GM splits IT services work, pulls together rivals

06.02.2006

For users, increased standardization could make services benchmarking easier, which in turn could lead to lower contract costs, said Robert McNeil, an analyst at Forrester Research Inc.

McNeil added that GM's decision to rely more heavily on services vendors other than EDS means "the death of sole-source delivery." Using multiple vendors to a greater extent will give GM added flexibility, drive more competition for its business and help it manage the risks associated with outsourcing IT work, he said.

Another decision by GM that could sway other companies is the signing of five-year contracts, McNeil said. GM's initial agreement with EDS after spinning off the services firm was for 10 years. That contract expires in June.

Many of the standardized operating processes being required by GM are based on the Information Technology Infrastructure Library, a set of IT best practices that was developed in the 1980s and is maintained by the U.K.'s Office of Government Commerce.

Setting standards