General Motors and Outsourcing

From 1996 to 2006, the information technology budget and agenda dollars were cut by over one million dollars (Bartholomew, 2007). Because of this major cut back, General Motors was forced to outsource many technology responsibilities companies in other countries. For the majority of the transition period, General Motors used EDS as a single outsource vendor. While this business relationship proved to be effective for General Motors and was able to stay within the smaller allowed budget, the business deal still proved to be costing more money than the organization would have liked.

Because General Motors is a global competitor and a leader within its industry, the organization realized that outsourcing to several different companies might be the wiser and more cost effective choice. Information technology companies began bidding for a contract with General Motors. With several companies offering competitive contracts, General Motors was able to cut the information technology budget even further and turn a larger profit. In fact, because of lowered information technology costs, General Motors was able to upgrade to new software, a new computer system, along with systems development and deployment (Bartholomew, 2007).

While cutting information technology costs were not the only transition made by General Motors, the changes made were able to increase profit for the company and operate on a global level at a significantly lower cost. Global Communications, like General Motors, also faces a budget cut back and requires outsourcing in order to incorporate these changes. General Motors proposes a good example of how outsourcing can save money, and if a global presence is achieved, how outsourcing can become competitive and lead to profit growth.

Global Communications should begin researching the different options for outsourcing. While initially, they only considered outsourcing to India and Ireland, other options may need to be considered if they are most cost effective. If Global Communications can establish a presence in other countires, they too might be able to save money through outsourcing competition. References Bartholomew, Doug. (2007). GM Outsourcing Overhaul. Baseline, Retrieved March 28, 2008, from ProQuest database.