IT Governance Model for Alcan - Essay Example

Alcan Case Study IT Governance Model for Alcan Choosing the IT governance model that best describes an organization will be based on two major criteria and these are whether the organization or company is at faster rate of change or at the slower rate of change. Judging from the case of Alcan, Alcan is no doubt operating as a faster rate of change organization. This assertion is made from the angle of the nature of business or industry in which Alcan is in. Alcan is in the minerals and metal sector. The mineral and metal sector or industry is faced with rapid changes in customer preference for products and services. The sector also suffers from disruptive economic changes resulting from performance of competitors. Even more, rapid changes in government regulations on pricing and taxes affect the sector and industry a lot and cause a lot of rapid changes. Finally, the operation of the industry is highly dependent on new technologies, which also change over time at a very rapid pace. Due to the fast rate of change and as per the Accenture IT governance model, Responsive Solution Providers and New Capability Enablers are two options of IT governance model, one of which would best fit the Alcan situation. Judging among the two models, it can be seen that the nature of Alcan’s business makes the company compete on more on product/service differentiation rather than on operational efficacy. This is because the company is more of production rather than services oriented: looking at the fact that they are manufacturers. Based on these assertions, the new capability enabler model will be selected as the best model under which Alcan falls in terms of IT governance. Governance styles in use at Alcan Right from Robert Ouellette’s comments, it is possible to identify the kind of IT governance at Alcan and the kind of governance he would want to introduce to the company. The IT governance organizing model is highly decentralized. This position is taken because in the IT governance of Alcan, every business group is absolutely independent in undertaking IT informed decisions. Some of these IT informed decisions include the design and drafting of strategic IT plan to take the department through. It also includes decision on the choice of infrastructure selection, based on the identified and specific needs of a department in question. Above all, each group or department had its own IT organization that it dealt in carrying out the implementation of set goals and objectives. This autonomy and decentralization affected the investment strategy and program of various groups and departments. With reference to architecture decisions, there is much room for flexibility whereby departments and groups have the freedom to make external purchases. The external purchases were also partly influenced by the fact that there were no centralized IT specialists in place at the company to determine and advice on internal purchase to make. From the discussions, it can be seen that there is no standardization in the IT governance and that things happen haphazardly. The position of director of corporate IT has been vacant for a very long time. Because of this, there is a situation whereby the need to stock the IT section of the organization with needed resources is lacking. The IT governance structure is therefore plagued with lack of resources. Reason for Present IT Governance IT governance is in the particular way it is at Alcan because the company barely has a choice to it. This means to say that the fact that there is no director of Corporate IT makes it impossible for the company to achieve a centralized governance system where all the affairs of company in terms of information technology would be manned by just one person. The absence of the director of corporate IT and the seemingly clear lack of commitment to make a replacement for the long number of months the company has been without such a director has made the company opt for decentralization so that every person within the departments and ranks who has some level of idea about information technology would control the IT system of that department. Using decentralized IT governance has some advantages. Particularly, it makes room for focused development of various departments of the company. There are however some disadvantages. One of such disadvantages is that the overall strategic plan of the company in terms of information technology becomes delayed in its achievement. Distribution of financial resources and other forms of resources to implement information technology projects become very costly. This is because distribution of resources is done in bits instead of doing it as a whole and once and for all. Potential CIO Changes As the CIO, I would make changes that are directed toward making things more organized. This would not only concern or be achieved through creating a centralized IT governance system but also through other systematic program and agenda. For example the various acquisitions made by the company have created a diversified and fragmented information technology environment that is working against the company. For this reason, there will be the re-organization and harnessing of the information technology environment to ensure that all strategies, programs, resources and agenda are brought together under a common unit. Such an achievement would ensure that monitoring of the information technology environment is made easier. Clearly, it would be more difficult for the CIO or director of information technology to manage and control the IT environment if it continues to exist in the haphazard manner in which it presently exists. As far as investments are concerned, the company would be required to make IT purchases that meet current global changing trends of modernity. This would be costly and expensive but very worthwhile. For a start, architectural purchases will be made from external sources but this will change with time. With time, the company will be put in a position to develop its own internal purchases. Recommended IT Initiatives On a personal note, I would advocate and recommend the continual expansion of information technology software acquisition as seen in the instance of the use the SAP strategy. This may be costly but as far as the Accenture document is concerned and the new capacity enabler is concerned, there is a characteristic where by companies are expected to deliver innovative IT solutions. Even though such innovations may be expensive, they are generally part of the identities of the new capacity enablers’ model and the innovations are very worthwhile and beneficial in the end. A critical study of Ouellette’s plan shows that he is skeptical about excessive spending and comments that when you look at them separately it does not look like a big deal but it involves as much as $500m. Such school of thought does not support my recommendations. However if Ouellette would stick by his beliefs, then it means he would be changing the very fundamental IT governance model of the company from New Capability Enabler to Efficient, Predictable Operators, which however does not conform to fast rate of changing companies. 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