Gm in-Sourcing
General Motors (GM) currently has approximately 90% of its information technology services outsourced, which include running data centers and writing applications. CIO Randy Mott, who joined GM in February 2012, wants to insource 90% of the company’s IT operations within the next three years. “GM has relied heavily on outsourcers to run its global IT. In 2006, for instance, the company announced it had signed outsourcing contracts valued at around $7 billion” (Thibodeau, 2012, para. six).
According to Schepp, “Bringing back IT jobs at the scale GM needs would require the Detroit-based company, which currently employs about 1,500 IT workers worldwide, to go on a hiring binge to staff the three U.S.-based software development centers it 's planning to build. Those would include jobs such as software developers, project managers, database experts and business analysts” (Schepp, 2012, para, two).
GM believes ‘insourcing’ is more effective than outsourcing. “Outsourcing has led to too many applications that are redundant, bulky technology systems that slow innovation, and feels that they can afford to run their own data centers” (Bomey, 2012, para. 6-16). GM also feels that its IT contractors that are outsourced do not understand the auto industry; therefore GM believes they can hire their own IT staff within the United States that can give results for the auto industry to GM standards.
Rationale for GM is that they believe that by insourcing its 23 outsourced data centers to 2 data centers inside Michigan, they will save cost by 40%, plus consolidate all their data into one location. The challenge to save money comes from three change accelerators – bandwidth, processing power, and storage. “The data the car produces also goes to the car maker so they can track customer satisfaction and vehicle performance, enabling them to make better vehicles in the future. In fact, the car maker can learn what’s happening with the cars in real time, which enhances their
According to Schepp, “Bringing back IT jobs at the scale GM needs would require the Detroit-based company, which currently employs about 1,500 IT workers worldwide, to go on a hiring binge to staff the three U.S.-based software development centers it 's planning to build. Those would include jobs such as software developers, project managers, database experts and business analysts” (Schepp, 2012, para, two).
GM believes ‘insourcing’ is more effective than outsourcing. “Outsourcing has led to too many applications that are redundant, bulky technology systems that slow innovation, and feels that they can afford to run their own data centers” (Bomey, 2012, para. 6-16). GM also feels that its IT contractors that are outsourced do not understand the auto industry; therefore GM believes they can hire their own IT staff within the United States that can give results for the auto industry to GM standards.
Rationale for GM is that they believe that by insourcing its 23 outsourced data centers to 2 data centers inside Michigan, they will save cost by 40%, plus consolidate all their data into one location. The challenge to save money comes from three change accelerators – bandwidth, processing power, and storage. “The data the car produces also goes to the car maker so they can track customer satisfaction and vehicle performance, enabling them to make better vehicles in the future. In fact, the car maker can learn what’s happening with the cars in real time, which enhances their
References: Bomey, Nathan. (2012, July 13th). 5 reasons why GM believes ‘insourcing’ more effective than outsourcing. Retrieved from: http://www.freep.com/article/20120713/BUSINESS0101/120713078/GM-General-Motors-insourcing Burrus, Daniel. (2013, July 1st). GM is insourcing its data centers: What’s your plan to leverage high-value data?. Retrieved from: http://bigthink.com/flash-foresight/gm-is-insourcing-its-data-centers-whats-your-plan-to-leverage-high-value-data Schepp, David. (2012, July 9th). GM vows to 'insource ' most of its IT jobs: Beginning of a trend? Retrieved from: http://jobs.aol.com/articles/2012/07/09/gm-vows-to-insource-most-of-its-it-jobs-beginning-of-a-trend/ Thibodeau, Patrick. (2012, September 24). GM ‘insources’, sets to hire 10,000 IT pros. Retrieved from: http://www.computerworld.com/s/article/9231519/GM_insources_set_to_hire_10_000_IT_pros