GM set to move away from IT outsourcing

11.07.2012
According to reports, General Motors is about to reverse its strategy of largely outsourcing its IT and bring it in-house.

This represents a massive turnaround in policy for the US carmaker, which owned the outsourcing giant EDS, until it was spun off in 1996 and has continued to use it for IT services even after it was acquired by HP in 2008.

, the carmaker will reverse the 90 per cent outsourced, versus 10 per cent in-house arrangement under the direction of CIO Randy Mott, who joined GM last February, from HP.

Previous GM CIO is regarded as the trend-setter of big-company outsourcing, slashing the company's budgets by billions of dollars a year through the use of companies like EDS.

It is expected that EDS, which is an outsourced services supplier for GM alongside IBM, Capgemini and Wipro, could lose out on $3bn a year in revenues if the carmaker goes predominantly in-house.

National Outsourcing Association Martyn Hart said in a statement: "Outsourcing's benefits come from economies of scale. GM's IT spend runs into billions of dollars. The fact that GM is as big in infrastructure as a major outsourcing player means that it has the same opportunities to lower its costs by developing in-house global services.