Newly installed General Motors CIO Randy Mott announced a massive three-year plan to move almost all of GM’s IT services in-house, bringing everything from data centers to software development into the fold and taking work away from outsourcing companies such as HP/EDS, IBM, Capgemini and Wipro.
The plan is to move 90 percent of the IT services work in-house, up from only 10 percent today, says Information Week.
Insourcing to this extent will force GM to go on a hiring spree for software developers, project managers, database experts, business analysts, and other IT pros over the next three years, says Information Week. And the automotive maker plans to create three new software development centers in the U.S.
GM’s outsourcers, including EDS, could lose contracts once valued upwards of $3 billion a year. As a result, IT workers at those companies tied to the GM contract may want to consider applying to GM down the road.
GM Punches Transformation Accelerator
The scope of GM's IT transformation is huge. It also comes at a time when the major auto maker is keenly in the pubic's eye after its massive federal bailout several years ago. Other aspects to GM's transformation plan outlined in Information Week include:
- Insourcing: Flipping from 90 percent outsourced IT to 90 percent of work done by internal staff.
- Data Center Consolidation: From 23 data centers to two new ones in Michigan, with the latest hardware and more automation.
- Application Consolidation: 40 percent or more of GM's apps could go, by moving to standardized, global applications.
- Software Development Centers: Likely three in U.S. sites to be determined (one will likely be in Detroit), based on the local development talent.
- Portfolio Management: Every IT project will require a cost-benefit analysis and a priority set by business units.
- Data Warehouse Consolidation: GM has about 200 data marts today and plans to move to one data architecture so data's easier to access and use.
While there will likely be much grumbling among the IT rank and file, Mott has been a change agent at all of his previous posts at Wal-Mart, Dell and HP, before joining GM six months ago. He’s clearly been brought in by GM to make big things happen quickly and has the support of CEO Dan Akerson, who apparently puts a high value on technology and its place in driving the company's future.
General Motors Will Slash Outsourcing In IT Overhaul