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Volkswagen of America
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| Words: 1294 | Submitted: 15-Apr-2013
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DescriptionVolkswagen of America Information Technology Upgrade and expansion
Matulovic who is the chief information officer of Volkswagen of America (VWoA) has a tough decision to make. Volkswagen’s subsidiary launched a new process for allocating budgets across the business. With the new process, they have derived at a list of approved projects that no one is happy about. Calls came flooding through to Matulovic with an informal request to insert an unfunded project into the IT department’s work plans. VWoA had projects requiring $210 million and the parent company of VWAG (Volkswagen Group) 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, 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. 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. This helps migrate away from the current silo thinking and start focusing on initiatives in an enterprise-wide level. At the end of this phase, the proposed $210 million was simplified to a list of projects that required $170 million. Phase 1 was a critical starting point in aligning all business initiatives and trimming down projects. With the list in hand, we now step into Phase 2.
During Phase 2 each business unit was required to classify each proposal into the type of investment (stay in business, return on investment, and option-creating investment) and technological application type (base-enterprise IT platform, enterprise applications, and customized point solutions). These classifications would influence how particular investments would be treated in the selection and prioritization process. Business units had to rank projects by priority and associate projects with enterprise goals. There was criticism that projects were reclassified as enterprise, but they really weren’t enterprise projects. The is because business units had to think of ways to associate their project with enterprise goals to improve chances of funding since the stay in business projects were given high priority, then the enterprise projects and finally individual business units. So if your project wasn’t a stay in business or enterprise project then the business units were tempted to reclassify their project to an enterprise project instead of a business unit. This built frustration as managers are looking for their own funding but don’t have the overall view to ...
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