A Framework of Steel

The biggest American steelmaker would have the world—and the Bush administration, which is trying to save the company with fresh tariffs on products of foreign rivals—believe it is one of the most efficient producers around. Is it?

A Framework of Steel

U.S. Steel's information technology budget is 1.1% of the company's annual revenue—about $70 million. That covers everything from the servers at headquarters, to PCs on workers' desks, to automation in the mills. By comparison, the median share of revenue spent on information technology by research and engineering companies is 9.2%, according to researcher International Data Corp.

"We're frugal, or conservative, in our investment," Trudell says.

The $70 million rarely gets spent on amenities. The data center team is hunkered down in a warehouse-style building, just a few miles south of headquarters, with the general luxury of an army barracks. Off-white walls blend into each other. Meetings are held in a windowless room with plastic chairs. Inside the computer room, older equipment—such as an early IBM 390 mainframe and a Storage Technology 4400 memory device—dominates the ends of the raised floor.

"We can't afford to be revolutionary," Trudell says, "but we can be evolutionary."

But even that has meant a lot more than simply making sure automakers get advanced notice of shipments. In the late 1990s, U.S. Steel undertook several ambitious projects—in order fulfillment, order status, inventory tracking—that eventually led to a homegrown method of managing suppliers. That, in turn, laid the foundation for Straightline.

Many of these projects, designed to improve customer service, were done internally and with small expenditures. Decades-old facilities and equipment would get upgraded, not replaced. Existing technology would be built upon, not discarded. For instance, when the company wanted to give employees online access to pension information, it created access through a Web browser to its 20-year-old pension tracking system, instead of buying new software.