The Identification of the Alcan with Governance Structure - Case Study Example

The Alcan Case Study Introduction The following is a case analysis of Alcan. In this analysis, Alcan is examined with respect to Accenture IT Governance Model. In addition, the case analysis considers the Weill and Ross Model of IT Governance in identifying the various governance styles used at Alcan in the five decision areas. The paper attempts to explain why Alcan is associated with the identified governance structure. Both advantages and disadvantages of the governance structure are described. Assuming the position of a CIO, the paper evaluates some of the possible changes that would be made in the organization with reference to its governance styles in the five decision areas. Lastly, the paper also identifies some other IT projects or initiatives recommended to help support any changes in governance that is believed to suit Alcan. Accenture IT Governance Model Efficient, Predictable Operators Quadrant: Undoubtedly, Alcan faces the some challenge of identifying governance priorities like any other contemporary organizations, which revolve around information technology. Accenture IT Governance Model is a useful strategic management tool that helps organizations in identifying their quadrant thus making it easy to identify governance priorities. According to Kiritsis (719), the three main factors influencing the positioning of a firm within Accenture IT Governance Model include rate of change, operational efficient, as well as product or service differentiation. From the four quadrants of Accenture IT Governance Model, Alcan falls in the first quadrant of Efficient, Predictable Operators, given the fact that it has slow rate of change while attempting to enhance operational efficiency within the firm. Kiritsis (720) identifies the fact that organizations falling in this quadrant are likely to meet business needs through supporting low-cost orientation. In addition, such firms keep costs low through minimizing changes whilst engaging in maximization of lifecycle of information technology assets. What’s more, organizations falling in the quadrant keep costs low through leveraging cost-saving devices through sharing of devices, outsourcing, and co-sourcing amongst others (Kiritsis 720). These are the same scenarios within Alcan when the CFO believes that the firm does not and cannot spend $300 million in IT as Robert asserts. In addition, the firm’s Corporate IT function organization structure has the infrastructure shared devices group indicating that Alcan attempts to keep costs low through leveraging cost-saving devices. Weill and Ross model of IT Governance The definition of IT governance as the decisions rights coupled with accountability framework that are applied within organizations to stimulate desirable behavior in as far as the use of IT is concerned, is a perfect description of the Weill and Ross Model of IT Governance. In this perspective, Weill and Ross Model of IT Governance identifies five key decision domains that include IT principles, IT infrastructure strategies, IT architecture, business applications needs, and IT investments. Alcan uses different governance styles in these five key decision domains in a bid to achieving efficiency through information technology (Kiritsis 657). IT governance styles are determined by the inputs and decision making process within Alcan. Nonetheless, every group within the IT department is represented in terms of information technology governance in the Alcan. Leadership monarchy is a governance style applied within IT principles domain as well as the IT investment domains. This is because despite the fact that the IT investment domain uses more that it is allocated by the CFO, it is the CFO who does the decisions in as far as IT investments are concerned. On the other hand, IT monarchy is a governance style that is highly seen within IT architecture. Various groups of IT senior managers define the architecture of the information technology with respect to the requirements and functions of their respect units. With respect to IT infrastructure there are group of IT managers who are in-charge of determining the types of infrastructural strategies that make the information technology within the domain efficient (Kiritsis 489). Consequently, the kind of leadership employed within the IT infrastructure strategies is feudal where unit leaders from various groups define the strategies. While applying the IT duopoly governance style, the CFO in conjunction with Robert take charge of the business application needs. The business application needs domain involves coordinating whilst providing specifications of the requirements that are required in order to enhance effectiveness and efficiency of Alcan practices and operations. Governance Structure Alcan’s governance structure is structured in a way that it enhances the operations of the firm in a decentralized manner. Decentralization of operations especially with information technology as exhibited within Alcan refers to a scenario where one aspect of management is performed in various branches of the organization. For instance, in Alcan the human resource, finance, and packaging amongst others apply the concept of information technology differently with the main aim of achieving collective goals and aims of the organization. Every department or section within Alcan is responsible for its own