Plant brownouts drove IT to the top of the to-do list for former GM CEO Dan Akerson.
DETROIT — A plane lost in the fog. A dull sword. A body without a neural system.
Those are metaphors used by former General Motors CEO Dan Akerson to describe the automaker when he arrived and found that its information technology operations had been outsourced.
“Think of the company as a body. It’s got a good heart. It has a good mind, and it has muscles,” Akerson told Automotive News. “But the neural system, the backbone down your spine, how do I get it all tied together to make a great athlete? To make it all come together? That’s IT.”
Akerson served as CEO from September 2010, about 15 months after GM emerged from bankruptcy protection, until January 2014. He led the company’s IT transformation by hiring Randy Mott as GM’s global chief information officer in 2012 — a move that has paid dividends five years later.
Among the systemic failures described by Akerson: four general ledgers, which he said was unheard of for a company of GM’s size; a time frame of weeks to accurately report employee payroll and head count; and brownouts at assembly plants due to a third-party server error. All of those are areas IT helps streamline, he said.
The brownouts, he said, occurred around late 2010 or early 2011. They were the “straw that broke the camel’s back” to drive IT to the top of Akerson’s to-do list.
“We were one of the 25 biggest IT users in the world, and we did not control that, and nobody could tell me why that mainframe in a faraway data center failed,” he said. “It wasn’t our program that brought the mainframe down; it was someone else’s. We were on a shared mainframe.”
The company now operates two of its own data centers in suburban Detroit, down from 23 locations before the IT insourcing. The operations now employ about 10,000 people in Michigan, Georgia, Texas and Arizona.
GM could barely report earnings by the U.S. Securities and Exchange Commission’s deadlines because of the company’s infamous operating silos, Akerson said. He said operations were in such disarray that he advised the U.S. government, which owned a majority stake in the automaker at the time, to delay the company’s November 2010 initial public offering.
“I told the federal government, quite frankly, we should wait six months to get a better handle on this thing,” he said, adding that the automaker’s 2009 bankruptcy “corrected the debt sheet” but “didn’t correct any of the operating issues that had gotten the company in trouble.”
Mott, an IT veteran of Wal-Mart Stores and Hewlett-Packard, and Akerson separately described their first meetings as an open discussion about the automaker and Mott being up to the challenge of reversing the company’s 16 years of IT outsourcing.
“Is that really the mission, and is the leadership team committed to that? That was really the discussion,” Mott said.
Akerson’s successor, Mary Barra, is “absolutely supportive” of GM’s IT operations, Mott said. “If anything, she’s been ramping it up.”