GM Nears Decision on Outsourcing Contracts

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    Stan Gibson, the outsourcing columnist for eWeek, offers this update on GM’s “third generation” outsourcing initiative. In this endeavor, the company will award about 40 IT-related contracts to handle “application management, infrastructure management, integration management and other services.” The winner of the business are expected to be announced in January 2006.

    The specific requirements — which could change the face of service delivery to large clients among providers, if GM can pull it off — mandate, “firm cost metrics; all suppliers work as one team;… system delivery must be done according to the CMMI frameworkITIL framework.” Mr. Gibson says there are also standards for the management of architecture, standards and contracts.

    An overarching requirement is each bidder's ability "to deal with GM on a global basis." GM Chief Strategy Officer Dan McNicholl points out that "very few suppliers have a fully global reach. Some may be strong on some continents; but not on others." Where gaps exist, companies will need to work with each other.

    EDS, the current dominant provider to GM, has responded with a strategy it calls the “Agile Enterprise.” This involves a rather common-sense approach: to standardize its own services around specific vendors, including Cisco, Dell, EMC, Microsoft, Sun and Xerox.

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