This study source was downloaded by 100000805287858 from CourseHero.

com on 07-11-2023 11:03:46 GMT -05:00

Volkswagen of America managing IT
priorities
► GROUP-6

►KANDALA CHAITANYA
►PRAFULLA SINGH
►MAYANK MITTAL
►RAVI SAHASMAL
►SHAMIT RASTOGI
►SUCHIT AGRAWAL

This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 • Dr. Uwe Matulovic
• Volkswagen America’s
CIO

• Mr. Chris Broderick

• Digital Business Council (DB

This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
Volkswagen was founded in Germany in May 1937
under the name of Volkswagen, which is known as
"The People's Car Company". The company's sales
have risen to reach their peak in the late 1960s
due to the Beetle introduction. The Rabbit and
the Jetta prompted a short-lived recovery before
dropping sharply to a new low point in the early
1990s known as the "Valley of Despair".
Volkswagen segregated their vehicle portfolio
between "classic" and "sporty" as a plan to
smooth out the growth curve. This case describes
the efforts of Volkswagen of America to create a
process for setting IT funding priorities so that
This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 • Mr. Brian Bullard
• IT steering
committee (ITSC)

• Mr. Donald Byrd

• Program Management
Office (PMO)

This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 Challenges

• HIGH PRIORITY PROJECTS REQUIRED FOR THEIR AREAS OF THE COMPANY HAVE NOT
BEEN FUNDED.
• 10 BUSINESS UNITS PROPOSED MORE THAN 40 PROJECTS WROTH 210MILLION$ VS
BUDGET OF 60 MILLION $.
• UNSTRUCTURED & THEORETICAL APPROACH FOR SELECTING THE PROJECT.
• REQUIREMENT OF THE NEW PROCESS FOR THE PROJECT.

This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 Assessment of the new
process
1. BUDGET CONSTRAINTS POSED A SIGNIFICANT BARRIER IN SELECTING AND PRIORITIZING IT PROJECTS
FOR FUNDING.
2. IN CONTRAST TO THE OLD PROCESS, WHICH WAS BASED ON UNSTRUCTURED DEBATES AMONG
EXECUTIVES PRIORITIZING THEIR OWN BUSINESS UNITS, LEADING TO UNJUSTIFIED CRITICISMS OF THE
NEW PROCESS
3. A PRIORITIZATION PROCESS IS A CENTRALIZED APPROACH THAT FOCUSES ON ALIGNING
ORGANIZATIONAL ACTIVITY WITH CORPORATE GOALS AND STRATEGY.
4. THE NEW PROCEDURE WAS BASED ON THE "NEXT ROUND OF GENERATION", WHICH ALLOWS PROJECT
PROPOSALS TO BE ALIGNED AND PRIORITIZED BY IDENTIFYING GOALS, FUNCTIONS, AND
ORGANIZATIONAL CHANGES.
5. THIS PROCESS ENHANCEMENT WAS NECESSARY TO MEET FINANCIAL OBLIGATIONS, BUT IT CAME WITH A
COST.
6. EVERY IMPROVEMENT, DO HAVE SOME ADVANTAGES AND DISADVANTAGES, AND NO PROCEDURE IS
FLAWLESS. THE DISADVANTAGE IS CENTERED ON. EMPLOYEES LOSE THE INCENTIVE TO ACCOMPLISH
THEIR JOBS AS A RESULT OF IDEAS BEING CONTINUOUSLY DROPPED AND BUSINESS UNIT INTEGRATION
BEING MISSED
7. EMPLOYEES LOSE INCENTIVE TO ACCOMPLISH THEIR JOBS AS A RESULT OF IDEAS BEING CONTINUOUSLY
DROPPED AND BUSINESS UNIT INTEGRATION BEING MISSED.
This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 Should the IT department have its own
budget?
1. ALLOCATING FOR IT PROJECT FUNDING IS A PROBLEM BECAUSE THE PARENT FIRM CUT
THE FUNDING REQUIREMENTS FROM $210 MILLION TO $60 MILLION, APPROVING ONLY
30% OF THE REQUIRED BUDGET. VWAG, VWOA'S PARENT BUSINESS, IS IN CHARGE OF
BUDGETING.
2. THE 10-YEAR CONTRACT WITH PEROT SYSTEMS CUT IT COSTS IN THE SHORT TERM.
PEROT WAS IN CHARGE OF THE IT PRODUCTION ENVIRONMENT'S MAINTENANCE,
REPAIR, AND OPERATION, WHICH ALLOWED HIM TO FREE UP SOME FUNDS FOR IT
PROJECTS. BUSINESS PROCESS, TECHNOLOGY, AND ORGANIZATION (BPTO), WHICH
SERVES AS A SINGLE POINT OF GOVERNANCE, SHOULD BE IN CHARGE OF THE IT
BUDGET, WHICH SHOULD BE APPROVED BY THE PROGRAM MANAGEMENT OFFICE
(PMO), WHICH OVERSEES ALL IT INITIATIVES.
3. GOOD GOVERNANCE STANDARDS STRIVE TO KEEP SENIOR EXECUTIVES AND THE
BOARD OF DIRECTORS ACCOUNTABLE FOR RISK MANAGEMENT AND ENSURE THAT
STAKEHOLDERS GET THE MOST OUT OF IT. AS A RESULT, IT, BUSINESS CUSTOMERS,
AND OTHER CORPORATE DIVISIONS MUST ALL BE INVOLVED IN GOVERNANCE IN ORDER
TO INCORPORATE MULTIPLE PERSPECTIVES INTO IMPORTANT IT DECISION-MAKING
This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
 What should Matulovic do about the unfunded Supply
Flow project?

1. THE UNFUNDED SUPPLY FLOW PROJECT APPEARS TO BE RELATED TO THE "BLACK

BOX" RIDDLES. MATULOVIC MUST DEVISE A STRATEGY TO DEMONSTRATE THE NEED
FOR SUPPLY FLOW PROJECT FUNDING AND REQUEST EXTRA RESOURCES BEYOND THE
FIRST ALLOCATION.
2. APPLEGATE SAYS THAT A KEY GOAL OF GOVERNANCE IS TO MAXIMIZE STRATEGIC
VALUE FROM MAJOR IT INVESTMENTS. THUS THE SUPPLY FLOW PROJECT, WHILE
INADEQUATELY ALIGNING WITH ENTERPRISE GOALS, HAS TO DEMONSTRATE ITS
NECESSITY THROUGH POTENTIAL PERFORMANCE.
3. APPLEGATE PROVIDES A RECOMMENDATION ON HOW TO ACCOMPLISH THIS BY
SAYING MANY GOVERNANCE INITIATIVES MAKE USE OF THE BALANCE SCORECARD
TECHNIQUE, MEASURING OVERALL IT PERFORMANCE ON A SET OF DIMENSIONS SUCH
AS ACHIEVEMENT OF BUSINESS GOALS, USER SATISFACTION, OPERATIONAL
EXCELLENCE, AND SUPPORT FOR LEARNING AND GROWTH)
4. MATULOVIC SIMPLY NEEDS TO USE DIFFERENT STRATIFICATION METHODS IN ORDER
TO DEMONSTRATE TO THE EXECUTIVE AND SHAREHOLDERS HOW THE SUPPLY FLOW
PROJECT WILL INEVITABLE INCREASE SHAREHOLDER VALUE
This study source was downloaded by 100000805287858 from CourseHero.com on 07-11-2023 11:03:46 GMT -05:00
Powered by TCPDF (www.tcpdf.org)