1. Describe five challenges that General Motors was facing before the acquisition of EDS?

Explain and provide support on how these challenges were / were not addressed after this
acquisition.
Before
- Fragmented across several operating divisions, manufacturing facilities, and dealer networks
- Lack of world-class information systems support
- Lack of a unified internal management responsibility for our data processing systems
- Heavily into computer-aided design and manufacture of cars, and burdened with a huge
worldwide accounting, payroll and data processing needs
- Hard to manage fragmentation problems
After
- Integrate the massive and dispersed information systems of GM into a common system
- Get support to make a world-class information systems
- Get common systems that able to achieve across the company
- Profitable and own provider of state-of-the-art computer services, easy into computer-aided
design and manufacture of cars, and burdened with a huge worldwide accounting, payroll and
data processing needs
- In mainframe area, solve the fragmentation problems

2. Identify and explain the added value for General Motors in acquiring EDS compared to
outsourcing its IT function.
October of 1984, GM co-operated with EDS as the external vendor in outsourching the needs
of building GMs IS.
GMs primary goal in acquitition with EDS is :
To integrate the disparate computer systems of GMs units
Difficulties in integrating the systems :
The shear size and the number of division (Operating divisions, manufacturing facilities, and
dealer networks).
The various individual needs for each division.
EDS tried to understand the needs of each division and was able to build a system to meet
whatever the of GM.
It helped in the fragmentation problems.
Reduced the cost of the central processing operations.
EDS built the system over the large number different divisions and also implemented support
maintenance in those running systems.
In 1995, GM announced plans to split-off EDS from the corporation. GM will insource its
own IS Infrastructure and Service Organization. However, some of the major parts was still
handled by EDS.
To reduce cost, as they wanted to develop their own information systems in order to keep up
with the lastest technology.
EDS cannot provide GM with the world-class IS support

3. What factors would have saved the split off from happening between General
Motors and EDS? Explain.
There were many factors in the spin off of EDS in 1995. EDS had continued to operate as
a separate business, providing IT outsourcing for a number of firms. However, EDS found

it difficult to compete for contracts with firms that competed with one or more of the
business lines of GM. The case specifically noted the fact that EDS lost out on bidding
for two contracts British Aerospace and Lucas Industries because they competed with
GM and its Hughes Aircraft subsidiary.
Another factor was the fact that while EDS did do much good for GM, they were not
successful in all areas. The case pointed out that one of the primary goals of the
acquisition was for EDS to help with the integration of disparate computer systems across
GMs units. This did not happen, nor could it under EDSs direction. This required
consensus and direction from within GM.
Finally, IT had become so important to GM that the leadership felt that they needed the IT
expertise to be in-house in order to be as responsive as possible to the needs of GM and
its various business units.
4. Analyze General Motors competitive advantage using Porters Five Forces model.
Which of these five forces is most important to General Motors? Explain why.
1. Bargaining power of customers
2. Intensity of competitive rivalry
3. Bargaining power of suppliers
Generating demand, involving sensing and responding to customer needs, creating
lifetime customers, and building a customer information warehouse.
Fulfilling demand, consisted of managing the dealer and supply chain inventory and
supporting lean manufacturing.
The product development process, was facilitated by using soft prototypes and
managing product data
GM Access, a suite dealership applications linking GM with its 8.500 dealers and
customers.
It consisted of GM PROSPEC, Vehicle Locator, Lotus Notes, Current Sales, Services, and
Lease Information.
GM PROSPEC provided product specifications, features, pricing, and competitive
comparisons.
Vehicles Locator searched current dealership inventories to find available vehicles.
5. Identify and describe four metrics that General Motors can use to assess and
monitor the performance of its IT function.
Monitor progress and quantify improvement, savings,efficiency gains.