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General Motors Will Slash Outsourcing In IT Overhaul

GM's new CIO Randy Mott plans to bring nearly all IT work in-house as one piece of a sweeping IT overhaul. It's a high-risk strategy that's similar to what Mott drove at Hewlett-Packard.
Mott Addresses His Critics

Mott was a polarizing figure at HP, and his plans for GM are no less ambitious. Former HP employees have written to us charging that Mott's IT organization was too slow to get things done, cut too many valuable people, and left the company underperforming. Many of those comments came soaked in emotion. "Like Hurd, Mott was an operator who burned the furniture with a short-term focus," wrote one commentator.

Mott acknowledges the tension caused by IT restructurings of this scale. A business unit leader may OK shutting down an app in favor of one used worldwide, but for employees of that unit "what you just did is take an application with which they were very comfortable ... and you set the time frame and didn't give them a choice," he says. For that, he says, IT "sometimes becomes a lightning rod."

Mott organized that June town hall meeting, with about an hour of presentation and 90 minutes of Q&A, in hopes of getting his IT people behind the effort. While Mott talks about letting people move into new roles and hiring others, employees of GM and its outsourcers will lose their jobs in this transformation. "'Change the mix' is very personal," Mott says. "You've got skill sets that you're going to change, and in some cases people can make transitions to those skills sets and in some cases they can't."

There also won't be a rigid IT org chart. "We will organize every year based on what we're trying to accomplish for the business," he says.

Outside of IT, GM employees will feel the effect of transformation, too. Mott's portfolio management process was a culture shock at HP, since it centralized IT control and forced business managers to prioritize projects. Mott will fight to quash "shadow IT." He insists that his cost-benefit analysis process scales to fit the size of the project--that a small project won't generate excess red tape and that it's worth the effort in order to allocate scarce IT resources efficiently. But he knows it will work only if employees feel like they get more IT benefits as a result.

Mott won't say what GM plans to spend on its IT transformation, only that it's much less than the $1.7 billion in capital HP spent. "I'm competing with capital to build a car," he says.

But the three-year time frame is the same. By January, Mott expects to have many pieces in place: a strategy and vendors for GM's new enterprise data warehouse; the Warren data center up and running; an IT portfolio management and CBA system in place with business units; and a portfolio of projects laid out that's bigger than 2012's. "Part of the goal is to go to the business and get them to imagine" what they want from IT, Mott says.

That statement points to what Mott's grand transformation doesn't address: What GM will do with its faster, more effective IT operation if this overhaul works. Can GM use analytics to better forecast sales or better read changing customer tastes? Would better collaboration tools help engineers and designers be more creative? Could GM and its dealers share customer insights that move more metal off the lot? Those kinds of ideas will come from working with business units on their priorities.

IT isn't the key to whether GM lives or dies. Making great cars and trucks and selling more of them is. Mott's transformation is big, but its success will be measured by whether it helps or holds back that goal.

See Also:
Randy Mott's Journey To General Motors