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Vendors Chase The Big Prize

The contenders for General Motors' IT outsourcing business have invested millions of dollars preparing bids and changing their organizations to land part of the $15-billion prize.
The contenders for General Motors' IT outsourcing business have invested millions of dollars preparing bids and changing their organizations to land part of the $15-billion prize.

That includes the incumbent, EDS. GM's CIO, Ralph Szygenda, wants to lessen dependence on one provider. EDS is trying to keep as much of his business as it can, restructuring to emphasize global processes over geographic teams, mirroring GM. "The outsourcer needs to become a logical extension of the customers they support," says EDS VP Jeff Kelly, the GM account head.

With $46 billion in services revenue, IBM is probably EDS's toughest challenger. IBM has pitched better use of customer-relationship-management software and business-intelligence tools to help the automaker out of its sales doldrums, and it appointed five "global-process leaders" that match the process areas Szygenda has identified as most critical to GM.

Hewlett-Packard would like a big GM deal to get back some of the services momentum it briefly scored with a major engagement with Procter & Gamble Co. GM is one of HP's 10-largest business customers; that's mostly from hardware, but the company will try to parlay that into more services work. "Our strength is our understanding of GM and how they operate, and our ability and willingness to collaborate with EDS and other vendors," HP executive VP Ann Livermore says.

Paul Spence, who heads Capgemini's outsourcing practice, says it's targeting select projects, homing in on application development for GM's dealer network and sales and marketing operations, and its enterprise architecture contract. Just pursuing the business is a risk. The company's outsourcing sales are about $3 billion, less than one-sixth IBM's, yet it has spent more than $8 million chasing GM contracts.

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