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VOLKSWAGEN OF AMERICA: MANAGING IT PRIORITIES

VOLKSWAGEN OF AMERICA: MANAGING IT PRIORITIES. Meeting. Date: September 8, 2003 Room: CIS 1012 Hour: 7 to 8 pm Reason: Discussing some last minute issues and concerns about Volkswagen America prioritization process for IT projects Participants:. Participants. Dr. Uwe Matulovic

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VOLKSWAGEN OF AMERICA: MANAGING IT PRIORITIES

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  1. VOLKSWAGEN OF AMERICA: MANAGING IT PRIORITIES

  2. Meeting • Date: September 8, 2003 • Room: CIS 1012 • Hour: 7 to 8 pm • Reason: Discussing some last minute issues and concerns about Volkswagen America prioritization process for IT projects • Participants:

  3. Participants • Dr. Uwe Matulovic • Volkswagen America’s CIO Alias Jonathan Garriss

  4. Participants • Mr. Chris Broderick • Digital Business Council (DBC)

  5. Participants • Mr. Brian Bullard • IT steering committee (ITSC)

  6. Participants • Mr. Donald Byrd • Program Management Office (PMO)

  7. MBA 2009 Participants • Class • Key personnel of Volkswagen America (VWoA) business units

  8. Participants • Ms. Susanna Lopez-Legentil • Executive Team Leader (LDT)

  9. Agenda • Overview of actual prioritization process • Problems and critiques • Alternatives: Other cases • Brainstorming • Best alternative + Implementation issues

  10. Prioritization process VWoA $12 FIDELITY Global $15 SUPPLY VWoA $4 SPANISH VWoA $10 USER

  11. Prioritization process $22 million

  12. Prioritization process • Calling for projects, communicating process, and identifying dependencies Business blueprint FIDELITY SUPPLY USER SPANISH

  13. Prioritization process • Formal project requests from business units FIDELITY USER SUPPLY

  14. 1 3 1 2 2 3 Prioritization process • Transforming business unit requests into VWoA goal portfolios FIDELITY USER SUPPLY

  15. Prioritization process IT projects prioritized: 1 $12 VWoA FIDELITY 2 $10 VWoA USER 3 Global $15 SUPPLY

  16. Develop a fidelity program 1 $12 VWoA FIDELITY Create a web user portal 2 $10 VWoA USER Develop software for supply chain 3 Global $15 SUPPLY Prioritization process $22 million

  17. Problems and critiques Projects of global importance were not funded How to encourage employees to think about the greater good of the company instead of their own business units Management exaggerates ROI Difficult to validate project’s strategic relevance Finding the right prioritization process

  18. Other cases discussed Donald, Chris, Brian

  19. Strategic Grid Goal!!! FACTORY STRATEGIC Strategic Impact of Existing IS SUPPORT TURNAROUND Strategic Impact of Future IS

  20. Matulovic’s notes Projects of global importance were not funded Ranking: metrics Management exaggerates ROI Validating Proposal’s Strategic Claims Setting and Applying Correct Filters Sources of Funding

  21. Alternatives Alternatives proposed in the VWoA case: Take funding from other funded projects to give a bit to critical unfunded projects Leave unfunded projects alone Help make an argument for funding the project from alternative resources Reopen prioritization process

  22. Prioritization process FIDELITY USER SUPPLY

  23. Key Questions 1 Volkswagen’s Next Round of Growth Initiative was established to accomplish what goal? To build more profitable product lines. To establish a line of communications between its North American and European divisions. To support and enable the new global product diversification strategy. Rank projects by their ROI.

  24. Key Questions 2 One correct way a business unit manager could ensure that their project would be raked highly would be to : Associate the project with an enterprise goal? Exaggerate the ROI? Only pursue projects that would be appealing to management? Buy their CIO a new car?

  25. Key Questions 3 When prioritizing IT projects, a critical step to perform is: Make sure the most innovative projects are funded. Align projects with the company’s strategic goals Optimize the available funding so as many projects as possible get funded Obtain the CIO’s agreement and support.

  26. Extra Credit Project leaders often exaggerate the ROI on IT proposals before submitting them. How can management limit this phenomenon? Project evaluation should be directly related to the initial proposal’s ROI calculation and any other metrics included within the proposal.

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