VOLKSWAGEN OF AMERICA:

Managing IT Priorities

Jesus MonzoPulkit GanjooOlivier Magnin

INTRODUCTION

• Case introduction

• Background

• Timeline

• Business Structure

• Phase I, II, III

• Class discussion – Video role play

• Our suggestions

BACKGROUND

• Ferdinand Porsche – 1930

• Beetle - High sales

• “Himalayas Chart” – 1970

• The Strategic Change – 2000

• Import increase U.S.A.

• Introduction Next Round of Growth

INFORMATION TECHNOLOGY TIMELINE

Volkswagen AG Group

- Creation: subsidiary GedasUSA

28 employees transfer

- Setting up: “eBusiness Teams”

1999

2002

19921992

Perrot

- 10-year contract

Cutting back IT-employees

Adding 28 employees to IT department

GedasUSA – Perot – eBusiness Teamswork together for new IT enivironment

Creation BPTO Department

- Problem: no single structure

- Matulovic: new internal It-department

MATULOVIC

NRG

ITSC

PMO

DBC

BPTO

ELT

• Implemented the new IT program

MATULOVIC (CIO)

• Execute NRG program

ELT (EXECUTIVE LEADERSHIP TEAM)

• IT Project management program

NRG (NEXT ROUND GENERATION)

• Guide and approve the process of IT project selection

ITSC (IT STEERING COMITEE)

• Administration of IT project proposal

PMO (PROGRAM MANAGEMENT OFFICE)

• Categorize projects• Assesing in business impact• Discussing the alignment with the goals

DBC (DIGITAL BUSINESS COUNCIL)

ENTERPRISE GOALS

CUSTOMER LOYALTY

NEW VEHICLE VALUE

STABLE BUSINESS INFRASTRUCTURE

PRE-OWNED VEHICLE BUSINESS

OPTIMIZE THE SUPPLY FLOW

PMO(BPTO)

WORKSHOPS W/ DBC

PROJECT PRESENTATION AND

MAPPING ONTO FUNCTION WALL

GROUPING BY INITIATIVE

DEFINE DEPENDENCIES

• Business function affected• Goal that the project would advance

PHASE I PHASE II

CATEGORIZE BY INVESTMENT TYPE

CATEGORIZE BY APPLICATION TYPE

COMPILE PROPOSALS

PRIORITIZE ACCORDING TO GOALS

SUBMIT TO DBC

•Base enterprise IT platform•Enterprise application•Customized point solutions

PHASE II PHASE III

•Stay in business•Return of investment•Option-creating investment

•With phase I projects

DBC DAY 1 MEETING

YES TOP 3 YESDBC DAY 2 MEETING

YES

REGROUP INTO 5 MAIN GOAL PORTFOLIO

YES

GOAL ACCURACY

NO

BUSINESS UNITNO

FINAL GOAL PORTFOLIOS

YESBUDGETYESFINAL APPROVAL

YES

PHASE III

1. Customer loyalty2. New vehicle value3. Stable business

infrastructure4. Pre-owned vehicle

business5. Optimize the supply

flow

PROS AND CONS OF THE IMPLEMENTED SYSTEM

PRO

• High-level organization structure

• New system keeps his IT employees

• Company goals connection

CONS

• Lack of companies goals consideration

• Lack of IT knowledge

• Core projects remained unfunded

How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority

management system?

What should Matulovic do about the unfunded Supply Flow project?

SUGGESTIONS

How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority

management system? 

•Matulovic has to work with these executives as part of the Executive Leadership Team. On the one hand he should consider the relationship, but there does not seem to be any reasonable basis for giving certain colleagues special treatment outside of the new priority management system other than due diplomacy.

SUGGESTIONS

What should Matulovic do about the unfunded Supply Flow project? 

•The prioritization process used by the team should be reviewed so that global benefit projects are more highly ranked.

•There is a definite failure in the system and addressing the problem should be a priority. Matulovic should make a decision as CIO

•Matulovic needs to exercise strong leadership, prioritizing company’s profit instead of department’s profit.