information technology governance. Decentralization of management attracts many demerits within an organizational structure. Decentralization in this perspective enhances growth and diversification whilst reducing burden of top executives. Top executives within decentralized IT structures as in the case of Alcan have time for growth hence make wiser decisions in respect to diversifications and growth. In addition, decentralization within Alcan has enabled quick and better decisions. It is on this basis that Robert is able to identify all the expenditure associated with information technology. What’s more, Alcan enjoys better and effective communication amongst the top executives as well as the juniors in the organization. Organization communication improvement and efficiency that results from fewer levels of authority have been influential in making appropriate and effective decisions. Other merits that accrue as a result of decentralization include development of executives, supervision and control become effective, motivation and morale of employees is highly improved, and there is room for democratic management. Nonetheless, decentralization faces various challenges in respect to management and performance. For instance, Alcan sometimes experiences the problem of inconsistencies especially when job descriptions are not provided as in the case of the manager in-charge of the packaging. In addition, through decentralizes Alcan incurs additional information technology expenses of approximately $100 million, which could otherwise be avoided had the company adopted the centralized organization structure within its IT. Lastly, decentralization usually leads to complexities especially when a problem arises since it becomes difficult to identify the particular area where the problem emanates. Alcan is facing problems with IT governance. Due to decentralized structure it is difficult to identify where exactly the problem is emanating from in the firm. Changes in the Governance Styles Assuming the position of a CIO, there are many changes that can be made within the governance styles applied in the various IT domains. For instance, instead of leadership governance style for IT principles it would be wise to have the federal style in makings while decisions making follow the duopoly governance style. This is because federal will encompass various C-level executives and one other group in brining probably solutions for the IT principles. Duopoly as a governance style is effective where IT executives coupled with specific groups are engaged in making decisions. The group concerned should be directly involved in the federal input within the IT principles. Another probably change would be to engaging business monarchy in making IT investment decisions instead of being left on the hand of two executives. Business monarchy comprises of C-level executives, groups, and individuals including the CIO. Making an investment decision collectively will be beneficial not only to all groups represented but the whole organization since Alcan’s objectives, aims, goals, and desires, which are diverse will be adequately represented by the respective groups. Leaving IT infrastructure strategies for feudal governance style will be ineffective. Hence, another change that should be made is to leave decision-making for IT infrastructure strategies on the hands of the CIO and the IT leadership. This means that IT monarchy will be an advisable governance style for developing strategies that conform to IT infrastructure. Other IT Projects or Initiatives Other IT project or initiative favorable for enhancing effectiveness is defining of the IT requirements, specifications, and expectations of each department. Every department should be given target to meet with improved information technology. Setting targets will be very effective in ensuring that every department struggles to meet set objects thus enhancing performance. It is also important that every department submits its annual budget for information technology so that it is compiled into a collective and comprehensive budget that meets the requirements of all the departments represented within Alcan. Ouelette’s plans Ouelette is so much concerned with the way information technology governance is carried within Alcan hence the passion and drive to make visible and effective changes. The first plan that Ouelette has is to change the budgeting of the information technology. Changing the budgeting will ensure that the organization effectively falls in their first quadrant. What’s more, Ouelette is concerned with the internally available skills, which according to him are very ineffective. Ouelette believes that outsourcing will be an option or alternative for enhancing effectiveness within Alcan. Most of these plans are good and geared towards attaining effective IT governance. In any case, Ouelette is so much concerned with making sure that Alcan operates within the first quadrant of the Accenture IT Governance Model through reducing costs from outsourcing other than training various individuals into the IT governance. Conclusion IT governance as identified earlier on is very complex and demanding. Therefore, there is need for organizations like Alcan to employ all the possible and required resources in attaining effectiveness of the same. Works Cited Kiritsis, Dimitris. Engineering Asset Lifecycle Management. Germany: Springer-Verlag, 2010. Print. Read More