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]

Posting A/C because I'm still working at HP...

Mott was the king of cost cuts. When I started at HP in 2001, HP IT was awesome -- call a number, get an American tech who had a clue. They would even come to your desk, if necessary. Mott "transformed" IT by:

-Laying off lots of IT workers
-Forcing most of the remaining IT workers to move to a single location in Texas, or be fired. No telecommuting allowed
-Making it impossible to purchase any software not on a short "approved" list. Even if it was $20
-Requiring almost all IT issues to be entered into a web-based ticket system -- an overloaded system that was often slow or down
-Limiting telephone support to nearly nothing. Login screens directed employees to "use a co-workers PC to enter a ticket"
-Requiring users to categorize their own tickets. However, the categories were impossible to decipher and I estimate well over 50% of tickets were mis-categorized. Further, mis-categorized tickets were summarily closed as "Resolved" with no hint on what the correct category might be. Further, even if you categorized your ticket correctly, but the level 1 tech didn't find your issue in his checklist, your ticket was closed as "Resolved" -- even though they had NOT resolved your issue.
-Eliminated desk-side support, forcing 6-figure engineers and managers to do time-consuming IT tasks such as re-imaging rather than paying less expensive IT staff to do the same thing. Further, for hardware failures they shipped you a new PC via UPS/FedEx so you had no working PC for several business days.

I'm sure all these things saved a ton of money -- for IT. However, it cost the various other HP business units giant wads of money in lost productivity. Since the productivity didn't show up on IT's cost sheet, it didn't matter to Mott.

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.

Re:In-house staff do have advantages

[Shoten]

There's a deeper side to this. Back when EDS was still EDS, they were doing a pretty good job for GM. The problem is, HP bought them, and started to apply the same goals/metrics to the services side (formerly EDS) that they use for the product side (that was losing money, and makes fucking printers in the first place). Side note: here is where my self-control keeps me from using terms like "fucking incompetent faggots" and "galactic assclowns" to describe the piss-chugging buttmonkeys that displaced EDS' leadership. As a result, the quality of service that GM got dropped...and the value proposition of outsourcing went with it.

Now, in all fairness, the fact that HP's leadership couldn't figure out how to get wet if they were dropped in the middle of the ocean is probably only part of the problem. Their ass-pounding mediocrity is probably also compounded by the current political situation and the drive to bring jobs back to the USA. So it's not entirely the fault of a bunch of circle-jerking sycophantic pole-chain-smokers. Just 99.99% their fault.

Guess who I used to work for before I quit? :)

Re:In-house staff do have advantages

[rhsanborn]

I worked for a while in state government. The IT department had established metrics for all products and services. If the Treasury department wanted a new PC (and the associated management, imaging, desktop support, etc) there was a fixed cost for that, and the Treasury department paid IT for the services it performed. This has a lot of administrative overhead, but it means that "IT" isn't a cost, they actually generate revenue. It forces the consumers of IT to justify their expenses. IT is in a terrible position having to describe why we spent XX amount of money on this particular system, or why we own this many PCs. They ought to be involved in finding out, but the users of the technology need to be involved and need to justify their own use of technology, and aid in making decisions about necessity.

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!

Slash Outsourcing

[Spad]

I presume that Slash Outsourcing is Slashdot's latest unwanted "channel" to go with that Business Intelligence nonsense?

Hooray!

[DCFusor]

I'm a GM guy, FWIW, and I own a Volt, which I loved at first, and now I love more - it grows on you, especially when you can charge it off solar power. But...the GM web presence is the absolute worst written software I've ever experienced on the web - and I've been here since the BBS days.

I'm thinking specifically about the MyVolt site. Ok, it's mostly a bunch of ads and info on the Volt - obviously mainly motivated by brain-dead marketing, since it's also the main place owners go to check their car's status.

So, you push the log in button. Though there's room on the page, oh no, we have to pop up a window to log in on - meanwhile, the animations on the page behind are still loading and running blocking code that makes my other web apps stutter. After maybe 10 seconds, you get the log on window, with it all filled in (thanks firefox) and click the log in button....and you wait, and wait, and wait. Meanwhile, the button you clicked doesn't grey or disable, and clicking it again breaks it. Finally, you're logged in and it starts trying to talk to the car to see what the state of charge is for you. This takes at least two minutes, often ending in "we failed to contact the car, try again?". During those two minutes, it's busy drawing an animation of the state of charge, in blocking code, so my other realtime (stock trading and TV) apps stutter. And, if there was already valid info on the SOC meter, it gets wiped up while you are waiting. It can take over 5 minutes to find out state of charge on this app! Every single page element is reloaded from scratch and re-initialized in response to every single user action, often wiping out valuable data you had already showing each time. And yes, it logs you out every 30 min - during which time you may or may not have gotten the data you wanted. This site must hit 5-6 different (all slow) servers for each redraw. It's obviously done by drag-drop-monkey tools by someone who doesn't even know how to do that, plus a lot of pretty but useless art from some marketing idiot - owners don't need to see more crappy ads for something they already own (are you listening too, Amazon?).

Anything, and I mean even a site writen by a 13 year old retard who was the nephew of a GM exec would be superior. Thank god, the Volt runs linux in a cluster...that was done mostly inhouse and by IBM, who at least have a clue.

Wal-Mart doesn't outsource their IT

[rollingcalf]

And they are the king of cost-cutting. They outsource many other things, but still insist on keeping their IT in-house.

Re:Design Flaw?

[spire3661]

Michigan is roughly as big as the U.K., maybe that will bring some perspective.