Volkswagen of America: Managing IT Priorities

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IT Budgeting
In 2002, ELT at VWoA along with IT Organization supported a new business unit within VWoA, as a single point of governance for all IT issues. The reason Dr. Matulovic was moved from Germany to US for design, establish and then leading the new Organization.
The budgets for IT projects at VWoA were controlled through a process that involves several organizational entities that establish priorities. There are four specific teams involved in this process: the ELT (Executive Leadership Team), the ITSC (IT Steering Committee), the PMO (Project Management Office), and the DBC (Digital Business Council.) The ELT is responsible for executing the NRG (Next Round of Growth) strategy in which the IT governance is a part. The ITSC consists of business and IT managers and is responsible for guiding and approving the process of IT project selection and prioritization. The PMO administers the project proposal and approval process. The DBC is responsible for the project filtering process, which decides which projects are most in line with the company’s business strategy.
As Dr. Matulovic background was from process development, he felt that the problem was more towards governance and process. He did a great job of getting the team under one umbrella, and also installing a system with process driven approach, responsibility for the weekly report and monthly budget checks. PMO did what was deemed necessary from and IT team, they started working towards on-schedule and on-budget projects and there were qualified project Managers who were responsible for the Management of IT projects.
In some terms IT does need to have a fundamental budget for its own operations, but it is just a customer assisting unit and will get budget based on the ...

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...ilot projects and follow agile practices. With this they are not committing for a full project, they just plan for a pilot project which can be operational in 3-6 months, they can then run these projects and start getting some value, if they get cost saving from a particular project they can utilize those funds and re-finance the next stage, Instead of looking for funds every year they can have a process where one project is funding other project and also cost saving is utilized back to the newer projects.
Dr. Matulovic should have a review with his VW management, have a discussion with them on the impending events, as they will be losing SAP project, which was supposed to be a part of the overarching globalization. Also, many ETL leaders are going to be unhappy, that means they have to be well aware of the events and if they want they can re-look at the projects.

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