General Motors is inviting suppliers into its plants and
IT departments to learn about the company's environment so they can
bid for the car giant's worldwide IT outsourcing
contracts.
Much of GM's IT is already run by EDS under a 10-year master
service agreement, worth $3bn, which ends in 2006.
"This is not to get rid of EDS," said José Eiras, chief
information officer of General Motors Europe, speaking at the CIO
Symposium in London. "We want EDS to continue to win a big part of
that spend."
Eiras said the new approach marked the beginning of
third-generation outsourcing at the company.
"The first generation was when GM bought EDS and all GM IT
employees were transferred to EDS in 1984," said Eiras. He called
that process "out-insourcing".
The second generation, from 1996 -2003, was when GM and EDS
severed their links with EDS to become a standalone IT services
company. This period saw GM rebuilt its internal IT department
using matrix management approach, said Eiras.
"You need higher-level people for matrix management approach and
people need to be more mature. Total control for IT is very easy
but it doesn't work in a company like ours," he said.
GM's second-generation outsourcing saw IT become an enabler not
an inhibitor, said Eiras, with IT costs being cut by £1bn
in seven years and IT spend going down from 2.5% of revenue to
between 1.4% to 1.5%.
The challenges for the next five years include:
- Getting the right products in place
- Implementing a worldwide CRM system. Europe is piloting GM's
global CRM project
- Structural cost improvement
- Real-time business processes
- Transition to third-generation outsourcing.