-barrel range. But those fields pump at a much fuller tilt than Iraq's outmoded, jury-rigged operations.

Once Iraqi oil pumps are back to speed, and the country's untapped fields are probed, it could become an even greater force within OPEC and the world oil markets. As Vice President Dick Cheney observed in warning of Saddam Hussein's oil aspirations, whoever sits atop the Middle Eastern oil market has a "stranglehold" on the global economy.

Oil analysts say it will be at least five years before Iraq's oil output ramps up fully; it will cost at least $5 billion, they say, to rehabilitate its oil fields.

<a href=www.sunspot.net>SunSpot.net Originally published Jun 8, 2003 Michael Olesker

AT THE end of another miserable rainy day, at the end of a half-century's work in cancer and psychiatry, there stood a beaming Dr. Nathan Schnaper last week, with his familiar red bow tie that could be seen halfway across downtown, in the midst of his very own legend.

He stood there at the University of Maryland Medical Center with his colleagues and his family all cheering him, and Schnaper tried to wave them off and tell them they were making too much of him. But they weren't. They named a new internship program in his honor, for students interested in medical research. And they said they were naming a new healing garden for him. And then a few folks stood up to try to put words around their emotions.

But how do you sum up so much time, and so much care, in a couple of minutes? This is a man, now halfway through his 80s, who "officially" retired seven years ago but still sees patients several times a week at the hospital's Greenebaum Cancer Center - as a volunteer.

"The most wonderful man in the world," said Sue Singer, whose late husband, Richard, was a cancer patient of Schnaper's. "Can you imagine? He sees these patients but doesn't charge them. And patients who are too weak to come in, he visits them at home. Who does such things today?"

"An incredibly caring person with great insight, who has seen so many families through the worst catastrophes," said Dr. Morton I. Rapoport, who will be retiring in September as the University of Maryland Medical System's chief executive officer. "Most of us have enemies. I don't know anybody that doesn't like Nate."

"He's been a mentor to practically everybody in this room, whether it's oncology or psychiatry - probably notary public, too," added Dick Adams, chairman of the hospital's cancer center.

"A great teacher," said Dr. Skip Connor. Schnaper is professor emeritus of psychiatry at the University of Maryland School of Medicine. "He taught me as a resident," Connor said. "What made him great was his frankness, and his ability to speak in clear English, and his insistence on telling the truth, even when it was painful."

In the history of the hospital's Shock Trauma Center, most of the credit generally goes to the legendary Dr. R Adams Cowley. But last week, everyone talked about Schnaper's unsung medical and fund-raising efforts behind the scenes. Or they talked about his sensitivity and his insights with patients.

"Cancer is a difficult disease," said Dr. Stephen Schimpff, executive vice president of the hospital. "Nobody wants to have it, and nobody knows how to cope with it. Nate would come with us on rounds. That way, he knew every patient, and they knew him. He could see who needed extra help. And he'd go back one on one, and it wasn't like, 'Oh, they've sent the shrink' in the patient's mind. He was just this familiar face from the group that made the rounds. Families adored him.

"But there was something else," Schimpff said. "When a patient dies, some of us dies with them. Sometimes, we need help, too. He understood that. We had what we called Saturday morning doughnut rounds. Doctors, nurses, pharmacists, we'd all sit down, and he'd talk to us about our issues."

"A wonderful, wonderful man," added attorney Ron Shapiro, who has helped raise more than $250,000 for the new Schnaper internship program.

As is his style, Schnaper listened to last week's remarks, and smiled graciously. He's been honored before. He's a Distinguished Life Fellow of the American Psychiatric Association. Several years back, the Mildred Mindell Cancer Foundation named him Humanitarian of the Year. Sheppard and Enoch Pratt Hospital honored him for contributions. So did the mayor of Caracas, Venezuela, for contributions to that city's psychiatric community.

In a few weeks, Schnaper's autobiography will appear in local bookstores. It is called I Pay You to Listen, Not Talk. It sounds like the self-effacing comic summation of a career, a patient reminding a doctor: Don't forget why we're here.

Last week, when everyone else had finished praising Schnaper, he smiled gently and said: "I'm so fortunate. I've now heard my obituary. To be alive and hear your own eulogies ... "

His words were drowned out by laughter. He told everybody they were giving him too much credit. Then he talked about things that he thinks are important: young people with curiosity, a faculty and a professional staff that cares about its profession, and the tender care of people in trouble.

At the end of a miserable rainy day, at the end of a half-century of hard work, the fundamental things apply.

<a href=www.sunspot.net>SunSpot.net By Jason Hagen Special To The Sun Originally published June 8, 2003

While Americans are pre-occupied with the Middle East, the U.S. government is furtively stoking a war in South America that has seethed for decades.

