Automotive giant General Motors Corp. is kicking off an IS management talent recruiting drive of historic proportions as it begins to move away from its near-total dependence on IT outsourcing provider Electronic Data Systems Corp.
New GM CIO Ralph Szygenda, in his first interview since joining the $168 billion company in August, said on Wednesday that he has contracted with six management recruiting and consulting companies to find 40 new CIOs by the end of next summer.
The CIOs will be assigned to manage IT strategy for different GM business units and core processes. They will fit into an innovative, matrix management structure that Szygenda revealed to company insiders last week. The organization, called Information Systems and Services, is charged with cutting costs and implementing common systems across GM's business units and divisions. It will take over all IT strategy and planning from EDS, and, between now and the year 2000, it will open GM to more competitive bidding from multiple IT service providers. GM spends about $4 billion annually on IT products and services.
First, however, Szygenda needs to find the people. The new CIO and his recruiters are looking for CIOs who will be dedicated to each of GM's business units. Others will be focused on systems and business processes that can be shared by different GM businesses, such as product development, brand management and manufacturing. Another group will be assigned to what Szygenda calls IT centers of excellence, focusing on such issues as electronic commerce, systems engineering, and IT architecture and standards.
Szygenda acknowledges that he has a big job in rebuilding GM's IT organization and that his efforts will have a big impact on the industry.
"We're looking for the best people in the industry," he said. "Clearly that's going to impact the industry because we're taking a lot of CIOs out of it."
IS management recruiters say the GM recruiting drive is likely to intensify already-tough competition for top IT management talent.
"Obviously, this will create a lot of demand that didn't exist before, and it's going to drive up salaries," said Jim McClure, director of the IT recruiting practice at Korn Ferry International in Boston.
McClure predicted GM may have difficulty finding the best and brightest IT managers. Top CIO candidates may resist entering such a large organization as one of 40 new recruits, he said. And it may be hard to attract them to Detroit, he added.
But Szygenda insisted GM will be able to attract top talent. Compensation will be good, he said. And GM is leading the charge that many companies are following to effectively manage IT outsourcing.
"That's where the world is going ... and we're already there," said Szygenda. "[GM's experience] is going to tell all these other companies that it can be done, and how can it be done."
So far, GM has recruited four of the 40 CIOs. The new GM CIOs will also be part of what Szygenda calls a "strategy board" made up of top business and IT managers who will coordinate IT spending and strategy across GM. Szygenda chairs the board.
Under EDS, there was little of that coordination, and that led to higher costs, Szygenda said.
"Our information technology thrust and our process thrust have been in different, individual businesses," he said. "There hasn't been anybody looking at the entire corporation in leveraging that."
GM, Szygenda said, is determined to get different divisions using common systems and common platforms for core processes such as new product development, manufacturing and sales/marketing.
And like its competitors, GM is likely to look at packaged software to implement those common processes, he said.
GM's move away from EDS is linked to its spin-off of EDS earlier this year. Under a new contract between the two, GM may turn to outside suppliers for IT services on new projects only. Szygenda said that will amount to about $30 million this year. Beginning in 1998, however, GM can open 6 percent of the business it currently does with EDS to open bidding. That figure will grow in succeeding years, he said.