

GM Puts IT Outsourcing in the Rearview Mirror - drp4929
http://www.technologyreview.com/news/506746/with-computerized-cars-ahead-gm-puts-it-outsourcing-in-the-rearview-mirror/

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dfxm12
I work in an enterprise environment larger than GM. Our leaders could learn a
lot from this quote:

 _“Everybody can make a decent enough powertrain. But what differentiates you
is what you can do with your software,” he says of car makers generally.
“Companies have to be careful that they don’t outsource the crown jewels.”_

Slowly but surely, I hope that we can learn that when used correctly, IT is
more than a cost center, it is a competitive advantage, even if you don't
think your product is IT related.

~~~
pinaceae
and that's why US cars suck ass compared to German ones. because, no, actually
it is really hard to build a good powertrain. and this is what customers
actually buy from you. your customers don't give a shit what you can do with
your software unless it leads to better products for them.

but hey, IT stroke-fests are fun.

~~~
darren
GM builds the automatic transmissions for many BMWs. Clearly some Germans
think that GM knows what they're doing.

~~~
kls
Being a diesel fan, and a 4x4 enthusiast I am pretty familiar with
transmissions from different vendors. GM and their Allison division are know
for producing some of the most reputable transmissions available. Their TH400
line is a staple in drag-racing, off-roading and most any high power
application. In high power applications it is a given that the GM TH400 will
be the transmission selected even if it is a Ford or Mopar powered vehicle.

They are correct in their assumption that software more and more is becoming
the defining factor. Software has improved the automatic transmission to the
point where humans cannot perform as well as shift points being set by
software. We are amazing creatures that can instinctually feel many variables
but if you can account for all of those variables and more in software we can
be outperformed. Power train technology has reached that point and even
vendors like Ferrari have taken notice. Vehicle connectivity and automation is
the next revolution. Moving parts will be reduced to a minimum as software
controls replace mechanical control parts. It has been a long time coming but
software has reached the point where embedded controllers are expected and do
provide the longevity of the mechanics it is replacing. The process started a
long time ago with fuel management but much like the PC revolution and the
mobile revolution, the proper convergence at the proper time has not taken
place in the automotive market. I think it may be here now, and I think the
shakeup in Detroit was needed to bring it about.

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johnrgrace
Boeing technical fellow LJ Hart-Smith wrote an spot on paper about
outsourcing, his point was when the work is outsourced all of the profits
associated with the work will be outsourced as well. GM seems to have gotten
this.

[https://www.documentcloud.org/documents/69746-hart-smith-
on-...](https://www.documentcloud.org/documents/69746-hart-smith-on-
outsourcing.html)

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Joeri
It's not about who does the work, it's about how the work is done. You need
continuous delivery and tight feedback loops with the end-user. Outsourcing
typically fails because of long iteration cycles and feedback through contract
negotiation. An insourced IT department can fail in the same way. The
successful outsourcing i've seen did two week sprints with a strong local
product owner who spoke directly with stakeholders. The worst outsourcing i've
seen was contracting out whole projects that spent six months building "stuff"
to do a big bang delivery at the end. That's the model that people doing
outsourcing prefer, and it's the model almost guaranteed to fail.

I do agree about the risk of outsourcing the core business, but outsourcing
makes sense if it's not core, as long as you use the right model. Ironically
you have to really know how to build software well to recognize which
outsourcing partners are any good. The companies best equiped to outsource are
least likely to because they are already in control of their IT processes.

~~~
ebiester
Of course, every hour you are asking of the stakeholders is an hour they
aren't working. Many of these people prefer to work on a Maker's schedule as
well.

I've also seen these stakeholder meetings devolve into political battles that
end up tearing the project apart due to bikeshedding concerns. These sort of
projects are best outsourced to Product Owners with no organizational
political affiliations. :)

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blinkingled
This is coming full circle for GM - they, not long ago, bought EDS and had all
of their IT run internally. It got so uncomfortable, they had to separate EDS
out to not much avail because of the stranglehold EDS had gotten on GM's
operations.

Having in-sourced IT can work, but it takes a lot of work to make sure you
don't end up with just a boat load of B & C players that become complacent and
work just hard enough to keep the status quo.

I suppose since GM has now experience both ways they can make it work this
time. They are hiring many of the same old EDS (now HP) employees though [1] -
hopefully they'll turn the old mindset around and be succesful in getting
things done the way they intend to.

[1]<http://online.wsj.com/article/BT-CO-20121018-712331.html>

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ahi
Long overdue. There are multiple layers of contractors and subcontractors
living off the Big 3; 100M dollar corporations that do nothing but increase
the rate on the billable hours. The amount of bureaucratic waste is
astonishing.

