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Jul 11, 2012 10:33 PM IST | Source: CNBC-TV18

GM's inhouse IT plans send shivers down Indian IT spine

CNBC-TV18‘s Ronojoy Banerjee, quoting sources, GM's plans to consolidate and centralise its IT services could impact IT firms in India

In a major overhaul of IT services, General Motors (GM) is looking to consolidate and centralise its IT outsourcing services and this could impact IT firms in India, reports CNBC-TV18's Ronojoy Banerjee, quoting sources.

Also watch the accompanying video.

The decision could be significant as currently General Motors outsources nearly 90% of its IT projects overseas as compared to other car-makers who outsource only about 25-30%.

GM aims to reverse the process and complete all its IT projects inhouse. The proposal, which is extremely ambitious, has generated interest in the international media and concerns have been raised regarding on the prudency of such a decision at a time when the company is recovering from recession in 2008.

The proposal has set off alarm bells in India as many of the IT giants like IBM, Mahindra Satyam and Wipro depend, to an extent, on GM's outsourcing deal of USD 3 billion.

According to sources, GM wants to consolidate 20-25 of its data centres to only two or three hubs.

In an exclusive to CNBC-TV18, GM responded that the consolidation of IT operations was part of an initiative to streamline operations and overhaul IT to improve performance and efficiency.

The process of consolidation of IT operations is being driven by GM’s new chief information officer Randy Mott. The company has announced that more announcements on its IT operations will be made in the next few weeks.

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