The year was 1999. IT costs were skyrocketing with an outside outsourcer, so VWoA cut short its 10-year contract in favor of strategically insourcing IT to Gedas AG, an IT services provider then wholly owned by German parent company Volkswagen AG.

"At that point, there was a thought that we had no need for governance because Gedas was part of the VW organization," recalls Allen Piercy, chief technology officer and general manager of IT infrastructure architecture and operations governance.

But it wasn't long before costs again began to climb. Different departments had added new and incompatible software and functionality on an ad hoc basis over several years. These applications had to be integrated via a complex set of homegrown software interfaces, all of which worked to erode system stability over time. As a result, routine tasks such as calculating automobile sales at month's end became major IT productions fraught with delays and expense. Even worse were highly visible, IT-enabled business blunders, like failing to accurately forecast and match the right car models to the right markets. "We woke up with a monster of an IT infrastructure," Piercy recalls.

VWoA officials knew that what was sorely lacking was clear alignment between IT and the business, but change came slowly until Andreas Hestermeyer was hired as CIO in 2004. His mission: to accelerate an IT transformation. Two years later, business and IT at VWoA are virtually indistinguishable, performing a single set of activities for manufacturing, selling and servicing cars.

The first step was stabilizing the IT infrastructure, which meant taking what Piercy calls "a much more hands-on role in setting technology standards and designing the operational IT infrastructure."