At a time when many CIOs find themselves increasingly distanced from the executive suite, Volkswagen's CIO Klaus-Hardy Mühleck sits on the executive board and has responsibility for defining business processes throughout the company. In that capacity he has championed a new organizational IT structure to use resources more efficiently and effectively. Process integration officers work across business units to simplify the capabilities of entire business domains—for example, a PIO in the order-to-delivery unit evaluates processes from the customer order back through sales, manufacturing, and design. Throughout Mühleck's career, he has promoted the use of IT to simplify processes, gain a competitive advantage, and create value. Detlev Hoch and Jürgen Laartz, directors in McKinsey's Düsseldorf and Berlin offices, respectively, recently spoke with him about how and why he has reorganized the IT function and the results that Volkswagen expects from the effort.

The Quarterly: You've helped lead Volkswagen through a transformation over the past few years—from a company whose IT function just supported the business to one where IT leads change and works hand in hand with the other functional leaders to innovate. Can you tell us about that transformation?

Klaus-Hardy Mühleck: In many companies and in a lot of...