For GM, software is a saviorJune 17, 2013: 11:40 AM ET
The automaker's CIO, Randy Mott, is remaking the old-line company's technological infrastructure.
By Doron Levin, contributor
FORTUNE -- When General Motors CEO Dan Akerson tapped Randy Mott to be the automaker's chief information officer in February, 2012, he had massive changes in mind in the way GM will use and develop information technology. In July 2012, Mott announced that GM, which had relied mostly on contractors and outside vendors to deliver information technology services, would be bringing most of that work in-house. Mott recently discussed the reasons for the change of strategy and the progress of new IT initiatives at GM with Fortune. A lightly edited transcript follows.
Having been on the job for 18 months as General Motors' chief information officer, could you please explain how your role fits into GM's (GM) strategy to reinvent itself?
When Dan Akerson hired me, he posed the question of how to transform GM, and all the parts that are supported and affected by IT. So our job is to think about how we can accelerate the pace and provide the tools to do that. It starts with the business and how you measure success. Before I got here, about 75% of IT was used for day-to-day business functions and 25% to move the company to the next level. We aim to reverse those numbers, and can automate many of the functions that were carried out by people. For example, we had people that were doing password resets. Now that process will be automated with an online tool that everyone knows how to access. So resources can be redirected to developing more strategic software solutions.
Why did GM decide to bring information technology work in-house from being mostly outsourced? And how is that process going?
The proportion had been 90% outsourced, 10% done by our employees. We reversed that. We used to have 23 data centers, many operated by outside vendors, and that number will be reduced to two, both operated by GM. We have opened four software development centers in Atlanta, Austin, Phoenix and Warren. We had fewer than 1,500 GM employees, a number that's increased to 5,900, including over 2,500 we've hired from Hewlett-Packard. The rest of the hires represent experienced personnel and recent college graduates from 40 universities, 8-10 for each of our four software development centers.
Could you describe the four centers of innovation you've created and what they're designed to accomplish?
With advanced simulation tools that we develop, the time it takes to develop a car gets shorter and shorter. We have greater ability to refresh models between major changes, such as the 2014 Malibu, since all the crash-testing, aerodynamics and other tests have to be redone as quickly as possible. Software makes it faster for us to decide where we should direct investments by figuring out where profit is optimized in terms of country of sale, and then we create if-then scenarios that help us decide. Between 30% to 35% of our applications had been global, and that should be 80%. Everything we do has to be analyzed to determine its benefit to the business. We want to be able to better measure costs, margins, quality level and better understand our markets.
How can information technology improve the efficiency and effectiveness of an organization that was multinational and is striving to become global?
Now that we have an overall chief for product development worldwide, Mary Barra, and an overall head of manufacturing, Tim Lee, we can make sure that our IT functions are a good fit for everyone and that slightly different processes don't require duplicate software systems. It starts with Mary Barra saying, "These are my priorities for the coming year." We have to make sure that IT can move at the speed of global business, not business moving at the speed of IT. The whole company has to line up to work at that speed, to lean into new markets and so we have to develop the tools more quickly.
Can you add some details to the hiring that GM is undertaking as part of its reorientation of information technology?
We're going to the top college computer science and computer engineering programs that are in the general geographic area of our innovation centers. We're recruiting at schools like Georgia Tech, Michigan, Michigan State and the University of Texas. At the end of the day, GM is an opportunity. We think we have a very attractive proposition for the people we hire, to be on the ground floor of one of the biggest business transformations of all time, to be part of a $150 billion startup. We design, build and sell cars. It's a very cool product, one that everyone has an opinion about.
Please give a few specific examples about how better, smarter software can improve the performance of a global automaker.
We can do more and more aerodynamic testing of vehicles using computer simulations, instead of relying entirely on mechanical tests such as those done in wind tunnels. This tool will shorten development times. We've developed an iPad-based app for sales personnel in dealerships called Dealer Sales Assistant. With this app, the sales person and customer can browse inventory, vehicle features, incentives and payment options, updated in real-time. The idea is to let sales happen quicker and more easily.