General Motors To Slash Outsourcing In IT Overhaul

gManZboy writes "GM's new CIO Randy Mott plans to bring nearly all IT work in-house as one piece of a sweeping IT overhaul. It's a high-risk strategy that's similar to what Mott drove at Hewlett-Packard. Today, about 90% of GM's IT services, from running data centers to writing applications, are provided by outsourcing companies such as HP/EDS, IBM, Capgemini, and Wipro, and only 10% are done by GM employees. Mott plans to flip those percentages in about three years--to 90% GM staff, 10% outsourcers. This will require a hiring binge. Mott's larger IT transformation plan doesn't emphasize budget cuts but centers on delivering more value from IT, much faster--at a time when the world's No. 2 automaker (Toyota is now No. 1) is still climbing out of bankruptcy protection and a $50 billion government bailout."

Comments

In-house staff do have advantages

[Calibax]

In-house staff provide a number of advantages:
        Quicker response from people who actually work for the same orgainzation
        Dedicated staff rather than whoever is free at the moment
        Familiarity with how your business operates
        Longer term institutional memory

Which taken together provide long term cost savings, mostly because you are investing in your own resources.

At least you are less likely to be training someone who will be working for your competitor on his next project.

Re:In-house staff do have advantages

[ackthpt]

In-house staff provide a number of advantages:

        Quicker response from people who actually work for the same orgainzation

        Dedicated staff rather than whoever is free at the moment

        Familiarity with how your business operates

        Longer term institutional memory

Which taken together provide long term cost savings, mostly because you are investing in your own resources.

At least you are less likely to be training someone who will be working for your competitor on his next project.

Smart, smart move by GM, who I do not often credit with making many. As a victim of outsourcing a couple times, I've seen how outsourcers operate - bring in the Crash team, of sharp, smart people, who gradually are rotated out to the next Crash site, while rotating in people with little to no experience who spend their days peering over the shoulders of others trying to figure out what they are supposed to be doing (and once they have it figured out to some degree, they leave their employer for a wage they can actually live on.)

Re:In-house staff do have advantages

[Anonymous Coward]

Nope, I predict an "insourced" but "offshored" branch will be opening soon wherever labor is cheapest.

Re:In-house staff do have advantages

[rolfwind]

They got their ideas about IT from playing golf with other CEOs.

This is the downside to "professional" CEOs, people (MBAs) who train to be management and nothing else. Never worked in the company before, doesn't understand the business, but they sure can juggle the numbers as if the pieces of paper told the whole story.

Which ups my admiration for the Steve Jobs/Bill Gates of the world who pretty much built it from the ground up and is in there real nitty gritty, or even Warren Buffett, who at least learns what he buys from the inside out and usually leaves the functioning parts the fuck alone.

Just about time

[mwvdlee]

It's been about 5 years or so since all IT was outsourced.
We're right on time for managers to start the in-house cycle again.
Good luck in the next 5 years and see you all again on the jobmarket in 2017!