GM Taps The Offshore Market

An increasingly popular model for outsourcing involves contracting application developers and operations specialists in countries where work can be done for cheaper than in the United States. General Motors Corp. says it will continue tapping the offshore market to develop its MyGMLink online service for drivers through an outsourcing arrangement with Cognizant Technology Solutions Corp.

MyGMLink is a Web site available to owners of all Pontiac models, as well as owners of Chevrolet Corvettes, Suburbans, Tahoes, and Avalanches. From the site, customers can receive E-mail reminders to have their vehicles serviced, access vehicle ownership manuals, view maintenance tips, and receive promotional offerings. MyGMLink will be available to all GM vehicle owners in the United States in the first half of this year, and will extend into the Asian, European, and Latin American markets later in the year.

Using teams of developers in Detroit and India, Cognizant built MyGMLink early last year. Although GM wouldn't reveal which other service providers were up for the contract, the automaker said it chose Cognizant because the company could deliver cost savings using the offshore model while also having a management team present at GM headquarters. Cognizant will also manage ongoing enhancements to the site.

Cognizant won GM's business over large domestic providers because GM didn't want to pay U.S. prices for the development and operations work, says Giga Group analyst Stephanie Moore. This is a growing theme among American businesses as they search for ways to reduce costs while still driving innovation. Says Moore, "The business world can look for an increasing amount of application development and business-process outsourcing to be sent offshore, particularly areas like call-center and transaction processing."