General Motors Co. says a new supercomputing data center and a fledgling
shift to bring software development in-house should help it limit the
size of future safety recalls.
The Detroit automaker, which formally
opened the giant data storage center in suburban Warren, Michigan, on
Monday, said the changes are examples of how it is moving faster to cut
costs and serve its customers better by bringing more computer
technology inside the company.
In the past, GM's regional
operations tracked problems by themselves, sometimes without
communicating with other regions, even though many of its cars are now
sold worldwide. Engineers in one region would check a problem part, but
it wasn't studied worldwide, at least not at the early stages.
with new software developed by GM's so-called innovation centers and
the data storage, problems are spotted quickly when they crop up across
the globe, and they're assigned to the right engineer who can work with
parts makers to fix the problem faster, said Randy Mott, the company's
chief information officer.
"You'd hope that if there is a problem
with a set of components, that you understand which components were
potentially susceptible and you would expect your recalls to be
smaller," Mott said. "You identify it earlier and you certainly limit it
to only the ones affected by whatever the problem was."
typically sells more than 9 million vehicles worldwide each year, makes
cars and trucks in 30 different countries. Many of its parts are common
worldwide, so if there is a recall, it can be large and costly. When
problems are spotted and fixed early, the size and cost can be held
down, Mott said.
GM also said Monday that during the next two
years, the company will close 23 data centers worldwide and consolidate
them into its two new Michigan facilities. GM says data centers at
Google and Facebook were benchmarked to draw up plans for the
state-of-the art facilities. The Warren Center cost $130 million to
build, while the Milford center will cost $100 million. GM will spend
another $158 million on each center for equipment.
It's all part
of a push led by CEO and Chairman Dan Akerson, a former
telecommunications executive, who believes it's important for companies
to have their own information technology rather than outsource it to
other companies. GM had outsourced 85 percent of its software
development and computer technology.
By consolidating the data
centers and hiring about 9,000 people to staff four U.S. "innovation
centers," the company hopes to bring 90 percent of the work in-house
within five years, Mott said. Competitors, GM said, already have about
30 percent of their information technology work in-house.
which began the data consolidation in the fall of 2011 and the software
efforts last summer, isn't sure how far it has moved toward the 90
percent goal although it has hired 64 percent of the people needed to do
GM, Akerson said, now has the ability to watch its factories
for production and parts supply problems, and perform more accurate
virtual crash tests, saving costs and speeding new products to market.
In the past, when most computer technology was outsourced, GM couldn't
even monitor its own network of computers, he said.
responsiveness wasn't there," he said of the outside vendors. "There
isn't a company on a global competitive basis that isn't good at I.T.,
that doesn't control its destiny by virtue of better information in
every aspect of the business."
GM also can use high-powered
computers to analyze data across the globe to discover sales trends and
potential new markets for its vehicles. The company said new crash-test
simulations that were made possible by the data centers are cutting down
on the number of physical crash tests that are needed. That saves the
company roughly $350,000 per test, GM said.
Even though GM is
taking on the added capital investment and personnel costs, Mott said it
will save money by eliminating the cost of paying outside computer
Bringing computer functions into the company
can make it more agile, but there are risks as well, including hiring
and keeping people who have many job choices, said Bryan Britz, a vice
president with Gartner Inc., a firm that advises companies on
information technology issues.
Most companies that outsource
computer functions continue to do so and don't try to build them from
inside, he said. But he also said GM is large enough to build and
maintain a talent pool.
"It really does come down to execution," he said. "That has proven to be, for a lot of organizations, a barrier too big."
GM also needs to make sure that it uses the remaining outsourced work to bring innovation from outside, he said.