General Motors has agreed to a US$1 billion, five-year contract with AT&T to help the auto maker continue development of a global IP network supporting voice, data, video and other services, the two companies said Wednesday.
The announcement renews an earlier five-year agreement between the two companies, but also expands on it by giving AT&T responsibility for managing GM's relationships with its other telecom providers, some 150 companies globally. The management role for AT&T is part of GM's overall goal to ensure that all of its IT providers work together and follow a consistent set of service and support practices.
"It follows the mindset that information technology providers have to work as one in a corporation," said Ralph Szygenda, GM's CIO and group vice president. "They can't work as a bunch of IT companies competing against each other inside your own company."
GM has already taken this approach in its IT contracts and is outsourcing some US$15 billion in IT world over five years. GM began awarding contracts one year ago this month, with Electronic Data Systems continuing to have the largest share of the auto maker's IT services work, with contracts valued at about US$1.4 billion annually.
AT&T now provides GM with a global virtual private network and has built an IP network based on Multiprotocol Label Switching (MPLS) technology, which allows network traffic management by priority.
"Now the next five years is really taking it to a totally different level," Szygenda said. The auto maker today runs operations on a global basis, with the capability to work with designers and suppliers no matter where they are located, he said. The company wants to continue to build out the capabilities of its MPLS network that will integrate voice, data and video, he said.
Ron Spears, executive vice president of AT&T global business sales, said the work at GM to integrate its communication platform, which includes (VOIP) voice over IP, is "in process and in progress" and will take some 18 months to reach the point "where they are running effectively a complete IP infrastructure environment on a global basis."
The goal of this IP-based system is to have a consistent experience for GM workers no matter where they are located. "At its simplest level, there will be a voice mail platform that will look the same to every General Motors employee around the world," said Spears, and that is not a trivial task. Historically, "it's been a hodgepodge of systems mostly built by the regional entities, and that's true in most enterprises today," he said.
Szygenda said company engineers and support staff work as teams, and the company can't have separate telecom and management systems supporting them. "That doesn't work when you are running a real-time global company," he said. "You don't want to have any differences."
Szygenda said GM's decision to go with MPLS technology as a "good bet" for the company when it was made about four years ago, and the "next thing now is to leverage all of it" and build out the capability and manage it as one system, he said.
"The real end goal is that every employee has the same type of capabilities no matter where they are in the world," Szygenda said, "and in fact, when they wake up they don't need to know where they are in the world. It just works."