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MIS 450x: Volkswagen of America: Managing IT Priorities

A exposition of a case study of Volkswagen of America
by

Naipong Vang

on 25 October 2012

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Transcript of MIS 450x: Volkswagen of America: Managing IT Priorities

VOLKSWAGEN OF AMERICA
MANAGING IT PRIORITIES Background Information SWOT Analysis Problem Fish Bone Diagram IT Governance Decision Criteria Solutions Recommendation Metrics Strengths Weaknesses Opportunities Threats Respect for Structure and Organization
Brand Grouping (Jetta, Beetle, Passat,Golf etc.)
Next Round Growth (NRG) initiatives
Pursued ecommerce VWoA downturns from "Himalayas Chart" in 1960s and eventually entered into the "Valley of Despair" in 1990-2002
IT is neglected and handed off
No Central IT organization
Previously unstructured debates North American Market
Organizational lessons
Global supply American and Japanese Automakers
Overgrowth
Human Resources Enterprise Goal Area Rank
Customer Loyalty
New Vehicle Value 2
Stable Business Infrastructure 3
Pre-Owned Vehicle Business 4
Optimize the Supply Flow 5 Volkswagen creates low-mid range automobiles
They are "The Peoples Car"

Successes peaked in 1960s

Japan and American competition stifled VW

Diversify lineup and prepare for "Next Round Growth"

Uwe Matulovic sent to America lead as "CIO" Reopen the new prioritization process

Fund SCM Project using other funds

Create an exception handling process

Leave issues up to supply flow We strongly suggest an exception-handling process:

Help the business unit executive for supply flow to make an argument for funding the SCM project from alternative sources Long Term Solution?

Fits the Core Competencies? In accordance with Enterprise Goals? Volkswagen cannot implement important IT because of unclear business values and lack of funding



Recover from their recession
Streamline business processes
Prepare a foundation for growth $60M budget Weak IT background
relationship and growth Resource
Management IT outsourcing with GedasUSA and Perot Systems Previously informal
process for funding projects Project Dependencies Reshuffling of Project Priorities Supply Flow Project IT is a tool for business needs

Federal System is bad for large decision making company

State Street Corporation

UPS and IT funding Data Information Acquisition Device Problem Conclusion We talked about Volkswagen's situation, the causes of the problem and chose a solution based on business needs


Questions? Why is this important Product diversification strategy being developed in Germany would have dramatic impact on US and Canadian Importer Operations. If all models proposed in 2002 were ultimately approved and produced, VWoA would grow from importing 9 models in 2002 to over 22 models by 2008.

Unprecedented in VW history. Sales and Service required "Next Round Growth". FUNDING 40 Projects 10 Business Units IT PROJECT PROPOSAL Request Overflow HUMAN RESOURCES Selfish Business Units Self-defined importance Narrow picture New process endangered projects Reopen The Prioritization Process Pros Cons Supply Flow Project will be overlooked
Does not follow the NRG priorities properly
If prioritized, funding for other projects will be depleted
Business unit resistance Redirect Funding from Projects Pros Cons Ensures funding for SCM project Funding for other projects gets depleted
Prioritization Process is made obsolete
Business unit resistance Create Exception Handling Process Pros Cons Helps business units argument for SFP funding from alt. resources
Sets up SFP that is foundation for global operations and aligns with corporate strategy
Encompasses other projects Funding requirement is unknown
Could deplete funds from other projects Ignore Supply Flow Project Pros Cons Business unit projects have priority
Sticks to Prioritization Process Global supply is ignored 1 1 2 3 4 5 Business Units Business Units Business Units Business Units Business Units Business Units Business Units Business Units Business Units Business Units Beetle VW IT Issues Top Three
From each Business Unit $$$$ $$$ $$ $
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