Major changes are taking place at General Motors. After an approximate 12-year relationship with EDS as the sole provider of IT services, GM’s Locomotive Group is moving into a multi-vendor relationship, with Computer Sciences Corp. (CSC) joining EDS as an IT provider. The changes have also taken place quickly. Dana Deasy, CIO of the Locomotive Group, decreed that the transition would be completed in 90 days, with cutover scheduled for June 27.
“My attitude on this was very simple,” said Deasy. “If I gave the vendor six months to get the transition done, they’d take the full six months and still wouldn’t know everything to make it absolutely smooth…I guarantee that we probably have not identified every issue, but the trade-off was important.”
The ‘trade-off,’ as defined by Deasy, was an attempt to shorten the time EDS employees remained in positions they knew were going to be phased out. “The longer you drag that out, the more you expose your customers to potential problems with service,” he said.
Deasy sought to avoid that issue, since he was already dealing with what he called “a quite complex” arrangement.When EDS was spun off from GM back in 1996, the automaker made the decision to create an Information Systems and Services organization and send some of its IT work out for bids. The Locomotive Group was the first sector to take that step.
A New Spin on Outsourcing
Although EDS retained responsibility for running the group’s mainframe processing environment, requests for proposals were issued for traditional IT services, such as help desk, infrastructure, desktop support, engineering services and application services. CSC won that work, creating a situation where EDS is responsible for mainframe processing and providing wide area network communications, while CSC is responsible for running the local area networks, the infrastructure and all of the equipment that hangs off of the local area networks. CSC also is responsible for all new application development and application maintenance.
“Now what we have is an environment where CSC is doing development and maintenance on systems that are running on EDS mainframe across a wide area network that EDS manages,” said Deasy. “How do we bring these vendors together to work in a multi-vendor relationship? That’s been part of the challenge in this whole initiative.”
Key to achieving that goal, he said, has been a formal transition plan co-developed by all of the parties. The plan lists hundreds of specific tasks to be accomplished, who is responsible for accomplishing them and what Deasy calls GM’s “acceptable criteria” for accepting the different services as being ready for takeover by CSC.
“Frankly, there’s not a lot written on how to take a service that’s been outsourced for a number of years and move that over to another supplier,” said Deasy.
Despite that lack, the three parties put together a plan that moved them through their 90-day transition. Investing time and energy in such a plan is at the top of the advice Deasy offered for other customers moving into a multi-vendor situation. Development of a responsibility matrix for every conceivable activity allows the parties to do a gap analysis to determine if there are any points where both vendors think they’re responsible for the same service or, even worse, that neither was responsible for the service.
“That has really helped us,” said Deasy. “We had less debate over who was going to perform services, because we did a fairly good job up front of defining the roles and responsibilities.”
Software, Security and Other Issues
Another point Deasy said customers should understand is that a multitude of issues revolve around software. “In our case, EDS owned a lot of the assets of the software,” he said. “People need to understand up front how much work and what complexities are involved in transferring licenses. In this case, we had to transfer the licenses from EDS to GM and then give the right to use to CSC.”
Companies moving into situations similar to GM’s where one vendor is responsible for running the mainframe process while another is responsible for new development and maintenance on that system also should be aware that issues exist around security and access rights. “We had some fairly complex issues to work through,” said Deasy.
Access also is an issue during the transition.
“One of the things that is important for people to understand is that you have an overlap period of time,” said Deasy. “You want your new provider to start getting access to some of your systems and services before the actual cutover date..How do you start getting the new vendor up to speed and, at the same time, keep the incumbent comfortable that the new vendor isn’t going to inhibit their ability to perform service up to the last day?”
GM approached that situation on an issue-by-issue basis. They established a countdown approach, in which the new vendor was granted more access as the cutover day approached. Solving such problems is essential for the future, according to Deasy.
“In my opinion, the multi-vendor environment is a world that’s going to grow,” he said. “One of the things we’ve communicated clearly to both vendors is that this is a model for the future. When we all collectively figure out how to make this work, it’s not only going to help you vendors, but it’s going to help me help the rest of GM as we continue to bring in multi-vendors. The vendors who figure this out the best are going to be able to put it in their marketing bag as a new tool to sell.”
Lessons from the Outsourcing Primer
- A short transition time offers less exposure to service problems.
- A good transition plan helps spot perceived overlaps in service, as well as gaps.
- The transfer of software licenses can present complex issues.