Volkswagen of America - Case Study Example

Customers Name Professor’s Name Volkswagen of America 10th March 2012 Volkswagen of America 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 new decision making process is highly structured and participatory. The new process has a number of stages through which the funding decisions pass before the final approval. It involves different kinds of analysis, but most importantly, it ensures that the final decisions have a contribution towards the overall objectives of the organization. This is a strong point compared to the previous process. Secondly, it is highly participatory, with the decision going through the ranks in the organization. The beauty of such systems is that it makes it possible for everyone to know what the other sections are doing. It also helps to avoid duplication of efforts. Despite its strengths, the criticisms against it are valid. This is because it focuses too much on the “science” of prioritization and neglects the “art” of it. Unless the system is thoroughly tested, it cannot provide realistic results even if they are objective. The new process is an improvement over the older one. While there are still issues to solve regarding its implementation, it has ensured that there is a strong basis for project funding decisions. This approach will yield greater long-term benefits because it will reduce the company’s exposure to organizational politics. Future proposals will have more merit and more relevance to the needs of the organization. 2. Who controls the budgets from which IT projects are funded at Volkswagen of America? Who should control these budgets? Should the IT department have its own budget? VWAG fixed the total budget on IT but Volkswagen of America made the decisions relating to the projects to benefit from that budget[Aus07]. So control in terms of total expenditure rested with VWAG, but control in terms of determining what the money would do rested with Volkswagen of America. It is ideal to have some form of central control regarding how much money goes into various budget votes. The problem though is that often, headquarters do not usually have a good appreciation of the conditions under which branches far from the headquarters operate. Volkswagen of America can do with more leeway in fixing their IT budget based on the needs that the company has, and not the dictates of the headquarters. The question of the IT department having its own budget or not depends on the overall budgeting process of the organization. It may need some affirmative action to establish its operations, but in the long term, it should play along the same rules as all other departments. Any preference should aim at making the department functional and it should be for a limited period. 3. What is generating all of the extra work requests? Are there factors in the history or plans of this firm that lead to excess demand for IT services? There are three factors leading to an increase in work requests. The first one is that the company is in the process of repositioning itself. This in itself involves several changes from how it has been running its operations. The new president of Volkswagen is interested in increasing the market share of the company through strategic placement of the flagship brands. The second reason is that there is an increase globally on IT based work requests for all companies. IT is now proprietary hence, it is important to have the best systems possible to derive any competitive advantage from it. This means that even if the company had no special circumstances, chances are that there would be more work requests from IT. The third factor is that there are three entities handling IT issues at the company. They include the internal IT desk at Volkswagen of America, Perot Systems, and GedasUSA. The reason for the increase in work requests comes from the fact that the contract of Perot Systems is about to end, hence the need to pass on information to Volkswagen of America and to GedasUSA. Transitions normally have many issues and can generate many work requests. 4. What problems arise from over commitment of resources? Over commitment of resources in any institution leads to poor working relationships. People who feel they need the resources cannot get them because of spreading the resources too thin. Those in charge of allocating resources end up with a hard time making everyone keep within their allocations and occasionally, they make cuts on their project budgets. These actions, if not checked, jeopardize working relations. Secondly, over commitment of resources leads to poor project delivery. With over commitment of resources, chances are that the projects approved do not get sufficient resources to assure their smooth implementation. Budgets are a critical component of all types of projects hence little money or lack of flexibility brings up serious challenges during implementation. Thirdly, over commitment of resources ends up bringing poor project outcomes. Having more projects than resources allow is a sure way of getting mediocre results. In IT, it is often difficult to gauge the need for resources beforehand because of the pace at which technologies change. Having resource constraints makes it impossible for project teams to adapt their plans to take advantage of emerging opportunities. 5. How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority management system? While Matulovic’s position is difficult, there are precedents set in company’s budgeting history that he can use to get an amicable decision on this matter. First, the key objective of using this system was to involve all the stakeholders in the decision making process. All the parties are therefore very familiar with the issues. He should avoid the temptation of making the decisions alone despite the fact that he has the authority to do it. This will ensure that his fellow executives do not feel used by the system. Secondly, Matulovic should avoid giving preferential treatment to any of the requests by the executives. The reason for this is that it will defeat the purpose of implementing the system. The system now has made it possible for Volkswagen of America to make project decisions based on the company’s priorities. The company needs to retain these gains. The best cause of action for Matulovic is to call all the executives to a meeting to discuss the causes of their dissatisfaction with the outcome with the goal of identifying weaknesses in the system, or pointing out more clearly why the projects chosen for funding are the best for the company. It is possible that the system has certain flaws hence the unpopular results. It is better to adjust the system to take care of the flaws than to use other methods outside it to correct the problem. In this sense, the meeting should identify the flaws in the process and find an objective means of correcting the problem. Since this was the first time to apply the system to the decision making process, it is important to ensure the lessons learnt serve to improve it for the purpose of future allocations. 6. What should Matulovic do about the unfunded Supply Flow project?   The unfunded Supply Flow Project is a strong signal that there is something inherently wrong with the decision making process adopted by Matulovic. It shows that there was insufficient appreciation of the importance of the project to the company’s strategic operations. It is a strong case for redesigning the process to ensure that important but unattractive projects get favorable treatment. The best cause of action though will be to get a follow-up process that can help prioritize the projects and yield greater satisfaction among the executives. A good approach would be to ensure that at least each department gets funding for its most significant project. The reason for this is that the departments arrive from the priority areas of the company. That fact ought to be a guiding factor in the allocation of funds. Another approach, which may require a reworking of the entire process, is to have a pre-proposal stage where a collective body such as the Digital Business Council or the IT Steering Committee identifies the priority areas and assigns a budget for each area before requesting proposals. The projects developed using this process will take into account the funding available hence there will be no need to readjust budgets afterwards. In addition, ongoing projects or others of importance to the company will get their funding before the rest that require competitive bidding. The import of this proposal is that the current system will become better by being more responsive than the process used to allocate funds in the case. Works Cited Aus07: , (Austin 3), Read More