GM's Revamp Consolidates Suppliers

Feb. 17, 2006

A decade after becoming GM's first CIO, Ralph Szygenda accelerates IT globalization with a $15 billion program.

To support GM global business direction and GM's global business processes." That's how CIO and group Vice President Ralph Szygenda describes the goals of General Motors Inc.'s $15 billion IT restructuring program. He describes naming the winning Tier One suppliers as an important step in developing GM's next-generation sourcing model.

The bidding process, which began in 2004, was driven by the ending of a 10-year split-off agreement with EDS that expires this June, Szygenda says. The focus: determine the global suppliers of the tactical day-to-day services for GM. Szygenda says all suppliers will work as one GM team in their systems integration activities.

"Integration is becoming extremely important given the globalization of General Motors," Szygenda adds. "Where we once had [geographically separated] companies that operated autonomously, whether in Europe or Australia, that model is changing. We're globalizing our business units and leveraging the same engineering and manufacturing environments and processes as well as supply chain." With that increasing global complexity, he notes that it helps to have fewer but very, very key suppliers.

Ralph Szygenda

Of the five-year contracts awarded, EDS will continue to have the most business at GM, but somewhat less than today, while Hewlett-Packard and Capgemini increase their current GM activities. EDS says it won about 70% of the contracts it pursued, worth about $3.8 billion over five years. Compuware Covisint, IBM and India-based Wipro also were awarded contracts.

The EDS agreement includes mission critical systems in global product development, global manufacturing and supply chain, global business services, mainframe operations, server operations, GM OnLine (desktops), local area networks, GMAC and OnStar.

EDS has been GM's primary provider of data processing and other IT services since 1984, when GM acquired it. Since EDS was spun off from GM in 1996, it's operated under the 10-year master services agreement.