Wednesday, July 14, 2004

i.t. and detroit

you might remember nicholas carr's article in the harvard business review entitled, 'IT doesn't matter'. i don't, because i don't read hbr, but judging by this wired essay, he basically says that i.t., like all industries before it, will become commoditized as a natural progression to maturity. in the one marketing class that i took, commoditization was the ultimate dirty word, since commodities have smaller profit margins.

understandably, people involved in i.t. don't want to believe that their work will be commoditized, and for reasons that go beyond the economic conscerns. such a large degree of creativity and insight go into the work, making us want to place our product at the same level as art, but really, commoditization is what OOP/SOA/components/frameworks are all about. after all, much of our 'originality' is simply reinventing the wheel. sometimes, as gaddis says in the recognitions, "originality is a device that untalented people use to impress other untalented people, and protect themselves from talented people..." (pg. 252).

ironically, as silicon valley morphs into detroit, the gearheads over at gm are using i.t. heavily and in very flexible ways. john battelle has the text of an interview he conducted with gm cto tony scott for business 2.0 over on his searchblog:

You have a strategy that calls for completely outsourcing your IT work. Why?

It enables speed. If we want to go do something new and innovative in the IT space, all we have to do is put out an RFP. Then we hire the best minds to do it. We don't have to worry about an internal staff of programmers who may not have the right skill sets, or who have other demands and can't respond to what we need. Very few internal organizations can muster the sort of resources and global deployment capability that's needed to do what we need to do. Especially in cases where you need those resources for short periods of times. You can't build an internal staff in Argentina, say, for a six-week project.

So your IT organization is basically mostly management?

Yes. It's 1,700 or so people who manage the contracts with the outsource vendors all around the world.

And if you were to do it in-house?

Oh, it'd easily be times 100 or more.

You've streamlined IT at headquarters. What's happening in the cars themselves?

Today in the typical car, and it doesn't matter whether it's a GM or a Honda (HMC), electronics and software represent roughly about a third of the cost of the car, more than the labor or the steel. They're the single biggest cost in a car today -- and rising. The power train, for example, is very highly computerized. There's a set of very finely tuned algorithms to meet emission control and mileage standards.


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