With a fully outsourced IT strategy, can a company gain a technological edge? Fred Killeen, acting chief technology officer of General Motors Corp., is trying to find a way.
General Motors has had an outsourced IT model for twenty-one years, ever since the automotive giant acquired Electronic Data Systems Corp. to take over its IT operations in 1984. GM stayed essentially wedded to EDS when it spun the outsourcer off in 1996.
In January 2006, the company will announce the winners of bids on its IT operations, anticipating the expiration of a 10-year contract with EDS in June 2006.
Killeen, here in Detroit, reports to GM CIO Ralph Szygenda and is part of Szygendas team of top IT executives who are carrying out GMs next phase of outsourcing, in which the automaker is demanding that providers cooperate with each other even as they compete for GMs business.
Although GMs contracts call for its providers to serve up the latest technologies, outsourcing deals are notorious for locking a company into last years technologies.
To fight against that tendency, Killeen keeps his telescope trained on the horizon for new developments. In doing so, he and GMs IT elite stay in touch with all its major vendors. “We make regular trips—well do that with the major suppliers to get their vision,” he said.
Killeen also calls on the research of expert sources such as venture investment firm Kleiner Perkins Caufield & Byers. In one example, Kleiner Perkins pointed GM in the direction of Virsa Systems, a small company whose Sarbanes Oxley compliance software GM now uses.
After hesitating, Killeen said, the auto giant is “ready to deploy wireless internally. We believe the security capabilities are there.” He said laptop users are connecting to wireless networks across GM, and cell phone users can communicate over GMs internal network as well.
GM, like other auto makers, is holding back on RFID (radio-frequency identification) deployment in factories, however, due to cost and the adverse effects of ambient factory conditions, such as excessive heat.
As a heavy manufacturer, GM is a big user of computer-aided design products, particularly those of UGS Corp. Killeen said the collaboration capabilities of CAD packages are more important than the individual capabilities of the tools.
“Its good to collaborate between Germany and Brazil on design. You can have people in many locations,” Killeen said. The companys standard collaboration tool is IBMs Lotus Notes.
Killeen also said a “strong focus” for the last few years has been better identity management—knowing the identity of a person who is accessing a system and linking that information to access controls.
As a global company, GM is looking at its worldwide IT capabilities as a single resource. “The question is how you get the best use of that. Were looking at grid technology,” Killeen said.
One area where GM is not on the leading edge is in deploying open-source software. But the company has its reasons. “Weve been very conservative about that because of indemnification. Our needs are mission-critical. We really want commercially supported products,” Killeen said.
Killeen did voice frustration with Microsoft Corp.s security problems. GMs office desktops are all Microsoft, including Active Directory. “Like everybody in the industry, were concerned about security. They [Microsoft] have made progress.” But, he said, “There are still a lot of viruses, and patches. We spend a lot of money keeping an eye out. We dont do the same for Unix.”
The pluses and minuses earned by each vendor show up in the report cards GM writes up for those providers. As many as one hundred GMers may have input in these evaluations, Killeen said, which cover the gamut of vendor performance—not the least measure of which is offering innovative technology that justifies GMs near-total reliance on outsourcing.
