Software, Growth, and the Future of the U.S Economy Report of a Symposium (2006) / Chapter Skim
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Panel I — The Role of Software — What Does Software Do?
Panel I — The Role of Software — What Does Software Do?
Pages 47-53
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From page 47... ...
He then introduced Tony Scott, the Chief Information Technology Officer of General Motors. Anthony Scott General Motors Dr.
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From page 48... ...
Downside of Software's Impact But Dr. Scott acknowledged that there is also a "bad-news side" to software's impact and, to explain it, turned to the history of Silicon Valley's famed Winchester Mystery House, which he called his "favorite analogy to the software business." Sarah Winchester, who at a fairly young age inherited the Winchester rifle fortune, came to believe that she must keep adding to her home constantly, for as long as it was under construction, she would not die.
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From page 49... ...
Scott called "the only flaw in the model" -- GM managers with budget authority were, during the period when EDS was under GM's roof, basically allowed to buy whatever IT they needed or wanted for their division or department. The view within GM, as he characterized it, was: " `Well, that's o.k., because all the profits stay in the company, so it's sort of funny money -- not real money -- that's being spent.'" This behavior resulted in tremendous overlap and waste, which were discovered only after GM had spun EDS off and formed a separate organization to manage its own IT assets.
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From page 50... ...
Scott, is that GM's annual spending on information technology had dropped from over $4 billion in 1996 to a projected $2.8 billion in 2004 -- even though, in the interim, its sales had increased every year. This change in cost, he noted, could be measured very accurately because GM is 100 percent outsourced in IT, employing no internal staff to develop code, support systems, maintain systems, operate data centers, run networks, or perform any other IT function.
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From page 51... ...
Registering his own surprise that anyone at all is able to answer some of these questions, he said that he personally "would be very uncomfortable signing Sarbanes-Oxley statements in those areas." Dr. Raduchel identified the stack issue as one of the challenges for CMM, observing that even if a software module is written according to the world's best engineering discipline, it must then go out into the real world.
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From page 52... ...
In Dr. Raduchel's experience of implementing major software projects, the biggest challenge arose in the actual operating environment, which could not be simulated in advance: "You'd put it together and were running it at scale -- and suddenly, for the first time, you had 100 million transactions an hour against it.
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From page 53... ...
Speaking as an economist, Dr. Raduchel lauded standards for opening up and expanding markets, and he declared that, in fact, "everything about them is good." But he cautioned that unless a software standard is accompanied by what a computer scientist would call a "working reference implementation," it is incomplete and of such limited value that, in the end, the volume leader defines the standard.
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