General Motors CIO Promotes Procurement Standards

Every little bit helps, right? While General Motors rocked Wall Street Wednesday with a $38 billion loss, CIO Ralph Szygenda participated in a press teleconference announcing a new best-practices model for acquiring IT services and goods, partly based on practices Szygenda has used to cut and control costs from his multi-billion-dollar IT budget.

The model, CMMI for Acquisition, is the result of several years' work by GM, Carnegie Mellon University's Software Engineering Institute, the U.S. government, and IT service providers Hewlett-Packard and CapGemini to develop a standards-based way to acquire and manage services and software. "In 2004, we realized we were buying more than we were building, but didn't have the acquisition standards in place," Szygenda said.

GM juggles multiple service vendors employing a total of 15,000 IT professionals worldwide working solely for the automaker, and is a huge consumer of packaged software applications -- it unquestionably has a lot of experience in the area of IT acquisitions.

The model defines, among many other things, how to initiate and manage a process for acquiring products and services, how to work with a supplier to define project requirements, and how to execute project oversight.

An over-riding theme in CMMI-ACQ is how to best collaborate with suppliers, which underlies a growing trend of companies working more closely with IT service providers than ever before. CMMI-ACQ doesn't support the practice of "saying I'm going to hand this to you, and I'm gone," Szygenda said. Instead, it's about "how you interact with your supplier every day to make sure it's done correctly."

The developers of CMMI-ACQ said word of the standard is just now getting out, so other organizations and companies haven't yet signed up to adopt it. But Szygenda, citing a Forrester Report that shows global purchase of IT goods and services will reach $1.55 trillion in 2007, insisted they can't afford to not adopt a standards process.

Kristen Baldwin, deputy director of the office of the U.S. Secretary of Defense, said the department will offer up the model it helped develop as an optional best practice, but won't require it to be followed. Carnegie Mellon's SEI publishes and controls the standard.

Those interested have the clout of GM's IT buying power and Szygenda to thank for getting HP, CapGemini, EDS, and other services providers to agree to work with GM--and now other companies--on adopting standards processes that reduce costs and produce quality work.