Chrysler Outsources IT to Tata Motors' Owners
Following its decision to spend $2b manufacturing seats on the Indian subcontinent, the Detroit Free Press reveals that Chrysler LLC is outsourcing $120m worth data crunching to India. The contract is headed for the Tata Group, whose portfolio includes Nano-maker and Jag/Landie suitor Tata Motors. Chrysler spinmeister David Elshoff said Tata will be working on dealers’ online vehicle ordering system and maintaining the company's dealer-brand websites. “The first phase of this evolution and our new partnerships will start this month and will continue throughout 2008,” Jan Bertsch, Chrysler chief information officer told her employees. “As the year progresses, we'll continue to evaluate additional opportunities… and will keep you apprised of the outcomes of our efforts." Not surprisingly, Tata’s CEO was slightly more upbeat. "The expertise and in-depth knowledge of the automotive industry and Chrysler's business, coupled with our ability to deliver certainty of results will provide sustained value to Chrysler." Does this move indicate Chrysler's desire to outsource car-building to Tata Motors? They should live so long…
IT outsourcing is a practice that is supposed to be a cost cutting measure. This has been done in the banking/finance and insurance industry with some mixed results. Usually the end-result is that the organization discovers that they effectvely lose a lot of control. This discovery usually takes 2 to 3 years and is then brought back in-house when new leadership is introduced. Nothing really noteworthy here other than Chrysler is trying to save some cash.
While they're at it, I'd like Chrysler to dump air conditioned Sebrings and Avengers into Bombay's Amby-intensive taxi fleets. That'll be one arena where Chrysler products are the head of their class.
This is for a limited subset of IT work (website stuff)that was already performed by another vendor. I.E. they switched suppliers. It could lead to other IT work going to Tata but no one knows for sure. "Chrysler and Tata Consultancy have teamed up on a $120 million, multi-year contract that sources Chrysler's dealer website work to India. The deal effectively continues the partnership formed between Tata and Chrysler in 2002, but the new deal means even more work goes to India. Chrysler points out that the IT services were previously performed by contractors that weren't Chrysler employees, but the Auburn Hills automaker declined to mention which company lost the work. IT workers at Chrysler are still nervous about the possibility of more IT outsourcing, however, and it's hard to blame them." Autoblog
Outsource the web stuff and you're going to get some odd designs. You get what you pay for, and when you start letting people getting paid $5000 a year do your creative work, the results will be as expected.