GM Outsourcing Overhaul, 1 Year Later - ' Base Case '
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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.
BASELINE GOALS:
- 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.
GM'S I.T. SUPPLIERS
- 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.
