Doug Bartholomew examines how GM’s outsourcing efforts are playing out a year after it signed contracts with six vendors for IT services. "GM Outsourcing Overhaul, 1 Year Later" can be summarized this way: The transition to the new service providers is done; now transformation can happen.
The story mentions GM’s relationship with EDS, which had been its sole primary vendor prior to last year, and which took a reduced role in its latest contracts. (EDS had previously jobbed out work to a number of other companies, but now it shares management responsibilities with IBM, HP, Capgemini, Wipro and Compuware Covisint.)
What it doesn’t mention – and what doesn’t get much play anywhere when this is covered – is that GM probably will never be totally rid of EDS as a service provider, because much of its pension fund is invested in EDS. As we all know from reading the business pages of our daily newspapers, the burden of pension funding is a constant quagmire that US auto companies blame for their financial woes. If GM were to cut EDS loose, suddenly, EDS would be that less valuable as a company and GM’s financial outlook would be even rockier.
Go, Szygenda!
