General Motors To Hire HP Workers As Part Of Its Insourcing Strategy

In a move aimed at boosting insourcing work from outside contractors, leading automaker General Motors (GM) plans to hire 3000 Hewlett Packard (HP) employees who previously executed information technology work for the organization.

This move brings 90% of IT work in-house from outside contractors giving control over software applications and reducing overlap of services, the Associated Press (AP) has reported.

Previously, the automaker purchased several HP software applications to improve software development, data management and support processes.

GM Chief Information Officer Randy Mott, who held a similar position with H-P, frustrated with automaker's outdated and overlapping IT systems sought to spruce up product development and reduce company's reliance on outsourced contracts.

"These agreements with HP will enable us to accelerate the progress of our IT transformation by delivering increased innovation and speed of delivery to our GM business partners, and reduce the cost of ongoing IT operations. Transforming our internal IT operations will give us the resources, tools and flexibility we need to provide better services and products to our global customers," Mott told the AP.

Apart from 3000 HP workers, GM plans to hire 1500 new IT workers at Warren Tech Center and another 500 to work in Austin, Texas. This apart, two new software centers are planned to open elsewhere.

HP is cited to be GM's main IT vendor with a $2 billion contract awarded in 2010 to manage product development software, network maintenance for desktop computers, supplier management and financial transaction among other functions.

Earlier, Electronic Data Systems was engaged in most of GM's IT work, which it acquired in 1986 and was subsequently spun off in 1996. HP bought EDS in 2008 and shed thousands of jobs.

Apparently, the HP employees who are likely to be moved to GM are based in the U.S. and already support the automaker's business systems.

Besides, the company announced that it might hire 10,000 IT workers in a three-to-five year period as it plans to insource operations.

GM plans to reduce its worldwide data center roster from 23 to two, within three years, as well as reduce the number of applications by about 40% "as we drive more application commonality and common processes across GM," Mott told Computerworld.

When queried if more HP employees would be offered jobs at GM, Mott indicated that the agreement specifically called for 3,000 transfers.

The value of new software contract is yet to be disclosed. However, George Kadifa, executive vice president, HP Software, told Computerworld: "This is the largest deployment of our full product portfolio in the world, second to none, at this stage."

This apart, HP will also continue to provide some services to GM. "There is a good chunk of employees that will stay with HP that will continue to provide services to General Motors," Mike Nefkens, acting global HP enterprise services leader, said during a conference call, according to Computerworld.