Case Study 1: Volkswagen in America – Managing IT Priorities
INTRODUCTION
This report identifies problems and recommends effective solution to CIO of VWoA Dr. Matulovic regarding the new priority management system for approving important IT project and also making right decision in spending IT project budget.
IMPACTS OF INSUFFICIENT FUNDS * Estimated project budget was $170 Million but the parent organisation allocated only $60 Million. This reduced the efficiency of VWoA’s final result as most other projects were unfunded.
Recommendations: CIO Dr. Matulovic could have raised for more IT project Budget from parent corporation VWAG. Board members of VWAG and Dr. matulovic could have discussed about requesting fund from government as government – private partnership or made partnership with any other private organisation for funding or could have applied for Bank loan. * Failure of SAP implementation over supply chain management domain caused a major loss to the organisation.
Recommendations: As this was highly important and most costly ERP system implementation process they can guided and funded completely by VWAG parent company. As they are very critical ERP system and their failure cause adverse effect, Dr. Matulovic and IT steering committee could have fully funded the project from the allocated $60 Million budget
CORPORATE GOVERNANCE ISSUES * Poor governance of internal structures, internal operations and lack of communication or reporting services lead to lack of upward communication.
Recommendations: Dr.matulovic should have made strong corporate governance by assigning tasks to BPTO and ELT member to prepare weekly status report of ongoing projects of their respective business unit. This would have warned about the insufficient fund for SAP implementation. And Dr. Matulovic should inform and get advice from board members of parent group