Base Case

By Doug Bartholomew  |  Posted 2007-01-07 Print this article Print

After spending a decade with basically a single outsourcer--EDS--GM last year tapped a half-dozen technology partners to run various technology operations. Here's how it's going so far.

Base Case

Headquarters: GM Renaissance Center, Detroit, MI 48265

Phone: (313) 556-5000

Business: GM is the world's largest auto manufacturer, producing cars and trucks under the Chevrolet, Buick, GMC, Hummer, Pontiac, Saturn and Cadillac brands in North America, as well as brands such as Saab abroad. It also owns a 49% stake in GMAC Financial Services, its auto financing unit.

Chief Executive: Rick Wagoner

Chief Information Officer: Ralph Szygenda

Financials in 2005: $192.6 billion in

revenue; $10.6 billion loss.

Challenge: Reduce costs by fostering competition among outsourcing vendors and creating infrastructure supporting global vehicle development and production.


  • Restructure operations, including information technology, to reduce overall structural costs from 34% of revenue in 2006 to 25% of revenue in 2010.
  • Diversify from one "monopoly" vendor to six primary providers of technology integration and support services.
  • Reduce annual technology spending from $3 billion in 2004 to about $2 billion in 2010.
  • Reduce the number of different instances of SAP in use worldwide from roughly 70 to about a half-dozen or fewer.


  • Hewlett-Packard: Contracts worth $700 million over fi ve years. HP will work with GM’s Information Systems and Services organization to provide server management, application maintenance and systems integration. HP also will manage GM’s global engineering workstations, ERP hosting and product development servers.
  • Capgemini: Dollar value of contract not disclosed. Capgemini was awarded six contracts for enterprisewide application integration management for strategic planning and architecture, program management, and verifi cation services; application integration management for purchasing and supply chain; sales, service and marketing; and business services, plus support for sales and marketing systems and dealer systems.
  • EDS: $1.3 billion in contracts in 2006, down from $1.9 billion in 2005 (awarded $3.8 billion in contracts over fi ve years). EDS continues as a strong player in global product development, manufacturing and supply chain applications, as well for as GMAC, OnStar, corporate information systems and computer infrastructure operations.
  • IBM: Will handle applications support for quality and parts and service, as well as enterprise computing infrastructure integration management.
  • Compuware Covisint: Continues to provide GM with electronic data interchange to enable business-to-business supply chain collaboration with suppliers, adding GM’s suppliers in Europe, Asia-Pacifi c and Latin America.
  • Wipro: Continues to provide application data integration services.

Doug Bartholomew is a career journalist who has covered information technology for more than 15 years. A former senior editor at IndustryWeek and InformationWeek, his freelance features have appeared in New York magazine and the Los Angeles Times Magazine. He has a B.S. in Journalism from Northwestern University.

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