Tony Scott, chief technology officer at General Motors Corp., says refreshing GM's IT infrastructure is high on the to-do list for 2004. The carmaker will upgrade its frame-relay network to multiprotocol label-switching technology, which is expected to provide a higher level of service control within its wide area network. The company also will continue consolidating the number of servers throughout its network, possibly making use of blade-server technology.
GM's efforts to digitize its vehicle-engineering processes are well known: The company already has reduced the amount of time it takes to bring a car from the drawing board to production from 40 months to 18 months or less, Scott says. In 2004, GM will focus on digitizing the drawing-board stage--the early design steps where car concepts are developed before being handed off to engineering.
Some of the automaker's biggest increases in IT spending will be outside the United States, including in Latin America and Asia, particularly China, where GM expects much of its future growth. GM plans to roll out its multiprotocol label switching network in Europe and then other parts of the world before doing so in the United States.
GM also needs to make plans for 2006, when its outsourcing contract with EDS expires. GM outsources far more than most companies, since it does none of its own development. But outsourcing is top-of-mind for the majority of survey respondents, with 85% saying they plan to spend the same or more on outsourced services this year. Of the 172 respondents whose companies outsource offshore, 46% plan to spend more, and only 11% expect to spend less.
Steve McDowell, CIO of Holiday Retirement Corp., which manages more than 260 independent-living retirement facilities in the United States, Canada, and Europe, says the company hasn't faced the kind of slump that retailers and manufacturers did during the downturn. Instead, its tech group's challenge has been keeping up with the steady addition of 12 to 15 facilities per year without much increase in its IT budget. In the late '90s, driven in part by Y2K issues, the company overhauled its IT infrastructure, which at the time was based on outdated technology, and upgraded to new servers, J.D. Edwards ERP applications, and Microsoft Exchange.
In 2004, the priority is implementing applications that leverage that infrastructure and make the company's business processes more efficient. "I now want to focus on things that will give us a big bang," McDowell says.
