Saved from the Brink

The world's largest vehicle manufacturer, GM - whose global headquarters are at the GM Renaissance Centre in Detroit - employs about 325,000 people globally, has manufacturing operations in 32 countries and sells vehicles in 192 countries. In 2003, GM sold almost 8.6 million cars and trucks, about 15 percent of the global vehicle market. Yet a dozen years ago GM was teetering on the brink of bankruptcy, beset by a 20-year legacy of shrinking North American market shares and bloated, slow and unprofitable operations. The shift to standards and architecture have both had some small part to play in this reversal, kicked off by former GM chief Jack Smith's "Run Common, Run Lean and Fast, Grow and Go Global" mantra.

Taggart was at BTELL's conference to show off a number of cleansed architecture deliverables achieved through various projects over the past three or four years.

Taggart has already used the business architecture to create an extensive model of all of the functions the GM enterprise performs. The model started at very high level and then drilled down to much greater detail - a thousand-plus entries - in key parts of the organization such as manufacturing and engineering. He then developed a technique to map GM's entire application base against those functions, giving it a "very clean" understanding of what applications are supporting which processes at GM. He has also developed techniques for mapping organizations according to functions, competencies and systems.

Taggart says the model makes it very easy visually to recognize opportunities for eliminating redundant applications, and areas where the organization lacks applications and needs new initiatives. For instance it let GM identify an opportunity for a new call centre application for its OnStar subsidiary, GM's highly successful telematic system for safety, security and online road service assistance.

"We did some work where we created a business model of the OnStar business. We clearly saw some important initiatives that were missing from our portfolio, which have now been addressed, where we saw that there were some functions that were rated as being high strategically. In other words these functions supported the goals of the organization - but we hadn't adequately mechanized them. We saw major gaps.

"The technique turned out to be a fairly big success here," he says.

Taggart also used similar techniques, based around those business models, to complete a worldwide SAP analysis for CIO Ralph Szygenda delineating how GM was using SAP across the globe, and pointing to opportunities to develop an initiative for further leveraging of SAP in a way that would be highly beneficial to the company.

"We found numerous ways that over the course of the next 18 months, we would be able to better leverage SAP inside of GM, and in fact we are doing that," he says. (One of CEO Rick Wagoner's objectives is to introduce common processes in the business. He has called "going global" with processes a major strategic objective of the corporation.) "We used this technique as an analysis technique to identify which processes needed to be further globalized, and we identified those, and now we're in the process of remediating," Taggart says.

Taggart says using what is basically a very simple but powerful analytic technique GM has discovered opportunities for cost reductions, additional systems initiative opportunities and clear gaps in its portfolio that have led to new initiatives to fill in those gaps. For example it discovered a way to leverage SAP for indirect material procurement on a global basis.

"It's primarily an analysis tool. It doesn't do the work for you - it's primarily an analysis technique that can show you where your gaps are," he says. "The real benefit of having business models is that you can create a model of where your business is today, and you can create a model of where your business needs to be in a year, in two years or five years - whatever time frame you want to pick - and then you can look for all the gaps. You have a way of analyzing how are you going to get to where it is you want to go."

The technique also gets to the very heart of business goal alignment by explicitly expressing the goals of the business and by providing, in architecture, a way to make strategy happen. "It gives you your road map to take your strategic initiatives and to show point by point the things we need to do to move towards where it is that we want to go," says Taggart. "It's great to have strat plans - strat plans are wonderful tools, but they sit on somebody's shelf. How do you make them actionable? Architecture can turn a goal into an actionable plan, if it's done well."