- Why did GM split off EDS and form an internal IS & S Organization?
GM was founded by William Durant in 1908 (Creation:1897-1908). Durant was a successful manufacturer of horse drawn vehicles in Flint, Michigan. In the beginning, the company only had Buick Motor Company, but as time progressed they acquired over 20 other companies (Creation:1897-1908). As time progressed they also discovered that the dispersed information systems were a hindrance to the business. They began to search for IT systems that would be beneficial to the company and its efficiency. The first was EDS.
In 1984, GM acquired Electronic Data Systems, or EDS (Pearlson). With this system GM acquired the ability to be its own provider of computer services as well as a very profitable subsidiary (Pearlson). This system allowed GM to integrate their computer systems into one common system which allowed for a more efficient network (Pearlson).
In 1995, GM decided to split from EDS. There were a number of reasons for this split. Though GM paid $2.5 million for EDS in 1984, with the split GM gained a onetime payment of $500 Million (Pearlson). This was a significant profit for GM.
Other reasons were technological; the first being that the company had failed to integrate GM’s computer systems into a common system (Pearlson). This was one of the main purposes for the acquisition. It was slowly coming together, but at a much slower pace than was wanted.
Though EDS did help with the mainframe problem which was a concern, GM felt that EDS was not capable of stopping the fragmentation of systems projects across divisions (Pearlson). This was a serious concern for the company. EDS failed to provide a strong internal IT management team, which became a primary goal (Pearlson).
Another reason for the split was the possibility that GM and EDS would be more successful. EDS would have the flexibility in pursuing contracts with the competitors of GM, if the company operated on its own (Pearlson). With the split GM obtained a significant amount of money and EDS was given the opportunity to substantially increase their profits through new contracts.
Information systems are put into place to in order to serve the best interest of the company (Laudon). In order for information systems to be successful, the organization must be aware of the influence of information systems to benefit from new technology (Laudon). This was exactly what GM was aware of when they decided to split from EDS.
- What was the mission of GM’s newly formed IS & S organization?
It is important when implementing information technology, that the system is properly managed. There are many factors that must be considered, such as managing the joint development and implementation of business and IT strategies, applications, technologies, the IT Organization, and the IT infrastructure (Marakas). These aspects of the position of CIO were considered when a hiring decision was made. This decision was reached in 1996.
In 1996, Ralph Szygenda was hired as GM’s new CIO. This position allowed Szygenda to structure and staff an information systems and services organization for a company that was already successful (Pearlson). The goal of this group was to help GM realize their goals.
It had become apparent to GM that an internal IT team was needed to be responsible for the architecture and strategy of their information systems (Pearlson). With a strong IT management team GM would be able to recognize the synergies that were possible, and this became a primary goal of the new system (Pearlson). The company felt that Szygenda was the man to take on this task due to his prior experience with Bell Atlantic (Pearlson).
Szygenda had potential goals in mind. He felt the goal of IS & S was to meet any responsibilities that concerned information technology, imperatives and opportunities (Pearlson). In order to accomplish this GM, GM employees, EDS, and any other suppliers had to work as a single organization (Pearlson).
These goals were communicated to the executive committee and the new vision was implemented in a “Plan to win”. This plan was to make transformations through “common processes and systems, leveraged global resources, targeted products efficiently and quickly distributed to their markets and competitive cost and quality (Pearlson).”
In order to do this part of the IS & S organization would include a knowledge management system. This type of system allows the company to more easily organize and dissect knowledge, and then share it with individuals within the company (Davoren). These systems bring innovation, improve performance, and bring integration to the company. One of the primary goals for GM was to have an integrated system, rather than dispersed systems. Other types of systems could include transaction processing, customer relationship management, and business intelligence systems (Davoren).
- What were the responsibilities of the information officers?
The job description of an information officer is to manage and develop the procurement, supply, and distribution of information for an organization (Information Officer ). They play a vital role in the organization by handling all types of information (Information Officer ). They have various titles and job duties. This is especially true of the information officers at GM, hired by Szygenda.
Szygenda began his tenure by finding numerous opportunities where information systems could greatly impact the business (Pearlson). These opportunities included generating customer demand, fulfilling demand, improving product development, integrating international processes, and reducing costs (Pearlson).He also found opportunities to improve competitive advantage. In order to accomplish his tasks, Szygenda needed to maintain the IS & S organization at the lowest cost possible (Pearlson). He decided that it was a necessity to have approximately 300 CIO’s, information executives, and technologist to create the best organizational structure (Pearlson).
Each unit of the businesses needed an information officer. These officers were responsible for aligning key business requirements and IT priorities, assuring that process change efforts were implemented, developing strategic plans, and defining business requirements (Pearlson). They were also responsible for managing the development, purchase, integration, and operation of information systems in a cost effective and timely manner (Pearlson). These information officers had many responsibilities.
There were also five process officers. They were assigned to oversee the development and implementation of common processes and systems that were global or that crossed unit boundaries (Pearlson). Each was a master of their specific unit . There were also three regional officers, representing Asia, Europe, and Latin America, who were responsible for emerging international markets and the information processes within their region (Pearlson).
Also included were a staff of technical experts that worked in areas of information technology, architecture and standards, networks, software development, electronic commerce, computing operations management, and other emerging technologies (Pearlson). There were also administrative managers that were responsible for strategic planning, finance and contracts, purchasing, and human resource development (Pearlson).
Szygenda clearly thought this process through. All CIO’s had responsibilities and specific duties that must be carried out. This team was now responsible for all IT systems and systems management. GM’s success was dependent on these services and the abilities of their team within the IS & S Organization.
Creation:1897-1908. 2013. http://www.gm.com. 21 May 2013.
Davoren, Julie. Types of Information Systems in Organizations. 2013. http:www.smallbusiness.chron.com. 21 May 2013.
Information Officer . 2013. http://www.prospects.ac.uk. 21 May 2013.
Laudon, Jane Price, Laudon, Kenneth C. Management Information Systems. Upper Saddle Lake: Prentice Hall, 2007. 81-123.
Marakas, George M., O’Brien, James A. “Management Information Systems.” New York: McGraw-Hill Irwin, 2011. 579-597.
Pearlson, Keri. General Motors: Building a New Information System and Services Organization. Case Study. New York: John Wiley and Sons, 2001.