Volkswagen Case Report

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Volkswagen of America: Managing IT 1. What is your assessment of the new process for managing priorities at Volkswagen of America? Are the criticisms justified? Is it an improvement over the old process? The process for managing priorities at Volkswagen of America changed from unstructured debate among executive sponsors to one with more structure and alignment as dictated by the enterprise goals. It’s important to note that during the 1990’s when most of the business resources and budgets were prioritized towards sales and marketing instead of IT infrastructure, the business suffered immensely. Applegate speaks of the business value of IT not only encompassing mechanisms and measures to enhance the day to day efficiency and effectiveness of IT, but better governance is expected to improve IT in areas tangible to its business customers such as service quality, cost control, project delivery time, and process improvement. (p.407). The criticisms of the new process are unjustified because the old method of having unstructured debates caused each individual executive team leader to prioritize their own business units over the necessary enterprise goals. Applegate says that governance efforts should include formation of organizational structures for overseeing and directing all of the organization’s IT resources, or the implementation of processes to ensure that IT resource requirements are identified based on business priorities. (p.416) This new process provides necessary structure and alignment with enterprise goals, however it should be noted that there are holes which need to be addressed in which certain business units can take advantage of the new priority management system by associating a project with an enterprise goal in order to increase chances of funding. (p.457) 2. Who controls the budgets from which IT projects are funded at Volkswagen

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