IT Outsourcing at GM *

Abstract:

The case gives a detailed account of IT outsourcing practice at General Motors (GM), the largest automobile manufacturer in the world. It traces the history of IT outsourcing initiatives at GM and presents the benefits that were gained by the company from its IT outsourcing strategy. The case details how GM was able to use the learning from its initial outsourcing experiences to modify its outsourcing model. It further discusses how the innovative matrix structure of GM's in-house IT department played an important role in making its outsourcing strategy a success. This case highlights the importance of effective IT and business alignment for a successful IT outsourcing initiative.

Issues: » Analyze the suitability and implications of an outsourcing strategy for a company's IT needs. » Study and analyze the problems faced with IT outsourcing. » Compare the advantages and disadvantages of in-house IT infrastructure development with IT outsourcing. » Study the role of matrix structure in the effective management of in-house IT department.

Questions for Discussion:

1. Study and comment on the role and functioning of matrix structure in the IS&S department. What role did matrix structure play in bringing about IT and business integration at GM? Explain.
2. Critically analyze the advantages and disadvantages of a 100% IT outsourcing strategy. How did GM modify its outsourcing model to overcome the problems faced earlier?
3. Comment on the measures which GM plans to take in the next phase of IT outsourcing beyond 2006. Assume yourself as the CIO of GM. What changes would you like to bring in the outsourcing model in the next phase? Discuss.

Key words:
Customer-focused, e-business, strategy, Marriott International, world leader, hospitality industry, IT, website, property-centric, customer-centric company

*Note : This case is a simplified version of a longer case study, and is intended for learners for whom English is a foreign language. The longer version of this case study (ITSY046) is available at: http://www.icmrindia.org/casestudies/catalogue/IT%20and%20Systems/ITSY046.htm