Survival Instincts - InformationWeek

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12/2/2005
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Survival Instincts

General Motors is cutting 30,000 jobs and closing plants, yet its latest IT transformation isn't focused on cutting tech costs. It's on reinventing how GM competes globally.

Ambitious Approach
OK, but can it work? To get a piece of the $15 billion, service providers must agree that they'll do dozens of things, such as system-architecture development, security management, and application-portfolio management, exactly the same way.

And GM has to prove it can manage all this, even if vendors can work that way. While the IT team has run one of the largest outsourced IT operations, and the company has made great strides in areas such as product quality, GM isn't seen as having the process and design discipline of nimbler rivals, like Toyota. Szygenda admits that if one thing goes wrong, such as a supply chain breaks because information wasn't communicated among vendors, all the fingers will point to him and his team. He's asking suppliers in every bid to demonstrate to GM how they'll conduct the transition without creating risk for the automaker.

And while this transition is happening, General Motors needs to make progress on key business goals. One is more rapidly getting the right capacity for the right vehicles everywhere it operates. GM's future depends on selling in booming economies such as China and India. And it needs to quickly increase capacity of hot sellers-in the United States, it has an 11-month waiting list for its Solstice sports car, and it's preparing to ramp up production of Saturn models coming out next year. GM relies on virtualization and simulation to design cars and has been moving to use those methods to design plants. "It's a build-anywhere, sell-anywhere model," says Kirk Gutmann, process information officer for manufacturing and quality at GM.


maryann

An upgrade to Windows XP won’t stop work, Maryann Goebel says.


Photo by Bridget Barrett
No Disruptions Allowed
GM's initiatives include upgrading 140,000 desktops to Windows XP and making security an integrated part of that environment. "Day one, we expect no business disruption," says Maryann Goebel, CIO of GM North America. The vendor selected to run GM's OnStar program, which has 4 million customers and is part of its customer-retention strategy, must prove it can support growth of the in-car telematics system. That means ensuring that the service never goes down.

Who wants in on this action? IBM has a "pursuit team" of 500 strategists and technicians. EDS over the past couple years restructured, with units devoted to global activities such as product development, marketing, and manufacturing, mirroring GM. Hewlett-Packard is embracing the cooperative model, talking up best-practice standards such as ITIL, the IT infrastructure library, while Capgemini is targeting specific work, such as application development for dealers.

No matter how big an IT transformation Szygenda can pull off, it isn't going to solve GM's biggest problems, like high fuel prices sinking sales of gas-guzzling SUVs or huge health-care and pension liabilities. But Szygenda's team has driven results before, with steps like consolidating digital-design systems to give designers the tools needed to shave years off the time it takes to get a vehicle from idea to steel. "My job at GM is to reinvent," Szygenda says. Assuming he does it without knocking the wheels off, GM could use all the reinventing Szygenda's team can muster.

With Paul McDougall

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