- Volkswagen of America: Managing IT Priorities Essay - Words | Cram
- Volkswagen Of America Managing It Priorities
- Case Study Solution & Analysis
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Founded in s, Volkswagen is the leading automotive vehicle manufacturer in Germany. However, its USA branch was facing problems with inadequate IT human resources due to excessive outsourcing and a reduction of internal IT staff. Additionally, an inadequate budget to cover the considerable cost of multiple IT projects was aggravating the issue.
I will demonstrate how the company can solve these issues by allocating its limited funds to support its IT infrastructure development. Through constant evolution, Volkswagen has not only dominated the automotive market in terms of lower-priced cars, but has also gained industry recognition for their midsized and emerging vehicles. This has been achieved through their comprehensive competencies in business strategy and manufacturing capability, as well as their extension of product portfolio, i. AUDI, Bentley and a wide range of models.
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Volkswagen of America: Managing IT Priorities Essay - Words | Cram
With your permission I would like to use this as an example for future students. Implementation of this exception-handling process will take place within 5 days of approval. As a result, the most important strategic goals of VWoA will still remain in focus and the new prioritization process will not have to be reopened. Thus, resistance and fighting against the new prioritization process can be prohibited and at the same time a potential conflict with the parent company due to impeding their globalization initiatives can be resolved.
Volkswagen Of America Managing It Priorities
The implementation of the new IT project approval process led to the fact, that a SCM project with high importance to the global level of the organization did not get funding as it does not show significant value at VWoA level. However, many initiatives do not qualify for funding based on the theoretical nature of the prioritization system. Managers from certain business units are unhappy with the process because they feel they cannot do their job without the requested funding.
Matulovic must assess the appropriateness of the new prioritization process and determine how to allocate future IT funding. The following criteria is recommended to determine the most effective allocation of IT funding: 1. Management Support: Allocation of funding is understood and accepted by all management, ensuring commitment to the corporate strategy across the organization.
Decision Making Input: Allocation process involves representatives from all groups affected by the funding decisions. Matulovic who is the chief information officer of Volkswagen of America VWoA has a tough decision to make. With the new process, they have derived at a list of approved projects that no one is happy about. In choosing the right projects to fund was a process that consisted of three phases: Phase 1-Calling for projects, communicating process, and identifying dependencies, Phase 2-Formal project requests for business unit, and Phase 3-Transforming business unit request into enterprise goal portfolios.
Phase I was able to reduce and re-categorize projects because business units realized that many of their initiatives were very similar to other initiatives throughout the company which lead projects to become grouped together into common enterprise projects.
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This phase identified dependencies among projects. Therefore, without completed projects, the other projects could not be started. This phase also involved members becoming exposed to information about proposed initiatives across the company which gave them a greater understanding and appreciation of different business units. Background In , Volkswagen of America VWoA together with other organizational entities of the Volkswagen enterprise created a high-level business architecture called a blueprint. This blueprint of the business was primarily developed to formalize the new IT governance and prioritization processes linked to the corporate strategy.
Each business unit categorized its IT projects for funding based on their business impact and their alignment with the business goals. Several entities within the organization were involved in the process of categorizing similar projects under enterprise portfolios, and select the most viable current business projects. Problem The main problem with the new process of managing IT priorities was the lack of a global perspective and a holistic approach in prioritizing IT projects.
Case Study Solution & Analysis
Background In , Volkswagen of America VWoA together with other organizational entities of the Volkswagen enterprise created a high-level business architecture called a blueprint. This blueprint of the business was primarily developed to formalize the new IT governance and prioritization processes linked to the corporate strategy. Each business unit categorized its IT projects for funding based on their business impact and their alignment with the business goals.
Several entities within the organization were involved in the process of categorizing similar projects under enterprise portfolios, and select the most viable current business projects.
Problem The main problem with the new process of managing IT priorities was the lack of a global perspective and a holistic approach in prioritizing IT projects. This was apparent as a critical project of global Supply Flow management was left partially funded even though the project required full funding to stay on track.
It was realized that the some business units were incorrectly aligning their projects to enterprise goals in the lieu of funding opportunities, leading important projects sidelined or unfunded. Recommendations and Alternatives Priority should be given to the projects that are aligned with business goals of the enterprise. The parent group and partner companies of Volkswagen of America should What is your assessment of the new process for managing priorities at Volkswagen of America?
Are the criticisms justified? Is it an improvement over the old process? The new system of prioritizing IT projects to determine funding is a very efficient way of ensuring those projects that are critical to business strategy meet their financial requirements. However, the method of dropping entire goal portfolios simply because they ranked lowest in the list could be deemed a flaw in the system, and one that could be detrimental to business unit integration slowly over time.
This understandably frustrates those whose proposals are receiving no funding, and if this prioritization system has any hope of future success, the business units being consistently funded will need to work better at recognizing other priorities , or the system will need to be restructured to allow for smaller projects to be phased in at the very least to maintain integration.
Who controls the budgets from which IT projects are funded at Volkswagen of America? Instead, over the past 40 years the company has had large peaks and valleys in the number of vehicles sold. This positioning led the company to plan for future growth throughout the brands, as well as define five clear goals for the company to manage its growth.
The first issue faced to this company is clearly the model of the IT department.
The company had six internal departments or groups that prioritized IT resources, headed up by the internal CIO. The decisions made by the IT department of the past were then transferred to Perot systems or gedasUSA, essentially leaving the company without any true IT resources. Both companies were seen as outsourcing for the projects even though gedasUSA clearly was an internal company, and costs even though billed at market value, were truly less expensive than market price if they were charged at cost to the company. This could have been a major deciding factor as the company estimated the cost of all business projects Matulovic, the new chief information officer, faced a lot of issues such as new business architecture, inadequate funding and increasing pressure from his peers.
As in the past, company had undergone the cycle of ups and downs, VWAG started diversifying its product offerings in the early s. Therefore, VWoA, an American subsidiary, began responding to these new initiatives by improving the structures of their processes so as to meet this new global diversification strategy.
IT was one of the key areas affected by this change and had to adapt to this new paradigm as well as to other changes such as e-Commerce applications. They implemented a new process where the submitted projects from all the business units over three phases were reviewed and the one that aligned with the company goals was selected. But, after going through the first iteration, the business managers realized that there were some obvious problems with the new prioritization process. Many factors such as high costs for existing legacy system, budget constraints and a complex Sign Up. Sign In. Sign Up Sign In.