Case Study: The Internet and the New Information Technology Infrastructure
1. Describe the competitive business environment in which GM is operating
General Motors, while they are the largest automobile maker, are currently going through a decline in sales. Their competition is extremely stiff. With competitors such as Ford, Chrysler, and other Japanese vehicles that have lower production costs and include better styling issues and quality in mind, this makes for a difficult struggle for GM.
• GM remains a far-flung vertically integrated corporation
• Makes 70% of their own parts
While GM makes their own parts, other companies, such as Daimer-Chrylser purchases their parts from other vendors with whom they can haggle over their prices. With such advances in the automobile industry, this brought about a race for companies surrounding GM to produce more vehicles quicker and allowed for faster sales. While some may say that GM still builds quality cars, they are by no means keeping up with the competition in production areas.
2. Describe the relationship between GM’s organization and its information technology infrastructure. What management, organization, and technology factors influenced this relationship?
GM’s organization found that its system as a whole was falling behind in technology. Their design group could not relate with other sectors of the company, as each division of the company was on their own software and hardware database. No one particular system communicated with another. In the early 80’s GM tried to integrate their system by using EDS (Electronic Data Systems) and they were able to streamline their computers together.
Their current CIO Ralph Szygenda has managed to bring the company to its feet once again by bringing in several new changes.
• Replaced many systems with standardized software for all computers which in turn was networked to other systems
• Created programs that would correlate with one another and enabled data sharing
• Consolidated legacy systems and databases
Management realized that without sharing the data and having a system that could run smoothly they would soon fall to their knees. When they began realizing that their inventory, manufacturing, and financial data systems were all different for each division they began to notice a problem.
The organization stepped in to take care of this issue, by streamlining the data systems under the direction of Ralph Szygenda. They took the many systems that were each running on separate databases, and varying hardware and software and consolidated them into 21 uniform information processing systems.
With the implementation of EDS (Electronic Data Systems) they consolidated 100 separate GM networks into one the world’s largest private networks. The...