The IT challenges at General Motors have always been huge. The immense scale of the enterprise, the extreme autonomy of the business units (until recently, Buick, Cadillac and Oldsmobile weren’t just brands, they were baronies), the hijacking of the entire IT function by Ross Perot’s EDS in the early ’90s—all combined to create one giant hair ball of IT problems.

When Ralph Szygenda became GM’s first corporate CIO in 1996, EDS had just been spun off from GM, but it was still running all of the company’s systems. Consequently, GM had no IT staff of its own. "There weren’t any IT people to speak of; there was no IT leadership," Szygenda recalls. "How do you transform that?"

His answer, which got quite a bit of publicity at the time, was to build an organizational matrix of IT managers unlike that found in any other company. Szygenda hired five divisional CIOs to correspond roughly to GM’s business divisions: North America; Europe; Asia-Pacific; Latin America, Africa and the Middle East; and finance. At the same time, he hired five process information officers (PIOs) to work horizontally in different specialities across all divisions around the world: product development, supply chain management, production, customer experience and business services (HR, legal and so on). These CIOs and PIOs came on board in 1997 to form the management organization of GM’s IT, formally known as Information Systems & Services (IS&S).

CIOs and PIOs work from divergent perspectives and have different reporting relationships. Each CIO reports not only to Szygenda but also to business heads; PIOs report to Szygenda alone. IT managers refer to "the matrix" or "the basket weave" to determine their relationship with one another and to explain their occasional clashes. (See "How the Matrix Works," Page 92.)

This matrix, proven over time, has been a critical part of how IS&S took control of IT spending from EDS. During the past seven years, Szygenda’s team has lowered GM’s IT budget by $1 billion (25 percent). Where previously GM used 7,000 different information systems, there are now fewer than 3,500.

By setting up overlapping, intersecting responsibilities among his direct reports, Szygenda designed the matrix to create internal competition, believing that was how to improve processes. "CIOs are driving efficiency in their world and PIOs are driving efficiency horizontally," says Cherri Musser, PIO for supply chain operations, who has twice been a CIO within IS&S and who was one of Szygenda’s first hires.