Industrial integration

Manufacturing industry CTOs lead the line, creating business-side buy-in for and then delivering on large-scale integration project

"This has made a huge difference because we can be more responsive to the marketplace," says General Motors CTO Tony Scott. "If you have 100 engineers working on a vehicle design for 18 months vs. 48 months, there's a lot more opportunity to produce more interesting cars."

But not every manufacturer is on the scale of a GM. Integration today remains difficult, especially at manufacturing firms where the legacy baggage is heavy, work is very project-oriented, and -- in some industries such as aerospace -- the company is highly regulated. All this brings a notoriously high price tag, leaving CTOs at many manufacturers under the gun to demonstrate proven ROI, according to Mike Burkett, research director at AMR Research in Boston.

"The early [integration] adopters are high-tech manufacturers," Burkett says. "The other end of the spectrum is heavy industrial manufacturing, and aerospace and defense. They're trying to move ahead, but need to transition from very old legacy systems to new technology. This is a major integration nightmare."

CTOs within the traditional spheres of manufacturing also face an added cultural hurdle: convincing business managers that there can be as much corporate value in smooth information flow across systems as there is in a new piece of machinery, according to Stan Cort, a professor of marketing at the Weatherhead School of Management at Case Western Reserve University in Cleveland.

"A lot of manufacturers want to hear it clink and clank, to touch it to see that it has value," says Cort, who specializes in the profitable design and management of targeted supply chains and distribution channels. "What many of them don't see is how you can significantly reduce your costs by cutting down the on the number of IT transactions needed across systems. Demonstrating this is a big opportunity for a CTO."

Cort argues that integration also affords CTOs a chance to position IT as a revenue generator for their companies by using information locked within a supply chain or logistics system as the foundation for a new business. As an example, he cites shipping giants FedEx and UPS, both of which have exploited real-time data on the location of their delivery trucks to carve out whole new markets in inventory tracking and management.

Driving standards

Beyond cutting down vehicle design time, integration and real-time information sharing has helped GM meet primary business objectives of maintaining high-volume manufacturing across a range of affordable vehicle types, according to Scott. Another impetus for connectivity is economics: It is no longer financially feasible to maintain a separate IT infrastructure for Buicks and another for Cadillacs, he says.

GM outsources all of its IT initiatives, including integration and middleware projects, with former subsidiary EDS handling much of the firm's procurement and implementation. Outsourcing gives GM the flexibility to go after best of breed and "light up" projects quickly, Scott says.

This business model also colors the way Scott approaches the CTO job. He spends more time evaluating and pushing standards internally and with suppliers and dealers -- something central to all integration projects -- and less time courting technology vendors.

"Because we procure externally, I can focus on strong standards, business processes, and methodologies," says Scott, who outlines the architecture for the hired guns to execute on.