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GM Shuns IT Outsourcing, But How Will It Manage Its Cars?

Posted By Chris Chiappinelli, July 24, 2012 at 1:31 PM, in Category: Factories of the Future

Recently, Information Week published a fascinating glimpse into the IT department at the world’s second-largest automaker. Under the direction of CIO Randy Mott, GM expects to invert its model of IT management, moving from 90% outsourced work to 90% handled by GM’s internal IT staff. You can imagine the hiring binge GM will undertake to sign up application developers, database specialists, and project managers.

The article concludes with a litany of questions, including whether GM will be able to use its newfound analytical capabilities to better forecast sales, and whether an improved IT model will allow GM’s product designers to be more creative in their work.

Good questions all, but I kept thinking about how GM will use its IT department not to serve its internal customers (employees and partners), but to serve its end customers—the people who drive GM vehicles. That’s the question a lot of companies will need to answer in the next five to 10 years, because IT is no longer a portfolio of business applications, data centers, and data warehouses. IT is what a lot of manufacturers embed into their products nowadays, from GM, to Mattel, to refrigerator-maker LG. Striking the right balance between an IT department and a product development team, and properly staffing up for each, will challenge many CIOs and CEOs in the days to come.

Forbes writer Matthew de Paula wrote recently that most cars will be connected to smart phones in the next four years. Deloitte published a report detailing what embedded IT will mean for car manufacturers over the next half-decade. Accordingto that report, by 2018 vehicles will be communicating with the transportation infrastructure in the name of safety and convenience, and drivers will be using their e-wallets to make purchases through their cars. That’s a lot of IT for a company like GM to manage.

I can’t fault Information Week for covering the part of the story that resonates best with its readers. For now, many IT executives are focused on data center consolidation and managing business applications.But before you know it, IT will mean so much more than that. Better be prepared.

Written by Chris Chiappinelli

Chris Chiappinelli is the online research manager for Manufacturing Leadership. He covers enterprise software, sustainability, economic trends, workforce issues, and emerging technologies.


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