Ralph Szygenda has been a formidable presence as CIO at General Motors, with expectations so tough for the IT services firms GM heavily relies on, Szygenda hasn't always made friends in the process.
Incoming CIO Terry Kline is described by one former colleague as someone so well-liked, "people would walk through walls for him." But he'll have to prove he's a tough negotiator when large IT contracts with HP/EDS and several other firms come up for renewal within the next few years.
The top IT leadership at GM will change on Oct. 1, when Szygenda resigns. The change will have implications for both the troubled automaker's future success and for the IT services industry that benefits from more than $2 billion a year GM spends on IT.
GM's announcement Thursday of Szygenda's resignation was grouped with several other executive resignations, including some still in their 50s, and comes at a time when there's a lot of pressure on GM to make sweeping cultural changes following its bankruptcy filing.
Yet despite how the announcement was made, Szygenda said he was not asked to leave GM. In fact, Szygenda said, CEO Fritz Henderson tried to persuade him to stay on the job for at least another year.
"But turning 61 in September and being the CIO of GM for 13.5 years, I thought it was the right time to retire and move on to other opportunities," Szygenda said in an email. "I stayed through the bankruptcy and now as GM moves into its next stage, I thought it best to select one of my direct reports to take the position."
Kline, Szygenda said, "has the knowledge, acumen and temperament to make a fine CIO for GM, and we will work together to ensure a smooth, seamless transition--so that we'll not miss a beat at continuing to deliver the best IT for GM."
Kline's product development and international experience played big roles in landing him the job. Kline, who joined GM in 2000, serves as the company's global product development officer, responsible for coordinating product development process reengineering activities, and implementing information systems across GM's business sectors.
His experience in auto development and information systems implementation "are integral to driving GM's common global development processes," according to Kline's bio, which GM provided to InformationWeek on Friday.
Prior to that role, Kline was CIO for GM Asia Pacific. "He's very sharp, very intelligent, really understands technology, and is dedicated to all get-out," said the former colleague who worked closely with Kline at GM, and spoke on condition of anonymity.
"This man would get on an airplane and literally travel around the world, from one location to the next, to try and ensure all global processes he was involved in were properly executed in the technology systems. And Kline would "encourage and lift up emotionally and professionally his team and people around him," a style that coworkers and suppliers might perceive as more "positive" than Szygenda's tough approach, this person said. Indeed, Szygenda has been an unrelenting task master as CIO at GM, yet he's delivered what top management expected of him following GM's spin-off of EDS in 1995. Szygenda's legacy is moving GM past a sole-source IT outsourcing relationship that he inherited with EDS, to a multi-source model that gave GM much more control over costs and expectations.
Szygenda never made any excuses for doing what he felt was necessary to cut IT costs at GM, starting when he joined in 1996. And in numerous interviews with InformationWeek over the years, he often focused on all he was doing to get more out of his IT service vendors.
In 2006, Szygenda offered up to $15 billion in multi-year IT services contracts to suppliers. But to win, he required that service providers adhere to 44 standard processes GM created for IT projects. Companies that got the biggest contracts, including EDS, Capgemini, Covisint, Hewlett-Packard (which hadn't yet acquired EDS), IBM, and Wipro, had to put aside proprietary approaches and competitive differences to get their employees all working for GM the same way.
Szygenda clearly relished holding all the cards during the 2006 contract process, and made it clear to EDS that despite its longtime relationship with GM, he was willing to give all or none of the contract work to the company. This ruthless tactic must have sent shock waves through EDS's management ranks, particularly given its one-time ownership by GM.
While EDS retained the largest chunk of GM's business, its annual contract rate was set at about $1.8 billion a year -- about $500 million less than it had been making. And it was awarded on the condition that EDS would "redo the organization -- how they manage their people, how to manage common processes," Szygenda said in a 2006 interview.
In recent years there's been a lot of tension between GM and EDS, said a former EDS employee, requesting anonymity. He described a performance dashboard that Szygenda used to keep on the screen of his desktop computer, which would analyze performance metrics for GM's IT vendors using color codes.
"We all knew that no one would ever see green on a dashboard because it would not give him leverage. If any vendor felt like Ralph was happy with him, he would lose all his clout," said the person.
Service providers may be more receptive to Kline's personable style. Yet Kline also will have to prove he can demand the most of EDS and other vendors at a time when GM, post bankruptcy, and at its most vulnerable, could lose negotiating leverage.
Kline's former co-worker thinks he's up to the task. "You could not find a more dedicated person," this person said. "He has such a demanding and difficult job that he's never lost sight of and probably never will, because of his make-up."
Szygenda did not indicate what his plans are following GM. "The signature of my life has always been to look forward, to keep my eyes on that horizon, to never rest on the laurels of the past," he said. "I will maintain that attitude when I leave GM October 1."