The news broke July 9 that Randy Mott, who joined General Motors Co. as chief information officer in February, had launched the automaker into a plan to move most of its outsourced information technology functions back in-house.
Currently, GM farms out 90 percent of its data management, software development and related IT to vendors at a cost of about $3 billion a year.
A major share of that cost reduction will be at Hewlett-Packard Co., Mott’s former company, which bought a big chunk of GM’s IT business when it bought Electronic Data Systems in 2008 for $13.9 billion.
Juli Huston-Rough, GM’s director of media strategies, said the company plans to move 90 percent of its IT in-house over the next three to five years, which will require the automaker to hire what she described as “several thousand” software developers, database experts, project managers and other highly paid IT professionals, many of them in Southeast Michigan.
GM currently has about 1,500 IT employees.
“Bringing outsourced employees in-house provides the company with more flexibility in meeting its needs and will speed up processes,” she said. “It will allow workers to provide more ideas and creativity instead of just keeping the trains running.”
Here are some of GM’s plans for the proposed change, Huston-Rough said:
• Reduce its 23 large data centers worldwide to two, both in Michigan, replacing servers, networking components and storage hardware with more efficient devices. One is already being built at the company’s Tech Center campus in Warren and is scheduled to open in October.
• Cut more than 40 percent of the software applications currently used and move to standardized applications across regions and business units.
• Create four software development centers, one at the Tech Center and the others in U.S. locations to be determined.
While GM acknowledges that its decision to move IT work back in-house will have an impact on such large outsourcers as Hewett-Packard, IBM, Paris-based Capgemini and India-based Wipro, Huston-Rough declined to say whether smaller staffing firms that provide on-site labor at GM facilities also will be affected.
She declined to say how many local employees of those firms are affected. She also declined to say how many outsourced jobs now overseas will migrate to the U.S.
The impact on the local staffing community probably will be minimal because not many of them have relationships with the automaker.
Officials at Detroit-based VisionIT Inc., Ann Arbor-based GDI Infotech Inc., Troy-based Syntel Inc., Detroit-based Strategic Staffing Solutions and Livonia-based Bartech Group Inc. say they have no current contracts with GM.
Denise Ridenour, public relations coordinator at Troy-based Kelly Services Inc., said that the company provides a small amount of IT-related services to GM but that losing the work would have little impact.
Lisa Elkin, vice president of marketing and communications at Detroit-based Compuware Corp., said the company provides staffing for GM but has not yet been affected by Mott’s announcement.
Tom Henderson, Crain’s Detroit