Use of IT for Business Success of Volkswagen Group - Case Study Example

REPORT By Name Course Instructor Institution City/State Date Overview of Organization The Volkswagen Group, a German-based company is amongst the leading automobile manufacturers in the world as well as the biggest Automaker in Europe. This is evidenced by the increase in number of cars delivered to clients; for instance, in 2013 the Group delivered 9.731 million as compared to 9.276 million vehicles delivered in 2012. Volkswagen Group is undoubtedly successful considering that nearly 24.8 percent of vehicles in Western Europe are manufactured by the company. The yearly revenue has progressively increased, for example, the revenue in 2013 amounted to €197 billion as compared to €193 billion in 2012, whereas profit subsequent to tax in 2013 totalled €9.1 billion. Currently, the Group has twelve brands manufactured in seven European nations and they include, and all brands have their own features and function as an autonomous unit on the market. The spectrum of product at Volkswagen Group ranges from luxury vehicles and low-consumption cars to motorcycles while in the commercial vehicle sector, the company’s products comprise ranges from heavy trucks and buses to pick-ups (Volkswagen Group, 2014). The company is as well active in other business fields, producing turnkey power plants and large-bore diesel engines, turbochargers, turbomachinery for gas and steam turbines), chemical reactors as well as compressors. Presently, the Group has 107 operating production plants, majority in 19 countries within Europe as well as additional eight countries in Asia, America and Africa. With almost 572,800 workers across the globe, the Group manufactures roughly 39,350 vehicles every weekday. The goal of the company is to provide eye-catching, environmentally sound, and secure vehicles which are capable of competing in a progressively more complex market (Volkswagen Group, 2014). Use of Information, Information Technology, and People for Business Success Basically, information technology is a contemporary trend that has considerably transformed the day after day lives of businesses as well as people all through the world (Rouse, 2006, p.12). At Volkswagen Group, information and IT solutions are used in computer software, personal computers, communications technology, as well as in production robotics. Basically, leveraging IT for business success has remained the survival key for Volkswagen Group in the present business world. Use of information and IT has allowed Volkswagen Group to make enormous steps in operational efficiency as well as the success of workers. For instance, automation technologies like computer-controlled machinery and assembly lines have helped Volkswagen to manufacture unique brands of cars. IT and information has also created a communicative and open environment within the company. In this case, by locating centrally the information concerning performance appraisal in a formal online structure, Volkswagen Group managers have managed to easily create reckonable objectives for their workers and also have been able to communicate business strategy that have supported the overall objectives of the company. Information has as well permitted for better visibility within the company, in that way enabling workers to notice the whole picture as well as to well comprehend how their personal goals can well fit with the company’s organisational goals (Akpan, 2007, p.129). This as a result, has made workers feel part of the company, thus increasing the business productivity. Information has virtually connected teams in the company, and this has been achieved through the team sites and employees portals created to aid people work efficiently in different departments within the company, regardless of the team or location. Thanks to information sharing and IT, Volkswagen has managed to eliminate corporate silos that in effect disconnect communication for the reason that workers can use information technology such as social media to connect to others personnel working on related projects or look for professionals to reply their questions. Importantly, Volkswagen has used IT to motivate their workers. Based on the information collected through online performance evaluation, managers as mentioned by Blasini and Leist (2013, p.447) can weigh present skills against those needed for progression or other acknowledgment or incentive/reward opportunities presenting themselves while the manager trails advances on worker goals all through the year. The manager might as well find the need to redirect workers to other departments upon feeling their business productivity may heighten somewhere else. Information technology has enabled Volkswagen discover barriers to better performance, and in turn get rid of these barriers through improved resources allocation or additional employee training. With regard to people, Volkswagen is devoted to cosmopolitanism, tolerance and respect; thus, the company treats its people with much respect and they work collectively with people by valuing their individual personality. Volkswagen business success has mainly be attributed by increased productivity, which has been brought about by the company ability to guarantee equal treatment and equal chance despite ethnicity, race, disability, political conviction, gender, beliefs, nationality, faith, social background, and sexual orientation. What’s more, Code of Conduct of Volkswagen Group emphasizes the significance of diversity within the company, and all workers as well as executive body members have the task under the Code for making certain that people work collectively in collaboration (Volkswagen AG, 2013). Transparency as well as openness, civil courage and collegiality have been the best paraphernalia through which to fight discrimination at Volkswagen, therefore all workers are under an obligation to give notice of any infringe of the Code with no delay. In case a worker feels discriminate, the statutory provisions allows for whistle-blowing but as well offers right to use trained staff for advising and supporting the concerned person (Volkswagen AG, 2013). Information stored or required by staff employees at Volkswagen Group At Volkswagen reason why correct storage of information is an obligation for workers; foremost, information storage makes good sense of business to having accurate information organized and handy when needed. Information is also given to workers for the reason that ultimately the company will have to produce documents concerning worker work history as well as performance. Therefore, having the appropriate records for retrieving is very important when needed. Workers as stakeholders of the company are offered with the financial statements so as to see effective or ineffective they have been. In addition if workers want to negotiate for salary increase, they need financial statements to provide evidence that the corporation can manage to pay for their negotiated wage increase (Parker, 2013, p.309). The information as well helps workers to witness the company stability; for instance, in case the company is bankrupt, the workers will manage to foresee the reality that their jobs are at risk. Besides that, all new workers are offered the Statement (a copy of the Fair Work Information