Skip to content

General Motors insourcing: what does it mean?

July 18, 2012
Twenty years ago, General Motors was one of the first corporations to outsource its Information Technology. It became a pillar of the outsourcing industry and, even during its recent financial troubles, the quality of its outsourcing process and contracting continued to be admired. The value of outsourced contracts rose to more than $3bn a year.
So it came as a surprise when GM announced last week that some 90% of its outsourced activities will be brought back in-house. What does this mean? Is it indicating a sea-change in attitudes to outsourcing, or due to circumstances that are unique to GM?
I certainly have my views about the possible drivers for this decision and also the potential implications to outsourcing more generally. But for now, I would very much like to hear your comments and views on this. If you prefer to keep them confidential (and I understand that some from within the industry may wish to do so) simply send me an email at tcummins@iaccm.com.
One Comment
  1. Rhonda Belinc permalink

    I’m local to the GM HQ and have been seeing more of this trend over the last few years with the OEMs and Tier1 suppliers– that is to selectively insource and often times it involves insourcing the management of the function and using/adding resources offshore (in low cost countries) to support that function. Our IT was about 85% outsourced under a 10 year deal, but between performance issues and cost constraints (do much more with much less) we’ve re-sourced about 30% and in-sourced about 40%; these are usually shorter term and lower service level agreements with more flexibility and we continue to RFP and shift these as the business needs dictate.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: