Plano, Texas-based EDS expects US$1.2 billion to $1.4 billion in annual revenue from GM through the new contracts awarded last week and other business that wasn't part of the bidding process. In comparison, its yearly revenue is about $1.8 billion under its current contract with the automaker. EDS was owned by GM until 1996.
Hewlett-Packard said it will receive more than $700 million worth of services contracts from GM over the next five years; IBM put its share at up to $500 million, while Covisint and Capgemini didn't disclose the expected value of their contracts.
Wipro, the only offshore services provider selected by GM, said it expects revenue of about $300 million from the new contracts. The Bangalore, India-based company already does software development work for GM, with revenue from the existing deals totaling about $30 million over the past four quarters.
To handle the bigger workload, Wipro plans to increase the number of employees assigned to GM projects from 500 to 1,000, said Sudip Banerjee, president of the enterprise solutions division at the company's Wipro Technologies unit. Future work will be done both at GM sites and Wipro's offshore facilities, Banerjee said.
GM CIO Ralph Szygenda said the increased business awarded to Wipro doesn't signal a big shift by the automaker toward offshore IT work. Some of GM's other IT services providers also do work overseas now. "I don't think it's moving any resources," he said. "We are already there."
Cost savings generated through the bidding process will reduce GM's spending rate for IT services below the projected five-year, $15 billion level, according to the company. But Szygenda said that any savings may be reinvested in new IT projects.
Now that the major IT services contracts have been awarded, GM will focus on ensuring a smooth transition over the next five months, Szygenda said. He added that his primary goals are to avoid any disruptions to GM's business and to make sure that the IT efforts fully support the company's global operations.