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September 27, 1999

GM Races To Keep Up With Buyers

Illustration by Dennis Harms eneral Motors Corp. isn't known for listening to individual customer needs--as the largest company in the world, perhaps there was a time when it didn't have to. But market pressures are pushing the automaker to be more responsive.

GM has traditionally followed a make-and-sell model--it would forecast ahead a year, make all the models it thought customers would want, then offer incentives to sell them. "That is no longer sustainable in the era of mass customization where the customer is much more astute to the competing products," says Jim Noble, global head of IT strategy at GM Information Systems and Services. Noble estimates that 30% of GM's customers check the Internet before they show up at a dealer's lot.

GM is moving to a sense-and-respond approach pioneered by its customer-friendly Saturn division.But it wants to move to an anticipate-and-lead model, drawing on customer feedback to develop cars, then build and deliver them to order. The problem with both models is that they require huge amounts of customer information, which is difficult to obtain. Automakers are prohibited from owning dealerships or selling directly to customers, so they're cut off from the sale, one of the easiest ways to gather data. "Although we have more than 100 million customers, we don't know about them because the dealers are our intermediaries," Noble says.

The information source showing the most promise is the Internet. Millions log onto GM's BuyPower.com site and enter data while configuring a car to order. Other data come from such GM services as its OnStar geographical-positioning and security network. All data go into a companywide database, to which GM is adding complex algorithms to determine relationships between people in a household. Noble calls it "household CRM."

The company is pulling information from its new Internet channels to focus and accelerate its design cycle, which is on its way down to 18 months from 48 months. In a program called Customer Express Delivery, GM is trying to build cars to customer specifications. The process once took six weeks, but the company hopes to get it down to five days.

Speedy responses to customers require tight integration of IT and business units. The company has just formed eGM, a business unit that acts as an umbrella for initiatives that require GM to move at Web speed. In that unit, "the business and IT people are seamless," Noble says. The cross-training and tight communication mean that eGM can be far more agile than the parent company. And in the brave new world where it's competing, GM needs every edge it can get.

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Illustration by Dennis Harms