Question

What is your assessment of the new process for managing priorities at Volkswagen of America? Are the criticisms justified? Is is an improvement over the old process? Who controls the budgets from which IT projects are funded at Volkswagon of America? Who should control these budgets? Should the IT department have its own budget? How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority management system? What should Matulovic do about the unfounded supply flow project?

Provide reference to your answer.

Answer 1

The old process is improved to new procedure and new procedure is much more structured and organized so it is definetly a substantial improvement over the existing. In favor of the new process Volkswagen implemented for managing IT priorities. New policies are that prior to this new process Volkswagen was operating as individual independent business units instead of with an enterprise wide perspective in regards to IT initiatives. These units (Business) were more concerned to what was good for them as opposed to what was good for the company as a whole. By establishing the Executive Leadership Team, whose high ranking members gave a horizontal view of the company as opposed to a vertical perspective, the ELT was able to prioritize those projects that supported the enterprise wide strategy. Likewise, the business units leaders may not have had the insight to determine what IT projects were best implemented for the good of the company as a whole even though there would be no benefit for their own particular business unit. In the new IT projects new process are prioritized to determine funding in a very efficient way, ensuring that the projects the are very important to business strategy meet their financial requirements, enabling business unit managers to business strategy meet their financial meet their financial requirements, enabling business unit managers to work together so they would make decision focused on the overall strategy of the company. Criticism of by the executive leadership team members were not justified at all in old process. The criticisms are justified and the focus should have been on aligning business and IT goals. The two main factors were getting IT to work better with other departments and also managing projects with costs and time as serious resources.

The criticisms of the new process were justified. The process was flawed in many ways. This project was important on a global level. Secondly, there was not enough in the budget to accomplish the top three business unit projects. Matulovic implemented very important changes to improve project management. He implemented the Program Management Office (PMO) to take over the management of IT projects and introduced project management standards. The results were great and projects were being implemented on time and on budget.

Matulovic has to work with these executives as part of the Executive Leadership Team. Given that there requests may have some merit, especially with a brand new prioritization process, I would recommend that a "wish list" be organized, from which excess budgets could be applied. Eventually, this process should be phased out to rely only on the new process. As for the Supply Flow project, I would first start with making an argument for funding it from alternate sources. The prioritization process used by the team should be reviewed so that global benefit projects are more highly ranked.

The strategy for substantial IT investment in early 2000s met with difficulties as a result of financial constraints and legacy IT architecture. Other difficulties were the expressions of Matulovic’s peers that investments on IT did not usually produce the required results and that current effort of the IT department was an attempt to drive business strategy. In light of this, Matulovic decided to make efforts to turn around the ill feeling against the IT department and needs to prioritize to those whose projects take the most precedent not those who are requesting special treatment. Matulovic needs to set up a system of how potential projects need to be laid out when executives are asking for funding.

There is a definite failure in the system and addressing the problem should be a priority. However, they should work with the system as it is for now and any decisions should involve all stakeholders. NO special treatment should be given to any executive as that will create more conflicts. The executives should agree on how best to handle situations that need prioritizing.