Volkswagen of America: Managing It
Case 7 – Volkswagen of America: Managing IT 1. 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.
2. Who controls the budgets from which IT projects are funded at Volkswagen of America?
The parent company of VWoA - VWAG - caps the IT budget at $60 million. However, the control of this budget includes the involvement of several cross-functional teams (AKA – “several organizational entities”, p. 5) that review project proposals before final approval – for instance, during Phase I the DBC (Digital Business Council) reduced the initial $210 million project proposals to $170 million (p. 6). Ultimately the PMO (Project Management Office) subsection of the BPTO (Business Process, Technology and Organization), which Matulovic established as a new internal IT department upon his arrival, approves projects prioritized by the IT steering committee (ITSC).
Who should control these budgets? Should the IT department have its own budget?
3. How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority
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.
2. Who controls the budgets from which IT projects are funded at Volkswagen of America?
The parent company of VWoA - VWAG - caps the IT budget at $60 million. However, the control of this budget includes the involvement of several cross-functional teams (AKA – “several organizational entities”, p. 5) that review project proposals before final approval – for instance, during Phase I the DBC (Digital Business Council) reduced the initial $210 million project proposals to $170 million (p. 6). Ultimately the PMO (Project Management Office) subsection of the BPTO (Business Process, Technology and Organization), which Matulovic established as a new internal IT department upon his arrival, approves projects prioritized by the IT steering committee (ITSC).
Who should control these budgets? Should the IT department have its own budget?
3. How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority