Alcan Essay

773 Words4 Pages
Multinational enterprises like Alcan are often built from the joining of diverse enterprises, each operating as its own entity. The business of acquisition depends on deriving value or profits from each entity, so instituting change is left to others after the mergers and acquisitions people move on to the next target. The IT function was ignored, with responses to new legislation (such as Sarbanes-Oxley in the United States) seemingly the only impetus for change. Alcan management had ignored the importance of an IT strategy, as evidenced by the Corporate IT Director position being vacant for almost a year when this case study started. The current structure is functional, and does provide Alcan management with information, so there are positives to start with. Their current IT structure does have a long list of issues and items to improve. First, and perhaps foremost, there is no central IT management or reporting structure. Autonomous business units with their own IT budgets and priorities manage their own information. Secondly, costs for the IT function were not assembled and analyzed. Hard costs, like facilities, were not included in the total commitment costs for IT, nor was there a methodology in place to provide management with what it would need to perform cost/benefit analyses. Ouellette identified $95 million in IT costs so misclassified. Add the sheer number of IT establishments, all of whom would ideally ‘speak’ to each other, and the consolidation/integration process that had been ignored for so long seems amazing in scope. The case further explores organization hierarchy of IT at Alcan. Issues such as: • Incompetent development and support functions (requiring outsourced assistance), • Numerous IT locations with separate allegiances to previous corporate ownership (Pechiney personnel had been acquired years ago, but had to be relied upon for

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