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 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. 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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. • 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 Page 2 PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT :)