Posted by George Colony on February 28, 2008
Here's the lightning account of what's happened at General Motors over the last ten years. The company lead all automakers in cost. Even though its IT was outsourced, it ignominiously sported the most expensive IT costs per car. Enter Ralph Szygenda as CIO with the charter to fix the mess. Ralph (along with then CEO Roger Smith) realized that they had to change an out-of-control decentralized culture in which every brand did things their own way. So Ralph didn't focus on tech -- he centered on standardizing process -- designing, engineering, manufacturing, and selling vehicles the same way, all over the world. The results have been amazing: costs down, quality up, speed increased. With a single process language the company can now design a car in China and build it in Detroit. It has gone from total decentralization to global in the space of a decade -- an amazing achievement for an organization of its size. In contrast, Toyota's manufacturing is global, but its design and engineering remains primarily centralized in Japan.
What's notable about this case, and a big lesson for CIOs in complex businesses like discrete manufacturing, is how Ralph didn't see himself as the guy who bought routers and configured servers. He saw no daylight between technology and process and he threw he and his team into harm's way -- into the business of the business, to paraphrase Calvin Coolidge. Technology is only half the job of the CIO, according Szygenda, even though most CIOs spend most of their time there.
So now it's put up or shut up time at GM. The company has solved its legacy problem (employee and retiree insurance), standardized process, and rationalized IT. It's done the ditch-digging to get itself back in the game. As Ralph puts it, "Now we've got to design cars that consumers want." It must win back customers that it has lost to Honda and Toyota over the last 15 years -- and impress and attract a new generation to its products. Bob Lutz and other senior designers have a perfect opportunity to wage an amazing comeback. If that happens, IT should and will get credit for the GM renaissance. If the designers fail, an extraordinary opportunity will have been wasted.