Information Goes Global

As with so many major businesses today, maintaining effective communications across the whole company is a complicated task if you have operations and offices spread over the world. As CIO of General Motors Europe (GME), Alejandro Martinez is charged not only with ensuring smooth IT performance across his division but also with keeping GME’s information strategies in step with the company’s global performance. “GM is globalised, which means we are doing things without any real boundaries,” he explains. “It’s critical for us to be able to support global designs, global manufacturing, global sourcing, global distribution and all the many footprints that we have on a global basis.”

Selling something in the region of 9.1 million vehicles in 2006 with only about 50 percent of that total sold in the US, GM have recognised that a regional approach to IT strategy is no longer viable. Harmonizing business practices across the entire company is a challenge facing the CIOs of all the regional operations. Martinez explains the company’s thinking: “We are now working on a global strategy that we call ‘IT Without Boundaries’. This is an extremely important element and is a very different environment than the one we had a few years ago, where we had regional and country-specific applications. Those days are gone for General Motors.”

Martinez now has to focus on making sure GME is moving in sync with the company’s overall global direction. Data centres and applications are widely dispersed across the whole company but must remain accessible to those who need them. Creating this kind of international IT infrastructure can present major challenges. “Based on the globalisation model that GM is following, we need to make sure that we have all the IT management ready,” says Martinez. “GM buys and outsources different IT goods and services. But most of the IT companies today are not running their operation on a global basis – so as the company becomes global, we have to help our IT vendors align to support the wider GM business model. It’s very important for all the regions. We have to work very closely with vendors in every area to make them understand the standardised GM framework. We are expecting all the vendors to be performing the same activities and developing the same quality of system across the world.”

The importance of accessing data exactly when it is required also cannot be underestimated. Supplying real-time information on demand requires yet more coordination and organisation. Data has to be stored in such a way that any unforeseen technical problems do not impact negatively on the company. “If there is a data centre application in a specific regional location and you have an outage then you can really disrupt the business operation,” continues Martinez. “Our job is to work together with our global colleagues to make sure we are in very good shape to support globalisation and the real-time enterprise.”

No ‘I’ in team

Faced with the challenges inherent in managing the information systems of a company as large and complex as GME, Martinez identifies two central elements that are essential to his job. “It is very important to have a clear direction and the proper resources,” he says. “In terms of direction, we are very clear on where we are going. In terms of resources, we have a wide range of tools in our IT toolbox.” But perhaps even more than these factors, a capable, well-educated team is absolutely vital to GME’s smooth running.

“The good news in my case is that I have a pretty strong team in place, which makes my life easier,” explains Martinez. “They are a very diverse bunch of people with different outlooks and capabilities; if you were to attend one of my staff meetings you would see that it is like being at the United Nations!” The benefits of having such a varied workforce clearly tie in with GM’s continuing efforts to become a truly global company. With business operations that cross borders and cultures, having a staff that reflects both the company and consumer base is a definite advantage. Just as essential is that these team members see themselves as a component of the wider GM family. “We have people from almost all parts of the world,” continues Martinez. “What is important is that they don’t see themselves as being part of GM Europe, they are part of the extended GM team and I think that makes a big difference.”

But a workforce is only as good as the education it is provided with, particularly in an environment as complex and fast moving as GME. To this end, the company operates an extensive training programme that guarantees employees are up to date. Martinez outlines the seriousness with which GM approaches the issue of education: “This year we have defined a global target that each of our IT employees, including myself, has to complete a total of 60 hours of technical training,” he says. “This ensures that everyone understands the company’s global direction and that we deploy our standardised work models consistently. It’s also instrumental in keeping our technical skills refreshed.”

Investing in the future

Aside from investment in people, running a successful IT operation requires extensive investment in technology and infrastructure. Asked about the company’s recent achievements in this area, Martinez is quick to identify what he considers to be a major success story: “One of the biggest accomplishments and investments has been in what we call the third generation of outsourcing models,” he says. “There is no question that this has been the greatest thing that we have done. It has brought company-wide consistency and has enabled us to achieve globalisation.”

