Volkswagen of America: Managing IT Priorities Group Case Presentation: Anand Sidharth Jenne Foo

What did Volkswagen get wrong regarding its method of prioritizing IT projects?

Sources of IT knowledge at its disposal What did Volkswagen get wrong regarding its method of prioritizing IT projects? Sources of IT knowledge at its disposal Business unit relationships with the web-service providers Contract with Perot Systems Least costly is the Gedas USA group. (IT based subsidiary of the VWAG group) Complicated IT Project Approval Process. (minimum of five levels of approval to reach the Project Management Team) Internal cost factor instead of an external structure; Significant differences in ROI calculations; Changing timelines as costs are reduced. Notes: By using a true cost for IT resources, the company should be able to increase the number of projects they are able to complete by using an internal cost factor instead of an external structure that they are currently using. This change in cost calculation could have significant differences in ROI calculations as well as changing timelines as costs are reduced. These additional levels of approval and discussion would add time and cost to the approval process. This current approval process also allows a diversion of the intended plan with each interpretation of the project plan as it moves thru those levels, allowing emotion about a project push it thru the process when it should not. The new process should be tuned to the point that the approval process does not go thru more than two people/groups for approval as well as following a strict approval process that is focused on four core metrics weighted heavily towards projects that effect the enterprise as a whole, then business units, and finally individual departments. The focus on the enterprise is critical to the company and it’s future success. Implement a strategic approval process thru the BPTO department

Categorization of Essential IT Projects What did Volkswagen get wrong regarding its method of prioritizing IT projects? Categorization of Essential IT Projects IT projects under Stay in Business (SIB) should not be ranked together with others. Mainly for legislative & business continuity reasons. Essential and not discretionary projects. Unstructured & flustered approach Last-minute real-time phone consultations with business unit managers. Project-to-goal Alignment The association of project-to-goal process in the last phase (Phase III) should be done at the initial stage rather than at the end. All project goals should be aligned to corporate strategy. SIB:  Such projects are required mainly for legislative & business continuity reasons, hence their nature is critical and of high importance. There should be a separate budget for this type of “compulsory” projects. Unstructured & flustered Approach: The last minute real-time phone consultations with business unit managers with regards to the top three projects are inefficient and not ideal. Decisions made in such time constraint manner may not result in the best priority of projects by each individual business unit.

Unofficial Accommodation Decentralised Adoption What did Volkswagen get wrong regarding its method of prioritizing IT projects? Unofficial Accommodation Incorrect prioritisation led to teams requesting unofficial accommodation when their projects where not approved. IT Knowledge Lost They lost all IT knowledge twice due to outsourcing to different parties. Later had to increase IT strength by almost 200%. Decentralised Adoption Approach to e-business was process decentralised adoption of independent process unlike systems thinking and interdependent. Non-existent PMO Surprisingly there was non-existent PMO even when multiple projects were underway.