Finance CIO Keeps Auto Industry Rolling
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
The loan business is as essential to the automobile industry as advertising and assembly lines. As such, the finance arms of the world's four largest automakersDaimlerChrysler Services Group, Ford Motor Credit Co., GMAC and Toyota Financial Services Corp.pooled their resources three years ago to create a Web-based joint venture called RouteOne LLC, a software start-up designed to accelerate the credit application process. In the last year alone, more than half the loan applications at GMAC were handled by RouteOne.
Joel Gruber, RouteOne's chief information officer, talks about his challenges on the road to success.
CIO Insight: What was it like to be a start-up with that kind of muscle behind you?
Gruber: We walked in with a fairly generous, but realistic, budget. Having four experienced CIOs [from each of the respective automakers], and the depth of their staffs behind them, was also helpful. And I was able to leverage their support when we were establishing key vendor relationshipswe were very attractive to vendors, because through us they got exposure to our owners.
Was there a downside?
We struggled to figure out how to interact with our backers at first. I had to define my relationship to their CIOs. RouteOne is essentially an extension of their infrastructure, but it's not a direct report.
The companies behind us have important, long-established systems, but IT doesn't define their companies. At RouteOne, the technology is the business, and that was an adjustment for some people. I convened a CIO council that met regularly in the early stages and helped to establish friendly relationships.
How much independence do you have in terms of staff and technology?
I have a bias toward having key decision-makers close to me so we can move fast. We've had offers to outsource to our parent organizations, but all our critical knowledge workers are RouteOne employees. We have about 50. We did try an outsourcer at first, who was good on technology but was overwhelmed by project management.
In technology, our four owners had well-established credit application systems, but instead of trying to get consensus on which one to use, we built our own.
Our next logical move is electronic contracting, which we are designing ourselves. Meanwhile, security is our number-one priority, and we do a lot of partnering there to leverage our backers' expertise.
It sounds like you've learned a lot about the diplomacy of partnerships.
Of course. For example, we had to build relationships with the three leading vendors of the software packages dealers use to run their business, so we could integrate our software into theirs. That took a lot of cooperation, and it did not have to go well.
They compete with each other, and we had to show them that we would not share their competitive information. This was not just a phone call, a meeting, and a contract. It took a full year.
At a Glance
Background: Joel Gruber began his career with Chrysler as a programmer/analyst and worked up to senior applications systems manager at DaimlerChrysler before becoming founding CIO of RouteOne in May 2002. He has an MBA from the University of Michigan and graduated from Kalamazoo College.
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