General Electric spreads its bets on IT sourcing

Technology, media and financial services conglomerate General Electric (GE) will seek to diversify its IT sourcing strategy worldwide in a move that may...

Technology, media and financial services conglomerate General Electric (GE) will seek to diversify its IT sourcing strategy worldwide in a move that may reverse a historic concentration of work offshored to India.

According to GE's chief information officer for Latin America João Lencioni, the company's IT organisation is already spread across countries such as Mexico and China with a significant presence in India, but the strategy is now moving towards an increasingly global approach.

"We would like to have global coverage for IT services and not keep so much concentration on India," Lencioni told Computer Weekly on the sidelines of the Brasscom Global IT Forum in São Paulo.

"We have been in India since the early 1990s and have learned a lot with the providers, the model has continually evolved. India will remain relevant and a key area for us, but we want to develop some alternatives - for example, we are stating an experiment in Chile," said Lencioni.

"There is also an opportunity to bring some IT knowledge back into the company," he added.

According to Lencioni, GE Latin America buys IT services in Brazil around specific areas such as local tax, accounting and regulations, which are complex and that particular expertise can't be found anywhere else.

For example, the company's different divisions use separate enterprise resource planning (ERP) platforms that need to be customised and "localised" to comply with such requirements.

"Those requirements changed heavily in the last few years. For example, we now have laws around electronic accounting and tax filing which did not exist before, as well as electronic invoicing regulations, that have now come into play," he said.

Commodity services, such as desktop support and infrastructure management are provided to GE Latin America as part of global contracts and delivered from India.

According to Lencioni, India and Brazil have their own merits when it comes to IT management culture and both countries have improved in that respect over the past few years.

"Brazilians are very creative and able to push back if they don't agree, which helps when you are in the process of identifying solutions for a problem. Conversely they, also need to get more disciplined in terms of processes to achieve consistency, but that has improved," he said.

"At the same time, whereas the Indians would just say 'yes, yes, yes' at the beginning, they are now understanding the value of pushing back through working with American and Western European companies."

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