Volkswagen of America: Managing It Priorities

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process was implemented for the first time, and some issues were bound to occur. Our team still recommend that Matulovic should defend the new process and take the ELT in to full confidence by laying down the economic benefits such as Transparency, Involvement of all business units, Identification of similar projects that will positively affect the organizational culture. No matter how unhappy the fellow executives are with the process, they cannot disagree with the above mentioned facts and ultimately it comes down to how Matulovic keeps them involved and on-board in the decision making process in future. Plus, a conveying the associated risks might have alerted the ELT about the risk of their project not being funded.

b. What should Matulovic do about the unfunded Supply Flow project?

Again, the design of the new process is reasonable but it is understood that the production of automobiles will be increasing in the coming years affecting the imports. This fact makes the supply chain management project an important step towards global integration. Yet it was put on hold because of the new process. The NRG goals criteria lists the “Optimization of Supply Flow” as lowest ranked goal. In our view, the goal portfolios should be given somewhat equal weightage for prioritization. There is no reason to postpone the project for next year since the Future Value of investment will only increase. Therefore, Matulovic should politely make the senior management of VWAG realize that the budget allocation was inadequate for IT projects, to begin with. They should have had contingency budget plans for this kind of situation. Now they should help for proper implementation of this project by either taking charge of the Supply Flow project or give additional funds to VWoA.

c. Provide specific next steps for Matulovic

The specific steps for Matulovic as CIO for upcoming years are stated below:

• A strong IT infrastructure might have saved them a lot of costs. Therefore, Matulovic should be able to make BPTO the central IT entity with the inclusion of IT professionals and retaining them for upcoming years for sustainability.

• The new process should be reorganized such that the participants from DBC, PMO and ITSC would sit together and make the prioritization list. Currently we observe that there is a lack of in-person communication between these entities in the three phases, resulting in members missing out on the rationale behind the decisions by the other teams.

• Matulovic should be able to present his case to senior management that the company as big as VWAG, should always have contingency plans for cost overruns and time delays and assign additional funds for that. If the projects are done on time, the additional funds can then be invested in the unfunded projects next year.

• Due to unclear goals every business looked for their own interest, forcefully aligning project to NRG goals for funding. Matulovic’s position is critical to work on the organizational culture and keep everyone involved and work towards the benefit of the enterprise. We are referring to the “Prioritize Action” AIM element here.

• We suggest that Matulovic should have defined the “Change” and the reasons of implementing the new process in the beginning for smooth transition, since not everyone liked the new process.

• He should request the Executives at VWAG to adopt the bottom up approach in IT budget decision making, and take budget estimates in the beginning. This way, the final budget will be reasonable and if not, they can at least provide some reasoning of why the desired funding hasn’t been given.

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