By Deepa Seetharaman
WARREN, Mich. May 13 General Motors Co
said it is investing $546 million in two new Michigan data
centers in hopes it will free up millions of dollars to boost
vehicle quality more quickly.
The largest U.S. automaker unveiled a $288 million data
center in the Detroit suburb of Warren on Monday, which went
online in January. Construction of a $258 million companion
center at the GM vehicle proving grounds in Milford, Michigan,
will begin this summer.
GM officials said the centers will help engineers to spot
and solve problems more quickly than when it outsourced about 90
percent of its information technology (IT) needs.
"We had five, six key suppliers of IT services and each one
of them had their own little control center, and we couldn't see
any of what was going on in our network," Chief Executive Dan
Akerson told reporters at a media event in Warren.
"Today we can look into our plants, our production, where
supply chain is a problem or an asset," said Akerson.
In the next five years, GM aims to bring 90 percent of its
IT work within the company. The two new data centers will get
new vehicle designs and technologies to consumers faster and
boost the company's bottom line, the company said.
By 2015, when the Milford center is scheduled to be
operational, GM will have reduced its IT facilities to two from
23, company officials said.
A number of GM's competitors outsource about one-third of
their IT functions, GM Chief Information Officer Randy Mott
"When we started this journey, we were the most outsourced,"
Mott said. "I think we'll end on the side of being the least
outsourced ... We're coming down kind of full swing back."
The Milford center will be about 40 miles from the Warren
facility and each will be able to serve as a backup if the other
goes down with technical problems, GM said.
The value of the IT equipment for each of the centers is
expected to be about $158 million.
GM said it has outsourced the bulk of its computing and IT
functions in recent years, which was more costly and not as
effective as the two data centers. Akerson said the company was
spending between $1 billion and $2.5 billion on "shadow IT"
services to back up its suppliers.
GM officials said employees around the world will be able to
get access to the super-computing abilities of the two data
It will also cut costs on crash tests, it said. Simulations
by computer will generate data that will help in designing safer
vehicles and save $350,000 for each crash test avoided, GM said.
Suppliers making tooling for GM vehicles in development will
be paid quicker and allow them to prioritize deliver of critical
parts, which may reduce engineering expenses by millions of
dollars, GM said.
GM was able to get a return of 20 times its IT investment
for one particular project to improve its global warranty
process and speed up how fast it spots and fixes problems, said
Tim Cox, chief information officer of GM's development services.
The data centers will allow engineers to do many of these
kind of projects, Cox said.