The Digital Economy

 

 

 

The Digital Economy

 

 

the development and delivery of ICT

within General Motors over the past 30 years.

Detail relating to developme

nts prior

to 2000 can

be found

in the attached case study (Ass1

.2 Case Study General Motors). When reading the case

study note that there were at least two major “players” in this story

General Motors and EDS.

You are to consider the roles of

both

organi

sations in your essay.

Of course

much

has happened to both General Motors and to EDS since 2000! Yo

u are

to

research what has happened and to speculate on why. There is a great deal of information

available on the internet!

Finally you a

re to reflect on

the many fascinating (and often confusing/co

nflicting) changes of

direction

these companies used in their attempts to provide ICT solutions and support over a very

long period.

This case poses a central question

is insourcing, outsourcing or mixed sourc

ing the best

strategy?

General Motors certainly had great trouble deciding

what do you think?

Content

/Assessment

As a minimum

,

you should include. Marks for each section are shown in brackets.

introduction to your essay.

(10%)

evidence of wide rea

ding about both General Motors/EDS and about IT

Sourcing St

ra

tegies

. (20%)

An accurate and complete history of the case, particularly after 2000.

(25%)

discussion of why GM and EDS acted in the apparently contradictory

ways they did over the course of time

. (20%)

reflection on the relevance of the lessons from the case study for similar

organizations today. (20%)

proper referencing (Harvard style is required)

(5%)

Submission Instructions

Your essay will be submitted through the class

UONonline

Site.

 

 

 

General Motors: Building a New

Information Systems and Services Organization

Prepared by Keri Pearlson

In the spring of 1998, Vice President and CIO of General Motors, Ralph J. Szygenda, drove his

new Cadillac out of the executive parking lot at the Re

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naissance Center in Downtown Detroit

and headed back to his Brewery Park office. Szygenda became the first CIO at GM in more than

twelve years when he accepted the position in June 1996. As he left the Renaissance Center,

GM’s worldwide headquarters, Szyge

nda thought about the successes of his two

year

organization.

During 1996, GM had split

off Electronic Data Systems [EDS], a leading information technology

consulting and outsourcing company, and with it most of the information systems expertise

within GM

. With a staff of approximately 2000 business analysts and technology personnel

employed by GM and various outside contractors, but with little in

house IT knowledge, and a

budget larger than some small countries, Szygenda was charged with building an Info

rmation

Systems & Services [IS&S] organization to support the internal needs of GM as well as its

suppliers, dealers, and customers.

What made this task so interesting was the fact that Szygenda had the opportunity to structure

and staff an information s

ystems and services group for one of the largest companies in the

United States, without having to deal with many of the problems inherent in taking over an

existing organization. He, essentially, had a clean slate upon which he could design an entirely

ne

w Information Systems and Services (IS&S) organization. Szygenda reflected upon his

organizational design and the choices he made to fill some of the 300 positions for information

officers (IOs), process leaders and technology specialists and thought about

how this group

would help GM realize its goals.

Keri Pearlson prepared this case, with the assistance of Michael Taylor

and Leslie Jorgensen, solely to provide

material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a

managerial situation.

The statements and opinions contained in this case are those of the indivi

dual contributors or advertisers, as

indicated. The Publisher has used reasonable care and skill in compiling the content of this case. However, the

Publisher and the Editors make no warranty as to the accuracy or completeness of any information on this ca

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se and

accept no responsibility or liability for any inaccuracy or errors and omissions, or for any damage or injury to persons

or property arising out of the use of the materials, instructions, methods or ideas contained on this case. This case

may not be

downloaded, reproduced, stored in a retrieval system, modified, made available on a network, used to

create derivative works, or transmitted in any form or by any means, electronic, mechanical, photocopying,

recording, scanning, or otherwise, except (i) i

n the United States, as permitted under Section 107 or 108 of the 1976

United States Copyright Act, or internationally, as permitted by other applicable national copyright laws, or (ii) as

expressly authorized on this case, or (iii) with the prior written

permission of the Publisher. Requests to the Publisher

for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue,

New York, New York, 10158

0012, USA, (212) 850

6011, fax (212) 850

6008, email: permreq@wile

y.com. Copyright

© 2001 by John Wiley & Sons, Inc. All rights reserved.

Company Background

William C. Durant started General Motors in 1908 in Flint, Michigan. Durant built GM by

bringing together many small automobile producers and components and parts manufacturers

into a si

ngle holding company. By 1920, more than thirty companies had been acquired by GM

via purchase of all or part of the acquired companies’ stock. In January of 1998, after the June

1996 split

off of EDS and the December 1997 split

off of the defense business

of Hughes

Electronics, General Motors consisted of five business units [Exhibit 1]:

North American Operations [NAO] built cars and trucks under the brand names:

Chevrolet/Geo, Buick, Cadillac, GMC, Oldsmobile, Pontiac, and Saturn.

The international busin

ess sector built and marketed vehicles throughout the world,

including some of the NAO brands as well as Opel, Vauxhall, Holden, Isuzu, and Saab.

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Delphi Automotive Systems supplied automotive components and systems to GM and

external customers.

Hughes Elec

tronics Corp. was a supplier of, telecommunications and space hardware,

systems and services.

General Motors Acceptance Corp. [GMAC] offered financial services, which covered

vehicle financing and leasing, GMAC Mortgage Group, and Motors Insurance

Corporat

ion.

The corporate vision of GM had been carefully worded to draw together these diverse businesses.

GM’s vision is to be the world leader in transportation products

and related services. We will earn our customer’s enthusiasm

through continuous improvem

ent driven by the integrity,

teamwork, and innovation of GM people.

The word transportation was broadly defined. It included transportation of people and cargo

but

also extended to include the transportation of information. Therefore, in addition to GM

’s

traditional cars, trucks, automotive components and systems, the vision also included, satellites,

and telecommunication systems and services.

By the early 1980’s GM had begun automating many of its factories to include cutting edge

technology. “We’re

the largest manufacturer of controlled computers today, and we use them on

all of our cars,” said former GM Chairman Roger Smith. GM has seized the technologies of the

computer, robot, and laser to make radical changes in its automobiles, in the way its a

ssembly

lines run, and the way its workers work and its managers manage.

In an effort to more effectively organize and manage their information systems and

telecommunications activities, GM sought to partner with a computer services company. Rather

than

simply outsource, GM managers were concerned that they remain competitive in the global

environment and they felt they needed to own their information systems organization. Early in

1984, GM executives met with executives of EDS, including founder Ross Per

ot and others, to

discuss GM’s acquisition of EDS.

General Motors IS&S

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2

 

 

 

 
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