InformationWeek: The Business Value of Technology

Pearce: In terms of the number and caliber of people and the breadth of responsibilities, what he is executing is comparable to the vision we had. We didn't want to suggest to anyone that there wasn't a very substantial undertaking ahead.

EDS had done some good things for the company over the years, particularly in mainframe computing, where we had a lot of fragmentation. They took a lot of cost out for us, and the feudal empire that we had going back [before GM bought EDS] was considerably worse. But it was a mistake, in my judgment, to transfer the strategic IT responsibilities to our major supplier, whether or not we owned our major supplier.

IW: How much can global common systems cut GM's costs, and are there other benefits you're expecting?

Pearce: The benefits are goi ng to be enormous, but I haven't tried to put a number on it. There's a tendency for people to get enraptured with technology-it happens whether you're designing a car or an IT system. There's a tendency for IT systems to grow without a very careful check on whether or not they're relevant to what you're trying to do for your shareholders. You've got to keep asking yourself: "Do we need it? Does it really make a difference? Is it really going to add value to the customer at the end of the day?"

IW: GM has been talking about common systems for a long time. How are you going to make sure it happens now, in the time frame you need it to happen?

Pearce: That's a tough one, because the company is very large and interdependent. At the same time, we recognize that there are differences among business sectors and among markets that require refinements of systems. We don't want to become so committed to "common" that people misunderstand what we're talking about when we say "common."

It's clear tha t we did far too much specialized. But since we had no centralized, disciplined approach in terms of making those choices, each individual business unit was out doing its own thing.

When you finally get it right, I think there is just an enormous amount of money that's going to drop right to the bottom line. Critically important is getting to a pure math-based approach to vehicle development. That's the way we're going to take substantial time out of our vehicle-development process. We're talking about cutting out weeks and weeks. That's worth hundreds of millions of dollars easily.

IW: Are you now at that stage?

Pearce: No. We've made good progress. Part of it's cultural. There are no technology roadblocks to becoming math-based in the truest sense. But when you have designers, for example, who have worked a lifetime in clay and fiberglass, and then all at once you want them to have the same confidence in their design judgments looking at a tube or a virtual-reality presentation, that's a big cultural change. That requires a lot of training and education.

IW: GM will be able to bring in IT suppliers other than EDS over the next few years. How important is that?

Pearce: You don't want to just go out there willy-nilly and get as many bidders as possible on every project. You want to really play the strengths of those suppliers. We know who the best players are. The only reason we know that is because of Ralph and the people he's brought in. We really didn't have that capability before. So we were entirely dependent on one supplier. And in today's world, nobody's that smart.

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