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How a global IT revamp is fueling Fords turnaround

Stephanie Overby | Sept. 1, 2010
If financial results are any indication, the One Ford strategy is moving the company in the right direction.

Ford's new CEO decreed that groups such as product development, engineering and IT in each of the company's four regions be consolidated via shared services. Every business function would have one global organization, not multiple sovereign and superfluous regional functions and business units. Mulally "sealed off the escape hatches that would allow Ford employees to say, 'But we're different. We do it this way,'" says Cole.

Smither and his team created a shared-services model for infrastructure, applications support and new-systems development. In addition to cutting staff, the IT group decreased its global application portfolio by 40 percent and consolidated six enterprise data centers into four. Resources are now managed globally.

So IT could contribute to global business initiatives such as product development, Smither assigned senior IT leaders to each of Ford's functional and business units. He also invested in new capabilities, such as common marketing, purchasing, manufacturing and communication tools.

A leaner organization has reduced bureaucracy, Smither says. Employee morale also went up, according to internal surveys. "When you go through valley of death and come out the other end, you say, 'Wow I didn't think we could do that but I guess we can,'" says CAR's Cole.

Hot Seat at the Table

Smither may not have fully appreciated what he was in for when he agreed to be CIO. "I had a sense that there were going to need to be some changes and a need to attack complexity," he recalls. "But, at that point, no one anticipated the enormity of the economic downturn" or how big a change adapting to the new strategies would be.

Yet Smither--British by birth, a Ford man by training--may be uniquely suited to the role he accepted. An automotive engineer, he graduated from college into a job working on power train development for the Ford Transit, a popular commercial van in Europe. In the 30 years since, Smither has worked in just about every function and region in the firm.

Smither replaced Marv Adams, who for a time reported to Ford's COO and, for five and a half years, focused on improving IT service levels. "Marv did a great job of addressing the fundamentals of IT," says Smither, who worked under him as director of product-development systems. Without the technical capabilities and IT-quality initiatives Adams put in place, One IT would be inconceivable. But requirements for IT have shifted at Ford, which under Adams and his two predecessors was acquiring global brands and diversifying into new transportation-related businesses. "It's a different company now," Smither says. "My work is focused around making sure we integrate Ford globally so that we're profitably moving forward."

Mulally recognized IT's importance in Ford's overhaul. "There aren't that many automotive CEOs that highlight the role of IT in their public statements. Alan does," says Gartner's Koslowski. Mulally elevated Smither to group vice president (and an office on the top floor at headquarters).

 

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