As Published In Profit's Special Edition for Financial Services

Cherri Musser, CIO of GMAC Financial Services, doesn't let attention to detail obscure the big picture.

Like juggling, outsourcing your IT operations may look easier than it is. At least that's what Cherri Musser discovered when she was CIO for supply chain at GM. As the executive in charge of the Order to Delivery (OTD) program, designed to reduce the time it took to order, build, and deliver automobiles, Musser found that effective outsourcing required a special proactive but hands-off management style that's somewhat disconcerting. "You feel a little schizophrenic, because if a project gets into trouble, your natural tendency is to go jump in and fix it. But at the same time, that's really the vendors' responsibility," says Musser. "It's a fine line you walk to make sure you've got the balance you need. In order to make it work successfully, you have to make sure your hand-offs and internal processes are well defined."

Although GM has committed to a fully outsourced model since 1986, as a way to operate efficiently, move quickly, and drive innovative practices, it still takes a disciplined manager to make it work. "You've got to be good at managing suppliers and understanding which internal processes are necessary to make sure you've defined the checkpoints for delivery, but you also have to make sure you're not doing their work for them," says Musser. "Although you're hiring them as experts to deliver, at the end of the day, we're the ones who have to stand in front of the customers—our internal business partners—and be responsible for delivery."

Learning from Customers

Knowing how to build the relationships to manage outsourced IT resources is only one secret to Musser's success. Although earning her mathematics degree from Mississippi State honed her skills to think logically about problems and break them down into components, she found that the analytical approach has to be balanced with an understanding of the business. "I got an MBA, because I was having a hard time understanding the problems the businesspeople were having," says Musser. "The MBA gave me that balance and perspective."

In her new role as CIO of GMAC Financial Services, which she took on last year, Musser should have ample opportunity for using that balance and perspective. GMAC Financial Services has a presence in 41 nations; earned US$2.8 billion in 2003; and includes automotive financing, insurance, and mortgage products. One of her first acts in her new capacity was to go out and talk to people at collection centers, administrative offices, and regional offices around the world to learn how they do their jobs. "It's been fun, because they're pleased that someone wants to see how they work, and you can spot a lot of things you can do that would make their lives easier." For example, on one such trip, Musser noticed how one dealer was entering information in one place; printing it out; and giving it to another person, who was faxing it to a processing center. "I saw, in a lot of detail, the importance of straight-through processing and some areas where we can make quick fixes and achieve improvements," says Musser.

However, Musser's biggest concern today is making sure she has the right architecture for future changes. "I need to get the right architecture defined for GMAC globally, so we can be faster in our delivery of solutions and make sure we can support new product offerings for GMAC," says Musser. "Right now, I don't feel comfortable that we've got the application architecture defined at a level that would really enable us to go as fast as I think we can go."

How Fast?

Although Musser doesn't use new technology just because it's cool, she's always been open to adopting leading-edge solutions. Under Musser, GM used J2EE and Java to create a three-tier architecture for the delivery of its business-to-consumer (B2C) Web services. "Without taking a leading-edge approach, we never would have been able to get a single instance of our shop-and-buy site for all countries in which GM operates," says Musser.

By adopting new Web architectures more rapidly, GM was able to deliver a scalable, worldwide solution, rather than having different marketing organizations within the company each do their own thing. "I had to push the technology, because that was the only way I could give ownership of the look and feel to the business but maintain the integrity of the core components and data," says Musser. "Some people might say I've been too aggressive, but I think you need to be aggressive, because the technology is really enabling us to go a lot faster in our delivery of new capabilities to the business these days."

Building on Experience

Identifying process improvements and defining the right architecture is nothing new for Musser. According to this executive, GM's historical business model had become increasingly uncompetitive over the years. Factories were pushed to produce vehicles to maximize factory sales, and cars were pushed to dealers, which created higher inventories and the need for specialized sales incentives, which eroded margins. Designing a solution wasn't simply about automating a process but also about transforming GM's supply chain into a faster, leaner, more global, more customer-focused machine.

Again, Musser's first step as the information officer for GM's supply chain was to visit many of the manufacturing plants. Even though she didn't have responsibility for plant systems, she was well aware that they were a critical part of the business and that working effectively with them would be a critical part of the solution. In addition, Musser assembled a cross-functional team composed of representatives from sales and marketing, logistics, and the production control group. "We put all those together and said, 'We're going to take a consumer's view and look at it from order to delivery, and we're going to drive the cycle time down on a global basis,'" she explains.

Trying to streamline a process that encompasses more than 140 manufacturing locations and 50 countries of origin and has more than US$45 billion in supply chain inventory is certainly not a trivial exercise. But the results, which Musser attributes to a combination of business process change and IT system changes, have been nothing less than stunning and are something she's particularly proud of:

• Order lead time reduced by 60 percent
• Delivery date reliability increased to 90 percent
• Material availability increased to 99.9 percent
• Of all outbound vehicles, 99.5 percent shipped damage-free
• Logistics costs reduced by 14 percent
• Product and material constraints reduced by 98 percent
• Work-in-process inventory costs reduced by 18 percent

"When you look at how big GM is, those accomplishments are good. It took a strong partnership between IT and business to achieve them," concludes Musser.

Out of the Office Favorite Musicians: Macy Gray and Alan Jackson Favorite Movie: Cool Hand Luke Favorite Food: Wine Favorite Wine: Chardonnay— Sonoma Cutrer Where She'd Go If She Had a Month Off: Cozumel, Mexico. "I'd just sit on the beach and read. It's a good place to relax. I love Mexican food, so it's a combination of the atmosphere, the pace, and the food." Books on the Nightstand: Four Blind Mice, by James Patterson; The Last Juror, by John Grisham Favorite Technology Gadgets: "I love my BlackBerry. I couldn't live without it. And I just got an iPod, which is pretty cool." Family: Husband Jack; Willie, a Belgian sheepdog mix Education: B.A., mathematics, Mississippi State University; M.B.A., Southern Methodist University

Solving the Configuration Problem

Musser believes that the speed at which IT groups can use technologies to address business needs has changed in the past few years. "We now have the tools and the technologies to respond much faster than we could to business changes," says Musser. "In the past, we were paced by the need to go build everything in-house, but there are so many more commercial products available now than what we had years ago, and that enables us to go much faster."

For example, part of making those dramatic improvements in GM's OTD process involved extending the B2C relationship into the back-end order processing capability through an order configurator. GM had typically built its own custom configurators, but as part of the OTD process, Musser decided to go with an off-the-shelf one from Oracle. "Working with Oracle has made a significant difference in our ability to provide access to vehicle configurations through the Web and provide better tools in our dealerships," says Musser. "We've streamlined our business process, but with Oracle Configurator, we have a robust tool that has been able to handle a lot of diversity, including vehicle configurations from around the world."

Scalability was key for the new OTD process and an important consideration for choosing an Oracle-based solution. "When you get a product from Oracle, you know it's going to scale and perform," says Musser. "From a technology standpoint, I never question whether Oracle knows how to do big."

Putting It All Together

When it comes down to it, Musser's excitement about technology is tempered by how easily and effectively it can be used by the business. "Sometimes I feel we get too caught up in worrying about technologies and technology transitions and are losing sight of why technology needs to be—we're here only because there is a business and we're here to help make it run better," says Musser. "But when I see it all come together and the businesspeople say, 'This is better than what we had before,' that's what I really enjoy, and it's what keeps me going."