Since the advent of "Plan Colombia" in 1999, Colombia has been the third-largest recipient of U.S. military aid, following Israel and Egypt. That aid was originally intended to put a dent in the drug trade that bankrolls many violent groups in Colombia, including the leftist Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN) guerrillas, and the right-wing paramilitaries calling themselves the United Self-Defense Forces of Colombia (AUC), who are allied with elements of the Colombian armed forces.

Washington regards all three groups, which count some 35,000 members, as terrorist organizations that threaten Colombian democracy, Andean security, and the prospects for free trade in the Americas.

Since the beginning of "Plan Colombia" the United States has spent more than $2.5 billion on its military and political campaign there and is expected to spend almost $700 million in the coming year.

But since last year, U.S. military assistance has expanded beyond fighting drugs to include defending the Caño Limón-Coveñas oil pipeline used by Los Angeles-based Occidental Petroleum. U.S. Special Forces are currently training Colombian soldiers in counter-insurgency tactics in order to protect the pipeline from guerrilla bombings.

By attempting to protect an oil pipeline and other sites of strategic infrastructure, the United States risks being dragged into a conflict that is more complex and deep-rooted than most policy-makers in the United States and even Colombia fully realize. What started as an open-ended but drug-centered Plan Colombia under President Bill Clinton has been transformed by the Bush administration into an ever-more-sprawling mission that lacks clearly defined goals, a definition of success, or an exit strategy. The choices made now regarding escalating assistance will limit the options available to policy-makers in both countries in the future.

Oil, like cocaine and heroin, provides revenues that enhance the armed actors' ability to participate in the war; the war in turn, provides them with opportunities for profit that they could not have under peaceful conditions. Guerrillas frequently extort money from oil companies in the eastern plains, while in the Middle Magdalena region, paramilitaries steal gasoline and sell it on the black market. For years, the Colombian armed forces have dedicated much of their limited resources to guarding pipelines and oil installations at the expense of establishing territorial control and protecting citizens from attacks by illegal armed groups.

Arauca province, nestled next to Venezuela in northeastern Colombia, is the center of Occidental's installations and increasingly the focus of U.S. and Colombian military operations. Intended to be a security priority and a showcase for how pacification can work under the new hard-nosed government of President Álvaro Uribe, the results in Arauca have been disturbing. The province has become a magnet for an explosive mix of characters, all jockeying to control the area's considerable material resources. The murder rate there is soaring, with about 160 killings per 100,000 people this year, twice the rate of the late 1990s. In the United States, the average is less than six per 100,000.

There are other telling examples of what U.S. engagement may look like in the future. In December 1998, a Colombian air force helicopter crew dropped a cluster bomb that killed 17 civilians (including six children) and seriously wounded 25 others (including fifteen children) in the town of Santo Domingo, approximately 30 miles south of Occidental's Caño Limón field installations. The bombing occurred with the participation of AirScan, a Florida-based aerial surveillance contractor that had recently worked for Occidental. Three U.S. citizens who worked for AirScan have been linked to the incident, one of them a then-active-duty member of the U.S. Coast Guard. No charges have been filed against them.

Although the AirScan pilots were employees of a foreign-based private-security company originally hired by a foreign oil company, they frequently provided assistance to the Colombian armed forces: in this case, for a counter-guerrilla operation that led to the death of innocent civilians. Because of their nebulous military status, the conduct of these and other contractors is unclear and their accountability to the U.S. public, and even the Colombian government, is limited.

This is particularly troubling when events go awry. At least 11 U.S. contractors have died in Colombia during the past five years (five already this year), and three others are being held captive by the FARC. Precious little information about them, and their activities, however, has been made public.

The Santo Domingo episode is symptomatic of a larger danger of U.S. policy in Colombia, because private military enterprises are a booming business, hired by the Pentagon to serve in Colombia and other global hotspots. Last year, three private companies had contracts with the State Department, and seventeen had contracts with the Department of Defense in Colombia. Colombia's most important newsweekly, Semana, has called these private contractors "a gang of lawless and godless Rambos." Despite these concerns, Undersecretary for Political Affairs Marc Grossman has said, "Contractors will continue to be a very important part of our effort [in Colombia]. That is how the modern world works."

The State and Defense departments increasingly argue that their goal is to provide security for all Colombians, and that protecting the Caño Limón pipeline is part of an integrated package that includes aerial fumigation of coca and poppy, as well as counter insurgency assistance in order to bring about a safe and stable Colombia. Despite congressional requests for more transparency, it is unclear how much money will be spent or how many years the mission will take.

Such a loosely defined mission, however, is exactly what some Colombian government officials prefer, in the hopes that the United States will solve Colombia's historic social and political problems with heavy doses of military aid and eventually, tens of thousands of U.S. soldiers.

Instead of wasting years dabbling in an intractable, decades-old conflict, at the cost of thousands of lives and billions of dollars, the United States should put its diplomatic weight behind a peace process in Colombia. And it should stop supporting a notoriously abusive military so that it can protect the resources of U.S. companies.

Jason Hagen is a Colombia specialist at the Washington Office on Latin America, a nonprofit research and advocacy organization.