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 • Volkswagen America’s CIO Alias Jonathan Garriss
Participants • Mr. Chris Broderick • Digital Business Council (DBC)
Participants • Mr. Brian Bullard • IT steering committee (ITSC)
Participants • Mr. Donald Byrd • Program Management Office (PMO)
MBA 2009 Participants • Class • Key personnel of Volkswagen America (VWoA) business units
Participants • Ms. Susanna Lopez-Legentil • Executive Team Leader (LDT)
Agenda • Overview of actual prioritization process • Problems and critiques • Alternatives: Other cases • Brainstorming • Best alternative + Implementation issues
Prioritization process VWoA $12 FIDELITY Global $15 SUPPLY VWoA $4 SPANISH VWoA $10 USER
Prioritization process $22 million
Prioritization process • Calling for projects, communicating process, and identifying dependencies Business blueprint FIDELITY SUPPLY USER SPANISH
Prioritization process • Formal project requests from business units FIDELITY USER SUPPLY
1 3 1 2 2 3 Prioritization process • Transforming business unit requests into VWoA goal portfolios FIDELITY USER SUPPLY
Prioritization process IT projects prioritized: 1 $12 VWoA FIDELITY 2 $10 VWoA USER 3 Global $15 SUPPLY
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
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
Other cases discussed Donald, Chris, Brian
Strategic Grid Goal!!! FACTORY STRATEGIC Strategic Impact of Existing IS SUPPORT TURNAROUND Strategic Impact of Future IS
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
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
Prioritization process FIDELITY USER SUPPLY
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.
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?
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.
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.