Statement) prior to, or immediately after, they begin their new job (Forsyth & Stewart, 2009, p.68). The Statement offers the new workers with information concerning their employment conditions. Information in the Statement includes: modern awards, right of entry, general protections, the Employment Standards, and termination of employment. Gaining Business Intelligence through the Implementation of a Customer Relationship Management System Business intelligence offers Volkswagen Group the needed information to understand changes in the competitors, market, regulatory as well as other legal issues. Business intelligence has offered the Group with ability to use its financial and human resources, and the quality of BI has been needy upon the ability of the company to manage information. To advance its reputation for industry leadership as well as innovation, Volkswagen implemented the Customer Relationship Management (CRM), in so doing, gaining business intelligence (Rajola, 2003, p.13). Amongst its main objectives is the need to improve the understanding of its customers as well as the capability to make more knowledgeable, well-timed decisions by examining consequential data. Volkswagen can gain business intelligence by implementing CRM through evaluation and extraction of customers’ data.  Volkswagen must understand the significance of customers and comprehend that the market these days focuses on the customer and not on sales.  Volkswagen always collects scores of information concerning its customers in all interaction or transaction; and by means of various communication channels, the company has managed to concentrate on the wants and needs of the customers with the intention of developing products that meet such needs and wants as well as even surpass them.  Basically, CRM can allow Volkswagen to boost the customers’ loyalty as well as maintain its business success.  In this case, CRM can enable the company to track the purchasing/buying behaviour of customers as well as offer them with the correct information derived from their preferences which were recorded beforehand in the CRM system.  For instance, Volkswagen can make out what communication channel is most reachable and best for a customer simply by retrieving data from the CRM system.  Business Intelligence gained from CRM can be used for designing promotion campaigns aiming at all customers individually and luring them to use money on purchasing the company’s products.  In addition, BI may be utilised for gaining loyalty of the customers to the various brands produced by the company (Rajola, 2003, p.14).  At present, customers’ loyalty to Volkswagens brand is indisputable considering that scores of customers are attracted to the company’s brands on a daily basis. Strategy for how Volkswagen Group can use efficiency IT metrics to improve its business In scores of companies, essential business objectives are from time to time measured as well as defined based on efficiency and activity metrics. Strategies may be formulated purposely to better inventory turns, for example, by means of espousing just in time sourcing or better management of inventory. In this case, efficiency IT metrics measures the IT system performance itself including availability, speed, and throughput (Baltzan & Phillips, 2008, p.13). The Strategy for how Volkswagen Group can use efficiency IT metrics to improve its business will entail seven crucial elements (per unit costs, cycle time, response time, backlog, per unit full time equivalents, staffing ratios, and per unit equipment utilisation), which should be measured individually. Per unit costs will be measured to make known how many resources are used in manufacturing certain unit of service. The cycle time measure the amount of duration taken for a manufacturing process to be finished. Response time measures the duration taken takes to react to a service request.  Importantly, response time is the main measure of customer satisfaction, given that it points out how much time is taken by customers to wait for service response.  Backlog measures the quantity of work in line, yet to be processed, and even though it is a complicated measure, it can be measured through overall work in queue yet to be processed.  Per unit FTE’s measures the number of workers needed to complete a unit of work and this can help the company save both production and labor cost. Performance can be measured through staffing ratios, by calculating a staffing ratio to a certain organizational function. Finally, per unit equipment utilisation are important for the reason that it measures how efficiently organisation’s equipments are used for production. Summary In sum, it has been argued in the report that Business Intelligence is important because it involves the integration as well as delivery of useful and relevant business information in the company. As such, Volkswagen makes use of BI for detecting crucial incidents as well as monitoring/offering business trends so as to become accustomed swiftly to their changing market. By using effective BI training in the company, Volkswagen has managed to improve the processes of decision making at all management levels it has improved the company strategic as well as tactical processes of management. Volkswagen strong brand portfolio has always been its main strength in automobile industry, and with its wide collection of vehicle models, Volkswagen satisfies almost all needs of the consumer and has managed to access huge consumer market. However, like any other company, Volkswagen has its shortcomings; for instance, nearly all cars of its vehicles are not environment friendly such as its sport car brands Bugatti, Lamborghini and Porsche, which are fuel inefficient and have high carbon emission. In addition, IT has continued changing the manner in which Volkswagen functions internally. Information systems have turn out to be a need for the company, and scores of manual labour have been replaced by highly developed robots thanks to automation technology that has made work much easier. References Akpan, E., 2007. Strategic Alignment: The Business Imperative for Leading Organizations. Mustang, Oklahoma: Tate Publishing. Baltzan, P. & Phillips, A., 2008. Essentials of Business Driven Information Systems. New Jersey : McGraw-Hill Education. Blasini, J. & Leist, S., 2013. Success factors in process performance management. Business Process Management Journal, vol. 19, no. 3, pp.477 - 495. Forsyth, A. & Stewart, A., 2009. Fair Work: The New Workplace Laws and the Work Choices Legacy. Sydney: Federation Press. Parker, L.D., 2013. Financial Reporting to Employees: From Past to Present. New York: Routledge. Rajola, F., 2003. Customer Relationship Management: Organizational and Technological Perspectives. London: Springer Science & Business Media. Rouse, W.B., 2006. Enterprise Transformation: Understanding and Enabling Fundamental Change. New York: John Wiley & Sons. Volkswagen AG, 2013. Diversity and Equality. [Online] Available at: http://sustainability-report2012.volkswagenag.com/en/society/advancing-women-and-promoting-diversity/diversity-and-equality.html [Accessed 26 November 2014]. Volkswagen Group, 2014. The Group. [Online] Available at: http://www.volkswagenag.com/content/vwcorp/content/en/the_group.html [Accessed 26 November 2014]. Read More