ENTERPRISE 2004 GLOBAL CIO SPEAK: ‘Our Measurement of RoI on Technology Investment is Based on Business Impact’

Ralph J Szygenda was named General Motor’s group vicepresident and CIO on
January 7, 2000. He is a member of the company’s Automotive Strategy Board and
is responsible for the Information Systems & Services organization. Szygenda
is a member of the board of directors of Covisint, an ebusiness trading exchange
company, and the Handleman Company. Before joining GM, he was VP and CIO at Bell
Atlantic Corporation, in Arlington, Virginia, where his main initiatives
involved re-engineering Bell Atlantic’s business processes and delivering
information systems to meet the new electronic generation. Prior to Bell
Atlantic, Szygenda spent 21 years with Texas Instruments. In 1989, he was
appointed vice-president, information systems and services, and CIO.
Additionally, Ralph was also the VP and general manager of Texas Instruments'
Enterprise Systems Business Unit, an external software systems integration
business supplying information products and services to the Fortune 500. At
General Motors, he is directly responsible for developing and implementing its
global digital business strategy. In an interview with Dataquest, his first-ever
with Indian media, Ralph shares some of his insights into managing technology at
GM:

GM has a track record of deploying many emerging technologies. How does
this happen, I mean the factors that drive the choice of a particular technology
before it’s taken in for deployment?

GM has the office of the CTO charged with defining information technology,
computing and telecommunications architecture and standards globally across
GM. We look at emerging technologies that can drive measurable benefits to
our business, including hard cost-savings, improved speed of communications and
operations, or process improvements like quality and plant productivity.

We work closely with our suppliers to develop technologies that are viable,
scalable and successful in addressing our needs. For example, we are piloting
applications using a JT Open standard that allows GM engineers to conduct design
reviews with teams based around the world. Previously, GM’s engineering team
had to travel on a weekly and monthly basis to conduct onsite reviews. Now it’s
done on a daily basis over the Internet to speed-up decisions and cut costs.

What are the top three technology priorities/initiatives
and the impact they will have on the business?

First, we will continue to develop a competitive, multi-vendor sourcing
model for information technology. We are the largest outsourced IT organization
in the world. It’s critical that we have a balance of companies competing for
business, but also working together through standard processes across GM.
Second, our focus remains on operating world-class systems that enable GM to be
more productive and efficient in all areas of the business. Third, we plan to
increase investment in new application development, infrastructure and
information security.

Executing on these fronts will help us to manage costs,
infuse innovative technology into GM, and operate as a real-time company. It’s
an evolution of the strategy we’ve had in place since 1996. For example, just
five years ago it took 48 months on average to develop a new vehicle. We made
significant investment in the digitization of the engineering process and now GM
is able to bring a vehicle to market in 18 months or less. It’s also enabled
us to put some of the best products we’ve ever made into the market.

How do you successfully manage technology across the
globe?

When I came on board we had significant IT management issues that had to be
addressed. Foremost were fragmentation and multiple solutions for the same
problem. Starting in 1996, we transformed GM’s operations from the inside out.
We removed over 3,500 information systems while investing $1.7 billion in
Internet applications.

We govern processes, standards, development and procurement
with an eye towards global implementation of information technology. We have a
matrixed organization that manages IT consistently around the world. The
organization includes CIOs who are responsible for improving operations within
their business units. We also have process information officers, who drive
common technologies and standards across business processes, such as
manufacturing, product development, or sales and marketing. This structure
creates an intended tension designed to drive immediate results in each business
unit while operating through cross-company standards that drive consistency and
structural cost reductions.

How do you measure the impact of IT? What are the key
measurement metrics and methods for tracking accountability?

We measure the impact of IT based on impact to the business. GM has specific
metrics that are reviewed regularly that gauge progress or improvement
areas.  Our investments in technology and process improvement are intended
to impact all business metrics. Our metrics are heading in the right direction.
Profitability is up, product launches are at an all-time high, our quality, once
again, world-class. At the same time, delivery times are shorter, product
launches are faster and decisions quicker. The improvements also have had
positive impact on the bottom line. Today we spend $1 billion less on IT than we
did in 1996.

As the senior-level tech manager, what activities occupy
most of your time? What is your advice to other CIO’s?

I spend the majority of my time changing and improving GM. I demand that IT
delivers measurable business value. Operating through a 100% outsourced model,
my management team is focused on being brokers of technology and moving the
business forward. Everyone from suppliers to internal staff must deliver
measurable business value. My advice to other CIO’s is that they must find
those ways where technology can differentiate their companies, create a
competitive advantage and deliver bottom-line business results. CIO’s who lose
sight of this, who focus on creating new technology at the expense of building
great businesses, will not survive.

Easwardas Satyan