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GM bets on insourcing, Brings back 10,000 IT jobs

Stephanie Overby | Oct. 8, 2012
It's going to cost GM a lot more to insource thousands of tech jobs than it did to outsource or offshore them. But it just may pay off for the auto maker.

But a strategic IT function should never be judged on cost effectiveness alone, but rather by other measures including productivity, business alignment and innovation.

"Costs can certainly be measured, and we expect them to be higher," says Rutchik. "The question is whether productivity, innovation and agility can be translated into [outcomes like] better vehicles and more sales."

That may be easier to do in certain areas of the IT function-the computer-aided manufacturing systems that drive produce design. "Insourcing could be proven to be worth it if it drives faster design turnaround, and higher quality and better selling vehicles," Rutchik says. "It's a big if, though."

Managing IT Change at GM

Change management will also be a big task, as Mott must transform and IT organization used to managing contracts to one capable of managing IT delivery, says Bendor-Samuel of Everest Group.

And the benefits will be years in coming, which could be difficult for business partners with an appetite for quick returns.

While most IT leaders who bring certain IT functions back in house tend to focus on core competencies like architecture, design and relationship management, GM says to-hire list includes everything from developers and testers to PeopleSoft wranglers and messaging engineers.

"We see many of these skillsets as commodity capabilities that won't provide competitive advantage by being supported internally," says Rutchik. "Business analytics is an area that makes more sense; it can be tied to internal marketing and product development and drive a true competitive advantage."

GM's current partners may not be too keen on handing its prized talent over to its-possibly former-customer. "The nastiest surprise that might be encountered is that right now vendor talent is hard to come by," says Samuel. "Turning over talent would lose vendors the opportunity to redeploy them."

Insourcing Equals Time and Money

Many will be watching to see how GM fares. "I don't believe [insourcing] has been done on this scale before. The degree of difficulty is high and is risk," says Bendor-Samuel. "It can be accomplished, however, I suspect it will cost more money and take longer than anticipated.

 

 

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