This case identifies problems and recommends effective solution to chief information officer of Volkswagen of America Dr. Matulovic regarding the new priority management system for approving important IT project and also making right decision in spending IT project budget.
1. Insufficient Budget:
The 10 business units that made up VWoA had proposed more than 40 projects, with funding requirements totaling $210 million. However, the parent company of VWoA (VWAG) budgeted only $60 million.
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. It was able to ...view middle of the document...
Phase 3-Transforming business unit requests into enterprise goal portfolios. This phase is that DBC converts the emerging business-unit-focused project portfolio into an enterprise-focused portfolio.
The new process is done in this phases to prioritize and award funding to the right projects. It replaced the past haphazard process by a more orderly rational process.
2. Poor information technology at VWoA:
In 1992, in order to reduce short-term IT costs, VWoA reduced its internal IT staff to fewer than 10 people, eliminated much of the knowledge of IT within the company. In 1999, the parents company was created in the U.S.A, gedasUSA Inc. To speed the start-up of gedasUSA, all employees of VWoA internal IT department were transferred to gedasUSA. There is an arms-length relationship between gedasUSA and VWoA. VWoA made it appear that the knowledge was lost to VWoA. In 2002, gedasUSA, Perot System and the eBusiness team worked together to rebuild the IT environment to support the now rapidly growing VW and Audi brands. But IT function was not performing optimally within VWoA.
3. The unfunded supply flow project:
Because optimize the supply flow is ranked No. 5 at enterprise goal ranking for project prioritization, failure of SAP implementation over supply chain management domain.
Dr. Matulovic must assess the appropriateness of the new prioritization process and determine how to allocate future IT funding.