General Motors CIO reduced IT spending by £766m

Ralph Szygenda, CIO and group vice-president of General Motors, has reduced his annual spending on IT by £766m.

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.

Read more on IT jobs and recruitment