But Martinez is keen that further advances be implemented to enable greater levels of worker collaboration. “I would like to see the corporation moving faster towards embracing technologies like virtual office and virtualisation,” he says. “There are clear opportunities for us to better leverage our IT assets and all of our infrastructure on a global basis. New technologies today can help us in these areas.” There is also room for improvement in the integration of portal services and improving the interoperability of personal and corporate technology. Says Martinez: “We need to make sure that we can provide IT access to all the employees all over the world, regardless if they’re working from a GM office, working remotely, working from home or on the road. I think this is vital.”

Plan of attack

Things move quickly in the world of communication and data management, so clear forward planning is essential. Martinez displays admirable confidence in the strength of GM’s planning process, particularly in the way that IT development correlates with the overall company business plan. “For each of the core global processes we have a very well defined range of IT systems for the next 3-5 years’” he explains. “We have a very clear systems roadmap in key areas like product development, supply chain, manufacturing and so on.”

The company has also addressed the issue of infrastructure strategy. The geographical location of data centres has been carefully planned, allowing a clear picture of the necessary network and telecommunication requirements. Says Martinez: “The most important element is to make sure that you have consistency in the execution of your strategy. For the eight or nine years that I have been at GM, I have seen plenty of consistency in this area.”

Questioned on the relationship between IT and GM’s core business, Martinez is once again extremely upbeat. He describes the company’s organisational structure as a ‘matrix’ that allows easy communication between company leaders and those further down the chain. This structure is replicated throughout the company. “In the European case, I have process information officers who report to regional business managers and to myself,” he explains. “This brings us a lot of consistency when discussing strategy.”

“My IT guys are completely embedded with the business,” continues Martinez, returning to a theme that is clearly central to his way of thinking. “They are not a separate entity but an integral part of the company. This is a major strength.” In turn, these regional process information officers also form part of the global organisation ‘matrix’, further aiding consistent strategic execution on a company-wide basis. Martinez is also a member of GME’s Board of Directors. He meets face to face with the rest of the Board each month, allowing yet more alignment between IT and business requirements.

Innovation remains a priority for GME, though Martinez admits that recently it may have fallen by the wayside. “For the last couple of years we have focused on the implementation of our third generation outsourcing model so I think that we were a little bit distracted from pursuing innovation,” he explains. “I’m pleased to say that that time is over. Having implemented the new outsourcing model we are now able to refocus on innovation.”

Though he remains cagey about exactly what GM has in the pipeline, fearful of damaging the company’s competitive advantage, Martinez promises that there big moves afoot. “There is a clear trend in GM that we are moving from operations to innovation and transformation. It is hard to find a balance between these disciplines, but we are very excited about what we are going to be doing in our core innovation.”

With the growing importance of IT to global business, it is interesting to note how the role of CIO has evolved. In the past sometimes unfairly viewed as a slightly unglamorous, functional position, it is increasingly hard to undervalue its contribution. Martinez concurs: “I think the job has changed. Business now sees the value of IT and we have clear examples where we have been of major benefit to the corporation.”

One such example can be seen in GM’s Brazilian activities. Noticing a specific opportunity in the country’s tax regulations, GM began selling cars there over the internet. Thanks to the IT structure that the company already had in place, they were able to mobilise this operation very quickly, selling a substantial number of vehicles and generating strong profits. And in business, that’s the most important thing. “Our competitors were not able to respond fast enough to our aggressiveness in the market,” explains Martinez. “So we improved the bottom line of the corporation.”

Streamlining business practices, improving communication and increasing revenue: these are all functions of modern CIOs like Martinez. As IT becomes more and more interwoven with companies’ overall business structure, the position is only likely to increase in influence. Knowledge is power, so whoever controls access to that knowledge is potentially very powerful indeed.