IT Case Study for Alcan - Essay Example

Case Study for Alcan Desired IT Governance Model at Alcan The present most desired IT governance model at Alcan is the new capability enabler model.This model is selected based on the description that Accenture IT governance model gives to the various models in relation to the kind of business that exists at Alcan. It is known that Alcan is a huge company that deals primarily in metal works and minerals. These two areas of business are subject to factors that cause rapid changes to the way that business is run in the company. In the models also, it can be seen that there are only two models that fit companies with faster rates of change. These are the responsive solution providers and new capability enablers. At Alcan, the rapid changes that are commonly recorded can be associated or linked to the fact that customers are always making different choices on the kind of mineral and metal products they want to own on buy. Competitors in the industry are also change oriented thereby undertaking rapid changes that calls for the need for Alcan to also change its style of operation to meet the competition presented by competitors. Finally, government has a lot of say in determining the prices and profit margin of the company. For this reason, the company continues to be a rapid or fast rate of change organization. Among the two models given by the Accenture IT governance model that fits Alcan, new capability enabler is deemed the very best for the company because of the fact that Alcan is a manufacturer rather than a service provider. Alcan is said to be product oriented because it produces metal and mineral products. Meanwhile, responsive solution providers IT governance model are highly concerned and linked to companies that work on operational efficiency. IT Governance Styles at Alcan Company There are three major IT governance styles or systems from which Alcan may be classified. These are decentralized, centralized or hybrid. Hybrid is a combination of centralized and decentralized IT governance styles. Meanwhile at Alcan, there is only one IT governance style and that is the decentralization IT governance style. Alcan is a company made up of several departments across several countries in different parts of the world. In a typical decentralized IT governance style, the various departments and agencies of the company are absolutely independent on their IT system decisions and operations. This is clearly seen in the case of Alcan as departments are free to make decisions on their own with the making of strategic plans to lead the departments in delivery of its IT needs. The various departments are also free to select the kind of infrastructural expansions and innovations they want to undertake. It can therefore be said that there is so much freedom that places the governance of IT at the doorstep of individual and various departments of the company. Another important component of decentralized IT governance style is that the acquisition and purchase of resources is mostly done from an external source. At Alcan, the present situation whereby the company has been without a director of IT for a very long time has created a situation whereby the company is not in a position for fend for its own architectural needs. Because of this, the company fall or depends on external sources for supply. Like most decentralized IT governance styles and not limited to Alcan alone, the style of IT governance seem to have created a disorganized way of doing things. There also seem to be a very large number of sub-units to deal with. This makes the coordinated way of doing things very difficult. Why the Present IT Governance Style The prevailing IT governance style at Alcan seems to be an unplanned one. The style has been selected or is in use by circumstance. The circumstance is the absence of an information technology director or personnel in the company. In using centralized information technology governance style, there is always the need to have a common or single unit that manages all the IT affair of the company. This unit takes and implements decisions and strategic plans for the company. It is this unit that determines the purchases that are needed to be made and the kind of architecture that the company needs. Meanwhile, Alcan has been without a director of corporate information technology for such a long. Because of this decision, any effort to have centralized the information technology governance style at the company would have been a fiasco. This situation not withstanding, the company has largely benefited from the advantages that come with the use of decentralized information technology governance style. This benefit has to do with the fact that there is the individual empowerment of departments and agents within the company. Such an empowerment makes the departments such as finance, marketing and production very independent in their operations: devoid of any interference. However, there are a number of disadvantages. Particularly, a decentralized information technology governance style is relatively expensive to manage as the number of units to be fed with independent facilities and programs to run their own information technology governance style are very many. Suggested CIO Changes The major change to make would be to centralize the information technology governance style. Centralization of the information technology governance style has been suggested because it is thought to hold the key to making things more organized in the company. The company has a tall history acquisition and mergers that has resulted in the creation of many diversified and fragmented information technology governance units that span beyond 20,000. What this situation has created is anarchy and disorganization. Because of the present situation, monitoring of progress and success within individual units and departments is very difficult. Centralization would therefore ensure that evaluation and monitoring of the information technology system of the company is made possible and easier. Again, the diversified units make cost of operation and maintenance very high. The cost of collective running of the information technology governance at Alcan would therefore be cut down because there will be fewer units to handle. Such cost reduction is very necessary and helpful in ensuring that the company has enough financial resources to undertake other developmental projects. Recommended IT Initiatives More software development initiatives that follow the idea and principles of SAP strategy are recommended. Ouellette thinks that with the present decentralized system, such software expansion would be very costly, running into the figures of $500 million. However, the need for such initiatives cannot be overemphasized judging from the fact that the company’s present information technology governance model is the new capability enabler model. The new capability enabler model operates on the principle of advancing initiatives and capabilities and this can therefore not be underestimated; unless Ouellette is ready to change the entire model of the governance of the company to one that is based on the principle of reduced cost. In the light of all this, it is important to note that the suggested initiatives; though may be very expensive, can lead to a long term benefit that the company would enjoy greatly. The best part of the need to go in for the investment in advanced software development is the fact that Alcan’s management is presently enthused to undertake such major investments and initiations. REFERENCE LIST Dube L, Bernier C and Roy V. ‘Taking on the challenge of IT management in a global business context. Part A’. 2009. International Journal of Case Studies Management. Vol. 7 Issue 2 Read More