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October 4, 1999

Transformation:
Be Careful What You Ask For

Bob Evans o did you know that for the past five years, General Motors has been installing in every car it makes a "black box" similar to the data recorders on airplanes that gather and store volumes of information about where that car has been and when, and what it did on the way there? And did you know that GM is prevented by law from gaining access to using that data, except in specific situations such as a lawsuit in which the data from the black box could prove that it was driver A who was actually at fault rather than, as was previously assumed, driver B? And that with the inclusion of a global positioning system into this data-guzzling MIS (mobile information system), General Motors could in fact know very precisely where you (or at least your car) are at all times?

But hey--for every sordid underbelly, there's a tasty morsel for the actual belly itself, right? So did you also know that this type of smart car could figure out that you've been on the road for two hours and that lunchtime is nigh and so is a Burger King, just a mile or two up ahead and right off the exit? And would you also care to know that this oh-so-smart automotive factotum would have the fax number or E-mail address for that Burger King and could beam your order ahead so that it would be ready and waiting when you got there (lucky you!)?

All this and more was revealed last week in an incredibly informative, enlightening, and enjoyable presentation by General Motors CIO and global head of IT strategy Jim Noble at the ninth-annual InformationWeek Conference. Spinning his tale of massive corporate transformation from GM to eGM, Noble shared in great detail with the more than 500 attendees the company's plans to use IT to go beyond the notion of customer relationships to that of household relationships. Why, Noble asked, should GM's financing unit offer car loans but not home mortgages? Why should it offer car insurance but not homeowner's insurance? And what upper boundary is there to the number of services and enhancements that GM's automotive business can offer to its 100 million--yes, that's 100,000,000 GM vehicles on the road today--customers?

The defining issue is that GM, until very recently, knew little, if anything, about those 100 million customers because the company is required by law to sell only through dealers--it's forbidden to sell directly to consumers. So with that type of sales intermediary, how was GM to learn about the drivers of its vehicles in order to be able to serve them better, build brand equity and customer loyalty, and increase profits?

One big part of the answer, according to Noble, is sensors: little data-suckers placed throughout the vehicle to capture the stuff that forms the raw material for converting data to information and, ultimately, knowledge about the driver, the car, and the related opportunities for GM. The other part is through leveraging the power of the company's brand and operating units for total focus on customers' household experiences, not just automotive experiences. But with such plans come, yet again, those enormous questions that the world of E-business keeps forcing all of us to confront and to answer repeatedly: What business are you in? Who are your customers? What do they expect from you? Do you base your answers on what you did for them yesterday--or on what they might want from you tomorrow? In that context, GM has decided that it needs to broaden its focus from the customer to the entire household: in Noble's terms, "in the car, out and about, around the home, in the family room, in the den office, and in the study." And Noble referred to the overarching concept as "People in Motion"--those are the company's targets for today and into the future, and that is the environment in which the company sees them.

The, technology, uh, road map to such a future is not a simple one--it requires not only all of the customer-relationship management essentials of data warehousing and mining, online analytical processing engines, and such, but also greater volume and deeper analysis of customer habits and preferences; greater technology links with partners to record, share, and interpret new information; greatly enhanced wireless communications; and, along with many others, two of Noble's favorites: "Java browser on wheels" and "Wireless PDA on steroids."

And if you want a great example of the differences between E-commerce and E-business, here it is: Noble said next to nothing about the use of technology to actually purchase a GM car (the E-commerce side). The far bigger play is in E-business, customer intimacy, new value chains that greatly enhance the opportunities to drive E-commerce. Or, as Noble said in his closing comment, "We said that IT could transform the auto industry. We are in danger of getting what we asked for!"

For more on the InformationWeek Conference, check out www.informationweek.com/755/btnconf.htm.

Bob Evans
Editor-in-Chief
bevans@cmp.com

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