Ralph Szygenda, CIO and group vice-president of General
Motors, has reduced his annual spending on IT by
£766m.
Szygenda has rolled out a global wide-area network from
AT&T, reduced the number of business applications from 7,500 to
4,500, and used IT to standardise business processes such as
product design,
procurement and distribution globally.
These changes have resulted in IT contributing £13bn in profit.
In
an exclusive interview with Computer Weekly, Szygenda, who
became GM's first chief information officer in 1996, said, "IT was
the only way to wire the company so that it worked as one global
unit around the world."
Throughout its 100-year history, GM has grown through
acquisitions with each business unit running its own process,
supported by their own IT systems and networks. "We needed
processes that could be used globally, but every business was
running its own IT."
Between 1996 and 2000, Szygenda hired 1000 IT staff including 10
CIOs and process information officers to implement the IT for the
company-wide strategy to standardise business processes. He wanted
the CIOs to bring their experiences of optimising business
processes in other industry sectors to the automobile industry.
Szygenda said: "We built a common design environment so that
everyone could collaborate. This has halved our product development
cycle." GM has also
rolled out a common procument system to handle £41m of
procurement across the group, which Szygenda said allows GM to
benefit from economies of scale. Another global project, the
dealership network, is accessed via a standard portal.
Szygenda has encouraged his team to take risks to allow them to
innovate quickly rather than spending a year or two on a risk
assessment exercise.
He said this approach has allowed IT to provide the business
with innovative projects with minimal business risk. His approach
to management has resulted in billions of dollars in savings for
GM. "We have reduced the cost of running IT for the company by
£766m per year. Over 10 years we have saved close to £6.6bn,"
Szygenda said.