GM and IT outsourcing

Tony D. has some reflections to offer on GM’s current IT sourcing process – essentially saying that they are trying to copy BPX’s famous "divide and conquer" strategy without taking into consideration that the implementation part of that deal was a qualified success, at best. I wasn’t really surprised that BPX had had problems with their very creative deal, but confess to not having followed it after the initial story was published.

Tony is the man on outsourcing deals: His article gives some idea on how complex such a decision really is, and how much the history of the corporation shapes the thinking. As Click and Clack once said, when you have had a very small car for a while, you get so frustrated that you err on the other side, getting a huge monster just to make up for all those years with a mailbox-on-wheels. I wonder if GM is doing something similar: Setting up a deal that will give them total power to squeeze their multiple outsourcers – a position that looks great when the contract is signed but turns out to be untenable in the long run. In an outsourcing relationship, you need to worry about the long-term economic health of your partners. There, too.

Advertisements