GM brings IT back in house...to SAVE money?

I don't care for their cars or tax breaks, but I do like this. Would like to see a trend.

GM Cuts IT Services, Brings IT Back In-House General Motors continues to bring back outsourced computer service in-house and said that it will hire at least 2,000 people for four new "information technology centers". According to Bloomberg, the first location - Austin, Texas - has opened and is currently staffed by a very few, but will end up at about 500 total workers. GM apparently plans to return 90 percent of work that has been outsourced after a lengthy IT evaluation process back to the company.

In 2006, GM invited companies such as IBM, HP and Cap Gemini to manage most of its IT infrastructure and awarded a multi-billion dollar contract over several years, which may not have delivered the results GM had hoped for. Bloomberg reports that GM intends to become more nimble by managing its own IT. CIO Randy Mott, who is responsible for the new plan, said that about 10,000 jobs could be added over the next three to five years globally. The primary mission of the new information technology centers will be to "develop software and change processes to help GM bring new vehicles to market faster." Bringing IT back in-house is also expected to save IT cost.

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Comments

ptilsen

No big shock to me. GM is a huge company. It can afford to provide effective infrastructure and management. External providers, even if they truly provide more cost-effective services, have to take a margin to earn a profit. It's highly unlikely that GM will manage its IT so inefficient that it would cost more than giving that profit to its vendors does.

Outsourcing makes much more sense for smaller companies. Limited outsourcing can still make a lot of sense for specific applications and services in the large enterprise, but outsourcing most or all of IT will almost never make sense.

tpatt100

Well HP is laying off 29,000 so there will be a pool of talent to look over.

Zartanasaurus

Looks like Proctor & Gamble is considering this move as well.

Procter & Gamble could follow General Motors

blargoe

ptilsen wrote: »

No big shock to me. GM is a huge company. It can afford to provide effective infrastructure and management. External providers, even if they truly provide more cost-effective services, have to take a margin to earn a profit. It's highly unlikely that GM will manage its IT so inefficient that it would cost more than giving that profit to its vendors does.

Outsourcing makes much more sense for smaller companies. Limited outsourcing can still make a lot of sense for specific applications and services in the large enterprise, but outsourcing most or all of IT will almost never make sense.

Yeah, I agree. The bigger companies that I have been involved with have been moving from decentalized to centralized IT, but are choosing to manage most of it themselves. Sucks for some of the folks working in IT for subsidiaries of said companies (I was even beginning to get caught up in a move like this), but it's the right move.