GM says standards will improve the way it does business with its IT suppliers. GM also plans to encourage other automakers, auto suppliers and any other company that does business with IT vendors to adopt these standard practices.
The idea is to reduce the cost of outsourcing IT business, Killeen says.
Because GM subcontracts nearly all of its $3 billion in annual IT spending, it deals frequently with many companies that have their own processes.
"Why should GM, or any company for that matter, have to work with different processes by different IT suppliers?" asked Debbie Yedlin, global director of verification and validation in GM's IT organization. "If a company wants to use 10 different IT suppliers, why should it be burdened with the headaches, cost and complications of managing the relationships in 10 different ways?"
GM has been working with its key IT suppliers - EDS, IBM Corp., Microsoft Corp., Hewlett-Packard Co. and others - for the last 12 months to develop standard practices with GM, said Killeen, during a media conference call with the Software Engineering Institute.
GM will not say how much it expects to save by standardizing how it deals with IT vendors. But GM believes there will be savings and efficiencies realized by both the acquirer and the provider of IT services.
IBM agrees on the dual benefits.
"It allows us to deliver one way to a global customer around the world," says Frank Roney, managing director for IBM's global GM account. "This is a good thing for the whole industry. It's good for General Motors; it's frankly good for the IT industry."
The cost savings comes from improving the processes and then implementing them globally, he says.
"It allows you to standardize the way you implement systems and how you operate your outsourced environment and that takes cost down, reduces complexity and improves the probability of success," Roney says.
Kevin Mixer, vice president at AMR Research Inc. in Boston, sees benefits from standardization for both the automaker and its IT vendors.
"The more standardization you have, the less unique customization you have," Mixer says. "If you get standardization between the vendor and the customers, then the cost of service goes down."