Strategic CIO // Executive Insights & Innovation
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3/27/2014
09:17 AM
Rob Preston
Rob Preston
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GM's Randy Mott: What I Believe...

CIO's five core principles underpin automaker's three-year "IT transformation" plan.

development. GM's consolidation of datacenters (from 23 to two) and applications (it has retired a few hundred of more than 4,000 apps so far) is designed to let the company divert dollars from IT operations and maintenance to more innovative work.

4. Sustained competitive advantage comes from a focus on continuous improvement, creative process, and technological change.
Mott knew from the start of GM's three-year IT transformation that it wouldn't be able to hold to a rigid master plan or IT org chart every step of the way. "We will organize every year based on what we're trying to accomplish for the business," he told InformationWeek in July 2012, when he was laying the groundwork.

The biggest challenge for GM, Mott says, is trying to evaluate new people, technologies, and processes -- as its focus becomes IT innovation -- at the same time it's consolidating applications, data marts, and datacenters to lower the cost of operational IT. "There are huge learning curves," he says. "Every month you need to reassess," based on new information the organization is taking in.

We asked Mott whether the appointment of insider Mary Barra as CEO in January would disrupt the company's IT overhaul plans, given that they were crafted under Barra's predecessor, Dan Akerson, who ran the company for four years amid GM's bankruptcy restructuring. Mott was having none of it. He compared the situation to when he was at Wal-Mart, after founder Sam Walton died and lots of employees as well as pundits worried about upheaval. "What they didn't take into account is that things were always changing when he was alive," Mott says.

5. IT is a strategic corporate asset with SPEED of innovation a major underlying factor of success.
Again, the all caps emphasis is Mott's. And it's a priority he has taken from Wal-Mart, where he spent 22 years and was CIO from 1994 to 2000, to Dell to HP to GM. InformationWeek used the term "Speed Merchant" to describe Mott on a 1996 magazine cover.

One of Mott's IT transformation objectives at GM is to double the speed of project delivery, mostly by putting more people on each project and doing fewer of them at a time. Mott knows that if he's going to stamp out shadow IT at the company (a cost drag as unsupported applications and devices proliferate), his team had better get GM's designers, engineers, manufacturers, dealers, marketers, and other key people the difference-making IT tools they need ASAP. If it takes many months to deliver new applications, compute capacity, and security controls, employees will go elsewhere for what they need and/or they'll always be playing catch-up with nimbler competitors.

Engage with Oracle president Mark Hurd, NFL CIO Michelle McKenna-Doyle, General Motors CIO Randy Mott, Box founder Aaron Levie, UPMC CIO Dan Drawbaugh, GE Power CIO Jim Fowler, and other leaders of the Digital Business movement at the InformationWeek Conference and Elite 100 Awards Ceremony, to be held in conjunction with Interop in Las Vegas, March 31 to April 1, 2014. See the full agenda here.

Rob Preston currently serves as VP and editor in chief of InformationWeek, where he oversees the editorial content and direction of its various website, digital magazine, Webcast, live and virtual event, and other products. Rob has 25 years of experience in high-tech ... View Full Bio

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David F. Carr
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David F. Carr,
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3/27/2014 | 10:46:59 AM
Will the trend toward inhouse IT stick at GM?
Do you think the direction toward bringing more IT inhouse will stick at GM, or will we see the strategy seesaw back to an emphasis on outsourcing? Many organizations identified outsourcing (and skill at doing it well) as a strategic imperative over the past couple of decades. Were they 100% wrong?
RobPreston
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RobPreston,
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3/27/2014 | 11:49:34 AM
Re: Will the trend toward inhouse IT stick at GM?
This will stick. Randy Mott didn't believe in outsourcing when he was at Wal-Mart, Dell, or HP either, and he stuck to that philosophy. It's a core principle of his, going back 30 years, not a trendy move. From what I understand, GM's leadership is on board. Mott thinks insourcing not only will produce more IT innovation, but it will also cost a bit less. As Mott says, IT outsourcing vendors charge for "resource + margin," so there's no incentive for them to reduce resources applied to any given project or responsibility.
Lorna Garey
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Lorna Garey,
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3/27/2014 | 1:32:24 PM
Re: Will the trend toward inhouse IT stick at GM?
At the size companies Mott leads, doing IT in-house seems to make perfect sense -- the scale is at least equal to what most outsourcers offer. For smaller companes the numbers are likely not as clear. 
ramacan1000
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ramacan1000,
User Rank: Apprentice
6/15/2014 | 10:32:42 PM
Re: Will the trend toward inhouse IT stick at GM?
You should interview the business unit leaders at GM... and ask them what they think about the insourcing...

 

GM IT has become bad to worse to impossible is what they will say..

 

GM's neighbours Ford, Chrysler etc. - all of them had insourced for many years... What happened there??
majenkins
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majenkins,
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3/27/2014 | 2:12:43 PM
Re: Will the trend toward inhouse IT stick at GM?
I think it will stick as long as Mott is there, when he leaves, not if when, then all bets are off. I was very glad to see someone in a position of authority say what I have been saying for years. Pundits and CIOs always talk about IT aligning with the business goals but never put any onus on the business to align with the IT goals and philosophies. That is why you have so much money wasted on what you called shadow IT, things that get one thing done for one part of the business but donít achieve any larger or longer term goals.
Charlie Babcock
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Charlie Babcock,
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3/27/2014 | 5:44:17 PM
Mott misconstrues cloud services
When Mott says using cloud infrastructure and software as a service is a way to get even, not get ahead, he misconceives of what's going on out there. I agree it is a good idea to keep core IT skills in house, but they can be put to work effectively on cloud infrastructure and customizing SaaS, if that's what the CIO wants. He's thinking too much in-house resources are better than external ones. You don't have to be an advocate of outsourcing to make good use of the cloud. On the contrary, the cloud gives the internal managers control over the resource and allows them to use it as an extension of the data center. To misconceive this could be damaging to your long term prospects.
ChrisMurphy
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ChrisMurphy,
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3/31/2014 | 9:47:25 AM
Re: Mott misconstrues cloud services
His cloud skepticism definitely bucks the trend, Charlie. I can't think of any CIO I've spoken with that is as skeptical about the value to be had from cloud software. I'm looking forward to the on stage discussion with InformationWeek Conference attendees this week, to hear what kind of questions CIO peers ask.
anon9793399602
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anon9793399602,
User Rank: Apprentice
3/28/2014 | 5:05:58 AM
GM's CIO
If you are CIO of a GM, you can afford to speak whatever you want. However, this looks like classic CIO speak who is disconnected with the ground realities and how the technology world is changing. Though some of the bets he is taking will be good, overall GM is going to lose. GM needs to smell coffee and leverage digital transformation across its business processes to leap ahead of its competition. He makes valid point that enterprise software are not best served by the VC-funded companies. However, GM should look to acquire such small companies and create in-house solutions that help in excel.
J_Brandt
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J_Brandt,
User Rank: Ninja
3/28/2014 | 2:17:48 PM
Integrate
I can't agree enough with his comment, "Real innovation happens with IT professionals tightly aligned to company strategy."  Too many times you have IT running for IT's sake and ignorant of the true business needs of the organization.  If IT wants to have any relevance, they have to move beyond basic plumbing support and maintenance.
ANON1255450178610
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ANON1255450178610,
User Rank: Apprentice
3/31/2014 | 10:50:30 AM
Speed
If speed of development is so important, why is he talking about annual updates on the plan rather than quarterly?
Abdul Jaludi
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Abdul Jaludi,
User Rank: Apprentice
4/1/2014 | 10:16:20 AM
A good model for others to follow
This sounds like the strategy John Reed, a strong proponent of IT, implemented that helped make Citicorp the global leader under his watch. This is also a great model for other companies, who are having problems reigning in IT, to follow

For most companies, IT-business "alignment" is doublespeak which means "sure, we'll create a new division whose job is to 'work closely' with you, while we continue working on what's really important". The business divisions don't need a feel good team that delivers hot air while shadow IT divisions continue to proliferate, but better access to the resources already there. IT internal alignment is a step in the right direction.

Many companies which create innovation centers in these trendy locations fail to realize that many of the best ideas, which will help the company long term, will come from the workers who already understand the environment, what the problems are and what's needed. What they usually lack is access to the right people to present these ideas. Building innovation centers close to staff is a step in the right direction and a great morale booster. Integrating new with existing talent rather than replacing one with the other helps this process along. The new thinkers can help existing staff formulate and better articulate their ideas.

The ability to deliver faster is what the automakers need. If Mott can deliver them GM has a good chance of making it to top.
larry.holder
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larry.holder,
User Rank: Apprentice
4/2/2014 | 12:37:58 PM
Great article
Randy was my first project leader at Wal-Mart in the early days (I was there 1981 to 87).  We did a lot of innovative stuff, all in-house.  The environment was friendly, fun, and we got things done.  (By the way, here's a news flash to anyone who says COBOL is dead: Wal-Mart was programmed 99% in COBOL).  Randy knows the IT business, and I dare say he is as innovative and daring in his thinking for enterprise computing as Steve Jobs was for micro computing.  GM is lucky to have him.
George5647
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George5647,
User Rank: Apprentice
7/24/2014 | 6:05:43 PM
Transformation
I think Randy made couple of mistakes in insourcing in GM, and it might collapse. I got a strange feeling he is building a typical IT company across GM, forgeting he's a CIO of the automotive coorporation, with business spread across the globe. People insourced on new positions are not having any experience in automotive industry at all, nor the experience with other regions outside of the US. This is leading to much stronger separation between GM business and GM IT and at the end it might destroy all relations that have been already built between IT and business. This is a point where Randy and his ex-HP and ex-DELL guys forgot that business owns the company, not IT. Business rates IT as well. Somebody mentioned about Shadow IT. According to me, Shadow IT was an answer on a weak performance of an IT organization in general. If business couldn't get from IT what they want, they are going to suppliers leaving GM IT and all is done, working without issues, without tons of documents, processes, analysis. I think Randy's organization will be hit again with Shadow IT, when the business will get angry about delayed projects, non-working apps, forced centralized apps with a limited business engagement lead by typical IT PMs with no idea about markets and business needs. That will be the first step the system is failing. Additionally when those projects or apps will have errors and for another year IT will be fixing it up, the level of business aggression which is quite high today will reach the top and the transformation will be over.

I think the general idea of Randy's strategy is worth trying, but not in the automotive industry, but he's doing too many things in one time in huge organization where the intertia between top and bottom might be even 1 year. I can belive he was an expert 30 years ago knowing the Walmart business across US, but I doubt if he's experienced automotive person across all the globe with multi-continental automotive regulations. Cars are not the same as a pop-corn, and I think he's treating this business this way. HP is still returning to the model before transformation. Have no idea about DELL, but I keep the fingers crossed. I'm giving personally 1 year - big success or failed transformation with huge mess... 3rd time in a row? 
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